WEBVTT

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Welcome back to The Rated Change with York Wealth

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Management. As advisors to some of the wealthiest

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families in the country, The Rated Change is

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a podcast designed to help you in the pursuit

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of building long -term wealth through the insights

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of some of the brightest minds in asset management.

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I'm your host, Murdoch Gaddy, and in today's

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ROCKcast, we're joined by Michael Campbell. He's

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from Macalester Capital. This is going to be

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a very fun conversation. It's going to be different

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to what we've done before. We've had a lot of

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fantastic asset managers on where we're discussing

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where to actually invest the money. But a lot

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of people that listen to this podcast, a lot

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of investors, and funny enough, a lot of industry

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people, a lot of advisors, and a lot of fund

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managers. So I thought it'd just be very, very

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interesting considering the state of the financial

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advisory space. to get Michael on and share his

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thoughts about what's happening in the financial

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advisory space. We've seen a whole bunch of advisors

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leave the industry, but what's happened great

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from an ethics standpoint is the financial advisors

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are now being classified as professional, as

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lawyers and doctors, which I think is fantastic

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for the industry. Well, Michael, welcome to The

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Rate of Change. And why don't we begin like we

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always do? And can you tell everyone a little

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bit about yourself and, you know, how you got

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into this wild world of finance? Yeah, sure,

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Murdoch. Thanks for having me on. Long time listener.

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uh first time guest and um yeah thank you for

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the kind words and i love the word fun in there

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so i'll try to live up to that accolade throughout

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this podcast so let's have fun um but um yeah

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for sure so i'm the principal of mcallister capital

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And McAllister Capital is a corporate advisory

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firm I started about six years ago. So it's a

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buy side M &A firm that specializes in financial

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services. So long story short, I help financial

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advisors, financial planners, private wealth,

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accounting groups, as well as some asset managers.

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If they want to go on an M &A journey, I step

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in their shoes. I represent them on the buy side

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and I go and find them deals and give them a

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hand along the way. So, yeah. So I've been doing

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an iteration of that for six years. I think that's

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how we came across each other in our travels.

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I think we even shared a board or two a couple

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of years back. So it's, yeah, it's nice to be

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invited on here and, you know, talk about a little

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bit about our journey together, as I'm sure this

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podcast will kind of overlap with your story.

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Yeah, it's been a good journey. It's been fun

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working with you. uh michael but yeah speaking

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of work i've always found this um quite fascinating

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because both of us got into the industry quite

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young we just wanted to get in and any young

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advisor uh listening to this i think you really

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learn from this we both started at you know really

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good firms great reputations i was at a fantastic

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institutional firm but the interesting thing

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is about structure like what does it mean like

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you know uh is it better to be an employee is

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it better to run your own business we we now

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have lots of friends that are great employees

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at very large institutional firms and they got

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the benefit of that. But for me personally, I

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don't know how you found it. I just remember

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I was about 12 months in doing really well at

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a large institutional firm. And then one day

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I heard that an advisor had unfortunately passed

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away. And then a very early gentleman, great

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guy had essentially an $80 million book, which

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he inherited and he needed to work on. So essentially

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I got asked to help. look after that $80 million

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book. And then I was very excited by it, right?

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Why wouldn't you be working with those families?

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But then it dawned on me, you know, if you retire

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and if you unfortunately pass away, how does

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that help your family? You know, you haven't

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actually got an asset, right? You know, the assets

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essentially are owned by the institution which

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you're representing. It doesn't, you know what

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I mean? Yeah, yeah, yeah. And the other thing

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which I find interesting about that is Look,

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as advisors, our entire job is to help protect

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and build wealth for families which we represent,

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which means that we're telling our clients, look,

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hey, invest in an asset. And then over time,

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you get compound interest. You can grow the value

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of that asset and then potentially sell it or

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get the income, right? But when I received that

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$80 million book of clients to manage, it dawned

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on me that the guy technically, and I saw someone

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else retire as well, got a tap on the shoulder.

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And then there was, he didn't have a business,

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you know, his entire business, which he was running

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his entire life, didn't have any equity. There

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was no uplift. There was no means to grow. There

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was no exit strategy. Meanwhile, we're advising

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our clients invest for essentially help build

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your business, you know, you know, grow a property

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business, you know, build a doctor, you know,

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a medical or pharmacy or something equivalent.

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And then, you know, have an exit strategy over

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30 years and then look after your family. Don't

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you find it fascinating that. You know, the industry

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is kind of split between, you know, some people

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that understand that and have benefit from that

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and then operate privately in boutique businesses.

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Meanwhile, you know, some advisors just really,

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really enjoy the, you know, like the old school

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banking model. Like, what do you think about

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that? Yeah, yeah, no, it's a great point. you've

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raised. I think it's always interesting learning

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more about your story, Murdoch, because there's

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a lot of parallels between our journeys. I think

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personality types, you and I are somewhat similar.

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From a young age, probably with a lot of risk

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-taking and rambunctious personality traits,

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the two of us took similar journeys and it was

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probably more often than not the path less traveled

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in that we went into self -employment early because

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we decided that we wanted to take the risk. you

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know, go and invest in ourselves and back ourselves.

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And, you know, whether that's right or wrong,

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sometimes it's better to go and leverage off

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an institution and branch out a little bit later.

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But no, it's definitely an interesting sentiment

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that you've made, especially when you're talking

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about the institutional advice model versus the

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IFA independent financial self -employed model.

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So that's definitely something that... I spend

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a lot of time, I guess, dissecting, navigating

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and advising on and weighing up. And for some

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advisors, it's probably better off with them

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staying off. And a lot of people leverage that

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safety net and support and really like just focusing

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on the relationship side of the client. And they

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can really scale a nice book with that support

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around them. Whereas a lot of advisors that have

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gone and fragmented out into self -licensed land

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or have gone and caught up with their own business.

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You know, it's kind of a different mentality.

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They try to wear every hat and they want to do

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everything themselves and they enjoy the fruits

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of that business all themselves. So there's merit

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to both, for sure. I've dabbled in both, as you

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have. I can't say which one's right or wrong.

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Both have merit. Both can result in, you know,

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great outcomes for clients, which is most important.

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But, you know, in terms of McAllister Capital,

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I end up siding with that IFA, right? So whether

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you're a lifestyle business who's self -employed

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or whether you're a five advisor or a 10 advisor

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practice looking at going to a 30 advisor practice,

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I tend to help the latter, right? So scaling

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through M &A. But no, it's definitely an interesting

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point and I come across a lot of time. I think

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it's maturity as well, right? So if I could give

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a message to the younger. Michael Campbell and

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potentially Murdoch, you've done very well for

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yourself. But I know for myself, I probably went

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out on my own a little bit too early. And it's

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that Dunning -Kruger effect, right? You get a

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couple of wins on the board, you have a little

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bit of knowledge. And when I was 23, I probably

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had a couple of RCTI slips that were probably

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a little bit too large. Went to my head and I

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decided I'm going to go out on my own and run

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my own book. And I was humbled shortly after

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that. But, you know, I learned a lot of lessons.

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It threw me in the deep end. And yeah, so look,

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there's merit to both. It's about maturity. It's

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about knowing where to win, what type of advisor

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you are. But, you know, more often than not,

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you know, there's that certain threshold that

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advisors cross when they're managing a quantum

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of revenue or thumb. where they start weighing

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up that option if the commercials aren't sticking

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at the house whether it's in an institution more

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often than not they'll go and you know that they'll

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do a commercial way up and balance the probabilities

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they'll sit there and and go and set up their

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own company right so makes sense but yes absolutely

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for the young people out there i completely agree

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with that i think the expression is when you

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agree learn before you earn And the best suggestion

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I've – and it really helped me as well is, look,

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get yourself a great mentor. You know, if that

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means you have to buy coffees for five years

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and you can get taught by one of the greatest

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minds of financial advice, you know, it's worth

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it. Absolutely. And it'll make you a better advisor.

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But why don't we actually get into – uh you know

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the the advice industry in australia because

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a lot of people are familiar with investments

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that's what they love right but why don't we

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just start at the beginning like well how is

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the financial advice um you know in australia

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you know currently set up and it's going through

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a whole raft of changes uh you know which is

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seeing essentially it evolve into this new incredibly

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professional you know, occupation almost held

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as highly now as, you know, doctors and lawyers,

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which is great. All the cowboys are kind of gone.

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So do you mind just giving a bit of a breakdown

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of what's actually changed and how the financial

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advice, you know, profession and industry is

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looking, please? Yeah, sure, Matt. Great question.

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I guess before I... go and provide my lens and

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viewpoint on the industry. I think it's good

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for people to understand how I see the industry

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because it's a little bit different to advisor,

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to an advisor. I haven't been client facing for

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nearly a decade now, right? So look, whilst I

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started off as an advisor, whilst I was at university

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and then, you know, shortly after I ended up

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managing my own book, which was a decent size

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for a 22 year old. I ended up, merging my book

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with another advisor, we ended up going on a

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bit of a growth journey, right? So he was the

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trader, I was the, I guess, relationship manager,

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and he got some great runs on the board. And

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we got to a point where he had a significant

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quantum and some great runs on the board and

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momentum. We took the view that... we'd sell

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a portion of our company off, do a capital raising

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and go to that next level. So we ended up raising

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a few mil with those funds. And we ended up acquiring,

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we went on the financial planning acquiring journey.

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So we started off acquiring an AFSL. And then

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shortly after that, we would attract cars in

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with a strategic offer as such. So we would start

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acquiring into our cars. So we ended up doing,

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I was there for the better part of maybe six

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or seven years. We ended up doing probably just

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shy of 10 acquisitions in that time. So a very

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aggressive growth journey. So I guess during

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that whole growth cycle as well, I wore many

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hats, right? So not only was I the advisor for

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my book of clients, we were also running MBAs

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for that book. So I have a spot on the investment

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committee as a portfolio manager. But where I

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started gravitating towards was the M &A. right

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so i really enjoyed that thrill of the chase

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and essentially hunting the deal procuring it

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and then also doing the due diligence and then

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the integration after that there after the settlement

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as well so one thing i really enjoyed about that

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was that i saw the material difference that that

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made on the growth and profitability of that

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business so we took what was you know call it

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a three four hundred thousand dollar combined

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book we ended up By the time I left there just

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before COVID, it was about a part of maybe six,

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six and a half mil in recurring revenue. So I

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took the view there that the more advisors that

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I spoke to, I realized that there was a real

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appetite and gap in the market for deal procurement,

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right? So I would call up an advisor if I couldn't

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get an acquisition or a deal done on behalf of...

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us at that time. I would then just sit there

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and be genuinely intellectually curious about

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their business and their growth journey. And

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the feedback was overwhelming, right? What do

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you want to do? What's your growth plan? We'd

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love to double our size in the next three to

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five years, but we simply can't find an acquisition.

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I said, okay, what's your M &A strategy? And

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they would sit there and go, we look at these

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two brokers' websites and we hit refresh every

00:13:01.460 --> 00:13:05.279
day. Whereas, you know, in my experience, it's

00:13:05.279 --> 00:13:08.279
better off to, I do all my deals direct. You

00:13:08.279 --> 00:13:11.340
can sit there and procure a deal. You can negotiate

00:13:11.340 --> 00:13:13.799
in a vacuum, which more often than not manifests

00:13:13.799 --> 00:13:17.960
in not only negotiating alone, but you can get

00:13:17.960 --> 00:13:20.960
a deal done more effectively on better time constraints.

00:13:20.960 --> 00:13:22.500
But more often than not, you can get a little

00:13:22.500 --> 00:13:26.419
lower multiple as well. So given that was the

00:13:26.419 --> 00:13:28.860
feedback in the market, I just took the view

00:13:28.860 --> 00:13:31.539
there and provided I really love the M &A aspect.

00:13:32.409 --> 00:13:35.110
I took the decision to leave that group. I still

00:13:35.110 --> 00:13:37.129
have equity, passive equity at the moment, and

00:13:37.129 --> 00:13:40.850
I still follow their journey. But I took the

00:13:40.850 --> 00:13:43.610
view that I wanted to work with multiple firms.

00:13:43.710 --> 00:13:45.870
I didn't want to hitch my horse just to one wagon.

00:13:45.929 --> 00:13:50.470
So I started McAllister Capital in 2021 with

00:13:50.470 --> 00:13:52.990
the idea that I wanted to work with maybe five

00:13:52.990 --> 00:13:55.850
or six really great firms so that when I find

00:13:55.850 --> 00:13:59.100
a deal. It's a high probability of closing because

00:13:59.100 --> 00:14:01.559
the firms that I've partnered with are of high

00:14:01.559 --> 00:14:04.500
caliber. And it gives me that footprint and casting

00:14:04.500 --> 00:14:07.039
a wide net. I got to the point there where I

00:14:07.039 --> 00:14:09.500
hated losing deals. And so I saw Macalester Capital

00:14:09.500 --> 00:14:12.679
as a solution where if I could have a handful

00:14:12.679 --> 00:14:16.600
of quality buyers, every acquisition target that

00:14:16.600 --> 00:14:19.559
I came across, it should be a high close rate,

00:14:19.620 --> 00:14:22.580
provided I've got an arsenal of buyers at the

00:14:22.580 --> 00:14:28.039
helm. I guess the benefit, just to revert back

00:14:28.039 --> 00:14:33.019
to your question, I've done due diligence. I've

00:14:33.019 --> 00:14:37.159
completed just under 15 transactions across the

00:14:37.159 --> 00:14:42.200
board, mainly in financial advice prior to that.

