By Adrian Payne
1n 1964 Neil Skeggs began the business as an insurance advisor for AMP. During the early years he found himself working with small business owners, and could see there was a niche.
Over the next 30 years he built a business that cared about his clients. But as he neared the end of his working life, he realised that if he wanted the business to survive him, he would need to do something about succession.
Today, Skeggs Goldstien defines itself as “a privately owned diversified financial services business, providing a complete range of financial, wealth and accounting services for individuals and businesses”.
So, the team today is led by four partners each with unique skills and abilities. The partners respective histories with Skeggs Goldstien indicate how well founded the business is, on their individual backgrounds and skills.
Adam has 23 years experience in the financial service industry, he specialises in providing small business and Self Managed Super Fund Advice. He is a Certified Financial Planner, Specialist SMSF Adviser and the NSW SPAA Chapter Chairman. In his free time, Adam enjoys relaxing down by the Hawkesbury River water skiing. He also finds time to get out on his motorcycle.
In 2010, he participated in the ‘Ride Around Australia’ to raise funds for the Steve Walters Foundation, a not-for-profit organisation dedicated to raising funds for childhood cancer research. The dream being that one day, all children with cancer will survive. During the five week ride, Adam and his motorcycle passed through many parts of Australia, surviving some close shaves and having a great adventure. By all accounts he had a fantastic time despite being away from family and work commitments for such an extended period.
Jonathan Reynolds has 11 years experience in the financial services industry of which four years have been with Skeggs Goldstien. He is an Accountant, Accredited Mortgage Consultant and Certified Financial Planner. Jonathan specialises in providing accounting, taxation and mortgage advice for small business. After hours, Jonathan enjoys socialising, playing golf and spending time with his young family.
In 2005 Darryn Fellowes merged his own Castle Hill practice with Skeggs Goldstien. He has 13 years experience in the financial service industry and is a Certified Financial Planner and SMSF Specialist Adviser. He provides Financial Planning and Business Advice, with specialities in the areas of self managed super fund and personal protection. Darryn also provides pro bono advice to cancer patients to assist them and their families through difficult times. This work is conducted via the AMP Cancer Council Pro Bono Program. When he’s out of the office, Darryn enjoys motor sports particularly formula one racing. He also likes ball sports and most of all, spending time with his family.
Khoung Tang has 11 years experience in the financial service industry all of which have been with Skeggs Goldstien. He is a Certified Financial Planner and holds a Bachelor of Engineering degree from UNSW. He enjoys the challenges that come with managing the day to day operations of the business. Khoung also enjoys playing golf, family time and travelling overseas.
Prior to Skeggs Goldstien being formed Neil started mentoring Adam Goldstien in 1992 and they began working together. Over an eight year period they laid the foundations for the way in which the business would offer services to small business owners and individuals into the future. After this period Adam bought the business from Neil and formed Skeggs Goldstien.
They had extended their offering by this time beyond AMP products and more into small business support. A business owner might be very good at providing the product or service they sell, but find themselves in need of support and expertise in areas like business planning, financial management, succession planning and staff management.
Being confident about the quality of his advice, Adam decided to go on a “fee for service” path back in 1998. Fee for service wasn’t seen as the way to go in those days indeed consultancies today are finding it difficult to move into charging a fee for service rather than charging traditional entry fees and receiving trailing commissions from suppliers.
Adam was also a pioneer in the concept of self managed superannuation funds and a founding member of the Self Managed Super Funds Professionals Association of Australia. To help develop this aspect as a specialty in the business, he invested in his team. Realising that he couldn’t do everything himself he put staff through further education and training to equip them for the direction in which he was guiding the company. At the time, training of this sort was not cheap, but his strategy paid off and he soon began to see a return on his investment.
Adam’s vision was to build a larger financial services business with multiple partners providing a range of services rather than being a 100% owner of a small financial planning practice. But in doing so he realised that he needed to bring people in to grow the business and not be principle reliant. Today it’s a strong team of four Partners and eighteen staff.
In 2008, with the business continuing to grow and after a couple of ‘growing pain’ moves in Parramatta, Adam invested in a property at Norwest Business Park and engaged designers to put together a business premises design that would project the professional image they were keen to present to clients. They now have 300 square metres of highly professional room-space in Norwest and an office in Chatswood servicing the North Shore. Most of their clients are in or around these areas and they see these areas as having ideal clients for their services.
Their ideal clients are those who would enjoy the benefits of their collaborative approach, providing financial and accounting services, suggesting greater efficiencies and the sharing of relevant information and ideas.
They define their ideal clients as: individuals or businesses, family oriented, financially successful and enjoyable to work with, prepared to partner with them and prepared to take and implement their advice. In this way they expect to be able to add significant value to their clients’ bottom line.
In short, a commitment to an ongoing relationship is critical for success.
An area that is increasingly in demand comes from the realisation by business owners that they are not being able to extract themselves from the daily grind.
The team at Skeggs Goldstien have strategies to help people move into working ‘on’ their business rather than ‘in’ it. Finding ways to release time so they are able to take days off, have holidays and do some of the lifestyle things they have been promising themselves for years. All this without damaging the business’ income stream and maintaining the promise of growth.
One approach that differentiates Skeggs Goldstien from other advisers is their initial focus being on the business owner identifying those personal and family needs and lifestyle ambitions. Then, looking at the business to see how strategies could be developed to meet not only the needs of the owner and their family, but also ways in which the business can be structured to accommodate the change. Many other consultants focus on either the personal life or the business as individual entities.
Succession planning is very much a part of the process of an owner extracting themselves from full time work in the business. Too many leave it too late. Then, when they look to sell their business to recover retirement capital, their own valuation of the business is more optimistic than the market is prepared to offer.
