Engine Room Podcast #18 – Gil Gordon – Transcript

Andrew Rocks
I’m Andrew Rocks and welcome to another edition of the engine room. And in fact, this particular episode should be called the engine room on tour. As we are now in sunny Maitland up the highway from Sydney, a very convenient trip, I’ve dragged my sound guy Kieran, all the way up and you know, Bucket List stuff an hour and a half with the sound guy I’m sitting next to you on the way up. And why we’re here is very special practice and quite an interesting guy. I’d like to introduce everyone to Gil Gordon, who runs and owns RI Lower Hunter and Newcastle. Good ideal. Welcome to the engine room.

Gil Gordon
Thank you, Andrew, pleasure to be here.

Andrew Rocks
Yeah, go on pretty jazzed up about this because quote, unquote, you said, I’m going to struggle to hold you to the hour. So for those of you who are listening, maybe put a few more steps in that walk, or maybe drive around the block a few more times. But Gil, maybe if you could just give us a bit of a feel of your backstory, you know how you’ve managed to get to where you are at the moment. And in that journey, the good, the bad, the ugly, that will be awesome.

Gil Gordon
Thank you. I started in the industry in 1994. At the time, I was a computer programmer, ex engineer, mechanical engineer, and computer programmer, I got very interested in money, because to be honest, it’s an intimidating subject. And I tend to lean into things. So I didn’t come via the classic sales route of insurance, which very quickly helped me because I had to convince myself that what I was doing for the clients was the right thing. And anyone that knows me knows that I can do a spreadsheet that will choke a horse in the first five minutes of meeting somebody. So I’m deeply into the analytical stuff. And that’s been a feature of what we do. Interestingly enough, this business is one of the few that love engineers, we have a lot of engineers and highly fairly high caliber engineers from the from the Hunter region, because we can go blow for blow with them into the numbers as deep as they want. And eventually, they stick in.

Andrew Rocks
Where did you kick off?

Gil Gordon
September 1994. 20 September 94.

Andrew Rocks
And computer programming before 1994, which is valves switches, what are we talking about? I sort of got a vibe of the Star Wars kind of computers, is that wrong?

Gil Gordon
When I’d studied at university, it was definitely punch cards and pencils. That’s how I learned to program on a computer. And bit by bit we got to the actual screens. It’s that it’s been that long,

Andrew Rocks
awesome. So not only for a lot of engineers, which which is a whole other kettle of fish that we’re going to talk about because normally engineers, actuaries, and architects, the big triumvirate of tough nut clients you’ve been doing every day of the week, I love them. Okay, well, we’ll keep going keep telling us this story. Let’s get to go through the whole horror story.

Gil Gordon
Alright, so because I was never a natural salesperson, so I just needed to convince myself that what we’re doing is the right thing. And it turns out that engineers love that. So we really built this business initially off the whole Telstra redundancy. So a lot of those guys are very bright, manual oriented guys, but they’re very technical. And so we have hundreds of Telstra clients in the practice. It’s moved on from that now. A the the the genesis of this business was Telstra. We we started just before the Asian bond crash I think in 19 Only four with a pregnant wife and not enough money. But it was one of those moments that I think that every business guy or girl has paid the price. And I remember those early years, which was a little bit scary, but we got through it very much a family oriented practice this one, we got five advisors, five senior advisors, for local partners, very heavily family oriented. And that’s how we run this business. We’ve been very active in the Ri advice community as well as the proprietors Advisory Council. I’ve had a lot to do with Kaplan over the years and developing a lot of the training framework within the art world in the industry. So I I’ve tried very hard to be an advocate for the advisor perspective on things and I think most people in the art world know me and, you know, that are frustrating, but they listen. So perhaps we’ve been successful in that.

Andrew Rocks
So you kicked off a lot of the at the back in the day, it was telecom that became Telstra for those out there and, and there was large redundancies there. And I think, potentially those people were also were given some Telstra stock, which would have helped them considerably. And so this is in the Newcastle area, or predominantly

Gil Gordon
the Hunter Valley, New Karsan. In the lower Hunter. We have clients in Tasmania clients in Brisbane, of course, like most practices, but we because we’re a fairly high touch kind of practice, we tend to keep local. But yeah, so it’s predominantly the Hunter Valley. Maitland region.

Andrew Rocks
And you mentioned you didn’t come through the Standard Life Insurance, does that mean that you were doing full comprehensive plans, with cash flow analysis spreadsheets from the get go? And what was the early doors sort of software that you used? Back in the day

Gil Gordon
made, I wrote it myself. I wrote my own spreadsheets, there was very little modeling that we used. To be honest, it’s fair while ago, I don’t quite remember. But I know we had the three page fact fines and the client ID sign in with barely any information on them. And, you know, the, what was the precursor to statements of advice or records and

Andrew Rocks
customer advice.

Gil Gordon
Because it was mainly about Super and roll over him very quickly, we land into Centrelink. And the only way to do that was to become an expert in Centrelink, a lot of these guys are being made redundant. And I had to model things myself, I had to write my own tools. And that shaped the kind of conversations we had. So instead of being guided by the tools, I wrote the tools to have the conversations that were happening in the office.

Andrew Rocks
hour, how were your soft skills, because if you were dealing with a lot of Telstra redundancies looking back, you’re probably thinking that was a great windfall for, for the individuals in the couples that came in. But at the time, these are people quite often that had spent their entire career in this one organization. At what stage did you think you were predominantly counseling, you happen to have a spreadsheet?

Gil Gordon
Mate? I’m a people person, like most advisors, are we here because we love the work? We do not because we’re after the money. I haven’t met anybody that’s that brutal about it. It’s good to be paid for what you do. But the calling is very strong in the advice community. i The biggest transition there, I would say was when we were in fee for service in about 2007. When

Andrew Rocks
why what was the catalyst? Well, that was pre the requirement to do so. Yeah. And what was the what was the moment?

Gil Gordon
The moment was me waking up one day going, Holy crap, the whole industry is gone fee for service. And I’m the last guy in that country. So that wasn’t the case? No, I thought it was. And so because I was embarrassed about how late we were to the party, or so I thought we stuck our head down for two years, I did it cost to serve and identify what needed to be charged. And then I’d have to go to the clients and say, Look, if fees need to go up. And then the client said, Gil, we love dealing with you guys, if you can show us that we can afford to pay this. And the money will last we’re happy to pay. And so I built a tool called how long the money lasts, which is just a projection tool. And it started to quiet weirdly shaped the conversation because instead of talking about Super and strategy, clients started to talk about their lives. They wanted to retire they wanted to renovate the house, they wanted to buy a car help their kids travel, and whatnot. And bit by bit that became the conversation we have in the conference room not a conversation about technical skills or strategy to the point now where we we rarely get deep into strategy in the first in the discovery meeting at all. The whole conversation is a 10 three now conversation which we every advisor in the business does it this way. So it’s an engagement conversation. So so

Andrew Rocks
let’s say 10 Three now maybe play that out for us, please. Okay, that

Gil Gordon
came from Scott Fitzpatrick and Brian Fitzpatrick’s lead Advisor Group. And a shout out particularly to Brian has been a great friend of ours and a great help as we’ve grown the business over the years. The The idea is where are you now? Where do you want to be in 10 years and where do we have to mean three years to be on track to the 10 year guy perfect. Yeah. So something that you can actually achieve? Yeah, it would they work with what they call the four L’s called Live Love, learn and legacy. And that’s a fairly intellectual concept. So we rewrote that into a model we call people. So there’s a cache line of anything that you see that I’ve written. And I’ve written articles online and a fair amount of stuff on LinkedIn. If anyone wants to have a look, is I finished most things I write with good advice puts people first, which is an obvious a no brainer, but people’s an acronym. It stands for place, employment and career, offspring and family, passions, and hobbies, liabilities, and expenses. So that acronym shapes a conversation, tell me where you want to live. Tell me what your career how long you want to work, whether you want to change, go back and study. Who do you love them? What’s the impact in your life, tell me about the things you’re going to do motorcycles, renovating your house travel, debt, and expenses. And we’ve found that have lost track the conversion rates, phenomenal when you say, we’ll get to your money, tell me about who you are and who you love. And if you put that centerpiece in your engagement and your ongoing conversation. These days, in a review, we might spend three or four minutes on investments, the rest of its on the people

Andrew Rocks
and kill the people acronym issues that was you know, you brought thought of that. Yeah, that took a little while to develop and give credit to Jay Gordon, in the in the notes there. And that was brilliant. Now it was really good. And, you know, the real art is to, to talk expansively about people’s wishes, desires and loves and whatnot, but have the rigor of consistency within your practice to make sure you’re doing it the same way at the back office. And by giving yourself those kinds of tools. It means that it’s not subjective, especially as your practice evolves, and other advisors but but heading back to yourself. So you went back, you’ve, you’ve kicked off, you’ve built this business you’ve set out started, you went fee for service in 2007. Yep. Okay. And from my personal experience, I went 2002. And the clients are the easiest component. Most of the time, it’s actually convincing yourself and your own team that, that this they’re willing to pay. And it’s surprising, like the amount of times advisors are coming out with these Jessie cap books going. They did pay me for my time. Yes. It’s weird, isn’t it?

