#68 Kirsty Scully – Transcript

Louis van der Merwe
Welcome to another episode of Financial Planners South Africa. Today I have with me literally sitting across the table from me Kirsty Scully. Kirsty is a good friend and someone that I look up to in this industry for setting the standard or the ball in what we do. And I know I just said industry instead of revision, and because he’s gonna point that out for me. And it’s someone that really lives out that ethos of the valuable work that we do. Kirsty, thank you for being here. Second time after our first recording, didn’t make the air some technical problems. But I’d love to unpack a little bit of how you got into financial planning, because I know you had a very interesting start. And we can explore the work that you do right now and what you see the future but tell us tell us a little bit how you got here.

Kirsty Scully
Yeah, well, actually, I’ve been in the profession now for about 32 years. And you’re absolutely correct. So I’m going to Criteo unsane. It’s not an industry, it’s a profession, and I’m absolutely proud and passionate about the profession, which we work in. But I’ve been in the profession for about 32 years I started years ago with some people remember, Southern life probably would be for your time, and I was in the universe company involved there. And from there Avvo worked for just two or three other companies along the way. I’m not really gonna gonna go into the detail about them. But yeah, from more from a marketing perspective, where I was a business development manager, bringing in business for an asset management company, and then about, gosh, probably about 1012 years ago, I decided it’s time to up the game a little bit more, did some more qualifications, in the process, completed my postgraduate diploma in financial planning, wrote the board exam and became a certified financial planner. And for for over 10 years now. I’ve been working specifically with individuals as a as a financial planner, and I specialize in investments. So that’s kind of my day to day is talking to people about their investments, how to grow them, how to set goals to achieve them, or whatever the case is. Yeah.

Louis van der Merwe
Can we talk about that part where you said, Okay, I want to up the game. What went into that thinking process? How did you get to Okay, the next clear step for me is to study towards the postgraduate diploma, what else did you consider? And just talk us through that thinking process?

Kirsty Scully
Yeah, what I did was because I previously done a good qualification in business management, I decided that I actually wanted to go more into the actual financial planning side, so and I forget the order that they were in, but the one was the I think, a certificate in financial planner, the other was a certificate in wealth management or something like that. I did that there was basically over a two year period, I did that. And then I went into doing the postgraduate diploma over another two years. I didn’t do it all in one year. And, yeah, I just decided that I really needed to do it to be able to offer my clients a much a much better solution to their financial planning to actually have that knowledge. I felt that I’d left it. I’d been working mainly on the asset management side. So my knowledge there is very strong. But I wanted to actually be able to understand the taxation, more of investments. I want to be able to understand just the psychology behind the investments, and I’ve always felt that that is very, very important. Yeah.

Louis van der Merwe
What’s the aspect that surprised you the most going through your studies that you thought, Oh, I’m really good at this. And then go entry, the studies realized, hey, there’s more to this.

Kirsty Scully
Yeah, well, I think, you know, probably just even talking about psychology. I mean, I studied initially, when I first finished school, I studied something totally different. And the psychology was involved there. And then when I went into financial planning, I just realized how important it is to actually understand people, because other people, others think I just deal with numbers all day long. I don’t I deal with people all day long. I deal their emotions all day long. That is much more important than the than the numbers because quite frankly, that’s what a paraplanners there to do. Some work the numbers, and I just sort of pass on what the actual numbers are as such, but as the psychology between, but about understanding what goals are important, and important enough to make as the primary goals that you want to put, you know, when you want to start putting, you can’t put aside money for everything, we can have goals, but not many of us should I say can easily achieve every single goal. But we can start by working out what is the most appropriate goals. And so for me, it’s very important to work on my clients goals. For fun. Can

Louis van der Merwe
we talk a little bit about that goal setting process? What do you take a client through? How do you help them prioritize their goals? Because remember, now we have financial planners listening to this conversation that might want to help the clients to visualize their goals, better to prioritize, like you rightly said, you know, we can do anything we can to everything. So how do you help your clients to select and rank and just prioritize and figure out this world of scary futures?

