I get calls from people all around the world who have seen the SMSF statistics – $750Bn in assets, average size fund of $1.2M, huge cash balances and growing year on year.  They all want to know the same thing, how do I tap into this vast source of wealth.  And it is not just investment people it is mostly advisers, accountants and planners.  And the sad thing for me is that so many have committed time, energy and resources and have come up dry.  It seems that the only ones making money are the accountants doing administration and audit but even those days are numbered as we see online administrators, both onshore and offshore offer the full compliance package with audit for less than $1,000. I spoke to someone last week who was getting it for $600 all included!

So why are SMSFs so hard?

It is simple, not having a system for the strategy.  Let’s say I give you a great SMSF estate planning strategy, one that could be worth $10k to $100k tax difference for a client.  I told you the bones of the strategy and looked at some case studies around it, ATO private binding rulings on it and you knew of at least six clients to apply it to.  So far so good.  So you sit at your desk or get on the phone and chat with the client, get them to come in and discuss the strategy.  They are keen, you’re keen and you set a fee of $3,500 to bring this amazing strategy to life.

Then the process stalls.  Do you have to do an SoA? What set of documents do you need? Who will do them?  What numbers need to be crunched? So you sit down with one of your administration team and tell them to do it.  The weekend comes, then Monday and on Tuesday you ask if there is any progress and silence.  They fudge because to be honest, they don’t know what they are doing and are scared to make a mistake or tell you and the WIP goes up.  And don’t worry it is not just your firm, it has happened to me recently – twice.  So another week goes by and still no results, the client calls wanting to know where things are at and well, you tell them it takes time.  Great strategy but no results.  Let me put it brutally you aren’t going to rush to see another client with this brilliant strategy when you can’t even complete the first one.

And there you have it – SMSF and for that matter any tax advising or if you have worked with lawyers on estate planning, can be so hard, so long and the initial momentum and desires wane very quickly.  It’s extremely frustrating for everyone involved and does nothing for the bottom line.  So back we go to compliance and the glimpse of the riches in SMSFs fly out the door.  Dreams shattered.  And I have seen that on so many occasions.

The only exception is setting up a SMSF.  We have all done that a lot of times and know the process down pat.  Get your best deed, set up a company trustee, open a bank account, get contributions and rollovers and away you go hand in hand with an excited client flying into the void.

The $1M Question – can we build a Strategy system?

I have been doing SMSFs for a long, long time and seen the good and the bad and how hard things can be.  And for those of you who know me I love a challenge.  The higher the bar the better and I never say no.  So how to solve the $1M question?

Let’s start at the start with the good stuff.  SMSFs are not going away and are going to get bigger as the next generation of pre-retirees shift to SMSFs with much bigger balances than the generation before.  So if there is a recession, we should not care as industry and retail fund returns go backwards, despite SGC and members wake up to doing it themselves.  It happened in 2001 and 2009 and will again.  So working in an industry that is recession proof suits me fine.  Why would you be anywhere else?

So here is my gift to you, a strategy system that works, each and every time.  It is not rocket science but then again neither is McDonalds but it’s perfect system feeds 68 million people per day.  Now that’s a business with scale.

Step One:  Find a strategy

Now there are a lot of strategies out there, even upgrading investment strategies at the moment is a very hot strategy issue and with the Commissioner of Taxation threatening $4,200 fines, it is a strong strategy requirement for all SMSF clients.  For me, it is crucial to let clients know what is going on around investment strategies just in case they get the next round of letters from the ATO.  I heard from industry sources that there are potentially 170,000 more to come.  Yikes!

To be honest I prefer to be a bit more upbeat and provide strategies that will improve a family’s finances, give them tax relief and maximise their wealth and opportunity.  After all that is what we are in this strategy game for, not the negative stuff – leave that to the lawyers.

Now if you don’t know which strategy to choose (and you only need one at this time), I strongly advise you come along to my SMSF Strategy and Estate Planning day where I will unveil 20 strategies with suggested client pricing.  Not only will it provide you with clarity and insight but momentum that once it starts going and your clients see results it becomes infectious.  To book for early bird or if you are a registered LightYear Docs user (costs nothing) – it is a very low $145 – https://ilovesmsf.com/roadshow/

Step Two: Communicate the Strategy – the Magic Key

Now this is where everything ordinarily grinds to a halt. For those who like to hit the phones, that is great but the problem is there are only so many hours in a day and it can be hard getting the right person at the right time.  In the end you need to book an appointment – whether face to face or by way of zoom conferencing if they are interstate or away from the office.

So let’s change that with my Magic Key to unlock clients hearts and minds.  I have written a lot of copy for my strategies and that copy is directed toward existing or prospective SMSF users not advisers.  There is no jargon, just benefits, possibilities, opportunities and how a well placed strategy will make the world of difference in their life.  Now I am good at writing copy, I have written five books and over 100 newsletters plus thousands of emails, so in terms of strategy copy I know my stuff.  So don’t reinvent the wheel as they say and use what works. Spending hours in front of a computer to do 400 words when it takes me 15 minutes is like a McDonalds owner bringing in their own beef patty.

