TRAP: The Real Adviser Podcast
Four business-owning entrepreneurial knuckleheads chew the fat on the sometimes murky, always quirky, world of UK and Irish personal finance.
TRAP: The Real Adviser Podcast
17 - Man Plans and God Laughs
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In this latest pile of TRAP, the Trap Pack discuss
- Three glowing reviews of the podcast, read by Andy in his inimitable style
- Topical issues, including Mr Hart’s Maven Money podcast breaking through 1M downloads (really); the decline in size of the UK stock market; Chat GPT - a threat?; more nonsense around risk scales
- Meat and Potatoes: Man Plans and God Laughs. Whilst planning for the future is important, so is giving clients permission to live their best lives now.
- Questions posted by our beloved Trappists @TobyHines @emmeliapowell
- Culture Corner
Links referred to in the show:
- New podcast from Brad Johnson: https://podcasts.apple.com/ie/podcast/do-business-do-life-the-financial-advisor-podcast-dbdl/id1677151221?i=1000604267590
- “Unreasonable Hospitality” by Will Guidara: https://www.amazon.co.uk/gp/product/0593418573/ref=x_gr_bb_amazon?ie=UTF8&tag=x_gr_bb_amazon-21&linkCode=as2&camp=1634&creative=6738
- Audere Consulting: https://audere.com.au/
- Modern Wisdom podcast: https://open.spotify.com/show/0XrOqvxlqQI6bmdYHuIVnr
- JP Morgan Guide to the Markets: https://am.jpmorgan.com/content/dam/jpm-am-aem/global/en/insights/market-insights/guide-to-the-markets/mi-guide-to-the-markets-uk.pdf
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Welcome to The Real advisor podcast, t r a p twerp please follow us and join in the conversation on Twitter at advisor podcast where you can suggest ideas and themes you'd like the track team to discuss. Also remember to like and subscribe to our YouTube channel and leave a six out of five star review on iTunes. Doing all this really really helps us which means we can do more to help you. Now let's head over to the studio for the latest pilot trap.
Nick Lincoln:Yes, indeed, dear TRAPPIST, welcome back to The Real advisor podcast episode 17 with the real advisor podcast te R A P trap my name is Nick Lincoln. Joining me as ever are the three other horsemen of the apocalypse call the voice widger and the heart and Alan the storyteller Smith from his exclusive Blofeld like ski lodge somewhere in the Alps call Chevelle I believe Alan Thank you.
Alan Smith:Indeed. That's right. Yes, speaking to you live and direct from the French Alps.
Nick Lincoln:Very, very good. Now gents, we've got a show packed full of absolutely nothing. So before we get to the topical tidbits let me hand over to my co host the ultra Shepherd aerial Mr. Andy Hart for some more track reviews.
Andy Hart:So the the ultra crapper what lik Ultra Pradera and get it right, here we go. So first up is Rm
Nick Lincoln:see you are now you are Apocrypha Dario. Okay, thank you. That makes you an Aryan.
Unknown:It's an adjective. For Yeah, if you're me. First up is excellent. Joe fivestars great podcasts for financial advisors. Every episode has value. Next up fivestars fantastic podcast as a new advisor, I find the podcast full of so many gems plus genuine laugh out loud moments in every episode. Thanks for taking the time to put this out. Please keep up the good work. The Meteor review is from Mark Hoyland, who we know quite well. It's almost interesting, almost five stars. As a sole trader with a relatively new business, it can be quite a lonely profession with no elder statesman to lean on for wisdom. Until now. It's like having a pub chat professional therapy session session session. I like how the trap pack often disagree and are open about there being no perfect approaches to financial planning or indeed running a financial planning business. The hit of the whole review, and the fact that Nick Lincoln can grow a successful business in this game makes me feel optimistic about my chances. Back to you, Nick.
Nick Lincoln:I want to just yeah, that review came in a few a little while ago didn't just I've just read it. Yeah, thank you. Mark marks actually asked me for some help on today or yesterday via emails. So Mark, you can go whistle for that now.
Alan Smith:He's got a point there, Nick, isn't he? Yeah, he's got a point.
Nick Lincoln:I think I can't deny people look,
Unknown:do you think if that guy can make a crack of it, and seems to be someone? Yeah. So
Nick Lincoln:and these are my friends. Okay. Now we've got a little bit of we've got a little bit of a success story to share with you Trappists. From from one of one of the members of the trap pack. Mr. Hart. I know you're you're very self effacing. And you're never you're never one for self promotion. So I sincere, magnificent. Congratulations to you on Maven money, which went through the 1 million downloads in the last week or so. Yeah, just from all of us.
Unknown:Know, I think it's approaching nearly six years since I launched the show. So yeah, it's taken a long time to get there. Yeah. Yeah. It's just amazing. Obviously, the the work that's gone into it. I think it's about 287 shows. So yeah, it's a it's an amazing milestone. So yeah, thank you very much I mentioned. So
Alan Smith:why? We did what you've done, what nearly you've done nearly one a week for six years. That's a hell of a dedication.
Unknown:Yeah, I launched on, I think June 2017 1819 2021 20. So coming up to six years. Yeah, June 2023. Will be six years. Yeah, generally stuck to the weekly show. I'm certainly in the point now where it's becoming very hard. But again, listening to podcasters that have been in this game for a long time. When it becomes hard, you've got to, you know that that's that that's the time you've got to continue to plow through. So yeah, I'm kidding. I'm getting through it. Yeah. So it's been it's been fantastic. It's definitely going to be one of the biggest marketing things I've I've ever done. You know, loads of new clients come from it and loads of advisors come RIP. Yeah call
Carl Widger:just from our own point of view, why is it become hard is because it's, it's to try and keep coming up with fresh topics and that kind of stuff or?
Unknown:Yeah, yeah, keep them fresh topics every week is the challenge. Yeah.
Alan Smith:So we've gotten about what 985,000 episodes or downloads to go this trap podcast, in order to meet to match your amazing payment.
Unknown:Traps done some good numbers early on. I mean, the reviews are fantastic. The great thing about trap is it's a concentrated audience. So people that listen to it, you know, really listened to it. It's not like a general food podcast where people just sort of dabble in and out. So that's the sort of uniqueness to the, to the trap sort of numbers. They're all sort of, you know, real listeners as such. Yeah. Back to you, Nick.
Nick Lincoln:Thank you. Yeah, that's great, great stuff. Yeah, so none of the top of the tip but I'm, I read I read an article in the ft and there's a link to it in the so called show notes. And it's not behind a paywall. The FT put some stuff behind the paywall and other stuff, it doesn't. And this isn't about the amazing decline in value of the UK stock market since the 1990s. Back Back in the 1990s 1999, even the UK stock market was about 11% of market, world market capitalization. And now it's under 4%. And there are a variety of factors for that. One of them was Gordon Brown, removing the dividend tax break that pension funds and so forth, got back in the 1990s. But the bigger thing was this this shift of pension funds, they that crazy thing, well, they now match long term liabilities with guilts rather than equities. And so they've been net sellers of of UK equities for decades now. So it's just an amazing decline in the value of the UK stock market relative to other markets. And it's just an interesting article. It's just I didn't realize I didn't realize that the UK market was only you know, the blink of an eye was about 11% of world market cap is now 4% sub 4%. I'm not saying it's a good or a bad thing. I'm just saying it's just contextually Interesting.
Unknown:Well, isn't isn't isn't a is an apple that one company Nick bigger than the whole UK stock market. That's the point we've got to I think Apple's market cap is more than the entire footsie footsie stock market, which is insane.
Nick Lincoln:Well, I know looking at the vanguard global share tracker fund. So this is down in the weeds already, isn't it that Apple is about 3.8% of that. Yeah. So
Unknown:yes, and they've declined a bit so at a certain point when Apple were their peak, the one company Apple was worth more than the entire listed UK footsie stock market that is insane.
Nick Lincoln:Yeah, nuts, isn't it? So I put out a tweet this week because I this this whole thing about prod. And this is you saying this is a niche audience ally and it is an issue and you won't get the retail job but listen to this because everything What the hell are we talking about? So in terms of product, consumer duty, whether or not we are sorry, callers won't be this won't apply to you. But this is probably coming to you at some later date, because things tend to go across the Irish Sea. Are we are we product manufacturers? And if so that that imposes on us a whole new bevy of things that we have to comply with. And I put the question out on Twitter, are we product manufacturers under Product consumer duty? And you know what, nobody bloody knows? I got 126 responses. 53% of people said, Yes, we are product manufacturers and 47% said no, we're not. So no, no one knows. And by by product manufacturers, I asked the question, if we put together our own in house model portfolios, which I've done since 2008, which I know all you guys do as well, does that make us product manufacturers under prod? And people just don't know. And if we are we there's a whole new level of regulatory stuff that we have to go through? I don't know if you guys have any thoughts on this?