Kirsty Scully
So, for me, the first and most important thing is to make sure that you have sufficient money for the future. I’ve avoided the word for your retirement, okay. And the reason why I’ve avoided that is because so many people, especially young people, nowadays, they immediately say, Oh, I’m never gonna retire. So, you know, harping on this thing about retirement is not necessarily the right way to go. Talk about it for the future, when you can’t work any longer. Because maybe you you’re not well enough to work, maybe you’re done was working, maybe you’ve got grandkids, and you actually rather want to have fun and enjoy your grandkids, for example, it’s at a time when you no longer generating what is called a traditional income, like a salary or however, you know, your generation your income. So it’s for a later stage, when you so I think that is priority two, to decide on how much you’re going to need in the future. And I work that based on what am I what is the person’s existing expenses, what is their lifestyle, like now, okay, and we and I go through a full exercise with people about going through exactly what it cost them to live now. In fact, I have a couple of columns, we do that I always get them to do the column on their own, about what it costs to live now, and I make sure they’ve got everything included. And then my next column is just the typical sort of risk on the risk side saying, Okay, if your spouse wasn’t there, how much would you need. But then, more importantly, my next two columns, the column number three is saying, if I was to stop working, and I’m going to assume the person is maybe, you know, 5560s 65, that sort of age, so they’re still healthy, they’re still well enough to do things. But they’re stopping their main form of income. What how much do they need to live on at that stage, so we take there existed, in fact, I just moved the column across, I copy that, copy the column, paste it into their column, and then I start changing the numbers. So hopefully, by then they’ve paid off the home loan, so we can scrap the home loan, by then hopefully, the kids are grown up. So you don’t don’t have school fees anymore. You can perhaps reduce medical medical scheme expenses, because you don’t have the kids on it any longer. But don’t reduce your medical expenses, because we all know as as we get older, gets more and more expensive. So I have this whole column, which is I’m going to use the word retirement here. It’s your when you go on to retirement, when you first got into retirement, you’re still healthy, you’re still well enough to be traveling overseas, you’re still well enough to be going out for dinner at restaurants and all that you’re having a good life, what is that going to cost you we need to understand in today’s value out there is going to cost. And then my final column is in the event that you’re either in frail care, or you are in a situation where you have no scene at home. Now, if you do the numbers, it’s much more expensive tend to have no scene at home. Because basically, you’re going to have to have a nurse, you’re going to have at least two nurses, one sort of a daytime one at nighttime, possibly even have a third one for just to swap over shifts as well. But in addition to the cost of the new sin, you still paying your own rates and taxes on your house, you’re still paying security, you’re still paying all sorts of things. But on the other hand, if you were to go into a frail care, you would reduce quite a number of those expenses. If you’ve you know, I’ve done a lot of work with elderly clients who are in frail care, and it’s certainly cheaper to have them in in even a very good frail care as opposed to still stay in their own homes. So I do their cost. And so at the end of the day I’m sitting with, you know, what does it cost them to live? Now I fully understand that. My second column is what would it cost them to, to live if their spouse wasn’t available to be supporting them as well. third column is, as you go into retirement, when you really still enjoy your life, what is the cost third, and fourth column is in the event of frail care?

Louis van der Merwe
Because you really get your hands dirty. Going into the numbers, you said, let’s let’s delve into this. Do you find that clients are apprehensive to doing that or or talking numbers?

Kirsty Scully
Not at all. In fact, they love it, because it really gives them a good understanding. Now, some of them don’t love the actual admin behind doing that, and trying to work out what what is petrol costs in or what, what is food costs, and some of them don’t like that. But it they really is, I think they find it quite. I don’t know what the word is, but quite fulfilling to know that they’re not understanding what it’s costing them to live on a monthly basis. And I always say, let’s just do all the figures at today’s value, don’t worry about you thinking about what is gonna cost with inflation in 20 years time, and I do that sort of thing. That’s my, that’s my part in the business. But it really gives them a good understanding. Quite often, the husbands go, No, I can’t believe that it does not cost us the slip. Well, the wife goes, this is what it costs us to live. You want to prove it. And then we have like a little Barney. And in the office, that is exactly what it’s getting what it does cost but and quite often the wife is the one who’s more accurate. In fact,

Louis van der Merwe
do you get them to buy into this process and say, Okay, now they go and do it at home and bring the numbers back?

Kirsty Scully
Absolutely. Well, I mean, I’m not a product salesperson, so I’m not here to sell them products, I’m here to give them financial advice, I can’t give them financial advice, if I don’t know what it’s costing them to live, you know, I’ve got to be able to see what has cost them to live versus what their income is. And then when I know what it cost them to live in that sort of type of lifestyle, I can work out what it’s going to cost them to live in the future. And therefore we need to start saving for it. So getting back to your question, how do we set goals, the first goal I set is ensuring that we’ve got enough money for future for retirement or whatever you want to call it. It’s the next chapter in your life when you stop working. Exactly. So that’s the first thing. And then the second thing is, then we start saying, Well, what do you guys like to do? We want you to achieve this. And you know, it’s if you don’t set a goal, you ain’t gonna get there. Okay. So I tend to talk about goes, you know, I mean, it’s goes like, Oh, do you want to pay for your house? How quickly do you want to pay for your house? Do you want to be buying a second property? What do you want? What sort of size property would that be? Do you want to be buying new cars? When do you think you need new cars? Is it every four years or every five years or every 10 years that you want to replace your cars? We’ve got to be able to put that into into the big picture. And then the niceties in life, you know, is it okay? Do you want to take the family overseas? And then we start discussing more? How old are the kids? The kids only two or three, I look at nine, I mean, being a mother, I can go back and I go, Well, to be quite honest, it is a waste of money taking a two or three year old overseas, they’ll never remember a thing. Leave them with Granny and grandpa, and you go and enjoy your trip saves you a lot of money. And you have a very different experience as well, when you’re not tracing kids around. So you know, we have discussions like that, about what does actually cost to go overseas? How often can you afford to do it? How often do we want to do that. But it all comes in a list of priorities when we set these goals. Other people have other goals. And I love to try and make them as practical as possible. So I mean, I’m just thinking of one that I did a while back a particular lady, she is desperate to retire and buy a caravan and traveled south Africa for a couple of years. So what what I did in a financial plan is I got a picture of a caravan. And I put it there in the financial plan. So she’s can see this, this is this whole thing about seeing your goals. It’s not just written down or not just in the back of your mind, oh, I want to buy a caravan. She’s actually seen that picture, I want to buy that caravan. And she’s feeling it. And from there, we can see, well, a caravan is going to cost X amount, whatever cost now to buy in a few years time, it’s going to therefore cost X amount based on inflation. That’s how much he needs to save. It becomes achievable when you start drawing pictures. And you start working on it like that, as opposed to people who just said oh, well, I’m just going to put all my savings into one pot. I don’t believe that I’m I’m very much into having different savings for different things that you are able to stick to those goals and achieve them.

