FPA Congress Insights #3 – Transcript

Fraser Jack
Hello, and welcome back to this special episode of the podcast series that we’re doing from the Financial Planning Association Conference. I am joined by Matt Jones. Thank you for joining me, Matt.

Matt Jones
Great to be with you, Fraser.

Fraser Jack
I’ll tell the listeners about your claim to fame.

Matt Jones
Well, I think the one you’re referring to I’m probably my only one, frankly, has been co founder of Four Pillars Gin. If I sat out of breath at the moment, it’s also because we’re sitting in the middle of the four pillars bar, and we have been smashed for the last 90 minutes non stop.

Fraser Jack
So yeah, this has been an amazing experience. For those people who weren’t here, you have actually been creating cocktails or creating a drink. First of all have a sit at behind on the tools, I would say

Matt Jones
I made the huge mistake of ending my presentation with a live cocktail demonstration on stage, which seems to have attracted quite a lot of people to have that cocktail is

Fraser Jack
not a huge mistake. Somebody who has just sampled the goods. Tell us a little bit about your background. 10 years, 10 years and four pillars.

Matt Jones
Yeah, look what 10 years of playing with four pillars we return nine in terms of our time on the market on the fourth of December, it was fourth of December 2013 that we launched, but we were toying with it from I guess sort of mid 2012 got serious towards the end of 2012, early 2013. We send my two co founders to and cam off and lo factfinding mission and really, you know, put some money in the bank put an order down on a scale and you know, things get serious. Yeah, things do get serious and and I think probably from a point of view, you’re entering a marketplace where there wasn’t a lot of boutique gin distilleries around in Australia. Look, there were there were fewer than 20 Gin distilleries, and the majority were probably distilleries that made other things including gin. So maybe a rum distillery here, a whiskey distillery in Tasmania. So there are a few different gin labels. There wasn’t really an Australian gin scene, what there was, was a new craft gin movement happening overseas hadn’t happened here really yet. And frankly, there probably wasn’t much demand for it to happen here yet. So there was you have to be very realistic about we think there’s exciting possibility, but it’s not exactly, you know, pent up demand that just waiting for someone to bring Australians into the market. Yeah,

Fraser Jack
this is what the Henry Ford says. If

Matt Jones
you ask people what they want, they’re going to ask you for faster horses or Yeah, and I don’t think anyone was going to say at that stage a great strategy. Yeah.

Fraser Jack
Fair enough. That wasn’t on the cards. Tell us a little bit about that process, though. Because you had to work through as it from a business point of view. Obviously, we’re talking about you, but we’re talking about a business right and a business where the market doesn’t exist. So well. The craft that I guess the the high quality gin market existed, but the craft market

Matt Jones
didn’t. Yeah, look, I mean, the high quality gym market was definitely there. It was dominated by Hendrix, there was a much bigger sort of rather tired old gym market, classic London dry gyms. The craft gym scene was definitely growing in the US it was growing in the UK. And I think how you go about building a business? There’s obviously no one right answer. And if you have an impatient desire and need to achieve growth, you can perhaps approach it in one way we were fortunate in four pillars in that we, from the outset, we we wanted to play the long game and play the quality game. And we really challenged ourselves to see what would happen if we made something to an exceptional standard where we place craft at the center. And I remember having a conversation very early on was doing how my co founders saying, Look, we’re going to be a craft business. And craft has no scale limit that there’ll be people who will tell us that craft means small and therefore after a certain size unit craft and what we said was not that craft is just a total commitment to quality and in theory, you can be a global brand and there are great examples of global brands that retain that sense of quality at the heart, they’re just rare and more commonly you see these big brands because he is perhaps being pushed to one side a little bit so I don’t think our business model is right for everyone we really prioritized product quality and we took it slow and you know members of the FDA will be interested that we we put enough money aside in the bank to make sure that we didn’t have to get impatient for short term returns and start running sales promotions because that way lies a very short term as approach to building a brand but instead we we really sort of prioritize getting the product right packaging the product right getting all those cues of quality and excellence and then over time seeing where can that take us Yeah, I want to harp on this craft it a little bit longer because craft can mean you know small and boutique and doing things but then to scale craft is a whole new story but but I think what you focus on was mastering the craft. Look, I think so. Something I I often say the world doesn’t need another anything. The world needs a better something. There’s always a market for a better something and I think your craft is your opportunity to unlock what it is that you can do. or make better. It doesn’t have to be everything it might be that you’re running a financial advisory practice, that’s just exceptional client experience, or you’re running a financial advisory practice that’s just exceptional at dealing with older people who’ve not prepared for their retirement and now they’re in the middle of it, that’s what you’re really good at your craft is, is that deep mastery, as you say, of the thing, that’s thing and unlock your opportunity to add value, I think what can then happen to a lot of businesses as they grow, they start to realize some of those things that drove their craft are expensive. And maybe they’re easier parts. But that doesn’t mean they’re better parts and probably in the long run, that’s going to dilute the craft and dilute the mastery and dilute the value. So I think there is a hard road to growth, which is holding on to the craft, but ultimately, it’s surely got to be a more rewarding road to growth.

Fraser Jack
Yeah, I couldn’t agree more. And, and certainly sampling the beverage is not there’s definitely a reward at the end of it. But before we get there, you presented today, you had a presentation on stage a keynote to finish the day. Yep.

Matt Jones
So, you know, I’m very fortunate I enjoy speaking and I get to do it a fair bit. And obviously, it is my job to hopefully tell a success story, because I think four pillars is absolutely a work in progress. But it’s a really fun one. And we’ve got some runs on the board. And it’s nice to be able to share that and say look what Australia can do. But I also see it as my job to connect some of the lessons that we’ve learned the principles we’ve followed and, and help other organizations and other people connect with them. Because the end of the day, most of us are not making gin, we’re not making cocktails, we’re but we are creating something. And that something needs to be wrapped in great storytelling and great experiences, if we’re going to make the most of it. So that’s what I chatted about today, the dual challenge of really mastering your craft, but then recognizing that that alone is not enough that if you don’t then really do justice to the value create in the stories you tell and the experiences you provide to your clients, then you’re leaving value on the table, you’re leaving it to chance that your clients will tell the story you wish they would tell about you. And we’ll take responsibility for that. Tell them the story and give them experiences that make it almost non negotiable, that they’ll go away. And they’ll, they’ll they’ll preach the gospel of your business and the experience that they have with you. So that was the, I guess the lessons that I hope that people took from them today. Yeah, as business, there’s very much those those you said those principles across different businesses and whether they’re a financial advice, business or a gin distillery, I want to learn in this in that space. Tell us a little bit about some of those principles. We talked about things like sandwiches, and peacocks and all these presentations. So I had a bit of a strange route into gin that started as an economist moved into politics and ended up in the in the brand space. And the part of the brand world that I was in was was this sort of emerging world of brand experience agencies. And it was a really interesting time I entered that world in 2006. So to cast your mind back and you and I probably just about old enough to remember the digital world, then we’re really, we’re pre social media, Facebook, technically launched in 2004, most of us got accounts 2010 2011, the iPhone only launched in 2007. It took a while for 3g to catch up and put social media in your pocket. So working in the brand experience faced in 2006 to 2012. Fortunately, it took me to New York for a little while. We’re really at a time when businesses were realizing that the experiences they created would be talked about by so many more people and put in the sort of the social media shot window by their customers. And what I’ve spent a lot of time thinking about that is what are the types of experiences that change how people talk about you that change how people behave and sandwiches and peacocks is a simple way that I’ve used over the years to articulate to, if you like mental models that the sandwich model is all about, how can you become easier to do business with easier to buy, easier to be to continue to transact where the easier to roll over and you see it from Amazon to Netflix to Uber these businesses that are just trying to eliminate friction because they recognize if they’ve got you as a customer, and they can eliminate friction, you’re never going to leave. So if we think as businesses, where are the points of friction, pain, annoyance for our clients, how can we send them away smoothen that sandwich thinking the challenge is your your competitors are probably seeing the same things as you they’re seeing that same pain point. And technology is making it easier and easier for people to eliminate pain points. So in four pillars, we’ve just invested in a super fancy new customer experience solution that means we can get back to more people with their inquiries faster. Five years ago that would cost us millions of dollars of tech stack investment and today it’s an off the shelf solution and it’s in the low 10s of 1000s. So, sandwich thinking is important, but it’s easy to replicate which is where the peacock comes in the peacock is my analogy for being colorful and noisy and memorable and I think every brand domestic about accounting zero, did anyone think that accounting software needed to get sexy but 00? Wait a minute, people who do the books do the account and look at software everyday, they’d rather look at something beautifully designed. And they’ve really carved out a niche there. And I think there’s room for design, aesthetics, beauty, storytelling, to make all of us feel something in any business. And so that’s that real encouragement, not to. It’s not that you shouldn’t be focused on quality, because as we discussed, it’s critical. But don’t overestimate how rational people are. Remember, we respond to emotion we respond to story. We’re hardwired that way. And so where can that show up those P cup moments in your business? And where can you create value? Through that way of thinking as well? Yeah, I

