Transcript

Matt Heine (MH):
Alright, welcome to this episode of Between Meetings. I'm Matt Hena and absolutely delighted to be joined with Brett and Justin today, the co-founders of Flux, which they started with their other co-founder Gus nearly four or five years ago.

Brett Joffe (BJ):
Yep, that's right. Thanks for having us, Matt. Great to be in the pod studio.

MH:
Absolutely. So I'm feeling a bit intimidated today. These two are absolute podcast celebrities. For those that haven't come across Flux, we're super excited. We acquired the Flux Business towards the end of 2024, having met both of the team some time ago. But why don't you just tell us a little bit about Flux and then we'll get into the story and how you got there.

BJ:
Thanks Matt. Sure. So Justin, Gus and I, we've all developed a strong passion for financial literacy and financial education throughout our lives. And about five or six years ago we were getting together, catching up. Obviously Justin and I are cousins and lifelong friends and Gus is a friend of ours from school as well. And so we came to learn about this really huge problem here in Australia and that is that three in four young adults struggle with basic financial literacy and what do we mean when we say financial literacy? We really mean anything from budgeting and saving to understanding debt and credit to the weird and wonderful world of investing and everything in between. And as I'm sure Matt, most of us here in Australia, we don't learn anything about money or finance at school. And so what happens is we get out into the big wide world and we're just not equipped or positioned to make smart money decisions.
And so that really leads to a whole lot of financial stress. We have too much debt, we don't save, we invest in the wrong things. And that financial stress that I just mentioned, it really leads to other areas of our lives that could impact our mental health, negatively, our family relationships, our employee experience, and much more. So Justin, Gus and I are all very passionate about that problem and about five years ago is when we started to really think about is there a way that we could solve this problem for young adults using technology and content?

MH:
And it's obviously been incredibly successful at last count and you've now got over 450,000 members on the Flux platform.

Justin Joffe (JJ):
Yeah, it has been, and it started in early 2020 with our podcast as you mentioned, what The Flux and the first few episodes or first couple of months of episodes were absolutely terrible,

BJ:
Awful.

JJ:
I wouldn't be listening to them right now,

MH:
Definitely digging into

JJ:
Those. But it was the foundation of what we built, which is how we wanted to make the topic of money and finances culturally relevant as things like music or sport or the arts where people can engage with it in a way that's really fun as opposed to this stigma or taboo build around money. As Brett mentioned, often we're not taught at a school, but many people are not taught about finance at home either. And so it's really, there's a huge gap in the market and that's why we felt like there was a huge opportunity for Flux to create a really engaging way to navigate finances, particularly for young adults and people who are starting to emerge into their careers and become more affluent as well.

MH:
Fantastic. We'll come back to exactly what the Flux Offer is and how it evolved from those early terrible podcasts, but I'm always intrigued by how people end up either coming into this industry, joining the industry, or doing what they do in a similar way to you have different career paths to get to the same place. Who wants to start maybe how you got here?

JJ:
Sure. So my background, I always thought I was going to be a lawyer, at least that's what my parents told me I should be. So I was tracking down that path and completed my law degree, but deep down I knew that it probably wasn't right for me. I ended up getting a job at a startup as their first employee and from there I felt the thrill of being part of a fast-paced environment where you can make meaningful changes. And so that startup called Psychic has now been acquired by Seek and I got firsthand experience of what it was to be a scrappy first employee of a startup and having to make real life decisions that had an impact on other people. I then went down the path of consulting, which was great and worked with large retailers and banks and really learned some key skills around finance and cutting my teeth. But ultimately, as Brett mentioned, when we saw a huge gap in this market and we thought this is a real opportunity to create impact ourselves with our own business. And that's really how we started with Flux.

BJ:
And I started as a humble graduate at one of the big four banks here in Australia and I was working in the corporate and institutional bank, which was a really great grounding. I got to learn a lot about how banks work with large corporates and learned a whole lot around why they provide credit, how they help big organisations grow, which was a great experience actually when I reflect on it. And then from there I moved into funds management at a large global fund manager, which was also a great experience. But as Justin touched on towards the end of that experience, we really started noticing just how big this problem is for young adults in Australia around financial illiteracy and were really motivated to see if there was something that we could build that could help individuals on their money journey.

MH:
I noticed you just stuttered, trying to remember Justin's actual name. For those of you that listen to the Fluff podcast, you might recognise these two as Jazzy Boy and Beeman. That's us. That's us. That's the real us,

JJ:
The stiff formal Justin and Brett.

MH:
Correct.

