#75 Kirsten de Wet – Transcript

Louis van der Merwe
Welcome to another episode of Ensombl Advice South Africa. Today I have in the studio with me Kristin de Wet. Kristen, it’s wonderful to have you. Yeah. Thank you so much for making the time to talk to me about all things finance,

Kirsten de Wet
Thanks, Louis, I feel quite honored to have been asked to be on your podcast in the first place. I feel like I’m going to be in the Hall of Fame just by chatting to you.

Louis van der Merwe
Absolutely. I mean, it’s it’s always wonderful if we see a very powerful women in finance. And I think that’s something that we need to talk about today. Why there’s not more. But before we get to that topic, give us a little bit of a background. So your business developer portfolio matrix, what was the route to get there like everyone

Kirsten de Wet
I think my story kind of is an interesting one because it happened without me really intending to. So I studied finance at Santa Barbara University. Never really thought I’d do anything except finance. That was my thing. Enjoyed it from the start. Finish that was lucky enough to do my honors and studies as well. So I escaped Joburg for a couple of years, came back Yeah, wanting to study towards my CFA. And I was actually taking kind of a semi gap year, or pairing and studying towards level two, when I got the opportunity to interview for a role at Portfolio matrix through a friend that I knew who was working there at the time. And to be perfectly honest, I thought what a great opportunity to get interview experience because I’d never actually gone on a job interview before. And I kind of went for this interview with no real expectation, or I think intent on wanting the job necessarily, because I’d had this plan to take the year off and do some traveling, and just wanting to figure out exactly what my next move would be. And here we are. I’ve been working on portfolio metrics now for going on five years.

Louis van der Merwe
That is amazing. And Kirsten, you recently became a CFA charter holder, congratulations, firstly, and when you enroll, they send you these little postcards, I’m not sure if they still do with maybe a kind of a dog and the leash saying, hey, you need to get someone to get your dog to go for a walk. So that is an evidence of how much time this is going to take up. And oftentimes when I have these conversations with people more in the financial planning field, they look under the hood of the CFA work, they maybe do level one, maybe level two. And a lot of them say, Hey, this is not really what I want to do. What made you stick through and actually go through all three levels, put in all the time and the energy and the effort, get your charter and then say maybe I don’t want to be an analyst.

Kirsten de Wet
So great question, Louis. I’ve asked myself that very question quite a few times. To answer the first part of your question because I had studied my undergrad and B COMM And then my post grad financial analysis, a lot of the content that is covered then in the CFA exams was already covered in my university degree. So I felt like I’d almost completed the first stage to what I was working towards. And if I didn’t then continue with the CFA exams and at least giving you know a crack at it. I would have almost been letting myself down. So I, it was always my intention to write the exams. And I think I was lucky enough that I managed to do level one while I was doing well honors. And that felt like an easy one. And I thought, if I can do level one, I can absolutely crack level two and hopefully level three. With the benefit of hindsight, I’m actually so grateful that I didn’t know how hard it would be, because I don’t think I would have been brave enough to have attempted it in the first place. And to then have achieved and completed all of the exams, consecutively, I think also helped my confidence, because I don’t know if I would have been strong enough to have failed level two or level three, and pick myself up and keep going. And then to answer the second part of your question, you know, you spend what, upwards of seven years studying towards having that designation, having Chartered Financial Analyst after your name, and I haven’t worked a single day as an equity analyst or actually analyzing companies. So it’s kind of mind blowing to me, that I walked this path had this very clear idea of what I wanted for my life, I wanted to be an equity analyst, I wanted to be a corporate girl, I wanted that suitcase, I wanted that, you know, walking into the office feeling like I knew what I was doing. And this was where I needed to be. And I think I was especially lucky that I ended up a portfolio matrix in the way that I did. Because I then got exposure to different aspects of a financial business and an investment manager. And when I finished level three, I actually sat down with Brandon seedsman, our CEO. And he basically said to me, what do you want? Do you want to go into the asset management team? Well, we’ll make a space for you. Where do you see yourself fitting in? And what is it that you want from your life. And at the time, when I was hired at PMA X, I was working in the partner relations team, which goes far beyond client support, but essentially a client support service. And I’d spent a lot of time on my Soft Skills, which was also kind of interesting, because I’d spent my whole life working on these hard skills on, you know, you work towards this qualification, you spend hundreds, hundreds of hours working towards an end goal. And what I then spent my time at Penn makes doing was working on my Soft Skills on communicating when leading on, you know, having conversations with financial advisors and learning about where they believe they add value to their clients. And when Brandon asked me that question, it was almost an epiphany for me, because I immediately knew I didn’t want to go directly into the asset management space, I knew that the joy that I found in my job in the two years that I’ve been in PMS at the time, came from my engagements and interactions with people. And it didn’t come well, I didn’t believe it would come from sitting behind my screen works human XR models. And luckily for PMS, we already have the most incredible team of asset managers and analysts. And I looked at where I thought, not just where would I get joy? But where would I add value to the business that I now saw myself as very much a part of, and I thought that the value I could bring wasn’t in modeling, in order for financial, you know, data analysts or anything like that. I really saw my value coming in the conversations I could have with the advisors that we choose to work with.

