TRAP: The Real Adviser Podcast

34 - Centres of Influence

• Episode 34

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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 track

Nick Lincoln:

yes indeed dear Travis, welcome back to what many people are calling episode 34 of the real advisor podcast to our eight P trap my name is Lincoln Lincoln and joining me as ever are the three other horsemen of the apocalypse call the voice switch and the ultra heart and Alan the storyteller Smith Now gentlemen We have a show packed full about salutely Nothing so let's start unpacking it straightaway with some high energy High Energy Reviews read by my good friend, Mr. Andrew Hart already talking over me and where will it be now? Yeah, 13 seconds in brilliant

Andy Hart:

crack. Or why change Why change a good old habit? So the first review is from Marcus australia i blues from Australia entitled great UK banter five stars. As an as an advisor in Australia. This would have to be my favorite financial planning podcast to listen to by far. It's a ritual listen to it. As soon as the episode breaks, it makes me chuckle away at the Irish UK banter, but also teaches valuable lessons throughout from four very experienced and varied advisors would recommend to any financial planner or really to any person who needs a good laugh. Thank you very much Marcus all the way from Downunder. Next up is from Paul at navigate Northern Irish advisor entitled informative straight talking and good crack five stars. I've listened to every episode and taken something from each one. Whether it's a book recommendation, new tech solution, or a turn of phrase to help clients all brilliant, is like a fortnightly check into all things relevant in the financial planning world. Keep up the great work, guys. Thank you back to you, boss.

Nick Lincoln:

Great stuff, thank you Trappists. For the reviews, they do mean an awful lot. And as ever, if you could put your real names in the reviews, if you'd like to do that, that'd be great, because then we know who you are. And it engenders the sense of community that we're trying desperately to build. Okay, so quite a lot in the news recently. And we'll start off with a couple of sad events out quickly mentioned the passing a bill was silly if we lost the in Taylor last year, the driving force behind Transact and Bilva cilia was another Titan in the platform field. He did celestial at the turn of the century. And that acquired Scandia and was bought by old mutual and then he started novia. So I haven't I didn't use any of his products. But I know people that worked for him and I know ifas that used his platforms and he apparently seemed to be a very good egg. So rest in peace build the cilia and an even bigger Titan in the world of finance and investing past Mr. Hart.

Andy Hart:

Yes, so Charlie Munger, who is Warren Buffett's sort of confident, right hand man left hand man depending on how you're viewing him. Anyways, date of birth was the first of January 1924. So he would have been 100 on the first of January 2024. So he died at 99. Very wise individual shed a lot of sort of mental models with the world are my favorite Charlie Munger quote is the first 100k is a bitch. Yeah, that's it back to you. Any comments?

Nick Lincoln:

No, I shall. I'll double down on the Charlie Munger passing in the culture corner because I've got something of interest in there on that from the late Mr. Manga. And he had a very good interview recently with our panel, Lee Robertson.

Andy Hart:

Yes, it was the first interview I've done for Octo members. I've been aware of Octomom for a while. I think Alan did an average interview a couple of years ago. So it's my turn on the mic. I think there's about half an hour 40 minutes just discussing sort of what I'm up to and a couple of other things. So yeah, check it out. Octo members, I think you've got to download the app. It's it's mainly app based. Or sometimes you can look at it on the desktop. And again, Lee Robertson's a good friend of our good friend of all of us on the call, so yeah, check it out. That's it back to you, Nick.

Nick Lincoln:

Great stuff I watched on the desktop version you didn't but you do have to log in and set up your profile to be able to have to access Octo members. Now which are you had this unique, unique idea. How's it going?

Carl Widger:

The Irish ideas exchange? Yeah, it was. It was the phrase. The icebreaker was coined by Jane McAleese. I think that was a perfect way to describe it. because we actually gathered in a pub in Dublin. And I won't say we did no work because we did talk about financial planning a bit and our various businesses absolute shambles. But it was a lot, it was a lot of fun. So 12 People 12, hearty souls on a dirty evening in Dublin turned up. And it was great, because it was a mix of like, you know, people who are part of bigger firms, people who are total solos, and then people who have kind of smaller teams. So what we've agreed anyway, is that yes, there is possibly something here. So we're gonna meet up in the new year over coffee, and maybe kind of set an agenda and that kind of stuff. So what's the was 12? There, I think there was there's four or maybe in five have since dropped me a mail to say, look, couldn't make it or a text, but love to be involved. So look, I think there's something there. And there was a, there was lots of chatter around, you know, how do we get, you know, the whole vibe of real financial planning out to the market? And you know, is there something that we could do together? So that was kind of one of the main themes. And the other one was some, I suppose, generally speaking, people were having torture with the various providers that the service levels were were pretty poor. I've actually had an instance of really, really good service, I think we need to point that out as much as we need to point out the bad stuff as well. But yeah, ideas exchange, Ireland kicked off with an icebreaker. And we look forward to meeting hopefully, maybe January, at some stage, and I'll fill you in as to progress as we go. So yeah, good, good. Good start.

Nick Lincoln:

Great, great stuff. Great stuff.

Alan Smith:

Pioneer. It's funny we to you

Nick Lincoln:

guys, before, before we started recording, I had credit to Aviv, I did a pension switch recently, it took three working days from submitting the pension switch form to Transact to Aviva sending the money over. So yeah, excellent, more of that. And he was saying, we'll just come to

Alan Smith:

the UK. Ideas exchange meets about 730 in the morning, over breakfast in a hotel in central London, the Irish do it the right way. In a pub?

Carl Widger:

Probably, I suppose lager was because I didn't know if there was going to be any appetite for this at all. So I think it was actually it was a good thing to do, because it's just much more relaxed over over a few drinks. I should point out, but I mentioned on, I think it was the last show that if consumer jusy came in to Ireland that 90% of the advisors would be would have to cease. And just to clarify a

Andy Hart:

netbook as a backdrop come in here, my friend.

Carl Widger:

It's not it's not it's a point of clarification. The context around me saying that was Alan had mentioned that in the consumer duty, it says that all ifas in the UK have to do cash flow modeling. So that was my that was the context behind it. I don't believe more than 10% of the Irish market are using cash flow modeling, as standard practice. So just to clarify that point. That's where I was coming from,

Alan Smith:

how to win friends and Influence People.

Carl Widger:

Yeah. Yeah, it seems

Andy Hart:

maybe not rubbing off on him. We're rubbing off and then let's keep this going. Keep it going

Nick Lincoln:

off on with you. There's a there's a mental model for you. Okay. Mr. Smith Sunday Times.

Alan Smith:

Yeah, this is this is one of these reports, you'll know whether to laugh or cry. It's actually quite funny. In a way Sunday Times. Ali Hussain comes out again, he's got a hit for the financial services industry. But this one is, is quite interesting what and it refers to call you be aware that in the UK for a while now, companies, certain investment managers have been expected to complete value assessment reports and publish them, put them prominently and publicly on their websites and give access to them give information to customers and clients so they can identify they've got to have assessed at themselves to identify whether it's value for money. And I'm just going to refer to the article here when it talks about this. They go through a whole range of big sort of fun groups and asset managers then just just to pick on one it's the first one of a number that they've analyzed. And so it's Lloyd's, Lloyd's, Lloyd's best management which, which in turn own a lot of investment companies including Scottish Widows, Scottish, Scottish, Halifax, etc. So under Scottish Widows website, you must first click the Personal tab, then scroll right to the bottom of the page to fund center. You then scroll down to fund charges and changes and then scroll to oike open ended investment company and Eisah fund documents. You then click into the value reports for Halifax and Scottish Widows fund, but you'll need to go to read their own mark, you'll then need to go to page 19 and click on individual's funds to get a summary. Then of the Scottish Widows funds 32 of the 36 analyzed had to read, ie poor rating for performance. 23 of the 31 funds were rated read for performance. So the Halifax range 23 of the 31 funds. In other words, the vast majority were rated read, in other words, terrorists, and it just the funny thing is in the report, Sophie O'Connor sounds Irish. So if you're the head of the board of Scottish Widows, Unit Trust managers said, This is a classic, quote, investment decisions have contributed to further underperformance relative to the market measures of contributors. Let me shift Sophie. Yeah, there we go. So it's kind of it's interesting, it's all being sort of flushed out and developed. And you know, it is now obviously a regulatory expectation, it is coming to advisors as well, we're expected to begin to do these things ourselves and create these value assessments. But it's amazing that the fund the funds groups are being kind of somewhat exposed. And the last thing I'm going to say on this, somebody called me out in the past recently for saying why do you mention these negative things, you should just be promoting the positive in our industry. And I don't agree with that I think we're all trying to make this is about better outcomes for our clients. And, you know, there are parts of our industry, which are not top performing. They're not great. They're not delivering great value for money for customers. But it's all kind of smoke and mirrors. And the very clients and customers that are using these products aren't aware. I mean, look at all the clicks and fun pages and squid No, I mean, no one is going to go to the trouble of identifying that just

Carl Widger:

it just goes back to the to that's just pointless regulation really to asking your managers to Yeah, to rate themselves. If you go down a rabbit hole that no one is ever going to read so pointless right?