00:14:42.279 --> 00:14:44.120
So on top of that, I've probably got heads of

00:14:44.120 --> 00:14:45.879
agreement and done due diligence on probably

00:14:45.879 --> 00:14:48.320
up to 50 companies, really looked under the hood.

00:14:48.940 --> 00:14:51.279
And further to that, I've probably got a business

00:14:51.279 --> 00:14:53.779
profile snapshot and had deep conversations with

00:14:53.779 --> 00:14:56.620
principals of probably upwards of 100 businesses

00:14:56.620 --> 00:15:00.899
in advice over the past five years. So I've seen

00:15:00.899 --> 00:15:03.500
businesses that work well. I've seen businesses

00:15:03.500 --> 00:15:07.019
work not so well. I kind of know where the bodies

00:15:07.019 --> 00:15:12.179
are buried, rather. And I can smell out a lot

00:15:12.179 --> 00:15:14.120
of the bullshit because I've said a lot of the

00:15:14.120 --> 00:15:17.730
bullshit in a previous life. Yeah, so I guess

00:15:17.730 --> 00:15:19.710
I've got a great perspective in the fact that

00:15:19.710 --> 00:15:22.629
I can zoom out at private wealth and financial

00:15:22.629 --> 00:15:25.929
advice. And I guess that's the perspective that

00:15:25.929 --> 00:15:29.769
that's how I see this landscape, right? So back

00:15:29.769 --> 00:15:33.370
to your earlier question, how do I see the state

00:15:33.370 --> 00:15:36.470
of advice at the moment? It excites me. There's

00:15:36.470 --> 00:15:39.350
a reason that I have gravitated towards financial

00:15:39.350 --> 00:15:41.789
advice. You know, I'm not hunting accounting

00:15:41.789 --> 00:15:44.269
books or insurance books so much anymore, even

00:15:44.269 --> 00:15:47.169
funds management businesses. I'm really focusing

00:15:47.169 --> 00:15:49.129
on advice. And that's because there are strong

00:15:49.129 --> 00:15:52.429
tailwinds for this industry. We've got the great

00:15:52.429 --> 00:15:55.009
advisor scarcity, as I'm sure, you know, you've

00:15:55.009 --> 00:15:56.850
probably got a lot of advisors that are listening.

00:15:57.470 --> 00:16:00.590
But, you know, there's that. Advice has gone

00:16:00.590 --> 00:16:02.990
through a much needed professionalization, increased

00:16:02.990 --> 00:16:06.940
qualifications. An inadvertent symptom of that

00:16:06.940 --> 00:16:09.220
is that there's been a lot of advisors exit this

00:16:09.220 --> 00:16:12.360
industry. So we've gone from 22 ,000 down to

00:16:12.360 --> 00:16:16.360
15 ,000. We're somewhat stabilizing now, but

00:16:16.360 --> 00:16:20.460
there's every possibility that we're looking

00:16:20.460 --> 00:16:23.179
at maybe 12 ,000 to 10 ,000 in the next decade.

00:16:24.340 --> 00:16:27.940
So coupled with, you know, the assets that need

00:16:27.940 --> 00:16:30.759
advice is only going to be growing. And we've

00:16:30.759 --> 00:16:35.200
got a $1 .4 trillion generational wealth transfer.

00:16:35.279 --> 00:16:38.039
And a lot of that needs, you know, quality advisors

00:16:38.039 --> 00:16:40.159
to sit there and manage them through that process.

00:16:40.200 --> 00:16:44.240
So for me, it's got supply and demand. It's got

00:16:44.240 --> 00:16:46.700
the double whammy from just if you're just looking

00:16:46.700 --> 00:16:50.039
at it as an industry. From a private equity perspective,

00:16:50.419 --> 00:16:52.659
it's got the double whammy of what you're looking

00:16:52.659 --> 00:16:56.659
for. And on top of that, given that supply and

00:16:56.659 --> 00:16:58.539
demand forces, what's that going to result in?

00:16:58.580 --> 00:17:00.840
We're already seeing upward pressure on fees

00:17:00.840 --> 00:17:05.220
for advisors. So outpacing inflation, and I imagine

00:17:05.220 --> 00:17:07.559
that's going to continue for the next decade.

00:17:08.380 --> 00:17:11.700
On top of that, inorganic growth, right? If there's

00:17:11.700 --> 00:17:14.400
going to be more clients in certain suburbs that

00:17:14.400 --> 00:17:16.440
need good advisors and there's going to be less

00:17:16.440 --> 00:17:19.160
advisors around, you know how it works. You do

00:17:19.160 --> 00:17:21.180
a good job for a client, you're going to get

00:17:21.180 --> 00:17:22.980
five of their friends, 10 of their friends or

00:17:22.980 --> 00:17:27.160
their relatives as well. I see revenue and profitability

00:17:27.160 --> 00:17:30.079
increasing. I see revenue increasing for individual

00:17:30.079 --> 00:17:33.420
businesses. I see organic growth increasing for

00:17:33.420 --> 00:17:36.039
individual advice businesses. And then the real

00:17:36.039 --> 00:17:39.640
little draw card here, which really gets exciting,

00:17:39.740 --> 00:17:43.109
but a lot of us can't really see. how it's actually

00:17:43.109 --> 00:17:46.569
going to manifest is is ai already we're seeing

00:17:46.569 --> 00:17:48.990
some great softwares and advice like paradino

00:17:48.990 --> 00:17:50.849
and i'm sure there's going to be a multitude

00:17:50.849 --> 00:17:54.109
more coming through so on top of that we've got

00:17:54.109 --> 00:17:56.849
revenue growth we've got we've got upward pressure

00:17:56.849 --> 00:17:59.880
on revenue on fees we've got strong organic growth

00:17:59.880 --> 00:18:02.380
tailwinds. And I think we're going to have some

00:18:02.380 --> 00:18:05.339
efficiency and downward cost pressures on these

00:18:05.339 --> 00:18:09.059
businesses as well. So we're already seeing that

00:18:09.059 --> 00:18:11.779
that's attracting a lot of private equity, both

00:18:11.779 --> 00:18:15.640
local and international at the moment. So it's

00:18:15.640 --> 00:18:18.220
good to be an advisor, mate. Whilst I'm not client

00:18:18.220 --> 00:18:21.119
facing anymore, I'd probably, I envy your shoes,

00:18:21.220 --> 00:18:23.119
Murdoch. It's a great industry to be in. And

00:18:23.119 --> 00:18:25.779
I think for those left standing, there's a pot

00:18:25.779 --> 00:18:30.920
of gold for most of you guys. What do you think,

00:18:30.940 --> 00:18:34.019
since you've done due diligence on so many different

00:18:34.019 --> 00:18:36.619
firms from retail firms, wholesale firms, you

00:18:36.619 --> 00:18:39.579
know, AI driven, summer legacy, what do you,

00:18:39.619 --> 00:18:42.440
when you look at these businesses, what would

00:18:42.440 --> 00:18:45.380
you say is a good firm? And this is important

00:18:45.380 --> 00:18:48.539
because there's, It's like sport. You might have

00:18:48.539 --> 00:18:51.700
the best player, you know, plays for Australia,

00:18:51.920 --> 00:18:53.839
but that doesn't mean they can coach, right?

00:18:54.539 --> 00:18:56.740
You know, how many times is essentially like

00:18:56.740 --> 00:19:00.319
a Manchester United phenomenal player comes back

00:19:00.319 --> 00:19:03.160
to try to coach and they just unfortunately stink,

00:19:03.339 --> 00:19:07.740
right? So when you're looking at these businesses,

00:19:07.980 --> 00:19:14.519
what makes a fantastic, you know, financial advisor

00:19:14.519 --> 00:19:18.160
or wealth advisor firm? in which you know the

00:19:18.160 --> 00:19:21.299
the client feels happy to be there they get essentially

00:19:21.299 --> 00:19:23.900
the response they want documents are done everything

00:19:23.900 --> 00:19:26.700
is compliant um you know the returns are there

00:19:26.700 --> 00:19:28.980
you're like what makes a very good financial

00:19:28.980 --> 00:19:32.500
advisory business yeah it's it's quite funny

00:19:32.500 --> 00:19:36.359
um you should ask that i was just sitting earlier

00:19:36.359 --> 00:19:38.720
this week about two days ago i was sitting in

00:19:38.720 --> 00:19:40.859
front of probably one of the wealthiest family

00:19:40.859 --> 00:19:43.660
offices in australia alongside my mentor santiago

00:19:43.660 --> 00:19:46.660
borage I'm sure a lot of people in the industry

00:19:46.660 --> 00:19:51.839
of advice know of. And Santiago had a very different

00:19:51.839 --> 00:19:55.779
answer to what a good business is versus mine.

00:19:55.980 --> 00:19:58.799
So as you probably know, rightly or wrongly,

00:19:58.819 --> 00:20:01.539
I'm very transactional. So I always look at things

00:20:01.539 --> 00:20:07.299
from an M &A perspective. So look, it's probably

00:20:07.299 --> 00:20:10.019
not my position to say what a good business is

00:20:10.019 --> 00:20:13.380
or what a bad business is. But, you know, from

00:20:13.380 --> 00:20:15.920
my perspective, it comes down to if you're making

00:20:15.920 --> 00:20:18.819
the decision to go down an M &A path, a good

00:20:18.819 --> 00:20:20.720
business for me is a business that's going to

00:20:20.720 --> 00:20:24.779
win a lot of deals, right? So, and, you know,

00:20:24.799 --> 00:20:27.319
without sacrificing integrity or client outcomes,

00:20:27.619 --> 00:20:32.299
okay? So from my perspective, I put broadly,

00:20:32.440 --> 00:20:34.480
you know, a good business comes in two forms.

00:20:34.539 --> 00:20:36.380
You're either a lifestyle business or you're

00:20:36.380 --> 00:20:40.039
a growth business, right? Typically, some of

00:20:40.039 --> 00:20:42.220
my clients are lifestyle businesses and what

00:20:42.220 --> 00:20:44.359
do those look like? It might be one or two or

00:20:44.359 --> 00:20:48.339
even three advisors and they've got a short -term

00:20:48.339 --> 00:20:50.480
focus on the bottom line. They get fulfillment

00:20:50.480 --> 00:20:54.880
out of their client relationships, but they enjoy

00:20:54.880 --> 00:20:57.720
the flexibility that these businesses can provide,

00:20:57.940 --> 00:20:59.980
as I'm sure you're aware of. So there's more

00:20:59.980 --> 00:21:02.500
of a focus on the business complementing lifestyle.

00:21:02.900 --> 00:21:04.799
They might do a lot of their reviews on the golf

00:21:04.799 --> 00:21:09.819
course and they might not work Mondays. And there's

00:21:09.819 --> 00:21:11.759
nothing wrong with that, right? I know a lot

00:21:11.759 --> 00:21:13.519
of good businesses and I work with a lot of those

00:21:13.519 --> 00:21:15.799
type of businesses that fit into that bracket.

00:21:16.680 --> 00:21:19.579
The other bracket, the other category that I

00:21:19.579 --> 00:21:22.279
put advice businesses in are growth businesses.

00:21:22.420 --> 00:21:25.519
And these look like they're usually typically

00:21:25.519 --> 00:21:29.240
a little bit larger. They might have four, 10

00:21:29.240 --> 00:21:32.640
or even 20 businesses, but the objective is very

00:21:32.640 --> 00:21:36.529
different. They're not sitting there having a

00:21:36.529 --> 00:21:39.990
high dividend payout ratio. They might have a

00:21:39.990 --> 00:21:43.349
revenue of 10 mil and they've got a five to 10

00:21:43.349 --> 00:21:46.369
year journey of growing that to 30 to 40 to 50

00:21:46.369 --> 00:21:49.329
mil. And it just looks very different. They typically,

00:21:49.390 --> 00:21:51.769
a growth business will have a track record of

00:21:51.769 --> 00:21:55.099
M &A. They will have... You know, departments

00:21:55.099 --> 00:21:57.579
dedicate, they'll have heavily invested in their

00:21:57.579 --> 00:22:00.259
processes. So they'll have a strong back and

00:22:00.259 --> 00:22:03.039
middle office infrastructure. And they will track

00:22:03.039 --> 00:22:07.259
metrics such as, you know, advisor, revenue managed

00:22:07.259 --> 00:22:11.519
per advisor or cost per SOA, if they're doing

00:22:11.519 --> 00:22:16.900
a middle office or a back office metric. So yeah,

00:22:17.019 --> 00:22:19.500
to me, what is a good business? A good business

00:22:19.500 --> 00:22:22.299
is knowing your DNA, knowing which of those categories

00:22:22.299 --> 00:22:23.839
you are and being true to it. There's nothing

00:22:23.839 --> 00:22:25.759
wrong with being a lifestyle business or a growth

00:22:25.759 --> 00:22:29.240
business. But yeah, a good business is knowing

00:22:29.240 --> 00:22:31.079
what you are and knowing what your five -year

00:22:31.079 --> 00:22:33.500
goal is and making sure that the two of those

00:22:33.500 --> 00:22:36.799
marry up. right so if you're a lifestyle business

00:22:36.799 --> 00:22:39.339
and you tell me oh you want to go 5x on your

00:22:39.339 --> 00:22:41.920
revenue um but you know i sit there and go well

00:22:41.920 --> 00:22:44.140
where's your you know what's what's your what's

00:22:44.140 --> 00:22:45.599
your tech stack look like and they're sitting

00:22:45.599 --> 00:22:48.599
there i'm using excel so you know to me that's

00:22:48.599 --> 00:22:50.440
probably that client's got a bit of soul searching

00:22:50.440 --> 00:22:52.299
to do and a bit of work to do before they actually

00:22:52.299 --> 00:22:55.480
want to go on that journey so um i guess yeah

00:22:55.480 --> 00:22:57.940
that's that's what i see as a good or a bad business

00:22:57.940 --> 00:23:01.900
yeah It's interesting how everything, it doesn't

00:23:01.900 --> 00:23:03.519
matter what industry we're in or what business

00:23:03.519 --> 00:23:07.019
we discuss, everything comes back to scalability

00:23:07.019 --> 00:23:09.700
based in your DNA of how you kind of want to

00:23:09.700 --> 00:23:12.779
run your business, which essentially means infrastructure,

00:23:13.039 --> 00:23:16.380
right? So with, say, these lifestyle or growth

00:23:16.380 --> 00:23:19.500
businesses, how important are essentially the

00:23:19.500 --> 00:23:22.980
third -party tools and the improvements on the

00:23:22.980 --> 00:23:28.410
efficiencies using like AI or chat GPT? to essentially

00:23:28.410 --> 00:23:31.509
produce these advice documents. And the other

00:23:31.509 --> 00:23:34.089
thing as well, the industry is incredibly litigious.