JJ:
Not used to it

MH:
Back in the big corporate. So thinking about the Flex offering started with the podcast, you might just talk a little bit about what the podcast is, how you came up with the format, and then also a little bit more about the services that you're offering.

JJ:
Sure. So we started with the podcast, which is called What the Flux. It's a five to seven minute daily business news podcast where we cover three of the key business stories from Australia and around the world every single day. It's short, it's punchy, and it has a key learning for every story which relates to a financial concept. And you'll notice if you listen to the podcast, there's a ding when we speak about each of the key learnings. And the reason for that is everyone now has such short attention spans that we know that and our community have told us that when they hear the ding, it's time to switch on and listen to the financial concept. And so it was a great way to tie in timely business news with key financial concepts that we wanted to teach our community. And immediately, although the first couple of months of podcasts weren't great, we had amazing feedback and so we really refined the offering from there and grew a really significant community after being featured in Apple and Spotify as their top podcasts. And off the back of that we've started to grow from the podcast to the newsletter and the Flux app, which is all part of our ecosystem. Now

MH:
Before going a little bit deeper on that, probably worth just clarifying, when you talk about your audience or your community, we often laugh, you do focus on young adults, apparently I'm not a young adult anymore, but what's your typical customer look like?

BJ:
Well, it's a very broad range. We really help individuals from age say 18 all the way out to say mid forties or even some in their fifties. When we think about financial education and who needs help, it's really about where you are at on your own financial journey. Some people might be in their fifties and sixties and be it beginner level and some might be in their twenties and be it advanced. So it's really about where you're at on your money journey. And for us, while we have targeted and definitely to a young adult audience say in twenties and thirties and early forties, we definitely know that we've got members who are outside of that age range as well. Ultimately for us it's really about making the topic of money accessible and engaging rather than being boring or intimidating, which we know a lot of people here in Australia feel.

MH:
So there is a lot of influencers if you like now in the market, a lot of podcasts, websites, trying to target this market. What is it that you do that's different that you think has allowed you to grow at the rate that you have?

BJ:
I think it's a really unique combination of a few things. So for someone who's familiar with the app, they'll know that there's really three distinct elements of the flux platform. Number one is education. So we're always striving to help people build knowledge around money, finance and the business world. And essentially we do that through bite-size, snappy videos, digital articles, and also short courses. That's the first element is the education part. Then we also have a huge focus on gamification. We know that for our audience and our community, gamification is critically important when it comes to engaging on a weekly or even a daily basis. So inside the Flux app you'll see competitions, you'll see leaderboards, you'll be able to win prizes every week or every month as a reward or an incentive for learning, which is really important when it comes to financial education. And then finally, we have a really critical money tools part of the app, which is where you can connect your bank account through open banking, you can connect your credit score as well and see some fantastic personalization that gives you a sense of clarity and most importantly a sense of control over your financial position today and the sorts of decisions you may want to take for the longterm as well.

JJ:
I think just to jump onto that point as well, when you think about influencers and people who are creating content online, that's what they're doing. They're creating content which enhances your knowledge around finance. Not to get all researchy on you, but we know that the Financial Capability framework in Australia focuses on knowledge but also habits. And so to create better habits around money, you need to adopt better tools. And that's why the flux ecosystem of both the content side and that habits or the tools is a really powerful system for enabling people to actually build their financial capability and literacy. And we've seen that through the app as well when people improve their budgeting and their saving and also financial wellbeing, which we track on a monthly basis.

MH:
And I think that's what excited us most as a business and certainly me personally was seeing the success that we've had with the banker programme, which many of the listeners would know is our financial literacy programme in school, which focuses not just on financial literacy but financial capability, which is actually simulating an environment which is different to what you are doing, but giving them those life skills where they can become better savers and do it in a safe environment. So when they hopefully then upgrade to the Flux app when they leave school, they can start to apply those same skills in a real life scenario. As you know, I'm a huge fan of the Flux app. When I first downloaded it and connected my banking in, I actually identified $1,500 a year of savings because I was subscribing to multiple streaming services and other subscriptions. And interestingly, I went back in again to review it yesterday and found another couple hundred dollars. So with

BJ:
A gift that keeps on giving up.

JJ:
How about that return on investment?

MH:
I know I'm guessing to you forever. So 400 plus thousand people in the community, I think over now 80,000 app users looking to build up that premium base where we're also really excited and focused at the moment is delivering what you've been able to do to the direct consumer, into the advice industry and looking at B2B partnerships with advice firms, what are you doing in the space?

