In the latest episode of Elite Broker, Annie Kane is joined by brothers Garry and Michael Pesochinsky of Full Circle Investment Group, a business so named because of the wide variety of services that they offer in an attempt to be a one-stop shop for everything financial.
Both beginning their careers as brokers for very different reasons, the pair will share how they split the business duties and the type of journey a client will take when they approach their company.
They will also share their thoughts on fee-for-service broking, negative posts and how they best utilise these in their social media, and their findings in regards to promoting a product versus promoting a service.
Tune in to find out:
And plenty more!
Announcer: Welcome to the Elite Broker podcast. This is your host, Annie Kane.
Annie Kane: Hello, and welcome back to The Adviser's Elite Broker podcast. I'm Annie Kane, editor of The Adviser, and while my usual co-host, James Mitchell, is still away on holiday, I've brought on not one, but two guests, to keep you informed and entertained this week. My guests this week come in the form of two brothers who run Full Circle Investment Group in Victoria, which encompasses property investment, financial planning and mortgages.
Garry Pesochinsky handles the mortgages side of things, while his brother Michael, who was originally a broker, handles the financial planning. So in this episode of Elite Broker we discover how the two brothers provide a holistic financial offering to ensure their clients are given a one stop shop for everything financial, how they generate leads and stay front of mind, and why they're keeping it in the family. So thank you both for joining me today. How're you guys doing?
Michael Pesochinksy: Good. How are you?
Garry Pesochinksy: Yeah. Excellent, thank you.
Annie Kane: Very well, thank you. So that was a little introduction there to what Full Circle Investment Group does, and I think it's a really interesting model that you guys have, offering pretty much the whole gambit of financial advice for your clients, but can you just give us a little background first off as to sort of what Full Circle is and how you started the company.
Michael Pesochinksy: We actually had the idea initially, when we first started the business, to call it Full Circle because we did want a wide variety of different services. So we originally did start as mortgage brokers, but we had always had the vision there to ultimately help our clients to achieve whatever those goals are. So the natural progression given that I had the financial planning qualifications was to set up the financial planning side, and progressed to all of those other services. But ultimately, what we do as a business is we help clients. We help them achieve their goals and we have a number of different services in house that they can utilise to get closer and closer towards that ultimate vision that they have. For a lot of people in this day and age its financial freedom, a lot of those buzz words. And for us, its living life to the fullest.
Annie Kane: Yeah. I think its interesting as well. As you say, you sort of both started in broking and then developed more of the financial planning and the property investment side of things after that. But how much of the sort of experience from broking have you carried over into your day to day life now? Do you still do both things, or do you solely focus on financial planning? How do you split it up between the two of you?
Michael Pesochinksy: I'll let Garry answer this one.
Garry Pesochinksy: Well, I think brokering, because the mortgage brokering is kind of like our life blood, in a sense. You'll never forget it and it will be a part of us for probably the rest of our lives. Because its something that we know very well, we've been in signatures for many years now, and its such an essential part of anything that anyone does in their lives. If you get a loan, you need to buy a property, to do development, you need to get a loan, to even financial planning. What are you going to do with your money? How are you going to invest it? Its really important that we keep that skill with home loans.
Michael Pesochinksy: I think a really good explanation for the mortgage broking side, and kind of for Garry in particular and why he entered the industry, was an experience he had when he was still working for a bank at the time in a completely different industry, and he just had a horrible experience and I'll let him talk about that.
Garry Pesochinksy: Thanks Michael. It was an interesting moment in my life. I actually got approached by an investment group, had a great meeting that I was at the time, I was about to have my second child, and needed to get a bigger house, and so they said, "We could find you a new home loan." So I bought a property, I went to them for the home loan, and two weeks later they were out of business...
Annie Kane: Oh no.
Garry Pesochinksy: ...and I was left with a contract that's filed that I signed, no deposit, and agents and solicitors chasing me for the deposit and to get my approval. Luckily enough, our father knew a broker who was able to assist me in getting this home loan over the line. But in the process I learned so much about customer service, the ins and outs of the banking system, what was required to get a home loan, which really sparked my interest to further my career in that industry.