Gil Gordon
It’s a great thing is I’m a huge fan of fasciae, which I think is standard six, it says your fees need to be fair, reasonable value for money. First thing I did was dive in and say, Okay, what does it cost for us to do what we do? And that was the beginning of saying, Okay, we need to do things consistently. And I’ve read on that cost to serve a dozen times in the last 15 years. And you’re right, the clients go, Okay, I understand. Now it helps to put it in the model as see on the screen and the conference. Absolutely. But you’ve got to believe in yourself. And I often say this in speaking gigs. In a roomful of advisors, how many of you would pay full fare for your own services? And it’s really interesting to watch people squirm. Most of them, you can sit and go, Oh, I’m not sure. Well, you need to understand that wild rubbish. You’re either pay for it or you wouldn’t. My problem here is I asked one of my partners, Chris to take me on as a client. He said, No, you’re too hard work. You wouldn’t. I don’t want you as a client. Well, I

Andrew Rocks
actually, I recently, about three years ago, asked one of my great friends and used to be my colleague to take me as a client, because only if you become a wholesale client, so I’m like, okay, okay. It’s okay. But and throughout your career, so which has there been any any people that have been changing doors? I mean, you mentioned the Fitzpatrick, Brian, any other people that have colored the flavor of how you’ve got your practice today? Of

Gil Gordon
course, there are the the coaching, the Fitzy brings his practices terrific is a team coach. He’s a head psych or head team coach for the Cabarrus and he’s very, He’s a specialist in the financial planning industry to make as the team grows, he got dynamic issues that you need to work through. That’s great. My partner Chris is an absolute legend. He’s very different to me. He’s a steady steady rock and he calls me on my BS. I couldn’t speak more highly of the the AFSL with ri advice, Joseph a route out a practice Development Manager is a legend. Anyone that knows him will tell you that shout out to Jack Joey is everyone’s family. Right? I couldn’t speak more highly than Peter wants to be a terrific bloke is invested heavily, very excited about the community on the part of NRI. There’s a lot of people out there that friends of mine like Jeff English should have been very valuable. The the industry itself is a terrific crew because we share you know, the perception that we might be in competition with each other I’ve never seen

Andrew Rocks
no, no, we’re only in competition to be efficient. Yeah, that’s really it and and look, the whole ensemble premises the positive evolution of financial advice, and you can’t have any of those words if there’s no sharing.

Gil Gordon
It’s an interesting dynamic. Some people like to hold information back when they’re engaging with a new client. I tend to go the other way, I tend to tell them as much as I can legally tell them in the first interview, and what it does is it if they if they like you, they see the complexity of what we do. And they go, I just need to find someone to help me on that journey. So I’ve always over shared and never regretted it. You’re either learning or you’re earning but you’re never losing.

Andrew Rocks
And so you’re residing now in the hunter with your family, or are they grown up? Or where are you at? Yeah,

Gil Gordon
I live 500 meters from the office here on a few acres.

Andrew Rocks
For everyone who’s commuting an hour and a half to work. Send your hate mail to the usual address

Gil Gordon
can be a burden like on a good day takes 90 seconds to get to work some other days. It can take two and a half minutes, we can cut this out. Now we also we also have we’ve got three offices one in in Newcastle, right we got a satellite office in accounting firms, we have three strong centers of influence. And we’ve got the big office here in Maitland but to be honest, we’ve got two major offices in Newcastle Maitland. So it’s a it’s a Maitland the Hunter is a terrific place to live. People that move up here very rarely move away. And it’s always fascinating watching Sydney people come up here and look around and go. What is it this place is undiscovered? And there’s a reason?

Andrew Rocks
Yeah, well, let’s invoke what I what I might might sort of switch gears in a minute is talking about you know, your actual practice per se. But before we do that, as as I walked into your quite beautiful offices, in a refurbished looks like a couple 100 100 100 year old, 170 year old 170 year old dwelling. And first thing I instantly asked is did you buy the building? And and you did. And it’s been one of those things that I know that a lot of financial planners themselves spend a lot of rent over their 1520 and 30 year careers. And it was something that was quite prevalent, but do you regret buying the building? Or is it Are you happy with it?

Gil Gordon
No, I’m happy with it. The it’s solid, it’s something you can rely upon you own it in the idea was that people get used to coming to a certain location, I was a friend of mines a property guy. So one of the things that he is a landlord does is he gets someone used to being there. And then he apps the rent. This is this building is the way we want it to be. It’s very warm. It’s got fireplaces in it, clients come and don’t leave, which is exactly the vibe we want to create the sense of they’re coming home, not that they’re coming to a glass and chrome place where they don’t belong. So no love the building of the building, my wife threatens to kick us out and move in here as a house.

Andrew Rocks
Oh, you’ve achieved that won’t walk. But no, I just wanted to add that because we’re talking about the engine room of how things are working. But we’re also talking about how advisors over their careers position themselves as well, because some advisors sometimes, like plumbers have leaky taps, and they think about their own their own financial position. Definitely lost. And it’s good to that. Now, with your particular practice or this practice that we’re currently in, how’s it structured, you know, maybe give us a feel for the org structure? Because, I mean, you’re one guy, but you’re not the star of all the shows in this business is

Gil Gordon
not anymore. Yeah, for a while there it was. But we’ve got five advisors for CFPs, one senior guy that could do it, he just doesn’t want to get a general manager Kate has been terrific to senior clients serve as managers. And this is a really strong concept. When you’re looking at an engine room, the need for the advisors to not run the business advisors have the talent, and they’re often the head of things. But our client service managers genuinely run the business. And we’ve got they’ve got to client service support staff, and we got to VBP in our team in the Philippines, and they are instrumental, they’ve been fantastic. We’ve got I think the three people work part time in the practice as well. So very much these days in a difficult recruitment environment to actually give that lifestyle and flexibility in the workplace. So we have videos roster days off of work from home policy, part time, as they say,

Andrew Rocks
well, I’ll touch on the people side in a minute. How long has Kate been in that role?

Gil Gordon
Kate’s only been with us for a year and a bit. Now, if we’ve had about 160% growth in about four or five years, the majority of that’s organic, so a bit of acquisition. And then we introduce our client service offer and the clients just fall into it that whole people think and they’ll help in the live modeling in front of the clients just as incredibly engaging. So we find that we’ve grown quite dramatically, but very steadily on the back of systems. And Kate was brought in to make it run better because I’m a good guy, but I’m not a great manager.

Andrew Rocks
And so the the premise of the interim, and so Kate’s been a year and a half here and the premise of the interim is to talk about how practice managers have run the business and in fact, I recently spoke with a Lady Belinda and she has been in that role 15 years but I’m also really keen on on working with the founders. And quite often they’re the advisors on what made them get that role. And you know, how did they justify it to themselves? And when you started down that path, so So when did you start thinking about appointing someone who was running the operations of your business?

Gil Gordon
This probably goes back to the current growth trajectory comes back about four, four and a half years ago.

Andrew Rocks
So if that’s the so you said, You made that decision four years ago, and things have been going pretty well. So yeah, let’s keep going on why you did.

Gil Gordon
Alright. So there’s a couple of things here I’m I’m the the guy that’s good on his feet in front of people. I tend to be quite creative with problem solving. But I rely heavily on my partner Chris, who is the steady guy who’s very much in the governance and templates and tools and finite template sort of space. The other thing we did, and it was, in hindsight, a terrific decision was to hire a lady named Corinne McKenzie, who she worked for a local firm now, but I’d say she’s a legend. Real shout out to Korean she’d built at the time, we had three separate teams of advisors. And I assumed because I’m a dummy, that everyone was doing things the same way with a geographically spread. No, no, no, they were working out of Newcastle, Maitland. So we alternate, everyone alternates between the two sites with with one exception. And we hired Korean to standardize things, because we were looking at VBP. And we said, we need to get standardization here. So very quickly found out that each team was doing things differently. So there’s less surprise, I’ve been in business 1520 years, how can this be? Well, guess what, you know, smart people, you can run a business with excellent people, you can run a business with excellent systems, far better to go the to the ladder. So Corinne built a whole workflow management system in explain for us,

Andrew Rocks
we’ll call her the Henry Ford of your business. All that?

Gil Gordon
Yeah. Now, I’ve got to admit, I was terrified at the time, because what if the team didn’t like the system she built?

