How One Adviser Used AI to Reinvent Client Meetings | Mike LeGassick

In this episode of Don't Shoot the Messenger, Chris Ball sits down with financial adviser, author and behavioural investment coach Mike LeGassick* to explore why great financial advice has far less to do with investment performance than most people think.

After more than 30 years in financial planning, Mike has become convinced that the biggest factor behind successful investing isn't markets, products or portfolios. It's human behaviour.

The conversation explores how advisers can use psychology, storytelling and now AI to create better client outcomes, build stronger relationships and communicate in ways that clients actually remember.


In this episode, you'll learn:

- How AI can improve client conversations rather than replace advisers
- Why storytelling is one of the most powerful tools an adviser can use
- The books and mentors that shaped Mike's career
- How simple props and memorable analogies can transform client meetings
- Why great communication builds trust better than charts and technical jargon
- What the future of financial advice could look like

Whether you're a financial adviser, planner, business owner or simply interested in how psychology influences decision-making, this episode is packed with practical ideas you can apply immediately.

If you enjoyed the episode, don't forget to like, subscribe and share it with someone who would find it valuable.

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If you want to see what life in Hoxton Wealth is like, please visit:  / @hoxtonlife 

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For my videos by Chris, please visit his Youtube:  ⁨@ChrisBallHoxton⁩  

Transcript

Welcome And Who Mike Is

SPEAKER_00 0:00

Welcome to another episode of Don't Shoot the Messenger. And today I am joined by Mike. He's been a practicing financial advisor for over 30 years. He's also written three books as well, which is pretty cool for advisors and clients.

SPEAKER_01 0:11

I think the minute you think you know it all you come to realise you know nothing.

SPEAKER_00 0:14

I've never come across anyone that uses props like that.

SPEAKER_01 0:18

Our profession has one questionnaire of a both. Mine has one for each one because they're fundamentally different in my opinion.

SPEAKER_00 0:23

Yeah, but it actually makes a lot, a lot of sense because you have so much experience and you can really visualize what you actually want. And I and I've always been fascinated by psychology. I think some crazy stacks like 40% of an advisor's time is actually spent on advising.

SPEAKER_01 0:37

I think it's timeless. Um you could pick it up today and it could have been written yesterday.

SPEAKER_00 0:46

So welcome to another episode of Don't Shoot the Messenger. And today I am joined by Mike. Mike is a director at Manning Company, an independent financial planning firm established in 1990 and based in Cornwall and Devon. He's been a practising financial advisor for over 30 years, having started with Pearl Assurance before moving into independent financial advice. Mike describes himself as a behavioural investment coach as much as a financial planner, and his work centres on the psychology of investing, how clients make decisions, why they make poor ones, and how advisors can communicate in ways that actually land. Mike has contributed to the Parliamentary Review and served on the Devon and Cornwall Personal Finance Society steering group, and he is a vouched-for top-rated advisor. He's also written three books as well, which is pretty cool for advisors and clients. So welcome, Mike. Thanks very much for joining us. So you've been advising for over thirty years, which you know is is quite a long uh stretch in any career, uh, you know, especially nowadays when people kind of chop and change a lot. When did you first start paying attention to the psychology of investing and what shifted your thinking to thinking of about it that way as opposed to you know how a lot of advisors think about it uh as a product and sales and you know, kind of that in the assurance business that you were in initially, I imagine that that was how it it you know it kind of started. So very keen to understand your thinking on the shift over and what the click moment was for you.

Why Investing Is Mostly Psychology

SPEAKER_01 2:32

Yeah, um about 25 years ago, um I'm I'm not quite sure what shifted it initially, but I sort of got into the psychology of what goes on in here around decision making. Um, so I've been advising for about eight years, doing the job that most people do um and and getting by, okay, fine. And then I thought to myself, it's not so much about the numbers um and graphs and so on, which which can bore people to death. It's about well, clients' money stories growing up, what influences you when you were younger, they say you are the product of your environment. And I and I've always been fascinated by psychology. Um, I guess if I had my time again, it's probably a field I would have probably gone into perhaps rather than financial advice and strange enough, because I do really find it fascinating on what what makes people do the things they do, what their drivers are and and and regrets and and repeating mistakes, you know. So I got into a learning curve about 25 years ago, and then I started absorbing a lot and reading a lot of books and getting involved with a lot of people who are sort of experts in our field, because I find it a fascinating subject, and it's been with me ever since. I I sort of concentrate more on human behaviour around money than the the technical side of it, because the technical side is the technical side, and every competent advisor knows that to a varying degree, but there's a lot more going on behind in here that that makes people do what the things they do. So I've always said better to be a sponge than a brick, you know. I think the minute you think you know it all, you come to realise you know nothing. So um I read and listen a lot in the car. I mean, I've got a life, you know, I like listening to music and talk sport and the rest of it, but uh I have to steal myself and listen to audiobooks in the car and picking up pearls of wisdom from you know people who have been doing this a lot longer than me and are highly respected in our profession. So it's something I really enjoy, and you're always learning

Books That Sharpen Client Conversations

SPEAKER_01 4:25

more.

SPEAKER_00 4:25

What's your going back to that question then you were going back to that uh statement you just said, listen to a lot of audiobooks. What's your favourite audiobook? Who you know, who are your top three authors that you kind of go back to, um, you know, and what are some of the key findings you've learned from them?

SPEAKER_01 4:42

Um I think the best book out there, I think the Bible probably for not just financial advice but business in life in general was something my my dad suggested I rank uh read many, many years ago was um Dale Carnegie's How to Win Friends and Influence People.

SPEAKER_00 4:56

Yeah.

