Engine Room Podcast #17 – Glen Reilly – Transcript

Andrew Rocks
Hello, welcome to another edition of the Engine Room. My name is Andrew Rocks and I am in the 150 year old Newcastle club. About to interview. Glen Reilly, welcome to the Engine Room, Glen.

Glen Reilly
Thanks for having me, Rocksy,

Andrew Rocks
And a big shout out. It’s probably the most grand sort of location that we’ve ever interviewed. Our sound guy Kieran, he was been told that he needs to be seen, but not so not seen and not heard by the constabulary at the front door, which was which was awesome. It’s, it’s the way he likes to be. So thank you.

Glen Reilly
Now, my bad I should have mentioned the dress code sorry, Kieran.

Andrew Rocks
Dress code to the sound, guys is what you get. But, look, we’ve known each other for some years, and I’ve been really looking forward to, to this particular podcast engine room because you’ve got a very definitive and strong way in which you speak about the service offering that you do, you’ve got a great track record. And just to bring the listeners up to speed, it’d be great to get a feel for you know how you’ve got to this point in your life in the context of financial planning and anything else that sort of tickles your fancy. So maybe take us through your backstory, please.

Glen Reilly
I’ll take you back to the beginning about 1994 Were in a an old English pub in a village called Lead Shem in the north of Yorkshire and a friend of mine, Martin sat me down and over a pint of Guinness. He was an advisor with pearl assurance over there, and he helped me set some short, medium and long term goals. I was playing professional football league back then, and I loved what he did for me, I’m very goal oriented. And I said to him, I want to have a look at this playing professional sport. I’m training two hours a day, and I’ve got a lot of free time. Fast forward six months, and I was an advisor with Allied Dunbar over in the UK, still playing professional sport as a first grade squad of 22 players. And every Tuesday, Thursday, Friday night after training, I would meet one of the players in the cocked hat at Sheffield arena,

Andrew Rocks
not a metaphor, everyone that was actually located it was a location

Glen Reilly
over the road from the from the training ground. And I would teach the boys how to save first and spend second. So that was how it all kind of kicked off. At being in a team was a great environment. There’s a lot of people that trusted me that I was spending a lot of time with. So all of the players became clients and then some of the sponsors and the directors and it rolled on from there. And the one thing that I kind of learned early was around, not letting rejection impact me. So prosper. I loved prospecting, I’d be filling my car up, and somebody would pull up next to me and a portion before he finished filling his car up, I’ve given him my business card. And on the way in the guy behind the counter, he got a business card and I was 20 years of age. And so there were no rules, I’ve got no preconceptions as to how this should work. And that’s how I kind of built a business over there.

Andrew Rocks
And look, I’m getting Ted last. So vibes here is as far as trying to picture yourself sitting down with these, you know, professional athletes and and trying your best as one of them, to relate to them, but also to really help them out. post their career.

Glen Reilly
Yeah, yeah. And you know what it was hard work that they were great guys, and I loved them all. But trying to get them to budget trying to get them to put something away for, you know, a retirement goal was was super hard. So I soon learned that professional sports people weren’t my target client. I moved to Australia, found a MP, join them in 1997. And again, I started off building this very general business, if you had a pulse, you’re a prospect. I didn’t know anybody over here. So I had to get really good at asking for referrals

Andrew Rocks
and whereabouts Did you move in Australia, straight to Newcastle, Newcastle, let’s

Glen Reilly
get straight to Newcastle. So my folks moved out here a year before, left me here. Let me back in the UK and I came out a year later and love the place. So great spot. So starting from scratch with no school friends, no work colleagues, it was a bit of a challenge. But asking for referrals was that the key that really helped me to grow the business. But take your forwards maybe three years or so. And now the ANP model back then was you find a client who has a need you organize their superannuation or sell them some insurance, you throw them out the back and you go and find somebody else you

Andrew Rocks
had to do a three page customer advisory did that was rigorous.

Glen Reilly
It was rigorous. There wasn’t a lot in that in that from a compliance standpoint. But what I soon found was that I didn’t want to build a business of scale. I wanted to build a business of margin and do more with less so it’s more Pareto is law. So by about

Andrew Rocks
wild because that that was almost against a MPs model when you look at the others large practices yeah So I’m very interested in at what stage the clash of the ideologies happens. Imagine you’re about to regale us. Yeah, yeah,

Glen Reilly
well, what happened was I was finding, I could add a lot more value to those small business owners that I had a much stronger relationship with. And I started just charging them a fixed fee was $500 a month back then in about 2001. And it slowly evolved from there. And the more that I did for them, the more value and the stronger the relationship became. And I turned into kind of their one throat to choke when it came to legal tax, asset protection, philanthropy, insurance, retirement planning. And that role of the Principal Advisor started to kind of unfold there. I sold all of the clients by 20. And I bought another practice with quite a decent chunk of funds under management and still a fairly small number of clients. And again, the Pareto is law unfolded where 80% of the revenue was coming from the top 20 clients bring on 2009 and I’m working 50 hours a week. We’ve just gone through the GFC. It was hard. I wasn’t as passionate about the business that I was building and growing. At that point, I was two hours north from my family. And I engaged a coach Brian Fitzpatrick, who sat on my left shoulder for for many, many years for the best part of Barek and 15 years. And Brian was part of the Fitzpatrick’s group. And we, we talked about the vision that I wanted to build for my practice, and the vision and the goal that I set back then in 2009. I said, Brian, I want to work four days a week, 40 weeks a year. And so he really helped me and held me accountable around the kind of clients that we engage the work that we did. And then through working with guys like Scott Fitzpatrick, who founded Fitzpatricks, and John Woodley, likewise, they really helped me to change my mindset where I wanted to go and buy all these businesses and, and instead of taking on again, lots more clients really do more with less, and be that Principal Advisor.

Andrew Rocks
Was there a moment? Was there a sort of a catalyst or just a slow burn associated with the the bang for buck working that long?