Nick Lincoln:

away. But let's be honest, no one wants to find it. No joke public couldn't give a damn about this crap, and not give a shit. Right. But But

Alan Smith:

nevertheless, is the regular regulator. Are there? No, but the regulator is there to to sort of have good outcomes for investors for retail.

Andy Hart:

I mean, where do you draw the line that they're still growing? They're still charging. They're still underperforming, and there'll be another regulation comes out that confirms is still underperforming? Where's the endpoint to this? It's? Who knows? And

Nick Lincoln:

it was an inefficient market half the half the people that are going to underperform all the time. And that's just the way it goes. Sure. So, right. Awesome statement I mentioned because it happened as far as I can tell Jensen, you can just will quickly be honest, I don't think there's much in it. There was some there's some pension stuff coming in that makes it seems quite complicated pension simplification, and as a cliche, but that seems so long ago, but there's nothing else in the autumn statement. Really. I met all the big tax bands will come in there in the spring budget, as we've got an election looming. sometime between now and January 2025. Oh, yes. Alan, your your latest Magpie Magpie moment with AI facial recognition.

Alan Smith:

Yeah, it's been a couple of episodes since I mentioned it. But yeah, this is this is what I'm going to say that AI parts of the AI revolution may have still work to do. I was contacted a little while ago by a company. I won't mention the name right now, because it's kind of it's a work in progress to be fair. And what they've done. They've built a an AI enabled tool based on facial recognition. So if you've, if you put a photograph, send a photograph then it's the

Andy Hart:

financial plan. And as you said to me last week, when I was talking about something totally unrelated, I mean, some rubbish company, that's some rubbish service, and he's talking about it. Alright, fine.

Alan Smith:

It's to do with these times. You're such a client, you really are. It's to do with it's all it's exactly built. It's built by a finance. It's a FinTech company that's built it to help advisors give more focused advice to their clients, based upon risk assessment, behavioral analytics, number of different things. It's spot on relevance for financial planners. However, the tool itself doesn't really work, because I said, I said on the photograph of all of us, actually, so let me just give you a couple of bits of feedback based on the photograph of Nick Lincoln. Nick comes in one of the top percentile for agreeableness. This individual likely excels in teamwork and collaboration. They're empathetic cooperative, and tend to pro tend to prioritize harmony in

Carl Widger:

AI is broken. We can announce that now.

Andy Hart:

Rogue AI call Witcher

Alan Smith:

zero percentile of extraversion

Carl Widger:

of extraversion lowest

Alan Smith:

percentile and extraversion represents a strong inclination towards introversion reserved, preferring solitary activities over social interactions, and finding energy and focus in solitude.

Carl Widger:

That's why do you giggle when you're reading that out, Alan? Because

Alan Smith:

I see you as quite extroverted or whenever you point out and on it goes. I mean, you mentioned what it says about anti heart. It's actually probably accurate but anti heart. But what does work there's still work to do on the on the AI enabled tools to help financial planners when they

Andy Hart:

crack it and it's useful for financial advisors. Maybe we'll revisit that point. But yeah, thank you.

Nick Lincoln:

Okay, so I we all know the names, were you not? You might not call but they're certainly the name Paul Lewis is in the UK financial. Yeah. Okay. Is that big that he's gone over the Irish. So he's a massive figure has been for decades in the UK. There's money box Show with the BBC. And we're just writing various columns and blogs, but years and years and years. And he was interviewed recently in the Daily Mail. And there's a link to the so called shownotes, where he gave his investment philosophies. And why is this important? Well, this guy is massively influential, and the way he invests, I'm gonna quickly quote from the article, but the question was, do you invest directly in the stock market? And it Mr. Lewis said, No, my pension is all in cash and has been for about a decade, I actively manage my cash. So every year I look where my cash is, find the best one year bond and move my cash there. Blah, blah, blah, blah, blah. There is no investment anywhere that will earn me 6.2%, which is what he says he's getting at the minute. I don't know where he gets that I. He mentioned the products in the in the interview, but I can't find it online. And my capital isn't at risk. Mr. Lewis is saying, well, his old cannot isn't understanding what the real risk is. final paragraph. Many people have seen the value of their pensions fall by 20%. In the past year, well, unless they're all invested in long dated gilts, but never mind. Mine hasn't it's grown. People also worry about the impact of inflation on cash. No shit, Sherlock. But Inflation affects the value of investments just as much as it impacts cash. Well, of course it does. No one ever said it didn't. But what you want are investments that can really knock inflation into a cocked hat and maybe return something over inflation. I did an analysis a few years ago and found that in the very long term, over 20 years tracker funds will be cash, there's a guarantee from Mr. Lewis, they will be cash. And but over shorter periods, they often won't end quote, there's so much in there, that's wrong. A tracker fund, we don't know if there'll be cash over any period, we never get to say that we can't guarantee it historically, they have done and they may well do so going forward, but we never guarantee it. But we're not an advisor like Mr. Lewis are we? And over shorter periods, you know, you need to be in cash, well, pension funds were invested for 3040 50 years, you're gonna pass them down to your children, the UK, and they're gonna pass them down to their children, theoretically, What a load of rubbish. And this is a guy who is extremely influential. So whenever he pens a piece, you've got to understand where people are coming from, and the context of their of their minds when they write stuff when they put content out. And you can just see there, you also slagged off by let investors not because property is a bad investment. But because you're keeping people away from owning property and, you know, people having to work half the week to put money in your pocket as a buy to let landlord How can you live with that? So, you know, yeah. Any views on that as we move on?

Carl Widger:

I think it's impressive that you're able to review every single sentence that he needs, not just the article in total. So you found error in each sentence? Yeah. No load of absolute rubbish. And it is disconcerting when you see people who are, as you say, influential? I mean, that's the age of social media, isn't it? You know, some people who are inverted commas, influential, say crazy things. And then that seems to be the standard or the norm. It's, yeah, our work is not yet done.

Andy Hart:

He is a huge consumer champion in the UK. Yeah. So he has done a lot of good work just to sort of balance the article out sorry, balance him out as a as a person. But yeah, as alternates obviously, confirm, and he's an investing illiterate, which is great. I love it when people publicly confirm their investing illiterate, you know, I'm sort of all for that. But yeah, back to the boss.

Alan Smith:

Yeah, there must be 1000s of 1000s of customers when sort of DIY, no help investors who will follow Him and follow exactly that and sit in cash at that investment. That's,

Andy Hart:

that's an assumption. It's an assumption.

Nick Lincoln:

Yeah, it isn't. But I think I think that's a decent assumption, too. And yet, he comes from a good place. I've now had no doubt about that. But it just to be so catastrophic ly wrong about something so important. Okay. I don't know who put this in the so called shownotes initial dip, open sea NFT platform.

Alan Smith:

I put it in. There's just a point of Back to the story of investing what's always worked, there is there's no doubt that digital digital content, digital art, that there is some sort of future but as you remember, a couple of years ago, certain people piled into the concept of NF T's open seas, the biggest platform by far. For these digital arts one What was one sold for $64 million. Remember people were there? Yeah. And it was loads and loads. It was just Yeah, it was just something that was on the down at 99%. In other words, close to worthless, and people have Yeah, is that is that from the sublime to the ridiculous, you've got Paul Lewis thing, just put it in completely in cash. You've got others who are investing their savings in things Like NF T's, for example, both are sub optimal outcomes, shall we say? So another reminder to stick to what's always worked.

Carl Widger:

I could never get my head around that NFT thing and the digital art and you just made a comment there. Alan, you think there is some kind of a future for digital arts? Like?

Alan Smith:

Definitely, I'll give you a very, very simple example. You've you've got your kids. I don't know if they you know that these online games, for example, fortnight and others, people actually pay real money like a pound 199 or whatever, to buy things which don't really exist in the real world. That's a very, very simplistic example of, you know, owning something, it is not unreasonable to own something in a digital environment that doesn't necessarily exist. Also in the physical environment. There is some sort there's something within that and the ownership of these Yeah, things. But people,

Carl Widger:

they're using them in a digital so they're buying guns and stuff. Is that what you're saying in the game? And yeah, but like to buy digital archives?

Alan Smith:

What's the difference? If I own stocks, I own something one of these crypto punks or monkeys, whatever they were, there's something attached to that. But but it was certainly was never worth it to my mind. Because the idea is you can create unlimited, there's only so many paintings that ban golf could paint or whoever. But use that unlimited number of these things. But the point, Wasn't

Carl Widger:

there some idiot who was shredding online, his paintings because he was selling them by nfts, or something as well.

