In this episode of the Trusted Adviser Podcast, Rob sits down with Alexander (Xan) Kitchin Founder of Wealth Connexion and 2025 IFA Excellence Awards winner for both Individual Excellence and Practice Principal of the Year, about building an enterprise advice business that scales with integrity. They explore the distinction between being a capable adviser and being an effective business owner, the discipline required to move from a cooperative mindset to an enterprise model, and why trust, accountability, and team structure sit at the core of sustainable growth. The conversation also examines the evolving role of AI in advice and how technology should deepen engagement rather than dilute relationships.

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SHOW NOTES

Topics Discussed

The difference between advisory capability and business leadership.
Moving from a cooperative mindset to an enterprise model.
Building scalable foundations in advice businesses.
Why team structure outperforms individual effort.
Client ownership at the enterprise level rather than the adviser level.
The limits of scalability in trust and accountability.
The structural link between service, pricing, and capacity.
Professional advice versus product distribution.
Strategic adoption of AI in financial advice.
Using technology to deepen client engagement rather than increase volume.

Episode Highlights

(Timestamps are approximate)

[00:00] – Introduction to Xan and Wealth Connexion.

[04:10] – Adviser Skill Versus Business Leadership

[08:35] – From Cooperative to Enterprise

[13:50] – Building on a Solid Foundation

[19:20] – Enterprise Client Ownership

[24:45] – Team Over Individual

[30:05] – Scaling Limits

[35:40] – Linking Service, Pricing, and Capacity

[41:10] – Professional Advice Versus Selling

[46:20] – AI in Advice: How AI is transforming workflow, compliance, and engagement.

[52:15] – Using AI to Deepen Client Relationships

[56:30] – Final Reflections: The future of enterprise advice and sustainable growth.

Quotes from Xan Kitchin

“Being a good adviser doesn’t make you a good business person.”
“We needed to embody an enterprise view. Not a cooperative view.”
“If you want to scale, you have to build on a foundation that is solid and clear.”
“Team will trump the individual effort every time.”
“The client is a client of Wealth Connexion. Not the adviser.”
“You can scale transactions. You cannot scale trust.”
“You can’t scale accountability either.”
“Client service, pricing, and capacity are inextricably linked.”
“We’re not in the business of selling. We’re in the business of providing professional advice.”
“AI will transform advice. But we’re not using it to add more clients. We’re using it to deepen engagement.”

Key Takeaways

A corporate mindset can bring rigor and efficiency to financial advice.
Enterprise thinking beats cooperative thinking.
Structured processes and systems are essential for scaling a practice.
A team-based culture and ‘we over me’ philosophy drive success.
Succession must be intentional.
Data-driven decision-making improves transparency and performance.
AI supports efficiency but cannot replace relationships.

Resources & Links

The Trusted Adviser: https://thetrustedadviser.com.au/
Wealth Connexion: https://wealthconnexion.com.au/
Connect with Rob Pyne on LinkedIn
Connect with Alexander (Xan) Kitchin on LinkedIn
Follow The Trusted Adviser Podcast

TRANSCRIPT

Rob (00:01.996)

Welcome Alexander Kitchin to the Trusted Adviser podcast.

Xan Kitchin (00:05.399)

Thank you, Rob, for having me today.

Rob (00:07.928)

Thanks for joining me, Alexander. I’ll say Alexander, but people know you as Zan. Am I right in saying that’s kind of people who know you well?

Xan Kitchin (00:15.329)

Yeah. And it’s not me trying to confuse people either. It’s just an abbreviation, three middle letters of Alexander. But yes, everybody refers to me as Xan.

Rob (00:23.822)

All right, well, I’m looking forward to our chat today because you at the IFA Excellence Awards in 2025 took out the top individual award in the IFA Excellence Awards, but also the practice principle of the year. And being a practice principle myself, I thought this is a man I wanna speak to and find out what he’s doing that has achieved that accolade because it’s an impressive one. I looked at the list of other candidates that were on that list of people that you beat out to win that sort of award to be recognised as the Practice Principal of Year. And there’s some really impressive people in that list. So you must be doing something great. We had a bit of a pre-chat. So now I know you’re doing something great, but the evidence was already there in that award. So I wanna dig into what Wealth Connections doing and congratulations again on winning those awards. So when we spoke this week earlier, you spoke about bringing a corporate mindset into financial planning.

Xan Kitchin (01:13.325)

Thank you, Rob.

Rob (01:22.232)

Tell me a bit about your background and what you saw was the missing piece in advice businesses that you wanted to bring and build differently at Wealth Connection.

Xan Kitchin (01:30.605)

Sure, sure. And it is an important point to clarify. I spent quite a number of years initially trained as an accountant and then worked in multinational organizations as a finance director, partnering with senior leadership teams and helping those businesses structure effective plans to drive their corporate goals and objectives. So I did that for quite a number of years, but did decide back in 2011 that I wanted to try something different. What appealed to me was the personal side of financial planning advice as opposed to the more stilted corporate environment. So I did make that change, but I was fortunate in that I was able to bring with me some of the rigor associated with my former role. So what it meant was while I was very much interested in the world of financial planning and all it had to offer, and certainly it was very appealing. I was able to identify some of the things that perhaps were missing in what was really a cottage industry at the time and certainly the firm that I joined. I was able to bring in some of that acumen, I suppose, to build wealth connection into the business that it is today.

Rob (02:50.03)

A little bit more about that. Let’s dig into that because that was the really quite a distinguishing fact, I think about the way you approached it from the word go. You came in and you’ve been used to running budgets and systems and processes and very, very ordered sort of approach to the way you ran your roles in those senior positions at multinational companies. And so you simply brought that mindset into the world of financial planning. You said it’s a little bit of cottage industry.

Xan Kitchin (02:58.646)

Yeah.

Rob (03:16.674)

You know, there was great practitioners, they could really give great advice on super and tax and the like, but you was bringing a business mindset to that as opposed to the pure practitioner mindset, you brought that corporate understanding.

