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Podcast Transcript

Episode 16, Season 1

Transitioning a traditional advice business is not easy, with Steven Hallam


Steven Hallam: [00:00] Traditionally, he’d sit there and look at goals and say, “Okay, I want to protect my family, I want to put my kids through this school or that school, and I want to pay down my mortgage and I want to have a set amount of money put aside,” but the world is changing and whilst those priorities are still there, people want to live along the way. And they want to know that they’ve got, you know, in most cases, that they’ve got the flexibility and the mindset and the structure to go out there and do the different things they want to do differently.

Fraser Jack: [00:34] Hello and welcome to the Goals Based Advice Podcast. We have conversations with pioneers of the new world of Financial Advice. I am your host, Fraser Jack, and I want to thank you for tuning in today. I would also like to thank our supporting partner, Advice Intelligence for powering this podcast.

Fraser Jack: [00:51] In this episode, I chat to Steve Hallam who has been through the process of transitioning his clients from an existing traditional advice model, to a goals based financial life coach and accountability offering, a process that was never going to be easy but Steve is a down-to-earth and practical guy and he talks candidly about how he got on with business and made it happen. So, if you’re thinking about purchasing a book or introducing a new service like goals based life coaching, Steve’s a great person to chat to. Let’s kick off our chat with Steve now.

Fraser Jack: [01:33] Welcome to the show, Steve.

Steven Hallam: [01:35] Yeah, thanks for having me.

Fraser Jack: [01:36] Very good, it’s certainly my pleasure. And tell me, whereabouts are you at the moment?

Steven Hallam: [01:41] I’m sitting in my dining room at Clear Island Waters here on the Gold Coast.

Fraser Jack: [01:46] Beautiful, hot day.

Steven Hallam: [01:48] It’s been a bit smoky today. There’s fires around South East Queensland, particularly Stradbroke Island. The smoke has been a bit around, but we’re not in the middle of the fire so you’ve got to be happy.

Fraser Jack: [01:58] Yeah, and you’ve got a bit of water around you, too.

Steven Hallam: [02:02] Yeah, I’m not too bad.

Fraser Jack: [02:04] So, tell me, let’s start with having a quick chat about you and your business, to sort of introduce what you do and your business.

Steven Hallam: [02:11] My business is called Pegasus Planning. I rebranded the business a couple of years ago when I wanted a change in direction. Coming back to being a sole practitioner after being part of a family practice that had the family name attached to it. So, financial planning, holistic financial planning is what we do. Goals based advice is the preference, although not everybody, not every client wants that or understands that they need that. So, you’re dealing with clients who are in their 30’s to clients who are in their 70’s.

Fraser Jack: [02:43] Okay, great, and how did you ... Let’s go back in time. What was your journey towards where you are now?

Steven Hallam: [02:49] Okay, well, I had joined the army when I was in my early 20’s and after spending a number of years in hospitality. I got out just before I turned 30 because I figured that either I make the army a long-term life ending career or a life long career, not life ending, or I had to get out of that stage to ensure that I still had a chance to do something proactive.

Steven Hallam: [03:13] So, I got out, went to university. I was studying economics and Chinese. Couldn’t get the Chinese, or the written part of the Chinese, so it was then that I was getting asked to join the family financial practice down here in Belfast, I was in Brisbane and I started working on a part-time basis until eventually it became full-time. Then I withdrew from university to start studying some of the financial planning subjects.

Steven Hallam: [03:40] So, that was in the late ‘90s, ‘97, ‘98. A couple years in a small, very, very, small office with family was enough to convince me that I needed to get out.

Steven Hallam: [03:53] So through mutual accidents, I was offered a position as a business development manager for a superannuation company in Sydney. I spent four to five years down there, working with and learning from advisors and accountants who were, a lot of them had been around for quite a long, long time. So, I sort of understood what I wanted financial planning to be from after seeing these guys and what I didn’t want it to be. We went through a takeover which, you know, in the business wasn’t exactly all that fun. Eventually, I decided that I want to get back into financial planning so I moved back up to Queensland and the Gold Coast. Been here since 2005.

Fraser Jack: [04:40] It’s a pretty interesting distinction, isn’t it, with the conversation around knowing what you don’t want it to be.

Steven Hallam: [04:46] Yeah, very much so. You know, I think financial planning in those days was still coming out of the dark ages of the big life insurance companies being the predominant providers of investment products, where the fees where horrendous. We were just starting to see the evolution of wrap accounts, master trusts had been around for a while but with master trusts, the fees were fairly high and so for the larger account balances, SMSF funds were very attractive because of the fixed fees generally from the accounting side.

Steven Hallam: [05:20] You know, so, and of course, you had a very mixed bag of advice providers. You had accountants who did it on a part-time basis which is, you know, probably never a great thing to do on a part-time basis. You had stock brokers who were doing financial planning on the side. Then you had a lot of the guys who’d been around in the ‘70s and ‘80s who were still involved in financial planning and unfortunately, a lot of them were still very, very much what can I sell today to who. And we saw that with the advent ... the rise and fall of afforestation projects and the various tax effective projects that come around. Not that the idea wasn’t great, it was just that the product costs and the sales methods were pretty ordinary. So, you get a fair idea of what we consider to be right and wrong.

