31 - Taking THAT Fork In The Road

In this latest pile of TRAP, the Trap Pack discuss

- Topical issues, including SJP swallowing Consumer Duty, NextWealth IFA report, M&G closing its property fund, Irish budget investor woes, adviser mastermind top tips
- Meat and Potatoes: Taking THAT Fork In The Road
- Questions posted by our beloved TRAPists Stuart Mullen
- Culture Corner

Links referred to in the show:
AS: https://www.nextwealth.co.uk/research/financial-advice-business-benchmarks-report-2023/ 
NL: https://www.mandg.com/news-and-media/press-releases/mandg-investments/2023/19-10-2023?utm_campaign=EM_RTL_MA_UKA_OTH_20231016_TBC&utm_medium=email&utm_source=Eloqua
Philip Palaveev https://ensemblepractice.com/about/philip-palaveev/ 
Startup Loans https://www.startuploans.co.uk/ 
AH - Same as Ever: Timeless Lessons on Risk, Opportunity and Living a Good Life - https://amzn.to/3tljmqE 
CW: Elon Musk by Walter Isaackson https://www.amazon.co.uk/Elon-Musk-Walter-Isaacson/dp/1398527491
CW: The best backpack in the world ever! https://nordace.com/en/product/nordace-siena-smart-backpack/
AS - Good/Bad Billionaires https://www.bbc.co.uk/sounds/brand/p0g7xj36

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Transcript

Unknown: 0:10

Welcome to The Real advisor podcast, te R A P twerp please follow us and join in the conversation on Twitter at advisor podcast where you can suggest ideas and themes you'd like the track team to discuss. Also remember to like and subscribe to our YouTube channel and leave a six out of five star review on iTunes. Doing all this really really helps us which means we can do more to help you. Now let's head over to the studio for the latest pilot trap

Nick Lincoln: 0:45

yes indeed, dear Trappists Welcome back to what many people are calling episode 31 of the real advisor podcast T R A P trap. My name is listening and joining me as ever are the three other Horsemen of the Apocalypse. Called the voice ager. Alan the storyteller Smith and and the heart now gentleman we have a show

Alan Smith: 1:06

Nick, Nick, sorry to interrupt so soon, just to your backdrop looks a bit different. Where are you? Not at home?

Nick Lincoln: 1:14

No, thank you. I'm not at home. No, I'm in my parents place in Bennett. Rafi on the Costa del Sol about 20 miles east of Malaga. My dad was playing for tank in the garden last week with my brother and his family per tank is the Spanish version of bool. And if you don't have a bool is it's basically a game where you throw metal balls into gravel, and it's duller than that in reality anyway somehow he managed to fall and break his leg playing per tank. So I'm now here managing the fort with mother and dad has just come out of hospital and got into a an assisted care rehab facility and you'll probably be there for the next three to six months as they work on his broken leg and getting him walking I know and then this morning I find out he's also got a COVID So I'm not sure whether we can visit him now and what the restrictions are Pat mother off so I've got a quiet house because business comes first and she's going to care if she can bustle her way into see him my mother was a force force of nature. The Spanish won't know what's hit her when she turns up at the rehab place so that's that's why

Alan Smith: 2:19

we wish wish him well Nick Well, the show must go on it's great that you've continued have have Mike have headset and the podcast goes on. Yeah,

Nick Lincoln: 2:31

I think we're now moved on to overseas ones I've done two overseas ones and Andy and the voice have yet to get off the call never will get off the mark but he's very settled in Limerick because the boy dissolves the boy

Carl Widger: 2:44

not to father Lincoln.

Nick Lincoln: 2:46

Thank you thank you guys.

Andy Hart: 2:48

We're quickly going to shoe on the England game in the England semi final was a pretty rough game to watch. So in the end, obviously yes a one by a point I think even the neutrals felt sorry for England which says a lot about the game anyway

Carl Widger: 3:07

I wasn't make sweeping generalizations like

Andy Hart: 3:10

what you said in the watsapp group.

Carl Widger: 3:14

They stood up and they were counted on fire and as magnificent rugby player he really is I'm really looking forward to the third and fourth place playoff match against Argentina which I think is on Friday just to watch England celebrating the Argentina knock ons like they've won the World Cup because that was definitely a feature of their play during the

Nick Lincoln: 3:36

grace period was very short right okay, are we ready? Mr. Hart? Are you ready to give us some more of your super super high energy read reviews or which they could be any number two to four to five I don't tell them the number anymore crap. Anyway.

Andy Hart: 3:53

Today we got three the first one is from Jeremy squared is a good friend of mine. Great financial advisor is entitled The conference bar available on demand five stars. This is a wonderful mix of views opinions, thoughts and ideas are wise and insightful discussion and great fun. These are the conversations that we value most financial planners thanks, chaps Keep up the great work you do. Next up is from addict to 81818 entitled The real not so hidden gem five stars. Great Listen, every new episode seems to be better than the previous one good chemistry between the four of you without having to agree on everything makes me think of my single advice business the service offered to my clients my investment philosophy. My evolution to being the best I can be Martin shades m j s financial management. The final one is from Bosch, Jan, entitled only five out of five five stars what a refreshing honest, sincere and helpful podcast is proving to be as someone who transitioned to the profession four years ago the tips tricks, dialog and unbiased views have helped me transform the way I think about doing business. First of all for the better. Thank you for the great pod. Back to you, boss.

Nick Lincoln: 5:05

Great stuff. Thanks, Andy. Yeah, so thank you very much, guys, girls and those in between for those reviews, they are really, really important to us in numerous ways, mostly just mental reinforcement of what we're doing is a value. And thank you as also putting your names in those reviews if you want to do so rather than than just using an anonymous hashtag. That's, that's great. And just I think agendas a bit more community, which is what we're all kind of about, because this show is as much made by you as as made by us for jabroni. Okay, so moving on to the topical tip bits. Yeah, we got a lot of really good news stuff this weekend. Well, let's lead off with the big thing, the SJP. And maybe consumer duty doing some decent duty, Alan?

Alan Smith: 5:46

Well, yes, this was obviously the biggest news in our sector of the last last couple of weeks. And the news is that St. James has placed the largest wealth management group in the UK announced some fairly sweeping changes to their structure, their fee model their their overall stepped up. I mean, the fact that their share price has haft in the meantime, as a result is only part of the story. I mean, the brief headlines that I've read so far are that they are planning to remove exit charges. This was the most egregious part, I think of the whole St. James's place setup was that the initially they had potentially you carried a 6% Exit charge. From day one, obviously, it decreased over a period of time. But that was the one that was felt just completely out of sync with the rest of the market, certainly since the retail distribution review, which is over 10 years ago. So their plans are to remove that. They've also announced plans to introduce more index funds as a range of options, presumably lower cost index funds. And I'm sure it's completely coincidental that it was about six months ago that we discussed in James's place on this very podcast and raised those very specific issues and points, I think, broadly speaking, our view was, was sort of balanced towards slightly positive in terms of their impact across the whole sector. We took a few bullets as a result of that from the sort of hardcore independent advisors, Mr. Hart in particular. But the kind of the those standout issues that we did highlight as being just not in line with the modern sort of financial planning business. They've, they've suggested they are going to change. Yes, it's not going to happen overnight, they've had a few sort of negative comments in that I understand these changes are not going to be brought into the end of 2025. But, you know, this is a huge organization. So the 100 and 50 billion assets under management, footsie 100 company, and I don't expect them to flip overnight, there's a huge amount of knock on impact within this as well in terms of the structure, how they recruit advisors, how they lend money to advisors to fund practice buyouts, there's a whole lot of knock on second and third order impacts of things that have yet to be fully understood. The last thing I'm going to say is to for a detailed breakdown of the kind of complexity of the model, our friend, Mr. Abraham, aka Sonya, in his podcast, and if anyone's listened to that advisor, 3.0 Yeah, he does a sort of deep dive on all this stuff. It's quite interesting that he unpacks, much more than than I had understood about the model, how it operates and how it's likely to change. But I would just say, for a company of their size to make these changes. It's so refreshing because most organizations most listed businesses are concerned only about the next quarter results, and therefore their share price. And to take a very bold decision that has effectively haft their share price with a view to the presumably the very medium to long term I think is very bold and should be applauded, frankly. What are your thoughts, guys?

Nick Lincoln: 8:48

Yeah, totally, totally agree with that. And you're sorry, I will come to you and yeah, I and also, you know, just be careful, be careful with those those those ifs, who are passionately against SGP for various reasons, whatever they may be valid or invalid, just just watch out because of SJP really do make a transition to be more more passive based. I'll never go entirely past but more passive based, certainly more financial planning based. I mean, I know that Andy does a lot of training with them on voyage SJP. So they do they do use the cash flow modeling if they start using passives embracing full fat financial planning. And then you've got that advice guarantee and you've still got the nice cartridge paper and the nice swanky country homes for the seminars, which is going to be a pretty compelling proposition so just you know, that they'll don't do this this entire and they will they will come out of the stronger and as you said, Alan Well done on them for having the balls to do it, seeing the share price drop off, but there's it there nothing else, if not long term visionaries people behind the SJP brand, they'll they'll know there'll be short term pain, but long term, this could make them even more powerful. I think, Andy?

