Introducing the future of financial advice – ‘The Crap Manager’ 13 May 2014

Rod Dunn is a man on a mission. A mission to transform his business into a high touch financial planning business servicing 50 high value clients that is focused on helping them achieve their goals. He started the journey one year ago and has six clients that fit his criteria already...

The title deserves an explanation…

Rod Dunn is an RI Advice financial adviser based in Bondi Junction in Sydney.  I first met Rod about 10 years ago whilst at AMP, and we hit it off straight away.  At the time, Rod was the state manager for RI Advice (nee RetireInvest) but had previously been a planner. For one reason or another we lost contact with each other until the magic of LinkedIn put us in touch again.  He invited me out for a coffee, and like any shrewd planner, asked me to pay, but it was there I was given the most interesting business card I had received from a white collar professional.

On the card it had the usual fields – name, number, address, fax (does anyone actually use these anymore?) and Rod’s title… ‘Crap Manager’ – the title intrigued me of course, and so I asked him what it was all about, and with a straight-faced response he said… “I manage all your financial crap, so you can live the life you want.”  Hence this blog piece.

Where did it all start?

Like many people in financial services, Rod “fell into the industry.”

“I had been a financial planner in the late 80’s and early 90’s but shifted to a career in management after living in the UK.  After seven years in management at RetireInvest, I decided to go back to the ‘dark side as an adviser in 2001, which was a terrible year if you recall for a whole bunch of reasons.”

As Rod tells it, his journey through the planning industry can be broken into three parts.  The first two include a period from from 2002-2006 the focus was on generating new business, because he had a debt to repay having purchased RetireInvest Bondi. In 2006-2007 he embarked on a journey of eliminating cross subsidisation by clients; “we priced our service according to the servicing needs of the client.” This was very helpful to the business during the GFC, as they had better cushioned the business to cope with the downturn in new business revenue.

More on the third part of the journey below but before that…

2009 – Annus Horribilis

They say what does kill you makes you stronger.  In the case of Rod, this makes him the toughest bloke going around – the photo with his son Harry at the end of a 10km mud run says it all.

In 2009, multiple members of his family were hit with a series of life threatening illnesses.  From breast cancer in his wife Sarah, terminal illness in his mother who then passed away, Sarah’s mother passing away, his grandmother passing away and being buried on what would have been her 100th birthday, his step father being diagnosed with pancreatic cancer and a great mate committing suicide – when people say they empathise with people with sickness within a family, I think Rod can safely claim that right.


Rod and his son Harry complete a 10km mud run!

Without admitting it, it is hard not to question whether these events got Rod to question, where to from here?  More of the same, or time to live the “life I want?”

A chance meeting sows the seed for future success

The third part of Rod’s journey started in 2013 when he enrolled in the Values Based Financial Planning program with Bill Bachrach in the US.  This is not an undertaking for the faint hearted.  It is a fundamental commitment of both serious time and money.

Rod had not heard of Bill’s program before and was introduced to him because of chance meeting with Peter Dunsworth, who runs Superfund Pro, an SMSF administration service in Double Bay, Sydney. Peter had been through the Bachrach program and the conversation they had talking about client values and goals really resonated with Rod. Two weeks later, by chance, RI Advice asked if any advisers were interested in enrolling in the Bachrach program… their own expense of course!

The rest, as they say, is history.

Bill’s impact on Rod’s business?

“We used to be investment advisers instead of financial planners – worrying about markets.  I have now unsubscribed from all daily market updates because it was adding no value to my clients.  It is not to say that investments are not important, they are in the context of being able to fund my clients goals but it is not the driver of adding value to my clients lives. Instead we’re trying to inspire clients to live their lives on purpose and we’ll help them to achieve their goals. They’re excited about achieving their goals for the reasons that are important to them.”

When asked about the biggest difference the program it has made to Rod’s business he was very clear.

