#96 Mark Hedderman – Transcript

Louis van der Merwe
Welcome to another episode of Ensombl Advice South Africa. Today, I have the privilege to have with me, Mark Hedderman. Mark is the CEO and a certified financial planner at Hedderman Financial Solutions, all the way from Dublin in Ireland. Mark, thanks so much for being here today,

Mark Hedderman
Louis, an absolute privilege and pleasure to join you. Thanks so much for having me.

Louis van der Merwe
It’s great to have you here, man. We first connected in Cape Town at the portfolio matrix lead symposium, which is wonderful to have people from across the board, like you just said, we 12 hours away. But we think in the same way, before we get to talk a little bit about the clients and the things that you do for them. I want to know a bit more about Hedeman financial solutions. It’s a multi generational firm. And when I look at your team page, I see quite a few people with the same surname. Yeah, tell us a little bit about about how is working with your family assuming that some of them might listen to this as well.

Mark Hedderman
Exactly. And and whether or not does it actually work working with your family? But yeah, we’re we’re very lucky to have joined a practice that my, my parents had spent a lot of time building and kind of crafting over the years. And, you know, I look back my, my dad joined the kind of life insurance company here in Ireland in 1982. And at the time, as he said, he was he did a two week sales training course was handed a rainbow convercent out into the vast wilderness of Dublin to go and write policies and damn on policies and personal pension plans and clients. And as he said himself, he did that from a relatively successful base, right up until the early 2000s. And a really interesting thing is it began to have a very detrimental impact on his health. And as he said himself, distress that came with this concept of feeding upon what you kill each year, if you excuse the expression or having to be constantly driven by targets and going out without there being you know, an underlying strategy around well, we want to help the clients here. But obviously, we have a big firm in the background dictating that we need to write all these cases every year and you know, is the tail starting to wag the dog so they made the decision but on my mom sorry, to to add to that. She joined him in Canada lived her system from an administration standpoint, because things are just run away with themselves. And I suppose the market in Ireland as well was evolving with compliance issues and things that just didn’t exist. So on today’s on the seventh, Tuesday, they established the firm head of my financial solutions, and one of the founding principles I suppose, and header man as a surname in Ireland, it might be probably might be more fit in South Africa than it will be in Ireland, which is, you know, you’re a burr and you’re a Murphy, you’re in O’Reilly. Herman has quite a unique surname, and the one of the rationales why that was put there, because he, you know, was was primarily to say, look worse, we feel strong enough in our service proposition. And we feel strong enough in the sense that we believe in building proper trust and proper relationship with our clients, that we’re going to put our name over on the logo. And obviously, if something goes belly up or goes wrong, with a name like Herman and Ireland, you’re not going to get very far. So the whole idea is we were constantly driven by, you know, empathy, total empathy for clients, and total trust and relationship. And I was very fortunate to join them in the business in 2011, havin kind of traveled the world a little bit and sampled a number of different professions in, in, in various jurisdictions in France and in in Australia, and I came back to an environment in Ireland where most people were exiting, so they were emigrating to America or to Australia or New Zealand, or Canada, at the time when we were effectively in economic basket case. And I joined as an apprentice haven’t studied Business Languages degree in college where I joined as an apprentice. And the interesting thing at the time it says 11 was they said, Look, we’re not really in a position to pay your salary. And in order for you to be on boarded, we’re going to have to take a court out of our own salary to pay you so it was it was a position whereby it wasn’t certainly wasn’t taken lightly by any of us. And I think we were very fortunate as a family unit, whereby we had the ability to sit down and kind of talk about what direction travel we wanted the business to go. And we were very lucky. My dad was one of the first individuals in Ireland, I think, roughly around two designated as a nine to undertake the certified financial planning course he was involved in bringing it in. And the interesting thing in Ireland was that it’s actually linked to a level nine master’s degree. So you you also graduate as a what’s called a graduate diploma in financial planning. So you not only hold a Certified Financial Planning qualification, but you also are even MSC then as well which was enormous. So he was one of the first people to to qualify, and I followed suit and roughly speaking in around 20 He’s 16. And the interesting thing we spoke about at the time was, I actually felt having done the CFP was in quite a bad place, because they felt we were primarily on, we were a reactionary firm. So we didn’t really have a major service proposition in place, it was kind of like our hope was, we have so many clients here, hopefully, you know, we will contact them, but our hope is, they’re not going to contact us. And we just don’t have the resources available. And as I said, doing the CFP course was almost like being trained to drive a Formula One car, but then going back to driving there, the fee of 500. And we sat down at that point, roughly speaking in 2016, and decided that we were going to try and chart a new journey for ourselves for the for the firm, and try and future proof effectively, exactly as you touched upon earlier on is, Can we can we can we see ourselves doing this happily for the next 25 years. And we’ve been on that sort of journey, roughly speaking since 2016. We’ve, we’ve tried to implement, we follow the South Africa model very closely where we noticed that African advisors in the late 90s decided things like commission didn’t add value to clients. So we transitioned away, we look at things like already or in the UK, roughly speaking, 2012, where major major changes were made. And we decided to say, well, our benchmark should be a global benchmark, as opposed to just primarily what happens on the ground here in Ireland. And we were very fortunate that the team continued to grow and expand. My two brothers joined us in the firm. And they my youngest brother, no, Luke has just turned 30 is qualified as a CFP. Now as well, II in the middle brother has just got a business degree and also was qf a are as kind of the qualified financial adviser exams. So as you said that the team page of our team of 10am, roughly speaking, we have six or so bear and the surname. So we have to be kind of very careful with that as well, that there isn’t that groupthink, where we’re all around a family table on a barbecue on a Sunday dictating the world, we’re very open to the concept that everybody has skin in the game, and everybody’s included as part of the conversation,