SPEAKER_01 4:57

Because I think it's timeless. Um you could pick it up today and it could have been written yesterday. Um I don't know whether you've read the book yourself, but my on my honest opinion is it it it would you could do a lot worse than incorporating that into the um school curriculum. But because the lesson stands you in so such good stead for working with peers in business, in family, friendships. I mean, you know, if you remember the back the background to that book is Darrell Carning, he asked himself a question. He thought, I wonder why certain people succeed and others fail. There must be some common denominators. And then he went to the library to root to find the book and it hadn't been written. And because obviously he was very successful, he had the resources, he put together a pool of experts to do the research, you know, back in when it was written around the 1930s, to find out why successful people of his day, sports people, politicians, movie stars, athletes, what what what were their what what was the you know what were the lower the common denominators? And then was born out of that inquisitiveness that they they wrote that book and set those principles in practice, and I think virtually all of them are as true today as they ever were then, they are just timeless. My other authors, Morgan Housel, is fantastic. Um I think he's a great author. Um, he wrote some really great stuff, and everything that Nick Murray has ever written.

SPEAKER_00 6:18

Yeah.

SPEAKER_01 6:18

Um as far as I'm concerned, Nick Murray's the goat in our profession, he is the advisor's advisor. And I've been lucky enough to attend his conferences a couple of times in New York. And yeah, the though from a financial standing point of view, Morgan House, Nick Murray, and How to Win Friends, anyone who can take most of that on board is probably gonna have a decent time of it in the future.

SPEAKER_00 6:40

For those of for those of uh, you know, I guess I think a lot of people know who Morgan House is, um, but a few might not know who Nick is. Um maybe you could educate them a little bit uh as to who Nick is and you know why what teachings you've you've found particularly useful. I've got his books in my office, I you know, try and read them once a year. Um I think you know all of his all of the things that he talks about are uh you know are so true, and you go, uh it's just it's just like kind of basic reminders, but um yeah, be really keen to uh really keen to for you to explain that.

SPEAKER_01 7:14

Yeah, well

Nick Murray As The Mentor

SPEAKER_01 7:15

Nick's been advis Nick's been advising, I think, or advising advisors for over half a century. He's a bit like Warren Buffett, where he's been there and seen it and done it all so many times. And and he speaks such common sense. I mean, there's nothing more frustrating than reading something and thinking, well, why didn't I think about that? Because when you read it, it it's it's so obvious. Um, and you know, I think Nick has mellowed in his years, but he doesn't suffer fools gladly. I don't know if you've ever met him. You know, he he's got a reputation that he could be quite cutting at times, it's just he's very matter-of-fact-ish, but he's mellowed in the years now. But he just he's he's he's very well read, he writes extremely well, and you find the way he conveys what we do as a profession and the conversations we have with clients, he conveys it in such a way where you you it's very difficult to argue with his philosophy and his principles. But again, the most annoying thing is you sit there and you think, I can't believe I didn't think of that myself. You know, you just can't see the wood for the trees. So I would suggest any advisor coming into a profession, particularly, or even those that are feeling they're hitting a bit of a glass ceiling, I would really try to do all you can to get hold of his books. And they're not easy because he doesn't ship outside of the States, um, or subscribe to his website, which for a couple hundred quid a year I think is tremendous value, where you get his newsletter every month. You know, I I really it's the one newsletter I really look forward to reading every time because he's always he always seems to have a handle on what's going on in the world and a a sensible um a a sensible balanced view on how to deal with what clients might be thinking and might be asking you about and challenging you on on what's going on in the world. So yeah, so the books he's got, like scripts and around the world, they're they are the Bibles as far as I'm concerned for financial advisors that I can't think of anything better. And even goes so far to say, and I know this sounds a bit strange, knowing what I've learned from Nick's writings and attending his conferences in New York and applying it to my business and the way I speak to clients, I do mean this when I say this. I would have paid thousands of pounds for his books. Seriously, I would have, because because I know the value it's generated to me and how that's helped my clients stay in their seats through thick and thin.

SPEAKER_00 9:33

That's um that's awesome, and I I I would agree with you. I think I don't know how much his course um courses were to attend, but I imagine just being there in the in the room, you know, with with other like-minded people listening to Nick must have been really, really cool um as well.

SPEAKER_01 9:49

Yeah, yeah, it is. It's a bit of a you know, for our profession, is it's a bit like meeting one of your heroes, to be honest with you. I mean, I just turned 60 the other week, and um you do often think strange things about celebrity, but at the end of the day they're just people, aren't they? You know, when people look at people like Beckham and and you you you you oh no at the end of the day, they're just a human being. But some people do extraordinary things, and Nick's done extraordinary things for our profession. And I truly would urge, as a profession, you you try and you know, you're an advocate, I know, but you you got advises you you you really do need to read him above all else. I mean, I've learned a lot, I've been very lucky that people have shared stuff with me over the years, really lucky. And um you and you look at the people that you think have had a biggest impact on your career, and many people have made big impacts on my career, but hand on heart, Nick is head and shoulders above everyone in that area. And it's hard to pimp it's you know, you could be watching this and thinking, well, can someone really have that much of an impact? Well, taking from me, if you're serious about this business and you want to try and take it to the next level or feel your glass ceilings, reading Nick's books will help you get over those hurdles, I am convinced of it.

SPEAKER_00 11:00

It's funny, isn't it? Because like people generally think of mentors um as someone that they you know have to speak to like this, or you know, you know, someone that you meet for a coffee and they give you, you know, a couple of hours of their time once a month or whatever. But actually a lot of the best mentors are typically you probably won't be able to get access to. Uh but therefore, you know, the next best thing is reading their life's work, which they've consolidated into typically books or you know, podcasts or whatever they whatever they do to try and impart their knowledge out. But you know, Nick's best work is in his books and then clearly his newsletter as well, uh which you've said, which obviously you know remains very topical. Um so yeah, definitely I I think people people should sometimes get over that mindset that they actually just need to be speaking to these people to learn from them, because clearly that's not the case.

SPEAKER_01 11:51

Yeah, I I agree a hundred percent. You know, sometimes you think you know it or or you don't think there's anything more you can learn in this profession, but I've always felt there's always something you can learn. Um, a phrase that you can say, something better, a story you can deliver that lands better with more clients. You know, it's very difficult to convey what he writes and and how the benefits that you know you can you can get from him as an advisor. It's not easy to explain. But the minute you start picking up his books and reading, it all becomes very clear.

SPEAKER_00 12:18

Yeah.

SPEAKER_01 12:18

That's the best thing I can say.

