Scale Up Series #5 – Paul Feeney – Transcript

Episode details

SUMMARY KEYWORDS

advisor, clients, people, advice, financial, plan, platform, talking, staff, pay, build, organization, business, moment, bit, investment, months, thought, surveys, product

SPEAKERS

Fraser Jack, Paul Feeney

 

Fraser Jack 

Welcome to the x y advisor podcast. A global community of financial advisors sharing and learning with one another to drive the positive evolution of financial advice. To get involved, go to x y advisor.com. Or simply download the x y for Pfizer.

 

 

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Fraser Jack 

Thanks for joining us on another episode of The X Y advisor podcast. I’m your host Fraser Jack, and we are talking all things scale. And so who better to talk scale and to introduce the idea of technology then Paul Feeny. Welcome,

 

 

thanks for being here.

 

Fraser Jack 

Now you run a startup, that’s probably not stellar anymore. It’s actually a full fledged, you know, ongoing organization, but around the idea of scale, influential advice.

 

Paul Feeney 

Yeah. So it’s basically a digital platform knowledge, anyone build a personal financial plan by themselves and figure out the question of what do I do next?

 

Fraser Jack 

Fantastic. So I will, we’ll get into the details here. But let’s go back in time a little bit. How did you start this process? I know you came from a, you know, an advice background?

 

Paul Feeney 

Yeah. So about 1516 years ago, I started as a financial planner in Sydney as an accounting firm looking after mums and dads moved across to perpetual looking after sort of the mass affluent, if you can say that. And then moved on to Credit Suisse, the private bank, looking after people on the orange list. So the whole gamut of type of clients from mums and dads right through to the Uber wealthy guy in the country. So I saw it all. But they all have a similar name, regardless of the comments. It’s really around, you know, what I want to do next. So what are the next steps for me to get there, so I can achieve the things that are important to me. And it’s fundamentally the same for people in the end,

 

Fraser Jack 

yeah, and you obviously had this idea in your head, it’s very difficult to affect change it at scale, when you’re only sitting in front of one person at a time.

 

Paul Feeney 

Yeah, that’s an advice business, you’re limited by the number of hours in the day, and how many hours you can work with people. And you multiply that by number of visors. And that’s how many clients, the firm can actually practice. So for me, it’s, it’s, you’ve got to look at it differently, if you want to sell that access to advice issues and check them is is the obvious solution.

 

Fraser Jack 

Yeah. And so obviously, a big fan of tech and other tech nerd, much like myself, we love the stuff. Tell us what the decision was then to sort of stop being, you know, a private, you know, ultra high net worth client advisor, which is, you know, some people’s dream, to almost doing a 180 and saying, oh, how do I how do I help all the people that can’t afford to pay for my exorbitant fees for the amazing advice I provide?

 

Paul Feeney 

Yeah, it was a dream to go and work for a Swiss bank, and all that sort of stuff, the ultimate in, in private banking, and all those sorts of things. And it’s not what it is what you think in your head, it’s nothing like that at all. But it was fun. I had a great time doing it. I left there and went start another business with a colleague and which took us to London. And we sold that out. And during that time, I was thinking to go to what am I going to do now. So I like giving advice that I don’t want to go back and do it the way I was doing before. And it just dawned on me. So surely, in a country like Australia, every single person should be able to have the information they need when they needed to make a well informed financial decision. And so Wealth Management what we do, I think we all agree it’s not rocket science. But it is a highly complex thing that we got to do. We’ve got to take into account a lot of variables. And there’s a lot of legislative environments around us, give us a framework that we’ve got to work with him. But once you understand what a person where the person is right now, and what they want to do, their data tells you what they should do next. Yeah. So because it’s a fairly logical process that we go through as advisors really treat aging, where money should go and everything else I thought, well, surely we can program this surely we can do it and but do it in a way where clients drive the process, so that you don’t need human beings behind there pulling levers and pressing buttons and so forth to give the advice and and that was the start of it. First thoughts of the Jeeva, six, six years ago, wrote a little, little white paper about it has done my thoughts have been brain down and down piece of paper and share it with some mates for some feedback.

 

Fraser Jack 

And you did that you shared it with a mate. And they said, you got to build it. Was that was that good advice for me? Or was that?

 

Paul Feeney 

Yeah, I keep looking back. And at all the depth of work and the challenges we’ve had, it’s like, gee, I think I’m onto something here. But I mean, the village idiot, or we are on to something, because it is highly complex in the synergy. And we all know as soon as you solve a problem for a client anything, what about a client like this, it Okay, we’ve got to solve that solution as well, we got to build that into the decision tree, and all that sort of stuff. But quite a few people seem to have a crack at it. And so I thought, well, just to do risk a bit more, I did a little video, I don’t know if you can still find it on YouTube, where we were, it was a demo, just saying this is what we’re trying to build. And I thought that, you know, if I get 500 likes, I’m going to build it, you end up getting three and a half 1000 likes inside two weeks, I thought, Okay, I’m gonna go and build it. And so you know, people say stop talking about it, just do it. So the avalanche kind of went had to do it

 

Fraser Jack 

with little validation to let you know that you’re on the right track. And of course, that tracks not in there’s actually an easy track. How did you go about starting up a technology business?