Louis van der Merwe
Mark, I can only imagine how nice it is for a client to experience being serviced by a family. And I want to know is that any of the clients that are still around from your dad’s early days of selling products? Like, are they still clients that would come and say, Oh, I used to do with your dad. And and this is the stories that they’ve shared with you. Yeah,

Mark Hedderman
it’s remarkable, because we’re actually now I suppose it in a really positive. And also in a slightly sad way, we’re allowed these case cases, because we’re now dealing with clients who are at the cusp of retirement. And a lot of them we have the distinct pleasure. Now, as I said, we haven’t had to build this, all we have to do is nurture the relationships. And our rationale for that was, once you once we implemented the ethos of empathy, transparency, and trust for clients, we couldn’t go wrong, I suppose we were just a little bit more tech and digitally savvy than than let’s say my parents would have been. So we’ve continued to, I would hope to continue to grow those relationships. And the interesting thing is, we now have people coming to us and saying, Well, what position what a great position it is that I’m now in a point where he can retire and retire comfortably. And the other flip side of that is it in the sometimes in the slightly sad point is, we’re also sitting our kitchen tables, with husbands or wives of those who have passed away, and who have been on the pitch with us for those 40 years. And it’s amazing, in a way from a relationship standpoint to be sitting there with saying, Well, look, we can’t replace the emotion loss, but no different than what we did for the last 30 years, we’re going to stay on the pitch here to help you. And financially you’re going to be okay. So it’s it is we’re very lucky that we still have those relationships, and a lot of cases, we’re now dealing with the second and in some cases, third generation of those original clients. So it’s almost like they’re planting of the seed. It takes a long time, but it’s now grown into the great big oak tree. And one of our difficulties around that is well, how do we fundamentally manage this thing without this sort of toppling over from a resource standpoint,

Louis van der Merwe
Mark, the comment you made there is around you know, dealing with someone who’s bought no spouse might have passed on. I truly believe that our financial advice is really tasted when someone actually passes away you can see the quality of the planning and the quality of the advice. What what are the kinds of guiding principles that you are giving Luke to be able to have these conversations with clients, you know, maybe someone with not the same amount of experience as you What would you say to him to avoid maybe some of the pitfalls of of dealing with someone when there’s emotional decisions to be made but still sound financial guidance?

Mark Hedderman
It’s so difficult because if you think about all the various training and all the logic that we go through you need to be almost like a behavioral psychologist to put yourself in a position well we’re How do you are you I think in particularly when we look at that and Ireland debt is treated in a very strange manner in Ireland whereby I even look at the example I made a recently to the lads here was funerals in Ireland are very, not a special kind of day but they had they have Old, a lot of significance and tradition here. So what you tend to find is everybody, anybody who ever came across you will be at your funeral, you could have hundreds of people. And as we say to the lads here, look, the funeral itself is not a difficult point difficult point of this piece is two weeks from now, when everyone has disappeared and gone back to their normal lives, and were the only ones left on the pitch. So we have to absolutely be fundamentally sound and respective of a on trying as best we can to understand where those people are at from a mental and psychological standpoint. And the biggest thing we can do is diminish the stresses and strains that they have. So as I said, if somebody is in that position, they’re going to have somewhere between eight to 10 key elements that are going to cause them massive stress. And where are we stealing wood Undertaker’s are dealing with hospitals are dealing with outstanding bills, whatever it has to be. Now if we can take two of those off the pitch for them, that’s a huge step in the right direction. And I think what we always have to direct as well noses say to the lads, and there’s no sign. So this is kind of more around saying, if this was the position of our own parents, and one was another pitch, how would we like our mother or father or siblings to be dealt with if their spouse or partner weren’t there? How would we like people to deal with? And I think if we always try and relate back to how we are, we, in our own minds would like that done, I don’t think he can go too far wrong. And we spend a lot of time talking about the softer things in the office around just on how do we approach these situations. And what we then try and do is, if we are in that situation, where we’ve dealt with somebody who’s had a very a major illness or has suffered a bereavement, we actually come back and sit down the office, and we talk through how that went, are there bits, we could do better in future this and it’s not that we have a distinct process, these are kind of the softer touch skills that kind of more exist, which you as a person rather than as a financial planner, but we’re really conscious that our key role here is to ensure that those people are looked after, and they get the right outcome, because as you know, well, we people tend to be very, very vulnerable, vulnerable adults circumstances. And there are older people with ulterior motives who might tend to move in at an inopportune time to try and get the betterment for them, as opposed to for those people have been bereaved or or suffer from an illness.