Alan Smith:

There was crazy stuff

Nick Lincoln:

is going on the Darwin Award for 2023. Yeah. Okay. Watch the Metis Christmas party. Yes,

Carl Widger:

yes. So we're recording this before Thursday. But on Thursday, when this goes out, the Metis team gathers in Dublin for our annual Christmas party. Now what we decided to do this year was to try and give back VR Christmas party. So we are we've taken two tables, at the cleaners Foundation, Christmas ball. So all of the money for that we've paid for our two tables is going to clean this foundation, which is a charity to help families who have sick very sick kids. So it's a great charity, I've probably spoken here about them before I support them an awful lot. I think they do unbelievable. And kind of in the background work. So it's probably probably too, too late to bring it up this year. But maybe it's an idea, you know, can you Is there a way of you know, supporting a charity via your Christmas party. It's not to say we're not going to, you know, have a lot of drinks and have a great time and probably have a lot too many drinks and all that we're still going to do our Christmas party. But instead of you know, just putting the money somewhere else, we're giving it to a charity. So and then also, they'll also see that I was deeply uncomfortable with the content of some who today's owing to the Irish versus UK cultural differences. However, I do not think that the cultural differences between Ireland and the UK are so great that the people in the UK would also like to support some charities around Christmas time. Hence, I brought it up. But anyway, I

Alan Smith:

think that makes no sense. I think it makes it I think it's a great idea, Carl, because the day when this podcast comes out, my team and I will be indulging in cocktail making. We're all going in a cocktail to some some organization that helps you teaches you how to make all these weird and wonderful alcoholic and non alcoholic cocktails. So that's we're gonna have a lot of fun doing that, then we're going for lunch and dinner or whatever we're doing. getting the team together, but it's a nice idea to go and do that somewhere where it's supporting people who haven't had quite such a good time in recent months or years. So good shout cow. Well done.

Nick Lincoln:

Thank you. Yeah, good luck. And sticking with you voice central bank roadshow. This sounds incredibly exciting.

Carl Widger:

Well, to give them credit, the Central Bank of Ireland do a roadshow every year and they go to Dublin and then another venue outside of Dublin and it's to kind of give the the intermediaries IFA, as you guys know them, I feel for what has gone on on hot is coming down the line. So to be fair, it was it's good to kind of get to know them a little bit more and you know, the central bank can be this like scary thing in the background. But to get to know them is definitely definitely a good thing. So well done to them for doing it. However, there are two big things, which I've spoken about a lot. Number one are we going to introduce an RDR or type arrangements or ban on commissions. In his opening remarks. He said spoiler alert, we haven't any plans to have a ban on commission. So straight off, I'm like God, Jesus Come on. So that's a little bit dis more than a little bit disappointing. Matters is 10 years old next year, and 10 years ago, I set up models for measures to be ready for RDR. And in Ireland, and 10 years later, it's still not even on the agenda. So that's a little bit disappointing for me to be honest. And then the second thing was that I've been going on about a good bit is brokers, intermediaries, ifas, whatever you want to call them selling unregulated products, so low notes and solar, we spoken about solar, that kind of stuff. And they just reiterated that you need to be very careful if you're selling unregulated products that you need to do this, that and the other right, which is, you know, you can't push it on your head at paper where you've say that you're regulated by the Central Bank, because the consumer protections don't apply, etc, etc. But we knew all that, well, at least we know all of that. I'm assuming the people who are selling unregulated products already know this. So to reaffirm this was a little bit disappointing, but to be fair to them, other than the batting it, you know, reaffirming it was probably the next best thing. Apparently, no, this was not said at the by the central bank. But apparently there's some legal issues around why they can't ban it. i That's anecdotally was was sent to me, so I'm not sure if that's the case. So look, I was a little bit disappointed with the I suppose with the with the outcome of the meeting, albeit I would say yeah, Central Bank, well known for doing it, it is good to do it. But I just love more. Just let's get let's get let's get on with the big stuff here. Let's get on with the stuff that's actually going to really help the consumers rather than, you know, putting regulation in place that you can't really manage or monitor properly.

Andy Hart:

You are saying that they're not gonna know what you're doing do any movement towards banning commission, then you're years away from it? That sounds like they're not even, they don't even have it on the project list. So that might be just the state of play that you've got to work within which obviously you are doing and everybody is working within. But yeah, somewhat disappointing, I'm sure

Carl Widger:

100% agree with Andy. Yeah, it's not going to come anytime soon.

Alan Smith:

As Ireland call historically followed the UK somewhat in I've heard the UK regulatory system is followed by a lot around the world is a leak considered a leading environment for you know, regulation and consumer protection, all that sort of stuff? Have they in the past? Do you have any other versions of the structures that we've we've gotten the independence modeling qualification levels? And

Carl Widger:

yeah, we have like, like, there are some things that are more stringent here. One of them being for example. Your accounts every year, you guys don't have to publish your accounts, we have to publish your accounts, which I think is good, because it stops people bullshitting and saying that they're doing so great and whatever. Right. So I think that's actually quite good. And like, you know, in terms of writing your recommendation letters, you know, not being calling yourself independent, if you're not looking at the whole market that so look, it is it is there is it's come on in absolute leaps and bounds since the financial crisis, no doubt about that. But it's at the same time, it's, there's there's just some things that I think if we're like, everyone has to be around the consumer here. And, you know, look, I met a I met an accountant, managing partner of a pretty large accountancy practice within the last two weeks. And he made one statement to me and it just rang so true. He said, Why does every financial advisor I, I know, drive a Range Rover, and icon is probably gonna piss a whole lot of people off. But the reason is that there's very high commissions still being paid out. And people are, you know, churning pension funds from one provider to the next to the next. And, you know, the providers have to stand up and answer this question. Why are you pissed off when business leaves you and then you'll you'll leak is out that the persistency rate for XYZ brokerage is very poor. On the same time, ABC brokerage will approach you and say, Can you give me a deal of a load of business, I'm going to transfer from the other provider over there. So you can talk out of both sides of your mouth. It's it has to be, you know, good, good on both sides. And, you know, one thing that I've often said is, you know, failing that we're not going to bring in RDR. What about banning commissions on pension transfers? because you've got paid originally when the money came in. So just Spanish, I'm sure the providers would love that. Because they don't have to pay out any Commission's, but it stops, exit penalties or stops all of that kind of stuff. Now, someone mentioned pensions, simplification, we are heading for pension simplification, although it's very complex. While we're on the road to get there, right? We

Alan Smith:

will get here we've got it and it has, it's not very simple, I can tell you well,

Carl Widger:

it is going to be much simpler here. And I do think our pensions system is really, really good and like pension freedoms that you guys brought in, we had them for probably 1015 years before you guys. So there has been some really good stuff on the pension freedoms. In PSAs, you know, there's limits and hot chicken pot, you can charge and blah, blah, blah, but at the same time, because the market is entirely headed down the pier as a route, all of the companies, all of the providers now are coming out with loads of different versions. So we'll get I think we got from one one provider of 48 different commission models on therapy or assays. So they have got approved by the pensions of Harvey. Yeah, it's bullshit. And it's basically why they're 48 models for the different ways of paying brokers. Anyway, I'm going to get I this was not on my agenda. Today, I know to get struggle up about this, but I feel very passionately that there are things we should be doing in our business in our profession, if we want to make it a profession and not an industry, in our profession to help consumers to help the end user, the clients

Andy Hart:

might share it, you know, it's totally right, we do so yeah, yeah, we're

Alan Smith:

trying to make the idea of making a really a positive impact in the lives of the families we look after. And giving them sort of a sense of peace of mind and security, all those things. And just churning pensions from Product A to product B policy doesn't do that. That is that is designed primarily for the person who earns the commission is not making the big impact whatsoever in the life of the customer. And the challenge is that London, like your accountant guy said, the reputation of advisors doesn't get better, it doesn't get strong, you won't have a situation where you'll just love the relationship they've got with a financial planner, because they're just adding value all day long. And I think it's a it's a sort of mutually beneficial project, if you can enhance and improve these things, because it raises the whole industry, the whole sector, the whole profession, becomes something that people are proud to talk about, as opposed to just turning policies around, which is not but

Carl Widger:

not everyone agrees with the stance I'm taking even the some of the my peers, as I would call them who do real financial planning, have said exactly what you said earlier, you know, should we not talk just a little bit more about what the good we do, as opposed to calling out bad practice? And I can't seem to help myself, because I did talk about this today. But I clearly I passionately believe it. So there you go. That's my opinion. Take it or leave it and

Alan Smith:

give it back to the new newly formed Irish ideas exchange related jobs

Carl Widger:

getting kicked out. already.

Andy Hart:

So Steve Jobs car that will

Nick Lincoln:

switch switches. Allen, Andy, hands up, would you prefer that all limited companies had to publish for profit and loss? I certainly think that's a good thing.

Alan Smith:

I'm neutral on it. I don't put there's positives and negatives are companies. Yeah. It's you got to you mean every company not just financial services? Yeah, well, yeah. I mean, I'm, I wouldn't mind neutral, it would provide us with a lot of interesting information. I

Andy Hart:

don't mind. I mean, somewhere, something's gone through.

Nick Lincoln:

Firms, bonafide, you're not you'd like to see their turnover? Wouldn't you just help and I don't know. Okay, Mr. Smith, JP Morgan retirement report.