Andy Hart: 9:48

Yeah, a couple of points. Yeah, I do quite a lot of training with them. So I sit from the inside and they certainly hadn't in the right direction. I echo or Alan and both of you said Nick about large firms making big difference agents, which is great. I mean, my real problem is with the purely investment managers that charge close to 3% for absolutely no financial planning, no financial advice, no money flow, no tax planning. You know, the real pirates and pinstripes, these firms, I hope they go. Yeah, the firm's that just do investment management and none of the good stuff. I mean, these are the ones that as I say, hopefully there'll be going after. The other thing about Yeah, obviously, the share price being hammered. This is good news for end consumers. What I mean by that is the Transact share price has also been hammered because they don't skim off cash. I think Transact could double their turnover. If they just skimmed off cash, they could be clear and an extra 50 million a year if they skimmed off cash, all the other platforms. So again, I agree, a slightly unconnected point. I have to COP.

Carl Widger: 10:57

Look, I think it's I just echo what everyone said. It's it's, it's it's a ballsy decision from them. They're definitely taken a lot of short term pain. I would be an investor in the SJP share price now, because I think they've taken what you don't often see with these bigger organizations, they've taken a long term view. Yeah, and I think I'd be worried if it was an IFA in the UK, honestly. Because you don't see this very often and more power to them. And I'm really glad they listened to our episode, and they took it on board, and they decided to make some real change. There

Nick Lincoln: 11:33

is without Without doubt, I think we unanimous on this, it was our episode that caused

Alan Smith: 11:37

this to happen. It was the only reason

Andy Hart: 11:39

I think this is brew been brewing for many years. But they're saying this is the

Carl Widger: 11:42

big enough. And it was just because of Trump

Andy Hart: 11:47

biggest change in over 30 years. So it's enormous. Anyway, back to Boston.

Carl Widger: 11:51

But But But But seriously speaking, I know you've been working with them on, you know, transitioning to doing some real financial planning. And that's been kind of going on for a number of years. So this has obviously been in the offing. So be careful what you wish for his next Yep.

Nick Lincoln: 12:04

Okay. The bottom line is it's good for consumers. And that's good for everybody. Really? I think so. Mr. Harder are Mr. Hart? Yes. Humans under management. You have the London Shindig, you have the Cape Town Shindig, there may be two other countries that are willing to have the shindig come to them speak on Yeah. Oh,

Andy Hart: 12:24

very briefly mentioned if this is anyone listening to that, anyone listening to this that is connected in either Sydney or Dublin. You know, I did a show in Dublin once before, and I'm planning on doing one in 2024. So I'm speaking to the right people, the right companies, right organization. So if that is you listening, and you are based in Dublin, and you're a consultant, an investment house, financial advisor, that wants to help you sort of put this on and it'll be great. You know, the idea is to sell out a room of 300 200 as a minimum. So that's very briefly about Dublin. I'm also speaking to a couple of people about hubs in Sydney. So if you're an Australian advisor, listen to this and think you've got some connections that can help with that, then please do again, reach out and send me an email, whatever, got humans on the management.com and hit contact or something. But anyway, that's it very briefly back to you, Nick.

Nick Lincoln: 13:10

Great stuff. Alan. I have got some time booked in actually with a with an Australian advisor based in Sydney, who, who made contact with us via a loom video and for his creativity. We thought, yeah, we'll give him some raw time. He just wants to know a bit more about what we're doing and so forth. So I mentioned him, Sydney to Marcus when we chat with him, Andy and see just just just so that see his end with with an OS as IFA or equivalent. Ah, Mr. Murray makes another appearance. Mr. Hart?

Andy Hart: 13:39

Yes. So Nick Murray, last week was 80 years of age. He's had the biggest impact on me in my career in life and everything. You know, the joke is we wake up in the morning, and we roll our mats out facing Brooklyn. Yeah. So Mr. Murray was at last week.

Unknown: 14:00

We I mean, yeah, you're the only one in the world.

Andy Hart: 14:03

I think three of us on this call have consumed a lot of Nick Murray stuff. I think Carl is the one that's consumed at least. Maybe an assumption from you. Yeah. So happy birthday. Nick Murray. Thank you for all the good that you do. I think Nick most newsletters got about four and a half 1000 subscribers worldwide. He says that's 1% of the advisor workforce. I believe there's about 450,000 financial advisors worldwide that, you know, try and do the good stuff for clients when he's got 1% of those are part of his his gang. So happy birthday, Nick Murray.

Nick Lincoln: 14:37

Okay, thank you very much. And, Mr. Smith, the next wealth Benchmark Report make this sound more interesting than it reads.

Alan Smith: 14:46

I think it's, I often read these they come up periodically from various organizations. I think I mentioned the Schroeder's one quite a few episodes ago. Next wealth. This is Heather Hopkins some of you know Heather. She's at I think she's a good egg.

Nick Lincoln: 15:01

If you met her at the CES, the city thing wouldn't hold in sorry. She said she was really good. She good fun. Yeah, she's striking good credit

Alan Smith: 15:09

as a word. No, she's good. She's very positive. She's obviously a consultant to the sector. Organization is called next wealthy produce publications to do research reports they have, I think they have their own their own conference. And I just haven't read this, the latest one that I've posted a link to anyone is interested can download it, I just think is quite interesting. Just keep your finger on the pulse we can. The danger of people like us, and maybe some of the people listening to this podcast is we kind of live in a bubble, we only can meet, we assume that all the rest of the sector is exactly like us talking the same way charging the same way, have the same sort of operating model. So it was quite useful just to spend 10 minutes reading through these reports which she goes out to the market does her research or her team does. I'll just I've singled out a couple of points, which I'll just highlight for this conversation. The general the general view is that the industry is fairly flat right now. And that's probably reflective of general sort of economic conditions, high interest rates, etc. Interestingly, only let me see, whilst they're talking about fee them talking about fees, for example, fees have come down. This is interesting as relates to SGP as well, our own fees have come down from a fairly steady the last few reports 2% all in to 1.75%. All in that seems to be the benchmark standard for advisory, full package, financial planning, investment management platform, etc. Across about 1.75% not sure whether you think that's high or low, Nick.

Nick Lincoln: 16:37

So does that include? If it does say sorry, I didn't hear it. Does that include sort of DFM kind of the Bruin dolphins and that kind of thing? No, I

Alan Smith: 16:45

don't. I don't think they get invited to participate. This is more. And there's there's very specific reference to the word financial advisor and financial planner, I'm not convinced that those organizations consider themselves to be financial planners. They are discretionary fund managers, aren't they? Because I think from all our own research, we don't really identify the fees being at least that if not more for those organizations without full fat financial planning, but that seems to be in the financial planning sector, as increasing number of advisors calling themselves financial planners, and it refers to in this year down to 1.75, which is quite a significant change in the last 12 months from 2% to 1.75. So fees are heading lower. And the on our it says only 50% of firms are planning to grow by taking on new clients 45% aiming to increase assets under management. So it feels like a fairly good sort of static market that with a lot of firms, at least half the market, according to the survey is kind of holding steady not looking to hire anyone not looking to take on a lot of new clients

Nick Lincoln: 17:52

is the seems actually to me and

Alan Smith: 17:54

and that does seem that's that's that's the research has gotten on many firms, certainly within the hundreds of firms that have been researched. And a significant number have been approached in terms of a number of are planning to sell their firms. Yes, 16% are planning to sell the firm's but half the market has been approached to sell the firm. So there's a few sort of bullet points, they're worth having a look. If nothing else, just sort of identify how your own organization fits with the broader market as in terms of the people who've been surveyed, it's feels like it's we're currently in a period of kind of transition, maybe holding the ship steady, high interest rates, etc. Not looking to recruit a lot of people not looking to take on a lot of clients. So interesting posted a link to in the show notes.

Nick Lincoln: 18:39

Okay, thank you, Mr. Smith. Appreciate that. Now voice the Irish budget, not great for investors.

Carl Widger: 18:48

Yeah, so the budget was last week, the week before, I can't remember. But anyway, so there was very little really changed in it. There was kind of significant change in the previous budget. With regard to PSAs, there has been a little further tweak, that basically all pension contracts in Ireland are going to be heading down to prsa roofs, which is kind of good, because you've got only two now you've got kind of Master Trusts, and then you've got PSAs. So it does take a lot of the complexity out of it. And there are some good rules around here as a is that you kind of exit fees and that kind of stuff. So it is better for the consumer under some kind of good rules in there in terms of foreign advisors, you know, contribution levels. I've spoken about that before, but I suppose the big one was, we were hoping in this budget that the gap between exit tax on funds which is 41% and CGT, which is 33% that that might be closed and it hasn't been closed. However, the minister did say that he is now asked for a report and that the report will be back to him kind of next summer so we'll be hopeful for some Ain't no changes in that in the in the budget next year. The problem with that, of course, is that I have come across a couple of high net worth folks who feel that, you know, by investing just buying shares themselves, that they can kind of replicate. They certainly couldn't replicate a DFA or an allocation fund that has 13,000 stocks without going oh, yeah, I could probably replicate or get close to an s&p 500 index, right? Because that reduces my tax rate from 41%, on my gain to 33%, which is not insignificant. But this is the classic case of the tax wagging the tail of the investment diagram, you just, it can't, you cannot try and replicate an s&p 500. By doing it yourself, because of trading costs because of rebalancing because of tax issues, it just you lose all of that potential gain by trying to do it yourself. So it doesn't make sense. But having said that, it also doesn't make sense the CGT and exit tax of this vast differential. And ultimately, I suppose my feeling on it would be the consumers will be much better served having the two tax bonds around the same, because they are much better in you know, funds, whereby professional managers are rebalancing and tracking the market and managing that tracking error, etc. So that was kind of a little bit disappointing, but it is in the pipeline. So there's just one other point from the budget. But Alan, you have your point to make there.