Louis van der Merwe
Yeah, it’s this continuous growth mindset where we could reflect and say, how do we do this even better? Next time. And I think you put it so nicely that you know, this, there is no exact science, right? It’s to get in. And if we do it the way we would want our family members to receive advice, then we also tick the big compliance box as well as default. It we don’t see that we see, you know, other professionals, jumping on opportunities to make a quick buck. Tell me a little bit about how the financial planner or advisor is seen in Ireland. Is it very similar to South Africa? Where, you know, yeah, it’s very close to for a lot of people to the second hand car salesman with like, oh, no, I’m gonna end up with another product, if I speak to you is that the kind of the same evolution that Ireland has gone through?

Mark Hedderman
Pretty much and then I would argue, we’re probably even further behind where I sit Africa at the moment, like I was, I was really taken aback by the I know, maybe we’re in a, we’re in a bit of a bubble with the portfolio metrics piece that the lead symposium because we know that these are going to be the, what I described as like the, the best of the best effectively at this year, we’re probably lagging behind us probably, we’re still in what I described as industry mode. And we need to make that transition to profession. And that isn’t, that isn’t totally dictated shoot truly by way of an education piece, I think it’s kind of a more of a mindset change. And we still have a commissions environment here in Ireland, whereby you’re paid to transact. And that’s that. And for most cases, the advice is provided by way of the larger life insurance companies and the banks. And a lot of instances, unless there’s a transaction to occur, the adviser doesn’t really see a lot of value in the relationship. And where we’ve tried to pivot on this is to say, well, you know, yes, it’s really important that we do get paid. But there are a number of methodologies and how we get paid. And that should be totally dictated by the client. And whether that’s by way of commission, a fee, an AUM model, a subscription model, we’re happy to have that conversation with a client and and ultimately, what we’re trying to dictate is, you know, obviously, as a firm, we want to ensure that we were survivable from a profitability standpoint, and it makes sense for us to get up in the morning come in. But at the same time, there’s there’s a difficulty in Ireland, I think, and you’re always going to be led by the fact that if we’re in a pre order, your style environment, so we had some legislative changes here a number of years ago called cp 116, where the central bank implemented changes and a lot of people thought they were going to call Commission’s, and they sort of moved away from doing that. And they call things like tickets to Roby matches and golf events and being wined and dined effectively. And it was a sort of a soft portion. We saw there was considerable lobbying in the background from some of the the advisory lobbying groups to keep commissions on the table. And you could argue both ways that there’s an argument to keep them and there’s an argument to get rid of them. And our, our, our thought process on this is, it’s not it’s not that we feel one way or the other, but we feel if this total transparency, so if the client knows and they’ve been given choice, then there shouldn’t be an issue. And I think until we’ve, we’ve sort of broached that hurdle. And like the vast majority of advisors here in Ireland are going to be seen in that light. And I think our concept and why we why the rationale of comedy and South Africa was so important. And secondly, secondary to my role in head of my financial solutions. I’m also a director in Ireland, of the financial planners of Ireland group, which is a membership and advocacy, a group for certified financial planners. And our real rationale around is can we get better outcomes for consumers and clients, like an if that’s all we do, by coming together and pooling ideas and sharing our experiences, clients get better outcomes, they tend to talk to other people. And we, and we all get a lift as a result. So our concept here domestically is the more we can collaborate globally, the the more ideas we can beg, borrow or steal from you guys in South Africa, from our colleagues in America, from Canada, from New Zealand, Australia, the better outcomes fundamentally our clients will get here. And it just gives us the approach whereby we then try and lift this and we’re seeing more on the view as a profession rather than an industry. And then I even think that from a personal standpoint, I think it makes your job a lot easier when you get up in the morning, because you can fundamentally come in and say we’re here to add goods, we’re here to add value for our clients. And I mean, that alone should speak volumes relative Well, are we well remunerated? Yes. But are we adding considerable value in their lives first and foremost, and I think that’s the primary piece. And it’s something we’re trying to drive very hard here in Ireland. And as I said, one of the difficulties we tend to have is we are a very small jurisdiction, we have a population of 5 million people. And what you tend to find is the water line is quite low. And as a result, our argument is all we have to be here is a little bit better than fair to be excellent. But that’s probably maybe not a good impression of where we stand then as a whole as a profession. So I think by continuing to share ideas, and to get a read and learn from our from our South African colleagues and from our colleagues overseas is the only way we’re going to be able to all of us as a global professional to drive this forward. And exactly as he said, Lift that waterline, because interesting conversations in Cape Town with which you and your colleagues is, albeit, and we’re all very well educated, we’re all trying to do our best we’re still seeing in that category, which is, you know, doesn’t make you feel very good. When you get up in the morning,

Louis van der Merwe
I can relate with so many things that you’ve said. And in South Africa, we’ve had a similar experience with limiting conflict of interest. And essentially, the regulator said, You cannot receive an incentive more than the equivalent of basically 20 euros. So gone are the overseas trips and the ski trips. You know, which is the reason a lot of people join this, this profession, or hopefully for the benefit of clients, right, where they can see that, you know, like you said, the they have options of the remuneration, is there anything that have maybe stood out to surprise you when giving a client a choice of how they can remain rate versus the standard, you know, commission model?

