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In this latest pile of TRAP, the Trap Pack discuss
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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 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 track
Nick Lincoln:see the van open tonnato Kira pista que la que multi key Amana episodio event to see the podcast the advisor T R A P trap. Mi chiamo Lincoln a CME and a commerce simply key Sona GLIAC later Can I barely telepathically say Andy Hart? Alan il Nana authority Smith a coal deliver che wicha orison abbiamo Ono's spettacolo pianos fo D Absolutely. Nullah KND Azzam was subito this Ambala Otto cannot call me I'll say reckoned Siani the high energy diamir buona Miko, Andrew Hart
Andy Hart:over to me for three reviews. The first review is from the Thor 3768 entitled complete trap fivestars always a great Listen, relevant, irreverent, topical and entertaining and equal measures. Next up is from Daniel Bloomfield entitled SJP fivestars. I'm an SJP advisor who listens to your excellent podcast and when I saw the meat and potatoes was about SGP, I was concerned, but it was so refreshing to hear from Fort ifas at the top of their game with some honest discussion. Keep up the good work Daniel B. Final larger review is from Stuart Knight of melonite. Good friend of mine a good friend of the show, proper podcast five stars a proper podcast on proper financial planning hard to think of life before trap now loving the eighth to entertaining chemistry between all of you, with obviously Carl being the big star. Thanks for the many useful insights some of which have directly helped clients over the last few months looking forward to the first live trap at home London this year. Not quite happening but you know about that listeners. Keep up the great output best CPD out there any chance of a certificate finally, smiley face Stuart s de vida been a MOBA back to you chairman.
Alan Smith:We have to explain to the dear listeners we listen well Bravo what you were on about there the beginning what's what's happening to
Carl Widger:you, Lincoln? I
Nick Lincoln:am I'm having a virtual meltdown I'm having a breakdown Yeah. So I am stranded in in in lovely Sicily. There are worse places to be stranded in Sicily the lovely Penelope and I spent seven nights at tyramine at a beautiful resort on the eastern coast of the island. Sicily is the biggest island in the Mediterranean, and I'll come back to why that matters in a moment. And then on Monday, we got the taxi 130 euros for a 45 minute schlep to katanya got to Qatar near airport. We step out of the taxi, I noticed there's an inch and a half of ash on the curb. unbeknownst to us, at night had had one of its eruptions in the night thrown out. God knows how many tons of ash and stuff and it had fallen over katanya and over the airport. The flight was delayed by an hour then the jet app goes into meltdown is now delayed by eight and a half hours and then it's canceled because Qatar new airport is canceled no flights in no flights out the arrivals hall is absolutely teeming people are streaming out onto the taxi rank is baking hot on there and my sports jacket and slacks dressed for Luton weather stuck in Qatar near airport. So we have to make a decision. What did we do we have to book a for next flight out so Tuesday flight is gone. Wednesday's flight is gone. Thursday, there are flights available. But we also have to think well crikey, where we staying tonight, we need to book somewhere. So I'll quickly go on to booking.com all the hotels say one room left then zero room let that updating in real time as everyone tries to book about your hotel room and Caetani and I booked a hotel room in Qatar and by the time I get back to the EasyJet app, the Thursday flight is gone. We're now on to Friday, so I booked Friday's flight out okay, this you know the cortisone is pumping through me by this stage. And I had to go and find a taxi driver like the rest of four fifths of the world population seems to be trying to find a taxi driver so I could turn around but I find this guy's Sicilian guy doesn't speak a word of English. I barely speak a word of Italian this is gonna go really well. He's old school won't take a debit card. He wants cash. I've given all my cash in bloody tips back at the hotel because this Sicily has a tip culture. But unlike anywhere else in the med, you tip everything I think it's because it got close linked to the Americans the USA, and that goes back to the five families of New York and the immigrants at the turn of the century. And so the turn of the last century and so forth, so I've got no cash on me. So I go back into the airport. I'm fighting my way through forfeits if you manage to go in the sky. Write it down to find the cash flow and get the cash flow. Stick my card in the machine. It won't go when I look at the screen out of order. I scream I raced back upstairs to the cab driver who's got Penelope by the way this guy can be part of the call and easy clan for online. We're gonna whisper away. He's still there. He's now got Ashley shoulders, I'm brushing ash off his shoulders saying send your cash machine kaput. Those are my exact words. And he understood that universal language kaput. So he then drives us the three miles to Katana driving around trying to find a cash machine. It dumps me there a cash machine says. So I go find this cash machine only gives me 100 euros and 250 euro notes I go back to him to pay him he sees the 50 euro and I say how much he says 40 euros. It was a three mile journey. I've got no other minus like bucket shoes, my language, there's 50 euros, get out of my life. We're in the hotel. All is joy. However, in that story of agony and pain, Penny brilliantly used framing didn't do it deliberately. And we use framing in our jobs right? We're gonna break brand news to clients, you break the really bad news and so actually, but thank God that hasn't happened. What's happened is this isn't this. She said in the airport. Oh my god. Imagine if we had young children what a nightmare this would be. And she was so right because it was a complete catastrophe. Right? It's really just a difficult look at after first of all catastrophe. But if you have a family of screaming kids can just imagine how much of this would have been amplified and we long story short, be careful what you wish for entire Mina on two different nights we went to this beautiful restaurant called Al sarin CFO, the Saracen you have to walk up the steps, it's 30 minutes of zigzag steps up a steep hill in Sicilian here you get to the top you're dripping wet, but nothing a cold beer won't cure. You go to this beautiful restaurant has these three levels and you're looking straight out to Aetna. And both times I went I thought to myself selfishly I wouldn't mind seeing a mini eruption now just you know some dead livestock is fine. No dead human beings were just just showing me something. Anyway, it didn't happen until the night of us going out to fly out there. So just be careful what you wish for Aetna by the way I finished Aetna is absolutely outstanding administer over three kilometers tool. It's obviously the tallest active volcano in Europe. It dominates the landscape and it is the female form. The female persona in in geographical physical form. It's beautiful. It's almost sensual. It's bewitching is brooding, and it's liable to explode for no reason without warning at any given time. That's my story. Wow,
Andy Hart:just Yeah, at least we
Carl Widger:are sounding you're sounding very calm about
Nick Lincoln:it. This is this this cathartic? So thank you gentlemen, for bearing with me.
Alan Smith:Where are you speaking to us from right this fantastic
Nick Lincoln:well if the viewers you watching on YouTube because in the backdrop I'm in this this this this common room people have already been in I've had two supermodels come in earlier taking teeny shots of each other on the balcony. Carl was there for that part of that the the pre show moment I mean a common room in this fantastic Polat so hotel with very high ceilings and might be a bit echoey so apologies for that. It's basically an art gallery that's been converted into a boutique hotel all the rooms are different. There's I've got a statue of back woman over there dressed in skin tight Sicilian. People are wandering in and out behind me and basically it's chaos. It's fantech But this place is fantastic. We're here till Friday 330 euros a night. But what are you going to do? You're just everywhere else is booked up because everyone else was in the same predicament. So this is the first time I'm ever going to use my travel insurance. I've got it I've never done it. I'm sure there must have caveats on what you can spend and limits and so forth. But we've got to eat out everyday because we can't cook you know, I'm gonna hotel What do want me to do? So that's all gonna be fun and games. I've got my car parked at Luton and you'll resonate with this, I booked my car in for Luton. It should have been out there yesterday Monday. I'm now running a clock up at Luton and I left my ticket at the hotel in time Ina. So when I get to the barrier, the machine is going to say you owe 3000 pounds or something. So that'll be my of my extended Sicilian journey. It is a beautiful island, but you cannot control Mount Etna that's
Andy Hart:well done chairman for making the effort. It was a wonderful
Alan Smith:episode of trap
Nick Lincoln:moods trapped by the storyteller and the spoken over the Okay, let's thank you for bearing with it. Let's let's let's move on to the tropical tidbits then. And Karl markets have gone sideways for 18 months. How are your clients handling that?
Carl Widger:Talk about markets going sideways after that eruption from Nicholas Lincoln. Yeah, so back to the real world of financial planning. So look, I just wanted to we kind of have discussed this amongst ourselves a little bit over the last while. I'm talking to a few clients who you know when you're kind of reviewing their financial plans, and obviously, you got to look at their portfolios, and there's not a whole lot of growth over the last kind of 18 months or so. And it's it's to, you know, how exactly are you dealing with that? And I suppose, what are you saying to clients? And I think I've had a number of these meetings in the in the over the last few weeks. And I asked one client, actually, after the meeting, I said, Look, I know him really well, at this stage. He's been a client for a long time. And he'd be Parliament as well. And I said, Look, do you mind actually given me a bit of feedback from that meeting? Because I know you're a little bit, you know, he's looking at, say, the dimension of long term returns for, you know, 6040 fund, and he said, I'm not getting that or anything near that at the moment. And I'm getting a little bit uneasy. So his feedback to me was, look, you communicated very well, the whole long term nature of it, albeit in my head, I'm looking at five year terms all the time, which this is all about listening to the client. And we can have our own story, our own kind of, you know, way that we want people to think about what they're going to think about whatever way they want. And, but he did say, look, the whole, the important bit was that you listened, and you listened carefully. And then the other thing was that you had empathy. He used that word that you had empathy to the way I was feeling. And he said, that was really important. So I think the important thing, the big message, for me coming out of this is not to be dismissive of people's concerns, and taking the time, you know, to sit down, listen to what they have to say, you know, if they're, you know, having a few concerns about how their portfolio is doing, you got to just take the time to be there for them and talk them through it. And, you know, again, we've always said, financial planning is a process, it's not a one and done. And there are portfolio investments are also the same. So look, I just wanted to bring it up, because I know, at least a couple of you guys have had similar conversations. And maybe obviously, our, our, our audience, stroke listeners will be kind of coming across the same kinds of conversations.