Conferences, Storytelling, And A Spark

SPEAKER_01 12:20

And um, I'm not being paid for this promotion, by the way. But he is, you know, he's just the best, you know, and I set up and lucky that the last live conference he did, it was his last one in New York last October. And I travelled across with Ian Farrah, another IFA in the UK, and we had a great time, and we met a lot of American advisors and shoot due to fat over there for a couple of days. But yeah, it was almost a pilgrimage to see his last full live conference, you know. He's doing recordings now, but I felt like I just felt I had to go because I I just felt I owed him a huge debt of gratitude, you know.

SPEAKER_00 12:53

Yeah.

SPEAKER_01 12:54

And um presenting him with a copy of my book, you know, was it was a big moment for me. And um, he's probably got it as a book, as a you know, a door stop somewhere, I imagine. Sure not. But you know, he was just curious that I'd written a book called The Art of Storytelling, and we had a chat about it between coffees and that, and and some of the feedback he gave and the idea that I had around the software that I'll talk about um in a bit later. I was very tentative to ask him his opinion because I know that he can be quite dismissive.

SPEAKER_00 13:26

Yeah.

SPEAKER_01 13:26

And um, yeah, I I did very tentatively um approach him at coffee and I just said, Look, can I can I run an idea by you, something I'm working on? And he's with his daughter, Karen. And I told him about the idea, and he said, you know, to to per to use his words, he said, What a cool idea. Um, never heard anything like it before. So that was that was great to hear from him. I I was half worried he was gonna burst a bubble and I was gonna walk away with my tail too much.

SPEAKER_00 13:52

I think um I think well let's get on to the idea next then because I think people then understand why he clearly didn't do that and and how uh how how well it's coming along. I mean look number one, you know, complete you know, kudos to you, someone who's been in the industry for 30 years, um, to then you know think uh or start to use AI in the manner that you have, uh vibe coding, you know, all the other things that you would maybe expect for someone in you know the earlier part of their career to be more interested in than you know someone who's been doing this for a for a long period of time. But it actually makes a lot a lot of sense because you have so much experience and you can really visualize what you actually want. And now rather than having to deal with a load of developers to build it out for you, you can actually you know use um claw code or uh codecs or whatever you're using to develop it out. So you know, I'm not gonna I'm not gonna uh kind of ruin the the cliffhanger for people, but I'd you know be super keen for you to talk more about what you've done, how you've thought about it, um and yeah, we we can we can go from there.

SPEAKER_01 14:51

Okay. I could

Rethinking Risk Questionnaires With AI

SPEAKER_01 14:53

spend a day on this actually. Um where should I start? I I'll start with I feel that most of the tools that we deal with in our profession, um I I personally don't think they're up to the job. Um I don't mind saying it. Um I think a lot a lot's left on the table. Um it's all about numbers and categorizing people and jargon. Um, you know, we use the term biases, um, which we all have, financial, you know, advisor investment biases, but I've softened the language for the software I've built, and I've replaced, like, for example, biases with tendencies, because I think that's a everyone's got tendencies. But if you if you say you've got a bias, it sort of labels people. Attitude to risk questionnaires, in my experience, we've we've seen them all through the years, and I I personally don't think they do a particularly good job. A lot of the questions are abstract. Um, the minute a client says to me, Michael, I've completed the attitude to risk question yet, but I'm not sure I did it right, that tells me all I need to know. It's not fit for purpose. If you can't understand it clearly, my opinion is that a 10-year-old should get an accurate reflection by answering those questions. There's a number of things wrong with them, in my opinion. Um, A, B, C, D, and E, cautious photo adventurous. After you've done the first three questions, your brain spots a pattern. A, B is cautious, C is medium, so and then all the way through. So you know the questions are going to follow the same format. Um, so my software randomizes the answers every time they're generated. So you can A could be adventurous effectively. Um it's more of a it's more not it could replace attitudes request questionnaires. I'm convinced it could replace them, but it doesn't have to, it can sit alongside it because there's more random behavior and how people react. But there's a whole more a whole lot more to it. The the principal part of the software, um it because it's called Letters from Your Future Self, and I'll and I'll tell you where that idea was born from, so it's it's a bit odd, really.

Stephen Fry And The Future Letter

SPEAKER_01 16:44

I mean, you know the actor Stephen Fry?

SPEAKER_00 16:46

Yes.

SPEAKER_01 16:47

Yeah, everyone pretty knows Stephen Fry, certainly in the UK. Well, I don't know whether you know, but when he was 16, he wrote a letter from his future self to himself, from his 60-year-old self.

SPEAKER_00 16:56

I had heard about that, and it was only when I was reading up for this episode on uh on your work that I've I it it it struck me that I had read about that before, but yeah, please continue.

SPEAKER_01 17:06

Yeah, so um Stephen Fry when he was 16, he's obviously a gay guy, he was you know a highly intelligent individual, um, teen angst at 16 through university. I imagine he must have had a pretty tough time of it, you know, going through all that. And he decided, as only Stephen Fry would decide, come up with an idea to write a letter from his 60-year-old self thinking, I wonder what my 60-year-old self would tell me seeing the way I am now. So I thought that was an that was I read about this years ago, and I thought that's just that's an unusual, interesting concept that. And it sort of stayed with me fleetingly and it went. And about 18 and 19 months ago, for some unknown reason it came back into my head, and I don't really know why it did, but it just did, it came into my head. And I thought, well, I wonder what a letter from your financial future would look like. That's quite an interesting concept as well. Um and when I was a kid growing up, my favourite book was The Christmas Carol, Charles Dickens. Yeah, and you probably know the story quite well. You know, Scrooge gets visited by three spirits, and the last spirit is the Christmases of yet to come.

SPEAKER_00 18:08

Yeah.