Fraser Jack
100% agree about the people make those emotional decisions. And those are the things that are those memorable moments that you create in the business are so important for consumers to be able to share with others about, you know, not the technical stuff, pushing financial advice. It’s about those magical moments where they go, I felt something. And often

Matt Jones
it’s the two are actually complimentary. And as I think about why it four pillars, I’ve always cared so much about design, photography, packaging labels. And it’s because all of those things, give our customers a hint of how much we care about quality and attention to detail. And if I could force them to watch camera distill about surgeon for eight hours, they would get it. But I can’t do that. And so how do I give them little cues? How do I drop little breadcrumbs to say, look how much we care. It’s the same in in the financial planning space, if we want to be trusted. Trust is a feeling if we want to give our clients confidence that we’ve got their backs. How do we convey confidence in the typefaces we choose in the clarity with which we convey information? So the two don’t have to be mutually exclusive? We think about what what’s the craft we want to be known for? What’s the trust, we want to be built? What do we want to be trusted at? And then how do we use things like design or environmental design? If we bring someone in for a financial planning conversation, and we know we’re going to ask them questions about their children and their ambitions in their retirement? How do we create a waiting room space that gets people thinking about the right things with the right visual cues, the right environment, the right coffee, I mean, it might sound trivial, but taking care of those details. That’s why Apple stores are such incredible places where you and I are happy to spend far more money on a piece on a laptop that we had to spend on the equivalent PC, because Apple gives us a feeling of trust and confidence in the hardware and the ecosystem. So yeah, I think that stuff is critical. And it’s not. It’s not sort of saying craft is not important to say that also, those experiences are really important. Yeah, they’re one of the things I loved about your presentation was we did talk about the sandwiches and the peacocks, and they’re all important, but they always link back to the core values of what you put down at the beginning. Yeah, so look, I mean, I think it gets easier to do all of that when you know why you’re doing it. And you know, we’ve all heard Simon Sinek talk about start with why. And there’s lots of different theories out there about what your purpose should be. Some people would say our purpose is all about bigger picture, social higher purpose, how is your business helping to save the world? For me, it’s more just about giving yourselves decision making tools to go, Why does our business exist? Why? Why will it grow? Why will it succeed? Why will we be valued by our clients. So for four pillars, it’s all about taking the opportunity that was given to us of making genuine Australian. And that has led us to go well, if we exist to elevate the craft of distilling gin, because we’re here in Australia, it helps us decide not to make vodka, not to make whiskey because if if our job is to elevate gin making them it’s probably not to get it one day ago, I was dungeon there, let’s make something else. But then it also helps you with so many other decisions and investments because fundamentally, you’ve got that clarity of why you exist and why you matter and why you

Fraser Jack
do it now 10 years on from making Jimmy also covered on some of the other stuff around sustainability around the fact that you you know reuse the oranges that come out of the vats to make marmalade all these sorts of things. But that’s that’s then also evolved in some other stuff with a new business

Matt Jones
look at has and there’s always been this sense of never compromise never compromise on the fundamental quality of the gin. And that meant that in the early days, our sustainability efforts were always about what can we do on the margin. So can we put solar on our roof? Yes. Can we be smart with our water usage? Can we can we take the water that gets heated from our stills and use it to heat the distillery in winter? Absolutely. So let’s be smart. And can we take the oranges and the botanicals and turn them into marmalade and salt and chocolate? Absolutely. The Game Changer though was in developing our growing distillery we effectively develop the site next door to double the size of it. That’s more Christmas ginger is being delivered very heavily. There we were able to make some really big decisions on sustainability. We’ve wrapped the whole site in this incredible copper fence a couple of Vail which is effectively close to two kilometer At passive water cooling chimney that is saving 10s of 1000s of liters of water every day. So, we’ve been able to make big decisions partly because we got a bit more money in our pockets, partly because we can start with a blank canvas. But the critical thing is always what can we do, that’s the right thing to do, while not compromising the core craft, a one more thing. Every investment we make in that space, we try and get a return from it in terms of storytelling. So the first thing we did after completing those things, and we, we got certified carbon neutral, we want this incredible accolade, at the International Wine Spirits competition in London when their their inaugural green spirits initiative trophy. Immediately, we got a camera crew out there with a filmmaker that we love and said, right, make the film of what we’ve done. Because we need to tell people about this because it’s only when we get the credit for it, we’re not going to distort it. We’re going to tell the truth of what we’ve done. But it’s our job. We’ve done this thing. It’s valuable. Let’s not get the get the return from that. And I think that’s maybe the the critical piece that brings us all together.

Fraser Jack
Absolutely. When you got a good story to tell, you should definitely get out there and start telling and I think financial advisor in that definitely space as well. Matt Jones, thank you so much for coming on the podcast and for being here at the NBA Congress in Sydney. I know you’ve had to travel to be here and appreciate you being some time away from your family. Thank you so much for sharing with us all your words of wisdom.

Matt Jones
Absolutely. And look me up on LinkedIn, Matt Jones, four pillars chin and always happy to connect and thrilled to be here. Thanks, man.

Fraser Jack
Thank you. Hello, everybody. And welcome back to this hour special podcast series brought to you by x y n the FPA come to you from the Financial Planning Association Conference in Sydney. joining us again this morning by Danni. Good morning, Danni.

Danni Visser
Good morning Fraser we are day two. We are halfway through an amazing sharing of ideas at the FPA is 30th birthday. Yeah, we’ve got our first podcast victim at the podcast bar. Thanks for kicking things off, Paul.

Dr. Paul Moran
My pleasure. Great to be here.

Danni Visser
So Paul, you spoke yesterday. So it would be we’ve just learned in the small amount of time that we’ve spoken with you before the podcasts that you’re a bit of an overachiever. You like to do a lot of things, would you before we get into your session? And what would that covered? Would you mind telling the listeners a bit about you? You know how you built an advice business? And obviously a technology business as well. I’m getting a thesis in there as well, there were three big things that we’re going to cover in this podcast. Yeah.

Dr. Paul Moran
Look, I guess, if I go right back to not the very start. But a long way back in a previous life. I was I was an ambulance paramedic for about a decade in the 80s 90s. And the thing I realized I worked as a country and for a few years and and I keep hearing this phrase all the way through my career, which was whenever you arrived at no matter what you arrived at, people would say, okay, the ambulance is here now, didn’t matter what was happening, how terrible what amount of crap was going on the animals and now it’s okay. Right. And I took from that, that what they’re saying is that I don’t know what to do. I’m in chaos, right? And so someone who knows what to do, they want the uniform on. They know what to do. This idea of chaos to calm became the sort of mantra for our practice that we started tapping into our practice motto. So when clients come and see financial advisors, I think they come in in a chaotic situation, panicking, worried, upset, don’t know what they’re going to do. Fearful. So our jobs know what to do. And I think that’s the job of financial planners know what to do. Right. So we’ve made that motto. So it’s around kind of,

Fraser Jack
does that mean we can call financial planners first responders now? Visual, you? Absolutely. you’ve tagged it? Okay, great. First first responder first podcast.

Danni Visser
And you started that 25 years ago? Yeah,

Dr. Paul Moran
that’s right. I think the job is very similar. I think we there is a process we go through the punch replenishment go through a similar process maybe in different different ways. But there’s a process that they go through getting to know the client first understanding that, and then working out what strategy that should be doing will get what the gaps are, and then following a format, a process approach, just like ambos do. And so, so consequently, that little need much later, into the idea of getting the client information much more accurately, much more efficiently. So we’ve got somewhere to go. So hence, we started the software business called back on that for four and a half years ago,

Fraser Jack
you decided to start while you’re doing a whole lot of other things at the same time. Now you’re in the middle of a thesis. Tell us about how you love the hectic life.

Dr. Paul Moran
I look, I love education. So I’ve got a couple of master’s degrees and a couple of degrees. And you know, I just really want to take that last step and get a thesis so I did a master’s in tax and muscle financial planning at uni in New South Wales in 2009 2011 finish that there’s a fairly big group there into behavioral finance and sort of got interested in it and took myself off to a conference in in Chicago, there’s a category Behavioral Finance Conference and kind of I was never I didn’t know a soul there, but but everyone crowd around me and I didn’t know what the hell I don’t know what’s going on here. But it was my accent and not the Have the accent but they wanted to know at that stage what was like living in a country where people still thought property prices couldn’t fall, stuff post post GFC women around the world house prices for 50% had to dip from a week and then rebounded up. And it got me thinking a lot about about that. And so I wanted to look at that in more detail. And hence, I kind of applied and got accepted to Stanford thesis for a doctorate. So

Fraser Jack
yeah, fascinating topic. Tell us a little bit about that process. How did you go through your thesis? thesis as in? How did you set what we got to decide on? What would be the you’re going to study? Yeah. And tell us about the the outcome.

