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TRAP LIVE IS HAPPENING ON 9th MAY 2024. BUY TICKETS HERE: www.therealadviserpodcast.com
In this latest pile of TRAP, the Trap Pack discuss
Links referred to in the show:
Take part in the conversation! We want YOU to suggest topics and questions you’d like the Trap Pack to answer. The best way to do this is to ask them here.
Help us to help you! The more followers we have, the more we can do stuff going forward. So please:
Welcome to The Real advisor podcast, T AR AP twerp. Please follow us and join in the conversation on Twitter at advisor podcast where you can suggest ideas and themes you'd like the track team to discuss. Also remember to like and subscribe to our YouTube channel and leave a six out of five star review on iTunes. Doing all this really really helps us which means we can do more to help you now over to the studio for the latest pilot trap
Nick Lincoln:yes indeed there Travis Welcome back to what many people are calling episode 40 of the real advisor podcast to aid the trap. My name is Lincoln and joining me as ever in the digital studio of doom are the three other horsemen of the apocalypse Alan, the storyteller Smith called Elif Archie which are and and the ultra heart Now gentlemen, we have a show packed full of app salutely nothing so let's start unpacking it straightaway with some more high energy review read read I've got my good friend the Right Honourable Mr. Andrew Hart.
Andy Hart:Thank you very much look certainly a creature of habit to reviews today. First one is from Simon Welsh entitled banter or content five stars. I'm on holiday listen to the podcast chuckling to myself. I'm not sure what I find more invaluable. The phenomenal no nonsense content or the unadulterated banter brilliant. Slightly longer review now from Steven Gleason, entitled excellent five stars as a New Entrant to the IFA world after 20 plus years with a large institution. I have found the insights and observations in this podcast to be invaluable. I feel I've avoided so many pitfalls and mistakes that I'm certain I would have made simply by listening and going through the back catalogue to revisit the back catalogue. So back that up a bit. Please keep up the good work guys experiences that might seem mundane and obvious to you can be a eureka moment for many of your listeners. Thank you back to you, Nick.
Nick Lincoln:Lovely, lovely, what a couple of lovely reviews and please do keep on posting the reviews on iTunes and, and commenting on our YouTube channel as well because it does mean a lot to us and it gives us a fillip, and they are genuinely, really, really strong reviews. We had the occasional one out of five, which we ran out last week. That's fine. We don't want to be all things to all people do we gentleman? Okay. And by the
Alan Smith:way, we haven't we haven't had a new review for quite a while. We few months. So if anyone likes the podcast, please do.
Andy Hart:All the low hanging fruit has been taken.
Alan Smith:Anyone who likes the podcast and hasn't gone to the trouble of leaving a review on the Apple podcast platform is the best place to leave them. Please do. Alright, okay, let's get this show before we go on.
Nick Lincoln:Oh my god. Absolutely brilliant. You're
Andy Hart:gonna have to scream at the wetland. Just want to give it so.
Alan Smith:Topical timestamp rugby, let's talk right?
Nick Lincoln:Yeah. Yeah,
Andy Hart:I think it'd be four out of six now Ave so just getting a bit last
Alan Smith:four in a row. Yeah, four or six? No, you're five out of six. I think it is. But yes, Nick and I watched the rugby at the weekend together. I had a great time. Thank you very much. Carl was what you were at the Ireland game where you call I
Unknown:was I was at the Ireland game Ireland are in spirit a strongly looking good for a back to back Grand Slam, which hasn't been done in the Six Nations era apparently. Yeah, now two very tricky games come in England and Scotland, obviously but fine. Yeah, Wales were poor, poor, poor poor, because are no more grace and still put them away easily. Yeah, so looking forward to that what happens over the next few weeks, but I am a little bit metered after the weekend goes. Yep. All right, happen. These things happen.
Alan Smith:Back to you, Mr. Chairman. Unless you want to talk rugby more. No. Okay.
Nick Lincoln:timestamp for the show, topical titbits, I'll start off. So metaphor, the artist formerly known as Facebook has paid his first dividend, which in the scheme of things isn't a monetary amount. It's like it's 5050 cents a share or something. But it's a kind of seismic line in the sand and moments remember, because all these these these tech stocks historically haven't paid dividends and meta just dipping its toe in the water. Once you've done it, it's very unlikely that you're going to rescind that and the dividend will only keep going up and up and up. And maybe over time we'll see the shift of a classic growth stock into more of a more of a kind of value stock where people buy it for its future income streams. Not just for the greater fool theory of thinking that somebody else would pay more for better going forward. So just I bring that up then I think I don't need to necessarily talk about it in one suit. So Mr. Hart trap live. How's it going? My friend? Yeah,
Andy Hart:this is just a quick update on the ticket sales are going really well. The room is got a capacity We have 150 on the ninth of May, central London trap live in hippodrome casino Lola's downstairs, we've sold 110 tickets. So I'm quietly confident we're gonna set it out. Hopefully we set out and you know, a couple of weeks or whatnot. So yeah, it's just up to us now to sort out the content work out what we're gonna do. And as
Unknown:I was thinking exactly, as you were saying that, Andy, we should probably start thinking about what are we going to do about
Andy Hart:it? We discussed it a lot. And I think there's going to be data. It's the first live financial services podcast that I know of. So sort of new ground nudging the profession on slowly but surely, so. Yeah, all good. So if you are on the fence, please do buy a ticket, you go to the real advisor, podcast.com Advise with me, buy a ticket, because they will go and then you will send me an email moaning that you didn't get ticket, yada, yada, yada. And the comments. Yeah,
Alan Smith:I think it's all about the community of being one of these things. You can listen to the podcast, and we will I think we're going to put out the recording the following episode, I think as a recording, but being in the room, I think will be very important. I in the last few weeks, I've had numerous conversations with listeners of the podcast, and they're all just looking forward to just chatting to other people like me, there's it feels to me, there's a lot of change going on in our sector, a lot of people reassessing their role, what they're doing, and even the position in their companies. I've certainly had a number of conversations along those lines and just being in the room with like minded people over a glass of Sasebo gorilla. I think it'll be a very productive experience for many, many people.
Andy Hart:All right. Good
Nick Lincoln:stuff. Good stuff. Okay. Let's go on to deliver che, your latest thing around one of our perennial favorites, the fun Yeah,
Unknown:it is one year ago. So. Yeah, well, it's funny, right? So my colleague, Ian Callahan wrote a blog. I think he did it maybe a year or 18 months ago about the fire movement. It's a much more balanced plug than how I've described her I think about the fire movement. But every time we say something or put something out about it, it seems to circle back and people saying, I don't know what I'm talking about. But yeah, Keen was the one of the papers did a recent article on the fire movement. And it was actually a very good journalists did a great job, because the journalist spoke to someone who's going through doing fire, and then also kind of counterbalance it with a couple of years from key and but I just thought is very interesting. It's something that people obviously that is peaking interest. So it's, it's it's very topical, and nice for my colleague Ian to be in the newspapers on one particular thing that he he wrote kind of a long time ago. So it just goes to show if you're writing stuff that people are interested in, it'll you can keep repurposing that content. So
Nick Lincoln:it's nice to see Kenyan newspapers for the right reasons this time. Mr. Smith, one of one of your perennial one of your perennials lumber loans, friend, yes.
Alan Smith:I'm never quite sure whether to put this in topical tip base or culture corner because they're they can they can be used in either either sector anyway. Lombard loans we have spoken about this before raised it before there was a company called Bond Smith that launched to high profile and subsequently closed down few months later, because they couldn't get the finance in place. But just to position this, there is a generally held concept that wealthy people don't pay tax, super wealthy who don't pay much tax. And one of the reasons you're right is the they, they, they don't ever sell assets, they borrow assets. The most famous one, but in recent times was Elon Musk, who borrowed against his stock his Tesla stock in order to fund the purchase of Twitter, now known as x. To give you an example now, one of one of the this is described, described as Lombard loans. Obviously, the origins of it go back to medieval Italy, Lombardy region of Italy, where wealthy merchants could borrow against assets, buildings, property, securities, etc, to fund their various opportunities and adventures. This has historically been the domain of the private banks, but I've been on Wikipedia this morning. No, no, I really wanted to go into it and understand it a bit more rather than just a throwaway thing. And I think it's potentially very, very useful and valuable for the for financial planners, financial planners, with particularly with those with wealthier clients, because it has been the domain than all those, you know, all the ones are the famous names we know and certainly wealthy clients liked the idea whether they use it all the time or not, to know that if I've got, I don't know, 5 million quid in an investment portfolio and I need 300,000 outs to give to my kids or to fund something or other. I don't have to sell their assets in order to do that and incur capital gains. is tax and all the other issues that go with it. So there is a new company that I've actually met with the founder now, David Newman, and he's got a highly credible background in banking, worked at UBS worked various other places, seen it from the other side of things, and wants to kind of largely democratize this to, you know, high end financial planners, which we all are. So he's now launched. Sorry, Nick,
Nick Lincoln:do you want to quickly is Mr. Newman, a friend or a close personal friend?