Andrew Rocks
Or what if they employed the one that wasn’t yours?

Gil Gordon
Exactly. Well, I Yeah, exactly. But they took to it like a duck to water? And if I said, No, we’re not doing that anymore. They’d walk out the door that afternoon. So this idea of getting your workflow management writing threads in x plan is it’s not negotiable.

Andrew Rocks
So So what’s the structure now? So do you have a pod system? Do you

Gil Gordon
broadly speaking, yes, we’ve got effectively we’ve got four advisors, I actually don’t have any personal clients, I float around like a subject matter expert in their domain for agents. So if

Andrew Rocks
you do see a client, you’re co creating that plan with with one of your other practitioners that creates, for instance, me for

Gil Gordon
Chris, or Steve or Paul Ryan, okay. And so they’ll wheel me out as a subject matter expert, particularly on estate planning and aged care. And also difficult decisions if this if we’re talking about asset protection and structure. So I guess it’s call me the old fart that is a subject matter expert. But the advisors, the four teams run their own client base, they have to senior to client service managers. So that’s two advisors to each CSM. And then there are four CSOs either in Australia or offshore. So they’re executing, they’re implementing, and they’re making the phone calls, they’re doing the thing, the research and preparing the arrows, and as in, you know, SOS get done offshore. So

Andrew Rocks
by the time you do the headcount, it’s almost a one to one support for your advisor for each

Gil Gordon
advisor. Yeah, and they get a half a set client service manager, and their job is to manage the talent, if you want to call the advisors because advisors, it can be very smart, very capable, and very frustrating to work with myself included.

Andrew Rocks
Maybe just give me a feel for the type of clients that you have now.

Gil Gordon
We are predominantly in over 50 shop, we have a bunch of wealth accumulators, we’re working hard on that at the moment, we need a risk skill set to be be built properly, we’ve got the skill set, but it’s not been a focus. So anyone from 50 on the pre retiree into retiree and ultimately now as our client base is aging towards the 7580 85, we’ve we’ve developed a suite of services in aged care and estate planning suitable for the older client, and something I’m calling elder advice. You know, the lawyers love to talk about elder law, but there’s a very different set of challenges for people on the shiny side of 75, the the early stage retirees, and it’s a totally different skill set. And it’s very lucrative, and also the gateway to the next generation of clients bring their kids that they that they get used to talking with us on mom and dad’s dime. So it’s a it’s a good place to work. It’s just a different skill set.

Andrew Rocks
About five years ago, I was at a conference and I think someone from JPMorgan out of New York, addressed this and they they sort of said, well, we’re now categorizing the clients, you know, usual pre retiree, retiree, but we’ve actually gotten a whole division for over 80s And we’re now no longer treating them like we’re treating the people from 65 up because as you say, it is different and maybe what I liked it So after I talk about the sort of the, the nature of the practices really, really hone in on your passion with, which is estate planning, because I’m of the belief in my history was that those those older clients, the best way to to maintain your practice is ultimately to get referred down to their, their children who ultimately will be the recipients of good financial planning advice that you’ve done, so that the next generation of financial planner, or alternatively general manager, whoever else is a stakeholder in this business views this as a as a real continuity, rather than rather than an endpoint. Would you agree? Yeah, totally.

Gil Gordon
People have been talking about intergenerational wealth transfer for last 30 years I’ve been around, never seen it, what there is is intergenerational advice, where mom and dad need help. And the kids are the ones that are actually leading the process, get him in for two or three years, as we go through aged care or whatever, they get very comfortable with competent advice. And then when Mum and Dad pass, we pick up well north of half. Those are the clients, they then and they, they’re very good clients, too, they often come in with substantial super of their own plus their inheritance. So it’s, it’s been a very good place, very rewarding as well,

Andrew Rocks
I think the best way, you know, for wealthy retirees to, to give a gift to their kids is actually to pay the fees for their first year or so of quality, you know, unbiased financial advice. I think that, you know, giving them giving them fish is definitely not as powerful as teaching them how to actually fish. So I agree. I would love that to be something that’s a thing in financial advice that that, because I do interview a lot of people and I think the spirit is with with the the fallout of advice. last 10 years, the split really has biased towards retired people. It’s about 7030. And I actually think that’s a fib. I reckon, you know, revenue wise is about 90% or so yeah. And that’s, that’s great. But it’s not great for an aging and aging business model. So, you know, having a real ability or making it common for the seven year old couple to request, you know, financial advice to their kids should be a thing.

Gil Gordon
Well, I mean, you’ve got to have a problem that the client wants solved. So if you’re a 45 year old, and everything’s going well, it’s hard for you to make the time to come to see the adviser. If you’re a 45 year old, and mom’s got dementia, they’re knocking on your door, they don’t know what to do, and they need someone to guide them through it. And I’ve had three or four cases in the last two weeks, simple cases and incredibly complex cases. And what you’re doing is solving problems and you get, you get to be paid for that. If you do it well, but you got to focus on people before you focus on product. This is one of the things I love about this space. It’s it’s not product advice. Generally in the older client space, it’s services it’s it’s Centrelink, it’s aged care, it’s age, estate planning, all of this as a service and non non product advice service.

Andrew Rocks
And look, you’re 15 years deep into fee for service. So you’ve refined your ability. And I often think that also, you know, no one bats an eyelid when a tradie comes out and says I’m going to do a cost plus 30%. And I’m going to make the 30%. So you know, I think we are getting there. Now back to your you’re not on your model of elite advisor. They’ve worked those types of clients in a second, I’m going to ask where the clients come from, you mentioned you had satellites and whatnot. What’s the role when does the advisor or the hrs role stop and when does the engine room takeover in in say, for instance, taking on a client.

Gil Gordon
So pragmatically, client calls here, they the client service team, book, a first telephone call with the advisor for that briefing thing. And then they also book a first meeting, a discovery meeting. So the advisor will sit down there, there’ll be a task thread kicked off from day one. So the advisor gets a series of tasks and they click Complete and take their file note moves back to the client service team who do their bit and comes back to the advisor. So it bounces around like the things

Andrew Rocks
you’re already getting the client service team involved in relation day one. Yeah, I think that’s clever, because it’s hard to win the clients off. You know, the advisor post. It’s the early you introduce it. I think the better it is your team

Gil Gordon
completely. I mean, I signed a new client up yesterday. And we introduced the client service team as the people that manage the process. And yeah, a bit of self deprecating. They don’t trust me with matches, that sort of stuff. And I’m not kidding. My daughter Kate works for me and Katie has lectured me three times this week about making diary appointments in my diary. She said you stuff up the system when you do that. Don’t do it. Don’t Don’t even try just to send them to us because they have a series of threads that kick off and we lean incredibly heavy into that and just as a number Maybe I’m jumping ahead ever since we engage with VBP. And one of the great things about VBP is you’re forced to standardize your handover. So I said to one of our advisors, Steve, a couple of years ago, and he picked up a yellow folder, which was a review folder. And I said to him, Mike, who did that review prep for you said, Don’t know, don’t care. And what he meant was, I know what’s in it, I know that the quality is there. And it really doesn’t matter who doesn’t, we’re getting the model I’m getting. And what we’ve noticed, since we’ve got that standardization, right, and VBP gets a big shout out for this, that our advisor numbers, our client numbers per advisor have gone up by about 40%. And accordingly, our revenue per advisor has gone up by about 40%. So basically, we’ve just been taking on more clients without needing to hire more staff. Because we simply do more with less time, because the system actually works. It’s customized to this practice, I’m not saying it’ll be perfect for the next guy, I think might be good. But what we did was we figured out what how we wanted to run our business, and then we put a system in place. And we created massive efficiency, I had a direct impact on the profit, and the turnover. and, by extension, the value of the business

Andrew Rocks
and look, good day, good to hear that, that that’s a positive outcome of that of that association. I think it also coincided with with COVID. So you’ve had the you’ve engaged in organization that has made you get more efficient. And at the same time, we’ve had this reality that we need to have clear instructions, because we might, there might be a well we don’t sit next to each other for a period of time. Absolutely. And I’ve seen that that that rising tide really positively affect advice practices. And and the other thing is the the engine room in a business and it’s interesting that you’ve already jumped into the increase in profit and whatnot. Where I see the businesses driving their value is the advisors are what they are okay, and they just want time and the confidence of what they say in a meeting gets done. But you don’t motivation is pretty easy. Just would you like to see more clients yell I’ve clients, they’re almost like all puppy dogs. And I was a CFP for 20 years and, and I like clients like signing things. And it makes me happy. The real value driver and EBIT driver is that that current bunch of people in your Australian office who were just doing things that are that, that they could be better, and they could be far more engaged with the client. Now, although they’re not licensed, they actually can still build that relationship. And I think that’s what you’re inferring here is that, that your team here in in Maitland and Newcastle are doing a lot more touch points with the relationship, which has enabled you to go from from a 40% increase in incline. So what would your advisors, how many family units I think is the cool thing to say Would they advise?

