TRAP: The Real Adviser Podcast

50 - What's Risk Got To Do With It?

• Episode 50

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In this latest pile of TRAP, the Trap Pack discuss

  • Topical issues, including cyber security, Monzo pensions, DFA Matrix Book, Métis Ireland work award, Consumer Duty one year on, stupid market predictions from Morgan Stanley
  • Meat and Potatoes: What’s Risk Got To Do With It?
  • Questions posted by NO beloved TRAPist because of time
  • Culture Corner

Links referred to in the show:

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Unknown:

Music, welcome to the real advisor podcast, T, R, A, P, T, T, follow us and join in the conversation on Twitter at advisor podcast, where you can suggest ideas and themes you'd like the trap team to discuss. Also remember to like and subscribe to our YouTube channel and leave a six out of five star review on iTunes. Doing all this really, really helps us, which means we can do more to help you. Now, let's head over to the studio for the latest pile of trap you right.

Nick Lincoln:

Yes, indeed, dear TRAPPIST, welcome back to Episode 50 of the real advisor podcast, tr, AP trap. My name is lick nincom. Joining me as ever in the digital studio of doom are the three other Horsemen of the Apocalypse, Alan the storyteller, Smith, back from Turkey, Carl de la voce, wieger back from Portugal, and first time ever, Andrew Ultra heart is on The continent in a hot and sweaty Athens. Gentlemen, welcome. How are we doing? All good, all good, little bit hot. All good, good, good, good. Okay, so we don't have any tech snafus today. There's no internet dropouts on the continent. I personally am glad that we've hit 50, not because it means anything. It's just an arbitrary number that we don't celebrate, do we, but it means I haven't got draw any more useless fours on the board, and it's not really episode 54

Andy Hart:

I'm the only one of the track packers under 50 age. Yeah.

Unknown:

Oh, an early shout. Oh,

Alan Smith:

I thought was IQ Okay. Page, yep, yep, no. IQ still

Andy Hart:

way below 50. Yeah,

Nick Lincoln:

correct. Okay, that cancels out. I'll give you that one. All right, talking about as you are as you're already talking nonsense. Mr. Hart, do you want to crack on and give us two more of your high energy review reads, please, sure.

Andy Hart:

The first one is from Skinner UK entitled Alan didn't bottle it. Five stars. Congratulations. 12 months late, but the honesty now about SJP, it was never, ever about how high the charges are were, but that their fees are commissioned by another name on the pension and bond wrapper the front end. Loading of advisory remuneration has driven the lack of ongoing servicing. Hence the debacle we have seen, maybe some had greater insights. The fact remains, incentives drive motivation, which drives behavior. Keep up the good work. I enjoy every episode and listen every time. Next up, private investor, Ashton, 1975 private investor, five stars. I recently came across the real advisor podcast whilst reviewing potential advisors. I'm a private investor, not an advisor. It is a minefield out there, but listening to this podcast brings intelligent debate, clarity, sensible thinking and good humor, which has really helped my search Keep up the great work. Have we not read that without before? Don't think we have rings. We spoke about it privately. I don't think we've read it out unless I've got it wrong. But yeah,

Nick Lincoln:

I think that. I think you're right. Andy, that's it, by the way. Has Ashton 75 become a client of any of us? I thought, yeah, well,

Alan Smith:

well, finally, cannot possibly discuss,

Carl Widger:

has been useful for him to rule us out.

Alan Smith:

Friend, yeah, yeah, good stuff and the previous one. What did you say? Alan was Alan didn't bottle it well, like, really, like it, read it, or they have my friend, all right, we talked about episode, yeah.

Nick Lincoln:

Okay, thank you. Thank you. Is

Andy Hart:

it on your printed out notes? No, Alan, you're, you're in your new office. Let's talk about this very briefly. Sure. Would you

Nick Lincoln:

want to know? Yeah, for the 10% that watch this on video, let's,

Alan Smith:

let's do it. Yeah, more people should watch on YouTube. I'm, increasingly, I didn't. I didn't used to watch podcasts on YouTube, it's quite good to see the the dynamics amongst the you know, the facial expressions, the all in podcast is great as for exactly that Nicholas, anyone's

Andy Hart:

listening so, so about the new office? Alan, you've moved to Chancery Lane from the city little bit

Alan Smith:

further? Yeah, Chancery Lane is what they call Midtown, isn't it? It's neither city nor West End. It's a kind of no man's land in between the two, but wasteland still very, very, very capital asset, very central, very accessible. It's quite a cool area, yeah, it's a good area, just getting used to it. But it's a great, yes, a great office space. Yeah, I've got all, all sorts of facilities here. Jim, sauna jacuzzi, great for the for the current weather, lots of outdoor terraces, outdoor space you can sit, have a little, you know, team meeting or a conversation on the terrace. Have a cup of coffee. So it's all good, yeah, just moved in a couple of weeks ago. Quite. Happy with it so far,

Andy Hart:

and a massive annual saving, I believe, on the rent. Is that correct?

Alan Smith:

It's crazy, isn't it? Things like this, I don't, I just don't understand commercial property and the structure of it. We had a, you know, a fixed lease, 10 year lease. I took my son, he would come in. I come in last Friday, my 16 year old, and had look around. He goes, Oh, this is the best office I've ever seen. Is it much more expensive than your last one, because, no, it's cheaper, much cheaper than the last one. It's just the dynamics of the dedicated office space. We've got a smaller dedicated space which is our own, but we've got access, like a, you know, co working space, but it's not, it's like, it's a lot more upmarket than a traditional kind of WeWork or some of those other spaces. It's really nice. Clients seem to like it as well. So we're very pleased with the move. Shout out to Shireen as always, for organizing everything and having us in here. So yeah, so far. So good, brilliant.

