Paul Kearney

Around two years down the track on a program to reinvent how advice is delivered to clients, Kearney Group chief executive officer Paul Kearney says the approach is beginning to show results.

“It is living up to what I dreamt was possible and shows very healthy signs of being a worthy model,” Kearney tells Professional Planner. But his path forward will look unlike most other firms’ plans for the future.

“I don’t look to the marketplace, and I know [they] say you have to look to the marketplace and who we would be competing with if we were to grow, [but] this is kind of not where I’m coming from,” he says.

“If this is worthy, this will find a way.”

Kearny’s re-engineering of advice is built on the insight that for most small business owners there’s little or no distinction between the business and the business owner’s household. For that reason, there should be no separation or siloing of the services provided to them.

It’s not so much thinking outside the square as redefining the boundaries altogether. Kearney has reorganised the resources of the business into “Integrated Advice Teams” (three IATs so far), each comprised of 15 or 16 experts, such as financial advisers, accountants and mortgage brokers, who work seamlessly together as a team of domain experts, contributing to the client’s requirements on as as-needed basis. Each IAT has the capacity to serve around 500 clients.

Kearney says most businesses remain “entangled” with their owners financially, emotionally and in terms of time commitment. Some reach a scale where they become disentangled, but “that doesn’t happen for a very long time and actually only happens to a few businesses”, he says.

“The households that are connected to small businesses [are] a really large part of the community and an important community segment,” Kearney says.

“My observation was that the clients we work with have just got a series of financial problems and need them solved and want them solved by people who they trust and who understand their story.

“So, how can you start from that lens, look at all the things that we do and gather it together so that the advice that was provided was what the client needed at the time, and was coordinated around an understanding of an overall strategy that the organisation understood, not various advisers having varying levels of understanding? That was the core problem.”

Better and more appealing for advisers

As Kearney began to think about the advice process and how to break it out of the silos it had developed into, he realised that what he was considering was also a potentially better and more appealing structure for the firm’s advisers.

“There’s a type of adviser for whom the silos that we present them to work in don’t suit them,” he says.

“They don’t want to be caught in that frame, either. They want to be providing holistic, more broadly considered advice, or participating in more broadly considered advice.

“And so, the magic – for want of a better word – that you seek in a commercial paradigmatic shift should be that not only is it a reimagining of what the client is seeking, but it’s a reimagining of what the practitioner is seeking, or the type of practitioner who would be suited to this type of work.”

Kearney says he was convinced that the approach he had in mind would work better for the firm’s clients, but if it didn’t work for advisers and couldn’t be implemented, it would be a futile exercise.

“Will advisers get this when you ask them to work differently and think differently and approach client situations differently; or will they think that I am bombarding them with a bunch of things they’d rather not think about?” Kearney says.

“That was the test. I believed that a type of adviser would really enjoy that. The test was actually bringing it to life, to see whether or not they’d actually bite at the processes to make this work.”

In the end, Kearney said he experienced “basically no resistance, and I would classify it as an embrace”.

“That might be a bit about our culture,” Kearney says.

“But I suspect that actually there’s just a lot of people who would like to be participating in this kind of model for the provision of advice.”

Kearney says any change naturally creates a degree of wariness, but he says it’s tapped into something that advisers have a natural affinity towards.

“If they didn’t like it, then you would be dragging [them] kicking and screaming, and you would find out,” he says. “That hasn’t been the case.”

No need to be an expert at everything

Kearney says reorganising domain experts around the client doesn’t mean each adviser suddenly needs to be an expert in all aspects of a client’s needs across their household and business, it means having specialists around the table and available to the client as needed.

“The example I’ve been going back to… is the surgery table,” Kearney says.

“I feel it’s the one place where multiple disciplines are coordinated to meet together at the same time and do the thing that each of them needs to do around a situation.

“It’s not an exact mapping of what we’re doing, and I don’t want to get what we’re doing confused with anything that’s life-saving. But it’s the one place where, to a large extent, egos are put to one side, there are roles to be performed, and in a particular moment one role is the most important, and in another moment [another] role becomes the most important, and that that moves around, serving the central objective.”

Kearney says the model is “not asking, and we never would ask, someone to do something that’s outside their domain”, but rather it requires them to co-ordinate their skills and expertise with experts in other fields around the client-focused strategy.

In other words, what Kearney believes he’s in the process of solving is “a coordination problem, not a work problem”.

Central to the approach is an administration system that enables a free flow of information between team members, which Kearney Group has developed in-house – it helps that Kearney himself has “some background in software design and I can build a model”.

It was a critical step in the transformation of the business to reorganise its resources with minimal disruption to existing client relationships.

“I figured out who the lead adviser was for every client… and maintained that relationship,” Kearney says.

“I didn’t shift that relationship and only shifted subsidiary relationships but clustered the clients together around least disturbance to the secondary relationship.

“So primary relationship unchanged; least disturbance to what I thought was the secondary relationship; and then gather the advisers around that. That was the that was the order of things. But of course, the advisers in that instance were still working with the clients they knew, so that was good.”

The bigger risk was to do nothing

Clearly, redesigning the delivery of advice around integrated advice teams was not a risk-free undertaking, but Kearney says the bigger risk was to do nothing.