#69 Brandon Ellse – Transcript

Louis van der Merwe
Welcome to another episode of Financial Planners, South Africa. Today in the studio I have with me Brandon Ellse. Brandon has a string of qualifications. He is a career changer. He is someone that challenges the default and the norm. And I look forward to a very interesting conversation. Brandon, thanks so much for being here.

Brandon Ellse
Thanks. It’s really nice to be with you today.

Louis van der Merwe
As we were just chatting and setting up for this conversation, we’ve had quite a few of these conversations in the past around kind of advisor default, you know, looking back saying this is the way things have always been done, and we will just continue doing them. For someone that came from a different career. Give us a little bit of the backstory of what that was and what your experience was entering financial planning.

Brandon Ellse
Yeah, so I studied at UCT for a long time. Charter changed a little bit, but kind of landed on economics, but financial economics specifically. So I’ve always really enjoyed the the technical side of of economics and finance, where the idea that I would be a fund manager, that was basically my dream when I left university, so I wanted to be an equity analyst and work my way up to managing money. So that was that was kind of idea. But just happened to graduate in the middle of the global financial crisis and was in London, and there were very few opportunities. So I found myself in more sort of research type roles, like research and development type roles, so not specifically in the finance world, which led me to a whole career in politics and working in parliament for for six years at specifically as a financial researcher. So it was yeah, it was, I guess, almost a full decade of being in that space, where I kind of realized that I had been on the right track originally, I really did love, finance versus specifically personal finance matters. And I just find myself getting more and more into that, and actually then worked with a coach for for a while, who, who really made me think a little bit about what was possible. And he importantly, I think he put me in front of a lot of interesting people. And those conversations really shifted my perspective. And so I kind of sat with one individual in particular, and I thought, well, that’s what I want to do. And so decided to make kind of a big leap into the world of financial planning or financial advice.

Louis van der Merwe
What a shift. I mean, you are a chartered financial analyst, and I can see how that fits into the picture of becoming a money manager. And yet, this coaching conversation, made a shift. We often hear that financial planners should be putting on coaching hats, and we should have that conversation. Was this your expectation when working with a coach who kind of what led to that?

Brandon Ellse
Yeah, I think sometimes, I mean, at the time, I was less clued up about the role of coaching and advice. I wasn’t really thinking about it from that perspective, I kind of went into that process with a very open mind meant to the extent that I was prepared to go back to university and study for another six years to do something else. I just realized that we spend a lot of time at work and I couldn’t tolerate 2030 years doing something that I that didn’t give me energy, and I could kind of play the movie forward and see that it would lead to a quite a unhappy, bitter person, I think so it was a kind of a I had to make the move. So for that, I think the challenge is when you get into a role where you are relatively senior and your particular if you’re getting paid quite well it becomes really, really challenging to to walk away from that. And so I needed somebody external from me to, to kind of open up the world of possibilities. And it’s very interesting, just having conversations with him and then leading to him connecting me with different people in the industry. I spoke to brokers and BDMS and find managers and everybody under the sun and I kind of that fear started to fall away. And actually, it was replaced with excitement. And I thought that was such a interesting mind shift to notice. And I couldn’t have done it without working with, with with that coach in particular, he was the right coach at the right time for me. So yeah, when by the time I had had made the decision, I was absolutely, there was no doubt in my mind that it was the right thing to do.

Louis van der Merwe
We have this idea of the sunk cost fallacy, right? So we’ve put in so much work working towards a specific career, and then to change that. I mean, how difficult was that it you’ve spoken out a little bit about exploring it and getting familiar with what the potential options are? How long did that take you? And kind of what was your biggest fear at that point?

