Active vs Passive investing: A Pointless Debate for Financial Planners?

In this episode of Financial Planner Life, host Sam Oakes sits down with Andrew Spence, Co-Founder of Aspen, to challenge the industry’s most controversial questions - what we call the Marmite topics of financial planning.

Aspen was born out of something deeper than disruption. After a personal health crisis led Andrew to reflect on the impact of his work, he decided to build a model portfolio service that put purpose, clarity & client outcomes first.

Now, he’s leading the charge on topics that divide financial services professionals daily.

🚨 Here’s what we cover:

• Is evidence-based investing just clever branding - or genuinely better for clients?
• Why most risk profiling tools are broken & unhelpful
• Should financial planners choose sides in the active vs passive debate?
• The rise of Bitcoin, the return of gold, & the role of private equity in portfolios
• How Aspen uses tech that actually works for financial planners & their clients
• Why first-principles thinking beats copy-paste product design

Andrew shares why financial planners need to stop overcomplicating things & start designing investment experiences that genuinely serve the people behind the portfolios.

This is a must-watch for:
✔️ Financial planners seeking clarity in the chaos
✔️ Firms looking to improve their MPS offering
✔️ Advisers questioning the one-size-fits-all model
✔️ Anyone ready to rethink what investment management should look like

📩 Learn more about Aspen or book a discovery session. 
🔗 Follow Sam Oakes & Financial Planner Life on LinkedIn

00:00 - Intro: From engineering to investment management  

00:34 - Andrew's early career & first role in wealth management  

02:45 - A personal health crisis & the search for purpose  

04:44 - Is finance a noble profession?  

05:39 - Why start an MPS business in a saturated market?  

08:06 - How engineering logic shaped Aspen's investment approach  

09:33 - Building intuitive tech for financial planners  

11:05 - Starting from scratch: Aspen’s early days & growth  

13:28 - Early supporters & the power of trust in MPS  

14:41 - Social proof & buying decisions in financial planning  

16:17 - Could AI avatars replace financial advisers?  

18:21 - Active vs Passive - is the debate pointless?  

22:34 - Is evidence-based investing just marketing?  

25:16 - Why risk profiling is broken  

29:01 - Should Bitcoin or gold be in portfolios?  

32:44 - Is private equity too complex for clients?  

34:43 - Andrew’s approach to LinkedIn & thought leadership  

37:04 - Sam’s take: Building trust & visibility on LinkedIn  

41:04 - Why YouTube is a goldmine for financial planners  

42:37 - Sam’s full breakdown of a video-first marketing setup  

45:19 - Turning content into conversations & conversions  

46:32 - Engagement matters: Don’t post & ghost  

48:24 - What’s next for wealth management & MPS?  

50:01 - Final reflections & how to connect with Aspen  

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Chapters

• 0:00 Andrew’s Unusual Path Into Finance
• 5:40 Cancer, Purpose, And Founding Aspen
• 10:30 Why Launch An MPS In A Crowded Market
• 16:20 First Principles And Goal-Based Design
• 22:30 Building “Portfolio Discovery” And Client Experience
• 27:20 Adoption, Early Supporters, And Growth
• 34:00 The Power Of Social Proof And Video
• 38:10 Active Vs Passive: The Sensible Middle
• 46:10 “Evidence-Based” As A Marketing Label
• 52:00 Risk Profiling And The Need For Standards

Transcript

SPEAKER_01: 0:00

Welcome to the Financial Planner Life Podcast. Today I'm joined by Andrew Spence. He's the co-founder of Aspen, a new model portfolio service, in one of the most competitive areas of wealth management. Andrew's story isn't typical. He started in marine engineering, faced a life-changing cancer diagnosis, and came out the other side determined to do things differently in this industry. Now we're going to dig into why he launched Aspen in such a crowded market, what makes it different, and then we're going to get into some quick fire marmite type topics Andrew's known for debating on LinkedIn. So active versus passive, do you really have to choose? Evidence-based investing. Is it real or just the buzzword? Risk profiling. Why do advisors hate it? And we're going to look at Bitcoin, gold, private equity. Do they belong in a client portfolio? And of course, LinkedIn. What works, what doesn't? And how he has been using it and some of the success he's had. Now we're going to finish by looking ahead. What's next for wealth management? What actually matters to Andrew now? So let's get into it. We've got to know each other for quite a long time. I've seen your journey from the very beginning, and I spoke to you back then. And to see where you've gone today with Aspen is phenomenal. And I think the future's looking really bright for you. So today it's about finding out about your journey, where you're going, what you do. And let's take a look at some of those Marmite topics out there about MPS and see what people are saying and see what your thoughts and feelings are about it. So, in the first instance, can you just give our listeners a bit of an insight into who you are, where you came from, how you got into uh investment management?

