72 - M&A Musings with special guest Rob Stevenson.

In this latest pile of TRAP, the Trap Pack discuss

• Topical Titbits
• Meat and Potatoes: M&A Musings with special guest Rob Stevenson. 
• Culture Corner
• TRAPist question(s) from Conor McLarnon http://linkedin.com/in/conormclarnon

Show links: http://tiny.cc/traplinks

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Transcript

Unknown: 0:07

Foreign Welcome to The Real advisor podcast, T, R, A, P, T, T, please follow us and join in the conversation on Twitter at advisor podcast, where you can suggest ideas and themes you'd like the trap 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 pile of trap you

Nick Lincoln: 0:40

Nick, yes, indeed, dear TRAPPIST, welcome back to what many people are calling episode 72 of the real advisor podcast, T, R, A, P, trap my name is indeed Nick Lincoln, and joining me today in the digital studio of doom are two of the three other Horsemen of the Apocalypse and the ultra heart and Alan, the storyteller, Smith, Carl dela Bucha, the voice wiger. He was at an Irish wedding yesterday. Know thyself. Carl said, in advance of the fact I'll be in no condition to do anything come the day of recording traps. So somewhere in a particular circle of hell is Carl wiger and his hangover. I hope he gets better for you as the day progresses. But in watches stead, we have, well, what can I say? We have one of the most revered consultants in the in the thing of ours, Rob Stevenson of Kingmaker, sir. Thank you for step standing in into the LA Bucha shoes. Give us a very quick 22nd bio. Would we'll delve into more about you later on. But just just to give the listeners some context, okay,

Rob Stevenson: 1:39

I work for a couple of product providers, a few ifas. I bought a load of IFA businesses. I set up my own business 20 years ago, and I've been doing ever

Andy Hart: 1:47

since. Welcome Rob. Welcome those of you, those you not watching on YouTube, he's got a fantastic, uh, fake background, solid, spontaneous lines. The best ones aren't

Alan Smith: 1:57

there. It's a real background. It's one of the nicest backgrounds. He's going

Nick Lincoln: 2:01

to get basketball in his second spin up his finger, Episode Seven. Dear. Listen, by the way, if I'm more texting the normal to that, because we're under the cost time by so I'll be pushing the boys along at a bit of a cancer so let's go straight off with some more high energy review reads or read, read out by my very good friend the right honorable Mr. Andrew Usain Hart, well,

Andy Hart: 2:18

this is an interesting one. It's certainly not a six out of five star reviews, but we'll read them all out. This is another one star. So I've had a couple of these coming in, which is great. We're at the end of our sort of reviews, so please do leave a review get read out almost immediately on the show. So anyway, this is a one star from dude Reno 72 this has become rather dull. If I wanted to hear a party political broadcast for Maga reform every couple of weeks, I could just tune into Fox or GB news also, yeah, 100% equities for everyone. Let's shove volatility down people's throats, even if they hate it, but that's okay. We offer behavioral counseling. The thought of the likes of Nick Lincoln offering me therapy during a 30% downturn is enough for the most hardened investor to throw in the towel. Thank you very much. Dude. Reno 72 Nickolas, any comments? No, not really ends

Nick Lincoln: 3:13

the same. 25 years of advising, I've never had a single client throw in the towel at any of the horrible

Andy Hart: 3:18

inflection points they've had so and you have counseled them during 30% declines

Nick Lincoln: 3:22

10 I have maybe some of us can do it, and some of us wish we could. And I'll leave it at that may have been

Alan Smith: 3:26

okay, projection from duderino 72

Nick Lincoln: 3:31

Yeah, I'm sure he or she. I'm sure he's a very nice chap. Okay, let's, let's give this episode a timestamp with some topical tidbits. TRAPPIST, as you may know, because a good chunk of you at it last a couple of weeks ago, the second of our trap live events held at the Royal College of Physicians. Trap live, 25 which was a success, that will be the Room The Room was crammed, which actually is a success as well. Because if you're playing to an empty room, you really are screwing things up. And we certainly were playing to an empty room. Thoughts on chat, live 25 quick recap from there, actually, Well, Rob, if you want to chip in as well, any good things to say? Alan Andy,

Andy Hart: 4:09

I'll go first then, yeah, it was a great night. There was obviously a conference beforehand, Brett and it was the DFA film event, so a lot of people in town anyway. It was a good vibe. Summers out. People were drinking early on. Yeah, the event went as best we could have hoped for. Yeah, it was very much overcrowded. The AV worked. We did quite well. We've learned quite a lot from it, so we're working already to put something together for next year. Bigger and better. Yeah, it was cracking Alan.

Alan Smith: 4:34

Yeah. Look, it was a success in terms of, it was completely sold out, and in fact, we had a few extra people show up on the day, so there was literally standing room only at the back, and we obviously gave away a few scholarship tickets for youngsters on the early stage of their career journey. So yeah, the room is absolutely packed. The only criticism that I would offer of it is and. You live and learn, is that the venue, as much as that's a great venue. Instagram, I know you've held your humans under management there before. Andy, the kind of theater style is a little bit too formal for me, for the kind of that, for this sort of style of trap is designed to be, you know, it's not someone standing up and presenting for an hour. It is more of a conversational the thing that I'm always reminded of having attended a few these things over the years is like a comedy club vibe, you know, you go to a comedy club, you know, up in Camden and the Comedy Store, things that we everyone sits around at normal tables. You've got drinks on the table. You can get up and go to the bar or go to the loo or whatever. That's what we had last year at Lola. We need to find. Obviously, Lola's is no longer hosting these things anymore, so we had to find a new venue. So that's the only thing. The vibe was a little bit certainly early on. It's a little bit sort of stayed, I thought, but, but other than that, great success, we are going to do it again next year. Final

Andy Hart: 5:55

thing on this, you boys were there 170 people in the room, and then 41 people ended up at the local curry house. That is a successful night. You know, we rocked up about half 10. The guys closing up. Keith button says to him, how many, how many people does your restaurant hold? He's like, what? It's a bit of an odd question about 35 he's like, we got 42 we all went in there, you know, we stayed there till about two in the morning. So the vibe might have been a little bit not too bouncy to begin with, but, my God, we ended the night. We made up for a negative high. Okay, I think us three, you got a taxi. All four of us actually got a taxi together, didn't we? We did anyway, rob your independent view of trap life. Yeah, it's

Rob Stevenson: 6:36

good. I was booked in last year and didn't bother turning up, so I thought I'd come this year, actually, actually, like, put an appearance. It was, it's kind of weird. It was interesting to watch you guys as whales with your shoals of followers afterwards. You know, there's, like, all these people that are kind of jumping in, and that's good, right? That's like, lovely age

Nick Lincoln: 6:53

group. There's a lot of people that are really interesting. Demographic, yeah, yeah. Really young. Demographic,

Rob Stevenson: 6:57

lot of people that are obviously really interested in what you're talking about next year, Dublin Castle, the bit at the back. Oh yeah. Now you're talking

Andy Hart: 7:06

what about downstairs? Downstairs is a no go zone. That might

Nick Lincoln: 7:11

not be a dear Trapp, so we're looking for a venue in London. There's a bit loosey goosey, ideally, a bar focus venue that can do a podcast, recording people.

Andy Hart: 7:19

You're right. Nick, it might be a good, good shout.

Alan Smith: 7:24

Sold out the Dublin Castle

Rob Stevenson: 7:26

walking distance for Alan to get home. Yeah, okay, all right, Nick,

Andy Hart: 7:30

we'll carry on, because the following day was Abraham's advisor 3.0 that was in North Greenwich area. Second year they've held it there. Yeah, I thought was a superb day, cracking day. Obviously, we were on a bit of a high. Anyway, me and Alan went the venue was great. I mean, they really went to town on everything. They raised the bar, in my opinion, last year. I'm sure he doesn't mind me saying was little bit contentious for various reasons, but will nudge but this year blew out the park. You know, palatial banquet for lunch, amazing dinner. The club was probably one of the loudest clubs I've been in, and I've been to some serious clubs over the years. So, yeah, he did really well. The content was great, and obviously the community was great. Chris Hoy was brilliant. It's very rare that you get these sort of globally recognized keynote speakers that actually deliver. I mean, he absolutely smashed it out the park. He did such a good job, even, even Alan was quiet during his keynote. So, um, yeah, hats off to Abram, the team. They, they absolutely smashed it. So if you didn't go to it this year, do think about it next year. I think they're going to be getting bigger and bigger and better.