00:23:34.349 --> 00:23:36.309
So, you know, they're pretty much legal contracts,

00:23:36.549 --> 00:23:38.849
right? So you need to ensure that everything's

00:23:38.849 --> 00:23:41.569
done, you know, compliantly by the book, but

00:23:41.569 --> 00:23:43.750
ensure that, you know, the client's getting the

00:23:43.750 --> 00:23:45.609
highest touch that they deserve and they've been

00:23:45.609 --> 00:23:48.710
looked after, the families. So, you know, how

00:23:48.710 --> 00:23:51.990
important is the infrastructure for both a lifestyle

00:23:51.990 --> 00:23:53.890
practice as well as like a growing business?

00:23:54.829 --> 00:23:57.170
Yeah, exactly. Great question. It's important

00:23:57.170 --> 00:23:59.130
for both, but just touching on your compliance

00:23:59.130 --> 00:24:02.549
point, maybe I was a little bit late to the industry

00:24:02.549 --> 00:24:06.230
given I was post -GFC and by the time I went

00:24:06.230 --> 00:24:09.349
into the M &A phase and started looking closely

00:24:09.349 --> 00:24:12.690
at each one of these businesses and the industry

00:24:12.690 --> 00:24:15.670
as a whole, that was probably post -Royal Haynes.

00:24:15.769 --> 00:24:20.390
So in my experience, most are compliant. most

00:24:20.390 --> 00:24:23.089
advisors and nearly all doing the right thing.

00:24:23.170 --> 00:24:26.029
I don't see any sharks out there. I know that

00:24:26.029 --> 00:24:30.589
I hear war stories back in early 2000s about

00:24:30.589 --> 00:24:33.470
some businesses, but I feel advisors out there,

00:24:33.509 --> 00:24:35.750
they've gone through that, at least internally

00:24:35.750 --> 00:24:37.410
and intrinsically, they've already gone through

00:24:37.410 --> 00:24:40.849
that shift to professionalization. And most advisors

00:24:40.849 --> 00:24:42.670
that I come across, and it's good for the industry,

00:24:42.809 --> 00:24:45.289
right? It's good for the clients, in all honesty.

00:24:45.819 --> 00:24:49.460
It's great. The reason a family chooses to work

00:24:49.460 --> 00:24:52.420
with us is because they spent 30 years doing

00:24:52.420 --> 00:24:55.279
one particular thing, selling furniture. And

00:24:55.279 --> 00:24:57.559
then essentially they've run that business and

00:24:57.559 --> 00:24:59.740
then it's the variables. Then they step in and

00:24:59.740 --> 00:25:02.259
they think, I can run $30 million. But then the

00:25:02.259 --> 00:25:03.940
variables kind of get them. There's so many different

00:25:03.940 --> 00:25:08.259
choices. Exactly. So, yeah, back to, I guess,

00:25:08.319 --> 00:25:10.920
investment in infrastructure. Look, for a lifestyle

00:25:10.920 --> 00:25:14.180
business, a lifestyle business will never attract

00:25:14.180 --> 00:25:17.680
an investor. right so from that aspect i always

00:25:17.680 --> 00:25:19.960
tell them if you're a lifestyle business and

00:25:19.960 --> 00:25:21.740
that's what you want to do and if you're an advisor

00:25:21.740 --> 00:25:25.160
that wants to wear many hats and um you know

00:25:25.160 --> 00:25:27.920
your dna is that and you know you tick every

00:25:27.920 --> 00:25:30.519
one of those boxes that i mentioned earlier you're

00:25:30.519 --> 00:25:33.359
somewhat capped your earning potential. And from

00:25:33.359 --> 00:25:34.880
my experience, that's probably looking at half

00:25:34.880 --> 00:25:37.880
a mil to maybe 700, 800 grand per advisor. And

00:25:37.880 --> 00:25:41.339
that's a great wicket to be on. But you're not

00:25:41.339 --> 00:25:43.799
going to be attracting any outside strategic

00:25:43.799 --> 00:25:46.420
investor to sit there and take you to that, turn

00:25:46.420 --> 00:25:49.779
you into that, whether that's a 25 mil EBIT or

00:25:49.779 --> 00:25:53.640
a 50 mil revenue firm. You're not going to be

00:25:53.640 --> 00:25:56.299
doing that with a lifestyle business. More often

00:25:56.299 --> 00:25:58.240
than not, those lifestyle businesses don't want

00:25:58.240 --> 00:26:00.319
to give up. They're very married to a certain

00:26:00.319 --> 00:26:03.660
way. I come across it a lot. Advisors will be

00:26:03.660 --> 00:26:06.240
using Excel and I sit there and tell them, I've

00:26:06.240 --> 00:26:09.880
had this software around called X -Plan for 30

00:26:09.880 --> 00:26:12.460
years and we've got some new ones that can pretty

00:26:12.460 --> 00:26:15.619
much halve your time, but convincing them to

00:26:15.619 --> 00:26:17.380
change if they're not motivated to go on that

00:26:17.380 --> 00:26:20.500
journey can be somewhat difficult. So for a lifestyle

00:26:20.500 --> 00:26:23.839
business, The primary M &A objective is sometimes

00:26:23.839 --> 00:26:25.759
they might just be looking for a little bolt

00:26:25.759 --> 00:26:28.019
-on, right? So they might decide that they've

00:26:28.019 --> 00:26:29.759
got a little bit too much time on their hand

00:26:29.759 --> 00:26:32.299
and they might just want a little 50 -mil bolt

00:26:32.299 --> 00:26:36.640
-on acquisition and that's the typical M &A objective

00:26:36.640 --> 00:26:39.779
that those guys give me. For a growth business,

00:26:40.039 --> 00:26:43.319
it's extremely important. So I spend the bulk

00:26:43.319 --> 00:26:46.299
of my time... trying to marry growth businesses

00:26:46.299 --> 00:26:48.920
with strategic capital, whether it's family offices

00:26:48.920 --> 00:26:51.099
or private equity funds that are looking at entering

00:26:51.099 --> 00:26:55.319
advice. And tech stack, you know, scalability,

00:26:55.619 --> 00:26:58.000
you know, the actual tracking of these metrics,

00:26:58.079 --> 00:27:00.259
productivity metrics, you know, how much per

00:27:00.259 --> 00:27:03.259
term, how much of GSOA turnaround. It's extremely

00:27:03.259 --> 00:27:08.660
important. And so, yeah, it's extremely important.

00:27:08.980 --> 00:27:13.640
But granted, being... ai right now it's an evolving

00:27:13.640 --> 00:27:16.940
show it's hard to be on the front of that um

00:27:16.940 --> 00:27:20.759
it's it's hard to sit there and being first mover

00:27:20.759 --> 00:27:23.180
in this industry first mover advantage isn't

00:27:23.180 --> 00:27:26.079
always an advantage um but you know i'm speaking

00:27:26.079 --> 00:27:28.759
to a lot of advisors that are sitting there saying

00:27:28.759 --> 00:27:31.519
you know i could barely see 100 clients a year

00:27:31.519 --> 00:27:34.970
now but um you know just just with the use of

00:27:34.970 --> 00:27:37.369
ai fire notes so they're not sitting there and

00:27:37.369 --> 00:27:40.089
you know after spending an hour with the client

00:27:40.089 --> 00:27:42.029
doing the review they're not spending three hours

00:27:42.029 --> 00:27:45.349
typing up a file on it um i speak to a lot of

00:27:45.349 --> 00:27:47.329
advisors now that's you know that's that's pretty

00:27:47.329 --> 00:27:50.869
much half their week so um you know as i said

00:27:50.869 --> 00:27:54.049
it's it's something that makes this type of industry

00:27:54.049 --> 00:27:56.710
that more attractive is the use of ai in terms

00:27:56.710 --> 00:28:01.269
of breeding efficiencies um but Even with AI

00:28:01.269 --> 00:28:03.950
disruption, one thing that advice has that probably

00:28:03.950 --> 00:28:06.470
a lot of other financial services doesn't have

00:28:06.470 --> 00:28:10.490
is that clients are paying for that client relationship,

00:28:10.650 --> 00:28:14.150
the advisor relationship. Some of that can't

00:28:14.150 --> 00:28:18.250
be said with potentially asset management, potentially

00:28:18.250 --> 00:28:26.309
some of the other financial services. I am extremely

00:28:26.309 --> 00:28:29.140
bullish on advice. especially with AI's disruption

00:28:29.140 --> 00:28:32.519
to it, because it might sit there and absolutely

00:28:32.519 --> 00:28:36.339
backfill the client capacity per advisor, but

00:28:36.339 --> 00:28:38.279
clients will always pay a premium knowing that

00:28:38.279 --> 00:28:40.140
they can sit there and know that Murdoch's down

00:28:40.140 --> 00:28:41.940
the street and they can look you in the eye and

00:28:41.940 --> 00:28:44.920
you can sit there and look them back and say,

00:28:44.980 --> 00:28:47.059
look, I'm doing the best that I can at managing

00:28:47.059 --> 00:28:48.859
your money and I'm safeguarding your future.

00:28:49.559 --> 00:28:53.019
So I guess that's the beauty about advice at

00:28:53.019 --> 00:28:56.519
the moment. Yeah, look, I must say some of these

00:28:56.519 --> 00:28:59.319
tools that we use are phenomenal. But I'm going

00:28:59.319 --> 00:29:01.220
to be a bit cheeky here and say, you know, from

00:29:01.220 --> 00:29:03.000
when you're running a business, when you look

00:29:03.000 --> 00:29:05.579
at these businesses, what tools? have you found

00:29:05.579 --> 00:29:08.039
that some of the best businesses use for each

00:29:08.039 --> 00:29:11.220
particular task? Come on, man, I'll put you on

00:29:11.220 --> 00:29:14.160
the spot. I'll tell you what I'm using. I'm using

00:29:14.160 --> 00:29:17.599
NetWealth for asset management, Morrison's for

00:29:17.599 --> 00:29:21.500
stockbroking. IntelliFlow is a fantastic evolution

00:29:21.500 --> 00:29:26.680
on X -Plan. And yes, to your point, that file

00:29:26.680 --> 00:29:31.000
reader is excellent for recording meetings using

00:29:31.000 --> 00:29:34.609
the file notes. It's incredible. Yeah, well,

00:29:34.690 --> 00:29:36.950
none of the third -party product providers are

00:29:36.950 --> 00:29:38.710
paying me, Murdoch, so I've got no one to listen

00:29:38.710 --> 00:29:40.690
to. They're not paying me either. At the end

00:29:40.690 --> 00:29:42.609
of the day, I'm doing this for me. I'm being

00:29:42.609 --> 00:29:44.289
incredibly selfish here. I want to get better

00:29:44.289 --> 00:29:46.549
tools to help my clients. Do you know, in my

00:29:46.549 --> 00:29:49.369
experience, right, so in the first company that

00:29:49.369 --> 00:29:52.690
I started off with that we built out to something

00:29:52.690 --> 00:29:56.150
quite large, you know, I had a bit more of a

00:29:56.150 --> 00:29:57.990
vested interest in the operations and the mechanics

00:29:57.990 --> 00:30:01.660
of advice, and I learned that... You kind of

00:30:01.660 --> 00:30:03.559
just marry one and deal with the flaws, right?