Xan Kitchin (03:16.685)

Yeah, that’s right. That’s right. Yeah, I guess also having worked at large corporates like Hewlett-Packard, they did have a professional services business. I also knew, you know, what it took to run a high quality professional services business as well. Albeit that was an information technology business. You know, the principles are the same when you apply them in the financial services space as well. So some of the things that we’re lacking were, you know, just rigor around the planning process. Things tended to be front of mind in the given day for financial advisors. What’s burning today? What fires do we necessarily need to put out? I encourage some thinking around a longer term view specifically planning for the next 12 months and the 12 months beyond that and what are the priorities for the organization, know, what is important to the business and what should we focus on. think in many businesses today, you know, we come up with these laundry lists of things to do and invariably you do all of them poorly when you have too many of them frankly. So I said about, you know, identifying core goals and then executing against those. So what does executing against those mean? One of the things that I introduced was a board of advice structure where the directors of the business would sit down and not only agree the objectives but then to regularly review where are we, you know. It’s a little bit like going to the doctor. That’s the analogy I provided. You go in there and get your blood pressure checked and you know you have blood tests taken and the doctor tells you. Well, you you’ve done this, this and this, right? But you’ve got to address all of these other things. Well, you know, that’s what the board of advice is all about, you know, identifying all of the metrics that are important to running a business and just taking a health check periodically to make sure that we’re on the right track. Doing it in a very structured way.

Rob (05:28.184)

Yeah, as we chat today, I wanna dig into some of those things that you’ve done. Before we go there though, you’ve said that many firms work hard to build a sort of an external polish to be highly visible and attractive, perhaps to the public, to a potential advice consumer, but perhaps lack that internal alignment. Things that you focused on very intentionally when you joined Wealth Connection in 2011.

Xan Kitchin (05:44.001)

Yeah.

Rob (05:55.673)

What are the not negotiable sort of foundations you believe that has to really exist in a business before it tries to scale?

Xan Kitchin (06:02.027)

Yeah, look, I guess the first point I would make is being a good advisor doesn’t make you a good business person. You know, they are two different skill sets. And my role today is predominantly and entirely focused, frankly, on running the business. I have been an advisor and a dedicated advisor, but I’ve found that in order to get wealth connection to where we need it to be, that’s my primary focus. So I would say that, you know, depending on the size of your business, you know, it’s important to identify somebody that can take that role and do it in an effective way. So that would be a critical element, I believe, for any business that’s looking to scale is somebody that can have that strategic foresight and be able to corral the resources in a business and point them effectively in the right direction. But what are the principles or what are the things that I think are really important? We spent a lot of time working on the business, Rob, as we discussed the other day, you know, getting under the hood, for want of a better way to put it and just making sure that everything’s running correctly. I identified early on that a lot of businesses, some of those businesses that outwardly look nice, when you dig a little bit deeper, what you find is that in many cases you have advisors sharing rent. They’re resources potentially internally, but essentially they’re doing their own thing. They have their own way of providing advice. They use their own portfolios. They price the way they want to price. And there’s really not a lot of consistency across a number of advisors. So I refer to it more as a cooperative. They’re getting together and trying to get some economies around cost, but not really taking it.

Rob (07:51.552)

Yes.

Xan Kitchin (07:57.297)

Any further than that. I think that if you want to be successful, you’ve got to do more than that. You’ve got to embody an enterprise view. So I call it an enterprise view because that’s what it is. You know, we’re looking at things from a practice and firm perspective, not a not a cooperative perspective. So once you embrace that idea, then a lot of other things fall into place like we will use a common system and within that system, will use common processes that will use workflows that are the same. And the reason for that is not to be dictatorial in any way, but it’s just a case of, taking that approach lends itself to not only succession, but efficiencies and training, and it minimizes redundancy. And ultimately, it’s very necessary if you’re the type of business that wants to scale, because you’re building on a foundation that is solid and not vague, it’s clear. So we spent a lot of time under the hood, getting it to a point where we feel really confident that all the bits work the way we want them to.

Rob (09:12.652)

Yeah, absolutely. In fact, our last guest, Dean Lombardo from Effortless Engagement said exactly the same thing. It’s literally, there’s a common theme there about you can’t scale something that isn’t already a system. It doesn’t scale. And why do you think that practitioners that have come together and do this sort of cooperative structure, what’s the impediment for them do you think? Why are they not going the way that seems obvious to me and you about building systems we can all follow?

Xan Kitchin (09:35.781)

I just think it’s how they’ve necessarily come into the industry and just how the financial planning industry has grown up. If we think about where we’ve come from, it’s been a distribution-based business that has come originally out of the insurance world. And I think that advisors naturally are confident people. They have a firm view of things because they don’t necessarily or haven’t experienced a corporatized world that’s foreign to them. And then, to some extent, you need to set aside a level of ego and defer to those that have an experience level beyond financial planning advice. And I think that that’s challenging for some people. You know, it’s, it’s it’s foreign and it’s in it’s challenging. And I think that until you embark on that approach, it’s also very difficult to see where the efficiencies necessarily come. And not everybody will ever go down that road. Maybe a sharing of cost is all they’ll ever want to do. But I think if you’re serious about a business that has growth prospects, then applying that rigor across the business is vitally important.

Rob (10:56.588)

Yeah, as you say, many advisors are a confident bunch. They have conviction about what they’re doing and how they do it. They value their own independence of style. How did you navigate that inevitable kind of friction where people are doing their own thing? Did you have the right people or did you have a particular way about trying to bring everyone up to the same view that we should try and do this one way together?

Xan Kitchin (11:00.267)

Yeah, that’s right.