Brandon Ellse
Yeah, about about a year, to be honest, that my biggest fear was, I mean, I’d achieved a level of financial freedom that I didn’t see around me. And there are other things I like to do. So I’m a big lover of travel. And travel is not cheap. And so yeah, I lived I lived a good life in that respects. And it was the idea that you’re walking away from some of those benefits. And I knew it was a commitment moving into the space because as you know, you don’t necessarily walk into big salaries. It’s it’s it’s a totally different mindset. I’ve never worked. I’ve never worked in a role that required a commission or sales, at least that type was pitched to me initially, which, which I don’t think it is. But yeah, that was that was the that was the risk for me. But it was a kind of a five year plan, when I moved to that was my view, I, I’m not someone who’s materialistic. But I figured it would take me roughly five years to get back to where I where I thought I would be. But I just, you know, money is one thing. And I’ve I’ve lived the experience of having your income doubled a few times in a short space of time. And it certainly it didn’t equate to me a little bit, you know, had being happier, or certainly productivity didn’t equate to productivity. So I kind of know that I’m not primarily motivated by money, it’s obviously important, but I was seeking are seeking that that energy. And you know, it’s having worked alongside a few people who had that, I knew that I could never compete with somebody who was just just interested. Absolutely, you know, absolutely fascinated by the field that they were working in now wants to bet. Because, yeah, I just felt like I had a lot of potential, but you know, you, you can be in a role and not feel that passionate about it, and just kind of cruise. And I just thought that was a shame.

Louis van der Merwe
This is quite interesting. And I think it’s worthwhile for us to chatterbot because the industry in some would call it a profession, often uses the financial incentive as a reason for people to get into this business. But what I’ve seen time and time, again, with conversations is that the people that really are in it to help people tend to put in more hours, they tend to be more successful over time. And it sounds like your experience was what similar? What’s your view on what it takes to be a successful financial planning in where we are now?

Brandon Ellse
Yeah, I mean, I think, I think what you’re saying is very true. And I suppose there’s a difference between a an advisor or a business that focuses on, you know, on a sort of has a sales approach or getting getting flows or ran through the door. I, to me, that’s an outcome. It’s an outcome of, as you say, doing the right things. And I think you’d be it’s a smarter strategy to focus on the causal links between between, you know, what, what leads to you putting in those extra hours or going the extra mile or upskilling in this area, or whatever it may be. And I think it’s an intangible thing, but I’ve sort of, I’ve seen it with some some advisors and I don’t see it with a lot of advisors. There’s just there’s this, this fascination and interest in the field and this desire to learn. So it’s like, I become very, I follow in about a particular fact, I want to go down that rabbit hole, I want to follow it to its conclusion. I mean, that’s, I have a very analytical mindset. But the arts are supposed to answer your question, what does it take to be successful? And I don’t think there’s, I don’t think there’s any one way to do it. But I do think a challenge. I mean, this industry faces a number of challenges. But I mean, one of them is obviously the the sort of remuneration model for new advisors, is the fact the fact is that the kind of legacy way of thinking about it is still that what we are fundamentally broken. So we broker transactions for products, which is salesman salesperson. And it’s the transition from that I think into an advice space, where it is where essentially products are incidental to another Last process, and actually, you’re not now you’re a professional, who consults and you advise somebody and it’s independent of product. So that’s where I think we’re heading. But I think as long as we have this sort of sales mindset, and a lot of businesses operate this way, which is fine, maybe you know, that’s the particular business model, that it’s tough for somebody, you know, you’re not going to attract, in my opinion, the best and brightest from the universities, if you’re offering them know basic or a little basic, and it’s all con based you are, I can tell you, the guys I studied with the UCT nobody wants to be a financial planner, not one. And that’s that’s the truth. So I don’t that’s where it is at the moment. I don’t, it’s sad, because I think it’s a profession, that’s, that’s arguably the most important profession going forward. But I’m advice. So I think that’s one challenge. And then the other, the other challenge is, once you get an advisor through the door, you know, there’s an expectation that this guy is good, or good guy or girl is going to be good at everything. And that I think I’ve just seen that it’s just not true. And not only that, I think it’s as a as a as a business model. It’s it’s fraud. I mean, effectively, you get advisors through the door, they’re meant to be technical experts. And you know, mark off of being a technical expert is very high. So I think I do, I think to be a good advisor, you need to know a heck of a lot about a heck of a lot. It’s it is not easy, and it is a, it’s a almost a lifetime dedication to like advanced learning. There’s just so much to know, you’re learning, you’re learning all the time. So you’re expected to have that you’re also expected to have coaching skills and a toolbox to interact successfully in front of clients. And there’s an emotional intelligence aspect to that. And on top of that, you’re expected to be a professional business developer, and networker where you’re going out there and establishing relationships with personal networking centers of influence. And I just, I think for most people, it’s unrealistic. It’s just, it’s Mission Impossible. And I just think, and then you know, you’re gonna bring that person in and not pay them a salary or pay them something, something very small. And I think it’s no wonder that you get the kind of dropout rates and maturing that we see.