Steven Hallam: [06:14] And then you hit the GFC and the lessons just started coming home thick and fast. The GFC changed the way I do business, changed the way I invest, both personally and for my clients. Took awhile to find the right solutions, but hopefully, we’ve found that now.

Steven Hallam: [06:35] And I’m one of those sort of advisors that, if it’s good enough for my clients, it’s good enough for me. So, my super fund, I had a self made super fund that closed down. It’s now invested in the same superannuation fund I recommend to my clients if it’s appropriate for them. My life insurance policy is exactly the same type of product, severity based product that I recommend to my clients if it’s appropriate for them. And if it’s available to them. So, I put my money where my mouth is.

Fraser Jack: [07:04] Yeah, fair enough. And you mentioned you made a change a couple years ago. Step us through that.

Steven Hallam: [07:09] Yeah, okay, so, we were still going through the process of ... You know that my business partner was my mother. She was getting more and more inactive in the practice and certainly in the client facing duties. So, it came to a time when we decided that she didn’t know I would need to be an authorized representative. And as a result of that, I decided that if I’m going to change the nature of the business and the type of clients I wanted to bring on and change the attitude of the existing clients to a new way of thinking, I had to rebrand.

Steven Hallam: [07:40] So, hence the reason why Pegasus Planning came about. You know, getting away from the family name of the business which every branding expert will tell you, “You know, you don’t use your family name.” But it worked for a long time. It worked for a reason because of reputations. But then when you no longer needed that, you moved away and created Pegasus Planning so that we created a new look and feel. Part of that getting the new clients and existing clients to understand the way we were working was, putting the ideal client on the website, which was something we’d never really done. And making sure that, you know, the message was out there that it was our choice to work with the clients as much as it was the clients choice to work with us.

Steven Hallam: [08:30] We tried to be all, be everything to everyone over the years and that made for a very disjointed business structure, products and services. We found that after a very serious review of the client base, we found that the guys we were giving all the service to were the ones not paying for it, which is fairly common.

Fraser Jack: [08:53] So, that leads you into the interesting conversations in you rebranded, you created some a point of difference, I guess that also helped with the question, like, you know, your clients would say, “You’ve got a new brand,” or something and you use that as a conversation starter to say, “Yeah, we’re doing things a new way now.”

Steven Hallam: [09:10] Yeah, very much so. Lost some clients deliberately as a result of that and lost some clients that I really didn’t want to lose but that was the risk I took and I knew that was going to be the risk. The ones that we moved on or away from deliberately, very happy to have done that but because I just figured that they weren’t going to be a part of the new role that we were looking for, new advice scenario we were looking for.

Steven Hallam: [09:36] And then sometimes, people just don’t want to change. That comes about as much as anything else from the fact that the family business was no longer a joint operation. Some of those clients had been around for a long time and the main focus of being a business partner whereas after a while, they were, “Well, maybe we’ll just sort of go a different way.”

Steven Hallam: [09:55] And I’ve ... that experience is not [inaudible 00:09:58] to me. That’s been a constant talking point amongst my peers in the industry as they bought client bases or as they’ve taken over where maybe an accountant was involved in a part-time way or they’ve brought on professional advice. They’ve found that transition sometimes very difficult because the clients were attached to the other advisor and that’s the nature of the beast. It’s a personalized business.

Fraser Jack: [10:21] Yeah, I don’t think ... I think that certainly a lot of advisors would have been through that or are about to go through that in some way. How did you ... Like, what was the conversation? If we broke it down, what was the sort of ... how did you go about the actual conversation with the client? What were you saying? What were they saying?

Steven Hallam: [10:36] There was a combination of two things. One, it was based around the advice services we were offering and what we were trying to achieve. The product services we were offering moved away from managed funds and unlisted structures. We used to use a lot of unlisted structures and managed funds. The two things we got out of the GFC in particular were the unlisted products, mainly around unlisted property trusts, failed and failed tragically during the GFC. And most of them never recovered. Clients suffered and we suffered because we were invested as well.

Steven Hallam: [11:09] And then we had the managed funds scenario and the clients were saying, “We can’t see it. We don’t understand what it’s doing. What’s it doing internally. What’s going on inside?” That was part of, I guess, a questioning of the whole process of the investment side of it. We knew that clients were focusing on the wrong thing at the end of the day, when there’s such big losses and such big changes in asset values, you know, we had to look at it in different ways.

Steven Hallam: [11:36] So, I moved onto using self-managed accounts where clients can actually see within the portfolio. You know, we give them a choice. We ask them, “Do you want to see what’s going on? Or do you just want to see the account balance?” If they just want to see the account balance, I’ve got a solution for that as well.

Steven Hallam: [11:52] I moved away from the idea of ... we’d been pushed a couple of times with the clients directing us into investments that were going to give them a better return and, of course, they don’t then realize that risk comes with that. So, the provider we use now is never going to shoot the lights out in terms of performance, but nor are they going to go the other way at a hundred miles an hour. It’s looking forward because losses are harder to recover from than anything else.

Steven Hallam: [12:20] So, you know, I don’t ... I’m not looking to give my clients the best possible return on their investment because it can go [inaudible 00:12:28] very quickly. It’s more about now, what are we trying to achieve? And in what time frame? And then what are we going to do? And then what’s the next step, and what’s the next step and what’s the next step. So, if you call it lifestyle coaching, if you call it goals based coaching, you know, it’s all part and parcel but from that perspective.