Alan Smith:Well, he was a friend. But now having met him, he's a close personal friend.
Nick Lincoln:Of the mark. Good. Sorry.
Alan Smith:Thank you. I've got a couple more later. But anyway, he's now a close, close friend. Thank you for that. So anyway, this company called florenzi, which is the Italian for Florence, where the whole thing began, is now up, up and running, they are now open to accepting loans from as low as 60,000 pounds. If you have a client with a few quid that does want access to capital, obviously, there's so many other good reasons for you people who charged percentage of assets fees as well, you don't take a hit on your revenue. Like all things go in with a with your eyes wide open, be cautious because it is a debt and portfolios can fall whilst you still got the debt, etc. But I'll put a link in the show notes. If anyone's interested in looking into Lombard lending for their clients, there is a service now available outside of the traditional routes, ie the banks, Andrew
Andy Hart:II, I think this whole area is developing quite aggressively at the moment, there's quite a new, quite a few new firms coming into play. Obviously, the CGT declining, the assets on platforms, becoming bigger and bigger, independent advisors looking after a wealthier and wealthier clients, the private banks have had an advantage, obviously, because they do this lending internally. I have heard those rumors of the platforms, you know, platform development, which has been not too innovative over the last few years, I think platforms are going to potentially do this in house. Again, I don't know if they're going to be lending their own money, or they're going to be sort of tying up with someone else that's going to be able to sort of allow this facility. So yeah, it's an interesting space. Yeah, the more things we can offer to our clients that are the better genuine investment accounts is normally where you could lend against some of the large private banks, larger wealth managers lend against social bonds. I don't quite know why you can't lend against ISIS, because that would seem obvious. The Pensions, which is where most of the assets are held. For typical clients 50 60%. For wealthier clients, it's probably a lower percentage. But again, they can't really then against the pensions for various reasons, access reasons or various other stuff. But again, some innovative companies might come along and sort of get into that space. So yeah, it is very interesting. Yep.
Nick Lincoln:Okay, good stuff. Thank you back to you voice, your Irish ideas exchange. Indeed.
Unknown:So the first the inaugural meeting of the Irish ideas exchange happened last week. So there was 12 people, I think, in the room. And I suppose the first meeting was just about setting the parameters and the rules and that kind of stuff. So it was it was really good to get in the room to chat with everybody. We kind of did a brief intro to each other about a known, you know, probably a good few of the people in the room, but but certainly didn't know one or two. So yeah, look, we've we've said, two more meetings kind of decided the summer, we're going to do a cadence of maybe once every couple of months. And looking forward to see how it goes. It's we're all feeling our way through it a little bit. But we did bring in based on your feedback, a facilitator aim to me, and that works really well. And I think that's one of the keys to success for going forward that there's some kind of keeping us sticking to agendas and that kind of stuff.
Alan Smith:Yeah, just congratulations on that getting off the ground. And you're right, you sort of you just got to it's a mini experiment you do. Do three or four or five meetings, see how you get on and progress it. Just as an aside and relevant to this you know, we've we've all believed in the concept we've raised this before column mastermind groups Call it what you will a group of like minded people who get together share their thoughts, ideas, best practice. I met with an advisor last week from Scotland based in Glasgow, she was talking about doing the same thing. There is every reason for this to do this regionally, wherever wherever you are in Scotland, McGrew, Manchester, the West Coast, East Coast or whatever, wherever you want to do it. So most of us would know who are the better firms, the ones you want to sit in a room with and sort of share thoughts and ideas and if anyone is of a mind to do it, and we have we have a previous podcast, we do talk about this. I think it was a question. Find the firm's reach out to them, send them a message. Just say thinking of doing this an experiment, you know, get in the room, let's meet three or four times see how we all get on. It doesn't work. It doesn't work, no harm done. So if you're listening to this, you want to start your own mastermind group. Go ahead. There's nothing stopping you
Unknown:Totally agree. And it's like, there's different backgrounds within the group. Some people are starting the financial planning journey that can actually only add to us, you know, because there's different points of view and makes you kind of sit back and think a small bit as well. And the other thing apparently, there was a few people who didn't weren't in touch me, but we're disappointed that they weren't in the room. So maybe we can look at developing us out a little bit more. But I think we just run with the people who have agreed to be in the at the start and see where it goes. So all good. All good. Yeah. Yeah,
Nick Lincoln:you want it you want to keep some exclusivity, don't worry about it as well. You want to make you want to you want to make an aspirational thing that people are waiting to get into rather than opening up to exactly Yeah, exactly. Exactly. Okay. smithy, you've been on a couple of podcasts recently. I listened to the SAM oaks one that was that was that was very good. And you you were on form in terms of ABC always be closing around trap. And so yeah, did include quite a bit of content about travel. That's good to tell us about it.
Alan Smith:Some oaks, if you haven't listened to it has got a fabulous podcast. It's highly professional. And unlike this one, possibly it's just a great point is is a great podcast host high energy guy. And he didn't he turns around quite quickly puts it out on YouTube, etc. But yeah, if those if you're listening to this, and you want to check it out, it's quite a broad spectrum. He goes deep into kind of career career things naturally, I think behind the scenes, he's got a successful recruitment company, great podcast, I was happy to be on it. Of course, we did spend some time talking about trap and what it's all about and the benefits of it. So do listening to that. I've also been an on another one which will come out I think will come out as people are listening to this and might come out tomorrow, which again, ABC always be closing lots of conversations around traps. So definitely worth checking that out. The other one that I would point out is the the award winning podcast that I host just called which I hardly ever mentioned on this but every now and again, I do host one on bulletproof entrepreneur, which I think is really relevant to to financial planners. Most recent episode of bulletproof is ladies me speaking with a lady called Christine Nicholson who's a successful serial entrepreneur. She's built and sold and exited several businesses. She's also she's business mentor, British business mentor of the year. So she's very, very successful. But I was just, if you as a as an advisor, as a financial planner, if you look of look after business owner clients, it's well worth an hour or so of listening to that podcast, honestly, listen back to it last week. And I thought, Man, this is just full of golden nuggets. And she she provides access to a number of tools and online things that you could point clients to that are of interest. So if you do look after business owners, check out that podcast I Thank you.
Nick Lincoln:Excellent. And there are links to those episodes that the ones that are out in the so called show notes. Okie dokie. Me? Yes, I'm sure we saw that again. Again. So it's not the same thing. But it's another ripple. You no matter announces its first dividend that's a bit of a landmark and the Nikkei, the Nikkei, the the Japanese stock market is finally finally back to the levels it was in, in 1989. And then
Andy Hart:a temporary decline? Oh, yeah. For the for the younger
Nick Lincoln:listeners, the Japanese stock market in 1989. Got to just insane levels. I think at one stage, the Japanese stock market was worth more than all of the real estate in California in 1989, which was just nuts. No, no, no, no, no.