Alan Smith: 8:36

Over to you, Alan, yeah, obviously we it was literally the next morning after our I think I went to bed about 3am that night. Quite a late one after our live event, plus the curry, plus we had a bit of a nightcap after the curry. So it was, it was a late one, man of my vintage, to get up the next day and and go again. But go again, we did. And, you know, yeah, we went down there, north, North Greenwich, which is actually surprisingly easy to get to. I thought it was really, really tricky, like the nightmare in your head. Yeah, it's yes on the Jubilee line, I think so, yeah, easy access. Look, it is now, I would state it's the biggest and best event in our profession, in the UK right now, I think I've no idea. I haven't spoken to Abraham about this, but it seems to me, let's modeled on the US future proof model. I mean, all right, we haven't got the Californian beaches and the sunshine, but it's big, you know, it's a huge, huge venue, loads of things going on simultaneously, you know, food, music, everything, and, yeah, it was another quite a late night as well. After that, in that, you know, music and dancing, I even got on the dance floor, which is a very rare thing for me nowadays, but it was just a load of fun, really good community. And it seems, and I think, to be fair, we're probably going to piggyback again next year, because obviously advisor 3.0 will be. Going again, probably roughly the same time next year. And why would we have got the data already? Yeah, why would we try to counter that? So we likely it's a bit of a sort of double hitter, and maybe Brett does his thing as well. I don't know, but that's a, yeah, that's a period of the year, in May 2026, that everyone should get into London. Get to trap, get to Abraham's thing. Fantastic, really, really great experience. Thoroughly enjoyed it. Well done. Abraham and all the team right

Andy Hart: 10:26

now. Let's get down to the serious stuff. Nickolas, okay,

Nick Lincoln: 10:29

good stuff. Good stuff. So in the episode prior to trap Live, which would have been even my mask told me that was episode 70. I believe there was a piece about how private equity is looking to get into UK pensions. And I think I talked about that and said this, this has got all the makings of a disaster. And then, lo and behold, a few days later, I read an article in the Wall Street Journal, which is still a great thing to subscribe to, by the way, it's not that expensive, and the writing is very good. And Jason schweig is one of the better us writers, and he wrote this piece about how private equity pushes are looking to get into pension funds over the pond as well. And now Jason's a very nuanced person. If you listen to him, he interviewed, he's very mild, very easy going, but his headline for this was this new investing idea isn't right for your retirement plan. So if someone like Jason Swick, who who's very careful what he says, is saying that these these alternative assets, these funds run by people like KKR, Apollo, global management Blackstone. They're just not fit for personal pensions or PRs, as Carl was say, It's not here. So we'll get that. We'll squeeze that corner. You know, these, these, these funds have limited so one of the funds he's looking at has a liquidity time. You can only sell out of it four times a year. This is not for retail. I cannot believe that the US are thinking about doing this as well, because institutional investors have pretty much filled their coffers up with private equity, so all the dregs now they're looking to flog it off into the retail market. And so even that's not good you get, not only you're going to private equity, which I'm not sure you should be into, you're probably gonna go to the shit end of it. So I wouldn't hope it doesn't come in this country, and hope it doesn't come in in the UK, and there's a link to it and so called show notes, because you get a certain number of free links each each month. I do from Wall Street Journal, so that should be able for you to open up on that, dear TRAPPIST, Okay,

Alan Smith: 12:05

hang on, hang on, hang on, hang on. I think it is worthy of a second on this, and particularly as we have somebody we've got in house expert who knows a little bit about private equity, private markets. Rob interested in your thoughts? You know this is being pushed by UK government right now, there was the Mansion House discussion Rachel Reeves, and from what I can read, is kind of a done deal. Quite a few of the big corporate pension providers, I think Scottish Widows were the only one to say not yes. I said, No. LNG and a bunch of others said, Yeah, fine. We'll just shoehorn this private equity stuff into retail, effectively, retail or corporate and

Andy Hart: 12:41

yeah, package for the retail market. Yeah. Rob Roberts, what's, what's

Alan Smith: 12:45

your thoughts as this as an asset class for investors and pension holders? Great, great audio for our podcast listeners, people just listen.

Rob Stevenson: 12:58

I just shook my I just shook my head. Well, look, they're close to end funds, so for all the you know, they're not liquid, and they often mark in their own homework exactly, if you don't get a result until the end of 10 years, then what exactly is the valuation in between? So it gets technical, but essentially, this is late stage capitalism at the macro level. This is just where else can we put this stuff? So they're opening up in the US. You've got private equity is now available for investment in MBA teams and NFL teams. And, you know, it's, it's just, it's a behemoth, and it's just the progression of that. A lot of the time when they say, we're going to do this, and then they get, they've already got governments on board with it, which is why it sounds like a done deal. So, yeah, I mean, I wouldn't put my mother's money into something like that, but that's a personal preference. It's yeah, it's a reflection of the fact that. And the other thing is, when people talk about private equities or private equity, a lot of it's private credit. Yeah, there's a lot of credit money sloshing around the debt side of that. And that's an interesting, another interesting sort of topic. But yeah, it's, um, yeah, it doesn't. I don't personally. It's a personal opinion, but I don't think that will end brilliantly.

Alan Smith: 14:07

I mean, if you lift the lead on the actual asset class, what it is is, is leveraged, leveraged, smaller cap equity. Most of this stuff is they're not, they're not buying Google or anyone. They're buying smaller companies with leverage, with with lending, and, yes, some of the results in the last 10 years, and this is what people seem to forget, have been pretty positive. Sorry about that, Rob, but they've been pretty positive. But if you've got a, you know, in the so called ZIRP zero interest rate period that they were, you know, if you could, if you could raise capital at close to zero. Of course, you're going to get half decent return on your money, but those days are long gone. So people, it's a classic rear view mirror investment strategy, because they'll come up with some figures showing the very, very best private equity numbers over the last 10 years, which by definition, we're always going to be quite good versus public markets, non leveraged. You know, it's comparing out. Couples with pairs. So, yeah, I think we're all there's a consensus. It does not make sense for our clients and people that we would speak to. But this story is

Andy Hart: 15:07

not going away. The private equity markets, I believe, are twice the size of the public equity markets. Like, there's, there's this shift

Alan Smith: 15:14

is, well, they see a fantastic opportunity. All this retail money, pension money, Yep, yeah. All

Andy Hart: 15:18

right, the investment management business is a marketing business, is a marketing business, not a finance business. So again, they're going to market

Rob Stevenson: 15:25

the hell out of this stuff. So yeah, in many ways, about 2008 or the years that preceded 2008 collateralized debt obligations, and, you know, mortgage bonds, that all of those things were packaged up so that they could slot them in, get them a triple A rating, and get them into the right type of investment class. So they're creating something to be able to put it into that investment class so that, you know, like a pension fund could buy that. So it's your shade of that, maybe a little bit that's a bit over dramatic, but you know, you can see a similarity between how those things were done.