SPEAKER_00: 2:02

Uh great to be on, Sam. I've been looking forward to this for uh many weeks now. So uh no, it's great to finally be doing it. So um, yeah, the journey into wealth management for me, um so I I studied engineering at university. Uh and uh one of my issues with the engineering discipline, why a lot of people actually don't stay in engineering, is that uh it's uh very uh theory-based and there's very little practical uh elements to it. Like I did marine engineering, and uh, you know, I wouldn't have known the first thing about stripping an outboard engine when I kind of came out of it. So yeah, it's it's um so you do see a lot of people actually leave the engineering discipline. Um and I think it's because the lack of the practical elements to it. But yeah, it was 2006 or so, and um, you know, based off in Scotland and Edinburgh, and Eborg has quite a thriving uh sort of asset management and wealth management. I think it's the fifth biggest asset manager uh city in Europe, actually, Emerg. So it's uh it's a big financial center. And 2006 everything was going well, obviously, two years prior to uh the financial crisis, and uh and I you know went for an interview, I was looking for um you know uh jobs as we do when we leave uni and uh went for an interview with a wealth manager called Gerard at the time and and got the job. And like it is uh you know, in professional services, you start a job, you start doing exams, and that's you now in the in the industry. And so um, so yeah, I was um uh starting in EMBR, and then after a few years, I I moved down to London in in 2010 um and became sort of head of fund research for Williams LeBron uh in London. Um and then I was there for for another couple of years before moving to the West End uh in 2012 and and joining a small firm uh to set up uh an MPS, well to set up the co-set up the investment side of uh of a business and doing model portfolios. And that was really in the early days of uh uh of model portfolios, um they're really just kind of getting going. Then previously things were very much full discretionary bespoke. Um and so that was the you know, that was the starting point of my model portfolio kind of journey. And so I was there for um about six years, and as I was kind of coming to the to the end of that, I was in London, had a small um health uh issue, which was um, you know, that episode with with cancer. Um and you know, I think that that was me 10 years into my career, and it was kind of a a kind of pivotal, transforming moment for me. Um I I remember sort of being in the hospital, we're going through the treatment process, and um and the doctors and nurses would ask me, you know, what do you do for a for a living? And um I was like, oh, I work in finance, um, but I my my parents are farmers, so we bring food to the world. I I was just I had this I had this perception that finance, we weren't doing you know, a huge amount of good. And the the business that I was with at the time was a perfectly good business. We'd provide per perfectly good solutions, but there was something in me that just wasn't comfortable. I didn't feel it was a very noble kind of profession at the time. And so that you know, was kind of uh that sort of three to six month period, you know, I did, you know, quite a lot of thought in terms of what the future looks like kind of beyond the treatment process. And um, and so it was a couple of years later later uh in 2019 that I then um you know left uh employed work and and looked to set up uh Aspen. And it was really to create a business that that patient uh in 20 um 15, 2016 would be proud of and to provide um you know investment services that the doctors and nurses uh would um you know would be great for them as well. So I think that was a bit of a seminal uh kind of period for me in terms of uh uh also wanting to create something and grow something, um, but to create something and grow something in financial services that created real value uh to the people that we provide our our you know kind of solutions to. So that was kind of the background to to Aspen, which was really properly started in sort of 2020 uh or so.

SPEAKER_01: 6:04

Love it. I think sometimes when we go through life struggles and strains and we're actually faced sometimes with death, we're looking at it, it can really kind of make you think about what it is you do and how you do it and the impact it's having on others. Is it is it purposeful? But often how we feel about it as well, you know, am I actually making a difference and how am I making a difference? And I think we have to remind ourselves sometimes in the work that we do that where we may not feel it, it's the outwardly positive impact you're having on others. So one of mine was always this higher purpose of attracting more people to the financial planning profession through the Financial Planning Life podcast, you know. I if if I always kind of have that as a shining beacon of higher purpose positive impact, I can always turn to that and feel good. And I think we often kind of can downplay the value that we add and worry what people can actually think, right?

SPEAKER_00: 6:57

I totally agree with that, Sam. And my mindset has shifted in the last five to seven years on on that. You know, I think you know, people's money is so important to them, and you know, looking after it and doing and responsibly and feed people feeling that you know they have financial confidence is such an important thing. You know, financial anxiety is a very real uh issue, and if you can, you know, do things to improve that and you know ensure that people have a good financial life and a good retirement, then you know, I I think there's there's um you know, I think it's a very noble profession um done well, yeah.

SPEAKER_01: 7:33

Model portfolio services is an incredibly crowded market. Whatever possessed you to get stuck into that and set up a brand new business in that space?

SPEAKER_00: 7:43

Yeah. Um, so uh in asset management, it's actually very difficult to start from grand zero. Um, you know, a lot of people uh in the industry sort of spin off and uh or or have like seed backers and these things. But I started Aspen, I knew I knew the financial advice landscape, but I I I I really only properly met one advisor once. And so I really was grand zero. We didn't buy any assets, we didn't do any deals. It was all about creating an awesome business and and service proposition. And um and so yeah, it was um it was you know, going into Elon Musk has a good saying on this, you know, if you um if you go into a new market with a lot of established uh and well-known um you know competitors, your product or service can't just be a little bit better than those. It has to be quite a lot different and better for people to use you over you know the the high street names that people are comfortable with. And I think that's particularly strong in financial services because people need a lot of comfort um that you know their money is safe and and and kind of well looked after. So, you know, it's not easy uh kind of starting a new business within financial services, uh particularly from scratch. And so it was really important that you know what it is that we did, and I knew the MPS space extremely well. I could see that you know, everyone that was launching people were falling over themselves to launch um MPS because it was a big growth area within wealth management, but pretty much everyone was doing variations of the same thing. Let's just roll out another range of risk profiles, model portfolios, because that's what everyone else is doing. And you know, that's reasoning by analogy, what everyone else is doing, rather than back to my engineering start, reasoning by first principles, which is what does the market want and people want and need? And so that's what I focused on, and um, and it was really creating solutions um around goals, what do people want, and and a bit away from pure risk profiled, uh kind of based model portfolio creation. So this notion that you as a client fill out a questionnaire, you come out as risk profile three, you go into model portfolio three, right? We're on to the next. I believe that clients have goals, dreams, needs, and out and and and objectives. And so we create the toolkit of portfolios that are able to deliver on those goals uh and objectives. And then we have great tech delivery and awesome services, kind of are kind of unique in terms of what we what we offer.

SPEAKER_01: 10:11

I love that. Let's bring this back because I always like to understand founders of businesses and their backgrounds and how previous experience impacts the new business that they're in and makes it unique, right? Your an engineering background. So just can you give some examples of how your engineering background and mindset actually has shaped the proposition aspen, some examples of that?

