Most financial advisory firms focus on generating more leads when the real growth constraint sits elsewhere. Part 1 of this episode with guest Jon Macintosh explores how Saltus evolved from investment management to advice, why client trust drives retention, and how better data, sales capability and digital marketing helped create sustained organic growth. Listeners will learn how to identify hidden leaks in their revenue engine and improve conversion without simply increasing marketing spend.

Hello, and welcome to the Growth Workshop Podcast.

In this podcast, we'll be sharing insights and hearing from other industry leaders

to get their thoughts and perspectives on what growth looks like in modern business.

This is part one of our two-part series.

Mr. John McIntosh, or otherwise known to your friends as Tosh,

thank you so much for joining us on the Growth Workshop podcast.

Delighted that you're here.

Tosh, I know that I've been admiring from a distance your growth as an

organisation for the last six years, the six years that we've known each other.

And I have to say, when it comes to our listeners that are actually talk

about the Growth Workshop or the growth of organisations, you are the

epitome of that because you guys have grown way beyond market expectations.

It's been quite thrilling to see that.

So we're super excited that you're here today.

But just for the benefit of our listeners and viewers as well, would

you be good enough just to give us a little potted history of maybe your

journey, your career up to this date?

Sure.

Hi, it's great to be on this podcast, so thank you for having me.

So my-- I started in the City as a institutional fund manager in 1991,

and with Schroders, and did a couple of years of it and discovered, and

they also discovered that I was really bad at it, and I also hated it.

And it was… And I actually got booted out, and w- while I was serving my notice,

I got re-hired by another department of Schroders to go off to Eastern Europe

at, at the time the Iron Curtain was falling, to go and help them design, help

the Hungarian government design their voucher scheme where they were g- getting

state assets out of state ownership into the ownership of private individuals.

And I suddenly realised, "Hey, actually, finance can be really fun and

creative and different, and actually can be a force for good." So it was

like a, it was a rebirth in job two happening hot on the heels of job one.

And I did, so I did that privatisation work for a few years and then thought

I'd had enough of working in finance, so I thought I'd go and get a proper job.

And in order to do that, I went to do an MBA at business school in France, and

I did that for a year at a place called

INSEAD.

Got an MBA and then thought, "Okay, I've got to get a j- a proper job."

And I discovered that proper jobs were paid like- Not very well.

And in fact, worse.

The, the… What I was being offered was worse than what I'd got five

years earlier as a graduate trainee.

So with my tail between my legs, I came back into the world of finance.

And, but in private equity, which I felt was hybrid, semi-proper job, 'cause

at least you were buying things that you could then own and control, buying

businesses and trying to turn them around.

And I loved that, and I did it for a little while, and in the end, that,

that business came to a sad end for reasons I won't bore you with right now.

And I had a friend who was at Goldman Sachs who'd been my original broker

when I'd been a fund manager, and we thought, "Hey, let's actually go and

try and start something, just do it on our own." So that's, that was the birth

of Saltus, and that, that was in 2004.

Wow.

Wow.

Like, and I know that our paths crossed in 2006, so only a couple of

years into that, which is phenomenal.

And actually, I've heard you mention that a few times, and there's always

been new things that you say in that journey that I didn't know about,

so thank you for sharing that.

When you look back at Saltus' growth journey, what discoveries most

changed your thinking as to where you considered growth to come from?

Is there anything you could enlighten our listeners to as far as how you did that?

I think the found- the founding principles of Saltus were, because we

were leaving the w- the institutional investment world and coming to the

world of private clients, and certainly at the time in 2004, the private

clients was, was basically the B team.

It was if you were any good, you went into the ins- institutional world, and if you

were a bit thick or hadn't done very well at school, you go into private clients.

And so we, we, our, our, our original game plan was thinking let's take the really

great bits of the institutional world, which is a ve- a very high rigor, high

levels of professionalism, sophisticated investment products, and let's go and

attack the world of private clients where- People are just less professional,

less hardworking, less rigorous.

The products aren't that good.