Steven Hallam: [12:46] That was a lesson we’d learnt. We’d always had that deep conversation, I think most advisors always had that personal conversations with their clients, but you know, starting to put a process around that and making sure that the focus is on the goals that you’re trying to achieve.

Steven Hallam: [13:03] We did some research and attended some courses throughout the industry. Quite often came back to in 2001, I think it was, I did a life coaching course in Sydney for my benefit, not for any other reason and had been using some of the techniques and skills that I’d gained from that. Now, we’re just, in the last 12 months, been putting that into a more formal approach.

Fraser Jack: [13:28] Yeah, do you want to tell us a little bit about that more formal approach, the goals based advice part. You mentioned that so many clients are and so many client’s aren’t. What is it for you and how does it work for you and which clients are taking it?

Steven Hallam: [13:40] Well, it’s a simple scenario. What are they looking for? In an ideal world, you would have your clients doing exactly fitting inside your box. And that might happen in five years time when you’ve got the business to a level of ... a momentum where you can afford to say 60% of the time.

Steven Hallam: [13:58] Reality is, you’re in business, you’re there to make a profit, and if your clients want to deal with you and they’re happy to work with you and they sit there and they say, “No, we don’t want that part of the service. We just want you to sit there and look after the financials,” we sit there and say, “Okay, we will do that.” And along the way, you’re feeding them information and education so that they, without them even realizing it, they’re getting the sort of assistance that helps them make decisions.

Steven Hallam: [14:22] So, you’ve got really in your lifespan, you’re got probably three different periods in your life. That 20s to 30s when you’re not married, when you don’t have a lot of commitments controlling but don’t blow it all which is a tough thing because most people are thinking about Friday night or Bali and not the more important things in life.

Steven Hallam: [14:43] Getting into the 40s and 50s when the debts are high, the kids are at high school costing a fortune, trying to control their cash flow and again, point them in the right direction. But their incomes are getting higher and then more importantly, when, you know, retirement is not about saying, “Okay, we don’t need you anymore. We pull the plug. Pull [inaudible 00:15:01] is going to spit us out, $30,000, $40,000 a year in income, see you later.”

Steven Hallam: [15:05] Well, it’s actually even more critical then because the issues that come up with retirement phases. Are you spending more than you’ve got available? Do you understand how long your portfolio is going to last for? Are you maximizing the benefits and the changes thinking and considering that those rules change on a consistent basis? Do you have things to do to fill in the gap?

Steven Hallam: [15:23] I mean, the number of times we’ve had clients come back to us after two years of retirement going, “You know, I’m bored now. What do I do?” So, we manipulate around using some strategies used by professional goals coaches such as Keith Abraham where you create a battle list and you try to work out what’s really right and what’s really wrong and what’s most effective for your dollar.

Steven Hallam: [15:48] Some people retire and they’ve got a million things to do but they’re a handyman and all that sort of stuff. Other people who don’t have that, particularly small business owners and executives where they’ve got to a stage where they put everything they have into their week. Outside interests weren’t really a thing. So, getting them refocused, whether they realize it or not, so that they are living a life.

Fraser Jack: [16:10] Yeah, I was going to ask you a little bit about that, how do you start having those conversations with clients because I know a lot of the time you might, you know, just asking what are your goals is sort of a question that people go, “Oh, you ...” unless they’ve really thought about it. Do you use Keith’s techniques or you start with a bucket list or dream or ...

Steven Hallam: [16:31] I’m not trying to reinvent the wheel. That’s why I outsource investment management. Keith has on his website as a free download has got a document called 25 Questions. I use that and I’ve told him I use that and share it with clients. The 25 Questions in a great deal of different areas of your life and the idea is to give four answers to each so it might be, what books do you want to read? What are the top four books you want to read? What are the top four places you want to go to? What are the top four experiences you want to see? You write them down.

Steven Hallam: [17:03] Now, most people won’t fill out four answers for everything. Some of the questions, they’ll go, “Oh, I’m not really interested in that area.” But you sit there and say, “Okay, well, what areas do you want to visit or what places do you want to see in Australia?” They might have a list of 20. All of a sudden, they’re starting to get the idea of, “Oh, so it’s not just the big, hairy, audacious goals, it’s the how do I live my life stuff.”

Steven Hallam: [17:27] And, of course, when there’s costs involved and you start looking at, “Okay, well, how do we budget for that?” So, that you can sit there and try to achieve those things without blowing your retirement in the first two or three years.

Fraser Jack: [17:40] So, that list gives you a really good conversation starting point, I suppose to start looking at what goals and ranking them and working out which ones are more achievable now and which ones are later?

Steven Hallam: [17:49] Exactly right. And, of course, obviously putting them into a perspective of what’s realistic, what’s priority, what’s something you’d like to do. Sometimes some of those they might complement each other. So, you know, “I want to travel around Australia in a camper van.” That’s great. And at the same time, I’m seeing the places I want to see. I’m spending time reading the books I want to read. I’m doing the home course on handyman or woodwork or something along those lines. It all sort of ... It can quite often merge into one major event like that where they’re kicking off a number of different things.