Andy Hart: 15:56

All right. Okay. Rob over to you for your next topic, my friend might have to remind her what it

Rob Stevenson: 16:02

is. No, I know. Okay, you so I was looking like a couple of things. You know, obviously I do try to pay attention to what's going on in the M and a market that's kind of quite close to my bank balance. So last week, Timothy James and partners merged with fidelius. So two companies I know TJP a little bit more than fidelius, one of the things interesting, and I know we're going to come on to talk about Mattioli Woods merging with Kingswood. Both of these deals are driven by investors. So TJP, I believe Waverton had a majority stake in TJP. That didn't work. They sold out, and then Soderbergh took a position in TJP, and now Soderbergh then took a position in fidelius, and then there you go. They're all together. So I'm not, I wasn't in the guts of that deal at all. But ultimately, this sort of comes back to the, you know, there's a lot of people offering investment in companies, and, you know, it does change the outcomes often. You know, you can't be a little bit pregnant, you know, once you once you've got an investor and you're in, you really have to up your game on shareholder agreements and drag and tag provisions and who's really controlling the outcome. There's this wonderful phrase, minority protections that gets kicked around a lot, which is sort of, you know, as a minority stockholder, we just need to be able to protect our interests. And then when you actually crack the shareholder agreement open, after about nine months of negotiations, it's a very long list of things that they have to protect their interests. So it looks a little bit like, you know, I think I was looking TJP and fidelius is going to be 50 advisors and 30 million of turnover. Fidelius also just announced the deal with the BMI, yeah, like an introducer, a formal introduce a deal there. So about 3 billion of AUM. There's going to be a bunch more debt going in there, and that business is going to become bigger. I'm assuming Soderbergh are still in you know, they wouldn't if they thought it was gonna be successful. They wouldn't come out of it at that stage, Soderbergh, I think, have got 200 tech developers. So I was talking to a firm the other day, and they're saying they're going to build their own back office kit and stuff. And they were looking for investors, and I just raised the point that, like Soderbergh, got 200 developers working on their, you know, back office systems integrated, sort of CRMs and whatnot. It's kind of not an ad for solo boat, but so hard to compete with that, if that's what you're after. So and with mattielli Woods, that's like mattially Woods was 16 billion of AUM Kingswood was 13. I don't think it's a trade secret to say that Kingswood was sort of looking for a new home for a period of time. Their investors bought mattially Woods back in the last year, kind of looks a little bit like you put those two things together, and you dilute the problems in one and balance them up with the other. You know, that sounds overly simplistic, but I've been behind the curtain. That's kind of how a lot of these things work. So, yeah, interesting times. And I think also, you know, speaks to this idea that you're going to start seeing some quite big businesses coming together as well, and some consolidators consolidating each other. Timothy

Andy Hart: 19:06

James apart as these two folks on the

Alan Smith: 19:08

niche, I can't remember exactly what it was. Alan, yeah. Tim, oh, Rob. Rob, no better than I do. I spent an afternoon at Wimbledon with Tim, and I've never forgotten it. And smiling knowingly, quite a character, quite a character. But yeah, really nice guy from what I saw. But the year, they did have an in with, call it the creative entertainment. They quite a few high profile clients, famous people. But yeah, that's interesting. That whole thing, my understanding is Soderbergh, the Scandinavian Swedish outfit, and they, and they were all about taking minority stakes, which I thought was going to be, it was just quite different. But as always have you, as you've just alluded to, there rob the kind of the devil's in the detail, because the minorities, there's minority stake, like we're going to buy a small part of you, give you some, you know, fresh powder to go and do whatever you want to do grow your company. And there's minority stake where. We'd like you now to merge with another one of our minority stakes. I don't know that's that's all in the detail. Well, it's

Rob Stevenson: 20:07

kind of if you think like, I'm going to take 30% of your business, first of all, a lot of people think like, oh, I'm going to sell 30% of my business. They're going to end up with 30% post transaction, which means they're probably going to ask you to raise new shares, which they're going to buy. So a lot of people think I'm selling 30% how much is my company worth? Company worth? I'm going to get that. It's 10 million. I'm going to get 3 million. It's never quite that. Because why do you want to just give people money and just let them walk away? Business needs cash for development, so it's often a mix between how much you actually get to take away and how much goes on the balance sheet. But fast forward five years, and the business has kind of done okay. You want to sell the other 70% who wants to buy that? And then they have to be in partnership with Soderbergh. So whilst Soderberg are all about we want to take minority stakes. They're going to end up owning these companies. They are, and they're a big business themselves. So they're going to end up majority, but

Alan Smith: 20:56

they're going to dictate the terms of which they buy the they're going to have a serious, yeah, exactly, because you can't just take that round the market. Well, you can. But who's going to buy it with their well, you have

Rob Stevenson: 21:07

to take them with it. If you're taking it around the market, if you take it alone, that's your first question is, are they on board? You know, and again, if you look at the Kingswood situation that's well publicized, the guys at citywide poured through all of that in terms of the debt that's, you know, a lot of that companies like ares are hugely influential in financial planning in the UK, because they provide a lot of the private credit, a lot of the debt that sits on top of these investments. And, you know, ultimately, I think I WP had a lot of debt with them. Kings with a lot of debt with them. I shows what I know. I always thought those two companies would probably come together, because then you can manage the whole debt, amorphous blob of debt in one in one place. I WP went to Titan again. You know, this is again. This is this sort of second, second wave of private.

Alan Smith: 21:56

It's whole different. We'll get, we're going to come in and talk about about this in a bit more detail, in the meat and potatoes, but it's the one thing I'll say before we move on, is that I mentioned this at trap live. Just a statistic that I saw a few weeks ago was, I can't remember what the numbers are, but I want to say 30% 50% of ifas working in the UK currently work for companies which are backed to some degree or other by private equity. All these consolidations have led to a situation where we are, now that, you know, and if you put in SJP in the mix as well, the numbers of, you know, pure, independent, independently owned, independently non restricted and from regulatory viewpoint, they're, we're becoming

Andy Hart: 22:38

a minority, is shrinking slowly, Alan, but there's still 1000s of

Alan Smith: 22:42

less than 50% now, which is, yeah, interesting. Yeah, sure. I think we keep

Nick Lincoln: 22:47

this clipping along. And as dear TRAPPIST as you might might have listened there. Listen carefully. It's quite refreshing to have someone who's an expert in their field on the show we're all

Andy Hart: 22:57

kind of just grown up on today. I understood some of it. I must

Nick Lincoln: 23:00

have. I sort of came in and out, but it sounded very sounded very good. So

Alan Smith: 23:06

Bitcoin talking of things that, you know, I feel slightly safer to be mentioning this while crypto Carl is in his hangover, sick bed right now, but I just wanted to flag it up. I mentioned this before. We have mentioned on the podcast before, but we've now had this guy by the name of Dan Parkinson, who was a regulated advisor, went really down the Bitcoin rabbit hole to become something of an expert on this emerging subject. We're not emerging, but it's seems to be getting continually raising its profile. But Dan, under the guise of the Bitcoin IFA and check out his website and his content. Came in and did the very first trading workshop for a regulated advice firm, which is my firm, came in and delivered an afternoon session, few hours, just kind of, you know, exploring, you know, the facts you establishing, what the myths are, what what makes sense and what doesn't all on the basis of, I always talk about this concept of is one of our core values in our business, curiosity. Be interested. Learn, you know, continue to learn. We, you know, probably have mentioned this before. We do have clients, some pretty successful clients, who are investors in Bitcoin specifically, and they expect us to at least have an intelligent, grown up conversation with them about the pros, cons and everything in between. So Dan parkerson is now rolling this out. We were his guinea pig. It worked really, really well. I thought it was a fantastic investment over a couple of hours of our time. And so if anyone is interested in learning a bit more, getting him in to run a workshop for their team, get in touch. Check out the Bitcoin, if a.com I think, and Dan Parkinson and and speak to him, because, yeah, as I say, I thought it was, I thought it was an excellent

Andy Hart: 24:52

session, great. I do subscribe to his email newsletter. Very informative. So do also do the same my point, sort of following on. From that Bitcoin related I suppose it had Bitcoin 2025 last week, I think, which was huge in Las Vegas. Talk about putting on a conference. Insane. But the person I'm going to highlight is Michael Saylor, who's the CEO, founder of a company called micro strategy. And he's a bit of a maverick. When he first came out a few years ago, people thought he was completely nuts, as most Mavericks are initially, but he's gone all in on Bitcoin. His talks are actually world class. He does great talks about private equities, global companies, public companies, the companies that people only invest. You know, he's got a lot of knowledge in this space. And his company, market strategy is huge, and the S p5 100, it's the top performers,

Alan Smith: 25:45

not quite an S p5 company. I think it should be, maybe by the end of the thought it is, it might be by the time this podcast,

Andy Hart: 25:53

let me carry on. I thought it wasn't the s p5 100. All right, maybe not. It will be. Anyways, got a new talk called 21 ways to wealth, which, again, is really insightful. Put aside the Bitcoin cryptocurrency thing, just listen to what he's got to say. 21 ways to wealth. It's about half an hour talk, and he's done some other previous amazing talk. So anyway, my strong recommendation is to check out Michael Saylor talks on YouTube.

