TRAP: The Real Adviser Podcast

15 - We Need To Talk About SJP

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In this St Patrick’s Day Special latest pile of TRAP, the Trap Pack discuss

  • Three glowing reviews of the podcast, read by Andy in his inimitable style
  • Topical issues, including one IFA saving a client from a £450,000 fraud; the road to hell that is pension Lifestyling; the unbelievably rapid demise of the Vanguard advice experiment
  • Meat and Potatoes: St James’s Place - a commercial behemoth. But at what cost?
  • Questions posted by our beloved Trappists @RossTaylorFP @cianmetiscfp
  • Culture Corner

Links referred to in the show:

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Unknown:

Welcome to The Real advisor podcast, t r a p twerp please follow us and join in the conversation on Twitter at advisor podcast where you can suggest ideas and themes you'd like the truck team to discuss. Also remember to like and subscribe to our YouTube channel and leave a six out of five star review on iTunes. Doing all this really really helps us which means we can do more to help you. Now let's head over to the studio for the latest pilot trap

Nick Lincoln:

yes indeed, dear TRAPPIST, welcome back to Episode 15 of the real advisor podcast te R A P trap. My name is Nick Lincoln and joining me as ever are the rest of the trap pack that is called the voice with Alan the storyteller Smith and and the heart. Now this is a very special edition because it's St. Patrick's Day when this guy goes out on the 17th of March and from the bottom of our hearts. Certainly Andy and myself we'd like to thank the Irish contingent the TRAPPIST in Ireland have been a great support of the show. We wish you We wish you a fantastic St. Patrick's Day. This is the one day of the year where the Irish drink heavily and follow the horses the other 364 days of the year. abstinent in every respect. Is that true car?

Carl Widger:

Absolutely. 100% Although we don't really drink that much anymore. But yeah. Delighted to be launching this podcast edition on St. Patrick's Day, especially really, really, really special weekend because tomorrow we play England in Dublin for the Grand Slam. And let's just say we're quite hopeful after England's recent performances, so

Alan Smith:

yeah, let's let's talk about that, shall we? England this game last week

Andy Hart:

and see French he just did he just did so no, I

Alan Smith:

think we should really spend a little bit of this could be a big conversation. What was the score again? Okay, I heard it was a record some some world records were broken.

Nick Lincoln:

Okay. England turned them on France France 53. And it was it was on to use d3, it was an absolute absolute sham bloody shambles. But having said that, credit to the hardest to work out how bad England were and how good France I think France was really really good. England were very, very bad. But the French were absolutely brilliant. And I think they've given most teams a run on that. I agree.

Carl Widger:

Yeah, I totally agree. Like they're definitely the second best team and

Nick Lincoln:

I wish the Ireland France guy could be replayed with both both teams at Full Tilt it would have been yeah, great stuff. So yeah, it is what it is. and Ireland overcame overcame Scotland in a match where both teams I think were knackered off the first half and it was just, yeah, just a drawn out thing. Okay, listen, we've got loads to get through in today's in this episode, guys. So without any further ado, let's go over to Mr. Charisma. Andrew read out with your normal Vim and Brio and enthusiasm. Some more reviews that are the really basic podcast

Andy Hart:

over to me so three reviews. The first one is from Big Al's 02 entitled brilliant five stars. Love the dynamics between the four review very informative and entertaining. Next up is a review from seven seven bn seven seven from Germany. fivestars thanks a lot being here in Germany. As a kind of a pioneer. It's really nice to listen to you talk about the issues that are in my head. I am a CG DFA IFA with only a limited amount of like minded people here thank you to Alan for recommending trap. Regards, Nicolas, final review is from Andrew stitch comm just based around the Bristol area, like a fireside chat, sharing wisdom five stars wonderful as I was listening to your conversation, sharing nuggets of wisdom and experiences, I could picture myself in a country hotel and x more sat in a leather wing chair gently cooking next to the roaring log fire with a pint of X and will stagger my hand, a pen and the other and my moleskin journal resting on the table in front of me waiting to gather notes. That's it back to you, Nick. Brilliant,

Alan Smith:

that calendar conjures up tastic scene doesn't care. I wish I was there too. We should do a live

Nick Lincoln:

episode that those replays next so, so good. That just means a lot. Yeah. And that's exactly what I think we wanted to get from the this this this production for the audience just to feel they're a part of it. And they can make it they are sat somewhere and just listening to us knuckleheads in a nice environment

Alan Smith:

and spread spreading it across to other places. It was the gentleman from Germany who I bumped into at a dimensional conference recently told him about it and he just you know, that he's quite a pioneer over in that country, as well. There's very few people who are kind of real financial advisors and continental Europe so we are spreading the word.

Nick Lincoln:

That is fantastic that okay, let's give this episode some topical tidbits. So it's a kind of a date stamp for you. I've got an experience I want to relate to you don't need to comment on it. But if you or business owner. If you're an IFA, and you own your business and you're in charge of the banking, you might bank with NatWest and I bank with NatWest, and I have no issues with them whatsoever. And their mobile app is brilliant and their online banking is very solid. I never need to go into the branch for anything. Interest rates have gone up, and I've got some money sloshing around in the company bank accounts. For the first time in 15 years, I thought I might just see if I can get some return on this money now. So opened up a 95 day notice account with NatWest online, brilliant, few clicks done business account opened up the next day is there on my mobile phone as well. So with a couple of switches or digits, and I took this, I transfer a six figure sum into this 95 day notice account. Anyway, in July, I need to get some of this money out to pay myself a dividend. So I thought, Okay, I'll just set it up on my mobile app. And I can't do it. Again, strange, maybe at the door on the on the website. So I'll go into the website. You can't do it turns out that in 2023, I've got to write to my branch to give 95 days notice to get my money out that it's okay for me to switch the money in through my phone. But to get it out, I've got his apartment. My branch doesn't even exist anymore. It's now some service center in Leicester. So bad marks to to NatWest, who are generally very cool, but that that's, that's, that's our cake. The next thing from me, and then I'll shut up for a little while, you'll be glad. So I run this IFA forum, this Google group, I moderate and manage it nearly 240 advisers and paraplanners in it now i'll put a link to it again in the SoCal show notes is a great resource. If you've got a question, you put it out, and somebody in that group will know the answer. How to Chain last week, and I've been given permission to use this guy's name and the advisors name Ian Cairns of Argyll financial services from your neck of the woods. Mr. Smith, he had an email. Well, I'll read it out because we know what happened because Neil Liversidge, who's another IFA, who runs West writing Personal Financial Solutions, has put out quite a good little thing about scams on the back of this experience last week, so let me quickly get to this out of the blue, a widow contacted in Cairns, and said she decided to encash all of her investments of roughly 450,000 pounds, most of it within an offshore bond. She said she had no plans for the funds. She had ample cash reserves without in cashing them and the investments she proposed in caching, we're providing her with a two grand monthly income. The adviser Ian can said that doing this will create a massive tax liability and you just give me time to get the calculations from the offshore bomb provider. But the widow said no, I want this money. Now I don't want to wait for an updated cash flow or anything. And even put this up the group. So is this late? How do I deal with this lady? Obviously, the vulnerable clients thing is a big thing. And we need to be, you know, cognizant of when clients maybe aren't totally in control of their of their faculties when it comes to money and emotions. And she's a widow and blah, blah, blah. And he put it out to the group and people came back I said this sounds like fraud. You've just got to go back and really try and just drill down with this client. What's going on anyway, turns out it was was fraud. And the advisor Ian made person inquiries. So the fraudsters cold call this widow pretending to be quote an investigator from the FCA and her bank and quote saying that someone had tried to buy airline tickets with her account, and claiming that someone had also tried to set up internet banking on her account. During this phone call, they installed TeamViewer on her laptop, they then opened up a revolute account in her name. They registered her for Internet Banking. And they told her that someone was trying to access her investments fraudulently and she needed to cash them ASAP to her bank account to which they now had access. This is the killer bit and they told her not to involve her IFA as this would jeopardize their investigations in Cannes kept on going back to slide and say, listen that this is not like you. We've had a great relationship for years, we had a great relationship with your late husband for years, I know something's wrong, speak to me. And in the end, she said, I've been told to do this. And they stopped it. They stopped it. So just be aware, when people act totally out of out of out of character, there's probably something going on. And at the end of the day, it's the clients money you can only push so far. But here, these people this is a widow, she's not even on the mainland. She lives on one of the islands in a remote house. She's grieving, I imagined stereotyping that the husband from that generation was probably the one in charge of the finances. This is like the ultimate vulnerable client and these people who pray the plural for these people. It starts with C and ends with this. And if there are children listening, yes, there are a bunch of cards. The good news from this is that not only being can save her and all credit this guy and hope you get some press from this, those bastards will probably that probably already spent the half a million quid though with what they're going to get because they were that urged a few clicks from getting a great story and the value of having an IFA fighting your fight. So that's my topical,

Alan Smith:

you worry Nick, how many other stories are going on? Probably, you know, as as we're speaking with this baby without an advisor or with someone who's perhaps less tenacious or diligent. It's it's always it's awful. It's this is terrible. So what's the well done him on protecting his client from just an awful a disastrous set of circumstances

Carl Widger:

and doesn't just show that you Knowing your clients so well obviously E News client and you know, had built a relationship over many, many years. You can't do that if you're having an online relationship with somebody, you know,

Andy Hart:

any, any big changes of anything like investment portfolios or anything like that on multiple touchpoints, Texas emails, phone calls everything. I'm before I take any action on that. So

Alan Smith:

you've all we've all received all. We certainly have emails, purportedly from clients, can you please send money to this account? So it was something a bit strange a bit unusual? Yeah. And yeah, there's you never I think there's a few people got caught up with this going back a few years. Yeah. Yeah. But no, but it's there. Were there were wise, even to this day. Don't speak don't involve your IV because they knew

Nick Lincoln:

that Oh, yeah. So so yeah. Okay, so, okay, that's in the end. It's a good news story. And I'll put a link in the so called Show Notes to Neil liversedge is a little guide that you might want to use with your clients, just to be aware of what a scam looks like. Okay, the next thing on the topical tip bits is Aberdeen have sold that or however you pronounce this extended life have sold their DFM? I don't know who put that in the notes and who wants to talk about it?