Louis van der Merwe
I can hear how excited you get on your client’s behalf. They can visualize this. Yeah, we had a conversation earlier in the office around maybe getting someone to use a Pinterest board and just pin some of the ideas and start thinking about what could be possible, but you’re making it even more practical thing. Let’s look at the numbers. Yes. How many of your clients expect him to expect that they can actually afford to reach their goals?

Kirsty Scully
Well, that is the sad reality that there are a number of clients who can’t because we actually get stuck on the first point. Are they saving sufficient for free? richer. And because there aren’t, we’ve got to push that up to such an extent, you can’t, you can’t buy the sweets, if you haven’t put bread on the table. It’s the same sort of concept. So we need to ensure that people start early with that saving for the future. And then let’s start seeing where can we put aside other money and can get those goals going. If you don’t have a goal, you’re not going to achieve it. And, you know, there’s all sorts of studies that have been done that you achieve a goal much more if you have the picture of it. So I did another one recently, a client wanted to go overseas. And she gave me the, I think it was Madrid or something like that she wanted to go to so we had a picture of Madrid. But if it’s wherever if it’s France, put a picture of the Eiffel Tower, or you name it, whatever it always is digital remind Disney. Yes, exactly. Make it a visual reminder, because that is a much a much better way of actually really getting yourself to focus on achieving that goal.

Louis van der Merwe
This is wonderful Kirsty and you’re making it a lot more practical for financial planners listening and saying what can we do? I know we once had a conversation around debt, and how you help clients manage their credit card debt, specifically, would you get to share some of the stories of interesting things that you might have done to help clients specifically ones that are tempted to dip into using the credit card for unnecessary expenses?

Kirsty Scully
Yeah, well, let me say at the outset, I have a credit card. I don’t think there’s anything wrong with having a credit card, I think it’s actually in today’s day and age, from a safety perspective and all that. And from all the sort of different bells and whistles that come with it, I think you can actually do quite well having a credit card, it’s how you manage it. That’s the issue. So in my case, I’m a firm believer, and I encourage my clients to do this, that you use a credit card by literally been able to pay it off every month. Okay? Some people will even go to the point of saying, well, actually, I’ve worked out, I’m going to spend 10,000, Rand $10,000, whatever the amount is, and they put it in their credit card at the end of the month, and then they’re using their own money. I love that way of doing it. But of course, you know, technically, it doesn’t really make total sense, because you could be getting the money for free without paying interest. But that’s a whole nother point in itself. But the point is that whatever you use on a credit card, you must be able to pay it off by the end of that month. Okay? So you essentially are using a credit card, almost like a debit card. And that’s what I would encourage people to do. Because otherwise it gets out of control. We all know how easy it is, you know, especially with buying things online. Now we just put the credit card number in there. And it’s and it’s done. It’s so easy. But I’m always wary of that. But I think I think what we have to look at as financial planners is ways to help people pay off their debt. Home loan debt is is one thing, that’s one side. And as long as they are paying, hopefully more than the minimum, I think that’s good. But it’s the the short term debt, the credit card debt, the Store account debt, we’ve got to clear it, we’ve got to get rid of it. And I work really hard and ensure my clients are getting rid of that sort of debt, any of that sort of short term debt, the clothes, clothes store accounts, you never go to make money, you know, that’s never going to be a good thing to have. So get rid of those sorts of things. And quite often I’ve had to put in place an actual strategy for us to get rid of it. And that strategy might mean that they can’t be saving any money at that time. But we’ll go through a process of say over a six month period, it depends on the amount of debt, obviously, it depends on the amount of debt, but maybe it’s over a six month period, maybe it’s a one year period that we go through the process of working exceptionally hard just to get rid of that debt. And I I work on, you know the amounts that’s there. Sometimes we consolidate it just to make it a little bit easier on the mind, then having debt all over the place. Sometimes it’s easier to have that thought of, it’s only a one place. And that would obviously you’d want to consolidate wherever the interest rate is at the lowest. So we’ve consolidated there and then work on how can we get that paid off in a either six months or get it paid off over a one year period, whatever the case is. But no, at that stage, it’s quite often means that they can’t be saving for anything else, because we just want to work hard on that. So yeah, that’s the sort of thing I do. I also go through people who are really struggling on managing their finances. I have had to go through that with a number of clients. years ago, we used to call it the envelope system. Now you can years ago we call it that because we literally worked on cash. So if for example just take a totally random figure your food for the month cost 4000 Rand then you would literally have your 4000 Rand in cash and put it into four envelopes of 1000 Rand and you only what you go to the shop with that one envelope, and that’s all the money that is it can’t be more. You can’t spend more you’re not going as a credit card. You’re not using a credit card anymore, because we’ve we’ve had to cancel that. In fact, to the point, when it comes to canceling credit cards, I’ve had to look after clients credit cards in our safe at work just to help them to discipline themselves to not use it. But so yeah, the envelope system has worked quite well, from a perspective of just, that’s what it is to spend on. And I’m using food food as an example, you could have another envelope for entertainment, and so on and so forth, just to try and discipline yourself throughout the month, so that you don’t spend any more than you should do. So not, it’s a little bit more difficult, because we don’t tend to use cash to the same extent. So you have to, there are apps that you can use to do it. And you can use those to try and ensure that you’re not spending or keep an Excel spreadsheet or whatever, pen and paper, whatever works for you, you know, just to know that you’re not going over that amount. And when you get to the end of that amount that was allocated as an example for food, you go and you look in your cabin, and you find that packet of soup or that tin of tuna that you didn’t really feel like having and and you eat that, you know,