Louis van der Merwe
I so agree with you. I mean, we we say that the technical expertise is important yet we remunerate for relationships and the broking of transactions. And there’s a disconnect between the two. Now, you mentioned that you go down these rabbit holes, and you explore a topic really deep out of the numerous topics and areas that you have explored. Which one surprised you the most? Which one did you think I’m gonna go down this road, I don’t really know if it’s going to be valuable for my conversations with clients or my everyday life and maybe as a person or as a financial planner, that looking back you said, I actually I’m really glad I did that

Brandon Ellse
probably are just purely from a technical perspective, if you kind of asking what area do I think has the most bang for buck? I’d probably say tax planning. It’s, it’s interesting, because it’s not it is it actually does serve as somewhat of a differentiator, because I think a lot of I know a lot of wealth management businesses don’t necessarily do a detailed tax assessment. So sort of pre read post recommendations. And I think it’s very, very powerful. Not Not only is it beneficial for the client, but I think it’s, it’s a great way to demonstrate value. So and you know, but as I said, tax is deep, you know, it’s when you start talking your personal tax and on the corporate tax side, and then you know, you’ve just gone through the whole, the trust side, and then cross border stuff it it gets, it gets really complicated. But I do think there’s a lot of value that can be added there. And I think as a financial planner, you’re you’re very well placed to advise and just see opportunities for clients. So probably the tax idea.

Louis van der Merwe
So how did you hone that skill? Because yes, you can become a chartered accountant, which I’m sure you could do in your spare time. But guessing if you don’t want to go that route, how did you develop it? And what would the types of conversations be with a client? Like what are the things that you talk about? I’m guessing it’s more than just oh, there’s a deductibility on your retirement contributions?

Brandon Ellse
Yeah. But you know, it’s interesting, you can give to people the same book to read. And then you can quiz them afterwards. And you can get quite quite a different and that’s what I said to you earlier. It’s, I mean, yeah, some people I guess, are very good at retaining and processing information. They’re very analytical. But I also think there’s a level of, of engagement with material and that’s the sort of interest and contemplation while you read. So it’s, it’s, it’s, you know, I read and I’m thinking about it, and then I’m intrigued about what about that angle, you know, then I’ll go chat to the expert and say, I’ll have you thought about this, how does this work and then you get a bit of feedback. And so I look a lot of it started with the CFP material their post grad diploma in financial planning and, and which I found just very, very interesting. So I really do enjoy tax. So it started there. And it’s just yeah, it’s just it’s just further and further engagements. But as I said, I know a lot of people are going through the CFPs Based on the ad, maybe they don’t necessarily use it or it’s not as not as interested. But that’s kind of to my point earlier where I think it’s it’s just there’s something to be said about getting energy from a certain a certain area or space. And it’s it’s that, that intangible that I think drives you to seek more information. And then yeah, on the client side, look, we it’s I mean, we have a fairly systematic advice framework, as I call it, that we engage with clients on. But I think earlier, early in the conversations, I mean, there are a few areas in which I would, I would simply phrase it as a question to clients, you know, have you got a strategy around x or strategy around y? Which I usually know the answer is no, but it’s it is just an opportunity to

Louis van der Merwe
Iran, minimizing the amount of tax you pay? Well, how do you phrase that? What like, what are the words that you use?

Brandon Ellse
It’s not as scripted as our luck. But it does take it does tend to be a little bit opportunistic. I mean, I might, for example, if there’s a client who haven’t contributed to retirement funds at any point, and they’re over the age of 55, I’ll ask them, you know, have Have you ever contributed? Have you thought about making a single lump sum contribution, and then retiring to living annuity and cashing out just to get the tax deduction that small little strategies like that it’s something I used in the last week? And clients so that interest in they’re like, Well, no, that’s because I mean, that’s just money in their pocket. So I mean, I’ve added value almost immediately. And it’s nice. It’s it’s nice to do that early on in a relationship, obviously, if we’re trying to, we’re trying to onboard this client. And so that’s I guess, that’s one way but the sort of more the deeper tax assessments we do full tax assessments for, for every individual and every couple. And I’ve never worked with a client where we weren’t able to to reduce their effective tax rates. It’s I haven’t seen it yet.

