DISCLAIMER: "STORYTELLER" SMITH WAS IN A TURKISH HOTEL ROOM WITH A FAULTY FIRE ALARM. THIS BEEPS THROUGHOUT. ALAN APOLOGISES PROFUSELY. HE KNOWS HE'S LET THE TRAP PACK DOWN, THE DEAR TRAPPISTS DOWN, HIS FAMILY DOWN, AND - WORSE OF ALL - HE'S LET HIMSELF DOWN.
In this latest pile of TRAP, the Trap Pack discuss
Links referred to in the show:
Take part in the conversation! We want YOU to suggest topics and questions you’d like the Trap Pack to answer. The best way to do this is to ask them here.
Help us to help you! The more followers we have, the more we can do stuff going forward. So please:
DISCLAIMER: "STORYTELLER" SMITH WAS IN A TURKISH HOTEL ROOM WITH A FAULTY FIRE ALARM. THIS BEEPS THROUGHOUT. ALAN APOLOGISES PROFUSELY. HE KNOWS HE'S LET THE TRAP PACK DOWN, THE DEAR TRAPPISTS DOWN, HIS FAMILY DOWN, AND - WORSE OF ALL - HE'S LET HIMSELF DOWN.
In this latest pile of TRAP, the Trap Pack discuss
Links referred to in the show:
Take part in the conversation! We want YOU to suggest topics and questions you’d like the Trap Pack to answer. The best way to do this is to ask them here.
Help us to help you! The more followers we have, the more we can do stuff going forward. So please:
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 truck 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 what many people are calling episode 24 of the real advisor podcast te R A P trap. My name is Luke Lincoln and joining me as ever are the three other Horsemen of the Apocalypse and the heart call the voice wager and Alan the story teller Smith. Now gentlemen, we have a show pack full of absolutely nothing. So let's start unpacking it straightaway. Andy, give us three more super high energy review reads.
Andy Hart:Well if you were reading the show notes note you can see there's only two today so here I go get cracking the first one is from Jackie d s. P ws Ltd, entitled brilliant banter and beneficial brainstorming fivestars late to the table, but a great podcast for those interested in joining the financial planning community, those in it and those who wish to call themselves seasoned professionals. I've never really labeled myself as a planner rather than just an advisor. But I know I've always given a service that's different from the norm goes beyond the transaction is about filling engagement and being involved in all aspects of the client's lives. The value both ways is enormous love the podcast especially because now I don't have a big network of fellow advisors. Perhaps a bit of girly input wouldn't go amiss in the future. Always happy to add a feminine touch keep me smiling guys. Next up is Dirk. We call him lunch club Dirk all the way from sa South Africa five stars again, the real deal podcast for real financial planners really enjoyed isn't this Bogarde on my hour long drive into my office in the city. Years of experience common sense and lots of humor from the track team. Make this a great lesson and the best bang for buck especially for active and young planners who wants to improve their art. Thanks for all the track team for giving back to our wonderful industry so generously and in such honest manner. Let's hope we finally get to have that lunch Lunch Club duck back to your boss.
Nick Lincoln:Thank you Andy. Yeah, the first review was I think from Leah that's Amelie as well. Mum. I think Jackie is Amelia is mum. Earlier our guest hosting a couple of episodes ago on the reviews. Trappist if you'd like to not compulsory, don't have to be leaving a review. Would you mind going forward just dropping your Twitter handle if you're on Twitter at the top of the review, because that way, we can link to your review in the show notes. And it helps us to identify who who the reviewers are because it's it's normally fairly anonymous. Don't have to do it. But it would just help us if you could do that going forward. Now. The wonders of technology. Mr. Smith, where are you? And how are you? How are you running your business from where you are?
Alan Smith:I am in wonderful country of Turkey. I'm in Turkey I'm on the in a hotel on the beach. And they've kindly led me there an office. So I've got my laptop with me. So business as usual, gentleman life carries on, which is an interesting topic. Before we we sort of open that up and talk about a bit more, which is kind of, you know, do you when you are on holiday? Do you close the shop? Do you continue? Some of you guys are running sort of solo practices. We've got a few people in our team, so what do you do, but I think there's an interesting connection here because I am staying I'm here with family wife, kids, and we are staying in this hotel. And we very first came here, you this hotel that we stay in is not on the tourist map. It's not that you can't sort of you can't generally, you know, access it through kind of what you know, Thomson holidays or whatever. In the UK. It's a bit obscure, kind of hard to find hard to get to. But there's a reason that we care. There's a little story behind this so you can pull yourself a quick drink on bear that won't be that long. But I first came here 12 years ago, and we'd be coming every single year obviously with the exception of what's it called Nick that Wuhan flu episode where we didn't come out to Wuhan. bedwetting. Yeah, yeah. So apart from that we weren't allowed to travel. We've been coming here every single year. And the reason for that is about 12 years ago, a friend of mine known to us all poor onsen, he, you know, he's, he's famous for having this this huge yacht. He's got a beautiful yacht oyster. It's and it's and it's, I don't know what it is still is but it was moored out here. And all those years ago Paul said, Look, do you want to come sailing as a few of us, we're gonna go sailing on his yacht. And we'll have an undo sort of business, you know, chew the fat, talk about issues, challenges, and give each other and so about four or five of us went on this boat trip all those years ago. And so in its support, invited me to want to come sailing for a week. And I thought, Yeah, I'd love to. And so I went home told my darling wife, now you guys know the beautiful Scandinavian, my other half she listens to this, and in classic Catarina style. So I said, Look, is it okay if I go sailing for a week? And she says, of course it is darling. But what's in it for me? And so I said, Well, you can come as well. So what happened Paul had discovered this hotel that we're staying at, because he came he sailed to this hotel once he said, beautiful little hotel, and his partner and him went here. So I think they stayed here had dinner had a drink. So he told us about I've never heard about it before. So I with the whole family came across, I think, Sean, my son was just a baby at the time. And we came here. So I dropped them off in this hotel, and literally dropped my bags or dropped them off. And I went off and got a taxi to the marina. Paul picked me up on his dinghy, and we went sailing for a week and we had the time of our life. Fabulous is a fabulous parts of the world, just the sailing around all these sort of nooks and crannies and places you can't access other than by boat. And we had the best time. So I came back after sort of best part of a week sailing, and met Katrina and said, So how is it she said, this is the best place I've ever stayed at. And it's and so we've been coming here ever since. And I think is quite interesting. People often say to me, why do you go to the same place year after year? There are so many places you can go on holiday? And the answer is it just works. Everyone likes it. I love it. wife likes it. Children like it. We used to bring my mother in law. She loved it. And it's just one of these things that it just works. And I just thought there are some similarities. This is my tenuous link. There are some similar similarities with the investment world. Because he will say, people say, I've got some more money into a vet to invest. What should I do with it? And we say the same thing. Put it in the same What have you got anything else have you got somewhere else you got something more interesting was, so we go back to the same place. Of course, we take other breaks and other vacations and different parts, but we basically found this thing that just works year after year. And so we keep doing it. So that's where I am at. This is where I'll probably be again this time next year. Inshallah, God willing. There we go. Next.
Nick Lincoln:Excellent. Thank you. Thank you. And you're right, that was extremely tenuous, but well worth well worth waiting for. Okay, and we've got quite a few topical tidbits for this episode. So if we say something, don't feel obliged to comment chaps unless you've got something of value to add. So this next point might be might be a case in point, we're thinking Trappists, about having a live a live event. In 2024. If we can tie it around episode 50. It will be this this kind of time next year. So in the so called shownotes, I've knocked up a Google form. And if you would like to come to a trap live event, just simply leave your email and name it. So we just want to get an idea of the interest that's out there and say, to please let us know. And then we can start planning for it. It'll be shits and giggles. We'll maybe have some special guests. God knows what we'll do. But it'll be fun. Audience participation trap live 2024 for the 50th episode, maybe this time next year. Okay, Mr. Hart, Google reviews?
Andy Hart:Yeah, so Google reviews, obviously is a is a big thing whilst building a business. I've got quite a few of them. I can't remember how many I think you've got quite a few of them. You Nick, I just thought I'd bring it up. And if it's gonna be a quick subject, or a bit more of a detailed subject. So yeah, I try and remind myself to ask clients to leave a Google review. It's quite quick. I think they just need to have a Gmail account. And I know some other advisors quite hot on it. Things like Google Maps, and just generally searching on Google to find a financial adviser in your area is quite a common thing. So yeah, anyone else got anything to say on Google reviews?
Nick Lincoln:I did go through a phase of asking clients for Google reviews. And I just fell out of that phase. So I don't I'm not really I've never used them. But you know, I don't vouch for them use any of those ones. I don't, I don't have particular strong view on it. Either way.
