Brisbane-based adviser Tapel Cafer was a co-founder of Complete Financial Balance which was formed in 1989 and acquired by Arthur J Gallagher in 2017. Cafer talked to Riskinfo’s Peter Sobels in 2018 about how his wealth management company began, the secret of its success, and why he and business partner Graham Campbell agreed to merge their firm with US-based insurance brokerage company Gallagher.
This CPD quiz is based on an interview conducted by Riskinfo with Gallagher Australia’s Tapel Cafer in 2018. Scroll down for the full transcript.
Can you tell us a little bit about Gallagher and where the businesses come from?
Gallagher is a new entrant in Australia’s benefit or wealth management space. In fact, we were their first acquisition here in Australia in employee benefits.
Who was ‘we’?
That’s Graham Campbell and myself, as well as our team at Complete Financial Balance.
Complete Financial Balance has been around for about 15 years, and was formed by Graham and myself – two individual advisers coming together – realizing we had very different ways of running a business.
But collectively, his strengths are my weaknesses and vice versa. Hence, we call ourselves the Yin and the Yang of the business. And it was that Yin and the Yang that took this business from an insurance sales business to a more comprehensive advice business.
Can you tell us a little bit about the business proposition of Complete Financial Balance, and then Gallagher, do you have a particular specialist area?
Over the years, and through the (2008) GFC, we realized we needed to adapt. We saw that many advice businesses were struggling. And we’re fortunate that we where we are geographically located opposite the Royal Brisbane Hospital, and at the time it was the largest employer of specialist doctors and health workers in Queensland.
So we started to target market that field. We started to understand their occupational risks. We formed a panel of advice which consisted of doctors and specialists, and we learned from them about their everyday duties and their biggest concerns. The outcome from that was [learning about] blood-borne disease and needlestick injuries.
As a result, we went to the life insurance companies and advised them of our findings. And the insurance companies jumped on board and adjusted their definitions for blood-borne disease, sharps, needlesticks, etc.
And before we knew it, we were what we call the architects of these definitions. And then sponsored medical conferences and talked about their occupational risks, and it got traction. And we were perceived as the specialists in that space. And we owned that space for quite a period of time. Hence, we’ve got 300 to 400 specialists and training specialists as clients now.
A lot of advisers listening to our conversation today are targeting, or will have considered targeting, the medical industry, or doctors and specialists. What exactly was it about your approach that saw the doors open for you?
We soon realized that we took a shotgun approach and literally went for everything medical that we could. But we realized it’s a very, very broad field.
So we actually started to target-market the specialists, which was first orthopaedics then anaesthetics, purely because of their exposure to blood-borne disease, and blood splashes and all those sort of horrible gross things, and just the nature of their work.
But we also changed our marketing strategy and structure. We wrote our marketing [material] in a medical format, they actually read things differently to us normal people. Our marketing pens were actually syringe needle pens, and every aspect of our business was focused to the medical space. And don’t get me wrong, we still got referred to mums and dads and engineers and teachers, but our pure marketing dollar was focused and spent in that medical space.
You created syringe needle pens as part of your marketing proposition?
Ethically it may be incorrect. But doctors liked them. They used to grab them by the handful. I used to love them anyway, they had our symbol and logo and a name, etc. And we had multicoloured ink. But of course we found red was the most popular and so just stuck with a red colour.
Your proposition has clearly worked and has been very successful. What are the other critical elements in building the business?
We started to acquire staff…like any business you grow, you need client services, you need para-planning, you need other advisers.
But we were very mindful of who we bring into the team. And we started to realize that culture is the number one aspect in our business. And we went through a number of teething problems. And we soon realized that this experience Graham and I brought to the table just wasn’t enough. So everybody in this business needed to play a part, from the receptionist to client services, they all needed to own a part of this business. And I don’t mean own via shares, I mean to be the champion of something.
So everybody in this business, even today is a champion of something, whether it’s X plant, whether it’s newsletters, whether it’s communication, whether it’s process. And that means that they are the best that they can be in that area, and they teach the business, but they also process it.
Is your message then to have all advice businesses find a way to have their staff feel like they own part of the business?
One hundred percent. And what we have learned is that many advisers think we know all areas of our business and know how to do everything, whether it’s technology, whether it’s technical, whether it’s sales… The reality is we can’t be the best of everything.
But if you actually ask your staff what they’re actually good at, or what they enjoyed, after hours, you realize you can actually incorporate that into the business. If you just stick to their job description, and they just come in and do their 8.30 to 5 based on their job description, then it’s very difficult for that individual staff member to grow, and in theory, for your business to grow.