Annie Kane: So what were you doing before you actually, when you were having a second child, and you were looking for a home loan, what career were you already in?
Garry Pesochinksy: I was working at NAB as an IT consultant.
Annie Kane: Okay. So this piqued your interest, this terrible experience. But I'm glad it had a happy outcome for you. But piqued your interest in broking. And did you go down straight away thinking, "Okay, well I want to see what else I can offer.", or was it sort of that you decided to shadow someone? How did you actually go about making this step into broking?
Garry Pesochinksy: I immediately approached the broker who obtained the loan for me, helped retain it, and I said, "Listen, could you mentor me and give me some experience in this industry because I really, really think I can make a difference in it." And he was open to that idea and so I started working with him part-time for the next couple years until my older brother approached me and said, "Hey, why don't we do this together?"
Annie Kane: Okay, and so Michael, what were you doing when you were coming up with this idea to work with Garry?
Michael Pesochinksy: Well, for me, I've ultimately had a passion for business from a very young age. Myself and my brother actually started our first business when we were 13 years old.
Annie Kane: Wow. What was that?
Michael Pesochinksy: It wasn't exactly the most legal business at the time, but we were burning CD's and it was a very, very new thing at that point. We didn't know all of the different regulations that would...
Annie Kane: Better keep up with your compliance.
Michael Pesochinksy: That what we did for a very stint, but from an entrepreneurial stance, it was kind of, "What can we do to make some money?", and then, "What are the next steps from there?" Given that myself and Garry have a significant age gap where we're 8 years apart, Garry had started a family and had started a career and I was still at school. So it wasn’t an opportunity at that point for us to join forces. But my entry into the industry was by accident actually. I wasn't really sure what I wanted to do, and I think that's probably common with a lot of people in my generation. Just trying to find my feet. I was doing a marketing degree at the time and I didn't enjoy it. I knew I had a passion for marketing and sales, and that arena, but just schooling wasn't for me. I was better on the tools.
I ended up starting my own business, and that business comprised of a number of different things, which I was trying my hand at, and mortgage broking at that point, which was almost 13 years ago now, wasn't highly regulated and didn't require a lot to get into the industry. So I just signed up and started broking and got mentoring from the aggregator or at the time.
Annie Kane: And so now that you have sort of developed this company, which is really offering quite substantial different services, so its got property investment as we mentioned, financial planning, mortgages. Can you just run me through how a borrower or a consumer would approach Full Circle? Would it be that someone would walk through the door whose firstly looking for a mortgage, and then they get the other services further down the line, or is it the other way around, that someone comes in for property investment, and then also needs a mortgage? What's the client journey, really, when they come to Full Circle?
Michael Pesochinksy: I think what's most important for any business is to try target the path of least resistance, and given that property is a very, very, what's the right term? Its high on peoples mind. Its very common for people to spend their weekends looking at property. Its very interesting as an asset class, as opposed to the boring side of mortgages and financial planning. It is also, the Australian dream as Garry pointed out, so our focus has progressed to property given that that's the path of least resistance.
The inquiry level is significantly higher in that field, so a lot of people are coming to us initially for property, but we first sit down with them. We're not a traditional real estate agent. We don't just sell them property. We'll sit down with them, have a discovery session, assess what their goals are, also what they want to achieve over the next 20 years of their journey, and then we'll put a plan in place to get them there. And that will entail a number of different investments, and one of them could be property.
Annie Kane: And I just wanna ask a little bit now, it’s sort of an interesting time that mortgage broking is going through at the moment. Just with your experiences, so you've been in this game for a while and I'm imagining you would have gone through FOFA with the financial planning side of things, and now we have this mortgage broker scrutiny and there's lot of focus on fees for service, for example. I wonder what your thoughts are on fees for service of broking. Do you have them at Full Circle at the moment?