Carl Widger:

Good luck with it. Can't wait to see it anytime,

Nick Lincoln:

yeah, so thank you for sort of the reviews that are read out reviews that read out half an hour ago. Thank you very much those dear Trappist. Give us a shot in the Oh, doesn't leave Watford.

Alan Smith:

He never leaves Watford.

Nick Lincoln:

Yeah, God forbid I should. I should never leave Watford, right? Let's move on. Let's give episode 55 zero. Let's give it a timestamp with some topical it's a bit of a quiet period, but we've still got some nuggets to talk about with our topical tip. It's starting off with Delaware. Oh, good grief. Okay, come on. 30 seconds, the Olympics. The Olympics.

Carl Widger:

Yeah, I love the Olympics. I've been watching all classes of sport over the last couple of days, but magnificent. I absolutely love it. Love it, love it. But, you know, there was two things that I kind of thought about when I was watching the coverage. So I've been flicking between the RTE, the Irish coverage, and the BBC, British coverage. And I love the way they put so much effort into telling kind of backstories about some of the competitors. And there was one as a great story about a British swimmer, Adam Petey, yeah, and Gordon Ramsay actually interviewed him on the BBC. He ended up winning a silver medal. But he had, he was going for three goals, I think, in three different Olympics, which is amazing stuff. But, yeah, I just the power of storytelling. You know, we can't, we shouldn't ever forget that. And we have our own storyteller amongst us here. But it is very powerful stuff. And it makes, it makes for, for brilliant, brilliant viewing and but also then I, you know, when you look at these people, the hard work, the dedication, the discipline over such a long period of time, like we're watching, you know, swimming that's gonna two minutes or three minutes or four minutes or whatever, like, it's decades in the making, and there's good lessons in business for that as well. Isn't there that? You know, there are no shortcuts. People might see the end results, but they don't see all the hard work that goes in over a very, very, very, very long period of time. Anyway, I just wanted to bring it up because I absolutely love the Olympics. There's

Nick Lincoln:

a LinkedIn post there isn't there. While I was watching XYZ swimmer doing it reminded me, Paul, I realized it's taken years and years and years and years of refinement to her ability and her performance, and that's what we've done to our business.

Andy Hart:

Give us a call at your pensions? No, I'm

Alan Smith:

with you. Carl, I enjoy that one of the best sporting experiences I've ever had in my life. I attended what is called Super Saturday in London, 2012 you know when UK Brighton won three

Andy Hart:

gold medals? So Mo,

Carl Widger:

yeah, and the other FARA, the the African runner, yeah, yeah,

Alan Smith:

three gold medals in the space of a couple of hours. It was fabulous. It was Saturday afternoon, evening in central London and East London, and sun was shining. Fabulous. I'll always remember that those those moments, as you say, it is a culmination of years and years and years of dedication, hard work, commitment, and unfortunately, you know, most actually fail the only there's only one gold medal winner, and there's lots of others. It's like there's a psycho, interesting psychology that says it's better to win a bronze medal if you can't win the gold. It's better to win a bronze than it is a silver. Because in bronze you ha, you're happy. You say, well, at least I got a medal as silver. It's, ah, just so, so close to get getting the gold. There

Carl Widger:

was some guy last night, uh, finished fourth in his in his event for the third Olympics running, he's finished fourth. Can you imagine that tragic like, yeah, I

Alan Smith:

just wanted to see a picture of Nick Lincoln during the opening ceremony, the controversial opening ceremony, which was somewhat woke as the me, as some people heard of said, So Nick, did you watch it?

Nick Lincoln:

When did it take place?

Andy Hart:

Just, just, just a shoehorn, Athens in. I was at the original Olympic Stadium yesterday, 1906 was the first Olympics in Athens. It's still down the stadium. It's a block of Con. Cree, it's very warm, and it's amazing. Simone, Biles was Biles as well. She's amazing. Her She's amazing. Brilliant. Watch it. She hasn't yet won all the gold, but that's coming, I think today or tomorrow. She's an amazing athlete, and all the stars turned up for her. So, yeah, again. More Olympic stories,

Carl Widger:

yeah. Brilliant, very good. Brilliant.

Nick Lincoln:

Okay, thank you for the Olympic podcast, right? Storyteller, cyber security.

Alan Smith:

