Lana Clark: [00:01] If you were looking to building a value proposition these days, what would be the first place you’d go to to start that process? You’d go to the client and say, “Well, what do we do that you love? And what do we do that you maybe don’t like so much? Or what’s not needed? What do you think is not necessary with what we give you or what we show you or what we take you through?” And understand what it is about those things.
Fraser Jack: [00:26] Welcome to the Goals Based Advice podcast, where we have conversation with pioneers of the new world of financial advice. I’m your host, Fraser Jack, and I’d like to thank you for tuning into today. I’d also like to thank our supporting partner Advice Intelligence for powering this podcast.
Fraser Jack: [00:44] In this episode I was very lucky to chat with Lana Clark, who works with Elixir Consulting, now they provide coaching and advice to Australian financial advice businesses. And all I can say is wow, what a jam packed episode this one is. Lana was so generous with her thoughts and we covered all sorts of topics like the importance of processes in your business, the pricing and the costs to provide advice, the challenges of wearing different hats in the business and people and teams and culture. We basically covered everything that we need to think about as things change in the future. There are so many great takeouts in this episode and I know you’re going to get a lot out of it. So let’s kick it off right now.
Fraser Jack: [01:34] Welcome to the show, Lana.
Lana Clark: [01:36] Thanks, Fraser. I’m pleased to be here.
Fraser Jack: [01:39] We’re very, very happy to have you actually.
Lana Clark: [01:41] Awesome.
Fraser Jack: [01:42] Tell our listeners a little bit about yourself and what you’re doing at the moment.
Lana Clark: [01:44] Everyone knows my name is Lana. I’m a coach with Elixir Consulting. Sue and I have worked together for quite a long time, and time marches by so quickly. I’m coming up to I think, oh gosh, about eight years or something like that, which is unheard of these days, but anyway. At the end of the day, we run around the country and we help advisors pretty much with whatever they need, but typically they want to know how to run a better business, and so that’s what we help them with. That can be anything from onboarding clients all the way through to how to do reviews, how to price. Pricing is such a big issue still. After all these years, I would’ve actually thought that pricing would have started to die off a bit, but it never does. It’s always here, and it’s always at the front of everyone’s mind.
Lana Clark: [02:28] So yes, A to Z of running a financial advice business is where we’re at.
Fraser Jack: [02:33] So everything and anything you need to know about what you should be doing in your practice, you’re the one.
Lana Clark: [02:38] Pretty much, yeah.
Fraser Jack: [02:39] And I know you’re obviously from Queensland, but you mention that you spend a bit of time running around the country. Are you everywhere?
Lana Clark: [02:47] Yes. I have had clients in every state in Australia with the exception of the Northern Territory. Everywhere else, though.
Fraser Jack: [02:55] How did you get into consulting?
Lana Clark: [02:58] That was by mistake. Seriously, by mistake. I was running around... Well, I wasn’t running around. I’d actually had a period of illness, so I was unwell for about... It’s no secret. I actually had a cancer diagnosis about nine years ago, and I had six months off work. I was working at a corporate at that time. I was very fortunate to be able to request a voluntary redundancy when I left that corporate, and walked out and decided... Had no idea what I wanted to do with my life at that point, but had worked in financial services for 20 years, or 20-plus years, so I had been around the tracks in corporate land.
Lana Clark: [03:40] But I think for me, just having that whole massive change in my life. I just didn’t want to be the same person anymore, so I needed to find something new and different, and something where I could run my own race and not have to answer to many people really. I started doing a few little odd jobs around the place with advisors that I knew, and one of those advisors one day just said to me, “You seriously need to talk to Sue Viskovic, because she... You both sing the same tune.” I’ve gone, “Okay, cool.” She introduced us and that was it, pretty much. That’s the story.
Fraser Jack: [04:14] You guys hit it off and just couldn’t stop hanging out together since.
Lana Clark: [04:17] Yeah. Just chat, chat, chat, chat, chat, chat, chat. All the time. There are always challenges in business no matter what we do. Challenges with clients, how to help them, all those sorts of things. Challenges with your own business, all that sort of stuff. Just because I’m helping someone with running a financial planning business, it doesn’t mean to say that at some point in time, I’m not going to need help with my own business. I happily take my own medicine if and when needed, and I go and seek my own help if I need to do that.
Fraser Jack: [04:48] There’s a lot of similarities really between what you’re doing and what an advisor’s doing in their practices. You still need to go out and talk to people, you still need to go out and find people to work with and bring them in and nurture them and have that ongoing relationship.
Lana Clark: [05:02] Absolutely. I think even more importantly, deciding who your tribe are and keeping those people around you and keeping those people close. I guess you and I have known each other for a few years now, and I know we may not speak that often but I know if I need an opinion on something I can call you or I can call other people and say, “Hey, what do you think about this?” And you’d go, “Great idea,” or you’d go, “Oh...”
Fraser Jack: [05:20] Isn’t it the great thing about all the people we work with in his profession or in this industry, is people are more than willing to help out. Everybody, whether they’re your competitor or whether they’re... It’s a great industry to be in.
Lana Clark: [05:33] Yeah. And I think the overarching point to all of that is that we’re all different and we all respect each other’s differences. One of the biggest things that I’ve learned is that there’s room for everybody. Just because the next consultant down the road doesn’t sing the exact same tune as me or Sue or whoever, we all have a similar end goal in mind. I think it’s just how you get there at the end of the day.