Michael Pesochinksy: Generally, no. It’s very difficult in the current space when you've got the banks that you're competing against, and they're not charging. It’s very difficult for us to start to charge advice, but I think if it was an industry standard, I think it could work. I think it would actually work very well because I do enjoy the featured service model in the financial planning space.
Annie Kane: Yeah.
Michael Pesochinksy: But I think there has to be an even playing field, and until that's the case it's gonna be very difficult to work under that model.
Garry Pesochinksy: Yeah, I concur. It definitely needs to be an industry standard. The amount of hurdles that we encounter when even if we say, "There's an outside fee for obtaining a home loan.", the first reaction from clients is, "Well, if I'm going to the bank they wouldn't charge me."
Annie Kane: Yeah.
Garry Pesochinksy: Definitely needs to be something that is implemented across the board.
Annie Kane: I think it’s a really interesting one, and we're looking a bit more into it, obviously, with all the royal commission, and the productivity commission, and all the millions of commissions that seem to be going on at the moment that are looking at broker remuneration and what can be done. Even some looking at financial planning, and suggesting planners should be given more ease into offering credit advice. I wonder what your thoughts are on that as well, if you think that financial planner should be offering credit advice, or if you think that they should be two separate things?
Michael Pesochinksy: One person can do both, but I don't think a lot of people can do both. To explain that question probably a little bit further, I think that a small percentage of the population are skilled enough to get the understanding, the awareness to the level that they need to. Where the majority of the population probably need to focus on one, and do that one really well. If you are wanting to get high quality advice, I would probably be steering towards separating that. And that's how we run it internally.
Garry Pesochinksy: We actually had a motto of four experts, one strategy. Which meant that you'd see each expert in their own industry to make sure you that you got the best advice possible for your position and what you want to achieve.
Annie Kane: Okay. I mean, really, I just sort of thought that would be a great question for you, just because you guys obviously have both of those things, and Michael, that you've done both of those things. You've had financial planning and mortgage experience. I also wanted to talk a little bit to Michael about introducers. I remember we spoke to you last year on The Adviser when you were sort of highlighting about the burgeoning referrer market, and what brokers should be doing to stay creative, to win more business. We've heard again, through all these commissions, more and more about introducers and this people getting confused between introducers and what brokers do. I wondered if you had any further thoughts on how brokers can differentiate themselves from introducers.
Michael Pesochinksy: I think the broker just needs to come from a space that they specialise in. Everyone needs to just find their niche. I think if you can claim your lane, and this probably is relevant to anything in life, if you claim your lane, you can excel in that. When brokers start to try to be too broad in their approach, they run into difficulty, and that's where it becomes very confusing for the end consumer. I think if they come with a specialty, say, an example of this might be they're a commercial lender, and their expertise is development funding. If they're coming from that space, and they're really good at that, they will generate business and start getting referrals. I think when they start to try to do everything and become the Jack of all trades, but the expert of none, they then fall into the trap of being very confusing to the consumer and it becomes very difficult to justify your position and even your fees.
Annie Kane: Okay, well, I've asked you a few questions now about what's happening in the industry and your thoughts on that, but I wanna focus back into a little more into Full Circle again. One of the things that I think really sets you apart is the presence you have as brand. You have a really strong social media presence, and now you've got your own video series as well, which I think is really sort of entertaining and really provides a great insight into your personalities and what business is like.
What was the decision behind starting the videos, and what do you hope they'll achieve?
Michael Pesochinksy: We're always thinking about how to get people to understand us, because a lot of the time you see companies, but you don't really understand who the people are being the companies. Its an interesting point in our society right now that social media and videos and etc., its all a lot of advertising type material that is being broadcast. We thought we'd be a little bit different and get to the real essence of who we are as people, and let people know what we do on a day to day basis, what challenges that we face, what values we have, what we stand for, what we fight for, and really get them to understand that there is a human side to our business.
Garry Pesochinksy: What ultimately the end consumer wants is they want transparency, and they wanna know what's real. As a society moving more and more towards that, and hence all of the different regulatory changes that are occurring. They want more transparency, they want more declarations of commissions and all the rest of it.