Mark Hedderman
Yeah, I think is remarkable. We had a chat with a client quite recently about this. And we were we’re very open and upfront in terms of chatting to our clients, because their stakeholders. So effectively, we look at them as being shareholders in our business. And as a result, like their dividend effectively from that outcome is that we get better, like I use analogy in the office, we need to get better here every week, by 1%, there was no 10% gains here, because, you know, we would prefer to be slow and steady. And one of the remarkable things is, I think there was a massive appreciation for clients, because then they’re part of the team. It’s now a collaborative effort. So for sitting down with them saying, Okay, here’s how we can map out this journey. And here’s what the next 20 years of that journey you’re going to look like. Now, by the way, this, unfortunately, is a for profit organization, and we need to, we need to pay our staff, we need to have top top class Tech, we need to, we need to occasionally take trips down to Cape Town to talk to what are our colleagues in South Africa and share and expand our ideas. So we do need to have a war chest available. But if we have to do some of this work, we’re very happy with you to share in terms of how we shall be paid to do it. And we’re not we’re not led by any way. So for example, client might say, well, like, Look, I just have a fundamental belief that I need to I’m happy with you to get a commission. And I’m okay with that, because it’s not costing me any money. And what we now need to do in a transparent way is to live and say, well, if we’re going to be paid a commission, ultimately that don’t money doesn’t invent itself out of fresh air. So you will pay for that and over 20 years, here’s the compounding effect of that increase in your costs. Now if we refer back and you take a little bit of pain upfront by way of an upfront fee, here’s how we smooth that journey out over the long run. And what we found with clients is the amazing thing with this Louis was clients became so much more engaged because They’ve skin in the game. And I always rationalize this. I always come back to sport particularly talking to clients. If I’m given free tickets to Ireland versus South Africa plane and dancing road here in Dublin, do I value those tickets as much? If I pay 200 euros for the benefits lashing rain, it’s freezing cold, do I decide, well, maybe I might not go to the match. Or maybe I will never fade the 200 euros, or the 4000 ran, I’m definitely going to show oops. So where we actually found his dynamic shifts with our clients, when we had that conversation is all of a sudden, they became part of the collaborative effort. And we had one or two remarkable instances. Monterey, recently, a very as one of our top clients. And when I say top clients, they’ve they’ve considerable assets, and VESA would be one of the people we have such a really, really good relationship with. And he said, Look on one of the calls we run, he said, I’ve I’ve a bit of a problem with the fees. And our as you know, from the financial planning standpoint, that’s for us is all the barriers are coming up, and we’re worried, okay, where’s this gonna go? What do we need to prep to him to pull up the file? He said, I’m worried they’re too low. I thought, wow, that’s remarkable. If we had to sit down and analyze that and say, you know, what I said to him, you know, we’re we’re actually very comfortable with where those fees are. And we January priests, he raising it as a point. And I think it’s it spoke volumes to the caliber of of our relationships that we could discuss that I said, we as a firm are very comfortable where they are, we don’t feel they necessarily need to be moved. If we implement something by wave in addition to the team, or software resources or something, we may need to discuss them. But for now, we’re absolutely fine. Now that that’s, that’s a dynamic shift in terms of a conversation with a client that when I started out, I didn’t think things like that would ever occur. So it’s amazing to see the transition and the the evolution of this, but now we’re fully in partnership. So I am, like, we’re on the same team here now. So we’re in the same 50. And he’s not on the opposition side. And we’re like Jesus, please don’t ever ask us about fees, or hide them in the background, we’re all now totally up or running, which means he is now I would describe when I say he’s part of the team, he now is an advocate for HFS. He’s going to be out on the golf club, he’s going to be out of a rugby match. Or he’ll be able to a friend or colleagues or whoever it happens to be. And somebody will inevitably raised that point, particularly at the life stage that these people are artists, money, pensions, investments. Now, he is become my understanding is an advocate of the firm by way of saying if somebody in sternal team has a problem, where he is he likely going to redirect them back to the Sei, I have the people who you need to talk to where we’ve gotten some people have dropped in later, the individual I had in the office just before we came on, the call was told I had a problem, I spoke to a trusted source, the first thing he said is talk to HFS. And don’t talk to anybody else until you’ve gotten in and spoken to them. And I just think that’s a really it’s a lovely place to be like because all of a sudden now we’ve shifted, we’ve shifted that conversation away. And clients as he said, A they’ve got skin in the game, be they have a seat at the table in respect of how that should look and feel. And the third thing is they have total transparency as well. So we are not we that comment back to your piece piece or you’re on the conflict of interest. We’re not placing a product if necessarily it has to be placed, which simply wouldn’t wouldn’t one firm on the base that we’re being remunerated at the highest level. In fact, in a lot of cases, we’re coming back to sit to clients saying you don’t need to do any transactions here, you’re absolutely fine. And we still get paid for the advice irrespective of whether something is transacted or not. So I think that’s a really wonderful space. I think the key is really is how do we how do we get that message out there in a broader sense with consumers? How do we, how do we verbalize that and a wider sense to say, Hey, this is available. And if you’re dealing with another entity, here are the questions you need to be asking of that advisor or that financial planner to ensure you’re getting total transparency from that side as well.