00:30:03.660 --> 00:30:06.680
Nothing's going to be perfectly perfect in this

00:30:06.680 --> 00:30:10.599
space. I speak to advisors every day and everyone

00:30:10.599 --> 00:30:13.920
can pick something to complain about. You can

00:30:13.920 --> 00:30:16.240
complain about every platform. You can complain

00:30:16.240 --> 00:30:19.099
about every software. No one's perfectly happy.

00:30:19.559 --> 00:30:22.039
So look, at the end of the day, I think you pick

00:30:22.039 --> 00:30:24.160
one, you marry it, you invest in people properly

00:30:24.160 --> 00:30:26.819
to sit there and manage the process. And there's

00:30:26.819 --> 00:30:28.160
always going to be an element of human overlay

00:30:28.160 --> 00:30:32.390
with this. So, yeah, look, I'm very agnostic

00:30:32.390 --> 00:30:34.789
to the operations of these businesses, as I said.

00:30:35.430 --> 00:30:37.910
To me, it's more about, you know, siding with

00:30:37.910 --> 00:30:40.470
a company that's, you know, got infrastructure

00:30:40.470 --> 00:30:44.609
support and essentially invest in their processes

00:30:44.609 --> 00:30:46.970
and whatever those processes manifest in, whichever

00:30:46.970 --> 00:30:50.509
platform or software. I don't really have a view

00:30:50.509 --> 00:30:52.690
as long as they're, you know, as long as they've

00:30:52.690 --> 00:30:55.049
got someone there dedicated and thinking about

00:30:55.049 --> 00:30:56.809
it and they're actually reviewing it and putting.

00:30:57.240 --> 00:30:59.579
putting some effort and resources into refining

00:30:59.579 --> 00:31:02.619
it and improving it. Because yeah, as I said,

00:31:02.640 --> 00:31:06.339
to sit there and just say, this is my advice

00:31:06.339 --> 00:31:09.339
software and I'm married to it and this is the

00:31:09.339 --> 00:31:11.140
only one I want to use for the next five to 10

00:31:11.140 --> 00:31:13.740
years. I think you're going to be missing out

00:31:13.740 --> 00:31:15.680
on a lot of great products that are coming to

00:31:15.680 --> 00:31:18.039
market with the integration and enhancements

00:31:18.039 --> 00:31:19.960
of AI over the course of the next five years.

00:31:22.560 --> 00:31:24.680
So that's my answer to your hairy question, mate.

00:31:27.720 --> 00:31:29.839
Look, at the end of the day, I think you're right.

00:31:29.960 --> 00:31:32.920
It's just like your gas bill. It's very easy

00:31:32.920 --> 00:31:34.720
to leave a gas bill ticking for 10 years and

00:31:34.720 --> 00:31:36.140
never check it. And then you check it. You're

00:31:36.140 --> 00:31:37.799
like, how did my fees go up by so much? Am I

00:31:37.799 --> 00:31:39.599
getting the best thing? So yes, it's definitely

00:31:39.599 --> 00:31:41.960
of your interest to check every single year and

00:31:41.960 --> 00:31:44.259
make sure that the deal you're getting and you're

00:31:44.259 --> 00:31:46.259
getting the best quality for your money and making

00:31:46.259 --> 00:31:48.240
sure that you're on track for your family. Absolutely.

00:31:49.000 --> 00:31:51.869
But back to the... Back to the businesses, I

00:31:51.869 --> 00:31:54.809
really want to get into the growth advisory businesses,

00:31:55.170 --> 00:31:58.750
right? So, you know, I use myself as an example,

00:31:58.849 --> 00:32:01.450
growth advisory, you know, type of business.

00:32:02.369 --> 00:32:04.970
But I won't use my numbers, obviously. But say

00:32:04.970 --> 00:32:08.069
you have, you know, advisory practice that has

00:32:08.069 --> 00:32:10.210
the capacity to borrow, I don't know, a million

00:32:10.210 --> 00:32:15.680
dollars, right? but it's not necessarily getting

00:32:15.680 --> 00:32:17.660
the capital or you have another issue. You know,

00:32:17.660 --> 00:32:20.660
some advisors may have just left a large institutional

00:32:20.660 --> 00:32:22.500
firm and getting their business up and running.

00:32:22.559 --> 00:32:24.579
Some of the tax in order to borrow, you require

00:32:24.579 --> 00:32:27.579
essentially two years of financials in order

00:32:27.579 --> 00:32:30.700
to even borrow any money from the bank. So then

00:32:30.700 --> 00:32:32.559
essentially they cap down on technicality because

00:32:32.559 --> 00:32:35.119
they can't access the capital, right? So how...

00:32:35.599 --> 00:32:39.660
Does a capital provider or a fund manager or

00:32:39.660 --> 00:32:42.720
someone with money essentially help an advisor

00:32:42.720 --> 00:32:48.279
access capital in order to help them find a practice

00:32:48.279 --> 00:32:51.619
like a retiring advisor or something of the equivalent

00:32:51.619 --> 00:32:54.680
to help them with an acquisition? How the hell

00:32:54.680 --> 00:32:57.700
does that work? I understand that for some people

00:32:57.700 --> 00:32:59.920
that don't understand it, that may be considering

00:32:59.920 --> 00:33:01.720
this for the first time. How does that relationship

00:33:01.720 --> 00:33:05.289
work? Yeah, exactly. you know this is probably

00:33:05.289 --> 00:33:07.710
where i won't play straight bad i think given

00:33:07.710 --> 00:33:11.490
the tailwinds that we discussed you know given

00:33:11.490 --> 00:33:13.529
the bullishness around advice and a lot of a

00:33:13.529 --> 00:33:17.029
lot of things working for it at the moment um

00:33:17.420 --> 00:33:20.119
I think if you're an advisor, you'd be remiss

00:33:20.119 --> 00:33:22.859
not to put yourself as a growth advisor and sit

00:33:22.859 --> 00:33:26.640
there and think about, how can I really 5X my

00:33:26.640 --> 00:33:28.259
business over the course of the next five to

00:33:28.259 --> 00:33:31.079
10 years? Because not only are you going to get,

00:33:31.200 --> 00:33:33.299
we can talk about growing the business through

00:33:33.299 --> 00:33:35.480
M &A organically and inorganically, but you're

00:33:35.480 --> 00:33:38.000
also, there's huge multiple arbitrage at the

00:33:38.000 --> 00:33:41.079
moment for sizable businesses, right? So privately,

00:33:41.200 --> 00:33:42.680
if you're a subscale business, you're looking

00:33:42.680 --> 00:33:45.799
at six or seven times even. But we're starting

00:33:45.799 --> 00:33:50.099
to see privately, we're seeing attraction from

00:33:50.099 --> 00:33:53.160
overseas institutional investors. We're seeing

00:33:53.160 --> 00:33:56.799
privately multiples up around 11 or 12. So if

00:33:56.799 --> 00:33:59.779
you do want to be a growth advisor, there's a

00:33:59.779 --> 00:34:04.480
clear formula for that. So even if you're a one

00:34:04.480 --> 00:34:09.340
-man advisor, the idea would be consolidate your

00:34:09.340 --> 00:34:12.139
own book, manage it yourself. If you've got the

00:34:12.139 --> 00:34:14.579
scale to justify being self -licensed, do it.

00:34:14.599 --> 00:34:17.199
If not, go and car up under a licensee that will

00:34:17.199 --> 00:34:20.599
support you economically as well as with compliance

00:34:20.599 --> 00:34:23.340
and regulatory, obviously, support that you need.

00:34:24.059 --> 00:34:27.000
But yeah, I'd be looking at, you know, is my

00:34:27.000 --> 00:34:29.320
business growing organically? Number one, how

00:34:29.320 --> 00:34:31.340
can I improve organic growth? Should I be hunting

00:34:31.340 --> 00:34:33.440
more? Should I be doing some pseudo -organic,

00:34:33.440 --> 00:34:36.530
whether it's... on my marketing or you know beefing

00:34:36.530 --> 00:34:39.949
up my referral capacity um but you know essentially

00:34:39.949 --> 00:34:43.309
the journey for a growth advisor is sit there

00:34:43.309 --> 00:34:46.150
and go and do an acquisition or two right so

00:34:46.150 --> 00:34:49.570
um don't bite off more than you can chew if you're

00:34:49.570 --> 00:34:52.090
a 50 mil if you're running a 50 mil book don't

00:34:52.090 --> 00:34:54.090
go and buy a 50 mil book you're not doubling

00:34:54.090 --> 00:34:56.030
your profit you're doubling your headaches and

00:34:56.030 --> 00:34:58.570
you're usually halving your product halving your

00:34:58.570 --> 00:35:02.250
product your profit rather um so i would say

00:35:02.250 --> 00:35:06.159
scale but with intellect and do it the smart

00:35:06.159 --> 00:35:08.659
way um but you know if look if you're if you're

00:35:08.659 --> 00:35:11.039
a 300 mil practice just call it you're managing

00:35:11.039 --> 00:35:13.519
three million revenue um and you want to sit

00:35:13.519 --> 00:35:15.619
there and you know you want to go to a 30 mil

00:35:15.619 --> 00:35:20.380
revenue business um go and you can use someone

00:35:20.380 --> 00:35:22.280
like myself if you can procure your own deals

00:35:22.280 --> 00:35:24.619
go and acquire go and do two or three or four

00:35:24.619 --> 00:35:28.150
acquisitions over a five year span um groove

00:35:28.150 --> 00:35:30.969
your you know and through that it'll be a baptism

00:35:30.969 --> 00:35:33.309
by fire and that it will force you to invest

00:35:33.309 --> 00:35:36.489
in your infrastructure and your scalability it'll

00:35:36.489 --> 00:35:40.429
expose some gaps there um not in a way that's

00:35:40.429 --> 00:35:42.369
going to sink the ship but it'll make you pay

00:35:42.369 --> 00:35:44.690
a little bit more attention to some some weak

00:35:44.690 --> 00:35:46.829
points where you might be so use them as learning

00:35:46.829 --> 00:35:49.769
curves as well as growth mechanisms and pretty

00:35:49.769 --> 00:35:51.550
soon you're going to get to a point where you

00:35:51.550 --> 00:35:54.420
keep acquiring where And you want to be using

00:35:54.420 --> 00:35:57.880
first -tier lenders. Banks right now are very

00:35:57.880 --> 00:35:59.940
supportive of financial advice acquisitions.

00:36:00.280 --> 00:36:03.559
I'm seeing business loans to this space, which

00:36:03.559 --> 00:36:07.860
is similar to first mortgages, right? So if that

00:36:07.860 --> 00:36:09.280
doesn't give you confidence in this space, I

00:36:09.280 --> 00:36:11.719
don't know what will. So get a good relationship

00:36:11.719 --> 00:36:14.639
with a bank. They will support you. They will

00:36:14.639 --> 00:36:17.320
do your first few acquisitions, groove your process,

00:36:17.619 --> 00:36:20.940
and then you'll get to a point where you can't

00:36:20.940 --> 00:36:22.579
undertake any more acquisitions because you've

00:36:22.579 --> 00:36:24.460
axed out your balance sheet. And that'll usually

00:36:24.460 --> 00:36:27.079
be around about three times EBIT is what I find.

00:36:28.159 --> 00:36:31.820
So banks will want to see you pay that debt down

00:36:31.820 --> 00:36:35.719
before you go again. But depending on the growth

00:36:35.719 --> 00:36:37.639
rate of the business, sometimes that might take

00:36:37.639 --> 00:36:40.699
three years before you can sit there and grow

00:36:40.699 --> 00:36:43.420
again. So if you want to, that's in that point

00:36:43.420 --> 00:36:46.059
in time, that little inflection point where these

00:36:46.059 --> 00:36:49.300
advice businesses get stuck, that's when they

00:36:49.300 --> 00:36:51.639
start looking for a strategic partner, right?

00:36:52.400 --> 00:36:54.699
So in a perfect world, a strategic partner will

00:36:54.699 --> 00:36:57.829
come and... um buy your shares portion of your

00:36:57.829 --> 00:37:00.980
shares clear off your debt and that allows you

00:37:00.980 --> 00:37:03.219
to go and borrow again through a first tier lender

00:37:03.219 --> 00:37:05.579
right and frees you up so you can go again and

00:37:05.579 --> 00:37:08.099
then you know at that point you might be a five

00:37:08.099 --> 00:37:11.639
or six or 700 mil practice and you let on a strategic

00:37:11.639 --> 00:37:14.320
partner clears your debt you've got a zero balance

00:37:14.320 --> 00:37:18.179
sheet um now you can go and become a three billion

00:37:18.179 --> 00:37:20.239
dollar business or a two billion dollar funds

00:37:20.239 --> 00:37:23.440
in a management business and um you know just

00:37:23.440 --> 00:37:25.539
as a straight line say your revenue model's one

00:37:25.539 --> 00:37:28.320
percent and say you're normalized EBIT margin

00:37:28.320 --> 00:37:32.559
should be maybe 40 % of that. You're looking

00:37:32.559 --> 00:37:35.539
at whatever that is, what's two bill, 20 mil,

00:37:35.719 --> 00:37:38.320
and you're looking at 40 % of that. You've got

00:37:38.320 --> 00:37:42.340
eight mil there in EBITDA. You times that by

00:37:42.340 --> 00:37:44.780
12, and that's your new valuation. And that's

00:37:44.780 --> 00:37:49.699
your journey. That's your journey to a near 100

00:37:49.699 --> 00:37:53.440
mil valuation. Granted, you might have sold maybe

00:37:53.440 --> 00:37:56.880
40 % of your business along the way, but You're

00:37:56.880 --> 00:38:00.679
left there with 60 % of what's on the fringe

00:38:00.679 --> 00:38:05.000
of a $100 million business, right? So look, that's

00:38:05.000 --> 00:38:06.920
it on paper. That's it on the back of the napkin.

