Taking the time to set up the back office right

By Next Wealth | 04 May 2020 | 19 minute read

Heather Hopkins meets Gregg Moss, Director at Eleven.2 FP. In this conversation with seasoned financial planning, Greg Moss, we talk about his plans to set up a new financial planning firm amid a pandemic, how he’s trying to get the back office set up right. Greg offers a realistic perspective on data integrations and re-keying.

You can listen to the full interview below.


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Transcript of conversation

Heather  0:02

This is Heather Hopkins Welcome to another next wealth podcast. I’m joined today by Greg moss. Greg is a Chartered Financial Planner and fellow with the PFS with about 18 years of experience advising clients. He set up an Eleven.2 as a dedicated financial planning practice focused on delivering really good client service just a few months ago, which is interesting timing. Craig, welcome to the podcast.


Greg  0:27

Hi, Heather. Yeah, it’s a really, really good time to be to be setting up. And nothing is holding our contingency planning about pandemics or anything like that. So, we’re sort of running on natural law at the moment a little bit, opportunities as well as challenges I guess at the moment.


Heather  0:45

Absolutely for everybody. And anyway, I’m sure it’ll be  great once things stabilise. But you tweeted something the other day that caught my eye that you were going to be using the current situation just to make sure, one of the things you mentioned, in addition to reading all of the Lord of the Rings books to your children, I think it was, but get your back office set up properly. And I think it’s a really interesting opportunity for firms to really rethink the processes they’re using in their business to make sure they’re more efficient, make sure they’re making maximum use of the systems and you’re in kind of this almost, I mean, I don’t know that that anyone would envy your situation but in the somewhat enviable situation, because you’re setting up with quite a bit of experience to think about how you want that back office to run. So just be interested to hear a little bit about, what systems and tools you’re looking to use and how you’re thinking through that?


Greg  1:37

Sure, sure. Yeah. I mean, I think it is, you know, going back to the opportunities,  I think having a lot a lot of time to work on building blocks is an opportunity for us and we’re trying to see it as such. We were already in a mindset of trying not to fall into some of the traps you can fall in as a start-up where you’re really trying to get your order book filled and trying to make decisions about how you doing things behind the scene, sort of under duress. And then in a bit of a hurry, as you try to get on to the next phase, we were trying to be already quite deliberate about getting all the foundations right before we think about new client acquisition. So, it sorts of feeds into that way of thinking, really.


We were already kind of halfway there. And I think, you know, having a lot of time where we’re, frankly, not expecting the level of new client inquiries that we might have expected before because people have got other things on their mind, understandably. We’re expecting other than the time we’re spending servicing clients and making sure that they’re okay, which is the most important thing, we are expected to have extra capacity to spend on the behind the scenes stuff. So, it’s given us an opportunity or sort of forced us in a way to, to spend that time getting everything right before we get into the growth phase, you know, which will hopefully be in when things are back to normal. And I think we’ve had a feeling as we as we embarked on this, because we’ve been around for a while myself, my business partner, Kate, that we’ve worked together at places where, there have been sort of established ways of doing things. And there’s been a lot of good technology in the background, a lot of good systems, but it’s never quite been all tied in, in the way that it’s meant to be. And I think the issue is, in an established business, you’ve just got legacy issues, and you’ve got, the flow of work is constant and everybody’s often too busy to sort of go back a step and really, really work on processes. And we’re trying to.


Like you say, we’re lucky because we’re going at this with a with a blank sheet of paper. So, we want to get all those things absolutely right before we even think about putting new clients into that process. So that it all works really well. And I think that’s going to be our focus more than it was, it sorts of was a bit already, but I think it’s really going to be what we’re going to spend a lot of our time on over the next couple of months. Just making sure things work in a super slick, efficient way behind the scenes so that, you know, when we hopefully get into that growth phase where we’re finding it very easy to get work in and get work done.


Heather  4:12

Yeah. And I think that that issue of changing the engine when a car is, you know, on the expressway, it’s a real, what would they call it here on an A road? I don’t know. I’m from Canada.