 

Paul Feeney 

Yeah. So like I said, a little bit of a brain dump to begin with. And I went out to find people that actually helped me build just the first little aspect of it. I had friends who have an agency, and I got them to build out the first MVP. We stayed with him for about a year or so. And then we started basically getting developers in house. But in between a the journey of, Okay, how am I going to fund it had to be to catch myself in the last business. But then going out and getting individual investors, we’ve said, brings another layer of complexity to what you’ve got to do when you’re running your business and everything else. So that was an interesting journey alone. Just the first investors came on. Literally, there’s a cliche thing, we’re actually at a pub, talking about what I’m doing. And I’m drawing on the back of the coast saying, This is what I want to try and do and the second work. Yeah, sure. Paul, when I leave, let’s, let’s give you a few bucks, let’s have a go. And that’s how it really started.

 

Fraser Jack 

Yeah, that’s always the way isn’t it with that first early reality, that they’re actually just looking at your passion for it, and you know, what you’re trying to achieve. And

 

Paul Feeney 

in any business, if you get external investors, they’re backing you. And because the story makes sense that they’re backing you that you can fulfill that story. So looking at two things that ultimately comes down to the backing yourself, and then the team you get around you. And then they continue to back you if you continue to keep them up to date, engage them and take them along the journey with you as well.

 

Fraser Jack 

Yeah. And as you start building out, one of the hardest things to get, as you know, new clients, new people on how did you go about that?

 

Paul Feeney 

Well, we’re basically in hibernation for about two years to build up. So we did a little MVP, shout out, got some more validation. So great. Now let’s go down and, and break down the process of how people manage their money and build out the tech and the back end. And so build that out came out with a really awful looking UX, it was described one, when I started, I don’t even know what a UX was. So I’ve come a long way, sort of built that out, and then started to get the feedback. And we got our first client, Ernst and Young to provide this tool, their staff that’s about three and a half years ago, that they come on board, which is great validation for us

 

Fraser Jack 

as a business. Now there’s that now, you brushed over the fact that this is two years in the making two years is not just a drop in the hat, that’s a long period of time where you’ve got to keep backing yourself and, and telling yourself that you are on the right track. And to keep going, I’m sure there was moments when you were ready to bring hitting install,

 

Paul Feeney 

oh my god moments where I’ve got the old, you know, looking up for jobs, it was nothing and I’m just gonna go back and get a job here. This is ridiculous. What am I just kidding myself that I can do this, no one else is doing it. So they must know something more than me. But then the little thing just in the back here, back your head, just keep saying no, you’re gonna have to guard this, you’ve got to have a guard. Because if you can do it, it’s going to be a great thing for a lot of people. And if you do well, by clients, everything else takes care of itself, my perspective, but there were lots of peaks and troughs continuing, but then you bring some backers up behind your name couraging. And they they bring other backers on there as well. So it starts to gather momentum itself, then all of a sudden, you’ve hired two, three people to help you build it out. And they’re responsible for their salaries and so forth. So you want to make sure it keeps going. And that pushes your momentum a little bit more. And then all of a sudden, you’re trying to do something and then you talk to the lawyers go, Oh, you can’t do that the regulation means this and this and says, Okay, let’s go back. Let’s try that again. And so you’ve got all these different competing pressures to try and get something up you want to make nice and easy. And then you’re doubting yourself that you should do it at all. But I don’t think anyone who started a business, whatever shape or size doesn’t doubt themselves at some stage.

 

Fraser Jack 

Yeah. Now your first client you mentioned was earnest and young. Internet really interesting from your point of view? Well, from the outside watching in at the time, I remember when you when you bet first happen, that was such a big deal. And of course, you know, bringing on such a massive client as your first client, but also, you know, you sort of built this thing so that people can get direction of where they’re going and sort of people assumed maybe it was for that the end of the market where people couldn’t afford financial advice. But then they could pick up a client where, you know, most of the employees are well paid, and theoretically know their way around a financial plan. At that moment,

 

Paul Feeney 

yeah. So it’s funny how we make these assumptions. Yeah. On Well, you know, the plumber with the leaky taps are the type of thing. I think there’s a lot of advisors, and I’m an ex advisor still am, I suppose, you know, just ignore some stuff. And if you want to focus, I guess, want to do other things. And so it’s those assumptions that we found really interesting. But I basically went through all of my network, and when we had the MVP, just going out and talking to people, and telling them what I’m doing, getting. And it was quite easy to get the meetings because all I’m doing is asking people who I know, for advice. Everyone loves to get a phone call, Hey, can I buy you a coffee for some advice, everyone loves that stroke of the ego and so forth. Yeah, I’m good enough. I’ll give you some advice. But it helped a great deal. It disarms people, they open up their doors and have a chat. And I got to a couple of partners in Estonia, and they said, you know, what, we just did a survey a couple of months ago, and the biggest issue was financial stress. So you’ve got to talk to so and so because this could be a solution for that. And so it’s the serendipity of actually having those conversations, that when you’re studying business, entrepreneurial, you’re running a business, if you’re not out talking to new people, and particularly people outside your circle, you’re going to miss opportunities, which can take you in a direction that you never would have thought possible. And I always thought advisors, they’re going to love this, we’re going to go there first, and they will go direct to consumers. But then all of a sudden, that sliding door moment opens. And this whole thing about employee financial well being we started doing that about three and a half years ago with them, opened up to us. And that’s been our focus now, as well. So it’s quite interesting how these things can happen.

 

Fraser Jack 

Yeah, this this is the validation moment, right? You’ve got a big client on. They are enrolling a stack of their staff into my plan. Talk us through that. What was the takeout? Like? Was it were you surprised in any way of what had that roll down?