But had they initiated a plan for the business to operate profitably and grow without them, they would have the choice of an on-going income stream without being involved in the day to day workings of the business, or to sell a profitable business that no longer needs its founder.
One strategy is to introduce a working shareholder, with the skills and, as a shareholder, the incentive to manage and grow the business.
Darryn quotes the example of a business that Adam has been working with for some years. In this example the founder of the business has been able to leave the day to day running of the business to his sons and confidently retire to watch the business he began grow several-fold under their management. This process has taken place under the watchful eye of Skeggs Goldstien and Adam in particular, being continually focused on their planning and steady growth.
Looking back to 2000 when Adam succeeded Neil, Skeggs Goldstien had three core parts to the business being Financial Planning, Corporate Superannuation and Self Managed Super Fund Advice. However in the past ten years the emphasis has changed and today Corporate Superannuation represents around 8% of the business and has been replaced with high value Business Advisory and Accounting Services to business owners.
Now, business planning and the provision of Accounting services has become a strong part of the core business, and they are constantly monitoring demand for their services so they can prepare for themselves appropriate business plans for the future growth of Skeggs Goldstien. Prudent business planning includes an annual review of opportunities. Their entry into business planning itself was a conscious one which included the engagement of appropriate outside coaching. They see that constant education and upskilling to meet demand is essential for the provision of a cutting-edge service.
In 2005 the directors identified ten essential criteria that could be used to identify an ‘ideal client’ for Skeggs Goldstien. This led to the realisation that not every family or business is a potential client. Simple criteria like whether the client is prepared to accept and act on advice. Is the client prepared to partner with them and would they enjoy working with this client?
From a family perspective (which may or may not include a business as well), they have developed a ‘Principal Advisory Service’. They identified the problem that for many years clients came to them confused about which direction to head regarding their financial future. It was identified that clients were obtaining advice from various sources none of which were consistent or in line with their personal values. Many clients were obtaining advice from their financial advisor, accountant, mortgage broker, and even perceived experts among family and friends. Usually this amounted to so much conflicting advice as to be of no value at all.
Skeggs Goldstien believes that their ‘Principal Advisory Service’ equips them to be a genuinely valuable adviser in assisting clients achieving their most important goals in life whether this be financial or personal. Part of the service is not to deny the advice of other expertise a person may have around them. Instead as their ‘Principal Advisory Service’ Skeggs Goldstien can work with their advisers to ‘manage’ the options and incorporate them into one well prepared plan.
“It’s all about helping clients make smart choices about what to do with their money” said Darryn Fellowes. To do this successfully they get to know more about the client, their dreams and ambitions than their accountant, insurance broker, mortgage adviser even other members of the broader family. Because they ask the questions.
In 2006, they realised that they needed to adjust their thinking on the way the client base ought to look. Their decision meant that they would take a ‘hit’ in revenue for a couple of years but in retrospect it has been worthwhile.
They decided to refine their client base to fit the criteria, to become proactive for fewer high quality clients. With a large client base, they were behaving reactively to most clients and providing a service when requested to do so. Today they are thinking ahead on behalf of a smaller, better value client mix. Now they approach their clients when they see an opportunity to be of service and offer ideas to improve the value of their ongoing advice.
The partners also realised that a lot of what they were doing involved engaging an Accountant for accounting and taxation advice administration and compliance work. They had previously been outsourcing their accounting work to various providers. However, the time and an opportunity came along in 2010 where bringing the accounting function ‘in house’ was considered to be a good move.
They soon identified an Accountancy Practice for sale which had a good client base of Small Business owners and Self Managed Superannuation clients. After a long due diligence process they purchased the business. From previous experience working with business owners, they knew that it was important to align the cultures of the two businesses and make the staff of the accountancy practice comfortable with the changes. Naturally the staff in the accounting business were suspicious and had concerns about their job security. So, before purchasing the practice Skeggs Goldstien partners arranged to meet the existing staff to allay fears and to let them know that they were to become part of a dynamic modern business that could offer a much broader service to their combined customer base.
It was necessary to blend the cultures of the two businesses to help the two teams see themselves as one – all on the ‘same page’. This was partly achieved by organising six-monthly staff retreats – once a year they run a two-day ‘get away’ to discuss not only the direction of the business, but also for people to get to know one another. They discuss family things, the partners leading with the thought in mind that the business now supports 18 families, all of these being ‘stakeholders’. No longer are four people supporting 4 families like in the early days.
A part of their retreat “bonding” is to undertake challenging activities that pushes the team outside of their comfort zone, For example, some recent retreats have involved quad bike riding, caving expeditions and paint ball games. Whilst some of the team were very nervous in taking part it has bonded the team with the knowledge that they belong to something more than just a job.
As usual Publisher Dmitry Greku sought the thoughts of two of the board members, Darryn Fellowes and Khoung Tang, on what key elements of advice they would give to others in business.
They responded with: Setting goals and aligning objectives especially among partners so people are all pulling in the same direction.
Look after staff, and their families.
Be constantly aware of the need for personal growth of staff, their education and advancement.
Be truthful and honest with clients and act with integrity, sometimes even to the disadvantage of your own business.
Know when you need help – no one can do everything.
Look after the little issues and the big ones will look after themselves.
Skeggs Goldstien, is a business that lives in today’s world. Constantly changing, ever adjusting to meet opportunities for its clients and for itself. It’s always on the lookout for ways to improve services and to deliver good lifestyle options to both clients’ families, and the families of their own team.
We are reminded of a company (some years ago) that manufactured an electric drill. They spent much time in a seminar discussing what it was that their ideal customer really wanted. After much deliberation they recorded their conclusion – “a hole”
In the end, ‘a great lifestyle’ is the end-product delivered by the team at Skeggs Goldstien.