Fraser Jack: [05:56] You’ve seen a lot of businesses over the years, and you’ve worked with many of them, and probably seen a lot things that, dare I say it, you didn’t necessarily agree with and others that you have. Tell me, what are some of the things that you’ve seen in the past that you thought have made great advice businesses, or excelled, some over others?
Lana Clark: [06:13] One of the biggest things that I would say, having a strong compliance background, is that... I used to work with advisors all the time in corporate land and go, “Oh, you just can’t make a process out of financial planning, it doesn’t work.” And they go, “What?” Financial planning is such a process-driven thing, let’s just say, that the better you are at process, the better you are at onboarding your clients, not to give cookie cutter advice, but to have the same experience for a client, really looking after them, taking care of them, understanding them, understanding what you can do to help them, all of those sorts of things...
Lana Clark: [06:49] If you can absolutely nail that process, then you’re going to drive the costs of your business down by delivering that advice in a really clear and consistent way, so therefore it’s better for the client, better for you as a business operator, all of those sorts of things. I think that is the overarching thing, to everything that we do. Understanding what it is in your business that opens and shuts so that it’s a better outcome for the client, you’re delivering advice at the lowest cost possible. And realistically, if you have your process right, you should really never have major issues with compliance either.
Fraser Jack: [07:24] You kind of feel sometimes, though, with process, it’s a bit like eating an elephant. There’s so many different little bits and pieces and where and how do you start? What would you say to somebody who was just thinking to themselves, “It’s overwhelming?”
Lana Clark: [07:38] I love that question because the answer to that question is that you’re absolutely right. There are so many things that open and shut in a financial advice business model, in any business really. I don’t think that as financial advisors we’re alone in that regard. But I guess my first point would be don’t put it off. Just start anywhere really. You don’t have to be a genius and start at one particular point in your business. If you think that there’s something in your business that’s really bugging you right now, start there. If there’s something that’s not working, it’s broken. Start there. If you really want to take a look and step back and say, “Right, how are we really looking after these clients?” then start there.
Lana Clark: [08:19] I don’t think there’s a magic pill for where you should start and stop. I think it’s where it should feel right at the time. But if you’re looking to undertake a massive review of every process in your business, then I would suggest that you start with the client in mind and always have a client-centric business. Does that make sense?
Fraser Jack: [08:34] Yeah, it certainly does. I really love the idea of asking your clients and having them involved in the process of this... How did you build a business and a process to actually run those processes past the client, or sort of give them the pub test or the sniff test or whatever you want to call it in that process. What do you think of that?
Lana Clark: [08:53] I think that you’re right. If you were looking to build a value proposition these days, what would be the first place you’d go to to start that process. You’d go to the client and say, “Well what do we do that you love, and what do we do that you maybe don’t like so much? What’s not needed? What do you think is not necessary with what we give you or what we show you or what we take you through?” And understand what it is about those things. I’m not talking about a yes, no answer. I’m talking about getting to that real qualitative data in understanding the meaning behind the words that the clients give you, because sometimes someone will say something but they might mean something slightly different. So really understanding what is at the bottom of what the client is telling you. Then start from there.
Fraser Jack: [09:38] Now, when we’re putting processes in place... I mean you’re working with a lot of businesses. What sort of time do we need to put towards it, as in how many hours a week or a month or something do we need to actually push towards this in an area do you think?
Lana Clark: [09:54] I think that that’s a loaded question. That is what I think, because you could spend 20 hours a week, and that might be a whole waste of time if you’re not getting to the end goal of where you want to be with that process. What I say to advisors or to business owners is that if you want to get on this process journey... Many already have. But if you’re the one that hasn’t, and you want to begin that process or that journey, then you just... When you pick up a piece of paper or when you pick up a job, you actually do it in the moment, where you’re actually in train of doing a process.
Lana Clark: [10:28] Let me give you an example. If it’s something simple like recording inbound mail, if you still do that in your business, then get your person that sorts the mail for you, opens it, allocates it, all of that sort of stuff, to begin the process and write it from start to finish. I’m talking about opening envelopes, collecting the mail, opening the envelopes. If you date stamp, date stamp. All that sort of thing, all the way through to... If you’re one of those businesses who are great with technology and you have the bar coding system and all of that sort of stuff that can scan directly to Xplan, then awesome, put that in the process. But just take it one step at a time. Choose one process, start at the beginning, finish at the end.
Lana Clark: [11:10] Once you’ve done that, scribble it out on paper, whatever you need to do, give it to the team and socialize it and say, “Is this what we do here?” If it’s what we do, great. Then is it the right way, or do we need to kill some sacred cows, as in is there stuff in here that we don’t need to do that we’ve done for 10 years and it just doesn’t mean anything to us, meaningless? Kill it, crash it, all of those sorts of things.
Lana Clark: [11:34] Then once you’ve done, there are some great tools that you can upload to. If you’re not using Xplan tasks and threads, there are other things called... Things like WorkSorted, Zoho, any of those sorts of things out in the marketplace that you can find. If you’re not wanting to use Xplan for example, you can go and use those things. Or do it the old-fashioned way if you have to and just put it on paper, but make sure it’s stored in a place where it can be updated easily by someone if they need to change the process or update it, and anyone can access it.