SPEAKER_00: 10:33

I think it comes back to again the first principles way of thinking. I I have a fairly no-nonsense uh kind of approach to financial services is is full of marketing jargon. Uh, you know, people you roll out product. I mean, we saw in 2021 everyone was again falling over themselves to launch ESG products because that was the thing in vogue. Um and so for me, in creating the investment philosophy and the Aspen business, it was like I've had, you know, had at the time, you know, 14, 15 years of experience in the industry. I'd seen the good, the bad, and the ugly of what makes a great investment uh or what the you know what what an investment solution should and shouldn't have. So for me, it was about okay, that makes good sense, that makes good sense, and that makes good sense. It wasn't like, oh, let's go all in on that camp and and ignore kind of the evidence over there. Um it was like, okay, let's pull in the evidence from all angles and create the ultimate kind of um kind of philosophy and flow. So I think that that engineering uh kind of grounding of sense, logic, uh, science uh was was um was helpful in in the creation of Aspen.

SPEAKER_01: 11:48

When you very first um, well, you remember when you very first set it up, you were a few months into it, you invited me to come and actually see the end-to-end process of what an advisor would see as well. And I thought that was really slick. And I remember at the time thinking, this is slick, this is quick, and it's simple. I got it. I'm not a financial advisor, and I got it. How has that progressed since? And how does tech play a part in your business? Because tech can be massively overwhelming. There's a lot of it out there, and a lot of people just don't know where to start.

SPEAKER_00: 12:16

Yeah, it's a really interesting one. Financial services, we're we're pretty good at making complicated technology or complicated pieces of software. I'm a bit of a technophobe. Um, when I get a new piece of software, I just want to be able to switch it on and start using it. Um, I don't want to go through 10 factor authentication. I just want to, you know, I want it to be intuitive and things. So for me, in building the software uh in Aspen, which we call portfolio discovery, uh, and then there's those kind of bells and whistles that have been added to that, but it's basically taking uh a financial planner and their client through an interactive journey of you know what their goals, what's what's their kind of wrappers, investments, uh options, risk, appetite, and these sorts of things, and creating a lovely experience for that and the creation of a portfolio solution. And so the client goes away thinking, I really understand that, rather than this notion, again, like they said, here's your questionnaire on risk, here's your portfolio, here's the stack of paperwork, you know, you're good. Um, and so it was really trying to um bridge that gap of financial literacy between you know the the investment side, uh the planning side and and the client's experience. I think how long have you been going now? Uh so properly for five uh five and a bit years now. Yeah, so it was uh it was really uh the start of the pandemic um that uh that that things kind of that kind of got going, yeah.

SPEAKER_01: 13:38

Being a crowded market, being a tough market to win um appreciation in as well and recognition in with financial planners, they're a very um critical bunch, aren't they? They can be, you know. Um but let's think about what is well what we don't even think about, but what's your adoption been like in the last couple of years then? You know, you've been going now for five years. It might have been a bit tough in the beginning, most startups are, right? But over the last couple of years, have you started to really win over financial planners? And what's that looking like? Have you increased your client numbers?

SPEAKER_00: 14:13

Yeah, so yeah, such an interesting, and I feel you know, I just I'm so grateful for the early people that came with us um in terms of because we didn't get them any senses. We didn't say, you know, if you come with us, we'll give you X or um or whatever. Uh and so you know, I remember our first clients, um, Richard at Clear in the Midlands, and then um, you know, got to know a few um few firms in Edinburgh pretty well, and um, you know, Carlton and and Tom Hamm and Wellington and the Ellis sisters, they've been huge supporters of of Aspen and early in our journey, and um, and you know, and then it's a bit of a snowball effect that it starts to kind of build and stuff. We now have 60 uh firms that that that we work with around the UK. And um I I I really love our clients. Like I really enjoy spending time with them, they provide great feedback. Hopefully, we provide a great service. And I I'm I'm loving the experience. I don't think, oh god, I've got to speak to that lot. I mean, you always have a few that you're you know, maybe a bit like, okay, well, that's that's fine. I mean, everyone has those clients. Uh, financial planners will be able to say that client and that client, they're not the best, but uh they're fine. But I would say on on the whole, I I truly truly enjoy spending time with with um the financial planners that we have. I think the industry has transformed in the last 12 12 years or so, and um, and it's uh it's a thriving um kind of kind of industry. But uh and we owe a lot to you know, Louis Brasso joined us um two years ago now. He's done a tremendous job in terms of growing our brand and growing our presence. Um, you know, I think people, I think people need to see someone or a business something like seven or eight times before they can feel comfortable kind of moving to that that next stage. So it's been really important for us to kind of get out and vote and and and be seen. So we're kind of on that, hopefully on that, on that strong growth curve.

SPEAKER_01: 16:04

Um Yeah, Luz Brasso, like a lovely guy. I've I've I've met him numerous times, really personable, cares a lot, asks really good questions, and he's just an interesting person to talk to. He's been great. Tom Howe. You know, if he's a if he's a a you know an advocate of your business of using it, I've known Tom for quite some time since he started his business up. He came on the podcast a few years back. Really like Tom, you know, Tom's no fool, you know, farming background like you, he's he's no fool. And you know, if Tom's a if Tom's an ad, you know, if he's if he's looking at Aspen and thinking this is the bee's knees and I'm using it and I'm an advocate, I think that's a really great, um, a great voice to have behind behind your business that, you know, from a social proof perspective. It's interesting you said people have to see things seven times. I live in this world now of social proof. I'm the type of person that if I talk to you, I'm going to go on to Google and I'm going to search for you, or I'm going to go on to LinkedIn and I'm going to want to find some information about you. And it is interesting because we're saying it seven times. And the people are making buying decisions before they've even spoken to the key person of influence within that business. They're making the decision as to buy, by what the thought leadership is being said from that company or individuals within that company. Are they ticking the boxes? Are they providing me with an example of whether or not a client is using that, a client, say an IFA, is using your services. And what are they saying about it? How is it benefiting them? What was the journey like? So it's super, super important that when people do search and they do see those seven things, right? Whether it's dripped over a period of time, so they get an email, then they go, oh, who is this person? Then they follow you on LinkedIn, and then they see something on LinkedIn, and then they might do a bit of searching on Google and find a YouTube video where they might find you on my podcast, and all of a sudden that's another great affiliation. So it's really, really important that companies that are looking to grow their audience and grow client bases are being seen and heard outside of just simple reviews, like you know, advisors using your vouchers. I've got a thousand people on vouchable. Brilliant. That's one. That's one area. I do think they and I, and you know, the written word is becoming so distrusted now that I have to hear and I have to see to be able to make a buy-and decision. I always use my daughter as an example. Nine and a half years old, dad. I want a bike. Great, go and research bikes. She's not going on and reading about bikes, she's going straight to YouTube and she's watching some kid riding the bike and telling the story of bike. So everybody that's coming through now wants to see and hear something in action. I'm not going to buy a television unless some cool dude on YouTube has made a really good video about every aspect of it, and then I'll buy it. The written words dying, yeah. It's the video audio here.