You know, it’s not easy, Rob. It’s not an easy undertaking. I think it requires a lot of diplomacy. It requires all those skills that we ask our financial planners to have, like listening and talking and demonstrating and proving. All of those things are vitally important. But what I’ve found is, you know, the persistence is important. And I don’t think it’s a case of trying to do everything at once. I think it’s a case of, well, where do we start? Do we feel that it’s important that this business have a common set of objective? Do we think that’s going to be beneficial? And if it is, what does that look like? And should we review that? Should we talk about that? Should we see how we’re… So you start with those things and then you build on them. I reflect on our own history, establishing a board of advice was important, then a strategic planning process that underpinned it and having a view of what that meant from a numbers point of view naturally flowed from there. But also things like pricing, know, financial planners all have a different view on how to price their services. And, you know, we actually engaged in external consultancy in the form of Peloton. You’ve had Rob on this show previously.

Rob (12:46.21)

Rob Jones from Peloton Partners.

Xan Kitchin (12:48.511)

Yeah, that’s right. And he didn’t pay me to say that either, by the way. We really enjoyed having Rob come into our business and do what he does. But it gave us a framework around pricing and value propositions and being able to articulate that and also to being able to analyze, you know, client by client what we’re actually doing for that client. But because that was undertaken on an enterprise wide basis, it sort of helped corral those disparate views into coalescing a positioning statement from a wealth connection point of view. So we did that. And then other things like establishing an investment committee and having an establishing an investment philosophy for our clients, being clear about what it is. If you have the philosophy right, then all the bits around it are much easier to solution that’s what we’ve done with everything that we’ve done is to get the philosophy right, agree it and then everything else tends to build in and around that. So where we are today is that we have agreement, we all know, we’re all clear on what the objectives are and how we’ll set about doing them. We’re not arguing about you know things that really should just be hygiene factors you know the way the business operates just needs to be known and done.

Rob (14:18.434)

Yeah, do know as you’ve articulated that the most common word you used just then is we. Which means that you actually spent time together with your colleagues and what should we do? How should we approach this? And you’re actually bringing people together to discuss issues, resolve what we think is the best way together. You one of our core values is we over me. And I love that because what you’re just describing is actually the way forward, isn’t it? If people are…

Xan Kitchin (14:26.091)

Yeah, that’s right.

Rob (14:47.096)

Doing their own thing and they recognise though that together we’re better, know, if we do things the same way. I love that. And that is diplomacy, but it’s actually just about getting everyone in the room and just getting their view.

Xan Kitchin (14:51.254)

Yeah.

Xan Kitchin (14:58.893)

And look, know, another way to frame it, Rob, is a team based culture, you know, and we really are a team and I really believe in team. think that team will trump the individual effort every time you can get three highly capable financial advisors in a business and individually they’re great. But if you can somehow manage to get the, you know, the one plus one plus one equals four dynamic, because that’s what it ultimately ends up being, then you can really push your business to the next level and that is what I’ve tried to cultivate internally. And I believe we’re really embracing that across the board. There’s no resistance. We have a really healthy and happy culture at Wealth Connection, which gives me lot of pleasure. I like the fact that people are able to come to work and feel good about the job that they’re doing.

Rob (15:52.815)

100% agree with you. Team will bump Trump the individual, and there’s a saying that goes something like, if you wanna go fast, go alone. If you wanna go far, go together. So the team will always.

Xan Kitchin (16:03.199)

Yeah, you know, it’s true though. I mean, look, there’ll be some cynics that say, yeah, right. Sure. And all the rest of it, but, but.

Rob (16:08.972)

Yep, they will be. Always Cynics. Yep.

Xan Kitchin (16:10.777)

Yeah, but the truth is, I’ll give you a specific example, because sometimes, you know, we get lost in motherhood statements. But, you know, and this talks a little bit about our strategic planning process, we very much convert our goals to numbers. And ultimately, we’re a numbers business. So it’s important that we move from the softer side of what we want to achieve to the numerical side. And that’s obviously set at a macro level, the wealth connection level, but at a detailed level and built up from the bottom up. It’s not a top down, it’s a bottom ups approach that we take. But from there individual advisors are clear on what their goals are, numeric goals are. those goals are not theirs alone to achieve. In many cases we have senior financial advisors that have PYs and provisional advisors working for them and they carry a joint goal and there’s a very healthy the view of clients. mean, it’s interesting, you’ll speak to different, different advisor, and that’s always my clients, my clients, my clients. And we don’t take that approach. The client is a client of wealth connection. Yes, they have an individual advisor that looks after them and takes responsibility for their needs. first and foremost, the client is a client of the business. And that’s really important because what that means is that there isn’t this possessiveness that sometimes happens with client and advisor relationships. There’s very much a healthy flow of client responsibility between senior advisors and those that are up and coming and looking to help out from a capacity side of things as well. that, if you take that approach, you do get that really nice natural flow across the business.

Rob (18:09.794)

Yeah, for sure. Let’s dig into how you go about things inside the business and go into some nuts and bolts. An advisor has a client review process, we all know that, but you’ve got a strategic planning process. You mentioned it right from the outset. For your business, you sit down and you work through a strategic plan together. Can you share how it translates into behavior for your advisors and the broader team day to day, that planning process you undertake, and what’s the frequency of that?

Xan Kitchin (18:16.077)

Yeah, sure. So look, it does start at board level. The process typically starts in that March, April timeframe every year. what we’re looking to do is to set a plan for the next financial year. We look further than that, but the detailed stuff is in that next 12 month period. What are the things that we’re looking to achieve? Whether it be new client activity, and we have a very strong organic referral rate. Any acquisitions that we’re planning to undertake and what that looks like. Pricing activity, if that’s relevant. We’re going through a rebranding exercise. That’s a corporate objective as well. But if we come back to the individual advisor, once we have some numbers that make sense at a macro level, we devise an advisor P &L. I’m very clear with advisors. this is the type of revenue that you’re looking after today. This is what we think you can reasonably achieve in the future and that might not be a lot of new client activity. It might all depend on advisor capacity. You know, here the underlying costs. I think it’s really important for advisors to not only understand their revenue responsibility, but to get a sense of what, does that translate to the enterprise bottom line? So I’m very, I’m very transparent with advisors around, you know, okay, this is what we pay you. This is the CSO cost. Here are the overheads. This is the revenue that you’re responsible for. And that’s the profit that is generated as a result of your effort. And here’s the incentive that we will provide you if you achieve the following KPIs. And the way I start with any advisor is your baseline is what you did last year. We’re not going to add unnecessary uplifts or make it difficult for you to achieve. And I always want to pay an advisor, you know, based on their worth and what they’re contributing to the organization, but to provide an incremental element as well, where they go above and beyond. I guess, you know, the best way to measure that is through growth. And we want to pay from, you know, from the first cent above what you’re doing last year. If you’re doing more business for the enterprise, then we want to recognize you straight away and we’ve developed metrics that allow us to do that and they benefit Wealth Connection, benefit the individual, they’re measured monthly, reported monthly, in detail, so people know where they stand. There’s no surprises, fully transparent and it seems to work really really well.