Alan Smith:That we've done the same week, we went through a spring we got about I can't remember maybe 2025 or so. Then we then we feel Yeah, but then we forget that we forget about because the last one is probably a year ago. I don't know if that's even worse. If you got to load them. They're all dated on me. So then you get a bunch of them at certain time and then you don't get any for a year or two. I don't
Nick Lincoln:my reviews are all five star and the more I asked husband to get one that wasn't just given the podcast reviews, actually what you're back to five, five out of five, which is amazing, like 100
Alan Smith:from my podcast, which was yeah, thank you. Andy Hart publicly gives you a one star review
Andy Hart:Nice friends.
Carl Widger:You can't undo that once you give a one star review, right? So if someone thinks that's funny, can you
Andy Hart:change maybe arthralgia going on for about two hours at a pub one there, but it's five star record. So you know what I'm gonna go home after a few beers with friends. But I apologize publicly to you. But it shows you all good podcasts as neither one.
Carl Widger:How we got the podcast back to five out of five when we didn't someone leave us a one
Andy Hart:star and it brought it down to the closest was 4.9. But now we've got so many five star reviews. The closest is now five which is very, very rare. But yeah,
Unknown:okay, so interesting. Okay, it is.
Nick Lincoln:Right. What else? Okay, so the Center for Policy Studies, which is one of the many gazillion think tanks in the UK put out a report, I think it was last week saying that. In the UK, there's 1.8 trillion in cash savings, and a further 300 million in national savings and investments. And it was really just well as as real financial advisors, we know the tragedy of having that much amount of money in cash that people generally defer to go into cash ISIS before they go into stocks and shares ISIS. That is very difficult in the UK culture. And I imagine also in the Irish culture to if you want to get take out a credit card, it's a couple of ticks. If you wanted to invest in stocks and shares, it's a whole plethora of regulations and hoops to go through. And the UK is now way behind other European countries in terms of how much return investors have. In in shares. It's 21% of the UK public compared to 28% in France, and up to 84% in Spain. So again, just just just the tragedy of the masses real isn't it 1.8 trillion languishing in cash, bad enough at bad enough trendline inflation, but when inflation is double digits, you know, it's just an absolute destruction of wealth on a scale that's hard to imagine. So this paper is trying to walk in and trying to say let's get people back into shares the way it wasn't the ages and so forth. But good news selfishly good news for us aid because our calling is still there are people nice, despite the fact we bang on about it forever. The ignorance is widespread, the disease's is pernicious, this this idea that cash is safe, and a good place to have your money. Any thoughts on that Genesis, we'll move on.
Andy Hart:Cash is certainly a topic now we're discussing a lot more with clients, because the returns are so much higher, you know, fixed rates now are astronomically high. I know still, they're below inflation, and hopefully they're below investments, but it's certainly more of a topic. Certainly with people that run businesses have got cash in businesses and also, you know, private cash. So it's certainly become more of a discussion point with clients when it was zero and nobody was paying anything, it was just a move on from it. Whereas now, it certainly is more of a discussion point. And it's continuing to sort of evolve as the variable sort of change. So yeah, it's certainly something I'm taking a bit more of a keen interest in. But your points are valid, Nick,
Alan Smith:surely, surely. It's just a question of identifying and understanding the purpose of cash. Why does anyone hold cash? We know is it's it's access and liquidity short term. That's that's all it is. Therefore, we know for certain over any period of time, and certainly after tax and inflation is a guaranteed locked in erosion of capital erosion of wealth. But we
Nick Lincoln:know that Alan but the the you know, the ignorance is is enormous. Most most people don't know that. And most people will leave a significant amount of their wealth in cash, not just for weeks and months, but for years and decades. Just just utterly, definitely a confusion about what the real risk is. And then I'm being told all the time by the culture that the great companies of the world are, are risky, you know, this, this whole thing of confusing volatility with risk, which we know is not but we're a tiny, tiny sliver, even within our profession where you could say that we're, we're a segment we're not the professional mess, there's still you know, careful how I word this, but I don't think not not all advisors think the way we do by a country mile. And we're, you know, that's already a small slice of the UK population. And we're just a slice of that slice.
Alan Smith:You see that thing? I see what I posted on LinkedIn as a few weeks ago about comment was that that the name of that lady who's super celebrity on Countdown, right, and she's, she's got a master sexualize Rachel Wiley she's and she's got a master's in advanced mathematics from Oxford or something like that. And she is she's really really clever there's no there's no question about it intelligent in Thailand I and yet she she was what you know, one of these what I do with my money articles in the in the Sunday Times and she said, You know, it's all I don't gamble so I don't invest in stocks, you know, I've got she says, I own a property I'm gonna pay off my mortgage or something. And I just posted that and there was just so many comments in support of us saying along the lines of football the stock market is just gambling. I'd rather just keep my cash flow thing and this There you go. Yeah, just say this. This this depression that is just gambling is can't save everybody.
Nick Lincoln:You can't see what I say. So there's a link to the Center for Policy Studies article in the so called show notes and adequately finished on this link to another article from Yahoo Finance, which says the same thing pretty much in the US that high net worth individuals, which is defined by this report as people with a million dollars or more in investable assets. high net worth individuals in the US held over 34% of their portfolios in cash as of January this year, the highest level since at least 2002. So that's normally a screaming buy signal to pile into equities, if nothing else, because at some stage, this money will rotate back into risk on assets. See, I can talk like an investment manager. It's just bullshit. Bingo. All right. What's the next thing on the list? Mr. widger? You've been quiet so far. But you've got some talking of BS 24/7 Hustle?
Carl Widger:Yeah. So I don't know Twitter for me at the moment is I'm, I'm getting a little bit disillusioned. But I don't see your accounts. I've mentioned that before, right. But I'm getting loads of these guys telling me that they're getting up at 6am. And they have a list to do. And they get through the list. And they do it every single day. And that's what success looks like. And frankly, I think it's horseshit, I'm sorry, but it's like, you know, life happens. And some days you're just busy with other stuff you can't get through your to do list. And for me my to do list is like I Andy correct to be on this analogy before, but it's like painting the Eiffel Tower, right? Because once I'm finished, I have to start all over again. It's just never ending. So me trying to get up and get through it to do list. You know, every day would be pretty pointless exercise. But I just as well think I did reply, and I got a few likes and comments on it. To say, Well, what happens when you just wake up and you're just feeling a little bit crap? And like, I'm not suggesting that, you know, every day your IV little bit crap, so I know got to do all the right things. But But I it's just driving me mad. And it's all these guys who I'm probably just jealous, because they all have six packs, and they're all probably 27. And they're putting this stuff out. Honestly, right. I think it's a little bit counterproductive. And I think it can it can get into people's heads that oh, you know, if I'm not doing this, I'm a bit of a loser. And then that can be a self fulfilling prophecy. And you're just kind of stopped trying to do anything. So it's like, for me, get up, do your best each day. But some days, you're just not gonna be feeling it. And yeah,
Nick Lincoln:it's all this social thing, isn't it? It's not the face, but the Facebook life. You know, on Facebook, you got these perfect families. Everything's fantastic, when in reality, she's doing a cupcake and he's into boys. But you know, it's all performative. So performance I in my day doesn't start until I see a picture of raw chars Jim. Yeah. We love you. We love you. Okay.
Andy Hart:Doesn't does it very impressed. Yeah.
Carl Widger:Yeah, I was probably when I tweeted that and put it into the show notes. I was probably having one of those should Would you just shut up?
Alan Smith:I think that's perfectly valid cop to to give yourself permission just to say I'm not up for it today. Yeah, every now and again just said, yeah. The fancier
Nick Lincoln:days become months become years that you might just
Carl Widger:two and a half years in, I'm hoping to turn the corner.
Nick Lincoln:You can do it. This is the year goal. This is the year. Okay, Mr. Smith, the power of boring, repeatable success strategy and you've even storytime that?
Alan Smith:No, no, no, no, no, it's this. I've kind of talked about it.
Andy Hart:They said in the chat to move on. We talked about what you do in the summer.
Alan Smith:Yeah, we want to call this point.
Nick Lincoln:Okay, fine. Okay, the high performance podcast, Carl now has an app.
Carl Widger:Yeah, so I've spoken about the high performance podcast probably way too much. It's my favorite podcast by a million miles. This is stuff I listen to these guys. Right? Because these guys do interviews with, it's not only sports people, you know, it's kind of well known people and how do they, you know, I suppose get to their goals. And he's good. And he's gonna try and you know, be seven and a half, eight out of 10. Everyday, right, as opposed to you don't have to be 10 out and anyway, does some absolutely amazing interviews on it. There's a back catalogue there have over 200 episodes, I would highly recommend you go back through it. But they've recently launched an app and the app if you want the code to download to be one of the pioneers for the app, listen to episode 200, which is with Dan Carter, which is really, really good. And highly recommend that but they give the code which I forget right now for the app in the app and they have lots of other kind of extra things. You know, they do like kind of summary talks of some of the interviews of For example, in the dome character thing that was a live event, so they did the q&a from the from that, I just think the app is really, really good. And the back catalogue there, you know, to have that in one app in one place, I think really outstanding and like it's about high performance, in terms of leadership, but in terms of goals and that kind of stuff. So I think everyone really everyone can learn from it. And I was talking to Alan about this and one of my kids had a little bit of a setback in their sporting careers. And I you know, there was there was great learnings from the diamond character episode, so yeah, look really, really good. I would highly recommend everyone downloads this app.