Alan Smith:

Yeah, that was me just a brief thing it is. This there just seems to be a lot. There's always things going on. There seems to be a lot of things going on at the moment, sort of significant strategic moves with some of the bigger players in our sector, Aberdeen, Aberdeen as well as X standard life, just an interesting, you know, it's no secret, I've got a long history with that organization spent many a year working for them back in the day. And I just find it quite interesting. But all other things that have been going on recently, that the sold off, they're a business that they built up over many, many years. The discretionary fund manager business, which was called Aberdeen standard capital for a time has changed his name several times anyway is you know, several billion six or 7 billion assets under management just quietly sold off to her thinks that Lichtenstein asset management company that straight and at the same time, they've got another subsidiary business, which is a private equity investment business with other countless billions assets under management, which they've also carved up a wall, I believe it's up for sale, and we'll try to sell it this year. Just find it interesting that and at the same time, something else which was quite widely reported, is some of the big investment banks are getting very much into this market. This kind of, you know, what they describe as being the wealth management market. Morgan Stanley had their share price has gone up significantly in the last year or two because they apparently have got a very successful wealth management business, whereas Goldman Sachs has seen the share price struggle and a lot of the thing College Financial Times. One of the reasons for that is they don't have a viable wealth management business. And he made a point he said, what we really like is a recurring revenue model with high margins, which is good, although unless you're a customer of these organizations, but I just I just think it's there's a lot of maneuvering going on at the big sort of institutional type level. And I've got, I've just got a slight question mark hanging over and I've got no information whatsoever to suggest this but looking at the way things are going in Aberdeen, how the how viable going forward there. Is that not an IFA, but advisor arm coordinating 25 Actually,

Nick Lincoln:

well that's that's going to be a recurring theme. I think this episode. Okay. Thank you for that. Alan, unpack this industry voice key advisor challenges in 2023. I think a report from Schroeder's Andy, did you put that in the

Andy Hart:

No, no, that's

Alan Smith:

me as well, that was one of these. There was a sort of a recent report, industry voice key advisor challenges. Schroeder's, they went out and surveyed, I don't know how many, quite a significant number of advisors, and they came back and I just sort of shared it around the group there was they made some interesting observations and made me realize that maybe some of us operate in a bit of a bubble, some of the conversations we have, because I mean, I know I shared it with you, and you had a look at it. You had a particular comment that you extracted from it, then I added something else. What were your thoughts on that report, Nick?

Nick Lincoln:

And it's just the normal, you're exactly right. It's like you just sometimes the lid is open on the rest of the profession. And there was one particular line that irked me where advisors cited capital protection as the number one concern for their clients. Yeah, so this thing about you know, just locking down, locking down to cash or whatever, that's not capital protection in the truest sense. You want to protect purchasing power, that should be the number one concern for the people's clients. So that's just one thing that leapt out of me, but I'm sure there's other dross in there as well. And I think

Alan Smith:

the other point that I extracted, you know, the consumer duty on the horizon price and value conversation about price and value and so why we saw a further increase in advisors outsourcing their investment proposition have increased the level of outsourcing the reasons for this were inverted commas access to investment expertise. He's and get this effective management of volatility, volatility. At what point will people realize that volatility is a feature not a bug. We're not trying to get rid of volatility,

Carl Widger:

and hence for all the reasons you both have just mentioned, that's why structured products continue to be sold, which is like, you know, just the bane of the investment world, unfortunately. But it fits, I guess, capital protection, and it fits consumer duty and looking after the clients and whatever. But that's not Yeah, we put up all the results on the show the optimal

Nick Lincoln:

sub much different. Okay, great stuff. Mr. Hart, Oh, this isn't now talking about things that are coming. And this this fascination with capital protection and protection of purchasing power, one of your trigger, trigger subjects lifestyle in my friend.

Andy Hart:

Yes, so we'll briefly touch upon this, you might want to sort of unpack this in a bit more detail on a future show. But life styling is the sort of investment process of moving from what they would describe of high risk investments, which we call high returning investments, which is a global equities, when they're going to officially retire at a certain point in the pension fund. Most of the assets are in what they call low risk funds, which might be guilts might be fixed income might even be cash, but real life outcomes for clients have something that's been designed or set up or legislated to protect people, as inadvertently harmed a lot of people. And it is pounds and pence harm nothing else, let's say but that's obviously a serious harm. We've heard of stories seen client stories of portfolios or pension values at 500,000, now at 370,000, perfectly aligned waiting for the client to buy the annuity that they're not going to buy. And then they're well, very much underwater because of this unusual situation that happened within the fixed income markets last year and sort of continued into this year. So advisors listening to this know that life styling is very destructive to a lot of people's pension funds, I did a podcast on Maven money called Lifestyle on your way to poverty, I think in May 2022, I've guided a lot of clients around this space and opted them out of lifestyle in which has saved them 10s of 1000s of pounds. I've covered my fee for a decade telling some clients to just turn this off. So yeah, I feel quite strongly about lifestyle. And

Alan Smith:

that's clients that are in company pension schemes, gun

Andy Hart:

just built in, yeah, comedy. Yeah, it's it's built in, and you have to turn it off. And sometimes it's quite tricky. You can't just like go on and just click it, you've got to sort of contact the administrators and staff. So it's not an easy thing to do. And this is obviously deferred schemes. So you have a client that, let's say, worked at a bank 20 years ago, and he's got 100 grand sitting there. They don't even think about it. And then it's our got this statement, and you don't do anything I go, yeah, we'll go we need to look into this. Like there's, you know, even though it's just been deferred, and you've not worried about it, and just, you know, stuck the letter in in your drawer every year. So yeah, it's mainly DC defined contribution schemes that people are part of, and it's the default to happen, rather than you have to turn it on. So the bulk of people will be in this strategy, let's call it probably 99. If I had to hazard a guess at it, probably 90% of people are lifestyles, and these are even people that are financially and investing literate, because it's just another job you have to do. So. Yeah. Anyone got any thoughts on that? I don't know if it's the same in Ireland, Carl?

Carl Widger:

Yeah, it is on the and I suppose that there is an onus, I would imagine, on the consultants to these big pension schemes, which tend to be the big corporate brokers here, I'm assuming it's the same over there. And I have seen no movement away from it at all. And it's all well and good clients saying, oh, you know, my annual management charge is really low, because I'm in a group pension scheme, or whatever it well, you know, if you're sticking with a very low annual management charge, and you're going to end up at retirement age, you know, with a very significant loss, because, as you say, Andy, you're in a low risk fund, and you're not buying annuities, which nobody is anymore, or very few anyway, you know, what's what's, you know, what's the regulator doing here? What's the regulator doing the UK to talk to these consultants about look, you got to actually start giving a bit of advice here.

Nick Lincoln:

Or go into lifestyle, get rid of lifestyle or make it far easier to opt out.

Alan Smith:

But it's another one of these things that started with good intention and intention because I mean, got buddies first were launched many years ago or whatever, you know, there wasn't any option. Everyone bought an annuity before you know, flexural drawdown that the existence so in terms of, you know, sensible you preserve your income is what's going to happen if if interest rates or annuity rates moved against you. by allocating to this type of fund, you would likely to sort of Have counter the movement be up or down because you're expecting to have 20,000 30,000 Wherever a year in income. So work quite well. But But the world has changed beyond all recognition in the last 20 years or so. And I'm just wondering if there are going to be is there's going to be litigation, that's going to be complaints, I tell you what if I had a fund that I was lifestyle into, and I've just lost a third of it, just the year before retire, I'll be wanting to have somebody, I'll be having a serious conversation with somebody about it, that will be

Andy Hart:

the outcome for 1000s. of pension holder, this

Alan Smith:

could be a class action, and any lawyers listening to this will say this is easy money. Oh, sue the the big consultants. The other

Andy Hart:

dilemma we have now is professional advisors, running regulated businesses that were very concerned about the sort of longevity of our company, clients who come into financial advisors and saying, I had 500,000, it's gone down to 370,000. What should I do now? Should I react? You know, should I change the asset allocation? Do I move into global equities now? Or should I wait until these funds recover? But then again, it's market timing, you don't know if there are going to recover? You don't know, you know. So again, the financial advisors got given a financial hospital pass, do they do anything, they help out their clients, they just declare themselves out because it's too dangerous from a regulatory compliance, you know, compliance point of view. So, again, it's created other concerns for practice practicing advisors.