Andy Hart:No, it was the Japanese emperor's palace, correct land that was worth more than the entire land California, something like that. Which
Alan Smith:was representative of the Japanese economy in the 1980s. Just everything real estate, property, equities. Everything was just off the scale. And of course, it's taking 30 something years to come back. Does that mean that all these people on Twitter who say, What
Andy Hart:about Japan? What about Japan? They just told Twitter to just reply back to people that say, Oh, well diversified global equity we have what about Japan? I would imagine what Japan
Nick Lincoln:is it is it is a lifetime ago, isn't it? Really it's but there wasn't a problem with Japan. And then the market isn't the worker and the companies were lending to each other there was there were very opaque, opaque corporate governance. And it's taken a long while to unwind that we had that guy who came in Eva nomics comment was certainly that Prime Minister came in and kind of radicalized and reformed the the Japanese kind of thing. It's actually passed away, isn't it? Yeah. So interesting. And I put a little substack out on it. Just just just harping back to 1989. And what's happened since then, and the fact that Yeah, but Japanese, you know, okay, for the people that do So Japan is the example the markets don't take for it. Well, okay. So, in our portfolios, it's about 6% of the of the market waiting, just another example to diversify. You don't know what's going to happen, right? You we've got no idea what's gonna happen going forward. I'm sure in 1989, there were many people who put all their money into into the nicotine have never never recovered. Because, you know, 35 years is a is a long, long time to wait for your for your for your temporary decline to evaporate and become a permanent advance. And so and there's a link to my substack article in there. And the final thing I should hold on I think, was was
Andy Hart:the general vibe has been a financial advisor in Japan or a wealth manager, obviously, they know their homebuyers situation, are they all generally global equities correctly country weighted, or what I mean, if you had been a 35 year I'll come in, it's 35 Already 1989 coming into your home stock market and you're 100% behind Japan, if you stuck with a plan and bought through all the frickin cycles, you now be absolutely freaking loaded because you'll be buying the units at knockdown prices. Obviously that's going to be an anecdote that's not you know, the average investor but it'll be interesting to know what if there's any Japanese financial advisors listening and want to send me a sort of high level overview about how all this sort of stuff has been working out then that'll be great. And
Nick Lincoln:kind of my question is that I know obviously the US market we know about the advisor advisor market then we know about the Australian market we know about the Irish market, Japan given its size, it's a it is a big economy, I know nothing. Now obviously there's enormous cultural difference I mean, proper cultural and linguistic differences everything else but I don't even know if if Japan has like a financial advice you know, sector maybe it's all done through the banks, you know, Wealth
Andy Hart:Management, they'll obviously have a huge management area.
Nick Lincoln:They might be final salary. Swank's supposed to us money purchase plebs, nothing about the Japanese personal finance world at all. Meaning speaking for me, okay, just give us two seconds when we have a quick promo
Unknown:Hello, dear Trappist. This is TLP great news. Somehow the four knuckleheads have managed to agree on the date and time and venue for the first ever track live event is happening on the later afternoon of Thursday, the night of May
doors open at 3:30pm. The venue is the historical Lola's bar at London's famous hippodrome casino right in the center of town details, including a link to purchase tickets can be found at the real advisor podcast.com forward slash trap live unbelievably, people like you are actually buying tickets fast. So don't hang around, get your tickets and come to what many people are already calling an absolute shambles. See you there
Nick Lincoln:Yes, indeed. TLP we'll see you there. Looking forward to it immensely. Okay, the final the final topical tidbit and this is storyteller.
Alan Smith:Yeah, sort of just following on from your comment there about meta Nick and other things I think all of us to varying degrees listen to the all in podcast which is you know, poor version of this one but bless God bless them they try. And so the three the all in is for those who don't know the all in podcast is for tech VC entrepreneur kind of billionaires generally a very wealthy and but successful technologist and investors and I it's the one podcast I do listen to every single week. And as a for those who don't know, there's a spin off as well the what they call the fifth best the the other guy that goes on it's called Brad goats, no, who's another sort of tech entrepreneur. He's now got his launch his own podcast, as well. So I listened to those and I really liked the the interaction, but also like their take on kind of global macro. They do talk about politics, talk about a lot of other things. But of course, they talk about business a lot. And I was just linking a lot of the conversations they were having. And of course, the news which came out last week about Nvidia and their sort of meteoric rise because anyone who doesn't know in video, the company who make the chips, the computer chips that go into all the kind of AI enabled tools around the world. So they have absolutely just shot away they're valued are well over 2 trillion in video are predicting that they're going to the other revenue numbers they announced last week are going to double literally one to x over the next 12 months alone. And often their predictions will undershoot the reality. There's a view that NVIDIA could be the first $10 trillion company ever to have existed and if so, it wouldn't be that far away. So these are obviously the conversations if you listen to the way these guys talking, I know a hell of a lot more about it than I do. But they talk about a structural shift in the global economy built on this tidal wave of technology which is coming away which we haven't even seen the beginnings of yet. So joining and also looking at things like meta paying a dividend, you know, at My question is and it's just throwing it out there, you guys are welcome to either ignore it or give you a feedback, which is the death of the value premium is I know it's been stated in the past, we all to one degree or another embrace the value premium in their buying out of favor low book to value stocks, stocks that pay dividends regularly compounded up up, you know, embrace compounding, it's a warren buffett strategy, etc. The view coming out of Silicon Valley is these tech companies are the new value stocks effectively, they actually relatively low p e ratios relatively low. But yet they are anticipated growth is going to be exponential and they are now beginning to pay dividends. So question mark, is now the time in dividend premium works. But my God, you got to be patient, sometimes you got to be you could wait 30 years to have a significant outperformance versus growth. And, and of course, the world you know, the world you know, it is a bit of a this time is different. And usually it isn't, but I'm just throwing it out there. If you look at the value tilted funds over the line, the UK us, particularly the apart from a blip in what was it 2022. When all the growth stocks sort of fell back quickly, quickly, all the tech stocks, you're waiting a long time. So just throwing it out there you got to give you if you're recommending it, you've got your if your clients are paying attention to this, you've got to encourage them to be extremely patient. And I can't see that reversing the next 10 years. Anyway. So looking at the way some of these tech stocks all, you know, developing and some of the predictions and how, you know, there's no doubt the world is gonna be a lot different 10 years now than it is today. Anyone got any thoughts on that?
Nick Lincoln:Was there a question in that in that in that monologue or
Alan Smith:it? No,
Unknown:it's a very interesting point. Very, very interesting point. I suppose. When you're looking at these premiums, you don't want to be just looking at kind of one thing. It's you know, that's the whole idea about diversification and maybe you're looking at smaller company Tilson, that kind of stuff. You're right, though, if we didn't have the value premium coming through and 2020 to the last kind of seven or eight years look very bleak for that. It's possibly not 30 years, but But you are absolutely under his own right. And I'm always leaning towards Ireland that you know, what has always worked, is what you will look at. But maybe I will doubt whole structural shift idea. That's definitely something to ponder. I think a little bit more for sure.
Nick Lincoln:Yeah, I think mean value stocks aren't just defined by their price earnings ratios that is a part of being a value stock the fact that these tech stocks have relatively low p e ratios doesn't necessarily mean they're valued. There are other reasons why it could be a value stock either another another good way of assessing a value stock as if you sold a company's fixtures and fittings and factories and land and everything else that you know is that worth more than the share price is going to Crystal the share price is of course a lot of these tech companies don't have it it's IP isn't it? Their ideas and they outsource the production of things to sweatshops in in Myanmar or what have you. So but it's it yes, that's something to watch but I think I think the markets that the fund managers will adapt if they feel that those those those stocks becoming more value like but it definitely comes along it is lumpy 2022 As you both said that that you take that out UK value especially UK value is Paul.
Alan Smith:I really Addy
Andy Hart:Yeah, these magnificent seven or whatever we're calling them have an absolute Stranglehold over the world. You know, I'm sitting here on a Microsoft PC with an apple PC behind it with an Apple phone here on frickin WhatsApp all day Tesla outside and all of its being funded by Nvidia and you know, to keep this whole mess together. Yeah, the numbers that's going to come out of it going to be astronomical. So we're interested in that same video is gonna be the first $10 trillion company what what? We haven't we haven't we haven't had the first $4 trillion company yet. I mean, we still got two to 3 trillion in terms of the value versus growth all that sort of stuff. Yes, a bit sort of bear on me when it comes to investing. I sort of try and keep it a bit more simple, sort of what Carl was alluding to. It's a little bit like the emerging market thing again, long term emerging markets should be you know, developed markets but again, you have to wait you know, different blocks of time for that to happen. So again, it's the same with value and growth but yeah, back to your boss.
Nick Lincoln:Okey dokey. Okay, we're almost half an hour in the software has yet to screw up so let's plow on with the next section of the show the the meat and potatoes where we take one subject and give it a damn good thrashing. And the title of this Episode Episode 40 is meat and potatoes is firing yourself as an advisor. One of us has technically done that and neither one of us was thinking about doing that and the other two of us can't, Mr. Smith, lead off.