Glen Reilly
Yeah, you know what, I just got tired and worn out of all that those hours on the freeway, all the demerit points. And it just the it wore away at me being away from the family. So I decided I wanted to do to do more with less. So again, I sold that practice, I kept the top 25 families from that practice, which together with the initial one that I had, that those clients seeded the New Castle business. And I think one of the key things that I did that really was instrumental in helping me to grow the business was actually taking on my first adviser in about 2009. I employed will Howard, who’s been with me now for about 14 years. And I transitioned all of my largest client relationships, my most important client relationships to will,

Andrew Rocks
that’s a real art, isn’t it? I mean, my, my background, roughly the same Vinci started 94. And it was around that time that I transitioned. And it’s scary. But it’s also it’s scary for two reasons. One is, you’re worried that the client won’t get on well with the new person, and then you realize they get on very well. And maybe you weren’t as good as what you taught me better. And so you know, I think you go through the cycles, and you get to acceptance. Is that

Glen Reilly
your is your as you know, my initial thoughts on day one, when I was considering this strategy was, no one’s going to do this job better than I can, or care as much as I can likewise. And I soon realized that we’ll could do the job just as good as I could. And nowadays better correct, because I’m off the tools altogether nowadays. But it really helped me to have more time to work on the business instead of in the business. So and What year was this? That was 2009.

Andrew Rocks
And that’s the same time that the, the Fitz team and John Woodley, we’re starting to coach you, is that right?

Glen Reilly
Yes. And that they started coaching me probably closer to about 2006.

Andrew Rocks
And were you part of Fitzpatrick? Because when did you go from a&p to across

Glen Reilly
so I acquired the business on the mid north coast in 2005. Got it. And that was when I first met Scott Fitzpatrick. And he helped to really change the direction that I was heading, wanting to go and acquire more businesses and grow by acquisition to taking that lead advisor approach and doing more with less. So he was kind of sitting on the other shoulder. And, and John would likewise helping steer the business to, to the business that we’ve got today where we’ve got the three advisors, each with about 75 families that they each look after, and it’s about that fast. Only CFO model so collaborating and leading their other professionals, okay and

Andrew Rocks
where you found yourself today, you’re in a wonderful office overlooking the harbor there in Newcastle, which, which I imagine part of that is the aspirational one. You’ve probably also written the real gentrification of Newcastle that has come from, you know, BHP steelworks. I was University back in the early 90s. And, and now there’s a lot of accomplished self employed very wealthy people here. And I imagine that that’s assisted your your prospecting.

Glen Reilly
It certainly has Yeah, you’d be surprised in a small town like Newcastle, the number of wealthy entrepreneurs that you’ve come across that I’ve done really well. So it’s the growth and development of Newcastle, even across the skyline. Now there’s lots of cranes, lots of development along honeysuckle where we are and yeah, there’s some trendy bars that you generally usually find in Melbourne or Sydney popping up and great restaurants. So shout out to the coal motor. That’s right. Definitely, yeah. And so it’s a great spot. And having said that, we’ve acquired three more businesses since that one in 2005. They’ve been two of them have been Sydney based. So we are spending a fair bit of time in Sydney, and then one in the Hunter Valley. And that’s really been, I think, a key strategy for us. We’ve always grown strongly, organically. But the acquisition opportunity has really helped us to find great clients and transition, strong relationships from the retiring principle across to our advisors. I think one of the key learnings that I that I’ve learned from that was in 20, in 2005, I was the advisor I took on the clients when I acquired in 2018. Patti Ryan retired he’d been with with Fitzpatrick for 20 years, he really wanted me to be the advisor. But I knew that I had to bring Selena in, who was a great new advisor at that stage. But she didn’t have a lot of client experience. At that stage. She was a strategy advisor in Sydney, with a firm down there. And so it was harder for me to let go of those clients, because they’d been with me for the first year. She’d been there in all the meetings, but it was a much bigger challenge for the clients to unhook from me and build that relationship with her.

Andrew Rocks
So maybe one of the key learnings is if you had your time again, and there’ll be people listening who have been on both sides of that equation, yeah. Either the purchasing principle or alternatively, the new associate advisor coming through, would you have changed it and got Selena involved earlier or what you thought

Glen Reilly
I would, and I did in this last 12 months, we’ve acquired acquired two practices. So a North Sydney business, and a Hunter Valley practice and the the entree on the day to the initial client that’s walking in for the first time that has been a client of that business for some time would be the principal that’s retiring, would give us a great rap. In both cases, I knew them and I’d worked with them for many, many years. But they would transition their trust from themselves to ourselves. And I’d explain to the clients look, I’ll be across your fall, but not in the day to day, Selena or will or Rachel, they’ll be the ones holding your hand, implementing the strategy, taking care of you and feeling your calls. I’ll be here across it, but not in the day to day. And in this last year, that’s worked really well, because we’ve on boarded 80 new clients, and they’re not stuck on me. And they’re not asking for me. They’ve been positioned so that that’s your advisor. And that’s where you go to

Andrew Rocks
oh, that’s that’s building a business, you know, and this is the engine room. So what I want to do, you’ve probably already started going on my next kind of theme of the podcast, which is learning and getting some of the detail of how you run your business so that the listeners can get a feel for, you know, people maybe what they’re doing versus what you’re doing and get some learnings. So you’ve mentioned a few times that you’ve been acquiring. How do you fund that?

Glen Reilly
It’s all bank funded at this stage. It’s been bank funded to date. There’s facilities with my dealer group Fitzpatrick’s that are there and available. But today, I’ve just set that up with bank funding.

Andrew Rocks
And you’ve mentioned Fitzpatrick’s you’ve. You’ve obviously spoken quite affectionately about the founders giving you coaching and they’re your current AFSL.

Glen Reilly
They are very happy. There’s a great community. It’s a national partnership that we’re building is a bit of an evolution right now, because as you probably aware, dealer groups aren’t all that profitable. And so right now Fitzpatrick’s have kind of pivoted, and they’re now an investor in good businesses across Australia. So they’ve taken equity in my practice, in a lot of the larger practices within the group. There’s a fair bit of consolidation happening right now. We want to ensure as the principles of these businesses that if you as a client walk into our Perth office, or our Melbourne, or Gulf Coast office, that you’re going to get the same deliverables, the same fee, the same type of service that you would across the board so that communities are really strong peace within our group nowadays.