Nick Lincoln:

Yep. All good stuff. Okay. Next thing or topical tip is I'm not sure who put this in. But this is this is a Vanguard thing, not the Vanguard thing. We'll come on to that in a second gentlemen. But Vanguard pulled out of the climate Alliance Now obviously, is the biggest or second biggest, I think, the alternate with iShares slash BlackRock, but Vanguard, just massive, right. And they pulled out of the climate Alliance things, basically a political thing, and we don't do politics. And that is to their immense credit. And then to add to that,

Alan Smith:

really, it's a huge issue, the whole kind of climate change thing. And as far as it pertains to investment and advisors, and our relationship is probably one for you. We could have, we could definitely make that a meat and potatoes in the future version. I don't think there's any one of us, you know, what it is, wants to make the planet a worse place. But there is there's certainly some conflicting issues at play here. I was surprised. But as you say, Nick, it is it is to their credit to for them to stand up and say this is just it is impossible for us to participate in this particular platform. And we're going to stand down from it from for an organization with 7 trillion assets under management, which is enormous. So but it certainly creates a lot of challenges. For us giving advice, and we have clients that are interested in whatever version of wherever shade of green, they want to talk about. It's not it's not easy. We're not going to do justice right now. But it's interesting that Vanguard chose to no longer participate.

Carl Widger:

Yeah, I think this is an evolving situation for sure. Because the EU regulations are about Article Six, Article eight, Article Nine, I'm not sure if you guys have that. Bearing in mind that you're not in the EU anymore. I

Andy Hart:

know enable development. We don't have we used to have that. Yeah, I don't know, I don't know about it.

Carl Widger:

But Article Nine basically was the, you know, superduper ESG funds on Article eight was the guys who were Yeah, we will keep it in mind kind of thing. 200 billion has moved from Article Nine to Article eight in the last four or five months as a result of the criteria being set by the EU Commission. So, you know, your point, Alan, about, you know, also advising clients. So say if a client comes along and says your remit is to get me into an article line fund, okay, so we did that six months ago. Oh, dear. Now, it's been moved to Article eight. So it's definitely an evolving situation. But I think the evolution of it is quite good because the criteria has now been set by independent regulators as opposed to fund managers sticking a green sign on their brochure and saying, Yeah, where ESG and where Article Nine. So I think this is a watch this space and I think maybe, as it evolves, it might be good for us to do an episode on this, but but I think we should wait and do it well down the line. And I think anybody, you know, saying that they're absolutely positive and they know what they're talking about in terms of ESG funds. It's actually impossible. Mary Carney and Mattis is kind of our researcher in all of this and you know, I think her her Her mind is fried from the evolving situation because literally every few days there is something new on this. So yeah, something to keep in mind but I think there's still a long road to go before this is all kind of sorted out once and for all.

Nick Lincoln:

Agreed. Agreed. Good stuff. Okay. What else do we got? Oh, okay. So and we are going to come on to the the main bit of the topical section but before that BlackRock, in the USA we keep mentioning BlackRock and Vanguard a lot today is something going on here. But Blackrock have pulled out of the US Robo advice market with the sale of its future advice business. And there's a link to that, and the so called show notes. So again, that's a massive low cost, low touch service business closing down with a firm that has got pockets that are almost infinite. And it's just saying, No, we can't make this work. Funny that, isn't it? Because, well, let's go on to the next thing and very timely for you. And it's brilliant on your part and hold on to you, you wrote an article in money marketing, I believe it was. financial advice will always be a luxury product. And I'll put a link to it in the show in the so called show notes. Got a lot of conversation going on, on LinkedIn. People will disagreeing with you people agreeing with you. But that's against some of the trigger conversations. Maybe just talk the dear TRAPPIST through the through what your article was about. And then we can move on to what subsequently happened. What, in the same week, the news that?

Andy Hart:

Well, the month later, yeah, so I wrote an article sort of intentionally provocative called financial advice would always be a luxury product. You know, I put out a lot of content throughout the year. So some things are gonna be pretty average. And some things are going to get people's attention. I think this caught people's attention. Because I was saying lots of things in the article that would trigger people that are trying to fix this issue of the advice gap, and trying to offer advice to more and more people. And most advisors run a business, a small amount of families that they look after 50 6070 100 products can be commoditized picking products, absolutely. Financial Education brands, again, a massive fan of I've helped train educate probably more financial advisors than most other ifas motor advisors. I've trained a lot of sort of end consumers or given information to end consumers. But I think the business of regulated personal financial advice, financial planning will always be a luxury product. Most advisors get better and better at this business and work with wealthier and wealthier people. That's just that's just the natural sort of progression. And a lot of people come into this space with great intentions of selling financial advice for a very, you know, menial amount of money, they want to get traction and attract hundreds and 1000s of people, but many fail. I haven't seen anybody do it successfully yet. And then a month later, Vanguard pulled out of the UK financial advice, financial planning market, BlackRock, you mentioned FutureAdvisor have also pulled out of there. And there are people that are trying to set up companies to try and address this, you know, hats off to them, but they haven't yet done it. So obviously, my article annoyed some people that are in that sort of space. So yeah, any thoughts from anyone else? Really?

Nick Lincoln:

Okay, just before we do, come on, we will come back to this in a second, we've got a word from our sponsors.

Carl Widger:

Dear tracklists, a small favorite, please, we rely on word of mouth to help grow the reach of travel.

Alan Smith:

Six out of five star reviews on iTunes, and liking and subscribing to our YouTube channel are all great, but but but.

Nick Lincoln:

But we would really appreciate it if between now on the next episode, you could recommend track to three of your peers.

Andy Hart:

Doing that helps us which means we can build crap to help you. Now back to what many Lafley call the show.

Nick Lincoln:

Andy Andy. Okay. So, Andy, thank you for talking us through your article. And then Vanguard pulled out. Let's go with Alan. And then Carl, what are your views on this?

Alan Smith:

It's complicated, isn't it. But I gotta tell you that I couldn't not have been more surprised when I heard the news about Vanguard. Now. That's an organization that every one of us on this call. And most of the people that I know have got immense respect for, you know, I've done that you're the origin story of how that company got going with St. Jack Bogle, and everything was about, you know, good client outcomes. And, you know, their office is here in London opposite where my offices, I've met some very senior people there over over the years. And you know, it's all about integrity, and good everything which is good about them. You know, the very fact that they're not a listed public company, they're owned by their investors. And so then they don't have this tyranny of quarterly results and profits. So like others have, and they've always said, every conversation I've had, and it's public information, we play the long game, you know, investment time horizons, for us are forever. And on one hand, there is no question that there is a need and a demand for a different version of full fat financial planning. You gotta meet somebody face to face and all that sort of stuff. And you can you just sort of dip in and out and you've got the different transitions in your life, you might need to get someone to give you a bit of guidance. Of course, what Vanguard created. And the strange thing is, it's been hugely successful as far as I understand it in the US. But you've got a qualified financial planners CFP in their language, who does as I understand it, proper cash flow modeling sold, Digital's all over the phone and through zoom calls, but you know, that's that's the world nowadays. That's what it is a lot of advisors. So I'm on this call, that's how they operate, predominantly. So with deep pockets with an infinite time horizon, and with an no doubt about it an increasing demand for this sort of service. I just scratched my head. I don't know how or why. But of course, it makes you think, well, if they can't do it, immediately, if they can't do it, then What chance does anyone have? How could they strategically decide because it sends out such a? I mean, honestly, don't you think it's just egg on the face of whoever has originally launched their program and then withdrawn from it for somebody, somebody's had to go to the board and say, Now we can't make this work, but it doesn't make any money or, or even if it didn't make any money, the company like Vanguard was just you do it at cost.

Andy Hart:

Just to jump in. There must be something else going on under the bonnet. We

Alan Smith:

don't know he was like, for three

Nick Lincoln:

years, three years, I

Alan Smith:

think. Two years, two years.

Nick Lincoln:

April 2021. is what I thought I know, Citywire in a case. They said three year but I think less than two years. Carl, what are you again, looking from the outside in on this? What do you what do you think?