SPEAKER_00: 18:49

What's your view on the AI digital avatar of someone like if if you were an avatar today and we were having this conversation, how much confidence do you think uh people would have in that?

SPEAKER_01: 19:01

I think a lot. Yeah. I really do. You know, and and I had this conversation with a financial planner recently. If I can contact my financial planner 24-7, and it's a version of them, and it's completely compliant, and I know 100% that what they're telling me is the truth. And at a point in time where I'm feeling anxious, it could be sat in bed at 10 o'clock at night worried about my portfolio or money, and I can go in and I can ask a question, I can go through a contract, and the contract reads it back to me with an answer based on what the question I've asked it. I think it's fantastic. I think it's a great addition to be able to be accessible to a client. And it's a it's then an ability to create a level of service which is cost effective. Because if the avatar is able to answer multiple questions, then you know that's a cheaper level of service, hopefully, in the future for everybody involved and making it more accessible. Different people require different levels of touch points. Not everybody has the time to sit down with a financial advisor or wants to sit down with a financial advisor. I'm not really that. I I have a lot of questions and I and I'm an emotional guy. So I want my kind of answers as quickly as I physically possibly can. And I've got no problem if there's a lovely avatar. In the beginning, I think these avatars are going to look a little bit robotic.

SPEAKER_00: 20:18

Yeah, right. Yeah.

SPEAKER_01: 20:19

You know, over time they're gonna look they're gonna look fantastic. Now, do I want do I want to tune into a YouTube video? Do I want to tune into a podcast with the perfect avatars talking back and forth to each other? Probably not. Probably not. Yeah. Because they haven't built the businesses, it's the people behind it who built the businesses that then have built the avatar. So I want to know from that authentic conversation. So that's how I feel about it. I welcome it, and I love the idea of a San Oaks avatar at some point, you know. I really I really do. And yeah, that's how I feel about it. Yeah, interesting. Yeah. What about um you're a vocal critic, you know, you're an ambassador to some of the big Marmite topics on LinkedIn. So let's fire at a few of them. I've got them written down here as well. So active and passive investing. Do you think you need to pick a side?

SPEAKER_00: 21:16

Um this is such a hard topic all the time, and uh to the point now people are getting a bit fed up with it. But it's uh I I don't view it as active and passive, I view it as uh decision-making powers and no decision-making powers. So either you've um passive, you've you've made a decision once. Um so I actually think all investing is a form of active decision making. Like, you know, you've if you buy Vanguard life strategy 60, for example, perfectly good uh uh option, um, that is an active decision to allocate capital on behalf of a client in a certain way. Um to say it's like you know, decision making is taken out or there's no investment selection there, it is a decision. Um and so the the the the difference between uh active and passive from there is it's one decision and no further decisions. Um whereas active management is one decision and the ability to make future decisions. Um so for me that's the difference between uh active and passive. But I believe we're all in the profession of financial services actively making decisions on how to allocate capital uh on behalf of clients. Um so I actually, you know, but within the uniqueness of active and passive, beyond that, you have um, as I said, um one decision, no further, um, multiple decisions kind of going forward. Um and then there's a whole spectrum in between. And often when we talk about active management, uh we we talk about the security selection, um, so the picking of stocks. Um, and you know, there is um reasonable evidence to suggest that that's quite a difficult um game. And it's it's a zero-sum game in the fact that um, you know, for every person making a right decision, there is a person making a wrong decision. And then if you take out the effective fees on balance, you're gonna be kind of losing uh uh if you have a portfolio of active funds. Um so that's at the one spectrum is the full portfolio of active funds versus, you know, I think where a lot of people landing are now is seeing a lot of the um you know cost uh and reliability uh in terms of market return performance of passive and then maybe selective use of active funds. But what gets completely missed out of the conversation is the most important driver of a portfolio, and that is asset allocation. So everyone often on the active side, um active passive debate focuses on security selection, where the real focus, um, and it's 80-90% of your return driver should be on asset allocation. So you can actually have a very low-cost uh portfolio uh and it for it still to be active. So we have our passive plus range, which is flexible asset allocation um and using low-cost funds to then then populate that. The thing then you need to avoid in the flexible asset allocation is the thing called market timing and trying to kind of pick and choose when you think a recession's coming and these sorts of things. But you don't need to do that. And you know, there's quite a lot of you know, in the pure passive camp, there's people out there that are very quite rude, uh honestly, about this people with decision-making uh uh ability. And um, my pushback uh has just been a little bit of a reality check that it is not, you know, you don't need to go to that end of the spectrum. There is actually a middle ground uh that actually has coming back to the engineering point, a lot of evidence uh and data around it it kind of bringing value. So it's an interesting debate. I think it becomes too polarized. I think there is a sensible middle ground. So picking a side then need not need be, right? No, no. I think it's interesting because people in the active camp see actually a lot of the benefit of using passive building blocks. Um, whereas people in the pure passive camp think that that camp's total idiots. And so um, yeah, I think there is on the spectrum, full passive to full active, I think here is about the sweet spot, um, in my opinion. Yeah. But there's nothing wrong with pure passive or or a more active solution. Um, but I think the sweet spot is kind of somewhere around here. Yeah.