Andrew Rocks
And operationally, community is one thing. But one of the things that’s been quite some substandard in financial services is the power of brand, and brand association with different sorts of cohorts and whatnot. So, so having that consistency, and I did pick up you mentioned the word where your fair bit there. So not only have they become a business partner of yours, so to speak, and we might get into other things they do. But you intimated that the buying power of them approaching the banks and has allowed you, I suppose a less friction for field experience every time you’ve gone to acquire because anyone who’s listening to this, who’s gone to the banks, and a big shout out to the ones who lend money, the Judo is an absolute macarius, it’s still a punish during the application. So is that how they structure?

Glen Reilly
It? It is yeah, it has been I think that having done this four times, now I’ve kind of learned to structure it the most appropriate way I possibly could so happy to pay a bit more for an acquisition. But if we’re going to pay a bit more, and that the multiples higher, I’m going to structure this deal over three payments. So the last one that I did in North Sydney was 50%, upfront 25%, after 13 months and 25% after 26 months, which allowed us to get all of the cash flow on day one, and start and pay down some debt. And then if clients dropped off or disengaged or passed away, that would impact the next payment. And there’d be a clawback from the first

Andrew Rocks
but did you keep the principal of the the acquired businesses on for a period of time was that part of the

Glen Reilly
year? It varied that one in 2018? I kept him on for a year and that was too long for 52 clients after about one a week contractually? That’s right, yeah, contractually. He’d got a 12 month contract with a good earnout. And after I reckon about seven or eight months, he was starting to twiddle his thumbs. The Hunter Valley practice was a five month transaction. That was probably a bit short for the size of that business. There were a few more businesses, we

Andrew Rocks
planned the maths game sounds like nine months is it we? Yeah, so

Glen Reilly
it’s somewhere from that six to 12 months, depending upon the number of the compliant the clients and the complexity of those clients. Yeah,

Andrew Rocks
perfect. And maybe just to change gears, the org structure. So you’ve, you’ve affectionately referred in directly to your advisors, do you? Does each advisor run a pod or as a collective, maybe getting a feel for how each one of those deliver the vision and, and then also the types of clients that you’ve that you’re you actually, you know, attract? And want? Yeah, for sure. So you can do it. The other order actually, does that sound? Yeah, I’ll

Glen Reilly
do that. So that the type of client that we’re targeting nowadays, and not all of our clients look like this, but they’ve got to establish wealth of somewhere from 10 million to $80 million, or they’ve got an income a taxable income of a million dollars a year, or they’re entrepreneurs on their way to

Andrew Rocks
the above. And you’ve seen it before. So you can sort of get a heat check on those the last part,

Glen Reilly
correct, yeah, and we’re really clear with our best of breed team, our distribution, our accountants, lawyers, bankers, and the likes of who we’re looking for. So they’re the kind of clients that we we tend to work with each pot would have a lead advisor. And my goal is that they can walk into that boardroom, not write a thing down, walk out, and their second chair who’s always in the meeting with them will then do a File note. They’ll do the Working Papers, paraplanner, handover, all of the compliance requirements. We’re not 100% there just yet, but that’s my goal is

Andrew Rocks
the Associate advisor concept, but you could call them second chair, which I’ll have to manually

Glen Reilly
Yeah, yeah. So you’ve got the lead, and then the second chair, and that’s made up I’ve got one associate advisor who’s aspiring to become a lead advisor. And then we’ve got two experienced Client Services offices. And they’re there just to make sure that the advisor can walk in and walk out and the complaint is taken care of.

Andrew Rocks
And that’s all from the Newcastle office, because you’ve got a few different offices, correct. Yeah.

Glen Reilly
So that’s all from the Newcastle office, whilst we’ve acquired to Sydney based businesses. We’ve got offices down there on Spring Street, which we’ll use when we got down there. The Hunter Valley practice came in within this practice. And as I mentioned, I sold the business on the mid north coast in 2009, south central head office kind of is Newcastle, just as part of those pods, they’re supporting each of those pods. We’ve got an offshore with the BP. So we’ve got actually two CSOs over there. We’ll be looking for a third one very shortly. But their role is to do all the client meeting prep, build the slides, they do all the compliance checks, make sure everything’s organized beforehand, post meeting avail do they’ll actually build an ROI from the file note paraplanner can build the advice. We’re teaching her right now to build the advice from the file note. So we’re trying to really kind of streamline that compliance process and the burden that’s been placed upon us post royal commission. So we’ve got a great VBP paraplanner. Likewise across there. So that’s a bit about the team. We’ve got one other we’ve got a Sydney based paraplanner. Likewise, working with us and it’s been a big year taking on two practices this last year, we’ve we’ve had a lot of new faces. So thankfully, my wife had sold her business a couple of years prior, not in the finance industry. She’s a naturopath and aerobics instructor and but very, I can say

Andrew Rocks
Look at the face very much. What we’re dealing with

Glen Reilly
very detailed, very methodical. And that’s not my skill set. I’m big picture. So it’s been great to have her on board in this last 18 months to build processes. She’s put everything onto a monday.com. We’re annex plan threads. And just having that consistency in the processes is really helping us to ensure that we’re doing it one way, same way. It wasn’t as important. Take you back five years ago when I got one pod. But then when we acquired the Sydney based business in 2018, we’ve got two pods. But now with three it’s important that they’re all doing the same thing the same way. And following that bouncing ball with the threads.

Andrew Rocks
So harking back to the beginning of our conversation, way back in the north of England, where you mentioned, you’re very target orientated and, and very driven. And I do think, you know, a big burly football player, coming up to a service station attendant and pulling something out of their pocket is not probably something that I would recommend in today’s sort of society. But with those pods that you’ve got, do you mind sharing maybe an idea of the revenue they’re looking after sort of you know how that works? Because the engine room is all about creating an efficient way and a great platform for all the stakeholders. Yeah, being the advisors, your team, but also the shareholders?