Alan Smith:Okay, I'll come in on that if I, if I may, yeah, we had this conversation. offline, I think a week or so ago, I just come out of a meeting at the time, with, you know, a client long standing client of ours, and course you are, you're looking at portfolios, and it is somewhat sideways for for the last little while, and, and this guy happens to run effectively a listed business. And he's just comparing the share price of his company, which again, it's a bit unfair to compare a single company started, he added it, you know, he admitted that it's around being somewhat unfair, but the share price is up 60% or something. Now, it's all reasons for that. But nevertheless, it is an issue and there is a sense of disappointment. And I think you I think you've hit the nail on the head call in that you can bombard people with logic and say it's the long term let's look at the charts over 30 years and stuff. But that doesn't help doesn't help anyone. The only thing you can really say a thing is that on a personal basis, if you haven't that one to one conversation me myself, my family's wealth is invested in exactly the same thing. I'm a bit frustrated by it as well, I'd love it if markets would move up in accordance with annualized returns of eight or 10% a year. But it's not like that. But I just want you to know I'm in the same boat. I'm a bit disappointed. But we can look at alternatives. We can try to time the market. Is that going to work? No, we can move to other asset classes. Is that going to work? No. We can kind of eliminate any other natural thing and say, unfortunately, it does come with a territory. But I think that idea of I'm exactly the same. I'm not doing anything other than you are. I think that's that adds something to the conversation. I know you've got a thought on this, Andy.
Andy Hart:Yeah, great point, Alan. Yeah, my family's life savings are invested exactly like yours. So yeah, we're certainly in this together. The latest hum, Advisor newsletter blog was about this sideways markets. I think the markets hit the same point 20 times in the last 18 months has been quite unprecedented. But while the longer you're in this business, things that you never thought you'd see, you'd see. That again, is the investment business, it just teaches you to be you know, open to seeing new things, you know, things that never happen happen. So yeah, we are doubling down on all of our normal principles, you know, stick with the plan, invest every single month, you're gonna have sideways markets, the market short to medium term is unpredictable, long term, it's inevitable, all the same sort of stuff. But it's a good point. That sometimes Yeah, just allowing clients to be a bit more open with their sort of natural thought is just
Carl Widger:justifiable. And this sorry, go for a character has to tie a bow on it. And to reiterate a point that Allah made, I was using the dimensional matrix book with the client, right? So when I asked so I went through that I thought it did a really great job. And when I asked for the feedback, he went, and by the way, that matrix book thing that you went through, I couldn't really give a toss about that. I needed to hear you saying the words. Do you talk him through it and you listen to Michael Sarens so Ireland's point was, you can show me any chart you want, right? To prove your point. I just want to have a conversation. So
Alan Smith:just data, it's just data call. No one gives a shit about data, the caravan, the caravan emotions and other thing. That's the point. It's like, if you ever indication as you haven't encountered an irate client, or you've been or just in life in general, I'm sure there's a lot of this going on in Sicily right now, is that people are shouting and screaming at the EasyJet desk or their hotels or whatever. But sometimes people just want to get something off their chest and feel heard. And that's a new strike counter that yes, but yes, but you have told you it's a long game, that doesn't help anyone left chest northern right places tell them that you're exactly experienced the same on a personal family basis, exactly the same as are your colleagues and move on, you know, that's, there's not a lot else that we can do. And their faith and their patients will be repaid.
Nick Lincoln:Okay, very good. A person convinced convinced against his will is of the same opinion still. Okay, Mr. Smith, Lombard lending.
Alan Smith:Yeah, okay, this is just a quick topical tidbit. Something just sort of come across my radar. recently. This is a generally held concept that wealthy people never sell assets, they always own them, they will, if they have a need for liquidity, they will borrow against the strength of their assets and their resources. Now, that is obviously applies traditionally, to real estate, property markets, you know, people who are big into that market, they just borrow money from the bank, they buy the assets, I mean, they need more money, they leverage a bit more against it, assuming the asset continues to rise in value over a period of time. Every now and again, we have a client normally kind of at the high net worth side that wants to get access to capital, and tells us our assets, look, should we sell down some of the portfolio and for multiple reasons, including tax and impacting the long term plan that we built? That's something that we'd like to avoid, if possible. So we've come across situations where, and that's that's the phrase that is used as Lombard lending would effectively you borrow money against the strength of your investment portfolio. Now traditionally, that was the home of the private banks. And they would pretty much insist that in order for them to lend money that they'd have to manage the assets and all the attendant costs and charges and fees that go with that, as we all know. So I was quite intrigued to be contacted recently by a company called Bond Smith, not fun Smith, Bond Smith. And so I was due to meet with them yesterday. But with a tech issue, I'm gonna meet with him in a couple of days. So I mean, do your own research. But this is a a new startup business, it is backed by another organization has provided them with funding, but they will do this they'll provide Lombard lending, via advisors to advisors clients against the value of their portfolio without the need to go and speak to Coots and CO, or a bank or anyone else like that. So, again, do your own research. I don't know much more about it at this stage. But it's an interesting sort of addition to the adviser sort of toolbox, I suppose to bond smith.com
Nick Lincoln:Okay, Andy?
Andy Hart:Yeah, I think this company is awesome, I was waiting for a company like this to launch. Just to be fair to private banks, this is a huge benefit of being a client of a private bank. You know, if you've got 50 million invested, and you need 3 million for some temporary transaction, back in the good old days of low interest rates, you were much better off borrowing the money at 1% Rather than paying CGT on liquidating the assets. And as you say, Ireland ruining the plan. So it is a massive, massive draw for private banks. In the US, it's even bit bigger. You know, I don't think Musk or Bezos have ever sold any stock in Amazon or Tesla. They've always borrowed against it. And they borrowed billions and billions against it. That's obviously an extreme example. But that's, you know, an example to bring it to life. Yeah, the CGT situation in the UK is getting worse, but so is the cost of borrowing. So it's great that the company is launched and innovation in finance is always, you know, welcomed. So yeah, I'm intrigued to see how bond Smith get on. I had a case couple of years ago with a lawyer where they were going to crystallize a massive CGT hit on a couple of property transactions. Anyway, I said, Why don't you do you know, bridging finance, which is a similar form of it, obviously, it's secured against properties. And back, then they could get the funding for about 0.75% a month rather than have a massive CGT liability. So again, as financial advisors, certainly me, I want to I'm in the money business, I want to know everything that's happening, and then I'll work out things, you know, useful for my clients. So yeah, I'm excited about bond Smith and seeing how they're gonna get on and obviously, it'll be good if there's a bit of competition in the market. I had a brief look at the PDF that you send, and I think they're lending a couple of percent above base, which seems pretty attractive. Yeah. So I'm, yeah, somewhat excited about coming into the market. Who's next?
Nick Lincoln:Okay, good. stuff it's it's me very quick when you haven't got a comment necessarily just a snapshot of what I think is happening in the buy to let market at large I have for my sins and I'm never going to do it going forward got a couple of clients on my books with with buy to let portfolios I'm coming to the view people say you shouldn't take your own prejudices into to a client situation if clients want to invest in property that's that's their God given right and I absolutely agree with that it doesn't mean you have to work with those clients I just find by two let's doing cash flow modeling you're trying to meet future liabilities with future relatively known cash flows, you know, dividends being thrown out of portfolios or unit encashment and then by to letter so lampion horrible and now you've got this this thing I've got a client I've got a client is going to buy to let the rent is 850 quid a month. I think that's net of management charges, let's assume it is and the mortgage on the bottle it was 194 quid. So what's that 600 quid in quotes profit before tax and upkeep and everything else, right or the hidden costs or the void periods that you'd want to talk about. And his 194 quid mortgage is coming to an end of the mortgage, if you left it didn't do anything was going to 700 quid basically wiping out effectively any profit after tax on the cost of the battle. And I just think this picture is going to be must be being replicated up and down there in the UK I don't know about Ireland so much but I imagine you've had a rising interest rate environment as well their car and just a snapshot and I'm saying this this client listen, you know in your cash flow we've all him and his wife have got four bike lanes between them the idea has always been to sell these disinvest and bring some liquidity into your lives. It's going to be easy going forward and the numbers are insane Why would you keep a buy to let because I don't necessarily need to comment on it call your hand is raised so the floor is yours.