Alan Smith:Intuitively, it was, you know, the answer is got to be No, we are not, we cannot be product manufacturers. All we're doing is assembling existing manufactured products and bundling together. But that is That's logical. And so therefore the answer is probably likely to be the opposite. And we are product manufacturers. What I haven't really investigated it, Nick, what are the implications? This is a sort of a headline around what the implications if we are deemed to be manufacturers, presumably, World of regulatory hurts for us?
Nick Lincoln:Yeah. So if you are a product manufacturer, you've got to show evidence that your products are suitable for the market, you're targeting them out, all that kind of stuff, you've got to have, you know, segmenting your clients, you that's got to be document. It's just a whole range of stuff that to me, it's just completely, completely not part of what I do and doesn't add any value to the end consumer as per normal. Yeah, I mean, I haven't listened to it too much. So I don't I don't I'm hoping the answer is no, we're not a product manufacturer. If
Alan Smith:you Are there any compliance experts listening in? Please? Just let us know. So we know what to do next.
Unknown:We often know what they come up with, don't we? Alan? You know, they don't say don't worry about it, guys. You know, they're overthinking it's going to be a 28 page report that says you are Yeah. Yeah. Yeah.
Nick Lincoln:Yeah. So I know I know that 360 services, which is a respected compliance consultancy out, you know, you can you can buy in their services, they say that we are product manufacturers. But as you as you alluded to,
Unknown:turkeys in Christmas,
Nick Lincoln:it's amazing what people will say when your salary depends on it. Okay, car deck of unregulated cards falling lots of examples in Ireland of firms who sold on unregulated investments finding themselves in a bit of hot water.
Carl Widger:Yeah, I just, I just thought I, this is definitely topical in Ireland. And I know from some of the stuff that you guys have shared with me that it's pretty topical in the UK as well, which is basically firms that were selling unregulated products, be they geared property phones, or low notes or solar panels or doing some other kind of off the beaten track stuff. Every single week in the newspaper, there's a story about a firm in trouble in court or with the central bank or whatever. So my hope and I'm repeating myself a little bit, but my hope is that you know, that regulated firms have to stick to regulated investments and regulated advice. And that this kind of, you know, I don't know how you describe it, and I'm sure some of them are good, but I just can't see the value in stuff that's, you know, not something that has always worked, I would hope that our regulator would would step in and make a, you know, a sweeping statement on this and just say, look, it's it's not okay to do this stuff, you're the regulatory or not, because every single week, there's, there's a number of very high profile cases going on in Ireland at the moment, and they've been going on and on and on, and we're reading about them for literally years on end. So I'm hoping that we're coming towards, you know, a very important point whereby this stuff is banned once and for all. And you know, that that there might be a place for it, but it's not through regulated firms, because it confuses clients, you know, and clients can get comfort, if they're going oh, well, this is a firm that's regulated by the Central Bank of Ireland. So therefore this might be okay. But they're selling then unregulated products and I think it's confusing for for clients and you guys have spoken about consumer duty and all of that kind of stuff. I think, you know, if we're looking after the client's best interest, then this stuff is not okay because it definitely muddies the water
Nick Lincoln:Yes, agreed. I think in the UK there is a move to and I think if you're a regulated advisor you should only be allowed to sell regulated regulated investments. And if you want to go into a SIP or what have you got have a really good reason just just having a SIP wrapper anyway. But within the SIP wrapper, you should only be allowed to put in regulation investments and commercial property what have you and I think the UK I think we're kind of at that situation now the SIP providers now are so under the microscope but there's been loads of shenanigans in the past we could all talk about this forever when we did last the last Episode Episode 16 with the shipwreck funds and and you know off Off Plan hotel, hotel things in the Bahamas and stuff like that and and student rent, rent accommodation funds and just absolute garbage you know, but because it comes under the veneer of being sold by a regulated adviser as you say, job why should Joe Public know any better they you know, they've got their own lives to live they think okay, this guy is regulated. This girl is regulated. This must be kosher stuff. And it's just horrible. Any anything Andy Allen, anything to add?
Unknown:Yeah, it's all financial crash it all blows up. In the end. It's all sold by marketing companies, not financial companies. And we know why it's sold because there's heavy Commission's involved in it. These companies sprout up, they sell a lot of this crap, make a lot of money. And then a few years later, they blow up. You know, rinse and repeat. We've seen it 1000 times. Yeah, it's horrendous. Yeah, the regulator, the stuff that they focus on. I mean, their guns are faced in no direction all the time. Yeah, they need to get on top of this stuff and, you know, protect protect consumers from professional salespeople that manipulate them easily with all this guff. So yeah, I absolutely hate it. It's all financial trash, and all of it should be banned. But that's not going to happen. So yeah. I feel quite strongly about this. Alan.
Alan Smith:Yeah, one of the challenges is that sounds interesting, and it sounds exciting, doesn't it? When you when you talk about some of these property developments in the Bahamas or Cape Verde or something, they've always seemed interesting that there's always a story. There's always going to be some sort of demographic revolution that amount of people that are hot Being in this destination now and you'll have a you know, a beautifully presented slide deck, the COVID looks logical and rational. And the alternative of investing in the great companies of the world buying low cost index funds and forgetting about it, it just sounds, you know, obviously dull. So, and it's kind of breaking news as we're recording this and the details are yet to be disclosed. I've no idea what the actual issues are. But there's, there's a wealth manager discretionary fund manager in the UK, it is public information, so we can share the code wealth tech, they've also got a different brand called verta. And I don't know much about that. I'm pretty sure that about you guys in the UK, if you've heard of virgin, I think I've heard of verten as a DFM that has promoted their services to ifas, a number of other faiths who have recommended them over the years unless unless I'm getting him confused with another company. But yeah, the details are yet to be revealed. But it's it's not looking very good. They've been suspended by the FCA not allowed to Transact or to continue operating, they've got a right to their clients. So there's something something amiss going on there. And I don't think this would be the end of it. As, as Warren Buffett famously said, It's only when the tide goes out that you see who's been swimming naked. And of course, you know, a decade plus of zero interest rates. And all these creative invent invented products and services, to try to get a yield to try and get some sort of investment return have been created. And now, you know, things have changed very rapidly, interest rates have gone up quickly. And it's all going to, you know, often it's a house of cards, it's coming crashing down. So I'm afraid it's you know, it's back to basics. It's back to simplicity, and absolutely our last episode, unpack that in quite some detail. I think it's worth just reminding ourselves, you know, simple is best.
Nick Lincoln:Without without a shadow of doubt. Yeah. Okay, Mr. Witter? Again, this is a this is a topical topic that could that we could go on forever. So let's just try and keep your focus but chat GP T. What does it mean for financial advisors? I know you Smith, no, this is this is the toy that you're running with the moment and just kind of front front and central of what what passes for your brain? Car? What do you think it means for financial advisors then on to Alan, then Andy?
Carl Widger:Yeah, I, I've been I'm certainly no expert in this. And I would defer to Alan on this a lot. But I suppose I've been looking at this a little bit. And I think that what it means for financial advisors into the future is that it will make the kind of more mundane, menial tasks easier. For sure. I think we should all be looking to AI it from that point of view. However, if you have a, a viewpoint, or you have an opinion, and that's never going to be replaced by AI, and I think that that's the type of stuff that, you know, if we talk about being really financial planners, and that every single client gets a different plan, because it's bespoke to them. And it's bespoke to their situation. I can't see for the life of me, and hopefully, I'm not proven wrong, right. But I can't see how, you know, somebody said, I saw some Twitter poll recently that M financial advisors are going to be pulled out of out of business by, by AI by chat GPT and the likes. How could that possibly be the case? We've seen the demise of Robo advice. We've seen, you know, we spoke about this before about people pulling out of that market, because it's not working because people want other people to guide them through complex stuff. And you know, to give them bespoke plans that are relevant to the clients and their families, and maybe the next generation. I don't think AI can get that sophisticated, certainly anytime soon, as far as I'm concerned. And I'll say it another way if I was a client, I wouldn't be letting the AI guide my financial plan for absolute sure. So that's just kind of my brief take on it. But as I said, I'm definitely no expert in it. So yeah, I wonder I wonder what you guys think.