Dr. Paul Moran
Yeah. So what that was really about was a belief I had or belief, which is a really important word in the thesis, but a sense that people were at the eighth atomic got worse, but people are paying spending so much of their resource, financial resource on property and residential real estate, spending so much money on it. But they were saying things to me like, I can’t afford insurance. What do you mean, I got big mortgage, I can’t afford extra super, super payments could have a big mortgage. And so why, why are they having? Why are they putting all of the resources into this one asset that they live in, you know that, and then and then bidding prices up. So going to auctions and actively bidding against other people doing the same thing. So no sense of this house was worth $800,000 Or a million dollars, it’s almost five 1.2 good on that we became going to pay 1.3 or so after pay 1.4 Next week, so this, this whole idea of prices only ever go up? I’ve got to get in now. So what was causing that? And

Danni Visser
I certainly wouldn’t do that with an insurance policy or premium was paid under dollars. I’ll pay 1200.

Dr. Paul Moran
Yeah, they’re doing with a car now. Yeah. But but but they normally wouldn’t do what you normally would you go back and you go, and so you know, I’m gonna buy this, I’ll give you a let you know, that bargain with it. But with the house, it was like, I’ll pay whatever I’m gonna pay. And so I wanted to know what what was that about. And so over a period of a couple of years, I did a doctorate in a professional doctorate. So Doctor of Business Administration, it’s still a thesis and still, but it’s a professional doctorate, which is a lot more practical orientated. A PhD is a really a real theoretical approach. And so as professional doctorates and more applied approach to research, so I wanted to look at so what I sort of started stumbled across a siphon, go through the whole behavioral finance elements and stuff and becoming really, I think, I think pretty expert in behavioral finance, reading about 500 papers, that the idea of beliefs, what are the beliefs behind this and, and the influence became CPV around the beliefs around past performance. So So, so I set up a survey and the study was involving a survey of really framing people’s investment preferences by both both past performance and then by future expected return, and seeing those differences. And there were very big differences between the two. So so if you are someone straight up, you know, what you prefer, and how I did it was studying three options I studied, the first option was residential real estate, second was Australian shares that there was superannuation. Now, superannuation that I know is not an asset class, it’s a tax structure. But in the general public’s mind, Superannuation is a thing. So it is it is the same as residential real estate and Australian shares in the public’s mind. They don’t see that as a tax structure, they see it as an investment thing. So, so the survey asked questions around that, what’s your preferred investment of the three? And then what do you think had done best over the previous three in the previous 10 years and seeing a relationship between between those, those sort of factors, and there was a pretty strong factor relationship between those those things. People had had, most people thought residential real estate that had an best effect. We polled the audience yesterday, and I said the same thing. They thought residential real estate had done the best, in fact, residential

Danni Visser
swing of I mean, the audience here, but what’s sort of in your research, what was that

Dr. Paul Moran
around 45%, but real estate invest, okay, okay. And Australian shares worsened superannuation second, and in fact, the actual results will reverse. So I did research, what was the best performing asset class over the 10 year period under the study, and to now and residential real estate was the worst performing, because people ignore the fact that it’s geared at 80%. So what they say is I’ve put my you know, I bought a house with $800,000 become 1.2, it’s grown by $400,000. And my money is gone. But that’s only a three or 4% return over a five or six year period, whereas the share market had done seven or eight or 9% return over that period, and super done six or 7% over that return. So there was a pretty clear relationship between belief around past performance even though it was wrong. So 60% of people got it wrong. But the influence for residential real estate was if you believed that it unless you were six times more likely to want to invest in real estate than anything else. So really heavy influence. So then I in the survey, I then asked them to predict what the returns would be in the next 10 years. So with a guide, gave them a list of a list of outcomes. So let’s say for example, I will ask a question like, say you inherited $180,000, but the proviso was you had to invest in a superannuation fund of which It was, Okay. What do you think it would grow to in 10 years time, and I gave them seven options, a little ranges, you know, like 170 to 210, or, and each of those ranges, the midpoint, equated to 02468 10 or 12%. compound returns, okay? And then goes on to predict. And then ask them like after having done that, now, what’s your proven investment and materially changed, so people who prefer investment have people who preferred superannuation or shares increased by about 25% each. So it kind of parented me that that framing, framing, investment choice, based on past performance versus expected future return, was very significantly different

Fraser Jack
did when I think about this, from the uneducated point of view, but I’m thinking about it from from point of view of conversations that I’ve had in the past. It’s those beliefs tend to tend to be there for a very long time, their cultural beliefs or beliefs of parents growing up and from an early age and, and how, how is it that people can change those beliefs by just a bit of logical evidence versus that emotional connection that they’ve got to?

Dr. Paul Moran
I’m sure they’ve changed the belief, if it really asked them, they’ll probably still say, probably doubles every seven years, right? That the heuristic people people go by, therefore, I can’t, I can’t, you know, I can’t lose on property. And people say this all the time. But, but the reality is that when you’re faced with a number on a page, especially if you’ve pushed the buttons on the calculator, which will sort of said yesterday, you get to get the chance to push the buttons on the calculator, don’t you do it, you get them to push the buttons, and they see the outcome, and they see what return that really means. Then they suddenly realized that doesn’t sound right to me. So it isn’t really a material difference between the two. So

Danni Visser
I’d be really in your research probably didn’t flex into this, but perhaps you have an opinion, poll is theirs beliefs are one thing, but is property preferred, do you think because I, I can. There’s that element of identity with property, I own all of these properties, and they’re, you know, things that I can talk around. Whereas perhaps that there isn’t that there is no ownership? Status? Yeah, that’s the word I’m looking for. Is a status element of having a number of properties. Whereas if you just have a SharePort, for like, it doesn’t seem as good really saying is boasting about Correct. unimportant, because I’ve got four properties versus a big share portfolio. So

Dr. Paul Moran
something else we looked at, is kind of the impact. I’m gonna say this. So one of the things we talked about yesterday is Prospect Theory. So that one of the one of the key behavioral finance theories, one of the impact that I want, it’s not the key, but the most popular, the most commonly known, you know, to Erskine Kanem. Ins, Prospect Theory. But one of the side effects prospect theory basically says people feel losses significant more than they enjoy gains in an emotional scale, right? It’s often talked about twice as much, but there’s no there’s no evidence at a scale of twice to one, but there’s more. But there’s a kind of less commonly known side bit of Prospect Theory, which kind of gets ignored. And that is when people are facing almost certain losses, they become risk seeking. Right? So so when people are facing almost certain losses, they start, they don’t know they are but they’ve become risk seekers. That’s

Fraser Jack
the reason that casino makes money again, gamblers.

Dr. Paul Moran
So this is this is exactly like I’ve lost 100 bucks of the pokies. I’ve gotta keep playing till went to win that money back. Right. So I’m looking for more and more risk over time. Now, I think I became interested in relative loss can not just actual loss, and relative loss is exactly what you’re talking about. If I’ve got friends who’ve got three investment properties, and I haven’t, I feel like I’ve lost compared to them. Right. And I better do that. Yeah. So the boasting about I’ve got three investment properties, and I great, has an impact on all the friends who haven’t got three investment properties, and it makes them want to feel like I’m going to take more risk. Now I’m going to do something else to take more risk. And so So, you know, I talked about, you know, young non homeowners highly at risk of, of Prospect Theory in that sense, because I’ve got to pay whatever it takes to get into the market, right? Doesn’t matter. I’ve got Mum and Dad, give me some more money on a, you know, a lot of the bank, I want to borrow more money, I’m going to give myself as much as I possibly can because I’m because I’m risk seeking, without any sense when we say people now who in their 50s had debt that they will never repay their lifetime. More and more people are absolutely relying on inheritances to get out of debt. So you know, so I feel

Fraser Jack
like people in property, more likely to ignore the downside. As in they will go, oh, the markets going up my house is now worth that. But when there’s a downside, they just ignore it because they’ll know they feel like it will come back. Whereas I guess with market prices being so prominent, this is the exact value of your super fund as of today. It’s a bit more in their face. Yeah, look, you

Dr. Paul Moran
can’t tell on the podcast, but I’m old. And I was around in 1989 when house prices go around 25% where the big recession that we had to have at a time and but Literally house prices go up 25%. Now the only people who notice that will people have to sell. If I didn’t sell will house price didn’t fall. Yeah, they did. I fell about 25%. But no one experienced that unless they had to sell. Nobody felt the pain, the ones who had to sell because I’d lost the jobs and couldn’t pay the mortgage is when you’re 29%. They really felt the pain. They lost everything at that stage. And there’s people around who still experienced that. But but if I didn’t have to itself, then I didn’t really notice it. Yeah. And so, you know, at the moment, we’ve had this period of really, really ultra low interest rates emergency low. It’s never been foreseen low interest rates, but it becomes normalized really quickly. And so we’re going to try to wear at the moment, which still aren’t normal. So fibers and mortgage rates still very low. But people are panicking about a 5% interest rate. Yes. So

Fraser Jack
I think there’s a little bit of media in that too, with regards to the just focusing on the increase. Paul, thanks so much for coming on today’s comment with today’s conversation. If somebody wants to continue that conversation with you and have a look at that research done, what’s probably the best way that they can reach out to you.