Carl Widger:Yeah, just a quick one like my my phrase on that as you know when you're doing financial planning and you're looking at people who have beitler we love property in Ireland by God we love it you cannot sell a window out of a house so when you need liquidity you know you've you've got a big problem and you know moving a house on as we all know, I have a client who is trying to sell on at the moment he sold it four times so it's closed four times and for various reasons the sale hasn't gone through so look like you're saying not sure what that was. But anyway yeah. Jack my life how Nick is feeling right now? Yeah, vital let's on having illiquid assets, problems down the line. We're
Nick Lincoln:sorry for the unexpected drop that that's the that's your typical buy to let investor when they get their mortgage renewal statement coming through every day. Okay, great stuff. Mr. Hart. You've had a nice time away in Port del Sala.
Andy Hart:Yeah, fortunately, I got back there wasn't any volcano eruptions on the island of Majorca. Yes, I went to quite Lockhart lighthearted I went to port the salah or soya they call it in Spain. Sawyer is the area I was staying in the port area back to Alan's point a couple of podcasts ago about finding your place you know bold statement Allah I think I might have found my place. Put the solar is amazing. I like sort of medium size resorts. You know, it's got a beautiful port. It's almost, you know, circular the port. So went running most morning stayed in the awesome hotel called the bikini Island Hotel. Fabulous hotel. It's adults only. It's not what you're thinking that he minds. But yeah, there was no kids there which is obviously useful for me because I don't like going away leaving my kids I don't see him running around the swimming pool and just missing them and such. Yeah, amazing place. I have my out of office on my Oh, I did a little bit of work. And I was away for a couple of days and I got a bit of a bit like a bit Itchy and Scratchy. So I had to release it and check some emails and do some work.
Alan Smith:Did you have a humble brag? No, I
Andy Hart:didn't have anything you were still a disk out for most of August. I'll try and reply when I can. I didn't check my client emails, which is a humble brag. That is a humble brag. I'm taking a month off. I'm not exactly taking a month off and doing this. I'd be working every frickin day off to get about this
Alan Smith:you complain about you do.
Andy Hart:I made a public statement. That was the intention. Anyway, it's a fantastic piece. Bikini Island Hotel on port de Sala. I can't recommend it enough. The weather was awesome. Yeah, I hate when it's too hot. So I'm sort of mid to high 20s i i prefer. So go into my next important point German
Nick Lincoln:go onto that go into that from your adults only hotel called bikini hotel that doesn't sound at all. Something you can find
Andy Hart:with a couple of clicks is one of those hotels or go horribly wrong or horribly right? And it goes it went horribly right? It's like white lotus season one is like that. It's sort of like the barley ticket. You know, Tiki kinda it's kind of vibe. Yeah, awesome. Check it out. Gonna go for a weekend away without your kids. Okay, the important point is I'm singling out Scottish Widows and a couple of funds that they have, mainly because of the name of it and mainly because of the returns. There are other funds from other providers as we know that heavily involved in bonds that have had an absolute, you know, Nightmare in terms of returns over the last couple of years. So I'm singling them out because of the name of the fund. But but but the sort of message can be sort of transferred. Anyway, they've got these fun portfolios called the pension protector series. This was flagged to me by David Hearn on Twitter, so shout out to David Hearn, I think it's called Don't was it don't delay his Twitter handle. Anyway, some of these funds are now down, you know, last three years, they're down minus 40%, from peak to trough, so high point to a low point, some of them are down minus 55. And there would have been some, you know, retirees that have parked placed or advisors have advised them to place their money in this fund that's framed perfectly called the pension protector fund. You know, we're trying to be positive on this show. But I mean, this is just bad practice that they've framed a named
Unknown:kumbaya My Lord by my lord, bye bye
Andy Hart:Okay, I will continue to draw
Nick Lincoln:positivity baby positivity tree hugging West Coast George Kinder make your clients cry positivity to the show. Love it. Right Andy crack on with the story. Come on.
Andy Hart:Okay, so that's it. Basically, these funds are framed and called the pension protector series funds. They've had an absolute diabolical performance. And I'm sure they were pitched and framed from the marketing departments of these fund management companies, which fund management companies are basically marketing companies, first and foremost, financial companies secondary, as sort of we are as financial advisors is another point. So yeah, these funds have done terribly, terribly, terribly badly. And they've been framed for investors and retirees as a safe haven for their money. Why this? Why is this not being called out? You know, consumer duty, you know, what, hang on regulation, you
Alan Smith:understand, just go without? I mean, you're absolutely right. Everything you say but there's a direct correlation with these funds. The point is, it was about protecting the income the annuity income now it's not Alan is the standard. That's what they're designed for the the basically buying long data gills is effectively what the underlying assets. I don't think you were to raise as we discussed in the last episode of rates have gone up in direct proportion to these funds going down? No,
Andy Hart:I don't think these funds are designed to pay our 100% Money short term to then buy an annuity
Alan Smith:which they were originally designed for that I used to sell them back in my days in alperton.
Andy Hart:Into the wheelbarrow, they
Alan Smith:sold like hotcakes me but the but it worked because in those days everyone did buy an annuity. There was nothing else you could do. I think reality is no series
Andy Hart:pension protector. Okay, fine. That's a terrible time
Alan Smith:to be interesting. I don't know if this these statistics are available. But what proportion of the retiring retiring public annuitize now, so if they're designed, I'm talking about workplace pensions, people retiring with 102 underground and a pension pot. They automatically because I mean, going into drawdown Gen generally requires some quite sophisticated advice often. And there's only I think, what's the numbers 10 or 15% of adults in the UK ever receive or pay for advice of any description? So maybe the vast majority are still the new retiring? Maybe? I don't know they're not. They're not they're not that What are people doing but 100 grand pension pot at age 65. And they've got no in one of these workplace funds. They're just leaving this leaving it.
Andy Hart:I do come across the data once every year. But off the top my head, I don't currently have the stats.
Nick Lincoln:Okay, well, we can get into the weeds about this and start talking about stats and averages and hidden risk. Let's let's get let's try and keep it punchy. So, Mr. Smith, the Morningstar report. Why do investors hire advisors, you want to give us a short overview of what that's about?
Alan Smith:Yeah, just very shortly. I quite like Morningstar. These days. They do seem to produce some quite regular, you know, high quality Independent reports, read, evidence based, data driven, et cetera. So I must be on their mailing list. They are big into the whole concept of behavioral research has come out of the Morningstar behavioral research team. And it's just a nice 12 page paper based on research speaking with customers and clients to some degree. It doesn't tell people who you know, you know, real financial planners doing behavioral investment coaching won't tell you anything you didn't already know, which is clients come to you often for a specific financial or investment problem to be solved. But really underneath it, which is the arts in the work that we do or try to do. Underneath it, there's more of a there's a behavioral issue, there's kind of a more broader based set of challenges. And so it explains all that goes into some detail having based on based on research that did with actual clients who hire advisors. But more than that, what's useful about this paper and there is a link to it in the show notes is it gives you an example because although that we all intuitively know this stuff, you know, by experience, it doesn't analysis of advisors, collateral materials and websites. And there's a disconnect, because advisors still talk about products on their websites and the materials, and they still talk about things like meet, you know, doing your financial plan, there's something missing in terms of the language. So it gives you some specific templates and examples, which then are quite helpful to say, the missing part and your client communication, the thing that would reassure your clients or prospective clients is by using some of this narrative some of this language, it actually gives you a sort of template client value proposition. Now, it wouldn't, it wouldn't be something you just copy and paste necessarily. But it gives you a kind of a few outlines and a few suggestions based on their research. So it's definitely worth it, you know, 12 pages or whatever is to having having a look at there we go.
Nick Lincoln:Superb stuff. And I think our final typical tip is another Morningstar report. So they obviously are the belle of the ball. And this has been the voice of boys. Tell us about your one.
Carl Widger:Yeah. And I didn't know Alan was going to share that one from Morningstar. But this is another Morningstar report called Mind the Gap. Very good. I have the link in the show notes. But but the thing is, that kind of stood out for me was I suppose we're all looking to, to get affirmation that we're doing the right thing. But one of the stats that came out of it was people who are in one fund, and maybe that's an equity bond portfolio, but one portfolio fund are doing better than people who have a kind of conglomerate of various funds in there. And there's no evidence to kind of, you know, back that up, and I think, look, you can read the report yourself. But the I think what happens is, you know, some of the smaller funds they change are you need to change them or they're, they're going into other funds. So there's there's more temptation to go tweaking, and that that damages your return in the long term. So look, again, like what Alan said, I could go into loads of detail on that, but I don't think it would be good right, right now to do it, but definitely look into the report really good stuff in there.