Louis van der Merwe
I’m guessing this is not something clients expect, you know, they don’t come to you to reduce the tax bill, do they see you as a technical expert? Do they see you as a sounding board? How is it that your client would describe the relationship they have with you?

Brandon Ellse
Yeah, to be honest, it’s something we I think we’d like to ask them that a little bit more often than we do. And I think it would be interesting to hear what they say. I mean, look, certainly, I am of the belief that first and foremost, what we are offering as a technical service. So that’s the first thing. So I think we add value by being technically Excellent. So it is it is a, it is something that is a priority for me. And it’s something that I spend a lot of time on. But having said that, I have also learned that the it’s very rare that the client is going to be in a position to interrogate your technical skill. So and nor nor should you expect the client to pat you on the back at any point and go, Well, you’ve already liked how you did that with this, you know, little tweak here and you saved me X amount. Like we’ve we’ve done great things for clients in the past. And they to be honest, they still don’t necessarily understand how much thank you so

Louis van der Merwe
much for optimizing by efficient frontier is not that cold

Brandon Ellse
in the mail. Exactly. So those two things are true simultaneously, but and then then it becomes it’s, there’s so there’s always a little bit of like marketing theater around your interaction with clients. And so there’s the telling them information that’s genuinely useful. And then and then there’s the obviously the coaching element around adherence and making them feel heard and making them own the plan and those sorts of things. But, but still, and because I have heard this to some degree in certain forums where I don’t want to get I think people are getting confused about that. That’s not to say that the technical stuff is not important. I think it’s crucial, and we mustn’t lose sight of the fact that that is actually where we add a tremendous amount of value. I just think you’ve got to have both, but I can’t I didn’t, that I didn’t realize, I think early on in my career, and it’s taken just, you know, repeated interactions with clients to understand that. Yeah, they know that they’re not, they’re not going to appreciate my insights on the ante nuptial contracts or that’s not necessarily where, where they’ll feel the value, I think, do you

Louis van der Merwe
think we’ve moved too far to the coaching side? Because with the conversations that I’ve had recently, it almost pops up everywhere yet. I’ve also seen financial plans that are technically very average or viral by and large, incorrect, right? So we’d never interrogate another financial planners, financial plan, we get we say, oh, go and speak to that person because they deliver excellent financial planning yet, how do we No, no. Well, how do we solve this like in in an ideal world where we could say, let’s figure out a system to gauge the quality of an advisors financial plan, maybe to signal to clients or maybe just to improve our profession? How would you tackle a challenge like that? And I know this is a very left field question, but

Brandon Ellse
it’s something I’ve thought about affordable Recently, because I’ve noticed that when advisors get together in whatever forum, it’s sold in that the conversations are actually on the technical side, it tends to be more about practice management and business models and fee models. And I think that’s where a lot of the time spins, and it’s actually that’s, I’m less interested in that side of it. Certainly, you know, the tech space. And I don’t have a lot of passion for that, to be honest, I’m very much interested in the technical side, but and there’s also an assumption that, well, you know, if you did your CFP, so we’ve all got the technical skills. Now, then I find that very interesting, because I just don’t think that could be further from the truth. I actually, I think there’s a relative I mean, this is anecdotal. But I think that there is probably a fairly wide distribution of, of skills. And it’s simply for the simply for the reason that I, as I said to you earlier, I just think there’s so much to know, in the space. Yeah, pick pick any of retirement planning or estate planning or tax planning, you could dedicate your whole career to going down those rabbit holes. I mean, and they do in the States, I mean, you do you have professors of retirement income planning, for example. So I don’t think, you know, to say that, you know, you write the CFP Board and no, we’ve we’ve all got the sort of funders, it’s a foundation for sure. But it’s never enough. In my sense, it’s, I don’t think I’ve answered your question at all. So what was your what was I mean,

Louis van der Merwe
there’s, we have continuous professional development that says, we’ve done a few points yet, is that effective? My question is, how do we rate the quality of a financial plan with in the profession so that we can say, this person delivers a high quality financial plan? Is there a way is it? Is that even necessary? I’m not sure but I think I do agree with you that once you go down the rabbit hole of further studying beyond the CFP, you realize that the CFP is not the ultimate it is a starting point, in my opinion.