Alan Smith:Do you want me to come in if I am this trapped, nominated expert, it's the epitome of in the kingdom of the blind, the one eyed man is king. Because I know a tiny bit more than you do because I've spent some time I'm fascinated by array I really am and yeah, I've got that kind of Magpie brain, I admit to this elitist, shiny new object for you to pay attention to. But I do sense that maybe unlike my previous shiny objects like NF Ts and some crypto stuff, this has got this has really got some some some merit. This feels like kind of the coming of age almost like the new generation of way have, you know, when the internet first came along, looking at this stuff now you've mentioned called Chat GPT. That is one model, there's a language model, an artificial intelligence model that will allow you to create, you know, written summary documentation. There's a lot of applications for advisors in that. But there are literally 1000s and 1000s. of other applications. It seems like just at the turn of this year, the beginning of this year, out of nowhere, these things were all had been quietly being built in the background, but it hit the mainstream. I think when when open AI, the company released free to the public, and it still is free chat GPG. Three, this program, I don't know if you guys have spent any time playing with it, but for certainly in terms of being able to create, to be able to create content. Yes, four, four is the latest version. But check GPG three is still available. But look, I call you're absolutely right. Human beings, we're sentient beings, we are social creatures. You know, I think we're going to be talking a bit later on in this episode about some of the experiences we have engaging with clients on a uniquely human level. I don't believe in my lifetime AI or computers, or any sort of type will replace that unique experience. But God if they can take away, and I just know, I know from my own in my own business, the amount of just time sucking stuff that we do with written documentation and spreadsheets and data entry and all that stuff, if that can be eliminated or minimized. Fantastic. You know, we're all we're all for that if that allows us to effectively have more time with real life, humans and real life families, giving them the benefit of our wisdom, our experience and our knowledge, knowing that the machines are taking care of all the dull stuff and fantastic. And the last thing I'll say is I think it's something I've asked around this moment in time, unless there's something hidden away. There doesn't seem to be anyone or any organization in retail financial services that I'm aware of this really grasping this, not that I'm aware of. And to quote Andy Hart, if no one else is doing it, you asked What is it you ask? You ask three times? If the answer is still no, or don't know that you got to do it yourself. So I'm just going to be attending numerous. There's there's a numerous conferences and events in and around London all the time. I just want to get myself up to speed because I think the opportunities for forward thinking financial planning firms are just extraordinary. What do you think, Andy?
Unknown:Yeah, I echo a lot of what you said, I love Chachi PTA, I've been playing around with it ever since it came out. I did a podcast, I asked him the top 10, financial, you know, success rates or whatever. Put it all together, I just see it as an advancement in technology, I don't see it as this new, you know, totally new frontier, I just see it as an advancement of what we currently have, in specific to us losing our jobs as financial advisors. I mean, as we're insiders, we know that that's not going to happen in a million years. But whenever they come out with these lists, financial advisors, weirdly, appear quite high on those lists, because they don't know what we do. They think we just pick investment funds or something. And yeah, a robot is going to do that better than us. They don't realize that we manage the humans hence, you know, we you know, that's our focus when we take on clients. And they often ask people that are slightly earlier on in their journey. And they don't have any expensive financial question. So when people do have expensive financial questions, that's why they that when they want to see a human rather than just plug all their information into chat, GPT that spits out a solution. But yeah, bring it on, the more AI stuff we can use, the better. But, you know, we're 2023 and our compliance facilities are still requiring us to provide bespoke advice is ridiculous. You know, clients don't need bespoke advice, any pensions, ISIS general investment accounts, collectively, the clients unique, the individual parts are seen a million times. And it's just it's ridiculous. You know, they're whatever is one step forward of getting getting simpler. Compliance wants to add two steps back, you know, to to rein us in, you know, God forbid, we can onboard a client, you know, in 12 minutes, none of those copy three and a half months or something. I don't know. So we're, we're constantly fighting that battle, aren't we with best of breed software solutions? Yeah, yeah, I'm a big fan of it. I just say it's the advancement of technology, not this new frontier.
Alan Smith:It will make us just far more efficient, you know, the ability to have you know, we have people have zoom meetings, I think, Nick, are you doing this already? Yeah. So you can have a Zoom meeting and you can have instantaneously a transcription of it. And then the key action points summarized what to do, who does what and next, automatic and automated and they're sent within seconds of the end of that meeting. As one tiny example of 1000s out there, so the net effect of that is simply greater efficiency for for good financial planning firms, and Andy, there are still plenty of firms that don't do the human behavioral stuff that are really, you know, fun picking and choosing the best pension fund to invest in and so on. And of course, they are likely to have a unit to come under some some threat. I don't think anyone is really good to. Robot. The failure of Robo so far has demonstrated that people still deal with people ultimately. Yeah, Nick, Nick, what do you think about this latest frontier of technology?
Nick Lincoln:I'm the anti Magpie, I think your Magpie illusion was well made and that you are like that, that's fine. I'm the anti Magpie I'd wait and see, wait and see. And I mean, it took forever for the fire to catch on the wheel and the knife and fork these things. Skeptic there'll be some utility, I think I think it's gonna have it's gonna have changes, funnily enough, the way I like the way I do see it, having a it's already having a massive impact isn't isn't in the academies, in the, in the universities and so forth. Were already to know that people need dissertations done by Jack GB. So I think it's going to lead. And I think there's a really good thing. So proper examinations, invigilated examinations where you get into a bloody room and you sit down for three hours. And you're right. And for some of these youngsters who are out there, this this writing business might be hard work on their little wrists. But yeah, that's my wait and see, wait and see. I don't think it's a threat, ultimately. But I could be wrong. As we've said, Robo every time a new robo brand comes out the Pink's the financial media say this is the end of advisors. And every time he's a nowadays, and if you're really worried about Robo advice, then then then you should be because you haven't got a business never works out. I don't see jet chat. GPT replacing the human element 99% of what we do is behavioral stuff. It's human to human is social contact. And Jack chat, GG. BT may well aid us in that in the in the compliance stuff in the follow up stuff on the onboarding. Great. Well, it replaces I don't think so. But I could be wrong, because I think we're just at the was this at the very bottom of this mountain called called AI and chat G and we're just in the foothills and we're just exploring that and it's blowing my mind. There's a long way to go. Okay. Mr. Hart rathbones and Investec have merged. Tell us about it and what you think it means.
Unknown:I don't know much about it. I've just read sort of the headlines around this, but they're two well known brands in the discretionary fund management business rathbones And Investec. I believe they're managing close to 100 billion between the two of them now, again, I don't know if they're going to come out with some funky new brand, they probably will. One that is sort of gender neutral. nobody quite knows where they sit. But who knows? Are they going to be called? Well, that's what a few brands have done, haven't they? They have chosen, chosen simple names that don't confer anything. It's odd, isn't it? It's like all of the lessons of brands have just been scrapped up during GA in recent years anyway. So yeah, rathbones and Investec have merged. They're doing it from cost saving point of view. I don't know what what brand they're gonna go with. But yeah, they're both quite well known brands and discretionary fund management world, sort of sort of, typically quite expensive, kind
Alan Smith:of. Yeah, hot on the heels of last year, Smith and Williamson. merged with Tilney. Yeah, to create another mega super brand. So it feels like looks like we're just heading into the world of super brands, huge, huge, huge organizations, 100 billion plus organizations. And undoubtedly, there are opportunities, there are cost savings eventually. I mean, putting these organized sort of organizations together is an absolute shitshow. In terms of the back office, the tech that I'm trying to get there, and culturally to get them to match. Yeah. Generally, in using past experience, it takes years and years to, to kind of properly merge, you have different sort of, inevitably both will have different cultures within the organizations and sort of mixing matching that but it looks good for the accountants looks good, potentially over the longer term for shareholders, whether it's wonderful for clients, I'm not sure. Just one little relevant tidbit to this, is that over the years, we have often picked up about you guys and there's plenty of m&a stuff going on in Ireland as well. Carl will will ask you in a second. But we have picked up numerous clients who were clients of you know, smaller firms like all of us, who's who then whose owners then sold to the likes of the companies we've just mentioned. And of course they get pigeonholed to get put into the kind of paint by numbers, investment portfolio, the in house quite expensive. portfolio, they don't have the same level of service that they had with the previous kind of, you know, 235 10 man band operation. And so they start looking around and I'm we're more than happy to sort of say yes, come and speak to us because we're a bit like the firm that you used to work with happily for 20 years before they sold out to the big company. So I see it for us sort of smaller boutique firms as positive, let all these big huge organizations merge, and some people like it, but honestly, I think a lot of people prefer the more personal, individual kind of experience that they get with dealing with a smaller business. What are your thoughts call over in Ireland?