Glen Reilly
Yeah, yeah. Got it. So the target is for each pod to be managing revenue of about a million dollars. So my first two advisors are managing north of that right now. One of them’s got too many clients. So this third pod that I’ve just created right now, Rachel’s just come on board, and we’re transitioning about 30 clients, from my second pod to the third pod to even out those numbers. And we’ll do a bit of a renovation of those clients likewise, and the revenue, but that’s the goal is about a million dollars, and about 70 to 75 clients. And then yeah, there’s supporting that pod, you’ve got your second chair, your offshore financial planning assistant or CSO. And then the Power Plan is supporting them.

Andrew Rocks
And the stakeholders, you know, ideally receiving something between 20 and 35%.

Glen Reilly
Correct. So we were targeting a 30% EBIT in acquisition mode this last couple of years, we’ve been slightly below that

Andrew Rocks
is that because you’ve you’ve got your capacity cup, that you’ve got a face, yeah, building a

Glen Reilly
bigger cup, you’ve got to take on more staff. And then you’ve got a lot of did due diligence. The legal bill, depending upon whether we bought the shares, and the business or the assets of the business was would range from 15 to $40,000. There’s a tax bill. So the DD, there’s a few more extra expenses in that

Andrew Rocks
plus, let’s not take away from the fact that as as the principal, you would be actively involved in those due diligence meetings. But that’s also the time that you can’t be the Rainmaker to attract people as well

Glen Reilly
correct. And that’s the part that I love the most. I love working on the business working with our distribution, supporting our lawyers, our accountants, and our other specialists, our business coaches, because they’re the ones that support us.

Andrew Rocks
So so this is your funnel of people and of our referral partners. And if I’m a if I’m a referral partner of yours, I’m an accountant or a business coach. What’s the what’s the cadence of you communicating with me? I’m gonna be going off piste but I know a lot of people would like to, to know

Glen Reilly
you know what, because you You’re out, you’re on our best of breed team, you’re on our board of advice supporting our clients. We’re talking every week, right? So every week, we’ve got clients that we’re working on together that I’ve referred to you, or vice versa. I’m up in Brisbane in next week, actually with one of our accountants. And I’ve got a day seeing three families up there of his clients. And then he’ll come down here in a couple of months, and we’ll and we’ll do the same will reciprocate year,

Andrew Rocks
right. So the takeaway is, it’s not just a referral, that you go into your box, and then you spit out the client back to them, etc. You’re creating a board of advisors for you know, as you say that a CFO stopped strategy in conjunction with their other professional advice,

Glen Reilly
correct? Yeah, yeah. And it’s horses for courses, we’ve got different accountants that suit different levels of complexity and different clients in different industries, and unsanded. The lawyers likewise,

Andrew Rocks
okay. Okay. And we went through your FSLN. And shout out to the Fitch team if you speak very affectionately about them, but maybe give me a feel for a bit more of a feel of your tech stack across your business.

Glen Reilly
Yeah, sure. So my source of truth for revenue is Monday. So I’ve got a dashboard on Monday, that shows me how many clients each advisor is looking after what the average revenue is, what their total revenue is, I can then break that down and see every client within there, we can see we’ve got a prospect board, some monday.com. It also holds all of our policies, our procedures, our videos, we’ve built a training model for our advisors to help take them from a white belt through to a black belt using the using the jujitsu or tai chi, karate and martial arts analogy. So that in there, we’ve got videos on there that would explain how we communicate asset protection, how we communicate, estate planning, any of the different frameworks, the soft skills, or the hard skills, how our investment approach works.

Andrew Rocks
So just just, I suppose looping back, so you’ve built this, or you’re going to build this with built this series. Or if I’m a white belt coming into your business, regardless of associate paraplanner, I can go to a library of honor self self serve basis, in conjunction with my face to face learning.

Glen Reilly
Correct. So this idea was born maybe a year or so ago. And it was I’m sure, it was from listening to a podcast from another advisor who had built something similar. But we’ve now been building out and recording a lot of videos on all of the different frameworks that’s gonna get you from a yellow belt to an orange belt, and from an orange belt to a brown belt and what you’ve got to do, right the way through, and the different layers of complexity with those frameworks. And we’ve got different coaches that will work with our team to ensure that you can graduate from one belt to the next, the end result that we’re looking for is we’re going to have an app where you can actually self paced and move through all of these different belts to become a black belt.

Andrew Rocks
And just I suppose to comment on church versus state, would this be something you do in conjunction with your licensee?

Glen Reilly
It is yeah, so whilst it was my brainchild, I’m hopeless at implementing. I like the ideas, the big picture, the visionary. When it comes to the detail and the implementation, I rang, Terry Reed and WA one of our coaches that works with all of our advisors to get out Terry Terry is awesome, she’s been working with our group for 20 odd years, from all the way from receptionist, right the way through to coach as she sits that the end result we’re looking for is that we’ve got an app, and the advisors can work their way through each belt, and graduate, and, and so on, and so forth. So that’s been a really crucial tool to help me engage and employ new people. So I’ve been chasing one advisor for about a year or so. And when I first called Rachel, a year ago, she just moved, she was settled, didn’t want to change again. And after two or three more phone calls, she gave me the time to sit down and talk her through the adviser development tool, white belt through black belt. And it was a really key and crucial piece of her coming on board was the business that she was in locally, it didn’t have any formal training of that sort or a plan to help her develop and invest in her future.

Andrew Rocks
And look, one of the I suppose one of the real positive benefits from ensemble is that people want to have the feel of a boutique advice firm, they want to have the closeness and community attachment of a small business, but they do need the rigor of a larger organization. And from what you said, it’d be really interesting to see the app and when it does get developed. I’m sure that if we could take a note there, sound guy that ensemble would be more than happy to sort of showcase that because anything that’s promoting the positive evolution for financial advice is is in our wheelhouse. So on that I wouldn’t mind just talking about the people and your your story. So you’ve got quite a few years in and look, I suppose the first person are normally asked at this stage, why do people join? Why did they stay and why they’re great. But let’s pick on the fact that your wife has been last year into this business after selling her her business. And she’s very detailed. And she’s done a fantastic job. How is it that long term? Or how are you going with with that interaction

Glen Reilly
now it’s, you know what we’ve both got very strong personalities. And whilst I love it to bits,

Andrew Rocks
I’ve met Belinda

Glen Reilly
working together has been a bit of a challenge. And she has done an awesome job of helping us get from A to B. But to get from B to C, I now need somebody that’s got more experience in the industry that is more passionate about the industry, she’s a yogi, and wants to walk around the office and bare feet. And she’s very woowoo. So I need somebody now that’s a bit more methodical, that is a bit more passionate. So that’s somebody we’re looking for as a practice lead.

