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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 trap
Nick Lincoln:yes indeed their trap is welcome back to what many people are calling episode 32 of the real advisor podcast T R A P trap. My name is Luke Lincoln and joining me as ever other three other horsemen of the apocalypse call the voice widger Allen the storyteller Smith and and the heart before we go on to the the high energy review reads and so forth just to let you know this shows coming out on a morning of the humans on the management conference this Thursday so some of the people at the conference might have already listened to this on their way into the conference if that makes sense. So Andy, we know him as a shy bit of a bit of a wallflower doesn't like to self promote so he doesn't want to talk about him so much this week, but no doubt we'll we'll we'll catch up on it on episode 33. But there's going to be a great event it's the best conference in the UK. And it's
Andy Hart:three shades you appreciate you both making the effort Nick and Alan
Nick Lincoln:Well true true true champion.
Alan Smith:We're bringing a dozen people there there's a whole capital there's a capital crew will be there first. That'd be good given out the free tickets I wish he did. But he doesn't get free tickets full price.
Andy Hart:I certainly wasn't full price but yeah
Alan Smith:5% off
Carl Widger:the very very best of luck and I know the effort that goes into these things. So fair play for putting it on again. I'm sure everyone will love it and good luck to everyone attending.
Andy Hart:Thank you.
Alan Smith:It's not speaking
Nick Lincoln:up I've crossed the Rubicon or something I think now
Alan Smith:cancel canceled by your heart.
Nick Lincoln:I got cancelled. Okay, he's focusing on his big brands. Okay, fine do reviews.
Andy Hart:Okay, first up is by dB hyphen 85 of five stars absolute gold, absolute gold as a relatively new advisor the Tips Tricks discussions in his podcast that given me some great insights into how best to serve my clients. I look forward to every new episode. Thanks gents. Next up is from back to why Nick at BW m bit of an odd handle anyway, the give us five stars. Some people in life give back and these four loons certainly do that great work, lads. Keep giving back to this amazing community of ours. I learned something new every time I tune in six star review. final review is from Jay wa haitch 1984 Five stars enjoyable. I really enjoyed the format simple and fun a mixing dry humor isn't dad jokes. Hopefully not talking about me with some topical financial content. Thank you back to your boss.
Nick Lincoln:Excellent, thank you for those reviews Trappists. And as ever do keep on sending them in and if you want to reference your name in the reviews even better, so we know who you are. That just engenders I think a sense of community. Okay, so we've got a lot of news going on not a stuff happening in our, in this thing of ours this world that we've we've chosen to immerse ourselves in and we have quite a few typical tickets, Mr. Hart lead off.
Andy Hart:Okay, yeah. So this is there was a company that launched called Open money. And it's an article about sort of the rise and fall of open money. It's one of these sort of no help. Robo Advisor, investment portfolio type companies. First thing I want to say obviously, hats off, you know, it's very commendable, setting up a new business and trying to start something new and do something quite disruptive. But then, obviously, let's talk about the challenge of scaling a regulated financial advice business. I have written about this in the past saying that financial advice regulated financial advice is a luxury product. It's very hard to do for cheap, online and at scale. And again, another company has sort of fallen by the wayside. They've invested about 30 million in open money. One of the key sort of original founders, co founders and investors was a guy called Duncan Cameron who is the sort of tech guy behind money supermarket. I think at one point, they were burning 600 grand a month there are close to 100 employees and the revenue of the company is about million. So it's one of those again, unfortunate stories where they weren't able to cry. act this thing that is called regulated financial advice on mass scale. So again, it's another sort of overly celebrated company that's sort of back down to earth. So yeah, it's uh, yeah, that's that's the money story. Any comments?
Alan Smith:I don't know, the story, obviously, other than what was reported in the media. One thing that struck me though, and referencing it back to our last episode, where we talked about starting advice business, and I think all of us broadly said that you kind of, you're going to earn nothing for two years, for example, it's gonna you're gonna have a tough, there's going to be years of quite tough times. And that is as a kind of micro all of us effectively One Man, Two men, sort of micro type businesses. One thing that struck me and I, you're right, Andy, I don't want to decry anyone who's got the idea to start any new business, but you look at the the burn rate this company had, because there was a lot of big salaries being taken out. And I just thought to myself, if you've got a startup business, you should be, you should have enough money not to take to take zero from that business for two, three years, you should have savings or something. You've started a startup that where the executives are being paid six figure salaries to me is just an athame. I couldn't imagine it wouldn't do it yourself. You're burning other people's money. Yeah, I may have the wrong end of the stick. But that's just what it seems to be the message I saw your heart you're going to struggle, if you if the money going out is multiples of the money coming in? Pretty obvious.
Nick Lincoln:Okay, thank you for that. Well, you're talking of Robo advice, businesses trying and failing it again, in the UK, a few episodes back, we discussed Vanguard closing down, it's kind of light advice. Robo service in the UK is going great guns in the US but just didn't get any traction here. And Vanguard, I'll also turn their back on China that if you guys saw this, they've closed down their China office. And obviously Vanguard is a significant brand, a significant investment manager. And they have just decided not to pursue their business in China, I'll put a link to the article which I read this in. They don't say why the quote here is Vanguard will close its Shanghai office, and will continue to monitor developments in China. I'm guessing it's just a sign of these, these these these these regimes in the world that are getting more and more autocratic and unpleasant. And China is kind of turning his back on. A lot of the developments we thought would happen to it as sort of embrace capitalism. I don't think Vanguard thinking we were getting out of this. Now maybe we'll come back in future. That's quite a quite a big thing. Obviously, China is a potentially massive, massive market. So just sort of mentioned that. Watch the ideas exchange in Ireland, how's it going?
Carl Widger:Really, really? Well. Yeah, so what I've done is I've sent about 10 messages to various principles of financial planning firms. And we are meeting on the 30th of November, in a house on Leeson Street, in Dublin at 6pm. And after that, I don't really know what's going to happen other than about 10, people have said that they're going to go so far, and have got a few kind of other messages. So kind of what we're trying to do to make it as effective as possible and maybe get it off the ground. Because I guess that's going to be the hard part is to maybe just limited to principles of firms. And we'll just kind of see where we go to allow us kick around a few ideas and see, is there an appetite to kind of kick something off? And if there is, then we'll decided that evening? And if not, we'd have a great night anyway. So yeah, looking forward to it. And thanks to everyone who pretty much straightaway came back and said, Yeah, I mean, couple of people obviously can't make it. You're never going to suit everybody. But yeah, so look, if I haven't been in touch, this is an open invite. If you're a principal of a financial planning firm, or you're on the road or the transition to real financial planning, please do come along 30th of November house and Leeson Street in Dublin 6pm. See you there
Nick Lincoln:a great ethical well done, we wish you the best. Well, that is certainly something that we we've been great with the three of us in the UK here. We go to our one and we get enough out of it, don't we? I think okay. All right, talking about world events. And despite some things going on, we can't we're not a political show. And we don't want to become a political show. But there are things going on in the world that are pretty shitty at the moment. In the Middle East, obviously and something that we were talking about, I think in the in the ideas exchange, actually. This peer group that we belong to is how are we talking to our clients about this because I have a number of Jewish clients and are we raising it these events and are we discussing it and and some people are sort of having phone calls I think the phoning their clients just talking about what's going on in Israel and so forth. I, I didn't because I just didn't. It's really hard, isn't it? I just I just didn't want to, I just didn't wanna have a conversation about it. But what I did have fun of this month I have three Jewish clients with birthdays, my right clients, birthday cards, I just put a handwritten little note in. You don't want me to kind of condescending or sentimental about it. But you want to you want to acknowledge right, you know what's going on, because a lot of these Jewish clients have family and and friends in Israel, they might be planning to go to Israel, you know, when they retire. So I've just been putting these and had one one guy came back to you. So that's really sweet and that you send to mental health for thank but thank you. So I don't know if you guys you guys are doing anything and sort of use the modern parlance reached out to to people who might be affected by these by these terrible events.
Carl Widger:Yeah. So yeah, look, it's it's shocking stuff. And let's hope for peaceful resolution very, very soon. And let's trust in humanity to go and find that resolution. Yeah, I had got a couple of more than a couple, I had a good few conversations with clients who are a little bit kind of worried about stock markets. And you know, the fact that their investment isn't returning, you know, the long term averages and all of that kind of stuff. So we actually have a our investment newsletter is due out next week. So we've kind of covered a couple of things, we various people from Metis, doing various articles on that. But what I've done is I actually shared it with DuBois. I've done a video to kind of just, I suppose I don't know if we can give comfort or ease concerns, but just to remind people as to why we're doing what we're doing, why they're invested in what they're invested in. And he was very kind to update his wall of worry, too, which I used in the presentation, I think it's you know, if you haven't seen Andy's wall of worry, I think it's a really good chart to use to just demonstrate to people that look, this time isn't different. volatility has always been around, we may have been in a couple of years where volatility seems to be the norm. That's fine. You know, it's you just got to sit in your hands. And you just got to ride this out. But it's that's much, much easier said than done. And we got to understand and appreciate that there are human emotions. And I suppose part of the video or the end of the video was for me to say, look, please don't sit and suffer in silence. do reach out because we can just have a conversation and chatter through and as we always know that, you know, talking is good, and you might feel better afterwards. Alan, what have you got to add to this?