Brandon Ellse
No, I would say at least 50% of what I know is off from books that I’ve read from, you know, the various world experts on retirement planning and tax planning, or whatever it may be. So it’s the CFP was a was a good foundation. But to a point we’ve because because advisors don’t actually speak all that much about their their philosophies and principles or our technical technical side, because I also one thing, I don’t think there is necessarily one approach to financial planning. I don’t think that’s true. I think there are a number of legitimate approaches or strategies that one could make an argument for. And I would, I would go, okay, I can understand your logical reasoning for doing that. But we don’t often get into it. And I think, yeah, we I have, it’s just been through conversation. So, you know, for example, you can you know, you can unpack pet Carter, you think about tying in a risk assessment to a portfolio, you know, how do you link one to the other? And what’s the point? Why would you do that? You know, I’d like to hear somebody’s thinking around it. But because a lot of this stuff is on some level, kind of philosophical, that’s where you start. So what is your philosophy around this, then you bring in the theory, okay, what do we know? What does the evidence suggest about this? And then there’s very important the behavioral component, especially from an investment perspective. So for example, you could get stuck in the weeds arguing about passive versus active, but actually, at the end of the day, it’s about sustainability. And is the client going to stick to a strategy? Okay, what goes into that? Yeah, totally. I mean, I don’t think it’s any necessarily a formal way of doing it. But I certainly would love to have more conversations about that, because I think we would, yeah, we would learn a lot from each other. I think. And again, there’s I don’t think there’s necessarily one approach,

Louis van der Merwe
almost like academic debates around, you know, what are these elements of financial planning, because we’re not really seeing that in South Africa, at least not that I’m aware of. I want to chat about your investment specific designations that you hold, and how that’s shaped the way you deliver investment specific advice. So you hold the CFA designation, you hold the CIA designation? How has that shaped your investment specific conversations? Do you tend to go a lot more detailed with clients? Do you have discussions around which single equity or single shares to buy? Or do you think it’s broad? You’re, you’re planning to maybe have a slightly different approach than someone that doesn’t hold those designations? You also

Brandon Ellse
interestingly, it probably hasn’t had the effect that you would think so we you say, sort of getting into the weeds on securities, and I don’t do that and for a good reason. So I am. So it’s two things. It’s actually it’s that and my my previous career as an economist effectively, right. I got the opportunity to engage with what I would call actual economists. So you know, people who work for the South African Reserve Bank, the National Treasury or the IMF or the World Bank and and certain I’m a nonprofit research organization. So and I’ve worked closely with some some outstanding individuals who are economists, I know what an economist looks and sounds like. And I’ve got the academic background there. And I’m, I’m kind of acutely aware of the standard and of the level. And it’s the same thing I said earlier, those guys are dedicating their lives to a very specific, very particular subject and becoming a subject matter experts on something niche. And so when I moved into this space, it is a very interesting phenomenon. You see, people without that background, talking about the macro economy. And I mean, to me, the macroeconomics is it’s incredibly complex, when you want to talk about mechanisms and all that. So. So I kind of became quite, quite wary of doing that with clients, or certainly I couldn’t do it credibly, I didn’t feel good about the conversations I was having with clients have, I’m sitting there, and I’m trying to pretend that I understand why, you know, the current account surplus has moved 1% to it’s not a credible exercise. And I said, I’ve always said, advisor, I don’t think you need to do that. But there is the view in the space that you do need to do that. And I think part of it is guys are desperate to demonstrate value. And I think they think that one of the ways they do that is by confusing people. And, you know, it’s I’ve seen this, if people who understand a subject incredibly well are able to communicate it really succinctly. Very, very simply. And and it’s so rare, because there are so few people who deeply understand a particular subject. So I just can’t sit in front of the client and talk about the stock or that stock. And I know that I haven’t put in the, you know, the 50 or 100 hours that it would take to do a thorough analysis of that. So I’m, I don’t play, I don’t go into that space. And I’m very clear about the fact that I what I do is a, I’m a financial planner, and I see that as a distinct profession. And an asset manager is a separate profession. But what it has done, it has given me the I would say a strong kind of theoretical understanding of, of, of markets and assets and how assets are priced in particular, which is not well understood at all, actually, by advisors especially. And so that helps me to have, I would say better conversations with clients. But the challenge is always to try and communicate with them in a simple way. And it’s in my previous role was that I would try to communicate complex matters to members of parliament, and it is the hardest job in the world to try and talk about bond markets. What is a bond? How does it you know, it’s never, it never gets easier? But yeah, I would say, I mean, it’s a lot of studying to basically say, I feel like I have a very strong theoretical foundation, but I don’t talk and as I say, I don’t go into we don’t talk stocks, we actually hardly ever talk about investment performance these days. It’s just not, it’s not really core to what we do. I mean,