And so we've always tried to, to, to hold ourselves out to be the best

that we possibly can in terms of our product offering and our service.

And that, that has-- that been a constant.

We, we-- these days, 20 years later, the standards in private clients are much

less bad than they were, but they're still, they're still not perfect.

And so just holding ourselves out to be, to g- to g- go that

extra mile, I think is a constant.

And then beyond that, it's the landscape is always, it's always shifting.

There's always new com- new competitors coming in, new products being launched,

new tax rules, just new opportunities.

And I think it's Darwinian.

You have to always be adapting in order not to become irrelevant.

And as they say, only the paranoid survive.

I certainly can relate to being on the thick side.

I started my career in the wholesales, knocking on doors, and that was

always considered to be if you couldn't get a job anywhere, you'd

go and learn to knock on doors.

And by bringing in systems and processes into place, then build out

an entire consultancy that actually now goes out and shares everybody

that those systems and processes.

So I certainly can relate to that, but you've done an excellent job

of that consistently over there.

What, what-- where was the vision?

Where did the vision come from to actually do this in- in- initially?

I think it, it, it was because both my original business partner, Simon,

and I both had, had Good careers in the investment banking world, but have

found the politics are very bruising.

So there are a lot of people who are generally bright, ambitious, very

often men, very often good-looking and very charming, but who are

pretty ruthless and pretty amoral.

And the more senior you get, the more the oxygen thins out and you almost have

to be like that to really, to survive.

And both of us had thin skin and were terrible at politics and

terrible at keeping our mouths shut and terrible at playing the game.

And so it was just the desire to take all the good bits and

leave behind the bad bits.

But the wish-- that, that's re- and that, that was as much as we had at the time.

And, and we've-- We, I think we have-- We've been like a sailing boat.

We headed in one direction, then when the winds changed, we've tacked, and we've

kept on tacking and changing direction as we've learnt from the millions of mistakes

that we've made, and also f- just from the, the shifting market opportunity.

But that, but it's, I'd say it's the same today as it, as it was then.

And I was really curious, Tosh, because I, I was hoping this was

gonna come up a bit about your journey and tacking either side, et cetera,

which I think is a brilliant analogy.

I was gonna ask you just what's been a couple of those core

challenges over the last two decades?

Even if you could summarize the things that you've met and then overcome, I'd

love to hear some of those challenges.

I think the first thing was we were pretty arrogant because we arrived in private

client land thinking, "Hey, we're better than all these guys. We're s- we're

smarter. We're the institutional Goldman Sachs, Lehman Brothers, Schroders."

And then we-- and so we had our plan, but we were- Just woefully ignorant

about tax and regulation and why no one was doing what we were doing,

because we thought we were so brilliant, but then no one else was doing it.

And no one else was doing it for a whole load of really good reasons.

And so and we just learnt the hard way.

So we, we had to, for example, we were trying to hold a whole load of

institutional type hedge funds and private equity funds inside ISAs and

SIPPs, which are retail tax wrappers.

But it just didn't work because the regulations, the regulator and the taxman

didn't want it to work, and so it didn't.

So we just had to wind our neck in and retreat and figure

out a different way to do it.

So we had to, for example, we set up some in-house unit trusts that we could put

all of those complicated assets in and then clients could own the unit trusts.

That, that was one lesson.

Another lesson that we learnt was actually we originally we were investment

managers, but as an investment manager, you don't really own the trust of the

client, whereas financial planners who, who's in the other limb of the stool in

terms of the way financial planning or the way retail investment is delivered

to clients really own the trust.

And so we looked down our nose a little bit at IFAs thinking that,

that we're too good for that.

And then we just, we learnt that actually clients love their relationship

with a financial planner, and that's why we had-- We were good at raising

money, so the money would flow in, but then it would be like a leaky

bucket, it would flow out again.

Whereas the financial planners help have their clients forever.

So we thought, "Okay, we need to get over that kind of snobbery basically,"

which I think is not the best word for it, and become financial planners.

