Blue Chip Issue 81

FINTECH A SAFE PLACE TO

FINTECH A SAFE PLACE TO SUCCEED Blue Chip chats to Rory Brachner from DoshGuide, a site to connect people that need personal finance advice with a passionate community of flat-fee financial advisors, who operate in a fundamentally different way to traditional financial advisors. What is DoshGuide about and what are you trying to achieve with it? The idea behind DoshGuide is that many people need help with their personal finances; they’ve never really been taught how to manage their money. Unfortunately, it’s difficult to figure out where to get help and who to trust. DoshGuide is aiming to solve that by providing a safe place for people to connect with a community of vetted, rated and reviewed financial advisors. We believe that flat-fee advice is the best opportunity for nextgeneration clients to get the help they need. Our goal is to make it as simple as possible for them to find their ideal flat-fee advisor. We’re excited for more people to experience what it feels like to work with an advisor who is working for you, and only you. Equally we’re excited to provide a platform for advisors looking to grow a flat-fee business or those looking to diversify their existing business to include a fee-based model. We focus on facilitating mutually beneficial longer-term client/advisor relationships, rather than once-off interactions. You are not a financial planner, so what is the story that lies behind you developing this website? Correct, I’m not a financial planner and quite new to the financial services industry. Prior to launching DoshGuide I worked at Google for nine years, so my background is in web and digital marketing. I quit Google in 2019 and took some time off to Getting paid less for helping people be better with their money doesn’t make sense. consider potential paths. I loved the idea of going back into the start-up space and wanted to look at solving problems that were tangible and meaningful to me, ideally something that could also benefit from my digital expertise. In the middle of 2020, I found myself sitting on a video call with five close friends. We’d all signed up for the same retirement annuity, which we were realising was a big mistake! Collectively, we arrived at the painful conclusion that it would be better to exit the annuity early and lose 25% of the money paid in, rather than stay in a product with extortionately high fees, till retirement. It was a painful decision, but it became clear we needed to pull the plug. I’d been paying a large monthly contribution into that fund for five years. It was a huge setback. I was angry at myself for not knowing better and at the trusted financial advisor who had sold me the annuity. This and other prior experiences really got me thinking more deeply about the financial services space. How did five of the smartest middle-aged people I know get pulled into investing in a product like this? How is it even possible that a product like this is available on the market? How many other people in similar predicaments haven’t realised it or will never realise it? Why would a financial advisor, in good conscience, be pushing such obviously flawed products? I become obsessed with these questions and figuring out how it could be better. I quickly realised my experience was not unique: 84 www.bluechipdigital.co.za

FINTECH unfortunately, there is a growing dissatisfaction and distrust in the financial services industry. I also realised it didn’t have to be this way – a solution already existed in the market, especially for younger clients, but not enough of them knew about it. I started to connect with a small passionate community of flat-fee financial advisors, and this is where the idea of DoshGuide took hold. We’re seeing strong indications in the market that the flat-fee model is growing faster than AUM-or commissionbased approaches. What is your definition of a “flat fee”? Where the advisor is paid by the client directly on an hourly, project or retainer basis. There is no third party or product involved in advisor remuneration, and fees are expressed in rands, not as a percentage of assets. Many very good and ethical financial planners charge AUM-based fees. Would they be excluded from being listed on DoshGuide? There are plenty of advisors doing a great job on an AUM basis and there are many platforms and large, established companies supporting that model. Currently it’s quite easy for people to find advisors operating on an AUM basis. However, it’s difficult to find flat-fee advisors; we want to make that simple – that’s our focus. It’s important to understand that planners who join our platform can have an existing AUM business, in fact many of them do. We have no issue with advisors on our platform growing their existing AUM business in parallel. However, we require that any clients you gain through our platform are engaged with on a pure flat-fee basis, so no commission and no percentage of assets. This approach gives advisors an opportunity to test out a new model without any impact on their existing AUM business. What for you is so important about financial planners charging flat fees? Ideally, there should be more financial advisors operating like any other professional service and they should be rewarded appropriately for their time and expertise without the burden of having to sell products. Suggesting options like investing in property, paying off debt, making gifts to children, increasing your cash buffer can lead to a reduction in an advisor’s fees. Getting paid less for helping people be better with their money doesn’t make sense. Flat-fee advisors are disproportionately represented in the industry, but more people, especially a younger demographic, are organically seeking out this service. We’re seeing strong indications in the market that the flat-fee model is growing faster than AUM-or commission-based approaches. We’re excited to support and increase that growth while helping more advisors build sustainable flat-fee businesses. You seem to be promoting a model where financial planners only give advice, and that clients are then left to implement that advice directly with product providers themselves. Is this correct? What about the many clients who don’t have the time, energy, experience or expertise to do this themselves and just want to delegate their affairs to a financial professional? No, most of our clients need help with implementation, and our advisors do a great job with that, the only difference is now they are getting paid on a project or retainer basis to do so. Since advisors are no longer drawing fees from the product, they are free to consider all options in the market for their clients, even self-service providers, where it makes sense. For advisors to be successful with flat-fee clients, they’ll need to suggest product providers that keep costs down to a minimum, and help with implementation, regardless of what providers are selected. We’re starting to introduce client ratings and reviews for individual advisors; this rewards those delivering true value, resulting in more exposure and more clients. In the future, we’ll also share learnings from the best-performing advisors on the platform so that everyone can understand how to deliver the best possible flat-fee client experience. Part of the value DoshGuide provides is sharing best practice around building this type of client base. There is no such thing as a free lunch. How does DoshGuide make money? We launched in July, and currently are giving away free lunches! While we’re in beta for the next several months, advisors who join can use the platform free of charge. Once we get beyond beta, our fees will be charged as a percentage of an advisor’s earnings on the platform. We’re still finalising our fee structure but we’re aiming at averaging around 10% to 15%, with longer client engagements dropping to below 10%. How do people get in touch with you? I’d love to hear people’s thoughts on what we’ve built, how we can do better and any questions they may have. Feel free to get in touch on LinkedIn or email rory@doshguide.co. If you are interested in becoming an advisor, visit www.doshguide.co/become-a-guide/ Prior to this, Brachner worked at Google for nine years, gaining extensive global experience as a senior sales and business development leader, having lived and worked in London, Singapore and San Francisco. This included eight years focused on growing Google's advertising technology business (DoubleClick, Google Marketing Platform, Google Analytics) in various markets and one year building partnerships for the Chrome product team. Rory Brachner, founder and MD at DoshGuide www.bluechipdigital.co.za 85