Annie Kane: Yep.
Garry Pesochinksy: So I think from a social perspective it’s good to move in that direction, to allow us to one, connect with the end consumer and give them a good understanding of who we are and what we stand for and what our vision is for the future.
Annie Kane: And have you found that they've generated leads? Have you found more business coming through your way because of that, or how are you generating leads?
Garry Pesochinksy: From a leads perspective we are still in our infancy in relation to that sort of a medium. I also think we're very much the pioneers, especially in a financial sense, there are some other people doing similar type things on social, but not in the financial industry. I think its gonna take time for it to get the end traction from a direct lead perspective, but I think from a credibility point, from the trust from the end consumer, because we do get a lot of good quality feedback. We also get a lot of feedback from just businesses associates that tell us that we're inspiring them on a day by day basis and they regularly watch our channel. The thing is, they don't regularly like shar comment, which is across the board. They'll privately tell us, but they won't publicly show that. So I think it’s just more of a time play than anything else.
Annie Kane: Just in terms of how you are generating leads, you do, as I mentioned, offer a full range of financial advice and services. So I just wonder, are you just sort of out in shopping centres? Are you doing sponsorships, how are you sort of getting these clients through your doors?
Garry Pesochinksy: A lot of our business comes through social marketing, through Facebook in particular, we have quite a specialised team in house that do a lot of dark post. For people that aren't aware of what a dark post is, it’s something that doesn't pop up on your wall, but it is a targeted post to a specific demographic or a specific audience that may looking for your product or service. We'll advertise that particular product. We find product gets a much better traction than service, which is why we generally advertise products, like properties, as opposed to services because the cost per lead just skyrockets from that perspective.
Michael Pesochinksy: We also get referrals as well, which we try to advocate very much. The other thing is in this industry for many years now, we've gotten a lot of positive feedback, which enables us to get more and more referrals.
Garry Pesochinksy: Our models probably a little bit different to your traditional mortgage broker. We now utilise our in-house services to service the referrals.
Annie Kane: Yeah.
Garry Pesochinksy: But if the lead comes through in property, we then make the internal referrals and they then get a lot of business out of that. We don’t necessarily need to advertise directly for the other services.
Annie Kane: Okay. One of the reasons we really wanted to speak to you is not only because of the things you are doing in terms of social media and that brand awareness, but also what you are doing in terms of diversification, and having that full service offering. I think now, especially with all of the scrutiny we've had, it’s just sort of an interesting model, for other people, for other brokers to listen to and see if it maybe fits for them.
If you had any advice for someone who is thinking maybe about sort of partnering up with a financial planner, or maybe setting up their own company to do similar type thing, what would your advice be? Is there anything that you've done that you really wish you could have known before you started out on this journey?
Garry Pesochinksy: Its an interesting question because we do have so many different parts, of the business so thinking solely as a partner of mortgage broker, just as a business in general. One bit of advice would be making sure you know your niche, as Michael mentioned earlier. If you want to be a home loans specialist, know where in the home loan's area you would like to focus on, and then partner up with someone who could add benefit or add value to that client that you're gonna see in the future. That's what we did. We just continued to add services because out there in the industry we didn't find we were getting the services for our clients that we wanted. That would be my advice.
Michael Pesochinksy: The biggest thing for mortgage brokers is not to look at what other people have done and try to replicate that. It may sound wonderful having all of the different services in house, and it is for our clients, but, internally, it’s an administration nightmare trying to put everything together and coordinate everyone, because everyone needs to work as a team and the hand over needs to be done accurately. Then there's all compliance in all the different areas in the businesses that you need to keep up with.
Annie Kane: Yep.
Michael Pesochinksy: On paper, it sounds great to try to take up all these other different services, but personally I'd recommend just doing a lot of due diligence. Trying to find the right partner in all those areas, and then making those referrals out so that you don't have to worry about all the nitty gritty, and just get the wider range put in place up front.
Annie Kane: Okay. And ideally maybe work with your brother as well if you've got one.
Michael Pesochinksy: Yeah.
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