Alan Smith:

Just Just a quick one, there's an update for the audience and the listeners. As we know, JP Morgan produced some high high quality information, data reports to do their quarterly market review, which hasn't been on here in the past. There's just a new one that they have put it was totally new to me. I hadn't seen it before the JP Morgan retirement report. It is us based but there's a lot of information that is highly relevant to the UK though we talk about longevity, life expectancy, how long you sort of the period of life you're reasonably expected to sustain your income for and there's just as if you're, if you're a sort of a data or information geek, there's loads in there. But it's actually relevant to the the advice process and actually, potentially, with clients and even like the likes of back to Paul Lewis in his cash account, if you've got 30 in some cases, 40 years of requiring inflation adjusted sustainable income, then all these other things are not going to support it. So I'll put a link to it in the show notes JP Morgan retirement report worth a browse, I would say is,

Andy Hart:

it's absolutely brilliant. Yeah, there's a couple of highlights in it. PAGE 21. It says about the long term savings rate for the US. I think the US at the moment in terms of gross income Um, same as they were about 7.8% is generally a little bit higher than it's been sort of historically, it's full. It's full of data, right? You can just scroll through it. You know, you can spend 10 minutes going through or three hours, but I think they publish annually down the Allen. Yeah, I think the guide to the mark is, is every quarter. So yeah, it's a superb resource. So check it out. If you're a financial adviser.

Nick Lincoln:

Well, I can sleep tight now knowing that the Americans save at a rate of 7.8 of their gross income. Okay. We had lunch yesterday with a bit of an industry lit and I say industry because this man was from a time when it was industrial. Alan took us through our lunch. Yeah, the

Alan Smith:

three the UK based Talens minutes of the trapeze, my mentor, so we had lunch with a gentleman on them, and she's called John Joseph. And he's in his 70s. Now he's, I guess he's retired, semi retired his SS. He's only probably the office Yeah, brought into the office. Now his son Jimmy, who's an outstanding character and great financial planners to expect to be taken over the business. John gets real didn't know that no one again, I mentioned yesterday just to entertain the clients, he says, because he's a bit of a you know, a joke teller, banter, banter, Meister, but it was just lovely. I just wanted to take the time to specifically, you know, kind of honor him in a way because when I went, when I was first getting into a certain amount, I first became an IFA. And I moved from the sort of corporate background into the alpha, he was super superbly supportive of me. And I think that just want to take the time, if this is a sector, this is a profession, where we do kind of help and support each other. And I just think it's income. That's part of the reasons why we do this route advisor podcast, because the four of us, you know, reasonably long in the tooth have been at the game a long time, but kind of passing on the wisdom because John did herbally. For many, many years, it was a little bit of a trip down memory lane for me, because we met up in northwest London, and I was getting the train up there. And I was just stopping every little town that I used to drive around in my day, with a wheelbarrow, here we go.

Unknown:

Puts on Whoa, I can't see my wheelbarrow. With Brock, signed by the week. Good. I was 21. When I found out

Alan Smith:

that is going to be your best drop. I like this song anyway, just so anyone doesn't know. outputed is one of those small towns in North small sort of areas in northwest London, where I used to drive my wheelbarrow up and you know, a bunch of advisers brokers as they were then and accountants and so on and collect the good old endowment policies from those advisors. So I hadn't been out there for a while. So it was lovely to get the trade up there. And then go for a nice lunch with John Joseph and these two other Muppets as well. We had a we had a good afternoon, I can say, thank you.

Nick Lincoln:

Great, great, great stuff, it was highly enjoyable. He's a highly enjoyable character. Okay, just closing off the topical tidbits because we're coming into quite a long time into the recording already. We have now bear with us on this we haven't met, we actually got a website now the real advisor podcast.com. Okay, the real advisor podcast.com. It's very basic at the moment, it's just a landing page. But the reason we've set it up is we're going to have a live event next year, May the ninth, we're trying to work out where the head is going to be, it's going to be in London, okay, if this is a hit, we might go out to the provinces. But this will be in London late afternoon, early evening. If you're interested and you want to register your interest in attending, please go to the real advisor podcast.com and just give your name and email address. So we just captured that and then we can later on come out with detail but trying to find a location that even that's a pain in the ass already. So that it will be a paid for event we'll we'll need to work out what the costings are going to be and what the venue hire is taught and confirm that but you will be shelling out for this. But hopefully, you'll agree that you're going to get value from it the same way you've got lots of value from us, but nothing over the previous 33 episodes. So there we go on that. Well, that's it. That's my channeling my inner my inner voice. They're mine. They literally might have links on

Carl Widger:

the website already good. I actually haven't looked at it yet. No,

Nick Lincoln:

it's basic. It's extremely basic, called you look at yours when you when we're done.

Alan Smith:

is good enough? Nick is good enough is good. Exactly. It's great new friends, Perfection

Nick Lincoln:

is the enemy. Okay. Let's now move on to what many people call the meat and potatoes of the show. So episode 33 was the first of three episodes that we're going to do on a kind of marketing theme. The first, the first of those three, Episode 33 was revolutionize your referrals, the referral strategies, what works, what doesn't work, why referral is important. This one is about centers of influence and other marketing leg of this three legged stool and Mr. Smith is going to lead us off on this and the potatoes have stopped being the peeling is over and so you can rest easy and crack on.

Alan Smith:

Thank you. Thanks, Nick. Yet another huge sub Jack's complex, some people are successful, some are less. So what I know is over the years, the firm's I know that are really smashing it or doing well or growing fast, are excellent. They've all got high quality relationships, we call them centers of influence, because third party professional partnerships, there might be accountants could be legal firms, it could be corporate finance teams, anything like that. But there's a kind of there's a collaborative relationship they have, but there's potential for clients to be referred back and forward, it tends to work pretty well. So it's, for all the positive signs, it nevertheless remains a tough nut to crack and actually, to make this work, and again, full disclosure, you know, we're, we're far from perfect at it ourselves. But we have sort of worked out a system and I think referring back to things we've talked about in the past, you'd what's the saying is James clear, when you don't rise to the level of your goals, you fall to the level of your systems, and a recommendation that I've had in order to develop this and, and try to make this work in an advisory business. Here's what I suggest people do. Starting off with new clients. taking on a new client, we do a you know, we all do a standard, what we used to be called a fact find process, we do a discovery meeting. And we ask them all the information that we need to know, in order to build financial models and financial plans and deliver advice. But one of the questions in the more kind of just detail based things is, do you have any relationships with professional advisors currently? Do you have an accountant? Do you have a lawyer? Do you have any number of other people that are currently supporting you? So we take the information? Often our clients, many of whom are business owners will say, Yeah, I've got an accountant. And we'll say, we will ask what How's What's your relationship like? And because I said, we're always looking for, you know, opportunities to work collaboratively with other with other professionals. And often they'll say, either Oh, he's great, my account is brilliant, love him is excellent. And we say great. In due course, be nice for you can introduce us occasionally, they say actually not very good, or he's about to retire, or she's about to retire. And we say noted, we work we've got a network of highly, you know, excellent professionals that we can, if appropriate, refer you to in due course, which is a good thing to do. point where you carry on to the normal process, you bring the client on board, you start working with them, and then you complete the circle, you've now that you've got the information, it's important, then your system should be that one of the first things you do once a client's on boarded, is you reach out to that in this case, that accountant is the most this is the most common approach you you reach out to them, you send them an email. And the guaranteed way of them opening the email is the title of the email is we have a mutual clients. And they'll definitely open that email and your what you're saying and of course with you seeking the permission from the client in the first place. Once we once we do this, we'll be okay to introduce and we'll I should go and meet John, your accountant to make sure that the advice is all joined up that there's no kind of duplication and he knows what we're doing with the clients permission, we will then show them the financial plan. And back to the point about how many advisors even in the UK are delivering high quality documented cash flow based financial plans still very few. So I find me go and have a conversation, have a meeting have a cup of coffee with the accountancy in this case, they're often the blown away the saying, Wow, I didn't and some of these are organizations, sometimes we've got an in house IFA. And they say I didn't know you did this sort of quality of work. And I'm you know, we were just effectively at that stage, we've opened the door, we've got a Fact Finder, sort of a questionnaire that we asked the accountant, it's important for us to know, we asked them

Unknown:

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

Nick Lincoln:

the funniest thing is the look of a noise that goes over

Alan Smith:

really well, that's not as good. But it's good. It's good food, just to be anti hot, happy. The only thing I see Scottish. The point here, you if you have a system and you automatically, for example, every time you take on an existing new client, you reach out to them. And you're going to ask them normal questions about their business, what they're trying to achieve to be specialized in anything because we are genuinely occasionally have a need to refer to high quality third party professionals like accountants, for example. So we've opened the door then, and we are that. The other thing to do is we'll just then and we're just sort of creating this now, we will just have a nurture campaign, we want to just send a high quality newsletter type email to this group of centers of influence that we've already got something of a relationship with, just to keep drip feeding, you know, updating new pension legislation, whatever it might be that's specifically relevant to their profession. So we remain front of mind. That's for new clients. And and the quick win here is all of us with existing client banks if you're looking to develop professional relationships with centers of influence. First of all, if you look at all your clients, do you have a question? Do you have all their if you've got accountants do you have all the names of their accountants listed side by side, on your CRM system or your on your documentation about your clients? And are you in contact with them regularly, because if we've got, if you've got these relationships, we know who they are, we shouldn't be speaking to them on a regular basis. So I'm just talking about creating a very simplistic system, which I promise you if you do this, and you've opened the doors, and certainly if you've met, and you've opened a relationship, and you show the quality of your work, and you drip feed some information, we're not going in there. So by the way, Journey client, you can refer us to course, we're not doing that. But we're effectively going back to that or magical thing, show your work. In Mises say my experience, you move away from this, oh, you're the IFA guys, you sell pensions and things to say, there'll be work collaboratively with, we can work capital with the UK, and particularly the business owners, because they've got cash flow, often built within the business, they've got the p&l, they've got all this stuff worked out. And if we're applying that to the family, in collaboration with a sort of business owner, it can be a really nice way of delivering and ultimately for the benefit of the client. And then you have the opportunity for further referrals. And of course, it works great if we've got the opportunity to refer clients into accountants or lawyers, or wherever else. So that's my starter for 10, who else wants to share?