BJ:
So for our first say three years or so, we were very much focused on the consumer and building our community for young adults in Australia. But over the last two years a lot of financial advisors and planners and wealth firms as well started to learn about the impact that Flux was having on the next generation. And so over the last couple of years we've been learning a lot about this space and we've come to learn that over 60% of emerging affluent or young professionals here in Australia actually don't receive any education or advice today. And so this represents a really huge commercial opportunity about, or more than $2 trillion here in Australia at the least. And so today we are able to provide solutions to advisors and planners when it comes to building and establishing relationships with the next generation. And so something that Justin Gus and I think about all the time is how can we help advisors to build those relationships in a scalable and cost-effective way?

MH:
And we've seen a lot of firms starting to dabble in this market. I think you mentioned 2 trillion before, the intergenerational number I think is closer to three and a half,

BJ:
Two. Yeah, it is.

MH:
And advisors are really struggling with how do we engage with the kids of our clients? And the stats are actually quite terrifying when you look at the number of next generation clients that actually leave their parents' advisor because there was no engagement or no relationship there. So we've seen firms starting to try and create their own content articles, micro sites, and to be honest, it's falling a little bit flat in many cases. It takes a big time commitment and they're only really scratching the surface. And are you seeing similar things out in the industry and having similar conversations?

BJ:
Definitely. So been privileged to speak to a lot of advice firms and planners over the last couple of years. And one theme that is definitely emerging is that it's a very scary moment when wealth is passed from the current generation to the next generation because what often happens is the next generation thinks I don't need that advisor, or I don't trust him or her as much as my parents did or my grandparents did, and so I'm going to give it to my friend, I'm going to manage it myself. And that's a really scary thing. And so one of the key value propositions that Flux addresses for advisors is helping to really form that relationship and build upon that relationship with the next generation. Another thing that we help advisors do is if you're an advisor that wants to build your presence and your reputation with the emerging affluent or the next generation, that's another thing that Flux does. And Matt, you mentioned that some firms are trying to address this problem already privately in their own way, whether it's an education programme or they're doing seminars and that sort of thing. Well, flux really helps with that too. So we assist if you're trying to build engagement and audience size, if you're trying to deliver engaging content as well, we really address all three of those problems for advisors in an effective and hopefully a very scalable way as well.

MH:
And the environment that you're able to deliver to firms is a co-branded environment, is that correct?

BJ:
Yeah, exactly. So advisors receive several benefits from Flux. So one is definitely the co-branded experience, and it's not just that you see your firm's logo on every page. We also provide banners and tiles and promotional materials so that you can include what's unique about your firm inside the app. So if you want to promote a video or a particular service or a market update inside the app with your branding, then you can do that with Flux. Also, we provide a nice broad range of webinars to advisors and their next gen clients as well. Everything from core personal finance topics like budgeting, saving and investing, but also money mindsets, how to have tough money, conversations with family and much more as well. And finally matter, really important. And the third piece of the puzzle that we provide to advisors is our monthly reports. So if you're really interested to see who's using the platform, what content are they interested in, are they interested in home loans right now, are they investing in ETFs for the first time? Are they thinking about insurance? You can get a really strong sense of all of those things and you can see if individuals are actually clicking on those promotional banners and are you getting a strong return on investment with Flux?

JJ:
And speaking to a lot of advisors, we know they all recognise as a really important piece of work to do with the next generation, but they're also super busy all the time. And so the challenge for them is building this new skillset around content and how to engage this generation. We're already speaking to the next of their clients and so for us, this is our bread and butter and that's why so many advisors have turned to Flux already to look at scaling this for them. And we're continuing to see really great impact in the advisor space as well.

MH:
I think as part of your journey to get here and to be working with advisors, you've actually worked with a lot of enterprises or corporates on that journey and see some fantastic results. So whether it's big consulting firms, the A FL, I believe you're working with mortgage broking firms, it's not just financial advisors that can be thinking about helping engage with that next generation and uplifting their capability.

BJ:
That's very true. So we have obviously had a big focus on financial wellbeing from the early days, and when it comes to employee financial wellbeing, this is a really important problem to solve for employers because if you are feeling stressed about money at home, that plays out in your professional life in a really significant way. And so whether it's about productivity at work or whether it's about employee retention, if you're stressed about money or making ends meet, then it's going to play out in the workplace. And so we've been very fortunate to establish partnerships with, like you mentioned, the A FL, but also a lot of hospitals, universities, large corporates, because they know that if they can address financial wellbeing for their staff in an effective way, it really plays out positively on their bottom line.