Alan Smith:That's my culture corner gone. Thank you very much.
Carl Widger:No, no, I I kind of put this shownotes Yeah, no, I did look at the show notes. And I saw Alan had robbed my culture corner. So I said I'm gonna bring this topic
Nick Lincoln:you having a good day today call well done. We love we love each other really? Bastard. Mr. Smith, Jr. is a no fees. Yeah,
Alan Smith:well, it's this is just a little thing that I learned this week. It comes from a slightly boring thing, but I think it's quite good. I was because I've got more time because I'm on holiday. As you do, I was checking my kids, Junior ICER accounts, which are Vanguard, Vanguard, Junior Eisah, in whatever global equities, obviously, small cap something or other. And I was just, I was just I was sitting doing a little chit chat with my 14 year old son. And just explaining because it's so you know, how it went, how the values gone up, and what it gives that basic stuff because I think he shows the top 10 Holdings. So he owns a little bit of Apple and Amazon and Tesla and all that sort of stuff. So it's quite a nice little thing to have a chat about. And he's just quite fascinated. So I posted something about that on social and on Twitter. And somebody came back and responded and said, I'll bet you could have done it I said it's amazing. It's almost it's this is sort of heart ism is financial magic is the closest thing you get to magic. You can own a little bit of these, you know, world class extraordinary businesses, and for practically for nothing, and you know what it's like 20 Point to do or something 2020 Odd basis points. And somebody came back and said, Well, you know that clever because you could have had it with fidelity. So I went on a check fidelity, I didn't realize this, but for junior ISIS fidelity, have zero charges. So there's there's no fees at all for them. And you can actually have good they've got they've got Vanguard funds, you can actually buy a Vanguard fund for lower cost than you can buy Vanguard directly. And they've got all the other kind of fidelity global equities. And they've got one they advertise it says our funds start from five basis points. I couldn't find what which one, it was at five basis points, the ones I saw were about 1111 12. So if you really are looking for a super, super low cost, Junior Eisah for your kids or your clients, kids, it looks like fidelity. This is obviously not advice Do your own research. But Can I
Nick Lincoln:Can I stop you there those that that no fee deal doesn't apply to advised clients? There's a different charging structure for advised clients.
Andy Hart:Fine. Yeah, good. It's
Nick Lincoln:nice. Okay, thank you for that. It's the heart flexible ISIS.
Andy Hart:We're just following on from Alan's point. So you're telling me that you didn't do an ATR for your newborn children? Wow. You just pick their fun did not funny that exactly why that funny how that works? Yeah, following on. incredibly boring Eisah theme, I've got a client, who's a financial planning client, not an ongoing client. Anyway, this flexible is the thing he needs to draw out about 300 grand temporarily, and then replace it when he gets a bonus in early 2024. And the legislation came in about this. That was going to force every all licensed providers to allow flexible sorry to offer flexible ICERs. And then they changed the rules right the 11th hour and said it's optional. So basically, almost nobody is is done it and stocks and shares ice has been flexible for D to C, almost none of them exist. All the providers that you think would do it HL interactive investor, AJ Bell, they don't. I think Vanguard is the only one who's DTC that does it that you'd actually want to become a client of, there's a lot more that do it on the advise channel. But yeah, I just thought I'd loosely mentioned it. I know a few other advisors might be interested in than that. That's it, Nick on my flexible Eisah talking as anybody's got point on that.
Nick Lincoln:No, that's fine as ever Transact I think, brought in pretty much the day after legislation was introduced. But I know some big companies like AJ Bell, and Aegon are on it when it was brought in two, three years ago, just under the junior marketing fund. This morning, I had an email exchange with a client because their daughter is turning 18 soon and he said to me, she's got this junior Eisah, which I didn't set up I inherited that I think Junior ice is the work of the devil. He said, What happens at age 80? And I saw that I don't know. Let's find out. So I'm going to find out shortly what happens with you know, because obviously then becomes the daughters now, is she a client of mine, you know, because I no longer sort of nested under the under the parents auspices? I don't know Gotta find out can't wait.
Andy Hart:June writers nook
Nick Lincoln:because they revert to the kid 18 There is a chance for them to sort of test themselves in the military to spunk it. Now maybe or maybe not most. Maybe your thanks. Yeah, obviously maybe or maybe not. But I think it's a pretty poor idea most husband and wife 40k ICER allowance every year most people off the mortgage and taxes aren't going to use that up if they've got young kids have a sub Eisah in the parents name, but urgent one watching to watch and do it again on Transact couple of clicks. Dead easy dice is a stupid idea. You've got a void test user group, my friend on the 12th of August.
Andy Hart:Yep, very quick note on that. So the volunteers user group, we used to do it probably twice a day, and we used to be face to face. And then we move on to zoom and it probably works better on Zoom. And there's a shedload of new changes for voyant go, lots of new features being added into the system, the gift that keeps on giving us such anyway, on the 12th of October, me and you will be hosting the next point is user group. And if you want to grab a ticket, you just go to the voices.com on the homepage link or voyant mastery and again, it's on the homepage a link. So that's it for that. Okay, you and I you and I will
Carl Widger:be hosting. Do we do we charge for advertisements? No. Or is that
Andy Hart:don't use don't use us. You mentioned
Nick Lincoln:you mentioned downcast for about 78 times over the last few podcasts. I think that's something that you have going on. Mr. Hart IHT UK constituents. And I
Andy Hart:mean, again, this is probably for a wider discussion, but there was a sort of the top 50 Paying constituents with inheritance tax in the UK and I put a link in the so called show notes. So Richmond Park is the number one payer of inheritance tax in terms of a constituency, and then it's Isha. So Richmond Park had 159 households pay this David Hearn put a link on this link about this in on Twitter. Obviously, inheritance tax because of wealth has been created and, you know, estates above the threshold means more and more households are paying it. I think it's got quite increased quite a bit in terms of what the revenue is generated. I think it's way over 6 billion now. I think it's doubled in the
Carl Widger:Did I read somewhere that in the UK they're talking about not having an inheritance tax anymore or something like Oh, it's
Nick Lincoln:it's a it's a think about last week the government may may get rid of inheritance tax. It's just one of these ideas that's been floated in the media. I even this shambolic government. I can't believe that that Craven has to do that just to get going. It's only like 6% of the UK. Population pays inheritance tax anyway, so it was such a it does raise a few billion. Yeah, it's not
Andy Hart:over 6 billion. Where I live is number number 10 on the list on the list. pinner, Northwood excetera. Obviously, it's a lot of the the lameness bar is caught up.
Alan Smith:That's quite a it's quite interesting list, isn't it? I think that is a marketing idea if you just target mailshot inheritance tax planning, in Richmond Isha
Andy Hart:Finchley, vengefully Golders Green Bekins field. Yeah, these are all
Alan Smith:the Hampstead and Kilburn. Boom, there we go. Here we are,
Nick Lincoln:is your chance to get in.
Carl Widger:And then they change the legislation said there's no inheritance tax. There goes your niche.
Nick Lincoln:What I'm trying to hurt his tax capital the income tax. Okay, Donald Andy. Interesting. Yep. Okay, and the next one is the final one final topical treatments. We've had loads, but there's loads going on, even though we're supposed to be in the dog days of summer, it's always busy. In this thing of ours. You you put a graph out showing some annuity rates for different ages and how they've increased in recent times. Yeah, so
Andy Hart:the annuity rates have escalated quite aggressively, sort of from mid 2021. To now. So two years, the rates of for younger clients age 60 have gone up by about 60%. You know, there were about 4000 pounds. Now the sort of just over six and a half. For slightly older clients, let's say 75, the rates have gone up by about 35%. So the mighty annuity that was not so mighty a couple of years ago, is having a bit of its, you know, sort of resurgence as such. So it's definitely again, a thing that people are talking about. The rates have gone up, as I say quite quite, quite considerably. So again, it's just something else that's in the wealth creation mix. You know, we don't favor anything apart from you know, what the numbers tell us and and obviously, what people's lives are going to dictate around the sort of financial products that are available to them. I don't think any of us have set up sold an annuity to a client for many, many years. I think that was discussed in a previous show. I'm sure some advisors listening to this are again thinking about them and this sort of into the mix. I know I'm quite negative about annuities I know knew what you are as well. Well, Nick, but yeah, so over to you, Nick, what do you think about this resurgence in annuity rates and potentially younger clients getting a 60% uplift to from from the bottom?