SPEAKER_01: 25:16

Yeah, it's not so black and white. It's a bit like the old IFA restricted debate, isn't it? Like people get so kind of bent out of shape and it must be in one camp or the other, the other one's better. It's like there's a gray area in between. Someone said to me, like, Sam, you think in black and white is a bit too much. And I was like, okay, well, how do I stop that? And they were like, one side's black, one side's white, and there's a shit ton of grey in the middle, different race scale. And it's like, and I often think, am I in black and white thinking? Where should I be? Am I in you know, the scale of grey in between? Can I move around? Am I okay to move up and down it? And I think it's worth it's worth it, isn't it, to explore and to listen and to debate and engage and and and then listen to the evidence for it as well and make a decision. Nothing should be so fixed. But evidence-based um investing. So um is it even a thing?

SPEAKER_00: 26:07

Uh no, it's not. Uh it's been a uh marketing term that's been created uh to um to uh you know convince people to to kind of uh invest in it in a certain way. Um so again, uh this is uh something that I push back on uh quite a lot in in the industry. Um and it comes from my engineering background where uh evidence and science and data has a grounding in in truth. And um the reality is an evidence-based portfolio, there is a near infinite number of possible allocations and decisions that are made in the creation of an evidence-based portfolio. So there is actually no central source of truth for an evidence uh-based portfolio. I I first came across the sort of phraseology and the science behind it when I attended a dimensional conference in in 2012, and it was exceptional. I have to say, I came away thinking this is a very, very sensible um way to do things, and they talk about the evidence, and they have done a lot of work and a lot of great work uh over the last 50 years on um understanding um the the movements in in assets. Um they they believe in the factors of value, profitability, and size, and there's some really, really sensible data that kind of sits sits behind that. I would say they're the the closest um there has been to sort of evidence, data science-led investing. Um, but unfortunately, um a whole range of providers are then piggybacked on that phrasing uh and then sort of start to describe their portfolio as evidence-based because it gives some scientific grounding, where in fact um it's just completely a marketing term. Um, you know, the the principles of generally evidence-based investors is better fixed asset allocation and using low-cost funds. That's kind of it. I could create for you today, Sam, uh, in the next uh 15 minutes, an evidence-based portfolio. That will be different to someone else's, to someone else's, to someone else's, to someone else's. Um, and so for me, it just doesn't make it makes no sense to to kind of call it. It might be fine, it might not be. I think to think that evidence-based and this way of thinking has solved investing is complete nonsense. I need to come off the fence on it.

SPEAKER_01: 28:23

Yeah, is it just like a bit of a mark a marketing term? Like people like to coin yeah, it's just a marketing term, right? It's interesting, grabs people's attention, you get in there. Yeah, it's clever though, isn't it, at the end of the day? It's people talking.

SPEAKER_00: 28:37

Yeah, um, it's not the the thing is there's nothing wrong generally with the portfolios under an evidence-based banner banner. It's just they're not evidence, they're just kind of an asset allocation that someone's decided and they've decided on some index funds to populate it, and that's that that's it. It'll probably be fine, but it's not evidence.

SPEAKER_01: 28:58

Okay, cool. So risk profiling, financial advisors, um, wealth managers seem to hate the process. So what do you think needs to change there?

SPEAKER_00: 29:08

Yeah, so risk profiling is another kind of uh interesting one, and I don't think this is this is too marmited. Uh it's one that advisors and us as wealth managers um just really frustrated with the process. Um, you know, I used to have clients and I used to have to go, you know, give a client uh a risk profiling questionnaire 10, 20 questions. I think one of them at the time was how do you feel about being on a roller coaster? Um and so they're they're really quite awkward and and and tricky questions that um are quite difficult and sometimes to to answer for the client. So they're quite uncomfortable. Um, the output generally isn't that helpful. And and it's say you come out with a say you fill in a questionnaire as a client, and you're you have a relatively low tolerance, you feel you have a relatively low tolerance for risk, and you might then answer a series of questions that come out too. out of five Sam but you have and this is your pension that we're looking at you have 30 year time horizon um for that for that um pension so what we now have to do is we've gone through this process and the FCA you know it needs this process of risk profiling and we've come you've come out a two now we need to go through the process of getting you up to a four or a five because that's where you should be you should be having most of your money in equities despite your risk tolerance being low. So we now have to go to an education piece of you know what it means to be invested volatility is just part of the journey all that sort of thing and to get you comfortable and that it kind of puts me at risk a little bit as a advisor because you come out as a two and I'm trying to force you up even though you should be a four or a five. So the framing of risk and the the the word risk is used far too much uh in our in our industry because risk is in fact staying in cash um uh it's not if you've got three year time horizon but if your time horizon is five years plus then risk is staying in cash and so the framing of risk is is done very poorly from our side of the fence in terms of asset managers there's like I don't know seven main risk profilers out there we need to write a check to them every quarter a big check um for them to risk profile our our model portfolios it gets spat into some engine that they have comes out we get assigned a three for our our portfolio that three is three for that provider it's a four for that provider it's a 2.7 for that provider it's seven out of ten for that provider they're all different in terms of their methodology in terms of how they score risk and it's complete nonsense it is complete nonsense and so what we need like we have for funds is a standardization of risk across the industry from other portfolios and wealth management and that's either one to seven one to five one to ten uh and we agree on what volatility bands or something like that um is that risk profile and then the providers can still exist but we all base off that um kind of simple risk profile it's much simpler for the client and easier for them to understand I was with an advisor the other day they're transitioning from one provider risk profile advisor to another provider they both score out of 10 they're gonna have to move the client from a six with one provider to a nine with the other provider and the client's going but I don't feel like I've gone out three notches in risk and they're having to explain it it's nine yours it's still the same risk it's just we're using a different provider. It's extremely confusing for the end client. So really I've got the end client in here in mind that everyone in the chain from us to financial planners hate the process and so we need a big radical kind of change in it. And when I put a couple of posts on LinkedIn I get so many messages about it. I mean it's it's it's a real issue. It needs to be directed from the regulator to produce a standardization and then we all need to improve the process of the clients um from from there.