Greg  4:28

That’s it. Absolutely. That’s a great analogy. I could, I could have five minutes of rambling if I had used that, but it’s really true. Exactly. I think it’s much easier to you know, we’ve been very deliberate about this. I think there have been even more, I think but like they are kind of current kind of weirdness was a factor. We were very much, mindful that there was the quick way to get something done that allowed us to do that particular client task or get on to the next stage of our marketing or whatever. And there was a slightly longer, more laborious way that was going to serve as well in the future.


So, we’re trying to give that choice in all these different areas where we’re trying to put the pieces in place, we’re trying to go with the slower, more laborious, but long term more beneficial way of doing things. Because I think, , like you say, we’re in that position, which is a good one where we can, we don’t have to undo things to get these things to work the way we want to do them. So, we’re all about putting that effort in now to hopefully reap the benefits of it over the coming years.


Heather  5:34

Yeah, I think that focus on efficiency will be really important over the next, probably even the next year or two and onwards, and it’s something that we talk a lot about, but if you know with most advisors charging based on assets, if those assets are down 20% then the fees to the business are down 20%. So, the importance of being efficient become more acute. And so, I would expect that that focus to come from other firms. You mentioned that you joined the Sense network and part of the Sense network are using Intelliflo. Is that right for your back-office system?


Greg  6:13

Yeah, that’s right.


Heather  6:14

And have you used into Intelligent Office?


Greg  6:17

We have. We’ve used it before in a previous life at another firm. So, it’s mandated by the network but not an issue for us, because of the systems we’d used before. We were pretty happy with it. And it seems to do everything that we want to do the right way. So, I suppose you know, there’s, you know, being a network member, and we can’t change that bit. But obviously, there are lots of elements of our technology and what we use to provide the service for clients that we’re picking and choosing. So, integration is important because we’re trying to make sure that all of it can dovetail nicely with Intelliflo seems to be reasonably good at all that


Heather  7:00

Yeah, they’ve done a lot of work on it. And so, what other systems and tools are you looking at? Are you happy to share?


Greg  7:08

Yeah, of course. Well, so I suppose on the day to day basis, we’re quite cashflow orientated. So, we use we use Voyant for that. And we use FE Analytics  for our risk profiling, and portfolio research and running model portfolios. So, I suppose on a day to day basis, they’d be the main things that we would use and all the integration that we need seems to be there between those. And obviously, you know, platform technology we use a lot we’re trying to narrow down our platform due diligence at the moment with some of the bits and pieces that we’re doing. But as it stands, we deal with a few different platforms for legacy reasons. So, we’re sort of reliant on their technology and their integration a little bit. Again, we’re trying to make sure we’ve gotten, stuff like live feeds done so that it’s all kind of embedded as much as it can be and in what we’re doing on I/O.


Heather  8:07

So, is it important that the platforms can integrate with I/O for you? Is that under consideration?


Greg  8:13

Yeah, massively. Because, particularly, it’s probably a transitional thing, because we’re looking to be a bit more systematic about what we use, but we have sort of inherited clients and clients that we’re using existing platforms that they’ve had. And they’re going to have for a while, it’s just about making sure that we don’t have to spend lots and lots of time doing lots of manual work and trying to figure out how to do things on platforms when actually we can just have it integrated and pulling what we need across. Just again, it’s about efficiency, it just saves us having to go and spend a lot of time doing a task that really frankly, the client doesn’t really get any benefit from and we don’t want to do. So, if we’ve got all those integrations built into it in the first place. And just means it’s a task that we can avoid doing later.


Heather  9:05

Are you looking at specifically what integrations they have? We recently asked platforms, back office and all the tech providers what integrations they had across the different pieces of advisor tech. And they sent us these massive lists, but then we said, well, hang on a second. So, what are one way or two-way integrations and the two-inch two-way integration shrunk quite a bit. And are you looking at to that level of detail as part of your due diligence?