Steven Hallam: [18:26] But it’s a starting point and it’s only a starting point because obviously, for some of those goals whether you’re creating that list in your 40’s or your creating that list in your 60’s, some of those goals do take up a bit of time, preparation and looking at the different aspects of how to achieve them, you know, from a time perspective, from a financial perspective, from a physical perspective. It’s all sort of a power of process.

Fraser Jack: [18:52] And I imagine that’s a list you can bring out every time you start your review meeting. You bring out the list and talk about what they have and haven’t done. It might not be financial goals, like you said, reading a book.

Steven Hallam: [19:01] Yes, look, quite often it’s just lifestyle. It’s doing the things they wish they’d done but never made the time or had the time because their lives were so busy. As the kids get older, obviously when you get kids in primary school at a younger age where the care is required is quite high. Getting to an older stage when the kids sort of hit high school, where they can be home by themselves, you know, in the afternoons where Mum doesn’t have to pick them up and make sure that they’re being fed and watered and nobody’s knocking on the front door, it’s when they can be a little more self-sufficient, where they can go to friends for the weekend while Mum and Dad disappear for a bit of personal time together to reconnect.

Steven Hallam: [19:42] It’s at all stages and even for the younger generations, like the millennials, that sort of a list gives them a better idea because the millennials tend to be focused on not, and this will be the nature of their work, one career, one aspiration, one be there, it will be a multiple of different careers, and different highlights in their working life over the next 40 years. So, you know that the idea of creating a list of 25 questions, even if you change the questions, is something that is probably very good for them because it gets their mind thinking in a dozen different ways.

Steven Hallam: [20:15] They’re all talking about, you know, their sideline gig, from a working perspective, you know, that’s sort of, you know, Gary Vaynerchuk’s put that out there in the world. They’re all working on their sideline gig. Unfortunately, some of them are not working on their main gig hard enough to worry about their sideline gig. But it’s a list that’s very handy.

Steven Hallam: [20:34] It’s great that Keith puts it up on his website and it’s there for people to go download and use as they please. If you don’t use it, some people don’t get into it for a period of time. I know I’ve got clients who it’s sitting beside their bedhead, you know. It hasn’t been filled in, but it’s there. The day they wake up and say, “I’m going to start filling this out,” it might take a couple of weeks. But it’s a process and it’s a prompt.

Fraser Jack: [20:59] It sounds like a really good part of the process to me to get the clients thinking about that from a head space point of view, some prompters to say, you know, these are the things they want to do. Then all of a sudden, they can be turned into goals.

Steven Hallam: [21:14] Traditionally, you’d sit there and look at goals and say, “Oh, okay, I want to protect my family. I want to put my kids through this school or that school. I want to pay down my mortgage. I want to have a set amount of money put aside.”

Steven Hallam: [21:25] But the world is changing and whilst those priorities are still there, people want to live along the way. And they want to know that they’ve got, in most cases, they’ve got the flexibility and the mindset and the structure to go out there and do the different things they want to do differently.

Steven Hallam: [21:44] Not everybody’s earning $400,000-$500,000 a year. And even the people that are, are not necessarily doing the smart thing with that money. You tend to live towards what you earn unless you have a bit of self-discipline.

Steven Hallam: [21:57] This is ... I read an article not long ago where the power of 1+1 is not 2. The power of 1+1 is 3. And if you’ve got two people in a committed relationship or two people in a relationship where it’s a coach and a client where you both see the client heading in the one direction or where you get husband and wife or two spouses together and they accept the direction they’re going in, and they’re working together. They don’t have to be exactly the same, just as long as they’re sort of heading in the same direction. The power of that is incredible.

Steven Hallam: [22:30] But I’ve come across clients or potential clients where they’re heading in separate directions financially and you’ve got no chance of working with them or advising them because they can’t agree. Until they do agree, you walk away.

Fraser Jack: [22:44] What part of your role do you think is more coaching than it is being a financial advisor or doing traditional advice?

Steven Hallam: [22:52] Every time I talk to clients, it’s even if it’s solving a simple scenario. One of my clients lived in Japan for a number of years, a professional sportsman and his family was back here. You know, it was getting tough on his young family. We had a conversation on Skype one night and he goes ... He was suffering. He was suffering from being away from his kids, missing them, watching them grow up. He was over in Japan probably six to eight months of the year. I remember reading a story many years ago in a self-help book and I reverberated the story to him.

Steven Hallam: [23:27] I said, “Look, why don’t you write a letter to your kids explaining to them why you are where you are. And what you miss about them and what you think it will gain by you being there.” The idea was not to post the letter, or give it to them, but just to get it out of your head and put it back in the drawer. Seal it in an envelope, address it, but never send it.

Steven Hallam: [23:51] I remember talking to him about it a few years ago and he actually did write it, which surprised me. His wife had actually found it on a trip to Japan to see him and she was blown away by it. That was just my advice to him but I had actually obviously heard that used in another context elsewhere. So, I guess that’s part of the education you put yourself through to understand the better ways to help your clients. You know, some of the ... whether it be a formal goal setting process you do over 12 months, or three months, or six months or ad hoc advice that you use in situations like that where you’ve drawn on something you’ve read about, learned about, heard about.