Louis van der Merwe
Your market also takes away that stress of wondering, you know, when is the client going to figure out when are they going to be able to use the calculator and add up all the fees? Right? Yeah, yeah, spoiler alert, they can add up and you know, most clients, I think, have a sense of what they’re paying. And if the advisor brings up the conversation, you just omit and yeah, well done for actually engaging with their client, because that was a great opportunity to potentially increase your fees, where you said, Well, we have thought about this. And I think just that piece, we can go to clients and say, there’s some thought behind this. It’s not just a random percentage that’s determined by the product provider. It’s aligned with the value we deliver. And I want to talk a little bit about that, because that’s something you focus on a lot like increasing the value that you’re delivering in your business. When you get to a point where the value that you add is so much that it detracts from your team and your profitability and the way you live your life as a business owner.

Mark Hedderman
Yeah, I think that’s that’s an interesting one. And it’s, I think that becomes very difficult and enhanced. I don’t think there is an out of box solution for that. I think that has to be implemented individually and also at a team level within the firm and it’s something the even as I said, chatter toward the team And over barbecue. Actually last night, we were talking about these concepts. Well, what does enough look like? And what does the right number? Where’s the right number? And it’s amazing. Even listening to your own podcast, we hear a lot of what our advisors talking about this concept of, you know, profitability levels. And where do we need to be. And I hope this doesn’t sound like arrogant, but I feel like with our age profile, and our level of qualifications, and the expanding wealth, and what we see in Ireland is the transition of wealth from one generation to the next, because we’re only one generation removed in this country from what I described as abject poverty. Now, we now have a generation of my parents age, who are in a lot of cases, incredibly wealthy. And we’re going to see a passing of their wealth onto the next generation. So for us, as a firm, we’re kind of looking this and saying, irrespective of what we do, clients are going to come to us because we’re at the younger scale of it, where the right qualifications, were talking the right language. So can we sideline this concept of saying, Well, what levels of profitability are we going to try and get to or what number of clients we want to get to some of the numbers that I think are more resounding for us around that piece as well? Can we ensure that no member of the team is going home and saying, Well, due to some client concern, or sometimes have in the background that I didn’t sleep this week, or as a result, I didn’t get a chance to go down to my children’s football match or rugby match whatever it is, as a result of what was going on at work, because I was driven to meant and our I think one of the big things when we try and talk to the clients about this, because as they said, they are stakeholders as well, their shareholders in this operation. So like, they fundamentally need us to be as, as on the pitch and as as as tuned in and as as ready to go, we like kind of they need a degree of vibrancy from us when we get that we’re constantly, you know, in good form and excited about what we do. And we try to explain to him that his model is that like at a certain point, we read it, we reach a critical mass in terms of over expanding ourselves in terms of well, how many people do we work with, and then we move we slide back into that reaction remote, and we get clients. Well, I haven’t heard from you. I said, I’m really sorry, we just have not the time. And that’s causing its own stresses and strains. And I think the difficulty, the difficulty, I think And away with doing that is trying to implement in such a fashion where everybody can say, Well, I’m happy I get off on a Sunday evening, I don’t read a Monday morning, and we were chatting about that last night. And it’s funny talking to one of our new members of Team hero and he was saying I genuinely love coming in. Because he said, Look, we have difficult days like any other firm, but he said it’s genuinely exciting and I can feel writing good. My said, well, the the biggest feedback I can get a CEO is if you ever lose that, or if you feel that about a weigh in, you need to feed that back to me or you need to feed it back to the team in own if that was slowing or in the corner for a cup of coffee and a chat external to the office. That’s really really important. We need to sense check these things as much as we can. And what we started to implement recently is I heard Taylor she’ll talking about this and I’m from the States this morning on a call was a lot of times she’ll be spent just going out and engaging with other advisors and not dissimilar to to you and I have this conversation or a very valuable conversation myself and the team are going to have David garioch and his team and Brandon next week which is amazing. I think we should be sent checking with one another and it’s not even so much around the fact well what new piece of shiny sofa or using good are you guys in a good space? Are we all in a good space for what we’re doing? Because I think if you look back even at the lead symposium conference and and the excuse me it was a doctor tool sir who spoke

Louis van der Merwe
truly modern seller to demand self assessment of a tricky Exactly yeah,