Andrew Rocks
And that’s located on the water in new cars correct

Glen Reilly
in Newcastle.

Andrew Rocks
Okay, we might, we might pop that in the in one of the attachments as well. And we might talk a bit more about that, sort of at the end of our podcast. But there’s nothing wrong with being different. That’s probably why you’re attracted to a chair accessory. Now I often when I’m talking about clients is that couples don’t marry themselves, which is why quite often you’ve got a left brain and right brain. Yeah. And having seen your presentation previously in person, about how you deal with clients, the way in which you have very detailed workings for the left brain person and also very visual interpretations as well hits the mark. So congratulations. Thank you. So yeah, why do people join you in the recruitment process? I mean, you’ve got a very lean and deep relationship with your people. Where have you had your success in attracting people? And is it replicatable? You know, what,

Glen Reilly
it’s, we’re still, we’ve been amateurs at this. And we’re still working on this and learning and it’s something that I think I’m keen to explore more your ensemble facility there where you’ve got people that are looking to join an organization. So that’s something that I was only talking to one of our other principals who’s looking for advisors and Associates, just this week. An example again, and I found Selena through seek, Selena came on board and was attracted to our business with the training and the investment that and the pathway that we built for her Chuck Norris program a bit like that. So we sat down on day one, and we talked about, well, what would make a great career for you, if we’re sitting here in five years, paint me that picture. And it was about then aligning my business goals with her personal career goals. Six years later, having not managed the client back then her top five clients are paying an average of 55,000 a year, she’s managing numerous clients with north of $5 million. And she’s a lead advisor looking after clients that are on the board of the ASX or their senior back bank executives. And it’s been great seeing her learn and grow and develop. So I think that’s one of the secret herbs and spices that is attracting people to us has been just like Rachel, is that learning and development that advisor development tool?

Andrew Rocks
And the type of personality said Do you use any personality profiling tools at all? Or

Glen Reilly
we have done over the years and Melinda takes that lead right now that’s above my paygrade as to exactly what she does with them, but she does use some some different personality tools.

Andrew Rocks
Yeah, so look, they’re they’re instructive, but not not definitive is my thoughts. Um, and when you’re with your actual business, if you’ve attracted that various people and you’ve kept them, but what does the office day look like? Are you are you work from home? Are you a hybrid? Do you insist on everyone being there? If I was looking to work with you, what does my week or month look like? Sure.

Glen Reilly
So I look at everyone works from home two days a week. We’re all in the office on a couple of days a week, typically.

Andrew Rocks
So you make you met. So the mandate you do is when written let’s try and be in together. Correct? Yeah.

Glen Reilly
Yep. So culture is really important. We’re going to spend 38 or 40 hours a week together. So let’s have some time together and and have some fun that’s really important is we’ve got a fun environment along the way. So we’ve got we’re doing an escape room in a couple of weeks.

Andrew Rocks
Oh, we did one of them. Ensemble. Yeah. Okay. So yeah, they can be fun. But they can be hard.

Glen Reilly
Can I? Well, all the partners are coming along that don’t work together. So there’ll be I’ll be the team that uh, when they will, I’m sure. And then there’ll be, and I think it was Emily from ensemble that shared that with Melinda at the VBP conference. Just recently. I was in

Andrew Rocks
the escape room with Emily. We got out and thought we’d killed it, but we’ve probably had died 10 times. Yeah, yeah.

Glen Reilly
So that’s one of the things we’ve we’re flying our VBP team over in November. For a week. They’re going to stay at our place and they’re going to experience the office and have some more onsight face to face training, they’ll be there for Melbourne Cup, we’ll have our Christmas party. They love karaoke. So I’m sure that will be on the agenda too.

Andrew Rocks
And look, one of the questions I ask is, you know, a lot of people have got team members in Australia and all different places, but also, you know, increasingly as I do this engineroom series, not just VBP, but many other renowned professional providers, have people overseas and but you’re been there a few times, but you’re taking the step of bringing those people over. How many years have they been with you before you took that step? Because that’s a reasonable financial commitment. Yeah,

Glen Reilly
that the longest ones five years, the shortest one, Justine, two years.

Andrew Rocks
So reasonable, Tanya? Yeah, reasonable, Tanya.

Glen Reilly
And, you know, what will approach me? It was the year before last that had fallen in love with a with a pommy. Girl. And he said, Do you mind if I go and work from London for eight months of 2022. And it worked fine. You know, his, his meetings were shifted to the afternoon. So it was pretty early for him. And for eight months, he worked out of the Putney office Fitzpatricks Putney in London. And he got married only a couple of months ago, and he said, Can I go back for six or eight weeks, and he worked our hours, the straight Australian hours at that time. And, and again, I don’t mind as long as the clients are happy, and we’re getting the job done. And it doesn’t impact our culture. I think it’s great, you know, a couple of my staff this week have been under the pump, and to let them work from home and not have to spend one of them spends an hour on the way and in an hour on the way home, she has been much more much happier and more settled, investing that time. And catching up than coming into the office.

Andrew Rocks
I think we’re all gonna look back on the discussions we’re having around hybrid work from home, you know, in five or six years time, and I imagine there’ll be subjects at University on this. Yeah. Because the utilization of of your your labor, your talents, your biggest cost, it’s the biggest, it’s the biggest upside. But I think that the real mature approach around being culture first works provided that you’ve got some non negotiables. And you mentioned that the team members have to be in but I was wondering what kind of meeting rhythm or cadences do you insist on as the leader of the business? And how do they, how do they work?