Gil Gordon
Technically, we have about 3.7 full time equivalent advisors in the practice. So I float around as a troublemaker. But the numbers have gone from about 120 as an average, to depending on which team I’m talking about between 150 and 170 clients per advisor.

Andrew Rocks
Great, great and look at some for those advice practices out there that are sort of in and around that sort of 80 to 90, and we’re talking we’re talking, you know, you’re definitely not a low net worth business. You’ve we would have in the Hunter Valley, there’s lots of wealth, right? And you mentioned being an engineering and also mining, and anything to do with that there’s significant wealth. So it’s these those 160 people that you doing full service with. So that’s the cash flow the investment quite often you might be doing some post retiree work. Do you do much life insurance, given the nature of the client base?

Gil Gordon
Honestly, no. Would you like to? Yes,

Andrew Rocks
I normally ask that. I just thought I’d throw that in.

Gil Gordon
The reason I say yes to it. I mean, we’re very happy with the over 55 model. But the and I guess there’s a call to action or whatever. If someone has those skills and wants to be part of a well run business, we’re very open to talking to that kind of advisor or anyone who owns their own business. Because we we’ve recently, not recently over the last few years, we’ve built three or four really strong center of influence referral frameworks. So partnerships, and to be truthful that it’s working very, very well. We’re drowning in new client leads right now, which I know is across the industry, but it’s going particularly well switch that

Andrew Rocks
out. Right. So you’ve obviously increased your client base by a couple of 100 clients in the last couple of years. How did you build these referral networks?

Gil Gordon
By being good at what we

Andrew Rocks
did? Are they are they are they like industries? I think you mentioned you’ve got three satellite accounting affiliations, is it? Yeah, we’ve

Gil Gordon
got three accountants that refer to us. They know about each other. But effectively, what they’re doing is I have a client with a problem. I want to give you my client and I want to know they’re handled well. So It really is a trust and competency based relationship, we do pay them a referral fee. And that’s more out of just to be truthful, it’s a respect thing.

Andrew Rocks
It also means that they know that they’re not the only account. And yet, they kind of assume that you’re going to get all the referrals because it’s correct. Different accountants have different skill sets. And they want different sorts of clients. So I think, you know, paying a cost of goods for a marketing is actually part of running a business

Gil Gordon
totally. But what we found is that that that fee is actually not very important to them. They like it because they’re in business, but the dominant reason and thinking that the latest firm locally that signed up, they had a relationship with a Sydney based advisor just kept leveling down, and the clients had come back from go, you told me to go, that person isn’t a muppet. So when they come here, they have a lot of confidence that they’re gonna be looking out for here. And this is critical. That the it’s not the adviser at that moment that makes it work. It’s the client service team. If your people in the backroom prompt with return phone calls, doing what they say they’re going to do, and just honor the commitments they make, you just get referrals like stinked from centers of influence, because I know when we talk about referring out to lawyers and risk specialist and things, the girls don’t talk about the advisor, they talk about the client service manager behind the scenes, we love. Lindell, we love, Judy, because it’s the back office that they love more than the advisor. Well, guess what?

Andrew Rocks
That one comment means you’ve got a business and not a job guilt. That’s that’s that sums it up, doesn’t it? You know, so we end in relation to the so you’ve got these, you’ve got people coming in through word of mouth, you’ve got other people there. You’re looking to refresh your your older clients. And if you’ve got new strategies that you know, you’re thinking guy, what Maybe, and maybe touch on your the older advice, and you’ve built some software that I’d love to hear about as well. Yeah.

Gil Gordon
So that’s, that’s a big question, Rocksy. But the first thing we did is as our clients age, and we’re going to fee for service framework, and because we do this, people tend to be in our thing, we’re always looking three to five to 10 years ahead of where they are to see how the numbers look. And that’s how we ended up in aged care advice. It’s also when we were in fee for service, I was looking around to create a differentiated between what we now call our silver service and our gold service. And that’s where estate planning for life came in. So if you if you genuinely break the nexus between product and advice, you end up going okay, I’m being paid by the client, what problem do I have to solve for them to keep paying me which is the professional model, and we found over and over again, that they were worried about their children, they were worried about the their evil son in law or their daughter in law, the kids marriage or the kids drinking problem, or, or the grandchild drinking problem.

Andrew Rocks
It’s all just one client, everyone.

Gil Gordon
Oh mate, if I could, I’ve already written one book on this actually, I don’t know, It’s over there, Rocksy, it’s called “the bugger went and died on me and I don’t know what to do”.

Andrew Rocks
Oh, we are definitely putting that in the link. Yeah, take a look at it. Now. That’s it literally for everyone. I’m looking at a book that says “the bugger went and died on me and I don’t know what to do”.

Gil Gordon
Now that that book. And just to tell you the truth, I wrote it because a client bullied me into writing it that their son had died without a will and left them a hell of a mess, text Tax Office debt and all sorts of things. And he read it on the back cover there. And I told him they should write they became an incredible advocate for estate planning. And I said, write a book. Consider how hard is it just tell the story? And they said, Will you do it for us and I couldn’t get out of the room. They wouldn’t let me out until I promise to write the book. And it’s such a powerful conversation. When the clients look at you and they don’t care about their money. They care about the children. So how are you going to protect their kids because the average retiree is now worth 1.2 to $1.8 million. With two point something kids, each of these kids are picking up 567 100,000 bucks, and they don’t like their son in law. Yeah. And I’ve got three daughters. I’m one protecting them. It’s much

Andrew Rocks
too Gil’s sons in laws, he does still love you. So, look, I’m gonna get off piste. I’ve got this book in my hand at the moment and I’m on the back cover 45% of Australians die without a will and and I would hazard a guess that of the 55% that have a will. Half of them have really bad or expired wills. So let’s just let’s just if picture this. This is on the back, please let us bury our son, Patrick and Simone were in shock. Their son Dave had just died in a boating accident. You ran a small electrical contracting business, owed money to the ATO and has a large mortgage. They knew Dave didn’t have a will. But they didn’t understand what that meant for them as administrators of Dave’s estate. Their first task was to bury their son. However, his new girlfriend Jane, still in shock barred from entering the house. Now you can’t come into our home. We were going to get married. Patrick and Simone we’re now scared. They Were in some sort of fight Family Court dispute. And all they wanted was to get the clothes with which to bury their son. That’s the starting point of your book. Awesome. I am it’s it’s people don’t care how much you know until they know how much you care and financial planning. So, um, yeah, I definitely do a shout out for that. We’ll we’ll put that on. So. And that was how long did it take you to write by the way,

Gil Gordon
boy, honestly, about six months, it’s about a dozen stories that are either I just took the names out and change them. Or it’s an amalgam of a couple of stories from complex Small Business throughs, my my mother and father in there actually, historically, and it’s like a bad relationship. When you’re writing a book, initially, it’s all fun and passion, over a period of time, you get a bit bored with it. And then eventually, you just want rid of the damn thing, but you can’t let it go. Because he got the history with it. So it’s published, it’s on, it’s available online. If you want to look at the website estate planning for life.com, that I will include

Andrew Rocks
all this in the link skill, you can prepare yourself to be on Oprah, very soon.

Gil Gordon
It’s, I tell you what, Rocksy, I love to work here because you’re, you’re helping people with their deepest emotional concerns, and they will pay you. So if you look at the estate planning offer we have in the practice, first thing, if we’re going to sit down with them explain that we’ve got to dive in and understand their family problems. And then we’ve got to get a lawyer in to do the legal documents. So we charge a fee for that never less than $1,100, and often 22 or $3,300. So

Andrew Rocks
just to clarify, you’re charging $1,000 plus GST fee to facilitate the estate plan, and then you bring in a special execute the legal side of it. Yep.

Gil Gordon
So all we do is basically collect information and give it to the lawyer, then we’ll proof the documents to make sure they got the names and addresses, right. But you know, it’s a good working relationship with a couple of law firms that we have. I like it when they come into our boardroom though, because it feels like we are delivering the service. And you the client feels very attached to us. The next part of it once the wills and powers of attorney and down along with the binding death notes, we capture the information in something we call the information that matter record. It’s just all the things that the family needs to know if someone if that alpha person, their mom, or dad is no longer able to share it. That’s a that’s a process. Then after that we have what’s called a crisis management plan, which is a living plan, which gets updated each to be honest every couple of years with clients so that they know what to do, who to call, what questions to ask if dad has a stroke or mom has a stroke or dies. And that was was quite strange. When we develop this in around 2008 2009. I thought it would have traction for a year or two. And I’d have to come up with something new to give to clients. Guess what it didn’t never gets out there, we’ll change it. They move houses, they change insurance companies change where their investments are. And as the client gets older into their 70s and 80s, they get more concerned with not being a burden on their kids, not less. So we have never had anyone disengaged from their state planning for life service. Clients love it because it’s about the people they love. And it’s about the things they need to not be a burden. And it’s a non Advice Service.