00:38:07.059 --> 00:38:09.260
Obviously, there's a lot of people involved in

00:38:09.260 --> 00:38:12.699
these businesses and to be someone to go through

00:38:12.699 --> 00:38:15.360
that growth journey, it's a lot of work. It's

00:38:15.360 --> 00:38:18.099
a privilege that's bestowed to the few to have

00:38:18.099 --> 00:38:20.780
the capacity and I guess the skill set to go

00:38:20.780 --> 00:38:23.730
on that. It requires a strong leader. But I come

00:38:23.730 --> 00:38:27.389
across these guys and there's some really great

00:38:27.389 --> 00:38:29.349
businesses and really great people out there

00:38:29.349 --> 00:38:31.469
that I work closely with and, you know, they're

00:38:31.469 --> 00:38:33.769
sitting and they've got that capacity in front

00:38:33.769 --> 00:38:38.150
of them, right? So, you know, if you can lead

00:38:38.150 --> 00:38:41.289
these businesses and you want growth and, you

00:38:41.289 --> 00:38:43.789
know, you feel that you can manage a growing

00:38:43.789 --> 00:38:46.610
team and you know your weaknesses and you have

00:38:46.610 --> 00:38:49.840
the humility to sit there and... specialize in

00:38:49.840 --> 00:38:51.800
certain areas you're not trying to wear too many

00:38:51.800 --> 00:38:54.039
hats you know what your your strengths are and

00:38:54.039 --> 00:38:57.599
your superpowers um and you can lead people um

00:38:57.599 --> 00:39:01.519
you know i think there's no reason why a lot

00:39:01.519 --> 00:39:03.340
of these businesses should be going on that journey

00:39:03.340 --> 00:39:06.320
to try to get that 100 bill valuation um and

00:39:06.320 --> 00:39:08.679
i think that's only growing right so i look at

00:39:09.599 --> 00:39:12.739
Valuations right now for a great business that

00:39:12.739 --> 00:39:16.139
has 20 mil EBIT, I'm seeing 10 times, right?

00:39:16.280 --> 00:39:19.699
So we're seeing a 10 times, maybe 11 times. I

00:39:19.699 --> 00:39:22.420
know that there's a very large prestigious firm

00:39:22.420 --> 00:39:24.920
there that's making headlines. They're probably

00:39:24.920 --> 00:39:28.079
in that similar bracket. They're not entertaining

00:39:28.079 --> 00:39:32.019
offers under 12 times EBIT. The exciting thing

00:39:32.019 --> 00:39:36.039
about that is when you look overseas, whether

00:39:36.039 --> 00:39:38.239
it's the US or the UK, a lot of these business

00:39:38.239 --> 00:39:42.519
privately are trading at 16, 18, 20 times. And

00:39:42.519 --> 00:39:44.320
don't get me started if you're listed, right?

00:39:44.400 --> 00:39:47.099
A lot of listed both foreign and domestic listed

00:39:47.099 --> 00:39:49.340
advice businesses can trade anywhere from 20

00:39:49.340 --> 00:39:52.699
to 40 times. So I think we're only going to see

00:39:52.699 --> 00:39:55.460
a closing of that gap, whether it's an overseas

00:39:55.460 --> 00:39:58.260
investor whose headcount is trading at 20 times.

00:39:59.180 --> 00:40:01.760
There's an obvious and compelling multiple arbitrage

00:40:01.760 --> 00:40:05.340
for them to come and buy a large firm with 20

00:40:05.340 --> 00:40:08.820
mil EBIT to go and buy that. They could pay you

00:40:08.820 --> 00:40:11.860
15 times and still make instant money on the

00:40:11.860 --> 00:40:15.659
balance sheet. So that's the really exciting

00:40:15.659 --> 00:40:19.159
thing about Australia at the moment. So I'm a

00:40:19.159 --> 00:40:22.320
real student of the US, speaking to some people

00:40:22.320 --> 00:40:24.369
that have gone on this journey. over the past

00:40:24.369 --> 00:40:27.650
10 years in advice in wealth management a lot

00:40:27.650 --> 00:40:28.969
of them are sitting there watching Australia

00:40:28.969 --> 00:40:31.309
saying the exact same thing is happening in Australia

00:40:31.309 --> 00:40:34.409
that happened here in the US 10 years ago so

00:40:34.409 --> 00:40:39.510
we've got a nice precedent there and yeah so

00:40:39.510 --> 00:40:41.969
yeah I think if you're an advisor and you have

00:40:41.969 --> 00:40:43.789
leadership qualities you should be strongly thinking

00:40:43.789 --> 00:40:46.809
about how do I take my business from you know

00:40:46.809 --> 00:40:48.889
a billion or two billion in funds under management

00:40:48.889 --> 00:40:52.750
and how do I get it to five or seven bill because

00:40:53.489 --> 00:40:56.590
You dropped the word capacity, right? Capacity

00:40:56.590 --> 00:40:59.090
is an interesting word, especially in this particular

00:40:59.090 --> 00:41:02.190
space. If someone has, or if an advisory business

00:41:02.190 --> 00:41:04.230
has the means and the capacity and they want

00:41:04.230 --> 00:41:07.309
to grow and expand. But the other thing as well,

00:41:07.309 --> 00:41:09.170
we are human beings, right? You have to go through

00:41:09.170 --> 00:41:11.250
the process. And if someone's going through the

00:41:11.250 --> 00:41:14.750
process to try to purchase businesses and essentially

00:41:14.750 --> 00:41:17.190
gets like, it's like, fine, I'll give you a different

00:41:17.190 --> 00:41:19.590
example that everyone understands, right? Buying

00:41:19.590 --> 00:41:21.570
a house, buying your home at the property. You

00:41:21.570 --> 00:41:25.190
get there, you rock up, you start bidding, then

00:41:25.190 --> 00:41:27.170
all of a sudden a phone call comes in and you

00:41:27.170 --> 00:41:29.570
kind of get outbid at the last second by an absolute

00:41:29.570 --> 00:41:32.480
monster that just wants to buy 500 homes. So

00:41:32.480 --> 00:41:36.099
for the advisors out there that have experienced

00:41:36.099 --> 00:41:38.500
that on the property side, it could also be said

00:41:38.500 --> 00:41:40.480
it's very similar on the advisory side. To your

00:41:40.480 --> 00:41:42.719
point, there are large institutions coming in

00:41:42.719 --> 00:41:45.400
trying to pick up these businesses. So how would

00:41:45.400 --> 00:41:48.920
essentially someone that's a growth -based business,

00:41:48.940 --> 00:41:51.059
just got a good shop that just wants to grow,

00:41:51.559 --> 00:41:54.539
that's kind of pretty much down the dumps, tried

00:41:54.539 --> 00:41:56.820
three or four different acquisitions, they haven't

00:41:56.820 --> 00:41:58.800
come through, maybe get outbid at the last second,

00:41:58.920 --> 00:42:03.389
right? they do differently to essentially you

00:42:03.389 --> 00:42:06.269
know help them with the next acquisition to actually

00:42:06.269 --> 00:42:08.389
be successful because there's a lot of competition

00:42:08.389 --> 00:42:10.630
coming in now that wasn't as much about three

00:42:10.630 --> 00:42:15.650
years ago but now it's really hot and heavy yeah

00:42:15.650 --> 00:42:19.029
well the short answer is they can call Michael

00:42:19.029 --> 00:42:24.289
McAllister Campbell as such. But you're quite

00:42:24.289 --> 00:42:27.030
right. Yeah, obviously, they can call you, they

00:42:27.030 --> 00:42:29.070
can call me. But the thing is, like, what do

00:42:29.070 --> 00:42:31.170
you do in that situation? Like, what defines?

00:42:31.550 --> 00:42:33.869
That's it. So that's the space that I'm playing

00:42:33.869 --> 00:42:36.409
in. Explain the process. Like, you know, what

00:42:36.409 --> 00:42:41.050
do you need to do? Like, what part of the process

00:42:41.050 --> 00:42:43.269
essentially determines whether or not you're

00:42:43.269 --> 00:42:44.849
going to be successful at the end of the day?

00:42:44.929 --> 00:42:47.150
Otherwise, you just. Don't get your head against

00:42:47.150 --> 00:42:50.050
the wall for the next couple of years. Yeah,

00:42:50.070 --> 00:42:53.650
exactly. So I think two things there. First thing,

00:42:53.650 --> 00:42:55.610
try to do all your deals direct, right? So I'll

00:42:55.610 --> 00:42:59.070
be career count is probably up near 15 deals.

00:42:59.230 --> 00:43:01.989
I've only done one through a broker, which is

00:43:01.989 --> 00:43:03.969
a testament that if you can sit there and negotiate

00:43:03.969 --> 00:43:06.250
in a vacuum and you can put the ring fence around

00:43:06.250 --> 00:43:08.909
an acquisition target by yourself. So it's not

00:43:08.909 --> 00:43:10.510
listed on the broker where you're competing with

00:43:10.510 --> 00:43:13.809
a thousand others. Some have. larger wallets

00:43:13.809 --> 00:43:16.889
more often than not. And it's just a race to

00:43:16.889 --> 00:43:20.110
the top, right? So I'm a strong believer in that

00:43:20.110 --> 00:43:22.489
you need to have an M &A strategy, which focuses

00:43:22.489 --> 00:43:25.289
on procuring deals directly so that you're a

00:43:25.289 --> 00:43:28.389
high probability of winning them. Because you

00:43:28.389 --> 00:43:31.530
can waste a lot of time sitting there contesting

00:43:31.530 --> 00:43:33.230
deals that you'll never win because you're competing

00:43:33.230 --> 00:43:38.150
with 30 to 50 other advice firms. And time is

00:43:38.150 --> 00:43:40.090
money. You can't afford to be spending six months

00:43:40.090 --> 00:43:43.190
on a deal and then losing it. given that your

00:43:43.190 --> 00:43:45.130
exclusivity is expired and they've gone just

00:43:45.130 --> 00:43:48.469
for the better offer or what have you. So my

00:43:48.469 --> 00:43:50.670
advice and the reason I started McAllister Capital

00:43:50.670 --> 00:43:54.010
was I saw this, it was gleamingly obvious when

00:43:54.010 --> 00:43:55.889
everyone said, oh, we've been trying to do acquisitions

00:43:55.889 --> 00:43:58.670
for years. But the group that I was with, because

00:43:58.670 --> 00:44:01.289
I made it my sole responsibility every day to

00:44:01.289 --> 00:44:04.650
procure acquisitions, I found that I was like,

00:44:04.750 --> 00:44:05.989
there's acquisitions everywhere. What do you

00:44:05.989 --> 00:44:08.159
mean you can't find them? I sit there and swing

00:44:08.159 --> 00:44:10.940
a cart and I'll make 50 calls a day in a suburb

00:44:10.940 --> 00:44:15.099
and there might be 50 advisors and more often

00:44:15.099 --> 00:44:17.400
than not, there'll be maybe five or six that

00:44:17.400 --> 00:44:19.179
are looking at doing something strategic and

00:44:19.179 --> 00:44:21.099
out of that five or six, if you put an offer

00:44:21.099 --> 00:44:22.880
in front of one or two of them, they'll buy it.

00:44:22.980 --> 00:44:27.900
So do deals directly would be my advice. Second

00:44:27.900 --> 00:44:34.300
to that is Skyrise. A skyrise can go as tall

00:44:34.300 --> 00:44:36.920
as it's the strength of its base and foundation.

00:44:37.340 --> 00:44:41.880
So, you know, and probably to add another analogy

00:44:41.880 --> 00:44:44.440
on top of an analogy, you need to attract bees

00:44:44.440 --> 00:44:47.639
with honey. So you need to make sure that your

00:44:47.639 --> 00:44:49.840
ship's in order, right? You need to make sure

00:44:49.840 --> 00:44:52.420
that your company presents well, and you need

00:44:52.420 --> 00:44:55.099
to make sure that you cast a wide net, which

00:44:55.099 --> 00:44:57.719
is a lot of something that I help a lot of advice

00:44:57.719 --> 00:45:00.000
firms with, which they don't really think about.

00:45:00.670 --> 00:45:02.449
Like if you're an advice firm, you want to go

00:45:02.449 --> 00:45:05.789
on an M &A journey, but you sit there and my

00:45:05.789 --> 00:45:08.610
mentor calls it a religion. But if you have a

00:45:08.610 --> 00:45:11.190
belief in something without evidence, that's

00:45:11.190 --> 00:45:15.210
a religion. So a common belief is indexing and

00:45:15.210 --> 00:45:17.769
passive investing the top 20 stocks is the only

00:45:17.769 --> 00:45:21.630
way to get good returns for clients. You're limiting

00:45:21.630 --> 00:45:23.989
how many acquisitions are going to be attracted

00:45:23.989 --> 00:45:26.429
to you, right? Because a lot of them out there

00:45:26.429 --> 00:45:28.150
don't subscribe to that investment philosophy.