Nick Lincoln: 26:18

Okay, cool. Thank you very much. So what's next? Well, this is another, yes, I'm sorry if the news is a bit Doom and gloomy at the moment. We were saying before we hit record and then hit record again, and then hit record again. We were saying before we did that, how it's all a bit Doom and gloomy out there, but then it is what it is. So we got a report on it. And another, another UK listed company is off to list properly, fully in America. No longer list on the FTSE. The company is called, I'm gonna get the name wrong here. I never quite managed to get in divial, which makes helps people with opioid addictions in the US. It provides drugs to wean people off these things. Okay? They do nausea. No, they're once begin with S my friend made and sub Suboxone. But I can get you either if

Alan Smith: 27:01

you want, made billions by selling all these opioids, like the Sackler family. And I wouldn't

Andy Hart: 27:08

comment to get you this is the one when they, when they this is when they OD on the street. Oh yeah, yeah, issued his staff, and then, boom, they're out of it in like, four seconds. It's

Nick Lincoln: 27:17

amazing. And it's just, you know, again, as the UK stock market becomes less relevant in the world. Just reading the Guardian article the link to the so called show notes, last year the London market, the London market, sorry, lost 88 companies that delisted or transferred their primary listings elsewhere, the most since the 2009 financial crisis. And nobody seems to give a shit, and nothing seems to be done about it. One of the reasons that in in Divio quoted totally not listing the UK anymore was regulatory burdens and administrative costs. And in those four words, five words, lies a whole host of evils, I would say, so, well, okay, I don't know. One day won't exist the UK stock market the way things, it really won't exist because it's just shrinking in value and number of companies year on year. And if that continues, it will just disappear. And you might think that's far fetched. I don't know. It could well happen. Any thoughts on that. But

Andy Hart: 28:03

oddly, hasn't the 3100 just hit an all time high? Which is,

Alan Smith: 28:06

again, well, it has, but that's, that's an odd drop of the economy and these and the kind of stocks that predominate, and that's only over the last last year or so, but yet, but it's been underperformance. You're You're right. There is, and we can't ignore it. There is a sentiment. I was saying it at trap live. You know, quite a lot of our topical tidbits then were a bit doom and gloom, but it is we are reflecting our experiences, our conversations with our peers, with our clients. Is it's, it is a bit doom and gloom. Maybe it's darkest before the dawn. Maybe things will turn around. Maybe things will change. Don't want to talk about politics, because dude, Reno 72 might get upset, but it's, yeah, it's tricky out there, and it is worrying so the UK. I mean, I guess obviously part of part of this story is because of the incredible growth of the US market, but the UK has just shrunk. What are we 3% of the global market account now. But I did read something the other day which was quite incredible, just in the last three years. But the US listed market has increased in value by about $20 trillion and Japan, Japan's total market cap is about 7 trillion. So the US has added three Japans in the last three years. Alan, just to

Nick Lincoln: 29:33

break in here. And you probably hear my voice now, but you are crackling up a bit, then I probably am recording and hope that it renders properly when we put it together. Okay, so let's just crack on. Okay.

Alan Smith: 29:45

Who's next? Is it me? You

Nick Lincoln: 29:47

three? Alan, yeah,

Alan Smith: 29:49

okay, I made a bit of an error last time. Well, not really, but I mentioned that I'd been speaking to an advisor who was running. A great firm, and he was recruiting just just in London or the south east. And I put that out and said, Anyone wants to get in touch with me, I'll connect you. And I ended up getting about 20 or more people contact me directly. And I did, so forgive me if I haven't replied to everyone, because I've got quite a few messages. But I just want, I did want to connect, if you start recruiting, that's a whole other story with, you know, building a traps, trap jobs board would be quite interesting, because we all would, you know that this is, you know, we mentioned it earlier on, in terms of the trap demographic, there are quite a lot of young financial planners who have listened to the podcast and think, hang on a minute. This sounds pretty good. This concept of full fat financial planning is something I'd like to be part of, but it seems that my current setup, the company I'm working for, isn't embracing that. So there's a lot of people are looking for opportunities. I'm going to say another one, but this time, I'm not going to ask you not to contact me, and I have this company's permission to flag this up. There's a really outstanding financial planning company who are a relative, relatively new startup. I say they're sort of a few years old now. Full disclosure, I am an investor in them, but they're called y tree, like the letter Y followed by tree, as in things that grow, y, t, r, double, E, and why y3 are a really kind of modern, digital based, full fat financial planning business, kind of at scale. And they are absolutely flying, say they've been off the radar for quite a period of time, but now they're kind of going full tilt, and they're recruiting people, recruiting planners, trainee planners, and actual, you know, we've mentioned before, computer engineers, you know, you know all these kind of coders and people to build their own tech and software. But if you are looking for an opportunity, and if you're good and competent, because they hire really, really top people, get in touch with Josh at ytree. Means ytree.com and send them your details and your what?

Andy Hart: 32:03

Why? Hybrid tree, yeah. Doc, yeah. So is it Josh at why?

Alan Smith: 32:10

Part of the process you've got to find a couple Josh Duggan. His name is, but get in touch with Josh, tell him trap sent you, and ask for have a cup of coffee or a conversation with them, because they are a business which is absolutely going places. That's it.

Nick Lincoln: 32:26

Okay? Very good. Very good. Thank you, Ultra. You got new new book to lick. Yeah,

Andy Hart: 32:31

this is again, a strong recommendation from me. Mr. Nick Murray, the advisor to advisors, has come out with a new book. It's very rare that he published his new book. He did about four in 20 years. And he did a couple sort of one after another. The latest one he did was scripts. This one is called this time. Isn't different. It's always very hard to get it as a UK advisor, so just sells to like the US and Canada. You can get the digital copy, which I'm halfway through at the moment. This is a book that you buy the physical copy and you give to clients, certainly ones that you think are going to be banging on the door when the market does its perfectly natural thing, temporary declines. And he's focusing on sort of three key messages anyway, the follow on link for this. I've mentioned it before in the podcast, but that was many moons ago. Now we've got hundreds of 1000s of more listeners, so I'll remind you of it. There is a website in the UK that sells Nick Murray books. The website in the UK is called simple wealth books.co.uk, there's link in this so called show notes, as Nicola says, so simple wealth books.co.uk it's a UK site. He's basically bought 100 of the books from America, you know, sent three ways around the world, landed in the UK. Now he sells them directly to people in the UK. I believe there's a discount code. The discount code is hum five, as in, h, u, m5, if it doesn't work, then contact me. But I think it does work, hum five, you get 5% off. So yeah, check out simple wealth books.co.uk. I've asked him, I sent an email said, Are you going to buy a load of the new Nick Murray ones, which is the this time isn't different book. And he's not yet got back to me, maybe I'll check my emails and confirm later on, but yeah, that's it. There's a new book by Nick Murray. It's gonna be absolutely brilliant, and the more content and messages that will keep clients in their seats during their investment lifetimes and journeys, the better. So I'll be buying 50 to 100 of these books and given them to as many clients as prospects as I can. That's it.

Nick Lincoln: 34:45

Okay, good stuff. Mr. Stevenson, another merger.

Alan Smith: 34:50

You kind of mentioned this already.

Rob Stevenson: 34:51

Kind of talked about this, I think,

Alan Smith: 34:53

yeah, okay,

Rob Stevenson: 34:54

that's Ellie woods and Kingswood. Oh yeah,

Nick Lincoln: 34:56

that's the one I zone out of you did talk about? Okay, you're right. Painter, right. I. Attention to heart rumors of changes. Oh, my God, go on. Yeah. So this one

Andy Hart: 35:04

has been doing the rounds in the in the media, mainstream media, so the rumors of changes to salary sacrifice in pensions may be announced in the autumn budget. There's obviously a huge benefit of opting to make your pension contributions as an employee via salary sacrifice, you save personal national insurance, and your company also saves some employer national insurance. So it costs the Treasury, you know, a big amount of money. Obviously, this is a delicate subject, because, you know, the idea is they want to encourage long term savings and not be, you know, tinkering around with the pension rules, which is what they're always doing that, you know, it might be short term thinking, as in, we're going to make a bit more money now, but then, if people are bloody destitute when they should have loads of money in their pensions in 1015, 20 years, so they might be brewing a bigger problem down the line. So any changes like this are, you know, discussed far and wide? So, yeah, potentially changes to salary sacrifice and employees. Any thoughts?