Andrew Rocks
I wish I’d met you 20 years ago, my my practice that I found it announcer we were very passionate along the same lines. And we even started a safe deposit service in the big cipher, Westpac in Sydney, where we would run their documents, and have a list of their documents, everything from marriage certificates to baptism certificates, that one comes in handy. you baptize your child, and then you know, 12 years later, you want to enroll them in the local Catholic school and they’ll show us the evidence. And we we started charging for that something like $60 a year or something like that, and just for the safe deposit. But I think we ended up with three and a half 1000 of them not available cash flow. Yeah, the safe wasn’t the, you know, at the time, the safe was 2000 bucks a year or something but but what it was was peace of mind. So yeah, but what I might do is, that’s really awesome. And we’re going to include some links there and, and I’d like to talk more and maybe we can do a whole other podcast. I’m just into the you know, the state planning because we need it as an industry there’s going to be a lot of people that need to to really work on that intergenerational wealth transfer. But whilst we’re talking about tech what what’s your tech stack in the in the practice?

Gil Gordon
were fairly vanilla. Very, very cybersecurity were which was quite interesting had a lot to do with the drafting of the cyber policies in our advice. But we use x plane and quite heavily. We could always use it better but I’m pretty confident we’re doing okay. Chris Neil, in particular is an expert in his practice, and I can’t speak more highly of Chris. He’s been instrumental in the efficiencies We have Chris knows how to program he’s, he writes threads and he templates and things. So we’re heavily into x plan and the ROI implementation of X plans very

Andrew Rocks
handy to have someone like that unique because there is consultants, but that’s a cost. Yeah, yeah. And I don’t really get no, no, you’ve got to be some get close, but they don’t really get

Gil Gordon
ya if you’re in the room. And Chris has done this terrific work lately on our finite templates. So I can do a full review with a client. And I’m a bit old school with this, I like pieces of paper in front of me, but I can tick and flick the file note and five to seven minutes is a full handover. And that’s including switches and withdrawals and things that often fall out. And it’s at, it’s just created real efficiency. So we use x plan, we, I still have a user of excel in a lot of the things we do here. And particularly when probably not going to go there. But the whole cyber cyber security side has been a big focus. For the last two years, we’ve had a lot of audits and a lot of penetration testing and saying you’ve got your password manager LastPass, LastPass, and two, factor authentication, everything all of that’s good. We also use heavy users of the wealth central system, through ri, it’s, it’s a terrific system for creating that engagement, that whole 10 Three now, people first thing, if you can explain to clients, what their life’s gonna look like. And I think all good advisors do this actually start to do some coaching and forward planning with clients. And so you’re going to be able to have what you want. Doing it live on the big screen in front of clients is life changing,

Andrew Rocks
especially when they can change the nuances and have have a plan in front of them. And you know, quite often when you talk about engine rooms and financial planning, we’re talking very much about the machine. And a lot of people lose sight of the user experience, which is now called UX. But not everyone wants to absorb information, auditory, some like visual stuff, like the feeling. So there’s definitely clients who you have to have face to face meetings with because they’re getting, they’re getting the feeling of the meetings, but other clients are very happy to have a phone call here auditory, and some just want the visual. But what I’ve learned over the years is that if you’ve got a couple, they are not the same. No. So people don’t marry themselves. There’s a whole thing I do on that. And so if you’ve got the multimedia methodology of presentation, and you know, one of the criticisms of compliance is it’s a very visual, only method of delivering information. So if you’re doing that, then you’re missing out on one of the two people and, you know, surprise, surprise, when they engage.

Gil Gordon
It’s a long conversation, because obviously all the governance framework that we operate within his product related,

Andrew Rocks
yeah, it actually like if you take the time to read that. It’s you read the legislation that we’re governed by and you’re thinking to yourself, This doesn’t sound like something that I’m involved in at all. You know, even when you get your own license, you look at that, and the bullet points a you know, it’s quite, it’s quite weird, not putting Well, it’s

Gil Gordon
it to me, one of the things that frustrate me is the, and when not a big user of managed accounts. As an example, we use paper based models

Andrew Rocks
here. So let’s let’s flesh that out for a second. What does that mean, and you have a platform that works for

Gil Gordon
ya. We’ve got a whole pricing and platform policy here. We’ve done all that that work in fasciae requires it but so does the licensee. So we’ve our ideal client is a delegator at the moment, it’s an over 50, delegated, probably was somewhere between 501 point 5 million who just wants to go fishing, right. And I can tell you any number of stories of clients that have water metaphor,

Andrew Rocks
actually fishing, everyone is listening, or golfing or whatever.

Gil Gordon
But any number of clients who have come in thinking it was going to be a technical dull conversation. And we don’t have that. Sometimes seriously, we forget to talk about the super funds and things and we got to bring them back, say, hey, we need to talk about what your objectives are. And but if you can dive into that, that the idea of modeling the next 25 years of their life, they will love you, except for the 5% or 1% that don’t, and they’re the non delegators. And to be blunt, I would rather we don’t even start down that path with them. Because our model is around, we’re going to do these things for you. If you want something different. Perhaps we’re not right for you. And so our engagement process is quite self filtering, I would say that we are at probably 96 to 98% conversion of the clients that we want doesn’t mean every client that brings us to someone we want,

Andrew Rocks
what are some of the tests that you use to figure out their delegators? So in the meeting, in the meeting craft, what’s kind of like the few of the teases where you’re trying to figure out whether it’s a couple or a single if they’re genuine delegators

Gil Gordon
that people acronym is transformative. If you get people to tell you where they live and why they live there. Get people to talk about their hopes for their careers or retirement. Tell them about your family, offspring and family as well. was a passions and hobbies, if they’re not enjoying that conversation or allowing you to have that conversation, if they’re closed if they’re closed because they want to, they want you to talk about how you’re going to manage the money, they want to talk about the fees, they want to talk about the returns. Well, guess what, and I say this openly, we’re actually a bit dull. When it comes to your money, I’m not taking risks. When we bought the Ri Newcastle business in 2018, we inherited a bunch of clients with a quote with a small direct equity portfolio and wrap accounts. Right. And I’m sure that that was done because it made the fees look good. COVID hit in February 2920 20. Those clients were down 18% 70 to 75%, asset allocation, direct equities, right? The same asset allocation for the model portfolio out of insignia and this one, I’ll give a shout out to Matt Olson, this guy’s really, really good, great news, I too, want to go drinking with him he’ll compose.

Andrew Rocks
We’re not, we’re not we’re not including the links of his of the pub drinks version

Gil Gordon
at all compose music at dinner, and then I play it for you that night. But those models same asset allocation, plus or minus, we’re down 3% when COVID hit. So our approach here is to be fairly dull with the way clients manage their money because we don’t want them. We don’t want them to be worrying about it. So oh, you know, you draw the graphs and the pictures. But if the clients are focused on the portfolio, the performance the technical side, they’re not they don’t quite fit us. And I found that 90, probably 80% of people are delegators. Yeah. And if you can get the delegator, right, then you’re gonna get 96% or 98. Well, I

Andrew Rocks
don’t know what what sort of engineer whispering you do. But to get into find engineers who delegators and they obviously are lots of them, I think is the perfect scenario, because they’ll also ones that have read your stuff,

Gil Gordon
they never leave where it goes. I mean, they test you to be blunt, they’re testing you to see how smart you are. And they’ll keep asking questions until they have no more, and then they’re yours for life.

Andrew Rocks
Let’s touch on how smart you guys are as a business. You do you have a buyer advisory board or coaching or what what’s the structure to help you around you going forward?

Gil Gordon
Well, we’re happily part of the AES ngaa family. So we do have a board of advice, or a board governance board meets every three months. And that’s wonderful. I love it. And it terrifies me because these guys are smart. The whole is anyone in Asia is a good crew. And I’d real shout out to to Paul Barrett and Gramma gay and his team, their teams,

Andrew Rocks
the kind of things that they hold you to account because for the people listening, some people are aware of AES at NGA, and some people are not. But for the uninitiated that they go in, and they, they work with business owners to really, really enhance their practice. So and there’s capital involved, but let’s put that to a side. Let’s talk about what they’re doing for you to keep you on the straight and narrow every quarter.

Gil Gordon
So obviously, we have very good board reports in Financials,

Andrew Rocks
because it’s the first time you’ve had to report to someone other than yourself. Yeah. Yep. And that was challenge is granting us first year for everyone who’s not getting the visuals. Just joking.