Glen Reilly
So that was quite smooth. And we’re using a few principles from the Rockefeller habits. So up until this last two acquisitions, where we’re having a daily huddle, we’d have a monthly meeting. And we’d catch up with our offshores on a regular basis. Likewise, in this last year is not been a normal year, it’s it almost broke a few of us. We’re probably in hindsight, been off more than I could chew. I was saying to my mate, Boise in North Sydney for years when you want to sell, give me a shout, I want to buy your business. It just so happened that I was about three months into due diligence and negotiations with the Hunter Valley practice when Boise rang me and said, Guess what, I’m good to go. And I said, Man, I can’t do it this year, in 2022. So we settled on him in February of 23. But this year, this last year has not been your typical year. So the daily huddle has kind of fallen by the wayside. We religiously have a meeting at 3pm on a Monday, so our VBP team can be involved, they then each pod will have a meeting with their offshore member a couple of times a week, we’ll have a paraplanning meeting where all the advisors and second chairs are on there too. So we’re still finding our feet with that with a few new faces. On the back of a pretty exhausting year.

Andrew Rocks
I’ve got a sneaking suspicion that when this drops, you’ll be committed to have to doing this give me the reason it’s like a New Year’s resolution, you’re back, maybe we’ll see. So but that’s I mean, having that that cadence is, is quite important. And you mentioned how you you have fun with your team and and we’ll we’ll look back on that. But how do you celebrate targets? So for instance, do you have a sort of company targets as far as are the operational revenue? What are the what are the critical numbers you obsess over?

Glen Reilly
Yeah, so I share with my advisors, the revenue and the EBIT of the business. The advisors have a four year long term incentive in place. So that’s based upon us hitting certain EBIT and revenue targets.

Andrew Rocks
So just to break that down, you’ve got a four year program with your advisors. And EBIT is obviously a company wide thing. Yeah, but they’re in charge of their revenue silo. So how does that play?

Glen Reilly
So the difference that it’s made is Yep, they’re looking after. It’s actually there’s clients in there sometimes that maybe have been a bit more demanding. They’ve been there for a bit less profitable. And I’m, I’m finding that having that It implies the advisors are coming to me saying, You know what this client is paying 10, they need to pay 20.

Andrew Rocks
So these are 1000s. By the way, everyone Yeah.

Glen Reilly
And for me, I make that clear that I’m happy to lose that client, if they’re being too demanding for the fee that they’re paying, and we’re adding the value, they need to be paying what what we’re worth having a coach that conversation, you know, it’s it’s a tough one, pricing. It’s about having the advisor having the conviction and the confidence to treat this business like their own and not give away time. So we were having to have some conversations in this last year have been increasing the lion’s share of all of our clients revenue, at their fees due to the fact that we’ve got a lot of operational costs increasing. So it’s been we’ve had to give them some coaching around that, likewise, and we’ve got to make sure we’re delivering and it’s a win win.

Andrew Rocks
And how many years through the four years, we’ve just embarked on every you’ve got a couple of my way towards

Glen Reilly
the end of that first two of them. And I’ve got what sort of cascades Correct, yeah, I’ll look to restart that again, and run for another four years before this next one finishes.

Andrew Rocks
And, you know, one of the things is, you know, how do you retain people? And how do you make them grow? And, and spending the time and probably, you know, delaying gratification for the stakeholders, providing an equitable is what you’ve rolled out, correct? Yes, correct. Yep. And what we’re talking about fun, a lot of businesses, you know, want to give back to the community, whether it be local or general is some is a does fits, you can also run a charitable program, or what’s, how does that operate within your ecosystem,

Glen Reilly
part of the ethos of Fitzpatricks is giving back, it’s about community, we’re very fortunate where we live and what we do. And therefore, it’s really important that we can contribute to causes and people that that need support. So I’ll give you a quick example, our conference was in Vietnam a couple of years ago. And we organized to go to a restaurant called Kota, which is no one teach one, where they would take kids off the street that were living under a bridge. And they would teach them how to work front of house or back of house in a restaurant. And then that once that graduated, these kids would go off, and they would work in great restaurants around the world. So we not only did we go there, but the group sponsored a few children, and our office. Likewise, we sponsored one of the students there for a couple of years, likewise. So that’s one of the charities that we’re quite passionate about. We have a client, Richie harcombe, who has the harcombe Foundation, his mission is to build 100 schools, in communities around the world where the kids have been forgotten, and it’s hard to keep them in school and their child labor. What What kind of countries, are we talking? Cambodia is one of them right now. And so at our conference last year, in the Hunter Valley, Richie told his story, which was quite moving, and shared his mission and his vision. And having grabbed the microphone, often, at the end of that I just urged our advisors to put their hand in their pocket, and we reached out to a few fund managers, a school friend to build a school, it’s $33,000 as nothing isn’t, it’s not Yeah, we raised 90 odd $1,000. At the end of that,

Andrew Rocks
well, you’ve just got yourself a permanent member of every PNF foundation. So if he wants a side hustle, I’m not gonna give out his personal details, but can sell some lamingtons

Glen Reilly
definitely. And, you know, philanthropy is important to, for us to educate our clients about that. Likewise, you know, we’ve got a lot of wealthy families and they don’t need their kids don’t need all of the wealth that they’re going to have, and mine are the same mind don’t need what we’re going to pass down. So we’re going to set up a foundation that will come to life upon our death. And that will live on on an ongoing basis. We have a lot of clients that have maybe large transaction, they’ve got a big tax bill. And we can bring forward their philanthropic giving into one event to help them minimize tax and set up their own foundation. So

Andrew Rocks
Wow. And look, there might be some listeners who have earlier in their career and maybe don’t have the wealth of those clients, but at what stage what’s the trigger event for a client led philanthropic conversation,

Glen Reilly
you know, that you can you can join a group philanthropic fund with as little as $50,000. Right? So you’re, you’re actually pulling that with other people. And you can have some influence over whether donations go to have a private or a path, a private ancillary fund. We’re talking half a million dollars as a minimum just due to the ongoing costs of that. They’ve got to give away 5% year on year of the account balance as at 30 June. So a quick example one of our clients came in, maybe five years ago, he just sold a business for $33 million and he was quite philanthropic, they were giving away about $100,000 a year. He had a $1.6 million tax bill and we brought forward is they’re giving their structured giving. And we set up a foundation for $3.1 million, and negated their tax bill, effectively. So. So that’s something that now we’ll

Andrew Rocks
well, they still gave money away, but they had more of a personal touch on

Glen Reilly
careers. And now we’ll sit on the board of that foundation. The two girls who were 11 and 13, they’re on the board, they choose some of the charities as to where the, the funds are going to go. They’re getting educated about giving back. And it’s great to see families doing that. So Fitzpatricks we have a foundation will be in Japan in three weeks time, and I’ll be leading the charge to support us harvest is one of our organizations this year, as well as the harcombe Foundation and a local Japanese orphanage. Giovanna,

Andrew Rocks
you mentioned bits many times maybe this is going over and above talking about your engine room but but Judy, your passion about it? What what’s what’s the scale of Fitzpatricks? Tell me advisors, we talk.