Greg  9:35

It’s a good question. I think we probably shouldn’t be I think we’re not quite at that stage of our platform due diligence yet, but I think it will be important, you know, I think anything that avoids duplication is really what we’re after, and it sort of struck me before that it’s quite hard to avoid that to have  two way integration between the two systems. That you know,  means you don’t have to go and enter a load of information on both sides of something. Because that’s just pointless enterprise, isn’t it, that doesn’t really benefit anyone. And that’s been my experience before is that for various reasons, I’m not sure if it’s to do with limits on the technology or just  the way things are done at firms.


I’ve spent a lot of time asking people to populate a load of information on two sides of something when there’s meant to be integration between them. And I don’t know. I think we were just trying to get to be that a limitation of what’s available by way of integration? Or is it just the way that it’s getting implemented at firms? And yeah, I expect maybe a bit of both? But again,  we want to not be the problem with that, because we can fit our processes around what the technology allows us to do. Because we’re not trying to undo systems and processes to get to there. So, we’re just looking really closely at what  the technology’s going to allow us to do and then we’ll fit our processes around that.


Heather  11:06

Are there things that you’re doing differently this time, specifically.  Things that didn’t work where you were before that you’re thinking we really need to set this up, so it’s done differently, in terms of how the back office is set up, relative to where you were before?


Greg  11:22

Yeah, sure. I suppose a lot of it is duplicating tasks a lot. A lot of it, I think, has to do with sort of fact finding and data gathering. I think all that stuff, it seems like you need to record it in slightly different ways in slightly different places for different purposes, for no real good reason. If you think about, the client interface and how that bit works. In reality, I’ll be there in real time with the client, collecting details from them and having discussions and it should be possible to move all of that really great rich information into somewhere that lives in one place and makes complete sense where it is, and everything else can spin off that. The reality is, I think a lot of places just don’t work on that basis. You know, the meeting with the client might be, if they’re very cashflow orientated, it might be that you sit there and you populate Voyant, for example, or other cashflow tools are available. But you might fill out in effect, a fact find on their which is geared around probably expenditure. And you might explore investment strategy and stress test that in the context of that cash flow plan. And I think it would be great to collect everything that you also needed for regulatory purposes on fact find, for capacity for loss discussions, for knowledge and experience.


If all of that could go, it doesn’t have to be the cash flow tool, but if that could all go somewhere where it can feel up all of those columns that you’re going to need to fill up, then that would be great. And I think that would allow you to have that conversation with a client that’s kind of natural and flows the right way. And then you could go back and do the important bits of the work without worrying about copying things from A to B. But reality is, I find a lot of the time you know, you’ll use the tool that allows you to have the meeting and collect the information in the right place for that purpose. And then you’ll go away and have to do a lot of extra work on perhaps the risk profiling perhaps the extra fact finding, and that that tail on that work, I think can be quite big, quite time consuming.


I think it’s avoidable. I think it’s avoidable if you’ve got if you’ve got proper integration and a good method and people well versed in what information you need and where it needs to go. I think it can be done in one in one exercise or should be able to be done that way. Anyway, and that’s what we’re trying to get to.


Heather  14:03

Yeah, one would think you could do it in one exercise, right? I think that’s one of the frustrations. It’s interesting because the conversations we’re having with advisors we are seeing this sort of different approach that some are going to. In like tech circles, they talk about a single source approach versus a network approach to tech. And with a single source approach, you get the information once and it integrates across that single system, rather than buying in multiple pieces of technology. The network approach should be the optimal one, because each piece of tech will do the best job at the thing it’s meant to be doing. But if you can’t get the data to marry up at the background, it doesn’t work. Did you consider a single source approach to go to a single provider for all of the different platform, back office, cashflow modelling, would you consider doing that?