Mark Hedderman
I mean she she hit the nail on the head is this profession is so so vital to the well being of an economy and so so vital for the well being of the consumers within that economy so we can we have the power to do great good. And obviously we have the power to do great evil as well or not agree evil maybe is too strong a word with great damage is probably more appropriate. But we have to be very mindful of ourselves in terms of as individuals are we are we growing relative to our clients in terms of their own wealth and I don’t mean that purely from a monetary standpoint, but are we also enjoying ourselves because what we try and take a lead on this thing is feeding back to our clients do as I do not as I say and I think the real benefit of that is before even we took off to the conference in South Africa last month we spoke to a number of clients and advise them what we were doing. So we said look, we’re gone down here and here’s the rationale. And there’s a little bit of a wow factor for clients and we’re very fortunate we get to travel a lot to to talk to for managers or to go to likes at a conference for really well we’re also Sanctum as well as look you know the business element of is really important but so are the relationships and the likes of the conversation that that you and I had to get to have and with with various brand in and with with M ferry Craig Torre and some super people then South African these are relationships we can hopefully hope to expand upon. So we’re trying to expand that by to our client is like look, we feel by us, you know, minding our own mental health and ensuring we also take time off and we came up with one of the ideas we’re going to do was we left the August bank holiday coming up when we made the decision. Look, the office is going to be closed and will be closed for that whole week. And that’s something we never really done before. And even I’m a stickler for this I was on a week’s I was meant to be on a week’s holidays last week, but I still worked every day. And if we don’t step away at some point, and take some time for ourselves, we’re not gonna be of any use to our clients in the long run. Again, coming back to sports, there’s no point in the Springboks going out and playing all year round without getting a break, to get back home ready for the world. Cool, you know, so we do need to sometimes step away from this thing. And I think, as a profession, we’re not good at doing that. And that’s one of the things we try and drive in the office here is, I think the best ideas we tend to have around the business is, is are those that come when we’re as far removed from the business as possible. Ie when I’m in the west of Ireland, I’m swimming on some exterior beach and something all of a sudden that my mind clicks, and I go have solved that problem. I’m sure you guys have gone down to Kruger or somewhere and you’re you’re out in the open the bush and you’re saying now we’ve got to collect,

Louis van der Merwe
you know, no one ever has a groundbreaking idea in the office, these things exactly. When when you allow it to percolate. I really loved what you said there about almost this idea of the canary in the coal mine, this leading indicator, if your passion starts waning, are you picking that up? You have to feed that back to the team, which is the part I liked. And yeah, I want to talk a little bit about the role of a financial planner, but also someone that is managing a team. How have you found that almost, let’s call it accidental, CEO role of having to manage people and motivate people as staff members, some of them also being family members. Yeah. What have you done to improve those skills? Personally, is there? Is it just time that you’ve accumulated this? Is it reflecting on decisions? Is it conversations, what has helped you do that because a lot of advisors, as their businesses grow, find themselves, you know, being the owner and looking after the employees yet, very few are actually trained to manage the amble motivate people in and I think it’s a tough task.

Mark Hedderman
It’s really difficult. And it’s funny, as my dad was standing down, he was really adamant about this concept of going off and doing a specific degree or a diploma purely around professional management, and to the Jays and the rails and how things tend to go is that it that was a great concept, but timelines just weren’t readily made available. And because we’re constantly chasing our tail, and, you know, one of the big things and it’s not that we don’t, like, it’s not, we don’t have issues here, either. But I think what we had to get across everybody is, you know, we needed to have, you know, total honesty and respect of all the conversations that we’re having. And one of the difficulties was a communication of messaging from my side, and which is absolutely clear and transparent, in my mind, may not be the right message to be assimilated by some of the members of the team. And the difficulty is, is I, I had to take a stand back and realize that not everybody’s going to think like I do and operate the same way I do. And particularly those wood, wood Wood family members, the expectation is that they should look like you know, mini mark or mark light. And that’s, that’s not going to happen. And I’ll be honest, that will be a bad thing. Because we as a firm have to be very careful in the sense that we can’t all have groupthink on this thing. It’s really positive, that we have different viewpoints, we challenge one another around these things. And as I said, we try to have an open door policy and we Ronnie again, chatting over this last night saying, we want to put everybody in a position within the firm, where they feel comfortable, challenging orders relative to what the style of advice is. So what I want to do is if we’re providing advice to a client, that each member of the team is almost at least two sets of additional sets of eyes on this. And it’s not that they all come in to backpack and say, That’s great stuff. They’re there to pull it apart. You know, when again, back to the sporting analogy, like at the end, it’s like the watching the video analysis of a match where did we go wrong? As opposed to where do we go? Right? And can we improve upon those things in future, and I suppose I never, I love the concept and, and sitting in front of clients and working with them directly. And I think nine times out of 10 most business owners that you talk to who are kind of wearing the two hats will say, you know, I fall down and they fall down heavily when it comes to trying to manage the practice and manage the firm, and Owen, and one of the areas that we’re trying to implement now at the moment and by way of even taking that week in in August now was to say we need to spend as much nearly as much time outside of the business thinking about it as we do inside it and working away and that’s one of the real that’s one of the crunchy elements that I’m trying to do and we do that in a we do that in a comfortable setting and we do that outside external to the Office Suite whether it’s going down and we go for we’ll go for a swim in the sea or something in the local sea and we go for a pint after and as he said that’s where we have open and free chat and our my rationale is we we wanted to build a team whereby we all be at I know look at you know a considerable numbers over from our founding members and that comes with its own and difficulty in the sand. because I didn’t want to get to a stage where anybody would in the practice as I don’t want to spend social time with one another as a result of the fact that they have me driven completely mad and the office. And it’s something we have to we have to be really careful of it’s obviously a strength for the firm, to have so many people from the same family involved. But at the same time, it poses a massive threat there for our long term well being and unhappiness and and also relationship as a family. And as most people will see, when families fall out, it tends to be over silly things like businesses or money or kind of which in the long run are bits that are totally, totally trivial. And when most people are on their deathbed will say, Well, that was absolutely a mistake. So we’re, I’m really conscious of just ensuring that I suppose in a way, it’s not to say that like it’s a title without it’s a title of CEO, and that has no no waiting to have. You know, I think it was really important that we all felt that we had skin in the game here and that everybody’s opinion was as valuable as everybody else’s. And one of the big things for me is I at times nearly need to sit back and shut up and listen and act and do proper active listening. Because, you know, I did say from the outset, when he took over look, there can only be one hand on the tiller, but it needs a full crew to man the ship. And we all serve a role here. And we all have to have a voice on this thing. So I think it’s a constant learned, do we I don’t I don’t think it can be ever really perfected. Because I think the business is going to ebb and flow. And there’s going to be changes and circumstances and compliance circumstances in the background that that are completely out of our control. But I think from a personal standpoint, and from a again, I come back to that point, if we have empathy for one another, I don’t even go too far wrong. And I hope I obviously I’m biased. I’m saying that because I’m running the ship now. But I would hope that the rest of the team would reiterate that sentiment. And as I said, we try and do those soft touches from time to time just feeding in saying, Look, are we all okay, here? Are we in a good space? Are we are is our relationship as good as possible? Because ultimately, the better we all are together again, at least back that same outcome, it’s a much better outcome for the client.