Rob (21:20.558)

Tell us about that. That’s fascinating that you’re doing an individual P &L for the advisors. And so I wanna understand that practically how you do that. Are you using literally software? Is it Excel spreadsheet first of all? And then extend that into, if you can, a bit about how that impacts the remuneration model that you are describing.

Xan Kitchin (21:23.714)

Yeah, yeah. Okay, so I’m a data person. Yeah, I love data.

Rob (21:46.818)

Me too.

Xan Kitchin (21:49.901)

We’re fortunate to get really nice clean data out of our CRM system on a weekly basis. And that’s very useful in terms of the analysis that we can do at a very minute level. So at an advisor client product fee level. So it comes to us in an Excel format we have a certain amount of internal acumen around being able to manipulate that data in a meaningful way so that we can really get our fingers on what’s happening in the business. Even at the most basic level, sometimes fees drop off, for example, that’s easily identified and can be corrected if that happens. If there’s a fee errors, that also throws up. But from a specific advisor’s perspective, that strategic planning process that I mentioned, that embeds that their core responsibility from a client perspective at the beginning of the financial year. So we know how that’s made up, what the fee structure is currently in place for each client. We also know how many new clients that advisor can take responsibility for, subject to advisor capacity constraints. We also are able to identify within that client list where perhaps the fees aren’t necessarily where they need to be given a review at a macro level as to where our minimum fee structures are. So we’ll identify where there’s some adjustments that need to be taken during the year for that as well. So that just helps us build up a picture of where we might want that advisor to be in 12 months time. Because we have access to data that is A, clean, readily available, it’s a very simple process to marry that up against the targets that an individual advisor will carry. So advisors are remunerated on the basis of a competitive base salary plus an incentive component. That’s a dollar incentive component associated with achieving a hundred percent target and then with some acceleration if they go beyond that. So, you know, that’s very much come out of that corporate world that I have been a part of in my past salespeople were targeted in that way and I want to come back to that term. I don’t see advisors as salespeople by the way. I do not at all. Somebody once said to me, yes you know so and so is a great sales advisor and I refuse to be given that title. We are professional practitioners that provide advice. Our role is to enable clients to make an informed decision about their financial future. That is what we are here to do first and foremost. If that then leads to productive outcomes around meeting targets, fantastic. But we’re not here to sell anything. We’re here to provide a service much like any other professional, whether that be a lawyer, an accountant, an architect. We’re not in the business of marketing. We’re in the business of providing good quality financial planning advice.

Rob (25:11.416)

Yeah, absolutely. given what you’re describing as to how you dig into the data in such detail, and it’s terrific that you do, and I totally am with you on that. And you’re an in focus licensed practice, and so you’ve got a CRM that was built by that team that’s giving you that data. People listening might be thinking, had the time for that, and how do I get that data? And so just go back a step for me.

Xan Kitchin (25:19.266)

Yeah.

Rob (25:40.032)

You still take on client relationship responsibilities at all now, Zan? Or are you doing 100% management of the business?

Xan Kitchin (25:46.061)

I have about 18 clients, Rob.

Rob (25:51.767)

Okay.

Xan Kitchin (25:55.437)

I had quite a number more than that at a point in time. I think I was looking after 110, 120 clients at a point in time. But one of the objectives that we identified at Wealth Connection was that if we were to scale our business, if we were to execute against some of these goals, it was important that somebody like myself could step into a role whose primary focus was making that happen. And in order to do that, it was important for me to relinquish my responsibility for client facing matters to a large extent. So, you know, I’ve transitioned clients to other advisors in our business. And, you know, that sort of talks to some of the earlier points I was making around team and, you know, I’ve done that in a very sort of structured way, warm handover introduction, it’s worked really, really well. But what it’s done is it’s enabled me to entirely focus on this business of wealth connection to make sure that it’s running smoothly. I have retained some clients, the reason I’ve done that is because I want to keep skin in the game so to speak. I enjoy financial planning, I love what it does, I love what we can do for clients so yes I continue to have some level of client responsibility. I think that’s important you you need to know how to you know you need to keep up to speed with how things are working and in order to be able to provide advice on those things internally thank.

Rob (27:29.078)

Yeah, for sure. So given your focus and really emphasis of your role now is around that reporting and management of the business, you’ve built that board level reporting and KPIs as you mentioned there from your data. What metrics do you believe truly matter for running an advice business? What do you pay the most attention to when you’re pulling data sets out and having a look and seeing how you’re progressing? What are the metrics you pay the most attention to that really matter?

Xan Kitchin (27:34.541)

Yeah.

Xan Kitchin (27:49.965)

Yeah, yeah, look, there are variety and I’ve got it to a point where they can be easily updated. We’re not using any proprietary software. It’s an internally built infrastructure that sits on the front end of our CRM effectively with an Excel interface. the metrics are obviously at a global level, things like revenue, profit, comparative benchmarks against prior years and forecasts. Those are really important things. And we do it by line of business as well because we’ve acquired few businesses, we keep track of those specifically to make sure that you know we bought something is it still retaining its clients is it

Rob (28:39.712)

Okay, so from a tracking standpoint, you quarantine that data, well, you don’t quarantine from your business per se, but you have the ability to track how it’s performing.