Nick Lincoln:As you may discuss later on in the show that yeah, they're getting a 6% uplift because the long dated gilt prices come down by 50%. So kind of nets out if you're in long data gilt, which apparently should be just before you buy an annuity I listened. annuity rates have gone from absolutely abysmal to rubbish. Rubbish, still doesn't mean they're good enough. And it's this thing of the facts. As you know, if you have a three decade retirement with trendline, inflation of 40%, all those annuity rates on that graph, after 30 years, they've all lost about 70% of what actually matters, which is their purchasing power. 70%. I know. You know, it's amazing what people will say when their salary depends on it. So you are seeing people who work for Annuity providers coming out and sort of pushing up in the orders now it's and that should be back on the discussion. You know, the the critical yield thing with drawdown and all this nonsense. And now this is the new thing, isn't it? Oh, let's make sure the clients have their essential spend come and it's essential that we get essential spend covered when you're doing client planning and cashflow and so forth. And and I thought about this now, so let's have a let's have a scenario. Let's imagine we've got a lady called Michelle, she's 65, right? And she's come back to me or 20 of us got guys and said, Listen, I've got 60k of lifestyle costs a year 21k of that I designate as being essential that's utility bills, council tax, insurances, groceries, petrol, just a dull stuff, but stuff I have to do 21k of my 60k is essential spend. I've got a state pension of 11k because that's what it is. So I need another 10k A year of guaranteed income to cover my essential spend, I don't want that exposed to investment mysteries. Okay, Michelle, well, you'll be glad to know that annuity rates have gone up so we can secure that 10k for you. As a 65 year old female, really good terms, it's only going to cost you now. 174,000 pounds to get a 10k. Net annuity and she's going Christ. That's a good rate. Don't tell me what the poor rates were. Yes, Michelle, we have to get you have to spend 174k of your pension fund to secure a gross annuity of 12 and a half 1000 pounds, people don't live off gross, they live off net tax is going to come off that 20% Because the state pension is taken up your income tax free allowance 20% of two and a half grand is 10,000 pounds. That with the state pension is 21k year of guaranteed income job done, box ticked and she goes away happy thinking her essential spend is covered. She comes back next year for the annual planning meeting. She got it she goes Nick, it's really good. My state pensions gone up by inflation. So the fact that inflation is 10% is really good when it's my annuity go up. And that's where you have this awkward silence with Michelle, because you got to say, yes, sorry about that. Michelle, you want that annuity now to be 11,000 pounds to keep pace with inflation, but we bought a level of annuity. So you're gonna have to work out which the 1000 pounds of your essential spend is not central, torturous website this all this nonsense about using an annuity to secure against a central spin when inflation will just knock it out of the water. And nobody in their right mind ever writes an escalating annuity, and industries new they are so expensive, you're giving up so much it doesn't happen. So people only ever talk about level annuities, and never talk about the inflation risk. So that's my current beef on a new when when will they become good value? I don't know. But I still think for a 60 year old a yield of 6.4% before tax level, which we'll see 70% of your income, purchasing power lost over 30 years or 4%. Inflation still doesn't strike me as exciting. And then you throw in the fact that as we all know with drawdown and so forth, whatever's left behind, currently, ghosts goes to your partner if he or she goes around and then can go to whoever your children free of inheritance tax that tax again, that was mentioned a few months ago. On this, it's an important
Andy Hart:factor. Because otherwise we've
Alan Smith:talked we talked about this before. I remember saying that there are highly unusual, but you know, more than zero times when they are relevant. And I'm thinking about a rather elderly widow or widower, let's say single person without an estate without children, or something that those circumstances who just want a guarantee that this money will be paid month after month for as long as they're alive. It's it's unusual, but it's not impossible. But point well made. Nick just said on a technical point, you don't pay the same amount of attacks on a if you just buy an annuity with cash purchase life annuity, the slightly more tax.
Nick Lincoln:Yeah, but that's that's kind of sorry, that kind of that kind of suits my argument because the purchase life annuity market doesn't really exist. Annuities only existed because we're pension funds you had to annuitize once upon a time. If annuities were so great people will be annuitize in their eyes is their unit trust their cash. I think there's one provider now in the PLA market. One. It just doesn't happen. People just don't like their pensions because that was them Dems were the rules but out side of that they just were never done. They were never yeah, technically you're right about that. Some of it is regardless, the turn of capitalism is all taxable the same way a pension annuity is.
Andy Hart:Alright. Yeah. Probably reduced. Yeah, about 80% 90%. Okay, yeah. Back to your boss. What's next?
Nick Lincoln:Okay, I think we've somehow managed to get through with the meat and potatoes that have sold the tropical tidbits. So let's move on to, I think the meat and potatoes. This is kind of kind of links into what we're talking about there with annuity rates and so forth. Obviously, they're linked to the price of long dated UK gilts. And a friend of the show, I believe, listen to the show, David Penny, he put out a graph on the interweb. He's at David Penny P. R. WS his firm Penny rather winter, he put out a graph showing the decline of the Vanguard UK long duration gilt index growth fund from sort of late 2020. Through to now it's down about 50%. Bearing in mind, this is supposedly a low risk asset. And it comes back to this eternal question. What is risk? How do we define risk? How do we measure risk? Mr. Hart?
Andy Hart:Yeah, I mean, this is very topical. And lots of people who are in pension schemes that have been lifestyle they've been put into similar type funds before potentially buying an annuity or not. Yeah, this comes down to our simplistic way of discussing risk. But also it is unprecedented. The inflation we've seen in 2022 have not seen since 1980. And then obviously, this is interest rates been historically low now rising up and again, we've had the sort of fallout of the bond price on the bond market in 2022, leading into 2023, to evaluate 18 months of generally declining prices of long term bonds. Yeah, it boils down to discussions, frank discussions with clients discussing with them what real assets are, real assets provide a rising income and rising capital value over time, the only asset we have access to as professional advisors, in my opinion, is global equities. The other asset is real physical property provides a rising income, rising capital value over time, there's been a lot of super cautious investors that's been absolutely hammered by the erosion of their capital. I believe there's four flavors of risk. There's loss of capital, there's loss of purchasing power, which is inflation, there's volatility, and there's low returns. So they're four different flavors of risk. But what most people and most attitude to risk questionnaires and conversations about risk focus on is purely volatility. And I look at 100% global equity portfolios from various different providers. And I don't even believe that that even volatile once you sort of understand what you're holding. So yeah, there's been huge destruction of people's wealth, who have been classified as Ultra cautious and cautious investors buy attitude to risk questionnaires, and I suppose inexperienced investment professionals? Yeah, I mean, about 80% of the money I look after is in global equities, because the money I look after is long term money for people building long term wealth, maintaining their purchasing power. I've been on a bit of a journey with this, when you first come into the business, you think these attitudes or risk questionnaires are the be all and end all and you have to follow them, they have to answer the questions, and you have to build a portfolio following from it. I've been schooled and educated by the investing greats, Warren Buffett, Charlie Munger, Nick Murray. So I've slowly become more and more and more and more pro global equities, which I believe is an absolute one, that asset class and a miracle. Volatility is the admission price to long term wealth. So yeah, I'm somewhat concerned that my mighty profession has let down a lot of people who are classified as Ultra cautious and cautious and wiped out a huge percentage of their wealth from something they thought was almost impossible. The key word there is almost so yeah, we've we've seen something that's not happened in about 45 years or something like that. Not in my lifetime. So yeah, it's a I think it's a it's a big issue. Yeah, and I'm quite passionate about it. Who's next?