MH:
And we certainly saw that when we rolled out the flux branded environment to the Netwealth team.

BJ:
It's huge here.

MH:
I think we had probably 25, 30% take up in a very short period of time.

BJ:
Absolutely. Really quickly. And it's growing as well. Yeah,

MH:
Thinking about that next generation and how to service them, it's the holy grail for many in the industry. We've been talking about robo advice or I have been anyway for 20 years, and probably the fact that in my view, which, and again I might turn out to be totally wrong, I don't think that's necessarily the right model for advisors at this point in time. I've always thought that what advice firms are trying to do is not necessarily scale advice through technology, but actually to create an engagement model around that next generation. And that's where I think this is so powerful in that you have this ongoing dialogue with your next generation customers. The plan is obviously to look to integrate it with the Netwealth platform. So over time, those younger clients can invest into our core product, see their superannuation balancer investment balances through the Flux app, but just had that ongoing dialogue. So it's part of their daily workflow where they get the Flux podcast or they go and check their banking. Any feedback on that from advisors?

BJ:
Yeah, advisors have been really pleased with the high touch, high frequency relationship that their next gen is able to have with Flux. And this is something that we've been working on for years. We want to have a regular daily even relationship with the end user or the end member. And so if that's you trying to stay on top of the business world and how it impacts you or if it's you trying to stay ahead of the latest around how should I be budgeting considering what I have today or what investment should I be thinking about long-term, engaging on a regular basis is critical for building those positive habits that we'll see a long-term financial future that most individuals are looking to achieve.

MH:
I should probably know the answer to this, but as part of the advisor offering, do those customers still get access to the weekly quiz?

JJ:
Of course. Yeah, they do. And we even do custom quizzes for some organisations as well, so it's really engaging. That's a level of the gamification that we have in the app every week where we have a quiz with three questions and the first person to answer all three questions correctly wins cash prizes. So,

BJ:
And Matt, I can't tell how much of a thrill it is when we get to look behind the scenes at how many people are logging into the app within a few seconds when we've sent that notification out, you've got to be quick. It's a lot of fun.

MH:
Presumably the quiz goes out at different times on a Friday?

BJ:
Yeah, it's a mystery time

MH:
And the three questions relate to stories from the pod.

JJ:
It's a combination of stories from the pod and the academy courses, the short courses that we have in the app that month. So it's really reinforcing the learning that we're doing. And again, going back to the capability framework, it's all about reinforcement as part of the knowledge and habits around money.

MH:
What I love about the quiz, it's not particularly big dollar, I think is it the winner gets $50?

JJ:
Yeah,

MH:
But just drives huge traffic.

BJ:
But anyone would do anything to even get 50 bucks. As long as they've been paying attention within the Fucks app, they're a chance.

MH:
So for firms out there that think they can do it better than flux, what are some of the key learnings from, I guess your early days of terrible podcasting to today? Are there things that you've found that have really helped drive the business forward around repetition, different platforms that you've experimented with, whether it's TikTok, Instagram, Facebook, what have you learned through the process?

JJ:
I think one of the things we've been testing over the journey, and it's a very startup approach to begin with, is around testing and being willing to fail. And so we've tested almost every single platform across the spectrum that you can imagine, whether it's even a Reddit or whether it's all platforms, some work and some don't. And so we've been able to narrow our focus now that we know what works for us. As an example, we've seen recently tiktoks been really effective for Flux to communicate business news updates or even personal finance tips. We've seen that our quizzes, as an example, work really well, and the gamified elements of our app are really, really engaging for our audience. And so testing and learning is a really key part of it and being willing to fail. I think for a lot of advice firms though they might be scared to take that step. We've actually done the hard work for a lot of these firms so we know what works and what doesn't and are able to roll that out for a lot of our clients as well.

MH:
So tiktoks obviously very topical at the moment. Is that something that you use as a way of driving traffic back to the podcast and back to the app, or are you actually seeing that as being a valuable way to distribute content that is going to add value to someone as well?

JJ:
It's a combination of both. We focus on TikTok as a brand building exercise and also to add value, but ultimately if you want to get the most amount of value from the flux ecosystem, it's all in the app. So that's where all the real value lives. But even the podcast and the newsletter and TikTok and Instagram, they're all key ways to get our brand out into the world without competing against the big banks for media dollars for paid ads on Facebook and TikTok as well.

MH:
And with very similar content on TikTok, I think you've been seeing some incredible results and also some very poor results. Was it 9 million viewers?