Alan Smith:Yeah, okay. This is A subject that yeah, it will be it'll certainly be relevant to some but not all Trappists admit whether it's now or in the future. But it's certainly something that has been on my radar for, you know, for 10 years. And it's something that I'm now getting contacted about. So let me give a bit of background, let me sort of start by telling a brief story about how this all came about.
Unknown:Grab yourself a drink, a very long drink. It's story time with Ellen Smith.
Alan Smith:Teed that up beautifully for you. As it's been documented, I mentioned in the past, I started this company that is called capital 20 years ago, this year in a glorified broom cupboards above a shop in Victoria. Fast forward, 10 years later, we've grown the business pretty significantly, you know, one client at a time, word of mouth, organic growth, and we're now in a different office over in the City of London. And we're kind of moving quite fast. Or it feels like that I'm still the sort of the lead advisor of then at that stage got two other advisors working alongside me. I am kind of chief cook and bottle washer, as they say, I'm the kind of lead advisor I've got 90 client families on my roster that I look after do annual planning meetings, we by that time, we'd absolutely embrace proper, full fat financial planning and running cash flow models for every client we had around about that site yet, but that time we've tenuous we had built our investment proposition that we still use to this day. So been quite a number of changes since we started. And I at that time, I'm also just dealing with everything. I'm recruiting staff. So I'm looking for staff interviewing, and I'm the opposite was a believer in doing sort of staff appraisals, and follow ups and quarterly reviews, all that sort of thing. So I am flat out with just activity, and work and you know, look at the year and a look at our numbers and our figures. And then we kind of flatline we weren't we probably weren't best part of three years, and our revenue numbers were flatline. And we weren't really growing. And yet, I was just so damn busy every day. And I think it was very clear to me that I was and I just wait, don't say anything, don't say anything. But I was mediocre at everything. I wasn't, I wasn't I wasn't good at anything. Because I wasn't very busy. I just didn't have enough time I was absolute shambles. I didn't have enough time to prepare for the meetings, I was doing like three meetings a day sometimes. And I'm running from one meeting to the other, then I'm doing you know, to speak to my team members and recruitment and then trying to build technology within the business, etc. So you show up for meetings, not fully as prepared as you'd want to be, for example, show up to a staff review appraisal, not fully prepared as much as you want to be because there are so many hours in the day, and I was working long hours. And yet sort of in the short term. I think God we're busy. And then let's check our data and our figures and our numbers. Oh my god, we're not even growing. And I couldn't work. I can't see the wood for the trees couldn't work out. Well, we're not growing because I'm crazy busy. And eventually the penny dropped. And the reason we're not growing is because of me. I am the bottleneck in the business. Because everything runs through me. Everything goes through me and the vast majority of new prospects, new clients, were coming through me and I just I didn't have enough time to see people. I mean, ridiculous. I, to my shame. There was some people I didn't even call back, you know, we got it I got a referral or something. I didn't call them back. Because I didn't have enough time. Yeah, so I felt something had to change. And it was clear to me that you know, where most of my time was was, you know, having client meetings, existing clients. So I thought, right, the first thing I'm going to do, I'm gonna, as I say to other advisors in the team, who weren't as busy as I was super busy enough, but weren't as busy. So I thought, what I'll do is, I look at my, I'll just take every client, if we've got 90 client families, I'll just very simply put it in a spreadsheet and on a annualized revenue basis from the bottom up, you know, remove, let's say, 40 50% of my client responsibilities. So they're kind of the proverbial Mrs. Miggins, who there's the revenue was pretty small, but the requirements and the complexity was pretty small as well. So I carved those out and effectively transferred them to two other advisors and the team Graham and Charles who are still with me now. Now, there's two things about about that. Well, the first thing is, interestingly, having done that, and we can talk later if you want about the communication process, how you had to search for how we had to sell this both to the my colleagues and enter the clients. But interestingly, my calendar and my commitments didn't reduce that much. Quite interesting is is one of the colors kind of the 8020 split what you realize eventually, that those bigger clients, they are more time consuming. There's more going on. There's more complexity, they want to speak to you more they want to there's more phone calls, there's more meetings than someone else. So although I sort of carved out a big chunk of clients and pass them on, just free up more time for myself to do other things, I didn't free up a lot, a lot more extra time. So I eventually bit the bullet and transferred the whole book of business to my colleagues. Every single client I had I transferred across, what I mean is for primary responsibility, I was still going to be there, I was going to be in the background, I was going to play a more strategic role. And depending on which clients it was, I was still attend all or most of the meetings going forward, but it was no longer responsible for the granular bits for actually writing advice reports and all that other day to day communication that's required. I remember at the time, I was speaking to a number of other colleagues of mine other people who were running advice businesses, and to a man or woman, they all said, You're effing crazy. Why the hell would you do that? Because if you want what's, what will happen? If your advisors then leave and take all the clients with them? That's, you know, you're running a big risk there.
Nick Lincoln:Well, that is that is the that's the story of financial services, isn't it?
Alan Smith:Yeah. Yeah, it is. But I and it's true, of course, but And my answer was, well, if I don't do this, we're done. As a business we are now this is the this is this is the most will ever grow by, we will grow very will grow, we always get a few referrals without trying too hard, every decent firm does. But we can no longer have our foot to the pedal, really, and really grow. Because that takes that just takes time. It takes budget, it takes activities to really go after a more focused growth strategy. And I didn't have much more to give in that. So my answer was, well, I have no choice if I want to continue to grow the business, which I did. And secondly, I guess the the issue was a fair amount as to say this was 10 years ago, when I started doing it, I was still I wasn't signing, I wasn't resigning my authorizations of FCA regulations, which I have done that, but in that, in that in those days, I was continuing to be regulated. But my view was if you create an environment when nobody really wants to leave, because they're well looked after you deliver on your promises, then why would you leave and go somewhere else, where you know what, for a few more, they might get a better deal on there, you know, people here generally, I would think, pretty well paid the environment, the culture is very good, very positive. And so but anyone running a business, and entrepreneurship is sort of taking calculated risks. So I did it. And I stepped back from the day to day responsibility for the advice roll. And what's interesting is at that moment, you look at your calendar ahead and is empty for a short period of time quickly fills up. But it's, it's very reassuring and very kind of therapeutic to have no longer any regular commitments to ongoing client meetings. So I mean, that's, that's the headlines of it. And as I said, at the beginning of this, in Carl's been having a few conversations recently, and I've taken calls, obviously, I won't name names, but from a number of other people in very similar situations to me, where they are the founder, the main person, and all the kind of the big client referrals, or the big sort of opportunities come to that person, they're the kind of key person of influence within the brand within the company. And once you get to depend on your, how efficient you are 5070 100 or so clients, then you're you don't have enough time left to be that strategic, visionary. So at some point, you're gonna have to take a decision, either gonna continue to be a financial planner, or you don't have to hire somebody to be like an MD and do all those MD CEO type roles. So with I thought, having had a few calls and messages directly from people going through exactly that, then we bring it up as a topic as a meat and potatoes. So any thoughts? I know it doesn't impact you quite as much. But Nick, Andy,
Nick Lincoln:will pass over to Randy in a second. That's interesting, Alan, because I think I mentioned many firms, they, they they'll bring somebody in an MD to sort of run the firm and that's me, it will be laden with more problems than just acknowledging that you know, your days as an advisor are over, because you're not needed to be an advisor, you're still needed to be front of house and to and to woo, to woo prospects into your firm and to and to make sure that the firm ethos is there and consistent and everything else. But I think what the way you've done it is, is admirable, it's obviously paid off. That's also about subsuming your ego, isn't it? You know, it's you know, I you know, I'm an advisor now I'm not an advisor, but you know, you're you're still involved in the planning meetings and so forth. You're still you're still imprinting the company ethos, through your own values on the poor saps of capital, who obviously do love what you're doing because you have very little attrition rate and, you know, the doubt Charles and so the other guy, Graham on, you know, they've been they've been there for, you know, for donkey's years, so credit to you. So and you and I, the other extreme in terms of size of staff, and so forth. What's your take,