Carl Widger:

Yeah, I remember like when it was launched, it was like, all my UK colleagues were like going, Oh, my God, here come Vanguard at

Andy Hart:

the end. Some of them

Nick Lincoln:

some of them work, or some of them are some of them weren't. But yeah,

Carl Widger:

yeah, you're right. Again, Nick. Well done. But yeah, look, I think on the one hand, it's kind of, I've kind of, there's two positions on this, right? You can be a little bit smug. So yeah, we do that. And they couldn't do it with all their money. But then I think Alan's point is really well made, I think it's, you know, if you're trying to scale, or get to any kind of scale, it just proves, you know, that it's just bloody difficult to do this. And this is all about human relationships, whether it's done via zoom, or whether it's done in person, it is all about human relationships. And, you know, it's going to be hard to scale that that's why Robo advice is, you know, gonna, you know, has run into difficulty. And that's why Vanguard have run into difficulty not being able to do full fat financial planning. So on the one hand, it's kind of nice that, you know, the little, the little boys have one here, but on the other hand, it's like, I've always thought, you know, we can scale this thing, and let's drive it on. And no, you'd have to sit back and go, Okay, well, like Alan said, if they can't do it, who bloody well can. So yeah, it's interesting, that I'm just blinded to you know, what all of these topical tidbits that we're talking about today, there's just so much happening. And it is most of it, you know, is kind of we're sitting back in Ireland, looking at it all happening, because it's mostly happening in the UK market. But the only constant seems to be change. And then also, they'll also see that I was deeply uncomfortable with the content of some of today's always do the Irish versus UK cultural differences.

Nick Lincoln:

He's wearing his rugby shirt. There you go. The view from the outside and on the bank. I think maybe I'll just quick, just draw a line. I mean, for me, as Alan said, and I want to say as well, because I mean, but I just cannot believe what the how they've dropped the ball on this such a brand. They do this brilliant research and the advisor market with their advisor Alpha papers in the US and who they know this market. They know. Yeah, advice, the direct to consumer market.

Andy Hart:

And a lot of smart people they employed as well, Nick, we know a lot of them as well. Yeah, in Vanguard towers.

Nick Lincoln:

Yeah, James James Norton was quite a, you know. And I was just, the department also thinks, you know, what, I kind of come out with some admiration for them, because they just other brands would have said, Oh, Christ, we'll just keep on putting money into this. And after maybe 10 years, we'll shutter it and just just just it'll go where they said no, after less than two years, I think it's less than two years they said no, this isn't we're just gonna

Alan Smith:

zone and it was just just to be clear on this this is different we got so we're not quite conflating but the the black rock thing in the US and and others was a robo, he said Robo advice, but it was no advice, wasn't it? So all these variants of version of in the UK, we've had think it was a bit of a hybrid FutureAdvisor Alan bit of a hybrid Well, eventually, I mean, I don't know much about it other than what I read, eventually they kind of plugged it into RIAs as a column over there, you know, advisor firms became the kind of the the back end. But ultimately, you know, the tradition of robo advisors we know it like the likes of nutmeg who themselves and are being flogged off to JPMorgan to think that was a misnomer, wasn't it? Because it's robo advisor. There was no advice from it. It was effectively a paint by numbers, low cost index allocation, selling Asian thing choose your funds, do a risk profiler thing on Robo portfolio. And I always felt that was going to struggle a bit because it just, you know, for the target audience, the the cost of acquisition per client was significant. And the product that they sold on low cost, that was the big thing. So the margins were wafer thin. And the sort of time for time to break even was decades ahead has been a struggle. But the Vanguard thing was different because it was advice. It was planning, it was building a financial plan, and it was alright, it was a sort of the couldn't deal with anything complex. That was the issue. But for this audience, that there absolutely is a market for people, I don't know 20s 30s 40s, which is accumulating, building a plan towards probably a retirement in many cases, a little bit of guidance need to get on the phone to somebody needs to be shown a cash flow plan. I'd heard again, anecdotally, no specific evidence I've got I've heard through speaking to various people there, that they built this absolutely world class piece of technology that was just fueling the whole thing. And so again, yeah, what the hell went on, it's almost simple. We'll find out later that there was something else that they just discovered, but no doubt

Nick Lincoln:

that they the market, they wanted what the what they ended up getting was the accumulation market and what they're after, when they launched was the D cumulation. Market, but but people have already accrued the pots. But that's the time when in our experience, certainly that's when people want human advice, like I've got this pot of money, please don't let me piss it away. Just tell me what I need to do for the next three decades. And he really, I think, you can't do that through it through a robo advice. And Hellena Wardle, who's a young IFA who's who's doing her own trying to do her own thing in this area. And and she she she she sent me an article from 2021 showing just how limited the Vanguard service actually was and there's a link to that and the so called show notes so that's they could do very very little couldn't even handle employer pension contributions. You know, so it was really but you know, I said gee, I have a personal pet and nothing else and obviously gonna go into Vanguard funds so that's I've got no issue with that at all. You know if Vanguard with any Fang group in the world that I think there probably will be a good thing in the round, but it was just it was neither one thing or the other and I do think these so far, these low cost, low touch services have not cracked it but there is one service that is high cost careful listeners careful campus high cost high touch, I think it's time that's okay with the dude yes that we move on to the meat the meat and potatoes. Let's serve it up. There we go. It's nice dollop of meat and potatoes now, St. James's place showing Anyway, go on. Yeah, no, this other one the water running is anyway I'll revise. SJ, St. James's place. That's where we're going with this one. Launched in 1991. I'll give a brief background and because and whenever we think of them, good or bad, and we're going to have an honest conversation here did Trappists about our views and SGP but as a business as a commercial venture, what a success. So let's just have a quick look at the at this company and I'm gonna give it some context. I used to work at Allied Dunbar the IFA division. So Mark Weinberg, born in South Africa and came to this country, I guess in the 50s. He set up a firm in 1961 called Abbey life, Abbey life where the first unit linked Life Assurance door to door sales force at that time, it was all with profits. It was all friendly societies. A lot of Scottish life insurance companies might wind bow came in in 1961 with Abby life and it was Wednesday, of course, everything is unit linked, everything is unit linked, but back in 1961. He was an outlier. And so we're going to do this. That was a success 10 years later in 1971. So Mark Weinberg set up hanborough life and if more aggressive sales force totally unit linking reviewable premiums on all of their life cover offerings, including term assurance and whole of life just transformational, superb training, aggressive sales culture, massively successful. The same chapter Mark Weinberg with the late Mike Wilson in 1991, set up J Rothschild assurance, which later became St. James's place, again, enormously successful. And a slight pivot was smart Weinberg. I think at that time, he was happy life and with Allied Dunbar he'd been after accumulated regular premium contracts, executive pensions, endowments, great cash flow for these burgeoning companies. In 1991, he kind of went off to the wealth management sector, so people already got money. And he sort of just pivoted a bit towards fund performance, and we're going to have the best fund managers. And of course, we all know what's happened since then, it has just been commercially an unremitting success. And it's an absolute powerhouse, right. So that's the background to what it comes from a guy who set up two very successful sales forces. And he was the guy behind St. James's place. Mr. Smith, you lead us off on what you think of the behemoth that is St. James's place. Thank you

Alan Smith:

Like, if you ever want to promote some activity or attention to yourself, particularly on social media, you talk about one of two things. You talk about advisor fees and fee models. And or you talk about St. James's place, cuz I trust you, in my personal experience, if you mentioned any of the either of those two particular subjects, everything blows up, and everyone gets excited. Everyone has got an opinion, and usually mean very within the professional and yeah, I do. Yeah, definitely. But then the profession brought also broader sort of run the peripheral edges of the profession. So I just happened to it was literally what a few weeks ago, but month ago, St. James has placed publish their results, annual results, 22 results, and I'm just browsing through them. And just to remind ourselves about what 2022 looked like, we had, sadly, we had war returning to Europe. For the first time in many, many decades, we had inflation returning to reach not seen in many decades, double digit inflation. And we had a global stock market, normally stock market, but a bond market bear a bear market, both in stocks and bonds. So by anyone's calculation, it was a challenging year for anyone in business, and particularly challenging for any organization who makes a living out of investment management, wealth management, financial planning, financial advice. Look at St. James's place numbers for 2022. There's without going to loads of detail, obviously publicly available, but the numbers that stick in my mind were that their profits increased by 41%. year on year, the previous year 41% increase in profits, and their assets under management increased by the new flows into the company was 17 billion in in 12 months. In a ridiculous year, when most people a lot of retail and private investors, we're not investing or pulling money out or being just you know, traditionally doing the things that private investors often do 41% increase in profit 17 billion in money being invested with it. And I just, I took to Twitter, and I quoted those numbers and a couple of other numbers as well, which are all just outstanding numbers that any organization would be completely just just proud proud of. And I made the point that you regardless of any views, any of us have got, you know, you take your buddy hats off to them. That is an extraordinary commercial success, as you've already alluded to Nick. And so what I wanted to discuss and maybe sort of explore a bit more detail during our conversation now is what can we all learn because they don't have get a lot of flack from particularly in the IFA community, but from others as well. I mean, the other thing that I posted was I've never seen an organization gets so much negative press at the same time. I mean, for going back a couple of years, you remember the Sunday Times just ran a complete campaign. So you know, you should look forward to it. Every Sunday be another article about you know, they talked about their their cruisers and the gold cufflinks and it was just a real hatchet job that was done on them. So the headwinds that they have against them and yet they were still you know, they've still obviously continued to enjoy outstanding commercial success. And and what I was wondering what we can learn from it, and obviously, invite you guys to speak in a second. But before I do just want to share something that I learned some years ago

Unknown:

grab yourself a drink, a very long drink. It's story time with Ellen Smith.