Andy Hart:That is a mind blown stack calm, I'll definitely be taking a look at that. So why do we think that is? Is it is it like they're more committed to that fun, they've told themselves a stronger story is the IKEA effect, they own this one thing. Now they're going to protect it with all their all their heart. That's amazing. I
Carl Widger:think like, one of the points was like, within those portfolio funds, they're rebalanced, right. So you don't have to go every year and start tinkering around with the rebalancing, and all of that kind of stuff. And then I think the point was, you know, that sometimes you might have, I don't know, an absolute return fund in there are a crypto fund in their reach, or something like that. And they become not fit for purpose anymore. So you have to start tinkering with it. And then you might start tinkering with the overall asset allocation, blah, blah, blah. So we've all seen like the dowel bar study, the behavior gap from Carl Richards, that little sketch that he does, so we're kind of aware of this. But I think it's more evidence, again, more research to show that the less you tinker with your portfolio, the better you're going to do.
Andy Hart:Yeah, reminds me of the money's like a virus. So the less you touch it, the more you have, like to your chairman.
Nick Lincoln:Thank you, gentlemen. Great stuff. Yeah, I think I think we're all gradually making a transition to some kind of one fund, one fund solution for our clients. And maybe we'll talk about that in a future show. There's actually a question on today's agenda from our Trappists about that if we have time we will address that in further detail. Great stuff. I think we've got through the the topical tip bits we put a good timestamp on this episode. So let's let's move across to what many people call the meat and potatoes of the show now we for useless hombres may come across as being the epitome of what a superb financial advisor should be. But in reality, we've all made our fair share of calamitous mistakes and one of the reasons we do you know we're not we churn out these piles of trap is to share not just the good stuff, but the bad stuff. So hopefully you don't go through the bad stuff, you know, in life. something bad happens the worst the worst thing could do is not learn from that mistake or you make mistakes and the worst thing you do is not learn from them. So we've all made mistakes. So the meat and potatoes today's talking about the big mistakes that we've all made. We've got some solo advisor firms in trap and we've got some bigger firms. In traps, we've all done things from different perspectives. I think Mr. Was it Mr. Smith, you're gonna lead off on this one with them, your your biggest mistake, and what and what you would do differently the lessons you've learned from it, please?
Alan Smith:No. I'm gonna go in my loins and share. I think Karl Karl said he'd just to do a sort of a gentle entry to the world of yeah, thank you.
Carl Widger:I'm not I'm not so sure mine is gentle. And look, I think I suggested that we do this, because we are, you know, I suppose putting ourselves out there, as you know, oh, this is how to run your firm, the best way, whatever. But it would be remiss of us not to say that, look, we've made many, many mistakes along the way. And God knows, continue to make many mistakes along the way. And I'd say, you know, when you're running your business, you know, there isn't a month that goes by that you wouldn't reflect on your, which ended up differently. So when I thought about this one, okay, if I was to, you know, roll back 10 years, what are the really big ones? What are the ones that stick out that I think, you know, if I didn't make those mistakes, it would have had a fundamental, more positive impact on our firm. So I think the first one for me is recruiting poorly. And I think when you think about recruitment, and we're going through it at the moment, right, and we've some really good people joining us have already joined and gonna join over the next while right. But when I think back as to, you know, when are recruited? You recruitment is a little bit like financial planning, in that there's science and there's art, right? So the science is, say, the CV and, you know, the numbers and the data and the psychometric testing, and the art is, how does this person make you feel? Are your values aligned, that kind of softer stuff, right spot on. And I might have, not I might have, I definitely got maybe blinded by the science a little bit, by the CV, by the, you know, the track record, all of that stuff, you know, past performance is not necessarily guide to future future performance. And I would say, when I try and analyze that, and it's just that the do recruitments, that the people who we kind of took into the business just weren't a fit for Mattis. Right? It's not to say that they weren't really good people, and could you know, and have done really well elsewhere. And this doesn't go for everybody who has left the business, by the way, right. But it's certainly my experience in a few, right. And what I would say is, when I reflect, and I'm totally and utterly honest, and being a little bit vulnerable here, I would say that would the conflict that I didn't get over, and I didn't think about was the values as to Metis. Ireland, why we do business, the integrity as to their, and then also, they'll also see that I was deeply uncomfortable with the content of some who today's always to the Irish versus UK cultural differences.
Nick Lincoln:So sorry, can I play that just as you were opening up some deep emotional issue in your soul? Yeah,
Carl Widger:no, it's not necessarily emotional. It's just, it's just maybe some of the softer stuff. It's like, what are our values? You know, Allah mentioned, you know, client value proposition what, what really is that? What, what are our beliefs, and we have in our other boardroom here, which I think you've seen before, you know, our promise to you, what we promise our clients, and that was conflicted with my ambition to grow the firm. So get blinded by numbers, someone who Yeah, oh, yeah, I totally believe in that whole financial planning thing that you're doing. And I knew we're looking at them, right? My God told me, they're just going to product sell, and they're going to just move across clients on a product selling basis. And and it didn't fit well with matter. So I would say that I've learned massively from that. And I also way more trust my gosh, when I'm talking to somebody, and if I get a good feel from them. Yeah, that's, that's kind of my bid on recruitment. So
Alan Smith:if I just come in there, as soon as you started, I wasn't going to talk about this. But of course, you start talking about recruitment. And my mind goes back to my early days of recruiting and I think I recruited wrongly but for probably a different set of reasons that you did. And honestly, I looked back with with an a laugh about it, and I've never really fallen out with anyone that's ever worked for us, but I definitely hired the wrong people. My main criteria in the early days of business when money was super tight, was how low our salary expectations what did they expect to get paid? Oh, that was a very wasn't much we can bring them in because we'll teach them how to be good. I kid you not. And this is not this is nothing negative a person but the people. I'm still friends with these people, I still bump into them now and again, one of our early administrators is main day job was a pub singer. He was a sort of Elvis Presley impersonator not getting name is Dave, you're just, I think you weren't a part time job working Saturdays at Nationwide Building Society. So that will you you must know about financial admin. He came in, certainly for a couple of years. He was he was a good guy. But his main, his main dream was, you know, being being in the Albert Hall doing Elvis collars or something. But even worse than that we
Unknown:did that we had
Alan Smith:this other guy, we had to go work for us. And we needed to hire that other administrator. And I said, Oh, I need to go to the market. She's my brother's available, he'll be available to work, you know, pretty much straight away. I said, fantastic. Brilliant. Same as a recruitment fee. You know, what is it? Is it where is it currently work is the administrator somewhere else. So you guys know, he's a painter and decorator. I said, that's fine. Bring him in. guy worked for us, albeit for a couple of weeks. So I can relate in different ways. Some of the early recruitment methods that I deployed, you know, you learn pretty quickly, it's actually a bit of a false economy to bring in people who are not really have no interest in doing the job. And you can get them for at relatively low cost. But sorry,
Carl Widger:no, no, totally, I look, I think the most important thing is, you know, culture fit. That's absolutely massive. Because, you know, one, we have a small team here. You know, and we have a good thing going here and one bad apple then can spread. And that's you do not want that. So trust your God is what I would say don't all just believe in the science. So that's my piece on recruitment. So do you want me to jump into my other big mistake?
Nick Lincoln:Nicholas? Yes, yes, jump into other big one card. Okay, so
Carl Widger:burning bridges, on this is again, being vulnerable, right. So I've told the story about working for a brokerage firm before I set up on my on my own in 2010. And when I left the firm, I paused in hopes that I did everything kind of right. And of course, when I set up my business, the two guys that I was working with, and I was a director in the business, right? They did everything they could to protect their business. And I got a little bit bitter about that. Now, when I look back, and I reflect now, they didn't do anything I wouldn't do now. And it meant that there was a falling out right. Now, there was a few things that they did that maybe I wished they didn't do. But certainly there was a lot of things that I did that I wish now that I didn't do, because I had worked with those guys. For Nolan column, they were fantastic guys, it was prior to it was definitely pre financial planning days in Ireland at all. So whilst it was product selling, I wouldn't say that those guys did anything, ever, that wasn't with integrity, and wasn't in the best interest of their clients. And I still say that about the guys. And the sad part for me is because I burned my bridges there. Two guys who I learned so much from who are really, really good guys, and really good friends of mine, I created, you know, a kind of a chiasm. There, I've actually tried over the last couple of years to reconnect a small bit and build those bridges. It's a little bit difficult. Calling a spade a spade, but I just wanted to put it out there because I know, I can see it happening to other people maybe at the moment. And I know that a lot of our listeners, so we get a lot of inquiries from people who are working for firms and are talking about going out on their own whatever. And you just got to understand and just you know, the business is a big bad world, right? And people are going to, they're going to do everything they can to protect their business, you just got to accept that. And you got to roll with those punches. And I would say, you know, it didn't it definitely didn't do me any favors to be burning any bridges. And it also played on my mind for a long time. So that was energy I didn't need to be expending on stuff that I could have prevented if I had acted differently. So, you know, I think it's really really important. You know, Alan, you made the point you haven't fallen out with anyone who's left your business, like actually can't say the same. However, what I can say is there are very, very few, very, very few, and I will hopefully continue to do that. So I think it's really important, especially for those younger advisors out there who have ambitions to go to alone, you know, you just, it doesn't do you any favors. And you never know like keeping, keeping good relations with people who you've previously done business with will always provide opportunity in the future. And I drew a line under those opportunities and I wish I didn't so sort of that that's another point. I
Alan Smith:think that's great advice call. I think it'd be exactly the same in Ireland, if not more so the financial planning financial services community in the UK, very small, very tight knit, and everyone knows everyone else or they know someone who Know someone else and if you've done a wrong turn to whoever it is to a competitor and other firms, so if it gets, it gets known. And one thing that is the most important thing any of us have got particularly in this in this sector is our reputation. Without that you've got nothing. And I've seen a few things that happened in the past, I managed to navigate. I've got situations now people I've known 1520 years ago. And it just because I mean might not have agreed on certain things, but we haven't really caused big bust up. So I think it's really good advice, particularly for younger planners.