Lana Clark: [12:04] Clever businesses these days would just do a lot of that stuff via... Use Loom for example. And they would hit the record button on their PC as they were going through the process, and just recording it live on... Use Loom and then they can store that where everyone can access it. There are 1000 ways. Well not literally, but there are many ways that you can record process.
Fraser Jack: [12:26] I was just going to say that actually with regards to the idea of a documented plan and a process regarding the written word. A lot of people are starting to use video and other means to be able to store that information.
Lana Clark: [12:37] Look, I think that we all learn in different ways. Some people get flustered with technology still, so it’s not as easy for some people to hit the button as record or use Loom for example, and just be live in the moment recording. People get flustered thinking, “Oh gosh, am I saying the wrong thing or the right thing?” It doesn’t really matter, as long as you get the message out in the end. But for some people, that might be a bridge that they’re not ready for, and that’s okay.
Fraser Jack: [13:06] Over the last few years, have you seen many changes in the way that people are providing advice to clients?
Lana Clark: [13:13] I think that there’s a lot more of video integration now. I think video integration is a great way to engage people. Talking to coaches all around the place at the moment, and advisors, really honing in on the skills that they use to engage a client. I find if you get it right at the front end, in terms of your engagement, then typically clients, to my mind anyway, should be clients for life. If you really explain your process, you keep them informed every step of the way. Just clicking the button on your iPhone or again use Loom at the end of the meeting and just summarizing it and sending it off to the client keeps them engaged.
Lana Clark: [13:55] Who walks out of a meeting with us, with any of us, whether a coach or a financial planner, and remembers everything that you say? You just don’t. So if you can spend a minute or two summarizing your conversation with that client and sending it off to them, then that’s a great thing to be able to do. So yeah, I think the good integration of technology... Because I don’t necessarily think that all technology, to use with clients, is always great. But basic stuff that people can go, “Oh, there’s Fraser. We saw him today. Isn’t he awesome? He’s already sent us a little video to summarize what we talked about today, so we’ll remember. That’s awesome that sort of thing’s happening. I think that’s really awesome.”
Lana Clark: [14:34] Even just down to advisors having real clarity on what it costs them to deliver advice, and not being shy about that with clients. There’s still many, many people who really struggle with the value of advice, in terms of how they ask a client to pay a fee and all of these sorts of things. As we all know, the numbers don’t lie. The fee is the fee. Once they have clarity and confidence around that, it kind of almost changes their whole life. The way they interact with clients, they’re not afraid anymore. It’s just like, “Yep, I’m awesome, our process is awesome. We’re going to treat you like a king or queen, could be both, whatever, and here’s the fee. And that’s okay with me.”
Fraser Jack: [15:16] I’m really interested in this piece around how much does it cost to produce advice. You’ve worked with a lot of advisors. I don’t want to put you on the spot and say an amount, but what would you see the price range of the raw cost of producing advice for advisors are at the moment?
Lana Clark: [15:34] Well that’s an interesting question, because the latest data that we’ve got is getting on for two years old now, so it is a bit aged. But here’s a plug, we’re going into... And I’m sorry that I will shamelessly plug here, but you did ask the question. We’re going into the pre-work for the next... I think it’s the fifth edition of the advisor pricing models report, fairly shortly. There’ll be a survey that goes out probably in the new year. In the last survey, in terms of hourly charge out rate, we would have anything from $100 an hour all the way up to $450, $550 an hour for an advisor. It comes down to how you value advice.
Lana Clark: [16:11] I guess in a data set, you always have outliers. The outliers are the people at $100 an hour for their advice versus... The $550 would be definitely an outlier. Most advisors would sit between $300 and $400 an hour for their hourly charge out rate.
Fraser Jack: [16:30] That’s an hourly charge out rate. What about the cost of bringing on a new client inside a practice? Do you have that off the top of your head?
Lana Clark: [16:37] I’m just looking for a copy, but I don’t have one with me in close range. But say about $3000 plus GST would be about average for an average client to bring onboard. About that.
Fraser Jack: [16:48] So that’s the first 12 months, about $3000 for the first year?
Lana Clark: [16:52] Yeah, so that’s comprehensive advice. Bit different when you have limited scope, so just your average [inaudible 00:16:58] kind of client’s a little bit different. So when you’re actually taking them through the whole process, bringing them onboard, giving them full advice, then yeah, it’s typically... It was in the last research about $3000 plus GST.
Fraser Jack: [17:11] Have you ever spoken to a consumer, somebody not in the industry, and mentioned that number at all, just to gauge their reaction?
Lana Clark: [17:21 Yes, absolutely. I remember being at a function somewhere, with friends, industry, non-industry friends, and typically someone w]ho worked with people who were disadvantaged in the community, and moreover women in the community who were at a disadvantage. There was a financial planner there who actually said, “Oh, you don’t want to come to me. I’m a bit expensive. I’m like $3000,” or whatever. Then we continued the conversation and I kind of said, “Well, if that’s what it costs to onboard people, if i’ s what it costs to deliver advice then...” This poor person was a bit mortified thinking, “Gosh, that’s really expensive for the average Australian, who may not be able to afford that.”
Lana Clark: [18:01] The lesson in that for all of us is that if the number’s the number, and that’s what it costs you to deliver your advice, then forget about the $3000. It’s your number, whatever your number is. Really understanding what it takes, what is included in that number and whether you have that number right. In the past, we’ve had a lot of advisors who just pick a number out of thin air or they copy their friend or whatever the case may be, because they think it’s about right.