Alan Smith:

Fan for those of you who are watching this on YouTube, and if you not then go and check it out on YouTube later, our esteemed friend Mr. Lincoln, in celebration of the day he just opened a can of Guinness, this pour himself is

Nick Lincoln:

the worst the worst. Solid six, it's the gonna

Alan Smith:

early, early days in my IFA life, and as we've kind of spoken about in the past past episodes, when you are especially early days, anyone is looking for prospects everywhere you go anyone that can fog a mirror is a potential prospect. And I remember speaking with a fresh sort of friend of a friend of mine who was a successful business person at the time, and I was kind of pitching to them too. You know, I can blah, blah, blah, come review your pensions and he was he was explained to me so nice. I'm really, really well looked after I've got a deal with a partner. He said, a very big firm. I didn't mention the name of the firm and he said what he's recommend. I've got some really, really interesting situation because you know, run my own business and what they've done give me access to is effectively my own private bank account. And what you do is you said you can throw money into it from your profits that you make in the company each year, and you get a tax break on the bank account, we put money in the bank account, you get a tax break on it. And if you want money out again, you can take it out, you can buy a property, you can invest it in lots of other you're gonna invest in shares of the company, you can do get other people your wife involved, and it's just an amazing product and I thought that doesn't exist there is no such bank account, you get tax relief, and you put money in put money out and oh, you get a good rate of return in putting you know where I'm going with this guys. Don't you have what it was? Exactly. Executive pension plan? Yeah, the words and the language and the framing phrased phrase, it was a mess. And I'll tell you even even down to the the, because he showed me that his guy's business card. And it's the word partner conjures up that different level of you know, if you just if you, Joe Bloggs IFA, versus, you know, Joe Bloggs partner, St. James's place, honestly, the business car is about half an inch thick. It just exuded class wealth, you know, embossed with that sort of nice logo, they've got an office that an office in partly nothing. So everything just came across as being representing high quality and high blood and just the way that it described what you and I would talk about as being a pension plan chop money a pension, and you get better tax a tax break on it. Now they talked about as your your company, business bank account, special business bank again, so I thought I reflect back on that. And if that is there, that was a long time ago. So the words and language the framing that this organization uses, we should all be learning from them and applying it to our to our own lives. So I just jump jump here, at least with your half a can of getting

Nick Lincoln:

through the I've got the I've got the original Guinness, I haven't got the draft flow once I've got the proper dark Guinness, and it's a meal. And so our Dumbo has come back through and I've done by training. So the broker consultants were were taught to sell EPS, and I've done by EPS to ifas, using that analogy, and it's perpetrated through perpetuated through others through the STB widget when I got nothing against that at all, but we're all selling all the time. And if we can make arcane complex dial things into something that people latch on to and see the positivity of and the pluses, then I'm all for it. Absolutely brilliant. Mr. Hart?

Andy Hart:

Yeah, so my thoughts on SAP, by thinking are a hugely impressive company. So I echo sort of what Alan says, disclaimer, I've been working with them for about a decade, certainly with their partners initially doing sort of voyant training now and doing lifestyle financial planning training. So yeah, I do quite a lot a lot with them. I mean, they represent about 20% of our workforce, about four and a half 1000 partners. So they're absolutely enormous. So back to, why do so many clients, you know, stick with them. They're reliable, they're sustainable, they're profitable. They're a footsie 100 company, they look after about 200 billion client assets. The other thing that's very interesting about them, which again, if I should look into this, I think about 70% of the assets they look after in pensions, which is exactly the same as my company, the thing that's very impressive, the thing that Alan alluded to, I think out of their 200 billion between 70 and 75% of that of those assets are in global equities. So for a company of their size, to have such a tilt towards the growth engine that is global equities is fantastic. So during 2022, they wouldn't have been hit as badly to other companies that had a lot more exposure to fixed income. Yeah, they've got a very strong sales culture, which I think is great, and they're proud of that the moment and IFA thinks they're not in the sales business and they just serve as clients I think they're lost at this business. So I'm all for them being sales and and it boils down to people don't want cheap they want safe. My say this why face people don't want cheap they want safe. What safe is is is that's up to the client to decide. So yeah, people don't want cheap, they want safe. They've got a fantastic Academy as well that bring a lot of young ifas through and nobody else is doing that. And they do everything from doing the exams, how to build a book of business, how to work your contacts, and how to run a business plan. Yeah, so I'm hugely Pro, the St. James's Ira before before he taught me basically here the view from Ireland from Ireland.

Alan Smith:

With this, we've been to fulsome in our praise here. I'm going to take the other side the the argument. Yeah, sure. Because let's just think it through all the things you say are absolutely spot on. And I would rather have a client have an advisor than no advisor and sort of blow themselves up and make all the big mistakes that we know DIY people often do. But how come they can get away with If just riding roughshod over what would appear to be rules and regulations that the rest of us have to comply with, this is what I just never really understand. The big one that gets referred to a lot is exit penalties. Now, I'm no expert other than what's publicly available for you invest in one of their pension products or their bond products. They have again, they've got a position which says there is no, there's no upfront fee commission or anything else. But what there is, is there's an exit if you change your mind or things change, your circumstances change. We will claw back. And it starts I believe, it starts at 6%. Year one, yes goes down over a period of time now. In 2015, our esteemed regulator the FCA published document fair treatment of customers, which was distilled down as TCF treating customers fairly first published to offer me 2015 have it in front of me, obviously, I I remember it very well. But going through there are six consumer outcomes. And without reading them all out, but outcome six, and I quote, consumers do not face unreasonable post sale barriers imposed by firms to change product swit switch provider, submit a claim or make a complaint.

Andy Hart:

I think you told me that was unreasonable. Alan,

Alan Smith:

I think the key word there to be interpreted. I'm not saying for or against that word unreasonable is just what it says as always rotation. So lawyers dream, right. So I just think in my business, I'm looking at you guys as well, if I took on a client, and he had a million pounds in a pension product, and we did all the work for him, he set them all up. And he just and he came back to me 11 months later and said my circumstances have changed or something else has happened. I need to move that fund else where I say absolutely fine. Here's my invoice. 60,000 pounds, please pay the invoice and I've made sure that paperwork is done, I think I'll be having a battle for that particular I think that client would interpret that as being unreasonable reasonable. I just I just do. And the other thing I would say is fruit for the largest wealth management companies, you say Andy with 200 billion of assets under management, the weights of evidence in favor of index investing, and not employing active fund picker stock pickers the weight of evidence is overwhelming. Those is not even up for dispute, peer reviewed academic papers, year after year after year. As far as I'm aware, there is not one single index passive type fund that you can get access to, through that.

Andy Hart:

Maybe some other can answer that. The other thing that people obviously say about them is their their high costs. So their annual management charge all in, I think the lowest it can be is about 1.6. I could be wrong on that. And the highest it can be is about 2.3. But again, there might be other fees I'm not too aware of. It just shows you the real cost to run a long term scalable business that employs all the right people in all the right places. I believe they're a high end vanilla firm. They don't get involved in too many weird and wacky type financial products. I mean, yes, they are quite involved. I believed in I believe in EIS and VCT and a couple of other sort of inheritance tax type product stuff, but you don't often hear about huge blow ups within the company. So they they're quite tight on their on their risk. So as I say it is said that they are quite expensive on an ongoing basis. But is that is that the cost to run a business that can be scalable for this long? Many have tried to do it cheap, and it's not worked out. Nick and then Carl.

Nick Lincoln:

Yeah, thank you. So my views on SGP, it is an interesting one I Yeah, business wise absolutely superb, brilliant. And it just shows that some people want to pay a bit more and they're quite happy to do is the stellar Artois thing we seem to be consumed with getting down to the lowest basis point shaving a basis point. Some people don't want that some people don't want low touch, low costs. Some people want high touch and higher cost and that's exactly what SJP gives gives them some people want want a seminar at the local country pile on inheritance tax and coming up for some food and wine. They want that they want the massively thick business card they want the valuations on beautiful cartridge paper. Some people want that and this obsession that we sometimes have in our profession with with cost. Again, we're forgetting about value. You know the client perceived value sorry, FCA, the client and some people will say I know my pain that because I like my SGP. I like the fact that he verbally is a he will turn up in a blue in a navy suit with a pristine white shirt and a beautiful foreign hand. Not I want that to be my advisor. I want to go to these lovely offices all around the country. I like the fact that if my SGP advisor makes a mistake, SGP will just underwrite it okay, here's a check to go don't don't go to the press. We made it we goofed up. You don't need to go through the torturous you know, appeals process with the FSCS and all that kind of stuff. Some people will like that. And by the way as a business owner isn't If I St. James's place because the FCS levy is based on sensitive turnover, they are by a country mile the biggest contributor to that Levy. And they never ever claim on it. If for whatever reason this gap doesn't exist our FCS levies would go through the bleedin roof. So just

Andy Hart:

just just bear that very interesting point, actually, Nick. Yeah, very interesting point. Yeah. So it's just

Nick Lincoln:

one of the other things so but and then so that's coming to the negative. Allen's perfectly, absolutely spot on this focus on fun baggage. I mean, the reason the Sunday Times article got so much traction, apart from the goal, the cufflinks and everything else on the cruises, which is pure from the Allied Dunbar sales school, you know, reward the high, the high producers, it was that their funds generally do underperform because they're just dragged down by the charges. And that's just that's just logical mass grinding its way to, to its conclusion. It's such an interesting brand, but high cost high touch against Vanguard who tried it for two years low cost low touch, couldn't make it work 32 years into the SJP story. Well, since 1961, what are the 62 years into this guy, Mike Weinberg just knocking out these fantastic financial advice, sales machines. And again, selling is not about the car, you know, from the outside in. SGP? Will you tell that utopian utility trap is called what the position is in Ireland?