Alan Smith: 21:37

I just wondered whether ETFs ETFs are considered individual securities aren't the other behind them. They are, you know, 1000s of underlying securities. What's the view? Presumably you get you access? ETFs in Ireland? Yeah. What's the tax difference?

Andy Hart: 21:55

That's pretty long for you, Alan.

Carl Widger: 21:57

Thank you. Yeah, but they're there. But they have exit tax on them. So this is no there was there was some there was some way of buying if you bought Canadian ETFs or something like that, that you could avoid the eggs attacks. And you know, it was just mad stuff. Yeah, yeah. Yeah, exactly. So. So yeah, it's it is a challenge I'm actually talking to.

Andy Hart: 22:23

Only on a Wednesday. Yeah, well,

Carl Widger: 22:25

Anandi you know what, you couldn't have put it better. Right, that that's exactly it. And it was like, and then they stopped it. So now people who have all got all these Canadian ETFs are going Oh, Jesus, how do we mind this screen? Yeah, so it's so look, it's I think simplification of the whole thing is just, you know, you know, tell us work out what talks you want out of this thing, and then just try and equalize it across across everything. So that's kind of my view. The other big one, by the way, was EIS so I think you you guys call it AI SL, it's investing in startups and that kind of stuff is Yeah, yeah. So we got an EIS that's changed, in terms of how old the company is a big company is in terms of your, your, the the tax relief that you can get, so they become much less attractive. And, and, look, here's the point that, you know, regulation, can all of a sudden wipe out businesses or make them much less attractive, because I know firms who are only doing EIS funds, and now they're gonna have to talk to their clients about how well we have, you know, I think you get the higher tax relief and the much riskier ones. So startups who are less in business less than two years or something like that, of course, you are going to but that's very high risk, you know, 90% of startups fail and all that good stuff. So, so look, a few changes, they're kind of minor tweaks. But at the same time, you know, it seems like we're heading to a better place because we're definitely in a better place as of last year's budget in terms of pensions, appearances, and that kind of stuff. I won't go on much more. It's kind of technical stuff. But But I suppose for any Irish advisors out there, important that you do know this stuff.

Nick Lincoln: 24:08

Go Andy Allen, myself, I think Karl came across there as actually understanding what he was talking about with that budget. And he that was the first isn't

Unknown: 24:16

easy. Reading straight from a script. Obviously, one of his colleagues have passed him so one of his colleagues, but it puts it in script. Can you read this out? Please?

Carl Widger: 24:25

See, these boys are always saying that I don't really know what I'm talking about. Right. Now, I might have an add on.

Nick Lincoln: 24:35

Thank you. Okay, so we're gonna come back to the point on we all do that. So my voice storyteller you went to a Business Strategy Workshop, run by DFA dimensional tell us about it.

Carl Widger: 24:49

We did indeed. This is I suppose I was attracted to this one because they were going through DFA do a study that if You participate, you get all the results back, which is really, really good. And it kind of helps us in terms of what are the metrics that the best performing advisors worldwide are looking at. Like, look, it was it was it was, as all the DFA conferences are, they're doing really well. And they're slick, I would have honestly preferred a little bit more on the on that financial advisor study, they did kind of an hour and a bit on it at the start, I'd have loved three hours on it, but I guess probably not everyone would have. But I've got to delve into a little bit more detail with the DFA folks. The one thing I was struck by in the event was the quality of advisor there. And it's, it's just better than anything else I go to, and, you know, the connections and the contacts you make. And there was a, there was a few advisors over from Ireland, and I managed to kind of have kind of direct discussions with them. And we've agreed to kind of link in a little bit better, because, you know, there's not too many of us doing, you know, the financial planning and the DFA and that kind of stuff. So we can only help each other. And I think there was definitely a feel for that. But also then meeting some advisors who are on this journey. And this was more kind of UK folks that I met, but there was some German folks as well. So it was really interesting hearing their stories as well. And I just thought good vibe about the place, really, really solid body of advisors. And I nearly got more alert more out of the chats in the coffees and those few drinks afterwards than I did at the actual conference. So I thought it was really

Nick Lincoln: 26:43

good as it is ever the way Alan, you got something to talk about as well. And I know you can talk about it, because you've unmuted and you're muted through the entire segment with your shuffling of your papers continue with good friend.

Alan Smith: 26:55

Yeah, I was at the same event with with Carl. And yeah, as you says dimensional kutani a good show. One of the things I look out for on the calendar when they announced they're kind of an agenda do a year in advance their various sort of programs, conferences, workshops, this is one that I tend to put in my calendar. The interesting thing about dimensional, they've got a program called dimensional 360. And, you know, I hesitate to make this podcast a kind of an advertisement for dimensional fund advisors, you know, but it is one thing that we all agree with the four of us have in common we all use the investment funds within within our our businesses. But the thing I find particularly interesting about dimensional is they say that here's here's how we think the world operates in terms of an investment philosophy. Here's the evidence, here's the kind of empirical research that backs it up. Do you engage? Do you want to engage or not? If you don't perfectly fine? If you do, it's almost like that's, that's a given. Now, let's take now what are the other issues and challenges within your business? And there's the idea of this kind of a complete view of your business, this dimensional 360? Is they talk about yes, they talk about investments, that's all part of it. But then he talks about strategy. Because we're all in business. We're all either, you know, trying to start a business trying to grow a business trying to maintain a business, what are the key issues, challenges, opportunities that exist, and taking the concept of best practice from around the world, they've got some of the very best businesses around in Europe, in US and Australia and all around the world, to deal with them. So they sort of share this concept of best practice. And the the third part of that kind of three legged stool in terms of the 360 approach is effective communication. How do you communicate with your clients? How do you communicate with prospects? How do you translate this sometimes dull and complex can story investment story practice management story into effective communication for your clients. So that's what I'm particularly attracted to. I'm not really one of these people who's deep in the weeds on the investment side of things, I find some of it relatively dull. I know other people love it. They spend their time sort of poring over their data and spreadsheets, but I'm interested in what best practice looks like from around the world. How really successful firms have achieved that level of success, how they're growing, how they're recruiting, how they're retaining staff, and dimensional do that super well. The last thing I'm going to say is all the people that spoke on that event and they're all high quality What stood out for me was guy called Philip pal Aviv, who is a kind of Bulgarian American character really high energy presenter he's yeah he's got two books to my knowledge which are worth checking out i'll put a link to his website in the show notes Yeah, call it for those who are watching this on YouTube calls holding it up. But some some really useful deep insights from Phillip and I thought it was just a high value contributor that to the day car car you want to come back on that?

Carl Widger: 29:45

Yeah, just just a couple of points. I Todd Katherine was the best of the day by the way. So there you go. Different different people have different views. And I'd also prefer a full day Alan, of, you know, best practice in advisory firms or whatever it Just singly, just to kind of come back to the point about the report that Heather Hopkins did about markets going flat. The growth rate for the best advisory firms is definitely down about five or 6%. Because I was surprised. So they said it's about 17%. Now, that's the as of last year. And I know for a fact, because I've been tracking these that it was in excess of 20%, the previous year. So you know, the growth rates are coming back a small, but I loved what you just said, they're out and about, you know, what are the metrics for the advisors, and they actually put it down in a slide. So I have written them down. It's revenue, profitability, client retention, employee potential retention, and revenue per advisor. So if you want to, if you have a firm that's, that's kind of in growth mode, and you want to track the metrics that the best firms track, there you go, and that's what we're going to do in matters. We've already put that in place. And we have a meeting on that tomorrow. So yeah, best best practice. I thought it was brilliant. And loved meeting all the advisors. It was really cool. A big shout out to Rohit, who, who I had lots of lots of chat was just a great guy who's kind of starting out and I loved hearing the story. I was I was inspired by him. It really was. Yeah, he

Nick Lincoln: 31:13

was good fun, Andy.

Andy Hart: 31:16

Yeah, dimensional teach financial advisors how to be excellent. So it can't be praised enough. Just to sort of lighten the mood. Yeah, I rocked up after for drinks with with you guys. And we had a few pints and a few pubs in Farringdon, we ended up in a lovely Italian restaurant, the best ravioli I've eaten for a long time. Yeah, lots of fun.

Alan Smith: 31:36

I mean, this this was quite funny. You know, Carl and I, the serious players here, we were there the whole day, we were sort of consuming all information. These two jokers rock up for the drinks afterwards.

Nick Lincoln: 31:48

Yeah. After the best bits of the conference and the bits at the, you know, in between.