Lana Clark: [18:27] As a business owner, and I’m sure that any business owner would agree who’s actually undertaken a robust process to go through and understand what it costs them to deliver advice, they would actually say it’s one of the most important things that you can do in your business, because as soon as you know what numbers are applicable and what it does cost you to deliver advice, everything becomes so much clearer, because you’re then constantly asking yourself, “We’ve got to find a way to deliver this advice at a lower cost.” That means a few triggers. You either cut expenses, increase other things, whatever the case may be, but there are levers in business that you pull either one way or the other to drive the costs down.
Lana Clark: [19:11] So yeah, fascinating stuff. It’s a fascinating psychological journey for advisors when they do their pricing in a robust way.
Fraser Jack: [19:18] With those levers, which ones have you found have provided the most beneficial to advisors?
Lana Clark: [19:24] It could be anything, honestly. It could be anything. Some people don’t realize how much money they spend. I worked with an advisor a few years ago who had... Mysteriously $90,000 had disappeared from their ongoing book over the 12 months, and they had no idea where it had gone. We sat together one day and worked it out, and we found it. It wasn’t that hard to find, but just being across your numbers is the starting point to really understand where your money comes from.
Lana Clark: [19:59] I think the challenge for many advice businesses is that they get an overall statement from their licensee, and then they don’t necessarily go through that with a fine tooth comb, most likely because they don’t have time. But the reality is most financial advisors or most advice business that I’ve worked in, actually physically sat and worked in, there is money that goes... Just disappears into thin air all the time, and you wouldn’t know unless you’re checking your statements that come in all the time.
Lana Clark: [20:27] I mean that’s not necessarily it’s the licensee’s fault. Not at all. That just happens sometimes, for whatever reason. So it’s always making sure that you’re across your numbers, where you spend your money, how money comes in, all those sorts of things. Making sure that you’ve got your pipeline working well. I always say to advisors, “Follow the recipe and it won’t fail you.” Activity, no matter what you do in life, always breeds results, so if you don’t maintain the rage so to speak with your activity, then something’s going to happen to you, if you don’t have that constant source of new business, keeping up with your reviews to make sure you’re maintaining your existing client base, keeping an eye on your expenses to make sure that you’re not overspending in certain areas. All of those things can make a difference.
Fraser Jack: [21:15] There’s a lot of hats to wear, isn’t there, as a business owner?
Lana Clark: [21:17] Absolutely, yeah. I think that that’s one of the challenges of being an advisor. A lot of us have not been a business owner before, and so when we step out, we don’t... It’s not necessarily a natural skillset for everybody, so it takes us to learn the hard way sometimes to be all over that... They’re the lessons in life that we learn, and that we’ll never make those mistakes again. So yeah, it can be difficult. It’s just like the same as... Advisors aren’t always people leaders, and people leading can be very difficult for some people. Some people have a natural talent at it, others don’t. Just new skills to learn really.
Fraser Jack: [21:50] New skills and a lot of skills, as you mentioned before, that you’ve got to do at the same time as providing advice or whatever it is you’re doing from your day job I guess.
Lana Clark: [21:59] Exactly.
Fraser Jack: [21:59] You’ve spent a lot of time working with staff and helping businesses with creating cultures in their business. Do you want to talk to that a little bit?
Lana Clark: [22:09] Culture is one of those things... I think I always maintain the fish rots from the head down, so if you don’t have it right in your mind, then you can’t possibly expect your team to deliver what you’re asking for or what you’re thinking of. We need to be really good communicators in business, and one of the failings of a lot of businesses is that they don’t communicate well.
Lana Clark: [22:32] Some businesses, for example... Some businesses choose to share their financials, other don’t. For some businesses that’s fine, but if you’re taking on an employee into the business and you’re offering them a share of revenue or a share of the business in two, three, four years’ time or whatever, their opportunity to buy in or however it’s you sorting it out, that person really needs to understand, “Well what are the gate openers for me to be able to complete that transaction in two or three years’ time? If they’re offering me equity in this business, then what are the gate openers for me to meet that final milestone of handing over the cash to buy in?”
Lana Clark: [23:08] Making it really transparent and clear what you’re wanting someone to achieve. It’s one thing to expect someone to come in and do their job every day. But not everyone has the skills to understand the expectations of the way they behave in front of clients, what you expect client experience to be, and therefore we have to communicate. If there’s one thing I can say to anybody, it’s you must communicate with your team, you have to.
Fraser Jack: [23:34] Just on that actual starting process for setting cultures, what are some of the things, the practical tips that you can suggest that people do in their office?
Lana Clark: [23:48] It sounds ridiculous, but when you employ somebody, you can’t... Everyone learns at a different pace, everyone likes praise in a different way, so... This sounds ridiculous, but really getting to know that person, how they like to be rewarded. Money’s not everything to everybody, so having a financial reward for everyone doesn’t work. It could be a day off, it could be another sort of time in lieu, it could be reward by money, reward by another means. Really understand what motivates that person to come to work every day. If it’s money, then great, then it might be a bonus. But if it’s someone else, it might be something else they want as a reward for fair, good, excellent effort.