 

Paul Feeney 

Yeah, so we’re learning as we go. Yeah. And so it’s interesting firms like that. We know, they’re all well paid. And they’ve got the financially astute and so forth. The average age of a firm like that with 5000 staff is 28. So it’s really heavy bottom on, on the lower age, which is a lower income, but still higher than the average person. But they are very much more technically like interested in using tech. So we thought, you know, we’ll just set up this website a while I’ll send a couple emails out of work. Great, you get a little lift, and it just falls off a cliff. So then we started to develop some internal webinars just to teach people about different aspects of financial well being what it means. But then how do you manage to do it? How do you manage your savings, your investments retirement in what is insurance as at work, and so things? And then we started to develop, essentially a six month promotional campaign internally, that the HR awards staff can use to implement within the organization. Because when you’re selling b2b, the person you’re talking to is thinking, not outside of price, like, how is this going to make my job more difficult? If it’s going to make my job more difficult, I don’t want to borrow it. So you’ve got to try and take all of those friction points away. And we learned that over the year or so for those guys. And now a new client, we get them up and running in a couple of weeks, we sit down, say what’s your internal promotional campaigns look like? for staff and communication campaigns? Right, some of them have a well being month, whatever is slot stuffing, and in between, so like, here are 12 different emails that we know work. And they work on these days at this time that we’ve seen. So we just give them a blueprint. So here you go, edit those documents, and and push that out. to totally make that seamless. We’re still experimenting and still making it up as we travel, as we all do. But it’s it’s trying to make it easy for them to get out there. But we got around about 15% penetration up to about 20%. And then we launched a new platform last year. And now we get I think $19.36 and 36 37%, across the entire workforce for some organizations is the penetration we get now. So that’s that UX stuff. And the better comes internally with them all. I think as well, the management like it one because you’ve got around FSL. So we’re, we’ve got around retail financial service license, we’re up regulated like any other financial planner, we choose not to push products, we’re just trying to come back to that later on. But just really focusing on what do they do next, regardless of the product, they can keep using the money I’ve got, but also what we do for the employer. And the management there is we provide macro de identified data that basically hides one of the financial pain points that exist in your organization. And we can break that down by gender, by age, group by office, all that sort of stuff. And we’ve now had some of these organizations come back to us and tell us that they’ve changed the employee benefits to better reflect what actually is happening inside your organization. So it’s quite powerful. And I’m quite proud that that sort of stuff happens as a result of our people using the platform provides a really good way to describe it, I would imagine Yeah. It’s nice is this. I mean, everyone is listening this most of us are advisors or listen to sort of podcasts and stuff. And all of us if we’re not here, because we actually want to help people deep down all of us if you really think you’ve got a desire to help people, otherwise you’re in the wrong game. Yeah, cuz there’s a social good to what we’re doing. If we improve people’s lives, they can do better things. They’ve got more money to do stuff, and they can help the community, the community is better, the economy is better everything. Everyone else is better off, because they received good advice. So let’s just try and make some more people get access to

 

Fraser Jack 

you know, now, let’s get back to the innocent young you’ve you’ve had it validated, you’ve made some changes, what are the next few clients view and how they come on?

 

Paul Feeney 

Yeah, so we, we then had a was an expert, I think it might have been suncorp. And then some super and medibank was soon after that. But they sort of came started at the end of 2019, early 2020, when we’re developing the new platform, and then a few more from there. And it’s been great, because the biggest validation, they want us to speak to someone who’s used it. So yeah, great, you can speak to a closet pioneer and Anson young, they can have a chat to you. And he’s you know, I’m selling a word that they want to speak to someone who’s used it. And so that’s helped him. And they’ve been a great support for us as Estonian partners, which has been fantastic. But then the learnings and the different experiments that those different organizations have had make a difference as well. And then Rio Tinto has come on board as well, we work with employee assistance program providers who use it for their staff. And we’ve got about six more in the pipeline at the moment as well. So it’s about I think it’s for them is about 15 or so companies that use at the moment is about about 10,000. So I think people using the platform

 

Fraser Jack 

10,000 people using the platform now there’s some scale for you to shoot in a few short years. Now, when I mean, I’ve been talking about this for a number of years, but you know, one of the thoughts at the time was financial advisors, this would be great for financial advisors to implement their business for a number of reasons, obviously, we’re talking, you know, that they can’t afford to service a particular level of client or the children of their existing, you know, good clients, all those sorts of things. I remember, you really sort of went heavy into that at one point to see if that was going to be a great thing. But it didn’t really work out the way you thought it was gonna

 

Paul Feeney 

No, I think there’s there’s two things, I mean, we get a binary outcome from advisors, one of it’s like, oh, you can’t replace me, or you can’t do that sort of stuff. So I’m gonna work on one, I’m not trying to replace you. But the others who said, Well, okay, now I can scale. And so looking after 100 150 clients, I can like after 2000. And then data tells me when I should have a chat to them, but also coaches along the way, so that they get beyond just paying off credit card debt and building an emergency fund. But then also, when we started talking to advisors practices, the hardest thing was, when someone is an authorized rep underneath a licensee, you then got a whole nother layer of stuff to go through. And they’re already dealing with so much complexity and everything else. So the sweet spot that we’re finding now is advisors who have got their own license that makes because they make the decisions, they’re making a decision, but they go in, and you can use the platform under your own license, or the soI producers as as everything else. But that’s mainly a bit of a difference. And it may have been the way we communicate the way we went out and all that sort of stuff and you live alone, or the whole way through, I think we’ll still be working with advisors at some stage was finding the niche, but also, the economics around it all that make it work for us and for them. Because no sense, it’s got to be a win win from both on that side, they’ve got to be making more money than what our fees are. Otherwise, they’re going to stop using the platform, like any piece of software that a practice uses. It’s got to be it’s got to improve the bottom line.