Xan Kitchin (28:46.879)

Absolutely. So just to go a little bit deeper on that, when we’ve acquired businesses, we set up a physical location. It’s another dimension to the data for that particular business. Let’s call it XYZ business. So that means that we can filter on XYZ, irrespective of which advisor is looking after that business. If we’ve transitioned clients away, we can always get a view of, you know, where the starting point was for XYZ business and where it is today. For example, we bought our business last year from a lady on the Gulf Coast and she was exiting out over a six month period. She’s been very good at transitioning client responsibility to other advisors within Wealth Connection, but we have not lost sight of her overall practice in its original form because of the flexibility around the data. So when she was coming across to our business, we made it very clear working with the in focus team to be able to make sure that we can pull that data out at any time to measure the performance over time. And that’s important, right? Because there are earn out metrics that need to be adhered to and payments that need to be made. So the data needs to support what you’re trying to do there. But look, some of the other metrics as a business, advisor level achievement against target, new business, fee uplifts are things that we look at as well. Just interrogating where we are from an advisor capacity perspective, client numbers per advisor are really important to me to understand as well. Transitioning activity, so we’ve got client movements between advisors, I want to understand what that implications of that offer at an individual advisor level as well. You know, looking at five years as well, you know, if we are to acquire a certain size of business each and every year, what does that look like from a resourcing perspective? What will it cost us? What will the revenue look like? What will the profitability look like? So it’s very much a case of looking at lots of different things. It’s almost like being in a cockpit with lots of little flashing lights and symbols and signals and but what I’ve done is I’ve managed to build in a way that can be easily communicated to the other directors in the business and make sure that they’re coming along for the journey in terms of understanding where the business is. I mean I live and breathe at Dali because of the role that I do but it’s important that the other directors in the business also have a view.

Rob (31:21.708)

Yeah, you’re actually responsible to keep everyone informed and make sure they’re across what’s happening. So you can collectively talk through that at next point that strategy sessions, what’s the next thing we wanna tackle. I wanna just touch on a point you just made there. when you make an acquisition, you will attach a location against each client effectively that comes with that acquisition. So you can actually track.

Xan Kitchin (31:31.819)

Yeah.

Rob (31:46.489)

For that location, if a client has left, you would know the number of clients from the word go. Let’s say it was simple numbers, 200 clients. You’d go, how many of those 200 are still there? And it might be the numbers gone down, but how much revenue is generated from the ones that are still there? And so you can track it at a client by client and then aggregate that data to get an overall picture. Is that how you do that?

Xan Kitchin (31:55.927)

Right. Yes.

Xan Kitchin (32:01.569)

Right.

Xan Kitchin (32:06.669)

Absolutely. it’s all, know, because it’s Excel based, can run a pivot table over and, you know, swap the dimensions around and interrogate it that way. I mean, the businesses that we’ve acquired, I send them a report each month that just shows them, well, you know, this is where you were when you started, this is where you are now. So they also get a sense of, well, you know, am I retaining my clients? Am I growing my clients? And that’s really important too, because what we’ve done with some of the businesses that we’ve acquired has been to reward them on a rise and fall basis. So in other words, in a year’s time, if they are still with us, and in many cases they are, we can say to them, well, know will honor what we paid you plus an uplift, a capped uplift to a certain level and pay you based on the initial multiple for the incremental revenue you’ve generated. So there’s a continuing incentive for them to add value to the business over time as well.

Rob (33:11.246)

Yeah, great. given you’ve done it, it sounds like you’ve got a pretty good systematic way of doing that what did you have to get right internally before you felt comfortable going ahead with that? What was it, because you were really about building the engine first and using an analogy that we spoke about earlier in the week, that you weren’t worried about how shiny the car looked necessarily. actually were, your emphasis was build great systems, build the engine, enable us to sort of grow, build a platform we can grow upon and then worry about shining the paintwork at the end of that. So what was it that you really focused on to build internally so you could build

Xan Kitchin (33:39.341)

Yeah, right. That’s so true.

Rob (33:48.556)

That platform and acquire the businesses successfully.

Xan Kitchin (33:51.789)

I think it was, it’s not one thing. It’s all of those things that we’ve, we’ve sort of run through. It’s like having the process in the first place around formulating the goals and objectives, getting it agreed at a board level, representing it in numbers, cascading it, making sure that advisors know what their goals are from 1st of July, not, you know, I’ve seen some businesses where the advisors sort of wondering what, you know, what am I meant to be doing? And it’s October before they even know. Right. So it’s making sure that we hit the ground running in as early as practical to make sure people are on the right foot. I think also, you know, we underestimate how important it is that the CSO or CSM team that operates that engine for us in the back end, how critically important they are to get through the work that is necessary from the perspective of advice implementation and lodging forms and following up and contacting Centrelink and all those things are so vitally important. So it’s important that we have workflows that are very clear, allow a CSO to be able to do their job in an effective way. But it’s the same across the border. That has been really important. We went down, it was some years ago, I realised Rob, how one person can leave your organization and that can really unstick you You know if you lose a really important person in your team that you know they’re the only person that has done certain things for then You know you got to replace them and train the new person that can really unstick a business and we went through a process of a Identifying this is a problem. What can we do about?

Xan Kitchin (35:51.543)

Fixing this we actually moved to a shared service model through our licensee. And that was really useful to really drive that commonality of approach across all of the advisors. That actually really helped. And then we moved, we did end up moving away from that for a variety of reasons and then in-house all of our CSO support again. But we didn’t lose the commonality piece. That was then entrenched at that stage and that continues to be the cases that we move for. I think that’s so important is just to get that piece right. And once you have it, the focus is less on building those things and just looking for those opportunities where you can add.

Rob (36:38.604)

Yeah, I really love it. mean, it’s such a strong theme here is about systems and process and building them and people know it. They’ve heard it, they know it, but actually, you just intentionally applied a lot of effort to making sure there was a way of doing things that everyone knew. So you could train the CSO CSM team on the way things are done around here. It just, makes so much sense to everyone listening, but it’s just, it’s making the effort to do it so that you do get that consistency so you can scale because

Xan Kitchin (36:44.597)

It is. It is.