Louis van der Merwe
It’s a wonderful question that you just said day, where would I get joy? How did you even start to tackle such a question? In your very first job? Straight out of university? That feels like a very overwhelming question, like, tell me how you are you tackle that?

Kirsten de Wet
I think it was that process of realizing my life had been so goal oriented, particularly around qualifications, and I won’t lie to you when I could put CFA after my name. I still to this day, I’m so chuffed and excited and proud of myself and the hard work that went into that. But in working in this partner relations team and seeing the impact that I could have, just through my words and my engagements with people, it started to weigh on me, kind of where was my energy going? And where was I getting energy back. And at the end of having completed CFA, I mean, I was up at 5am, studying five to 8am, starting my workday at a finishing of five jamming. That was my routine for pretty much I mean year and a half, two years in getting that qualification. And once it was done, and I kind of had this open black space to evaluate my life. I could see that as much as I I still do love academia. I love reading. I love learning. I don’t think I’ll ever stop learning. I did the ESG certificate through CFA as well. That’s amazing. And I think it’s so important to continue to improve on yourself. But for me, when I actually was placed with that question, do you want to leave this relationship role that you’ve cultivated and go into the asset management team? I knew immediately that my answer was no, it was a resounding no. There wasn’t even a moment’s hesitation. Should. And I think we could have a whole conversation right lead to that in itself because I was lucky enough to be mentored by the likes of Brandon and Aiden kept who’s also been on your podcast. And I really believe that the people you surround yourself with, impact your life and impact the life that you’re going to live and eat. And working with Brandon and working with it and and being able to engage with so many different people across, you know, the world. BMX is a global business. I didn’t want to lose that. And I think on another kind of aspect, this idea of being an analyst, I associated with kind of assertiveness, and having to be a hard person, and needing to be quite disciplined and maybe not empathetic. And when I looked at who I believed myself to be, none of those things resonated with me. I believe I’m empathetic and kind and I think I am soft to a certain extent. And it’s taken, I mean, up with five odd years to realize that I can be compassionate and empathetic and a listener, without being weak, I am strong, and I’m strong in the role that I have at Portfolio matrix. And that’s not something that happens overnight, either.

Louis van der Merwe
Kristin. So when you set out this career journey, it feels like it was a very narrow focus, it was, hey, I want to become an SAE equity analyst. Right? Maybe not the saps but an equity analyst way. Think when we like we look at tertiary education, a lot of people are starting to say you need to go as broad as possible. Because it’s really difficult to predict, you know, what new technologies will be there? What new careers will be there? Looking back five years ago, how would you have approached your studies differently? Knowing what you know, now,

Kirsten de Wet
with the benefit of perfect hindsight, I think I would have done degree in politics and philosophy and economics. And I especially have a passion for history. So when I was studying at studies, I also took first year history just because part of me thought you don’t need to be a corporate girl, you can be a historian, you can go and just you know, absolutely love this based life and literature. I didn’t even know what part of his job was especially passionate about. I just knew that that was something that excited me. And if I could go back to first Jeremy would say why why are you narrowing yourself when you can do a B komen, incorporate other subjects and broaden your horizons. And secondly, you don’t need to absolutely smash and come your first your your second year, yes, you need to pass and you need to be good enough to get into honors. But that aside, there’s so much more to life than just studying and getting A’s and this very rigid path that I set myself on. No one put me on that path and say, You need to be a CFA, this is your guiding light, this is where you’re going to I did that to myself. And looking back on it. I don’t regret it. I don’t regret doing the common analysis, etc, etc. But I definitely compounded the same skill set over and over again. And maybe that’s why I really loved the soft skills that I then got to do they love to being in the partner relations team.