Carl Widger:I have in the last 45 years, not in my lifetime, because clearly none of the rest of us can say that. But yeah, look, I brilliant, brilliant stuff. Andy and you absolutely nailed that. And Nick, you absolutely nailed the annuity argument as well. I mean, they're, they're like, that's just gold for so many people. So well. I look I would say, as you all know, we use the dimensional word allocation funds. Now obviously, word allocation means a mix between equities and bonds. So do we recommend to our clients are bond holding, in the vast majority of cases, yes, we do all albeit some are in just a word Equity Fund, which which I'm in myself. I like your point, Andy that there are some the attitude to risk questionnaires, right, we've kind of learned and developed along the way that look, no matter really what the answer is come back out of that, we got to go and look at your financial plan. And then we got to talk to you about you know, the types of returns that are required in order for you to live the life that you want to live. So, for me, the people who are in you know, where attitude risk questionnaire has come out, saying, oh, you should be 100% of bonds or 80% of bonds. For me, they're the, they're the people that you got to talk about, you know, volatility is the is the key here, it's not risk of losing all your money. So if you're not willing to put a more sizable chunk your money into equities, well, then maybe you shouldn't actually be an investor. And maybe they're the clients that you gotta, you know, some people you just can't, you know, the education piece that you're trying to do, it just won't get through. And you will do them a disservice if you know, you're going to invest them in 100% bond portfolio, or if you invest them in a 80% equity 20% bond portfolio where when volatility kicks in, they're going to take the money out, right so so sometimes you got to be brave enough just to say you mister missus client should not actually be investing. Right. So So that's the first point you'll save is not invested. Yeah, exactly. And just some people are gonna be like that. Now very few. Once you've if you're doing if your processes, right, and you're doing the financial planning, you know, properly and you're taking the time to do that coaching, educating bit, right. So you know, there's very few that what you kind of say, No, not for you. But But what I do like guys, right and a half to say this is number one, you know, bond returns over the last while yet we know they've been terrible, right? So they haven't done what they were supposed to do, which was kind of smooth out a return over a period of time. But but that's in the recent past, right? History tells us right, so go back to what we just talked about, we invest in what has always worked. So history does tell us that it'll actually will work. If you look over over the long term. And I go through the I spoke about this in just the last episode, I go through the dimensional returns page. So it shows the lowest one year return for 6040 for an 8020. And for 100%. portfolio. And, you know, people wince when you show them a minus 39 or a minus 40%. You know, they have, it's all well and good telling me that you gave me a million quid and I'm going to show you next year, if you're in the world equity in it have that lowest one year return, your value is going to be on paper 600k is not going to be okay. Probably not right, even though I'm I know what's going to happen. And you've told me it's going to happen. So that's why I do think like we are better getting people in ATS at a reasonable level, they're not at all. So I think the human behavior thing does come into it, albeit yet to have bonds done their job the last couple of years know that the answer is they haven't. But having said that I'm confident over the long period and Alan's phrase, we're multi decade investors, you know, over that period of time, they will do their job. So I'm confident that having some level of bond content is the right thing to do. So yeah, we're comfortable in doing that. But but but your points are really really well made. And yeah, I think this is a great discussion to have, because it's important just to open these things up as Nicolas
Nick Lincoln:Okay, I'll be quick. So I'm gonna segue to Alan but I think this is the tip of the iceberg and and it when we were prepping for the show, yesterday, TRAPPIST, we do prep for the show, you wouldn't know sometimes, when we were prepping for this show. Alan made a comment in the in our agenda that ambulance chaser claims companies are going to have a field day No, I think this is really going to take off. I mean, I I can only imagine how many advise clients there are in the UK and in Ireland, who 1015 years ago put a significant watch of their bonds and bonds do have a place but these cards would have put a significant maybe a 5050 portfolio or a 4060 portfolio in bonds. And they're now sitting on massive declines in value. They were putting those portfolios because the compliance thing said Tick, tick the attitude to risk questionnaire they tick the various questions. I will come to you and I'm sorry, I can't live with it was humans in the management 2018 or 2019? Where I said this phrase mumbo jumbo question is because I was I was doing a riff on the inanity of compliance driven investment solutions. And it's kind of entered the lexicon a bit now I hear people say MJ queues and mumbo jumbo questionnaires. They really are mumbo jumbo questionnaires, and they they, they they've led to a lot of bad outcomes. I think it's really good that we're going to see I think we're going to see this ambulance chasing thing. Go on because these you know that Vanguard long dated, okay, it's an extremely long duration guild, but that's fallen by over 50%? How long is that going to take to get back to where it was? And these people that are putting there with the nervous investors, they are going to, if I was a nervous investor, and I saw more, you could speak to me all day long about it, I am not going to be happy. Alan, what do you think?
Alan Smith:I was getting a bit uncomfortable there. Because this episode so far was we've all been agreeing with each other, next bit nervous to agree with everything. So I'm going to take the other side, and of course, that what everyone has said is all is all spot on. We're looking at extremes here, you know, if I hope not many people, if any, are 100%, in that, you know, Vanguard, or any long dated gilt fund, maybe some on you know, it's going to help them it'll take a long time to recover, if you fall by 50%, but you got to rise by 100%, to get back to where you were so, but we do have to recognize that we can't have it always. And just to sort of, I suppose follow up on Carl's point, we do the very fact that we say we're multi decade, investors, we can't get too excited by one year or half a year really have extreme circumstances, call mentioned the dimensional matrix book. I've also looked at the, you know, the the other great publication, and then the new one has just come out again, you know, the JP Morgan, markets quarterly review, but I was just looking at the data on that. And so they go back to 1976. And it shows you how extreme last year was in terms of bond returns, the actual data is that investing in bonds, they do a kind of the Bloomberg us aggregate, which is obviously a blend of different duration, and quality of bonds, but it's a decent proxy for bond investing. And they say that it is it is it has provided positive returns in 42 or 47 years. So to provide a bit of ballast to a portfolio is not necessarily a bad thing. Yes, there was one year of extremes. But bonds I think can have their place do have the place even if only to manage human beings and human emotion. So that's just that's just one point, I think the bonds have got a place in certain circumstances. But the other thing, and this is just opening up the conversation, I'm interested in your guys your guys's view on this car, you mentioned the point before that everything does of course, begin with the financial plan. If you model effectively the return a client needs to achieve all they want to do for the rest of their lives. And it says let's say it's a pretty modest return it's three or 4% or something a year, they could achieve everything. You know, give me an argument why you would invest significantly in equities, if you can achieve everything you want to do for the rest of your life with taking accepting less volatility,
Carl Widger:good, good point. And it does happen. And you know, we can say okay, well, you, you only need a return of you know, 2% to, you know, live the life that you want it to lead. But I only made the point a couple of episodes ago and I love it, you know that we shouldn't be afraid at same time of creating wealth. So and the way and the reason the way to create wealth is to have a higher exposure to equities. So whilst your return might be required as 2%, and it's all about financial planning, well, then you start kicking in when people have more than they need, well, then you start talking about legacy issues, right. And it's about passing wealth and that kind of stuff, but we shouldn't be afraid of creating wealth. Not necessarily maybe for just for wealth sake. Right. But but to you know, embellish your legacy on your family's, you know, nest eggs down the line. So, but, um, we have had cases where we only need a return of three or 4%. So, you know, well, that's a 4060 portfolio over the long term. So, like, you know, we'll talk to the clients will tell them what they need, and then we'll have that discussion. But I think all of this is about I minded by Nick's mumbo jumbo questionnaires that you know, if so are ones go from zero to seven, I don't know, maybe it was zero to 10. But you know, if you come up with a two, this is why tracker bonds are sold, right? So if you do your mumbo jumbo question and it comes out to Oh, you need guaranteed returns, so you go into track one, so not only are mumbo jumbo questionnaires pretty bloody useless on their own, they also lead to bad behavior. But the easy option for some advisors and this is my final point is is, you know, this is all about the financial planning process is a process. You can't rush it, you got to take your time and you got to if we're if we're really going to do right by each client family, we've got to take our time and therefore it's not about the sale that comes at the end. It's about what's the process, it's the coaching, it's the education, it's bringing them on the journey and all of that kind of stuff. So hope hope that kind of have answers that if not come back.
Andy Hart:And a couple of couple of points I'm sure that that you can explain guilt fund is probably now a set than out of seven on whatever scale they deem important. And it probably went from a one out of seven to a seven out of seven. So that shows how ridic Oh, the LNG index link guilt tracker. Yeah, so that shows how rugged is the 100% global equity portfolios are now generally four or five out of seven on again, whatever scale you deem that to be important. I've said it before Yeah, the best portfolio is the one that clients sticks to, I'm also got no problem with creating wealth and only create wealth, you just spend it, you know, recklessly, but more wealth equals more freedom, more opportunity. And our financial plans don't include the unknowns, the medical emergencies, the helping out the families, the divorces, the kids, like there's so much, we can't just go Oh, in nine years time, you're gonna need 500 grand, something just come complete left field. So a point so I'm, I'm comfortable with a predominantly, you know, more global equity portfolio and the client would end up with, I mean, I call the misconception mirrors client fills in a questionnaire they've got that, you know, there are financial and investing illiterate, they come to us for help. And we give them a misconception mirror, fill them up with financial anxiety and then put them in a badly performing portfolio. I mean, what's the point in working with an advisor, if you're going to end up with a portfolio that you as a, as an investing illiterate would naturally end up with? I mean, we have to put some Yeah, yeah, are a huge proportion of you're working with an advisor, they're holding your hand, they've built you a very diversified portfolio in the right asset class. And when you are a little bit nervous, you can give them a call, you don't have to push the sell button. So working with a professional advisor, and holding your hand over those multi decades, has a massive impacts on what portfolio you ultimately end up in. And we just need a couple of years of good returns and the clients are happy. Obviously, we don't know exactly what you know, what averages we're going to run into, you know, the average long term return a global equities is about 10% a year, but they do not come in a smooth line, as we all know very well. Back to you, Jim,
Alan Smith:I think it's the it's the value really isn't it's the kind of the one of the core value parts of the value proposition. If you can encourage with your sort of advice, support, information, coaching, you'd encourage your client to just move one degree, you look from a 6040 to an 8020, or something, you've covered all your fees, and the encircling, there's no question about that. And so all this and again, we've mentioned this before, and honestly, but repetition is the mother of learning, you keep saying keep saying the same things. But framing is really important. If you just said to your client or prospective client, you want a higher return or a lower return. You know, that's, that's another way to say, no, I'd like a return please. You can have the high return. It does come with a little bit more volatility, but this is how it plays out. Would you Would would you prefer or you can have the low return fund if you want. So it just, but I just think it's it but I think this is really interesting in terms of this discussion. We're all talking about it here. What's happened to all the kind of the risk profiling zealots what's what's going on what's happens to the companies, I've got to take accountability, responsibility, the ones that
Andy Hart:companies use 10s of millions and buggered off 100% global equity, that's what they've done. Bloody points, even though I know they're worth 10s of millions,
Carl Widger:I think it's a well it's about it's about having the integrity to you know, to continue even when it's a little bit difficult sometimes to do the right thing by the clients, you know, to really, you know, stick to your guns and say no, this is you know, because I don't know if you've these silly structure product things over there and like oh, yeah, there's some now and it's like, it'd be so easy just to say you know, I will stick your million in there where you estimate the dark side and the Commission's on them are much higher than if you do a 6040 portfolio. So you know, it's about having that integrity Stick out your key words. Yeah, and and it's all about financial planning and financial planning is a process it's not a one soft therefore a once in 40 year return and bond funds for me is largely irrelevant but I'm aware
Alan Smith:Yeah, yeah, those structure products they are aesthetically pleasing on the the to the to the non expert. They just sound really nice. He will sort of guarantee your money back guarantee a certain return smooth return smoothies they are hugely popular the bank still selling tons of them
Andy Hart:only available to sophisticated investors. Yeah, which mean aka Richard EITS. anyway moving on.