Alan Smith:The challenge we've got is, in my experience, this isn't really about markets, and volatility. That's the issue. We had something written on a similar vein, which we send a monthly newsletter so it to all our existing clients. And it was an we'd have one written which is which has a similar message, don't worry about it. If you if you're a Jewish family living in London with close members of of your family living in Israel, they It reminds me a little bit entirely different bus but similar kind of sentiment when COVID hit. And people say don't worry about the markets to wherever you are because people, people saying I don't give a shit about the markets. I give a shit about staying alive, and making sure that my parents or grandparents are okay. And I think we've got to be careful in this. I'm saying Don't worry, don't worry. I'm not I wasn't even thinking about it. But my mother lives in Tel Aviv or something that that and I think that's the, you know, we're in London, we've got a lot of Jewish clients. And it's an issue. And you're right, Nick, it's tricky. Because as much as I've tried, I don't really know the full history of a conflict, it's effectively been going on for maybe hundreds or even 1000s of years in one way or another. All we've done thus far in response to this because I think it's dangerous to completely ignore it and pretend nothing's happening. We, for our client newsletter, which went out last week, I just did a cover note. And it was very it was it was referencing it is referencing the terrible events are going on in the Middle East. I said, you know, the only words of comfort I can offer is those famous words. this too shall pass. And hopefully very soon. And if anyone wants to speak about it, then feel free to have a conversation with us. But that's all that the point that makes making is tricky. And it's difficult, but we shouldn't ignore it. Do you have anything on this? And you'll have similar situations similar clients to me. Yeah,
Andy Hart:I'm, I obviously live in northwest London. So I've got lots of friends, clients connections that obviously have family that are in Israel and various other things. So I've become very much more aware of it. I haven't led in any way the sort of financial stock market element to it. But yeah, I've become a lot more aware of it. But again, I echo what you both the voice said Allah Nik it's somewhat tricky to navigate. But yeah, we didn't all began in a in a tough situation. Back to your boss.
Nick Lincoln:Okay, just close on that. I mean, obviously our thoughts go out to everybody involved in this in that mess on both sides. It's not not great. And I've I am finding the sideways market I think is a bigger we've had a lot we're in a long sideways market. We have talked about this before, but I find this harder to navigate with clients actually, than a precipitous decline because they're kind of expecting you to be on the clients are expecting us to come to them when that happens. And they know what we're going to say make it but when you have two sisters, it just does. It's not going anywhere. And I've been in stasis now for like three years it feels like and you know, people taking money out of their portfolios, you know that they aren't they are going down and just just gradually is this it's like a slow demise. So I'm sure obviously we'll come out of it at some stage. But current world events aren't helping. Oh, yeah, right. Our good friend, the huckster watch. Sham, bankrupt fraud.
Carl Widger:Sorry, yes, indeed. Yeah, sure. Why did you call them shut? Sham scam, bankrupt rule, whatever you will, yeah, the FTX trial happened. And in four hours, a jury of lay people said this guy is a fraudster and convicted him on I think 19 counts of fraud. It took Silicon Valley, how many years five or six years to kind of see through this dude. So how he got away with what he was doing for so long is an absolute and utter mystery. It just goes to show that you know, you got to take with a bucket of salt. These large are these star fund managers, you know, Star people in various industries, you know, you got to look under the bonnet. And I think Sequoia Capital who are like the biggest P firm out there, you know, they got cash really, really badly. And apparently, they invested in COVID. Towards the end, they invested hundreds of millions. And it was over a zoom call. And apparently the chat within the Sequoia people on that Zoom call was like oh my god, this guy is amazing. I'm 10 out of 10 and, and all this kind of stuff. I read a lot of articles over the weekend on this. So just incredible stuff. I look it's good to have our own biases reconfirmed I suppose, but always invest in what has always worked. And you know, the next best thing and the new shiny thing is not necessarily always what it's cracked up to be. So tread carefully. Yeah, that guy is gonna go down for a long time. I think there's gonna be a Netflix documentary, it's gonna be awesome, because there was crazy stuff going on in there. And he,
Andy Hart:I'm pretty mesmerized by the story. I find it fascinating. And the numbers are involved the mind blowing, it's not as clear cut as a straight up fraud as we think. I think all in all said and done. Maybe nobody's going to lose money again.
Alan Smith:It's nice to be in the pound. But yeah, so
Andy Hart:this, this guy did something like 300 private equity investments in two years. It's staggering, just that alone. And weirdly, nobody, that nobody will maybe lose money, which is just so this fraud is a is unique. It's not like anything else we've seen before. And the guy is incredibly smart and intelligent. Obviously he was doing the wrong thing. That's another story. But putting this guy behind bars for 100 years is not good for humanity. But that's my point on it over to you, Alan.
Alan Smith:There nothing really, to add to it. It just it's just interesting. Just linking this to something else. As you know, we'll maybe talk about a future thing. But I saw Morgan Housel on your Morgan Housel as you've got a new book out, he's on the Tim Ferriss podcast recently. This is not my culture corner. But the interesting thing was, he talks about things that never change. And all the things that do change things that don't change. And this is just one this there's always going to be fraud, there's always going to be scams and Ponzi schemes. So this is yet another one and they'll be another one next year or the year after or something and human beings will be attracted to it. You're right. I heard about the Sequoia Capital guy so So honestly, I've followed them on podcasts and things over the years smartest people on the planet. And they're on that Zoom famous zoom call you talking about Kanye and this and this dude was playing Sam back and frog fried was playing some video games or something on another screen whilst he's having this pitch call to the people at Sequoia that you might I would take that as being God this guy, this guy is rude. He's not paying attention to us. He's pitching us for money, but they taught me how clever this guy is. He's playing video games whilst pitching to us. He must be the smartest guy ever. Let's
Andy Hart:get all right This semester, it's another power, it's another power move, don't give a shit and then somebody comes towards you, you pull away and like don't care and people
Alan Smith:want you more about your money if it's not you someone else or invest in it, so they're all piling it No, there is an amazing levels and layers of human, human. It's all about human beings. That's always interest.
Carl Widger:I was a, there was one comment made that he had only three directors in the business, and he couldn't remember the names of two of them. And that the prerequisite for being a director of the firm was that you were DocuSign at 3am in the morning, right?
Andy Hart:This was the same thing about the investments, all he was doing was DocuSign and the whole frickin time anyone who's ever done investments know that DocuSign is the thing with with raising money. All he was doing was on DocuSign 24 hours a day 300 whistles in two years. relation,
Carl Widger:where's the regulation? And where was the due diligence, you know, like, I mean, if we want to appoint a director to Metis Ireland, we have to go through all this big huge process with the central bank, UBS, Norway, there's there's a process this guy couldn't even remember the names of the two directors like I mean just crazy stuff. And there's stories about his CFO I think was didn't even have an office. It was a floor in a building that didn't exist. Anyway, crazy stuff. I
Alan Smith:can tell you this, there'll be more to come out in other stories as yet not revealed. This was a story of the ages of the zero interest rate policy of the of COVID, of lockdown, of just of stimulation money of just a whole series. It was a perfect storm of crazy. So Lipner were living through it at the time and everyone being absolute shambles. Yeah, it was just crazy. And I'm convinced as other things are yet to be revealed in that hole in the crypto world and NF T's associated kind of it businesses. So
Carl Widger:NF Ts, there's a there's an hour long conversation for another day, anyway.
Nick Lincoln:Okay, well, let's draw on it. I'm gonna I strongly disagree with you. This guy's an odious little shit. And 110 years in jail is not long enough for him. Yeah, right. Okay. Mr. Smith, a white paper from our tool, Australian friend.
Alan Smith:Yeah, I read a lot of this stuff that comes out. I mentioned a white paper or report last time we had this episode, this podcast from next wealth. This is something that's come out from Brett Davidson. I believe this is just a generic comment. First of all, I believe it's important. If you want to be good at your job, if you're a financial planner, listening to this, to immerse yourself in what's going on to read white papers, to read new documents, to read blogs and things which are relevant, that which are relevant to the work we do. You should pursue excellence at all times. And one way to pursue excellence was by knowing what's going on. When I got started in business, I was looking to pursue it.
Unknown:Grab yourself a drink a very long drink. Story time. Alan Smith.