Gil Gordon
Fitzy Brian Fitz talks about it that there are there are people that are accountable, and people that are responsible. Think of it as a football player, give me the ball. Trust me, I know what I’m doing with the ball. Monday morning, quarterback me, that’s something that I’ve had to learn how to do, learn how to actually be accountable for my decisions. They couldn’t be more supportive. These guys are very experienced Graham used to run count plus and Paul Barrett, obviously, he’s been around the industry forever. But they asked the right questions, I’ve never found them anything other than supportive. They’ve got a great team behind me, behind us that help us with m&a opportunities that help us with business models, sort of stuff, hiring, recruitment, marketing, they’ve done a huge amount for us, what they haven’t done is interfere. You know, they they’re not in here telling us how to do this or that they’re, they’re a great partner, because they ask us to have a plan. And then we explain the plan. And then they back us when we implement it. And it’s been, it’s been a very good relationship as well as creating and this is a big thing, as well as creating a succession plan for the business. So they’ve got the money and they’re helping us with, you know, acquisitions and things like that. But they also create the employee share plan where the smaller partners in the senior people in the business have got an equity Participation Plan, which is terrific,

Andrew Rocks
and how does that look in your practice? You know, you’ve got a couple of advisors some other team have you got any other owners in the practice

Gil Gordon
well for their for local partners, right on the on the major shareholder locally? Is it and Jay has a large percentage of the business. And then it scales down I think from about 14, sorry, it was 14. It’s probably now around about eight or nine, five and about 3%.

Andrew Rocks
So you’ve got, you’ve got a cohort of people working, indeed in the same building who have a vested interest in making sure that you’re making more than you spend, that the risks of the business are, such as client complaints. And Neil, and that the growth and future directories sound correct? Yes,

Gil Gordon
yes, we’re all aligned. And again, these are talented people, which means we don’t agree on everything. But we’ve got a very healthy we meet every two weeks with a leadership meeting. And it’s a leadership advice meeting. And we sit down and we go through an agenda of things that have to change projects we’re working on. Ryan Muir, gave me a book a couple of years ago called for dx, four disciplines of execution. Now, it’s not lightweight reading, if anyone wants to know why they’re not getting stuff done in their business, read the book, try to implement it, spend a year learning how to do it wrong. And then the second year, you tend to get better. But it’s a terrific book for 40x

Andrew Rocks
or become part of the ensemble network and learn from other people’s mistakes. That’s another way of doing it. So I’m on that let’s talk about the people. So you’ve got you’ve got not just employees, you’ve got team members, the owners in the business you’ve got, which means you’ve got people around you, you’ve also then got people holding you to account you’ve got a corporate rigor, which is making sure that there’s no imperceptible drift, you’ve got a real purpose around the clients, but then maybe get a feel for you know, I’d like to know, you know, why people join your business, why they stay and why they grow. So, so why would someone join your business? What sort of person would come into your, your audit in the local area or indeed, remotely? And, yeah,

Gil Gordon
we’ve got a good story to tell there. If you look at Heather, who’s worked with Heather’s in her 70s Now, she does some back office accounts and client reporting. She’s been here 24 years. My partner Chris has been about 22 years. Louise our paraplanning manager 17 Ryan and Steve have been here I think about 11 and 15 years or something like that. Olga has been here 10 years. Courtney five, so the people tend to stick and I largely put that down to two factors. One, we really are people oriented, right. All guy said the other day, I

Andrew Rocks
say that all the time. So but the maths of what you’ve just told me is staggering. It’s 100 years, right? Yeah. Yeah. So some people say that people focus and they’ve got turnover every six months. Yes. So what do you mean by people focused on the ground? The best story

Gil Gordon
of God is a lady named Rosemary I ran into in the pharmacy across the road a couple of days ago. She left us as a client three years ago. She had an account balance rundown. We looked after her for 15 years, but she left us as a client. But Olga was still helping her with a settling problem because they’re older and they were confused about Centrelink. And Olga came up with Rosemarie came into the office about six months ago and gave over a box of chocolates or something like that. And Olga came up stairs and she was bouncing she was on air shins, if you know her, she’s polish. It’s not her style to be chirpy. But she she was absolutely delightful. I said, Well, why are you so happy about should I just help rosemary, she’s such a lovely lady. I love that we can help people like that. Now, what I heard was one, she enjoyed it. But two, she’s got the delegated authority to do some pro bono work for people that she cares about. Because she knows that our job is to actually help people. And she didn’t ask permission for anyone to do pro bono work. She didn’t ask. And she just did it, because she knew how to do it efficiently. And she knew it was going to be okay. And my all I’ve ever said I’ve never set financial targets for any of the advisors here. So I often call this place a socialist collective. All I’ve ever said is do your job properly, just do everything you’re gonna save for the clients. And we know that because at the moment, I think we had 23 referrals in in March alone. So

Andrew Rocks
I think for a socialist collective, having a 40% increase in the size of your client base, you’re running a pretty neat variation on socialist perspective. It’s,

Gil Gordon
it’s like if I look at all these guys, they’re all incredibly ethical. Paul has joined us as a partner in the last few years, very caring guy really honest. The commitment he makes his clients. So all I’ve ever said to the clients is structure, you built the

Andrew Rocks
engine room, so that people who exist in that, that that kind of state of mind can actually also achieve financially for the company and for themselves, because you’ve, you’re getting him to do the things that they’re really good at, and you’re removing him from the things that they they shouldn’t be doing.

Gil Gordon
There’s an old story about Dick Smith, who said if you want to make a million dollars, find a shop that’s giving bad service and open up next door and service the daylights out of the clients. So because this is two sides at one we really do Whew that the simple rule is if you say you’re going to do it, do it, right. And if you’re not going to do it, call the client and tell them it’s not happening or get someone to help you. But don’t drop the ball just don’t. Now, we built the threads and the workflow management processes. And we’ve got the checklists up the wazoo, and all that sort of stuff. But one of the other things we’ve done very well is, and this started with the fee for service sort of work we do,

Andrew Rocks
which half your team sound like they were here in 2007.

Gil Gordon
To an extent, yeah. So I think it was 13 or 14 in the team. And we’ve grown and shrunk a little bit over the years, but it’s growing now. The we’ve got these four service packages, bronze, silver, gold and platinum, right? What we do with those clients with those service packages very well defined, each of the staff know exactly what’s what the clients are entitled to. And they also know when they’re allowed to do a little extra without getting too much. And if the client is too demanding, they’ll go to the advisor and say, You’re gonna have a chat with them, they either pay more, or they ask less. And that is guided by primarily the client service team. But one of the other things we do and part of our review process, we put those four service packages on the on the screen, with the dollar amount attached to each service offer, along with the services they’re entitled to. So there’s a table goes up on the screen, and we say to the client, you’re on goal, we think you should stay there for these reasons. Or you might want it, it’s quite weird. I don’t I can’t remember a single client ever downgrading a service level. It’s always the adviser saying, Look, I don’t think they need to be on gold, I want to push them down to silver, which is straight out of the fasciae playbook that we got to identify what we charge and what we do. And we’ve got to be ethically comfortable that That’s right. And so to answer, why do the people stay? Why do they come? Because my guys are honest and ethical. And we actually have a business model that actually honest that I know that sounds a little bit highfalutin.

Andrew Rocks
How do you think so you mentioned that you’re getting some assistance with mergers and acquisitions. So how is that going to play out? When you bring people in all at once? This is gonna be tough?

Gil Gordon
That’s a magic question. How do I assess the culture of someone I’m talking to. And that’s lots of coffee, lots of chats. When Paul came in with his client book a few years ago, I’d known Paul for many years, we played soccer together, and I judge him to be one of us, if that makes sense. And his clients. It’s interesting when Ryan came back, but it’s quite interesting when you when you bring these clients in, this has been our experience, our service levels are so much higher than the classic financial advisor simply sends a report talks to the client about technical things that clients either don’t care about or don’t understand, when we talk to them about their family and their children and their holidays and their cars and renovations on their house. And that is the center of our conversation. And we have found over and over again that clients when they understand the service that’s available, when they understand the conversation we have we explained the fees openly and honestly and then say look, if you enjoy that, that’s available this service level, and the clients almost universally, and I’m thinking about the our new castle book we acquired. We were seeing 100% 200% fee upgrades from clients that were used to an investment conversation rather than a

Andrew Rocks
meeting the market. You’re giving them what they what the what they want, rather than what you think that yeah. Now when you’re with your actual your team, you’ve got two offices. Do you ever work from home or hybrid policy at all?

Gil Gordon
We do. We particularly post COVID. There’s a few that wanted to work from home as a few that did not. They don’t like bringing work home. One of our clients, service managers, she lives two hours north of here. So she comes down once a month. So people can work from home one day a week, we have a roster day off policy as well. So once a month, people can work extra hours and take time off. So it’s all about adapting to be that employer of choice.