Dr. Paul Moran
Like you’re probably Email me if they want to. I’m certainly if they’re at the Congress, listen to the podcast. We’re at the standard the AIPAC by Stan but otherwise I can look at looking at Paul Paul Paul, that I find that Kamala uses he uses plastic to catch me so

Fraser Jack
wonderful. Thank you very much. Cool.

Danni Visser
Thanks for chatting. Cool.

Fraser Jack
All right. Thank you. Hello, everybody. And welcome back to this podcast series we’re doing from the Financial Planning Association Congress, joined by Danny, thank you for joining me, Danny.

Danni Visser
Thanks, Fraser. I’m still here. It’s a mini series. But there’s lots of sear. There’s lots of episodes within the miniseries absolutely covered 17 conversations yesterday.

Fraser Jack
So many don’t introduce our next guest on

Danni Visser
we have been Martian. So head of policy, is that the correct term head of policy at the FPA.

Ben Marshan
I’ve actually had a title change.

Danni Visser
Should I start that again? Because that’s how I’ve always known you that?

Ben Marshan
Well, yeah. NiteSite. I’m technically the general manager of policy and advocacy. But I like my old title, which was head of policy, strategy and innovation, because I like the strategy. And

Fraser Jack
Ben, thanks for joining us. New Title new role, same same position, same job, same job, amazingly, this, everything you know, then we’ll do it. You will also get done within the financial planning association is that the guy who loves technology, so anything that there’s technology involved up in Bend will take take care of it.

Ben Marshan
It’s more i when you’re reading 300 pages of legislation and writing 150 Page submissions to government and regulators. You need something to keep you sane and technology is that for me.

Fraser Jack
Fantastic. And so one of the sessions we want to talk about in this class, as well, selfishly I want to talk about it is one of the sessions that came on the day before the Congress. Tell us a little bit about that session.

Ben Marshan
So we have been running training sessions for members on doing video essays. And the idea there is that if you have a look at our six regulatory guide, 90, what they say is that they’re technology neutral. And Fraser and I worked two and a half years ago on a paper called The Future of the SOA. And we tried to encourage everybody to use digital tools to better engage their clients. And I think we’ve COVID Royal Commission implementations, everyone’s gotten really busy. So what we wanted to do was go really extreme, what’s the most what’s the cheapest and most efficient and most engaging way to provide an SOA to the client? that’s legal. And video, is it. And I was, I was reflecting yesterday in the gin session that we had, I would have been interesting reflections. It was an I probably reflected a bit more on the quality of the gin. Later in

Danni Visser
the Christmas one was my favorite feeling

Ben Marshan
is early this morning. And he was talking about the sandwich theory, which and he was talking about the fact that people don’t like to cross the road to buy a sandwich. And what we do in financial planning is we spend 10 to 15 hours making a sandwich that nobody wants to eat. So the video SOA is the sandwich theory that the the most efficient way to document the advice that you’re providing to a client is to record it when you tell the client so as long as you meet the eight requirements of a statement of advice.

Fraser Jack
I love the Word document as a documentary, yeah, that’s documented on film, not on not necessarily on paper. I think that’s certainly something that is something that people can get their head around. I also refer to the document of advice being the document device and a statement being the words that come out of your mouth. Now, the statement of advice is one of those things that regulatory disclosure requirement. There’s lots of moving pieces to that puzzle. For example, you need to make sure you’ve got a basis of advice and you’ve know your client, you got to make sure that you’ve scoped the advisor appropriately, you’ve got to make sure you cover off on strategy and product and how you selected product. And you got to make sure you’ve talked about fees and all the other things. So how do how do planners do that then in the process of a video, I mean, one of the I think the key takeaways that we’ve spoken about a lot is the fact that it’s not a pre prepared video.

Ben Marshan
No, it’s not a pre prepared video. So when you’re in that meeting with a client, where they’re where you’re providing the recommendations to them, and you’re talking through the strategies, and you’re talking through the products, as long as you hit the eight points that you need to in an SOA, then you have met your disclosure obligations in terms of the SOA. The only really tricky one is how you put a cover page on an SOA with the title statement of advice with your AFSL number and who’s providing the advice. But if you get past that one, you will go through the client’s financial position, you’ll go through their goals and objectives, you’ll go through the strategies, you’ll go through the products, you’re talking about the benefits and disadvantages of those. If you’re replacing one product with another, you’ll have that conversation with a client, you’ll have a conversation about fees. And if you’re doing all that, then you made all your regulatory obligations in terms of the SOA. And so the only thing that you probably want to think about the licensee might want you to think about his helmet, how you make sure you cover off all of those things. And so what we’ve done is created an agenda. That is just a plain slide deck, which you can make look really good. You can, you could print it out, put it on the table and make sure you go through the points, you could create it into a presentation, you could build it into your software flow. But it makes sure that you go through all the points you need to to cover for your regulatory obligations.

Danni Visser
It’s interesting, we were speaking to Cory yesterday, who’s now started to embed the video. So I so he has saved was at six hours in that process dramatically

Fraser Jack
changed their advice process. And it was really a lability of advice as well.

Danni Visser
And he was sort of talking around how it’s really nice, where finally there’s a space where the client experience and great advice can actually lead the process rather than a compliance framework. So that’s yeah, I mean, how is the adoption feel like are there people taking up the ideas, what sets the adoption of this SOA in uniform.

Ben Marshan
So we’ve had more than 140 planners come through the training sessions that Fraser and I have run. So for the last 12 months or so

Danni Visser
that’s a lot of hours.

Ben Marshan
And we’ve got a we’ve got a great community of planners who are helping each other and having conversations about how the get their compliance teams across this, how to get their PII insurers across it, what technology they’re using. And we’re seeing a lot more members out of that 140 start to actually produce video essays for their clients. And the feedback we’re getting is that, depending on how long it takes to edit up the document, they’re saving 10 to 15 hours per client in the advice process, which is probably seeing another two to three clients a week or even a day in doing that in saving all that back office time and effort. And the clients love it. Because as much as you say, as much as people kind of go, our clients really going to be comfortable watching a video back. People actually love watching videos of themselves. That’s why we have mobile phones. And that’s why we take videos of our experiences, selfies, selfies.

Danni Visser
They’re all the thing in Bondi where I live.

Fraser Jack
But it’s also the fact that when we talk about watching a video of themselves, it’s rewatching. The video, right? Because they’re watching, they were already in the conversation in the first place, they experienced 100% of the advice that it’s not like they didn’t read the document of advice that, you know, they can’t get away with saying I didn’t know or you didn’t tell me at the time because they were there they were they experienced it

Danni Visser
and different learning styles as well. Like if you’re if you’re if hearing how someone speaks or reading something is not your learning style. It’s not my learning style. I’m a very visual learner, it’s very difficult to take a lot of information in when it’s presented in a way that doesn’t absorb. So having this video SOA and thinking how you include it into your software flows, you said Ben is you can get really creative with adapting it to that person’s learning style, because you really want them to understand the advice given

Ben Marshan
Absolutely. And Michel LaVey was talking about it yesterday on stage, he was talking about the fact that the current legislative framework creates this process flow and you know, it says who can provide advice and who can’t and what documents you have to provide the client and what your conduct obligations are. But she says it doesn’t make sense. what the client wants is advice. And the real way the client gets the advice is when you speak to them, and you have the conversation with them, and you make the recommendations to them. And they say yes, that makes sense to me or no, that doesn’t make sense to me. Let’s change this around. That’s when advice is provided.

Fraser Jack
Yeah. I really think that from a consumer point of view, there’s two things they want. They want advice but they want to plan. They want a financial plan and most people come in thinking that they’re going to get a fine If you’re planning on when they see a document and think, oh, that must be my plan. And people have said to me, and we’ve had a lot of, you know, year, but what about that conversations over the years and people have great objections, which are all worth exploring? And even right now, planners say to me Look, you know, I think my clients would still want some sort of paper, and I’m thinking well, to do a plan, give him a plan, what they pay for, it’s really good point. Yeah. And, and so and so if we, if we get that if we’ve done the disclosure requirements in the conversation, then the the document, we’re talking about a paper or a visual piece of paper that can be online, but it might be able to be printed, could still be something that’s a lot more visual and be more around their plan rather than the the disclosure requirements.

Ben Marshan
Absolutely. And part of the problem with ADPH, under Page SOA is is an a4 piece of paper restricts you in how you communicate with clients. Whereas if you provide them with a plan, there’s lots of technology solutions that give you an infinite canvas, you can make that plan as big or as little as what you need. And the client can zoom in and zoom out and engage with it in a way that makes sense.

Fraser Jack
Yeah, I think one of the big blocks with with a lot of the technology providers out there has been trying to convert that that content that they’re creating, or the or the graphs they’re creating, or the data that they’re producing into a document. And if you’re avoiding that piece, you can still demonstrate on a on a visual screen in a beautiful way, what that what that projection might look like, or that strategy outcome might look like. Or that product selection might look like in on a screen rather than having to then convert it to an a4 piece of paper. That’s right. And

Ben Marshan
I think, you know, even technology is guilty of this. They’re guilty of, of creating a process and creating tools and creating solutions that they think consumers want. But what they’re actually producing is what licensees one, Iris yesterday was on stage talking about the fact they got two and a half 1000 screens that a financial planner can go through when they’re talking to their clients about advice. That’s not what clients want. Clients just want to know how they can meet their goals and objectives. They just want to know how the strategies are going to make their life better. And you know, some of them are going to understand salary sacrifice, and some of them are going to have to talk through the process.