SPEAKER_01: 32:54

What about Bitcoin and gold should that be in a portfolio do you think?

SPEAKER_00: 32:58

Yeah so both have been raised um again it's a bit of a you know we're generally quite used to bonds and equities as being the main asset classes in in in portfolios and so the use of alternatives has come and gone over the years. You know if we were sitting here uh 10 to 15 years ago you would have seen a lot more absolute return funds uh in there so standard like GARS for example it had 65 billion of of assets a lot of that was um financial advisor led that was after we've come out of an extremely difficult decade for equities um and so we would see another assets in there equities have had a very very good run uh over the last 10 to 15 years since the financial crisis um and so that has been um you know we're we're we're understandably seeing a lot of uh assets hurting into into equities over the last couple of years um we've obviously seen bitcoin uh grow in uh in its popularity and its awareness uh and obviously the price has been something that people are interested in when something is going up a lot uh and then obviously in the last two years gold has gone on a on a big tear um up from about$1700 to about$4,000 uh dollars today and so people are obviously thinking should I be including gold as part of uh the portfolio it comes into the news um as does Bitcoin and uh so advisors are kind of clearly getting questions uh on that uh Ray Dalio you know he's a pretty sensible guy uh running Bridgewater or previously running Bridgewater um you know he advocates around 15% of your asset should be split between Bitcoin and gold. I don't think you have to hold them um but I do think you know we we have a four season strategy which is basically the ultimate diversified uh portfolio we do have a 7.5% neutral weighting uh in gold uh in that um and so you know people are seeing we're seeing monetary debasement at the moment um of of fiat currencies and gold is the is the sort of beneficiary uh of that and so I think gold probably does have a place in a it depends on the mandate of the portfolio but if you're looking for an ultra diversified uh portfolio then then gold has a position uh in in that um a 6040 portfolio of equities and bonds equally is is is is a fine uh option but i i think i think completely discounting gold as a as a silly asset that you can just look at and it looks nice back you is is is not necessarily the case I think it has a an absolute store of value and um and I think it should be considered um as part of a portfolio yeah Bitcoin obviously is uh is one that we've now regulations have been eased finally after the 10,000% rise in Bitcoin um for uh investors probably be the top um that investors are now able to buy uh exchange traded products in Bitcoin and Ethereum I think at the moment uh that's regulation that's come into place this month and so it is now an investable asset um for us to consider um I think it probably will be some time before you start to see it more in in in portfolios if at all we'll see how that all pans out yeah well big big shout outs that Bitcoin IFA I spoke to him a little a little while back and you know maybe he's a been quite ahead of the curve on this one um but he's going around and having conversations with financial planning companies he's running uh presentations seminars training sessions about how to have the conversation with the client and how to approach it yeah um so if anyone's listening to this and they're unsure about how to do that or whether they should or why they should check out the Bitcoin IFA I know he's got a podcast and um he's definitely somebody to probably get into your business and run a few training sessions and um he seems to know his stuff. Yeah he does I've spoken to him as well and uh I think he does a combination of in-person uh uh training sessions or you can subscribe to webinars and things so yeah he he he knows his stuff and definitely worth I think worth exploring understanding and then discounting if you wish but at least kind of going there and considering yeah what about private equity should financial planners be considering this yeah so it's another one that um has uh you know I think people are quite uh disparaging of the use of private equity in poor and in sort of client wealth um I think the issue with private equity is um uh liquidity um it's very illiquid but that's the nature of it um you know the the the lockup periods are there you know I run a private business if we had to offer daily liquidity for people that would be difficult but I think we'll bring a lot of value to shareholders if they're happy to you know stay in for a period of time um so that's the nature of private equity you do need to be locked in for a for a period of time um I say but it but it is an issue um if people are needing to buy and sell from their uh portfolio so that's one issue there is then uh the the sometimes the professional upgrades that you need to do for clients there's a lot of paperwork that comes with with private equity there's a lot of opaqueness in in terms of what you actually um hold um and then there's this mark-to-market issue you know if you do get a market fall it's still prices at that current level and I think people find that a bit a bit tricky as well so I I think under its current structure private equity is a real challenge um there's just a lot of barriers and friction points for financial planners to to access it I think the transformation uh will probably be when um uh tokenization improves uh and you can actually um hold uh elements you know if you um consider the property I'm in at the moment or a private company if you have uh an easier way of buying and selling uh those um the the component parts the shares uh in that um uh illiquid asset I think that really uh improves the the the ability to access private equity but I think that's going to be a few years away yet.

SPEAKER_01: 38:41

Love it. Well listen thanks for answering those questions. I want to move on to LinkedIn now because you've actually been quite active on LinkedIn I would say probably within the last 12 months more so than ever. It's a great place to have discussion and it's a great place to bring up those Marmite topics and get people involved in expressing how they feel. But I'd love to know as somebody who's now adopting LinkedIn in part of your networking marketing how are you finding it?

SPEAKER_00: 39:08

Yeah the LinkedIn journey has been an interesting one over the last 12 to 18 months. I've uh I didn't consciously decide I'm gonna start posting on LinkedIn. I think it's quite obvious when someone does that you get like two weeks worth of lots of posts and then they sort of fall away and so for me it was more you know I was I've been on LinkedIn for a few years um but then there was just things on there that I was like I don't know I don't know if I fully agree with that and uh and so I just I wanted to start to be a bit of a voice for um for a certain section of the market that perhaps you know had a a healthy debate with a with another section of of of areas in in investment management. And um and so I think it's been a tremendous I've I've thoroughly enjoyed the LinkedIn journey. I've met some really interesting people both online and uh IRL uh and so it's um it's it's it's been great. And I think my the the I think the great opportunity on LinkedIn is authenticity. I think because everyone sees it as a as a work platform. So everyone kind of moves away from their uh their true self into sort of work mode and then sort of writes in work mode but if you can actually be authentic on LinkedIn um um and and um respectful and these sorts of things then I think that's the real um kind of opportunity um on LinkedIn so I really enjoy it I really enjoy the debate and discussion and it's managed LinkedIn's done really well as a social network to not um descend into you know you know the Daily Mail comments section or you know other social media platforms where it's just like a slagging match of of stuff. So it's it's a really great platform for um you know for you know debate and discussion and you know as a byproduct of that you you build your brand and you build the brand of the business and these sorts of things but that wasn't a rejective for me um but it has been a byproduct of of the whole thing. What about you Sam? I mean you obviously do a lot on LinkedIn as well how have you you know find it and and you're you're more on other channels of communication as well where do you see LinkedIn LinkedIn's place in in the industry well apparently 1% of all LinkedIn members actually post.