Glen Reilly
Right now we’ve got about 50 advisors. You know what, over the years, we took on some advisors that maybe weren’t, that didn’t fit the family photograph, we were looking for more of a scale business back then. But that’s starting to consolidate a bit more now. Now that we’re forming this National Partnership, a few businesses that were taken on, maybe weren’t looking at the ideal client that were wanting to work with, or charging the revenue or providing the service that was congruent across the businesses. So there’s probably about 50, right now, we might see that shrink slightly, because we’re looking for a very specific partner, if someone’s going to join the business,

Andrew Rocks
and I had the pleasure of watching you present in front of a crowd of couple of 100, only recently about how you deal with clients. And although this is the business of the business, I think that you know, the granularity of how you do it, you do a mind map, maybe give us a sort of, if I’m paying you $50,000 per annum as a client. What are the things that I’m getting for that? Because we’re gonna have some aspirational people who like that first number. Yeah, but you own your money?

Glen Reilly
Definitely. Yep. And you know what, you’ve got to charge appropriately, when you’re going to be providing this kind of a family office or a lead Advisor service, it’s not going to work if you’re charging less than $20,000 a year. So if we look at the types of clients that we’re working with nowadays, I’ll give you a quick example, the last three or four that we’ve engaged over the last few months, they get referred to us by their accountant or their lawyer or a banker, or an existing client. And the first part is to have a good look at where the weaknesses are in their current situation or structure. So we want to have a look at all of their estate plans, all of their structures, their org chart for their, their companies and trusts. We want their constitutions, their trust deeds. We want to have a look at all their insurances, their superannuation, and once we’ve got all of that, we’re going to put that together on an a three page and advice map. And I’ve got to give credit to Jim Stackpole, for this framework that he taught us when he was coaching me. So we want to see their entire life on a page. At the initial meeting, the context is to get really clear about what would make a great life for you as a client. So I want to take you forward 10 years, and I want you to paint me that picture. Where are you living? What are you doing? How much income do we need? What are your financial milestones? What do you want to give back? If you weren’t here yesterday? What did it all mean? What’s your legacy? So they’re the kind of things that we want to be understanding and getting really clear about what that looks like and why that’s important. We then going to take you forward three years from now, what’s going to happen for you to be on track for your 10 year milestone And in three years, what are some of the milestones that need to happen there? And then in 12 months, what are we going to achieve together in the next 12 months? What kind of plans or advice Do we need to provide execution time it is for you to nail your 12 month milestones. So they go on the top right hand corner of our advice map, along with the family tree, along with their other advisors, their income assets, liabilities, insurance structures, everything’s on this one page, because these clients typically have a fair bit of complexity, their typical wealth, as I mentioned, is somewhere from 10 million to $80 million dollars. So once we charge you an initial fee to put that together, and that might be three to $6,000, we’re going to come back, and we’re going to report back to you and say, You know what, you’ve got a family trust. And here’s the risks from an asset protection standpoint, you’ve got estate plans that aren’t going to keep your wealth within the family bloodlines. We need to work out if you’re on track or off track, to achieving your financial milestones. So we’ve put together a PowerPoint slide deck that would help communicate, here’s the weaknesses around, that’s going to stop you from getting to where you’re where you need to, and here are the opportunities likewise. And then here’s our scope for the next 12 months, we’re going to charge you $30,000, for example, and we’re going to meet more than likely six times seven times, we’re going to collaborate with all of your other advisors, we’re going to get everybody on the same page, and make sure that if we, if we’ve got an advisor, or somebody on your team there, that’s not a grade, because often clients will build a business, and they don’t know when to let go. They’re quite loyal to an accountant or a lawyer or a banker. And sometimes we come across professionals that are B grade, and there’s things missing that just aren’t adding value. Sometimes

Andrew Rocks
their family members aren’t appropriate for the roles they’re in,

Glen Reilly
correct. That’s right. So we want to work out, is there a financial flat tire happening somewhere there, that’s going to slow us down. And once the client understands, okay, well, I really should have a family trust owning the equity in my business, or I should have this asset owned in this particular structure. Often we get asked for an introduction to somebody from our best of breed team. And over the last 27 years, we’ve worked with the best and the worst of other professionals. And we’ve put together our best of breed team and we will bring in a professional that will help solve that problem. So that’s the kind of initial processes we’ll put together, the advice map will charge a one off fee. Give us a month, we’ll come back and we’ll show you where the chinks in the armor are and that

Andrew Rocks
at that stage, if they just don’t like what you’re cooking, or that you’ve you’ve charged cost recovery. And but I doubt that happens very often. You know

Glen Reilly
what, there’s not a lot of profit in that initial five, recover series is purely just to work out. Are you a match for us? And what are we going to do to add value?

Andrew Rocks
Yep. And, and then once once they’re on that journey, because you’ve got the 10 year, the three year and the one year philosophy, every time you elapse a year, you trigger the same

Glen Reilly
correction, we review that. So we want to check in because that’s why they’re engaging us. They’re not engaging us for the salary sacrifice strategy, or whatever it might be the real contribution strategy. They’re engaging us for whatever’s on the top right hand corner of their advice map. And that’s I want to put the kids through university or I want to go and spend a year living in Chinko, Terra, or this is the lifestyle that I want. And they’re engaging us to maximize the probability of them achieving that and help them navigate the potholes and the landmines along the way.