SPEAKER_01 18:08

Or what might be. And you know, he has that encounter with his spirit, and he sees the things and he says something on the lines of, are these the things it will be, or are they shadows of things it might be? And and those two ideas fused in my head, the letter from your future self, can you change the path? And then so I thought, well, imagine if you got a letter from your future self explaining your investment journey and whether it did turn out the way you thought it was going to turn out, or achieve the things you wanted it to do, or whether it went off piecing and went down the wrong road. So, what the principal part of the software does, it generates a letter from your future self when you go through some questionnaires in a male or a female voice, it's an audio, it's read back to you, and you can and you can download the letter as well to read it. Um and I I spent an awful lot of time on the language and the behavior, so it's never dismissive, it's never judgmental, it's very reflective and soft. So to sort of put it into perspective, imagine that you're imagine that you had some lofty financial goals and you you wanted to support your kids, uh, support elderly parents, put them from university, maybe help them with a deposit house, or travel slowly through new countries in retirement. And the way you go through the questionnaires, and there's two by the way, there's one for accumulation and decumulation, but I don't use that language for clients. I usually call it I call it saving and spending. Because we do shift fundamentally when we start saving and start spending. You would have known this. Clients find it very difficult to get off that hamster wheel and flip that switch of being accumulators and then stop and then start spending. So our profession has one questionnaire for both, mine has one for each one because they're fundamentally different, in my opinion. Yeah. So they ask different questions when you're going through that different environment. So when you go through that questionnaire, if if you if you turn out to be what's deemed to be a cautious investor and you've got very high, lofty financial goals, then there's a good likelihood that's probably not going to come to fruition. Would you agree on that?

SPEAKER_00 20:13

Yeah, I mean, yeah, I suppose it's yeah, I suppose it depends upon how venturous they are, but yeah, I can I can definitely see the logic.

SPEAKER_01 20:21

I'm just saying broadly, if you're really, really cautious, yeah, and your investments are in in and in the way you invest your money is only likely to keep pace with inflation, for example, typically, because you're just cautious by nature, but you've set yourself really lofty goals, so I'd like to do this, I'd like to do that, then you know it it it you're probably lowering the chances of that happening. So it doesn't dismiss it, it doesn't say, but I've produced it produces five canonical letters which are deterministic through the AI, so it doesn't go off into its own thing, that's too dangerous. So everything in my software, all the calculators, all the um learning modules, and the things that integrate with it, they're all deterministic and built on empirical data, yeah, which I've embedded into the software. So um you don't get anything making it up as it goes along, so that's that's way too dangerous. So no hoolie says, so yeah, it it'll give a gentle reflective letter, encouraging reflection. I've I've spent an awful lot of time on the language. Um you know Neil Bage, the one of the top behavioral guys in the UK? No, Neil Bage is an expert on human behaviour and he's involved in the financial world. He speaks internationally, Neil. And I've run it by him a couple of times, and he really liked the language I use, you know, because he's an expert in what sort of lands, and you know. So I ran it by Neil and he's he really likes it a lot of it. So that that's where the idea was born from. It was born from what this is where I am now. If I keep following the path I'm going to be, what are the likelihood things? Are there any are there any um red lights up ahead that I mmm that might not work out the way I think it would? So it's a discussion point with the with the advisor, it's a discussion. Point. So the key the key crux of it is it does generate this letter from your future self. But there's a number of other things that tie into it to help the advisor.

Early Warnings For Client Behaviour

SPEAKER_01 22:09

So basically, the way your clients answer that question is it's also got a rag system built to it, red, amber, green. So it preempts the advisor. So if something spooky happens in the market, it will alert the advisor to the clients that are likely to be twitching right now based on the way they've answered those questions. So it gives an early warning system, a stress test as well. When you send it to the client, it also provides a pre-meeting brief. So a one-pager that the advisor can browse for five minutes before the client comes in, and it'll give them it'll it they should be hitting the ground running on all the points that are important rather than uh spending two hours in a meeting trying to eke this information out. So it almost makes the advisor, for the want of a better phrase, almost look like a bit like a mind reader. Okay. But but in an altruisticking and you know, in a fairer way, you're you're you're touching on the points that the client's got misconceptions about and you're hitting the things that are really important to them right off the bat. And when you look at a lot of the financial calculators out there, I've not gone down the road of cash flow modelling because there's great stuff it does that out there. It's not down the mode of asset allocation, there's great stuff it does there. This is all about understanding what's going on up here. And just to finish that bit off, in my experience, what I what I measure client, real everyday clients, how they think, is it's a bit like this, particularly when they do attitude to risk questionnaires. Imagine you're driving along on a sunny day like this weather we've had. If you if you're driving along on an uncrowded road with perfect weather and conditions, we drive along whether a care in the world on autopilot. No problem. But but what happens when the weather changes? We change the way we drive. We're more immersed in our conditions, in what's around us. Fog, heavy rain, thunder, wet, icy conditions, we change. And the investors do the same thing. So basically, the problem with attitude to risk questionnaires, one of the problems, or one of the problems I believe there are, is that when you complete one of those in a calm state with no concerns and worries, and you've got a coffee or a glass of wine, and you complete it, you complete that questionnaire exactly as you believe you really are. But then something bad happens in the markets, and you may perceive yourself to be an eight out of ten until the proverbial hits the fan, and then you suddenly overnight become a two out of ten because you're reacting to the news and the media. And that's a perfectly normal human condition. So, what my software is trying to do is to eke out how clients really react and not how they think they you think they ought to, or the way they think they ought to. Does that make sense?

SPEAKER_00 24:57

Yeah, 100%. I mean look, how you know you put someone in crisis mode, then you really find out, you know, their their kind of true colours and what you know what what they are. Um I I I I completely get that. I'm really I'm really, really interested as well in how you you know, do you give them scenarios based on that? You know, like how how do you how do you bring that out, I suppose?

SPEAKER_01 25:19

What the stuff what the driving addition mean?

SPEAKER_00 25:21

Yeah, yeah, yeah. So yeah, you know, how do you, you know, like you're in you know you're in heavy traffic and someone's just crashed into you, how do you react, you know, or you're in heavy rain, you know, you're gonna be more cautious.

Honest Risk Talk That Sticks

SPEAKER_01 25:30

Well, I mean it it all goes back, you know. I mean, I I I send to my I send my clients about ten times a year a video blog, and I refer to it as my um regular shot of sanity serum.

SPEAKER_00 25:41

Okay.