Carl Widger:

You want me to go, I wrote a couple of points. This is really big for us, Mattis, we've been reasonably successful, I would say. And so there's a couple of key things that we do. Number one, we have case studies written so case studies on the types of clients, business owners, our Estate Planning, so we've blogs written so that if we're talking to someone who might maybe a center of influence, we can send a link to here's a, here's something we've written before. And that might be from effort, we're trying to make those as evergreen as possible. And so I think that is absolutely key because very, very quickly after conversation, you go, Hey, enjoyed our chat, here's a case study that we've already done. So you're not like in the background, trying to, let's do a case study or whatever. So have those ready, they'll help you anyway, in terms of, you know, having on your website, and that kind of stuff. So I can see how everybody wouldn't have some case studies on their, on their website. Ours are there for everyone to see. So you can go look at ours. And I would say that every advisor, every client facing advisor, private client managers, we we call them should have no more than three, so two to three centers of influence. So don't try and spread yourself too thin, because you won't be able to give kind of dedicated service and the good fields and the good vibes to more than that. So try and limit yourself to identifying, you know, maybe four or five and then trying to actually get to do some work with with two or three. We've often gone in and done a plan for the, you know, managing partner of an accountancy practice, we're in the middle of doing that for very big accountancy practice, we're doing plans for the partners, that's we said, we'll just let us let us just show you exactly what we do, we'll take you individually, and we'll bring you through the planning process. You know, like start to finish, like we're going to do business and there's no pressure, if you have other relationships built up, that's absolutely fine. You do not have to do any business with us. But this is a great way for us to, as you say, Alan to actually show our work. And the we've often don't know this is this can be tricky with new clients, right. But it is a good thing to do, because it does build trust is invite the client to invite their accountant to the Metis lifeline meeting, which is which is our financial planning meeting. Now, it can be done. It can stunt though the goals dreams and aspirations talk, because clients in our experience tend not to want to have those discussions in front of their accountant, because they're private. And they're you know, so what we've tended to do is, let's do the matters life plan meeting as we are with the husband and with the wife. And before we go implement. Let's do it again, to make sure you're comfortable and let's bring your accountant in. And this is very valid, right? We don't want to be gone off doing the perfect example. Let's absolutely load up your pension fund to 2 million quid when the accountant is thinking in his head well on we need a million quid in the in the business for entrepreneur relief. So you know, it's totally valid to say we need your financial, we need your tax advisor at the meeting before we go and implement all of this to make sure that that attack strategy he's been working on for 10 years that we're not going to screw the whole thing up so that we're all the really important people are Welcome to each other. And so that's worked really, really well for us. Now, we're not talking about doing hundreds of these, by the way, like, if everybody is looking to get two or three centers of influence, you might have one or two or three of these meetings a year. That's it, you know, but we started this process with a few clients, five or six years ago. And now the accountant tax advisor comes to every single meeting. So it's a bit of a faff, try and organize your diary for a couple and then their tax advisor. But it worked really works because the clients right, go back to the WHO manners here, the clients feel like, wow, I've got great people around me here. Have two other things, Nick, but if you want to jump in there, the two others are very quick. You crack on magic. Thank you. Okay, just the two others are events, and particularly for us golf. So bringing, people like to go to nice places, right? Let's call a spade a spade. So we've been used. That's the

Nick Lincoln:

that's the Insight artifacts expect from you guys.

Carl Widger:

Like don't, don't don't overlook this. There's the simple wins. Yeah. So where were members in Mount Juliet. So we bring people to Mount Juliet, which is a lovely golf course in southeast of Ireland. And that's been very effective for us. I would say, one of my colleagues is different on this, but I never ever ever talk about work on a golf course, ever just have a bit of fun, have a bit of crack, and then I'll follow up with an email, Hey, can we have a coffee and maybe talk about a business. And then I mentioned in the when we're talking about client referrals in the last episode about little things, small things work, you know, so that was buying gifts or whatever, right? Way, way back, this is possibly a little bit cringe, right? But tax deadline, personal tax deadline, middle of November, and accountants are all work until at nine o'clock at night, we ordered a lot of pizzas, and we sent them around to an accountants office

Nick Lincoln:

really loved it. And it is brilliant. And

Carl Widger:

we still do business with them. So there you go. So look, there are just a couple of ideas. And I've kind of flown through all of them. Because, you know, people will take, some of them will be great for people, and some of them will be absolute rubbish. So here you go. That's my take on central again.

Nick Lincoln:

Thank you. Thanks, Anna, for your contributions. What if people do bring up work on the golf course called D, then will you then engage with them? Or do you try and steer it away to keep it light touch, but if you bring in the clients that the prospects bring into the conversation,

Carl Widger:

I tend to steer it away, because what do most accountants think of the financial advisor industry? Is that, you know, what's the best pension fund out there? Or would you buy Apple shares now? Yeah, they're the questions I get asked, nobody asked me about real financial planning. So I kind of, I don't dismiss that, like, you know, some of you might strive in terms of that's not what we do, right? I just go, Look, there's an awful lot more to what we do. And actually, that's kind of the end of the process is investment strategies. And we do have an investment philosophy, but happy to share that with you. But But you know, it's really holistic financial planning, which is why we'd love to talk to you and your best clients. And then I'd that at that stage, I wouldn't have brought up happy to do a plan. So you know exactly, actually what we do, we can do it for you. Or we could do it for your best clients. But take the best clients name out. So we're just working on a bunch of data, you fill it in and put in Joe Bloggs and Mary blogs, and we'll do the plan for them and show you. So that's been effective as

Alan Smith:

well. It's quite funny on that just in general car when people say no doubt they do to all of us. So people ask, especially during the holiday season, coming up meeting up with friends and family and stuff. And they'll ask questions like would you think the market is going to do next year? And the disappointment? You say, I have no idea. And if you say that to them, which generally do they just sort of look the little faces is what why? I thought you had finances that agenda will change

Andy Hart:

our reply Shouldn't we should say like, 36%. And then I'm super interested when we go with no idea. We say 25% Probably next year.

Carl Widger:

I think there's a there's a slightly better way of answering it, which is I want I don't know what he's going to do next year. But I can tell you over the next 10 years is going to go well.

Alan Smith:

Yeah, but didn't want to know that. You want to buy Apple should I sell Amazon should I do this or that? Yes, the thing and navigate your way around that without just being dulled, which is what the answer is, which is I don't know, but I believe over the longer term it will call up.

Andy Hart:

People want

Carl Widger:

to tell you let me tell you why I think smaller companies will outperform I have changed over VBA What do you do? Right? So I used to call financial planner, we do real financial plans. So now I say are financial planning firm and a wealth management firm. So because I don't want to automatically preclude myself from potential business. So that has a

Alan Smith:

subject that's an I agree with you is me See the client potential client or wherever, where they're where their mind is? Do you see? Financial life planner? I mean, yeah. story. I wrote a story for another time. And I did exactly that in a big networking meeting and everyone always thought was a life coach, basically. Yeah.

Nick Lincoln:

So yeah, Andy, I'm

Andy Hart:

gonna be talking about classic network in a second, just on your point about two to three centers of influence, like, Yes, that's correct. If the two or three are really good, but I think in your early stages, it's more a case of kissing a few more frogs to them to then, you know, isolate those two to three, and then really work on them. Does that make sense? But it was in the early stages of building your career as a lawyer as accountant as a financial advisor, you you spread yourself quite thin, and try and speak to as many

Alan Smith:

as you would do that you want to spread yourself quite thin. And just the law of averages means you will hopefully over time, you'd only hit off with two or three that they build a bit. And it's those ones very good. Meet, right. What what is what is I think is just as dangerous can be a waste of time is trying to meet every single account that you can do a sort of meet for lunch, and it's just you spread too thin. Meet them meet them initially, if it's meant to take them onboard new clients, are you currently working with them and then have content share with that and you'll find inevitably, that you're right content, ongoing relationships, two or 333 would be great.