Alan Smith:You love it. That was a that was a cue I thought How do I had one? Tee you up anyway. But it was it is true. You're always used to go and I was getting started. I was just I was looking everywhere for lessons. How do I learn about this. And you're right the toll irreverent Ozzie by the name of Brett Davis, and I think he had recently arrived in the UK. And when I got started, and I think I was one of his early clients, because he ran a workshop program. And I signed up for it. And it was great. And I've been following Brett. And we've done a lot of work with him and our business over the years. And he's been brilliant. He's one of these. And he's not a knack because he has advised clients. So it was about 64 years ago, but it has been an advisor in Sydney, Australia, and he knows and he's but he's one of the people would Brett writes his blog, which comes out every time I read it, I think he's in my brain is thinking how I'm thinking and that's the essence of knowing your audience and he really does know know his audience. And he writes about the issues and challenges and the opportunities that all of us have. And actually relating it back to a conversation call that you are having in our private group over the last week or so. I think his latest paper is really really relevant because it's all about I think it's titled How to solve how to solve the scale problem and in fact he even redefines this you know a lot of the a lot of people at a tech companies partake talk about scaling up everyone uses words scaling up as stripe most of us don't I don't like that word. It sounds just sounds pretty awful. We're in the we're in the people business. We look after families to take care of not scale up. So he's redefined. That is how to help more people, which we all like why wouldn't you want to help more people if you got 50 clients help 100 If you got 100 clients help 1000 and so on. And I'd also like the way he has produced this on his website, F p advance is his website, because you can download the white paper you can listen to the audio or it's actually Got it in sort of sections literally on the website, if you want to skim read it. So the way he's delivered the content, I think is excellent. And all I'm saying is, if you're remotely interested in growing your business, you should read this white paper, you should engage with it or listen to it, because he comes up with a lot of sensible ideas. And I think, again, a lot some of the stuff that I've done, because it's very difficult to grow your business, if you the original principle or founder, are going to keep your arms around all the clients because at some point, there's just not enough time in the day and how would you double the number of clients, because if you are the original person, like all of us are, most of the new opportunities come to you, you know, the other clients and your prospective clients will tend to come to you and at some point, something has to give, because you can't just keep dealing with the these clients, you've got to find ways of ultimately, this white paper is about changing your fundamental business model. And Brett is clearly from reading it is clear. He understands how remuneration works, how revenues works or profitability works in businesses. So if you're remotely interested in growing your company, then I strongly recommend not just Brett's this this particular paper, but all his stuff, subscribe to his blog. It's really good. Really interesting. It's well worth.
Andy Hart:I think he runs a course I think it's called uncover your business or something. I think he does it once a year takes in sort of a cohort. And I've heard some some good things about that. So yeah, he's definitely one of the good people in this space. Are you scaling up Nick, helping more people?
Nick Lincoln:No, no, I'm going to change my strap line. I'm not helping people aggressively. That's my scaling. Just winding it decline we're setting in 1969. And building that to my business. Mr. Smith, as you alluded to a guy who said it's so stereotypical Ozzie but he's very blunt and direct, which is nice. And he doesn't need Yeah, doesn't Fanny about to quote, but okay. I saw something interesting i In the US there, I sort of asked about how they're increasing the the annual at their equivalent, the annual allowance, what you can pay into pensions, which they call 401. K's for workplace pensions, and I think they're called IRAs individual personal pensions. The amounts are tiny compared to some history, I put it against a link this article from The Wall Street Journal, so it might be behind a paywall. But most work this is quoting, most workers will be able to put up to$23,000 into their 401 K's annually, up 500 pounds from 2023 23,000 That's their annual allowance you can also put another 7000 into a personal pension so 30,000 is their is their annual allowance, which just obviously their salaries are generally going to be higher. You know, it's the world's capitalist engine, those limits just sound incredibly low to me. So just just interesting point and perhaps we should be grateful for the 60,000 that we've currently got in the UK that if you guys got and we should be
Carl Widger:therefore in Ireland for no limit at all. You can put whatever you want in your pension fund. You don't
Andy Hart:in terms of across the population Nick there obviously still quite high numbers you know, I'm sure the average amount that's paid into a pension per year is low 1000s In the UK, a couple of 1000 at most so obviously you know we work in the world space so you know I get that
Nick Lincoln:six figure kind of you know salary more than I say only half a million dollars or you might not bother cuz you're never going to be able to accrue enough it's your pension funds or even begin to replace your income they Yeah, I just thought Yeah, I thought it was a we're always
Andy Hart:similar to the ice limits that the ice limits in the UK or 20 I know us obviously we're talking about pensions and ISIS you can still build up some wealth Mr. or Mrs. And ice is at 20k a year so there's still some merit in our belief. Move on.
Nick Lincoln:Okay, right. What's the next thing we're looking at? De sorry, my things over and the FCA crypto
Andy Hart:on slightly annoys me, I don't know if you guys have seen this link. This is the FCA and they're quietly started to regulate crypto marketing in some way. I don't believe crypto as an asset class. It's really irritating. It boils my blood actually if you click on the link, you just read the opening sentence to this sort of stuff. Let me just Yeah, okay, I'm I am a muted, sorry. Yeah, if you go to the top of this, it says if you're thinking about buying crypto, you need to know the basics and understand the risks before jumping in. So they're already assuming that you are going to be exchanging your golden coins for this crap. That's already very much annoyed me. And remember if you decide to they're calling it invest, they're not calling it speculate gamble. So already in the opening power paragraph The FCA inadvertently promoting this crap. This is Financial trashing my world we avoid this and an end consumer punter will click on this link to learn about crypto from the regulator, and even the opening paragraph and I'll read that again before jumping in. And remember, if you decide to invest, this is not an investment investment provides a rising income, which inadvertently then provides a rising rise and capital value through profits of companies or rent from property. This is not an investment, it just blows my blood that our regulators now causing us more problems. And they're meant to be on our on our side over
Nick Lincoln:time. Sorry, I'm gonna push back against you again here. And I you know, I certainly not found a crypto I think there's a whole world of pain in that the FCA has cornered about if it doesn't do something doesn't mention it, it gets down and when it does mention it is getting dammed. So I
Andy Hart:don't mention it in that in that context, Nick, before jumping in. Yeah,
Alan Smith:I think the point being the words are really important. This is the basic definition of investing. This is absolutely speculating. It's nothing wrong with speculating. If you want to spec Yeah, but also know it's free. We don't have a public body designed here to regulate and protect the public. And to under do all that stuff that the FCA is designed for and use words like before jumping in
Andy Hart:any in assuming everyone's going to be jumping in it's reading, I
Alan Smith:bet you'd have hired some PR branding kind of communication companies are you're appealing to the youth appeal to the millennials. That's the language they use. But they've completely misjudged the message here.
Andy Hart:Yeah, to protect them and to be protecting clients from scams and frauds and financial trash and all they're doing is promoting it anyway. First,
Nick Lincoln:you can't call it it's not unnecessarily, but we just we don't like it. But it's not an out fraud
Alan Smith:thing, but it's vestments. It doesn't it doesn't meet the basic criteria of an investment as Andy is described. I mean, Chris, I haven't read the piece. And the crypto generically is, as we've discussed in this podcast before is 99%. Crap. You can make a case for Bitcoin, but not necessarily as an investment. It doesn't throw off any income. No, it's no, there's no definition of how it generates for you. How can you anticipate as compensation for another time?
Nick Lincoln:I think, I think
Andy Hart:a language which is used is bad.
Nick Lincoln:They do say in this opening paragraph, you should be prepared to lose all the money you have in quotes invested. So that's opening the opening paragraph.
Andy Hart:Okay, that's all right. Yeah, I think Charlie Munger calls it rat poison squared. So I'll go with Charlie on that.