Carl Widger:

Yes. So they're not in Ireland, they did do a deal to acquire a firm, I think about three or maybe four years ago, deal was done and announced, and then it didn't happen. So I don't really know why. I thought at the time, maybe that firm just didn't fit with them. But they'd be back. But they haven't been and there are a few aggregators, as they say, in the Irish market at the moment, but no sign of SJP returning. But maybe there'll be back at some stage. Who knows? Yeah, I look from from the outside looking in, obviously, I've looked at them. I've, you know, even if you just look at their website, I think some of the negatives that Alan has kind of portrayed there. The argument against that will be well, it's just there on the front page of our website. So it's like, we're not trying to hide anything. It's it's absolutely 100% upfront. I suppose I've met his art. And we do have the exact same thing with the some of the bigger brands here in Ireland in terms of private banks, the stockbrokers, that kind of stuff. And they're much much dearer, and they don't do full fat financial planning. And I remember pitching for a client who was like, Yeah, I get it, I know that you'd be doing a lot more, and you charge us a lot less, but I can't brag about Metis Ireland, on the golf course.

Nick Lincoln:

That's a brilliant, that's a brilliant point. That's just a status purchase.

Unknown:

It's a status purchase a

Carl Widger:

lot of brands and, and, you know, I kind of went, right, we've and hence we've tried to do an awful lot of we've spoken about marketing before about an awful lot of brand building and not necessarily client catching, and to try and be known as, you know, the firm that will do the proper financial planning at a reasonable fee. But we also look after you and we do do a lot of events now, right as a result, and I'd have to say, Yeah, okay, the active fund management, but that that's the bit that just doesn't sit well with me that you can't, there isn't even a passive option. So I think that's a big negative. I think the charges are if you look at their website, right, just click on their charges. It is there right in front here. So it is what it is. I think stuff like the financial advisor Academy, right, I looked through that is absolutely bloody brilliant. Yeah. Anybody who, anybody who's talking about the advice gap, right? Well, they're training people to go and you know, here's your exams, and here's how to build a business. And here's how to network and here's how to get sales across the line. I think it's absolutely phenomenal, very difficult for any of us or anybody else to replicate something like that, because that costs an absolute shitload of money. But it's absolutely fantastic. And I would love, love, love dearly love to do that. Because then what you're gonna do, you're gonna grow organically, if you put your money into something like that. So I think absolutely, you know, really, really amazing. And the other thing that none of you have touched on, right, one of the big problems here in Ireland is how do you sell your business? So when you're getting to island out? Oh, yeah. Yeah, the succession planning that is absolutely magnificent. And, you know, you tie the financial active financial advisor Academy in with our succession planning. And I think if you look at our website, again, I think they've you know, two and a half 1000 people have gone through this process. CES two and a half 1000 people, right? This is just,

Alan Smith:

ya know, they'll they'll facilitate, give a loan to, to buy out the retiring advisor to give a ready made client bank to the newly graduated from the academy. It's just it's really really,

Carl Widger:

I don't try to add a prescribed multiple, so everybody knows if my business, this is what I'm gonna get on it's like this day, and then the guys coming in who are going to buy it or getting the loan, they don't have to do any of the you know, get the finance and all of that stuff, which is going to make sure that they've ensured their own longevity. I think it's absolutely amazing. I think

Alan Smith:

it's really smart business. And I think as I've always said, I'd like I'd be a shareholder in the company. I wouldn't want to be you know it to me, despite all the things you're saying doesn't pass the mother in law test, would you recommend that your mother in law or your best friend or someone else went and sought them? Versus anyone else? I wouldn't necessarily, what are we doing this thing, badge, the badge and the brand? Do you know that the red the other day, Volkswagen touring car is exact pretty much exactly the same cars, a Porsche Cayenne, but Porsche is 8000 pounds more. And that's just that's just the power of a name and a brand. And they have got despite the Sunday Times the best intentions, they have got a badge and a brand that smacks of quality and good. And the last thing I'll say on it is I did Strategic Coach program for several years go back a few years, and there's loads of St. James's place advisors there. And without exception, they're all good people, to a man and a woman. And they are the high quality, the good there. They've got integrity. But you bet, as I said that they have there's definitely flaws in what they do and what they offer. But as they say, Thank you, I heard this from you, Andy, a poor advisor is a poor financial advisor.

Andy Hart:

And you kind of wonder this, I am in my consultancy role, I travel around the country and go to lots of different firms. I've learned a shedload from senior partners at SJP. Throughout the years, some fantastic stuff that they've shared me of how to grow my business, how to think about things, how to pitch stuff to clients, how to talk about things. But granted, I do see, let's say the better advisors, because they're the ones that pay for consultants to come in, share ideas. I know there's four and a half 1000. So there's going to be a whole sort of mix across that sort of spectrum. But yeah, that's a final point on this. Any other.

Carl Widger:

I just make one final point that anything I've seen, or almost anything I've seen, that's been kind of detracting from the St. James's place model has all been about charges,

Andy Hart:

fees, all fees, fees, fees, right?

Carl Widger:

Fees, right. So maybe we as a profession, are focusing too much on fees, maybe actually clients want, I'm not

Alan Smith:

just WW fees, and you'll you'll do well, it's

Carl Widger:

not necessarily that it's like just people don't want

Andy Hart:

you they want safe, people don't cheat their peace of mind, right?

Carl Widger:

Maybe that's the kind of thing that we should be focusing on when we're talking to our clients

Nick Lincoln:

about you mean, I can't switch that pension plan because it's two basis points more expensive than the seeding scheme.

Carl Widger:

But I don't want to change but I don't want that because my partner my SJP partners, this is

Andy Hart:

why these this is why these tickets to Wimbledon a year, which is another thing Yeah, but these these companies that launch they always focus on fees were cheaper achieved. Don't tell me that, you know, say like we're more expensive, but we do loads of these things that are fantastic. Why? Why did these stops never come up with that, or they come out of his way cheaper, way cheaper, cheaper, and it's like we don't even care about

Alan Smith:

the most in most. Most walks of life the best you wouldn't say we're the cheapest restaurant in town you

Andy Hart:

restaurants about that. Just tell them what you do. And then I'll work out on the values go where you sit.

Nick Lincoln:

Really, really good

Alan Smith:

stuff. I did not expect this. And I'm sure the listeners when we publicize that the four of us independent advisors are gonna have a deep dive in a conversation about St. James's place that will be quite so praiseworthy. Well, the organization but but but we are other than the obvious chinks in the armor which we know about. I just think for

Carl Widger:

me there sorry, Nick, there are only two chinks in the armor, right? That the fees that we've done

Alan Smith:

it there are significant chinks in the armor and the

Carl Widger:

fund management however, just let me finish the point, right? I'm sure if St. James's place come into Manus Island, they would find a few drinks and armor to strike. It's just different business models and we can all be recapped really snobbish about Oh, that's terrible, right? And we and we can be all evangelical about Evangelina. We do it the best way and this is the only way. Not true. There are different business models and they have proven that that one bloody well works

Andy Hart:

at I'm, I'm not too fussed about the passive active obviously, I'm an asset allocation passive index person, I'm more bothered about the clients investing the right amount of money, go and see a passive financial advisor is going to be the light touch on you not really hammer home, you're the problem that you're the best put you into bonds versus someone else who's active management says look up the bonds. So you need to really put some effort into this to create your financial independence. And every year I'm going to be banging on about you increasing your contribution. There's loads of other stuff that is way more important than worrying about the past.

Nick Lincoln:

It's the rounds and would you send your mother I would rather send my parents to an SJP advisor who did full fat financial planning using cash flow which they're doing because Andy trained with active with active management with whatever Yeah, with everything else in the lobby cartridge paper and the nice suit and everything else, then go to an accredited IFA with every every qualification under the sun who can't communicate and doesn't do cash flow. I would and that's that's how I see the so let's draw. I was at Rs let's that's Yeah, yeah. Christ. Yeah, I let's let's let's tie a bow on to this. I'm going to ask one question that go along the panel. And this is a yes or no, I don't want to caveat saying yes or no. Do you think in the round SJP is a positive in the UK financial services world? I'll start off yes.

Alan Smith:

Yes.

Carl Widger:

Yes.

Andy Hart:

You know my answer, yes.

Nick Lincoln:

Okay, that's half the TRAPPIST audience and now just disengaging from this podcast really, really good.