00:45:28.960 --> 00:45:31.440
So if you're going to sit there and hang on to

00:45:31.440 --> 00:45:33.719
a religion such as an investment philosophy or

00:45:33.719 --> 00:45:35.519
another common religion that I see in advice

00:45:35.519 --> 00:45:38.139
firms is that only I know how to service my clients.

00:45:38.500 --> 00:45:40.980
So you have this key man, you have layers of

00:45:40.980 --> 00:45:43.420
key man risk within a business and clients aren't

00:45:43.420 --> 00:45:45.320
clients of the business, they're clients of the

00:45:45.320 --> 00:45:49.079
advisor. You're going to have issues in terms

00:45:49.079 --> 00:45:53.260
of helping and sharing clients and being able

00:45:53.260 --> 00:45:58.139
to fill your capacity. So my advice usually from

00:45:58.139 --> 00:46:00.920
day one, if I see some religions and investment

00:46:00.920 --> 00:46:02.940
philosophies of common money, it would be to

00:46:02.940 --> 00:46:06.360
do some work on that. So whilst you might believe

00:46:06.360 --> 00:46:09.800
that trading, doing direct equities only and

00:46:09.800 --> 00:46:12.300
abandoning fixed income and just doing an indexing

00:46:12.300 --> 00:46:14.480
strategy with cash is the best way to get a return

00:46:14.480 --> 00:46:17.480
in the market, you probably need to be challenged

00:46:17.480 --> 00:46:20.380
on that. you're going to lose a lot of deals.

00:46:20.420 --> 00:46:22.659
So you might come across a perfect acquisition

00:46:22.659 --> 00:46:24.739
that might be right down the street and ticks

00:46:24.739 --> 00:46:27.579
all the boxes that you want. As soon as the other

00:46:27.579 --> 00:46:30.960
advisor might believe in more of an active approach

00:46:30.960 --> 00:46:35.960
using funds of funds, he's not going to see the

00:46:35.960 --> 00:46:38.960
world the same way that you do. So casting a

00:46:38.960 --> 00:46:40.599
wide net on investment philosophy is something

00:46:40.599 --> 00:46:44.019
that's quite important, I feel. But other than

00:46:44.019 --> 00:46:46.440
that, yeah, other advisors like to see that there's

00:46:46.440 --> 00:46:49.449
multiple people. servicing clients as well right

00:46:49.449 --> 00:46:52.809
so to be a growth business making sure that you've

00:46:52.809 --> 00:46:55.030
got your advice team making sure you've got an

00:46:55.030 --> 00:46:57.510
investment committee whether it's external or

00:46:57.510 --> 00:47:00.230
internal making sure that you've got operation

00:47:00.230 --> 00:47:03.070
team and csms making sure that you've got a nice

00:47:03.070 --> 00:47:06.150
corporatized infrastructure that when a when

00:47:06.150 --> 00:47:08.489
when you're sitting in front of a target yes

00:47:08.489 --> 00:47:10.840
they might like you and when they look at your

00:47:10.840 --> 00:47:13.659
website and they look at your company, they can

00:47:13.659 --> 00:47:15.559
get a high degree of comfort that their clients

00:47:15.559 --> 00:47:17.800
are going to be looked after and that you've

00:47:17.800 --> 00:47:21.059
got capacity to service their clients. So that's

00:47:21.059 --> 00:47:24.420
some of the winning recipes that I like to see

00:47:24.420 --> 00:47:29.559
with my buyers. Thanks for that. Without using,

00:47:29.940 --> 00:47:32.320
obviously privacy is very important, so don't

00:47:32.320 --> 00:47:34.960
say anyone's name, but can you, we discussed

00:47:34.960 --> 00:47:36.940
valuations a couple of times, right? But do you

00:47:36.940 --> 00:47:40.469
want to walk through, you know, say, a couple

00:47:40.469 --> 00:47:43.250
of deals or something or the equivalent and and

00:47:43.250 --> 00:47:48.289
and show exactly the process of okay you've made

00:47:48.289 --> 00:47:50.590
the 50 calls you found five people now you're

00:47:50.590 --> 00:47:54.590
down to two right so so how the like someone

00:47:54.590 --> 00:47:56.329
say someone's doing this for the first time they've

00:47:56.329 --> 00:47:58.449
got the balance sheet all the ducks in a row

00:47:58.449 --> 00:48:00.730
they're great shop the clients love them They're

00:48:00.730 --> 00:48:02.909
not essentially, as you say, religious on their

00:48:02.909 --> 00:48:04.869
policy. And they're looking at an acquisition.

00:48:05.269 --> 00:48:08.130
It can be daunting to an extent because you're

00:48:08.130 --> 00:48:10.670
opening up a business that looks completely different

00:48:10.670 --> 00:48:12.309
than yours, but essentially the clients you know

00:48:12.309 --> 00:48:15.269
you can help. How the hell do you essentially

00:48:15.269 --> 00:48:20.449
value that business? Number one. Why don't we

00:48:20.449 --> 00:48:22.130
start with that? Can you give an example of how

00:48:22.130 --> 00:48:23.909
you actually value the business? Because obviously

00:48:23.909 --> 00:48:25.469
it's going to be different for a stockbroking

00:48:25.469 --> 00:48:28.670
firm. to you know a fund of funds or you know

00:48:28.670 --> 00:48:30.710
a hybrid or something some platform like how

00:48:30.710 --> 00:48:34.349
do you actually value a firm yeah for sure great

00:48:34.349 --> 00:48:36.949
question well i represent two types of buyers

00:48:36.949 --> 00:48:40.809
right so um you know i'd put an advice firm whether

00:48:40.809 --> 00:48:42.670
it's a lifestyle growth business that's as a

00:48:42.670 --> 00:48:45.650
substrata but um you know if i'm representing

00:48:45.650 --> 00:48:47.570
a strategic buyer and they're looking at partnering

00:48:47.570 --> 00:48:51.849
right and they'll more often than not comes down

00:48:51.849 --> 00:48:55.940
to a share sale so i guess More articulately

00:48:55.940 --> 00:48:58.320
put would be it comes down to the nature of the

00:48:58.320 --> 00:49:01.719
acquisition, right? So if you're one advice firm

00:49:01.719 --> 00:49:04.780
looking at acquiring another, if it's typically

00:49:04.780 --> 00:49:07.099
it's a small business where you're not inheriting

00:49:07.099 --> 00:49:10.440
a lot of the operational costs, there's a case

00:49:10.440 --> 00:49:13.280
and the common rule is you'll be buying a recurring

00:49:13.280 --> 00:49:16.179
revenue multiple, right? The justification for

00:49:16.179 --> 00:49:19.039
that is, as I said, you're not inheriting the

00:49:19.039 --> 00:49:21.079
operational costs, right? You're inheriting those

00:49:21.079 --> 00:49:23.800
clients, that revenues. coming into your infrastructure

00:49:23.800 --> 00:49:26.239
and you're leaving a lot of the costs from that

00:49:26.239 --> 00:49:31.340
vendor with that business. The second type of

00:49:31.340 --> 00:49:33.699
acquisition is a share sale. And that's where

00:49:33.699 --> 00:49:37.099
it's more of a strategic venture. And more often

00:49:37.099 --> 00:49:39.179
than not, that's when a private equity firm or

00:49:39.179 --> 00:49:42.139
a family office is looking at acquiring into

00:49:42.139 --> 00:49:43.840
a business and they're only looking at acquiring

00:49:43.840 --> 00:49:46.119
partly into the business, whether it's a minority

00:49:46.119 --> 00:49:47.820
or controlling, they're looking at acquiring

00:49:47.820 --> 00:49:51.159
a portion of shares. And they're more interested

00:49:51.159 --> 00:49:53.340
in profitability, right? Because they're not

00:49:53.340 --> 00:49:55.820
looking at changing the nature of the business.

00:49:55.920 --> 00:49:57.960
They're looking at the bottom line profitability

00:49:57.960 --> 00:50:00.519
as it is a percentage of return on capital. So

00:50:00.519 --> 00:50:03.679
for a strategic venture, whether it's a JV or

00:50:03.679 --> 00:50:07.159
a partial share sale, you're looking at an EBIT

00:50:07.159 --> 00:50:11.280
multiple, right? So currently for an advice firm,

00:50:11.539 --> 00:50:13.320
you might be looking at anywhere between six

00:50:13.320 --> 00:50:18.099
and eight as an EBIT multiple, typically speaking.

00:50:18.460 --> 00:50:20.400
Whereas, you know, for advice at the moment,

00:50:20.460 --> 00:50:23.000
if you're doing an asset purchase, i .e. buying

00:50:23.000 --> 00:50:25.659
a book of clients, you're looking at anywhere

00:50:25.659 --> 00:50:27.639
from, you know, as a mid -range, maybe two and

00:50:27.639 --> 00:50:33.460
a half times recurring revenue. And what's the

00:50:33.460 --> 00:50:35.659
multiple on, say, a stockbroking book? Well,

00:50:35.679 --> 00:50:38.289
you just don't touch those these days. Yeah,

00:50:38.309 --> 00:50:41.329
no, I think Murdoch, we might have had a go at

00:50:41.329 --> 00:50:44.650
one or two back in the day, right? So I think

00:50:44.650 --> 00:50:50.570
I've completed one transactional asset purchase

00:50:50.570 --> 00:50:55.269
a while back. So look, the case for stockbroking

00:50:55.269 --> 00:50:58.670
is that it's transactional, right? So typically

00:50:58.670 --> 00:51:01.769
because it's transactional, it attracts a lower

00:51:01.769 --> 00:51:04.230
multiple, whereas you convert that to something

00:51:04.230 --> 00:51:06.449
that's a funds management business that has a

00:51:06.449 --> 00:51:09.119
management fee. or an advice business that has

00:51:09.119 --> 00:51:12.360
an ongoing advice fee, that money's there for

00:51:12.360 --> 00:51:14.559
the next year. People sign an ongoing fee agreement

00:51:14.559 --> 00:51:18.000
or if they might place money in a product and

00:51:18.000 --> 00:51:20.360
it's sitting there earning money in perpetuity

00:51:20.360 --> 00:51:23.639
until that client terminates. So typically that's

00:51:23.639 --> 00:51:25.880
why that attracts a higher recurring revenue

00:51:25.880 --> 00:51:29.039
and profit multiple. But yeah, transactional

00:51:29.039 --> 00:51:31.280
multiple, and it's similar with accounting. Accounting

00:51:31.280 --> 00:51:33.420
can be probably put in that same category as

00:51:33.420 --> 00:51:35.460
transactional. You're probably looking at around

00:51:35.460 --> 00:51:38.380
one times recurring revenue. The reason being

00:51:38.380 --> 00:51:41.900
is someone's got to do the work, right? So, you

00:51:41.900 --> 00:51:43.880
know, more often than not, you know, someone's

00:51:43.880 --> 00:51:46.119
got to get on the phone and pitch the trade and

00:51:46.119 --> 00:51:49.039
that requires cost and the clients typically

00:51:49.039 --> 00:51:53.760
are less sticky. So after you valued the business

00:51:53.760 --> 00:51:56.780
and then you found essentially a business, say

00:51:56.780 --> 00:51:59.619
someone's, look, ideally, I think the ones we're

00:51:59.619 --> 00:52:01.820
looking at is, you know, great advisory firms.

00:52:02.800 --> 00:52:04.519
And they've just essentially, you know, retired.

00:52:04.619 --> 00:52:07.239
You know, their wife's kicking them in the ass

00:52:07.239 --> 00:52:08.880
saying, you know, come with me on the boat. I

00:52:08.880 --> 00:52:10.119
just want to relax. Like, what are you doing?

00:52:10.219 --> 00:52:13.239
Get out of the office, right? But on the other

00:52:13.239 --> 00:52:15.179
side as well is like, can you walk through the

00:52:15.179 --> 00:52:17.480
mindset of the seller? Like, you know, what they're

00:52:17.480 --> 00:52:21.480
thinking as well? Because being acquired is,

00:52:21.579 --> 00:52:25.079
you know, just as important as, you know, if

00:52:25.079 --> 00:52:27.360
you're the acquirer. Like, how do they think

00:52:27.360 --> 00:52:30.670
about this process? Yeah, it's interesting. I

00:52:30.670 --> 00:52:33.329
probably made the mistake earlier in my career

00:52:33.329 --> 00:52:38.389
thinking it was all about price, right? So sit

00:52:38.389 --> 00:52:40.130
there and offer them the best price. You've got

00:52:40.130 --> 00:52:42.030
the money ready to go. Why can't we do a deal?

00:52:43.090 --> 00:52:46.409
So it took me a few lost deals to realize that

00:52:46.409 --> 00:52:50.409
price is probably fifth on the list of a selling

00:52:50.409 --> 00:52:53.889
advisor. Number one is he wants to see that the

00:52:53.889 --> 00:52:56.510
buying advisor cares about his clients, right?