Greg  14:51

Yes, I think if every element of it worked to the required standard, I think we’d have no issues with that. I mean, it would do the job, wouldn’t it? Like you say, because you wouldn’t have to worry about, I guess, different systems talking to each other. So we’d be up for it, I mean, it seemed to me that I guess we’ve looked at it from the other perspective, you know, we’ve sort of tried to find the best of breed in all the different areas and then, you know, try and have the conversations about making sure that it integrates properly. So, I suppose naturally, we come at it from that that perspective. But yeah, I mean,  I guess it’s trade off, isn’t there,  if you can have really good integration within a single system, and you can do what you need within the different modules of it, then I think that that’s an okay place to be. But I suppose it sort of feels like a shame if we want to use the best tools that we feel work best with clients and then get them to link up. So that’s sort of our preference, I guess. And that’s kind of how we’re, we’re looking at.


Heather  16:01

I think that makes sense; it would feel a bit strange to do a risk profile that’s offered by a platform when you haven’t chosen what platform is right for that client, yet it feels a bit the wrong way around. So,  I think there’s a good reason for that sort of network approach to try and get different systems that are optimal for what they do.


Greg  16:22

Yeah, absolutely. I mean, I suppose intuitively, I know our approach in the same way that when we advise clients on solutions, we sort of have a sense that just intuitively the more you can pull the parts away from each other and analyse each one in its own merit. It feels like a good way to approach it because you’ve got sort of full transparency and your kind of assessing and interrogating every element of it and running your due diligence on the different bits so that it all does what you want it to do. I sort of feel like that the more you bundle it in you know, I can see how that  appeals in terms of practice management in processes. But I sort of feel like just intuitively I feel like there’s potentially a sacrifice there. Like you say in terms of using something proprietorial, that might not be the best thing you can get because you’ve got it from there. And it’s easy,


Heather  17:13

That’s really helpful.  I always make notes, I’m like a student. And taking the time out to rethink the processes. I think it’s a good opportunity to do this for a lot of people. And some research we did recently showed that advisers are spending about a third of their time with clients, and the thing taking the most amount of time away from time with clients is admin. So this is a good time to think about those back office processes setup to drive that efficiency, and to really think about how to make the systems work together because you’re right, they do work together, but it sometimes just takes a bit of time to figure out how to make it work together. And it’s a good opportunity to do that. And then your last point about doing the due diligence to make sure that system does what you need it to do. It’s really focusing on  that part, as well as all the other important bits, you need to think about due diligence.


Greg  18:13

Sure. Yeah,  it is, my suspicion is what you said is that the tools are probably there, if, you know, at practice level, you can figure out how to make it all mash together and get your processes, right. And that’s kind of what we’re exploring, whether the limitations are with the tools or the way that they’re used by firms. And I suspect it’s probably a bit of both, but I think firms could certainly,  do more to just put the brakes on and really fixed processes before they get new work in and  that’s our mindset. I think the bigger point about all of this is, just as a new firm, we really want to try to push our service out as far as we possibly can and within the market. And do our small bit to address your supply issues around advice, and I think there are a lot, a lot of good firms out there that are overburdened with their own processes and just aren’t efficient enough to do the volumes of work that they could be doing. And we don’t want to be like that as we grow.

At all stages from the beginning, we want to make sure that we’re building efficiencies as we grow and have the right ingredients in there so that we can do, work efficiently enough and quickly enough to get more clients in and potentially go into markets that be more difficult to provide a service to profitably, if we can get enough efficiency in our processes for sort of light touch clients, accumulating clients, the sorts of areas that firms find challenging to work for profitably. I think if we can find a way to crack that by doubling down on efficiency, then that’ll be a good win for us. So, that’s the goal.


Heather  19:59

That sounds great.  I’m sure it’s going to be a huge success. And actually, a lot of those people we were talking about before we hit the record button need your help more than ever. Times are changing and they’re really complex and  some of the help and support that’s been given by the government feels generous, but a lot of people don’t really know how to navigate it. Thanks very much, Greg, for taking the time to speak with us today.


Greg  20:25

Very welcome. Thank you, Heather.


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