Nick Lincoln:Yes, like these these sort of get get rich property deals you see on the banners that pop up in a guarantee return of 12% Well if that's true, why aren't you doing it yourself and keeping it keeping it quiet with the structure products you've got to say Well one is your massive PLC just invest all your money and if it's so good, and just keep it away from the return investor, somebody somewhere is having a fine lunch on those products and somebody somewhere else is getting turned over. Have we done that to death? Do you think chaps
Carl Widger:a good discussion though guys and lots of different points. So I think that's
Nick Lincoln:a really want to call your point is well made. I mean, and we talked about this before that you as an advisor, you have to have a set of core beliefs, you have to have an ideology, right? You, you have to go into a meeting with the client knowing that this is this is the way I want this meeting to go. Okay, I'm bringing my my thoughts into this and this is the way it's going to go with this client. Yes, all clients are different but I'm going to bring my beliefs into this meeting. If you've got you know, your your, your a ship at sea, and it's we're being buffeted all the time by news and markets and these waves are crashing over us and we put an anchor into the ocean and we're going to stay pretty solid, the the the advisors who are weak who haven't got an anchor in the sea are just getting pushed and pulled by today's events are, you're absolutely lost. So you've got to be quite dogmatic. I'm not saying that you've got to have views that I agree with, but you've got to have your own set of views and apply them because that will see you through all the cycles if you just change personally, if you try and be a chameleon, you won't you'll be nothing to anybody. You're trying to be all things to everyone and you'll be nothing to anybody and you'll be lost and you'll have complaints coming in left, right and center. On that joyous note. I think I can see on my little nest camera that she is posted dropping off another sack full of TRAPPIST questions. These are questions posted to us by our beloved TRAPPIST audience. There's a pin tweet at advisor podcast in there, there is a link you can click on and you can leave questions we will get to that we're still working through a backlog. I think I'm up to January or February of this year with today's two questions, so please do keep them coming in. Let's have a look here and see who's first on the list. I've got to get my letter opener out. This is from Adam he is on LinkedIn. Adam says thanks, chaps love the podcast, I'm interested to hear a discussion around how all gods are the big one. I'm interested to hear a discussion around how you all deal with IHT planning. Thanks and a thumbs up. I'll go very quickly first, I don't do a great deal of IHT planning in the sense of trust and so forth. I deal with sort of mass affluent families. And by the time you you've arranged their affairs for the pension fund is outside of your state. So you spend everything else down in retirement, a million quid between them husband and wife, the exemption is pretty generous I, I do use a third party for my study using a third party firm called it's not the greatest name because it sounds a bit like a swear words like you know, can hear it. who specializes in trusts and wills. I'm of the mindset that the older I get, the more I know, I don't know. And I'm specialists a specialized down and down and down and outsource everything to people that know what they're doing. If you're doing trusts, do them all day long and make them a speciality and firms like inherit or solid us just do trust. So I've just refer clients to them for people who want specific trust work done and they want to underground for each of the kids to be used for a property purchase later on. But they don't want their money going to their the ex wife or the ex husband or their children should their marriages break down already. I'm going okay, I'm out of my depth refer to a third party. That's what I do, guys. Any thoughts on inheritance tax planning?
Carl Widger:I'll jump in just from the Irish point of view. I know the rules are probably a little bit different. So we use bear trusts for the small gift exemption. So that is what it is we do Royal London here have a great section 72 life policy, which basically gives people the option to take the money back if they say if legislation changes or whatever, you have to pay the premiums for 15 years, it's a joint life second death policy. Often times talking to clients about gifting them the gift into kids their inheritance tax threshold before you know not trying to do it from the grave because kids might need the money earlier. And then we've only a few times maybe three or four done with a tax advisor, set up Family Partnerships, that kind of stuff. It's complex though and you want to know what you're doing and I would engage tax advisor along the way for sure.
Nick Lincoln:Absolutely. I will come to your secondary just remind me I should know this pension personal pension funds in Ireland are they part of the state for your equivalent of inheritance tax are the outside of their state?
Carl Widger:It depends on where you are whether your pre retirement or post retirement. But yeah, most of it is outside of the states so it doesn't it's taxed differently and then you know, it's it's just dealt with and then your estate value is your estate value.
Nick Lincoln:Okay that thank you that changed when it was in the UK when effectively that was put outside of the state was I think the biggest change to taxation in terms of financial planning that I've ever experienced in my career. And uh, you had you had a digit waving in the air. Yeah, somewhat similar
Andy Hart:to Nick. I do spend quite a lot of time actually discussing this with with clients Matheran but a lot of people are now got caught up by this similar to Carl just gonna go through the options obviously the first option is do nothing I think it's quite polarized and people are either do nothing or just do it down the line or pay it you know, I'm not too bothered I've created wealth or other people I don't pay a penny it's very rare that they're sort of in the middle like a nerd you know what we should we should do a bit about this maybe it's always like right I can give a monkey's I'll just keep the you know the issue down the road or I've got a real concern about it and my father my uncle, my mother might you know, had a bad experience with it. So obviously it's do nothing pay the bill. The next step is obviously you Give the money away. We all know the rules around that. The next is insure it, which is comments in Section 72. We've got similar sort of holder life type of policies. And then the third one is a little bit more convoluted, but it gets around trust, bbrss, loan trust and various other things. So it is a huge area in the UK. And there isn't anything. There's no sort of elegant, simplistic solutions around it. So it's something that we will discuss with our clients on a sort of year by year basis, when in terms of actually addressing the problem. Sometimes it's a it's kicked down the road. Over to you, Ellen.
Alan Smith:Interesting, what you say there were, often when I would speak to clients take on new clients, and I asked one of the sort of open questions is, you know, what do you what do you think, what's your views on tax? And almost everyone said that I don't mind I recognize we've got to pay for, you know, all the stuff that keeps us for the police and the teachers and all that stuff. But I don't like inheritance tax, most people have got this view have already paid a ton of tax throughout my life. And it's quite an emotive subject. But a lot of the conversations that I've had, I did have one when having had about 10 of those conversations back to back with with clients or prospective clients. And then I said to this other new prospective client, you probably don't like to pay inheritance tax. And he was he was outraged. He said, Absolutely, you should everyone should pay it. It's our civic duty, which south? Okay. So it does, but that's I think it's the only time that ever happened. Yeah, I think like, like everyone else in the past, I mean, I have set up in years ago, you know, these aim investments you can put out and you they are inheritance tax free after two years investing in aim stock. And just got lucky with this one we did, we invested quite a lot of money for quite an elderly lady, and probably at the absolute bottom of the market. 2008 Nine, and it tried to travel in value quite quickly. So that was quite useful. But then we did some analysis on it on these sort of things later. And actually, they are expensive, look at the fees and charges, they can run to the best part of 3% a year. And they got spreads and all that sort of smaller liquid companies. And you don't have to live too long to sort of to have do returns if you don't have really stellar returns from this. And obviously, it's a very sort of high risk micro company type investments. It's a, it's a gamble that it's probably not worth paying for I don't think are worth taking on. So we don't do much of that. The one thing that hasn't been mentioned, which we have done a few of them really are for more they're kind of, you know, very wealthy, I suppose, or people with five to 10 million pounds of liquid investable assets and above Family Investment Companies. You guys have ever looked into these. They're generally set up by lawyers effectively so companies limited company that you can put a lot of assets into the artery IHT effective, I'm always wary that they're going to be very, very honorable. Yeah. Because they are I mean, they are effective and they do work and you can put a lot of money out besides of your taxable estate. So for those with significant wealth, because it's not cheap to set out, they do cost you know, you're running into five figures, your appoint trust companies got appointed lawyer, there's ongoing costs as tax returns gonna be made. So but it can be worthwhile looking at for seriously wealthy people. Yes, and
Andy Hart:we've spoken about it a little bit. Alan is a lot of these schemes end up just saving the tax but not growing the assets. So we say I'm able to display the assets in a traditional way. And after a couple of years of good returns, you're probably in a net better position, even if you still have to pay the 40% because they do this thing called wealth preservation, which again is something that the wealthy like, which is again, financial madness, but yeah, you know, flatlining your wealth forever, but it preserves it but we'll just to still take our two and a half percent fees for preserving your wealth, you know, Mr. And Mrs multimillionaire. And
Alan Smith:and you know what all this is kind of just seems to me it's the recurring theme of this podcast, all roads lead back to simplicity, effectiveness, you because I agree with you, you just you invest, invest in the capital markets, let them let it grow, you will then have the opportunity to be more and under underpinned by a solid and annually reviewed at a minimum financial plan, gifting your assets becomes a really meaningful thing. And that's a whole other conversation and I have had many of these conversations with clients. In an ideal world you want to gift your assets and your wealth in your lifetime whilst you can see the benefits of your money turn that over to your kids, grandchildren, you know, paying for for grandchildren's education, things like that really meaningful stuff that you can happily see as opposed to you know, some thing that's has you know, some convoluted trust thing that sends money to your beneficiaries after you're dead you never get to see to see that so I honestly I just think the idea keep it simple. We can review all these fancy schemes, but I'd be eliminating 99% of them frankly.