 

Fraser Jack 

Yeah. Yeah. Or in saying that, though, a lot of the time that they either return on investment may not be that year, but you know, your people that are using the system are sort of working their way up to getting financial advice, if you like this sort of, you know, getting a few things in place, and then, you know, patching up a few gaping wounds, like maybe the cash flow, and then they get into themselves a position where they want to go forth and then speak to an advisor, that might not happen this year. But that might be next year.

 

Paul Feeney 

Yeah, so if you’ve got a if you’ve got a solution, as an advice, practice, that you’ve got a long tail of lower revenue clients, and I think that’s the most polite way we can put it, there not really do, you can’t put your head in your heart and say, pay me the three to $5,000 or whatever it may be to be a client and a fee for service, when you know, at some stage and that tsunami of wealth transfer comes down, they’re going to be an ideal client. But if you haven’t, if you’re not at the table, educating them now it’s going to be pretty hard to get their attention at that point. So the platform would allow them to stay in touch continue just just the cash flow coaching and that’s just up and, and understanding how the civil works and what today’s actually means for the future. And, and what insurance should I have and how does insurance work? Do I even have any insurance, all that sort of stuff. If you help people on that sort of path, then at the very least you’re going to be at the table when that wealth transfer happens or the salary increases? Or you know, they’re married, and they put two to two incomes together and they can do things there. all that sort of stuff and wealth management is a long, long game. Yeah, it’s there’s no quick wins. If If you If an advisor comes in the room says, here’s a quick win for you, the client should get up and run away. Yeah, exactly right. And to me, it’s not so much about the price, but the value, right? And so the value of, you know, that client getting two or three years with a value from you, with very little in return, all of a sudden, that creates a long, you know, a trusted relationship. Yeah, exactly. I think the economics for us are quite low. It doesn’t, it doesn’t cost a great deal. It’s mad for someone to be using it. But it’s, it’s all about starting to get those habits, right. I mean, it’s, it’s short, put more money into sacrifice took a credit card game. Well, if you’re in your 20s, or 30s, probably not, you probably should be paying your credit card offers, and go on and doing the other stuff. So it’s just helping him with that, like we said earlier information, they knew when they needed to make those informed decisions. And you can do that that way. But an advisor can’t do that with their time. Because the biggest thing for me, I’m going to segue here, but we about the access to advice with ethics paper out there, see a lot of commentary around their people saying regulation, so expensive, the insurance is so expensive. All these different protocols were followed, it makes advice, so expensive. But if we take a step back, and we look at the balance sheet, or the profit or loss of any advice, practice, the biggest single variable costs, the highest one is salary, because you’ve got to pay for someone’s time, the more time an individual advisor has to spend or giving you advice, the more the advice is going to cost. So let’s try and decrease that for the clients that don’t necessarily need the complex full on face to face stuff that the traditional advice that I’ve been in the past.

 

Fraser Jack 

Yeah, I definitely agree that computing, best outcomes, you know, is only going to get more and more done by you know, computers, if you like, because, you know, they can it can easily do that. Now, you’re absolutely right about the the staff being the biggest cost and sort of trying to remove that part of the equation. When it comes to decision making. Now inside a client’s head, sometimes the the the numbers just don’t just aren’t enough, like as in they are financially it makes sense. But, you know, emotionally I’m caught up over here, I end up making the wrong decisions. And I guess that’s where the human, you know, accountability for like comes involved? Are you finding that with your system, people sort of, you know, do the calculations, but may not follow the plan?

 

Paul Feeney 

Yeah. And I used to find that when I was an advisor all types of levels of clients. But yeah, we definitely do find that. And that’s okay. Because all we’re doing is, is whenever judging anyone, we just basically sell given what you’ve told me about you. And the goals that you’ve told me, you’ve got no, we don’t have the nuances and so forth and everything else. But that takes human interaction, which is human time and salary, therefore higher cost. So a lot of people can’t afford to pay for that. But what it does then is for us when one piece of data changes, so we’ve given a suggestion, the data says this, but then they go and I’ve gone and done this, they spent the money elsewhere. Well, they update their play with that. And all the advice recommendations tips are recalibrated to take that into account. That’s great that you’ve done that that was obviously more important to you. Don’t worry, we can still do this with this amount of money. It’ll take a little bit longer, but that’s okay. Yeah, I’m on track.

 

Fraser Jack 

When I think of that I visualize the concept of you know, giving somebody showing somebody a map to get from A to B and then saying now go and not giving them the map, or them having the map in in the in the drawer. But then you know what, you know, you call me up my plan, but it’s almost like a GPS, right? That updates itself along the way. So you’re driving along, you take a wrong turn and doesn’t really matter. You just calculate from the new spot to where you need to get to.

 

Paul Feeney 

Yeah, so it’s, it’s like a Google map of financial life into the point where when someone leaves their bank account feeds into map my planet. And the great thing about a platform is you get utility, whether you do that or not, because not everyone’s comfortable doing that. And if they do great, and not even not all institutions can be linked. But if they link that, we basically update the balances of the transaction set to him every day. So like you said, it’s Google Maps, you’re driving along, and then five minutes later, you’re like, Oh, geez, I’m in the wrong place. recalbox, nowhere to go. You come back a month, two months, six months, whatever me over a day. But whatever day you log back onto your plan, it reflects today’s situation, even if there’s been a change in regulations, and so forth, it’s taken that into account as well. So all of a sudden says, Well, this is what you should be doing now. But just make sure everything else is up to date before you go and do it. And then go through it. I actually it’s now more important for you to save for kids education. I didn’t talk about a kid right here. Oh, great. Let’s change all that. But you should be doing this now. And you take it from there. I mean, it’s it needs to be a dynamic service, when we’re looking at a solution like that. It can’t be a static point in time, like when I was an advisor 15 years ago, you give the SLA Two weeks later, like after two weeks after the first meeting. And you see them again, in six or 12 months, things have changed in that time. You want it to be a living, dynamic sort of plan.