Louis van der Merwe
You know, there isn’t this like hard framework of, you know, correct or incorrect or right or wrong. Like it’s a lot more nuanced. And it’s it’s how you develop as a person thinking about financial planning and how you know, life can take these different parts yet. Sometimes we want to really simplify it, you know, this is when you’re going to retire, this is how much money you’ll have this is what your drawdowns gonna be like it, do you think there’s a different way we should be approaching financial planning to take into consideration these various life parts? Or actually the width of the path as opposed to this is what other people expect you to do overtime?

Kirsten de Wet
I love that question. And I think for most students, being privileged enough to study often means that that comes with a student loan. And if I had chosen to become a historian, or whatever the case may be, and maybe I didn’t earn as much as I earn. Now, at the end of the day, I sort of had student loans to pay back. And how do you then account for student debt coupled with the stream to be whatever it might be? You want to be a musician or an artist or a book editor? I don’t know. How do you then incorporate that with the career path that you’ve perhaps set for yourself or this idea that you have for yourself in choosing the degree you pick to study, but to mention you’re picking this degree at 18? You are a child? You are so young. And to think you’re an adult and you go into the big wide world and you know what you’re going to be and the job that you’re potentially going to do for what I mean we can chat about this 50 odd years. It’s obscene. It’s absolutely mind boggling to me and I think what I’m learning more and more each day in So your career and your job doesn’t define who you are as a person. And it doesn’t limit you to having a side hustle to having things that you’re passionate about outside of the role that you’ve set for yourself. I mean, look at you agree, you’re doing this podcast, and it connects so beautifully with your passion for speaking to people and communicating with people and bringing this message of financial planning to the broader community, even internationally. But that’s something secondary, or as far as part of what you are doing. And you could say that that’s a side hustle for you as well.

Louis van der Merwe
You know, for me, I think it’s that creative expression, right? My communication or my needs, if you look at the Gallop string finder, my communication list is quite low. And yet I have this need for creative expression. And I love what you’re saying that you are using part of your day, in a specific role. You are not an equity. LNS, right? Like, that’s not your only title, your fiance and your, you know, a friend and these all these like all these different roles and labels. And we start conversing in the workspace around things outside of work that we can bring to make ourselves richer, like is that conversations that’s happening at BMX?

Kirsten de Wet
Absolutely. So I think we’re lucky that our business is relatively small. So we know everyone and we know them, well. We know their partners, we probably know too much. To be honest, the lunchtime Table Talk is really not limited to just what we do on the weekends. And everyone has something that they’re passionate about. And as you kind of engage with the different team members with in Portfolio matrix, you realize that everyone has something outside of finance that they’re passionate about. And whether that links in beautifully with what we do, is is another thing, I mean, we were just chatting about how I’ve been reading these books on habits. And I think that habit forming is something that could impact my job. And it’s something that I feel like I’m starting to grow a passion for. And that’s something that could really set me up to open up time for other passions that I could then incorporate into my job. And I think what I found quite surprising about my role at PMA x, it’s twofold. The first is that I never would have expected the level of confidence that I’ve gained, throughout the years that I’ve been working there, because I’ve been put in situations where I wasn’t necessarily ready. So it was a sink or swim situation, but supported by this incredible team, who completely completely believed in me, when I didn’t believe in myself. That was that was the one thing and then the second thing I can’t remember now, I wanted to say confidence is the one. But secondly, to have the ability to not just be this one tiny, little role, whether it’s a relationship specialist, or business development, or asset management, my role that I’m in now covers all aspects of the business. And I think that opens my opportunity set to what I could potentially be passionate about in the future.

Louis van der Merwe
Because then from the outside, you seem very disciplined, right? When we talk about habits, and the use of habits to specifically help as in the areas of life where discipline doesn’t necessarily come that easy. What are the tricks that you’ve learned to have you trick yourself into doing things that you don’t feel like doing? This might be a little bit more personal, but if there is something you could share, I’d love for you to do that.