Andy Hart:So look 60 Trust for families and stuff. Sorry card to you, mate. Yeah, no,
Carl Widger:I just on that team, right. I especially for new clients, right when they come in new financial planning clients, and we have tons of work to do in the first year or maybe even over the first Two years, unless it's absolutely top of their agenda about inheritance tax, we always say that's phase two. Phase one is getting absolutely everything set up now get you comfortable with the plan, get you knowing exactly how the plan works. And once we're comfortable, and you're comfortable that everything is working as it should be, and that we can then still see that there's going to be legacy issues in terms of extra money down the line, while phase two is to look at inheritance tax planning. So I would just, you know, after all this is for other financial advisors, that's my experience, if you try and bring it in too early, it adds a lot of complexity for all the reasons that we've just discussed. And you might lose people. So keeping it simple at the start, and just focusing on the real, the real core stuff, and then do that as phase two, I totally
Andy Hart:agree with you call there are advisors out there that immediately look to save clients inheritance tax, and all their focus is on that and the Yeah,
Alan Smith:just I think I would, I would, I would just have a word of caution about that, again, based on personal experience when I had a client who came for us for the sole reason of inheritance tax and I said exactly that said, we'll come to that we'll come to that and he said, No, we start with this and I do think occasionally you got to meet the client where they all you got to stop
Carl Widger:he said that he said that no, I did say that we had one last week and they know in their intuition said we're going to be okay and here's the text the big thing because the soul the family business and fellas, you know what we're going to look after the kids but whatever so that does happen. But if it's not number one on the agenda, I'd be trying to ease it out because the inheritance tax issue is going to be there next year and the year after and the year after and we can you know you have a bit of time on your hands.
Alan Smith:All right, sorry, call just just proving I wasn't 100% paying attention to what you just said. As you did the same to me a couple of episodes ago. There we go. You've got you've got
Nick Lincoln:drawing a line under this I had a prospect initial planning meeting last week. Clients referred to me prospects prefer to be existing clients as per normal and their front of mind thing was we want to gift away 600k to our three children. Can we do that without later on running out of money? So they brought it to the table? It was their key thing. So we did the financial planning based around that and the cash flow showing Yeah, this is the if you don't give the money away. This is if you do give the money away. Will it put you in penury later on? It turns out it won't. So let's crack on and do that. And these are the clients I've referred on to a specialist third party now to do the trust work and there's client there's prospect hopefully will come back to me when that's been done. And then we can help with investing for their future sales and their impending retirement. So it's swings and roundabouts. Right? Cash flow,
Andy Hart:Nick, did you put gift earch in one gift urgent two? Gift urgent three?
Nick Lincoln:What's wrong with that? It's fine. final final question for
Carl Widger:you do these on Tuesday or Wednesday? Everyone's a bit testy on a Monday. This
Nick Lincoln:is probably you're putting drops in the shallow do the drops. I'll tell them
Andy Hart:you're slacking.
Nick Lincoln:Early on they told me not to do it. So I didn't do that. And Carl has not been particularly Irish references now that you've said how great you are. But that's got to be coming cuz your head's gonna explode if you don't get it out. Let's just do it anyway. Let's just do it the price.
Unknown:See, Dan, Andy, he knows about everything. Andy can be told anything. His name is Andrew Hart.
Nick Lincoln:Okay, thank you. Right. That's so good.
Alan Smith:We are coming on to it. But sorry. So he knows about everything.
Nick Lincoln:Right. Yeah, yes. Shallow. In other words, okay. MICHAEL WALSH, you put in the question, my friend. Your question. Thank you. It's a three paragraph one. I do like this. We go. I'm currently coming to the end of my third year at university and I have purchased our oh five financial protection to complete over the summer. Wow, mate, you sow your seeds. I currently work for a third party firm processing the administration for a wealth management company. And I've done so for six years. This December. I'll let you guess who it is. I've already done the Darth Vader drop not doing it again. I think we know who that is. As a result, I believe that I have a level of experience that very few people applying for similar Junior advisor paraplanner roles will have. My question is on top of completing my aro five over the summer. Is there anything else you could think of that would help me to stand out when applying for jobs at the end of the year? Or anything either of you would specifically look for in the recruitment process? Cheers and he said either of us I think he's inferring that this question should go to Carl or Alan although Andy's got his finger roast. No, no,
Andy Hart:no. Go to them guys first if you wish.
Alan Smith:And he knows of everything.
Nick Lincoln:70 minutes to kill somebody said
Carl Widger:we can feel it. I would say And I don't know if the market is the same in the UK, but in Ireland, certainly, there's people always crying out for good people. And there's lots of people recruiting at the moment. So, you know, having your examples ready as to why you feel you're better than all the other Junior paraplanners. For the interview, I think just having that prep, I would go to the recruitment firms, you know, and have a chat with them, because the really good recruitment firms will put you forward and tell the prospective hiring firm, why you're a little bit above the other kind of junior people. For me, I had a young friend last week, and I was just saying, you know, expand your LinkedIn network, that kind of stuff and all Nickleby wincing at that, but but it does work. And and it is important to to, you know, have all of that looking as professional as possible, because that's what we look at the LinkedIn profiles, before we even consider somebody you know, but having that little bit of experience nailed on in our very short CV, do not have CVS that are going on, and that are really really wordy bullet points, but explain our experience on one page. I'd love a one page, one page CV.
Alan Smith:The question was, was to do with how do I stand out differently, I was. So do suck, do something that others don't do. Make, you know, I've often referred to loom video, make a short video, make a you know two minute video about why you're doing email to. And there's there's another thing is that there's an idea that another close personal friend of mine by the name of Jack butcher, his letter of America that he's got this concept, you know, Jack's very popular on Twitter and social media, and he says creator and a designer, but he talks about this idea of the permissionless apprentice he was seen this where you just you go and do some work without permission for somebody, you know, somebody's profile. So if you I think the advice to Micah would be do your research, find out the companies that you want to work for, because as you write cargo to recruitment companies fine, you kind of lose control over it. There are a such a wide range of companies out there, you're going to try to identify with one that you really or a handful that you realize you like the culture, you like the ethos, so it takes doing a little bit of research. So go online, check the websites, check the social media profiles of the companies you'd like to work for, and do something for them. I'd certainly for me if I got if somebody just sent me a video or sent me a short piece an article or something that was relevant to something I'd complained about or written about a LinkedIn profile or article about and he said, I read this, this this thing that you were having a challenge with, here's my thoughts on it. Here's my idea. I would have that person or in the office in the fight in a heartbeat that would do something to be different to stand out from the crowd. So you know, maybe video permission this apprentice,
Andy Hart:cue Allen getting 25 loom videos next week from
Alan Smith:university students looking for a job and always looking for grip always looking for great people. No, yeah,
Carl Widger:no, you're right. So we're recruiting at the moment, as you know, and I've got loads of direct messages on LinkedIn, right? And people who've bothered to actually send me direct messages on LinkedIn, I've engaged directly with them. Because they've obviously listened to what we've asked for, and I said some DMs. So just being a little bit proactive.