I wanted to raise this. I shared it with you guys and some others that we know. Whilst I have been on my travels for the last few weeks, we were called for a kind of urgent zoom call teams call a couple of weeks ago because there had been, kind of overnight in our firm, some sort of attempted cyber hacking attack on our systems. And the good news is they were unsuccessful, but we all had to get on a call. The whole team arrived with, you know, we outsource our IT support, third party specialist company. They're monitoring this stuff. 24/7, they got different levels of support. We pretty much pay for the highest level of support. So we all got on the call. They all went through everything as to how this had happened, and they showed they did a screen share, and they showed all of us the the log. They call it, and it's just page after page after page of attempted, you know, break ins, effectively cyber break ins. And I said, What does this? He said, This is happening all the time, and it's happening to most companies all the time. And the main, you know, geographical sources are, as you might expect, maybe Russia, China, parts of Africa. And it's constant. And there was one of our team unfortunately didn't update their passwords or something. They kind of got in. But there was, we got a second and third line of defense either. You know, this is obviously above my pay grade. I don't really understand it all, but I'm just really keen. I've said for years that cybersecurity single biggest issue that financial planning firms should be paying their attention to, not consumer duty, not many or these other things, because we have got, most of us are small businesses, but we and for that reason, we haven't got the kind of, I don't know, the security that Barclays Bank or HSBC or someone has got, I presume. But at the same time, we've got access to very important, very sensitive data that in the hands of cyber criminals and hackers would be very, very valuable. So we are as kind of an ideal target for these. Long story short, I was very pleased that we were sort of secure, and we've now, as a consequence of this little threat that we had, we've all kind of gone to another level of two factor authentication and passwords and blah, blah, a lot of other stuff that we now, we're kind of taking it to the ultimate level. We are already certified for something called Cyber essentials, which, you know, you got to comply with all sorts of rules and regulations you have at this third party organization come and test your systems. And we're now going for cyber essentials, plus, which is the highest level possible that any firm can do and that. And you know, that's all we can do. If we ever did get a breach or a hack or something, we would be able to legitimately say that we did. We've done absolutely everything we can. And it's just a kind of a warning shout to anyone listening to this who's running a financial planning business that you should pay a lot of attention to this, because, from a reputational risk viewpoint, if anyone got access to your client's data and then began to do funny stuff and your clients data, access their bank accounts or anything else, it would not be a good thing to have happen. So what a warning to everyone, look and look into cyber essentials at the very least,

Nick Lincoln:

yeah, yeah, thank you for that. Okie dokie, ultra wealth jar on sale.

Andy Hart:

Okay, so this is the continued buying, selling, rolling up of IFA firms and businesses and wealth management firms. That the latest news came out that Evelyn, which is a combination of, I believe, Tilney and Smith Williamson and a couple of other companies, is potentially going to be sold. The price tag is around 1.5 billion. And also in the same article, Cooper parry were mentioned in terms of maybe their private equity owner is looking to sell them. So, yeah, I just thought I'd mention it, if anyone's got any comments

Alan Smith:

on it. No. Private equity investors usually are running a fund. This is, this is just reaching its natural cycle. It's, I don't know, the generally, seven year between five, between five and 10 years, it would seem. But the net, they're generally a fund, and the original investors want to have their money back and either reinvest it or get some liquidity or some sort so I don't think there's anything either positive or negative about a big sale. It's just the look for the and I have no doubt another private equity company will come in and take it off your hands, it's before that price, and then and then roll it up again. Sell it for double that in another so

Carl Widger:

are these consolidators? Are they? Are they running into difficulty? I know consumer duty is, is on our list for for discussion today, but to maybe shoehorn it in, it has consumer duty made it a little less attractive, a little more, yeah, more difficult to to kind of mush them all in together, and maybe there's a much greater risk. Now, I

Andy Hart:

thought the valuation was a little bit lower than what we've seen in previous years based on assets under management as a sort of crude measurement. But yes, consumer duties had, I think, a big impact higher interest rates, you know, various other things, but consumer duty and providing a better and better service, and not piling on additional cost for the sake of it?

Alan Smith:

Yeah, I've heard that again, somewhat after the horse is bolted, that any consolidator or acquirer now, as part of their due diligence process is asking to evidence the fact that you have been delivering an ongoing service. They hadn't really passed in many cases, so they effectively bought firms with kind of, I suppose, an open ended liability if you haven't been delivering a service. So now it is. But you know, it's all part and parcel of cleaning up the business, making it more professional, making it better. Guess what? You actually have to do what you promise you're going to do in return for the fee? Scan,

Nick Lincoln:

wow. Scan,

Carl Widger:

much harder to do at scale, though. Guys, that's that's the challenge that they're all going to have. So, yeah, my heart

Nick Lincoln:

breaks. My heart breaks for them. Okay, thank you for that. Back to you. Stroyteller, Monzo,

Alan Smith:

just flagging something up. I saw this advertised the other day. Monzo, who many people will be familiar with, are a challenger bank, I suppose one of these kind of newer startup tech banks. But they have woken up to the fact that there is money to be made from effectively consolidating legacy pension assets and putting them onto a platform and managing them. There's no doubt about it, your pension B have been a hugely, a big success out of this. They got a full stock market listing a couple of years ago, not sure if make any profit yet, but nevertheless, they have scaled that business quite successfully based on, as I say, just organizing and consolidating historical pension accounts. So no surprise that Monza have done it. Had a quick look at their website. Of course, all these companies, the website looks beautiful, just sort of nice, elegant, interesting. You know, easy to follow. The fee structure, the charge, point six 3% which I Yeah, point six 3% which I don't think is overly cheap. Put it that way. I mean, you could do the same effectively with Vanguard, their DIY approach, for about 23 basis points, or something, for about a third of the cost. Someone like Vanguard would do it. It's, again, a couple of interesting points on this Monza thing. Having had a look at it, all the money goes in to BlackRock. So they are the money managers, 80% of the funds are by default. ESG.

Andy Hart:

Was that for ESG or Blackrock Nick both?