Andy Hart:you know, a couple of points on on Alan I mean, I think the position is in at the moment is is fantastic. I know and situation very well. I don't know if it's more luck or judgment. I'm thinking it's more luck that he's got himself into that position. Yeah, you're just not cut off of the technical side. Are you really Alan and the way it sort of become way more technical and,
Alan Smith:and totally with respect is yeah, it's not I do believe in embracing what you enjoy doing before I resigned my role, I was qualified up the ying yang, I've got all my technical had to do that. But I think this is this is really, really important. So because it's true is getting you know what they talk about being in flow, there's some things you're doing, and you just love it. Yeah, I can't believe. Yeah, loving Well, if I'm going deep in the weeds of on pension, technical calculations, that is not flow for me, every minute feels like an hour, I just don't like doing it just the person has personality. And even actually, frankly, on the client meetings, when I started doing this, I used to love every client meeting, just love it, it was just the impact we were making and seeing the sort of penny drop moments, goosebump moments and all the rest of it. But I've done hundreds and hundreds and hundreds of them. And I wouldn't say I didn't, I disliked it, but I didn't have the same love for it to the same degree. And yeah, I remember speaking to and shout out to Charles, for example. He said, When I'm in those meetings, I just I just love it, I don't want to ever not been as meeting since. So that's interesting as well, I think as a, if you're an owner, founder, just if you really love them, and you don't ever stop doing them, then fine. But you need to create some sort of other resource within your business to do that. And I just wasn't loving doing all that stuff anymore. And, and also, yeah, you've
Andy Hart:got a great team. So you don't really have too many horror stories about hiring someone for five years. And then, you know, draining all the fun out of the business and having to get rid of him for two years. And he, again, we hear that from other people. And it's that combination, isn't it with financial advisors, you're either client smart or Business Smart, or both. Yeah. And that is obviously what everybody needs to try to some people are just superb with the client work. So clients might, but they can't run businesses, other people just run businesses, and they want to see a client, again, the dangerous people are the people that can do both, you know, clients smarter business model. Anyway, so I'll throw in my two pens. I know a lot of the listeners are solo advisors, and a lot of people plan to be solo advisors. You know, I outsource as much as I can within my business, but I still keep the client communication and the client planning work with me as such, and then I oversee everything within it. We've spoken before about the Colin Lawson elegant exit, which is like a big company that has usually a single founder or maybe two founders, then they end up selling the business to the clients. It's sort of a win win for the clients and win win for the for the for the founders, what I have heard other solo advisors do and once I've got the business to a certain level is hiring. So firing themselves in some ways, and hiring a regulated advisor to take over all of the maintenance of the client work. But the person who's resigning, let's say the original founder, the silo advisor, who set it up, stays regulated for a while, which is what Alan said, because they're still interacting with clients discussing things which are regulated and technical, but they're also then the chief rainmakers, they're going out looking for new clients and just, you know, topping up the funnel, and then filtering down to the, to the original, sorry, to the new advisors they've hired. I think this is the most elegant exit a solo advisor firm could have, but you need to have great systems and processes in place, you need to have great income in place. Because you're going to be paying someone keep it simple, a couple of 100 grand to then have 50 7080 client meetings a year, and they've got to be happy within that role. So that's something I could see myself potentially doing. No time soon. But there's obviously various ways to slice and dice this. Call you next.
Unknown:Yeah, look, it's it's top very topical. For me, myself and Alan have had lots and lots of discussions over the last couple of months. So matters is 10 years old, this month. And we've just got to the size whereby we've, we've just so that there's 20 on the team now, the last couple of years have been very good for us last year actually was the first year I wasn't the top fee earner in the business, which was very, very nice. And so I've been doing it a little bit differently. And I'm still not sure if I'm doing it right. But I've been kind of just slowly, you know, passing some clients to other advisors, we have, I think six other advisors in the firm now so I can kind of match them up with who I think might be might be the right person to work with the client. Interesting. He wouldn't one kind of client segment that I'm really struggling that they're going to not not doing I want you it's kind of the 75 year olds that have you know, their pension funds and awareness and they're like, I've always met you, I'm always gonna meet you and that's just the end of it. So but it's a bit of a challenge. I have given away a lot of the clients on an in my diary just seems to be getting, there's just more stuff goes back into it. And so I'm definitely not at the stage where there's new stuff. However, what it is allowed me to do is do a lot of exciting stuff that's, you know, kind of new for us and, you know, explore other newer opportunities and that kind of stuff. I do, I do, I'm a little bit like, you know, Ireland right now, and working out pension calculations would be like, I'd rather stick pins in my eyes. But I do definitely still get a real buzz out of doing the client work. And that's definitely held me back. Because I do get the goose bumps and that kind of stuff, which I just I just really enjoyed. But I can see totally what you're saying that if I don't make changes, I will, you know, hold the business back for absolute sure. Now, what we did do a couple of years ago, we've pointed at a head of finance, we've appointed a head of compliance, you know, we have that pod system working. So I've put a lot of the steps in there. I don't think there's any perfect way. I would also say that this is something that when the business gets to a certain level of maturity, you got to maybe do it by degrees, I don't think there's a moment that you can go right on the first January, whatever year I'm just, we're changing everything. I think it's you know, so I have been thinking about this for the last couple of years. And it's it's working to an extent, but then there are a little bit like everything you introduce, I guess there's stuff that's definitely not working, and I need to change it. But like the guy who would have spoken to you guys, I definitely limped to the finish line at the end of last year. And it made me go I have to be way more disciplined about this. Because as you say, Alan, I was coming into every meeting, you know, half prepared. How's your? Yeah, my weekend was really good. But yeah, so it's something that, you know, you got to focus in on what's best for the business, and to keep taking steps back what's best for the business, what's best for the business? So yeah, it's, it's, look, they're kind of nice problems to have. Because if you weren't growing and things weren't going going reasonably well, you wouldn't obviously be having these discussions. And we have grown in the last couple of years. But that's as a result of, you know, really good people at matters, seizing opportunity, and a couple of really key good hires as well. And I have to be honest, right? I don't have any, maybe I should, in fact, listening to you today, right? I definitely should. I have no concerns whatsoever about someone leaving matters and taking a bunch of lines. I mean, maybe that's too much confidence in the fact that we have the Metis proposition and people are doing business happen.
Nick Lincoln:If it does happen, you can ride it out. You just don't think it'll happen? I
Unknown:have no concern that it will happen. Right? So and, and that's probably no total misconception from my point of view.
Nick Lincoln:About key and Yeah.
Unknown:But, but yeah, it's my look, or my overall thing is that this can't be a bang moment in time, John, I would say there's so many moving parts, like every time myself and Ireland. I go Alan, what did you do when AlphaGo did this this isn't it? And it's like, okay, I'll fix that one. And then I'd be like an add on what did you do them when there's because there are knock on effects all the time. So
Andy Hart:as far as fighting fires, are our maybe
Unknown:handyman a little bit different than fighting fires? Maybe Maybe it's tweaking stuff are, you know, so they're not big problems being caused, but like, organizing the structure of the business and at the moment, I'm that's my big thing for last week and this week, there's, I'm not sure I've got I know, we don't need more people, but I'm not sure I have the right people in the right seat on the bus. So I'm, I'm talking a lot about that at the moment and maybe looking at maybe kind of reorganizing justice. They're only little tweaks, you know, not big things, but making sure that we have we have the right people doing the right job. It's very interesting. And it's a challenge. It's there's no doubt it's a challenge. And there's no doubt you could get it off your arm too. Right. So that's, it's it's very, very, very important to do it and do it properly. will be my view.