Kirsten de Wet
I think motivation is alive. I don’t think that people who when you say, oh, where does this person find the motivation to do X Y was it a lot of the time it’s not motivation, it’s the habits that they formed. When I was waking up early to study for CFA, I wasn’t motivated. I wasn’t getting an immediate reward by completing 30 pages in the morning and thinking I’m one step closer to my goal of being a CFA when that was, you know, a year and a half, two years away. It was the habit of I get up early, I go to the office and I study and I was lucky enough that at the time when I was doing these early mornings, Liam Dawson, you’ve also interviewed was also studying he was studying percaya at the time, and I had motivation and in varying adverse comments. I had a habit that I was waking up early to get to the office and I knew Liam was so I had an accountability partner to certain extent. And it’s when it’s no longer a decision that you’re actively making. You just get up and you do it. It doesn’t take away from your day. It doesn’t deplete your cup if I can explain it like that because it’s a habit. So I started my day at 8am no less drained than if I’d woken up at seven and got arrived at the office at eight.

Louis van der Merwe
Are you saying you didn’t have to think about it? It was hey, this is a decision so if I if I wake up and I need to decide am I gonna go and study or not? You know, you just bypass that and say cool, this is what I need to do and and let me go and do it.

Kirsten de Wet
Exactly. Up. Make your bed in the car. If you go day started, that’s it. And I think I’ve been able to incorporate that or I’m trying to now because I thought, postie Ave, I’ve got this great morning routine, I’m up at 5am, energized. And as soon as I stopped studying, and I didn’t have that driving force, or a place to be necessarily at 530, or whatever the case may be, I then started sleeping in a little bit later. So that’s a habit I’m looking to address now where I want to be up early, and I want to be at the gym or going for a walk or exercising or having my coffee and planning my day, and making more time for myself. Because then if it’s a habit, and you know what you’re wanting to achieve in that small space that you carve out for yourself, I think it frees you up, to be better at your job, to communicate better with your partner, to have more on your cup at the end of the day to give to others or to give to yourself. And I think that links beautifully with our conversation around work, not the job that you do not defining your being your absolute everything, you need to find other means of bringing joy into your life.

Louis van der Merwe
While we’re talking about that the role of a business developer, what comes to mind for me is typically a sales role. Right? You need to ultimately bring in new business yet, very little of our conversation today has been around selling something. How do you approach sales in what you do? Is it the dirty word that we see on LinkedIn and people complaining about things selling? Or are we constantly selling ourselves in any case, and maybe we shouldn’t be avoiding sales.

Kirsten de Wet
That’s exactly what I think if someone says they are against sales, well, they don’t. They’ve never engaged in sales, or they don’t, they’re not comfortable with it, or it’s a dirty word. They are completely undermining themselves every day. And I don’t want to cheapen what I’m about to say. But every day that you have an engagement with a person, anyone, you ultimately are selling them something, you’re selling them your time, your energy, your conviction, your opinion, whether we’re then kind of incorporating the fact that what I talk to financial advisors about is our portfolio management expertise, and how that that could potentially benefit them and their practice in their in clients. That secondary, if every role has an element of sales in it, you meeting with your clients and empowering them through a financial plan, you’re selling them the potential for a better life later down the line, a better retirement, a more comfortable retirement, maybe they can afford to visit their grandchildren more often than they think that you can, I have absolutely no issue with someone saying I’m a salesman, because at the end of the day, I am. But I think what I sell is where I paste the value. And I think that what we what portfolio matrix does is meaningful, and has an impact on people’s lives, not just the advisors, that they’re in clients. And we’re also part of that journey that you’re on with your clients in helping them to achieve that goal that more comfortable retirement that better life.

Louis van der Merwe
So a lot of these things, you’re talking about a very positive, right, it’s creating something better, leaving the client in a better position than without you. What if there was a scenario where the client needs to hear the truth that they maybe have been sheltered? From? How would you guide an advisor to better approach those types of conversations where maybe someone has to make really tough decisions around considering selling their home because they cannot afford it, considering moving, you know, considering drawing less of an income from their portfolio, things where the sales is not a this is all positive and good, like how would you guide an advisor? Through those type of conversations, I

Kirsten de Wet
think authenticity is so important in the conversations that you’re having with someone. And whether you’re trying to I still think the conversation is the same because you’re still trying to sell them a better life a better option. And if that unfortunately comes with some negatives, that it is what it is, it’s a situation that they’re currently in. And they’re lucky enough to have partnered with an advisor who is looking for a way out for a solution to the problem that they have. And if you’re coming to that conversation from a place of authenticity, and Jen genuinely wanting to help, as long as the client is open to hearing what you have to say, I don’t think that conversation could be a negative one. I’m not saying it’d be a hard conversation. But I think that the way you’d be able to frame it for the person is so important to ultimately also getting their buy in to sell their house or to maybe not spend as much income in a month, make those hard decisions. And in making those hard decisions today. You’re impacting the life you can have in the future. And I have so much respect for financial advisors because I don’t have conversations with in clients. I don’t have to, you know, translate this financial world that we take for granted because we understand it. I don’t have to have this Congress. issues with clients. And I think it must be incredibly difficult to sit opposite someone and have to tell them, you don’t have enough money for retirement, or no, you actually can’t afford to stay in the house that you’re staying in that and you need to make some hard life decisions. And if you don’t, it’s going to impact the rest of your future.