Steven Hallam: [24:30] You know, I did that with another advisor not long ago. He was looking to bring somebody into the practice. He kept a staff but he was looking to bring in a junior advisor and looking at ways in which getting them involved without putting the practice at too much risk.

Steven Hallam: [24:49] I said, “Well, you’re doing a lot of reviews on an annual basis. You’ve reviewed these clients three or four times.” I said, “you’re talking about the same thing every time. Why don’t you change the review conversations each time and get less technical, have a structure and that way the junior can get involved without feeling left out and become more involved with the clients on a personal level.” That went down really well. Should have charged him for it.

Fraser Jack: [25:18] All this great free advice is advice we give each other.

Steven Hallam: [25:21] I know, I know, so.

Fraser Jack: [25:25] So, you mentioned cash flow before. You do a lot of cashflow and accountability type conversations?

Steven Hallam: [25:33] I talk accountability stuff with my clients. I’ve just started in the last few months using My Prosperity as a tool. And I was just starting to get that out there with the clients. Like I’ve said, not all clients want it. Some clients are a little bit fearful of the technology or having information like that in all in one spot but I see it becoming more and more a part of the practice and even to the point where I’m offering it outside of financial planning.

Steven Hallam: [25:57] Because at the end of the day, you know, without sort of doing ... You know, Warren Buffet has said this for years, you know, “Save 20% first, then spend the rest.” And I always loved it with fund managers. You know, the whole world would stop whenever Warren Buffet would send out his annual letter to investors. And they would go, “Oh, isn’t he fantastic, isn’t he great,” but .001% of them actually put into place what he coaches and advises.

Steven Hallam: [26:24] That’s the reason why I use the fund manager that I do is because they actually do put into place the investment strategies that he espouses to, so that you know, as he said, maybe he doesn’t get [inaudible 00:26:36] but going backwards is so much harder than getting a reasonable return for the risk you’re prepared to take. So, its ...

Fraser Jack: [26:45] Do you charge [inaudible 00:26:47], I do hope you don’t mind me asking about your charging, but do you charge separately for cash flow as a different program?

Steven Hallam: [26:52] Well, as a separate program, that’s only just coming on board now, so, yes, I will be. So, for those people that want to come on board and sit down and say, “We don’t want you to ... You know, we’re in an industry super fund or we’re not worried about that.” It surprised me the number of people that don’t want estate planning advice but if they just want to sit there and say, “Yep, we want to build a cash-flow goal set and want to be paying off credit cards or whacking another hundred thousand dollars off the mortgage in the next couple of years,” yeah, that will be a separate program so no financial advice as any way, shape or form. They may come on board later on but that was part of the idea of using My Prosperity so that, or a tool similar to My Prosperity, so that you can do that, monitor their financial goals and put in place a process that everybody can see and get it from there. I’s a pretty good tool, I mean. No tool’s perfect. They all drop and change. Technology puts them down.

Fraser Jack: [27:47] Yeah, love technology. Tell me about your business and do you have other staff that work with you and how do you run ... What is the size of your business?

Steven Hallam: [27:57] My practice is now 35 family groups with the aim to build it up to a hundred. So, over that period of time, it’s just myself at the moment. I do outsource work through a [inaudible 00:28:09] group. They’ve all checked the outsourcing solutions for privacy and for security processes and obviously for [inaudible 00:28:17].

Steven Hallam: [28:18] The idea is that at a point in time, I will gain another staff member in house whilst continuing to use the outsourcing solution for probably more and more of the administration work so that I’m not glued to the business 24/7 and that the clients can rely on somebody else being around if I’m traveling. Because, as much as technology is great, you know, I don’t really want to be getting phone calls if I’m in [inaudible 00:28:46] trying to have a break.

Fraser Jack: [28:49] With those groups, are they all local to you or do you have some, like you mentioned Skype before, do you do a lot of virtual meetings?

Steven Hallam: [28:55] Do a number of virtual meetings. I’ve got a number of clients in Sydney, clients down in Victoria, New South Wales border, clients around South East Queensland, clients in Zurich, I’ve had clients in the Middle East who have since gone their own way because they’re predominantly staying overseas now and moving their Australian assets over there. I’ve had clients in Japan, but predominantly South East Queensland. And I probably see that that would be the area where the future growth of the business would continue to be predominantly in South East Queensland. Although, my clients in Sydney have grown because I’ve referred, so that’s been very good of them, very nice of them, I appreciate that and I like it.

Fraser Jack: [29:38] Fair enough, good excuse. Now, what are you working on at the moment with regards to changes to your business over the next sort of twelve months or two years.

Steven Hallam: [29:46] Well, interestingly enough, yeah, good question, good timing, yeah, just in the process of joining the International Coaching Federation and I’ve just signed up to complete a more formal Executive Coaching Life Coaching course through an accredited group associated with the International Coaching Federation. The course I did in the early 2000’s, the Federations weren’t around in those days. Life coaching is still fairly unregulated around the world, but it’s good to see that there’s now an international association and that they’ve accredited certain providers of education. So, that’s what I was looking for when I was looking for a provider and obviously made a course and the materials that I would be satisfied with.

Steven Hallam: [30:30] I’m way past the idea of studying courses for the sake of letters after my name. You know, I’ve seen far too many university degrees have full of subjects that are just a complete and utter waste of time and money for the student. So that was the end of the game and I’ll institute that in regards to more lessons because obviously things have changed since over the course of 15, 16 years ago, insert the learnings from that into the Cash Flow course and my general advice business.