Nick Lincoln:I agree. I agree with if I died, just from one side number four, I think the FCA is in a difficult place with this if they don't do something they get down. Okay, another political thing. And, again, I'll be careful. I'm not I'm not saying I'm not saying this is necessarily a good or bad thing. But the Labour government has proposed to bring in VAT on school fees. And I should know and I'll consider myself I do think it's a bad thing. And I'll tell you why in a second. And I had an annual planning meeting with clients last week, we're planning on sending their three children through private school private education. And they were saying that, what they might do what the what the schools are now doing, these private schools is saying to people pay up front. Now, if you've got if your 11 year old is coming here for seven years, we'll we'll we'll factor an invoice for you. Where you pay for those whole seven years upfront, and we avoid this vat thing. So it's just an interesting wrinkle on the unintended consequences of up to potential political and budgetary changes. Also, this client was saying he's got quite a bit money, his business is thanks. I might just pay myself a one off dividend because I'm sure later we're going to get rid of entrepreneurs relief. And it's kind of well, it might they might, but they might not. And we can't really make financial decisions on the hoof on what on what what might what might happen and what might not happen. But certainly for school fees, I think it's if you've got clients, putting kids through school, through private school or thinking about it, this conversation is going to come up. And just I mean, why I think it's a bad idea. But there are close to this because you know, the lovely Penelope is a governor and merchant Taylor's School, which is a fantastic private school, around the corner from me in Moorpark. And a lot of the children there are English of Indian descent, and they are the grandchildren of those African Indians who came to the UK in the late 60s and early 70s, fleeing persecution by black leaders such as EBR mean, and they came here they went through loads of crap they put up with a lot of rubbish, but they they assaulted away and they put their kids through university and now that they've their grandkids are now going to these public schools. If this vat thing comes in, it'd be really, really hot. Those are the people they're going to get affected by it. And the kids that get into it Have a school because their dads are our old boys, and they've given money to these schools and it's all not in the wing, they won't be touched by it. So there's politics of everything is really going to hit the absolute aspirational class that we want to be encouraging in this country. So I think it's a real shame. If that happens. Alan, you're you were waving your digit. Yeah, I
Alan Smith:completely agree. I mean, as somebody who would be impacted by this, like a two kids at private school at the moment, increasing their fees by 20%. What there are is at the schools, I go to the various events in the sports days and stuff, you meet a lot of the other parents. And there's certainly a number of them who are aspiration, who are just about affordability, everything that they can, because you're a particularly ones who have come from an immigrant history, and their parents and their grandparents told them all about education, it's all about education. And these people are the mums and mum and dad are both working and are putting under no doubt they are compromised a lot of their other parts of their life, to make sure their kids get the very best education that they can just about afford. And that's a big slap in the face to those people. And there's a lot of other parents who are there who are just International, obviously, I mean, London has a lot of international parents, and the school fees are effectively paid by the corporate, the company the cut, if they're, you know, they're working for American bank or something like that. And so in the UK and London for three years, so that will make any impact to them whatsoever. So I think they're going after the wrong people. They're going after often very aspirational people, I don't care how much money you earn, if you're earning a lot of money, you're already paying a huge amount of tax and personal tax, and probably capital gains tax VAT, etc. It just feels very unfair to go after education, which is the you know, this is the building block of any sort of modern civilized societies to educate next generation of children. And obviously, it takes the pressure off the state system as well by not having all these kids going to public schools. So I think it's very, it's misjudge. Obviously we're speculating on what may or may not happen, but it certainly seems to be part of their agenda. One last thing I'll throw in here, I'm not a particular fan of current government. But I did see our prime minister interview Elon Musk and AI conference in London recently. And he was very impressive. Rishi was very impressive. He had a conversation with Elon Musk, that I don't think any other political leader in the world could have in terms of his level of intelligence, his intellect, his ability to discuss some very complex issues. I thought was that was fabulous. And Rishi went up a degree to, in my estimation, through through that I
Carl Widger:watch, I watched that out. And it was it's essential viewing, right. It's a really, really fantastic interview. I think it's 50 or 55 minutes. Yeah. However, to say that no other leader in the world could have conducted the interview like he did. I think that's a stretch too far. off top your head now. I would say Leo Varadkar from Ireland could definitely have conducted the same interview. I think,
Alan Smith:I don't know. I don't know him. I obviously can Joe Biden. I'm thinking of you know, other Trump in days gone past. Maybe you're Irish in America? I think I'm thinking in Europe. I'm thinking I don't know if the French which column could do it. But anyway, I just thought he was impressive. And the last thing it relates to your issue on tax, Nick, someone asked a question. And an Elon specifically raised about entrepreneurs and business owners. And he said, it was brilliant. He just said so that the model is you put all your life savings and three to five years of really hard work into a new business venture. And there's 90% possibility that you'll fail and lose everything, which is which is the whole kind of entrepreneur founder challenge. And so an Elon himself is making the point, you've got to reward success, you know, in other words, so don't go after entrepreneurs relief, if you've absolutely managed to be one of the very few who start a business and grow it but all your life savings and you hire people, you pay your taxes, if you manage to sell it at some stage, you know, don't take away this small benefit that exists in the UK, in terms of entrepreneurs relief from capital gains tax. So it was a great interview. And as you say, it's essential listening. Yeah,
Nick Lincoln:and also talking about the US and then regulations and throw this in on Andy's point about the FCA regulating crypto, you see that they're all in pot. They're livid about this, this this US legislation where they're going to try and regulate AI and it's just like, you know, wow, you know, that will be the death of AI.
Carl Widger:If if, but that was kind of a lot of that. That's why Musk was in London was to kind of set some regulation rules around AI so that there's AI remains a good thing as opposed to having the bad actors coming into AI. I think there's a lot of relevance to that. I think that is a that's a real thing. Because if AI takes the the legs that Elon Musk thinks it's going to do by Christ, we do need to regulate it. There's absolutely no no
Nick Lincoln:no I'm fundamentally just the US legislation as it's being muted is that the EU US government decides what's bad and what's good and what's not. And so now you've now you've suddenly politicized this whole thing, and you're going to Well, I think, before we Musk was there, you know, the Democrat party in particular, we're working in cahoots with Jack Dorsey. And and it's all out. And this is not me speculating, this has been proven by the Twitter files and they will stick to any level.
Carl Widger:And that is a case of, I suppose, Musk is trying to fix that. And I know there's pros and cons of Elon Musk for sure. But I think listen to that are watched that interview with Rishi Sunak. And Elon Musk, I think this is this is going to go to places none of us can actually imagine. It's it's just absolutely incredible what's going to happen in our lifetime. This isn't like gonna happen in 100 years, this is gonna happen in the next over the next few years. And the potential for this to go wrong is quite large. And I suppose the, the the scale of, you know, evil that could be out there is is is a little bit scary. They did sign I think an agreement and China signed the agreement and the UK signed the agreement. I think the US signed the agreement, but I'm not entirely sure. So just just to try and set some framework around it. And I think if it's not just the US deciding, Nick, if it's kind of the government's globally, I think that's probably a good thing. Anyway, time will tell I guess.
Nick Lincoln:Okay, great stuff. Thank you. Oh, yes. Sticking with you watch. You. I think yesterday, you put under our noses they an article about the St. James's place adviser who couldn't pay back his business loan?
Carl Widger:Yeah. So I actually I got Sunday Times yesterday. And this wasn't in the Irish version of the Sunday Times. So I did something I shouldn't have been doing. I was looking at LinkedIn on a Sunday. And a couple of I'm connected with a lot of probably through this podcast with a lot of UK advisors. And people in the financial services industry in the UK. And three or four times, people I'm connected with, had put up this article from The Sunday Times yesterday, where as an SGP advisor basically went to the Sunday Times and said, Oh, look at this, this is a disgrace, SGP loaned me some money to buy a book business. And I basically couldn't pay it back. And then they put a lot of pressure on me to pay the money back, because I ordered to them. And all of the comments on LinkedIn I saw were all basically gone. Terrible SJP, the big bully boys and whatever. And maybe it's because SJP aren't in Ireland that I can actually have the power of the dark side. Yeah, but that's actually the point, right? I don't believe they are the dark side. I think they're fantastic business, like every other business, in financial services. And I suppose every industry, they have their good points, and they have their bad points, right. But an advisor running to the newspaper because he couldn't pay back money. Under a model that's very, very well known. I know what the model is, you boys know what the model is about, you know, you you buy another advisor who's retiring and they give you the money and, and he basically one of the points he was making was an interest rates went up. And I'm like, for Christ's sake, man, if you didn't do the maths to kind of, you know, factor in well, if interest rates right were rising, or if they if they went up, then, you know, am I going to be able to afford it? And I just thought the commentary from the IFA market in the UK basically supporting this advisor and slating the SGP, was all wrong. I thought, This isn't balanced at all. This guy needs to take an awful lot of responsibility for what went wrong and why you run into the newspaper because they look for the money back that they gave you a new sign up to the terms and conditions. Yeah, sorry if that pisses a lot of people off, but come on, like
Nick Lincoln:businessman butchers business plan. Yeah, correct. That's what it was.
Andy Hart:A couple of points. It was slightly different on Twitter, Twitter, it was a bit more sort of supporting SAP is such again, failed. I mean, it's peaked its peak journalism isn't its peak mainstream media. Ali Hussain loves these stories. I mean, it wasn't balanced. I mean, how many 10s Hundreds 1000s of successful loans have been set up like this, you know that they didn't cover any of that. When I set up a business when I was a mortgage broker at 24 and I was wearing my polyester suit. I had to borrow 40,000 pounds from a bank and sign a personal guarantee and then get my ass out there and try and pay it back. You know, it's called business. You know, I wasn't moaning saying you know, how am I going to pay this back? What have I got to do? Yeah, we know the model that also Transact and Virtus use it's very successful. Yeah, again, it's just peed journalism. They love to find Sony ridiculous angle. Look,
Carl Widger:I Except Except to peak journalism, but on the on, you're right about that. And they got seven newspapers, right. So headlines and all that kind of stuff and make the small guy look like he's been bullied. It was more of the commentary from the ifas. Basically saying, Oh, this is terrible note of SJP was the bit that surprised me. I'll be honest, it's
Nick Lincoln:still an immense trigger for a lot of people.
Alan Smith:It's a huge trigger. We know when we did the famous SGP episode, that we got a bit of flack from it from the independent sector, because we were kind of apologists for this brand is company. But I stand by everything that we said on that we didn't we, we we criticize where criticism was appropriate, and we praise where praise was appropriate. It's just, it's not black and white. There's any you could if you focus this amount of attention on any advice, business, my business even matters, Norway, you find a few negative points is true about it. But your eye Ally has seen in particular, the Sunday Times specifically there is like every week and has been for years. Whilst we're seeing this kind of a quick side mentioned, because we're talking about the you taking when you were wearing a cheap, polyester, cheap polyester suit, and smelling of desperation, as they described you and your first meeting with him. Just just a correction of the episode last week, I think it's a correction because somebody I think we mentioned when we were starting up in business, and anyone starting their own new independent advice business you mentioned and the, you're gonna need about 80, grand 80,080 or 90,000. I
Andy Hart:think you said Oh, 7000.
Alan Smith:Somebody contacted me recently, somebody's thinking of doing exactly this, then why they didn't contact you? Well, maybe I do know. Oh, and they said, Is that Is that right? And I said, because I didn't I didn't really pay attention. When you mentioned it, I thought, not at all. That's not right. So you need 20 grand. I think if you're going to go directly authorized, you need about 20 for capital adequacy. And the rest, I think you could set up an AI their business for well, under 10,000. You tell me where are your costs and overheads, regulatory costs and stuff, but you don't need 70,000?