That’s right. And document your processes as well. And I have a practice manager who’s done a wonderful job of videoing how you do X. But that means that somebody new coming to the organization can watch the video. They can understand how that works. So that’s a helpful education tool as well. And you’re not having to reinvent the wheel all the time.

Rob (37:08.29)

You’ve built the engine to grow.

Rob (37:36.707)

I’ll share how we did it. Because I think people hear about this, go, how do you started? I’ll tell you what we did. We found the biggest wall in the office and we use yellow Post-it notes. And we literally stuck each step of the process in a little task, write the task down, stuck it on the wall, looked at the process on the wall, this big wall and sort of moved around that sticky note should go there. let’s add a sticky note here because that task needs to step in that part of the process. So then you have this visual map.

Xan Kitchin (37:42.443)

Yeah.

Rob (38:06.104)

That you could kind of move around with sticky notes. And it was a great, it’s actually just since a simple thing, but people don’t know how to get started. And for us, that was the way a number of years ago now we did that. And it was such a great way to get started on the process, because then you can map it out, then you can draw it on a charting software, and then you can put it in place, but you have to start somewhere. Yeah.

Xan Kitchin (38:14.637)

That’s right. And then it becomes iterative as well, Rob. You you start there and you get it, you’ve got a starting point and then you’ll find as you move along, gee, it’d be good if we had a box where we could get the CSO to check whatever it is. So then you’re just building upon, you know, the Japanese call it kaizen. It’s a continuous improvement. And I think that’s what we need to be continually doing as a business is looking for those opportunities to improve things.

Rob (38:42.754)

Yes.

Rob (38:50.678)

I love it. And I’m sure what’s happened, as you say, you build a skeleton process to begin with. And then as you get together as a group, you’re actually, and we are, I recall this all the time for us too, someone’s going, we should probably add a step in here or add a task there. And so there’s this constant sort of like collective effort to enhance and build the process out to be more complete. So you’re putting meat on the bones, so to speak.

Xan Kitchin (39:13.089)

That’s right. And Rob, so you’re only going to get that where you take an enterprise view. If you’ve got this siloed approach internally where everybody’s doing it differently, nobody’s going to be recommending anything that everybody else can benefit from. And see, that’s the miss. That’s the the hot sauce or whatever you want to call it. That’s the bit that that really gives the flavor. That’s the bit that propels. And I think that’s lost on on some businesses.

Rob (39:30.872)

Yep. Yep.

I think that’s a golden piece of advice there for people listening. If they haven’t got that nailed down, that’s the thing, that’s the approach to go about getting your systems in place. then, as you say, then you get the collaborative effort to improve things. Now let’s talk about advisor capacity, something you said there a while back, you’re talking about capacity and you’ve got a view about this. And I know that there’s a lot of pundits that are talking about, know, we need to get technology to make sure we can go up to 200, 250, 300 clients. And I’m reading those articles too.

Rob (40:11.392)

You’ve got a strong view about capacity and you talk about this about 150 clients. And what led you to that number? And what do you believe breaks down when firms try to go beyond that number?

Xan Kitchin (40:13.633)

I don’t.

Xan Kitchin (40:19.149)

Yeah. Yeah, look, I think it’s experience observing client outcomes and also advisory experience internally. mean, I take a very hands-on view of understanding that dynamic to make sure that you don’t want burn advisors out for one. You want to keep them happy. You want to keep them productive. Also, you want to make sure that your client experience is where it needs to be. Our model is very much about a high-touch, high-engagement model. We’ve chosen that path. We’re holistic advisors. We know we’re going to need to speak to our clients a couple of times a year. So we need the advisor capacity is really important for me in the sense that I want my advisors to be able to to give that high quality advice and and I know Empirically and based on my experience that when you go past a certain level Then you’re going to compromise that client service and and it’s just a fact a feature of time, right? So there’s there’s only so many days in a year or working hours in a year. And if you do the maths on it I think I did the maths on it was like 1500, 1600 hours a year that an advisor has. So if you divide the number of clients into the number of hours, that tells you how many hours on average you’re spending on a particular client. Well, you know, obviously the more clients that you have, that hour rate drops right down. And I think that when it does drop down, you’re compromising something. I actually believe there are three key variables that are all interlinked and one, they all affect each other that is client service, excellent client service, pricing and capacity. Those three, advisor capacity, those three things are inextricably linked. And when you push hard on one lever, then you have compensating effects in the other areas as well. So, you know, we’ve made a conscious choice to limit client numbers at a particular advisor level.

Xan Kitchin (42:33.901)

By the way, they’re all fully deployed these advisors. They’re not sitting around twiddling their thumbs. Somebody actually once said, suggested to me, you know, they’ve only got a couple of days a week then. It’s like, no, what they’re doing is a full-time role, but it just means that they can do more per client. You know, rather than spending the incremental time available to them, getting another client and getting another client, they’re they’re just investing that time into the clients that they have. Now we want client, we want advisors to be at capacity. You know, we want them to be fully deployed. But I just feel 150 is the right number. I’ve done the math on it. Unsurprisingly, I know what that looks like based on average fees, therefore revenue. I know what my costs are. Therefore I know what the profitability. And that’s important. We have shareholders in our business. You know, I have a responsibility to clients. I have a responsibility to staff and advisors, but I also have a responsibility to shareholders. So, you know, we have hurdles that we need to cross. And I know that 150 is a good level without compromising that client service ethic, but also delivering around those other metrics as well.

Rob (43:47.203)

Yeah, you said something powerful when we spoke about this capacity question. You said, you can’t scale trust. I loved that. And I actually used it. I’ve used it as the title of this episode because what does it mean to you in practice? You know, that idea.

Xan Kitchin (43:53.693)

Yeah, love that. I love that as well.