Lana Clark: [24:29] One of the other things that I would say that when someone does a really good job, understand that not everyone likes to be publicly praised. Some people like the whole clap at the morning tea and all of that sort of thing, and that’s awesome. But some people really don’t like that, so it’s more of a, “You did a great job there and I really want to say thank you. Because of you, we saved this client X, Y, Z and A, B, C,” whatever the case may be. So really get to know and understand who the people are that you work with, because sometimes we’re just not all the same. That would be my biggest takeaway there.
Lana Clark: [25:01] Number two, make sure that your whole team understands what is expected of them every day of the week. Just don’t let them sit in their chair and flounder, and look at emails and do this and do that and do something else, because invariably that will come unstuck somewhere. They really need to have a really good understanding of what their expectations are in the business of them every day.
Lana Clark: [25:21] Number three, one of the biggest things I find with any business owner is the lack of accountability in teams. We think it’s okay to sail along. If we don’t have a huge amount of work to do today, we’ll just sit here and twiddle our thumbs sometimes, and we’ll do that tomorrow. But the reality is everyone needs to be accountable to something. Accountability is really important, including being a business owner. You need to be accountable to yourself, not just expect your whole team to be accountable.
Lana Clark: [25:51] Some awesome ideas around accountability is just having a 10 minute standup meeting every day in your office, to say, “What went well yesterday? What didn’t? What’s your metric for today, i.e. what are you going to get done today?” If there’s a challenge, just call it out and say, “Let’s take it offline and talk about it a bit later,” or some people say, “Where are you stuck?” So talking about challenge and how you need help with that. Just that quick, short, sharp meeting where no one can sit down. It’s just a quick 10 minute thing where you go round the team and everyone’s ready to start the day, start the day with intention really.
Fraser Jack: [26:25] Yeah, start the day with intention. I love the standup scrum meeting too, I think that they’re brilliant.
Fraser Jack: [26:31] You mentioned previously around the idea of succession and advisors coming in and coming into the business. Do you see a lot of that happening at the moment? Obviously there’s a fair few changes happening.
Lana Clark: [26:42] That’s a really tough one, and I guess it’s a really hot topic at the moment, a hot potato. I guess everyone everyone is having lots of conversations with advisors who are in the position where they maybe don’t want to meet the education standards going forward, that sort of stuff.
Lana Clark: [27:02] I tell a story of my dad, who retired as a financial advisor 12 months ago, and I’d been telling him for maybe three years... I’ve been asking him every time I spoke to him, “Dad, is it time? Dad, is it time?” He’d go, “No, no, no.” Anyway, a few things happened in his life personally which led him to go, “Right, this is it. I’m done, I’m out,” so I’ve gone, “Great, let’s do it.” He had that very good fortune of exiting 12 months ago, but for people who are in a similar situation that he was, it’s really tough.
Lana Clark: [27:37] I guess some hard decisions need to be made, but I guess at the end of the day, you’ve really got to understand who you are and what you want out of your life before you make that end decision. Just because you don’t have a degree, it doesn’t mean to say you can’t stick around in the business. It just means that your role might need to change, that sort of thing. Then you’ve got to ask the question, “Okay, if that’s me, and I’m going to stay here and I’m going to manage the business, but I’m not going to do client work, that’s great, but where do I get these advisors from to come and help my clients?” That sort of thing. There’s a lot of things to consider.
Lana Clark: [28:07] I guess I’ve heard a lot of people around the place, whether it’s other advisors, education people, other coaches. We’ve all got the same message. Don’t leave it until the last minute. You don’t need to make a decision right now, but you’d probably be in the best position to be picking up the phone and talking to people and asking questions about, “What are my options? If I haven’t made up my mind about study yet,” that’s okay, but go to a uni and just have a chat with someone that might be able to help you there, and really be in a position where you can make an informed decision about whether you want to study or you don’t.
Lana Clark: [28:44] If it’s not the study thing, then think about how you might bring other advisors into your business so that there can eventually be a succession in that way, and you can maybe just hang around for a few years and manage the business. There are many things that can be done. It’s just about, if you like, work shopping them for want of a better term, but work shopping what the options are and where to go.
Lana Clark: [29:07] For those advisors who are struggling with getting their heads around the whole education thing, I think that the thing always to remember is that if you don’t want to do it that’s fine. But if you’re on the fence and you’re kind of thinking, “Oh, maybe I do want to do it, then I would encourage you to go to a university and talk to someone, and just say, “Is this possible for me?” I’m always of the belief that universities will not set people up for failure. It wouldn’t be in their best interests to do so. And it’s never too late to study. Never, ever, ever.
Fraser Jack: [29:38] Exactly. Quite a few different models you mentioned before. There’s obviously a lot of challenges to get through. I speak to advisors entering or wanting to purchase into businesses. There’s big consideration for their values and the type of client they want to serve. There’s a lot of younger advisors who want to look after millennials and don’t necessarily want to look after retirees and that sort of consideration.
Fraser Jack: [30:02] What are some of the models that you see, because I see some of the models coming forward a bit like the legal practitioners where they have junior partners and senior partners in legal businesses. What are some of the models that you’re seeing and might be working or not working?