Andy Hart: 31:53

All joking, but all jokes aside, I met a lot of great advisors in the pub, and have agreed a conference speaker for next year. There's a connection for a conference. You know, there's loads of good stuff that how it ends with with advisors in and around the DFA. So yeah, that's a quite a lot. The over

Alan Smith: 32:11

a lot of Trappists were in attendance were and they quite a lot of people who listen to this podcast where their car was a celebrity people begging him to have selfies taken with them showing all their colleagues. It was quite what was your colleague? What did you get? What is one of Patti say? You said it's like hanging out with a celebrity footballer, and you're the you're the sort of non famous one standing alongside.

Andy Hart: 32:32

Juries. Juries are two people. Alan Sophie's a single.

Carl Widger: 32:38

He takes care and back to the office gone for fixing cars like celebrity here. Oh, I'd say he's hazy.

Nick Lincoln: 32:48

Enough ego massage and good. Moving on to Okay, yeah, this is so MG MG is closing its physical property fund. And this is really a very quick trip down nostalgia, nostalgia lane and just sort of commenting on the changing investment landscape and the way things are done. Now. When I when I used to work for allied Dunbar in the 1990s we didn't have we didn't have with profits were a totally unique link. Basically, we were the future. But the future then was hard to sell. You could sell on Amazon high street because you were flogging with profits, weren't you? And we didn't have that the closest we had was the commercial property fund the Dunbar commercial property fund which invested in bricks and mortar commercial property. So retail business parks offices, light industrial, and it had a very low correlation to the stock market. So it was kind of an alternative thing. And I when I became an IFA, I used bricks and mortar commercial property funds from Allied Dunbar, which was then Zurich, and then LNG, and maybe some M and G. And I stopped kind of using them around the credit crunch, because they're highly liquid these funds and when people want to come out of them, the fund manager has to sell property. And these are some of these properties of millions of pounds worth of property. They don't settle that often. So they're very illiquid. And there were gates put up on coming out of those funds in the credit crunch. So I thought Hold on, I don't need this. So I kind of migrated to using a REIT fund or real estate investment trust fund the Blackrock one, which they recently were two years ago, they changed to put some ESG garbage in the title. So I thought, well, I'm getting rid of that. And of course, I've got rid of that as well. Now as I use the one fund philosophy, but just a throwback when it's when images are closing this fund. It was a massive property fund, they're saying they're gonna just sell the properties within the fund overtime and return it back to investors in the form of cash. But of course, those those those investors are locked in. So we do cash flow modeling for people and then the idea is that the cash is there when when the cash is needed. That's really what we do. And alongside that, we make sure there's always going to be enough cash for future needs very difficult. Now, if you're one of these gated property fans, but a sign of the time these were these were all the rage A while ago, and that just caught my eye.

Alan Smith: 34:50

Just just just quick points on that make this this is the challenge of having what's called open ended funds with illiquid assets, isn't it? You got to fund that kind money coming in and out. But the underlying asset is entirely illiquid. And the challenge then is that they have to keep quite a high significant portion in cash to keep liquidity that which then has an impact on the long term sort of cash drag on the overall yield and return. Just just as we are topical titbits, Mr. Hart and I went and looked my I'm in I've got an office in the city of London. Been here for nine years, we're coming up to the end of our lease. And of course, we're looking around and of course, everything I'm reading is, well, office rents are going to be loads of empty office space, everyone's working from home half the time. The modern approach is to have a kind of Flexi office type space, you know, kind of these we work type things and then have some dedicated offices with some sort of open plantings. Anyway, I had a look at an office space last week. Very nice. It was all kind of modern and funky and interesting, and it's the City of London. And for those people who know about this stuff, just to give you headlines you remember Andy the the guy was quoting now it's an all inclusive, all your rent and electricity and all the rest of it, but 248 pounds per square foot. Now that is about three times what we're currently paying for our basic rent. Exactly. So this view that property all these sort of empty office space is going to be desolate, and they'll the City of London is going to be empty, etc. For whatever reason, it's not quite true, and I don't I think that's a punchy sort of first offer but while I was absolutely gobsmacked when he quoted that, that remember Andy?

Andy Hart: 36:32

Yeah, it was pretty punchy was a lovely office, fantastic location, great inside lovely balconies, etc. But yeah, punchy numbers.

Nick Lincoln: 36:39

I think you'd need lovely balconies if you're gonna start paying that kind of money because it might be jumping off them after a year or so. That is expensive.

Carl Widger: 36:46

Yeah, can't do client meetings and lovely balconies. That's all I'd say about that.

Alan Smith: 36:50

Yeah, it's a bit more than Limerick. I'm imagining in terms of the rental,

Carl Widger: 36:54

but slightly.

Unknown: 36:57

Okay. Moving on.

Nick Lincoln: 36:58

Okay, so the final tropical chip bit and this could this could this could be a real this could be something that could evolve into into a bit of a bit of a long subject, Mr. Hart starting a mastermind do's and don'ts, good ideas. We have been around the block with this a few times, haven't we, Andy?

Andy Hart: 37:14

Yeah, I think we have but a couple of people have reached out since then. And I know some people have set up masterminds following on from trap I spoke to a guy Northern Irish advisor he's done it. I think Alan spoke to guys in Scotland. They've done it. Yeah, so I've set up a couple of masterminds over the years I set up like the volunteers user group obviously create harm which is slightly different is more like a sort of conference and sort of company.

Unknown: 37:39

And the the odds are grab a Darien Andy knows about everything. Can't be told anything. His name is Andrew Hart.

Andy Hart: 37:55

Beautiful, I will explain that I want to know. But the mastermind I'm part of that we quote a lot of the time I didn't set it up. I've been part of it about 10 years, obviously, I'm a key member. So that one is we meet monthly, we meet in a lovely Hotel in London, we meet in the Dorchester we meet at about eight in the morning, that goes on to 11. It's an important meeting that we all block out a year in advance and commitment, as in showing up is a central tenant to the club. So let's say we have 12 meetings a year, you cannot miss more than two, you know, it's that strict, successful clubs. The reason why clubs are successful is because commitment from the members. In terms of what we talk about, it's a bit like a little bit like this, we have topical tip bits and then meat and potatoes, let's say as in meat and potatoes is a talk from someone. Over the years, we used to get people in that sold stuff to financial advisors, and they pay a fee to sell to you know, a roomful of 40 people. And obviously, if some of us become clients, it's great. If we don't, then obviously, that's their, their sort of dilemma. Whereas now we don't really do that we sort of cover the cost of ourselves. And then we get great speakers in, I suppose how you're going to start one I'd start in an ideal world, you start with 10 people like minded people, you know, get a couple of you know, monthly meetings in the diary. If you can't get 10 and obviously fives okay if you get five people so right next month, you come back you got to bring, you know, a mate or another colleague that you know, you know, a similar mindset. And then within obviously, a month it will go from five to 10 I don't quite know more, what more about it. I mean, our mastermind we've got an email group that we email each other sort of questions, queries, you know, help requests. So again, it's all about community getting to know people better. We meet people outside of the mastermind, so we'll have a coffee before or after or go and meet them in an office or have lunch. So you want to get to know the people quite well. Yeah, we've got a big diverse group of people in our mastermind 40 People from little little old me solo advisors to people that work for, you know, large organizations. I think the mix is good. I mean, you could get a mastermind with 10 of you that all use the same platform will use the same font and all have the same sort of message to clients. But that might be a bit hard to continue in the scale have might be having Nick. Yeah, that's what we're sort of brewing on mute, potentially gonna launch it at some point. Anyway, so that's, that's my start for 10. On this topical tidbit that is almost the meat and potatoes. So who's next? I think I just signed up.

Carl Widger: 40:28

Yeah, I'll jump in. Quick question, Andy. And the one that you guys are in is 40. Too many? It just seems like an awful lot of people

Andy Hart: 40:37

sort of getting to the point where it potentially is. Yeah, if you had to, if I was really pushed, I'd probably say 25 might be the ultimate number. Okay. Alan might have a different view, because he's been a member for a lot longer. He's obviously allowed for me.

Alan Smith: 40:52

Yeah, it is, it is quite a lot. But you don't you reckon you never get everyone showing up? There's always somebody can't make it on holiday or something? So you generally you do

Andy Hart: 41:01

get close to 40? Allen most most months now. It's,

Alan Smith: 41:05

yeah, there's there's a WhatsApp group of people that have raised questions as a as an email group. So it's a decent human eye. And you're right, it's the diversity of the group, I think, watch this power. If we're all the same, then we're not learning a ton of each other. It's a bit of an echo chamber. So there's often quite a few things that I completely disagree with within the group, that's fine. That's where you can probably possibly possibly learn. But, I mean, I don't know this. I mean, it's probably beyond our scope. But if we built a website on track, or something, just had people communicate, I'm in Scotland, I'm in the Midlands, I'm in Newcastle or something you could, because a lot of these, we've got quite a few listeners now to try out. And if they all wanted to sort of congregate or get together, but I don't haven't got the scope to just set up a matchmaking service. But yeah,

Carl Widger: 41:53

let me know how that goes. Can you do a call Can you can you get have sorted

Unknown: 41:57

by the morning,

Carl Widger: 41:58

I can't even get the Irish one off the ground. So that's what I was gonna say, like, I was kind of going to get it off the ground. And then I just got busy with other stuff. But what we have agreed is we're going to put a date in the diary around Christmas for just drinks and get whoever wants to go to that drinks and just kind of see, just have a chat and see where we go from there. Because I'm not going to do the work for it. I'm just not like, there's no point in me saying otherwise. But you'd never know if we all met up with my micro leg. So if there are any real financial planning advisors out there in Ireland, or maybe based on what you guys have said, people who are not, but would like to transition, you know, pop me a message on LinkedIn. And I'll be sure to include you and let you know what the date is. And when we're going to do it.