Andy Hart:

So what I'm going to talk about centers of influence is I was a member of BNI for five years when I was a polyester wearing mortgage broker slightly selling spelling of desperation, as Nick Lincoln once famously described me. So I joined BNI, nothing much has changed. And it's nothing much has changed. Yeah, we've got the polyester suit, though, to be fair, by polyester suit. Cool, cool blazer now smelling of a slight desperation. Yeah, so why don't be in it for five years. And it's a it's a structured network organization. So sometimes I sort of sort of sound like I've done no networking in the past, I've done all the classic stuff, and then I've done all the sort of modern stuff, you're gonna play the fucking drop on in there. And then some of the money stuff in terms of podcasts. So just focus on BNI. So I was part of member of BNI. For five years long story short, it's a group of business owners in a room and one profession is represented per one seat, there's only allowed one financial advisor, one accountant, one painter, one decorate one plumber, etc. And it does teach you, you know, the rules of networking. So BNI stands for business, networking, international, I think there's all different roles within the chapter. It's a well organized club, I sort of call it the sort of McDonald's network, and it's very well organized and sort of global organization. I know a lot of financial advisors, currently still members, you know, people, people we know, well in this group. And I know some younger advisors do join BNI, if you are thinking about are on the fence of joining BNI. And you know what, what BNI is, and you can find a local chapter, I'd say join it, it really did accelerate my career. I'm still in contact with a lot of the people that I met in those early days, mortgage brokers, random professions, consultants, coaches, and it was really good. And then obviously, I had had enough clients to then sort of leave it is quite a relentless group, it's weekly. And famously, they meet very early in the morning. Luckily, mine was a lunch group. So we met every Tuesday lunch, but it's relentless weekly, it's relentless, and you have to provide leads and for leads and referrals for all the other people in the in the room. So you become a lot more of a of a referral for yourself. You know, so you're having a pint with your your brother or your friend or your mum, dad, and they mentioned something and immediately say, What do you mean, you need to get your bathroom, redecorated? I know Tony, was before you just sit there going, yeah, get your bathroom done. Whatever was was you become a lot more attune to opportunities out there. And again, it tells you how to properly refer people, there's loads of good stuff are being I can talk about it for for a long time. Again, it's one of those things, it's sort of got a bit of a bad rap. Maybe if someone's joined a chapter not committed to it and then left and just thought it's rubbish, whereas I know lots of people. You got to commit, yeah, lots of people can get in it and they get great success out of it. So do check it out. Certainly, if you're a mortgage broker or something like that, listen to this or, or whatever. So that's my BNI stuff. That's a traditional sense of influence. So now I've got various different centers of influence. I don't quite know where they've come from. As I say, I've got a few accountants. I look after his clients on my own. They refer flay draft as they refer to me. A lot of other financial advisors refer to me anyway, that's it.

Alan Smith:

I just sing it and the area

Carl Widger:

they just played.

Unknown:

Darien Andy, he knows about everything. Andy can't be told anything. His name is Andrew Hart.

Carl Widger:

Can I just say on day on the drops? Can we do a twitter poll? Do you love them? Or do you hate them? Because I got a lot of feed that stay in they people are not fans of the drops.

Andy Hart:

Here is positive feedback from the drops. Yeah,

Carl Widger:

because you're in the echo chamber. Anyway on the radio, like

Nick Lincoln:

it turned the radio centers of influence. Accountants love accountants, I would highly recommend that accountant so preferable to solicitors unless you want to get involved in estate planning and will writing and everything else but God knows why you want to do that unless you've got some sort of death wish. Yeah, and again, my you know, my hobby horse is limited company, limited company, husband and wife firms. You know, you they are so ripe to introduce you to the account, you're gonna have interaction with the accounts anyway asking for tax returns and full profit and loss because you can't get them online as we discussed earlier. And bring them into it because they cashflow accountants are obviously numerous. They're number driven. They do cash flow modeling for their limited company clients. And we do the we do the cash flow modeling for the owners of the limited company clouds is such an overused word, but it's such a synergy there. It's it's sort of automatic. So I've got I've got a fantastic accountant in Berkhamsted Angela, she's to the right of me politically, so you know, very moderate, and she's a great accountant. And she's introduced limited company, clients to me husbands and wives. And Angela sits in on the yacht in the annual planning meetings. And it's great, it just helps and everyone's reputation gets reinforced because I'm doing good work for her clients. And she's doing good work for her clients and we both bouncing ideas off each other in front of the clients in terms of pensions and everything else. And it worked and I think this is just the start of this again the Zoom revolution I think we know we all think we've mastered zoom and we've been we've incorporated into our business live and I know Carl you're probably edging away from this little bit but you know having an accountant sit in on a client annual planning meeting once you've done the goals and aspirations part you might then say oh well you can't you know used to say that you then you bring the council into the Zoom meeting. They haven't got to travel anywhere they can sit in for the 20 minutes where you're talking about the corporation tax planning ideas and then the maybe the debt and surface everything and then they can just drop out again, you know, haven't haven't left their offices. So I don't see why you wouldn't get them in. And while you're while while they're in the meeting, it's your chance to impress them or to show them the cash flow you know, reminded because we do this every day with our clients their clients only say it once a year twice a year what have you the counters only gonna see it once a year, twice a year. But if you bring them in and just remind us and what we do for people is ends bass we're looking to help them walk away from their business on a valuation figure that you Mr or Mrs. Accountant are going to agree on. And and there's so much overlap. And I do think accountants are a really and you got to kiss a lot of frogs, right a lot of accountants won't get it and don't care, fine, fine, just you know, have an abundance mentality. There'll be if you can get three or four accountants on your side, they will love you and they'll refer clients to you because it enhances their reputation because they know you're going to do a good job. So that's what that's the central difference that I would that's what I that's what I do work on it. And what if I started from scratch? I would really you know, I've given him on the previous episode that in quotes, ultra Tepidarium masterclass on, on how to how to niche down and find a certain segments it was about limited companies

Andy Hart:

that accounting in Berkhamsted that you mentioned sorry, that accounted in bootcamp to the sheer client of yours like an actual client should

Nick Lincoln:

not no should not do you know that

Alan Smith:

the interests even this I think one of the themes it's run throughout what we've all said is having the ability to demonstrate what we do because it's very experiential, isn't it financial planning in real in real life and collaboratively in a room or on a zoom or whatever and showing the model in the what if scenarios what have you sold your business what have you retired we've had all these different things. You can tell someone all day long and they kind of eyes glaze over and they go yeah, whatever they're fine have to be actually in the room and they're asking questions and everyone's involved and and you and I've been there before and the accountant in this case, the penny drops the oh, shit actually, this is really good. I've got a few other people I should probably introduce you to to talk about this because I didn't really understand. So I think that's one of the key messages use every opportunity you can to to demonstrate and as as Carl has done if you say we're happy to run it for yourself, if you like and presumably call you wouldn't charge them for that you just want to it's more kind of show and tell and just show what it's like and it's nothing is more impactful than your own circumstances you can do demo you know, Mr exam, Mr Mrs. A or B or something but actually say let's give at least some at least at a headline level let's put some numbers in it. Let's model a few things and and then you get at penny drops sinks in so yeah, this is this can be very, very helpful to other clients. I think it's the key message. Try to look for the opportunity to actually show show what we do. Yeah.

Andy Hart:

Agree. Just on the point of the counters. Isn't it a bit mind blowing how amazingly attractive pensions are on this still reacting with their client? When you say look, you paid a shedload of taxes shitload of taxes, I wouldn't do any of that. Like I don't know the exact answer, but please go and speak to a financial planner that I know really well, it's mind blowing that they're losing their clients 10s of 1000s of pounds every year, I could own their fee and a good referral to an advisor. It's ridiculous how unproductive most accountants are when the client proposes to the client. Sorry, when you when the client proposes to the accountant, they'll say, yeah, you can do that's a great idea. You say this, you say that and you think, are you freaking mad? Why have you not been on the front foot with this? Fricking anyway, it's better. Tricking my mind back to you. Yeah,

Nick Lincoln:

I mean, hearken back to the revolutionize your referrals. The previous episode, I have, husband and wife limited company owners, blah, blah, blah, referred to me by a client recently, lovely people down to earth. They've got a million quid in their business give or take, and they haven't made any pension contributions over the last 1015 years. And it's like, the accountant is response treading carefully here because I want to make Council is responsible for that. I want to have a relationship where your counsel should be taken to task on their when it might, maybe he brought it up.

Alan Smith:

But who's it but who's at fault, though, here? Come on, sit in the fence heart. Oh, you're like, I've read your

Nick Lincoln:

accounting, didn't introduce didn't didn't raise it, and the clients declined it. But I gotta be very careful bringing that into conversation, because they might have a great relationship with their accountant. They've done you a disservice. It's like, you know, then suddenly, everything is done. So well. It can't be done. Or perhaps

Carl Widger:

the accountant is I don't know if you've guys got an entrepreneur leave, but maybe he does his or her. So Oh, yeah. Yeah. So

Nick Lincoln:

but I still have a corporation tax savings. They could have they could have they could have made 80 grand a year between them and now 120 grand a year that would have wiped out their profit every year and they pay no tax, you know, and don't get

Andy Hart:

save more money on the on the court. Save it in the ER saving Nick, you know, yes. Yeah. So,

Alan Smith:

go ahead, Nick.