Louis van der Merwe
part of me want to argue that it’s because you’ve gone through this, that you have the confidence to, to not have to talk about it to say, Well, I do have the skills, and we can have that conversation. But yet, I found that it’s more helpful for the client to not have those conversations, right. So you’ve replaced politicians with into clients. And it’s a fascinating area to kind of just this idea of simplifying things. And I think that by itself, is a deep rabbit hole that we probably not going down enough, right, like taking this really complex elimite Like, like tax planning, for instance, where there’s a lot of emotion around, it’s like fear, I was going to end up in jail. And just holding someone’s hand and saying, Hey, we can we can sort this out, and we can optimize it, it doesn’t just have to be sorted out. Yeah,

Brandon Ellse
I mean, it’s, it’s true. It’s, uh, you know, even with our proposals and our views, it’s I came from a space where we would produce these big thick documents, and there was a lot of technical analysis and, and again, all great from a necessary from a record of advice perspective, it’s great for me as the, the, the analyst, when I go back to it in six months, I can understand where my thinking was, but, but as I said earlier, there’s a big difference between that and the background. And the what is presented to the client. So, you know, I know us sort of a one page tops and top thing I think is makes a lot of sense. And we’ve we’ve moved in that direction as well. And it’s yeah, it’s very, I say it’s high level that’s my default knows is high level with clients. And if they want to double click on a subject, we can go down into the weeds, but to be honest, it’s very rare and if anything, I’ve had clients begged me not to give them theory anymore. They don’t want the theory. I had that two weeks ago that don’t tell me the investment there, you know, and so so you know, it’s not you know, yeah, yeah, just don’t know. I trust you. I trust you just don’t give me a so it’s, yeah, it said because, you know, I’d love to talk about that sort of thing. I think that but it’s true. The truth is it’s not obviously it’s not important to the clients, as you know, a lot of them come in with the, I find the one thing that a lot of client Ever since, like they don’t have control, especially the the wealthier clients, or everybody, I suppose for that matter, but and I think that’s what we’re trying to do. It’s that it’s that sense. It’s under control, we’ve considered every aspect we possibly can. And in one page, this is what we’ve looked at. Okay, and these are the main points,

Louis van der Merwe
what would you say is the most challenging part? In your, in your career now dealing with clients? Like what do you feel is the thing that comes up the most that clients want to talk about or need to talk about? That’s kind of really, really important, other than regulation and politics, to take those two off the table?

Brandon Ellse
Yeah, I mean, it’s really kind of two different answers. If you if you if you say what the for me personally, something that I noticed, I get frustrated quite quickly, but I have to, obviously, I have to manage that. And I have to have to manage my inclination to argue, which is not helpful, is is actually around investment discussions, because especially with what we do, there’s definitely been this perception, firstly, of what of what we are, and I think we are perceived to be investment brokers. So that’s, that’s something we deal with all the time. So clients want to talk product. It’s not a conversation, I like to have often until at least we’ve had other conversations.

Louis van der Merwe
Do you put that under kind of wealth management and your wealth manager? Yeah. How would you define that?