00:52:56.730 --> 00:52:59.269
They've got their best interest at heart. um

00:52:59.269 --> 00:53:02.349
you know second on that list might be that they've

00:53:02.349 --> 00:53:04.210
got a shared investment philosophy or a way of

00:53:04.210 --> 00:53:07.469
viewing the industry right um probably third

00:53:07.469 --> 00:53:10.030
on that list is you know making sure that there's

00:53:10.030 --> 00:53:12.190
a bit of size and scale and infrastructure so

00:53:12.190 --> 00:53:15.849
it's not just um you know they feel that if they're

00:53:15.849 --> 00:53:17.969
selling to a one -man band i've done this as

00:53:17.969 --> 00:53:20.730
well i've represented clients might be a small

00:53:20.730 --> 00:53:22.809
business and they're looking at acquiring a similar

00:53:22.809 --> 00:53:26.409
size business and Sometimes we'll miss that deal

00:53:26.409 --> 00:53:28.929
because the feedback from the vendor is they're

00:53:28.929 --> 00:53:31.030
concerned about the capacity of that advice firm.

00:53:31.150 --> 00:53:32.409
They feel that they're going to be overwhelmed

00:53:32.409 --> 00:53:34.889
because these vendors, they're not scrubs. They've

00:53:34.889 --> 00:53:36.849
gone through the journey. They know what it takes

00:53:36.849 --> 00:53:38.829
to manage these types of businesses. They know

00:53:38.829 --> 00:53:44.119
how much capacity each advisor has. They want

00:53:44.119 --> 00:53:46.500
to see that this advisor's got capacity support,

00:53:46.800 --> 00:53:49.239
whether that's operations, licensing, tech stack,

00:53:49.559 --> 00:53:52.139
all those bells and whistles that we kind of

00:53:52.139 --> 00:53:56.099
discussed earlier. They want to see that the

00:53:56.099 --> 00:53:57.699
clients are going to be looked after by a team

00:53:57.699 --> 00:54:00.420
as opposed to just one person. And then probably

00:54:00.420 --> 00:54:02.539
fourth on that list is probably price, right?

00:54:02.659 --> 00:54:07.400
So it comes down to multiple things, but it gets

00:54:07.400 --> 00:54:10.059
back to that earlier point. Advice has gone through

00:54:10.059 --> 00:54:14.300
professionalization, right? More often than not,

00:54:14.300 --> 00:54:18.000
advisors are extremely ethical. They deeply care

00:54:18.000 --> 00:54:21.980
about their clients and they just want to rest

00:54:21.980 --> 00:54:24.239
assured that their clients are going to be looked

00:54:24.239 --> 00:54:26.340
after and that they can sail off into the sunset

00:54:26.340 --> 00:54:30.840
and not have their clients calling them. um you

00:54:30.840 --> 00:54:32.699
know for the next few years because they're concerned

00:54:32.699 --> 00:54:35.280
about you know who they've who they've just transitioned

00:54:35.280 --> 00:54:38.059
to so well actually that's probably the most

00:54:38.059 --> 00:54:41.019
important thing um the clients uh at the end

00:54:41.019 --> 00:54:42.920
of the day is the most important thing so how

00:54:42.920 --> 00:54:46.440
do the clients feel about um you know these acquisitions

00:54:46.440 --> 00:54:48.099
you know they've worked with someone say for

00:54:48.099 --> 00:54:50.349
20 30 years And all of a sudden they're being

00:54:50.349 --> 00:54:52.710
acquired by someone, there's a new face, the

00:54:52.710 --> 00:54:54.949
advisor's saying, hey, they're good at their

00:54:54.949 --> 00:54:57.969
job, trust them. But it's a brand new relationship,

00:54:58.050 --> 00:55:01.309
you know, for that family. And that advisor may

00:55:01.309 --> 00:55:03.489
be looking after like three generations, you

00:55:03.489 --> 00:55:05.710
know what I mean? You know, plus working with

00:55:05.710 --> 00:55:08.269
their accountant and everything. So how does

00:55:08.269 --> 00:55:11.530
the client essentially feel about being acquired

00:55:11.530 --> 00:55:13.570
by a firm which they don't know who they are?

00:55:13.650 --> 00:55:15.130
They're just being told, oh, they're good, trust

00:55:15.130 --> 00:55:18.239
them. Yeah, well, this is where it comes down

00:55:18.239 --> 00:55:20.599
to getting your ship in order, right? So making

00:55:20.599 --> 00:55:24.440
sure that you've got, not saying a necessarily

00:55:24.440 --> 00:55:26.920
superior offer, like if you're a buyer and you're

00:55:26.920 --> 00:55:28.400
looking at acquiring, making sure that you've

00:55:28.400 --> 00:55:30.840
got a superior offer and making sure your ducks

00:55:30.840 --> 00:55:34.800
are all in a row when compared to the vendor

00:55:34.800 --> 00:55:38.300
is quite important because vendors, clients are

00:55:38.300 --> 00:55:39.800
going to be doing that little way up. They're

00:55:39.800 --> 00:55:42.659
going to be judging and placing a high degree

00:55:42.659 --> 00:55:45.619
of trust. in that buying advisor to safeguard

00:55:45.619 --> 00:55:49.340
their future, right? So, you know, more often

00:55:49.340 --> 00:55:51.980
than not, clients, a vendor, it's typical for

00:55:51.980 --> 00:55:54.000
a vendor to stick around for a 12 -month transition,

00:55:54.179 --> 00:55:56.440
right? So you want to ensure that there's a smooth

00:55:56.440 --> 00:55:59.559
hand over there and sometimes that's six months,

00:55:59.679 --> 00:56:02.500
sometimes that's 12 months. So, you know, typically

00:56:02.500 --> 00:56:05.679
if I'm looking at advising on a purchase of a

00:56:05.679 --> 00:56:07.880
business, I would like to see the vendor advisor

00:56:07.880 --> 00:56:10.420
or advisors, I'd like to see them employed for

00:56:10.420 --> 00:56:13.650
a period of 12 months. If there's any changes

00:56:13.650 --> 00:56:15.349
that need to be made, whether it's investment

00:56:15.349 --> 00:56:19.289
philosophy, platform, or any sort of change to

00:56:19.289 --> 00:56:23.849
the level of service, it's a prudent idea to

00:56:23.849 --> 00:56:26.170
get the vendor advisor who's been that client's

00:56:26.170 --> 00:56:28.190
advisor for 20 years to deliver that change.

00:56:28.409 --> 00:56:31.210
And if there's a reason for the change, you need

00:56:31.210 --> 00:56:33.090
to have a comprehensive reason why it's in the

00:56:33.090 --> 00:56:34.849
client's best interest. Otherwise, the change

00:56:34.849 --> 00:56:37.530
won't happen, right? So it comes down to change

00:56:37.530 --> 00:56:40.019
management. And you need to have everyone on

00:56:40.019 --> 00:56:43.699
board for that whole process, right? So, but

00:56:43.699 --> 00:56:46.820
yeah. But in my experience, clients are very

00:56:46.820 --> 00:56:49.940
sticky, right? So, and this is where it comes

00:56:49.940 --> 00:56:52.280
up to marrying a good buyer with a good seller.

00:56:52.500 --> 00:56:55.039
That makes that transition process even easier

00:56:55.039 --> 00:56:57.800
because you're not disrupting too much. You don't

00:56:57.800 --> 00:57:00.340
have to sit there and ask that vendor advisor

00:57:00.340 --> 00:57:04.639
to sit there and sell a service offering that's

00:57:04.639 --> 00:57:06.360
completely different to what he's been delivering

00:57:06.360 --> 00:57:08.739
for 20 years. Because more often than not, you

00:57:08.739 --> 00:57:13.119
actually won't get to that stage. So having that

00:57:13.119 --> 00:57:15.599
continuity and alignment of investment philosophy,

00:57:15.800 --> 00:57:19.420
values, and integrity, that's important. And

00:57:19.420 --> 00:57:21.360
that's usually done before the transaction. So

00:57:21.360 --> 00:57:24.079
that makes that client transition even more smoother.

00:57:24.219 --> 00:57:26.280
So these are some of the things that we deal

00:57:26.280 --> 00:57:28.840
with and I think about before I've even approached

00:57:28.840 --> 00:57:33.610
a transaction. It's an important one because

00:57:33.610 --> 00:57:36.610
obviously the client is the bedrock of this industry.

00:57:36.710 --> 00:57:38.710
You're doing the right thing by the family. But

00:57:38.710 --> 00:57:41.429
also, that's in the client's best interest, obviously.

00:57:41.590 --> 00:57:43.409
But from a business perspective, if you're in

00:57:43.409 --> 00:57:46.170
a financial advisor, you've got five people you're

00:57:46.170 --> 00:57:48.670
looking to expand and purchase a business. One

00:57:48.670 --> 00:57:50.809
of the questions that pops into everyone's mind

00:57:50.809 --> 00:57:52.809
and popped into my mind when we're going through

00:57:52.809 --> 00:57:58.670
the process is the risk of what happens. You're

00:57:58.670 --> 00:58:03.360
purchasing essentially a business. say you've

00:58:03.360 --> 00:58:05.440
been doing the share sale, you're taking the

00:58:05.440 --> 00:58:07.880
clients, you leave all the costs, you bring them

00:58:07.880 --> 00:58:09.619
into your network, you work with the advisor

00:58:09.619 --> 00:58:11.920
in a transition for 12 months, but you essentially

00:58:11.920 --> 00:58:16.500
have a liability, you know, a 3X. It might take

00:58:16.500 --> 00:58:18.199
you hypothetically, you know, say, I don't know,

00:58:18.239 --> 00:58:20.500
eight or 10 years to essentially pay that capital

00:58:20.500 --> 00:58:24.519
back. You know, it is a long -term style loan,

00:58:24.699 --> 00:58:27.199
right? You know, tied to, and, you know, clients

00:58:27.199 --> 00:58:30.909
can pass away, clients can leave. So what happens

00:58:30.909 --> 00:58:35.929
when advisors in the growth perspective are looking

00:58:35.929 --> 00:58:39.429
at these businesses to buy? What are their concerns

00:58:39.429 --> 00:58:42.210
regarding the risk of potentially clients leaving?

00:58:42.349 --> 00:58:45.090
And besides the fact of them just running a good

00:58:45.090 --> 00:58:49.190
business, how do they ensure that the clients

00:58:49.190 --> 00:58:52.449
stay sticky? Which is probably the most important

00:58:52.449 --> 00:58:54.789
question when looking at buying a business or

00:58:54.789 --> 00:59:00.110
any business really. Yeah, correct. I only partner

00:59:00.110 --> 00:59:02.250
with firms that have a high degree of confidence

00:59:02.250 --> 00:59:04.289
that there's going to be no transition issues,

00:59:04.570 --> 00:59:08.150
right? So a lot of my clients that I side with,

00:59:08.309 --> 00:59:11.289
I like to get a sense of how they approach that

00:59:11.289 --> 00:59:15.690
aspect. And more often than not, good advisors

00:59:15.690 --> 00:59:17.550
such as yourself, Murdo, you probably have a

00:59:17.550 --> 00:59:19.530
high degree of confidence that your service offering

00:59:19.530 --> 00:59:22.909
is strong. You deliver great portfolio outcomes.

00:59:23.070 --> 00:59:26.570
You deliver great client outcomes, right? So

00:59:26.570 --> 00:59:28.559
as long as you're doing that. And for the most

00:59:28.559 --> 00:59:30.539
part, most of the industry is delivering on that.

00:59:31.599 --> 00:59:34.139
These are pretty hard businesses to muck up.

00:59:34.280 --> 00:59:38.219
It's very hard to lose a client, whether it's

00:59:38.219 --> 00:59:42.860
through a transition or not. So in my experience

00:59:42.860 --> 00:59:45.519
and with my first firm, we would have done just

00:59:45.519 --> 00:59:49.400
shy of 10 asset purchases, which means foundation

00:59:49.400 --> 00:59:52.599
SOAs and advisor transitions. Client turnover

00:59:52.599 --> 00:59:57.920
is very low. We're talking 2%, 3%. And more often

00:59:57.920 --> 01:00:00.659
than not, that might be due to mortality or some

01:00:00.659 --> 01:00:07.239
other unforeseen reason. Yeah, it's an interesting

01:00:07.239 --> 01:00:10.900
journey to go through. It's definitely just like

01:00:10.900 --> 01:00:13.539
any industry, right? Everything goes up and regulations

01:00:13.539 --> 01:00:16.960
come through, which is great. It means everyone

01:00:16.960 --> 01:00:19.219
performs better and then you get a natural compression,

01:00:19.460 --> 01:00:21.840
right? It's inevitable. So where do you think

01:00:21.840 --> 01:00:24.860
the future is? What do you reckon this looks

01:00:24.860 --> 01:00:27.780
like in, say, five years from now? Because we're

01:00:27.780 --> 01:00:29.739
going through this particular stage. Obviously,

01:00:29.739 --> 01:00:33.239
the US has gone through it. Valuations are higher.

01:00:33.380 --> 01:00:35.960
So what would the Australian advice industry

01:00:35.960 --> 01:00:38.119
look like in, say, five or 10 years, do you think?