Andy Hart:

Your complaint has been abandoned, don't they? They would think that we're gonna give them a bastion but anyway, we have

Carl Widger:

some guy on Twitter. Oh, you're

Andy Hart:

just Yeah, I know him. Well, he's SAP advisor. So he thought oh, here we go for for non SJP advisors shouting their mouths off. So anyway, I think it'd be pretty sure he knows.

Alan Smith:

Next week's episode sponsored by St. James

Andy Hart:

I'm sorry. Is the other thing Hargreaves? Lansdown, again, another fantastic company SJP and RVs Lansdown both footsie 100 companies both astronomically great forces in this world always get slated by people that don't really understand this real challenge so SAP a massive fan of and and a massive fan of Hargreaves Lansdown as well. Hargreaves Lansdown have done what tons of startups have done already years ago. It's done. We don't need it anymore. We've already got the super cheap visor. Oh no, but but Hargreaves Lansdown charge 0.45 We're gonna do it for 0.43

Alan Smith:

They're just reducing their fees a lot they've just announced Yeah, I know that

Andy Hart:

point 4545 points on their case who cares they don't care that their clients will pay point six five Alan

Nick Lincoln:

Yeah, cuz they worse. Well, that's

Alan Smith:

again and we might we might come back to them in the future. But I know people I don't but I know others who use arguments and just swear by. They're amazing. Believe that all the other platforms and we all of us sports in the UK have had our gripes and our moans privately about our use of the various platforms. The Hargreaves Lansdown platform as a user experience is second to none. Fantastic. So what have you got to pay a couple of basis points more product. Good point.

Andy Hart:

About 10 years ago Hargreaves Lansdown invested 50 million and at the time well the shareholders are going What on earth are you doing to build their own tech? They probably make 50 million a month now from the vantage platform that they've built I mean what a stroke of genius move that was anyway

Nick Lincoln:

yeah, yeah, I mean, it does a previous episode The the the execution only VCT EIS platform wealth club is built by next Hargreaves Lansdown guy and investing in those things is like tricky because you got to disclaimer this disclaimer that is so slick that is so slick and that's that's just the again

Andy Hart:

when you want to send something to Hargreaves Lansdown in the post, you get your envelope pal, and you write hate jail free post nothing else it gets straight to their HQ. I mean, jeez, hate jail free post nothing else. I mean,

Carl Widger:

I have that that was the wage monster you don't

Alan Smith:

want to receive what we're gonna be sending you

Andy Hart:

had chained is going to arrive at my bloody postbox

Nick Lincoln:

matches matches Norway and ends up in your place in Limerick it's out of

Alan Smith:

space, so it's cool.

Nick Lincoln:

Okay, for crying out loud. Can we draw a line under this please? Please? Okay, fine.

Alan Smith:

What's next Nicholas?

Nick Lincoln:

Well, let's see what's next. Hold on. I'm watching to refresh my I don't think the soundboard is doing its thing. It's so annoying. It goes from working to not work okay, well, it's the TRAPPIST questions but I'm we're not getting any sound of the TRAPPIST question. So let's go on to that. If you want to ask the team the trap packet question dear TRAPPIST and click on the link in the so called Show Notes or the link in the pinned tweet at advisor podcast. We're going to do just two questions this this episode We're already an hour and 10 minutes in. The first one is from Ross Taylor, who's on Twitter as at Ross Taylor. FP financial planning. Hello, love the pod by the way is such a great resource. Thank you. I have recently taken on a trainee advisor, he will make an incredible advisor that I am sure how would you go about fast tracking his training, already given him a load of Nick Murray books was wondering what resources you would use to train someone else? Thank you. Who wants to have a go at that?

Andy Hart:

I don't mind taking that. First. Sorry, Alan gone.

Alan Smith:

All right, just just briefly, this is based on what we just said, Send to the St. James police academy for a few years. You might never see him again, as the only it's a challenge because it's mostly small businesses. Isn't that that are and I'm not I'm not sure what Ross's business is like, but it's time and resource and effort to create these programs, which is difficult. We've we've got our thing, which is grandly titled The Capital Academy, and it's not easy to do. The biggest thing I would say, and it's perhaps stating the bleedin obvious is getting to as many meetings as possible that young trainee advisors should be with the other with Ross and or whoever else you've got there. Every single opportunity watching, observing, if you've got more than one advisor in the firm, I've got a colleague of mine now who just really expressed an interest to sit with all our different advisors and you know, all the different people you've got her bring different skills, as you know, positives and negatives and different conversations. So there's no substitute for real ethics. You can read all the books, even Nick Murray books best in the world. There's no substitute for doing the job getting in the room with real life people live clients and other experienced advisors, you agree with that call?

Carl Widger:

100% nothing more to add, that's nailed. That's what I would say.

Andy Hart:

I would say join next gen planners, lots of young new ish people in the business. That's the thing that I tell people to do immediately. I would say listen to my podcast, I'd also say listen to Pete Matthews, podcast, meaningful money, my controversial view on employing people. If you want people to hang around in your business, you should put employ just above average, when you employ excellent and incredible. They're in flow, and they leave. That's my opinion. Over to you, Nick,

Carl Widger:

you should say as a solo, ya know, someone

Alan Smith:

who's never employed anyone. Thanks for that feedback. And you know,

Nick Lincoln:

I think you guys have nailed that pretty well. I mean, again, it's not self promotion, it's not a financial thing for me. But at the IFA forum, if you will just maybe join that if you're just learning to join that you'll see this question has been posed by 240 advisors, and you might just slowly pick stuff up and eventually have the courage to ask your own question. No question is too silly for the forum. Okay,

Alan Smith:

we'll post a link to that. There. Isn't that

Nick Lincoln:

right, the next one is from a chap called Keon Callahan apparently somehow spelled with the CIA in I mean, what's going on? Key and Nicole will sit this one out whose key and key and and there's no way to say he must have met us Norway key and ask how do you arrange client review meetings, have seen some advisors block off one or two months of the year and only meet clients for reviews in these periods interested how this works in practice versus spreading client reviews over 12 months. So this is the surge meeting thing, which is a phrase that's that sort of caught on from America, where you batch all of your planning meetings into maybe two or three months, typically around the tax year end? We know, we know, friend of ours at the ideas exchange who's massively into this, Sam, he's, he's adopted that. So guys, what do you think about this? And in respect of Ken's question, do you think? Would you ever consider doing it? And have you spoken to advisors who have done it and what have they said?

Andy Hart:

Well, I do do it in a second year, I've done it. So I want to take on new clients, existing families, I say, we're gonna have an official sit down annual planning meeting between January and March every year. So if I take them on in, let's say, October, I'll ever have that meeting, you know, the preceding or the following jantar March, or I'll wait to the following year, depending on what's going on. So it might be a short year or longer year, but just to get them in sync. There are some clients that I've got to be seeing post the January March that have zero things related to tax, just to sort of release the pressure for me, but I'm getting 90% of my meetings done between January and March every single year. And for me, it's working really well. So I'm gonna stick with it. Definitely. Okay.

Alan Smith:

All right, I've got a view on this, which is counter to that, which is if you this is this can be good for the adviser, but not necessarily good for the client. So if you are not, a lot of this is again, the positive that the outcome of this is predicated by the number of clients you've got. Now in previous podcast episodes, we've talked about having 6080 100 I mean, Nick is talked about but because of via zoom nowadays, up to 100 clients. Now I didn't know anything. I didn't know that. Well. 150 or something. Yeah, it was it was pretty punchy. Let's just assume that you've got 100. And just just, you know, brick All done 100 client reviews between January and March. That's a lot as a lot. And all I'm saying is I don't want to be on the last batch last week before the end of March, because you are absolutely knackered you're exhausted. You're not on your game. I'd rather if you're going to do it, I'd rather be this sort of in January, please. I think it comes from adult if you if you adopted the kind of the Steve Jobs approach was begin with your customer and work your way back, you wouldn't come out with this. You wouldn't say this is optimizing life for my clients. And I just don't think the ability to from a capacity viewpoint, I think it's, you're going to you're going to struggle with it. I understand why people do it. I'm not a fan. I've talked to my colleagues about doing it and no one really wants to be a doctor we like the idea of spreading things across another what you will often do is you'll do it you'll have this meeting because it suits you but then a client has something that pops up during the summer or something and you want to jump

Andy Hart:

in and just absolutely fine we have an official meeting where I sit down to do all the nuts and bolts update the financial plan outside of that I'm available for unlimited phone calls, unlimited emails, unlimited meetings, that's always baked into the pie but we sit down and have the official annual planning meeting between January and March usually there's some tax things that we need to tie up so that's that's not in dispute. I'm aware of people who've summer we can get together some we can do zoom but we can do phone call we can face anything around that so that's always built in unlimited meetings unlimited phone calls unlimited. I mean

Alan Smith:

again each their own I'm aware of a few people who enthusiastically went down this route and then now reversing back out of it the saying we tried it I'm just absolutely knackered is too much of the chances of me dropping the ball and making a mistake because I've got like three meetings a day day after day after day are increased. It's not ideal. So we're going to spread it out over a longer period

Andy Hart:

for me it works the opposite way because I'm sort of red hot on all the processes and the selling down at this the transferring, Nick so for me it works a little bit better. Grab a Darien the knows the name is

Carl Widger:

on behalf of Keon at Metis Ireland, I'd like to thank you for the clarity on that boys.