Carl Widger:Yeah, it's funny, because we're kind of probably only at the very, very start of this m&a activity. And so there's a couple of P firms. Interestingly, the general insurance market has been undergoing massive transformation over the last few years. So there's definitely consolidators, or aggregators, or whatever you want to call them coming in and kind of gathering up 810 12 different firms, and they're going to, I'm sure move those on. But in the in the financial advice market, it hasn't really been a thing. But there is without any question, lots of activity at the moment. So lots of talking going on. And some have have entered to the Irish market from the UK. So aggregators plus pe. And I, I'm sure there's lots of deals have been done in the background that I'm not aware of. But yet, I haven't heard of kind of lots of deals been concluded just yet. And I would imagine when it starts, then it would kind of start to snowball. But it seems to me, nobody wants to kind of be the first one. So it's a bit of a standoff at the moment. But yeah, I take the point, I don't think there are any of those massive massive brands here just yet. That are kind of starting from scratch to develop a kind of a much bigger operation. And I, you know, there is a part of me thinking that the firm that stands alone and remains independent is going to, to probably in rolling around five years be unique in that regard. And I think can have an awful lot of USPS that some of the others don't have. So I think there's definite merit in a long term, sort of very successful strategy. For a firm to remain independent, but I don't have any kind of firm views on it. I'll be a little bit like licking the AI. I'll be sitting back and watching from afar and seeing exactly what happens, because definitely interesting times ahead. I think the general insurance market has been kind of done and dusted now. And now it's like, right, where where else can we look? Oh, let's look at the financial advice firms. So yeah, very interesting times and, and yeah, there's gonna be lots of lots of stuff happening over the next kind of in the in the short term, I would say. So watch this space is for sure. The news over here.
Nick Lincoln:Okay. Yeah, so the talk wins and Petronella is a shuffling around from one brand to another. Mr. Hart, let's move on to another topical tidbit 100% global equity funds are this is prepare for Mr. Hart's to meltdown coming global equity funds coming in as a four out of seven on the risk scale and speak to
Unknown:us. So this is just brilliant. I know a lot of the listeners are on their journey as well. We are on the call from what it used to be 6040 portfolio every client gets and it went up to 8020. Now a lot of advisors are thinking actually 100% global equities is where the real returns are going to come from. Yes, I'm going to manage my clients behavior, yada, yada, yada. A lot of my new clients listen to the mobile money show so they come well prepared and they'll Andy 100%, global equities, no questions I then I'll just have to, from a compliance point of view, deal with it in a slightly different way. Anyway, those of you listening the dimensional world fund, the Vanguard life Strategy Fund, maybe the Vanguard sort of all chef, global Global Fund as well. I believe they're all coming in at 4x sevens now, which is very interesting. If you asked a typical compliance consultant, on a scale of one to 10, where do you see in their world risk of 100% Global Equity Fund? I'm pretty sure they're gonna tell you it's, you know, near the far right, you know, it's like eight 910 out of 10. The fact that it's coming in at four out of seven. I know it's maybe the recent issue with bonds having more volatility to the downside, maybe maybe played into the hands of this, but what I'm saying is I'm just giving you more collateral with your clients and your compliance consultant that the 100% global equity funds now, if they are globally well spread, you know, the volatility is not that much because they're globally widespread, etc. And their peak, you know, peak the troughs are not actually that extreme either. So anyway, it's just more things to put in your arsenal. was such. So yeah, they're coming in at four out of seven, which I think is, is brilliant. Anyone else has any comments on this? So are you?
Nick Lincoln:Are you? Are you saying that when I put my ID my risk planning software that I use, which is very expensive, and I'm, I've got four out of seven clients, they're coming out four out of seven on the risk scale. So have I got to put those clients now into this world equity funds, and my heart we say six or seven out of seven, I should probably put them into the index linked gilt fund.
Unknown:If that's how it works, you do the mumbo jumbo questionnaire, you get the result, the scale of whatever, you then align it on the scale, and then you move forward. Oh, no, no, no, you don't do that. Oh, what so we've got to interpretively? Oh, yes, you do. It's it's my blog. Anyway. So yeah, I'm going to be banging on about the risk of low returns this year. So I'm going to introduce the concept of the risk of low returns. So I'm going to try and bring that to life into as many different ways as I can. But for me, the risk of low returns is enormous for lots of people, certainly over multi decades. So yeah, we're going to be unpacking the risk of low returns, which people don't talk about enough. And we've seen it with real clients who are in their 70s and 80s, have not invested correctly in my world, you know, for the last few decades, and they've got all right wealth, but it'll be fantastic. If they had more wealth, they could do more things with it, they could help their family out more, they could, you know, not worry so much about money. So the risk of low returns from real people, I think, a bit of a travesty that we're trying to address. Any final points on though.
Alan Smith:I'll just make a comment that every time I refer to this plot of stuff publicly, like on social media at LinkedIn, or Twitter or something, and just it's kind of a statement of the bleeding obvious the longer term, you know, real returns, using history as our guide, investing in the great companies of the world is likely no guarantees, but likely to be more rewarding. I can guarantee I'll get half a dozen responses saying yes, but yes, but and it's there's been periods of time in the past where bonds have outperformed. And there's been periods of time where, well, the classic is the Japanese equity market. And there's all there's always pushback. And I just, I mean, I just I ignore it and move on. But inevitably, I think what we're seeing is there are no guarantees. I'm just trying to wait to put the odds weigh the odds in our favor, there may well be a period hard to believe we're bonds will outperform I don't know. But it's, I think the balance of probability is less likely, but I just find it interesting. Every time I refer to anything remotely like that, you get a guarantee you get half a dozen people say yes, you're wrong, you're wrong, you're wrong. And look at this period between 1936 and 19, whatever, when that wasn't the case. But all we do is tell the truth and move on.
Unknown:Most professionals don't know what they're doing Allah when it comes to investing. They still follow the dogma of the day. You Yeah, they're still doing everything really complicated. You know, 25 question risk question is a multi Asset Fund for clients it's is what it is. Yeah, social media tools and to get stuff knocked out. Back to you Nick.
Nick Lincoln:Thank you very much. I'm sorry for the deer trap. So listen to this or watching this you can't see that our recording software once again I think is giving us the heebie jeebies I my recording stopped earlier I had to leave the studio and come back Carl if you leave the studio and come back so it might reengage your recording that's all I can tell you wow all the fun we have a the time we put aside Mr. Mr. Smith could be out on the slopes and course your buddies spent his time doing this and economic but he didn't know well. We'll find out at the end of this show. Okay, that's quite a bit of a topical tidbits there. And there's so much going on. I mean, you wouldn't know this to trap us we're recording this episode at the start of a happy new tax year to all of our our listeners. So I'm sure the three of us in the UK here have just had a whole season of capital gains tax washing through pregnant gains and so forth obviously from today the capital gains tax allowances crashed down by 50% and it's crashing down in 365 days to buy further 50% or 3000 pounds so that's that's that's all been going on. And good fun. So there's a topical timestamp for you. I think while we wait for Carl to rejoin us he's putting pennies into his always putting euros into his meter in Limerick and he's firing up the his it section let's let's move on to what to what we call the meat and potatoes. Carl he's coming back into the into the room and even the meat and potatoes sound drop isn't playing so this is all going very well so Carl, can you hear us my friend?
Carl Widger:I certainly can't sorry for that gentleman. Technology. Ai my backside. Yeah, exactly. They can't even get the podcast software work.
Nick Lincoln:Christ on it by Okay, so Cole, show God your five year plan. We can get to focus on the long term. It's incumbent on us to get clients to live their best lives. Now you extemporize and then we'll hand over to Mr. Smith.