Andy Hart:Yeah, I mean, this business is this business is not six degrees of separation, it's two degrees of separation. You know, it's an incredibly tight knit community. So yeah, good points on that. Back to UK. Ireland doesn't interrupt you on your third point.
Carl Widger:No, no, I think look, the interaction has gone on, I think other other other issues, Andrew? Yeah, I think I know their points of view are good. So look, I would say, I don't think necessarily I did do damage to my reputation. But I can tell you that I regretted how it all played out. And I definitely could have you know, if there was a junction in the road, I could have gone right but I chose left because I knew at all. You don't know what I'll
Nick Lincoln:call don't worry about you doing damage your reputation. We're doing it on your behalf. Okay.
Carl Widger:All right. We might association with you guys doing that anyway.
Nick Lincoln:So call it those your mistakes.
Carl Widger:What look what I just quickly do the last one. So the last one is our when lockdown happened, right? It was what do we do next? So it was like, right, let's do virtual coffees. And I was being pushed by our marketing firm at the moment that you know, you got to get out there. Don't go into your show. And that was great advice. So we went on to do these virtual coffees. And the very first one we sent out a public zoom link and we got loads of people registering I was like oh happy days. Now I should have known when one guy registered as Ben Dover
Nick Lincoln:that was that was your red flag? Siren wasn't a car. Come on?
Carl Widger:Yes, yes. So anyway, suffice to say that we got everyone into the Zoom call and everyone's cameras were on and there was a lot of people who were doing very, very questionable things live on camera. So I had to quickly stupidly I was doing the tech as well which as you guys all know, that never works well. So I had to try and kick these people out and then keep the whole thing going and it got a little bit of media exposure it didn't add on but but anyway, the important thing and here's about the resilience and about you know, getting up and going again, we did not decide that that was the end of the virtual coffees and we ended up doing virtual coffees also lucked out and we got somewhere between 60 and 80 people on a virtual coffee every week with guest speakers and it was absolutely fantastic for us so I look just generally speaking you know, learn from your mistakes but have the resilience to keep going don't let them knock you back. So that's me thank you for allowing me to share those with you
Nick Lincoln:super super I in a different life actually worked with someone called Denver Dover. He was an MEP, believe it or not for you, Kip Denver. Den Dover. What was parents thinking? It's just wow,
Carl Widger:I don't know like
Nick Lincoln:yeah, I'm not gonna be christened lick, ma'am. Either way. Okay. So let's go on to the solar advisor a different perspective. And Andy and I have a different different pressure points and different processes to you guys with with multi multi staff firms. I have gone on about this before. But I would say to anybody who's in the solar advisor space or thinking about going into it, this whole thing about thinking that you have to have one of these awful off the shelf back office systems, you just do not need it. When I went out in 2008 on my own, I thought I knew I won't the brand name, it sounds like anti flow. Okay, and I got anti flow this back office system or whistles and bells. And it was just a you needed to go on loads of learning modules. It was clunky, I just didn't need I am. I'll go to my grave convinced that as a solo advisor, you just need the best of breed tech in the various areas. You need Dropbox or a good equivalent, you need the paid for version of Gmail, because then you get a search facility of Google and I can find the emails from 2008 with a couple of keywords. Bang, it's just there. The good calendar, that's gonna be the Google Calendar, scheduling thing Calendly and you need a decent task app and there are loads of them. And all of those apps I've just mentioned you if you get an outsource power panel or an outsourced advisor, you can add them to the app so you can get do back and forth. You can see audit trails as well. What What you don't need is a back office system is a legacy from the days when you had agencies with 38 different insurance companies, you had renewals coming in on the drip and you had to reconcile the commission statements. And if nothing else, they send out a behavioral message that is that is it to me, it's cognitive dissonance, these back office systems that say, Yeah, we allow your clients to log in via port or so they can see their investments all in one place. 24/7. And yet, we as behavioral investment counselors are saying to our clients, the last thing you want, by all means, go ahead. It's your money, right. But the last thing you really want to do is look at your investments. 24/7. You want to look at your investments every 24 weeks, over the next, you know, seven decades of your life. That's the 24/7 we're talking about. And even that's too too much. So I just think Don't be don't I think they must when you become a financial advisor, when you pass your exams, they must, they must put some serum into your bloodstream that makes you think I need a backup system, because we just automatically go out and then certainly you don't need them. My biggest mistake was taking out a back office system with anti flow. I didn't need it and I was locked in for six months. It's quite an expensive contract, and I couldn't break it. On the back of my Sicilian escapades, I'm going to quickly talk about something I haven't made a mistake of. And but but it could happen. Thank God, I did bring my laptop out with me for the first seven nights of our schedule. Stay here. I didn't look at it. I was really good. I did have an out of office saying this. And I'm not looking at emails, if your dear client friends send me a WhatsApp, if it's urgent. And I'll come back to you. But if it's not urgent, and you bug me, I know where you live. That was my head of office. I didn't look at my laptop, because I knew that I would have obviously gone out to anyone who emailed me. But now I've got the laptop, I'm making the best of what's happened to depend on I wish we're stuck here. That's lovely, great. firstworldproblems. But least I can work. So don't go on holiday without your laptop. Because you never know when you might be near an airport that might be near a volcano that might erupt out of the blue. That's my do not do always take a laptop with you just in case if you don't get out of the bag. Great. Fantastic. But habit there, Andy?
Andy Hart:Wow, Nick, you don't come out of many pearls of wisdom. But once you do that absolutely. Bang in 24/7 every 24 months for seven decades. Yeah. That's brilliant.
Nick Lincoln:That's, that's how
Andy Hart:often you should check your investment portfolio if at all, if you want to. So 24/7 schedule. Brilliant. Thank you very much.
Nick Lincoln:Thank you, my friend. Okay, so that's me from the solopreneur stuff. Now. Now now now. Now, should I do it? I'm gonna do it. Now. I'm gonna do it. Now. I'm gonna do it now. Because this is this is a beauty.
Unknown:Grab yourself a drink, a very long drink. It's story time with Alan Smith.