Alan Smith: 42:46

I think she makes a good point in their call. And one of the reasons that our group that ideas exchange has held together for so long, is there is some decent admin behind it, there is somebody there who is appointed to organize, you know, send out the agendas agree who's the chair, you know, and kind of just generally keep an eye on the admin. And let's face it, most of us to not want that role at all. So you got to identify somebody, or even somebody within an organization, somebody's got some of that extra capacity, somebody in their team, who's happy just to send out the monthly agendas and meeting notes or whatever. And the other thing is we do get we get CPD points, which you guys love. So you can qualify for your CPD which can which is helpful.

Nick Lincoln: 43:31

Yeah, just to amplify that point, that the guy who organizes the ideas exchange that we go to, you know, it's a paid role, because it is it is it is a big role. And it's a it's a serious concern, and it's a serious group. Okie dokie, I haven't gotten

Andy Hart: 43:45

just final point on that. But don't let that put you off. You know, in the early stages, getting five people in a decent hotel room here in Liverpool is not going to be too much admin at all. But when you're an established organization, dealing with money coming in people that have not paid, you know, all that sort of stuff, then it becomes a bit more cumbersome. Maybe you'd appoint a chairman and they'll they'll pay less than the other people let's say get get get a kitty going like five people pay 500 quid to get get the thing going. Again, it's a business write off expense, all that sort of stuff. I think the masterminds are really good when something has gone wrong in your business, or there's a real challenging situation that you've got to deal with. I mean, the amount of requests that come into our mastermind, you know, does anyone deal with, you know, fill in the blank, really, really complicated situation. And then immediately three people say, Yeah, I've dealt with that. Yeah, I've dealt with that. Yeah, I've dealt with that. So

Carl Widger: 44:32

that's exactly it only because I had a couple of conversations that the dimensional gig with some Irish advisors, and on the one hand, I had a problem that I was discussing with with one guy and he's been through it and then the, you know, the flip side of that I was able to help someone else so 100% You're absolutely right. Yep. I need to get my ass in gear on that. Okay, Irish advisors. I'm gonna do it.

Nick Lincoln: 44:53

There's your there's your commitment from Episode 31 of the real advisor podcast from the voice. Great stuff. Okay, we finally managed it. Fresh your way through the tropical titbits, which tells me we naturally now lead on to the meat and potatoes of episode 31. This was an idea put forward by Mr. Smith, Mr. Smith, a fork in the road career choices and big decisions.

Alan Smith: 45:15

Yeah, thank you this. For that the knife sharpening to stop sort of putting calm is although it's speeding, speeding spots, it's peeling

Andy Hart: 45:26

potatoes. Yeah, you don't

Nick Lincoln: 45:30

want a man full of testosterone, you want a man who's frightened by the sound of a spuds being peeled?

Alan Smith: 45:36

All right isn't since since we've been running this podcast, I think all of us gets sort of inbound contact emails, LinkedIn often requests and and I've just gone through in the last maybe four weeks a real kind of increase in those number of numbers of requests just to have a chat, you know, kind of pick your brains, that sort of thing. So I've been on a few teams calls zoom calls in the last little while. And I just thought, rather than, you know, meet me one to one giving my sort of thoughts and feedback to other advisors, I thought we'd just raise it as a meat and potatoes subject. So we can share the information with a wider audience and also get the four of us to contribute. So the issues are the similar in that you've got to you've got a number of advisors who, how can I put it kind of see the light that maybe listen to this podcast, they've understood that there's more to life than than certain, you know, firms that they might be working in. They like the idea of what we're calling full fat, financial planning. They like the idea of kind of a sensible, low cost, evidence based investing philosophy, all those things that we've discussed.

Unknown: 46:50

Grab yourself a drink, a very long drink. It's story time. ALAN SMITH

Nick Lincoln: 46:58

thrashes his bio on his paper pad in anger, when the drop comes.

Alan Smith: 47:03

Impatient, get on with it. So look, obviously I'm not gonna name any names. But this is a couple of situations, for example, there is a guy I spoke to seemed like a really, really nice guy, he really gets it, he understands it. And he's working in a firm, that's, I mean, these firms still exist is basically basically just churning plans, they're just sort of looking at client's current investment portfolio or pension product, for example. And they're going back to the same client and saying, Oh, we found this idle hours, make it out. Let's say it's a Scottish Widows pension, we found this Aberdeen pension or standard life pension or whatever. That's point 00 1% cheaper. So we're going to move your funds from this one to that one with a charge of 3% plus 1%. Ongoing, and it's just it's not real, it's not financial planning at all. So this particular individual says, I'm really frustrated. I mean, this organization, this is what we're doing, I can't get my sort of heart and soul behind it, we're just sort of we're not adding any value whatsoever. And we're charging a lot of money. There's other people in in sort of large, what I would call vertically integrated organizations, which again, are seeing the challenge of the model that they're currently in. So they're looking for the what is the sort of the magic bullet seat, you know, what is the silver bullet should say, what are they trying, you know, what is the way out of this. And so the range of options are from look, start your own company. Now, that's an easy thing to say, it's a hard thing to do. And I'm and this is why we're going to sort of unpack this and sort of talk it through. The other issue is, find a good friend, find a firm that's out there that are doing this stuff that you can really get behind it really going to enjoy and, and get a lot more value out of the role that you perform. I've done a little bit of matchmaking, but it's just not my job. I haven't got the time or this the range of contacts, I have put a few people in touch with each other. I just happen to know actually put a tweet out about this last week or the week before and got a few contacts from firms who are doing the real stuff who are doing a good quality work, good quality financial planner, they contacted me and said, Look, we're in this area, we're in the northwest, or we're in the southeast, or we're somewhere else. And we are actively recruiting right now. So I've done a little bit of matchmaking but again, it's not a sustainable process, I think so that's the kind of this opening statement, there is a lot of people who have got this and that's what we called it a fork in the road to a carry on where I am right now carry on being frustrated, I've seen the light I want to change, do I set up on my own and there's all the issues and challenges and risks attached to that? Do I Find another firm that I can really enjoy working with so those are the kind of some of the range of of options so I think it'd be worthwhile spending five or 10 minutes unpacking this and I thought what we would do too, in order to give some specifics and some detail on this is start with our learned friend Ultra crapper, Darien, Mr. Andrew Hart and allow Andy to run through his sort of brief career history going from working in large organizations. Due to being setting up on his own and being obviously highly successful as he never stopped eyes of telling us, and the How did you get going? Oh, boy,

Andy Hart: 50:07

yeah, I'm gonna take a slightly different track to what you've gone through. And so I'm gonna give a very brief potted history about how I became a financial adviser really. So I've been self employed since I was 24. Now 42, I had a job once for 18 months, it was the worst 18 months of my life. Anyway, so I came into this mighty profession on the first of November 22,008. I came from a mortgage broking background. Again, I was self employed, the mortgage crisis hit, I needed to flap around and work out what I was doing. I did the exams, I became a financial advisor. So I worked for a local firm. That was, let's say, it'd be kind here, not how I operate, you know, my firm now, but they were okay, their hearts were in the right place, but they weren't really doing the right thing for their clients. So anyway, I joined a bad firm, I was working in the bad town. I won't mention the town again, just to be kind to the area. So it was a rough couple of years, I turned over a turned over 13 and a half 1000 pounds in my first 24 months turned over 13 and a half 1000 pounds, I made a profit of three and a half 1000 pounds over 24 months, but under 50 pounds a month. So could you earn 150 pounds a month for 24 months. I'm not saying your story's gonna be the same as mine, but I'm just giving you some back context. I then joined a good firm serenity financial planning good friend of mine, Tina weeks runs it, who a lot of people know and a lot of people listening will know, I joined her firm in July 2010, I took my first financial planning client and charge them 500 pounds for a review. They're still clients now. And I look after over seven figures for them, they were in a complete mess. So I've done a lot of tidying up for this client. So I worked for Tina was a self employed advisor, I helped her sort of build the company actually, in the early days, get the investment philosophy sorted out yada, yada, yada. So from July 2010, to the first of June 2017, I worked for Tina. At same time, I was building up sort of a sort of other revenue streams and companies and things. And then I set up on my own in June 2017. So it's been six years directly authorized, it's been challenging. If I had to give you a number, I'd probably say my initial cost to set up the company to pay for getting the regulation sorted out haven't capital, adequate adequacy, which is 20 grand just sitting there in the bank doing nothing. Office cost marketing, I'd probably say 70,000 pounds. So if you've got 70 grand hanging around, you could potentially go directly authorized, you could probably do it for less, you could probably do it for more, but I'm just giving some context. My advice. So um, so that's my history, if that's useful for anyone. It is a journey is tough, it is challenging. But you know, if you're seeking excellence, and you want to do the right thing, you got to you're gonna have to take some some rough years along the way. But my point to people listening to this, I see people that work for great firms too soon in their career. So I'll go and do training at what I consider a great firm. And there'll be two people in the room. They're like, Oh, we only joined three months ago, you know, we're on work experience is our first job. And I'll let you like it here. And they'll be like, yeah, it's okay. And I think shit, if you think this is okay, Jesus Christ, the moment you get out there, to the to the real bad stuff, you got to enjoy this. So that's an example of they've joined a too good firm too soon. I say, Look, you go and join, go work with a crap firm. Then you come here, you'd be like, Wow, this is mind blowing. But they've joined a too good firm too soon. I know, some people disagree with that. So I'm alright. We've got to work for a crap firm, you know, the boss not doing the right things, the investment philosophy a bit all over the place. You know, because then it's up to you to you to push back and say, well, actually, I don't think that's the right way of doing things. And there's obviously, communities like next gen, there's communities like trap, there's things like harm. So there's a lot of ways to consume information these days, coming into the profession. You know, when I came in on the first of November 2008, I had nothing. I had a new model advisor. That was every two weeks. Yeah, so I've rambled on a bit. Yeah, it's it's a, it's a decision we will have to make. There's sort of key forks in the road, you need to do your exams, you need to understand how to do the job correctly. You need to earn money. You need to balance that with Do you have kids and family? You know, it is challenging. And as I said, I earn sweet FA for my first 24 months, but luckily I had a little bit of money saved. I didn't have kids. Mortgage rates were low. You know, I got lucky. But yeah, I took a lot of pain for short term, but long term it's potentially pulling off. So who's next? We didn't mention