And there, and there've been the graveyard of Saltus' brilliant ideas

that didn't work is so crowded.

We could have a whole podcast just on that.

I, I think ultimately, I think probably and that's one of the m- lessons

I think for most of the listeners is that there's always a, a whole

plethora of things that didn't work to get you to where you did work.

And actually, when we first met, the industry standard was around 4%

growth in the IFA market at the time.

You were already around about that 4% to 6%, so you were doing okay as

far as the, the organization, but you came up with an ambitious goal

to get to 10%, but you actually ended up at 12%, I think within about 12

months of that sort of set, set goal.

Can you share with us what on earth did you do to have such a meteoc- meteoric

improvement, which is more than double the growth in the market at the time?

I think the first thing was become-- moving from being investment

managers to f- to financial planners.

Because financial planners, it's a better, it's a better offering that's solving

problems that clients actually care about.

And also you have less outflow.

So it's your growth is a function of how much is coming in the bucket and

how much is leaking out the bucket.

And so it-- that-- a-as a business model, financial planning is better than

investment management because you've got more natural flows in and less-- and more

loyalty, so therefore less flows out.

This-- I think the second thing which we touched on already

is just trying to be good.

So actually having a good offering of high levels of service and a great

investment product which continues to outperform the market because

then people aren't gonna sack you for the reasons of faulty products.

They're gonna-- The, the, the chance of you hanging on to those assets

and/or being reputed for being good means it's easier to get referrals.

And the-- I think the, the, the big thing which we, which we decided to

have a crack at was none-- w-w-was actually there were two-- we had two

impediments to, to growth, and one was that our advisors were scared of

picking up the phone to their clients.

And that was because when a client would ring and they'd go, "How much is

my portfolio worth?" Or, "What's my tax bill gonna be for this year?" Or, "Can

you send me a copy of my evaluation?" Our data and systems meant that it

was really hard for them to find it.

And so they were always being wrong-footed and embarrassed because they couldn't

solve the client's problem then and there.

So therefore, they would go, "Oh no, the phone's ringing." And they-- or

they wouldn't make outgoing calls.

So the first thing was to get good data and good dashboards so they could have

everything at their fingertips, so they actually felt like calling the clients.

And then the second thing was we just observed that some of the old-timers

in our world would talk about, "Oh, when I was at the Pru in 1962, we

used to go on sales training courses."

And it had always become that was a dirty word, that sales.

But no-no-no one under the age of 60 or whatever it was, had

ever been taught how to sell.

And by selling, we-- what we really meant was instilling customer confidence

and building relationship and getting the customer to want to buy from us

as opposed to the more double glazing image of selling, I think still

persists within our industry where it's like-- where it's a bad thing.

And then the third thing was we thought we would try and have a go at digital

marketing, which is almost non-existent in the world of retail financial services.

In terms of certainly where the in- intermediated re- re- retail financial

services, i.e., where there's an advisor or relationship manager.

And so th- those were our three big pushes, and that's where I think our

relationship with you guys came along.

I can't even remember how we found each other.

I th- I think

you had been recommended by someone.

Yes.

I think that was right.

Yeah.

And I remember it was actually during the pandemic that we first

had a conversation in March 2020.

And you'd already had a vendor, you were using other people, or you were intending

to use somebody else, but actually you were recommended, and so that's how-

Yeah, we ha- we hadn't actually got down the road with anyone else, but I think

'cause we were just trying to go back to first principles and go, "What does

good look like, and how can we think about m- making the, the art of our

sales function a bit more scientific?"

And so that, that was… It, it was exactly March 2020 when we

first started to think about it.

So

Tosh, just m- many of your competitors envy you as an organization from

your digital marketing channel.

The amount of leaders that I speak to about the below par

conversion that they've got and the high costs of lead generation.

What do you think Sortis has done to really build a well-oiled

machine to convert leads?

Maybe don't give all your secret sauce away, but maybe there's just a little

few, a few first principles that you use to ensure that you convert those

leads much better than your competitors.