Alan Smith: 36:12

Is there any indication as to how much is is raised or saved, or the HMRC lose out on because often they'll, you know, dabble around these things.

Andy Hart: 36:25

Is a bit of a loaded statement.

Alan Smith: 36:27

Well, it's like, you know, they've got a number for how much tax relief is given to just normal pension contribution. They know these numbers. So what the reason I'm asking that drives behaviors exactly, but, but, yeah, don't, don't get me started doing my very best not to be political here. But I mean a couple of things recently, I think we talked about this on the last episode, or, you know, the famous Laffer curve that, you know, the raised capital gains tax. And the most recent data, the attempt, the amount of actual revenue raised by capital gains tax

Andy Hart: 36:55

fell, has declined. Lay people tweet people put off capital come

Alan Smith: 36:59

on to this in a second with with Rob. But you know, if you were think, if you're going to sell a business and but you're not desperate to do it, you think, well, I'll just hang on a minute, so we'll see what will change. And I saw something else yesterday, which is, you know, the inheritance tax applied to farmland and to private companies and family businesses. Well, latest survey on that expected to raise 1.8 billion, which again, is a bloody rounding error to the rate government. And it's not just this government or past government. So the rate they spend, it's neither here nor there, considering the disruption. But again, incentives drive behavior. So a lot of these family businesses are no longer recruiting, no longer growing, no longer investing. So the latest statistics from the research that has been done is that they're going to have 2 billion less in terms of tax revenue. So trying to raise 1.8 end up losing two because unfortunately, politicians don't seem to understand human behavior and the importance of incentives. It's just freaking nuts. It drives me pretty. Excuse

Nick Lincoln: 38:01

for it. It's nice. There's been something the lapper curve is so old now it's 50 years old. I mean, it's not, but you would think,

Alan Smith: 38:07

would you not that before you're going to make a material change that impacts 1000s, hundreds of 1000s of businesses, you would do some research, ask some experts, some consultants, some tax people, it seems well. I mean, if they are then, God forbid, because they are announcing these rules without really understanding the potential impact of them. You normally you would do a, you know, an analysis, a study, if we did this, but what they do is they launch these things, not in the market. Now we're gonna have to back and change it. Of

Andy Hart: 38:38

course, they do a lot of analysis reports and getting very expensive consultants. But sometimes the intended consequences and unintended consequences are very hard to predict. You know, it's not an easy thing to be balancing what they're doing. You know, to support, I'd push back this was bloody

Nick Lincoln: 38:53

obvious. Was going to happen? The CGT, bloody obvious is going to happen. You didn't need you didn't need to

Andy Hart: 38:59

be, I don't think yet we have data. We don't have enough data yet. And also, the change coming in with private companies is not even in yet. It's in April 2026,

Alan Smith: 39:08

the benchmark is already saying, if you've got a fact that's growing and hiring people and investing, because we've got this, you know, we've got an issue now about passing on, how we're going to, you know, deal with this tax liability that we haven't had up until now. So hey, ho,

Nick Lincoln: 39:24

interesting. Okie, all right. OK, right. So the final point here was watch. But watch will carry your point forward, surviving you on assumption you're around for

Alan Smith: 39:34

next time just about recovered two weeks from now. So we will work

Nick Lincoln: 39:37

nearly at 40 minutes, which is just about perfect. We'll move on to the meat and potatoes of the show. This is where we take a deep dive into an aspect or a personality in this thing of ours. And of course, we do have today our very esteemed guest, Mr. Rob Stevenson, and we've got some questions for you, my friend. I think story channel is going to lead off and we'll take it from there. But this next session will take around 15 minutes, max.

Alan Smith: 40:01

Uh, yeah, Rob, good to see you as always. I was reflecting before you coming on this that I've known you pretty much as long as I've been in business. I think I set up 21 years ago, and I didn't, I really didn't know what I was doing. I know a little bit now, not much more, but I was all I was looking for, sort of guidance and direction. And I think, to be fair, you weren't quite sure what you would you're trying to work out exactly what specific role as a consultant that you you were going to do, but you so you and I are pretty much known. You must have been one of your early clients, and so we've known each other through the ups and downs and everything in between ever since then, and I've always really respected you and admired what you've done. You've been super helpful to me over the years with that's gonna say, I just think it's really, really good to have somebody who understands our sector really, really well, but isn't it's like, why you'd hire, why anyone would hire a financial planner, but the but they're not emotionally attached to the outcome. So what I've been there have been a few moments when I have been slightly emotional. It would be a phrase that Rob has kind of been the voice, the voice of reason, but Rob, I'm I'm interested now you've obviously, you've evolved your consulting role, and you spend, I think, most of your time correct me if I'm wrong in what we call M A businesses growing and selling. But just clarify, because you do other things as well. Do you do you focus on businesses that just want to grow, for example? But just let's, let's spend share a couple of minutes in a bit of the detail in terms of what you actually do now, what your role is. So

Rob Stevenson: 41:35

just to go back to the first time I met you, we sat in a room at Great Queen Street for about 20 minutes, kind of sizing each other up. You went right, I'll be back in a minute. And you ran off, and you came back with like a ream of paper. You dumped it on the desk, and you went, this is Strategic Coach, if you can turn that into something, yeah, I'll pay you. Thank you very much. Yeah. And it was everything that strategic coach is great for the idea, but the implementation is, like, you come back, that's where it falls down. You come back, and you kind of like, well, what am I going to do with all this stuff? There's this great exercise that Dan took us through. But like, what does that actually mean? Is it useful for me or not? So kind of where I started, and it was 20 years ago, was we've lost Nick Yeah, don't

Alan Smith: 42:18

worry. It was, this is that. We call it. This is Big Boy shit. It does

Rob Stevenson: 42:24

grow nuts. Kids can leave the room for this bit. The original idea was, I do M and A, and that's success fees, yeah, and then I do some consulting in between. And at the time, it was like treating customers fairly. And there were a few firms like yours that were bit more sort of forward thinking, like, how do I grow and stuff like that. And I guess 20 years later, it's the same it's actually the same thing. So probably most of what I do is succession, whether it's firms that are a long way back from that, and they're thinking, how do I grow this business and just get to the point of kind of, you know, having a good lifestyle, and potentially, I might build some value in the business. And I might have, you know, the chance to get where I'm trying to get my clients to, you know, financial independence in the future, that kind of thing. Some of them are much further along. So these are firms like, you know, that were turning over a couple of million, now turning over 10 million. And so we've worked together for, in some cases, 20 years, not constantly, but, you know, backwards and forwards where they need me. And the focus there has always been on building enterprise value, you know, sort of, how do you kind of scale that business? And how does that work? And then obviously, you know, we come out the other end of it, and, Oh, Father Time knocks on the door. Then I help them, ease them into retirement. So it's, yeah, I probably I work on probably a dozen deals a year, but I guess I am sell side. So without to get into much terminology, most of the important distinction. So I worked buy side. I worked for a firm, and we were buying companies, and then I am sell side. Now all the consulting I've done is all sell side. So if I'm selling a company, I'm selling it, I'm representing the seller. They pay me. And as an important distinction, you know, business brokers are typically buy side, but it kind of it can feel often like their sell side, and they do, they do care about the seller, but they're ultimately paid by the buyer. So so I took a different, a very different, you know, position, because everyone else was, you know, buy side. And I could have done that, and done very well at that by because of the consulting, I wanted to be on the sell side. So, so the whole bunch of firms that I've worked with for extended periods of time and then sold, and continue to do that now, because of the consulting, it allows me to get involved in debt, finance management buyouts, EOTs. So, you know, the core of what I do is the planning is people come to me and say, Well, I don't really know what I'm doing. And so we go through a process. I came from a financial planning background, and so I use a very similar financial planning process, but it's just for, you know, numbers of people and, you know, entire companies. So. Yeah, it's,