Lana Clark: [30:15] I think that that’s the fairly traditional model. There is still a lot of that sort of stuff that goes on. In the instances, some people, they just want to exit, so they get someone in to buy the business just because they’re looking for a business to buy and they hang around to transition the clients, and then they’re out. I see business who want to make sure they’ve got the right cultural fit for the business. They’re really worried that they’re going to be seeing these people, as in their clients, at the shopping center, and they don’t want to have an embarrassing moment at the shops. So rather than thinking about what it is, they just want to get in and get out, as in make the sale, the transaction and leave. They really care for their clients.
Lana Clark: [30:57] I mean look, 99.9% of advisors would absolutely and do absolutely care for their clients. That’s not what I’m trying to say. But a cultural fit is more important for some people than retiring, that sort of thing, so they tend to hang on until they do find the right person. At the end of the day, I guess you have to ask yourself some questions. Does this person fit well here? What will happen to my staff if I’ve got staff? What will happen to them? Will they come in and exit the staff and get their own team in? What will happen? Can I make sure that there’s a smooth transition for my people here?
Lana Clark: [31:34] There are so many questions to ask, and I don’t necessarily think it’s about what’s common out in the marketplace. I think it’s making sure that you’re going to negotiate an exit from the business for yourself that sits right with you, because there would be nothing worse than retiring from an industry and always wondering whether you did the right thing by everybody. All you can do about that is make sure that you plan in advance and plan well enough to be confident, but still all the while making your own checklist in your mind and making sure that you’re looking after everyone and considering everyone that you want to before you exit, including yourself.
Fraser Jack: [32:14] One of the hot topics of course at the moment for people that are looking to exit is the valuations. How do you see that? It’s tended to be dropping over time as we get closer to these regulations coming in. How do you see this playing out?
Lana Clark: [32:24] I’m not an expert at that. I would have to refer you to someone like Steve [inaudible 00:32:35] or whoever about that. But there is definitely a line where you say if everything that everyone is saying out in the industry happens, in terms of mass exodus, that sort of stuff, then of course it’ll be a buyers’ market because there will be a lot on the market to buy.
Lana Clark: [32:55] I think from a business owners’ perspective, if you think that might be you, that you want to exit, I think the best thing that you can do for you and your business is to make sure that there is no opportunity for your business to be devalued as a result of something that you haven’t achieved in your business from an understanding who your clients are, having a really, really nice offer for the client, making sure that everything that you do for that client to onboard them and service them ongoing is in terms of open and shut.
Lana Clark: [33:29] So it’s a turn for... To coin a phrase, to have a turn key business, so someone coming in is buying something. They walk in, switch the lights on and off they go. I think that they are the businesses that are going to see less movement let’s just say in valuation, versus someone who hasn’t taken that sort of stuff into consideration.
Fraser Jack: [33:52] Back to your initial point, if you’ve got all of your systems and processes in place, then you’ll [crosstalk 00:33:56] a much better valuation.
Lana Clark: [34:02] Yeah, and understanding who your clients are and what you do for them, and all of those sorts of things.
Fraser Jack: [34:04] When it comes to valuation, I think it’s a buyers’ market at the moment, prices are dropping, valuations are dropping. It could well be the price of or the cost of going and studying and getting a degree and going through that process could actually repay itself on the other end of this once we get through this in 12 months’, two years’, three years’ time valuations will come back up again?
Lana Clark: [34:25] Yeah, yeah. I had a conversation with someone at the AFA conference. Was that last week? Last week or the week before, about this very issue. If you think about the cost of a degree, yes, there’s time out of the business, all of those sorts of things, to do study, exams, all of that sort of stuff. But the reality is if you spend that little bit of money and the time, then you don’t know how that’s going to repay you in the future.
Lana Clark: [34:50] If you think about it the other way, the investment that you make as a result of your further education, if you equated that back to the number of new clients that you need to bring on, it’s a fairly simple equation. Over three years, if a degree costs you, I don’t know, $30,000, let’s keep the math really simple, and it’s a three year degree, it’s $10,000 a year, if you charge a client $500 let’s just say, it’s two clients per year over three years, the maths is quite simple I know, and people will be out there going, “Oh, you’re being ridiculous. How dare you say that?” I understand, I understand it pulls at the heartstrings and the mind that we’re all going crazy and we’re expected to do these degrees.
Lana Clark: [35:36] Well yeah, that is the expectation, but you also have the choice on whether you do it or you don’t. Here are the choices, and here’s the pathway if that’s your choice, and here’s the other way pathways if that’s your choice. No one will think any less of you either way. I think that making a choice for yourself that is right for you is fantastic. You just don’t want to be that person that’s stuck in the middle and can’t decide.
Fraser Jack: [35:58] I also see that there are a couple of business models around for advisors that don’t want to go and become... stay as an advisor or become a... To work in a coaching job or in a role in their business that is working with clients on achieving their goals or setting their goals or cashflow, all those sorts of areas as well. Do you see many of those?
Lana Clark: [36:16] I haven’t personally seen many of those at the moment. But I think that if you put your thinking cap on and really strategize with other people in your business, actually think about ways that you can be involved in an advice business, not necessarily just managing the business, there are a lot, a lot of ways that you could do it. Some of us in the industry are great at getting out there and shaking the tree, absolutely fantastic at going in, engaging people and talking to people about what they need, what they want in life and all of those sorts of things. There’s nothing wrong with doing that and then bringing those people into the business, for them to come into the new client process as a potential new client.