Andy Hart:Over to your finger,
Nick Lincoln:right? Yeah, I
Alan Smith:did. But you want to come in Nick, or have you said your bit or do you want to wrap
Nick Lincoln:this up? So you've got any comment on that All
Alan Smith:right couple of things just to share a couple of experiences. So this was done literally, maybe not 10 years ago, eight years ago. Anyway, when we started to this nope, it probably was 10 years ago, actually. And they are to get to your point, Carl, there's some clients who say, no, no, I signed up because of you that said, there are clients that I still go to every meeting to this day. And there are clients that I never saw again, there was quick anecdote. So I did it on the basis because all about words and language and positioning, it's not like I'm out of here. See you later is good news is, there's a team of people here as well, that unfortunately, I've never been exposed to, and they are outstanding, and in some ways better than me. And you know, you do, of course, and actually, that's, it was, it was very easy for me to say that because they were. But the good news is Mr. Mrs. Client, of course, I'm here and I will show up and you kind of attend the first meeting, but you kind of quietly moonwalk out the door, you know, you don't come to the and I've said to you one, I'll go to all the meetings, but I'll go alongside someone else and they will lead the meeting. I'll top and tail it. And then he kind of, and then for some clients, I was doing, you know, year two meeting, and I sat in a meeting in you to remember this. This client, John was alongside Charles. And he said, and John says, Alan, what are you doing here? I said, Well, I thought also, I'll be here just because No, no, no, Charles is good. See you later, or you go out you go. Bloody hell, that was nice after looking out for you. But at least it showed that the transfer work successfully was more than happy to deal with Charles in that case. And I did didn't need to appear anymore. But of course, it's a gradual transition. And for those who say, Look, if you're not in the room, then I'm nobody having you as a client as a client, I'm not going to be a client anymore, then you manage that and you navigate it. And I think what you'll find people don't want. That's like a shock to them. They've known you and you know, they kind of inside leg measurement, because you've been working with them so long. So you do call meetings. And then one meeting, as I was to always say, What happens if, if you got hit by the proverbial bus, they'd have to see somebody? What if you got sick? What if you just weren't able to get there that day, they'd have to see somebody. So it's actually future proofing for them to have more people that know them, it's absolutely in their interest. And if they ever want to speak to you, you're there, you'll attend any meeting they want. They're getting phone call they want. But you'll find over time that the that they don't. But what you do need to do is work out what the hell you are going to do. Because that's the easy, easy thing, sort of stepping out the client meeting and say right now I've got theoretically a lot of time on my hands, what the hell should I do? And just responding to your point, their call? I think we've talked about it before, if we hadn't, we should have done but if you ever read the book traction, Gino Whitman tracks, yes. Yeah. And I read it years ago. And I'm kind of rereading it again, or some of the spin off books that come from it. Because of course, within traction, they've got the concept, traction applies to any small business. Bottom line is not financial planning book is any sort of non heat, you know, huge institution, institution, small business handbook, I would say they talk about the visionary and the integrator. So I think you step into the role as being the visionary. And there's lots of other things you think more macro than micro, you're thinking about what's the direction of travel for the industry? How do we position ourselves? How do we, what strategy are going to be we're going to deploy over the next three to five years in order to, you know, capture our potential as a business, you embrace, you know, you are the flag carrier for the culture in the business, and you are consistently speaking with people about it, and reminding and what and as you're hiring people, and all those things, and of course you are you are the rocket fuel. You're the rocket fuel behind the growth of the business, whether you're physically doing things or other things, but just identifying what it is you're going to do to capture the most of you're now freely available time. Whilst you're not you're no longer on the tools. So I think it's it's a natural step for most businesses to go through. Interestingly, Carl, you're not it's coming on your agenda random at exactly the same time as it came on my agenda, which was about 10 years in the business. So maybe, maybe that's a thing of anyone who's a decade into business.
Unknown:Yeah, it's, it's also pretty exciting, right? Because it's like you have shirts working here. This is all going well, so we but we definitely need to make changes like you know, because otherwise, we're just going to kind of get stuck in you know, as you say flatline a small bit or are worse potentially. So sort of there they are who probably as our neck smiling there when you were saying you are the flagbearer for the culture of the organization. It was only one weekend Nick Ryan okay, just let it go.
Nick Lincoln:Not my friend. Management speak for Nick.
Alan Smith:But the culture is enjoying yourself embracing work life and all that stuff. You enjoyed your weekend right? So you're like Eric flag carrier that necessary
Andy Hart:comes to that. Yeah, that's very
Unknown:true. Very true.
Nick Lincoln:It was the point the car was saying how he was gonna burnt out the end of last year and he said, I'm, you know, I'm gonna I'm changing the way I do things and do these things. All right, shall I shall I come in on this on this idea of sort of I'm a one man band so I cannot find myself really interesting with Andy's point now I haven't hadn't considered that you know, maybe you bring somebody on who who takes over your your, your advisors and you gradually exited the business I can't see myself doing that I'm envious of, there are certain things I'm envious of certain points of car, your setup with Metis now and yours with capital, because you have last year to do things that I can't do. But similarly, I there are things that the corporate world and you are corporates, effectively, your businesses with all the HR problems, and just the politicking and everything else, and sometimes hiring the wrong person and trying to get that person out of your business. Because there are a bit of accounts, I don't have any of that. And on the balance of things. I love being a solo advisor that the pros far outweigh the negatives, but it's not for everybody. But obviously I cannot, you know, fire myself, I cannot ease myself out of the business. And even Andy's route. I don't think I'm going to do it. I've said it before in Australia again, I started my business is the Stephen Covey thing, the seven Seven Habits of Highly Effective People, it's I think it's Habit number two is begin with the end in mind. I fashioned my business in 2008. So that's 16 years ago now 2008 I, okay, this is what I need to earn. And this is what I need to also be able to take the business to fund for my future self in whatever in pensions, what have you and I work back from that figure everything was about working back from that, okay, so I need that number. That's number of clients, I need this level of turnover, and so forth and so forth. If my your point, Alan about your revenue, plateauing for two or three years, it doesn't really, it doesn't really bother me, if my if my turnover plateaus for two or three years, I'd like it to gradually go up and up and up. It doesn't bother me because I'm still earning enough from the business with it with the turnover as it is now I'm still drawing enough out of it and putting it into little pots here and there for my future self with the current level of income, and I'm still building up my reserves each year. So I'm very fortunate from that point of view. And I think that one day what will happen is, so as I'm getting older, right, and we're all getting older now it's coming up more in annual planning meetings of the class, they're looking at me and say, Nick, what are your plans? You know, when when are you what's what's happening with you and I started them once and I've got a plan with the lovely Penelope. Our plan is and I'll share this with the TRAPPIST there's nothing particularly personal here that we are financial plan because we do our own planning, we take our own medicine, we use the cash flow modeling everything else is that we can walk away from work at the age of 60 If we want to write that but that's all it's about the financial planning and then this is this is a message I would I urge trappers to to take out especially younger ones financial cash is about choice. That's all it's about. All right, money gives you choices. The the accretion of money for its own sake is horrible, and the people and people who will create money for its own sake, will never have enough and then perpetually miserable. Money's about having choices. So our plan is okay, but the actual ratio around the age of 60. Can we have enough that if certainly penny would that being a head teacher, it's very, it's grueling work, and she will do something else maybe consultancy, but she wants to be out of it at around the age of 60. I think when I get to 60, I'm gonna keep on doing what I do, because I love it. And I love that like Carl, I love the meetings, it's the best part of the job and interacting with people. And I get a lot of personal worth from from from doing my job, what am I going to do? You know, and we're looking at the other pubs open yet, you know, and that that's that I don't I don't want to fall more into that kind of lifestyle for sure. So what I'm saying is, I'll probably work and work and work until one day I just that you know, I just don't enjoy it, the regulatory burdens are too much. And at that point, I'll either sell my business or I'll just give it to somebody I you know, I've always said that in our financial plan myself and pennies. There is no cell value on the business. If we get something it's an absolute bone, who knows what legislation is coming down the train the train tracks in 1015 years time that could wipe out all of our businesses. You know, it may well be the FCA says listen from going forward. Now, we don't want this one man or small micro businesses, you've got to have X million of CAP add, you've got to have at least 30 advisors and you've got to follow a prescribed path to deliver financial advice might sound a bit wacky, but you never know what's coming down the line and that would wipe out all of our businesses. So I haven't built in any business plan. business selling in our financial plans, I will just sell the business. And I'll just do it cold turkey. I won't hand over Andy to someone like young apprentice I mean, maybe my son will develop into an financial adviser I don't know. But I'm not forcing on him by any means. And I'm certainly not letting him know it's an option because I want him to go and forge his own path in the world and not so I think we've all known if a firm's where it goes from and yes, yes, sorry, ladies, it is may or when it goes from father to son, and the son isn't entitled to that and that they're just generally useless and it doesn't end up well. That's that's a Latin phrase car. So that's my that's my view on it as as as the ultimate one I'm really I'm more of a one man band and Ultra, and that's saying something that and that's my approach to it. I'll keep on doing it for as long as I love it the moment I don't love it. And we've got enough, a walk away. And just a quick trip in
Andy Hart:the advisors. I know that asoto founders that have then employed an advisor to basically take over the client where they're not taken on a young apprentice is a very established advisor and they're paying have a serious chunk of money because the company can afford it you know they're hitting the ground sprinting than or hitting the ground walking, running or hitting the ground sprinting and it's usually an advisor they've known for 1020 years anyway and that advisor for various reasons have got this got capacity to basically look after the kinds of X amount of years so that's the quick point on that.