SPEAKER_01 25:42

You know to paraphrase Nick Murray, you know, if if you need a vaccine, if it if it's not administered periodically, it wanes. So you have to keep people on track, you have to keep giving them that regular shot of sanity serum jab every now and again to let them know, you know, to keep them informed and to make sure they don't forget core principles at investing. So I don't mind using I don't mind using that analogy. I tell clients, well, one of the most liberating things about the way I deliver my advice is, and I know this is gonna sound obvious, but but on unfiltered transparently, honesty. So I tell all my clients who are investors, you know, I've got this thing that says um I think the big lie in our profession is that awful statement, your investments can go down as well as that.

SPEAKER_00 26:26

Yeah.

SPEAKER_01 26:27

I hate that phrase because it's a blatant lie, to be honest with you. So I I tell all my clients, I look at them straight in the eye, and I say, be under no illusion, uh your investments are categorically 100% going to fall in value from time to time. Not might, not could. They absolutely will. Yeah. And then I reflect on the Mike Tyson story, um, which everyone knows that phrase, you know, when he was 21 in knocking everybody out, everyone's got a plan until they get punched in the mouth.

SPEAKER_00 26:52

Yeah.

SPEAKER_01 26:53

Yeah. So, so, and I tell clients that I said, you know, you can sit here quite calmly now and thinking everything's fine and investing is as easy as falling off a log. You look at your statement, it's worth more, you go online. But I say, be under no illusion, there will be something coming over the hill, as there always is, and it's how you react to that information. It's probably going to determine your outcome. I I've been a firm believer behavior determines outcomes, not charges and investment in performance. You know, I know it's important, of course it is, but behavior ruins more financial plans than markets going up and down, at least in my experience. In my experience. So I don't mind using those those sort of phrases and analogies, and I also use um I still use props when I speak to clients.

Props, Humour, And Cutting Market Noise

SPEAKER_01 27:39

Um I think it's underused personally. Um I covered it Yeah, I I covered it in the book, Storytelling for Financial Advisors. So for example, um if I get a new client referral coming to see me, the uh the only thing they see on a desk is that well so they they'll come in to see me for the first time and they'll see a crystal ball in the middle of the table with nothing else in there. Alright, and right, so let me explain what why I do it, okay? So um as soon as they come in, you know when you go down a roller coaster and they take the snaps of your faces when you start going down, and it's like that shocking awe and what's going on. I just wish I had pictures of all the clients that come in that have been referred to me that are greeted with that, because it it their looks on their faces are like, oh my god, who is this clown? What have I just walked into here? And then what I do as soon as they sit down, I'll go, oh Chris. Um, sorry, I said I meant to remove that one before you came in. It's the 68th one I've tried, and this one doesn't work either.

SPEAKER_00 28:47

Yeah.

SPEAKER_01 28:49

And what it is, it's an ice-breaking, war-lowering moment. It anchors clients. And I still get clients reminding me about it now, and I know they tell it at dinner parties and friends, because they told me they do. Uh and when the markets, because I just tell them I don't know what's going to happen. If I knew it was going to happen, I wouldn't be sat here talking to you. I'll be on the long retired on a beach in the Bahamas, you know, somewhere. So um the it just tells them right off the bat I don't know what's gonna happen next. If Warren Buffett doesn't know, what chance have I got? Yeah. And they get a common sense reality check. You know, well, yeah, of course you wouldn't know what's gonna happen. But but clients are often always asking that question, what do you think the markets are gonna do?

SPEAKER_00 29:31

Yeah.

SPEAKER_01 29:31

You know, we get it all the time. You know, oh Trump's done that, what do you think it's gonna do? And when clients say to me, What do you think the markets are gonna do? I just say, Oh, they're gonna go up and down quite a bit a lot like they normally do. You know, and I'm not being sarky or you know, I I explain what I mean by that, and clients get it. So I yeah, I use that there, you know, it's just it really it just lowers the tension in the room. Because, you know, I'm always trying to see it from the client's point of view. If the client's coming in, maybe they've inherited money. It can be quite daunting to speak to an advisor. Because the thing you're worried about is am I gonna look foolish in front of this advisor? Am I gonna be saying something I really ought to know or asking a dumb question? You know, so you've got to try and always put yourself in a client's point of view. You know, they've had money involved, they're emotionally charged, maybe they've inherited off of a lost parent or something like that, and they don't know what to do, and they come to see like you because you've been recommended to them. There's a lot of tension in the room, and I think some humour and uh you know, just just relaxing the client or making them see things differently. In my experience, you know, I mean, some people would be terrified to use that prop. You've got to use things that you're comfortable with. Yeah, um, I use noise cancelling headphones. I'll have a pair of them on my desk as well, because they don't expect to see it. And when we get into the market noise, I'll say, you know, these are my go-to when I go on an airplane. I don't want to hear screaming kids, you know, when I'm on a nine-hof, you know, right? And um, and I'll say they're fantastic, they're they're really great, these headphones, because they they they filter out all the stuff I don't need to know about, and they I only listen to what I want I need to hear. And I said, because believe me, when you're investing for multi-decades, you're gonna be subjected to an awful lot of noise in the media, an awful lot. Um, and I said, you know, you've got to really learn to tune the stuff out that's important and things that you can't have no control over. Um, so yeah, I think props are underused, and um I I have got them loosely in some of the modules, in the education modules that I've got with within the software, on visual animations that help land a point to a client.

SPEAKER_00 31:43

It's really cool. I've never I've never come across anyone that uses props like that. Um you know, maybe you know, draw some diagrams and things like that, but actually having a crystal ball on their desk, I think is that's uh super cool. I never kind of thought of it like that either, which is um yeah, which is you know, not only does it get the message across, but clearly it's a great icebreaker when you first start talking to someone. Um and it's that memory point, it's that touch point, like they you know it's it's it's a nice story that they associate with you um and makes them feel at ease, which ultimately, like you said, whenever you're trying to get anyone's behaviour or whenever you're trying to talk about a difficult subject, making them feel comfortable and making them feel at ease initially is uh is what's so important. Um so so important.