Andy Hart:Do you? That's basically what it costs me all in with loss of wages, putting the 20 grand in the bank getting a slightly different office, it depends on what your starting point is. If you already run a successful business in a different network or something going on, you want to go directly authorised Yeah, the actual FCA cost and a console to help you out fill in the form or something like that will not cost you much. And there's other people that set up a business cost and quarter of a million pounds. So I'm just telling you my story. That's why I said 70k. But yeah, if you've already got a bit of money in the bank, a bit of traction bit clients and obviously just switching to become directly authorized. I think you could probably do it for your right, Elon under 10 grand. Yeah, okay.
Nick Lincoln:Okay. Let's not get too too much in the weeds on that. Thank you, gents. Yeah. Okay. Next topical tip, Mr. Smith, the wealth front DEVAR.
Alan Smith:Yeah, these topical techniques are going on a bit today. But yeah, there's something else that I saw recently. And here's another example of things which will never change. So Wealthfront are effectively a so called Robo advice firm based in the US, which sets up number of years ago to great fanfare. And I believe we're pretty successful. They've, they've got a lot of assets on their platform now, but they are that classic early stage, Robo vise company. And I picked this up on Twitter, there's a, there's a guy who writes a lot about this stuff, Andrew beer, his name is on Twitter. And he posted this thing which had passed me by other buys. So Wealthfront themselves as these companies tend to do from time to time not satisfied, but just has to having a platform and offering simple low cost index funds, which is the kind of the whole premise of many of these Robo firms. They decided to build their own fund, and effectively a sort of quasi hedge fund. They called it the risk parity fund. This guy has written a really interesting thread about I could post a link to that on the show notes. Risk parity fund, and it's just, it's just all these complicated things that you kind of don't need and don't want. We've got you know, they've got derivatives in it. They've got a whole series of complex, sorry, shoehorning
Nick Lincoln:clients into this without additional, then there were kind of a discussion or
Alan Smith:something untoward going on I thought that they could have actually been doing this or I hope they haven't, but it actually moved some clients who had their kind of Vanguard 6040 type portfolio, it seems it actually moved them into this fund without necessarily knowing about it. I don't know if he had a kind of you had to opt out of having your money moved into it or not. I'm not sure exactly how but certainly, more than a billion dollars of assets went into this kind of strange fund called the Wealthfront risk parity fund.
Andy Hart:Alan without charging more was that the reason why they charge you more they were trying to become profitable such what
Alan Smith:I mean interestingly, this guy's mentioned it as well on the Twitter thread, they were charging half a percent which for kind of hedge fund type font type font is very good. But what they haven't done, you haven't caught, there's no doubt you've got to pay for derivatives to some sort of leverage in it as well. It's a usual mess of complexity. And he's saying, hang on a minute, you're just saying the fees a half percent, there's no way and he's a hedge fund guy, the guy that does this three, where's all the other fees, because there's definitely fees. And then if it's, if it's purports to do what you say it does, so I don't know what they're charging for a typical index fund, maybe it's similar, but we're definitely looking for to create some profitability some extra profit in it. Fast forward to today, the funds down 20% over the period, if you had been in it sort of Vanguard 6040, up up. 34% says an effective loss of 50% of capital over 50%. There's a billion dollars going into it has gone into it thus far. And he said, you know how to incinerate half a billion dollars of retail investors money, boom, you know, there you go. This is how it's been done. And even more Incredibly, this money still going into it's still over a billion dollars and people are still putting money into this crazy fund. So in summary, some things change. Some things never change, companies will still create products and services to try to generate extra profits. I thought Wealthfront were one of the you know, the cleanest purest of YNAB. You know, I've heard you know that I think they advertise in the Tim Ferriss podcast. This is supposed to be some of the good guys and yet they've come up with this nonsense fund, they've attracted a billion dollars of incinerated half a billion of investors money. It's not good, but these things will always happen if it's not well find someone else to do it next year. I think it's just an interesting story.
Nick Lincoln:Yeah, yeah, Pluto shows Pluto meme shows as they say, Okay, right. I talked about our elected betters and whether it's labour or conservative, they're pretty pretty. Pretty mediocre bunch I saw this question posted by a Labour MP Justin mod as the MP for Ellesmere port. And Nesta, he posed this to the Secretary of State for Work and Pensions. His question was, how many and what proportion of people claiming pension credit were born on or after April 2016. And Laura Trott conservative for seven extra applied pension credit is only available to those of state pension age. Therefore the number and proportion of people claiming pension credit who were born on or after April 2016 is zero. They are at most seven years old. So I actually delivered that with some Pithom verbund Our answer them that the ignorance the ignorance of those that would take everything from our wallets and they got the chances or status that's
Alan Smith:obviously a spelling mistake. It's obviously an error from him, isn't it? That's just that's you didn't mean it didn't mean 2016.
Nick Lincoln:Just it's it's heights questions. It's a type two question. And he's got a team around well, he's got a team around him as well. Yeah, yeah. Okay. We don't have London Andy Google interview warm up tool.
Andy Hart:Yeah, Google have launched this tool, the know how recently they launched. It's called the Google interview warm up tool, you click it, it's a website. So if anyone listening to this is going to be going through the interview process, or they've got kids grandkids are going to be doing it. Check it out. And then you basically say what type of industry profession you're in. And then they ask you these questions and you answer them back and it's sort of grades your answer and stuff. It's quite cool. So check it out. Nothing more really to say on that. So Google interview warmup tool.
Nick Lincoln:Interesting. I just happen to have so so yeah, knee, knee. Okay. All right. Why are Blimey 53 minutes in and we just did we just done the topical titbits? I think we better quickly move on to what some people laughingly call the meat and potatoes of the show and where we're having we're having some chats before we started recording this about whether this was going to be something worthy of discussion I think it is and we can probably build it into something to other areas we don't need to go on about it forever. The final exit strategy so the last episode I was in Spain, if you watched you too soon I was I was in Spain, I mentioned it in the in the audio as well because my dad who's 84 managed to fall over and break his leg quite badly. Just just stumbled didn't wasn't doing anything particularly arduous. But 84 years old, he's got three months of rehab and he's already going stir crazy bless him and it just made me think because they my mum and dad of that generation again I'm not saying it's a good or bad thing it's just what it is that dad does does all the financial all the runs all the money runs the house you know in terms of the finances all the gadgets all the Wi Fi or you know, the hot weather, how the boiler works, how how the irrigation system works on their place in Spain mum and mum doesn't have a clue about this kind of stuff, you know, even logging into the bank, you know is what was was an effort for her. So and my dad you know, he's got everything and he's I couldn't Chairman Mao because he's got everything written in red book, you know, all the passwords all the Wi Fi. Everything is in there and nothing is it nothing is available for mum. And it just got me thinking but obviously we're business owners. We're human beings. We've got stuff going on in our lives. What if we passed away would our other half know what to do? So I put together what I call a life file for penny, and my Luke and in there, I've just dumped everything. It's three sections. It's a money section. It's a house section, how does the house run where are the brochures, the manuals, all the devices in the house and there's there's a there's a thirst section as well which escapes me at the moment. It's just a Google doc I'm evolving all the time. So if I'm not around, Penny and my son and her and her Luke can work through it and just have a clue but a bit of a clue. They'll sort of the third section is the fact that I'm a business owner so it's a bit in there that said, listen, share this with my locum you know, this is just you know, I'm an I'm a locum for people. I would want this kind of document because I don't I don't you know, you want to you won't have you won't have a clue what the hell is going on? You know, if Nick Lincoln is not here, what what how was he doing stuff for good or for good or bad? So I've just, and you don't want to do it? Do you? Cuz you're thinking well, this is kind of admitting your own mortality in a way you know, you're you're you're you're admitting to yourself that you are going to die. I think we have a responsibility to those we love just to put something down in a format that is that is sustainable, we'll be around they can easily access a password protected it or that's a pain with Google Docs, you can't actually password protect. But I've I've put into a dropbox folder, which is password protected. So yeah, and then I just wonder, you know, do we took a you guys done this? Because you know, if you wouldn't suddenly be incapacitated? Not necessarily debit incapacitated? Or Or you pass away? Would your loved ones know where the hell to start with your estate? Yeah, there's the will. But the wills don't cover the nitty gritty stuff, the actual practicalities of living your we all have a digital life. And, and then you talk about it with your cat, I'm certainly gonna talk about with my clients, but once I just you know, you I know you've made wills, because I check every year with you and their current value. But you know, if, you know if, if he if if Mrs. Mr. Smith Goes Mrs. Smith, are you would you have a clue? And vice versa, and I wouldn't lead us in, maybe asked us to change the genders around there and say, you know, Mr. Smith, if Mr. Smith Goes, would you have a clue? You know, have you documented it? So I'm just wondering how you guys do and how you how you've addressed this, if you've addressed it in your lives initially. And then do you raise it with clients?