SPEAKER_01: 41:16

I read that last night as well yeah I think we're I think we're in a bit I think we're in a bit of a gold rush when it comes to LinkedIn I think what what people um struggle with is how to position yourself um so whether that's how you position yourself when you're working for a company or how you position yourself as a thought leader for your own company like how are people going to take you seriously are they going to um dislike you if you put an opinion out are you going to put people off and I think there's a lot of worry there's a lot of fear and there's a lot of anxiety as to why those people are and they're the reason where it is an education piece like you can come across as a dick on there without a shadow of a doubt and I've seen it and I've advised certain people to not put too much out there that's going to make them come across the wrong way you still have to protect your brand and you still have to have like kind of PR experience I would say and there's a there's a ginormous risk of really kind of alienating yourself with with people. So you have to be quite careful and you have to tread carefully without being somebody the kowtows to everybody in a people pleaser I think there's a style and approach to how you come across and it comes and I think it comes also from one the authenticity not just picking so don't just pick at things you know you get people who are like oh I'll pick at that I'll pick at that I'll pick at that and that's their strategy to pick at things it's not and if you're gonna pick at something come at it with something that's going to add value. Come out with something that's going to be educational as to the reasons why can you see the positive in what the other person's saying can you expand upon that with your point of view that's going to hopefully create not conflicts but collaboration to move forward and take it up idea forward. Nobody owns an idea and how an idea isn't you know there was an idea once that the world was flat you know there probably is still with some people but there was an idea that the world was flat and now it's not so without discussion without engagement it's never going to get it's never going to move forward. And I think if you're a facilitator of conversation and you are a facilitator of debate in a positive way you will be seen as that and people like to follow somebody who is willing to challenge as much as they like to follow the person who's going to just abuse people because it's just entertaining. But those people get boring very quickly. Whereas the person who's actually forward thinking and willing to put their opinion out there in a constructive way, I think people respect. So I think it's about getting respect and it's getting collaboration and competition going. And it's just making sure also you're having conversations because if you're not having those conversations you're not going to be winning business. Now a lot of us are on LinkedIn to be able to stand out and let's face it try to generate new business and those conversations need to be had right so you need to be having a few a bit of engagement on say like a LinkedIn profile on your post but you need to be taking that to the comment to the um uh to the DMs as quickly as you possibly can and you need to take a conversation into the DMs and you need to take that conversation out of the DMs onto a Teams call where you can then really get into detail to know that person. And that's the way I I I look at LinkedIn. Now the way to do that is to create interesting compelling content that drives the drives that awareness drives engagement conversation into DMs where you can take it off. So I just think people often live a bit too much either watching other people and not engaging enough or putting content out and hoping someone's going to land in their DMs and then buy from them. That's not the case use it as a tool to outbound connect with people through the messaging and get them on the telephone and get them on Facebook because it's that's why I love podcasts because podcast is all about sort of engagement it's all about collaboration it's all about learning it's about raising other people up and not myself so it's not an ego egotistical trip. And then it's about then content creation off the back of it because one video one podcast can become 10 different assets and there lies your social media strategy on LinkedIn that you've been worried about like one hour session can be turned to a load of content. And the thing is with me is I use LinkedIn I use YouTube because that's the fastest growing demographic is on LinkedIn as well as the 50 uh the 50 year old plus group right so from from my perspective no it's on um YouTube oh YouTube right right right fastest growing demographic is 50 plus which is why right now for instance as a financial advisor if you're not considering YouTube as a platform for you to be talking about what it is you do and the problems and the solutions that you can offer people and most clients are averaging around 50 years old in a client portfolio for a financial advisor that's the fastest growing demographic and they're not watching on uh on their on their phones they're watching on on TV so they're going from like iPlayer into uh YouTube and searching for the topics so if you take a take a James Shack or something or um you know or a Pete Matthew you know they're they're doing phenomenally well on on on YouTube and there's lots of American guys and girls that are doing it as well. You flip all their you flip all their the topics of conversation on his head and to see what the most top performing ones are. 80% of those is retirement planning. You know that's what people are searching for is retirement planning conversations. You know and if you look at it they're the top performing ones. So if you're gonna set up a channel you're gonna create content let's say as a financial planner lean into that because that's the most searched lean into uh YouTube because fastest growing demographic is 50 plus the 60 plus market is also really fast growing and some of the top top things they're searching for is finance obviously because they're at that right they're at that age right they're at that age where they're gonna start looking around and again so if you're creating something I call it like video first marketing or podcast first marketing. You take a video and then from there you create your strategy.

SPEAKER_00: 47:18

Yeah I think Sam I think and this is where I think you're in a sweet spot um I think I think it's a bit like AI people know that they need to be producing more video content. People know that we need to be integrating AI into their business we just don't really know where to start.