Lana Clark: [36:53] Some advisors love talking to people. If you want to be out there kissing babies, that’s awesome. Go do that, and bring the person back to the business, and let the team handle the rest. There are many things that advisors could be doing if they don’t want to be in the position where they’re giving specific personal advice to clients. Many, many things.
Fraser Jack: [37:13] I think there’s a bit of work there still to do with regards to that. I really do fear that there could be a lot of people who have been in important roles in business for a long time to be told by the industry that they’re no longer important or no longer relevant. We could end up with all sorts of... not just mental health issues through to losing a lot of good people that actually can talk numbers in a story way so they’re actually telling a good story.
Fraser Jack: [37:39] Have you seen or heard of any particular level of exodus from the industry from advisors?
Lana Clark: [37:46] There are more and more people going, but I’ve not heard that. What I am hearing is people who are struggling with... I actually had a phone call the other day from a client who is having some health struggles, and really concerned that if they have to go and have surgery for example next year, what happens to them if they’ve got to have three to six months off work, in terms of if they have to leave their current role, they don’t have a degree? What happens if they have to leave their job because their employer can’t carry them for that period, and they’re effectively without a role for that three to six months that they’re convalescing? What happens to them?
Lana Clark: [38:31] My question to them was... Well no, my comment was, “That’s really a good question because I don’t know the answer to that one.” Anyway, we decided that we’d go off and talk to the FPA and see what they say and do a few other bits and bobs, do some investigation licensee-wise and all of that sort of stuff. But that’s a really valid point. If you’re not in a role for a particular period of time and you don’t have a degree, what does that mean for you? I’m hearing quite a bit of that at the moment.
Fraser Jack: [38:58] Now let’s have a look at what’s coming in the future and the near-future and the long-term future. What do you see happening in firms over the next 12 months as a trend?
Lana Clark: [39:06] In my own firms, I just want to see people bed down their offer, as in my clients I’m talking about. Bed down their offer, get their back office up and running really well, and just get themselves sorted for whatever might come their way. I have a few clients in each camp, where they have degrees or they don’t, so continually having that conversation with the clients that don’t. “What are you doing about your study?” All of those sorts of things. I probably sound like a broken record, but it’s not in a way that’s confronting. It’s a way that I’m here to support you. Let’s make some decisions. Have you decided? All of those sorts of things.
Lana Clark: [39:45] But yeah, I’ve got some businesses who have faced some real challenges this year in a few spaces, and just getting them back to business I think. I think that that is a really big one for everybody. We’ve spent a whole year, or more than a year, worrying about what’s coming. The reality is some of us have lost sight of what’s right in front of us. I think it’s important to remember that we need to get back to basics, and just put one foot in front of the other and go through the motions in terms of step by step, what do I need to do for education now, but always be back in front of the client saying, “How are you going? What’s happening your life? How are you feeling about the royal commission?” Because hopefully everyone’s having an open conversation with their clients.
Lana Clark: [40:33] I think that if you’re a really great business owner and you have a great offer to your clients, then I think it’s going to be business as usual, unless you want to undergo a massive change to business for whatever reason. But I think for those business owners who are a little bit stuck or might not be quite ready to make decisions, then I think the pressure is going to be increased a little bit more, because we’re getting closer to deadlines, et cetera.
Lana Clark: [41:00] Like I said before, just get started on something. Pick up the phone. I’m more than happy to have a chat with anyone on the phone. No questions asked, no strings attached. Just call if you need someone to talk to, vent, whatever. Pick up the phone. I’m happy to take your call.
Fraser Jack: [41:18] Very good. While we’re on that topic, how can people get a hold of you to continue a conversation?
Lana Clark: [41:23] You can reach me via LinkedIn. Lana Clark, in Brisbane. You can reach me via the Elixir Consulting website. You can pick up the phone and call Elixir. Any of those ways is all good.
Fraser Jack: [41:32] Very good.
Fraser Jack: [41:35] Tell me about the long-term future. How do you see this all playing out in the next five years or so? What’s the profession going to look like in five years once everyone’s qualified and we’ve been through all that?
Lana Clark: [41:45] That’s an interesting question, isn’t it? People might shoot me down in flames, but I think that this is a good thing that we’re about to embark on. I think it’s going to make it a lot more level playing field for many people. I think that business models will come out the other side and those who survive and are really good business models will only go from strength to strength, and those who currently need to do some work will... Yes, they’ll be forced into making some decisions, but they’ll either come out the other side a really good business, or they’ll move on and someone else will take their business and turn it into a really good business.
Lana Clark: [42:19] My biggest fear is that we will have that set from the industry and we will have clients not being serviced, and the fear of not having enough people to service clients and their needs is a bit real for me. But I’m crossing fingers that we maintain sensibility and we ensure that we do everything that we can to transition those people who are in that vulnerable position where they’re not education compliant, let’s just say, right now, and we will help them get through that.
Fraser Jack: [42:51] So the future is bright.
Lana Clark: [42:53] I believe so. There’s plenty of opportunity. Plenty.
Fraser Jack: [42:56] Very good. Well we’re almost out of time. I better race onto our quickfire round questions now. I’m sure to speak to plenty of people at barbecues. As you mentioned, you have friends outside the advice industry. When you talk to a consumer or a potential client, and they’re maybe thinking of getting advice, what’s your advice to them?