JJ:
Yeah, we have had one video with 9.8 million views. We've had another one with I think 1.2 million views. And this is really with TikTok, you don't know what's going to work and what's not, and so you test the algorithm with a whole range of different pieces of content. It is really about quantity over quality to start with, and then you refine the offering to make it much more quality based. And there's a heap of focus around analytics as well.

MH:
With the two that went totally viral, was there anything different that you did that you think led to that result? Was it the content? How did that

JJ:
Yeah, I think the key one is about creating a really compelling hook. So the first four seconds of a video need to capture somebody's attention, and then you almost don't reveal what the solution to the hook is until halfway through the video. That's at least what we've seen has worked and we've seen in the industries worked really well. So this was actually around a credit score and people not knowing their credit score and then finding out halfway through the video what their score is. And it was really compelling. I think also people are curious to know how other people are tracking with their money and spending their money and finances as well.

BJ:
I think Matt, that really speaks to one of the insights that we've been able to learn over the last few years. Anyone in Australia can go and get their credit score or their credit report. Not only is it expensive, but it's a very challenging document to digest. And we knew that for young adults in Australia, debt and credit is a big problem. It's really easy to get into too much debt. And so we knew it was really important to build a solution that made the experience much more pleasurable. So we have built technology that connects to Australia's largest credit bureau, present your credit score in a nice and pretty way, you can see what factors are impacting your score, what's hurting your score, all of the repayments that you've made on time or missed and much more as well. And so while a lot of people may not be familiar with their credit report or score, this actually solves a really big problem for young adults in Australia. And it's just something that we learned along the way. And clearly our insights played out on TikTok in a big way as well.

MH:
Just listening to you talk then, you built out a very broad product offering. You are active across social media platforms, you're doing the podcast three times a week, you must have a huge team.

BJ:
Oh yes. We are a resourceful bunch. I think when I think about flux and very grateful for what we've achieved so far, we like to think the best is yet to come. But Justin, Gus and I together with our small team, we have really been pushing ourselves to the max, but it's because we really love what we do. We feel genuinely privileged to have started a company and to see it impact around 450,000 people on a regular basis and that trust that we have is not something that we take for granted.

MH:
And when you say small team, you're probably averaging around five staff.

JJ:
Yeah, exactly. Five very passionate staff that get a lot done. Yeah,

MH:
Absolutely. As I always say, adversity leads to innovation and you guys have delivered on that in absolute spades, so well done. Thank you. For years I've been trying to engage with people. No, that's not actually true at dinner parties about what I do in superannuation, and I'll generally change the subject pretty quickly. You've managed to make superannuation investing credit scores really fun to the point where you were actually invited to do a live podcast at Splendour on the Grass. How did that come about? Talk to me about that.

JJ:
Yeah, obviously we do the podcast regularly and we've built a really significant following, and one of the festival organisers is a big fan of the podcast, and so we were the first finance podcast to ever be invited to Splendour in the Grass, which hopefully says a lot about the style in which we deliver our content. And yeah, we went up to Splendour in the Grass for the podcast, had a great reception of people listening to the podcast and then got to enjoy the weekend up in Byron Bay

BJ:
And Matt. I think that being invited to Splendour in the Grass really reflected a pivotal moment for us because when we started, as Justin mentioned earlier, we had a bit of a crazy vision. Could we make the topic of money and finance as engaging as music or sport or the arts? And being at Splendour at a festival that was all about being young and music and having fun, and then being up there on the panel and talking about money and finance is not the most obvious situation to be in. But we loved it. It was a really great experience, and the audience really loved it as well.

MH:
Amazing. I'm a huge fan of everything you do, as you know. For those that are wanting to find out a little bit more, how do they get in touch with you and connect?

BJ:
Well, I think the simplest way is by email. So you can find us at Brett at Flux Finance or Justin at Flux Finance, but also you can go to our website, which is Flux Finance if you want to learn more about Flux. But we are always looking to speak to new potential partners, whether you're in the B2B space or you're a consumer that is interested in taking your finance to the next level. We love speaking to everyone, so we would encourage you to get in touch if you're interested,

MH:
Make sure you follow the podcast, which is on all of your podcasting platforms. The free app is available to anyone that would like to download it. I'd also love you to pay for the premium. But yeah, highly recommend having a chat to the team if that next generation is something that you're interested in. Brett, I believe, will also be joining us around the country as part of our Accelerate on Tour, and no doubt will be joining us at Summit later in the year. But yeah, thanks for a great chat. Really enjoyed it.

BJ:
Thanks Matt.