Nick Lincoln:

Choose your pick. Yeah,

Alan Smith:

yeah. So 80% by default. Again, I don't really get that because you are the love ESG, and you want all your money managed by that or you don't, and for them to

Andy Hart:

choose big ESG slant as well. So yeah, maybe the

Alan Smith:

targeting younger, non advised investors. Maybe there's a key theme there. Other interesting thing, they say they automatically use target date funds. They said, We will remove, we will reduce your risk as you get closer to your retirement age. They're going to move them into bonds automatically as they get closer to retirement age, of the of the fee structure. Can this? Find this fascinating? So they've gone with, because they disclose all this stuff they've got. They've gone with Fnz as their platform, you know, sip provider, which, again, is interesting. I would have thought that our our friend Dave Ferguson, would have been closer to the action on this. The second would seem a more logical partner, because apart from anything else, the fee structure broken down is point six, three is point four, five is for the platform, and point one, eight is for the funds. It's interesting, isn't it? You pay double for, just for the plumbing. Effectively, you do for access to, you know, the global capital markets. Pay twice the cost for just the administration. Interesting. Anyway, that was it. It's all it's great. Having more options, more what they do, though, is all you need to

Nick Lincoln:

do. It sounds like, is it? Though? It's just, it sounds like shit, doesn't it? I mean, as you said, Vanguard, you get on there for whatever it is. 20 pips was quite interesting. They cap it. Yeah,

Alan Smith:

everything's nuanced. There's always some they will do according to again, all I've done is have a quick scan through their website. But because they make it really simple, and he's mentioned, the average person has got, he's been for four different jobs. Jobs, and they've got, like, 12 grand with one fund, one ex employer, 10 grand with someone else. And it's just a ball ache to try to organize it and structure it. And so Vanguard, or whoever else they expect you to do, I think most of the grunt work to organize this with the Monzo platform, you just tell them who you worked for and the approximate months and years you worked for them, and say, we'll do the rest. We'll organize it, we'll structure we'll we'll get the money for you, chase it up, sign the forms. That's what they say. I mean, that's quite attractive. Well, you could do you could game the system. You can get them to do all the work, and then once it's on there, I don't get any exit penalties. Move it to Vanguard or someone else encouraging that, but, yeah, interesting. But if nothing, if nothing else, the comparison between, like the average, you know, any of us an IFA type process, ours is by nature. It's very clunky, and, you know, filling in forms and sending stuff, it's very manual. Their whole process looks really elegant, very attractive, quite sexy, making pension sexy again, that was it back to you, boss.

Nick Lincoln:

Thank you. Okay, watch client feedback.

Carl Widger:

Yeah, I just thought we kind of did an interesting thing recently, got a client, kind of an ideal client of ours, in to do a testimonial video, which we used on social media, which was kind of a short, sharp piece, but then I did a little bit of a longer interview, shall we say, with them, just maybe a 10 minutes, just for internal purposes, right, to basically ask them straight out, you know, what are the what are the parts that we do, that we do really well, that you value, that you really like, and maybe are there a couple of things that you don't like us doing or that you'd love if we did do? And despite every which way of me trying to push the conversation around to say, oh, it's the meta life plan, and it's amazing. It was communication. It was just straight up communication. So it was like, look, the fact that I know you're there, that I know you'll answer a query. And he even said that, you know, if there was say, potentially some bad news or anything like that, that you know we will address it, and we won't ever shy away from it. And and I kept kind of coming back around and kept asking him, and he was like, you've asked me to do this interview. I'm telling you what the answer is. You know, he was just straight up. So I think the big lesson for us all here is make sure you're in communication with your clients all of the time. And it's not like, you know, you're once or twice a year. It's if there's other stuff happening or if they have a query, you know, make sure it's dealt with and dealt with really, really quickly, because he gets the comfort out of that, that where is trusted advisor. We're on his side, because we will react to whatever he needs in a particular moment, as well as the stuff that we have scheduled, obviously. But it's more, you know, if he has a query, and he doesn't have loads, by the way, right? So it's not as if we're over and back onto him every week or two, but it's when he does that we kind of front up. And then the second most important thing, from his point of view, was early doors with him. We suggested that he didn't invest money, and he said, I can't tell you how much the trust was built in that moment. Because we were, he was planning for maybe a business exit and all that kind of stuff, we said, no, no, that should not go into anything that's short term money. You need to leave that in the company, and you'll get the tax advantages from it. So they were the two key things. We think it's all about financial planning and about, you know, passive funds, or whatever it ain't that's not what they're what what this particular client told me. And I think if people bother to go and ask their clients, actually sit down and and ask them these questions. Number one, the clients are happy to help, especially if they're kind of long term clients people, most people are nice and they'll have they'll be happy to help. And number two, they might tell you stuff that's a little bit different from what you think is really, really important. So I just thought I'd mention it, because it was a bit of an eye opener for me. To be honest. I

Alan Smith:

think that's really good what you've done, Carl, and it just reminds me that we don't do enough of it, and we should do most devices don't do enough of it. I'm reminded of mention of at least once or twice on this podcast before a guy in the US called Dan Allison. He's got a whole sort of script and process with feedback marketing, go and speak to your best clients, sit down and really important, if you can this face to face, not not a not an email exchange, not even a zoom call, can I buy you breakfast? Can I buy a cup of coffee? Can I just want to ask you some honest and and it's kind of because you're authentically you really value their opinion. We can't see our business because we're inside of it. You have someone from the outside, and they also think sometimes clients use certain words and language. You think, Man, that is just beautiful. I love the way you said that. And if you ask permission, if you do, you're not fishing for that. You're just asking the. Genuine, honest opinion. They say something really smart. They're saying it in, like, normal human language. We're talking about financial planning and stuff. And I'll say, Did you mind that sentence? Can I use that in our website or something? Yeah, it's really good.