Louis van der Merwe
that’s so true, because physically touching money. And actually taking out that counting out the amount of notes and paying that over feels a lot more impactful than just tapping your phone or swiping your card. I remember because my first paycheck, I missed the payment run somehow I think they forgot to add me on the system. And they wrote out a check for me. And so this was a cash check that I had to go and take to the bank. And it was the was the net bank in the foreshore area. And they physically paid out notes. And it wasn’t a big amount of money. But that was the most amount of money that I ever had in person. Yes. And I felt rich. And taking that money out and having to pay for it. There’s an emotion behind it. There’s physicality. And yet now it’s so easy just to tap. Yeah. And it can be read could be 5000 grand, you just tap? Yeah. How do we create more friction in terms of our everyday spinning? I mean, you’ve mentioned now the kind of the envelope system? Is that something that’s still practical?

Kirsty Scully
Personally, I still think it is practical. Yeah, I think if the situation is bad enough, I think just do that. Yes, it does cost to draw cash out, granted. But I do think that it is one of the ways that it helps people to discipline themselves to ensure the other thing is, don’t keep going to the shops, discipline yourself, you go once a week, for example. Okay, some people say good once a month, I haven’t quite mastered that one. But, you know, I mean, I know, practically the boy, I go to the shops, the more I spend. And quite frankly, the more the cupboard actually gets fuller and fuller and fuller. And, you know, at some stage, just open your cupboard and find what is in there still, because quite often there is still food in the cupboards. And it’s just that owner, but it didn’t feel like that tonight. Well, you know, if you’re sitting with a financial issue, you need to start feeling like it

Louis van der Merwe
takes a bit of planning and planning. Yeah, being practical and attentional

Kirsty Scully
do the shopping list thing, where you actually write a shopping list with exactly what you need and ensure you don’t go buy anything other than that’s on the shopping list. And, and that’s very tempting, because you kind of see all these specials. Now. I mean, I’m a person I will look for when that when there are specials, and I will buy those specials. If it’s things like typical 10 of tuna as an example, just a wild example there. But you know, if the unspecial get a few, because you get to save yourself, you know, in the long run by by being able to do that. But you can only do that when you get to you get to the financial situation that you have that flexibility with your money. And if you are really in the doldrums as your money and you having to go through the envelope system must have only you know, bind once a week, you’ve got to get yourself back into that good scenario before you can start looking further ahead.

Louis van der Merwe
If we’re making this practical. Have you had any experience where you’ve had to work with dead counselors or dead consolidators? And if so, what does that experience been?

Kirsty Scully
Well, I don’t personally work with them. I had somebody I used to refer clients to, to help them go through but no, that’s not really my market.

Louis van der Merwe
Because I feel like sometimes clients need a bit of direction they need to be told what to do. But then other times it doesn’t always work that way.

Kirsty Scully
It’s hard going people don’t want to hear it. Okay. They just don’t want to hear but if I can think of the examples of people who have listened. They’re the ones who thanked me years later, they are still thanking me. Thank you, you. I had one just just last week and an appointment. He said thank you, you got me out of our debt. Mighty it was actually his debt before they got married. We set that as a as a deal before they could get married. He had to get rid of the debt. And I mean, I think it was at that stage like 30,000 rent, but you know, there can be quite a lot of money to some people. And it took them about took about six months to get rid of that debt. And still last week he was thanking me for to be married for a number of years already. And it is really good. It’s so refreshing to not have debt.