“The new model is so vastly different from what we used to do. We have a values conversation with a prospective client to understand what really matters to them in their life. We then talk about their goals and finally look at their financial position today. If we see there is a “fit”, we put an offer on the table to create a financial plan for them. The model is superior in so many ways, not the least by way in which we measure ourselves. We measure ourselves by value delivered to the client. This is not a metric used in our industry where production of business is often used as the key measure. Our conversations are so much richer because they focus on the client’s goals and values, not what the markets are doing. It means that clients can do all the important things in their life with their friends and family and not have to worry about their money.”

Financial segmentation aside, Rod’s ideal client is someone who “gets it”, is a natural delegator, “can handle the truth, is passionate about goals and knows what they want.”

Central to Rod’s new approach is the visual model that he gives his clients…

When taking to a client he paints the picture in this way.  “Instead of you being the CEO of your affairs, you become the chairman and then you appoint me as your CEO to do the day to day stuff and in keeping you on track.”  Hence why delegators are behavioural segmentation variables that his ideal clients must exhibit.

But this is not all warm and fuzzy kumbaya type stuff – this is a commitment to very high quality advice and service, matched by four face to face meetings per annum (six in the first year), a 140+ checklist to ensure all of a clients financial affairs are well looked after, which also includes a general insurance review.  This is what financial planning is meant to be isn’t it?

Client reaction so far?

When I asked Rod about what the results had been so far, he responded by saying that “most people really like the experience, but not everyone does. This is good because we can quickly determine if we will be able to work together or not. If we can’t, we’re happy to tell people that we’re not right for them. This means that we’re only working with people who “get it” and not just taking on clients for the sake of generating fee income. Since last July, I have added six new ideal clients and my goal is to have 50.”

If there is any downside, it is in the increased workload per client but the fees have increased to compensate for this. “There is a lot more work we do now for our ideal clients and everyone has a role to play. In time, we see that the roles of our staff will be more rewarding, as we reduce the number of clients we have that will allow them to do more interesting things for our clients. As for product offerings, we’re not anchored to products. If the investment is good for the client, we’re happy. For example, if a client has a property investment and the return is good with good capital growth prospects, then we’re happy. We’re not about to recommend they sell it and invest in managed funds to serve our needs because they pay us our fee, so we’re product agnostic.”

Rod is a new man with newfound self belief, which is on display with any client who says “I will think about it.”  Rod is very open at this point (and is relaxed about it) to let those clients know that there is no real point in reconnecting.  He is also keen on working less hours – “who wants to work with a stressed out financial planner working 80 hours a week?”

“We eat our own cooking and BYO tissues”

What was most surprising about Rod is that he has his own financial planner who he pays his Ideal Client fee to; “if I got hit by a bus today I know that my family would be well and truly looked after.”  I found this pretty unique, because we all know the story of the plumber with the worst plumbing etc but the belief and commitment in what they are doing is very strong.

When I asked Rod what the payoff was for him in focusing on helping clients achieve their personal goals so passionately, he paused.  He sat back and thought for a while and then proceeded to tell me the story of an 80 year old Italian client who came in to see him with her daughter – the father had since passed away and the couple had been a long term client of the firm.  Whilst she had a small amount of funds, Rod still took her through his new values based process – e.g. he did not differentiate the process because she was a ‘low value’ client.  He asked her what her key goals were.  She said she had always wanted to go to Hamilton Island with her daughter.  Rod then asked her when?  She had the goal but had never articulated the date – she was startled by the question.  She said in 2014.  Rod again… When in 2014?  April.  What day in April. About the 15th.  At this point the client started to cry – she never thought that it would be possible to achieve her goal.  She went on that trip last month.  Rod then pointed to the box of tissues on the bench behind me and said that is why we have those – what was most telling about this anecdote, was that Rod started welling up when recounting it – he knew he had made a  difference to her and this was important to him – the essence of why he comes to work each day. Of course I welled up to, it was hard not to – but I only welled up because someone was cooking onions in the next room…

Crap Manager?  Hardly.  I would prefer Rod’s business card said ‘Financial Planning Industry Leader’.

Andrew Fairweather, Founding Partner and Managing Director

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