Carl Widger:

You nailed you nailed that one. You took the words out of me, like it's they describe. We have a way of of making it complex, right? They describe what we do for them really simplistically. So it's, it's like, that's what you know if you're gonna, if you're gonna do some marketing, they're the kind of words that you should use, if that's the if they're the words that your ideal clients are already using to describe what you do for them. So, yeah, look, I suppose the big message here is, go talk to your best clients. Go talk to your most, your most ideal clients. It will also, I believe, help those clients. If you, as you say, if you ask for help, I think they become more on side, and you might get more referrals out of it as well. So interesting thing to do, for sure.

Nick Lincoln:

Okay, okay, let's bring the assignment level down. Storyteller, the new DFA matrix book. Am

Alan Smith:

I the only one with any contributions this? You guys have all been to somebody.

Nick Lincoln:

Contribution is that we were just padding out topical tidbits. And this is just a bit of padder, so crack on. At least I was padding

Alan Smith:

it comes up periodically, but I noticed it in my inbox this week, the latest version of the dimensional fund advisors matrix book has just been released, and it should be part of any advisors toolkit. You can go online. You can speak to dimensional if you're a dimensional user, you can get access to it. You can get a digital copy. You get a PDF copy. You can get hard copies sent to you. Our advisors often are using them in client meetings. It's just a useful piece of kit. It's quite geeky, but it's interesting for most, most people. And if you're not a dimensional user, I think they'll provide access to you on the basis that they'll be open to having a conversation about their their investment models and proposition. It's just a really good piece of care. I think all of us, to one degree another, have used it or referred to it from time, from time to time. As I say, it's topical, because it just released the latest version

Carl Widger:

to the end of 2023

Alan Smith:

Yeah, no, they never do it quick enough for you. Carl, do they? But it does. It doesn't really matter. It doesn't really matter. Yeah, time is an interesting concept. Don't worry about it. Just another it

Carl Widger:

does, but, but I will say there are a couple of pages that we use all of the time. It is seriously, seriously good, good data, and really good to use with clients. Yeah,

Andy Hart:

just to hammer it home, yeah, as a younger advisor, I spent hours and hours and hours in that book. I'll get the latest version. The best page goal. You talking about the world map page code. You like that one? No,

Carl Widger:

that's good. But no, I love the the the various portfolios and maximum drawdowns, as in what over the last 20 years? What was the worst? One year performance, three year performance? Because we're going to be talking about, you know, you know, 6040, 8020, later on, I think this stuff is really, really good to lead the conversation at the very outset, that this isn't risk. This is the volatility, yeah, but here's the here's, are you okay if this happens, but in the long term, this is what we're looking for, and that's all on one page, and it's a brilliant, brilliant page. Really, really good. Yeah,

Andy Hart:

younger advisors definitely get a copy. I get a physical copy. That's what you would learn it the most there is a digital copy, but the PDF, but the physical copy is amazing.

Unknown:

Yeah,

Nick Lincoln:

okay, watch Metis Norway featured in some thing.

Carl Widger:

Yes, whilst I was away, the Sunday Times with work, L for business launched their inaugural Best Places to Work list and metas Ireland were amongst those nominated. So for for this award, you first of all have to fill in a an application form and tell them all of the things that we do for our team here at Metis, and then they will decide if they push you into the It's not bullshit, actually. And I'm very proud of this one, and I'm certainly going this award. No this one. If to get into phase two, they send an anonymous survey to all of the team, and you have to score more than 80 out of 100 so this one, you can't buy. You can't make up. And it's basically my own team saying this is a cool place to work. I've worked really, really, really hard over the last while to create a really good environment. And for me, as I always say to my own team, my job is to create an environment where high performers can perform highly. I really believe in it, and I'm and I'm really, really proud of this one, and I suppose the challenge. Me is, can we be, you know, can we get on the list again next year? So this is a, this is a never ending story, and hopefully, you know, something that we can replicate again next year. Was

Andy Hart:

it ranked? Carl? Was it just these 50? A decent? Was it like one to one to 50 or not? No,

Carl Widger:

it wasn't ranked, no, because it was in alphabetical order, but they did. There was a kind of magazine in the Sunday Times, and they did a little profile on each of the companies. And they kind of highlighted the Venice piece, which was

Alan Smith:

two points, good moment. Two points to make all your greatest successes in your business car seem to happen when you're away. Did it last year when you were waiting hardly. Last year you had some great new business, great successes. Hit some milestones. We

Carl Widger:

also passed a significant milestone in terms of Aom, which is, yeah, oh, which is cool. It is Oh, whilst I was away, that's the

Alan Smith:

first thing. The second thing is, every ever since we did the episode on awards, and the conclusion was, it's not worth not they're not worth bothering about. We seem to want an award. Every week we won the Best podcast. Last episode, you've won this. Awards are rubbish, apart from the ones that we win,

Carl Widger:

yeah, but if you, if you listen back to that episode, I did not say that I like I do think that there's, there is an element, if I did say it, that, you know, if I was starting out, I would be applying for all the awards, because it does give you an element of social proof. And then as you mature, maybe there are some that are more important than you know. This one was important to me as the team grows, because, look, it means that we'll be able to do great work. But it also means that if we are hiring into the future, that people will go, oh, yeah, I think that's isn't that the crowd the one the best places to work. So it's good, and it was

Andy Hart:

cheap. In the grand scheme of things, you just gave each employee 500 euros for So, yeah,

Carl Widger:

anyone listening to this who's employed by matters, Don't get any ideas. That's not happening. Yeah, see

Nick Lincoln:

it happening. Like I said, we actually are the award, the next gen award that we didn't know we'd entered in, been incident into, and that we didn't even know we'd won until someone at the ceremony said we'd won. That trophy is winging its way back to us. So that will take Where's going to be kept for North Watford. Yeah, Lincoln Lodge, and then