Steven Hallam: [31:04] Of course, if you’re not learning yourself along the way, you’re not going anywhere.

Fraser Jack: [31:09] So, you see that personal life coaching as a much more important subject for your business than the mainly technical subjects?

Steven Hallam: [31:20] Well, the technical will always be there but you can get that technical information from experts anywhere, you know. That’s not an issue. There are plenty of people out there with those skills and we’ve got them in our head office. So, purely from a technical point of view, that’s not an issue. I’ll continue to learn about what the changes are as we have to because the government likes to keep on changing the goal post and the rules, but I think far and more is the personal advice, the personal coaching scenario that is going to be part of financial planning.

Steven Hallam: [31:51] In fact, on the Facebook page, XY Advisor, I think it was last week, one of the female advisors put her hand up and said, “Oh, look, I’ve just finished this life coaching course. It’s been 13 years in the making because things have got in the way.” I said, “Great, that’s fantastic because that’s where we’re going. If you can’t communicate and help clients build goals and achieve those goals ...” And it’s not just about achieving the goal. I mean, the idea is about building goals that are very hard to achieve, but it’s the steps and the process that go along the way and the small wins you’ve had along the way that add up, you know, that make a big difference, whether they be financial, whether they be personal goals or anything else like that.

Steven Hallam: [32:36] I think the benefits of coaching far outweigh the benefits of the technical advice. And that comes through business coaches, accountants who are giving business advice as opposed to just doing compliance work. The strategic advice will always outweigh the benefits of the technical advice. Unless, obviously, there’s a big technical issue that needs to be solved.

Fraser Jack: [33:00] Yeah, I agree with that. The human to human contact that personal coaching, that ability to have those conversations is a massive part of the value chain. Now, tell me, you’ve also had some other studies to do haven’t you before you ... just for the educational framework?

Steven Hallam: [33:18] Yeah, I’m about a third of the way through a master’s of financial planning. I put that on hold this year just because I was sort of struggling getting back into the technical aspects of post-graduate study but I’ll get back into that now as I get my brain back into study mode. Of course, we’re now in a situation where we need to upgrade our educational skills and I’m one of those so that’ll take place.

Fraser Jack: [33:48] Yep. And how do you see the long term panning out after all the dust settles?

Steven Hallam: [33:53] Yeah, interesting. Unfortunately, you know, I think we’re going to see a massive change in the industry’s employment section. We’ve got 25,000 authorized reps in Australia and they’re not all of those are client facing advisors. We’ll probably see that, I mean, the estimations are that that will halve. We will see a considerable number of people no longer employed in the industry around Australia which will have an effect in a lot of different ways.

Steven Hallam: [34:24] We will see the instigation of robo-advice and robo-advice will be a part of life. That’s okay but robo-advice can’t hold your hand and robo-advice will have it’s limitations. Guys who are professional life insurance advisors who are dealing with 13 or 14 different companies, robo-advice is not going to give you the technical aspects of why this policy is better suited to you or your wife in comparison to another policy. So, we’re going to lose some of that.

Steven Hallam: [34:56] At the end of the day, it means a number of Australians are just not going to get the advice that they need because they’re going to be dealing with a computer system that is only as good as the people who create it. And those people aren’t necessarily on the front lines of advice. So, that’ll be the poor losses in the industry.

Steven Hallam: [35:19] The benefits, I guess, will be that some of the people who are still in the profession and have been for a very long time and are not willing to change, they will go. But, again, you know, for people out there selling their practices, I mean, I’ve looked at two books of business in the last twelve months and I’ve walked away from both purely because I just think that pricing for financial planning business is now going to come back in line with the way accountants price their businesses. So no multiples, it will be cents on the dollar. Because of opt-in and FDS, you know, I do opt-in every year with my clients, their opt-in requirement, as opposed to every two years under it’s current parent requirements, but you know, the difficulties we have seen with some people when they buy a box of business off an individual is completely different to them in personality wise, you can’t mimic that relationship. They don’t necessarily win the clients over, so the clients walk away. So, that’s also going to have an effect.

Fraser Jack: [36:23] So, and you would have been through that with the transaction that you did already, so you know exactly how that-

Steven Hallam: [36:27] Yeah, exactly right and, as I said that earlier, you know, the transition, regardless of how long you’re embedded in the practice, the original attraction to the practice was the original advisor. And unless something really goes wrong with that relationship, that’s where the client sees it and it is tough to change that over.

Steven Hallam: [36:48] That’s the, I guess, obviously with clients that are dealing with large institutions, I mean, they are probably going through that on a regular basis. So, they’re, I guess, it probably takes away from some of their faith in the advice or even personal advice that they are getting from the financial advisors because they are not seeing the same people on a regular basis. It might be every two or three years somebody else is coming along, so therefore, they’re just focused on what the return is, not necessarily what else they can be offered.

Fraser Jack: [37:20] Now, tell me, if you were to catch up with somebody at a barbecue, a consumer, somebody that didn’t have advice and they wanted a couple of tips around how they should go about getting advice or seeing or choosing an advisor, what tips would you give them?