Purpose, Plan, Portfolio And Passion

SPEAKER_00 32:28

You really, really are passionate about behavioural finance uh quite clearly. Like how how have you maintained your passion with it? Like what what what sparks that passion on a daily basis?

SPEAKER_01 32:43

Do you know what? I think I need to see a psychiatrist, you know, right? Because I don't know whether this is a curse or a blessing, but I I get ideas from the strangest of places. I could watch a drama, I could watch a killer line. Have you ever watched the series Billions?

SPEAKER_00 32:56

Yes.

SPEAKER_01 32:57

One of my favourite TV shows, brilliant writing. And and I'll watch an episode and one of them will just say a line. They'll deliver a killer line, you know, in it, other acts will or you know, whatever. And it and something just lights up in my head, and I think, God, I could use that in a in a different, I can use that as a as a metaphor or something. And I'll always make a note of it. You know, I'll always make a note of it. Lines in movies, TV shows, I don't know what it is, something just sparks a magnet thing. That's quite interesting to say that. I could expand on that. So, and like I said, I don't know whether it's a blessing or a curse, but I'd and I'll make a note of it, and then the next morning I'll play with the idea and think, well, how would that land in a certain client situation, just you know, just using that. But yeah, I have got a passion for it. Um I'm not a I'm not um a programmer or you know a coder. I I basically taught myself vibe coding from about 18 months ago, two years ago, and it's something that anyone can do with a bit of time and patience. The learning curve has been like that, I won't lie. I mean it will it has been incredible what I've learned doing it, but any advisor can do this because you're basically speaking to programmers like this and they're doing it immediately, you know? So yeah, the I don't know what I think I I do want ultimately clients to have I know this is gonna sound obvious, I do really want clients to have good outcomes. And and and I don't want my phone ringing ever with someone saying, You never said this could happen. I don't want I haven't got time in my life for those calls. So but but by closing all those doors and managing clients' expectations and giving them their regular shot of sanity serum on principles, largely from Nick Murray's teachings on my ad. It it just my phone doesn't ring when markets go wrong. And it is plugged in by the way. I honestly don't get calls. When COVID came, I had about three or four people that needed an arm wrapped around them and a reminder of their long-term plan. Because my my philosophy has always been purpose, plan, portfolio.

SPEAKER_00 35:03

Yeah.

SPEAKER_01 35:04

Always in that order. What are you trying to do? What do you want to do? What do you hope to do? That's the purpose, obviously. Then we formulate a plan that serves the purpose, and the last, least important thing is the portfolio that drives that engine.

SPEAKER_00 35:17

Yeah.

SPEAKER_01 35:17

You know, um, I know it sounds quite obvious, but clients, you know, clients, they just that they start saving for no apparent reason. There's no end goal, you know. So yeah, the the passion, I don't think the passion is going to leave me. Um the PFS have asked me to give a talk at their conference in November, which I've gratefully accepted. And I'm gonna be covering in my presentation some of the stuff I've demonstrated today and read and why storytelling in business to me is one of the most important things. You know, we grew up on stories, you know, a bedtime story, what happened next? What how did the hero get away? And and and we used to tell stories around fires fires, you know, thousands and thousands of years ago. We all love a good story or a good joke, you know, a scene in a movie. And and and it makes it immersive. And if a client can see themselves in the scene, I think ideas land more powerfully and they sort of take ownership of it. But when we go into business, we stop telling stories for some reason and we bombard people with grass and plot grass, and uh not for me, it's not for me, I'm afraid.

SPEAKER_00 36:24

I also I also feel that people do that a lot because they're not necessarily overly confident in what they're talking about. Um and you know, a lot of people do try and bamboozle people with things that they don't really understand themselves, but you know, they think that that's how it's meant to be done and it and it and you think it makes them you know, I think it makes you sound intelligent.

AI As An Advice Force Multiplier

SPEAKER_00 36:42

I'm I'm really, really interested as well, like you know, in in your use of AI. I don't want to, you know, kind of do a good ten minutes to start talking to you on this now because I think it's again for someone who's been in the business for th you know for in the profession for 30 odd years um who doesn't necessarily need to use this. Clearly you've got you know, I'm I'm not gonna say clearly you do have a passion. My question should be do you have a passion for technology, or is you know, is it just kind of a an enabler to for you to be able to spread what you are passionate about, which is you know the the behavioural finance side.

SPEAKER_01 37:17

I am a tech aid, I do like my gadgets and my toys, I do honestly. I do. But obviously AI is a bit bit a little bit different from that. Um I just think we're a great time to be an advisor. I just wish I was 20 years younger. You know, that's the that's my regret. I do a wish, I wish I was 20 years younger. Why? Because I think people coming in the reason I say that is because the opportunity that young advisors have now got for me is a huge game changer. So I again I don't mind telling clients, you know, I like I love having frank conversations with clients because I think it comes across as being human and honesty is paramount in our profession, obviously, you know, naturally. But I do like being really honest with clients, and and I tell them, I say, look, you know, you you pay fees for for me or our company, managing a company, to look after you and to be there when you need us, you know. You're not interested, and nor would I be interested in what goes on behind the curtain. I'm not interested. You know, I want I'm interested in this and being able to get all of you as quickly as I I need to and you know talk me through some tough times and make sure I don't self-sabotage. That's where clients get the value on. And if we can get AI to do most of the heavy lifting, the stuff that goes beyond the curtain, that we have to do to be compliant and satisfy FCA rules and regulations and to and to you know do practice. Well, in my mind, that frees up the time for education and real conversations with clients that value. And I know this sounds all high and mighty in Night and Shining Armour. I'm always aware of that when I say this, it's going on in my head, you know. You're coming across as fluffy and woolly, you know. But the the honest truth is if I was a client, this is what I'm paying for real conversations about you know my life and what's going on and how things might change and go the right way or the wrong way. And I'm not interested in all the stuff that you've got to do as a practice to be allowed to practice. I think anyone would take that view. So AI now, we're on the cusp with this fantastic tool AI, which is going ahead at breakneck speed, where smart use of AI will take care of most of the stuff that we have to do to practice and will free up much more of the time that clients really value. And that's why I'm envious of young people that will embrace this and use it in a smart way, so that they're spending most of the time speaking and educating clients, because I think education is massively missed in our profession and way too much jargon. Um so yeah, I yeah, the passion, I don't think that's gonna leave, you know. Um I love to talk about it and and do these type of things and get it across. And um, but yeah, that that's that's why I I do what I do. I just I really think it's a great opportunity.