Nick Lincoln:So Mr. Smith,
Alan Smith:thank you very much. I hadn't heard that drop for a couple of episodes. So actually welcome it back. Because this is a bit of a tale. I've never spoken publicly about this. We've spoken privately with you guys. I'm not going to name names, obviously. But this was an experience that I went through a couple of years ago. Now. It's still fresh in my memory, such as the kind of the pain of it. Brief backstory is as we sort of evolved, we're all we're all all of us on this podcast. And most other advisors that I speak to are growth oriented. We want to grow our businesses one way or another organically through whatever methods you adopt. One of the things that we decided to do myself and my sort, of course, team, leadership team, we want we want to explore the possibility of acquisitions, because there's loads of other firms were doing it let's go out and the sort of the conversation was around, let's go and buy two or three smaller businesses, tuck them into our business, and then we'll sort of grow we can double in size we can we can move, you know, organically and in organically. How difficult can it be? Of course, this was the view. God now so you guys obviously shared some of my pain going through this. But in summary, I haven't decided this. We're going to look for some acquisitions, and I was tasked with the job and then did have to look too far because I took a phone call in October of 2020. And if you remember 2020 In October, we're actually it was that year we were kind of obviously in lockdown. They were in and out of lockdown. We'd had the summer where in the UK where it was sort of what was that offer they had you know eat out to help out or something so in and out of that we were subsequently going to go back into lockdown at Christmas but in October or 2020 Because it's indelibly etched in my brain. I took a phone call on my mobile phone unsolicited by somebody who said Hi Alan, you don't know me, but would you like to buy my business? And I thought well just so happens that we have decided that we do want to buy businesses tell me more. So then began a process which went on actually for the for another 12 months, because I started negotiating to acquire another financial planning business and my god was it painful. So we go Through from October, you'll use the the usual negotiations for price for strike for deal structure for terms etc. That, of course involves me because I'm immediately out of my depth. I've never done one. I've done a couple of very small acquisitions when I got started. But apart from that never done anything else and you enter an honestly you enter into a new world. There's words, this language, the terminology that I'm not used to dealing with, you've got to appoint lawyers and lawyers aren't cheap. And you start getting involved in multiple conversations, when with banks and funding and all that sort of stuff that goes on, runs through to Christmas of that year, we've agreed terms. And the years a rush on then to complete the deal. Because if you remember, there was going to be a budget. If I recall, the budgets are then Chancellor, who is now our prime minister, was running a budget in February. And so the deal had to be done because of an expectation that capital gains tax were going to be changed and significantly uplifted. So pressure was on to get the deal done, get it completed before the budget. At Christmas, I never forget this. I actually got COVID at Christmas. And I'll tell you, it was I was wiped out for a week. And it was that time we were on lockdown anyway, but I had to still show up for zoom meetings with lawyers and stuff. And I was just, I was wrecked physically. But we couldn't afford to lose a day we're trying to get everything through. So that means December 23. I'm on Zoom calls. I'm deeply ill, just to try and get this deal across the line. We carry on we carry on we do everything that's expected loads of negotiations back and forward back and forward. But comes February budget time, you need to get obviously clearance from the regulator. And they just hadn't they had such a backlog of work to do. We've done everything we could do. But the regulator, the FCA didn't clear it in time. So everyone's sat there with bated breath, working out or waiting to see whether capital gains tax rates would be changed. And if you recall, they weren't, no changes were made. So everyone breathes a sigh of relief. and on we go. And at that moment, everything began to change, because the seller of this business suddenly had enough time on his hands. Meantime, if you think of the what was going on their markets were continuing to go up, markets were racing away, we'd kind of got used to this kind of COVID lifestyle, businesses were carrying on to one degree or another. And, and there began just a death by 1000 cuts. It was an ongoing series of negotiations and negotiations back and forward, I think we're in and locked down again, I'm back into doing zoom calls with the seller bearing in mind, it's a very small selling business, very, very small business that was being sold. And therefore we just thought we'll just do it do it ourselves, me as a buyer him as a seller. And it just got kind of it got a little bit personal, it got a little bit direct and the terms of what should reasonably been agreed completely documented in what's called the heads of terms which unless there's something material changes we should all stick to that this is this is what we've agreed the cap being chipped away at the seller still said, Well, can we change this? Can we adapt that? And you know what, looking back, it was, this was a classic example of sunk cost fallacy. You're familiar with sunk cost fallacy. I think when I'm too into this now it's been months and months and months, I've racked up at that time 10s of 1000s of pounds of legal bills are final agree to that. I'll agree to that. I'll agree to that kept going. kept going. And it's just it's very time consuming. It takes takes up a lot of your kind of mental brain space. And and it goes until the point when the seller said actually it's been going on for so long, not through my fault. You're not paying me enough. I need I need more money. At which point I said no, that's not going to happen. We've agreed terms we can fine tune the detail, but I am not paying any more. That became a bit of a standoff for several weeks. Eventually he came back to the table said fine, let's go ahead. I'm not happy about the terms. Let's go ahead and do you know what and then it got delayed a couple of other times. And I'm just getting a worse and worse feeling about this. And I've still racked up fees, it's dominated my life for such a long time. And it's just a little bit of a if everyone ever ever considers getting into acquisitions, just recognize unless you're gonna appoint someone else to do all the work for you. Everything else takes a back burner it sits on the back burner you are not your life if you're the principal of the lead person in the company your life will be dominated by this on an ongoing basis all the time people to speak to lawyers, accountants to sell and multiple other participants. And on it goes and on it goes and there's still little chips and requests for more requests for this and as I say each one of those they weren't big in themselves but they mount up the mount up and I can tell you guys know me well I'm someone that I'm pretty laid back in most things in life I sleep well at night. Nothing really fazes me too much but I was actually having sleepless nights I was waking up at 1am 3am Thinking shit. The upside to this deal is pretty good. But the downside is is really bad in our business, if this just falls off, because I've got to work with this person, you know, you do an acquisition. It's not like the upsell, because we're in the relationship business. As we know, you don't you want the seller to stay around to sort of Hatton in, you know, facilitate the handover. Make sure that everything because you're buying, you're all you're doing is buying relationships isn't you're buying their clients, so they've known for 20 or 30 years or something. So you need that person to be around. And increasingly, I'm not enjoying this relationship that's been built up. Look, to some degree, if you're a seller, you want to maximize your sale value. But in my opinion, in my experience, and other people that I know that were party to this transaction, you know, could you saw it for what for what it was, and I'm just getting increasingly bad feeling about this. I woke up early, having had another couple of delayed completions, we finally got a completion date agreed. And it's a few weeks away from the point is now nearly a year after the initial phone call. And I just wake up super early one morning, I'm out in the park, taking a long walk. And I'm just thinking, I'm not a religious person. But I say like universe send me a sign. If they ask for one more, I don't care what the changes are, they just want to use a different colored pen that we agreed to sign the contract. That is the fight that will be the final straw, anything else changes now, I'm walking away. Sure enough, my phone rings. And it's the accountant who's doing the completion accounts on this. And he said, Yeah, they've asked for this tweak, it's not a big tweak device for this, I've said I'm not going to do it, go back and tell them I'm not changing it. I don't care what it is, I'm not changing it goes away comes back five minutes later, no, they're insisting on it, I say thank you very much, do no more, leave it with me, hung up, got a taxi to my office in the taxi caught my accountant said I'm pulling out, I don't care. I'm pulling out now got into the office gathered a team together, announced it to them really interesting sort of result and experience for the team, the team will in some ways disappointed because of all sort of the heart and soul behind this is going to be quite an interesting acquisition for us. They're going to be taking on new really, you know, high quality clients, but they could see it for what it was they could see this as going to be a potentially dangerous relationship, and a potentially dangerous sort of addition to the to the company. I'm just sort of wrapping up now because this is all about lessons learned. This is about errors and mistakes. And you know what, when the position that I was at I was surrounded with advisors, don't get me wrong, I've got a fantastic accountant. I've got a business advisor, I've got a strong team leadership team experienced people. But ultimately, in this situation, it was me who has to make a decision. And I'm six figures deep in legal fees by this point, you know, weigh over 100,000 pounds. And not only that, the the opportunity cost of a year of my life do not much else but this huge at that point two weeks away from completion. Just deciding to walk away from that. We had so I did I walked away. I said, I'm pulling out now No thanks. I'm not going to complete. I know that we're close to it. And you know, the buyer came back though, you know, let's just agree. Well, don't worry about that. Last I said too late. There's there's one thing and actually, it relates to the conversation we had a moment ago, call your point. All we've got in this business is trust. And if I don't trust and it might be it might be me, it might not be the seller. Yeah. But if there's if there's any lack of trust in such an important relationship, and my colleagues had lost faith and lost trust, then you got to take a take a view and make a hard decision. And I made a hard decision. I couldn't make it I just come up with it. The final point, which is what I've learned, they'll be okay. We had a it's important for us to have a post mortem on this because of the cost of the business of this non transaction. We sat down with my team, and we just literally went through it right Alan and I was kind of being interviewed. What happened. How did it start? Well, I took a phone call from this guy, fine. When was that? October, right? Mark it up? Then what happened? Then what happened? And we map the whole thing across, we got our white board and our boardroom wrote the whole thing up. And every time I said something, then the team went well, that was a red flag, wasn't it? And of course, I wasn't telling the team every single thing going on because they just drive them nuts because things they said, Well, that was a red flag. And that was a red flag. We've got this big massive whiteboard. And my colleague Don said it's the funniest thing he's ever said looking at this this board by the end of the sort of our post mortem we had you said there's more red flags on that board than the Chinese Communist Party rally. Theme This is death by 1000 cuts because you don't they all happen the first month you just say wow, this is crazy. It's the boiling frog. It's so boring frog exactly what it was until such time you put them all down you think so? Quick Lessons, the lessons I've learned from that. If you're ever going to get involved in serious transaction, buying selling anything else, but significant one, even hiring a big member of your team, anything like that. Don't do it yourself with personal you know, we're human We're human beings. And it's too personal is too emotional for this. Go and hire somebody hire a coach or consultant, somebody to do that face to face negotiation be well worthwhile. Secondly, three strikes and you're out. Whatever your rules are, whatever you've agreed, this is what we're doing. If the person changes once, that's fine twice, maybe three times that's it done. Whatever the reason, move out. And last of all, and again, the alludes to a point I made earlier. Trust your intuition. Go with your gut if it just feels despite what the spreadsheets say, despite what the forecast say if it just doesn't feel right. Yeah, live to fight another day, just as
Carl Widger:the point I was making earlier on if it feels epic, it's epic.
Alan Smith:Just walk away. Know you're gone. But look at the cost. Look at the cost. Look at the time we spent know if the downside feels worse than the potential upside, walk the hell away. Thank you for indulging me. That's how it feels. cathartic? I've done it. I got off my chair.
Nick Lincoln:That is that is absolutely brilliant. That's that's, I think how many Trappists that'll be worth listening to this episode just for that segment alone. And yeah, really, really great stuff. Now listen, in the interest of time, I think we need to go on to our our final member of the trap pack Mr. Mr. Hart now, I don't think I've ever known you make any mistakes ever. Andy. So this is gonna be interesting.