Nick Lincoln:

Well, okay. You wanted to do it sort of be in

Andy Hart:

try it,

Nick Lincoln:

you want to do it? What call in your experience in Ireland? Is this a thing?

Carl Widger:

So the reason he asked the question is, so we've different does a few advisors in Metis. And the rule is you just have to make sure that you have the annual client meeting, you do whatever works for you. So people are trying different things. And the exhaustion that Alan talks about. That's real, that is real when you do discharge meetings. But it also gives a great focus to the start of the year. And sometimes I don't know what your experience is guys, but sometimes the start of the year can be a little bit slow for people coming back. Yeah, so if you've got these things nailed on these meetings now nine it kind of you're straight into it and it's like gets you off to a good start. I take the point from both of you that yeah, there's the

Alan Smith:

the rest of the year Andy from from April all

Andy Hart:

the the the additional thing Carl for us is the tax year is this is this you know, fifth sixth of April. So that's why those final three months of it sort of works well. Well, obviously I'm still around Alan you know, new client work existing client work ad hoc meetings, and the official stuff with all

Nick Lincoln:

that free time. You should set up some other brands. I mean, it seems insane Yeah, I think that's an idea that's a goer.

Andy Hart:

I could do I could do another 10x your brands

Carl Widger:

contagion

Nick Lincoln:

I think I do actually have the conferences over actually 10x the contagion that's oh my god where's that goodness I think Alan's point with the just you're just gonna be this could work both ways. But come March you could be so good. And you've had all the client questions thrown at you and the answer the script, it's ingrained but there's the other side which called cars episode we'll talk about mental health about the load that we we carry I think if I did all my meetings, and by March you're thinking you know, burnout must also it's a seesaw isn't always a balancing act with this kind of thing. So it can definitely

Andy Hart:

as I say, presenting loads of financial plans dealing with loads of different scenarios as I say I'm yeah I'm Yeah, yeah, it's like playing shitloads of tennis you know you're gonna be decent in March compared to January on you.

Carl Widger:

kind of exhausted come back to it. We're all agreed as JP are brilliant, but we can agree on Serge meetings or not. So yeah, that's

Nick Lincoln:

fine. That's, that's that's the whole purpose of this. This, this this this form is that we can we can we can argue with and I can meet the ones I don't like. Right. I think it's time. We're at 80 minutes in spare. Save me for like Ricky Gervais and the Oscars Yeah. Okay culture corner are trying to the transition I don't think it's going to work so Dun dun dun dun dun we will culture corner we've got first off Mr. Smith explain experiments in advisor marketing.

Alan Smith:

Yeah, this is a this is a bit of a blast from the past this is something when you listen to podcasts you if I listen to a particularly good one, I star it. I think that's good. I'll come back to that. And I might listen to it again. And this is one it's been out. It's been out for quite a while. There is a podcast that's the name of the podcast experiments in advisor marketing guy called Taylor short. I don't know exactly how you pronounce it, but I think that's it. Yeah. Yeah, tell Sure. And so he he interviewed our mutual friend, Carl Richards behavior gap, going back a couple of years and it Ramona listen to this, it reminded me because McCall was in London, can't actually come into my office. And the way she did it did a version of this what he shares. And I remember it was everything that went on was a story from another time. But it was a really great conversation. A great meeting that we had when Carl come in, of course said that it was he said there's two things about this one is it's so simple, that you're not going to believe it's going to work and number two a bit you don't do it. And he was right. He was right both points. But

Andy Hart:

he he was this Watergate.

Alan Smith:

Yeah, it is a version of that that again story for another time. But it's because often something a recurring theme on this podcast is advisors, kind of particularly early stage advisors, but pretty much everyone on their journey is how do I grow my business? How do I grow? How do we get more clients how to grow a business in this podcast, which again, there's a link to it in the SoCal show notes. Kyle just unpacked step by step by step this is what he did call and I don't It's no secret things publicly shared information that Carl has built from scratch to different IFA RIA brands in the US to kind of you know million dollar status and then did one sold it went on to another one and he said this is the only thing I did in order to build those businesses. So tune into it listen to it you want to grow grow your brand, grow your business, get more clients, there is a step by step as to how to do it over to

Nick Lincoln:

you great stuff thank you my next tow business breakdown series which I think was our normal car put me on to this the the pre one the previous episodes where Michael O'Leary was being interviewed which is just a brilliant a brilliant episode it was called Okay thanks. And the latest episode in the business breakdown series it was on was on the zone. Oh God spare me was on the was on the IPL the Indian cricket League, which now you don't have to be a cricket fan. And the IPL is just worth billions. And it's just a success story. And it's it's an interesting episode. And the way the way it was set up the way it was run. It's done on a franchise basis and like the American NFL, they have a draw almost like a draft really. The point the point is that every year you don't know who's going to win. It's not like football soccer where you really premier you know is going to your donors. donor is going to win at the start that tournament. Almost every match apparently comes down to the last six balls. Okay, so it's they're tight, they're close. And we don't understand. I mean, I'm a cricket nut, and I will never get it that the India with its massive population is pretty much a uni sport country's cricket and that's pretty much it. And the Indian cricketers are treated like living gods. I mean, if Messi walks into a cheering Gita on some Argentinian Beach, he'll get some attention and the same with Ronaldo on the Algarve. They'll go to a restaurant they'll get if someone like Virat Kohli or Sachin Tendulkar. They cannot leave their homes they have hundreds of people just camped outside where they live. In this episode, that chap says he saw a man a grown man weeping in the street because Virat Kohli was dismissed. It's just next level and this IPL has tapped into his passion for cricket. As I say an interesting business story. You don't have to like cricket it probably helps you down to like cricket to to enjoy the episode. Mr. Hearts. You've got a new podcast you want to talk to us about?

Andy Hart:

Yeah, this is someone who probably lot people listen to the show. No, this individual probably read a lot of his articles Morgan Housel fomos got to him. And he's finally decided to put his own podcast out. I think it's just called the Morgan Housel podcast, I think it's going to be twice a week. There's a link in the so called show notes. He's very good at storytelling on the written form. So let's see how good he is. On the audio form. I think he's gonna be talking about the behavioral side of everything to do with money. Seems like a something he's picked up for maybe another podcast out there. So yeah, it'll be interesting to see.

Unknown:

It's good. It's good.

Nick Lincoln:

It's not Morgan houses, isn't it? Maven household

Andy Hart:

Yeah, that's that's Yeah. Made a name. Okay,

Alan Smith:

maybe lunch with them again?

Unknown:

Yeah, try the lunch. He does

Andy Hart:

be a bit larger the mallard Yeah, okay, let's not Tesla

Alan Smith:

story. Nick, just to clarify, that was, it was a bit of both in terms of where you got that that the business breakdowns podcast. That was the origin story was calls one about the Norwegian sovereign fund podcast guy who interviewed Michael O'Leary, which then led me to find another Michael O'Leary podcasts, you don't interview him, but on the business brain, and they do a deep dive breakdown, which is fascinating. And then that podcast, if you're interested in business models and how people make profits and all that it's a really good podcast. Okay. Thank you. Thank you.

Andy Hart:

Any advisor in the US? Isn't Yellen, who's a financial adviser in the US? Who is guy that the guy that runs a business business?

Alan Smith:

Now not this is not the Patrick Shaughnessy? Yeah, okay. Sorry, do with it, but he wasn't the host of this particular one. Absolutely. Right. Okay. Now, let's finish his

Nick Lincoln:

detractors, as we're doing this episode, the holistic VB debacle is unfolding in the States. We don't follow the markets. But I can tell you in about 23 minutes, the US markets are going to open so for once I will be looking at the ticket just to see what happens. Karl, tell us your culture corner link.

Carl Widger:

Yeah, so I was reading loads of stuff about this SV, be meltdown and was trying to get my head around it because it was like kind of there was different people having different stories about what would actually happen. So I came across this article from Bloomberg, and it's the best explainer. It's a long read, but I've included it in the show notes. If you want to know exactly what happened, it is a brilliant explainer article. Take the time to go through it. And you'll know exactly what has happened and the implications of of saying, but I guess the next few days, weeks months are probably actually going to tell us what the implications are. But yeah, what happened at SBB? Read the article.

Nick Lincoln:

Yeah, basically, if you start up a bank, don't have customers who don't need to borrow from you. Is that long or short, logical.

Carl Widger:

Like if you do commerce in school, like how the banks make money, well, they take money in and then they loan it out. Well SBB didn't loan any money out so they had to find other ways and that's how they run into trouble.

Nick Lincoln:

Indeed, indeed. Listen, I think that's been a fantastic episode. Thank you trap pack for your contribution. And that's a wrap for this episode. Dear Trappist. Thank you for your precious time and input as ever, please do rate us on iTunes, leave a six on a five star like and subscribe to our YouTube but until the next time from the trap packets at EOS and take care out there folks. Goodbye home

Carl Widger:

on Ireland tomorrow. Grant

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