We've got, we've got a three-letter acronym, which is SBR.

Now I think, I think you guys taught us pretty much everything

that we know, and I'm not being paid for this podcast by the way.

That the, the… But we could see out there that there must be a way of making

the sales function be not just haphazard.

Have we got a charming guy who's got a relationship with

the local firm of solicitors?

But actually to see whether we could build, understand and build the

whole concept of a sales function, of creating leads and converting them and

moving through, through the system and ultimately getting them on the hook.

And- That you said, so it, it was the s- the, in, in the sales funnel,

obviously throwing leads in the top, it doesn't matter where they come from.

And digital marketing was just an idea, it was an experiment that we had, and we

had a tiny budget, and we were determined to see whether we could make it work with

tiny budgets before we stepped it up.

So it's been incremental one step at a time as we've learnt from our mistakes,

changed it, had another go, got a bit better, spent a bit more money.

And the more you do it and the better you get, then the, you can,

if you've got a bigger budget, you can afford a better ad agency, so

you get better stuff coming through.

So it's been step by step, but it's, but it, but I think the key to it is

that it's, the sales process is like having seven or eight links in a chain.

And if any one of those links is rubbish, you might as well not bother,

because it-- when you pour good stuff in here and if the pipe leaks,

nothing comes out of the other end.

And seeing as it's expensive filling the hopper up and each, each step

of the chain has a cost to it, if one step's broken, you might as well

not, you might as well save your money and not do any of the rest.

Sorry.

To just continue the train of thought, because there's a slight unfair

advantage because I've worked and seen other organisations in your peer

group try this, and I think there's three things that I would reference

that Salters do better than most.

Number one, your lead qualification team in Jordan, Tom, and

the others is phenomenal.

They're highly quality people that are dealing with those leads and,

and doing the right thing for them.

The, the other thing is what you have got is the infrastructure that

sits around it, whether it's the dashboards, the systems, and the

playbooks, which again, others don't.

But I'd say the third and the most thing that you differentiate yourself away

from is whenever you've done M&A and brought new people in, you've always

treated central leads as gold dust.

And that's an important facet, which is your mindset around them

is that's a high value lead versus where other organisations, in my

opinion, actually don't see them as valuable and therefore actually they

don't treat them like gold dust.

So I think that's personally where I've seen others do the way that they do it

and the way that you do it is that you've just got it right with those three things.

That's, yeah.

Those bus- business development guys are fantastic and, and

they're so passionate about it.

I listen to them on the phone and y- it, because it is, it's not quite cold

calling, but it's only one step away, and they're so polite and charming

and knowledgeable and not hard selling that it's great to listen to them.

But, but I think the point about treating the leads as gold dust is, it's the same

point about the weak links in the chain.

It's if you've got David Beckham crossing amazing ball into the middle

and some- someone who keeps on scuffing it over the top, it's a bit dispiriting

for David crossing the ball in.

And so you need to have someone who can execute.

You, you did actually have that as a challenge at one stage, because I remember

working with you guys that actually to, to the point around one weak link in

the chain is that there was a challenge when people were getting… They were

having their meetings, they were doing great openers, they were having good

conversations with people, and then they were sending them a proposal to go and

didn't realise why the conversion rate just dropped off massively at that stage.

And the big realisation was actually they weren't discussing the proposal.

It was just being sent in an email.

And so that was again a bit of a light bulb moment, I think, within your

organisation of, wow, that weak link actually caused a quite sig- significant

drop-off in performance until it was rectified and that all proposals are,

are now spoken through or, or, or-

But absolutely.

And another one that we learned was about the speed of getting that proposal

out, because our power planners who write those reports, those proposals

were often ver- very obsessive about detail and getting it exactly right

rather than getting something which was 90% perfect out really fast.

And that, that was another big learning point.

You know, just another- Fantastic … another link in the chain.

Yeah.

And I think those are really super valuable lessons that have happened.

We'll pick this up in part two.

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Until next time, keep up that forward-thinking mindset.

Goodbye.