Fraser Jack
One of the one of the things I’ve really enjoyed through this process, Ben is the fact that there’s been no legislative change required to do this. Now we’re not waiting on the legislation changes. There’s been no different technology systems have to be prepared. Everyone’s currently using zoom or teams and they know how to record a meeting.

Ben Marshan
Absolutely. No, and that then that that’s exactly what we’re pointing to you can in the conversation you have with the client, you made all your SOA obligations. You To your point praise already using zoom, you just need to make sure you got a camera that picks up you and picks up the client, you need to have a microphone that picks up the conversation. And you need to record the screen to show them the information you need to show them and you’re you’re done. Yep. And Asik. I mean, we’ve got acid coming at a session shortly. I want to ask Leah Chaka from Asik the lead of advice and ASIC is video SOA, alright. And I know she’s going to say yes, because we’ve had that conversation that many times the regulator says they’re technology agnostic. As long as you meet your obligations, then it doesn’t matter how you document your advice.

Danni Visser
He started this process many years ago, like talking around the video SLA. Has the regulator always been supportive? Or is that been the journey that you’ve taken? Like from the beginning? Did they say yes, we were agnostic on how this is delivered? Like what’s that journey been like?

Ben Marshan
So in 2017, as a graded rj 90, and they had some consultations and phrase, you’re in a different different job, but I was here at the FPA at the time. And we started having conversations and we asked, kept making the point where technology neutral. We don’t we don’t really care what the document format is, as long as you meet the obligations, and we asked them to clearly spell out knrg 90. Our infographics are right. I said yes, infographics are right. Our videos are right. Yes, videos are on our audio clips are right. Yes. Audio clips are all right. Can we do it digitally? Can it be in an HTML file rather than a paper based format? Yes, that’s fine. And we kept going through list of different technologies and they kept saying, yes, that’s fine. So since 20, previous answer yes. Yes. Yes. So ASIC, ASIC in their regulatory guides, RG 90 talks about the SOA RG 244 talks about the delivery of disclosure obligations and it talks about being technology neutral. So they’ve they’ve said it’s fine and then the other year about that comes up is yeah but what after gonna think about it. And and you know, We can, we can grab the guys from Africa who are here as well. But um, but they love watching videos, the conversation you have with the client. And what they can do is really quickly point out to the client. Actually the thing you complaining about you and the planner talked about at that minute. And you explain back to the plan and what that strategy was and why that product was right for you and why you agreed with it and why you understood it, it met your goals and objectives, what are you complaining about

Fraser Jack
any dispute resolution is very fast for both Africa or Pei, for that matter, they either know straightaway, whether it is a claim or it’s not. And it gets settled, so that there’s not that ongoing, a large legal obligations around, you know, trying to gather all the evidence is all there. And when the regulator’s do those file reviews, they do a full file review, it’s not just the video that the statement of advice or whatever, maybe it’s everything that you’ve got. So probably file notes, all those sort of things as well. So it’s very much around, you know, complete file No. And just just on as a cover from all the dealings I’ve had with ASIC over the years, that they’re, they’re not so much the police like they’re made out to be, they’re actually just a protector of consumers, right. And so most planners that I know, are also the protector of consumers. And so they’re kind of on the same play page to me as a lot of planners. And I know that this is this fear of ASIC, when really the face shouldn’t be of ASIC if you’re doing the right thing by consumers. And you’re predicting them that you’re on the same page.

Ben Marshan
Now, and I think if you have a look at that action ASIC has taken against financial planners over the years, they’re pretty egregious examples of terrible things that financial planners have done to clients and ASIC should be taking action against those people who are ruining clients lives and creating a bad reputation for planners. But they’re not the bad guys in any of this. And I have a very, very strong and good working relationship with ASIC. And I can ring them up and ask them questions and clarify things. And they’re real, nice, lovely people.

Fraser Jack
And one of the things I just want them to quickly cover too is that we get this question a lot is, it’s great. If you’re doing a Zoom meeting or a team’s meeting, you can record that online, and you’ve got the client at their house and you at your office. But what about for people coming into offices? We can be coming back into offices? How do you do a video SOA for in person?

Ben Marshan
Yes, I mean, it can be as simple as just pointing the camera at the room and making sure you’ve you’ve got both you and the client in there and hit record on the Zoom meeting that you otherwise would have been doing. There’s a lot of screen capture technology if you want to get a little bit more sophisticated. But if you’re used to using teams, if you used to using zoom, to start up a Zoom meeting, and only have one participant in it, which is the room and share the screen into it, and yet bring everything in probably

Fraser Jack
the final objective I want to get to before we finish this podcast is the concept of recording and that mindset shift that if people aren’t currently recording their meetings, they have a fear around odd clients wouldn’t want to and yet when every time we talk to people who record the meetings in client never say no, hardly ever say no. I think

Ben Marshan
we had we had one person who had been recording their meetings for five years, two days ago. And he said he’s had one client in that five year period. So they weren’t comfortable with the meeting being recorded. That’s not the right client for him. You record these meetings. That’s his process. That client is not his client.

Fraser Jack
Yeah, fantastic.

Danni Visser
I have a very simple question. And I might be missing something here. But this seems like such a logical solution. It seems like it’s almost for lack of a better example, the Uber of like the Uber, that was always something that we should have had but took so long to get here or the Airbnb, what has been the delay in brief if Essex never had sort of a problem with how technology’s delivered, and this has been something that’s been taking a bit of time to come through? I know you’ve been talking about this for a long time, Fraser, what what is it just how thorough the process has been? Or has there been? Because it’s taken a couple of years to bring this to life for people to start adopting it, what’s been the sort of time delay?

Ben Marshan
So there’s two issues in my head, and maybe you’ve thought of some more urban issues. Number one is when the Corporations Act came about and statements of advice were put into the law. Honestly, the best piece of technology you could, you could use to consistently provide advice to your clients at that time was was word processing. And so it was a natural, natural way to deliver. Documenting your advice to the client was to use Word documents that made sense at the time you could, it was a step up from using the typewriter at the time it was and you could use templates and it was the most efficient way to do it. The reality is we’ve had and it’s not today. The quickest and easiest way to create a document today is to pull out your phone In Geopoint, turn the camera around. So it’s recording you and press record. And that’s the quickest way to document something today. But the reality is we’ve had nearly 20 years of constant regulatory change. And so anytime financial planning businesses had the opportunity to sit down and actually make a change to their business, it’s probably to be been to implement some piece of regulatory change. You think since 2007 2008, we’ve gone through the GFC. So that was chaotic for us. We then had FOFA. We then had the professional standards and education framework, we have the life insurance framework, we had the Royal Commission, we’ve had the Royal Commission implementation, I can go on. Right, so So anytime we’ve had time to money, we’ve had to make regulatory change. So we haven’t had time to sit down and think about is paper still the right way to record?

Fraser Jack
I also think, I suppose I think if we go back to that, when if as I came in, in 2001, the lawyers read through their legislation, they went, this is a obviously it’s a document, of course, it is what could about our school to bake because everything that legal, has done in the past, whether it was riding wheels, or creating contracts has been on paper. And so they were charged with the task of creating a document that would suffice to the legislation. And so ever since then, we’ve been at the mercy of the legal paternity that says, This is how we do things. Now, the the fact that the statement of advice is not a document, and sorry, it’s not a contract. It doesn’t have to be a document, it can be a statement, you can state it, just as we’re stating our opinions on the podcast today, without anything in writing. So I think I think we get stuck in this place and the the compliance teams for Eva cells, they just do it, the lawyers say you know, they just go well, we’ve got to make sure that that our business model, which is our license doesn’t get taken away. And then we do that through a legal form. So I think what’s happened is, it’s been legally led, and not so much consumer LED. And the whole purpose of a statement advice is to provide the client with the relevant information that that particular client needs to make an informed decision. Right whether to proceed with advice or not proceed with the advice and that is the purpose of the statement advice is not about producing long documents, which we’re about used to clients come in, they want advice, they want plans, and we go and give them an SLA because that’s the way the law is assumed. We need a contract but it was not a contract. That’s my high horse. Game a soapbox Gosh, it’s

Danni Visser
a good soapbox. I learned a lot from that thanks Fraser.

Fraser Jack
I’m just like black information I think we probably should wrap this one up.

Danni Visser
Wrap Fraser up that’s

Ben Marshan
why it takes a full day session to train everybody up

Fraser Jack
on somebody turns praises mic down before he gets himself in trouble.