Carl Widger:Yeah, so I've been reflecting as is my want. So if you looked at my own five year plan five years ago, it has, remarkably not worked out. Let's just say it has evolved. And even if I go back to the last two years, two years ago, what I think personally or professionally, I am where I am now. Definitely, definitely not. And that kind of got me thinking about, you know, as our jobs as as financial planners, when we do, say cashflow plans, right, are what are we always looking to do? We're trying to get rid of ranch out of the plan, right, so any cashflow shortfalls in the long term, I know when we talk about investments we're always talking about in the long term. So you got to stick with the plan, and you got to, you know, look to the long term and for looking at returns and all that kind of stuff. It's long term, it's long term, everything is long term. And I thought about this from my own point of view that you know, you know, what I've been doing a lot of over the last few years, when this happens, I will do this, our you know, we will have that experience, our I will feel this particular way. And General out guys, I'm just tearing that plan up, and I'm going to start living each day as it comes. I'm going to start living living in the moment. And I've had some experiences in the very recent past with clients, whereby, yeah, of course, we're always looking to, are we gonna run out of money and all of that kind of stuff. So just just two quick stories, I have a absolutely wonderful couple who have been clients of ours for a good few years. And unfortunately, the husband passed away last year, so it's, it's about maybe nine months ago at this stage. And I left a gap before obviously, there's some cleaning up we have to do in terms of investment portfolios, and that kind of stuff and putting it into one name. And it's, it's all tough stuff. So I always try and leave a big gap. Painfully this hasn't happened too often. But when I sent the email out to the spouse, she's absolutely diamond lady. And she just came back and went, Yeah, look, it's been a tough, tough time. And we had so many plans for travel post COVID. And they were they were hanging on. And obviously, those plans are out the window now. And I just felt so what I've done, and I really, really hope this doesn't sound condescending at all, but I just felt so sad and so sorry for because they didn't get to do all of the things that they wanted to do. And, you know, it's it's, it just, it just drove home the point that look, you know, don't wait around to do that bucket list item. And look, we're in the lucky position that most of the people we talk to are quite privileged. So they do have the resources to do the stuff now. And, you know, it's so incumbent on us as as real financial planners to make sure that people go and live their best lives like that effect, that is our job, our job is to, you know, match the resources with getting people to live their best lives. And I had another new clients sold their business and have a bunch of money for the last three years in the bank. And they're now kind of coming to us because they're worried about the effects of inflation as they should be, you know, as as, right. So they came in and we did the plan, they're never going to run out of money. And, you know, they wanted to do things like put in new windows in the house and put in solar plans, and haven't been doing it because they were worried that they were going to run out of money. And it was like, okay, the financial plan was able to tell us look, this is not going to be an issue we can drive it on. And but more than that, it was kind of, you know, could I get a new car? And that would, you know, we'd get some thrill out of that because we haven't had a new car in years. And we'd love to go and visit our daughter who's who's living abroad. And, you know, we're worried, you know, couldn't be gold for more than a week or whatever. And without any question or doubt we can and I just thought it'd be it'd be it'd be a good conversation. It's not it's kind of philosophical as opposed to anything to do with investments or any technical stuff. But, you know, we spoke about what is our what is our main role here, it's about managing human behavior, but that's not the right way to say it. Our role here is to be the the facilitator to help people live their very best lives. And that's where I get my greatest thrill when we we, I have a nother story which I won't go into but I get I'm a client is gonna, we're running our future you event and he told me a story about he went to New Zealand for seven weeks to visit his son and brought his daughter over to New Zealand because his daughter had had a baby as his son's wife had had a baby. And the two cousins had never met each other and he was able to facilitate that. And he said to me straight out, as you all know, we call it the Mattis lifeboat, and he said it because the Mattis life plan gave us confidence to go and do that. And I just, I the hair stood up in the back
Nick Lincoln:of mind. Brilliant. Absolutely brilliant. Yeah.
Carl Widger:So what do you all think about that?
Nick Lincoln:Smithy? Smith, you I think you're muted.
Carl Widger:We hope anyway, or else something is
Nick Lincoln:calling call Chevelle you, if
Alan Smith:you wish. Yes, exactly. Well, proving the earlier made point that AI isn't going to disrupt this, these sort of experiences in conversations anytime soon. Couple of points, I just note that a colleague of mine, Graham, wrote a blog post is on our website can post a link in the show notes. And it's called someday, maybe one day, and I think he just came from the heart, he just typed it up and read it. And he said it to me. And it was kind of a, you know, one of those moments, you read an article written by someone that you know, well, and it's just beautiful. It's just all these things. Someday I'll do this, someday, I'll do that. I mean, the very last line is looking at those someday I will have my last day, which is true for all of us. And it's just sort of encouraging people to do those things. That, that they should be doing, just sharing a kind of just an anecdote or a brief reference, one of my things, we get close to our clients, don't we, we say clients become friends, friends become clients. Client, one of my earliest clients, John died this week. And it's, I just, I just thought it was very poignant for me, because he was literally, I think, as I shared in a previous episode, when I was getting going at this sort of crazy marketing standard, put an advert in the newspaper, when the equitable life was blowing up. And he was one of the people who responded to it. And he came to see me and he had, he's an absolute, just a giant of a man in every way, you know, absolute integrity, running through his bones. And he had very diligently from an early age, but a lot of money, more money than he could really afford into a pension fund, because he just knew the importance of building a retirement fund for himself for his family for later life. And they put it all as often was the case, if you bought into the equitable life brand, you put, you know, lock stock and barrel into the into these funds. And of course, the whole thing went belly up, and his money was locked in. I could just add in the paper, he came to see me. And I'll never forget the meeting, he said, and he was a big guy, big man. And he had literally had tears rolling down his face. And he said, he said to me, and I quote, he said, These bastards have stolen my money. They've stolen my money. And I said, at that moment, John, I will do everything I've physically can to help you win this win these funds bet you've done nothing wrong. You've been cheated. And you've been taken advantage of. And so there began a whole process that we did you know, writing, I wrote letters I got on the phone, I spoke to all manner of different people at this organization. And by hook or by crook, we managed to extract his funds. We got revenge, we eventually got all the money out in the end, and we transferred across to a you know, sort of normal CIP that was set up for him but he was very, very damaged by that his trust to being completely he was very grateful to me and my colleagues for for helping him out really grateful he couldn't stop saying it in the end. But, but he just and he had quite a lot of other money as well. He was very reluctant to allocate it or invest it so we will have many conversation I fully understood why he didn't trust you know, the financial services industry having had the experience that he had. But slowly but surely, slowly but surely he just offered to all we do in our in our jobs, isn't it? All we do is we show up, I always say we show up every day, we do the right thing. We tell the truth. We try to help people. We don't always get it right. But we do our very best every time. And that's what I did. That's what my colleagues did. And eventually started talking about his he had, he had four grandchildren and education was really important to him. When I had my first child and a new and then when Sean was coming along, he gave me a bit of advice, which I still remember now. He said, when you have kids, he said, what you should do is give them the best education you can afford a lot of love, and the rest is up to them. I always remember that education was really important to him. And what we eventually what we eventually did was we Set up effectively like an educational fund that was just an investment account and his name, but the money was kind of notionally allocated to fund his grandchildren, through school through university. And it's exactly what's happened. So John passed away this week, after after an illness, and I'm just happy. I'm not trying to like claim glory or anything. But all we my colleagues did was show up as do the right thing was helping encourage them. And eventually he did invest and his grandchildren have gone through, they've grown up now. And they've gone through great university education and their, their future lives are as assured as any young person's can be nowadays. So it's another it's another, you know, we've all got stories to share. We've all got these examples. And I think and I'm, as I say, I'm proud of the work we did. And I'm, you know, I'm sad for the loss for, for for John and for his family, but he's absolutely left a legacy. And you couldn't ask for any more than that. So I'm pleased with the work we did. Karl, Karl,
Carl Widger:Joe, just, I just want to before I bring in the other two guys, that's the point, Alan, you know, are you proud of the work that you do every day, and I have a financial planner working with with me, Ron queerly. And Roland said to me, so when the clients come in there, they're all like your best friends. And clearly, they can't all be my best friends. But the point is, I've been working with a lot of them for a long time. And I really liked working with them. And I really liked the people that I work with. And, you know, it's, it's, I have brought people on my journey with me, because remember, I was the guy who was selling the best pension fund, because I thought that was the way and a lot of these people have come from that card. To Deckard Who's No, no, it's really financial planning. And that's what gets me up in the morning and gets me going every morning. You know, it is, it's easy, say it, it is so easy to say, we do really, really important work, and we have a deep impact on the lives of our clients. So you know, that that's the message for anyone, especially we got loads of questions here from people who are setting out on the journey. If you can go with that as your mission in life, then you are going to be a successful real financial planner.
Nick Lincoln:Yeah, yeah. I think that's a I think it's a point well made. And, yeah, so you know, as you said, I'll show God your five year plan. And yeah, he laughs You know, there's a there's a saying, isn't there man plans, and God laughs as evenly as you'd been in Yiddish man tract and got locked in a man plans and God laughs but you still have to have a plan, don't you? That's the whole point. This this whole thing again, about ambiguity. And making sure that our clients know that this is just as soon as as soon as you walk out of the Zoom meeting, or you walk out the office, this plan is redundant, because something will have changed, or something's in separately about to change, but you've still got to have a plan. But what we're saying to our clients is, you're going to have a plan, but we'll adjust it along the way, right? This, you know, you won't be this smooth, linear journey to your, to your financial salvation, it'll be bumpy, and they'll be bumps along the way. But we are here to stand on your shoulder figuratively, as you're constantly error, your your financial counsel, and just guide you there and redirect you back, you know, redirected, like your sat nav, you know, you plan a route, and suddenly your Sat Nav will say, you know, hit the motorway shot, and it will redirect you around that blip and it might take a bit longer, but we will get you there. But you still need to have a plan. Because if you don't plan, then then then you just don't know where you're going to go. And suddenly, you're going to be 63. And you're going to be hating your boss. And you're going to think, well, you're stuffed because you haven't done the planning in those previous years. And you haven't made the adjustments along the way. Andy?
Unknown:Not a huge amount to add. But yeah, we as financial planners, some get sometimes do get a bit fixed, fixated with too many decades ahead. So we need we need to bring it back, you know, our typical clients, probably thinking, weeks, months, you know, short term, but life's that whole being balanced between the join now and planning for them, isn't it? I think the real thing we do with our clients is give them permission. Because even though intuitively we know that they've got enough money to do all the things that they want to do. They just need that professional to say and confirm it. Certainly through building a you know, a cautious plan. Yeah. The long term plans obviously do changes as you say, Man plans person plans. God laughs very poignant in my situation. The last five years a lot has happened. I've had twins, okay, divorced. I mean, new relationships, etc, etc. Businesses is going Oh, well.