SPEAKER_00 39:59

Agreed. I think it I think as well that it's uh so and I think it works at all different ends of scale as well. So like you know for people that are doing this themselves it gives them the ability and the you know the empowerment to be able to essentially develop tools that they might have had to pay for before or that that you know that they you know would have to you know spend their own time with a developer trying to figure through. You know, and I think it I think the same is like is is even true like for let's say a medium to large size firm like ours, like we'll so we employ 24 developers, which is not atypical of a financial planning business quite clearly, but you know, been heavily invested in technology, I understood the power of it from from when we started and have invested in it. But now it enables me to produce tools very much at a POC MVP stage, you know, like minimum viable product that I can put in front of a developer and actually show them, look, this is what I want it to look like rather than weeks and months of them trying to get up the curve. You said your learning curve was like that. Typically, when we're trying trying to train anyone who's not a financial planner on what we're actually thinking and saying, they've got to get up that curve pretty quickly themselves as well. So, you know, giving them you know, this is what I want it to look like and this is how I I I want it to feel, and this is what I'm really trying to say is like has been so empowering for me because I don't feel like I'm waiting on someone, uh-huh, but then also it's empowering for them because it enables them to do their job quicker and they're not wasting time producing things that don't necessarily know aren't aren't necessarily fit for purpose. So it's it's it's it's also you know it's it's also powerful and it's you know it's it's really really taken shape now, like and the fact that anyone can really build most things to a to you know to uh maybe not an enterprise level, but definitely to a level that uh is uh you know is uh is is uh is okay and and is usable for uh um for for most consumers. You also said a really interesting thing that I I wanted to ask

Speed Of Reply As A Superpower

SPEAKER_00 41:51

you about as well. And you you said that advisors who use AI will replace those who don't. What you know what what does that mean in terms of you know actual planners and for you and your business? What like what what what what what does what did you mean by that?

SPEAKER_01 42:04

Yeah, it's my it's my opinion. I I I don't think I to be clear on it, I don't think AI at the moment will replace advisors, but I think an advisor using AI will probably replace an advisor that isn't because they're bound to become more productive.

SPEAKER_00 42:19

Yeah.

SPEAKER_01 42:20

If a client suddenly gets a lot more contact and more access to their advisor, they they probably won't understand immediately why that's happening. But it's because it's freeing up the time to do that and what the clients pay for. So yeah, I I think you know, I'm not I'm not gonna say obviously it's a blanket approach, that's gonna happen across the board, but I can see a lot more of it happening because the client, the the client again, won't see what's going on beyond the curtain, they'll just realize subliminally that they're somehow getting more information, valuable information in education, or a bit more soft touch contact from their advisor. Of course, that's for the advisors that do use the the time saved to do that, obviously. Some might want to go on a golf course for four hours a week, whatever. Yeah, I don't know. But if if you're gonna if you're gonna use those time savings that tech gives you to apply more to what the clients are paying you for, then the clients are gonna over time see I'm getting a bit more contact, or as a there's a closer eye on this now. So um, and that becomes a really important commodity. I mean, I think one of the most underplayed traits that advisors have, which I don't think is mentioned enough in our profession, is how quickly you get back to clients. I think that's been underplayed for years, you know. Um what me and my PA Sharon, we're almost obsessive about it. If we get an email coming from a client, I'm being honest with you, it it's normally responded to within about 10 minutes from one of us. I mean, I'm not lying, that is true. That is honestly, because Sharon's are a desk all time, so as soon as an email comes in, she acknowledges it immediately. And clients they love that. I would go so far to say is you you may not be the person they go at another point with on a front.

SPEAKER_00 44:00

Yeah.

SPEAKER_01 44:01

You may not be their cup of tea socially, but they'd never want to lose you as an advisor because no matter where you are in the world, you're always replying to them at lightning speed on something which is really important to them at that point in time. So there's nothing worse than you leave three emails and two voicemails and they're not even acknowledged.

SPEAKER_00 44:19

Yeah.

SPEAKER_01 44:19

I mean that it frustrates the hell out of me. And and I do it, I know it in most people. So we almost become a bit obsessive about, you know, we've we've got it, we're on it, you know, and we'll update you shortly. And and um so I think that's an underutilised trait um in our profession.

SPEAKER_00 44:35

I think that's a massively underutilised trait as well. I think you know, for gener in generally, I think people think they have to the answer when they go back, but I think that acknowledgement and building expectation is what people, you know, okay, great, they'll they'll come back to me, they've got it. Like you, it's that sense of relief rather than it putting it in the kind of in the ether and then hoping for a reply, you know.

SPEAKER_01 44:54

Yeah, because you know, clients realise that you know you they're not your only client, yeah. But giving the acknowledgement that we've got it and we're dealing with it and we'll get back to you tomorrow, whatever, that that's that they're fine with that, you know. I mean you know, and you know, if you've got clients that are too demanding, you know, and we've all had them in the past, yeah, then again, Nick Murray's phrase is the classic one that I've used for years. Don't let the crazies onto your arc.

SPEAKER_00 45:15

Yeah.

SPEAKER_01 45:16

He said that years ago, don't let the crazies onto your arc. There's always someone else that gets it.

SPEAKER_00 45:20

Yeah.

SPEAKER_01 45:20

And if some people are ridiculously demanding, then I'm not I'm sorry, but they're not worth your time because they're just too much of a pain.

SPEAKER_00 45:26

And they take up they take up your time that you would put into someone else. It's an opportunity cost as you get busier. And I think again, a lot of junior advisors will probably struggle with that initially. Obviously, when you've got a hundred clients, then maybe it's not as much of an issue, but you like you will never be able to get to the hundred great clients that you want to service if you constantly take on people that are going to be draining you as you go on.