 

Fraser Jack 

Yeah, it’s what we do. Exactly. And that all relies on accurate data. And now, not just that, but over the years, we’ve talked about stats that you’ve said, you know, people that are using this or doing that or this sort of better often, and I know there’s there’s just getting better and better as that as you say the user x variances becoming more and more enjoyable for people and you building out. So talk to us about some of those stats around how people are better off on on the system using it that you know, versus where they could have been or might have been when they first joined.

 

Paul Feeney 

Yeah, so we’ve got a lot of qualitative and quantitative data, which is always interesting to look at, sort of bring some stuff up in there as well. But it’s, it’s also like 47% of people tell us that I now feel comfortable about where I’m going after using that my plan for six months for me, which is, which is a fantastic sort of thing. And 34% of people feel less worried about the financial situation. But when someone’s following the advice are much more sort of quantitative measure their superannuation ends up lasting over four years longer, because they’re making the extra contributions, people are paying their credit card down four and a half times quicker, saving about one and a half $1,000 in interest, by following the advice on the platform. And so all of a sudden, when you do that, you’re accelerating their ability to be able to do the next thing that they can go forward. And, and for us, we always like get rid of that old debt, get your get your rainy day fund emergency fund sorted after it’s like, Wow, what’s important to you now, and then we just nothing, they tell us, we just take over and say, Well, hey, we’d suggest looking at this, when you give us a new piece of information that changes again. So to be able to measure that sort of stuff is great. And we can measure for everyone. Because you’re the ones who are linked to bank accounts, we can really see how much quicker they’re paying stuff off and saving stuff. But even the ones who have linked accounts we can do through surveys that we look at, and their attitudes to the situation at the moment how they’re feeling like for stuff, we can see that they’re feeling less stressed after using that my plan, and that is sort of data that we share with employers without going into the micro of who he is, obviously,

 

Fraser Jack 

of course, that’s a pretty good story to bring to the next, you know, client. Yeah, I really love the idea of collecting qualitative data, not just quantitative, you know, you want to just financially in a in a better commerce better position. as we as we like to use that term, you might emotionally, you know, emotionally in a better position. And, you know, just to have those stats, you know, you have those stats to show that people feel more secure in the by this percentage, you know, that they feel this or they, you know, feel, you know, like they’ve got their stuff, you know, the bits and pieces together. And the feeling of confidence capturing that I think is so important. How would you suggest, you know, the average financial advisor running a practice that like he used to do start collecting that data?

 

Paul Feeney 

Yeah, the first performance in the conversations with your clients, for sure. I mean, that’s anecdotal, but it’s still it’s still worthwhile to I mean, and that’s, we can get those testimonials from and so forth, as well. But it’s also going back out to the clients and saying, I want you to judge me and my firm, be open to that judgment, because it’s only going to improve you in the past. And you’ll be amazed the nuggets that come back and and our first survey with clients was judges tell us what you like what you don’t like, but tell them tell us how you feeling here and all that sort of stuff. And it’s pretty good, great feedback, and you’ve got to have some thick skin, especially.

 

 

Definitely.

 

Paul Feeney 

Going to come in, I don’t like this car. Can you change that? Yeah, we could. I think there are more valuable things we could spend our time and money on?

 

Fraser Jack 

Yeah. Fantastic. Yeah, I think I think it’s, you know, you take that information to an employer, and it’s, um, all of a sudden, it becomes a bit of a no brainer, doesn’t it?

 

Paul Feeney 

Yeah, I definitely does. And I like that sort of stats. And I’d like to see that. And then, like, we get someone’s like, three weeks later, they start like, like, give us a status. Well, we’ve got to get a few more people using it, we’re getting there. But they’re really eager to see the proof points within their organization. And the thing, they really want to they’re really eager to have the proof point against the rest of the cohort of people using that plan. But they’re also we’ve done Australia wide surveys about 16 1700 people, and we can compare them against the average Australians as well. Would you mind doing COVID. And it’s really interesting what came out there that the two, the two most critical things that people are worried about, and this is in Maine, right in the middle of everyone being locked down was job security, and not having enough actual rainy day emergency funds. And now we look at the savings rates, well, that was taken care of and the job rates coming back up, which is fantastic. And then the last one was being worried about having to go and use credit cards because I didn’t have enough savings. And those ones either wealth destroying things if you can’t sort those things out,

 

Fraser Jack 

yes. And now that now with the size of the business and the sample size of the amount of end users, humans using the system, you’re able to actually produce some some fairly good stats around you but with a well structured data model really good stats around and then create papers on the way people are feeling in large numbers.