Ben Marshan
But the the training sessions were doing were answering all these questions or answering these Yeah, bots, were talking to compliance people were talking to lawyers was willing to pay AI. But the training session is really about making you comfortable with the process what you need to actually cover off. And then we do a heap of of live action players, we get the we get the bad video, SOA is out of the way, in a safe environment with us. And what our members are doing is going away having done two or three video essays in the training session, and they’re ready to go back to their office and start doing it with their clients. Yep, that’s

Danni Visser
fantastic that so much rigor is being put into this rather than just being adopted. Because if everyone’s really thinking about it, and thinking about whether it’s something they want to do, and it’s taking a lot of time to think through that and work through that, I don’t think that that’s a bad thing. I really care about the quality of whatever they’re doing.

Ben Marshan
Yeah. And I’ll just repeat what we said at the moment. It’s a recording of the meeting with the client, it’s not standing in front of a green screen and and just speaking out into the world. That that is adding additional time to your advice process the same way that the creating a paper based SOA is we’re talking about recording the meeting, you’re having the meeting anyway, writing device anyway, just record it then and now you’re at regulatory obligations and you’re done.

Fraser Jack
Follow it follow a fairly strict agenda that makes sure you cover your points and actually make your points.

Ben Marshan
Yep, Save File Share the client. SOA out

Danni Visser
the door. And that’s a wrap. That’s a wrap. Thanks for joining us, Ben.

Ben Marshan
Thanks, Danny. Thanks Fraser.

Fraser Jack
Thankyou.

Danni Visser
Good morning everyone. Welcome back to our very long Micro Series of fireside chats. We’re into day two. So we’re at the FPA Congress. It’s the 30th birthday of the FPGAs Congress. So it’s fantastic to be here. Now, Fraser has darted off, and I’m joined by a new co host. Hey, Clayton.

Clayton Daniel
Hey, how’s it going?

Danni Visser
And we have a very special guest to kick off the discussions. Hi, William. Hey, going? Good. Thank you. So can you before we dive into your session and what you’re talking about at the FPA day, can you tell everyone his list saying a little bit about what you do because it’s a bit unique. Sure. So

William Johns
I’m William Jones, the founder of two companies health and finance integrated, which gives advice to people after suffering a complex health condition. And claim right, which is a claims platform administration service that makes claims easier for things like NDIS, Centrelink, and insurances. So we do everything.

Danni Visser
Fantastic. And you’ve also had a heritage of being a financial planner,

William Johns
correct? Well, I am a financial planner, but I’m also a

Danni Visser
practicing financial, financial planner, wearing many hats wearing

William Johns
many hats. But these days, I’m more of a ticket. So people come to me for tech advice, if you like. And I’m not talking about like computer advice. I’m talking about like technical

Danni Visser
clarification these days. No, thank you so much.

William Johns
But also, on the I hold a Master’s in disability studies from from the School of Medicine. So that makes it a little bit better for me when it comes to understanding impairments and disability.

Danni Visser
I’m so glad you explained all of that, because I would have Yeah, I would have got lost in all these are ciments. So thank you. So how did you get up? How did you end up in the claims disability space? What drew you to that particular area

William Johns
back in when I started health and finance integrated, we had a great relationship with Ms. Australia, they put me up as, as a guy that people with MS should go to. And what happened was, I was getting a lot of people seeking my advice, after having seen a legal representative, a lawyer, legal specialist, etc. And by then it was too late to do any meaningful work, because the way that works is that the lawyer would do the claim and they do a fantastic job. Right? They don’t a fantastic job. But then the way to get paid is to take the money out of the superannuation system and put it in the lawyer’s trust accounts, the lawyer will take their fee and they give the residual to the client. And by then the tax has already been withholding withheld from by the fund. And Centrelink and everything else has already factored in that this person has got all this money out of super.

Clayton Daniel
So for a lawyer to get paid, it screws the client.

William Johns
Right. Well, yeah, I mean, but that’s the deal that the you know, the lawyers job is not to kind of

Clayton Daniel
future financial planning. Right. Yeah,

William Johns
they’re there to execute a transaction. Yeah. efficiently. And yes, I want to get paid. Right. Yeah, right. Right. Right. Right. And so I kind of thought, Okay, well, what we really need to do is speak to the lawyers about, you know, the process, and I did, and they kinda listened. But the reality is financial planning takes a good month, two months. And so for a lawyer to kind of say, Look, I’m gonna, I’m happy to hold on, you know, my payment is going to be pending. And then there is no guarantee because Superannuation is a protected thing from bankruptcy. A lot of these people didn’t have any other money. So there was like a trust issue by, you know, the lawyer client issues and all that sort of stuff. And I thought to myself, Well, I think we can do this better. And I think we can do it cheaper, how much you charging, you’re charging X percent? I think I can do it for 1/5 of that. And that excellent. And that kind of got me thinking about how do I measure body impairments really efficiently because part of the issue that we were having is that Medicare is didn’t understand the disability definitions. They didn’t understand. Somebody is diagnosed with MS. But what does Ms mean? Like? Is it a cognitive impairment? What’s the rate of cognitive impairment? If somebody is got heat exhaustion? Okay. What does that mean, in the workplace? If somebody’s got bladder control issues, how often how frequent. So you needed an Occupational Physician to interpret the what Ms really means or a neurologist to go into it. That meant that there was a lot of money being exchanged at the medical side of things, for people to write these reports a lot of time wasted. And I figured, wait, I know how to do this. I’ll create the the app, the ecosystem that measures impairments, and we will then generate a report to go to their normal GP, who will look at this and say, gee, this is pretty good. And I’ll sign off on it. And that’s what happened. So that’s the claim, right? You know, that’s how we’ve been able to add efficiencies and reduce costs.

Danni Visser
So you’re talking about all the whole person impairment measures, right, right, right.

William Johns
Within within 25 minutes. Yeah, exactly. Within 25 minutes, we know exactly where the impairment is how severe it is. And we generate a report that is comprehensive,

Danni Visser
because you take that to two or three different doctors. I know from my time in insurance, if you take that two or three different doctors, you’ll have two or three or four or five different measures of whole person impairment on depending on how they’ve done that sort of measurement. So that’s fantastic. Exactly. Centralize that and given them a little bit of support and calculate Exactly,

William Johns
but the thing is, when we designed it, we didn’t just design it for the purpose of insurance claims. We designed it for Centrelink, and we designed it for NDIS. And so what that meant was, I achieved what I wanted to set what I set out to achieve with when I started the financial planning side, which is I want it to people, I want people to have suitable accommodation, stable income, and good care. And so by us being able to, you know, do the claim, often what that meant is that the money was then being used for the purposes of housing, etc, but appropriate housing, you know, paying mortgages, etc. The second thing I wanted to do was ensure that the Disability Support Pension or any other benefits were, were being paid quickly. And the rate of rejection is 74%. On this, so I wanted to reduce that, and we reduced it now we’ve got a 5% rejection rate, whoa. Which is like 95. So like, this is Australia wide. It’s 76% rejection, right? Or 7476. I wanted to reduce that, because there’s no, I can’t understand how we could have a margin of error.

Clayton Daniel
75 75% We’ve done this, but we’re wrong. 75% of the time. Yeah.

William Johns
Like if you’re if you’re if you’re a government body, how could you be proud of a margin of error of 75%. So to me, there was something wrong with the system. And I’ve discovered that it’s an actual impairment, ratings and measurement payments, and what it means to have a permanent impairment versus a doctor who says this person can’t work any more complicated, right? It’s so complicated. So this

Danni Visser
comes to your session that you’re talking a day later today. So you’re going to be breaking all of that down? Well,

William Johns
as much as possible. I mean, we’ve got 45 minutes to kind of break down a whole lot of stuff. But this gets people to start thinking about where the issues are in the system. So maybe they can do their own digging, and get them to start thinking about these things from a strategy point of view. And that’s what it’s about.

Danni Visser
So what are the things in that 40? You’ve only got 45 minutes? What are the things that are really important for? What are the pitfalls that you definitely want to avoid? In your strategy piece in this disability space?

William Johns
I think you’ve got to understand that perhaps financial planners can play a exceptional role in, in what disability is, and how to remove that disability and create abilities. So it’s a matter of I mean, you are disabled if somebody keeps reminding you that you are faced with challenges all the time. And so is, is there a space where, or room for a financial planner to remove some of those obstacles out of the way of the systems that were associated with? I’ll give you an example of that. So and we’re not talking about disability now. But we’ll talk about disabling factors. Let me give you an example. Somebody goes and applies for insurance. They’ve got, they go and see a psychologist because of COVID. The psychologist says you listen, you’ve got generalized anxiety disorder, and we then get a exclusion for mental health. Okay, so there are two obstacles that can be removed by the financial planner in this point, first of all, a generalized anxiety disorder is a permanent condition. The question is, is this really Generalized Anxiety Disorder? Or did the guy just have a hard time during COVID? And if that is the case, then you would go back to the psychologist and kind of challenge them push back, say, Hey, this is a permanent condition, this guy is fine. Now, how could it be that he’s fine if it’s a permanent condition, without medications without therapies? Ah, it could be what they call adjustment disorder, which is basically burnouts. Right? And you think, ah, because when you do something like slap somebody within a generalized anxiety disorder, you need 20 visits, not one or two to slap somebody with a with a disorder. Totally. And so guess what? That was last week, we had this case, the psychiatrist came back and he said, Well, yeah, you’re right. We’ll remove that will. So then they gave the client two years exclusion, mental health exclusion to be reviewed. The next question, if I wanted to push back on that, I would say, okay, under Section 46, of the Disability Discrimination Act, the insurer has three ways to discriminate by slapping a exclusion. One of them is that you’ve got to show me actually, through actuarial data, or through medical data, or any other data that this person as part of a general population is going to have an episode down the track, or more likely, and they might come back with a legitimate data, but it’s on them under the DDA to prove to me otherwise disk nomination.