Nick Lincoln:Yeah. gender reassignment. I mean, it's all going on for you, isn't it?
Unknown:It's a lot, a lot. A lot. A lot in the diary. Yeah, so not not a huge amount to add. But yeah, I think that is important as well showing up every day with your clients. You know, we've we have tough times and you know, we're going Through various things, but we're not going to bring our problems into the clients situation. That's why I believe it is a little bit like going on stage, when you have client meetings, we just got to put all the crap that's happened in your life behind you, and just be totally there for the clients. And sometimes you get into situations where there's a lot of happiness like, you know, retirement sold a business, a lot of time it's divorce, it's someone's died. So different human emotions that we're confronted with. And we don't realize how skillful we are in those situations. Certainly, having had hundreds 1000s of client meetings, or something else cropped up to my mind, when I think Alan was talking all about working with people that you like, you know, the definition of should you fire this client, and should they not be in your lives is, if your phone rings and you see their name, and it fills you with dread? You need to get rid of that client. That's the definition of should disclaim go. So just think of all your clients names. Look at your phone. And if you see that name on any go yet habits, speak them have speak them have speak to them. Jesus, what does this person want? If you get that Jesus, what does this person want? That person should not be in your business. And that's a little bit off topic. But I thought I'd want to hammer that one in. So the test of whether or not you should not be working with this client and getting rid of this client is if your phone rings, forget that they might have your personal mobile number, but the whole sort of thought experiment. If your mobile rings and you see their name, and it fills you with dread. You've got to get rid of that client. Back to you, Nick.
Nick Lincoln:Yeah. Yeah, the point well made, and also the, you know, we've talked about a lot of the emotional burden of what we do it is it is hard, you know, we need to give ourselves, we need to be at our best in front of clients. Okay, so we need to take care of yourself as well. So you do need, you know, I think there's a correlation between how mentally and physically fit we are and how good we are as advisors. Because we do carry a toll and, and also, as we all age, and our client banks age, when that phone rings, it could well be this, someone's son or daughter saying, you know, your beloved client who you've known all these years, he put he she passed away last night. And you know, that's not going to diminish as as our clients get older with us. And you know, we the clients do become friends and we do become involved. And it's a it's a, it's like, you know, this is the price we pay. This is what we've chosen to do. This is our calling, right, but it comes with the Hepburn. Mr. Widow, you were raising your very cheap hen.
Carl Widger:Yeah, it's it's a it's a matters, art and pencils skews.
Nick Lincoln:You can get Metis Norway ones, they're pricey, because they're very scarce.
Carl Widger:Yeah, we shut down that project. Yeah, just a tiny little bit of pushback on something that both Andy and Nick have said, right, which is about you know, bringing your best self to your to your client meetings and leaving aside anything that you're going through yourself, maybe maybe a slightly different way of thinking about it. Right. I think one of the reasons I have been very successful in dealing with business owners is that I'm a business owner myself, so that we would and I would discuss with them my challenges as a business owner. But but but it's also fair to say that I've had some personal challenges myself, like Andy, over the last few years, all of my clients would know that. And it is it is okay for them to discuss that with me. And a lot of them would actually say, Well, how are you know, at the start of a meeting? How are you getting on or whatever. And I'll be open and honest. And I share the stuff. So I don't necessarily think that I take the point, of course. So we got to look after ourselves. And I'm, you know, putting that one out there all of the time, as you guys know, but I think being read as okay, too, because I think that's going to help us forge stronger links, stronger connections with our clients, you know, that with all the challenges they have, we also have as well. Sorry, Andy.
Unknown:No, this is a wider subject. I've spoken to this. I've spoken about as with other financial advisors, how open are we with our clients? I've been very open from the beginning. But we don't want our issues concerns challenges to dominate the meeting. So is that balance, isn't it? It's, it's probably 9010 or maybe at 20? Yeah, totally. We want to open up we want to be human, we want to be vulnerable. You know, we want to share ourselves with our clients. Absolutely. No problem with that. But I suppose it's yeah, that was kind of my point. Yeah. Yeah. But we don't have the initial meeting. And you know, it starts at nine o'clock and 930 I'm still rambling on about my issues with custody, or something. co parenting, but ya know, I get it. Some advisors are very, no, that's just my personal stuff. I'm just gonna go in there and deal with that. And these are quite successful advisors that I know that told me this stuff over the years was other advisors that are also successful told me sort of a slightly different tack that they've got Yeah, I'm much more around the Be yourself. It's still professional. But, you know, you can still let your guard down and be yourself quite quite a lot as well. Any other thoughts?
Carl Widger:100%. Mr. Smith,
Alan Smith:just to add that, I mean, we've touched on this before that when you have these situations where a client passes away, what I've often found is we, after the immediate family are notified, the next call is to is to us, because we are the ones who kind of we were at, we exist at the intersection of the money, the finances, the wills, the estate, and the human beings and the family. And I've often reflected on that, what a absolutely what a privilege is, what an honor, it is to be in that position, it is, as Nick has suggested before, it's to some degree can be a mental burden, it's they will, you know, I don't have the answers necessarily, but to be that the role because it's not the accountant, it's not the lawyer, it's not, you know, anyone else really, we exist in that place. And it's something I think, to be to be treasured, to be respected and to to make sure that we continue to fulfill the importance of that role. And I think this is a key to, you know, the real advisor podcast, this is what we're talking about, this is what begins to without kind of just, you know, blowing our own trumpet too much, but we're sort of stating the fact that the four of us have often talked about, you know, over a, you know, a beer in a pub or something, because that's the sort of stuff we talk about sometimes, but it's, you know, it's absolutely true. And I'm just not convinced that that exists out there, you know, across the board, for every advisor, I think there's a lot of people who are just completely focused on the data, the facts, the spreadsheets, and the numbers. And don't really go to the next level. So anyone listening to this, encourage you and get closer and closer to the families that you operate within you and you serve and look after, it's it's an important role, no one else is doing it and you will be, you'll be such a vital thing for any family to have a trusted advisor relationship. And it's what we all strive to do at all times. And
Unknown:this is what I was going to say when I take on new clients, I say your relationship is with me. Um, you know, it's not this large organization where there's gonna be advisors that are in and out. So I think that's a selling point for solo advice firms. I know larger firms do it slightly differently. But I think there's a selling selling point for the seller advice firms, and if you are a solo advisor, bang that drum say, Look, your relationship was with me, you found me, I've got a team behind me that do various things, but everything comes by me. Again, I know multi advisor firms sell it in a different way. But yeah, if you're a solo advisor, you know, sell that as a huge benefit. Yes, you could go with large random corporate organization, but the good people are going to be in and out. And therefore we're gonna have to re establish a relationship every time we'd like a lead advisor. And it's just, you could do without it. Anyway, yeah, that's it.
Nick Lincoln:Okay, very good. Just to push back against coal pushing back against me. What I meant was that when you're engaging with clients, when they come into your life for that annual planning meeting, or whatever it is, by yearly meeting, six monthly, be present. So whatever's going on in your life, you just got to you've just got to get that out of your headspace and give these people a damn good listening to it's really hard sometimes you know, you will something will have happened just before meeting starts and you're your brains foggy, you've just got to give the people the respect they deserve but by all means, share things you know, I absolutely will limited company owners I'm a limited company and as you said, Carl you know it so that's a you have a synergy with certain people you have an affinity because you can see the world through there. You're walking in their shoes to a degree I shared the story of my you know, my divorce and so forth and my clients and they were all asking about you know, the lovely Penelope and then they know I believe married and because it's human, but definitely share that side of yourself as well. There's no There's no shame in it. You know, people aren't people aren't necessarily going to judge you unless you do something really heinous. And you know, Alan that that the court case will go well, and we're all rooting for
Alan Smith:so but I'm relying on your support. Thank you.
Nick Lincoln:Witnesses, Alan, so you're facing a nice stretch. Okay, nothing is given. We've given that a damn good
Carl Widger:Yeah, well, it was raised as usual. Yeah. I 100% agree with what you said. Yeah.