Unknown:

Lodge,

Nick Lincoln:

Watford. I'm happy to pass it on once I've, once I've had a good squeeze. Okay, what is the next? Oh, my God, right. Smithy, yes, mate. Nice and direct to the point it's

Alan Smith:

very important at the date this podcast goes out, it will mean as of yesterday, ie the 31st of July, every regulated firm in the UK will have had to file their report on consumer duty. Consumer duty is one year old as an introductory piece of legislation. It's pretty clear that the regulator are taking this quite seriously. The challenges that the likes of St James's place and others have had as a consequence of this means that their teeth are quite sharp, unlike perhaps some previous legislation, which seemed to get announced and then quite quickly forgotten about. I don't know what you guys are doing, but Shireen, our head of operations, was telling me this morning that she's currently sort of completely busy making sure that we are filing our report, documenting it. There's a we use it. We use we get some compliance support. Company called 360 services. They provided at least a template. I'm sure other companies do the templates, 46 pages long, and you've got to go into detail about what you've actually done, provide evidence of what you've done waste of time, submitted, and it actually Nick forms part of your RM, ar, Gabriel, whatever it's called, submission, because we're also due to do that quite soon as well.

Nick Lincoln:

I just did by year end one. Yeah, well, the big one that's

Alan Smith:

prior to the 31st of July, though, isn't it because as of because now we are, you know, we're arriving at this one year anniversary, by which time every company has to submit that they've done something and have it proved that it was signed off at board level. I don't know if you you haven't got

Andy Hart:

a board, yeah, there's a different deadline, end of July, yeah. So

Alan Smith:

it's just, you know, it's the thing. Fundamentally, it's a good thing. Actually, I'm quite happy with it. Progress has been made. If it does sort the wheat from the chaff, it doesn't apply. I know, Nick, you don't agree with it. Okay, you're doing. You're doing. There is still a tail end of this industry which is a bit scrappy and doesn't really do what it should do. And if this is helpful, if this clears it up, if this removes those handfuls, well, for the good boys. To

Nick Lincoln:

do this stuff anyway. It doesn't, it doesn't boxes. That's all it is. Regulation

Alan Smith:

works its lowest common denominator. That's how it kind of how it has to work. It'd be great to have different tiers of regulation, but at this stage, we're all tarred for the same brush. But as I've always said before, Carl and I've spoken about in the past, if you use compliance as a tool for your advantage. It's a pain in the ass, but you get it done, you systemize it, you move forward and you feel, you know, positive about it. And should the regulator come knocking on our door, we got a clean bill of health. Here's the work we've done, and we have done quite a lot of work. You know, I think any firm who was most firms were in decent shape anyway, but it may not have been superbly well documented. There may not have been a lot of evidence you can easily lay your hands on. So now we've all it's basically good business practice. A lot of this stuff is good business practice. You know, it's, maybe it's a sledgehammer to cracking up to a one advisor firm, possibly, but certainly the larger organizations have had to get more focused, get get smarter about it, be more professional than perhaps they've been in the past. And as I always say, this is important stuff. This is family's life savings. You need to take it seriously.

Nick Lincoln:

Regulators draft good business practice. They've never they don't run businesses. So I just, I this, this, I cannot score.

Alan Smith:

Should they do they ignore it? Should they just allow people to

Nick Lincoln:

do whatever? Where's your TCF report file now? And is that in some draw in the back room where you got to update that all the time, in all the order of these things? Well, it's just nonsense

Andy Hart:

compounds. They don't bring out something new and get something rid of something old. It's like everything that's been previously introduced

Nick Lincoln:

this, yeah, the previous job anymore, but I'm sure we still have to file something somewhere every year, an affidavit with our blood saying we've done it. Zero complaints. How about that? Is the metric that matters, right? Zero. Little churn. How about having some real metrics? Anyway,

Carl Widger:

I'd have a different, different view. I think the corporate governance and compliance in this business has been sadly lacking in Ireland, in the UK, for years and years and years. And if we want to be considered a real profession, like the legal profession, like the accountancy profession,

Unknown:

we gotta

Carl Widger:

step up, step up to the mark. And we gotta, you know, just, there's some stuff that just needs to be done. And I couldn't agree with you more, Alan, people who take this stuff seriously, and who, you know, commit to the highest possible standards in this I think you're setting yourself apart from your competitors. And I think, you know, getting these kind of messages out, and we started to do it to your own clients. I think will, you know, again, build that trust with your clients. So, yeah, I disagree. Nick, I'm afraid.

Nick Lincoln:

Okay, well, we'll agree to disagree because I have a fundamentally, fundamentally different and there's nothing all of us have really good businesses and medicine capital are bigger businesses. There's nothing in consumer duty that's going to change the way you do your work, your fundamental work, nothing, nothing. You might be able to advertise that you do it a certain way. Great. Why you should have to? I've got no idea. My

Carl Widger:

guide our systems and processes a little bit better, more streamlined. Make sure. I guess one of the worries for a regulator would be, if Alan has 10 different people offering advice in capital. Do they all get, broadly speaking, the same kind of service and results and outcomes that's really important, so that you can't have any loose cannons in your business. And I think certainly for us, that has it has been a massive help for us. I know everybody gets the same types of outcomes, albeit there's individual styles with various individuals. But I think it's,

Alan Smith:

I have to say, Sure, we always talk about evidence based. I think should be evidence based and not not guesswork. And again, we've mentioned this. I mentioned it on this podcast before, thematic reviews and stuff that FCA has done, and they asked for data from, you know, a random bunch of companies, small ones, big ones, everything in between. I can't remember the stats, but they were pretty poor. You know, 60% of companies hadn't done whatever they're supposed to do. There's a bunch of stuff out there. And so if that is the case, if that is factual and evidence based, there's a lot of work to be done. And if the regulator is providing a framework to they don't seem to be really coming down with, you know, size 10 boots and smashing everyone. They're saying, look, for the time being, we're going to work collaboratively together. We're going to organize things together for the good of the industry. So but the facts are, you only see your own business, and in your opinion, you run it super well, but the evidence seems to be there's a quite a high number of firms that aren't meeting minimum standards.