Alan Smith:So what are you are you angling you angling there to take over hat tip financial services, so
Unknown:it might be a next business plan but I can tell you
Nick Lincoln:it would be a to a like minded device like like Andy obviously, because we're similar outlook and we see the world in similar ways. And we use the same kind of language with our clients and you want to you want to consistency and continuity of message and so with only with with your approach, and if you did that if you if you brought in an experienced advisor, right, you would still be owning Maven, but But you should be paying this guy to or girl, yeah,
Andy Hart:you are 100% owner of the business, you are 100% entitled to the profits or however you want to distribute everything the numbers need to be
Nick Lincoln:give me a call, I'll change on my give me a call. And after this, that's great. Whenever two parts, buy and sale, yeah.
Unknown:What does this person then do all the client meetings do absolutely everything. So
Andy Hart:what I've seen, what I've seen is keep it simple. One solo advisor founder with a team of three admin, you know, looking at the punchy numbers and clients, high high profit in the company, minimal costs, you know, the the, the, you know, the the ultimate type firm of that setup. And then they don't want to sell to X Y, Zed grubby PLC, however, they want the clients to be looked after, and still, you know, juice the income out of that business that they've built for the last 20 or 30 years. So they find a device that they know well enough, that's still quite young, let's say late 40s, early 50s. You pay them a couple 100 grand a year to do all the client work, you're still regulated as the owner for various reasons, because he's still discussing things with him. And you're and you're a rainmaker, so you bring in new clients, for the person below them. So you're given up on a know, let's say, 20 to 30% of what used to take out the company will be now diverted to the to the salary of this advisor, that's going to hit the ground, sprinting and take over the clients. Again, similar type of advisor that is, you know, financial planning lead, you know, global equity, location investing, you know, it's not like, Oh, we're going to pull out the plumbing of Mr. or Mrs. Miggins, that you Millikan after the last 20 years, and we're going to set up an offshore multi trust situation. Keep all the plug in the same it's perfectly set up my friend don't bollocks it up. So yeah, that's the strategy I've seen. And I think that is going to become more and more common, potentially.
Nick Lincoln:Interesting. Okay, gents, we were at the hour mark. That was, that was a meeting potential. So I got a lot more out of that than I thought. And I think we gave him a damn. A damn good thrashing. So without any further ado, let's head over. No, no, no, it's not. It's not it's just seems that the door Fingers crossed. Oh, my God. It actually works. Praise be praise be. That is posted at my front door. She's hold a bulging sack of trappers questions about my drive. And she's just sticking them through the post box. This is the part of the show where we answer questions from our beloved tracklist. If you want to post us a question, please do so. There's a link in a so called shownotes. Scroll right to the bottom and the link is there because the pinned tweet presently is for our trap live event on ninth? Ninth of May. So you can't do it by there. But do do it in the so called shownotes. Now let's have a look and see who this question is from but he got time today for one question because this question again, like many of our dear trapeze questions goes on for about three years, and I'll try to get there without losing the will to live. So this is from Alice to pee who's on Twitter as at a P 592 D catchy Aleister. I should try that. And it doesn't work either in the Twitter browser. So either you've managed to get your handle wrong or something strange is happening. Anyway. Enough rambling. What's your question? Here we go have a lie down somebody found at the pod great to listen to thoughtful discussion having taken the plunge to go directly authorised in 2021. The general consensus during the last episode was that a typical married couple retirement planning should go with 100k Premium Bonds and the rest of their global equity fund. Genuine question as we use risk profiling questionnaires that help dictate asset allocation and I agree it feels broken with to larger content going towards money market bond funds for cautious clients needing low volatility. They don't need low volatility. I'll come back to that. But how would 100k Premium Bonds and 100% Global Equity Fund be appropriate for a three hour turn? Cautious attitude to risk coupled in retirement, where are you assuming that the clients have income from other sources to meet their expenditure needs? Of course I acknowledge it wasn't advice and acceptable caveats for full factfinding cetera perhaps I missed something. Yeah, Alice to pee with a strange twitter handle that doesn't work. It sounds to me and I'm reading between the lines. And there's a lot of readings, there are a lot of lines and that question sounds to me that you're not doing full fat financial planning. There are various points in that question there that will be answered. If you're doing cash flow modeling. attitude to risk doesn't help any married couple in retirement, a three out of 10 low volatility couple will find themselves running out of money in all likelihood before they run out of life. But the compliance officer tick the box and he's long since retired financial plan dictates the portfolio financial plan will incorporate other income streams as you mentioned, of course, it will and that will also determine how you build the actual portfolio from their invested pots. I, if I'm wrong, Aleister challenged me back, maybe you'll come to trap live and buy me a drink, which and then pour of my head. But sounds to me like you're not doing financial planning. And if you're not doing that everything else is built on. It's a house of cards that's waiting to come down, it'll come down on that married couple and about 20 years when they go to the bank. And the bank says sorry, your portfolio has gone because it hasn't kept pace with inflation. But you've got your three out of 10 Gents, any thoughts?
Andy Hart:I'll chip in next just to give it a go. Yeah, risk is just risk is not just volatility for the last time some multifactor problem. In order of destruction when it comes to investing, I believe it should be capital loss is your biggest concern, then it's inflation, then it's low returns. And then finally it's volatility. Please watch the video I've put together called informed risk on the humans on the management.com website. It puts this to bed in a very way that I believe he'd appreciate back to you Alan.
Unknown:And the the ultra crab a Darien Andy knows about everything. Andy can be told anything His name is Andrew Hart
Andy Hart:nearly made it to the end I thought was gonna get away with this week. But I
Nick Lincoln:did kind of shoehorn that one in a bit there. So the bound found you, but you were still beating yourself up just a bit too much. Who was going next?
Alan Smith:I think you guys have. You've got to you've covered it. You were extremely rude to the person who submitted the question, Nick. But that's what we call tough love. That's it? I'm really kidding. Yeah, you're honest. The thing is, if you do one of these questionnaires, and I can't remember last time I looked at this, but a three out of 10, I suspect is going to give you a portfolio full of cash and bonds, right for cash. This is somebody who could have we've seen or lots of other statistics,
Andy Hart:what three out of 10? Well, on the volatility on on, what's the financial plan where the returns come from? If anyone is listening to this, it's just if
Alan Smith:no one listens. If you've listened to this podcast, or listen to any number of our past episodes, you wouldn't ask the question. Start with there are too many variables to think about. What about health? What about getting divorced, as you know, the divorce rates are much higher in the over 60s in the iron under 60s, for example. There were so many variables
Nick Lincoln:out there last week, Ashley
Alan Smith:and her lawyer help. You know, so there's so many variables, right and so to try to squeeze all this onto a tick box questionnaire and then determine the next 30 years of your life is bordering on criminal
Andy Hart:is white collar crime carries in portfolios that are going to give them almost nothing a massively underwater against inflation. It's,
Alan Smith:it sounds horrible, it's horrible. And yet, people still use these and use them as a tick box exercise and follow what the box says the response to the box takes if you have to do one of these questionnaires if you have to. And there's no legislation which says that you have to but if you want to fine, but it's one of about 30 Other things that you want to discuss and put in the mix and you've talked about them already. And our job is not to follow the tick box our job is to inform and educate our clients that's where the rewards are. That's why we get paid if we if you're getting your commit your fee sorry nearly said commission but it's kind of like that. If you're getting your fee for following a tick box and giving clients what the box says that they should have as opposed to you telling them what they really should have been doing it through a process of information, education, guidance, coaching, all that stuff. You're, you're earning your fee 10 times over. If you're delivering this tick box stuff, you haven't earned a penny of your fee. You should be
Andy Hart:there was a financial planner. Sorry guys. I think you saw it on Twitter this week. Who is I think working with his mum. And he sent his mum this mumbo jumbo question Yes. Oh,
Unknown:that yeah, I
Andy Hart:also I also call it a misconception mirror. You got to fill in this misconception American firm, we're misconceptions back at you. And then we're going to follow what an investing illiterate would want to do with their money. Why see it unfashionable if they're going up in a portfolio that and investing illiterate would naturally want to end up on their own. So yeah, he sent his Porter who said this mumbo jumbo. Mom was right. Yeah, mama said, back or this sort of like tech thread, it is a bit embarrassing. You say, Mom, you know what I'm going to do? I'm going to remove all your financial sucks all your financial stress, your investing anxiety will take over your portfolio. And the first job you need to do is probably the worst thing she's had to do that whole year. You know, she just feels a bit silly. She didn't quite understand that she's out of a depth. It's all just complicated. And
Nick Lincoln:normally classified. You know, mother and son. She can tell him it's bollocks. But I'm not. You know, normally a client's gonna go I don't want to look like an idiot with my
Andy Hart:mom through that. And my mom's quite, you know, savvy I never put through and what did
Alan Smith:your mom say? She says something like, I don't understand the question. It doesn't it doesn't doesn't make sense to me. Something like that. Yeah,
Andy Hart:it was it was interesting. I mean, fairplay for everybody because it because he was basically saying ADRs are a load of BS, but then I'm taking on my mum at the moment, and here's my mom's thoughts. It's like,
Nick Lincoln:has been a bit of a disconnect. It's a bit of a disconnect. Okay, all right. Well, okay. It wasn't too rude to you. I'm just being honest. Do you remember we're here or are wrong? Yeah. Yeah,
Alan Smith:just call. Jerry. Well, I would say do you have any thoughts call?