Alan Smith: 54:45

the best day of your professional life. The day you met me for a coffee and everything changed.

Andy Hart: 54:51

The day I went for a coffee with a multimillionaire, absolutely ambles but then I ended up buying the coffee. Yeah, that's it.

Alan Smith: 54:58

Never let me forget

Nick Lincoln: 54:59

the key Well, a key word you mentioned there, and he was the role that luck plays in, in our lives in every aspect, not just our business lives, but our personal lives and life in general. Certainly in business luck is you can't you can't invent luck, you know, it just happens to you. But when it does happen to you, you've got to be you've got to have a mouse to be able to seize it. I think, Carl, you've got some thoughts, thoughts around this?

Carl Widger: 55:23

Yeah, it's funny. Before Andy and Alan join myself and Nick, were just chatting about this this morning before we went on air. And that's exactly what I said. I said, you know, we, we gotta admit here that luck plays a massive part in it. And I think, you know, that was definitely a massive part of, you know, how I've ended up where I am. First of all, like, when I left a brokerage in 2010, set up on my own because I had to, I wouldn't have I didn't have if I didn't have to, to be perfectly honest, I then did my own thing for for three or four years, about halfway through that. I was product setting, as I said, before I went okay, this is I'm not adding any value here, I'm not getting any job satisfaction, there must be a better way. So I went researching myself. At the time friends first, who no longer exists here, they've been bought out by Aviva ran a course about financial planning. I went on that course I met Carl Daly, who I set up matters with originally in 2014. And I kind of just took it from there and went, Okay, let's research this as best as we possibly can. I do believe people at that crossroads now are luckier because they do have what they've trapped, they've DFA, they have loads of different resources, they can go to loads of different people who are willing to kind of help loads of people who were doing real financial planning, and it wasn't a thing in Ireland at all. I guess it was, you know, when Andy was you, when you were working with Tina, it was kind of it was in its infancy. So you know, you are in a better place, because there's lots more people to learn from. But exactly like Andy said, we struggled really badly, from 14 to 16. I've often told this story where struggle to pay staff. The directors didn't get paid for a number of months in the first 24 months. And but it was almost like a light switch once it started to happen, then we started growing exponentially, but it did take two years. Now looking back, right? I think that's because we were poor at telling the story about what financial planning is the benefits of financial planning. And I suppose we were in a marketplace for this was all entirely new. So you know, if you're in a place whereby you're in a firm that's inverted commas, a bad firm, and you want to go and do it, I think you're I think, you know, you're lucky in that you're in an environment where you can go and do us understand, it's going to be different, difficult for a couple of years. And I always, always, always say that. But if you know that you can sell right, and don't be afraid of that word you need to sell, right, because you need to get out in front of people. If you're a person who's sitting behind a laptop, you're That's not for you. So you just go and find a firm and just go and work for a proper firm. But if you want to do it yourself, you need to be able to sell, you need to be massively massively resilient. And you need to just consistently go at it day after day after day, and it will become easier. It's never easy, but it will become easier. But I would say anybody thinking about going to do it, just go and do it. Just go and do it. There's so many people out there who need read financial planning. Go back to Allen's story about the starfish, right? There are so many starfish out there. Right? And there's loads for everybody and Irish advisors just go for it because you know, where there's not enough people doing it. So that's what I would say about it. By the way, just one other point. Got working for a bad firm, like Andy said, just to reiterate that point, we met somebody who said he worked for a bank assurance channel, and it was just sales, sales, sales, and all that I get my kids to do that, because you get proper sales training and you understand Can you do it? Can you do it? So? Yeah, it's a big, big topic. It's a big, big topic. I don't know we can't solve it in one episode here. But yeah, that's my views are some of my views. Thank

Alan Smith: 59:27

you. Thanks, call. Let me just come in. And I'm going to my very brief backstory, our posture some of this before was I set up by myself in the early 2000s. Actually 2004 By the time we got going, and I was working, as I mentioned here before, but we're working for you know, an institution for as well as standard life at the time. And I joined so I left there left to security this is this is the kind of the risk management thing to do. Because we've a lot of people that I know have got their What do you call it? I mean, if that is walking around the dimensional thing last week, whatever you call it a gilded cage or something like that you're in a particular role, and it's quite well paid. And it's pretty straightforward, quite easy a bit. You know, it's not really for you for the long term, but it's a huge leap. And I think quite a lot of advisors, a lot of people are in this. I don't love where I am right now. But I get quite well paid as quite secure and all the rest of it. I just knew I had this view in my life. This is the kind of the regret minimization process that Jeff Bezos talks about, I'd imagine myself being really old, looking back in my life back at my career and saying, Would I have regretted, if I didn't take this leap didn't take this risk, even if it all failed, even if it didn't work out? Would I regret not taking the chance. And I said to myself, I absolutely would regret not just finding out what I was made or finding out if I could do this. And I took so I left a very secure role set up by myself. I was working I basically to COVID, or retiring ifas, sort of sole trader advisor. And here's a handful of clients. It was a nice business. It was a very small business, but at least I had something at a foundation to get started with. But I took a 50% pickup, the one and if you see that a lot of people or people just couldn't face that they couldn't take a 50% pay cut, because they've got lots of commitments. A lot of outgoings, and I think that's a lot of that's another aspect in this. And I think we've all mentioned, you've just got it. You don't have to do it, but you can do it. I didn't like you and I didn't have wife didn't have kids. So I didn't, I just had to kind of feed myself, if I had to live on pot noodles for six months or a year I would do it wasn't wasn't there. And I did have some money saved, you've got to just in just increase your chances of survival and success, which means you do have to save up a bit of capital, save some money, change, you know, work out what is the minimum cost is their basic financial planning DIY to yourself financially, if I had to, I don't want to. But if I had to cut all the holidays, had to just pay the very basic bills, what can I survive on for a period of time? It's not and setting up in business by yourself. We've all done it to varying degrees, it's not for everyone, it's absolutely not for everyone, finding yourself in a good practice could be the advantage. I like the idea. We talk about the role of luck. And I like the concept of increasing the surface area of luck in order to access more luck.

Andy Hart: 1:02:23

It's true, Nick, Nick doesn't like this sort of talk. We've had this talk

Unknown: 1:02:26

before. But it's but it's true. How do you how do you

Andy Hart: 1:02:30

believe in your lucky

Carl Widger: 1:02:32

speakers is barred in this place.