Louis van der Merwe
It’s an interesting comment, because a lot of the times those are the type of clients that we don’t get to see. We don’t get to have those conversations, because maybe the clients are not approaching financial planners, right? Then they know things are in a position to where maybe there’s a bit of shame, or there’s a bit of guilt. How do we how do we position financial planning in a way where people feel like they are open enough to talk about difficult situations without feeling shame without feeling less of a person, because they don’t have the size of assets that are maybe required to work with some financial planners? Do you think that’s a challenge that we’re facing or not

Kirsten de Wet
dfinity. And if you think about how powerful just having control of your finances is at its at its core, just budgeting, just knowing what’s coming in and what’s going out monthly. If you don’t know that, you don’t worry have control of your life. Because as much as we want to avoid it and say, you know, we can have these great passion projects and money makes to walk around, and you need money as an enabler to the life that you want to live. And if you don’t have the right partners, advisors, investment managers guiding you on that journey, and you don’t have any education around your finances, how could you even know what steps to take to get to in goal? And if financial advice isn’t easily accessible? How then do we expect people to make good financial decisions? And I think the banks are doing a really great job at the moment of pushing this idea of financial literacy and educating yourself and but it’s very, it feels to me like it’s separate from having this relationship with a financial advisor. And I feel like that’s a little bit of a failing. And I think all of us in your especially on your podcast, maybe it’s something to think about how do we get this podcast to inclines to people who want to learn more about fun finances and financial literacy? And how they and does the financial planning it especially in South Africa? How do financial advisors offer services to clients who maybe don’t have a huge asset base? And who you’re not going to earn a big fee from?

Louis van der Merwe
Yeah, like you said, the banks are in a really good position to be able to do that. But it feels like then you’ve more using gamification and habits to maybe prompt someone into doing something which might be good for the client or it might be good for the bank. I’m not always sure that it’s it’s all all based for for the client. But it’s these conversations that you that you’re talking about. It’s saying how do I use my communication skills, not to be talking at someone but to be having a conversation with them? I want to kind of come back a little bit to the practicalities around your job. And you mentioned to me, that part of the CFA curriculum, you didn’t enjoy it as much the fixed income side is now one of your passion projects. Tell me a little bit about how you explain to clients and financial planners. Why fixed income is important, because I think this is something that as a young financial planner, you can very easily glaze over, right? You can say, well, that’s the income side, it’s the stable piece. It’s the piece that’s going to generate an income. We don’t have to worry too much about it. Let’s talk about the stocks that you earn. Which shares are you buying and selling?

Kirsten de Wet
Because that’s the exciting stuff, right? Equities are exciting. The latest thing, it’s what’s hot at the moment? Are we talking less fast? Are we talking process? What’s happening with Mehta? These are conversations that I don’t have, because I’m not talking to insurance is pure makes me take it from a step back and we say, what are we worried about? At the poll, we’re worried about strategic asset allocation. And fixed income is an important component to that overall asset allocation. And I find that advisors aren’t comfortable with fixed income. Maybe it’s because we overcomplicated when we talk about bonds and yields. And I’ll be the first to admit having to study the yield curve. I didn’t know what was up and what was down. I sat with Liam Liam drew me this curve over and over and I just couldn’t wrap my head around it. So I’m not saying it is something that’s simple. But I think advisers shy away from understanding it, because it’s not as exciting and not as sexy as equities and are some African equities and global equities. But it’s an important component to that overall asset allocation and to a diversified portfolio. So independently from all of the other asset classes that we look at. You’ve hit the nail on the head, we’re looking at stable income. We’re looking at living annuity clients who are joined up, where’s that yield coming from? And it’s such an important element of a portfolio and I think it’s a difficult one to to hammer home, because the environment is changing all the time. And that’s why, you know, outsourcing to an investment manager who’s making those decisions for you, and looking at what’s happening on the yield curve. So you don’t have to, so you can have meaningful conversations with clients. Because I mean, Gary, have you ever spoken about the yield curve to any of your clients?