Andy Hart:I'll throw in a couple of things. I'd love to be a fly on the wall here and you and your dad have conversations about stuff and how much you sort of respect Chairman Mao, but that's a that's a separate point. I'd pay good money to see that. It is quite a deep subject. I mean, yeah, do we talk about it with our clients? What have we done ourselves? I mean, everyone's got their own situation. You're right digitally. It's a complete mess. I mean, the fact that you've told you know, Luke, your son where where the thermostat manual is again, I don't know how we use it. That's going to be post your demise. Yes, there are there are quite a few moving parts to this. I mean, it's a bit like the Italians isn't it? They don't wear seatbelts because it's like preparing for a crash. And I'm like yeah, okay. The law says you need to wear a seatbelt so yeah, the digital lives are a whole other mess like passwords for social media passwords for email What do you want to share not two step authentication banks as a successful divorce See, I don't have a spouse that I can share this file with and my kids are three and a half at the moment so they're not on the list so yeah, my brother knows pretty much everything that's going on with my situation. So yeah, that's my start
Nick Lincoln:to foresee What's that supposed to mean?
Unknown:Over to another successful
Nick Lincoln:successful divorce a what's it called?
Carl Widger:Jesus. I thought the talk all the talk about the UK politics was bad. It was just really bad. Anyway, and I've never kept a manual from a thermostat or a cooker. Like that, Nick, I absolutely the worst in the world. So
Nick Lincoln:I am very OCD can I get that but I use a storm as PDFs and Evernote. Now the chances are people aren't going to need any of that stuff. But they just say, if you need that stuff, it's in this file here, you know, to click on this link, and it is all there but all the bloody receipts and manuals might you know my sad life on this on this face?
Carl Widger:Anyway, my kids would totally understand that appreciate that. I wouldn't have kept them and they'd have to figure that stuff out themselves. I'm embarrassed to say I haven't done anything like that. I'm yeah, my personal scenario still not sorted. So I'll be a little bit of light before I kind of get all of that stuff done. What I will say is two points in this. When we started out, doing real financial planning we used to give our clients what we called, was a blue box. It was like a little box with like various little slots for various files. I know that an awful lot of clients still have their blue box and they have everything in their blue box and In the US, as we kind of transformed to the digital era, I had a coffee with a friend of mine yesterday. And he asked me exactly about this point, he said, what's going to happen if something happened to me, when at least two of my accounts are only access via my thumbprint? And I was like, that's actually a really good point, you should probably write all of this down in a document. I'll put you in touch with Nick Lincoln. He's the master. But, but yeah, so look, it's it's an area of I suppose, when we do financial plans for our clients, we would always you know, it's especially when there's couples there, we would say, Look, you know, if anything was to happen, your first port of call is us, because we know exactly where everything is, we're never going to have the manual for the washing machine. But in terms of your finances, your wills, you know, all of that kind of stuff, I think, you know, we are, that's part of the service, we are your partner here. We're your partner in good times, and in bad times, and we will help people get through. And we have successfully done that. And, you know, that's part of the, you know, if you get very close to your client, you know, what their goals, dreams and aspirations are. So it's not just about the finances, and therefore, you're in the best possible place to help people through difficult periods like that.
Nick Lincoln:Okay, I know, Alan, you you've you've, you've done this, haven't you written out? You know, if Adam Smith is not around, you know, where the parties are held? And then secondly, wherever your what your what your lovely wife would do and what what did she say when you mentioned this to her recently?
Alan Smith:She said, Oh, yeah, you did. I have no idea where it is, though. So So yeah, that's the other thing as well is Yeah, I did yeah, two years ago, created, and it was just as documents as your Word doc, which is less shareable really think Google Doc. But anyway, do this and kind of brain dump everything I had, it didn't have the thermostat or the cooker, the lipo to work that out. But I had all kinds of financial stuff. bank account details, I mean, I've got God, I've just got a, you know, a few kind of legacy, things that aren't, you know, they're not, they're just not necessarily known, just investments and small accounts here and there. So just want to have a list of things that she knew about which but here's the other challenge. And that just needs to be because you can do all this and create whatever format be a digital hardcopy, but the person to whom it's designed for now, be careful to save it to store it now you can print it off. But the point being if you print it off, it'll change. So many things have changed over the last since I did it three, four years ago. So it's hard to keep it, maybe you should just do it, everyone instead of speaking. First of all, it's just us or me, as a business owner, we're not overly complex and FERS but certainly there's quite a number of moving parts in it. So there needs to be a method of doing it. And whether it's just an annual, you know, internal family meeting and you say, well, I'll print it off again, and keep it here. And this bloody drawer makes sure you don't forget where it is. That's an important thing. But I did, I think broadening that it's out to a service to clients. I think it's really important to, I think this kind of, you know, additional service we provide as the trusted adviser to the families in a circle. I think this goes hand in hand with this stuff. I was speaking to a new potential potential new client the other day, and he said that one of the I think I'm reasonably competent at doing some of this stuff myself. But as I get older, this guy said to me, so I think it's important that we have somebody in our family that should not be around anymore. And without being sexist about it, it is usually the man or the male who takes control the family finances. And so and he said, he said, he said to me, he said, My wife doesn't really know much about this stuff. And I wanted to want to get involved. But if I'm no longer around, I'd like to ensure that somebody that I know and trust and respect who could step into that role and can take care of things. I remember speaking to a client, Lady client several years ago, whose husband just died and I knew the husband pretty well and I went to see her at her home. And she did say she said exactly that. Next she said I don't even know how the Sky TV works. You know, Bill took care of all that stuff to get everything and this is somebody now often you'd have members of the family you know the son or grandson or somebody step in and take care of this stuff. This is a lady who had two daughters, one of whom lived in Australia and one lives some miles away and it just it wasn't quite so helpful that some of just the other kind of life stuff. So I think it can be a value added service if we purport to be trusted advisors and a lot of this the Canada financial stuff can be you know relatively straightforward to invest this particular way you need to have a plan util you know, stick with the plan as Carlos says, But what about the other stuff when life becomes challenging or different? I think there are there's there's a there's definitely value in creating. I'd call it an ice pack in case of emergency break glass or get some He opened the folder. Here's all the information. Here's the stuff, this is what you need to do and for something else that we can help you with. Give us a call, Andy.
Andy Hart:Yeah, a couple of points. I think a good friend of a couple of us on the show Kev de mer, I think he coined the acronym ice in case of emergency, the first time I heard it. And I know he does quite a lot of good work with his clients. So in relation to that, I've personally had three clients pass away die, all three were male, all three with a dominant one in terms of the finances and the knowledge. But I knew all three of the survivors. And one of the benefits of working with a proper financial advisor that looks after families and couples, not individuals and pots of money, is you are there for the survivor. I mean, if you take that to new clients in their 40s, it just sounds a bit murky, that's probably not really going to be something that we're going to use. But certainly when they're in their 60s and 70s, you know, being there for the survivor is something important. So early on, I obviously want to meet the couple. And even if there's one who's less financially dominant, I certainly want to meet them in the early onboarding stages. I then say if they want to sort of dip out have a couple of meetings here, they're in everywhere. It's not it's not the end of the world, but at least they know me. And if anything happens, I'm available for them. Yeah, so it's got quite a few moving parts here. What do we do personally, is sort of conversation itself. And then how how, how much do we lead with this with our clients is a is another conversation. I know, some advisors and firms have put together decent sort of PDFs in relation to this. But I haven't seen any any for a while. But I know there's some sort of templates out there. So yeah. Who's next?
Alan Smith:Can I just can I just come back briefly on a associated point, when I was speaking to prospective new clients, and I was describing what are sort of processes, what's the next stage of the you know, we have initial what we call a coffee meeting, which needs to be a telephone call initial chatter. So Well, the next stage is, we'd like to invite you and your wife into our office to do and doesn't have to be our office, but we'd like to invite you and your wife, because that's the way we do things we meet as a couple because we consider ourselves to be advisors to the family and not to just to you. And this guy said straightaway, said, fantastic. He said, I've spoken to another couple of firms that didn't mention that at all that to me is really, really important now for us is is basic is hygiene factor. But a lot of other firms don't do that. They say, Well, it's the man has called me up. He's the one that sort of knows about the money in the family finances, we only need to speak to him. Or we say no, it's it's, it's quite different. And sometimes it can be a bit difficult about you know, people juggling calendars and diaries, and finding the time I say well, wait. And so we can all get together in a room with because we are here to advise your family. And not just you and I'm sure your your spouse, your other half will have a lot of views on how she sees the future, working out for you as a couple in your family, what your values are, and what's important to you. And it was just a reminder, to me, this stuff is important. Anyone listening to this, always do your best to encourage if there is a couple, there's two people together. Meet them both. It's really important.
Nick Lincoln:And your hand was raised and now we're waiting for you to say something. So yeah,
Andy Hart:I'm almost I'm almost certain that is still the minority of financial advisors. They are delighted to look after a random pot of money that delighted to look after a random individual. But yeah, front front foot. No, we only look after couples, we only look after families. That's how we work here. Take it or leave it basically.