Unknown:Andy, Darren, Lee knows about everything. Andy can be told anything. His name is Andrew Hart.
Andy Hart:Are you just getting me back for the pearls of wisdom comment earlier on? Anyway. Okay, so moving on with my mistakes. A couple of platitudes. Before we get started, you know, there is no shortcuts with success, you know, should be hard. Why should it be easy? It's all about blood, sweat, and years, you know, you fail, fail your way to the top. And an expert is someone who's made all the mistakes. If anyone's calling themselves an expert, expert, financial advisor, expert financial planner, they would have had to have made all the mistakes, there is no no shortcuts. Anyway, on was the my first mistake. My first mistake is not having tough conversations earlier on. The one that springs to mind is when I set up Maven advisor in 2017, I moved a chunk of clients across, I sort of cleanse the client bank, let's call it and there was a couple of clients I was on the fence about. So I was sort of calling them up and had an open conversation about anyway, one client was a bit I was a bit on the fence with them. They were a couple. And I said okay, no, it's fine, whatever normal annual planning meeting, and it seems like you want to go ahead with me and come to the new company. I said, Well, I'll email you the new client agreement at the new company, just bring it along with you. And you know, sign it and give it to me because it's just a formality. They said, Yeah, that's fine. We'll do that then. So they came to my office. And I thought they were gonna have this conversation about signing the client agreement. Now we'll just have the normal client meeting. You know, I sort of chickened out a bit. And then I was like, Okay, well, I love the normal client meeting as normal. It was full on an hour and a half, discussing everything about their family, what's going on everything about the business, the kids are away, just finished uni full volume plan, update everything like bang on we've got this track, you know, got this financial track sorted, right, the endless at all, by the way, for you guys. We've got to get that current agreement signed. In this case, the The wife said, Yeah, no worries. It's sort of like a grab a pen. And then the husband went, No, no, wait there, we need to think about this. And I was thinking, What do you mean? And he said, I wanna I need to sort of think about this and speak to my hand and do this. And, and I was thinking, that's a bit odd. We just had like, a fantastic hour and a half meeting, everything went on perfectly well. And now at the final 11th hour, he's like, oh, hold up, I don't wanna become a client of yours. And I was like, Okay, right. So anyway, that ended. For me, I'm giving no second chances. So, you know, I sent a polite email the next day, basically saying, you know, I wish you all the best, but you're not going to be coming to my new firm. Anyway, on hindsight, when I sort of journaled it in my head or sort of wrote some notes, I should have had a tough conversation early up, you know, again, it's what is the theme of this show? Trust your gut? The moment you think, actually should I talk about that and you go now i'll probably push that down the line, you know, if you meet if you meet a mate for a beer, and you've got something important to talk about, don't talk about you know, the fun stuff for half an hour and they got all finally Ireland. You know, just the really tough thing that we need to speak about. Can we talk about it now? just ruins the whole day or not, you know, sets it up. So yeah, trust your gut, if you're going to have those tough conversations have the tough conversation sooner rather than later. Is from my experience. And you know, that feeling when you think is this gonna go wrong? Do I call it out? So anyway, that's my first point. Moving on to my second point, it's a bit more I suppose practical, it's avoid the shiny new stuff. You know, there's so much shiny new stuff in this business and profession, usually around a I usually around financial products. You know, there's so much financial trash that's been created, invented to sell to financial and investing illiterates to make themselves wealthy. You as professional advisors, one of the key things of you working with your clients is things like financial trash, avoidance, scam avoidance, and it's a huge benefit of working with a serious professional. So this is all around shrink your circle of competence, I believe there's very few financial assets you should get involved in is global equities for the growth engine for the long term money. It's property if you're into having a high hassle factor, asset class, and then it's cash roll known expenses. Everything else is financial trash and noise. My final point, this is a marketing. It's a Seth Godin term. So some people will like it, somebody won't ship more, you know, deliver more, you know, be vulnerable, do a bit more of your work in public. You know, I think I started my podcast too late. I think I started in 2017. I've not yet started my YouTube channel. So this is me sort of making a sort of public stamp, I need to start a YouTube channel because I'll start one and do it for a few years and then regret I didn't do it soon. And this is a bit of an odd one for me and Pierre, the sort of founder of hum premium, we've got this bad ideas, idea that we're constantly trying to throw bad ideas to each other. From bad ideas. Usually good ideas come but I'm just sort of saying, find someone who can be your sort of bad ideas, accountability partner, because we always want to wait for the good ideas. But if you just start, you know, just sharing bad ideas, with someone you're close to and trust, you know, through and can be honest, you know, terrible ideas. Quite good to share. As I say, usually good ideas come from terrible ideas. And that's my three points, a bit of a meander through my fourth point was my mistake was meeting Alan Smith for a coffee in the Sherlock Holmes Hotel on June 2023. Sorry, June 2013.
Nick Lincoln:So many people have made that mistake. So it sounds
Alan Smith:like your life has never been the same
Andy Hart:10 year anniversary. And just just for the record, I brew coffee as a struggling polyester wearing suit, mortgage advisor. And this wealthy good looking back, best investment, achieve multi millionaire financial advisor. But anyway, back to you, Sherman.
Nick Lincoln:That's excellent. That's excellent. Well, I I really enjoyed listening to that. And I know it's cathartic for at least 111 of the track back and yeah, you just made the mistake. You gotta make the mistakes right now that was trying correctly. We're not We're not superhuman, you're gonna make mistakes. The thing is, learn from them. And the recurring theme of this episode, Episode 26. To me, and it's a big thing for me because I do go about the oversight is the gut instinct. I don't know what it isn't the human body how we're wired. We have this way this intuition you just you've got to go within if you sense, Allen, ignore us Do not ignore it. And if you sent some marker, once a marker, always a marker, and you don't want more red flags, and the Chinese Communist Party was on don't that's okay.
Carl Widger:I think like a good a good, a good sense. Just on that last point. And sorry, Nick, just fine. dwell on it. But if there's an emotional toll being taken, you got to take a step back and go, Why am I feeling like this? Because it does, it just doesn't feel right. And, okay, sometimes you just got to work through stuff, right. But But like, as you said, Alan, you had so many red flags. And, you know, I think emotional toll have been taken on you is time to take a step back and give yourself that helicopter view. Because sometimes you can be too much in the weeds. So yeah, look, I think that was great. Well done everybody. And hopefully that helps everybody who is listening.
Nick Lincoln:And who isn't that amazing as it is, I mean, it's fantastic. Polat so in Katana, but somehow through through ways I do not understand the Oil Man has found me and here she can was dragging her bulging sack up these fantastic marble stairs, I'm not going to help her because she's paid to do a job and I'm paid to do a job and sit here. And wait here comes the sack. And I'm going to just have a look and see what we've got. And who is the first of the person forgetting the pin tweet and advisor podcast there is a link to a Google form where you can submit your questions and we aren't getting round to them. We've still got quite a few in the bag to get through so if you post a question we haven't come to it yet don't think we're ignoring you we're just we're just getting through them as and when we can. Now the first question again is from Amon Prendergast who are so long question about how to organize a seminar and gents if that's okay with you I'm going to bounce this this this is a meat and potatoes for another episode and maybe the next episode we will get round to aim and the pros and cons of doing a seminar how you do it, who you target, how you follow up. That's the meat and potatoes. So with respect, we're going to ignore that one but I haven't opened up any more TRAPPIST questions so this one is from Ian G he's not got a social handle so he's not on Twitter or LinkedIn partly thinks well done on you and then part of me thinks you're a weirdo. In the most recent podcast, one of you says going much simpler. That was me one plan three buckets one fund What's the fun, please? And what's in each bucket How'd the buckets change if at all? Okay, well I'll Mia culpa. inspired in part by by by the voice by widget and his practice of using the dimensional world allocation funds. By the way, what I say now is not advice. Okay? This show is aimed at financial financial professionals, despite the fact that we deliver it. It's aimed at financial professionals. I know that some some job Publix and retail people watch this show on YouTube, especially just for the banter. Apparently, God help you. So what I'm telling you here is not advice. I'm just telling you, what I deliver for my clients. Okay, it's gotta get out there, right. So I use one fund, and it's the dimensional world equity fund. Okay, I've made this passage over the last 22 years of being an advisor, I went from active, I then joined the culture dimension or whatever you want to call it. Okay, I went down that route. And then I had a multi fund portfolio made up of primarily dimensional funds. And now I've come to the realization if I can achieve massive exposure to the great companies of the world through one fun than you can with this fund, it typically has around 13,000 of the great companies in the world in it. And it is benchmark is the MSCI All world. So it's all the developed world and all the emerging markets. It is global capitalism in one fund. And I'm glad Carl and his topical, tip it on the Morningstar, report LinkedIn to their habit, having one fund actually can help clients not do those bad things so they don't get tempted by the rebalancing and chasing the hot fund. And coming out of the corporate, you don't need to one fund goes into all three buckets in as and when, obviously, in the spending stage, or what some people who don't do our job called D cumulation. They should be shot. It's the spending stage, then you might have a bucket of cash for two or three years worth of income or global short dated bonds or what have you. But otherwise, you go into that one fund job done. John Wheatley, John Wheatley, you are also actually you are on Twitter, you're at wheat. Oh 1976. And John asks, Is the reason that financial advisors stating they have never been busier? And not to covering themselves in advance of consumer duty? If you're asking this consumer to take up quite a bit of our time? Yes, it does. I'm not sure it's covering ourselves to one of the team. Want to have a stab at John Wooden this question. I
Alan Smith:don't really understand the question.