Brandon Ellse
Yeah, exactly. So me, you know that in this industry, the titles are meaningless. So you can call yourself whatever you want. So just that this, but for whatever reason, if you’re a wealth manager, I think the perception is sort of that it’s a little bit more, I don’t know. Yeah, press more prestige than just, you know, a broker and advisor. But I mean, again, none of it really means anything, you can call yourself whatever you like. But I do think when we position ourselves as sort of wealth management, it’s okay, investment broker, you’re here to talk about investments products and perform my money doing. Yeah, how’s my money doing? And I do get frustrated, because I guess I just see a bigger picture there. I mean, what I see you’re essentially spending goals that a client needs to depending on what they tell us they value, they give us their values, and we’ve got spending goals, and I’m trying to help them get there. And that’s, and there’s a lot that goes into that. And but then I get I feel like I’m kind of getting dragged into almost the past the old way of thinking and honest. So I do. And yeah, I think that’s sort of what frustrates me. But then the other question, sort of what would clients what should they be considering? I wish that I guess my wish is that they came into the conversations with a little bit more of a, an open mind to the interconnectedness of, of all of their different goals. So they could see her long term health care planning is crucial, actually, and affects their investment planning and legacy planning. And so it’s the big picture that I kind of wished they, they could appreciate. But it often it’ll just go straight to that investment, conversation. And then and then there’s a big responsibility on us to frame the conversation differently. And I’ve, we’ve, you know, just in this new business I’ve been, I suspected this was true, and it has proven to be true. But a large part of the, of the nature of the conversations that we have with clients depend on our framing. And you really can frame the engagement differently from the first meeting. And going forward, as long as you’re consistent, and you have a particular way of communicating and presenting what you do. You can have totally different conversations with clients. And I can’t tell you how many advisors don’t believe that’s true. They’ll believe that you must, you know, your clients know that they love a little bit on the macro economy, you know, we’ve got to have a little bit No their debt, they actually don’t it’s you are you framed your value from the first meeting in that way. And that is why those conversations are being had. So

Louis van der Merwe
I’m I’m chuckling because I’ve gone through a similar journey and kind of how I’ve had to deal with that is to not have up to date knowledge of economics or in even literally what the markets are doing. And so now, it’s not a crutch that I can rely on to have a conversation and starting the conversation asking your client, what are your expectations of today’s meeting? How much time do we have what’s most important, and sometimes there’s a list of 20 things. We can only do maybe with one or two of these and which ones are our most important. The part that you mentioned that intrigued me there is that you have a discussion around the client’s values, and then how the future spending aligns to that. Tell me about how you unpack the values. Is that something that you have a specific structure for? Is that something that you intentionally listen for? Or how do you uncover someone’s values?

Brandon Ellse
So so I can tell you in terms of our advice process, if that is an area, I think we can get better at and it’s an area that I don’t I know, we haven’t, we certainly haven’t gotten to the point that I want it to be at. But effectively, it’s, you know, we have what’s called a fifth meeting and we will ask and sort of open ended questions. So took a lot of the stuff out of more asylum as advice that sticks. And just getting the client to talk a little bit about. Yeah, but what matters to them because because I, we have this the advice framework is basically, if I can identify what we call their financial planning purpose, which is, which is sort of a Kitsis call, cup top framework where we get these values from them, those values map on to spend and goals, those spending goals need to future liabilities, those future liabilities must be funded by assets. That’s basically the framework. But the values Yeah, the values it’s at this stage it is it is informal, but it’s it’s trying to ask good questions that to some extent, we’ve scripted beforehand, and listening and trying to just listen for. And it’s difficult, because you’ll know, I mean, you know, you don’t think with some clients, you’re not going to get the most detailed or emotive answers there. So it can be tricky. And it’s I guess, it’s learning better ways to probe there. But no, I wish we have looked for, perhaps there are better or more formal ways to do that. And I really would like to develop that that side of it, because we what we’re what I’m trying to do in my presentation of our reviews and proposals is trying to link all of our recommendations back to a value, you know, you said it was important that your surviving spouses looked after one day, okay, that is what we read. That is why we’re recommending ABC because it ties it in nicely. And it kind of they take a sense of ownership of those recommendations, which improves adherence and and shows that we’re adding value, because that’s the way it should be. I mean, this is actually what matters to them. So we have to tie their recommendations back. But yeah, not as formulas I would like,

Louis van der Merwe
there is something worthwhile checking out, it’s called Values in Action inventory, it’s called the via character, and it kind of tries to help you unpack what your values are. And it’s a free assessment that anyone can do financial planners or clients and bring to the meeting. And we’ve kind of been on this journey to explore different areas value sorting, and yet, still haven’t found something that works 100% for us. But I’m curious when when a value might come up that’s in contradiction with your own personal values. You know, you mentioned traveling and someone might say, that doesn’t really resonate with me how easy it is to just how easy is it to project our own values onto our clients and say this is what should be important to you, right? Family, travel, these kind of things, even even when we talk about goal setting, right? How much of it is our own goals versus the client versus, you know, what society dictates?