Nick Lincoln:

So we're trying, and those firms will continue not to meet minimum standards, not if they are, not if they get you I didn't. I didn't even know it launched nine then, so that that slipped under the radar. I'm glad you're embracing it.

Alan Smith:

You don't have to. Wait for a piece of legislation to run a good business, correct?

Carl Widger:

You can go and do best practice.

Nick Lincoln:

Okay, all right, we'll agree to differ, right? Uh, watch Morgan Stanley.

Carl Widger:

Yeah, I put this one in because we were struggling for topical tidbits. So this will be 10 second job. Some dude from this is a good one. Some dude from Morgan Stanley said we should brace ourselves for a 10% correction in advance of the US elections. On, it's behind a paywall. The article right? So I read the first four lines. There was no chance I was going to pay to go in and read that article. But it was like, it was like, mother of sweet is divine. Jesus Christ, like that person and or Morgan Stanley, and must have gone through their compliance department has decided, let's put this out there. I have absolutely no idea whatsoever if this is going to be right or wrong. We'll just ignore it if it's wrong and sure if it's right, won't we seem like geniuses active fund management. Oh, my mother of Swedish divine Christ, will you give us a break, please?

Andy Hart:

Yeah, no. I quite like, quite like these articles, because people publicly showing that they're investing illiterate. The markets declines, as we know, regularly, every single year, minus 15% is now. So we've basically, you know, state in a historical

Alan Smith:

you Stacy, this happens every single year. Decline in three year decline.

Andy Hart:

He said, I think the market, if he said, I think the market by the end of October, is going to go down by minus 63% and I'm dead sure about it. I prefer that person when they're just mentioning something that happens every year as regularly as your birthday. It's ridiculous

Nick Lincoln:

news cycle.

Andy Hart:

So I love it. It's the summer that someone who's highly paid, highly intelligent, you know, highly experienced, publicly declares that they're an investing illiterate. You know, it's brilliant. The

Alan Smith:

great thing about the internet is these things stay forever, don't they, all these great predictions that were made. Remember that one? And it was a good few years ago. Now it was the Bank of Scotland, the Royal Bank of Scotland. Remember Nick you

Nick Lincoln:

saw? And it was, I've

Alan Smith:

got that one in my folder, brought up every now and again, and I can't remember you just there are so many predictions of doom and gloom, which so and eventually, as we all say, they will be right. You know, there will be a massive correction. Or haven't

Andy Hart:

we got that famous one who's a consultant in our business that said, like, the market's screamingly too high at the moment, and it's literally, it's literally gone up like 140% since then.

Carl Widger:

Alan has tracking that was we get the graphs

Alan Smith:

from stupid advisors, or something, some very

Andy Hart:

derogatory. Financial Advisors always telling you to stay invested. Now's a good time to get out the market. 30% since you did that post,

Alan Smith:

you'd be right. Eventually, I won't actually can't be

Andy Hart:

that insane to publicly stamp an opinion

Alan Smith:

you know, having to make an attack convictions, make an attack on people who, you know in the arena, who have got the qualifications, who are dealing with real clients, who are putting their money where their mouth is themselves, and to say these advisors are all was it the dumb and something else? Yeah, phrase, it was awful, but it will not be forgotten about. We'll make sure never forgotten about, actually, as it is, a quiet Newsweek, bring something else up, which is not on our docket. It's always quite interesting. A close personal friend of mine, true story, Eddie Jordan, the previous the ex Formula One racing team owner. I don't know if you saw that in the press over the week. It's not the claim self bankrupt. No, far from it. Okay. He put, he's very wealthy guy, put a chunk of money. He was advised by his banker, private bankers, which, again, his old public domain. Just look it up, HSBC, who's banked with for years. And they advised him to put the thick hair 4946 point something million, so nearly 50 million pounds into an investment and on, all he was looking for was low risk, safely, just and there's a lot of these things around kind of cash, proxy type funds. So this was supposed to be, is going to keep your money safe. It won't go down. It won't make you a high, particularly high return, but you'll, uh, you'll do okay by anyway. Inevitably, it's all going tits up. He's taking them. He's in the High Court, I think, this week, suing the advice that he was given and the and again, you read through the article. I mean, it's, it's, it's, it's comical in a way, albeit it's sad for somebody who wanted something safe and secure. It's something called a floating rate, floating rate bond. It's a bunch of different underlying securities and bonds and trading of different 100%

Andy Hart:

capital. Wipe

Alan Smith:

out. No, no, no, no, he's declining. It's declined in value. It's done. It hasn't done as well as it's done. It didn't preserve capital. He said it lost. A 5 million quid suing for 5 million pounds. Fine, fine, fine. But in the vast and, of course, these things, and it reminds me a little bit of the the previous Aberdeen Standard Life gars Fund, which, again, on the on the surface, it all looks great, you know, preserve capital, you know, give you a high return, or a reasonable return in any market. And it's similar to this, because this HSBC bombed account, it had investments in amongst other places, China and Zimbabwe, you know, so that they're the bastions of safety and security from a financial viewpoint. And is it