Lana Clark: [43:18] My advice to them initially is to do your homework. Most of us these days would Google someone before we went near them, so do that. Ask friends and family if they can refer you onto someone and for whatever reasons. Look at advisor ratings and see what your profile looks like there. Just generally check out the digital footprint and see what’s there. I mean look, inside the industry you’d probably look at the [inaudible 00:43:43] register and all of that stuff, but external to the industry, you wouldn’t know about that sort of stuff. But yeah, you just want to be looking for a really good digital footprint, a really good online review, and a referral from a friend, right?
Fraser Jack: [43:56] Yeah, sounds good. Now for newer advisors and people looking to get into advice or start out or get into a practice, what advice would you give to those people?
Lana Clark: [44:05] Have a really good idea of what sort of advisor you want to be in the future. Sometimes we just throw ourselves into the job, which is great. There’s no drama with that. But some advisors are very purposeful with who they look for. Be really clear on what it is that you want to achieve down the track. If you do want to have the opportunity to buy equity into a firm, then make sure you’re seeking out people like that, rather than just going anywhere just for the sake of getting a job. I mean look, that’s a very real situation for some of us. We need to get into a job, it doesn’t matter what we’re doing, and that’s okay. But if you want to do that, then make sure that you’re doing your homework on that as well.
Lana Clark: [44:47] Number two, if you’re absolutely hellbent on being a business owner, then I would suggest to you that you need to get people to help you to start that up. Don’t go in there blind and just think that you can do it all on your own. There are some people who do and can do it all on their own, and that’s awesome, all power to them, I wish I was them, but most of us are going to need some help. So if you’re planning to start your own advice business, then I would suggest that you need to look for a few friends to help you in the first three to six months leading up to opening your doors.
Lana Clark: [45:18] And having a plan on day one when you do open the doors. Often you ask advisors, “Well what are you going to do on day one when you open the door?” “Oh, I don’t know.” It’s like, “Okay, well you might want to sort that out.”
Fraser Jack: [45:30] Very good advice there. Having a plan. That’s come up a few times, and also the reaching out. There’s a lot of people in this industry that are more than willing to help advisors enter into the advice industry.
Fraser Jack: [45:41] If you were talking to someone that’s been in the business for a long time that hasn’t had a lot of change to it, that sort of needs a transition and change at the moment, what advice are you giving to them?
Lana Clark: [45:50] Well I get a lot of those people. I do talk to a lot of people like that, and the overarching point that I make to them... We talk, talk, talk, talk, talk about the help they need, and that’s awesome. I say, “Yep, I can help you with all of that,” but the reality is, I look them in the eye and I say, “Will you do the work? Who is going to implement? Can you implement? Or will you need someone else to do it?”
Lana Clark: [46:13] Sometimes there’s a bit of silence when I ask that question. Realistically, a lot of us in this industry don’t have the ability to implement or to execute well. We’re great at ideas and giving advice and all of those things, but we have a team of people around us to execute. I would say if people are looking to make changes in their business, awesome, make that decision, make a plan. But really the number one thing you need to consider is how will you execute that plan, because without execution, nothing will happen. Or it will happen by part. And you may end up a bigger mess than you are now, if that’s your story.
Fraser Jack: [46:48] I completely agree with that. Get an implementer and/or an accountability buddy, and make sure that you actually get the outcome, not just the idea.
Lana Clark: [46:58] Exactly, exactly.
Fraser Jack: [46:58] I can learn a few things from that myself. I’ve got lots of ideas, and I’d love to try and get them implemented.
Fraser Jack: [47:04] Last question, it’s about you. If you could go back in time and give yourself some advice, when would you go, what would you say to yourself?
Lana Clark: [47:15] I mean I almost became an advisor, and I’m actually glad that I didn’t. That was a really good decision. People say, “Why have you never been an advisor?” It’s not something that I’ve really wanted to do, having seen my dad go through that, being an advisor that is. He’s had some great times, but I see the highs and the lows of advice, and I like to be happy most of the time, so being unhappy doesn’t really sit well with me most of the time. But that’s okay. We all have our challenges.
Lana Clark: [47:41] I would actually just put myself out there a lot more and back myself, because a couple of years ago I made a speech. It was actually two days ago two years ago. I made a speech where I said... I think I said 29 years had passed since I’d done the [inaudible 00:47:58], which is the highest law certificate in New South Wales, and I said it’s taken me 30 years to get here, and it shouldn’t, and that’s because I didn’t back myself. That’s the one piece of advice I could give to everyone. You have to put yourself out there and you have to back yourself.
Fraser Jack: [48:11] Good advice, and thank you so much for sharing all that advice with us today. As I mentioned before, you’ve already said that people can get hold of you on LinkedIn if they want to continue the conversation. Thank you so much for putting yourself out three on this and backing yourself. Appreciate it, and we’ve really much enjoyed having you on the show today.
Lana Clark: [48:28] My friend, it’s my absolute pleasure.
Fraser Jack: [48:30] Thank you.
Fraser Jack: [48:32] If you haven’t already, I’d love you to subscribe to the podcast on your podcast platform of choice. To continue the conversation, head over to our social media channels. We’ll catch you next time.
Disclaimer: This document is a transcription obtained through a third party. There is no claim to accuracy on the content provided in this document, and divergence from the audio file are to be expected. As a transcription, this is not a legal document in itself, and should not be considered binding to advice intelligence, but merely a convenience for reference.