Louis van der Merwe
I mean, this is the impact we can make in our clients lives. What What stands out for you in terms of client experiences where you felt that wow, as a maybe as a business or maybe as a person, or maybe it was another financial planner that really made a difference in someone’s life? Is there

Kirsty Scully
something that that I think is very important that we certainly did call wealth. So for those listening, the business I’m involved in is called call wealth advisory services. But we have like a little division, which is called call wealth cares. And we have a staff member who runs this, so called wealth cares was started, years back, we looked at it, and some people don’t know that I was with a number of years ago. And so I was able to really put my head around this whole thing. And if you imagine, it wasn’t necessarily my for me, because I was very young when I was widowed. But for pepsin, an older lady when when she’s widowed, she is so vulnerable. Absolutely, she’s vulnerable to so many things. Security is a massive thing. being ripped off with different things is a massive thing. So we started core wealth cares, really with Hungary, almost there are old ladies in mind. Okay, but it has gone further than that. So if you imagine she has now left on her own, the washing machine breaks. Now, unfortunately, we live in a country where you can’t just open your door to anybody to come and fix your washing machine. Because are they safe? Are you going to be safe when you do that. So what we’ve done is we’ve got a lovely gentleman who runs cool wealth cares. And when one of our old ladies, for example, needs her washing machine fixed, he will go to her house, and he will bring in two or three people who come and quote, and they’ll have a look at the washing machine, they’ll say what it’s gonna cost this, this to fix. And then along with her, they’ll choose which is the best quote, and he’ll be there when that person comes to actually fix the washing machine as such, which means a she’s been looked after from a security perspective. But be is this somebody else watching to make sure that she’s not been ripped off. So there’s an example we use it for if you’re if you wake up in the morning, in your car batteries flat, Oh, my word now how you gonna get to the place to get your battery fix, you know, he will sort that out, he’ll come and fetch, you sort out the battery, quickly put it in for you something, you know, something simple like that. Trips to the airport, a lot of people better with that sort of thing. They want to go and visit their friends or family overseas, and they can’t get to the airport, because they don’t they don’t have anybody who can take them. So he does that sort of thing. Another thing he does on a regular basis. In fact, he’s got a client, one of our clients who, every Friday, he takes this couple out for lunch, to restaurant, he doesn’t join them for the meal, but he transports them. And he waits for about two hours outside the restaurant. And when they finished, he takes them back home again. And that’s just part of the service that we offer clients who need that sort of service, it’s taken financial planning to the next level. And that is what we did call wealth

Louis van der Merwe
bog as the that’s wonderful. And what comes to mind is kind of a concierge service, what you would see or expect from a nice hotel. I was going through the Johannesburg airport, and it struck me how all the banks are using the airports as a way to add services to their clients. Yet we don’t see financial planning firms do this, we don’t see that often financial planning firms do what you just mentioned, is the is the industries that we can borrow ideas from, or kind of used to influence us and improve our service. You know, like you said, beyond financial planning, what else is there that you think we might be missing?

Kirsty Scully
I suppose I think for me, I will work my main main clients, I work with our doctors. So I look to the medical profession for a lot of things. And I think this is such a generalization because not everybody is ethical. But I see so many ethical people in amongst the doctors that I work with us. And I think that is something we need to borrow. If uncovered. As a profession, we need to bring more ethics into it. This is not just a case of getting your CPD points for those those number of ethics points that you

Louis van der Merwe
need four or five.

Kirsty Scully
This is we’re doing it because we need to be more ethical. And I’d like to see that happening more I’d like to see financial planners working more with people and their emotions, not just what product can be sold. I’m absolutely NT the whole feel of a product being sold, we need to be selling. And I don’t even like to use the word selling I’m Ed that we like to be we need to be basically instill solutions that work for our for our clients. And those those are involved with psychological solutions, as well as the monetary ones that go with it.

Louis van der Merwe
On this topic of ethics. What would a more ethical financial planet do for instance that we could borrow from the medical field? You know, what, what would that practically look like? Is it just putting our clients first before our own profits is and having different types of conversations?

Kirsty Scully
Definitely different conversations. Because so many financial planners are hitting the on the conversation to products, they might not let give the name of the products or anything like that. But they actually hidden the tours, they’re just thinking, What product are we going to use here? And that’s not the case you need, it’s what solution? Are we finding for this client’s problem? Okay, and this kind could have various problems, their problems, or what to do with their short term money, their problems, or what to do with my long term money, the problems or what to do to ensure you don’t have unnecessary state duty in and this is for executives, fees, those things. So what solution are you creating for your client? As opposed to what product you’re selling your client?

Louis van der Merwe
And that solution might include a product or it might mean removing a product? Absolutely. And yet, when we go to conferences, we are things like advice, lead sales, and we are words of targets and 80 to 90% of new financial planning entrants don’t make it through the industry, or the profession. I think that’s a big part of them is working in that in the industry, how do we get this shift to solutions? Is it the handful of practices that are saying this is the way? Or is there another

Kirsty Scully
way? You need to go to different conferences, you need to go to conferences that are not sales driven? There’s the point, it’s because when they are sales driven, that that is when we focus on products. Okay, you need to coach conferences, where we learn about dealing with our, with our clients, and them as individuals, if it was your mother, if it was your granny, you were dealing with? How would you how would you be dealing with them, then? Would you be dealing with them in a different way?