Nick Lincoln:Yeah, I just okay, well wrap, wrap, wrap this up, it's not perhaps the most interesting. So it's just front of my mind, it was just I would want this from you know, I would, if I didn't know how the house was robbed, I would want something like this. If my if my partner died, and she did it all Penny passed away, I would want this and I'd want and I wouldn't want to go on about the bloody washing machine, Nick, is that, you know, it's a time of terrible loss, you know, and then all of a sudden, the person who did all that also has to
Alan Smith:organize the party, just just just
Unknown:just evaluate, we just can't work the thermostat, if there was only a link to a manual
Alan Smith:on a Google doc folder, which is in a dropbox folder, which is possible to control that no one's got access to
Nick Lincoln:around the house and your wife doesn't even know where it is. I'm gonna log into your money account,
Carl Widger:who's gotten your who's gotten your 10% Share and trapped by the way
Unknown:that was five, seven and a half.
Nick Lincoln:One just just as I put this document together, I said to Penny Oh, this by the Coventry building society, I'm mortgage with them. This is the password blah, blah, blah, blah. And then when you log in, they'll they'll they'll call my phone with a code. Access your phone. So this is how two factor authentication stuff is. It's just me Dad, I don't think I don't know. I just think I think you've got a responsibility to those you leave behind to just make it a little less arduous. And that's why if
Alan Smith:anyone is listening to this, who's as you say, Andy, there are a few I've got a few drafts kicking around never quite nailed the final thing to share with clients. If it was listening to this I've got one share it share it online on Twitter or LinkedIn profile or something or
Andy Hart:email one of us email or contact one of us if you think you've got the template and maybe we can do that as a giveaway of future show or something if our chairman allows.
Nick Lincoln:Is this upon. Okay, listen, good 7070 minutes in to the into the show. So I think we should probably move on to the TRAPPIST question, if only for the reason that there she is at the front door with a bulging sack of trapeze questions as ever on X Twitter, whatever you want to call it, the pin tweet, there's a link there you click on that you submit your question and then months and months later, we may get around to answering it as we go through them. And I think we'll just do one question today if that's okay, guys, just from a timing point of view kind of makes sense, I think to do that and let's have a look and see who this dispersed trapeze question is from Richard Polson, who is on Twitter as Gregor Polson nine threes also on LinkedIn, chaps love your podcast smashing content and stupendous bands who have been advising for just under two years, I'm really trying to embrace the goals based financial planning that you guys speak of. And I'm trying to steal and emulate as many ideas as possible. Yeah, you crack on and do that which, looking back at your career, though? What was the moment where you feel that it all clicked in for you, guys, and what book is most inspired you in your line of work? Keep up the good work or the podcast, Richard Polson from de Mello and company wealth management. So, when was the moment when was that eureka moment for us? And what was the book that inspired you first, Andy?
Andy Hart:I know his boss, Chris. He's a superfan of trap. So um, hello. I don't think it was any one thing I think Alan alluded to earlier, you know, constantly seeking excellence, you're constantly trying to learn things all the time. The one book, I'd say had a biggest sort of kick for me, was the War of Art by Steven Pressfield. It just by basically gave me permission to, you know, deliver and do things and don't fight the resistance that's constantly in your brain about delivering and becoming so Yeah, nothing specific. Obviously, we mentioned a couple of things previously, like dimensional life plan in voyant. But again, so many moving parts to it. I couldn't identify anything individually. Anyone else?
Alan Smith:Yeah, I've saw the question. Given some thought, and I agree with you, there is no one single light bulb moment, there's a series of light bulb moments. And I'll summarize three of them because they apply across three different aspects of what I consider to be core financial planning. One was and we have talked about him and our experiences on this podcast before was when I went and saw Paul onsen. When I saw him talk about effectively cashflow modeling was, you know, it was a new and unheard of thing. The tools we use nowadays don't matter. The concept is vital. And it's important. And I saw Paul, I know that Nick might be in the same tour, we did a UK tour. And our next song at Watford, I saw him in London, and it was just bang light bulb, I get this now, this context that was really, really important to me. And then further down the line, I started thinking about the investment process, once you built the plan, you need to fuel the plan with something and I wasn't really satisfied with what we were doing at the time. But I wasn't exactly I wasn't convinced, I didn't know really what the next stage was. And I met with a guy called Tim Hale who runs a company still does run a company called Albion strategic consulting. And if you don't know them should check them out, check their website. And Tim provides effectively investment counsel to independent advice businesses and helps you build your models from scratch your investment philosophy. And so I spent a lot of time me and my team with Tim, that was another series of lightbulb moments when I began to understand how capital markets truly work, and that we're wasting our time if we're trying to find the new staff fund manager. And that was an important point. And I'm surprised you didn't mention this, Andy. But the last part when I begin to understand once I've got the plan, and once I've got how to fuel the plan, I'd realize the importance of behavioral investment counseling, and of course it was finding a gentleman called Nick Murray, his newsletter, and if you want to a book, or in fact you could it's hard to choose one choose around the year because if you want because it's got all the the sort of snippets from Nick Murray, but start reading we talked about this many times in the past. But those are the things to me, it was understanding, planning, understanding investment and understanding the importance of behavioral investment counseling. That was a multiple series of light bulb moments that happened to me over probably the course of five, six years. And that's actually there's not much more to learn after that. It's more you can rinse and repeat and keep understanding and define and refining it. But there are no huge differences. It's not going to be you know, crypto is not the new best or better one or there's not a new better way to do planning that might New technology, but the actual concept doesn't change. And you want to come back on this, Andy.
Andy Hart:Yeah, I'm calling I'm calling it the three P's. It's the plan first, that's paramount. The portfolio funds the plan. And then it's the path we've got to ensure that they stick to the path.
Alan Smith:You're almost glad we've been using our company values plan portfolio partnership. That's that's the key we've been using as our business. You call it path, our love for you. We'll call it Partnership, which is the truly important thing, and it's trademarked, so don't try to steal it. Let
Carl Widger:me know if you'd like to contribute German.
Nick Lincoln:Okey dokey. Carl, did you have a an epiphany moment? I
Carl Widger:just, I read the question I talked about two books that I read, that were transformational, had nothing to do with financial planning, atomic habits, which I probably mentioned, as much as you boys mentioned, Nick Murray. That book by James clear. And also when I was setting up my firm, I read the book called The real deal by James Ken, who was the Dragon's Den guy who was into recruitment and that kind of stuff. And in terms of building a business from the ground up, and then kind of how to scale and you know, blah, blah, blah, I thought it was really good. So there are two books I would recommend. My, my kind of Eureka moment was, Stephen Brown was a part of mine. And Steven was, had found his volume software, and he came down to my office, I think this was 2012. And he showed me this software, and I went, Holy God, that's unbelievable. There's nothing like this. But bear in mind, like literally everybody in Ireland were product sellers at that stage. And Stephen said, I'm going to bring this to Ireland, and I'm gonna sell it. 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. Anyway, browner said he was going to bring this software to Ireland, and I thought, it looks fantastic. But there's no chance that this will work. Anyway, Brown was VP of volumes, the world I think this stage right? He's gone on to be a huge success. So well done to him. What it was.
Unknown:Yeah, I was gonna say he loved that venture. They'd love that little bit. He's a
Carl Widger:great guy. He's an absolutely great guy. But it was after that meeting, he told me this is standard stuff, Carlin in America and, you know, just beginning to become big in the UK. And it was at that moment, I started to to do a lot of research. So that was really the moment for me. So thank you, Stephen Brown.
Alan Smith:Is it worth briefly mentioning since she did that drop the Irish drop just there, Nick about the new world record? Or beer consumption? What is it you posted call or you shared with us
Carl Widger:the Ireland's gotten a budget the Rugby World Cup, which we are all that. Yeah, there was 137,000 lines served for that much. Which beat the previous record by something like 50,000. But my point was, I only remembered the one that I delicately tucked under my seat to watch during the first half and Andrew Hart kicked over into my shoe. I didn't mind that he kicked it into my shoe I minded that He spilt it. He of course does have a lot of excuses.
Andy Hart:Anyway, to be fair, it wasn't my fault was that idiot behind me with his jacket. But you know, we did the right thing. We all tipped up points accordingly. So we have the same amount.
Unknown:We shared the spoils. You took
Carl Widger:some of Ireland ours on the next point and poured it into mine for then some of your own and Scotland were 14 nil down at the time. challenge because of a mood. He was
Alan Smith:on the board. I wasn't talking to anyone at the
Nick Lincoln:time. He was on the board. Okay. Very good. Right, Mike? Thank you for asking what my epiphany moment was chaps on our way through and others mentioned it it was I do have a clear eureka moment. And it was when I saw Paul Armisen talking about the bucket and truth software and this was a 2007 ish, I guess. And I thought bloody hell this is this is this is this is the word. This is the this is the word. And it just everything I did after that cascaded off of that books to read. I've mentioned it before and I know you love it as well, it is. It's not a finance one. But I would say just just really, really Dale Carnegie's book came out in 1936, How to Win Friends and Influence People. And a more recent kind of update on that book is asked by Dan Solon, which is really s o li N Dan Solon. Really, really good book just about the power of questions. Since you know and it's become interesting become interested if you give people a damn good listening to they will love you generally we're just all itching to talk as as Mr. Hall with your digit roaster yeah
Andy Hart:final thing in the pool arms and thing Yeah, I went to see his truth presentation I think I paid 59 quid or whatever it was in 2008 in St. Albans. I wasn't impressed. I was just thinking surely everyone's doing this aren't financial advisors, you know, using software to show people what what what's the reason behind their money? Yeah, the whole room was impressed. I was like, really is this the standard we're at? I thought it was a
Unknown:and the the Hilter grab a Darien. Andy knows about everything. Andy can be told anything His name is Art.