Nick Lincoln:

Do you have a close and we don't even know where we are. I mean, I know we shouldn't ever make policy on the hoof about what ifs but there's no way that entrepreneurship is gonna get more generous in the next year or so. Put it that way. Yeah, yeah. Okay, guys, that's a really good. So it's funny how all interlinked. So last episode was about playing so

Alan Smith:

that you can mute for your Oh, sorry, suckling on your bottle. This is gonna go with

Nick Lincoln:

this, this episode overlaps a lot with the previous episode about referrals because centers of influence will generate referrals for you. And I think we've just given that a damn good thrashing on the next episode or the next. Whether there's a third party to come in this series on marketing, whether it's the next episode or not, I don't know because Christmas is coming up. But there will be one more on that. I'll be happy to move on gents to the next part of the show. Okay, very well, because at the door is posting she's holding the bulging sack up my drive, and she's left the sack at the my door so this is a chance for you TRAPPIST to submit your questions. The show is formed by you as much as it's formed by us for dobro news. And every episode we go through one or two TRAPPIST questions that you can send in the pinned tweet has a little link on it. Click on there, submit your question your name and your social handles and we will get around to addressing you these questions are from July and August. So we're still catching up but we will come to you we're doing them in sequential order that doo doo doo bear with us on that. I might even I might even improve our fantastic new website www the real advisor podcast.com and put a link to the TRAPPIST question form on there as well making use of in time our website will become the hub you go to for everything. We'll even upload the old podcasts on there as well. You just saw the future there. What we've,

Andy Hart:

what we've got, who's

Nick Lincoln:

this first one from open up the envelope. This is from Mark palling comes on Twitter as mother Alfa Pappa Ma Ma palling. I'm a keen listener of your podcast been an IFA for 30 years and trading on my own for 19 now need admin support to ensure good service to clients and make sure I'm not working silly hours. Amen to that. I've been contemplating employing someone part time for the first time versus outsourcing. What do you guys do? And do you have any advice on our phone service or Mr. Hart? I think?

Andy Hart:

Uh, yeah, no, I would recommend he definitely outsources. It would be cheaper and better. Yeah, that's my opinion on it and it will certainly give him an initial see how he gets on what what tasks does he need help with? And obviously you can build out that sort of like task list. There's a lot of IFA specific outsourced administration help that is brilliant, which I use I've been using for years. So yeah, I definitely recommend he goes the outsource route.

Alan Smith:

Yeah, doesn't this this comes back to what sort of business you want to run we've done at one of our one of our early episodes was solo ads. Heiser that YouTube versus you trying to grow a company build a business? Because one, once you understand that, then then what? Yeah, then then that works well, but it's a question. I just, he has no support at all right now should I hire

Andy Hart:

so it sounds like he's done everything himself as a solo, we just

Alan Smith:

don't understand why anyone would want is that back to that the idea of doing you know, $10 jobs $10 An hour jobs versus $100 $1,000 An hour jobs? Why would you I don't know what you to God, you both of you, do you outsource negative? No, I do everything yourself all in my new shy and sitting on the phone to Prudential.

Nick Lincoln:

That is a that can be a pain when I have to interact with the dinosaur companies and Prudential much as we'd like to praise companies as well. Prudential, you know, it's example I want you dread. It happens so infrequently, man, it happens. Just you know, I just don't I don't have any clients with insurance companies, they're on platforms. But you know, my process is really honed and, and, and and it's, you know, everybody gets the same experience for good or bad. And I follow it all the time. And it minimizes the

Andy Hart:

You're right. And we don't know, we're just interpreting from the question what type of businesses trying to grow and where he's come from is quite clear. That's come from, you know, a very, very small so business needs training on its own for 19 years. And it me in order of, in order it goes it's like I first of all, I want to try and find a tech solution. So if I can find a tech solution, that's the answer. So for example, I'm not going to employ someone to do my diary management, I'm going to employ Calendly so that's a tick when I'm like, is there a tech solution? No, there's not I need a human then I'm like outsource, then if there's not a decent outsource, then I'm then I'm INSOURCE that's my order. So it goes tech outsource then employee, I've got one employee in a team of 12 outsource I'm happy with that. And I won't be changing that that order around I'll just be adding to the outsource not the INSOURCE but everyone's trying to build different things. They've got different things going on.

Nick Lincoln:

Okay, I think I think it's counterintuitive that if you have a bigger firm then you're going to need to employ people so but for certainly for smaller smaller one my bad friends I would I would echo at this point. So we okay, we've been good affair answering okeydoke thank you for the the thumbs up the who is the next one from this is from a Benjamin Mitchell who's on Twitter or x. As at the money Scott is also on LinkedIn. And I'll put his details as well on the so called shownotes. Benjamin asked Hi guys, many thanks for sharing your wisdom on the show as a new startup advisory firm. There's lots to think about but the trap podcast really helps to focus my attention. Good. My question is a tad technical but always one that gets brushed under the carpet in our industry. You mean profession, Ben and we'll we'll give you one. That's your one. Everyone's favorite topic of VAT. How have you guys approached the charging of VAT in your own businesses? The argument goes that if you're implementing business then it's not valuable. But even if that's a gray area thoughts and opinions welcomed and keep up the great podcast work. I'm gonna go first to Mr. Smith on this one.

Alan Smith:

Yeah, interesting. It does get brought up from time to time, particularly as the kind of the evolution of the revolution continues towards financial planning is not a gray area in terms of the VAT exempt status of financial intermediation, we get caught under that which is generally positive for us because you don't have to register for VAT etc, through financial intermediation which, which covers a lot of things. And I understand part of that goes back to kind of the the financial services industry generally would like the City of London and the fact that you know, financial intermediation is big thing with portals as a country that significant disadvantage versus whatever Frankfurt or something else if we were charging VAT on financial intermediation, and others weren't. So I think that's pretty well known where it does become a gray area is around the fact that if you were just doing standalone financial planning, building financial models, venture plans, financial coaching venture consulting, that is a valuable process of asset service. So it's important to create the link the very visible link between the financial planning journey and actually at some stage you are generally going to do some sort of intermediation, some sort of product investment structure and anything like that. And if anyone's in any any doubt, another friend of the podcast called Jason Butler, who was an advisor on a fantastic firm for many years, he's now off do many other things. But good old Jason in his inimitable style, and anyone who knows Jason will recognize easy is a good guy, but he's pretty direct. But he took on and took I believe he took them to the High Court at HMRC. Because he was they were being told they had to charge VAT for the work they did. He didn't believe so actually that there's a you can Google it. Company was Bloomsbury wealth, or Bruce Lee financial planning, Jason Butler, and he won the case. You want the case doing what largely I think that's when you've got these legal precedents that exist unless unless some new case comes up. You can always cite them and say we're doing pretty much the same as What this company was where there was a high court ruling that said this sub this process is not valuable. But I think just that just document it just be clear, as long if you're doing the end to end thing, which does result in some sort of investment structure, some sort of retail investment product. I think you're pretty safe right now. What are your thoughts? Sandy?

Andy Hart:

Does Jamie listen to the show? Do you know that?

Alan Smith:

No chance?

Andy Hart:

My quick answer that was is get out of your own way. Go and find some more clients pay it no mind move on next.

Nick Lincoln:

Great cars, do you want to contribute insightful as ever? I don't know what the bad situation is in in Ireland? Have

Carl Widger:

you got something that makes two of us? No, we don't, we don't have to judge us on fee income from providers or platforms. Which is actually I hope, I assume everybody in Ireland knows this. Like if you are doing business on a platform. And the platform provider actually has a private client division and they're pitching for the same business, they do have to charge VAT, and we don't so there's a 23% saving for your client, if they did exactly the same thing with you as as an intermediary, as opposed to the big private world houses, shall we say? And then we do have a thing where we if you go over a certain amount for fee income, you have to start charging and all that, but genuinely I don't really know how that works. Patty O'Halloran is our CFO and he's all over that so don't ask me any questions about that

Unknown:

please

Andy Hart:

um thank you great stuff.

Alan Smith:

Wouldn't it wouldn't be terrible if we had to charge back we effectively become unpaid tax collectors and part of HMRC and what

Andy Hart:

is it will be really bad I run to variable businesses that are small my VAT returns are 127 pages every every quarter but they've been returned Alan, Alan your VAT return for cam I'm not joking about three and a half 1000 pages every quarter I know he's all done by technologies to me see I use technology but Jesus Christ may is overwhelming so if

Alan Smith:

god yeah all right, but it all depends what what is the frustration to me is a lot of our big expenses which are plus VAT we can't clean them back so are not adding office raise more out you'll be paying way more out than you're taking in you'll get a tiny offset you get a tiny offset now you don't want to be you don't be paying but

Carl Widger:

are you sure?

Nick Lincoln:

I'm not sure are you in favor of that or not?

Andy Hart:

I'm very pleased that regulated I'm very pleased at regulated businesses that do intermediation that look after the money VAT exempt or whatever the status is, you know, the person who's asked the question is a new startup firm that I'm pretty sure they're gonna be hired vanilla firm just get on with it. Don't worry about the VAT. Like none of us ELLs are right

Nick Lincoln:

rather just have a VAT and then be able to offset against the basket items you buy. How about getting rid of that? Okay, same end, right. Same goal, same done won't happen with political actors in

Andy Hart:

a huge intake, you know, yeah, anyway.