Andrew Rocks
One of the great things have been exposed to many, many financial planning businesses, financial services businesses in my various roles, is that there’s no there’s no right one, we interview people that have got 100 employees in their market and they’re doing very well we we talk to companies that are specific with the the industries that they get their clients from, and we talked with practitioners such as yourself, or hyper specialized and, and for those of you listening, who are embarking on a career in this industry, definitely figuring out what what suits you, you know, if you’re if you’re a really deep interpersonal relationship, personalized complexities, there might be one, if you like, the, the thrill of maybe dealing with a lot of people at once. And that’s the beauty of financial planning in 2023. I think we, we’ve we’ve worked it out. We probably were accelerated through various things. I think the GFC probably woke us up and that the Royal Commission, you know, put us to sleep they woke us up again. So it works really well. And if I was to ask you the vision for the future of financial services companies, and not just your one, but where do you see, you know, a good tapestry of offering that is going to be professional and respected by the general public.

Glen Reilly
True. The one thing that’s kind of evolved since the Royal Commission is that it’s become harder and harder for a single man, you’re one man bounds, your smaller practices to offer a profitable service, they need scale they need to leverage their time and let go of some of the the things that they’ve got to do like compliance to other people that are better off doing that so they can focus more time on giving advice. So, again, if I bring you back to our model where I want each of our advisors managing at least a million dollars of revenue, not making the final note, so during the paraplanner handovers, the goal is that they can walk in, give advice and walk out. So that model would look like a senior advisor, there might be two associates straddling each meeting, jumping across each meeting, and offshore CSO managing them. In a perfect world, this business, you know, we’re generating 30 to 35% EBIT. And there’s no reason why with that model, with the right kind of infrastructure, you couldn’t be turning over $10 million.

Andrew Rocks
That would just be you’ve got to find another four or five open minded people to lead as lead advisors direct. And that’s the big you in the market for later. We’re always in the market. So I’ve just done the numbers. It sounds like you’re short one associate advisor. We are

Glen Reilly
right now. Yeah. So actually, what I’ve got right now is I’ve got a couple of my advisors spending too much time with those paraplanner handovers and some of those admin functions that are the compliance function. So I would be perfect to have another associate that could come on board and help leverage their time.

Andrew Rocks
So you’ve heard it here. First, the fits Newcastle business is in the market for an associate advisor as well, we might we might put that into the talent hub. I think, Karen Yep, let’s do that. And maybe, you know, flesh out the the national advisor network. So so you’re clearly so Fitzpatrick’s part of you and you’re part of them. Do you operate in any sort of advisory capacity with their business? Do I operate sorry, in any kind of advisory capacity with a business?

Glen Reilly
Yeah, so I’ve got a board. John Woodley sits on my board, we’ll catch up every quarter. I did have another coach Greg Gunther, sitting on my board for a period of time just to bring some independent governance to the business. Greg stepped down, and he’s still a coach for us. And he still coaches a lot of our clients. Greg, and Joshna, shout out to them your business momentum. They’re amazing coaches that support financial planning and lots of other different businesses likewise, but they they both started in financial advice, built businesses sold them. And they are down in Newcastle supporting a lot of our local business owners helping them get really well organized. But they still kind of sit on my board unofficially. And we likewise sit on boards of other clients businesses. So we just engaged a client who’s based out of Newcastle, turning over about $10 million a year with businesses in London. And he lacks a bit of government. So I’m sitting down with him and building his 90 Day rocks is 12 month game plan his three year milestones and holding him accountable.

Andrew Rocks
And if I if I sort of go back to the very beginning, so you’re a professional athlete, and obviously you had coached you were coached. Right now, for someone to meet you. You’re an A type personality. But throughout the last, throughout this whole podcast, you’ve you’ve very respectfully referenced a lot of people who’ve coached you over the years and what’s been you know, is there any advice on people out there as far as being coach, because clearly, you’re a fan of it. And it’s it flows through from the very beginning of your story?

Glen Reilly
It does, yeah. We have had Brian Fitzpatrick fly down from Bogota, which is near cabarita, every six months. He’s retired now, he’s a client of ours. But Brian had a massive influence on the direction of our business, and he helped us with emotional intelligence and coaching. He’s handed the baton to Terry Reid and Paul crane, who are also coaches within the business and they spend a lot of time with our advisors around the soft skills that was at that advisor development journey that we talked about. They lead the charge in educating our advisors around frameworks like red, blue, black from Sherlock or the stages model, or just other emotional intelligence to help our advisors move kind of below the line. Most advisors we tend to find it’s natural to spend time up in all the numbers, but very, very seldom do they go below the line and look at the emotional and spiritual and work out well, you know, why is that important to you that you want to take your kids overseas for a year old, educate them or give back or that’s where the magic happens we find is when we’re going below that line in the with emotional intelligence

Andrew Rocks
and that that has to start at grassroots because as you can, the regulator’s have completely ignored that in everything they’ve done. And do you have any best of breed shout outs because, you know, you’ve got an aspirational business. Is there any, anyone who you see out there in our, our ecosystem that you like?

Glen Reilly
Sure, definitely, I look as part of our best of breed team from a tax standpoint, Josh makes pilot partners in Brisbane, he is our go to for clients that are turning over, say north of $3 million. He from a technical standpoint, you’re not going to better meet a better technical and a great communicator than Josh. From an asset protection estate planning. Fran Becker Hamilton lock again in Brisbane. They’re a national law firm. They were the fastest growing law firm last year. And we’re building a national partnership with them right now. I mentioned Greg and Joshua from your business momentum, amazing coaches. And then a frm. They handle a lot of our insurance, personal insurances. So they’re the key ones that we tend to work with that sit on our best of breed team.

Andrew Rocks
Look, I love the fact that you wanted to make sure that that that you gave shout outs to people who have helped you on their journey and I get the feeling that there’s a warmth, with with all your personal interactions as there is not only today but in my previous interactions with yourself. I’d like to take the time to thank you for being on the engine room. You don’t know how much this means to the listeners because they’re taking little nuggets of gold. So with that, I’d like to thank on behalf of ensemble for a rollicking good time and welcome to the engine room.

Glen Reilly
Thanks Rocksy. It’s been a pleasure.