Alan Smith: 45:00

it's, it's really interesting, what you do, Rob, because you, I would say, you do you act as, in many respects, as a financial planner, to the financial planner or business owner, I think you've still got them on your website. There's a lot of good collateral and downloads and resources, which I've made you. So were you effectively, you kind of, I suppose, you take the same approach as I might do if I was meeting with a prospective client who wants to talk to me about their pensions or something. You go back to say, well, you know, what is, what's all about? What are we trying to achieve here? What's your kind of idealized lifestyle, and trying to look, you know, 30,000 feet helicopter view, rather than get deep in the weeds. And so you've got to, you apply the same philosophy and strategy, I would say to that, because you've got a kind of a, you've got a series of workbooks. Am I right in saying, Yeah, I guess you encourage people to think more about right, you know, can you sell my business for me? Rob, which is a kind of, normally, a sell side corporate finance advisor. Yes, of course. I can look and get and you're more like, Yeah, but why do you want to sell? And, you know, let's go into it a little bit more depth. Yeah,

Rob Stevenson: 46:06

I don't deal with listed companies. That's way outside my wheelhouse, and I wouldn't want to anyway. Ultimately, I deal with small businesses, and the owners of those businesses are doing it for their families, largely, you know, they love their clients, but they're kind of doing it for themselves and their families. And so the definition of shareholder value is just not more more profit, more growth. You know, at all costs it is, yes, profit growth, enterprise value, business value, whatever terms you think of it in. But that's balance with lifestyle. It's like, what are my relationships like? Is my health? Okay? You know what? You know, Am I satisfied with my career. I'm not just banging my head up against the brick wall to finally retire and have a heart attack on a beach in Egypt. You know, it's like, that's a poor outcome, right?

Andy Hart: 46:50

Yeah? Starbucks, was that a true story? Rob,

Rob Stevenson: 46:54

well, I've lost yeah, I've lost a few, yeah, on a long enough timeline, you know, the numbers are, there's a few. You're gonna lose a few. Yeah, well, ultimately, go on. It's trying not to Yeah,

Alan Smith: 47:06

Rob, what? What is, I've just got maybe one more question, and I'll open up to the to the floor there. I don't know if you saw I got, you know, there's loads of these things flying around. I received a report the other day about, I think there's a corporate finance, helican Heligan consult, yeah, I think so. I had a look at that, which was their, you know, company that gets involved in this stuff. I don't know, I don't know them. You might know them. And it was just kind of their overview of the financial planning, Wealth Management, state of the market emanate, you know, as of now, as we've kind of bang up to date, and it seemed to suggest the market remain, despite all sort of the headwinds that we've talked about in sort of commercial world and business world, market remains very vibrant. Lot of deals getting done. What's your take on the current state of the IFA M A market right now?

Rob Stevenson: 48:03

Well, first of all, most of the reports, the corporate finance stuff is usually deals that are 5 million plus. So marshbury Do one, you know, and they bought out a broker corporate finance house of you know, from they've been doing this for years. So a lot of, a lot of the smaller deals are unreported. So the bigger stuff is kind of what they're looking at. So they're looking for data points, and they look for bigger transactions that, you know, I come from a sort of proper, full fat financial planning background, and these are businesses that are, they're more like a wire house in the US versus an RIA, you know. So they're, they're bought more like the old fashioned, kind of scaled we're doing. Everyone calls it financial planning, but it's actually a fact. Find a risk question here, and that's and that could be fine, and there's space for that, but that's not the same as you know, doing that job of what makes you tick, you know, what are your values? Why? You know, what are you trying to achieve? What are the things? Want to do in your life? What's your perfect day look like? You know, the bigger stuff. And I think so the data points are very much that. But also I think that there are very few people that have been both buy side and sell side. So you have an opinion, because you sit on one side and you're talking to a particular audience to answer your question. I think the I think it's a little bit artificial, but there is a drive with companies looking to sell out because the business asset disposal relief rates are going to change. So there's a bit of that going on. I think demographics are probably more of a push you guys, you know, and Andy is the exception here, but you guys are not getting any younger and well, yeah, thank you for reminding me. I don't think Andy is getting that older. Is he? Easily, he is getting younger, but thank you again. Yeah, most of my clients are kind of five, at least five, if not 10, years old. I'm 53 so a lot of them are like, you know, early 60s and and so they are thinking, you know, they enjoy what they're doing, but at the same time, it's like, I have got to deal with this. And succession planning is not about how much is my business worth and who wants to buy it that's selling. Succession Planning is about what is it that this business it? Why is it unique, and how, and what, what commitments have I made to people, clients, team, all these things, and how do I perpetuate that? How do I continue that? How do I pass that on? And is it best doing internal, external, and all the demographics around, you know, the differences in generations and whatnot, if you know what you're doing, add king makers, all that, if you know what you're doing, and I don't think the actual metrics and you know, valuations have changed fundamentally. The terms in which people talk about things have changed. So people don't talk in terms of recurring revenue anymore. They tend to talk in terms of operating profit or EBITDA. But nothing's changed. Right? If you work buy side, then it's an investment. So you sit there and you look at your discount rate and your terminal value, and you look at your internal rate of return you want, Mike, multiple of invested capital, all of these different things, and you look at how much do I need to pay for this thing, and what return am I going to get for it? None of that has ever changed. It's just the way it's being discussed. And the narrative has changed a little bit. And I think that's for, actually for the better, you know, in terms of what that is. So people are now starting to fixate a little bit more on what makes a business worth a higher multiple. So, you know, you've got a million quids worth of profit, and what makes it eight times that million or 10 times, and that, that's work I've been doing for years and years and years. So I'm happy that we've kind of caught up just

Andy Hart: 51:42

following over a point you made there. Cole highlighted a question you wanted to ask. So yeah. So if a firm is planning to in, you know, enhance their enterprise value, which is the point you just made, what the key areas to focus on? If you would have to sort of do a top three, top five, key areas to focus on, to basically build the enterprise value of a of an IFA financial planning firm, it's

Rob Stevenson: 52:02

an easy answer, but it's not a very helpful answer. The easy answer is that you want 35 to 40% profit margin, and you need 20% compound annual growth rate, and with you coming out of it as the founder, those two things can continue everything else it sits behind, but ultimately, high profitability, high growth rate. If you think about what a valuation is, what a sale of a business is, it's a capitalization of expected future cash flow. Yeah, that's all it is. It's like, I'm betting Andy, I'm going to buy your business. It currently produces half a million quid a year in free cash flow. And I think that that's going to grow. And so I'll multiply that by 678, and I'll give you a number, and it's a bet, right? It's an educated bet, but it's a bet on expected future cash flows. So the trick to all of this is, you have to think of your business becoming a business unit in a larger business, and what is going to happen to it, what costs get stripped out, what revenues get added, hopefully, and what's the outcome for the buyer. So the trick is, as a seller, is to put yourself in the buyer shoes.

Andy Hart: 53:04

Next question, is there a lot of, as they call it, dry powder out there, a load of cash that needs to be allocated, or is that ship sailed and now the interest rates are rising, so there's less dry powder out there. What's what you see?

Rob Stevenson: 53:16

It's like shipping containers. So if you load up the capital, it's gonna have to take its journey. So, yes, you've got money that was committed. You know, if you, if you've ever raised money, it's never again. It's very difficult, and it takes a lot of time. And back to private equity, if it's a closed end fund, that's typically 10 years. So you're, you know, the money that's being committed has been committed a while ago, several years ago, I think at the moment, there are some pretty high profile companies who are re capitalizing, which is shorthand for being sold from one PE firm to another. So they might not characterize it that way, and we won't get into the intricacies of cap tables and stuff. But ultimately they're changing their investor, and I think as that happens, the economics of deals change, because that's then a third party who's investing, saying right now, cost of capital is x, equity risk premium is y, weighted average cost of capital is z, and therefore that might start to push prices down a little bit, which is much more,

Andy Hart: 54:24

just to give the listeners a bit more meat to the bones. Can you share anything about sort of rule of thumbs in terms of valuations and stuff? I mean, I've always looked at companies buying and selling, and I've just used a, you know, a shorthand heuristic of basically 4% of assets. So if a company's got 100 million AUM, usually, however you slice and dice it, they're probably going to get sold for 4 million quid as a starting point. Can you add anything to that? Is that sound the ballpark, correct? Is it six times net profit? Eight times? You know? PES and all the other stuff. So, so