Andrew Rocks
And given that that’s the case. What do you mentioned you have a fortnightly sort of leadership meeting? What other meeting cadences do you have in your office? And I’m assuming that given the previous answer you you have electronic meetings on Microsoft Teams or zoom as well. So maybe sort of what are the cadences of the meeting for the engine room? Right? And what’s the general format there?

Gil Gordon
So the the workflow management threads out of x plan, create task lists for everybody, the client service managers run those meetings with the advisors once a week,

Andrew Rocks
once a week that they’re getting their client service manager escalating up to the advisor

Gil Gordon
Yes, so the advisor has to either be there physically room advisor and they’re giving

Andrew Rocks
feedback on current state and also gives the adviser an opportunity to to inquire as to where the capacity and capability in Italy Yeah.

Gil Gordon
Okay, good, good. And I think they also do that with the with their client service officers. So the 414 members are talking was the CSM all the time. But I think pragmatically, there were probably I know there’s at least one task meeting a week in the client service team, but probably two in each point. That so that’s happening. The general manager Kate is part of a general admin meeting once a week where they air issues for systematic stuff. And Kate also does what she calls her check ins with people once a fortnight or once a month, depending on how difficult the advisor is to pin down. The girls call them the therapy sessions where they unload on Kate. And her job is to look for thematics and fix them. But so we’ve got a very regular check in framework where the communication is structured and happening.

Andrew Rocks
Well, if you don’t communicate, you’re in trouble. Right. So. And then in that I mean, so you’ve you’ve mentioned a lot about your client service officers, the client service managers, you mentioned a lot about Kate, I’ve got a question I like to ask around, you know, training. And the training for your advisors is obvious, you know, it’s along the lines of CPD points and whatnot. I don’t know if you do but but do you do any training for the other members of your team. And if you had a magic wand, and you were speaking to an organization, you had a considerable share of the market being ensemble? What kind of things? Would you recommend that the industry get behind to help with practice managers, client service offices, etc?

Gil Gordon
For our small question. So yes, they have a training framework. We recently hired a terrific lady crystal, it’s one of the things you talk about recruitment. I have great faith in girls, often girls, but people that were restaurant managers, they’re very good at managing in chaos, which is not a bad description of how this place runs. Time because clients make it chaotic, right? I’m

Andrew Rocks
watching the show the bear. So if it’s anything like that, then good God. Yeah,

Gil Gordon
so crystals crystals landed really well. But it’s quite interesting, because some of the advisors have started tasking crystal, please do this and prepare that into that sort of stuff. And I was delighted the I got feedback from two people going leave her alone, we have a whole training program, we are teaching her the job, week by week, and you’re asking her to do things that she hasn’t been trained in yet, please copy us in if you’re going to do that, or send the work to the CSM, and so that she can judge whether crystals capable, and crystal who’s a very intelligent woman is is just eating it up, because she’s being trained in a structured way. So we will let

Andrew Rocks
your train that’s what you’ve done. And yes, right up to you. Right? And you obviously do a lot right to keep people in the business that long. If it What would you what do you think the industry should

Gil Gordon
get through in client management, financial planning management, we need

Andrew Rocks
a TAFE course I guess, like like they do in like a certificate, which then we need a career path for the engineroom it’s part of my passion. That’s the reason I signed up to do this. And, you know, certificate as entry point, you mentioned, you’ve done some work in the education CapitaLand before all the the education. And that would be that would give a minimum standard to the engine room. And if ASICs are concerned about minimum standards, then the person who deals with the client, actually volumize more than the adviser totally needs to have some some rigor around what

Gil Gordon
I would love to see sort of DFP level maybe TAFE level sort of course, that’s an idea I kicked around with my daughter Kate that if she ever got sick of working for someone, she could build a framework since sounds like we’re ensembles going where you are training and accrediting client service officers who walk into it understanding super understanding tax understanding, explain understanding workflow management, understanding how to manage diaries are in to liaise with clients in a structured way. It’s a whole skill set, but we’re just the whole industry skewed on product advice, it’s the engine room that matters. And we’ll talk about this was the CEO the other day Pete Hornsby that the the first person and this is where VBP has such an opportunity, and I think he’s doing well to come up with a best practice model for how you should run your business. And that includes operating threads and operating frameworks and reporting guidelines in the in the engine room site, as well as service packages and processes to produce RAs and SL A’s.

Andrew Rocks
Look I completely agree and there’s the theory and presenting the theory but you still need the people and and you know when I look at what what team members want, they want done NP renumerated properly and cogent but they want a genuine intellectual career path. Yes. And I just feel there’s just a yawning gap in in our industry financial services for those other people. So yet again, we might look to take this conversation up In other fields, you know cert three cert for whatever you do would be I found a fantastic thing. And um, could you imagine if

Gil Gordon
someone knock on your door saying I’ve just finished or I’m about to finish my Cert three and financial planning admin, that girl wouldn’t be wouldn’t be allowed on girl a guy, right? Wouldn’t be allowed out the front door before she got a job offer these days.

Andrew Rocks
That’s right and look for disclosure I’m involved in in virtual business partners. And it’s something that we, we we’ve been doing for a long time. But we did that because we wanted to better demonstrate competency for people. But we’ve often we’ve often wondered that it should be something more universal. Now. I also let me change some gears you mentioned that a bit of a pro bono and and quite a lot of practices have sort of a charitable style a thing and you can either you know donate time or money. So you’ve just mentioned that you do allow pro bono work which is which is donating let’s be brutally honest, because it’s it’s it’s time, what other charitable, or how do you have a structure for that?

Gil Gordon
Yes, we do. The pro bono has a soft spot or sore spot. I’ve tried several times over the years to get a genuine pro bono framework up with the university with the Salvation Army. And the legislative framework we work in makes it so hard to do it.

Andrew Rocks
Yeah. Agreed. Agreed. Because some it’s it’s just hard.

Gil Gordon
Yes. Just hard. You got to document everything. Instead of giving perhaps on a quality of advice, it’s going to get better, we’ll see. But the this this Office supports the Smith family as a as an office, but also the the team members get to make a donation every year to the charity of their choice. It’s a part of their package, I guess you’d call it that.

Andrew Rocks
So is that is that is there a set time of the year is Yeah, and

Gil Gordon
review. So we’re coming up to now I think it’s up to $500 per person, I think you got to work five years to get $500. But the guys have, I’m a big fan of Salvation Army, I ran the red shield appeal locally for many years here. And it’s terrific. And we support carries place here locally, which is a bad, you know, refuge for domestic violence. I know Olga, it was very passionate about rescue animals and things like that. And so each of the guys get to direct some money every year to a charity of their choice.

Andrew Rocks
Awesome, awesome eiendom. And all of these things go on to the straight of the people side of the business. And you’ve even got a structure for your charitable giving in case that you know, people didn’t pick up on that you’ve got a tenure based and you’ve got a structure there. So even though you can be a charismatic leader and CEO, the ones who actually benefit and get scale end up putting that framework almost behind every single decision they make when they walk in the door. Yeah,

Gil Gordon
so the employee value propositions are a hot discussion in this business at the moment. As we try to identify in a world where people can go anywhere, let’s be honest, there’s a talent competition

Andrew Rocks
as we speak, where 3% unemployment and I have a feeling that that that’s actually lower than that for people who were in financial services. There is no talent. So sorry, that’s poorly put. We won’t even edit that out. Would you say that Andrew rock stuff that from time to time, he has that sound guarantee?

Gil Gordon
The pool of talents a bit thin?

Andrew Rocks
Yeah. Okay. Thank you. Thank you, I’ve got my ghost rider. The reality is, is that you need that invoice, you need to have a invoice employee value proposition that doesn’t send you broke, it’s not all about money. It’s about identifying, you know, the careers because people want careers, not jobs.

Gil Gordon
So in that sense, one of the things is getting shout out to Chris Neil. He has been the culture captain of this place for the last 20 years. So every month we sit down, we have our staff meeting, but then we spend two hours playing board games. And every three months we go on and off site, and we go and do something whitewater rafting or quad bike riding or learning to surf for barefoot balls,

Andrew Rocks
you might want to get that insurance specialist in the practice pretty quickly.