Louis van der Merwe
That’s such a nice way of putting it almost saying, you know, this is a really close family member, if it hits home, how would you want them to service your clients? So if you had a list of wishes for financial planners, where you had to give a friend a checklist that they could use in terms of looking for financial planner? What what would be on that list for you?

Kirsty Scully
Well, you know, I’m a certified financial planner. So I will obviously be pro using a Certified Financial Planner, if you if I went to see if I had a heart problem, I wouldn’t go and see my GP, I’d go and see my cardiology cardiologist. So I’m going to suggest that one should look for something like a Certified Financial Planner, although I’m not putting down other designations, but if you are wanting the specialist, it needs to be a certified financial planner. So that I think is the first thing and then yes, to find somebody, I mean, you know, you go and reputation, you know, find out who other people are using, get get referrals. Look at companies such as if I look here in South Africa, companies, such as 90 ones, companies such as Alan Gray, they have a preferred provider list. Look at those, those people on those lists are not just there, because they came into the it came into the profession yesterday, they’ve been around the block, they’ve been doing it for a long time. And those companies have checked out the work that those financial planners are doing, they don’t just put those people on the list. So they come with a good reputation. So that’s the sort of thing I would look at. But then you need to be asking yourself, or asking them other questions. How does your fee structure work? Are you how you incentivized? Are you incentivized by commission? Are you Is that all you’re gonna be earning commission? Because then you got to start out? Sure, clearly, they’re gonna want to earn more commission, so they’re gonna possibly try and sell me something that’s gonna pay more commission. So are they not rather able to charge a fee a consulting fee? So for me, I always charge a consulting fee to my clients, because it keeps me absolutely neutral. There’s the fee doesn’t matter where we place the business, I’m gonna give you recommendations for where you could, but it has no impact on how I earn. So there’s no conflict of interest there. A consulting fee, for me is what’s most important. So I’m prepared to pay a consulting fee for somebody to give me that advice, as opposed to somebody who’s just going to earn a commission.

Louis van der Merwe
And you’re expected when you go to the doctor or the specialist? Of course,

Kirsty Scully
of course, exactly. You wouldn’t you wouldn’t go to your lawyer or you wouldn’t go to your your doctor and expect them to give you that advice for free. So why come to me? So Kristin?

Louis van der Merwe
Would that be an hourly fee? Would that be a project fee or planning fee? How do you practically implement that? And are you flexible, you know, just like we wouldn’t negotiate with our GPS, and so but you prescribe this medication will give me a discount on through that.

Kirsty Scully
So what I do is I have a set fee that are charged for a full financial plan, alright, and I go with it. And if they’re not prepared to pay it, then I’m also not serious about their money. Alright, so that’s how I view it. If they’re not prepared to pay the fee. It’s because they’re not serious about their money. So I’m serious about their money, so they need to pay me to do that. So it’s a set fee, I charge for a full financial plan. I do sometimes have clients who go well actually, there’s just no way I can afford that. And then we have to start, then it’s okay. First of all, what part? What part of the advice do you want? I mean, it’s like it’s like going to see a gynecologist. And you say to the guy anyway, could you sorry? Can you give me a discount? Also, do you want me to only check the one boob? I mean, that’s what it actually is, if you think about it, so I have to actually say to the clients, well, what don’t you

Louis van der Merwe
want to use that example?

Kirsty Scully
I’ve used that example of many occasions. I mean, that’s what it’s like, you know, what, don’t you want me to do that. And sometimes they are. Because sometimes it’s fairly simple, where we can cut up cut back, for example, if a person has got group benefits, okay, at work, well, then I probably don’t need to be looking at income protection, that’s gonna save me a lot of time, if I don’t have to stock in quotes all over the place. So I’m prepared to say, well, it’s gonna save me time. So therefore, I don’t need to charge for that. So there’s, there’s a perfect example of maybe they are under medical aid already. And we now don’t have to go through the whole process of trying to work out which is the most appropriate medical aid for them, then maybe we can cut a little bit there. So there are times I’m able to charge a little bit less. So generally, it’s a set fee for a financial plan, unless we are cutting out certain things, then we’ll reduce the fee. And then the other thing is, sometimes I have people to come to me for specific things, not a financial plan. They’re coming to me specifically for budgeting. Okay, I will then charge them an hourly fee. You know, okay, I’m going to sit with you for an hour, and we’re going to talk about it, you know, you have to pay for my time, unfortunately, somebody’s got to pay for it. So so we do too, I do charge per idea.

Louis van der Merwe
Something that I’ve often thought about is when do we see industry standards that a Certified Financial Planner could be charging as an hourly fee? Especially when we’re looking at maybe staff members like benchmarking? How do we compare what we should be paying people? Is that something you’ve come across? And do you have a number in mind that you think of Fe fi would be as a certified financial planner to charge?