Rob Stevenson: 55:02

if you, if you imagine you had a piece of paper, and you do a T bar, and you put past and future, so if you're looking at the past, it's kind of past and present, yeah, that is what we call relative values. So you're using multiples of whatever your whatever, whatever type of valuation relative to what other transactions have happened in the marketplace, essentially going assets under management. Oh, there's a company over there. It was sold for 3% of assets or 2% of assets. That is not how that deal was constructed. I

Andy Hart: 55:30

know that when I went the numbers out, yeah,

Rob Stevenson: 55:34

as a proxy. So percentage of assets under management is kind of two to 3% I think falls probably if it's a restricted business, if it's recurring revenue, then that's like three, four times. And there have been deals that have been much higher. Again, the deals tend to be higher where there's a bit of scale involved. Maybe there's a, you know, central London has always got a premium to it, you know, particularly if consolidators don't tend to have central London,

Andy Hart: 55:58

you know, is pricked up. Yeah,

Nick Lincoln: 56:01

oh, and

Rob Stevenson: 56:02

capital is a website that really is a massive premium for that. Obviously, I'm talking about that. And then EBITDA numbers, you know, little little firms are four, then six, then eight, and you can get 10, 1214, but you've really got to have a, an absolute USP, you know, a real kind of moat around the business and something and growth and all these various different things that's all sort of present. But then the future is what we call intrinsic value, which is where you're doing a discounted cash flow, which is where you look at the future cash flows, and you bring them back to a net present value. And ultimately your discounted cash flow needs to be higher than your relative value. And that's where you start. The real action is in that delta.

Andy Hart: 56:43

That's awesome, Rob, we are going to have to nudge on my final question. When we had our breakfast at that lovely cafe in Molly band the other day, you were telling me about potentially writing a book. So share with the share with the listeners. What's happening about actually still

Rob Stevenson: 56:55

trying to digest that breakfast

Alan Smith: 56:59

that was pretty heavy. Yeah, about six hours prior to it.

Rob Stevenson: 57:04

Yes, it was a bit of a It was everything everywhere, all at once. That 24 hour is right now I have, yeah, despite the fact that I sound like I can't connect all my knowledge together, I have, I've written two books, actually. One of them is kind of resting, and this one's about one of them. The first one's about growth and growth and growth stages and how to navigate that, and it's for financial planners. And then I kind of diverted off into doing one on succession planning, which is very, very the first shitty draft is done on that completely. So I'm in the editing phase on that, and that'll be coming out soon. It's also coming out with a digital course, so you can go through and there's, you know, case study and stuff. And so you can work on your own succession plan, which covers MBOs and trade sales and the OTs and the whole works. And then later in the year, maybe early next year, we might be doing some group therapy, so we can all get together and sing Kumbaya and work out your succession plan over sort of a year, you know, that kind of

Unknown: 57:59

stuff. Kumbaya, my lord. Kumbaya. Just

Andy Hart: 58:13

just, we will put Rob's website in the show notes, but it's king makers group.co.uk, you can pop your email address in there. And if any new books will be announced, I'm sure he'll be able to email you about that. Sorry, Alan,

Rob Stevenson: 58:27

if you sign up for the newsletter, you'll get on the there's only one list, yeah,

Alan Smith: 58:31

anyone, anyone who's a sort of senior position, running a business, owning a business, just to check start off by Yes, subscribe to your newsletter. Download some of those resources. Really, really helpful I found. And then you, I mean, there's, obviously, there's quite a few people sell side, kicking around. You've got that sort of, I just think at that specific sector, you're not dealing with the kind of multi billion pound transactions and a listed companies normally, all the rest of it, you're dealing with predominantly our audience, which are by and large, you know, small idiot planning practice. You understand what full fat financial planning is. You've got a background in it as well. So you caught up, I would say you're in a category of one right now. Mr. Stevenson, and people are in that space, even if they're like three to five to seven years out, probably worthwhile having a chat with you so thoroughly endorse. Keep keep up with you, Laura, and do let us know when that book comes out, I will be a customer. Okay, that's it. Good stuff.

Nick Lincoln: 59:30

Good stuff. Thanks. Rob somewhere in Marlo greasy spoon. Very good. Okay, let's move on to the next section of the show. This is where we take questions from our beloved Trappist. I can see the lady postman is at the front door. At the front door. She's dropped off the bulging sack of TRAPPIST questions. And you can leave a Trappist question either in the pinned tweet on X or the pinned X on Twitter, whatever, or in the link in the so called show notes. And we will get round to your questions. This one today is from Connor McLaren, who's also on LinkedIn, and we'll put that in the show notes as well. Oh God, this one gone forever. So let's be succinct and to the point, please, gentlemen, Hi All. First, I wanted to say a big fan of the show, having only recently found this gem of a podcast, I've went back to the start and began listening in order. I've went back to the start. I went back Connor not I've went back as a relatively newly registered planner. Have you any advice in terms of mistakes you've seen or made in the past that have led to valuable lessons Good grief, because that's that is a show and mistakes. So let's be pithy into it, like 30 seconds

Andy Hart: 1:00:30

each. I've got a bullet point list. You want me to go? Yep, I'll go right. See and speak to as many people as you can about money, but be selective of the clients that you take on. Use a capable platform. Don't focus on cost, focus on capabilities. Learn voyant inside out. It's the tool of this trade. Become really good at building financial plans. Learn about asset class investing and turn off the noise of active management. Join some communities, for example, next gen harm advisor, 3.0 PFS, read all you can about Nick from Nick Murray.

Alan Smith: 1:00:59

These are the mistakes you made. Okay, fine.

Andy Hart: 1:01:05

In terms of, yeah,

Nick Lincoln: 1:01:10

avoid the opposite

Alan Smith: 1:01:13

Andy's list. Don't do the opposite of that. Not doing that, you're making mistakes Exactly. I've just got got a couple that I've learned school of hard knocks, which is, well, to follow Andy's lead. It's simplify. So there is a there is a

Andy Hart: 1:01:30

that's not a mistake. There's such

Alan Smith: 1:01:32

a temptation. And I've done it to complicate everything, to look at the next shiny new object, the next Tech, next platform, the next this industry, this profession, is actually really, really simple. So do it with the minimum possible friction, one platform, yeah, once investment solution, one set of tools, just all that. Just do not everywhere you go, people selling you more stuff. And just don't find the best and stick to it. And the only other one I've got. Again, the mistake is not sticking to your guns when I started to do proper financial planning and have kind of deep and meaningful and this the song Nick played a second ago, was very relevant to so kumbaya type conversations hugging a tree with some pretty sort of high net worth type entrepreneurs and clients, and I was talking to them about what money was like, growing up and all that sort of stuff. And it's a bit it was really awkward, because I was kind of just, you know, going through the motions. I'm not sure if I fully believed in it, but I did, and I to my guns, and clients actually like it. So there was a temptation to say, oh, no, you know, we're British. We're not going to talk about important things like life and family, the mistake would be not to do that, stick to your guns, embrace full fat financial planning and have meaningful conversations consistently with your clients, regardless of their status in life. Nicholas, okay, very

Nick Lincoln: 1:02:53

well, I haven't really got much to work because I'll just be repeating, really, what Ultra said in the list of things that you want to do to avoid making mistakes and then and what you said there about and about and about sticking to your guns. I mean, that's, as you know, my personality traits that is a big part of what I just find out, what you think is right, and then just stick to it, and then let

Andy Hart: 1:03:09

the chips fall as they may. Just a brief note, Nick, sorry, Rob is actually a back. Barely advise a client. He's not a knack. He's back. Rob, any any mistakes to

Nick Lincoln: 1:03:15

avoid, because I wasn't involved over this conversation, but thank God you're here to pull me out the weeds. I

Rob Stevenson: 1:03:20

think that you

Alan Smith: 1:03:22

should, yeah, exactly. I

Rob Stevenson: 1:03:25

think you should. I think actually spending a lot of time with other advisors is not it. I think that ultimately you want to spend time with clients. You want to do work for free. You want to get to that 7500 150 whatever your max number of clients is, your only job is to get to capacity. And to do that, you stick to your guns. You go, this is my proposition, and you just go out and you just do it and do it and do it, and spend all of your time in front of clients, because they'll tell you what's right or wrong. And ultimately, then, once you've built a business at that level, then you'll have to unwind all of that and do it all to try and get yourself out of it, which is a completely different and wonderful challenge. They're different, okay,

Nick Lincoln: 1:04:08

thank you rob and thank you for your contribution to this show. So without any further ado, I think it's time for us to move on to what many people call culture corner.