Steven Hallam: [37:34] Well, again, I’ve just done that on the weekend through family connections. Definitely go and have a chat to three advisors because it’s a personality business. If you’re going to work with someone and you’re going to pay them, you’ve got to be comfortable with that. So, it might be the first person you come across is great, but you don’t know how good until you can compare them with two or three others. So, that would be certainly the first bit of advice.

Steven Hallam: [38:02] Secondly, understand why are you there? What are you trying to achieve? If you’re looking to put someone up against the wall and say, “Oh, I want a 10% return, and that’s it. If you can’t give me that, you’re in trouble,” maybe you need to reassess what the role and what is possible out there in the world.

Steven Hallam: [38:22] Certainly, in my early days the business owners were like that. They were saying, “Well, I can get 30% in my business, so why can’t you get me 10?” It doesn’t work that way. You know, you’re giving your heart and soul to your business. You can control that. You can’t control the markets.

Steven Hallam: [38:37] So, your reason why is going to be important and probably the key reason. Then it’s a decision of who do you work with and do you think that they can help you solve your problems or help you create the goals or the lifestyle that you’re looking for. That would be the big key.

Fraser Jack: [38:55] Okay, great. And if you’re giving some tips to a younger advisor or planner that’s coming through and wanting to build their business and start from scratch and like that, what tips would you give for them?

Steven Hallam: [39:07] Attitude is everything. If you walk into a business twelve months after you’ve finished a degree and think you know everything, you need to pull your head in. This is the real world, not the university world.

Steven Hallam: [39:20] So, you’ll take anywhere from five to ten years gaining your skills in working with people. It’s not about the technical advice, you’ll have that pretty quick. But having clients willing to pay you for your personal advice and the way you work for them, it’s going to take some time. Some people will pick it up pretty quickly, but those people I’ve seen in the past, sometimes are more sales oriented. So, people fall for the sales pitch but not ... you know, they tend to not fall for the advice pitch.

Steven Hallam: [39:52] Learn when to say no. You don’t have to deal with every client. Now, if you’re working for somebody else, which most young advisors will be, you can have that discussion with your boss about, “Okay, well, how can we make this a better result for the business, for the advisor and for the client and if we can’t, what do we do?”

Steven Hallam: [40:10] I think one of the things I learned three years ago was that sometimes 60% of the new clients that walk in your door are the ones you want. Any more and you’re probably taking everybody that you can’t work with or you can’t help. Any less, then something’s got to change, whether it’s your fee structure or your attitude, you know, or your entire market’s got to change. So, attitude is everything.

Steven Hallam: [40:37] Find a good mentor and be coachable. You know, if there’s one thing that I’ve learned over all these years is that I didn’t really have a mentor in the days when I was away from the family practice. In the family practice, yes, I did, and that was invaluable. I saw that on a regular basis doing what when I was working with my young peers who are going out on their own by the time they’re age 30 and they were constantly asking questions when you’d go to PD days or conferences, basically because they didn’t have anybody else to ask that question of that they could get the answer and respect.

Steven Hallam: [41:13] So, mentor is absolutely critical and having your own coach, a paid coach, to help you figure out the steps and the journey you’ve got to go through. For some people it’s ... you get that 1% of the population that don’t need that because they’re so driven within themselves they’ll find a way and they’re elite. They’re elite in their professions all around the world. They’re the 1 percenters. They’re, you know, I’ve seen them in the military and they’re the guys that end up at the front end in Special Forces because they’re driven. And all they need to do is find the direction they’re driven in.

Steven Hallam: [41:46] But for the rest of us, you know getting that advice, getting that support through a mentor or coaching relationship is critical. I wish that I’d sort of figured that out a lot earlier in life and taken that on board.

Fraser Jack: [42:01] Yeah, now if you were turning to one of your advisors or a friend of yours at a PD day or something and they’re talking about moving their practice to more of a goals based advice practice, what do you say to them?

Steven Hallam: [42:14] Well, then they’ve got to go and figure out how they do it. Okay, you know, what skills do they have to support the process? Maybe they go and do a course, you know, life coaching course, to help them develop those skills and understand the process they’re going to take on board.

Steven Hallam: [42:31] Predominately, life coaching, executive coaching, in a lot of instances, only goes from three to six months but when you’re working with clients in financial planning, traditionally over the years, the average life-span of a client is anywhere from 10 to 15 or 20 years. How do you maintain the flow? And you’ve got to remember that not everybody, you know, you can’t operate at 100% all of the time. You’ve going to have downtime and slow times, ebbs and flows, you know.

Steven Hallam: [42:56] Just like a professional athlete has times when they’re tapering off their training or times when they’re taking their training forward in preparation for a fight or an event or a game. It’s the same thing in business. It’s the same thing in life and it’s the same thing with the clients. You’ve got to understand that sometimes, they just take their foot off the accelerator and you’ve got to let that one go and accept that. Sometimes they’ll tell you why and it could be things going on outside that you’ve got no real control over and neither do they.

Steven Hallam: [43:27] Because, you know, we’ve all had clients where they’re dealing with deaths of spouses, deaths of very close family relatives, divorce, separations, post-natal depression, business issues bringing on the onset of depression in some way, shape or form. So, those things you’ve got to sit there and say, “Okay, how do I add value here?” A, I’d give them space and B, I’d check in to see are they seeking the appropriate help?