Kirsty Scully
No, I’m not gonna give you any numbers, because each company is going to come up with their own numbers, each each financial plan will come with their own numbers, we have a core wealth, we’ve spent a lot of time working through what does actually cost us to get that service. And I can tell you, it’s more than you think. And if clients were to see how much it cost, they would be they’d be mind blown, as to actually how much it does cost in all our staff members time. And, you know, when you start adding everything into it, if you start adding the rent in if you start adding the photocopy machine, if you add the the online services that we offer, it cost, it does cost a lot of money. So we have come up with what we believe is the cost is an appropriate cost to charge. But again, you know, you sit it’s a difficult one, you You youngsters when they’ve just started first first, you know, first job might not necessarily have that sort of money to pay. But then what we’ve done at core wealth is we do have some more, some younger advisors who can can come in at a lower cost. So again, I guess it’s the same if you if you seen a lawyer and you see somebody who’s more experienced, you gotta pay more for them, then you gotta pay for a junior lawyer. So it’s good. It works the same way with with us as well.

Louis van der Merwe
So that’s great when you’ve got a business that’s growing, when you’ve got people coming into the business younger, find out well, less experienced financial planners, there might not always be younger, that can charge at a lower rate. Correct? We see that that doesn’t always happen. Now, a lot of independent planning practices, and very few new planners, and how do we start bringing that model into the mass market where we have 1000 new people joining maybe one of the insurance, how do we get them to start thinking

Kirsty Scully
this is incredibly difficult, because it’s this whole thing about Commission. In in this profession, you generally only earn if you are selling something, okay. And if they can’t sell something, it’s very difficult. So I was in a fortunate position, when I started advising clients, I had saved up some money already. So I had saved enough money to provide myself with an income for a year, although it was a very minute income. It wasn’t, it wasn’t what I really needed to live on, but it kind of got me through. And so that is something you know, if you can build up a bit of cash, to actually just fund yourself for a few months or for a year or so, that will then allow you to start getting into that ability to charge a consulting fee. And of course, a consulting fee, you know, is paying is paying you upfront, at least it’s paying you something whatever you whatever it is that you’re charging, and if it’s a younger person, you know, I don’t really name numbers, but maybe they’re charging 5000 Rand for and, and they could they could do for financial plans a month as 20,000 Rand already, that’s more than a lot of them are earning from commission in any case. So get into it, the quicker you just get into it, the quicker you’ll make this a success of it. But it is it is really hard and beginner can’t deny that But get going. But you possibly just need a couple of months leeway to be able to actually do it. Yeah.

Louis van der Merwe
Is there any legislation that limits the amount we can charge? No, there’s

Kirsty Scully
no legislation that limits limited. Nothing. And there’s no recommended amount either. So that’s why each company comes up with their own their own figure. And I mean, even then, yeah, the amounts vary extensively. When I hear what some of our colleagues are charging, I’m thinking, Oh, my word, how do you have the guts to you and ask that amount of money. But I think at the end of the day, you’ve got to be just comfortable, I’ve got to be comfortable with being able to ask for the amount. So if it was a massive amount of money, I would never be comfortable to ask that. So I guess it goes to the person self confidence as well, maybe I don’t have sufficient toilet. But

Louis van der Merwe
sometimes we perceive our own value, or what we contribute much less than what clients think we’ve had. We’ve started in the business, showing clients what we earn on an annual basis. And we started at the top and it was super scary, showing up a bit, one of our biggest clients, how much they paid us over. Yeah. And you said, Great, I have a lot of friends who wouldn’t pay that. But I believe in the value, not what I expected to hear. But so relieved to hear that our clients believe that they get more than what they pay for maybe a big part of this is our mindset as financial planners, or maybe not the same as someone that have accumulated wealth, and that needs guidance and advice. How do we get past something like that we may be, you haven’t experienced what your clients have gone through, you haven’t built up the assets that your clients have bought them? What right do we have advising them on their lives? Yeah.

Kirsty Scully
Funnily enough, when I first but it wasn’t really when I first I’d been in been in the profession for a few years already. But when I was really young, I was probably in my mid 20s. And I was trying to advise people at that stage, I found it really difficult, because kind of the people with money at that stage tended to be in the sounds like a huge general generalization, but tended to be the 60 plus year old male. So he’s like, looking down at me as Oh, your little girl, 25 years old, how do you know, but I’ll, I really firmly believe that if you are well qualified, you have the ability to speak well, and to be able to convince through not just facts and figures, but through pure experience. And I can talk through about financial planning through pure experience of the good and the bad times. So I do think that that that helps. But I think what you got to be able to do is you’ve got to be able to convince your clients that by investing through you, they should be able to get a better return than invest in on their own. And we have seen this over and over. In fact, I actually had an example yesterday. And we all know, the market hasn’t been great. But the client had had invested in one RA on her own. And we had been invested in the other one. And there was a difference of 4%. In in return, we got 4% higher than what she was getting in an in, you know, investment for herself. But the problem was that there was going to be this penalty to actually move the money from the from the company to where we were recommending, but if when we looked at the size of the penalty, it was less than 1% of the actual value of the investment, that we’re getting 4% Higher. So it’s, it’s an absolute no brainer, you know, move the money, even though like I think in that case, it was like a 9000 Rand penalty that she was going to have to pay, it was worth it, to pay that she still got a number of years to retirement than to then to actually just leave it. So you got to be able to prove that but also be able to prove other things. It’s not just all about the performance, you get to get on a on an investment. It’s about how you are also benefiting your client from a tax perspective, from that sort of thing. Other financial planning aspects. So it’s a case of are they in the correct structure? Should they be in an endowment to a sinking fund? Or should they be in an ordinary Unit Trust investment? And that’s going to depend a lot on their taxes and the need for the money and that sort of thing? Or should it be it? Should you be putting more money into a retirement fund? Or should you be putting it into a Tax Free Savings Account? And you know, then you can kind of go on that debate and and start looking at what is more important when should you be using a tax free savings card? Because yes, it is great that that you don’t pay having that there’s no tax on that then investment. But unless you’ve got more than about 400,000 Rand saved in a cash investment, you’re actually not paying tax on the interest in any case. So you’ve got to look at all those sorts of things. And so I think that there’s huge value in not just the performance of the underlying funds, but in what we can give them in the structure of the investments that they that they make yourself.

