Family Office Coaching with Lance Meikle: Recent Episodes

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AN ACCOUNTANT EXPANDING INTO FAMILY OFFICE

This podcast is going to:

• Get insights from a qualified accountant about why explore Family Office
• The pathway from employee at Sunshine Coast to multi-family office in Brisbane
• Leanings to date of selling and delivering a Family Office to a client.

Chris Davey is a qualified Accountant, father of his 3-year-old son, Nikita and overall good person. Chris approached me circa one year ago to assist with Family Office coaching and I’m pleased to say, he has his first client with second looking very likely any day.

Chris, hullo, welcome and thank you for your time and agreeing to share your journey into Family Office.

• How did you go from a safe and secure job as an Accountant on the Sunshine Coast to selling your first Family Office?
• How’s the home life with the change?
• What would you say was the hook for you to explore Family Office?
• Any regrets?
• How hard has it been grasping Family Office?
• Do you think that you could achieve this own your own?
• Your second client looks likely to be onboarded any day, how different was it to receive the lead passed over to you from me?
• What learnings would you gift our audience if they are considering putting their toe in the water with regards Family Office?

Lessons learnt: Knowing what you know now, what are the things you wish you had learned earlier in your career?

What is the best way for anyone in the audience who wishes to contact you, discuss some Family Office coaching, refer a client?

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Cody Harmon, Cruz Family Office walks us though his pathway to being a Family Office adviser.

He shares the nuggets about what he has learnt to date along with the good, bad and the ugly.

We both hear and feel the light-bulb moment where he made the decision to move to Family Office from Financial Planning.

Cody provides his counsel to anyone listening if they are pondering whether or not to put their toe in the water and explore Family Office.

What would he have done differently on his journey?

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HOW SUCCESSFUL IS YOUR CLIENT RETENTION?

This podcast is going to:

• Challenge your honesty to yourself
• Explain:
  • why clients leave
  • what you can do to eliminate losing clients
  • how to have client engagement that will lead to referrals
• Give direct feedback from clients we onboard

Now, let’s jump straight into the information for making you money.

Why clients leave?

• You meet your prospect, build a rapport, educate them, discuss options and then implement. Then what?
• The time between discussions starts to push out, the level of enthusiasm and engagement diminishes because the needs of the now client, have been met.
• Enter year three. The value | reason for your client to meet with you becomes, at best, questionable as ‘everything is fine’ and you are looking after things and they appear happy but they don’t know what they don’t know. Then a business like Generational comes along and commences a conversation about eulogy, legacy, and intergenerational transfer of assets &/or wealth and connect at an emotional intelligence Having arrived at this point, the conversation and relationship take on a new meaning, has substance and a purpose and they are engaged, but sadly, no longer with you.

What you can do to eliminate losing clients?

• Change, change, change
• Look inwards and be honest about what you find with regards the lack of engagement from your business to your clients and from your clients to your business
• The definition of insanity is “doing the same thing over and over and expecting a different result”
• Adapt and implement an offering that is a new frontier – It’s called “Family Office”
• Show your clients respect by not talking about care, but rather, allowing them to experience it. Don’t talk care but rather ‘walk the walk’
• Not only identify what is important to your clients but provide solutions
• Understand and engage with your clients based on emotional intelligence not jargon and transactions
• Know the tribe that is important to your client

How to have client engagement that leads to referrals

• Understand that when a customer goes to KFC, what do they expect? Chicken, “it’s a given”, when they go to a garage, what do they expect, fuel “it’s a given”. When they come to see you, what do they expect? That you will do what you offer and charge for it “it’s a given” don’t expect engagement nor excitement about what you do, surprise | excite the client with what’s not a given.
• Invite a client to sit on your Advisory Board so that they can provide input and share their experience with their tribe
• Ask the client if they are happy with mediocrity or would like abundance. Mediocrity is what you (and competitors) currently offer and abundance is family office (which is the new frontier)
• Here’s the question for genuine client engagement “If you were at your eulogy today listening, are you happy with what your heard or are there gaps? If you want the gaps gone, let’s get started”.
• Talk about what your business is doing both in reducing your carbon footprint and contributing to zero carbon emissions by 2050 (this demonstrates that your business is a responsible corporate entity, not an ignorant one)
• Establish what values and attributes align with the values of your business and only deal with clients that meet this brief. Create and promote on socials and your website, what the attributes of a client are for your business. This is the how alignment | engagement happen, it is not luck nor coincidence that having done this exercise, you will only deal with aligned and engaged clients, who referrer likeminded people | businesses to you.