Nick Lincoln:Okay, fine. Let's see if this works. Oh, thank God it works. There we go. Well, guess who it is. It's posted with a giant SATA drive I can see it now. This the questions that are coming in to the route advisor podcasts from our beloved TRAPPIST our audience if you want to post a question to us that one to us. The pinned tweet at advisor podcast has the link even easier in the so called shownotes. There is a link to click on that you submit your question and in due course, we will come to them we've got a backlog of questions still. So we're working our way through them and we're doing to an episode currently Let me read out the first one. Start with Amelia. Actually, Amelia is a big fan of the show. I think it's her and a mum. They're from the northwest Cheshire way. They seem to love the show for some reason, which is really nice to have female input feet and the know that we're reaching the female audience because we are pale male Estelle, we know that but what can you do? Amelia who's on Twitter as at Amelia Powell. That's an easy one. Not on Amelia, we like that. She says a young new advisor that's her a part a part of an independent firm enroute to chartered looking for discussions around inheriting clients with advisory portfolios, where providers and font choices are limited. What suggestions could you make here? I really enjoyed you touching on a strong portfolio and your simplification here. The global equities versus other crap in quotes. Could you talk more about this? I attend lots of the road shows. And sometimes it's hard to see the wood through the trees. Thoughts on D FM's, can we explore the AI space and Amelia? There's a lifetime's worth of questions here. Can we explore the AI space and ideas and developing your firm's in this in this space? Okay, well, we talked about AI earlier, so we'll know that one off. Okay, who wants to run with one of the 78 questions that Amelia put there in various sub clauses, call your fingers raised,
Carl Widger:I'll go first stop going to fund manager roadshows, it's a waste of your time, and get get comfortable with simplifying your process. And don't worry that it's broadly speaking, the same portfolio that all of your clients are getting, you don't need to make it any more complicated, or sexy or anything like that. So just get yourself comfortable that that's what you're doing. And then focus on the human behavior thing. That will be my advice to Amelia
Alan Smith:Can I jump in here, I really get it, I understand that when you're early on in your career, you are overwhelmed with the volume of noise from the investment management industry. We've talked about this before. But if you are, you know, if you're a keen students of your profession, you're going to read the magazines, read the blogs, read the online stuff, and it's it's conflicted. And it's confusing. One piece of advice I would give and it is quite specific. But I think all of us have a respect for this organization. As a company called dimensional fund advisors, DFA, they have a program that they run two or three times a year, it's called the foundations of investment course I believe last time I looked, it was two days, two full days. And that is almost like it's a cleansing of all the noise and knowledge information that you might have picked up the fastest. It goes right back to basics is like what you know, do markets work? Are markets efficient? Yes, no, let's identify let's look for the evidence for or against any of these things. And not obviously they're arriving at the conclusion, which is their way of life is the kind of evidence base as the appropriate way. You make up your own mind. But what you will do is you will learn from scratch as if you knew nothing at all. And anyone, regardless of where they are on their career, seek out dimensional asked to go on their foundations of investment course. And I think it will make life a lot clearer for you, Amelia. Who's next,
Nick Lincoln:Mr. Howe.
Unknown:So if you ever go to a roadshow, anyone's talking about investment standing on the stage, and they're talking about sectors, countries and guessing where the markets going, they're doing what I call lying from the stage. So be very cautious of people that are lying from the stage, the FM's all they do is extract value. Not a fan of the FM's at all. In relation to investment portfolios, there is one fund solutions that are going to be pretty much 99% of all solutions out there. The investment management business game has been one, obviously there is hundreds and 1000s of people that their salaries depend on pandering to this madness that's been going on for so many years. But choosing the investment funds is not the reason why your clients are going to be successful. You know, you put client a in the perfect Investment Fund and they make all the behavioral state mistakes under the sun versus client B in the worst investment fund. But they do all the behavioral correctly, they will the correct behavioral things like aggressive increase in their portfolios, not panic into the market, getting their tax position, right updating their financial plan, you know, client A's in the best investment fund that they're going to they're going to end up in a complete disaster client B's in the worst investment fund but they're going to end up you know that you're going to take them to financial salvation because all the other stuff is way more important. So the investment element into it is important and you want to want to get it right. But there are other things I think you should focus on first. I'm pretty sure Amelia works for SJP. So I think what she has what she is exposed to is maybe not the same as what other advisors can be exposed to. I don't know if she can go on the DFM DFA courses. But yeah, it's it's important to get it right. But it's not the bill Anindo Yeah.
Alan Smith:She's she says, she says no question. She's part of an independent firm. So
Nick Lincoln:yeah, I don't think she's part of SJP. But no, that's
Alan Smith:not SGP, Andy, but
Nick Lincoln:just to judge I mean, at this point is this mainly the it's asset allocation is the big thing that's the big driver, as Andy said, you can you can, you can research your way to to a migraine finding the best smooth return fund that's top quartile and has alpha and beta and Sharpe ratios coming out of its nostrils. And if you put client a into the best absolute return fund, and client B into one that's slightly worse, the first client will have their money last a bit longer. The second client will run out of money a bit sooner, but they're both run out of money, because you've got them in the wrong assets. It doesn't matter. All this all this bullshit around fund selection. Long story short, I'm inspired by the voice, Mr. Widget. And I think we all go down this route. When I started off in 2001, I was a fun picking, IFA was three plus a half, Bob, and I've evolved now, as this is happening now in my business, I have one equity fund for my clients. And I just moved my entire pension fund in my eyes into one equity fund because I take my own medicine. And I'm in the and I don't have DFM permissions. So it's got to be advisory over the course of the next 12 months during the annual planning meeting process, I will be telling my clients, listen, you've got four equity funds at the minute in your portfolio, I found one fun that does everything those four funds give you in fact, it gives you a slightly broader exposure 13,000 of the great companies in the world, including emerging markets, there's no need to have these four funds, these moving parts, you're going into it consent here. And whether the clients got 100,000 or 100 million, they will go into me you know, I'm pushing this to the extremes, they will go in that one fund because that one fund gives them global capitalization. And it's simple. And it's the it's a screaming rejection of the culture that says complicate things to justify your fees, which I think is is a pernicious evil in our in our mighty noble professionals thing of ours. Okay, maybe there's some thought. Yeah, if any of us see you at a roadshow, Amelia, we will give you a damn good talking to
Alan Smith:a lot of information in Episode 14, which we did. I think that pretty much a whole episode about advice to early stage financial planners and included the reference to the investment solution. So if you haven't heard that one immediate do check out episode 14.
Nick Lincoln:Great stuff. Thanks for going to the back catalogue. That's, that's that's helpful. Okay, so the next one, the next TRAPPIST question is from Toby Heinz who's on Twitter as at Toby Heinz, these are brilliant. These are names that just are spelled properly and are easy. Toby asks you are at an event, the supermarket or a barbecue. And someone had very specific and someone asked you what do you do for a living? What line of work are you in? I would really like to hear each of your responses, your elevator pitches, I'll have a rough stab at this. So I help people plan for and retire for fulfilling retirements where there are no money worries. It's say I don't mention my nominal kutcho as an IFA, or a wealth manager or anything else. I say I help people live fulfilled retirements without money worries. Guys don't have a stab at that one.
Alan Smith:Can I be just before we do Nick, can I ask you that? That sounds like a classic elevator pitch. You literally to quote Toby's question, you're at the proverbial barbecue. And someone says that that's exactly what you would say. I help people fulfill whatever was fulfilling retirements. Is that literally what you would say word for word to the stranger? You met over? Over a hot dog and a glass of warm wine?
Nick Lincoln:Yes, I have to caveat it. I don't get invited to any social events. So I've never had and when I want to go to the supermarket, I don't want to talk to the checkout chicks. I sell scan. I talk to the scanning machine. I get quite a good rapport with that. But yes, if I was, I think that's what I would try. And I'd probably mangle the words because I'm English and it's uncomfortable, but that's what I try. And I try a
Alan Smith:hypothetical.
Nick Lincoln:Hypothetical. Anybody else got an elevator pitch?
Alan Smith:And Andy will talk is Andy and I've spoken about this quite a few times in the past, trying to get the right phraseology, because financial planner IFA, and all the rest of it just to the general public, I think sends out the wrong messages. Um, I'm afraid the brand has been tarnished over the years. modulo I'll sort of have a go at my I use for my sins currently. And I don't think anyone's got this right. Trust me, I've done my research. For my sins. I currently use the phrase wealth manager, I think it's a more encompassing, I think people can get it and understand it. But the best kind of elevator pitches are saying what it is that you do that somebody can mentally sort of file away? Yes, I've heard of that thing before, and then see who you do it for. So I would just say I run a wealth management business for entrepreneurs, we help business owners make sense of their money, and taxes. And that's it. So, you know, minimum, what I do, who would do for next, you know, do you want to join another sausage and you played the barbecue?
Carl Widger:And what do you think about Tesla stock? That's the next question. And it's like, no, no.
Alan Smith:We Oh, we own it along with 13,000 other stocks next.
Unknown:are on Andy. Andy. No, go good at this. I've done different things over the years. I stick to financial advice. You're not good at this. I'm not good at this. People just want to put you in a box. And the the olds who grew up with Darien Andy, he knows about everything. Andy can be told anything. His name is Andrew Hart.
Nick Lincoln:Episode 17, and he's not good at something. Well, I knew we'd get there in the end my friend crack on.