Alan Smith: 1:02:35

But it's but it's so true. And how do you increase the surface area, you attend events, you go to conferences, you you I didn't know the next gen processor program, you go to a dimensional conference. And it is those chants copy. I promise I had a conversation with somebody at the dimensional gig last week over lunch, which is going to lead to a number of other things which without being there, there's no chance of that happening. So increase your surface area contribute go to wherever it is the CIA si the PFS program, join online debates online communities, that sort of thing will increase the opportunity because otherwise no one knows where you are or what you're doing. You need to spend time to do your research, who are the good firms who decides who the good firms or not, it's up to you find out research, go online, look at their website, see what the sort of them the materials they're pushing out, you can find out it won't necessarily automatically come to you begin to identify who the best firms are. And of course, you can reach out to them. I think really good people are always in demand. If you proven that you are a really good person, we've kind of spoke about this somewhat in the past as well. If you've created some content, if you've written a blog or a LinkedIn article about your philosophy and your views, and you've shared it with somebody you've identified as being a potentially good firm or a good future employer, then that's going to increase your surface area no guarantee of things happening. The last thing I'm going to say in just a very, very practical terms. I recently interviewed on my award winning podcast, the bulletproof entrepreneur I interviewed the managing director of, of the British, the British business bank, who now has a close personal friend of mine, obviously. Richard Bandler, and I didn't know about this, but I think there's some practical application for those people who are thinking of setting up on their own, the British business bank has got a subsidiary called Startup startup loans. And they will lend up to 25,000 pounds with no fees than I think, at a flat rate of 6%, which in the current interest rate environment for business loan is very, very competitive. So they will give you some funding if you can prove that you've got a good business idea. So it's not as if you've got no access to capital. But the most important thing I think of their offering is that they give you mentoring they give you experienced business development people marketing, sales, you know, cash flow management, all that sort of stuff for free as part of the program. So I think anyone who's got a streak of entrepreneurship within them but thinks I just haven't got the capital right now, maybe I've got a bit of money saved, but I'm not sure if it could last that long. I'll put a link to this in the show notes as well, I would check out that organization because they can be potentially beneficial. And the last thing, obviously, if you don't want to go directly authorised, and again, this is no endorsement, I don't know. But I do know a couple of people that have done this. And again, do your own research. But sense network seems to be the kind of the network to go to, if you want to get join a network is maybe a stepping stone NACA directly authorised, they seem to be all set up and a number people I've know recently have set up on their own have gone through that that particular organization

Carl Widger: 1:05:37

is SJP an option for these people know that they're going to do lower cost funds, they're going to do full financial planning, and maybe that's a good place to go. Because it is the regulation is a big deal now. And you know, it is more way more difficult than it was when all of us set up. Certainly in Ireland, it's expanded exponentially more more expensive and cumbersome to do it yourself. So you know, there's there is there's a there, there is a way where you can make a right good living doing the right things, but in other firms, Andy,

Andy Hart: 1:06:15

a couple of points. Yeah, I think that's correct, Carl, I've heard people who tried to go directly authorized in 2023 is a lot more cumbersome. And they asked them, they put them through a lot more qualifying than even I think I went through in 2017, even though it was a really complex application. Yeah, I'm almost there's also another network that I think people use a similar to sense called valid path, which is also quite open to advisors in those situations and makes it as friction come by. Sounds like a cult, isn't it? But also picking up on Kyle's point, I do say that, okay, set up on your own, directly authorize or go to SJP. I think all the problems happened in the middle, you know, on my, you know, I talked to hundreds of advisors every single year, all these advisors are happy SJP. And all the DA people are happy, everyone in the middle is not happy, and they're looking to do something else. So that's my two extreme views on it. I mean, this is a bit left field, me and Alan and Lucy sort of spoken about it. But we sat down with a young adviser last week. Alan and I Sorry, am I writing a letter on my talk in person?

Nick Lincoln: 1:07:31

Doing both words? Please?

Andy Hart: 1:07:35

Yeah, so me and Alan sat down with the younger advisor who's a good firm, actually, but he's thinking about setting up on his own. So we spoke to him, we said, What's your personal burn rate? How much money do you have in the bank? You know, if me and Alan were to give you x 1000s? What, you know, it's I'm just throwing it out there. I mean, maybe if trap could get a load of funding, we could we could invest in these companies, you know, with quite low friction, you know, and take a slice of them, and then consult them along the way. Anyway, we'll come back to that as a potential thing as trapped.

Carl Widger: 1:08:02

Can I just can I just say what we've had. So we've a couple of people who are have joined are in the process of joining so that were in firms that weren't doing financial planning are, you know, have a book of clients that they want to serve? I suppose more properly put there. They have all those problems that we spoke about, right? They've they're married your kids mortgage, God, Jesus Christ, I can't take that. So the way we've set it up, and this isn't rocket science, right? And again, we're just replicating what's been done elsewhere is, we're just going to say, right, we were happy to bring you in, if you're comfortable that real financial planning is what you do. Because that's the only thing we will do. Everybody has to have a financial plan. Yeah, I want to do that. Okay, come on over, we just give you a slice of all of the income that comes in, and we look after all of the other stuff. We put a pod system around you. We've spoken about all that before. So look, there's there's definitely there's lots of different ways of doing it.

Andy Hart: 1:08:58

You can also agree minimums call, like, what's the net you need per month? Okay, we'll we'll agree and, you know, minimum of x per month for the first six and scale it down and then offset we've,

Carl Widger: 1:09:07

we've done that for the first couple of years, right? So for two years, because otherwise, you're incentivizing bad behavior. So we're going we're gonna take the long term view, you need to take the long term view. And that's good from a regulation point of view as well. But look, we're not just saying come in and assess employee basis, we're gonna pay a proper salary. And we're going to buy into you over the long term. So yeah,

Alan Smith: 1:09:29

I think I think the point is that there are definitely some really good firms out there in Ireland and the UK and various other places, and they are recruiting and they are open to bringing in really good people. But if you're in a firm that you don't love, for whatever reason, it's up to you to find out who the good ones are, as I said before, just do your research because I can tell you, there are a number of organizations out there who would just love to have a good person in their organization. So do your work, Nicholas.

Nick Lincoln: 1:09:58

So some interesting points raised They're, I know somebody who I went to junior school with in the 1970s. And he always careers is a chartered accountant. He's run teams within SMEs, nothing to do with financial services. He in his early 50s, as in the last couple of years, I believe, joined St. James's place. And he's doing financial services. Okay. He's doing it through SGP, but he's going in there with no clients, very little experience. He loves trapped by the way. So Graham, if you're listening, watching to this, you know, I'm talking about you. So it can be done via that route. The points you made about balancing the factors we've all alluded to, in Alan, your situation when you went out from standard life. And when you when you went out on your own? You know, yes, I'm sure it is, it obviously is easy. If you don't have family, you don't have kids, and so forth. And if you really do think you cannot afford to move then don't afford to move. Okay, if you really have tried every avenue, and you're in a job you don't particularly like but you can't get out of it for various reasons, fine. But I'd be very surprised if that actually ever happened. I went out my own I had to re mortgage to get my capital adequacy, you have to have a drop in earnings. The world doesn't know you are living, you know, if you want to join a business or have your own business that's going to be built in your own in your mind's eye, you're gonna have to make some bloody sacrifices, man, that's how it works. You give up a lot at the start. And if you do it right, it comes back. Just do it. Don't sit there and be one of those people that thinks 20 years down the line. Dammit, I wish I'd got out on my own just I have far more respect for a girl or a guy who goes out and does this and it doesn't work out. Who then goes back to working for a big firm whether they're happier being an employee than the person who never tries it. Just just do it you know, there's go to this this quote this there's magic and power in just taking action just just go out there and do it. And then never be a perfect I'll talk if you're waiting for the perfect time to go out on your own and or to leave a comfortable big if a firm and join a booty if a firm that's more aligned to your values. And you're waiting for that perfect moment for the clouds to open up. And the Messiah to send you on an angel a little wing message saying now is the time to do it. It's never gonna bloody happen. There's never going to be a perfect time. You just got to do it when you're ready to do it. And that's, that's That's all I've got to say. It all sounds very easy. No, I did it. As I said, I've read more because I went through two years of very low earnings, no dividends or anything. Just building up a client bank. It's hard work man. But you've got to put the work in it will not be given to on a plate but it's out there if you want it and if you want it, commit to it. Andy great,

Andy Hart: 1:12:23

great, great speech, Nick. Ladies and gentlemen. Listen to this podcast. If Nick Lincoln can make a success of it, please please.

Unknown: 1:12:29

You can do it. Anyone can make it do it. I

Nick Lincoln: 1:12:32

can't I can't deny that I mean do track this. You listen and watch the jabroni is on this. I've seen these men naked I mean if you've only barely functioning human beings and we've all managed to do this so we can we have you given us a damn quick record. Come on, because we're coming in now as an hour. The best part of an hour and a quarter show each. Because even in Spain, even in Spain, postie Posty follows me around the world. And there she is. And my parents door here and Ben Hur Rafi. She's hold the bolting sack up a very steep hill. So she's sweating profusely. And she's struggling to open up some trapeze questions and see what's going on here today. Here's the first one from our This isn't right. This is a this is someone who's who's been in contact lenses before. By the way this trap is questions you can actually know pin tweet at the top of our profile. There's a link in there, you can put your question into a Google spreadsheet. Leave your name leave your Twitter handle leave your LinkedIn profile, please. There's also in the so called show notes, a link to do exactly the same. Now this is a this is from Mr. Stewart Mullen who doesn't have a social hound but what if you had a Twitter account? He's forgotten it so screw up my client my kind of moron Hey guys love the podcast as I've said in the previous YouTube review section, apologies I'm not in the trade but as an airline pilot planning ahead for retirement your content is superb, wide and varied, narrow and shallow. What's your thoughts on money market funds as an emergency fund as opposed to instant access Premium Bonds Thanks in advance no I can't get cheap flights everything is full revenge travel right that's a brilliant brilliant question poses various things that I will come after Stuart manner for free flights in due course.

Alan Smith: 1:14:07

What's your revenge travel?