Nick Lincoln:

Right, we've answered two trackers question. So if you want to leave a Trappist question dear TRAPPIST, do click on the link in the pinned tweet. And at some stage do look at our website, which I might have mentioned www when advice, the real advice podcast.com. Okay, I think we're cracked we're well over the hour mark. So it's time to crack on with culture corner. I thought the media board has gotten to me as

Andy Hart:

we get to the end. We're going to talk about the media board.

Nick Lincoln:

No, let's not talk about media. Charlie Munger. We mentioned his passing at the age of 99. Interestingly, there's a podcast called invested like the best and they had a recording with Charlie in the can that was due to come out about now anyway, because his his his book of the Charlie Munger almanac book has been reprinted again and then they thought they put this intratumor out. And it's and with the with the with the with the acceptance of his family who said that Charlie would want this interview to go out there. They put it out. So you can hear Charlie Munger speak from the grave as it were 99 year old man still incredibly sharp and pithy and funny, and so forth. And I can't believe there are many other recorded episodes of Charlie Munger that are waiting to be published and this might be the last thing that he ever did. So well worth listening to. I'm just getting through it now. It's just it's about an hour or so. It's just very it's just Charlie Munger. You wouldn't know he was not you know, he you have no idea is 99 There's a link to that the so called shownotes Mr. Smith

Alan Smith:

is not going to invest like the best. That's the Shaughnessy really good. So there's been some cracking ones with him in the past. Yes, I'll check that out, Nick. Yeah, a couple of things I've just been watching consuming on telly recent times vanishing Act, which is on ITV or ITV x. So it's available you can download you watch it, etc. This is the story this is the dramatization of On the call mentioned a few quite a few episodes ago, this Australian Melissa Caddick, this firm, is bizarre. What what's what's quite interesting for people like us is we've seen all this stuff about Bernie Madoff and the rest of it, and it's kind of although we're generally in that industry, sort of, but we're not really in it seems sort of world as he was. This was effectively an IFA and Australian financial advisor, although completely unregistered, you know, she borrowed someone else's registration numbers just set up and created this entire aura or for self and you know, driving fast cars, you know, wearing expensive clothes, going through all the right parties and things. Just a fascinating story. How she managed to hoodwink people, the sums of money actually weren't huge, about 40 million, I think, I think Aussie dollars, which isn't compared to the meat off, everything else is relatively small. What was it's actually very poignant in it because she basically ripped off of her parents, sister, family, everyone, it was just awful. And we don't read no one ever really knows what ever happened to her. She's completely disappeared off the face of the earth, but her foot was found of all things with washed up on shore, but there's a few different there's a few different kinds of she's dead. She's guesses, as I think she may have messed with the wrong people as well and maybe stole some money off a few shady characters, which is kind of insinuate anyway, it's highly entertaining. And it's it's

Nick Lincoln:

she I think she's been eaten by a shark mate and the sharks about the footer. And there was a there was a pug cut. I think it was Yeah, was called a maybe 10 us on the podcast series about her. So we don't watch TV. I don't want to watch TV then. You prefer an audio. Just to search for Melissa category? The podcast. It's

Alan Smith:

a very Yes. That was only on the podcast. Yeah. This one is for three episodes on the on the TV program. Okay. The other one I've got briefly is I used to be a big fan of snooker when I was a young man, I used to watch it a lot on the TV and used to play it a bit. And I've just been watching the kind of rise and fall of this genius called Ronnie O'Sullivan, who's just the episode is going out earlier this week or the week last weekend, he won again, he won the British Championship snooker and this and coincidentally, I started watching this thing on Amazon Prime TV is called the edge of everything but just tracks is his life and the success of the really good the last bit is really good. It is just like a lot of these guys who's just that that borderline between genius and madness. You know, he's got you know, he's got a lot of voices. And he's gonna go through a story that was so close to his dad as well documented, his dad went to prison and it's just, it's a fabulous kind of fly in the wall. They got deep insight into what was going on in his mind. And he talks about mental health issues. And these this was like, as he says, This is real mental health issues. I was ahead of the game. I was doing some of the Mental Health things 20 years ago, before it became fashionable, but it's a fabulous, very,

Andy Hart:

very tricky and dreary travels very challenging. Yeah, I think he just goes out there and it's just it's a lot more ways. Yeah,

Alan Smith:

it's well worth watching. Anyone who's just he's just a genius. He's the best ever at this. Anyone is the best at a sport is worth just sort of watching how they've achieved their level of success. I recommend it thank you.

Nick Lincoln:

Interesting Okay, I'll try and find the time to watch that great stuff. Watch

Carl Widger:

how did I put in our cars ETFs

Nick Lincoln:

sorry to wake you up

Carl Widger:

Yeah, I actually struggled a little bit I'm uh, I'm actually running on empty I'll be honest, I'm looking forward to a little bit of a break at the end of this year so I struggled for a culture corner piece but I did listen to this a Bloomberg Bloomberg series short episodes on kind of the the the rise of the ETF following Black Monday in 1987 It's not great because loads there's loads of Bloomberg guides that are at the end of the episode and then at the start of the next episode, I'm like, Oh, just listen to that. Like just move on. But it is quite interesting in terms of where you know DTF despite or came from and that kind of stuff. So look, we should know this stuff. So it's easy.

Alan Smith:

I think quite sounds like you need to go on a three day retreat by yourself on a country cottage or by the beach and just lad holiday just

Carl Widger:

cranky it made you I'm definitely not.

Andy Hart:

I won't be spoken about that. Alan, you weren't you weren't mentioned that last time that I was going on there but you've actually done it.

Alan Smith:

Successfully is the planning recommend it to everyone. It was wonderful. I had some headspace time to think or for long walks, reflect on my life, reflect and reflect on my friendship with you and I

Andy Hart:

sit down by the fire that

Alan Smith:

takes your clothes there. Your clothes I love I recommend it to everyone. And that's why I can come up with good culture corner things not nonsense that you

Andy Hart:

can watch a really depressing documentary about Ronnie O'Sullivan come back the next day.

Nick Lincoln:

And he said, You're and you've got to you've got two items. And I've

Andy Hart:

got two items. Yeah, the first one is a podcast recommendation. It's a podcast called My first million. I quite like it. And they've got a founder of a company that's called Tiny and tiny pitches themselves with a sort of internet version of Berkshire Hathaway. So they buy incredibly profitable businesses that make them you know, hyper incredibly sorry, hyper profitable by making some tweaks and stuff. So the founder, Andrew Wilkinson talks about boring businesses. There's a lot of good insights I took from that episode. I think you listened to it as well, Alan, but yeah, if you're into sort of, yeah, online scalable type businesses and different types of ways of thinking about businesses got some superb insights in it's

Alan Smith:

really easily a good one I did listen to on your recommendation. Interesting thing about all these sort of podcasts is it became this one they were hit and miss some of them that my first million I mean, I must find the one of them close one of the holes quite annoying, which is probably again like this one as well. But, but some of the episodes they do are really good. And that one was good because Andrew Wilkinson is a bit is a superstar in just business building and creation, valuing.

Andy Hart:

a listed company in in Canada are quite interesting. He runs an online businesses and he also runs a bakery. And the online businesses are super profitable. And there's lots going on with them. There's lots of stuff to learn. But when he meets people, all they want to know is about the bakery. It's like its highest hassle, business and loads of other stuff he goes into. It's quite quite interesting. My next point is quite unrelated to financial services. This is sort of on the level of the cars bag and my IKEA wardrobe. But it is a superb film from Bill Nayeli or nightly living. Now he Yeah, it's called. It's called Living. And it's on Amazon Prime. And it's just the most wonderfully filmed cinematography I've seen of any film, there is a story to it, because it's called Living, it's all about him getting some sort of bad illness. And it's all based around London sort of 6070 years ago, so that sort of the, the early early time of commuting, it's got loads of just stories embedded into it and and people do say it's like some of the most beautiful from they've ever seen. So it's definitely worth checking it out what

Alan Smith:

to do with financial services. What's it got to watch twice? What's the relevance for the audience?

Andy Hart:

Our call I pitched it like that.

Alan Smith:

I mean, you're just wasting everyone's time.

Andy Hart:

It's got good human stories into it. It's

Alan Smith:

I watched it I've watched it a while ago is brilliant. It's lovely. It's very generous a lovely stuff to watch this time of year with your family or other there's no big dramas. It's very it's kind of slow movies. It's got his haters connections, its beauty news connections to what we do. But to your boss, none but honestly,

Nick Lincoln:

I'm looking forward to the film we're going to make about the guy who made AI faces that was shit and then stripping it back to financial services. Oh, that's for F bombs and I'm not doing any editing. Okay, listen, we're all we're all running on fumes. I think now I think of the episode 34 the second in our masterclass marketing masterclass series. Thank you for your time your traffic please please, please do like and subscribe to us on your podcast app of choice and not like Instagram, just subscribe to it that way every episode goes into your phone bang in the early hours of every Thursday morning please do that and likewise with the YouTube channel please like and subscribe to that as well. And do check out the new website WWW dot the real advisor podcast.com I think that's pretty much about it, isn't it guys? Yeah, we're done. So fabulous. Love you all. Take care adios from the trap pack and we will speak to you on the other side. Goodbye. Later

Andy Hart:

goodbye. Bye bye

Carl Widger:

absolute shambles. I think we should do while you call our box.

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