Louis van der Merwe
I’m sure I have a whole

Kirsten de Wet
generation and convexity one of them.

Louis van der Merwe
Even like you saying, even this converse, you have this conversation around, you know, what’s going on with Mehta and what’s going on with this, Shay? Is that a helpful conversation to be having with clients in the framework of the financial planning? And why I’m asking that is, we’ve noted non business that it’s very easy to fall into that habit of talking about investment and investment performance, yet other pieces of the financial planning might have been unintentionally neglected, right? Because it’s not as interesting or the client is not as interested in talking about it. How do we start shifting that? Or do we see a splitting in the role as wealth managers and financial planners?

Kirsten de Wet
Absolutely. And I think we got the conversations that we have. And again, I don’t speak to in clients, but I think you’re in a uniquely powerful position to guide the conversation, and you choose what is important to your clients. So if you start every meeting with a prospective client, and the first thing you talk about is fees, and are expensive everything is your client is going to be acutely aware of what is my T IC, what is my t er, they might not know what those figures on that page mean. But it’s going to matter to them, because it’s the first thing you bought, when you meet with them. So if the first thing you’re talking about when you sit with your client is how x share has gone up 10%, and how that’s what you’re excited about. That is what the client is going to be excited about. And they’re going to immediately link, the success of my financial plan is dependent on x share performing well, and when they see a news headline that says X shares now tumbled 20%, they’re going to link that to my financial planners in jeopardy, you’ve met, you may have their advisor neglected to have said oh, that she’s only actually 2% of your entire portfolio. But that’s what your client hears. And I think it’s our responsibility as the stewards of these people’s money, ultimately, to have the right conversations with them and lead the behavior that we would hope to see from them. So if you don’t want to talk about shares, maybe don’t bring them up, maybe focus on what you think is going to have an impact on your client staying the course, you know, maintaining their composure during tough market periods, and making the right decisions, maybe not spending 5000 Rand a month on you cook every month while they’re going in buying their own groceries for half of that price.

Louis van der Merwe
Do you know my budget because it’s this, you cook, it’s just went off, though it’s been bothering me too well. This is such a valuable piece, because the picture that comes to mind to me is almost someone navigating in the dark. And this advisor or financial planner, lighting a few light bulbs on things that may or may not be relevant, shouldn’t they be more of a framework to say these are the things when you’re having discussions with clients? These are the things that are the most important. And, you know, we have this six step financial planning process. Yet, it doesn’t help us to identify what has the greatest impact, you spoke a little bit about asset allocation. And maybe we should work on the bigger things first, before we get to the small components like Ha changing x percentages or even fees, right? We have this fixation around costs, yet someone that have saved money, even at a higher cost is still in a better position than someone that didn’t save the money.

Kirsten de Wet
Exactly. I think where we choose to guide those conversations is on us. And I think it’s a good question for you because you are a financial planner, you’ve had these conversations with your clients. Where do you see that light bulb moment when you’re talking to them and their eyes light up and they understand what it is you’re trying to show them? Is it when you’re showing them? You know, let’s look at correlation between all the shares that you own or they don’t know what green or red or orange means in this strange little chart that you’re showing them? Or is it if you stay on the path you’re on now, this is how much money you will have a ton X assuming why you will be okay. And that’s what we circle back to in all of our conversations with the advisors. They always say to us, my clients want to know if they are going to be okay. And our cane looks different to everyone. Right? Someone with a higher income okay means they can still go on that overseas holiday once a year. Okay for someone else means I can live in my beautiful little cottage in Sandton with my lovely garden, feed my birds and I’m happy. Okay means something different to everyone else. And I think it’s the job as the financial planter, to identify what is that for your client? And how do you help them achieve that goal? Without judging as well, which I think must be quite difficult when you could say to your client, but you can draw down so much more money, you have more money than you’re spending? Why aren’t you spending it? I mean, that’s ideal situation, we’d all like to have more money than we know what to do with.

Louis van der Merwe
You put it so beautifully. I’m curious, what are the financial planning businesses worried about that you think they shouldn’t be worried about like, what are the things that when someone says, Oh, I’m worried about XYZ, and you think, another one of these that are worrying about this thing that they shouldn’t be worrying about? Like, what’s what’s coming up a lot with? Is there no such thing?