 

Paul Feeney 

Yeah. So we continued and we’ve spoken in field seminars and so forth that we go about and doing that is it’s just looking at that data which lets you come back and it’s almost like a pulse survey. How are people feeling now and and we do it with a mix of outside that my plan users and internal as well and, and we’ve got to get better with that. I don’t think we’re doing it well enough at the moment. And some will continue to work on. But it’s, it’s such a great resource to be able to pull that back and see what and the macro plan users don’t reflect Australia wide. They reflect the cohort or the demographics, I suppose, of the types of organizations that are currently using that my plan. So in most of them are basically mid 20s to mid 40s, is the big sort of 75 80% of people seem to sit in that sort of space at the moment, which sort of reflects that old the older you get, the more likely you are to go and get advice and so forth as well, which reflects that too. But it’s also a reflection of the demographics of those companies that are using,

 

Fraser Jack 

yeah, now I just want to get back to the idea that, hey, you can work with advisors, you know, listen to this podcast, for example, to me, it’s almost like a part of a social media part of a marketing program part of it, how do we help another like use the word sort of top of the funnel, but that whole scenario around, you know, helping people that may one day become a client and providing an offering. Now, I know you guys do that in a way where you can actually start looking at ways of white labeling white labeling with planners to talk to us about how you how you do that?

 

Paul Feeney 

Yeah, so if an advisor comes through, so we’re talking to two firms, at the moment, I’ve got their NFL, they can completely white label the platform, they can change some of the variables inside of the algorithms to make sure, for example, if you walk through the virtual door through MetLife plan, or through the physical door, you want to make sure the person gets the same quantum of life insurance and the advice. So you can change the calculation, the variables that go into calculation that we have the other thing, the growth rates, and all those sorts of things, just to make sure you’ve got some consistency. But typically, our advisors then are talking about using it is a couple different ways. First, is we’re looking at the long tail of those lower revenue clients. So they want to continue to serve. But it’s not economical without a face to face sort of relationship. It’s transferring them across to the platform, letting them activated, fill in the gaps that they may not have, because it might just be an insurance client or something like that, or a bit dated, they didn’t fill that out. But the advisor gets to see the data in the backend as well. So they can actually proactively contact those clients. Because the very beginning when they sign up, they say, look, we’re gonna use this platform, we want to be proactive in our advice. So we’re going to approach you when we know we can add value, but we’ll then also put buttons like I need help contact my advisor buttons all the way through it. So as they’re building their plan, if you’re going to how much life insurance and it’s like, Oh, that’s interesting, boom, I need help. And advice is never going to get a little more Molina life than someone in the middle of building their plan themselves may go on. So I don’t know what I was advisor, and quite a few years ago did, the first meeting was awful. You know, it’s like pulling, it’s compliance and data collection driven. You’re getting all this information stuff’s going to in your head, but you can’t really talk too much about the strategies and what you’re going to do, which is where the real value is, they’ve got to leave that meeting with some faith in you that you’re gonna come back with something valuable. Well, imagine if the clients gone through and filled out that fact fine, but in a way, that not is like, Here’s 150 data points fill it out. It just skips them through the process. And they get rewarded with some advice and nudges along the way. They do that the day or two before the meeting, you can have a look on the platform, see where they’re at. And you can call them and say look, at the moment, I can’t put my hand on my heart and say that I can help you beyond pay your credit card off and building an emergency fund and keep your mortgage going. Or you can look at it’s a great, I can see they’ve got some shares, they’ve got a property here, they’ve got a blended family, I know the things I can talk about where I can add immediate value, and start talking to that, and see if they’d like to take the next step from the virtual digital advisor onwards. And our advisors are looking at how they can package it. So we charge $8 a month per user. That’s it. That includes banking, links and daylight. So as often you want all that sort of stuff. But if eyes are looking at say more, I might charge them $20 a month, but it will include a guaranteeing of turnaround of five days by email from an advisor if you’ve got a question. Or if you want fries with that pay an extra $500 a year to have one a one on one meeting with us when you can package it that sort of way. Anything on the dollars don’t include themselves. And they do the implementation or product recommendations where it might be and then they go down that sort of path. And so that’s really doing and another firm is basically looking and saying well, we like to go to corporate. So we want to get to senior level executives. But a C level executives want to make sure everyone’s taken care of. So now an advisor with this tool can put their hand on the heart to that CEO and say, I can guarantee every single one of your staff can get advice. It’ll be a mix of digital only digital with ad hoc interaction, or full on face to face we have and I can come in around webinars, lots of seven could package that up. And all of a sudden you become that trusted advisor for that firm that allows you to go in that way. And they’re the sort of things that we’re we’re talking to advisors about.

 

Fraser Jack 

Yeah, they’re both both option sounds right. And to me, the you know, the first one around the ongoing service agreement when advisors are talking to clients around you know, what are they going to get for their fees over that 12 month period until next time, this seems to be you know, for $8 a month seems to be you know, could well Within that budget,

 

Paul Feeney 

yeah, well, it’s a living plan isn’t they’ve gotten at 12 months, we’ve built something and says, Hey, you want to keep on utilizing this, this plan. And so for me, it’s, it’s turning advice into a subscription service, where the clients are there. And the analogy I use is that, you know, performed, the travel industry is open, you’re going to learn economy, and the only fee you pay would be the credit card transaction fee outside buying the airline ticket, that’s the sole service, that’s the met my plan of financial planning, then the next step really is ad hoc, you might actually just want someone just to implement the investment changes my suit performing, but you’re gonna have to pay some for your time. That’s the same as I need to split. My wife and I got to travel different dates. Now, I can’t rely on a guy called Chronos. Pay the 100 bucks could not have paid for that person’s time, pay for their time to do the investment options, or your walk into Flight Center, is I want to leave in this day, come back on this date, stay in these nice hotels go to these places and these dates sorted out from that’s your full, holistic financial planning. So it’s having those things but allowing an advice practice to allow a client to move seamlessly through each one, I think is a critical part.

 

Fraser Jack 

Yeah, and have some bit of a choice on where the money’s been distributed. As in I don’t want to pay for stuff that’s not value to me.

