It’s not every day that you get the opportunity to visit the US on a study tour so when Jonathan Elliot, Managing Director and Adviser at Collins SBA returned we sat down with him to get some insights into what he saw and more importantly the key points he took away. In this interview, Jonathan shares what’s happening in the US around advice, innovation, leadership and technology. Thanks, Jono for taking all the study notes for us!


1. How important is it to make sure you look at what other countries and industries are doing these days?
There are many things common to most businesses such as the importance of customer needs, building a great culture and employing technology and smart processes to create effective outcomes. We’re probably just as likely to find great ideas, see emerging trends or risks coming if we look outside the ‘square’ of our specific industry.


The US, in particular, being a highly capitalistic economy breeds a high level of competitiveness amongst businesses and individuals. The lack of a social safety net means people are driven by necessity to do well.


Here in Australia, I believe we have a more collegial and genuinely friendly culture, but we are also more generally complacent about success. In Australia, we have a ‘tall poppy’ syndrome which creates a fear to stand out for doing well. In the US the opposite is true. Success is celebrated. Americans bulldoze through anything that challenges them with innovative ideas and high-risk appetites to achieve success. I think we can learn a lot from both the positive and negative sides of US culture without leaving behind our genuine friendliness and care for one another (like paying tax to provide a medical social safety net for everyone).


2. The US study tour you recently took part in talked about the US wealth trends. What are they and how do they compare to the Australian trends?

I see both in the US and here in Australia that the best Advisers are just that – Advisers helping people make informed decisions about the many aspects of their financial lives that most people lack the confidence to do on their own. As technology such as online investing, ETF’s, and AI [artificial intelligence] gains traction, Advisers are having to better define their value proposition to where they can sustainably add value to their clients. I think this is a good thing for I don’t believe Advisers should try to be portfolio managers. Good Advisers are financial coaches, helping people make smart decisions and stopping them from making bad ones!


The US wealth advice industry shares many similarities but also some distinct differences with us. The rise of the RIA (Registered Investment Adviser) away from Advisers employed by major wirehouses and institutions (such as banks and other wealth management businesses) is occurring rapidly in parallel. I see the emergence of the self-licensed unaffiliated Adviser only gaining pace. This I see as a good outcome for consumers generally, but disruption in the next few years as business models adjust. The downside to institutions leaving the advice space is that advice may become less affordable and accessible for different client segments, as institutions typically have greater scale to deliver lower cost services.


Additional compliance and regulatory requirements is an increasing cost to business. I believe adopting technology both for client engagement and business process as essential to delivering better client outcomes more consistently and effectively while controlling costs and therefore the price that people pay.


The US has a general ‘anti-regulatory’ approach, but I believe the Australian consumer receives greater transparency and is better protected. The SEC (US regulator) individually licenses Advisers, so each Adviser carries their own responsibility. In Australia, we are seeing the model change from a third-party licensee (dealer) model to self-licensing for businesses (such as Collins SBA), and I think the eventual outcome may, and probably should be, individual licensing. The simple fact is when the buck stops with you; you apply more rigour.



3. One of the guest speakers was from Ideo Toy Lab, one of the most innovative toy experts in the world; what did you learn about the importance of innovation to the success of businesses today?

This was a fascinating visit. IDEO has two businesses. One of them works on product design, consumer testing and marketing for other companies. For example, IDEO helped Microsoft in the ‘70’s bring their original mouse to market and then helped Apple ten years later with their mouse. Current IDEO projects include lemon zesters, Fender guitar amps, cordless breast pumps for mothers, better-designed chairs for school classrooms and the new Barbie campervan!


Their second business is their own toy creation enterprise. This was really interesting as it was all about turning creative ideas into commercially successful products. They have a process to enable creative thinking through goal setting, team structuring, collaboration using drawing and prototypes and effective critical feedback to make this a successful business. They may take 4,000 product ideas to 400 that are worth exploring further. Then down to 40 that may end up as built prototypes for user testing. The end result is just 1-4 products that may go to market. There is a significant business risk, and their motto is “fail quickly, succeed early”. My key takeaway point was that innovation and creativity is not just about talent, but “a muscle you train” through a repeatable process.