Xan Kitchin (44:03.233)

Yeah, okay. So I think there are two elements, right? So you’ve got transactions, you’ve got a of transactions. Those transactions could just be, you know, the number of tasks in a day or the workflows that need to be completed, the number of advice documents that need to be generated. You know, the number of application forms that need to, they’re all transactions, right? Like transactions can be scaled. There’s no doubt about it, right? Like there are lots of really nice processes that can help us scale transactions. But in my view, the most important thing is the relationship an advisor has with a client. That’s where the trust comes in. That’s where the trust comes in. And I do not believe you can scale trust. You can’t scale trust and you can’t scale accountability if you’re exponentiating your client responsibility. Because remember, you’re diminishing the number of available hours and mindshare as well for clients when you do that. And that is why you can’t scale trust. You can absolutely scale businesses, can scale processes and transactions, but relationships, you know, there’s an emotional component to relationships and that’s built over time with clients. You you’ve invested time with clients, they trust you on the basis of what you’ve done and what you continue to do for them. And that takes time and you can’t scale that.

Rob (45:35.66)

Yeah, no, I love it. I think that one’s gonna stick. You are…

Xan Kitchin (45:40.523)

You can also, and just on that, Rob, you can’t scale accountability either. You know, that is a, it was a specific thing that, you will never be scaled.

Rob (45:44.79)

Yeah, those go hand in hand, don’t they?

Rob (45:52.045)

Yeah, you know, in terms of that scaling and making sure that there’s capacity being managed, you’re investing heavily in developing provisional advisors and associates. How do you balance that giving younger advisors real responsibility while still making sure client experience is kept up, standards are kept up?

Xan Kitchin (46:10.635)

Yeah, I just think it’s the way we’ve structured it. And what I mean by that is, we have four, we have two provisional advisors in the business, have two associates, we have a former provisional advisor who’s now an advisor. I mentored her into the business as well as an advisor. So we have a track record of doing this, I guess is the first thing. So what we’ve done is we’ve buddied up or partnered up senior advisors in the business with an associate or PY. And effectively that PY is just doing in the early days doing a lot of CSO work, a lot of client engagement stuff, getting to know clients, getting to know that advisor’s client. there’s a lot of relationship building that is going on in the early days of a PY anyway. As they skill up, you know, they’re sitting in on client meetings, they’re getting a familiarity around that particular client in many cases, but also the advice process. So it’s a nurturing relationship. It’s, it is very much mentored relationship and when it’s appropriate to do so a senior advisor will identify clients that they can transition or hand over to that PY but it’s done on an incremental and progressive basis. And you know, there’s an element of oversight and guidance that’s provided to ensure that the client experience is not detrimental in any way. But eventually, you know, what we find is because of that natural affinity that has built up over time, that there’s actually always a really easy progression and acceptance too of the client. And the experience they’re getting is what they’re already used to anyway because they’ve been trained by the very person that is handed over. So we find it works really really well.

Rob (48:05.516)

Yeah, no, absolutely. it’s, yeah, now we adopt the same approach and anyone that thinks it’s a waste of time having two people in the room hasn’t caught on to that point you’re just making about training the next person and building relationship connection between the client and that provisional advisor or that associate because they’re gonna be building that trust with those clients such that the transition for the client is so smooth. The client doesn’t get that dislocation of, I’ve never had a new advisor. They’ve got someone they’ve known and trusted for some years.

Xan Kitchin (48:34.88)

Absolutely.

Rob (48:34.976)

Alongside the premier, the primary advisor.

Xan Kitchin (48:38.027)

Yeah, no, that is so true. In fact, there is no redundancy whatsoever. It’s an investment like anything else. You’re investing in human capital.is how I see it. And what you’re doing is you’re ensuring your commitment around advisor capacity ultimately, because what it enables that senior advisor to do is to still free them up to see new clients. Because as they’re transitioning, they’re taking on new clients as well. Because of that, because of those advisor capacity constraints, they’re not being limited. There’s nothing worse than new clients approaching a business and saying, look, we’d love advice because you’ve you know, our friends and being, well, you know, I can’t really help you because I’ve got too many clients. But that’s one response. The other response is, yeah, sure, I’ll do it. I’ll do it. I’ll do it. And then you don’t do a very good job of it because you spread yourself too thin. the theory or the practice around incorporating provisional advisors is actually all about succession planning and continuity and fulfilling your promise.

Rob (49:45.869)

Yeah, absolutely. I want to take a second to talk about you when we chatted, you said you were using Paradino, which is an artificial intelligence tool and you’re not suggesting for a moment here that you’re not trying to become more efficient here. When we want to maximise your client trust, 150 clients per advisor, it’s not about…

Xan Kitchin (49:53.963)

Yeah.

Rob (50:08.768)

Saying we’re happy to do it the way it’s always been done. It’s really about trying to still build efficiency. And I wanna just touch on this point I think you spoke of, which is about it being a fork in the road for businesses. There’s high volume AI assisted models versus the high engagement relationship models. And there is, in your view, at least there is a clear distinction or if you like a separation of the approach businesses might choose to take. You’ve chosen the latter, which is to go about

Xan Kitchin (50:13.377)

Yeah.

Rob (50:37.55)

That high engagement relationship model, what does it say about your view of the future of the profession? Does it say what you think is the right path versus this idea of 500 clients per advisor, assisted, seeing them for, I don’t know, 20 minutes at a time and sort of having that very, very high number of people coming through? Much like people expect to go to their GP, they don’t expect an hour with their GP, do they?

Xan Kitchin (50:49.505)

Yeah.