Danni Visser
So your every underwriters best friend? Well, I

William Johns
think so back back maybe six, seven years ago, I took a big company to the to the Human Rights Commission. And they said the Human Rights Commission said you’re absolutely right. This is discriminations, arbitrary discrimination. And now, of course, if you wanted to do something about that, like in practical terms, there is no, that’s an arbitration system. And if you’re not happy with arbitration, then you go to court, and a lot of people won’t go to court. But the point is this is that the financial planner needs to know these little things so they can do business better. And they can remove obstacles

Clayton Daniel
and serve their client better. Right. Right. Yeah. Right. Right.

William Johns
And it kind of makes us cool. Yeah. And it kind of makes us scary. Yeah. Makes it makes us the you know, the underdog. Yeah. And I like all that.

Danni Visser
I never heard underwriting claims cool. underdog. Reinventing things. Right.

William Johns
Right. Right. This is professional financial advice.

Clayton Daniel
So I interviewed William a while ago. And you’ve got an amazing backstory, right compared to like, for even how you got here, which I know is a one of the major sort of driving factors for even for you to describe what it is that you do as what you do. And so it all makes sense in in context, and I would welcome anyone to go back through the archives of the X Y podcast and listen to that podcast is one of the most standout podcasts, you know I was ever brought up. But what you what you are describing right here, and right now is truly what what financial planning is, because financial planning is understanding the rules in your subset better than anyone else, including the person you speak to with the government, including the person you speak to at the product provider, including the lawyer that deals with this, the psychologist, and it’s not always going to be around health. Right? Yeah, there are many different areas to go into. But the thing that I really, really appreciate what it is that you do is that you created your own skill set to become an expert in what you saw as an issue. And and find that is financial planning the the level of area that the amount of areas that you can go into and deep dive into because, you know, you know what it took for you to become proficient at what it is that you do hard work much more on time in your Graduate Diploma, where you learn about how to do a risk assessment, right, in that pursuit of, of a higher skill set by just so appreciate in any financial planner,

William Johns
I agree with that. And you find that the best financial planners are financial planners who tend to start being inquisitive about this. Absolutely. Because they identify that the job of a financial planner is to be the conduit between the person and the financial system. Yep. And the financial system is not just superannuation or insurance. It’s an entire ecosystem. Oh, yeah. That includes when somebody gets into hospital, they go to find a sign, financial consent, stuff like that, like I got into hospital, and they got me to say, you know, this, this and that, and then they gave me a $3,000 bill. And I was thinking to myself, I never signed anything, because I know from my time as a financial planner, I need to sign something, to consent to spend money. So I dug up. And I found that before any surgery that the doctor is kinda like a financial planner in a lot of ways is that they have to get a signature like we get on an SOA. Now my doctor never got a signature from me. And so therefore, they can’t charge me. Wow, I went back to him. And I said, Hey, I looked at this consent stuff. And it sounds like you’re like me, I can’t charge without having consent. Yeah. And you can’t charge if you can’t, yes. We stopped up. Do you want to find that?

Clayton Daniel
For 20 years, I’ve just realized it’s been illegal.

William Johns
Now, listen, I ended up paying the guy shot.

Clayton Daniel
But it’s still the point. Right? Yeah.

William Johns
And I look, I mean, I’m in a privileged position in that I’m also the chair of the CERTIFIED FINANCIAL PLANNING designation. So a lot of the stuff that we’re talking about now is going back into the practice of financial planning and the Certified Financial Planning Program. Do we have do you know, we want to move away from you know, what universities used to teach 20 years ago, to something a bit more dynamic to make it more relevant, and people want relevance? Yeah, this is relevant.

Clayton Daniel
Yeah. I couldn’t agree more.

William Johns
Yeah. Great.

Danni Visser
William, thank you for joining us in this morning’s very early sessions. I’ve learned a lot. I look. I am going to try and get to your session because it sounds amazing. Thank you. Good luck. Appreciate it. Cheers, mate. Cheers.

Fraser Jack
Hello, everybody. And welcome back to our podcast, mega where we got a mini mini series brought to you from the Financial Planning Association. I confront Congress. So I should say, day two, day two we are, I’m losing my mind already. Danni and I are joined by the honorable, the Honorable Bernie Ripoll. Welcome. Thank you. Great to be here. Fantastic to have you along. Now, of course, we, most of the people know you from your original work that you didn’t superannuation, the Ripoll report.

Hon. Bernie Ripoll
Yep, yep. So yeah, seems quite some time ago now. Because it was, and it was a major piece of reform, really born out of the storm financial collapse and born out of the 1000s of consumers really losing their life savings through mismanagement of schemes and a whole range of other things. And, and, and I think, at that time, it was probably the straw that broke the camel’s back to use that sort of analogy around the parliament needing to step in and do more for for consumers and really led to some some big thinking around where the future financial advice and advisors would be. And, and today, obviously, we’re here talking about, you know, what does advice look like in 2030? Yeah, well,

Fraser Jack
talking about the future now. We’ve been through the past. Now, tell us a little bit about what you’re doing that these days, you’re no longer in a government role. You’re sort of working more in financial services. You love this space, you love the technology space, tell us about what you’re doing?

Hon. Bernie Ripoll
Yeah. So I’m with Otivo, which is the rebranded Matt my plan. And so we’re a self directed digital advice platform. I’d say we’re, we’re breaking new ground. And it’s always a challenge. When you’re doing that. You often hear about a lot of talk about innovation. And people say they’re constrained and no one innovates. And to some extent, I’d agree, I’d say that this sector hasn’t been innovating some good reasons why it’s expensive. And when things work, you just keep doing what you’re doing. But we had a really big vision vision, and we’ve got a big vision about what the future of advice looks like. And the key thing about that, is that right now, only about, you know, arguably 10 or 15% of Australians actually get advice. And our thinking is all what about the other 85 or even 90% of Australians who need advice, I think the demands there, but there’s a real challenge in terms of how you deliver that on scale affordably, you know, there’s all the things that we already understand. And so our mission really is to be able to deliver that quality advice. You know, it’s any Australian that wants it for the price of a cup of coffee a week. And that’s, that’s a big step change on how you get there, and how you make that real. That’s our goal. That’s what we’ve been working on for quite a few years now. Yeah. So

Fraser Jack
it certainly appears that the cost of providing advice has gone up a lot in the last few years, and certainly a lot more than a cup of coffee.

Danni Visser
Yep. And also, as we spoke about, I guess, the gap in advice, one of the widening gaps in the disparities, I guess he’s around when you look at women, and their, you know, their advice, and I guess things like the pay gap. And so are there any things that you’re doing to address like in that innovation space? To address those things? Because I think as an industry, we have been, and I’m always part of these conversations where we are always looking at innovation, but there’s still, I guess, a widening gap in some of those imbalances in Super balances in I guess, in in generic pay, those things are only increasing and COVID hasn’t started helped. Is there anything that you’re seeing in that 2030 vision to address those?

Hon. Bernie Ripoll
So So there’s, there’s a fair bit, and that’s good, because I’m trying to unpack a few bits of it sort of sequentially. But look, you’re 100%, right. And everyone acknowledges that there’s work being done in terms of gender inequity, and pay gaps and superannuation. And it’s a consequence of our economy and how we live our lives. And they’re really difficult things to fix, I think, for all of us, in terms of, you know, I think there’s a willingness, from a regulatory perspective, and Parliament and community, everyone wants to sort of try to get that balance as close as possible, a lot of work being done, still a lot of work to go, there’s no question about that, you know, what can we do? And what are we trying to do through our platform, probably the simplest way to respond to that would be to say, we’re gender neutral. What we’re really doing is providing a system and technology and a platform, which democratizes advice. It’s really about saying it’s open to everyone at a price, which is affordable to everyone and can help everyone regardless of gender or family circumstances. And so it really opens that up. Because often, the traditional model of advice the face to face, it’s expensive for a good reason, rather than for me to look at these things in terms of is it cheap or expensive, I say is a good value, you know, because it doesn’t matter how much you pay. If it’s great value, then that’s what’s important. It’s the value proposition. And I’ve always said to the financial advice sector, you should charge according to value and what’s appropriate, whatever that might be. I’ve done I give people a lot of money. But there’s also a really big piece that’s needed to help people on that life journey, that financial journey on how do they access it, how do they do it? And I think if we look at 2030 is the benchmark. You know, I’m looking What does an advisor look like? Well, I’d say just very simply, she will be a lot younger than what’s around today in terms of an advisor, the average age, also much better educated at the university education. And it’ll be someone who’s come to the industry direct, not from another sector. So I think that’s quite bright. And I think that the demand means that we’re going to have a lot more service needed for people providing advice directly face to face, expensive, time consuming, complicated, and a really big role to play for digital platforms and technology to support that, and begin that journey for people. You know, and

Fraser Jack
there’s plenty of good examples, but all Yeah, 100%. And obviously, the the session that you were involved in here at the Congress was, was about that, you know, 2030, that looking forward. And what might look like, technology to me is, has done a good job at looking at efficiencies, it’s done a good job, or looking at in a process. Outside of financial services, software, there’s other types of technology that does some great stuff in you know, medical fields, there’s some great technology that’s used and looking at capacity with a human. There’s some great stuff that looks at how does somebody have intimacy and intimate connection with the technology? There’s dating apps that have worked this sort of stuff out? Are we starting to start to see these other types of technologies then move into device?