Gil Gordon
But in I know, particularly with ebp because Courtney Nichols has been a great part of the leadership team. She’s the one that made VBP work for us by by engaging to the people down in Chi in the Philippines. They they talk with them daily, but they play games with them every week, half an hour, at the end of every Friday, they’re sitting down playing online games. We’re sending a little gifts all the time. And Courtney is in many ways a den mother there and has really made the VBP experience work for us to the point and we haven’t talked about numbers, but I’ll throw a couple in there. We got the 40% uptake, but I did the numbers the other day on on what it cost for us to get a review prep because we’re very standardized between 10 and $15. For them to prepare a full review and for them to do a switch ROI or withdrawal or rebalance costs $10 Afterwards, you get 25 have bucks to have the review prep done. And then the ROA prepared and dispatch to the client afterwards is that’s that’s a brilliant cost thing. And to do that you’ve got to have people want to stay, you’ve got to have people caring for the people, and you got to have the systems working. And Courtney has been terrific at helping us get a big shout

Andrew Rocks
out to Courtney. Absolutely. And the engine room. You know, I mentioned before the podcast that quite often I talk with General Manager or practice managers, but quite often, I’m talking to the owner who’s just who’s put in one in the last couple of years like have we’ve Kate. And I really want to appeal to you know, the reason why I’ve done that, and we’ve touched on that today. And if you were to put your sort of operational hat on or on the business of the business, I’d love to hear about where you see sort of the the industry going not from a client perspective, necessarily, but from how we arrange our, our businesses, and what’s going to work for all of the stakeholders, one being the general public, the other one being the owners, etc. So when you see it

Gil Gordon
again, small question, honestly, I think the business breaks into two types, you either have a business at scale, which is probably turning over 2 million plus that can afford to build the systems and runs on excellent systems, you then have the alternative practice, which is somewhere between 500 and a million in turnover, would you call it a small family practice very much a lifestyle practice where it’s able to run on really intelligent people with decent systems, but you take that person out, the whole thing grinds to a halt. So the first thing is we’re headed into a scale scenario, or we’re going to be specialist boutique lifestyle practices. And you can see that happening everywhere right now. The next thing I’m rather excited and twitchy, but excited about quality of advice. Because the call center solution is going to be well, why would you pay a financial advisor we can give you advice for free, but it’s going to translate into product advice and holistic advice. So right now I’m focusing on the marketing conversation around identifying the client experience that we provide here, create our own voice on social media, and LinkedIn, and all those sort of things. So that clients can happily deal with their industry fund if they want to, and say now it’s time for me to get someone that’s more invested in me give them some fact based choosing. Yeah, just create a differentiation point. Yeah, the the other things that I think are really exciting, we’re going to see, we’re seeing it everywhere where the AFSL is are buying into the advice margin. So we’re going to see a lot of oversells, taking a piece of their practices, which is going to be interesting for the smaller businesses that they don’t necessarily want to partner with. So that piece is already happening as part of the asset story. But you’re seeing in a lot of the majors around town, and probably the next piece that I’m pumped about, and I’m having a meeting with Jay Becton, from plan logic after this conversation, Rocksy, where we’re talking about AI, and how we’re going to be able to use AI to create a safe advice model. So in many ways, it’s a fairly simple thing, you just give it 1000 Really good files, and it’s going to be able to create an auditing framework that allows you to go hey, that’s a good file you’ve just done but you miss these two things. Make sure it’s in your file note, or is going to give the auditors a very easy path of auditing 100% of your files. Yeah, so we’re headed and I think fairly quickly, to 100% audit of our client files.

Andrew Rocks
That’s primarily proactive auditing real time practice.

Gil Gordon
Yeah, it’s going to be a piece of cake for the system’s to do it.

Andrew Rocks
If you’re a PIR, and you’re out there, maybe the the premiums can start heading south, please,

Gil Gordon
possibly can only hope so. But this is one of those ones, you got to lean into this. If you think the change is over. You’re kidding. kidding yourself. Maybe the legislative pressure is off for a bit, and we’re going to get some tail winds. But the the old school way is not going to last within five years, it’s going to be a very different industry again, and it’s gonna be exciting. But it’s going to be 200 250 or more clients per advisor, not 125.

Andrew Rocks
That’s right. And service. Well, and if you you know, people who you mentioned their technology will the iPhone came out in 2007. You know, the Apple, Apple Apple Watches, which I know you’re wearing today and you know, things like Google Maps, all of these things that, that they used to not exist everyone. And so we it’ll be a tectonic shift. And look, we’re really, we’re really pumped for it here at ensemble. And, and part of what the sharing of this engineroom is, is there are people out there who are thinking of doing things, but they just need to hear a few other people in the industry who are also thinking that way and that will give them the confidence to go out and do it. If if

Gil Gordon
we’re having that kind of conversation and someone’s sitting here going, Okay, I need to start to improve things. The first thing I would say is start to outsource, start to outsource. We went to Viva Pay terrific the other partner we have which have been brilliant is playing logic perfect. And I’d give a real shout out to to plan logic and Jay Becton in particular has been a real partner, we were forced to learn how to handover efficiently which forced us to change our file notes which forced us to create a power planning manager who acts as a filter. And bit by bit we got the dumb stuff out of the process and it started to work and it released our volume of SLAs quadrupled when we got through the the outsource playing logic

Andrew Rocks
and you were given guidance by your licensee is that correct to go to plan or as part of looking at outsourcing or what what brought you into doing?

Gil Gordon
It look again, a shout out to Joseph Joseph a rat, and Joe is really bought into this, the licensee has supported the outsource journey big time. And so yes, they’ve got that vision, which is good. But it was one of those ones where it was an idea on the shelf that we could grab. Once you grab it, it’s not just a matter of going click tick the switch, you have to lean in for six months to learn how to make it work for you. And Jay Jay will often talk from plenty logic about conversations we have that led him to modify the way they the electronic submission documents because I was pushing him to go, I don’t care what you need, this is the way I need to give it to you. So it was real partnership between us that improve things. And I know that if you look at and so say you’re doing 50 essays a year, and each SOA is worth $5,000 to the practice, if you can double the number of SOPs, you’ve just you’ve unlocked value in your business, we didn’t double it, we quadrupled, we unlocked a massive amount of value in the business. This is the the advice that advisors sometimes leave on the shelf, because they know it’s going to take eight weeks to get an SOA done. And they got other ones that they have to do. And so they leave stuff on the shelf, you partner properly, you’re going to unlock tremendous value and make it more efficient, and you’ll get 40% more clients.

Andrew Rocks
So what you’re saying is, is that you know the engine room and getting it right and, and having people in your practice who are coming on that journey. So if you’re a practice out there, and you’ve got a couple of people in your practice, before you go out and, and look to try and make all of these, these things happen, you really need to have a talk with your business partners. And you’ve got to get the context of why you’re going to do things because if you’re not on the same page, all of these things, whether it be outsourcing or technology or threads, you’ll end up being how you used to be we had four different models before different advisors and, and so that would be my advice to, to small practices. The other one is, you know, you’ve mentioned a person who’s who’s been instrumental Joe, from your licensee or your their classic, what they used to be called business development or practice managers, I would say lean into these people. There they are there, they asked him the best thing that these individuals all across licenses and business coaches have is perspective of other clients. salutely. Okay, they get to see what other people are doing. Because we’re not the sole arbiter of brilliance.

Gil Gordon
No. And I couldn’t agree with you more, you need. And that’s another value of the outsource partners, this seeing multiple businesses, I get to see lots of stuff, the ensemble thing, the VBP thing, the plan logic thing, the RBM see, right, they, they, you don’t need to lay the road in front of you, what you need to do is to commit to changing and then you got a great quote, you know, sacred cows make the best burgers, you’re going to have to give something okay. Have you written

Andrew Rocks
a book on that one? Because I don’t really want to see the print version. That’s all good. Well, Gil, it’s been it’s been a real pleasure to talk about your journey to talk about your beliefs to touch on the work and the passion that you have around the client engagement, the the estate planning the intergenerational you know, how I can see how people have stayed with with you. And now it’s not just the guilt show anymore with the business. For those people out there, guilt guilt, as you you know, if you just met him, you would think he’s a classic, powerful entrepreneur. And he is but he’s also smart enough to have partnered with another company who calls him to account, which in reality means that businesses go through these cycles of growth and decline, growth and decline. And the the element that you need to make sure that you limit the decline is bringing in people, bringing people around you and holding accountability

Gil Gordon
is an easy as an easy way to identify when you need to partner with people is when you hit the wall, when you’re so damn busy and revenues not growing. And you’ve got the same problem occurring over and over again. That’s where something’s got to give. And that’s the partnership with the Licensee or the VVIPs have a plan logics. You’ve got to do something different. And in my case, it was the GIL show a few years ago. And that was a wall And nowadays, majority of the new clients don’t meet me. Right? And it, it. It’s a it’s a much better business model because it gives me the freedom to work four days a week, right and take 12 weeks a week, a year off and things like that. But the machine still runs itself

Andrew Rocks
On that last quote the machine. I’m going to thank you very much for being on the engineering podcast, Gil. It’s been very informative, and we look forward for new chapters and I’m sure we’ll talk about in the future. Take care.