Unknown:I think you nailed it there boys. And we should move on. Okay,
Alan Smith:Nick, Nick, is the chance that we haven't had just the chance call is still fairly, let's face it a little bit fragile after his weekend. Cue the jet crew cue the drop. Nicholas,
Nick Lincoln:you take advantage of the show completely.
Alan Smith:It's not as easy as you think. If the
Andy Hart:Allen show with the trap back, and then
Unknown:also they'll also see that I was deeply uncomfortable with the content of some who today's or going to the Irish versus UK cultural differences.
Nick Lincoln:Yes, yes. Well done. Well, Antoine are beating the wells on the 16th. Team, well down to Scotland and the Springboks. were beating the England team. And damn Italy, Damn that post, shave that post of it. Now I get that put inside that bloody post, you could have beaten France. Okay. Let's move on to the next stage of the show. And that is of course coverage and right, I shall lead off with this one I mentioned at the start of the show that meta paying a dividend there's a episode podcast rather sorry, that you can download and listen to that about the reemergence of the importance of dividends around the world. It's called the unhedged podcast, it's an F T branded. One, they're the hosts are a little bit annoying. But it's only 17 minutes or so. And that episode, talks about meta bringing in its dividend and the implications and that links into what Alan took talked about with with value stocks, and so forth as well. So give that listen short, sharp, and punchy, like my like my mother, Mr. Smith,
Alan Smith:to two quick things. I never thought I'd see the day when Google wouldn't dominate for search. There's an app or a website called perplexity.ai, which is just like Google on steroids gives far better responses far better answers, and is definitely worth checking out in this kind of new revolution that we're going through. That's the first thing perplexity.ai also quick one, I'll just throw into the web. And we must have mentioned before the famous Michael Kitces. When it gets his blog, there's an article which has been out for quite a while, but I'll post a link in the show notes too. I just thought it was excellent. It is all about the just kind of focusing your process of bringing value to a prospective client very early on, because all our business relationships are about trust. How would you how would you sort of how do you deliver trust to new prospective client early on in the stage and it was just a just a very well written article, which is worth or five minutes of your time to read through and there was examples given in sort of various things that you can sort of clip or download. So Kitces Michael gets his blog. Very good. Thank you very much.
Nick Lincoln:Superb, Andrew.
Andy Hart:This one might outshine the IKEA wardrobe so bear with me first, I use the food service called pots of gold. The web is my GSN. Okay, this is a microwave straight from the freezer ready meal recommendation. Busy financial professionals listening to this the website is called pots of gold. Sorry, pots of gold. The website is my gsn.co. UK. It's a link in the show notes, do a Google search. They're freaking brilliant. You buy about 10 or 20 at a time that cost about three four pounds, and they're brilliant. Alan your wife's a big fan of the so back me up
Alan Smith:I'm gonna say the perfect meal for the Bachelor or the sex successfully divorced
Andy Hart:then you're not actually know my wife's a big fan of these previous point yeah very healthy simple and nice honestly.
Alan Smith:You're you're building a trapeze lifestyle aren't you first get the IKEA wardrobe
Andy Hart:get get I'm actually gonna have one of the curries after this call. Is it my mouth now we've got I've got the got the flavor. Jacket is it
Alan Smith:is it is it like your Tesla? Is it more? Is it more of a friend meal deal with a friend than a potluck?
Nick Lincoln:Which part this is the sleep coach. I've lost track of your sleep coach.
Andy Hart:You've got no sleep Coach Nick, you said I shared an image on our group
Nick Lincoln:that I wasn't I was in
Andy Hart:tracking your sleep now following on
Nick Lincoln:my watch at night but I was I was out at someone else's house and I wore it and I just saw I had five hours sleep and then met Smithy. They share his talk just about perplexity Ayane and your thing I mean, Jesus Christ Google talking about disaster in Gemini just oh and that's what an absolute but interesting has revealed the lid on on the progressive Yeah. I don't know evil that's perpetrated these two this rune call. I mean, it's just one of the disastrous laundry. Obviously Google is not going to fall off the face of the earth but Christ on mighty what? What a catastrophe. Yeah, following
Andy Hart:on from the perplexity recommendation from Alan, there is a freakanomics latest podcast that talks about Google's dominance in search and perplexity of featured in it if anyone's really interested in this stuff.
Nick Lincoln:All right, good stuff. Voice
Unknown:while we sleep, Matthew Walker gave it as a present to somebody recently, and I kind of went, I actually probably should look back at this or listen back to this book again. It is absolutely brilliant. So if you're struggling a small bit at all with insomnia or any such thing. Go and listen to that book, or storyteller
Andy Hart:read it a couple of years ago, didn't we? Yep. Yeah. Excellent. Good. Yeah. A
Nick Lincoln:couple years ago,
Alan Smith:you'll realize it's that sleep is the foundation everything else you go to the gym 10 times a day or what? Eat healthily less. You're getting decent sleep. You're screwed long, long term. Yeah. The highest sleep coach digital sleep coach, digital sleep coach. Yeah, yeah, it's great book Great book worth watching or listening or reading cauliflower cheese.
Nick Lincoln:Cauliflower. Cheese is the enemy of a good night's sleep is tasty when you're eating it, but it has repercussions later on. I can vouch for that cauliflower cheese yesterday.
Andy Hart:Not the six bottles of red wine. You're blaming the frickin cheese.
Unknown:Cauliflower Jews. Yeah,
Nick Lincoln:I'm sticking to my store a lot. And I wouldn't, I wouldn't change. Okay, Trappist. I think that's a wrap of this episode. One hour, one hour, 20 minutes in, give or take that's we've emptied our vows and the latest part of the trap is flushed down the Ube end of time. Thank you, dear travelers for your precious time and your input into the show. Please do subscribe to the podcast on your podcast app of choice that way it lands freshly baked on your phone every other Thursday at 1am and do likewise with our YouTube channel. Please like and subscribe for that. Click the bell leave
Andy Hart:reviews on the Apple podcast if you haven't already. We're a bit light for 2024 We're thinking we're going to run out.
Nick Lincoln:We need to be told continually how great we are.
Andy Hart:We need a shot in the arm people
Nick Lincoln:or something. All right. All right, gentlemen.
Alan Smith:Get your tickets to trap live it will sell out pretty soon. Get your tickets.
Unknown:Hello dear Trappist. This is to details including a link to the purchase tickets. Fuck
Nick Lincoln:let's go take care. Bye bye hi