Louis van der Merwe
It’s almost like your team members are your most valuable customers, and that you’re looking after them first. And then they can service those clients. I want to know what what are you saying to your kids? Or they have an age where they can start thinking about hey, do I join the family business? Do I want to go and work for and with Dad ultimately? Or how old are your kids are that too far off air? Well, my

Mark Hedderman
eldest boy, che is six and my youngest, Rory is three. And so they’re kind of more interested in playing, they’re playing their game of football or hurling their Irish sports and their soccer and still fear. And that’s kind of more, it’s how many ice creams a week and they eat rather than about thinking about the business. And I was reflecting that analogy, you know, the first generation starts the business, the second generation builds it up. And the third generation squanders the wealth. And I would love like, and I don’t think I’m wrong and saying this, I think most of us like to particularly those of us who are to shame sharing these ideas or thinking, what a wonderful, wonderful business for someone to get involved in than the the ability to do good. And the touch points and the relationships you build with clients are absolutely, you know, fundamental, and have so much value. And I think also, like, if you think about this concept of financial planning as a profession, we are, we are like at the industrial age, in terms of the steam engine, we are right at the coalface of this just getting started. So, I would love the concept of the boys at some point in the future being feeling comfortable and be in a position to say we can call men and carry this on into the future. And that it’s it’s, it’s palatable for them to do that and have their own families and be comfortable. But again, I think we also, I think we have to be somewhat careful as well. And I remember speaking to my parents about this is like obviously the name is over the door. And it’s a family practice. But we we sometimes have to remove the room emotion from the business as well. And we have to be conscious that dreams we have may not be shared by the next generation, they might decide to go and do something different. Like I mean, I never had any aspirations come into this into the business, my aspiration was to, to go to college to get a business degree, sorry to fall back to do language. So I studied French or Spanish, and ultimately to do to cadetship or go in into the army as an officer. And it just so happened that that kind of journey took a slightly different path. And in a way thank God that it did. But I I think the benefits of of my parents allow me the flexibility and freedom to go out and try these things. And they actually think I wouldn’t have a problem with them potentially going out into the world and discovering themselves and trying loads of different things and then coming back because again, we have to be very careful in the sense that groupthink tools tend to slide in. And it’s really important that you know people that do join the firm or whether that’s if my own two cylinder document that they’ve gone and tried loads of different things, and they figure it out the good bits from those professions and the Babbitt’s. And the hope is they can then come in and assimilate here but bring all the value they’ve picked up from those other gigs to be able to kick this thing on. But I mean, they’re they’re so young. And I don’t know, if you’re in a similar position, I’m not sure if you’ve if you’ve children, but I don’t know whether or not that’s just an idea you’ve talked about yourself for.