01:00:40.719 --> 01:00:42.800
Well, given the precedent that we've got overseas,

01:00:43.179 --> 01:00:48.250
more advisors dwindling, advisor shortage. you

01:00:48.250 --> 01:00:50.869
know, increase assets that need to be advised

01:00:50.869 --> 01:00:53.929
over the course of the next 10 years. You know,

01:00:53.949 --> 01:00:55.849
I'm going to see multiples, see upward pressure

01:00:55.849 --> 01:00:58.550
on valuation multiples. So if I was to sit back

01:00:58.550 --> 01:01:01.670
and make a crystal ball estimate, I'd like to

01:01:01.670 --> 01:01:04.010
see high caliber businesses probably trading

01:01:04.010 --> 01:01:08.429
around that 14, 15 times EBIT. I see, I probably

01:01:08.429 --> 01:01:11.170
see a lot of listings maybe around year five

01:01:11.170 --> 01:01:14.309
or seven for those that want to go on that supercharged

01:01:14.309 --> 01:01:17.639
growth journey. um because it's been a while

01:01:17.639 --> 01:01:20.059
since there's been you know i think we all kind

01:01:20.059 --> 01:01:22.679
of look back to shadforths as a real success

01:01:22.679 --> 01:01:25.820
story that's done this in a different cycle and

01:01:25.820 --> 01:01:28.199
every time i speak to a growth business they

01:01:28.199 --> 01:01:30.139
want to you know the ambition is to be the next

01:01:30.139 --> 01:01:33.849
shadforth right so I want to see private multiples

01:01:33.849 --> 01:01:36.570
around that 14, 15 times. I want to see maybe

01:01:36.570 --> 01:01:39.289
four or five really good advice firms eyeing

01:01:39.289 --> 01:01:42.110
the door for an IPO. And I probably just see

01:01:42.110 --> 01:01:44.369
more foreign investment. Until we see that gap

01:01:44.369 --> 01:01:46.389
close between us and the US, there's going to

01:01:46.389 --> 01:01:48.349
be more US institutional investment out here.

01:01:48.570 --> 01:01:51.670
While there's that arbitrage opportunity, as

01:01:51.670 --> 01:01:53.929
long as they're trading it privately, you know,

01:01:53.949 --> 01:01:57.280
18 to 20. And as long as we're trading at anything

01:01:57.280 --> 01:02:00.079
below that, I just see that gap getting closed

01:02:00.079 --> 01:02:01.840
over the course of the next five to 10 years.

01:02:02.079 --> 01:02:07.480
So exciting times ahead, Murdoch. Yes. Exciting

01:02:07.480 --> 01:02:09.719
times ahead. So what about you, mate? What's

01:02:09.719 --> 01:02:11.659
happening with McAllister Capital? Are you just

01:02:11.659 --> 01:02:14.039
going to stay in the brokerage space? You mentioned

01:02:14.039 --> 01:02:17.519
your mentor. What plans do you have for this

01:02:17.519 --> 01:02:20.059
space? Are you just going to stay helping people?

01:02:21.220 --> 01:02:23.159
transact deals or are you going to do something

01:02:23.159 --> 01:02:25.159
else? Like what's the plan for McAllister Capital?

01:02:26.000 --> 01:02:28.719
Yeah, well, look, I acknowledge my superpower

01:02:28.719 --> 01:02:31.380
was sitting there and hunting deals for high

01:02:31.380 --> 01:02:35.079
quality firms, right? So I will be always doing

01:02:35.079 --> 01:02:38.400
that, I think, or some iteration of that. You

01:02:38.400 --> 01:02:40.320
know, one thing that's probably exciting and

01:02:40.320 --> 01:02:44.760
somewhat interesting is speak to a lot of growth

01:02:44.760 --> 01:02:47.630
firms out there and we feel that Whilst there's

01:02:47.630 --> 01:02:50.090
been some institutional investment into high

01:02:50.090 --> 01:02:53.010
growth firms in advice in Australia at the moment,

01:02:53.130 --> 01:02:56.570
no one's really done it well. And I have some

01:02:56.570 --> 01:03:00.070
views in terms of what well looks like. And no

01:03:00.070 --> 01:03:02.570
one's done it with Australian capital just yet.

01:03:02.630 --> 01:03:06.750
So I would like to see one of the local institutions

01:03:06.750 --> 01:03:10.530
sit there, get together, partner with some industry

01:03:10.530 --> 01:03:14.320
tyrants and sit there and come and... really

01:03:14.320 --> 01:03:16.840
supercharged, maybe five or six businesses. So

01:03:16.840 --> 01:03:20.699
no one's done that well. Maybe I'm hatching some

01:03:20.699 --> 01:03:24.019
plans to potentially pull that off. But in the

01:03:24.019 --> 01:03:25.820
interim, I'm going to be working closely with

01:03:25.820 --> 01:03:27.880
great businesses such as yours, Murdoch, just

01:03:27.880 --> 01:03:30.380
to help you on your growth journey because it's

01:03:30.380 --> 01:03:35.380
a great space to be in. Look, I told you guys,

01:03:35.480 --> 01:03:37.579
listeners, it'll be a fun conversation. I really

01:03:37.579 --> 01:03:39.940
wanted to have this conversation with Michael

01:03:39.940 --> 01:03:42.139
because everyone understands how to invest. But

01:03:42.139 --> 01:03:43.920
at the end of the day, when you're an investor,

01:03:44.199 --> 01:03:46.780
who are you actually working with? What are the

01:03:46.780 --> 01:03:49.539
advisors actually thinking? Because we work with

01:03:49.539 --> 01:03:52.579
essentially phenomenal people, great families

01:03:52.579 --> 01:03:54.800
that have all built a business. You must understand

01:03:54.800 --> 01:03:56.880
as well that your advisor is also trying to build

01:03:56.880 --> 01:04:00.300
their business. And Michael's pointed out at

01:04:00.300 --> 01:04:01.719
the end of the day, the core of the business

01:04:01.719 --> 01:04:04.019
is doing the right thing by the client. Wouldn't

01:04:04.019 --> 01:04:07.420
you agree, Michael? Exactly, yeah. It all starts

01:04:07.420 --> 01:04:11.119
with that. So, Michael, is there anything that

01:04:11.119 --> 01:04:12.559
when you're normally speaking with people they

01:04:12.559 --> 01:04:14.519
ask or is there anything that we've missed or

01:04:14.519 --> 01:04:17.619
is there anything you want to leave listeners

01:04:17.619 --> 01:04:19.980
or other advisors out there thinking of going

01:04:19.980 --> 01:04:24.239
on this growth journey with? um look not as such

01:04:24.239 --> 01:04:26.659
give me a call and let me know what your ambitions

01:04:26.659 --> 01:04:29.559
are and your intention and you know if you're

01:04:29.559 --> 01:04:31.840
a great business and you want to go on a great

01:04:31.840 --> 01:04:33.820
journey there's plenty of potential and capacity

01:04:33.820 --> 01:04:36.280
out there at the moment i don't see why any advisor

01:04:36.280 --> 01:04:40.000
uh at the moment wouldn't sit there and be strongly

01:04:40.000 --> 01:04:42.760
thinking about how they can sit there and you

01:04:42.760 --> 01:04:44.800
know two to three x their business over the course

01:04:44.800 --> 01:04:48.019
of the next five years and beyond so at the end

01:04:48.019 --> 01:04:50.440
of the day i made a living out of going back

01:04:50.440 --> 01:04:52.829
to enhancing client outcomes i made a living

01:04:52.829 --> 01:04:55.570
out of helping advisors work on their business

01:04:55.570 --> 01:04:58.869
rather than in their business and whilst i'm

01:04:58.869 --> 01:05:00.949
a younger man i like to think that i've i've

01:05:00.949 --> 01:05:03.409
looked under the hood at a lot of advice businesses

01:05:03.409 --> 01:05:06.510
and um you know even just a complimentary conversation

01:05:06.510 --> 01:05:09.590
so i can chat with advisors and share some perspective

01:05:09.590 --> 01:05:12.329
um whether they want to use my services or not

01:05:12.329 --> 01:05:15.929
i'm more than willing to do that so But, yeah,

01:05:16.050 --> 01:05:18.150
no, it's been a privilege to be on here, Murdoch.

01:05:18.250 --> 01:05:19.909
Thank you. Thank you for giving me the opportunity

01:05:19.909 --> 01:05:23.030
to talk about my humble little corporate advisory

01:05:23.030 --> 01:05:27.530
company. And I'm sure we'll be speaking to each

01:05:27.530 --> 01:05:32.369
other both on and off the air in no time. 100%.

01:05:32.369 --> 01:05:34.389
But you're not jumping off that quickly. One

01:05:34.389 --> 01:05:36.969
other thing that just dawned on me is do you

01:05:36.969 --> 01:05:40.469
help advisors? Like say, as an example, an advisor.

01:05:41.420 --> 01:05:43.679
um you know has a business just left the firm

01:05:43.679 --> 01:05:47.579
and then wants to uh get in a position as you

01:05:47.579 --> 01:05:49.559
say you know make themselves look attractive

01:05:49.559 --> 01:05:52.260
in order for acquiring a business someone that

01:05:52.260 --> 01:05:53.780
you know when they're in meetings actually want

01:05:53.780 --> 01:05:57.119
to essentially be acquired by them right um do

01:05:57.119 --> 01:06:00.280
you help firms uh like take a look at their business

01:06:00.280 --> 01:06:02.079
maybe help them with a two -year plan or something

01:06:02.079 --> 01:06:05.260
equivalent to get them to the point where um

01:06:05.260 --> 01:06:08.059
they can start taking on these acquisitions if

01:06:08.059 --> 01:06:09.739
they're not there yet is that something you do

01:06:09.739 --> 01:06:13.380
as well Yeah, it's a different conversation.

01:06:13.719 --> 01:06:16.800
I do have a couple of ideas. Right now, my focus

01:06:16.800 --> 01:06:20.820
is taking those growth businesses from 5 mil

01:06:20.820 --> 01:06:24.860
up to 30 mil for the select few. But Murdoch,

01:06:24.880 --> 01:06:26.639
you've gone through that journey as well. So

01:06:26.639 --> 01:06:30.099
you'd be equally apt to sit there and deliver

01:06:30.099 --> 01:06:33.039
that advice. There's a lot of great hungry advisors

01:06:33.039 --> 01:06:36.079
out there that I speak to that might be at some

01:06:36.079 --> 01:06:39.070
of the bigger institutions. will they or should

01:06:39.070 --> 01:06:41.989
they or won't they um it can be quite a daunting

01:06:41.989 --> 01:06:43.949
thing and i think this is where it comes back

01:06:43.949 --> 01:06:46.630
to having a good mentor so provided i've been

01:06:46.630 --> 01:06:48.809
out in corporate advisory land now for probably

01:06:48.809 --> 01:06:52.150
the better part of you know in my own instance

01:06:52.150 --> 01:06:54.190
maybe five six years prior to that another two

01:06:54.190 --> 01:06:57.650
three years um you know i think the advice would

01:06:57.650 --> 01:07:01.070
be speak to a mentor get a mentor who's gone

01:07:01.070 --> 01:07:03.630
and done that journey um gone out on their own

01:07:03.630 --> 01:07:05.969
and built a book and gone through the trials

01:07:05.969 --> 01:07:09.119
and tribulations of you know, going and restarting

01:07:09.119 --> 01:07:12.199
again and such as you have, Murdoch, and I've

01:07:12.199 --> 01:07:14.320
watched your journey and you have done it, you

01:07:14.320 --> 01:07:15.820
know, you have done it better than most and I

01:07:15.820 --> 01:07:20.000
watch you continue to grow as well. So I think

01:07:20.000 --> 01:07:22.059
getting a mentor would be my advice to an advisor

01:07:22.059 --> 01:07:26.340
like that. Get a mentor, best advice ever. Seriously,

01:07:26.579 --> 01:07:29.539
works for me. Great mentors are fantastic people.

01:07:29.699 --> 01:07:31.940
And also when you get to where you want to be,

01:07:32.000 --> 01:07:33.559
make sure that you can turn around and do the

01:07:33.559 --> 01:07:36.480
favour to someone else coming up. Michael, it's

01:07:36.480 --> 01:07:39.260
been great having you on. If anyone wants to

01:07:39.260 --> 01:07:41.360
reach out and speak to you, how can they get

01:07:41.360 --> 01:07:45.000
in touch with you? Yeah, you can go to mcallistercapital

01:07:45.000 --> 01:07:49.940
.com .au or reach out to Murdoch. Murdoch, I'm

01:07:49.940 --> 01:07:51.719
probably in your favourites in the contact book.

01:07:51.800 --> 01:07:55.300
So if you want to sit there and... so don't forward

01:07:55.300 --> 01:07:57.739
them on to me um by all means go for it but um

01:07:57.739 --> 01:08:00.739
other than that mcallistercapital .com .au i've

01:08:00.739 --> 01:08:03.099
got my mobile listed on the on the website there

01:08:03.099 --> 01:08:05.800
so freely available to anyone who wants to have

01:08:05.800 --> 01:08:09.480
a chat michael been fantastic you having you

01:08:09.480 --> 01:08:12.320
on i learn lots every single time we speak so

01:08:12.320 --> 01:08:15.519
i really appreciate your time thanks for having

01:08:15.519 --> 01:08:29.760
me fantastic The Rate of Change podcast is presented

01:08:29.760 --> 01:08:31.899
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01:08:31.899 --> 01:08:33.920
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