Andy Hart:The question.
Alan Smith:It's a reason of financial advisors. They've never been busier a nod to covering themselves in advance of consumer or this is obviously question before consumer duty. Well, I don't know. The most financial planners or financial planners I speak to are busy is that statement I've never been busier seems to be quite common. There's an increasing demand for advice, quality professional advice. I don't think it's anything to do with consumer duty. Think so.
Unknown:But a
Carl Widger:financial advisors are incapable of saying no, I'm a little bit quiet at the moment. I'd love a lot more clients, everyone I made anyways, I was so flat. You were
Alan Smith:looking after your existing clients and that you just busy, busy as lots going on. Legislation is changing tech tax rates are changing. We're just busy managing our book. That's you not
Carl Widger:everyone is smashing it out of the park all the time out and it just works firms.
Alan Smith:Again, statistically most firms are not if it wasn't for market growth mode. organic growth across most firms is some stats about that I think Lange can do some are in FCA, most firms are sort of lucky to be growing at 5% a year if you stripped out market growth in the past. So anyone who tells you much differently is well interesting. So sure, that was entirely unhelpful Mr. John Wheatley, but
Andy Hart:I think the statement is correct though never been busier. I mean, you start off with zero clients and you have one then you have two then you have three it's never been busier. It still means you've got loads of retiring clients.
Alan Smith:Yeah, that's more than when I had one. Yeah,
Nick Lincoln:everything's relative. Okay, I mean, I did read I'm trying to attribute it but I can't but I read yesterday somewhere there's simply Bizible a guide to consumer duty that runs to 13,000 words which is a half a dissertation supposed to read this crud Okay, so there's your questions answered for this show. will last them as best we can. If the questions are very clear, we will try and give clear and direct answers to the questions that are less clear Our answer is gonna be slightly more muddy. Let's move on then without any further haste because we're one hour 90 minutes God help us on to culture corner now voice don't you haha oh, okay. Go again. Double
Carl Widger:whammy. Wow. Okay,
Nick Lincoln:um, called Dr. Patty Barrett podcast. I guess Dr. Patty as well. She's
Carl Widger:Dr. potyvirus is a consultant cardiologist so I always love hearing from people who have the evidence and have the research for potty Barrett is a little bit different because he doesn't only talk About your heart health and your overall health, he talks about your lifespan so how long you're going to live and trying to extend your lifespan. He also talks about your health span so no point in living very long life but being unhealthy and not being able to do stuff but then the third one that I love he talks about your soul span you know so this is goes back to stuff about your
Alan Smith:name again please
Carl Widger:it's really good stuff it really is good stuff. So I've I've shared a link to a very short podcast 2025 minutes about a consultant cardiologist saying that you know a lot one of the best things for your your health overall mental and physical is to you know, have experiences with the people that you love and he comes up with some absolute beauties right so follow this guy it's potty underscore Barrows in on Twitter, that was an ambulance passing by my window here. But his
Andy Hart:eyes often hear
Carl Widger:a phrase he used right I love this. Your kids are the only ones who will remember that you worked late. Follow Paddy Power and
Nick Lincoln:that is that
Andy Hart:is that is that is actually very good. Thank
Nick Lincoln:you for that car. Lovely. You're welcome Mr. Hart, modern wisdom Sam Harris and go Window Bogle.
Andy Hart:That's basically it. I'm a big fan of Sam Harris obviously, got hundreds of his podcasts over the years. He's got a bit quiet of recent times, which is great, you know, you sort of you're into people then you sort of have a bit of a gap. But it's a big big hit for the modern wisdom podcast. I think it's three hours. It's sort of production so I've done the YouTube link. He's also interviewed during the BOGO people know I'm a huge fan of go in the Bogle I'm substack subscriber of his and they sort of episodes after each other. So once you find the Sam Harris episode, go back to the go into Bogle one I can't get enough of go into Bogle and other way things over to Nick, Nick. Yeah,
Nick Lincoln:I mean, the reason Sam Harris were offered, went quiet was because he had a complete meltdown. He suffered from a severe dose of TDS Trump derangement syndrome. And he said something along the lines of if Hunter Biden, if they found the dead bodies of children in Hunter Biden's basement, he would still mean the Biden family is a better, better case you're running the country than Donald Trump. I mean, it was completely completely off the deep end and he lost a lot of credibility.
Andy Hart:He also kind
Alan Smith:of American politics, but when he said that, I thought, man he's he's lost the plot. Now. There's also he's very, very deep, but he was on the diary of CEO podcast even Bartlett one recently. Oh my God, it was just just you know, so depressing about his future outlook for on AI world. Ai. Just it was that so like? Yeah, just so negative. So yeah.
Andy Hart:I learned a lot from the way he talks not maybe what he talks about. A big fan of him. Anyway, moving on to my second point. Octopus energy
Nick Lincoln:energy, energy. Water wardrobe, take the energy out of
Andy Hart:the house renovation blurbs that I've been embroiled in over the last few months. But yeah, octopus energy is the company I've gone through gone with the new place. A shout out to octopus is obviously a company in our space. It's got multiple companies that are involved in finance, octopus energy, I believe they're the biggest company now. It's amazing. It's amazing. I mean, the energy sector is ripe for having normal people that have got an email address called Hello, octopus energy. Not no reply. No reply. No reply. No reply. Yeah, so it's a breath of fresh air. So yeah, just sign up for octopus energy. Their emails are amazing. Their marketing is amazing. Their service is amazing. Their prices are amazing. Yeah, I'm a big fan of octopus energy. Back to you boss.
Nick Lincoln:If you invest if you if you if you use octopus energy, do you get 30% Your premiums back after two years if you put on your tax return. Very good. Thank you. Okay, Mr. Smith, the Dave Zela streamline my practice coach corner
Alan Smith:are gonna mention him in a second. I'm just gonna do a quick shout out. There's a podcast is put out a few weeks ago, our friend friend to us all, Abraham Abraham, aka Sonia and his podcasts retire mentals I listened to so listen to most of those when they come out. But he did one with the CEO of Transact Jonathan Gunby. Correct. Yeah. I just thought it was a brilliant idea is such an advertisement for that organization Transact. And Jonathan comes across with great humility. And I just yeah, it's just a really good and I think Abraham's got his son. Not that we've got much to shout about but it's got his sound issues baked stand out. It was just a really good positive podcast and worth listening to what I was going to mention this guy, just come on my radar out of nowhere starts following me on Twitter and then notice he's got a newsletter. This is actually guy Dave Zola, Zed o l l e. R. And he's got a business called streamline my practice. So he's a practicing CFP, Certified Financial Planner out of Chicago us. And I gotta tell you, his content is fabulous is well worth subscribing to link to the show notes in the show notes. Just as any as a practice as a practicing advisor, the things that he's doing the things that he's sharing, are first class and you know, it's more, it's more of this sort of stuff that we're doing sharing your experiences with the world. And I think we've all we all agree that we'd rather hear from people who are actually in the trenches dealing with clients day to day and sharing their experiences, their ideas, their suggestions. He's a good follow on Twitter, and he's a good person to subscribe to on this newsletter, Dave Zola, shout out to Dave.
Nick Lincoln:Oh, brilliant. I'm gonna give that a go. Thank you very much, I think and yeah, I concur with Abraham was one with Jonathan Gumby very honest about how the service standards fell off a cliff at Transact as they did with all them everybody during lockdown and how they've really addressed it it's very open and I didn't enjoy that. Okay, I don't I'm not goofing up here guys. Um, I don't think we got any more culture corners we're at 186 minutes in ATC and the air conditioning is turned off. I'm sweating. Sweating. I don't know like a stock buckets. Thank you buckets. So I think we'll call that a bit I think it's a really good show. Episode 26 is one of our one of our one of our really good ones for some cathartic stuff. And there's some mistakes we're open and honest and rare and raw even. So we'll call that a wrap. Thank you dear Trappist. If you want to leave a review for us please do on iTunes six out of five stars you know the score. Like him subscribe to our YouTube channel. We're about 370 people now on YouTube, which is a good number so if you'd like to listen to us, you can watch us as well. I should do that before you eat. Without any further ado, I think we're done aren't we take care out there folks and very
Andy Hart:caring. Chairman good effort.
Carl Widger:Chairman we love you.
Nick Lincoln:Bless you all now get back on sawed off sawed off
Andy Hart:poor poor Sicily.
Nick Lincoln:That I'm keeping that in there. That's really