Remember, this is about educating the client to not only read but act on the advice.  But not everyone gets it first time, just like this blog, some people need to see it two or three times before the penny drops.  Some it takes a year or two but that is fine .

So here is my suggested action plan for you:

  1. Set up a free Mailchimp or other email account for communicating to clients current and future educational pieces. It’s best to get a program that provides quality data and can segment clients for specific use – simple and sensible.  Now if you don’t know what to do, you can contact us and we are more than happy to help – at no cost after all your success is our success.  We will help you set it up, show you how to load your client database onto the platform and then provide you with the strategy copy and also the call to action for the client– a strategy appointment with you using https://calendly.com/
  2. For those that don’t book an appointment we will provide you with a letter on the strategy to send to your client, again it is a template and you can change but I suggest you don’t change the copy. As we can go into things a little more in the letter (and let’s face it who would not like to get a strategy letter from their accountant or planner) the call to action is to discuss it over the phone or book an appointment.
  3. For those that don’t open the email or respond to the letter – let’s change the headline and send it again through Mailchimp, the beauty of this system is that it takes a minute to do this and also find out who opens the email and then books.

IDEALLY this process of strategy education, email, letter and appointment would be continuous with a new strategy being rolled out every month if you like but no later than every quarter.  We want your clients to see you as a strategic adviser coming up with new ideas all the time.  Like the Castle when Darryl Kerrigan says to his middle son Steve – “You’re an ideas man.”  And for me there is nothing better for our clients to see us as ideas people – innovators and strategists.

Step Three – Do the Appointment/Interview

Now I am not mincing words here the purpose of the appointment is to show the benefits of the strategy to the client and at the end they use it or lose it, it’s time sensitive.  Importantly we have to touch on all the benefits including:

  1. Tax savings
  2. How it will help the family
  3. How it will set up a great asset base for a strong, secure retirement income
  4. Tax savings – this needs to be shown twice in a different way.

So show them the strategy as it applies to their circumstances . I like whiteboards personally as 70% of people are visual people and standing in front of a whiteboard provides credibility and authority.

Super Strategy Tip:  Make sure that you have a junior in the room with the LightYear Docs strategy automation system open at the strategy interview so that all the data you collect from the appointment/interview is recorded in the system. By the end of the meeting all of your strategy documentation, to the umpteenth degree, will be completed and ready for delivery to the client when you want.

Step Four – Settle on Delivery times and Pricing

In closing with the client emphasise the tax and other benefits and show on the Board the potential tax savings over a 3 year period.  If you are doing fixed pricing, tell them the fixed price and importantly the delivery date of the strategy.  As the strategy will be fully completed by the end of the interview, I suggest that you send them a draft for their review late the next day or the day after.  They can then review, finalise and prepare for invoice.

Value Pricing:  Alternatively if you are value pricing, show the client the tax savings and ask them “how much is this strategy worth to you” and they may give you a number but may say “I don’t know” which is fine.  Just follow up with “This strategy is going to improve your family’s wealth, help build a base for secure retirement income stream (or estate plan/ or living will, etc) and save you $x in tax, now if you did know what it was worth to you, how much would you say now.”

Step Five – Deliver and Refocus

The final step should be the “event”.  The client will have a few documents to sign so get the documents ready on the Boardroom table or if you go to their home, their dining room table.  Take a bottle of champagne, this is a special occasion.  Complete the signing ensuring all parts of the strategy are completed, explaining each part before signing and when completed open the champagne or if it is too early, leave it with them as a parting gift. If you don’t want to do champagne, get a great big cake – everyone loves cake!

The Next Step – Your ROI

The next step is to assess how you went with the strategy.  How many emails were opened, how many appointments filled, how many strategies completed and how much revenue earned.  More importantly break down the time and costs involved versus the revenue so you can work out your grow profit margin per strategy.  The higher the better.

Then plan, budget and prepare for the next Strategy rollout.  Can you imagine the results if you did a strategy every quarter, mastered Mailchimp so specific strategies only went to those clients or prospects best suited for the strategy and had 10 appointments per week?

The Final Takeaway

Years ago we had a conference on Maui for our top SMSF strategists and Michael Gerber of the E-Myth fame came and spoke.  He is one of my heroes and if you have read this far and really want to see the power of the SMSF Strategy system above listen to Michael in this video – I love him: https://youtu.be/XP3wm63KS8E  It’s about increasing the value of the business ready for sale.

Now if all of this interests you, and really how can it not, and you would like to get started straight away, contact me personally 0418 735 491 or email me – grant@ilovesmsf.com or book a 30 minute free session with me so I can show you a strategy to start with straight away (note this link is exactly the same way you can easily schedule appointments with your clients with integrations straight to your email, calendars and zoom if needed) – https://calendly.com/grant-92/consultation

Or if you want to take a little longer, do some more investigating then come to my SMSF Strategies and Estate Planning Roadshow where you will see 20 strategies to sink your teeth into.  And I am going to give you a treat if you have read this far – use the LYD booking tab to get it for $145, it will honestly open your eyes – https://ilovesmsf.com/roadshow/

– Stay Strategic!

Grant Abbott