 

Paul Feeney 

Yeah, exactly. Yeah. Now,

 

Fraser Jack 

I wanted to ask you about, obviously, you’ve got your own FSL, or you create digital plans, those digital plans, a lot of the time are created by an algorithm. Your afsl essentially is providing, you know, the licensing for you as the advisor providing the advice. Talk to me about that, because a lot of the information that’s coming out is not necessarily for your product advice. And as you said, you’re not going to be going to be involved in products. You know, you do an SLA, sometimes you want no need. So

 

Paul Feeney 

yeah. So the funny thing is that afsl is not a license to give advice. It’s a license to sell financial products. And I think that’s the fundamental thing, that’s that if we can shift that and making a license to give advice, and fundamentally change the industry, but that’s a whole nother podcast that for me, we basically looked at until the average person’s average Joe Yeah, it’s like, if you ask them, what do you what do you spend, what do you goals and I tell them what you should do this, this and this, that’s personal advice. That’s as far as they’re concerned, they’re getting personal advice. So the approach we took, let’s just embrace it and say, Well, everything on here is personal advice, whether we get a product or not. Now, to the left of the law, when you influence the consumption of a class or financial product, or giving personal advice. So we influenced the consumption of insurance or superannuation with extra contributions, and all that sort of stuff as well. So we do fall over there. So we thought, well, let’s just tell us as to the highest level of standard and go from there. And the SLA for us is basically a PDF version of what they can see on the dynamic platform. It’s a record for them to take. And legally, we’ve got to put the word statement of advice at the top. And so that’s why we got about and doing it that way.

 

Fraser Jack 

Excellent. So you take the you take the idea that you’re influencing decision in some way, and you’re giving them information to be able to make a decision, an informed decision, let’s say, but just not necessarily giving them information around which particular product they should be using.

 

Paul Feeney 

Yeah, we’ll just start off with we help them optimize their current products. Yeah, man, let’s face it. If you look at superannuation, there’s no perfect Superfund it doesn’t exist. So the focus shouldn’t be on a down moving, but it should be about well, are they the right goals? Are there extra contributions you can make? Is that the right investment option, and house insurance inside of supergen? affection? All those things should be taken into account before you start thinking about, gee, should we look at a different Superfund?

 

Fraser Jack 

I refer to them as the egos or logos on the top? Yeah. And they all abide by the SEC, are they all doing the right thing? You know, they’ve all got trustees in place, they’ve all got regulation in place where they’re not interested outside, they will offer similar things. It’s just at the end of the year, you’ll be able to work out which one was better, because you can look back in time,

 

Paul Feeney 

the answer the way you can do it in hindsight, lovely.

 

Fraser Jack 

Very good. So so that’s good to know. So you basically go above and beyond what you think you might be needing just, you know, because it’s the right thing to do,

 

Paul Feeney 

basically, yeah, I don’t think it’s the right thing to do.

 

Fraser Jack 

Now. It’s about scale. You’ve obviously grown phenomenally in the last few years. And I’m looking at it. I’m thinking about a, you know, compound interest curve on steroids. What, you know, what we do from here? What are your thoughts around, you know, what does this look like in a couple of years? What are your plans and goals?

 

Paul Feeney 

Are you in five years time, Matt, my plan will be the largest provider of advice in this country, measured by one thing, the number of people we help, I’m not interested in the vanity metrics, and are you me number of advisors and all that sort of stuff. And that’s around about a quarter million people. That’s what we want to be able to do. Well,

 

Fraser Jack 

pure and simple quarter of a million. And it’s interesting that you dismissed IOM, from all those conversations. I think that that to me, there are a hangover from you know, the product days of you know, and we use that term and we measure that as a as a crazy benchmark, but that doesn’t actually mean anything.

 

Paul Feeney 

Yeah, yeah, exactly. It’s who you help and how many people you’re hoping it’s, that’s familiar, but as an advisor if you helping 10 people improve their lives exponentially. That’s fantastic. I mean, it’s irrelevant. their net worth and how that’s because Are you helping them achieve the things that are important to them? Yep. period?

 

Fraser Jack 

Are you seeing an uplift in Employee Benefit schemes and programs at the moment they based on the last 12 months? Or do you think they’re always going

 

Paul Feeney 

back in not 2018 2019, talking to people about financial well being of their staff, Sokaiya, that’s nice. whenever it’s a bit fluffy and everything else, you do not have to explain to any senior manager the importance of the financial well being of their staff anymore at all. It’s now a matter of and every conversation we have in the corporate, it’s never a matter of we don’t like that we don’t think it’s going to work. And I think it’s relevant. It’s, can we do it in the trauma now, and do we have budget to be able to do it, it’s never a bad idea conversation, which is great, because it helps productivity of a house. But I think fundamentally, it’s something that every employer has to do, because none of us work for free. We do it to improve the lives of ourselves and our family. And hopefully, we get really good intellectual stimulation from the work that we’re doing. But fundamentally, it’s to prevent a lot of life. And so I think it’s a responsibility of employers to empower them with that. And the great thing from our stats is that 58% of staff, the number one place that they look, is to their employer to provide them with tools to help them one that the funny thing is only 14% of organizations do anything at all about financial well being. And half of that half of that figure is just having a superannuation fund come in for a semi annual, you know, get together in a bit of a seminar. But then you go and ask managers and 68% of managers think it’s critical or very important to improve the financial well being of their staff. It’s a huge chasm. And as an industry, we can play a huge role in filling that gap, whether it’s one on one advice, whether it’s through tech, like us, or some combination about us, the employers a screening out for so yeah, it’s up to us to fill that, I suppose.