Alan Smith: 1:04:19

I can see Nick is going through this whole episode at a hell of a clip. Have you got, uh, lunch coming up, lunch,

Andy Hart: 1:04:26

and he's, he's got, he's

Nick Lincoln: 1:04:28

got 64 minutes in, and I have got a client meeting in in Kensington in just over an

Alan Smith: 1:04:34

hour. Yeah, plenty of time, okay. But this, yeah, this is one of our faster episodes, so it's probably not a bad thing. I'm going first with culture corner. Yep, I'm a great fan of a guy called Scott Adams. I think you guys are as well. He was original creator of the Dilbert cartoon strip and a whole bunch of other stuff. He's written loads of books. He's got a daily podcast, and very sadly, he announced just a couple of weeks ago that he's been diagnosed. Close with terminal cancer, and he's unlikely to be with us even in the summer of this year in a few months. Hasn't got long to live, which is really, really sad if you haven't come across Scott Adams work. Go and check it out immediately. I just think it's one of the one of the best, deepest thinkers, most insightful, uh, creators, authors, whatever you I've ever come across. He's written loads of books. The one that I'm going to recommend, if you haven't read it yet, is called reframe your brain, just an entirely different way of thinking, how you can effectively just rewire your brain. We often think about things and moan and groan and shit. I've got to do this. I've got to do that. He has he has just the pages are packed with ideas and suggestions, how you can rewire and reframe just by thinking about things differently. I really think there is a lot about application in financial planning, both in the day to day work we do, and also the conversations we have with clients. There is so yeah, but I was just reading through it again recently, I thought, wow, that would apply next time have a conversation with a client, just restructure. I recommend Scott Adams reframe your brain. Yeah.

Andy Hart: 1:06:02

He also reads his own books on audible. So if you're an audible listener, check them out there. Nicholas,

Nick Lincoln: 1:06:08

thank you. Andrew. So I read a business book, which is not something I do that often, but I read this book the thinking machine, Jensen Huang and Nvidia, the company shaping the future of AI. I heard Jensen Huang. He was one of the co founders of Nvidia back in the late 80s, early 90s, him and two other chaps, and they thought, we can make a business launching gaming chips, because they saw it was coming with Nintendos and segas and Intel, who are, who were the biggest chip manufacturer at the time, had looked down their noses at this and said, No, we're just doing business and super computers. And you so Nvidia found this little, this little angle. And of course, we know what's then. With Nvidia, they've met these CPUs and these GPUs which are powering these neural networks and everything else. He's a brilliant if you listen to him, he's on some podcasts, just Google, Jensen Huang and podcast, see what comes up. He's a very engaging guy. The story is riveting. Some of it is a little bit too much in the weeds for me with there was AI and how it works, but it is an amazing story of how this guy is a workaholic in the right place at the right time, but his staff love him. Nvidia has very low turnover of staff there. They mainly because they're burnt out Nvidia or Jensen and Frank, his big thing is you have six month cycles and then a new product update comes out in six months time. So all these gamers back in the 90s had to have the list of video chip and then six months later they had the other one. Of course, that means all the engineers are under incredible stress. But the thing I took away from it was was a guy saying, then Silicon Valley, Jensen Huang is one of the genuinely nice and humble people who sometimes has to put on the appearance of being an evil bastard, whereas most people in Silicon Valley are evil bastards who sometimes put an appearance of being humble and nice. Really good book race through it. You don't have to be massively into AI or tech to understand this story. Really, really interesting guy, and he want to just have an hour with him on any subject. I think he'd be, he'd be very entertaining. Wow. Nick. I mean, the latest

Andy Hart: 1:07:53

numbers are insane. I think the last quarter they did something like 44 I mean, we should say, again, just the

Nick Lincoln: 1:07:59

thinking machine by Jensen Huang, because some of the Trappists say we go through these things. We these things, we don't repeat the name of the book often

Alan Smith: 1:08:04

enough. So there's always links in the show notes for those who were just chicken, yeah. But some of our trappers can barely

Nick Lincoln: 1:08:09

we know this. Come on. Yeah.

Andy Hart: 1:08:11

The the latest numbers from video never insane. I think the last quarter they'd 44 billion revenue, 19 billion net profit. They're again the number one valued company in the world. It's an insane story. Yeah, I'll probably check that out. Nick, thanks. My point is a YouTube interview called the investing show. Robin Powell is the host, who some of you may know, but he's got the amazing Jason Butler on, who's a force of nature. Check it out. It's very funny. It's really good. It's really good. Yeah, so check it out. I'm Jason Butler. Is also one you've got another podcast. Yeah, he's

Alan Smith: 1:08:49

been on my award winning podcast, the bulletproof entrepreneur, as Jason is, Rob knows

Andy Hart: 1:08:58

it's a good it's a good use of an hour and a half of your time. So listen to the one in the so called show notes, and then listen to the Okay, the quote with the show. He said, the vast majority of the vast majority, I quite like that saying, Sorry. Jason Butler, thing to say very Jason, now our guest, our guest,

Nick Lincoln: 1:09:16

is taking liberties. He thinks he can shoehorn in three culture corners, Robert, so you're limited to one. So pick your favorite.

Rob Stevenson: 1:09:23

Oh, really. Okay. So okay, so the podcast with this guy who started and ran touch base. His name's Ryan Maynard, touch base. Sorry, Rob. Touch base is was a huge business in the US that was doing kind of telecoms and stuff like that. It's a really simple business. The links in the show notes, the interview is Jamie Lang, the guy who was originally on, oh yeah, maybe Chelsea. I think, Yeah, that guy. So not something I'd normally see. But ultimately, I think he done an interview. You with Rory Southern, which is why it kind of threw and the algorithm threw it up for me, absolutely amazing podcast with this guy who started a business with the best intentions. It got a bit out of hand, and he wound up defrauding the IRS, and he was sent to jail in the States, and he spent six years in jail in America, in various different prisons, and has come out of that. And it struck me for a number of different reasons. One, because you're talking about the laughter curve, and people sort of going, oh, you know, I want to delay tax and defer to his is such an innocent story that wound up with him getting shackled in jail, and he goes through some of the experiences that he had in jail, which is just really kind of scary, but petrifying, you know. But one of his I think, I think it was his brother sent him. And this is hat tip to to Carl sent him. Man search for meaning, the famous book by Victor Frankl. And so he read that, and that started to get him along the path of reframing his experience. And, you know, it's about optimism and it's about hope and but ultimately, it's about logo therapy. You know, Logos is the Greek word for meaning, and so essentially, he's now started a business coaching people based on logo therapy, which is a sort of punchline to it, but for an hour and a half of your time, it's something different, and it's really interesting. And he's a really kind of gregarious, interesting. You can see how he built a business, and everyone loved him. He's just a really wonderful character. And I just, I thought that was just something that's the

Nick Lincoln: 1:11:36

great company, the great company podcast, which I Okay, I should listen to that. Thank you. Excellent. I

Andy Hart: 1:11:41

sat, I sat next to Jamie in Harry's restaurant in Marylebone a couple of weeks ago. So now he's a close personal friend of

Unknown: 1:11:50

mine. He's close, yes Andy. He knows about everything, and he can't be told anything. His name is Andrew Hart. Andrew

Nick Lincoln: 1:12:07

Hart's gone. That's an hour good now and 12 minutes. We've given our best today. Want to say thanks to rob Stevenson standing in the shoes of Carl wicher, easy shoes to fill. But you did it. You did it very well. There you go, dear TRAPPIST, it's episode 70. What is it? 72 comes to a close. Another part of traps slides down the you bend of Father Time. Thank you, dear TRAPPIST, for your precious time and input on the show. Rate us. Leave a six out of five star on iTunes what have you, or a one out of five star review. If you're that kind of a bitter person, like and subscribe to our YouTube channel. But until the next time, dear TRAPPIST, it's adios from us, and take care of there. We will see you on the other side. Goodbye, bye bye, bye, bye bye. Oh, Christ, we got there right. Oh.