Kirsten de Wet
Oh, that’s such an unfair question, because I’m not an advisor. So I’ve haven’t sat in your shoes I wish I had. So I could actually add,

Louis van der Merwe
like, what are you hearing? What are people asking you about saying, struggling with this in my business,

Kirsten de Wet
we’ve had quite a bit, I mean, fees, fees have been a massive issue. And even when we present what we do to potential partners, we always say to them, are you worried about the fee that you’re paying or the value that you’re getting after the fee has been paid. And I find, especially with the younger advisors who work with us, they are really tormented by fees. And they are so quick to capitulate on what they charge their clients, because they want to do the right thing. They want to add value, they want to grow their client base, they want to have an impact. And they do that to the detriment of the value that they add to their client, because they’re not confident in charging the fee that they charge, the client sense that. And I just think, if you take a step back, and you’re confident in your value proposition and what you’re bringing to the table, charging your fee, and having a fee discussion shouldn’t be an awkward thing. It shouldn’t be a difficult conversation, this is what I charge. And this is what I believe my service is worth. And I’m comfortable, that this is what you should be paying.

Louis van der Merwe
Because there we struggled with the same thing in our business, we because we didn’t have a published scale on our website, we had to come up with a fee for every client. And when we did that, we said, hey, here’s our fee, it takes away that need to negotiate or feeling like this person has to get a discount, or this person has to charge a little bit more which in that case, it never happens. There’s a famous saying that the money that someone paid doesn’t necessarily have to be the value that they’re receiving, but it’s showing their commitment. And once we started looking at it that way, yes, you need to get more value than what you pay. But this also shows your commitment to what we’re going through. And in my experience clients that haven’t paid or got free advice, they discounted that advice very easily. Because, you know, they didn’t have to pay for it. They didn’t action it. And so I would urge the financial planners listening to this, you’re actually doing your clients a disservice by not charging them an appropriate fee, because it means that they’re not taking it seriously.

Kirsten de Wet
Do you think making your fees transparent and easily accessible? That someone who’s considering working with your firm, they can quickly have a look on your website and see, what is the fee that you’re charging? Do you think that helped? Because then the people who were choosing to meet with you had already wrap their head around what that fee would be?

Louis van der Merwe
Custom, very few clients start the conversation around, what do you charge? If you look at how Salesforce right, the world’s biggest CRM, business, sells the service, they have a few onboarding calls, they figure out exactly what’s wrong in your business. And then at the end, even though everyone pays the same fee, they they give you the proposal, right? This is what we’re going to this is the problem, this is how we’re going to fix it. And this is what you’re going to pay. If your problem is big enough, and you’re committed enough, the fee becomes irrelevant. So I think it’s having a process, right? It’s saying that we have a way of coming up with our fee. It’s not just random, because people feel like they are being taken advantage of because it’s this, let’s negotiate it. And if you’re a better negotiator than what I am, you will earn a higher fee. In my mind, that’s not a fiduciary role. And that’s not a fair outcome for client yet if it’s step by step, and you know, this is what we charge, we have a fixed fee for financial planning. Sometimes we change it a little bit based on complexity. So we’ll discount it if it’s less complex, and we’ll increase it if it’s more complex, but clients are okay that makes sense, right? With you charge 1% For my neighbor, and for me, you charge 1.2% For the same portfolio. I think at some point, you know, people are going to start talking and they’re going to figure out Hold on, something’s not right. Just like Apple doesn’t charge a different price in one store. Compared to somewhere else. It feels fair. You don’t have this need to compare. You don’t have this need to drive around to 50 different stores and find In the best deal, so I think there’s a, there’s a benefit and, and a drawback to, to having public information, but figure out what you processes.

Kirsten de Wet
Do clients go and shop around when it comes to advisors? Because I, part of that conversation is some of the younger advisors especially say to us, but you know, they’re coming to me these clients are coming to me with proposals where other advisors are charging, you know, 1525 pips less than I am. And then how do I compete with that?