4. How does that manifest into Collins SBA and the advice you offer your clients who own businesses?

Our business is going through rapid change; an ever-changing and increasing compliance and regulatory landscape, consumer preferences for what they value (advice, service, products) and how they prefer to engage, i.e. in person, using technology. This means that as a team we have to not only be very aware of the things we must do now to keep up but ensure we anticipate what’s coming and ensure we’re delivering a valued outcome to our clients as effectively as possible. Looking at how we or our peers did things last month, last year or 5 years ago almost holds no relevance. It’s about staying above all of this and keeping our team energised and clients empowered.


Collins SBA’s core values include teamwork and innovation. As IDEO recognise, innovation is a muscle you train through disciplined practice. Living these values as part of how we do things every day is key and seeing how successful teams in other industries accomplish this is relevant for us.


5. What did you learn on the Facebook tour?

We toured the Facebook HQ in Silicon Valley as a sticky beak more than a structured tour. It’s a massive complex with around 10,000 employees, designed by the same architect who designed Disneyland and originally built for Microsoft. We walked past Mark Zuckerberg in a seemingly intense meeting (he was about to be grilled by Congress at the time) so stress levels were high, and our guide didn’t want us loitering there too long or taking photos.


A few quirky things stood out; most of the buildings don’t have internal ceilings, so the rooms look half finished. This was by design. The message being reinforced everyone was “Done is better than perfect” i.e. Don’t spend too long finessing the end solution, getting something done is more important. For a technology company in particular where things are moving so fast, this makes sense.


There were a lot of restaurants and eateries, even a video game arcade, within the complex that were all provided at no cost to the employees. Every employee was working on a project with strict deadlines and expected outcomes and if these weren’t meant you no longer had a job. So loiter in the games arcade or pizza parlour at your peril! There was a large rooftop garden (the size of 7 football fields!) to allow people to have walking meetings in a more relaxed environment. The original Microsoft sign was retained as a reminder that success does not last (and had to leave this complex many years ago).

“Don’t mistake motion for progress” 


6. What key points did you take out of the thought leaders roundtable discussion? Anything that business clients can leverage?

Matt Heine – MD of listed wealth management company Netwealth – and his executive team were on tour with us. One of the key things I gained from their brief was that prioritising was the most important thing in their business. Like most of us in business, we have more ideas and projects to work on than we have time or resources to implement so prioritising is the number one function of leadership.


Another theme was around using data in your business so that you can really see what’s happening and how things are interconnected. Making data-driven decisions is a key to prioritising. Collins SBA has since been prioritising the analysis of our own business data to ensure we are aware of, and focus on what matters the most. This data analysis has already helped us to prioritise better. We’ve also taken this a step further by bringing technology-enabled reporting to both our business and financial planning clients (Spotlight and Wealth Portal respectively) so that we can help our clients better understand the data of their financial lives to help with better decision making.


7. What other tips did you take away from the tour? From other attendees or presenters, you spoke to?

Mike Dunworth – an Australian who has established a successful tech company in San Francisco facilitating large payments between corporates and governments using cryptocurrency. He spent a couple of hours explaining this incredibly complex technology. He made the point that when they first started to market themselves as facilitating payments using the blockchain, most of their enquiries were about how it worked. Now they don’t communicate that they use cryptocurrency and blockchain, only that they securely facilitate large money transfers and business has taken off. The lesson here was to communicate the value you deliver to customers, not how you do it.


We met with Yodlee incubator in Silicon Valley. They take on eight entrepreneurs each year to coach and fund their technology ideas to market. Central to these business ideas are solving problems that matter to people, not creating solutions to problems that don’t exist.


We met with BlackRock in San Francisco, and they shared with us their research into the US wealth and advice industry. With so much changing faster than ever, the key points they concluded with was that for advice businesses to be successful, they must;
• Be consistent and dependable (i.e. compliant, delivering value supported by data)
• Time efficient
• Technology enabled


For more information please feel free to contact Jonathan directly on 1300 265 722.