Clearly, you’ve been on a journey, are there any key learnings you can share with advisers?
Some of the best learnings are through your mistakes. So when you make mistakes, you can’t run away from it, you’ve got to fix it. And we’ve made lots and lots of mistakes.
I use an analogy that we make mistakes probably every week in some aspect. But we’re able to keep those mistakes limited to what I call a hallway or a corridor, and we literally bounce between the walls down that corridor – but we’re able to keep moving forward.
I think for many businesses, their corridor is too wide, and they actually fall over, which means they grow too big too quickly, and don’t have the right processes and don’t have the right systems, or don’t have the right technology or people. Because all of those are very important in building a business.
Many advisers will be seeking to grow their business, so what are the danger signs that they’re growing too quickly?
The fact that you can’t provide customer service in an adequate time, the fact that your revenue is dropping, or revenue may be increasing, but profitability is dropping, the fact that you have a high turnover of staff.
If you have no culture in your business, you can feel it when you walk through your doors first thing in the morning. So if you have a high sick rate, or an idea that your business may not be working as effectively and efficiently as it probably should be.
You’ve mentioned the word culture a few times. And it’s an easy thing to say. How do you build a culture, that you determine, within an advice business?
It takes a long time. I now have the fortune of looking back and saying it takes years. And with culture, you’ve soon got to realize who doesn’t have the culture – you need to address that and it doesn’t mean it’ll eliminate them. It means you need to address it. And we’re very fortunate that of our team of 19. We are very close to having 19 on our bus.
When I go back 10 years ago, I looked at what we call our core staff. We probably had seven out of 20 on our bus, on our journey in our right direction.
So over the last 10 years we’ve taken seven, up to 18 or 19. So the ones who I say, aren’t quite on there yet, it’s because they’re new, they’re learning. They’re still understanding where they fit into this ever-changing business.
Has there been a big turnover of staff in that time?
Not overly, no. So like any business, we lose staff to maternity, and we lose staff to family reasons.
However, those positions are held because those people that are currently on maternity leave, we want them to come back, and that’s a call to come back as soon as you can, because they are valuable pieces of the business.
So you’ve built, you’ve evolved, do you know where you’re going to go?
We’ve been on a phenomenal journey since we were acquired by Gallagher in 2017. We weren’t for sale. But what attracted us, again, was that word culture. When we met them, we met them in the UK, we met them in Chicago, we met them here in Brisbane, we met them in Sydney. And these were all different people in their global business.
And what attracted us was many of these people had their own businesses at some point in the past, whether it was three years ago, eight years ago, 10 years ago, and they’ve all stayed with the business.
Now, as we all know, being self-employed advisers, it’s very difficult to retain self-employed people yet somehow they’d been able to do it. And it comes down to that culture, it comes down to they don’t micromanage.
When they came knocking they said ‘we don’t want to change who you are, we don’t buy things that are broken, we buy things that are working’.
They want to grow business that can fit in with the rest of their existing business, and just add another service, another benefit to their clients. That was the attraction.
Well, congratulations on the business that you’ve built and you continue building. Is there one particular message perhaps you can give aspiring advice business owners, some lessons, some key tips or recommendations for those just starting out on the journey.
Yes. Never stop evolving your business. Our industry is changing immensely. I’m only 15 years old in this industry and many of you listening to this podcast are 30 years of age. But this industry is changing weekly, monthly, and we need to continuously adapt.
And we were fortunate to have won the AFA practice of the Year award in 2014. Wow, that’s a long time ago. And I remember in literally the the speech that we gave to acknowledge everybody who would help our business was that today’s ceiling is tomorrow’s floor. And that is the honest truth.
What’s happened in that last three years is astronomical, where this industry has now changed. And I think with the changes that are potentially going to occur in the next three or four years, due to changes in listed requirements, the current legal proceedings that are happening in our industry, I think that we now need to open our eyes and start saying ‘right, what is the best models be moving forward?’
Tapel Cafer is Head of Personal Solutions for the benefits & HR consulting division of Gallagher Australia. Gallagher is one of the world’s leading providers of employee benefits, insurance broking, and risk management services.
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Tapel Cafer says one of the reasons the advisory business partnership with Graham Campbell thrived was:CorrectIncorrect
Complete Financial Balance raised its profile in the medical profession by:CorrectIncorrect
The common thread that ran through the Complete Financial Balance business was:CorrectIncorrect
Tapel Cafer says some of the danger signs that a business is growing too quickly could be that:CorrectIncorrect
Gallagher was attracted to acquiring Complete Financial Balance because it:CorrectIncorrect