SPEAKER_01: 47:33

On the video content side of things where do people start in terms of the creation of content so you could use a you could use a platform like we're using today which is real side so that might cost you like 20 pounds a month I think it is maybe even less than that right buy yourself a good camera. I'm looking directly into an Elegato teleprompter right now which is basically an additional screen to my computer so I can drag my riverside into here look directly into my camera and I can start to record content. I've got a 4K camera behind me with a nice lens that tot in total that cost me about 650 quid right elegato teleprompter was 250 pounds. My microphone is a shore microphone you can't see it but it's a good microphone it's on a stand. So in total my kit being at home if I include my lights as well is probably about£1200 to get myself set up. Now I'm then able to go onto other people's podcasts when I've got a lovely little setup so I can be guesting on other people's podcasts. That's a great way to get yourself out there. And it's a great way to build authority because if they're good podcasts, your name's attached to it, your company's attached to it, AI, an AEO search will reference those podcasts that you're on up against the vouch for reviews that you actually have and maybe some reviews in authority on your website and go, this person's legit and they're going to start to push you up the rankings and you'll start to get found. So if you search for like financial planning career podcasts I'm number one in the world on Gemini which is you know Google's it's a pretty sick right you know so so when you buy the kits you're thinking right I'm buying the kit but what can I do with it? Well one set yourself up a podcast on Riverside build your podcast now using things like BuzzSprout might cost you again about£20 a month right and that Buzz Sprout will distribute your podcast to Spotify to Apple it won't distribute it to YouTube so you'll have to upload it to YouTube as well. I think be realistic with where you're going to start when it comes to content creation um I think one of the most untapped markets within financial planning right now is B2B so if lawyers are your core subject then go after lawyers. If um HR professionals are because you're a corporate uh you know you're a corporate um employee benefit specialist go after HR professionals call it call it HR heroes partner with an amazing HR influencer and let's get HR people listening to your podcast because that's who you want to listen turn those listeners into clients so start thinking a bit strategically and logically about who you're trying to impress who you're trying to target and go after that and stick at it it is consistency. So buy the kit it's not expensive get a little bit of a strategy around if I take a YouTube video like this I could then outsource that to the plethora of people out there whose jobs are to edit stuff into clips and everything else for YouTube or for TikTok and all of that kind of stuff. Use that realistically if you want to if you've got the time as well right which is why probably don't commit to it every week to do an episode maybe biweekly in the beginning and then squeeze as much lemon juice as out of the lemon as you possibly can with that one piece of content and source it so you don't have to worry too much about it and all you have to worry about is booking your booking your guests in. But what what I think people forget as well is that it's not about creating content and putting content on LinkedIn and hoping it comes into you because you'll spend hours doing that and nothing will come into you. I know that because for three years nothing came into me I had no inbound business for three years. But once you start to build authority and people start to see you, they start to trust you so then you start reaching out to people then they start to buy from you. So you have to use the video you have to use your podcast whatever you're creating as a tool to business develop did you watch this video? Can I invite you on this podcast? Oh, would you like to set your own podcast up? Would you be interested in a partnership with the Financial Planet Life? You're obviously keen to build video content you don't know how to do it. I do an end-to-end service and take that stress and pressure away from you and by the way I've talked to you about my video first podcast strategy that will take care of all the LinkedIn and it's evergreen so it continues working the year after as well and oh my god like I I I don't know how to do that. So it's about articulating what it is you do connecting with the audience that you want to sell to investing in the kit understanding how to use it and being consistent and that to me is a LinkedIn strategy. Just watch other people engage even if you don't want to create the content be somebody who engages on other people's posts because the algorithm will reward you for you will notice yeah I agree with you posting ghost or just not engaged is is is not the is not the strategy the comment section is actually where quite a lot of uh interesting stuff happens uh on on LinkedIn and it's being used a lot more now uh which is which is great so yeah I think it's a great forum and uh I really enjoy uh really enjoyed it yeah yeah perfect well andrew listen great conversation with you today thank you so much for sharing your insights um and I think you've really touched on some of those Marmite topics with your viewpoints and hopefully fingers crossed people to come back to you and they will talk to you and they want to understand a little bit more they know you're a collaborator they know you're somebody who's not arrogant and the idea here is you like to have conversation and welcome conversations from financial planners to learn more.

SPEAKER_00: 52:58

And at any point I assume they could come to you have a demonstration maybe a webinar something along those lines can we take something put it in the comments section for them to find absolutely you know there's um obviously find us through the website and these sorts of things but uh always happy and always enjoy you know conversation uh around any of these topics and obviously about Aspen and what we're doing here but uh it's really just uh uh trying to be trying to anchor everything in um common sense and uh and and things there are actually a variety of sensible ways of doing so there's definitely bad bad ways of doing things but there's a a spectrum of of of of of good ways too so uh yeah always encourage open mindedness and and these sorts of things too so yeah myself Lewis um we've got Francis uh in the in the north as well now so um yeah there's all sorts of channels that people can get in touch with asking there but yeah we can put something in the comments brilliant I always like to answer this I always like to ask this question as well of anybody really that comes on the podcast especially an engineering mind future thinker younger business owner what do you think is next within wealth management and financial planning we'll leave it on that yeah that's a big question but I'll keep it short um so I think the last 10 years 12 years um you know we've seen we've seen quite a lot of consolidation uh in the in the industry amongst financial planning and in wealth management uh we've seen a big rise in indexing in terms of on the investment side um we've seen big cost pressures uh come on uh you know certainly on the the investment side the platform side uh and the service and product side of things um so that's that's been the last 10 to 12 years I think goodness me the next 10 to 12 years is going to be an interesting one um I actually think we'll start to see more deconsolidation it's becoming easier and easier for people to set up uh on their own through networks and you know plugging into good technology and these sorts of things so I I think you know you do see these things go in cycles um I I think we're gonna see uh more of that coming so I think we'll see lots of uh independence um and you know the big topic is is is the use of um of of AI and technology as we as we evolve as a as a profession both in uh investment management and in financial planning I think financial planning is fairly well insulated for the next 10 years uh I think investment management areas of it will be challenged by AI in terms of portfolio optimization and and these sorts of things um but I think if you're open minded and always try and keep on the front foot of things uh I think we will um I think you know the the the good businesses will survive and thrive and those that um have their head in the sand uh will will probably not and so I think you know you've you've probably got to stay on the front foot of these things.

SPEAKER_01: 55:41

Absolutely stay up to date. Andrew brilliant talking to you thank you so much.

SPEAKER_00: 55:44

Thanks Sam