Louis van der Merwe
In my experience, I think we’ve only had two or three clients that brought other proposals. And we said, You know what, that’s not, it’s not fair for us to see what those clients, those advisors are proposing, you know, we would come up with our own financial plan, and then you decide if it’s a better fit, I think we have this fear around the, the scarcity of clients, we have to serve every client, we have to take on every person, someone once said, anyone that fogs a mirror can become a client, to figure out who you going to be serving, and what it costs you to serve them. Like that’s maybe a really good, good place to start. How did pm X come up with a fee that a charging? Are you privy to that type of information,

Kirsten de Wet
we’ve always charged the same fee. So since the dawn of time, since humic, started in 2010, we haven’t had to appoint there’s been transparency, we haven’t had special deals that we’ve run for other people that then we’re worried when we have these advisor community in you know, events, we’re worried that x advisors fees to Arthas, and they figure it out, I’ve never had that. We’ve never had that as a problem, because we’ve never deviated from what we believe our value is. And it makes the fee conversation really simple and straightforward. And I’m not scared to ever bring up fees with with guys who want to chat about it. And it’s a fair question, because you need to make sure that your clients are getting value after all fees. And it’s the question that we ask ourselves in managing money and choosing specialist managers, will this manager add value after all the fees that they charge, and if not, if we can’t find a manager in a particular region, we’re happy to implement passive IP. And that’s not because we’re wanting to drive down costs and our solutions, that’s not the overarching goal, we want to create the best possible solution for the client. Obviously, fees are important, but we wouldn’t be afraid to implement an expensive manager, if we believe that manager would add value to the portfolio after their fees. And that’s what we keep coming back to is, what is that value after all fees? And it’s a really fair question. And maybe that’s something that if it wasn’t so difficult to interpret ti C’s and Te Rs, maybe clients would be a little bit more trusting when it comes to the financial services industry. And the value that they get from their advisor and the investment manager in the platform that they pay to do the administration all comes together. And I think it’s difficult for clients to unpack that when it’s presented in this long table. And they have no idea what what’s what. And I guess they trust you as the advisor to interpret that for them.

Louis van der Merwe
Yeah, it adds to the jargon, it adds to the confusion, it adds to the exclusivity. At the beginning of today’s podcast, we spoke a little bit about women in finance, and how if we look at the statistics, there’s very, very few people, few women in equity analyst or analyst roles portfolio managers, you are one of the few women that has a seat at the table, especially in South Africa. How do we start changing that? Because clearly, that’s a problem, right? It can’t, we can’t have 8% of portfolio managers being women. Why do you think that is number one, and then we do we start to tackle this dilemma.

Kirsten de Wet
So the why, I would say comes back again to hard skills. And I think I don’t know how I’m going to articulate this in the way that I see it in my head. But when we stock school, we’re pressured to get good grades, so we can get into a good university. When we’re in university, we’re pressured to get good grades to get into the honors degree that you want to get into. And a good example of what you’ve just said is, in my honours year, there were around 23 students in the financial analysis class, and of those 23, only three were female, then the financial management class had majority woman. And I can’t tell you why that is why the girls in my class didn’t necessarily want to be in the financial analysis stream, or what made us think that we didn’t, that wasn’t for us, or alternatively, what made the guys feel that financial analysis was more suited to them, because there were far fewer guys in the financial management stream for instance. So financial management being the stream that would have fade into CFPs, for instance, and analysis feeding into CFAES. And I mean, from my experience In the last five years, when I go into a meeting with an asset manager, if there is a woman on the other side of the table, I’m acutely aware of her because now I’m so used to being in male company, and being in rooms where I am often the only female, that that is almost my normal. And I, it’s almost unusual for me to find a woman in that space. And how do we then address it? I don’t know, this is something that I’ve thought about a lot. And I’ve wondered the girls that I studied with at steez. A lot of them went into financial management. And I never questioned why they weren’t interested in financial analysis. Maybe that was a conversation we should have been having, as a group. Why was this little niche very much for the boys. And I feel like that’s continued. And I do see it changing. I really do. I think there are some amazing asset managers, particularly in South Africa, who are female, there are amazing female leaders in finance. My Managing Director, cat, she’s just had her second baby, she runs all business I having to go for months without her was really hard. She’s an incredible woman in the space. And being surrounded by incredible women in finance makes me think that there is space for us and there is space for us at the table. We just have to be brave enough to take the seats.

Louis van der Merwe
Kristen, that’s such a nice way and ties in so perfectly with our conversation around. It is just one of the roles that you play. And by showing the other people, right men and women that it’s possible, and you can do it and you can do it extremely well and with grace. It’s, it’s wonderful to hear you talk about this and I think you’re setting such a wonderful example. Thank you for doing this work. I know it comes with a lot of blood and sweat and tears and early mornings and late nights. And the wonderful part for me is that you’re just getting started.

Kirsten de Wet
Thank you, Louis. Thank you for having me.