Xan Kitchin (51:01.349)

No, no, and maybe that’s an issue in its own right, but we won’t go down that path. But yeah, look, just first and foremost around AI, AI without a doubt is…

Rob (51:06.712)

Yeah

Xan Kitchin (51:12.301)

You it’s transformative. It’s going to have a significant role when it comes to financial planning as it will in most industries. We are already benefiting from, you know, the AI tool that you mentioned, Paradino. you know, reduced the amount of time to take a file note, for example, from, you know, hour, hour and a half to five minutes, you know, with a bit of checking and making sure. And it actually does an extremely good job. In fact, there’s detail in file notes today that I suspect we’d never ever have been contained had it been done manually. So I think, you know, we embrace AI and I think AI works in any model. It works in our model and we’ll continue to exploit the benefits of AI. I’m not proposing for one minute that you shouldn’t always look for efficiencies. You absolutely should. But I’m not looking for efficiencies so I can add more clients to an advisor’s responsibility. I’m looking for efficiencies because then they can use their time more effectively on other matters, client facing matters. I think that fork in the road that you referred to, I do think there’s some divergence going on. And I think the reason for it is simply that the industry has, you know, post-hain, we’ve had a lot of costs come into the world of advice. You know, we had a lot of regulatory and compliant based changes. They come with cost, licensee costs and CSLR costs and various other costs. So naturally the response to that can be one of two directions and I’m sure there’s permutations therein as well and you know what your costs are and then you arguably also know what you need to generate from a revenue point of view and we’ve seen you know steady increases in advice fees not in our firm per se but across the industry we’ve seen advice fees rise and that has been the natural response to this. Our view is well, the last thing we want to do is compromise client service ethic. We think that’s important and I think that, you know, that will be important today but it will be important in five, ten years time. That’s where the value is.

Xan Kitchin (53:28.575)

You know, that’s where the value is. mean, where is the value in a business? Sometimes when you’re buying a business is, you know, I’m buying a client book. You’re not buying a client, but you are. But what you’re what you’re investing in is the relationship. You know, what makes a client book valuable is not the number of clients and what their relevant fee is. It’s the relationship that those clients have with the advisor and the trust that you’re buying goodwill ultimately. Right. And if we accept that that’s the case, that’s what we need to promote in our business anyway. And that’s what we’re saying. We’re saying, well, we know that goodwill is important. That’s why clients are already paying fees. So we don’t want to diminish that goodwill. We want to enhance it where we can. So AI helps us do that. I think, unfortunately, unfortunately, though, there are businesses out that have taken a different view around advisor capacity and said well we’re going to jump on the AI bandwagon and of course that makes sense but we’re doing that too but their view is they want to treat it slightly differently they want to try and strip out as much of the slack if you will around processes which is important but what they then want to do with that free time is to add more clients to an advisor’s responsibility. And that enables them to pull their prices off as well, because, you know, all of a sudden they’ve got more clients, they don’t need to charge as much. So they’re going for a high volume model and each to their own, right? But my view is, particularly with the enhancements in AI, if you’re taking away from the very thing that is your value proposition, which is the value you provide to your client, you’re effectively undermining your business.

Rob (55:04.407)

Yeah.

Xan Kitchin (55:21.679)

You’re taking away from the very thing that made you successful in the first place. And I just don’t know that that’s the answer. Particularly if AI does become more profound, what are you then doing that’s any different that a digital tool can’t otherwise provide? So that’s how I’m seeing it at the moment. And I think I’ll be proven right ultimately over time.

Rob (55:48.27)

Well, for what it’s worth, I’m with you on that, Sam. We are…

Xan Kitchin (55:51.44)

That’s good, I’m glad to hear I’m not a liar. Because I do get a lot of feedback, oh you don’t know what you’re talking about, you can have 300, 600, clients. I’m sure that you can.

Rob (55:59.107)

Well, yeah, our view is that yes, yeah, we wanna be efficient too. We wanna drive that we wanna make our advisors and our associates and our client service team wanna make their job easier, but enable us to then be even more effective with the clients. I do things that we are strapped to do sometimes, even with the client capacity sort of numbers that you’re describing. So we’re of that same view. And as you say, if…

Rob (56:28.044)

If AI does become more profound, then it will be important to maintain the thing that the client wants most of all, which is time with the person that actually they trust. The person that knows them and they trust to have a really meaningful and personal conversation with. And so to undermine that does seem, as you say, counterproductive, but each to their own. time will tell, we’re not forecasters, we’re just making decisions we think suit us. Yeah.

Xan Kitchin (56:36.363)

Right. Exactly.

Xan Kitchin (56:48.781)

Of course. I’m not preaching. I mean, it may sound like that occasionally, but you know, I just have a view, you know, as others do too. And I respect others views, and everybody’s entitled to their view. I, yeah.

Rob (56:56.109)

You

Rob (57:04.162)

So I’ve got one more question. We’ve nearly gone an hour, which I’ve enjoyed thoroughly. I am a tragic for talking to other great practice principles and what they’re doing that’s working for them. But I’ve got one more question for you. If you could change one mindset, and maybe we just touched on it, but if you could change one mindset across the advice industry tomorrow, what would it be?

Xan Kitchin (57:23.895)

Yeah, without sounding like a broken record, I do think that what I would encourage all practice owners to think about is, think about their business as not as a volume business, but a professional service business. And I think there is that distinction. I think if they can think about that in those terms, then I think that will go a long way to helping them, you know, devise ways in which they can make their business better.

Rob (57:55.854)

Yep, so we are a profession. We provide professional services and I think there’s been a lot in what you’ve said today that people will listen to if they’re not already doing it, think that, okay, we need to really, time to step up to how we run this thing together, bring our best ideas together and make sure we do it one way together and that approach to team-based delivery of advice, team-based approach is we fully embrace it too and it is a…

Xan Kitchin (58:12.15)

Yeah.

Rob (58:25.698)

it creates a step change in the way things are done. It allows you to grow and you can build a much more robust and sustainable business with that approach. So Alexander Kitchin, I really appreciate you joining me today on the Trusted Adviser Podcast.

Xan Kitchin (58:34.05)

Yeah.

Xan Kitchin (58:39.191)

Thank you, Rob, it’s been a pleasure, and thank you for listening to my views on what it means to be a successful financial planning practice.

Rob (58:48.366)

The pleasure was all mine. Thanks again, and cheers.