Nick Lincoln: 1:14:10

I people catching up I think after COVID as I saw it just been yeah just traveling a lot right just traveling for the sake of it maybe I don't Yeah, sure. Come down to us. I'm not on Twitter because I'm not on it.

Andy Hart: 1:14:21

Agile Hi. Yeah, I think the perfect solution for retiring couple I'm assuming he may or may not be married 100 grand in Premium Bonds, the rest 100% global equities elegant simplicity. Avoid money market funds. Obviously if you want to have a bit of cash for everyday money in whatever bank you bank with great 100 grand in premium brand bonds high friction to in cash them in. Blah, blah, blah, blah, blah. Yeah. I'm not planning dictating my,

Alan Smith: 1:14:48

my two penneth on this is back to this thing about complicating things that the essence of all we talk about is simplification. Not a complication that's Word money market funds and I can tell you from bitter experience back in my standard life days and not singling them out because a lot of organizations suffered from this money market funds were invested and also the underlying assets they held are also so weird wonderful bonds and sort of things which in the times you wanted them to be safe and secure, they weren't and money market funds fell I mean, it didn't feel full by a lot they fell about 5% or something that's not what you want for you sort of immediate access liquid type funds, so don't bother what are you trying to do trying to squeeze out an extra point half a percent return on it now as Andy says Premium Bonds, National Savings Cutler sort of cash or cash like but soon as you go into these money market actively managed actively traded, you just it's just a different asset class, so don't bother

Nick Lincoln: 1:15:48

with the caveat that within pensions, you don't have access to premium bonds and so forth. So there you will go for the you know, just a short, a short dated, this is not advice by the way, Christ, but maybe a short dated bond fund and all cash at the moment. Now, cash in on Transact is cash cash within a pension for 1.86%. You know, it's, it's an amazing, amazing rate. Okay, I am conscious of time this this week, so perhaps we'll, we'll defer there's a second question. So Richard Polson thank you for your question. We will answer that in trap episode 32 But I do think we need to move on to culture corner and get some get some juicy juicy bits out there Mr. Hart same as ever Timeless Lessons on risk opportunity and living a good life muted Andy

Alan Smith: 1:16:46

amateur embarrassing I've

Andy Hart: 1:16:48

got I've got my dog behind me as well. He snores quite a bit. So I

Carl Widger: 1:16:52

like to apply with everybody for that.

Andy Hart: 1:16:55

G Okay, so the book recommendation this fortnight is from Morgan Housel, who is a close personal friend of mine it's called same as ever Timeless Lessons on risk opportunity and living a good life. His first book is one of the greatest books about money. I'm not calling it personal finance about money called the psychology of money. It was 20 chapters, narrative stories around the area of money and how we make decisions around it and stuff. So the psychology of money 2020 chapters was brilliant. I'm assuming this book is going to be great same as ever. As I say the title says it all things that never change around human psychology and human nature. I haven't read it yet. I don't believe it's yet

Unknown: 1:17:45

on this this this haven't read a book and you make it a recommendation. Sorry, I can't do that anymore. Okay, I'm going to war and peace. That's my recommendation. Pretty great. Um, write it

Nick Lincoln: 1:17:57

the Old Testament the juicy bit? Yeah.

Carl Widger: 1:18:03

Least at least it's out there now that he recommends stuff that he

Unknown: 1:18:07

Yeah, he's heard.

Carl Widger: 1:18:09

We don't have to hang in

Andy Hart: 1:18:12

the corner is gonna come from when I worked at standard life. What the hell? Right, Carla, between

Nick Lincoln: 1:18:19

that contract back on call. Save us. Tell us you've read this one. First of all, can you read it?

Carl Widger: 1:18:24

It's 17 hours. And I have about two hours left and is really brilliant at the moment. So it's the Elon Musk book.

Andy Hart: 1:18:31

He's just extended that as a day just because of what we're talking about you probably two hours in on you got 15 hours.

Unknown: 1:18:36

It is a beast of a book. I've got the book and

Carl Widger: 1:18:38

I've got one chapter no I'm I'm right now in the last few chapters are broken up into the days literally a day on around the Twitter thing and hottie hottie was doing it's absolutely fascinating. Look, he's a force of nature. He's a peculiar individual, for sure. He's not like anybody else I've ever come across to Sandy. No, not even Gandhi. Right? But look, he's done Tesla. He's done SpaceX. He's done Twitter. He's done neuro link he's done the boring company. I suppose as I'm listening to this book, I'm reflecting on us thinking we're kind of great because we run IFA businesses you know, this guy is just history will will look back favorably I think even though the guy is he's different than everybody else should we say right but absolutely and utterly fascinating. It's 17 hours long and and as I said, I've to two hours less than two hours ago, and I've loved every bit of it. I've found myself like trying to go off and listen to 20 minutes over because I'm like, don't know what happened. And the last time I felt like that in any book was Shoe Dog by Phil Knight book, The Nike fella. So absolutely amazing. Highly recommend it to everybody. He's Different he's like he's got the cosmic view shall we say that none of the rest of us have. I also have in my coach corner they do

Nick Lincoln: 1:20:09

from time to the ridiculous

Andy Hart: 1:20:12

only We'd only go there we don't want to go there. We don't mind that a parrot

Carl Widger: 1:20:16

the greatest BlackBerry's bringing people go that's looks amazing. I'll go yeah it is. So if you kind of a lot of traveling even if it's like for me when I'm going to Dublin or whatever do overnights nor days so I think that's how you pronounce it anyway, it doesn't matter. It's the Sienna backpack.

Andy Hart: 1:20:33

I think this is worse than the IKEA wardrobe recommendation. Thank you for taking that slot

Carl Widger: 1:20:38

because all business people do a little bit of travel and rather than bring in your stupid really case, this one is brilliant. You put it on your back anyway, check it out. It's 99 euros, you will you will say thank you card wager. That was a brilliant recommendation.

Nick Lincoln: 1:20:53

Okay, excellent. Thank you. I might I might actually do that watch. So there you go. Mr. Smith, good, bad billionaires.

Alan Smith: 1:21:00

Yeah, this is a relatively new podcast, which I've noticed is sort of immediately gone into the number one slot is a BBC sounds podcast. It's incredible, actually, when you listen to podcasts, which a properly produced have got kind of music and proper sound effects and really highly edited and produced, but it's good. It's the guy, Simon Jack, business editor for the BBC, and they just do an analysis of our billionaires or various billionaires. I've listened to a few of them now and then it kind of detail the whole story behind them and there's the one about Philip green or Sir Philip green is quite interesting, because they talk about how they got started talking about how they made their first million like from zero to a million. And then that huge leap from a million to a billion or mult multi billions. They've got one about Jeff Bezos. They've got one about when it you would know Rihanna, famous pop singer. She was she was she was on your playlist.

Nick Lincoln: 1:21:57

Lover? Yeah. Guitarist Yeah.

Alan Smith: 1:22:00

Something like that. Yeah. They got a guy got a guy out of you know, the WeWork empire and then he kind of the make a judgement in terms of woman was this a good billionaire? Or a bad billionaire? And some of them they got the guy comonomers name. This is this one yet? The I think it's Irish origin whose guide you passed away recently call you know, an American philanthropist. He became a multi billionaire and gave away 95% of his money

Nick Lincoln: 1:22:25

fell out with ice. You could say I'm philanthropy. Celebrity. Last Chuck

Carl Widger: 1:22:29

Feeney, that's the man. He basically built University of Limerick which is beside me here. An amazing man gave money away. Yeah.

Alan Smith: 1:22:37

So he would be classified as a good billionaire. I'll leave it to your own judgment as to whether to Philip Green is a good billionaire or a bad billionaire or Adam Newman. But it's highly entertaining about 35 minutes long. So as I find it quite interesting, quite, quite good, good, bad.

Nick Lincoln: 1:22:53

Adam Newman is a thumbs down. When we were right, I don't have a typical tip. But this this episode, dear travelers to understand I've got a few other things going on. So I haven't necessarily time to consume

Andy Hart: 1:23:05

either not acceptable. packs or books I

Nick Lincoln: 1:23:09

haven't read but I will I'm definitely what I'm gonna do is buy a backpack and not use it. How about that? That way we're straddled both both camps. Buy a

Alan Smith: 1:23:18

book and not read it

Carl Widger: 1:23:26

with the books that you haven't read

Unknown: 1:23:28

the backpack and then leave it at home and never use it. Perfect solution.

Andy Hart: 1:23:34

Standard Life didn't get that one. Okay, okay. Okay,

Nick Lincoln: 1:23:38

I think we're done. Are we done? I'm sure he's helped tell me is one hour 23 minutes with God, I think we've moved we need a damn good hash of that. So that's a wrap for this episode. Thank you. Dear Travis, do remember to, to like and subscribe to us on the podcast app. on keyboards with John Mayer and his channel he's doing somebody lucky. I'm in Spain and you're on the cheaper end of hatching. That's a six out of five star review. Until the next time, did Travis is an EOS from Austin. Take care. Bye.

Unknown: 1:24:15

Bye now. Well,

Carl Widger: 1:24:16

thank you complexification that's a shambles. That was quite that was quite funny though.