Direct feedback from clients we onboard

• “Our current advisor is useless. We never hear from them unless they want something”. The issue here is that an advisor does ‘want’ things like signatures, provide updates etc. etc. etc. however their client feels | thinks | says that this is a burden on them (I don’t blame them). Solution: digital ecosystem and video messages, family office
• “Every time we talk to them (accountants | lawyers) we get a bill”. Generally speaking, this is correct and hence, at best, there may be some engagement but normally there is none, because the client feels as though it is going to cost them to speak to you or listen to you. Solution: fixed fees, family office
• “Why do we have to do the running around and chasing?”. The answer lies in the previous two points but the client doesn’t know that they don’t know. Solution: family office
• “I wish we found out about family office decades ago”. Solution: On your favourite app, listen to show Family Office with Lance Meikle | Episode: AS A PATRIARCH, WHY A FAMILY OFFICE?

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WHAT IS IT LIKE FOR AN ACCOUNTANT WORKING WITH MULTI FAMILY OFFICE?

• The difference in experience for a qualified accountant in the day-to-day dealings with clients to that of dealing with a Family Office.
• If you’re a qualified accountant, should or shouldn’t you broaden your service offering to include Family Office?
• What’s it like to experience the synergy and collaboration of a Family Office Management Team?

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WHAT ARE THE ATTRIBUTES OF A FAMILY OFFICE CLIENT?

What traits you need to look for when deciding on the suitability of a Family Office client for your business.

At Generational, we identify the following attributes or we don’t proceed with the family as a client. • No. 1: Delegators • No. 2: Time poor • Pride in establishing a legacy | purpose • A desire to make a difference to the betterment of others • Seeking security for what and who is important to them • Are interesting people - living and people are more important than money • Value integrity • Social inclusion - committed to playing a role in empowering individuals to participate as fully as possible in society • Enjoy simplicity and freedom that comes from having all their financial issues under the watchful eye of a corporate trusted advisor • A necessity to hear the truth • Value the collaboration of professionals working together for their purpose; and • Appreciation of time saving and reduction of grief that Management Team meetings provide.

Why selecting the wrong prospect hurts? • The capacity of your business will be eroded with a relationship that both parties don’t want to be in • You can’t undo a family office easily nor quickly • At Generational our success to date has been 100% aligned, engaged and wonderful clients – this is no luck. If you have ANY doubt, don’t proceed • My three G’s of business | life: Grateful | Grumpy | Greedy (you don’t want your business, yourself, your family nor your staff dealing with a greedy client

Referrals: there’s a difference between grateful and thankful • A Patriarch &/or Matriarch who are: o  happy with living their lives, having created a legacy; and o knowing that their eulogy will be aligned with what their values and purpose will be GRATEFUL and your best referrers

• A client being thankful is nice, cute, and financially rewarding but well short of the emotional beauty and richness of a grateful client.

Being grateful is about appreciating what one has (this is a Family Office client), as opposed to what one wants (a prospect who wants what a Family offering delivers but doesn’t want to pay for it) Being thankful implies thanks for something that someone has given you (this is typically a transactional-based relationship).

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A FINANCIAL PLANNER'S FIRST FAMILY OFFICE EXPERIENCE

Co-host is Nat Daley, Financial Adviser & Managing Partner at Hard-Line Wealth (Coolangatta, Queensland). Nat is a gentleman, a father to young Lenny Jean, husband, and someone I respect. He certainly punches above his wait in the financial planning sector.

Nat is in the process of adding Family Office to the service offering of Hard Line Wealth.

Recently, Nat was a guest of our largest Family Office, Management Team meeting so he could experience the reality, not the theory of what goes on. Nat answered the below questions:

• The difference in experience and offering between being a financial planning, and a Family Office client
• If you’re a financial planner, should or shouldn’t you broaden your Financial Planning offer or take a leap of faith and explore Family Office and why?
• What’s it like to experience a Family Office Management Team?
• What is it that excites you about having Family Office clients?
• What have your observed to be the key differences between being a high-end Financial Planning | Private Wealth client and being a Family Office client?
• Knowing what you know now, would you recommend to the financial planners listening to this episode, that they broaden their Financial Planning offer or take a leap of faith and explore Family Office and why?
• What advice would you give our audience if they are weighing up whether to put their ‘toe in the water’ and looking at becoming a multi-family Office?
• After your experience of sitting in on the Management Team of our largest Family Office, how (or has) this changed how you deal with prospects & existing financial planning clients?
• In your career, have you come across, or experienced, a similar offering to Family Office?

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WHY ADD FAMILY OFFICE TO YOUR SERVICE OFFERING?

What levers do you currently have, or use, to stop the loss of your key clients?