Louis van der Merwe
I love that this is such a collaborative approach with your clients not planning at them, but pulling them into the process and saying, let’s figure this out together. Let’s debate it is one of the words that you use. Absolutely. Let’s see, what does the next 10 years look like, in this profession? What do you see playing out?

Kirsty Scully
Right? Interesting one, I still see it as a very much a people person profession. Okay. So, I know there’s a lot of talk about, you know, you know, what are those called online, you know, online advice. Robo advice. I’m not concerned about Robo advice, because Robo advice will literally just put you into into a product, it’s not necessarily giving you a solution to your situation, because cannot possibly understand you as a person, without a doubt. So I would still, if I was a client, I would still be looking for that one on one interaction of somebody who’s really going to understand me. So I do not feel Robo advice is a threat to our provision to those of us who are doing the professional well. Okay. I think it’s a threat to people who sell products. And I think it’s a wake up call to people who are just selling products. If you’re only offering products, you’re not offering a solution, you’re going to be taken over by that Robo. Yeah, yeah, definitely. Definitely. So. So from the next 10 years. That’s what I that’s what I’ve definitely foresee. I also think if you look at the markets now, I think there’s huge value to be bought it to be needed to invest in now. I think valuations are particularly low son here in South Africa at the moment. And I think it’s a good time to be investing. The RAND is always, always a challenging one with it being as weak, as weak as it is at the moment, but to hopefully, if we get to see it strengthened, and again, in the not too, not too far away. Should I say? I think we’ll probably see the RAND strengthen again, as we see it strengthening, great opportunity to get more money out the country to be able to diversify. Because, yeah, I mean, that’s a whole nother point in itself, how well our clients diversifying. Are you diversifying your clients across different asset managers? And once you diversify across different asset managers, are you diversifying them across different asset classes? And then are you diversifying them and geographically, so there’s so many things to think about,

Louis van der Merwe
because the Long gone are the days where financial planners sit back and play golf all day and just provide a product, and I can hear and see your passion and actually providing Client Solutions, working with them, and getting them into a better financial place?

Kirsty Scully
Yeah, I think what I always love is when I, when I meet with somebody for the first time, and 50, my first appointment is normally two hours long. It’s a long appointment, because I have to understand that person. So I’m not being nosy when I ask about who the kids are, and what the where the kids are at school and all that I’m understanding that family, and then dynamics, okay, because I’ve got to get that to be able to really put insight in place the psychological side of financial planning. But what what I always love is when people come to me, and then they say, Oh, I didn’t know, you got to ask me all these questions. I don’t even have this information with me. And that is so often the case, I think people think we’re just going to invest for retirement annuity, I’m not going to ask them anything else. But no, we’re going to look at so many aspects. And the biggest aspects are going to start looking at goals, how are they going to achieve their goals, and that they actually get excited about? And when they leave? They all say, this was great, you have made me think so much about different things. I mean, most of them don’t even think of I’m going to ask them about their wills, and what’s happening in the event of the death. And what are we, you know, when are the kids going to inherit? At what age do do they should they get it? And should we split that date that they get the money and all that. So you know, there’s so many so many, many things that we think we actually discuss in the meeting, I think people come across quite sort of shocked as like, wow, this is what a financial planner does. They’re not just somebody who sells a product.

Louis van der Merwe
I look forward to that day where clients expected with clients expect to be talking about themselves and their hopes and their dreams and not just ending up with another product. Yeah. Kirsty, thank you so much for being here. It’s been wonderful. And your passion really shines through in what you do. We didn’t even touch on your work with the Financial Planning Institute as the chair. But I think the work that you’re doing is living out what you stand for. And thank you for that.

Kirsty Scully
Yeah. And at the end of the day, you know, we want to ensure that financial planning is there for all yes for all different levels of financial planning because not everybody needs integrated financial planning, but we do want to ensure that it is financial planning for all.

Louis van der Merwe
Brilliant. Thank you so much.