Unknown:All right. I don't think you played that last show. I haven't had the worst chest infection ever. I was gonna pull out this episode. But anyway, I turned up for the for the fast. I'll be those watching on YouTube. We'll see how much I'm coughing. Anyway, I've got a doctor's appointment at 1pm to go through my chest X ray. All right, keep on topic. Now I do save a financial advisor I have people just want to put you in a box. They don't want anything complicated on their financial life planner, and all this sort of jargon. I might say to them, you know, I help people answer expensive questions. You know, I've been banging on about expensive questions for years. Depends who they are. Most people don't want to talk about what is that? I do, you know, immediately, I wouldn't want them as a client. So yeah, it just depends on what type of thing it is. But I'm a little bit more down the line than you know, maybe the person asking the question, he still needs to do elevator pitches, I suppose. But yeah, I stick to keeping it simple financial adviser. Call and he was I might Yeah.
Carl Widger:So. So we we have one written down which everyone in matters is supposed to know off by heart and it goes something like we help busy high achievers get really important stuff done by creating a bespoke individualized lifestyle financial plan. Now
Alan Smith:the elevator is already gone to the top floor. And it's everyone's got out of it half an hour ago.
Carl Widger:Excuse me, let me finish. No, I would never say that in the supermarket. I would go to the supermarket because I just hate shopping. So I've never had that conversation supermarket but out of barbecue. I clearly I've never seen that. So that's the big reveal to all the matters to
Alan Smith:say not as I do. Yeah.
Unknown:barbecues in Ireland.
Carl Widger:Yeah. Four or five. That's four or five? Well, that's maybe four or five more than Nick is invited to. So this is true. Yeah, I would say something like, look, we do a little bit like what Alan says, Yeah, we do. Wealth Management. We do investment in pensions, but we do it a little bit differently. Because I think that everybody has a burning subconscious question in their mind, which is are we going to be okay, and we were able to work that out the one time. Yeah, so yeah. So I got there in the end, guys, despite the fact that you were all gobbling up my first effort.
Nick Lincoln:You love it. You love it. You love it. Okay, so that's the TRAPPIST questions done, I think I think without any further ado, we can move on to culture cool. And Carl, we're gonna lead off with you. Your one Brad Johnson formerly of elite advisor blueprint has a new podcast out do tell us about it young men,
Carl Widger:but Well, I can't because big reveal again, right. I haven't actually listened to any of this. But I didn't do to the show notes because I follow Kristin Shay. You should link over Kristen cuz she's just absolutely brilliant. I've put our Twitter handle in the show notes along with Brian Uh, I was I loved, loved loved Brad's lead advisor podcast is what it was called the previous one. It was absolutely fantastic. And again to Amelia and anybody else starting their journey, and are looking to kind of grow your business, just go and listen to all of those. I think it's absolutely fantastic. So I will I have them downloaded, but I haven't listened to any of the latest, the new ones that Brad has launched. So looking forward to that.
Nick Lincoln:Okay, cool. Well, I've done the whole book for you, because I saw, I saw this in the show notes a few days ago, and I have down here, it's pushed out five episodes today. And I've listened to the first one. And basically, he was a former regulated investment advisor and in the in the USA, he's actually given that up completely now to become a consultant to other to other to other advisors. So it's a big transition. And I think it'd be a good series. Interestingly, with podcasts, you know, if you, if you get a magazine or something and it comes every every week, you suddenly notice if you don't get it, right, when it comes through my three stops, you can't notice it with podcasts when they drop off. And they don't publish episodes. I never realized, you know, you just don't unless there's a real real favorite, the elite advisor blueprint, he stopped doing that in July 2020. It's almost three years ago. Yeah, kind of even. Because they'd like it. You know, it's one of the ones I dip in and out of depending on the subject matter, but it's just really helped podcasts and just just slowly get out of your life you don't even realize so thank you for that. Thank you for that one called my culture corner is a book that I think Andy mentioned at our peer group. One of our peer group meetings that myself and Alan go to the book is called unreasonable hospitality by a will good era. Really interesting guy. You know, Manhattan, New York, the restaurant scene is ultra ultra competitive. Okay, top class dining places expensive. They're all desperate to get their Michelin stars. It's a mad mad world. This is a really good book about how this guy will get Daraa helped with this with this partner run 11 Madison Park and got it up to three Michelin stars and just how they went out of their way to give just unbelievable hospitality. And you don't have to like restaurants to to enjoy this book. It probably helps. But the lessons learned as well can be any service industry can pick up on what this guy talks about just going the extra mile and surprising people a basic thing. These diners were parked their cars up metered car parking because it's hard to park in Manhattan have their meal and have to go outside now and again to top up the meters. And he said no, what we'll do, we'll we'll just get the keys from the customers or whatever it needs to get into the car and move and or they were just the restaurant staff would go out and top the meat they say which car is yours, Mr. Mrs. diner, and they would go out and top up the meters on behalf of the customer. So they wouldn't have to leave their seats and ruin their diet. It's just a small thing like that. And then there's loads of things we just wow people by doing the unexpected and doing being unreasonable in a good way with your hospitality. So a really good book. Okay, Mr. Smith, you're next Stuart Bell. And I'd like to say oh, dear consulting. Yeah.
Alan Smith:Yes. Just before I do that, I would. I just wanna follow up that on the book recommendation, again, I've got that haven't started reading it yet. But it kind of reminds me of can't remember if we mentioned this before, this idea of critical non essentials load of ideas that I took out from a guy called paddy Lund, Australian dentist to kill revolutionize revolutionized the the kind of whole dental profession which would you believe what professions and became an absolute sort of superstar celebrity dentist in Australia by doing a similar sort of thing, loads and loads of small but impactful ideas. And we've sort of I think it's worthy of a sort of perhaps a future discussion on this podcast, what are the sort of additional things you could do to really make the client experience just stand out? So that's, that's worth checking out? My, my one is, yeah, there's a guy called Stuart Bell, who is in Australia. And he's asked me, I've been following him for several years. He's asked me to come on his podcast in the next couple of weeks. He is a coach and a consultant to financial advisors in us. And we know that Australia has got a very developed financial planning profession that doing some great things over there. And he has got there's a lot of content on his website. Again, his firm is called Yeah, I don't know how to spell it how to say either Odair AU, D E, R E, or dairy consulting, we'll put a link to it. It's got a ton of stuff and PDFs and downloads and checklists and ideas. So it's really really useful and worth worth checking out Stuart Bell, down there in Sydney, Australia, and one I'll chuck an extra one in which is always I like doing doing this every quarter, the JP Morgan, their guide to the markets, it's just full of just I think really interesting, geeky type stuff. And if nothing else, I totally agree confirms all the information that we know All that investing in the capital markets, investing global equities is likely to give you a better outcome than anything else backed with a ton of information and data. So again, I've posted a link to that in the show notes worth having a look at. Thank you.
Unknown:If you only
Nick Lincoln:read the JP Morgan guide the markets
Unknown:if you only read one publication every single year, it would be the JP Morgan guide to the markets.
Nick Lincoln:Yes, and there are about 80 slides in it depending on whether you're the US or UK one. But there are two slides that always resonate with me and I think resonate with you guys. One is the slides showing the intra year declines. 15% peak to trough is totally average and totally normal. Where do you read that anywhere else? Nowhere. And the second slide is showing the returns of different funds sectors and against the return what the average invest or gets and that's the so called behavior gap and it was just seems endemic and perennial, and is never going to go away despite our best efforts, which is good because it gives us reason to be on this planet. Mr. Hart you have a culture corner section modern wisdom pod with Alex Hall Mozi.
Unknown:That's exactly right. So again, it's another modern wisdom podcast recommendation. Chris Williams interviews Alex Hall Hall Mozi fantastic, absolutely brilliant Alex homos. He is a relatively young, successful entrepreneurs that early 30s He's got some great sort of mental models and ways of seeing the world. Definitely recommend check it out.
Nick Lincoln:Great stuff in there'll be a link to all these items in the so called show notes. I think by hook or by crook we somehow got this job with our friend Mr. Smith in in Kosha Val and various episodes. It issues that you won't did crappiest You won't understand.
Alan Smith:Bring out the jingle it's not the absolute shambles, but it's another
Unknown:I've tried to
Carl Widger:take shambles. I tried to take the stress out of my life. The most stressful hour of every week.
Nick Lincoln:I did my I did my tax return this morning and it's more enjoyable than doing this. And that's that's true. I did my tax return at 7am on the sixth of April. OCD me Not at all. Okay, thank you very much do trapeze for your time and your input please do rate us leave a six and a five star review on iTunes like and subscribe to our burgeoning YouTube channel. And we will see you on the other side. Take care out there folks. Goodbye.
Carl Widger:Bye, everybody. Bye
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