Louis van der Merwe
So my daughter’s now two and a half, I must say it hasn’t. It has crossed my mind. But I haven’t spent a lot of time thinking about it. But like you, I agree with that idea of going broad building experiences, building some skills, you know, if she happens to be involved in the business, great, but my, my dad also started his own business. And now, I think it would be wonderful to have the privilege to spend time working with your family. But at the same time, you also craft your own fingerprints and your own impression on the world, which gives you an viewability. What are those skills that you think they would have to work on? If you fast forward, kind of nine years from now on, they have to start thinking about, you know, tertiary education and that like, and I know, we’re trying to have a sense of what the world would look like now. But what I what do you think are the kind of skills that a financial plan that 10 years from now we’d need to work on today to still remain relevant? Yeah, in an age where things are changing so quickly? It’s

Mark Hedderman
a great question. And I mean, like, we’re looking at a change moving at such a rapid pace at the moment, and it’s sometimes can be stressful feeling Carter, we’re getting left behind here, you know, and I think the fundamentals of of being a good financial planner will always be the same thing. And I mean, the key the key point is somebody walks in the door to their door here today, we’re having a shot before on this, we’re saying, Look, if we can just implement a strategy where we’ve total TROSA one another, we can build a relationship. And the third thing is his genuine likability IE, when you come to see me, will you look forward to seeing me in years time? Or does this be act as a drag, if we can develop those skill sets? And a lot of those are just dictated by things like active listening? Like, are we listening correctly? Are we analyzing what the individual is saying? And we are we actually enable Brent, as Brendan Fraser would say, in America, are we posing the right questions? Do we have those three to five absolute nuggets of the right questions to ask to disarm that person say disguise and trying to sell me a product is activate you’re genuinely interested, and he’s trying to help me? I think if we can implement those, which will never I don’t think will fundamentally ever change because my I remember my dad had great expression with this when they when somebody spoke their robot voice and you know, the the the evolution of the Internet and how people will take your plans online. As he said, The the internet never rang anybody the internet ever picked up the phone and somebody passed away? Or somebody was a week from retirement to ring them to ask them? Are they okay? And did he need help? And that human connection I think is the key bit I think if we can spend all of our time are primarily it’s really important that we become CFPs. And we do our various exams. What I think we need to spend a lot more time looking at the Behavioral Economics and Psychology side soft skill psychology bit. So I got a book recently called How to die well, I mean, how morbid does that sound. And this is a really a big trend as we spoke with her on trying to understand and have empathy for those who have suffered major major losses and how we can assist them I, I couldn’t get it, I couldn’t get that I got to upset read. And if I’m being honest to god, I haven’t managed to break the back on it. But I think really crafting and honing her our ability to nudge people in the right direction. Or sorry, not nudge them in the right direction, nudge them away from the wrong direction. And they use this analogy is our job is not to make right decisions with clients, our job is to prevent them from making three life altering mistakes over the course of their financial life. And that’s it. And I think leaning in on, on on technology, the way we can do with things like aI going forward should make this much more seamless. Because I heard another great expression is, if you’re in a role as a CFP, if you’re doing any admin for that client, you’re effectively robbing them. So 90, we have the 8020 rule 80% to an admin and 20% of front of the client, I think a nice got a 9010 90% of our time, she’ll be in front of the client, talking to them. And a lot of that time doesn’t necessarily be driven by reviewing portfolio reports or talking about the estate plan or reviewing the risk or the investment strategies. It’s just talking as humans as an as an individuals, and growing that army of information that we have around those people. I heard a really interesting one from a client before and I picked up on it again from Brendan Fraser. And the client was in the office with me and we were just chatting and he said, You know, I really want to retire early. And I just asked him well, is there is there something that happened to you or what’s driving or dictating that? And he said, Well, look, my my dad passed away in his early 50s. And I don’t want to put myself in his position where I’ve worked and worked and effectively, you know, nearly killed myself for the work and not be able to spend time with my family. And that’s a kind of a lightbulb moment for us as financial planners, because we can now craft a whole plan around that. And you could argue, you know, okay, once it’s noted from a compliance standpoint, we’ll hopefully satisfy the various regulators here as to how we got to that was sometimes very hard, because it’s almost like an intangible asset in a way we reflect back that any decision made in the future should be driven and dictated by that sort of rationale. So I think for for advisors of the future, and planners of the future, technology is obviously gonna be probably the number one thing but the second one that only Galera change is having those soft skills and being in a position, whether by way of, you know, the psychological element and the behavioral economics, Lake, that’s, that’s what I feel my next transition, having gotten all the qualifications, the exams is I need to absorb more stuff from Daniel Crosby, I need to pull in Morgan Housel is great book, The Psychology of money. I probably read that no for the fifth time, and it’s still, even though I’m in the business 1011 12 years, we still have a rational elements of ourselves as human beings. And it’s really important that we go back and read and just as simple elements that come through here, you say, Oh, my God, it seems so simple. But in practice, it principle it’s easy, but in practice, it doesn’t work. And I think that’s why we will always there will always be a need for financial planners. In fact, I think our need has grown and will continue to grow into the future and it makes our role and our profession. So, so important into the future, to help steer people away, as he said, not from the right decisions, but steer them away from the wrong decisions.

Louis van der Merwe
Mark, what a wonderful way to end thank you for your energy and your passion for this profession and that continuous involvement. I wish you all the best for Hedeman financial solutions and your growing family and your growing team. Thank you for being a great guest today.

Mark Hedderman
Thank you so much, Lou. It’s an absolute pleasure and continued success to you in respect of the podcast, it’s added huge value to me listening in and I continue to do so.