SPEAKER_01 45:48

Yeah, because when I was at Perl Assurance, I'd go out on a Friday night in the pouring rain in the middle of winter to write a £10 a month per assurance or you know, an IB policy industrial branch as it was then. Yeah. You know, and I think to myself, there can't be many of my peers that can go out on a Friday night for an hour and a half and another 8200 quid, you know? Because that that that's where I cut my teeth in this business all those years ago. Um, but no, I I I agree with you. That's you know that that's certainly my philosophy when it comes to that anyway. Awesome.

Fees, Value, And What You Control

SPEAKER_00 46:16

And I I think the AI, the AI piece you talked about as well, was kind of the relieving the you know, the the almost and enabling advisors to do more of what they want to do. I think it's some it's some crazy static like 40% of an advisor's time is actually spent on advising, 60% is spent on other things, which is always baffling to me. The kind of question that comes from it though, and and and the normal the normal one, I'd just be keen to hear your your kind of last views on this, but it's fee pressure. So my take on fee pressure is is that you know I get asked regularly, do you see fee pressure in advice or do you see you know fees lower in uh as um you know with within the financial planning? And my answer is invariably yes, I do think that they will reduce over time. Um and for a number of reasons. I think number one, as an advisor, you it doesn't mean your earning capacity will, uh and it doesn't mean your margin uh you know it means your margin on a maybe an individual client, right? Um but ultimately your margin over all the client bank that you're you know that you're that you're looking after shouldn't with AI because it just enables you to become more efficient and and effectively it also is going to lower your cost as well if you use it effectively. And hopefully if you lower your cost rather than keeping all that margin, then ultimately you can pass that on to your client. So to lower that, you know, uh overall revenue per client might decrease, but actually profitability per client remains relatively you know, relatively static, actually giving a better outcome for everyone. You get to do more of what you want to do, you get rid of a load of costs that you know that were you know kind of weighing you down and maybe linear to as you took on more clients, um, and ultimately for the client you provide uh the a serve the same service or hopefully a better service for for a cheaper price over time, so everyone's winning.

SPEAKER_01 47:58

Yeah, I mean the fee argument's gonna go on forever. You've got the fixed fee brigade and you've got the assets under management brigade, right? And and my honest opinion after doing this job for over 30 years, I'm not for I'm not I'm not fuss which one you use. My my here's my honest opinion. If you're open and transparent with the client on what they're paying and what you're gonna provide for them, if they're happy, I don't see the problem. Yeah, they can always change advisors, they can always look online, they can always do research, they can always speak to a friend if they're if they think they're overpaying, you know? If they're not getting value for money, they don't think they're getting value for money. And and I I give clients the get-out clause all the time. I always say to them, look, if you genuinely don't believe you're getting real value from me, you should never be afraid to raise it or say, you know, this isn't working for me, I think I can do this on my own. I I don't want to have those conversations which are borderline all the time. Yeah. I don't I don't want it. If I see someone like in the dentist chair looking up at me, you think you know that patients in a dentist chair are fearing. I don't I don't want that. Who wants that in their life? No one. So I'm I always give my clients a get out cause and say, look, do you think you're getting value from me and Sharon and the team? And if not, you should never be afraid to walk away because you've got to do what you feel is best for you and your family. So I'm I'm not one side or the other. You you can argue about this all day, you know, ethical side, moral, or fixed fee and all the rest of it. You know, I mean, sometimes, um if I'm being real honest, I think sometimes fixed fees can be dressed up as the emperor's new clothes. Because if you look at if you look at what some, you know, if I was in a client, I would look at what my fixed fee is and I'd immediately express it as a percentage of the assets. And and if it turns out that it's 1% of the assets, and the guy I was used to seeing was charging me 0.6 or 0.7, morally they might say, well, you'll get a fixed fee.

SPEAKER_00 49:41

Yeah.

SPEAKER_01 49:42

But the other guy might think, well, yeah, but it's still costing me a lot more, and I was getting the same anyway.

SPEAKER_00 49:46

Yeah.

SPEAKER_01 49:46

So all I'm saying is I don't have a I don't have a real opinion on which one of it. It's whatever works for your practice, providing your clients absolutely believe they're getting value for money and they're happy to sign the fee agreement. I don't see the problem with it personally, you know. We're not the only profession that charges differently for services, you know. So this argument will rage on.

SPEAKER_00 50:06

No, agreed.

SPEAKER_01 50:07

I mean, I tell clients, and I keep telling them time and time again, there are only two things that you have any control over. Right? Be under no illusion. One is the fees that you choose to pay for your ongoing advice, that's up to you. If you want to pay someone 2% a year in London, or you know, that's that's on you if you're gonna pay that. Um and the only other thing you can control is the your behaviour, the way you react to the news. Yeah. And then the sooner you get used to that, that everything else is out of your control, you'll probably have an easier time as an investor. You know, not fretting over stuff that you've got no control over. Those are the only two things you have any control over: fees and how you react.

SPEAKER_00 50:46

Agreed.

Closing Thoughts And What Comes Next

SPEAKER_00 50:47

Look, Mike, that was absolutely awesome. I feel like we could have actually gone on for this for a whole other hour or a couple of hours. Um, so I'd love to invite you back sometime. Um, but yeah, really, really enjoyed our conversation today. Thank you so much for your time. Um, it's been really interesting hearing what you're doing, hearing how you're going about things, uh, and I look forward to hopefully keeping in touch with you uh in the future as well. So thank you very much.

SPEAKER_01 51:11

Yeah, thanks very much. Just to finish on the conversation I'm having with some of our large fintech companies, um the conversations are quite advanced and serious now, so it it you know, hopefully it'll take off and it will be a bit B2B um offering from from larger providers. Um so yeah, exciting times, but um and I and I really appreciate you you're for me to come on to the show today, Chris. It's been great to meet you personally and talk to you, and um very kind of you'd invite me, so I've really enjoyed it. Thank you ever so much.

SPEAKER_00 51:36

You too, Mike, me too, and good luck with everything, and I'll speak to you soon. Thanks very much.