Brandon Ellse
Yeah, so no, I mean, absolutely. I think that’s that’s very true. I think from I mean, from the analytical side, I’m usually very grateful when they express something like that, because that gives me direction. As far as the planning is concerned, I that tends to be the way I think about it, I’d rather than say more than less, that’s harder, actually just did a plan recently, where they, they weren’t a lot of values in my, you know, for me to go on. And that makes it really tricky. Because now I’m sort of guessing as to how I want to plan for them. And that’s not ideal. But you’re right. I mean, I think that’s I think that’s a very natural response, I suppose you, you’ll always, you know, your way up what you hear relative to the way you think about something, and I haven’t found it to obviously be a problem, but I can understand how that it could certainly color my interactions with him going forward. That that is that is a possibility.

Louis van der Merwe
Brandon, what, what’s the next chapter for you? I mean, you and David, who was a previous guest, on this podcast, have now started the business, the business is is up and running. When you look back 10 years from now, what is it that you spent the last 10 years building or improving that you think would be would have moved the needle?

Brandon Ellse
Yeah, I’m not. I mean, David and others, probably a little bit different show. But um, I guess I’m not necessarily motivated by empire building, I don’t have that in me, it’s not that important to me, I basically wanted to create a vehicle for me to do what I love doing, and and add value. And that’s one of our purposes, improving labs. And we’re very serious about that. Because that that really is that’s kind of at the heart of what we do at the same time. I do think this is a very, it’s a very exciting time to do what we do, because I think this as we transition into the into a profession, I think there’s an opportunity for advisors to come forward with kind of fresh thinking and new ideas and different business models, and really make a name for yourself in that space. So that’s, I mean, I think when we look back we’ve you know, we’ve got a different way of, of charging that we think is more free of conflicts more aligned with the with the client’s interests. We’ve got an advice framework that I think is very holistic, truly, not just a buzzword and yeah, I guess now Me, what what tends to matter more than the financial side, although we would like that as well would be to to basically be viewed as a company that was sort of at the forefront, right? We were, we really kind of turned over a lot of the old or older way of thinking about things, the old way of doing things. I must say that, to be honest, that matters to me, probably more than the kind of commercial success if at all,

Louis van der Merwe
that sounds wonderful. And I’m 100% guarantee that when we look back, you would have had a massive impact on how clients expect financial planning conversations to go and there is this shift happening for the good or the bad, right? It’s just a different section within the market and to say, when I, when I’m looking for someone like this, these are the businesses that I can that I can go to, is there anything else you’d like to share as a parting note, as maybe as guidance to young financial planners that have just changed their careers? Or just maybe joining the profession? What would what would a little bit of hope, sound like to them?

Brandon Ellse
Yeah, I think I mean, I think I guess my view on what we do this, there’s some is really informed by sort of the some of the founders of the financial planning profession. So you read like, I like Richard Wagner, you know, he’s somebody who thought very deeply about what what a profession would look like meaningful phonology is this whole sort of theoretical, you know, like, like law and, you know, like the medical, the medical space. And I fundamentally believe that what we do is advice, and it is we’re no different to a legal adviser or a medical adviser. And I think there’s Yeah, it’s your what are the set high principles and advanced learning? That’s what, that’s what professions are about. And I think that’s what we should be about. But I do recognize at the same time that it’s, it is tricky. If you think that way, and you come into the space because you are going to meet, you’re going to face a lot of people who don’t think that way. It’s it is it is about sales, it is about numbers. It’s about closing, it’s about, but I think, yeah, I don’t feel disheartened, because I think there are practices out there who are like yours or like, hopefully, like ours, who are who are taking on this new way of thinking. And I think if you can find a space in one of those organizations, I think it’s it’s the right way to go.

Louis van der Merwe
Absolutely. Yeah, that financial planning 3.0 book, by Nick Wagner is definitely anyone listening. It’s it’s good reading, he was way ahead of his time. And we have the benefit that we have this guidance, right. We don’t have to remake it. And I love how you said that. Ai principles and advanced learning like that, really is those I’m sure those words are used intentionally. And thank you just so much for for the breadth of knowledge and the excitement and the passion that you share for this masterful financial planning. I wish you all the best with building the business and your financial planning endeavors. And thank you so much for being here.

Brandon Ellse
Yeah, thanks to you. And thanks again. I think what you’re doing here is awesome. I think we need to have more conversations like this and look forward to the next episode.

Louis van der Merwe
The start of many. Bye now.