 

Fraser Jack 

Well, that’s that their mess of stats, you know, like from 58 to 68%, with staff expecting and managers to expect it, and then 14 that actually do that. That’s crazy.

 

Paul Feeney 

Yeah, it is. I mean, and so we asked, we asked staff if the employee does and if management if they do, and they both came out pretty close to the 14%. So it wasn’t the staff to know about the staff was a little bit lower, they probably didn’t know about and stuff. But yeah, it’s the kind of thing with the logic, it’s, of course, it’s going to help, it’s going to help the productivity of your workforce, for goodness sake, while at work. If you’re not, if you’re not financially stressed, you’re not distracted, spending three and a half hours worrying about your finances while you’re at work, which is, you know, almost half a day a week, your employer loses when an employee’s financially stressed, let alone white collar crimes. And so just just being distracted at work and having to deal with that stuff.

 

Fraser Jack 

I know there’s been a lot of surveys on that, and productivity, loss of productivity with regards to that half day, a week. And yet some of you also talked to boys about visiting.

 

Paul Feeney 

Yeah, I definitely. And they they’re aware of because there’d be so many, so much surveys about and it’s the same stats, UK, US, Canada, Australia, they’re all pretty much similar stats that go across it. And that’s the sort of stuff we used to leave with in tears at 2019. Now, it’s basically like, we know the impact of COVID, we’ve got to look at you got to look after your staff. And here’s a tool that can help them do that. And if they guide, the conversation is easy. It’s all about timing. That’s suitable for that organization.

 

Fraser Jack 

Yeah, fantastic. All right. Well, we weren’t represented here. Tell us how, um, how can advisors get ahold of you? Or if they wanted to continue this conversation?

 

Paul Feeney 

Yeah, shoot me an email Paul and Matt, my plan, comm shoot me a message on LinkedIn or on our website, and our homepage is all contact form there. I can come in and do that. But it’d be great to have a chat with anyone and, and unveil what we’re doing next, and try to make things even more seamless for clients and

 

Fraser Jack 

able to give us a bit of a sneak peek into what’s coming,

 

Paul Feeney 

a little sneak peek, we’re gonna have automated interfund advice. So advice about your investment choice and insurance inside of Super. The next one is going live probably at my table, you know, clients got to find all those competitive market sites and they find a bit of credit card health insurance, the super fund or home loan or whatever it may be. Imagine if you go online platform like my plant like my planner has got all of your financial plan and then all the financial products you use. Imagine clicking one button for each of them going, would you like to see if there’s a better deal out there for that product? Is it Yeah, I would like to see this better credit card for me are the best ones not having one. But nonetheless, what’s important to you low interest rate and rewards. Great. Here’s a list of all the ones in the marketplace ordered by the one that’s going to save you the most amount of money in the next 12 months based on your current situation, click the button to go to the provider if you want or don’t it doesn’t really matter to us. But we just want to basically make sure that people have got the idea or understand that there could be a better deal out there. And if they do transact, then that’s great for them. If they don’t, we don’t care either. But it’s it’s going that step further with that information to me when I needed to make a well informed decision. Let’s let them know if there is a better product out for them. So we’re developing that out of the moment as well

 

Fraser Jack 

like the way that you talk to a Instantly started with their preferences.

 

Paul Feeney 

Yeah, it’s day driving. It’s not as pushing it or anything else like that. They decide what’s important to them. And we’ll just show them a call. This is the one that saves you the most. And if you don’t change, that’s okay. It’s up to them.

 

Fraser Jack 

Fantastic. Well, busy year ahead by the tail of it. A lot, a lot of stuff to release plus also a lot of growth in the works. Congratulations.

 

Paul Feeney 

Thank you, man. Yeah, it’s it’s a journey. As a startup founder, it’s never fast enough.

 

Fraser Jack 

Well, looking from the outside in, it looks like it’s eating very good growth, you know, this year, next year, and it’s all onwards and upwards from you. I think you’ve done that. You’ve done the hard yards, and hopefully the compounding effect takes kicks in now.

 

Paul Feeney 

It does feel like it but like you said, an E is terrible. I’ll look backwards and see what happens.

 

Fraser Jack 

Yeah. Wonderful. Thanks, Paul. Really appreciate it.

 

Paul Feeney 

Good, man. Thanks a lot.

 

Fraser Jack 

Well, there you have it. Another episode of The X Y advisor podcast. I’m Fraser Jack, and I’m joined at the moment by Emily Blanche. Kyla Emily.

 

 

Hey, Fraser, how are you? I’m

 

Fraser Jack 

tremendous. Thank you for asking. No, it’s a great part of the week we get to do a couple of shout outs and who are we going to have a shout out to today?

 

 

Yes. So today, I want to give a huge shout out to x y advisor Kelly Harris. Up in the Sunshine Coast, she reached out and said and I absolutely want to organize and start a group for the x y advisors up here in the sunny coast. Now these guys discussed this at the deconstructed Christmas party tool last year. And we finally kicked it off. So I’m really excited that they’re already in there collaborating. It’s an opportunity to get to know each other’s businesses get to learn what they’re up to share their ideas. And they’ve already organized their first local catch up for the year, which is really exciting. So well done, guys. I’m really excited to see this group come to life and see more collaboration. Yeah, well

 

Fraser Jack 

done. Big shout out to all those advisors in the sunny coast who are joining the group and to to the other regional groups we’ve got around the country. This is such a great idea for smaller regional groups. He has a group in illawarra and even Bundaberg. So if you’re writing a local regional area, and you want to start up a group then I recommend you have a quick shout out or reach out at least to to him and we’ll see what we can do.