Andy Hart:I thought poor Paul did a great presentation. But what I meant I wasn't impressed with a standard of financial advisors or financial advice in the UK. Yeah, there was no financial planning.
Alan Smith:You weren't because you weren't one is important thing you assumed that was surely everyone's doing this.
Andy Hart:Yeah, I thought surely everyone's that's actually following proper financial exactly
Alan Smith:what Paul was saying in that presentation when he spoke to a client. Yeah. Surely everyone does this? Yes, that's exactly I thought. However, many years later, it's still the minority, or people and companies who deliver what we call full fat financial planning, it remains to the minority a decade plus later, which is crazy. But well, if we're saying it's a waste of time, you thought it was rubbish. It wasn't a
Andy Hart:waste of time, I wasn't pleased with the standard of financial advice that I was entering into. And I've tried to loosely fix it as time goes on.
Nick Lincoln:Drop again, actually, okay, let's see. We're at 81 minutes in let's go on to let's go into Coca Cola for the love of God. Right, I'm not allowed to read this out. So you can look at the notes and start talking.
Carl Widger:College. You lowly, I like it. And so I put in a Google talks with JL Collins, didn't I? Yeah, that's what he did. I would much prefer to read them out, Nick. What I actually did, yeah, it's a really, it's a really good video, YouTube video. I think it's 50 minutes. He, he touches on, I sometimes wonder where I got, I get a lot of the phrases. I don't know if he got them from somebody else. But I use a lot of the phrases that he uses. He's not very friendly, are. He's not a big fan of financial advisors. So you got to listen to that as well. And I think that that, you know, you should listen to that, you know, and formulate your views as to why you as a financial planner, add value. Really, really good stuff. Really good guy. Yep. Enjoyed it.
Andy Hart:Great stuff. Alan, over to you, mate. Your culture corner point.
Alan Smith:Yeah, just just before I do that, I think just it's important that because the other guy, the other guy who's sort of non advisor but writes a lot of books about financial planning and investing. So and it's guy that we've heard of called Ramit Sethi, who had his own Netflix series and so on, he just published again on whatever social media channels I think I saw on Twitter that all the data about why paying fees to an advisor is all fall ticket if you do the compounding effect of a 1% model over 30 years or something that adds up. So he was absolutely slating it. All I would say to anyone we know the answers, I think we've talked about it loosely at some level in the past, but advisors need to have be well versed with the response to that which, which we all agree with. If you're hiring somebody just to tell you what funds to invest in, you're right, it's probably a waste of money. If you advise if you hire someone to do the work that firms like us do, and the good people listening to this do, it's worth 10 times the fee you pay and that's what's lost in the message. But people like this are pretty popular and are getting increasingly popular when you get a whole series on Netflix. What I'm saying is be prepared because a prospective client will say to you I was just watching this program last night or just watch the JL Collins video that call recommended so have your research done have your response to that you know listen to their question thoughtfully reflect on it and say that's I agree with them for this type of advisor Fortunately, we're not that type of advisor and this is why it's worth engaging with us just reflect reflect that back now.
Nick Lincoln:I'm sorry I just sign in as someone who regularly pour scorn on the dying legacy media doesn't mean I don't read it because I need to I do look at it, because I need to know what my clients are consuming so I can be on the front foot when they come to me with the latest stupid idea by some some bonehead journalist right Mr. Smith, Sylvester Stallone on Netflix get to it.
Alan Smith:I think we all need to be inspired on a regular basis. I certainly do. Do I is enough doom and gloom around if he, as you say, if you've subscribed to the mainstream media or any type of media, there's lots of negativity. I absolutely love Sly Stallone, I've been a sort of fan of his from the early, you know, the very first Rocky movie and so many of his other films, and I knew something of the semester Stallone story. But he himself unpacks his whole kind of life story on this Netflix and it's just, it's an hour and a half. It's not a long sort of series or anything. And in particular, if anyone knows about Sly Stallone as he got started really tough upbringing in Hell's Kitchen in New York and his parents were very kind of absent and it's a tough, tough life. And he wanted to and he buys on admission. He's not the best looking but most handsome. He's got this kind of strange, Brooklyn sight, whatever it is New York accent he wasn't the archetypal movie star. But he got into writing early on and he wrote the screenplay wrote the script for Rocky this very unlikely situation over kind of a white boxer coming up from the sort of backstreets and becoming world champion heavyweight boxer. And he was absolutely skint. He had no money whatsoever. And he was but it just his work ethic was just frickin relentless. He just would not say no wouldn't take no for an answer. And he would knock on every door, every particular any any remote person that could help you and he's shopping this scripts around. And eventually, everyone's doing it all these agents were saying not interested, not interested. And he started to get some interest in it. And eventually the price was bid up and up and up. Eventually bear in mind, someone who's got no money whatsoever. He's in debt left, right and center, barely surviving. And he gets over$265,000 for the script on the premise that he can't be in it. It's a quarter of a million dollars not to be in the movie. And he turns it down. Because he says I have to be in it. It's my story. I need to be part of it even though but no money at all. And it's just fabulous. Just the relentless desire. And I was relating it back to previous conversations. We've had this podcast, people say, Oh, I can't start up my own. I hate where I am. I don't want to start my own, I have a business because I might have to, you know, live a tough time for a year or two, I might have to cut back my expenditure for a year or two. Just watch Sylvester Stallone tell his own personal journey. He's now
Carl Widger:in his mid 70s. And he doesn't have to know you just don't
Alan Smith:know, I just told you the beginning of the beginning, which is a well documented story, but called by people who pay attention to these sort of things. Maybe you haven't seen it. But it there is
Andy Hart:a ruin in the punch line of the whole document. Just
Alan Smith:the first five minutes of this the document. Slide is far more interesting down the line. That's just the opening story. Thank you. Okay, great.
Nick Lincoln:Great, great. Right. So Joe rose, Nick, over to me. You want to tell me what I'm gonna talk about God? What am I talking about?
Andy Hart:This in front of you read the frickin notes. Oh, yeah.
Nick Lincoln:So it's Thank you lucky you're here. So Joe Rogan on his recent podcast and Elon Musk on and it's just a really good listen. And if you can watch the video a bit that's that's, that's fun as well. Yeah, just engaging. And of all these faults, Carl and I have got the audio book to listen to his biography. He's an engaging character, Elon Musk, and he's, you know, he doesn't take himself too seriously, which given his position in the world and his wealth and everything is quite refreshing. And, yeah, I never had a hankering for double pineapple and double entry pizza. But if you listen to the podcast, or watch the video, you will do my second culture corner and I'll put a link to the video. on Dailymotion, it's on Spotify. So Spotify, the video, the videos on Spotify, okay, fine, whatever those that's just a word. That's a source for if you wanna watch it.
Andy Hart:Guys falling apart the listeners thinking
Nick Lincoln:Grow Rich by Napoleon Hill, a great book, and it's parentally on Kindle at 99 p. So I would just suggest invest 99 P if you don't like it, you've wasted a quit thinking Grow Rich by Napoleon Hill. Mr. Ha, you're living the dream and the PowerPoint course Christ on a bike.
Andy Hart:Yeah, okay, couple of tips here. So I've recently subscribed to chat GBT plus, they've got this sort of subscription service. 20 bucks a month, just subscribe to it can use it for so many different things. Again, we've spoken about it on the podcast before but yeah, the plus version is got a few more bells and whistles. My sort of important culture corner is it sounds very dull a PowerPoint course. So I've been down a bit of a PowerPoint rabbit hole recently. I'm really trying to up my slide game. So for him today, my slides are going to be world class. And I've learned a load from this guy called Jacob, who's like a random online PowerPoint teacher anyways, got a great course it's 49 bucks. It's Jacob PPT which is the sort of file code for PowerPoint. So Jacob PPT dot let me just check if it's calm. is.com There's a link in the show notes. If you want to up your PowerPoint game. Subscribe to unmute and I know I know. I know a few We'll
Unknown:check this out. It's epic.
Nick Lincoln:I wonder if I care on that for there? Now there's Okay. Very good stuff. Are we done with the culture corner?
Alan Smith:Yes,
Nick Lincoln:I think we are on me. I think we're pretty much done for an episode was that 90 minutes, 90 minutes. Okay, I think we're gonna wrap this up now as ever. If you want to leave a six on a five star review on iTunes, that would be great. Please do subscribe to our podcast as well that way it'll pop into your phone. As if by magic in the early hours of every other Thursday morning. We have a YouTube channel we're now nearly 500 people on that so we're gonna get to 1000 people and then we will stop letting you with terrible outbursts that have no context and interrupt the flow. I think that side that is pretty much it for the show. Hum, we look forward to seeing you there. It'll be a good catch up with TRAPPIST there good luck with that Andy on the first day I know it's gonna be brilliant. It always is. Until the next time Trappists at the OS and take care out there folks. Goodbye. Goodbye later.
Unknown:Absolute champ