Here are the only two that I observe financial planners use: 1) Lower the price? 2) Stager services, conversations &/or the implementation of the services

It becomes very difficult to keep justifying the same fee or payment every year given you have already been paid to implement what was recommended | needed in your Statement of Advice.

Why add Family Office to your service offering?

1) You will have a clear point of difference 2) Engagement, engagement, engagement is not tomorrows story, it was not yesterday’s story and it will remain the ONLY thing you have to remain relevant. Professionalism and care are a given but engagement is the no. 1 item on every research item that I read on client dissatisfaction 3) Currently the discussions | solutions | recommendations revolve around goals, objectives, performance, and inheritance, whereas a Family Office implemented (via coaching from Generational), moves every conversation to legacy (this is an incredibly powerful and enduring competitive advantage) 4) Marketing rule 101 is to seek an SCA (a sustainable competitive advantage). Very, very, very few businesses ever achieve this goal and as such, it always remains an ideology. Adding Family Office to your service offering delivers you a sustainable competitive advantage 5) Your business will be the envy of your peers as they deal in a crowded sector with reducing revenue per client 6) Increased revenue per client per annum (or at your discretion, leave the pricing as is and add value) 7) Sustainable engagement via discussions that involve emotional intelligence not transactions 8) A further 3 generations of sustainable income 9) Unique, pre-qualified, high price point leads

FASEA Code of Ethics

• It is now very, very clear, that commissions | fees | payments from all sources are under severe scrutiny, especially from a 3rd party • The code of ethics is going to impact on businesses that rely on revenue from 3rd party referral arrangement • Implementing Family Office to your service offering, not only replaces such income but will surpass it

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HOW MANY HOURS P.A FOR HOW MUCH INCOME?

• When it comes to pricing, is it a fixed price per annum and then adjust the hours to suit the price OR is it the hours and then establish the price (like and Accountant | Lawyer)?
• 36 is the number of hours p.a per Family Office.
• How does controlling the hours work? The format I utilise and strongly recommend to my coaching clients, is to capture items in an Agenda. This Agenda is disbursed to the Management Team at a certain time, in a format and the hours of the meeting is capped to 2 hours. Depending on location, travel or not, style of meeting (virtual, face to face etc.) and other variables, you will generally have 2 to 3 meetings p.a to ensure the total (inclusive of ALL the back-office admin ‘stuff’) no. of hours p.a = 36 p.a per Family Office client.
• What is the maximum number of Family Office clients you can service? The number is 26
• Are you currently earning $286,000 p.a, working 40 weeks a year, 4 days a week and 6 hours a day = $305 an hour?

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WHAT MULTIPLE OF REVENUE DOES A FAMILY OFFICE SELL FOR?

If you’re a Financial Planner, Accountant or Mortgage Broker and interested in having a business that has a saleable revenue of 9 to 12 times or EBIT of 5 to 6 times, Family Office is the structure.

Why is it that Financial Planning leads the way with revenue multiples?

• Engagement | discussions | pro-active and caring nature of the human being delivering the advice and value proposition. Clearly there are, have been and will be bad eggs (as there are in every industry where money is involved) however overall, most of the financial planners that sell | deliver | provide personal advice meet the definitions I just used:
  • Pro-active, engaged and caring

Yes, digitization is (and will continue to) have a short-term negative impact of the current multiples. However, with millennials being natives and making up 76% of the workforce from 2023 in Australia, the very thing called digitization will simply become a standard thing, a bunch of tools that will make up what is called ‘a digital ecosystem’. In my view, the revenue multiple will not change significantly for this cohort however it will go to zero for financial planners who don’t build | provide a digital ecosystem.

Whilst I believe revenue multiples will remain similar for those that operate in a digital ecosystem, the gloom for the audience is that the price point applying to the multiple (called revenue) will be exponentially lower (my forecast is circa 50% lower) as a result of the very thing that saved the multiple from dropping – digital.

Price points are already being savaged, and will continue, until we see the bottom. If my forecast is correct, this means that if you purchase revenue for 2 times and provide the very best value proposition to your clients, you will be paying off a loan that is 100% overvalued or put another way, you paid 4 times for the revenue.

Buying revenue and overpaying 100% is not good business however if do purchase revenue and pivot to an additional service offering called Family Office, you will not only retain existing price points, you can increase the price point.

To buy or not to buy revenue? If you believe that the price point of personal financial advice is going up, go forth. If not, keep listening.

The opportunity for higher revenue multiples sits with both Accountants and Mortgage Brokers if they pivot. Due to the personality type and both the service, and value proposition, it is my view that Mortgage Brokers will win this race for the same client. There has already been an increase (albeit gradual) in revenue multiples for mortgage brokers and it is my view that this will continue.