Steven Hallam: [43:51] Because whilst I coach, counseling is a very, very different thing. And we’ve all seen, I think in the last probably five to ten years, that the explosion of awareness around mental health issues. A lot of that’s coming out of the military and the young chaps going overseas in Afghanistan and Iraq, but now we’re seeing more and more in business. We’re seeing it more and more in general life. Plenty of people I know that consistently suffering with mental health issues. I’ve had clients where we go to get them insured and they will send me a disclosure that reads, “Yes, I’ve been seen or have in the past, had a mental health issue.” See, then you’ve got to deal with that. It’s a big part of everything we do, isn’t it, from an advisors point of view.

Fraser Jack: [44:40] Absolutely and I also have a bit of concern for a lot of the advisors and planners that are planning on leaving or leaving the industry over the next couple of years, maybe not because they were planning on doing it this early or just because of the framework that’s coming in. Do you think mental illness will be an issue for sort of a lot of those advisors?

Steven Hallam: [45:00] Unfortunately, we’ve already seen it. A member of our group, dealer group, took his own life about six to eight weeks ago in South East Queensland and as a result of that the dealer group who already had access for staff through a mental health program, opened that up to all of the advisors, which is fortunate so that they may pay for that.

Steven Hallam: [45:24] Yeah, I think that’s going to be a major issue. Because, you know, all of these guys have been the controllers of their own destiny for a long time and, particularly those guys in their 50’s and 60’s who are thinking, “Well, you know, I can sell my business for ...” whether it’s a multiple or a large profit, those numbers are going and going fast. It changes their retirement plan.

Steven Hallam: [45:46] I’ve been saying this for years to business owners outside of the profession, you can’t rely on your business being your retirement plan because any outside influence can affect your own businesses future welfare.

Steven Hallam: [45:58] I had a client of mine a number of years ago who left ... I’d been telling him for two years ... He had a number of taxi licenses. I’d been telling him for two years to sell them, to get away from them because the changes were coming. He even watched his own brother sell his taxi licenses at the high price and then 12 months later, Uber destroyed all of that. And he thought, “Ah, I can live on the income,” but the income was changing because Uber was taking those clients, as well. And then other competitors, you’ve got now, the competition in that space and that’s just ...

Steven Hallam: [46:31] You know, who’d have thought that downloading, streaming, would change the video store game or DVDs or all that sort of stuff 15 years ago. You know, the Walkman has come a long way and it’s now turned the recording industry upside down. Newspapers, you know? I’m still an avid reader of hardcover newspapers and magazines. But they’re struggling. They’re putting journalists off left, right and center because people are going online and it won’t be long before all newspapers are then fee-for-service or subscription.

Fraser Jack: [47:06] So, you’re the one that’s still reading newspapers, ah, okay.

Steven Hallam: [47:09] Yeah, I’m that bloke.

Fraser Jack: [47:11] Now tell me if you could go back in time and give yourself some tips, you know, where would you go and what would you say to yourself?

Steven Hallam: [47:18] Well, I think you know, as I’ve said it before, but the biggest tips I’d go back in time is to have someone that was probably outside of my profession to mentor or coach me. Keep me accountable is the biggest thing, you know? From a top-down perspective, not for the nitty-gritty stuff, but just to sit there and say, “What are you doing? Are you doing the right thing? Are you hitting the right areas?”

Steven Hallam: [47:45] Because your goals shouldn’t change. The way you achieve them, quite often, needs to because of interference from internal or external factors. And we see that you know, on a regular basis. Someone to talk to and someone to turn to who will sit there and say, “Hey, is everything okay?” more than anything else. Because we are ...

Steven Hallam: [48:05] You know, the GFC, we learned a lot through that, through the fact that our own portfolios suffered greatly as well as the business revenue suffered greatly through that couple of years where it was pretty horrendous. And now we’re seeing an industry that’s getting thrashed on a daily basis in the press, so you’ve got to wonder, if I’m a client out there in the world, where’s the faith I have in the financial planning profession and why would I want to talk to one given the press?

Steven Hallam: [48:35] Well, there’s two factors in the financial money world. There’s the employees, particularly the ones who work for the large institutions who are set targets and goals based on revenue and those who work for themselves who still have those targets and goals but they’re not churning and burning clients to achieve that, you know? Hearts and minds wins more than sales every [inaudible 00:48:59].

Fraser Jack: [48:59] Yep, exactly and it does. So, it sounds like you would give yourself the advice to get a coach, get somebody who can keep you accountable, coaching, mentoring and accountability, very much like what you’re trying to produce for your clients.

Steven Hallam: [49:12] Absolutely. If that’s the one thing I would change over time, you know, that would be it. Keep me accountable as much as anything else. You’ve got to practice what you preach.

Fraser Jack: [49:21] Good, good idea. So, thank you, Steve, for coming on the show today. I really appreciate it. We’re going to probably have to wrap it up now. We’re running out of time. But thank you so much for coming and sharing your insights, for talking about your business, talking about your clients. I really appreciate it.

Steven Hallam: [49:32] You’re welcome. Thanks, Fraser.

Fraser Jack: [49:34] Thanks, Steve. If you haven’t already, I’d love you to subscribe to the podcast on your podcast platform of choice. And 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.