Nick Lincoln:Let's just, it's just using imagination, isn't it? I mean, if I was a business owner, say Alan or call Metis Norway and I got an email from somebody two minute loom video saying car, love your firm really like the work you're doing in these areas. I've noticed that you do this and this just to let you know, I've put together this this this proposition. I think it worked really well for your clients, whatever, just two minutes of your time, and it's a video video embedded in an email. It's like you stand out from the crowd and as you say,
Carl Widger:his promises Ireland says I would engage with that and you get
Nick Lincoln:these four PCBs which tell you nothing and it's just like, you know, your LinkedIn even but something like just using using the tech to bring yourself to life to people that have never met you before and you've got a short attention. We've all got short attention spans, we're all busy, some are busier than others. Make it impactful? Make it impact Okay,
Andy Hart:okay, a couple of points before we wrap this up entire bonus so the first one obviously you're gonna say man with a hammer, but I recommend that you learn voyant financial planning software inside out forget this called void. It's a financial planning software, it's a separate skill. And people do look for void skills with recruiting younger, you know, and
Carl Widger:do you have any courses coming up now that he could have October
Alan Smith:episode sponsored by voice? The next
Andy Hart:thing which is the next thing is a follow on from the loom. Why don't you just set up a website go to squarespace.com by young advisor.co.uk It will cost you 12 quid it will take you an hour to build a beautiful website and send that link to people do something slightly unusual, creative, it costs you nothing, and it will show you have an issue to give. And also back to next point about CVS don't have a BS word CV that looks terrible, create something beautiful and Canva. Again, it will take you half an hour. So learn financial planning people do look for that as a skill for recruiting young people because they can't be asked to do it themselves Long story short, so if you can save them time, hassle and energy and effort, they'll employ you. And then the next thing is set up your own website and the next thing is create a beautiful CV I get sent terrible CV and people telling me I'm a young creative, innovative, please find attached my CV and it looks horrendous, like something about a 1993 It's mind blowing. So yeah, there's my three little tip bits.
Nick Lincoln:Okie dokie great stuff. We're now at 75 minutes since I think we should move without any further ado to couch and I've got a couple of them. Firstly, I'm wearing the first thing today. I've got two today. The first thing is a tech thing sound called Liberty for noise cancelling headphones. I think that the best you can get there was 75 quid they were doing a 25 quid off thing that came out a couple of weeks ago. I'm wearing them now as I said, brilliant, comfortable. 50 hours of battery life noise cancelling just work really good app. Thank you sound cool Liberty forts from the anchor stable. sound cool. Okay, my next thing is a book. You guys might know this one, it's called you are not so smart by David Mcrainey. And it is 48 chapters on how we kid ourselves all the time. And each chapter deals with things like logical fallacies and just just all these things that we these these heuristics that we use to cope with life because if we didn't have shortcuts and mental shortcuts, we go mad. There's so much going on all the time. So we use these shortcuts. And we tell ourselves stories in this book breaks them down, you do x, because you think it's y, actually you're doing X because of Zed. How could this help professionally? Well, you know, we have to know our clients, right? We have to know our customers and you never know anybody. We don't even know ourselves if we don't know ourselves how can we know our clients but if you read this book, it might give you an insight if you've got a client, whenever you suggest something, he or she reacts in a way you don't quite understand or expect read this book and oh my god, you know what, that's why Betty is doing that when I say that to her that she gets this reaction because of that really good book. Just the chapters are short. I'm gonna reread actually, there's so much in it. You are not so smart by David Mcrainey. Mr. Smith, the shocks open run water booth bone conduction headphones.
Alan Smith:I've got a couple that was that's very interesting that what you just said that, I'll be reading that but good. I'll get that. Yeah, you'd love it. Yeah, sounds good. Yeah, I mean, it's we're headphone focus right now. Have I mentioned that I'm on holiday, I'm on holiday. And, and, and it's this is the summer holidays. So there's a lot of just kind of sitting around and eating and drinking and so on. And that's you tried to do a little bit of exercise. And there's there's a beautiful swimming pool here. And it's and I like the idea of swimming up and down, doing some lengths to do a little bit of exercise at least once a day. But I find swimming exceedingly boring, just back and forth, forward. And so I thought what would be good idea would be if I could listen to podcasts whilst I was swimming, then I'd be more encouraged to do it. Obviously, the challenge is waterproof headphones. So I did a bit of research and I found these ones have you come across these ones that kind of on the bone. They don't they don't go in your ear. Don't have them with me. Yeah, they don't have to go on your own bizarrely,
Nick Lincoln:I have the sound gets transmitted. I mentioned earphones that don't throw the bone conduction that the sound vibrates up your jawbone. Yeah. Yeah. It's incredible. And the under completely waterproof, so
Alan Smith:yeah, I'll put a link to them. The ones that I found shocks, S H. O k center
Andy Hart:and 30 quid for headphones, you can listen to podcasts while swimming during about nine lense in Turkey for a week that's pretty punchy for you.
Alan Smith:30, at least 30 lengths 100 metre pool. Anyway. They're really good. And as a consequence I have listened to and this thing is not just thrown together. I've listened to quite a few podcasts so far. In the last week. Carl's already mentioned this one, but I did listen to it and it's brilliant. Dan Carter on the high performance I won't go into it again. There is but he's got a there's a phrase in it that I like I think this is I'm gonna give you this one hearts. You're gonna love this. He talks about his he's had a lot of coaching and sort of the corporate athletes not not that one. Now he talks about in life. You talk you've got to be a poet and a plumber. Is poetry and plumbing. You can it's the it's the arts. He talked about leadership, strong leaders are poets and plumbers. You got to do the basics. You know the normal stuff that plumbing, but you've got to add a bit of artistry. And I think the best financial planners are both poets and plumbers. Do you like that one? Andrew? I like that. It's
Andy Hart:fantastic. Brilliant.
Nick Lincoln:Art versus science thing that I go on about all the time. I agree with that. Well, I talked about
Andy Hart:in the poetry is brilliant. Yeah, I love that. Thank you. Your resort
Nick Lincoln:you're floating around at your resort in Turkey. You on the A G and C, aren't you? Correct? We
Alan Smith:are. Yeah, it was like Sandy or pebbly. Sandy. It's beautiful. Oh, isn't really really nice. But the so that's so that's not my culture corner because that's called one Dan Carter, that you've heard that phrase but my podcast I've just listened to at the moment. It doesn't sound very interesting but it is brilliant. Have you listened to the invest like the best? The Patrick Shaughnessy good Irish name? Invest. Yeah. The best. Yeah, it's this got this. I've never heard of this guy before. You heard it before. Jeremy Giffen. Jeremy Giffen. Anyway, he's a private market investor sounds dolt special situations in private markets. But somebody recommended to me and it is really, really good. It's just a lot of stories about life. It's just really interesting. Okay, that POC is well worth listening to. I'll post a link to it in the show notes. That's me. Thank
Nick Lincoln:Okay. Thank you very much, Carl, the Melissa Caddick story.
Carl Widger:Yeah. Melissa Carnac is Australia's very own. Bernie Madoff does a nine part series, a podcast series. It's very, very interesting. And I suppose the point is that no matter where you go in the world, there are people who are going to try and swindle other people out of money and make it look, you know, kind of like they are doing well kind of we are doing so I think it's really it's very interesting story. Some of you will be just gobsmacked by. But but then the learning or the lesson is, you know, to make sure we're telling people about our corporate governance about you know, where the money is going, how safe it is where it is going into that kind of stuff. But yeah, it's really really interesting. mental stuff going on there, but very, very listen to it very live. Yeah, it's
Nick Lincoln:like, listen to him, as well. Yeah, I
Alan Smith:have. I've listened to one of them listen to all nine parts of it. But it's just it's a real sort of literally murder mystery. So So it's fascinating. Yeah, the best stories are, you know, factors that are fiction? That just, yeah, it's just kind of crazy. A lot of stuff that went on. And it's Well, it's a lot of sort of family and friends and neighbors all been they've been completely wiped out eventually. But what happened
Carl Widger:to her and I will give it away because yeah, it's but it's a really it is like a murder mystery. It's really, really interesting.
Nick Lincoln:Because I mean, I find that kind of stuff fast. I find I still find the Bernie Madoff thing fascinating. Even even like, years after the event is still like Jesus. How?
Carl Widger:Yeah, the podcast is hosted by two Australian journals and I can absolutely promise you Nick, they're going to drive you mental.
Nick Lincoln:But I will listen to Andy
Andy Hart:I've not mentioned on here before but a podcast I like I think you listen to Nick I support him on Patreon is called swindled and he talks about all of the different scams around the world. It's absolutely brilliant. And it's sort of him sort of producing the podcast and narrating it doing all the research. Yeah, it's a real passion project for him. I think he's on about five or six series it's called swindled definitely worth checking as financial advisors.
Nick Lincoln:It dries very dry toned and corporate scandals. Wow. Okay, I think that's the end of college Jesus thank God for 83 minutes 83 minutes right I think agenda I think that is a wrap for this episode. Yeah. Thank you very much that I think was a goodie. That is a wrap dear Travis, so as ever, please, please, please do leave us questions for us to come back to do leave reviews either on iTunes or on YouTube. If you do leave a review and you wouldn't mind please stick in your Twitter handle within the review so we know who it's from. And we just we can just then reference you in the show notes and get the sense of community building up. I think that side until the next time from the trap pack, it's at EOS and take care of their folks. Goodbye. Bye bye bye bye