Debt to income ratios in Australia and most OECD member countries is at an all-time and is continuing its climb with no sign of abating due to consumerism and social status. As a result of this trend, clients want to know how much they can borrow to ‘get more’ and as such, the lending specialists | mortgage broker is in the box seat to utilize the captured data and engage utilizing digital tools.

I have never come across a client yet who is excited about either meeting with or going to an Accountant. This value proposition needs to change for Accountants and is. Behind the scenes the leading associations and consultants to the Accounting profession are on to it and strategically trying to get Accountants to pivot and understand that engagement is where it is at NOT ’36 &/or ’97 Tax Acts.

The mortgage broker (like the Accountant) has a limited awareness of Family Office (for now) and as such, is under threat that a business like Generational comes along and provides 17 services to their client (that includes their offering as simply one of the 17) and

The game of cat and mouse is whoever touches your client first as the Adviser Concierge will win the higher revenue battle.

Family Office = 9 to 12 times | why?

• Family office clients are incredibly sticky due to the nature of the complexities and relationships and the high barrier to entry to become a client
• There are 3 to 4 generations of income
• A legacy is NOT an inheritance (accounting | financial planning)
• Collaboration between numerous professions, commands a premium over sending clients away to do things themselves
• The fluency and pro-active approach towards a family enterprise (i.e. Family Office), commands a premium
• Generational offers 17 services and solutions, NOT 1
• A true one stop shop for both existing and future family members
  • Meeting to email to phone call to email to meeting to email to phone call …………… and this is every time for every professional
    • Accountant
    • Insurance broker
    • Financial Planner
    • Lawyer (not specialists)
    • Valuer
    • Etc etc etc
  • It is a structure | vehicle for smooth intergenerational transfer of wealth and elimination (or reduction) of intra-family disputes
  • Family offices are the fastest-growing investment vehicles in the world today
    • Investment decisions of a Family Office
      • Short-term = 20 years
      • Medium-term = 50 years
      • Long-term = 100 years
    • Confidentiality is ensured under the family office structure, as wealth management and other advisory services for the family members are under a single entity

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HOW LONG DOES IT TAKE TO SET UP A FAMILY OFFICE?

• Can I do this on my own?
• What's involved?
• How do you bill?
• How long until I can make money?

In my case, it took 3 years:

• from the idea of becoming a business that would service Family Office clients
• identifying the client; and
• getting paid.

I started with no idea as to which way to turn, where to go &/or, who to speak to

I started with a pilot client and STRONGLY RECOMMEND this approach as;

• it allows you to make mistakes (based on a discounted rate to the client)
• it enables you to be authentic
• you will receive open and priceless feedback | critique which will enable you to not repeat mistakes and implement a better value proposition moving forward RATHER than ‘hitting the ground running’ and ‘learning on the job’ whilst treating your clients as Guinea pigs (it doesn’t have to be this way if you use a pilot)

Today, it takes me circa one hour to set up a new Family Office client.

This is not because I remember what to do, it is because I follow procedures in a Procedures Manual I built.

What are the components involved in setting up a Family Office?

• Knowing what to ask and what to do, when. It is extremely costly learning this yourself and via my coaching, you don’t need to make the mistakes and simply enjoy the benefits
• Templates, templates, templates – an awful lot of time and grief happens in creating your own templates, so don’t, just engage me and get them
• Meeting with Patriarch or Matriarch
• Establish legacy
• Interview existing professionals
• Implement and coordinate an aligned team of collaborative and accountable professionals
• Implement governance in order of identified priority
• Creation of a set of guiding documents, policies and rules dictating how the Family Office will operate:
  • Family Office members and entities
  • Appointment of management team and functions
  • Meeting venue, frequency and style (virtual &/or face-to-face)
  • Charter
  • Strategic Plan
  • Function (in house versus outsource)
  • Appointment of professionals

If you wish to make money and lift the image of your business, IT’S TIME FOR ACTION

Regardless of where you are located, my consultancy offer is the same:

• There are only two bills
• One at the end of 6 months
• The second at the end of 12 months

If you don’t wish to pay either of these bills DON’T

I have configured the payment so that you use client’s monies to pay me (not yours)

• I supply you a Terms of Engagement outlining the above
• All I.P is included and delivered in Word format, so that you can manipulate it easy to suit your business
• I participate in meetings (virtual &/or face-to-face) in whatever role you wish me to play and provide post meeting feedback | critique for the 12 month term.

As part of my coaching;

• I provide a copy of our Procedures Manual
• I show; and explain how and why to build one, and how to utilize it to make both revenue and profit.