Hon. Bernie Ripoll
Absolutely. And they’re already here, I’d like to say that our TiVo actually does a lot of that. So there’s two key components and to make it simple. One is dealing with complexity. We live in a very complex world, it’s not getting simpler, it’s actually getting more complex. And that complexity in that interconnectivity is what can really make a difference to someone who’s seeking an answer for a simple question is, what do I do next? So in terms of financial life, what do I do next? Pay is coming in. I’ve had a windfall, I’ve had a big cast, what do I do next? And so that’s where the technology can really help. And it can help to give you advice and nudges and provide options and people still need to make decisions for themselves. But you need to empower people. That’s the financial literacy piece, right? How do you How does someone get empowered? Well, they need to be financially literate, around what’s happening in their lives. The other really important piece around the technology question is really, that it becomes so integrated in your life that you’re no longer asking the question. And so for, you know, there’s lots of examples of that. I mean, no one thinks twice about, you know, texting or Snapchatting, or everything else, that’s just part of normal life. When you want to transfer even large sums of money to someone, you just get on your phone, you do it instantly right in front of them. We don’t even question that there’s something it’s integrated into every part of our daily life. financial advice is not not yet. But it will be. And the power of that will mean that that’s the empowerment, that’s what it will help people do to make decisions. And then whether they choose to just focus on the platform that has the critical data, they don’t even need to enter it manually, you know, we would do direct connections and drop downs from your bank accounts, from your super fund, from, how much you’re earning cetera, et cetera. So the tax already there, the big data drives it, and it’ll help to inform individuals on making better and better decisions.

Danni Visser
So when do you start to him? Because because all of those add ons to our lives and enhance our lives, and we kind of just seamlessly work with, yeah, they become part of our lives, because they’re kind of put into our world at a certain time and quite early in our journey. Whereas advice, sort of recently that we used to all have dolemite accounts or an equivalent. So that was probably the sort of the first integrate that now that’s gone. And then suddenly, people get to an age and they’re like, Oh, should you know this, this advice is a big jump. And it’s really interesting. We did a piece of work with Morningstar, recently around this escalating consumer trend of I want almost a transactional relate like, early in someone’s journey, they perhaps want a transactional relationship with an advisor, which is quite difficult under the current sort of environment. But I want to sort of partake in these apps that you talk about, and then probably go and foster this relationship. And I want to do it together for a period of time. When do you introduce advice, financial concepts, literacy so that they do become part of someone’s world and not this big leap that they’ve got to make at some stage? Because, yeah, that would be really interesting to get your thoughts on that.

Hon. Bernie Ripoll
Yeah. Look, that’s quite insightful in terms of in terms of that process, and we did sort of just touch on this in the panel session. The answer to that if we look forward is that there is no start point. It happens seamlessly. You don’t even know you’re getting the advice. That’s at the point where the technology really makes that difference. And that’s happening now already. So for example, a lot of people have got the an app to their superfan and so they get nudges from the super fund in terms of their balance where the deposits been made. So you’re starting to get

Danni Visser
He can’t be doing it yourself without any advice at all. Absolutely not. Not ideal.

Hon. Bernie Ripoll
Yeah. So there’s lots of platforms which are interacting with our life, that we you either have a choice or not a choice. But you know, we are in a compulsory system in Australia in terms of our superannuation, yeah. And so that is the base, and then you look at our digital life. In a cashless economy, we’re almost there. It’s not completely cashless, but we’re as close as we’ve ever been. And, you know, by 2030, maybe we are, maybe we’re not, but this seamlessness around, it means that no one’s getting advice anymore. It’s just part of every day, right now, the old system, which is got a great and bright future, which is that at some point in my life, I feel I have enough of the complexity and financial status or well being, you know, I’ve saved enough money, perhaps where I’ve got a large super balance, where I go and see someone, I make a conscious decision, I ring up, make an appointment, you know, in three weeks time, we’ll go and spend an hour and a half. And that’ll be our first appointment. And, you know, there’s this whole sort of very long detail complex, it’s very hard for people to begin that journey. And it usually happens a little bit later in life posts, 30 or 40, roughly speaking, right?

Fraser Jack
It’s not an absolute. Yeah, what I’m talking about is introducing systems and platforms and technology to assist humans in having that happen everyday, for them in the background seamlessly. And then the nudges come from, I feel like there are a lot of the time the consumer expectation is I don’t have enough to go to a financial planner, yet I don’t have enough to go to and then all of a sudden, we think we’ve got enough, and now we’re gonna go and so to be able to provide that, that that experience on the way through I think is really important. I think it’s really important to be able to make those miniscule steps. And to some of your points before, if you look back when we were 15, you know, 10 years ago, it’s we’ve come a long way. Absolutely. Yeah, we’ve come a long way. And so there’s, it’s exciting to hear about what the future

Hon. Bernie Ripoll
could be. Yeah, I did a lot of presentations over the last two decades, around change, and looking at technology and technology change and all those sorts of things. And I look back and almost laugh at some of those early presentations, talking about, you know, booking, booking a hotel on the telephone, you know, and, and just reminding people that the first real smartphone, the iPhone was only 2007 Oh my God, that’s just like yesterday. So we’ve come a long, long way. But it’s big leaps forward. So there’s periods where we just sort of everyone argues and debates over whether we will or won’t, and then it just happens. And no one talks about it anymore. Because it’s just part of your ordinary life. Yeah, you know, people talk about EVs, you know, like, Oh, I’m not gonna get one, or I’m gonna get one or that’s not gonna happen. I say to

Danni Visser
stop producing

Hon. Bernie Ripoll
any other car, any spot on is made for you, yes, you’ve got a bike or you’ve got an Eevee. Yeah. And suddenly, they’re just everywhere. And there’s lots of evidences through history, I love there’s this great image of New York City in 19, I think it was 1911. And it’s about 95% horses, you know, this horse poo and carriages, and it’s a beautiful photo. And there’s two cars, you can see these two old cars just sitting in there. And then there’s another photo, which is 1921. And it’s all cars, and there’s two horses, and you think, Oh, my God, and it can happen to you really fast. And I think that’s in a sense, what we’re talking about here today. But there’s 2020 vision, people need to open up their imagination, to what it can be and what it will be.

Danni Visser
What excites you the most out of that 2030 vision? Like what are you what do you go that and all that you could share with the listeners? And oh, look, we’re really excited about this, you’ve obviously got a more integrated model than an advisor might have, but what might you share with advisors to go this is the thing you should really jump on. And piggyback on

Hon. Bernie Ripoll
what really excites me about that vision of 2030 is that people have got back control of their own data and their own financial well being financial well being is. And the reason I say that is because financial well being it’s not about how much you’ve gone. It’s about understanding what to do the best with what you’ve got. You know, we’ve all heard the stories that you know, somebody on a very low income is the happiest person in the world. And they’re financially really secure. And somebody who earns many, many multiples more, is very unhappy, and they’ve dead broke. And so really, this is about democratization and empowering people and technology can deliver that because it gives you back your information and gives it back to you in a form. That makes sense. Because right now we have too much too much information right now, I couldn’t tell you, you know, you asked me stuff about my financial I

Fraser Jack
say you got too much money.

Hon. Bernie Ripoll
I don’t know where’s where and what’s why there’s so much but but when I use the platform, it gives me visual snapshots. It tells me on a day to day basis. It’s like looking at your banking app, and you go straight to your account summary and you go Ah, okay, yeah, I know where I’m at today. I know you know

Danni Visser
all of the important things that you actually need to do rather than the highs of

Hon. Bernie Ripoll
so that’s what’s exciting.

Fraser Jack
That is exciting. I love that I love the fact of bringing the world the emotional world and the in a logical world together and giving people control because they can see in visually understand where everything’s at. Bernie, thank you so much for dropping by the podcast. Bye Ah here at the Congress really appreciate you dropping your insights from your amazing session this morning thank you

Hon. Bernie Ripoll
Thank you absolute pleasure

Danni Visser
Thanks