Carl Widger:

this sounds a little bit like that? Do you remember that case I brought up a month or so back where that that financial advisory firm were were found to be, you know, selling these safe bonds. Yeah, it all went pear shaped as well. So sounds pretty similar. Well, floating, floating,

Alan Smith:

yeah. But another is yet. Another example of the theme that we keep coming back to is, the wealthier you are, the more complexity seems to get shown. If you just said, Yeah, you know, put this in whatever. It's some sort of government treasury or National Savings type account or something which is just a cash account, you're going to make nothing, but it's pretty safe. No, the one, I have no doubt, imagine what it would be like going to HSBC and Canary Wharf up in the executive suite, and just being pitched something rather saying, this is safe and secure. And even this, this the, you know, the very wealthy. They tend not to be financially sophisticated in these types of products, and so, but they meet a nice guy, and he's wearing a nice suit, and they pitch it to him, and he goes, That sounds great. And anyway, he's ended up in court. If I was HSBC, I'd have just paid him, you know, given a 5 million coins. Now,

Andy Hart:

I mean, they are, it's around. It's a rounding error. Yeah, it is.

Alan Smith:

And it's, it's not going to do them any good whatsoever, from a publicity viewpoint. But anyway, that was just an extra one added in that's just hot off the press in the papers this week.

Andy Hart:

And good one. And even this very day, those wealthy people sitting in skyscrapers all around the world being sold a load of other guff. Yeah, that in three months, six months, nine months, three years, will turn out to be financial trash that I should have avoided. But again, Chinese suit, wealthy people, more lies.

Alan Smith:

I did a post on that, rinsen, repeated a post on that on LinkedIn, I think last week, I think before, when I was in holes, about this, just keeping your big part of the advisors jobs keeping clients safe from trash. There is so much trash out there, and

Andy Hart:

we read about all the trash, and our job is to protect you from it, like we're aware of all this crap, yeah, to protect you from it. Like, that's why I'm reading about this crap,

Alan Smith:

and I've certainly met in real life some very smart, seriously smart, intelligent human beings who have been seduced by some of this stuff, and they've and they've lost one client in particular, one person I know, lost a million quid, pretty much wiped out that amount of money, never going to get it back. It was a fraud. And I do think that is a significant and I kind of sometimes not particularly talked about very much, because we talk about the things we do. Do we advise you to invest in simple, low cost, highly diversified, la, la, la. But what do you tell me to avoid? What are the things that with your expertise, knowledge, connections, contacts, you can keep me safe from, because a lot of this stuff, again, back to this idea of we're dealing with human beings. Even the smartest people are seduced by attractive sounding offers, and particularly, you know, not usually men in in nice suits with them. You know the nice smile and a charming way of being. And it sounds, it sounds too good to be true. Fabulously. Where do I

Andy Hart:

be so easy? It would be so easy to sell these schemes and scams. It would be shooting fish in a barrel.

Alan Smith:

They are optimized. They are designed all the words and the language and everything else is designed to be

Andy Hart:

always looking for something new, shiny, exciting. What's the returns? Is it Yes? Guaranteed 14.9% Yeah. It's just Yeah, shooting fish in a barrel.

Nick Lincoln:

While we were just digressing on a very interesting subject. I looked, opened up my Evernote and went into my forecasts folder. So Morgan Stanley said, brace for 10% correct. And I wonder if the chap at Morgan Stan who said that was the same guy who at the end of 2022 said new stock market low coming in 2023 according to Morgan Stanley, US equities are set for their worst year since the global financial crisis, and according to a Morgan Stanley strategist Michael Wilson, corporate profits are about to meet the same fate. Plus shows clue sailor men shows it's just garbage, isn't it? But if you go and come back, you won't, isn't

Alan Smith:

that crazy? Morgan's down a huge global investment bank got to lose his job on this junk. It's crazy. Yeah,

Nick Lincoln:

okay, just in chaps. We're at 50 minutes more or less. So let's do the final, the final topical tidbit. Oh, this one's from stories. Yeah, no, this is

Alan Smith:

just a, just pointing things out. I did a, it was a kind of rehash, and I updated a post I did. We often, all of us get contacts from young financial planners, Trappists, people who list. Into the show and they want a bit of feedback, thoughts, ideas, suggestions, how to progress their career. I wrote something posted on LinkedIn and Twitter, and it's available. So posted if you if you didn't see it, the link is in the show notes. I hope it's of some value to someone out there. I thank you.

Nick Lincoln:

Okay, thank you very, very much. Okay, so Ultras Ultra screen's gone off, but I think his microphone is still on, so his roommate is going to the toilet. This could be some interesting background noise. Again. Let's move on to what many people call the meat and potatoes of the show. And for episode 50, we've got a bit of a doozy for you. We want to kind of address this subject and make it. Make this episode the reference point for this subject. And this was inspired by one of the many tweets that storyteller was sending while he was on holiday, notionally, with his family, but read his glue to his phone. And this was about risk and volatility and so forth. That's, that's, that's the essence of it. And Alan said, you know, if we can persuade clients to go in from a 6040, or even got a bit of 5050, into a 7030, or an 8020, and then help them stay the course. The value we add not just for the clients, but for that client's family, in terms of children and grandchildren and so forth, the value is just a medicine, and it brought up a whole lot of some views that were very much applauding what, what storyteller has said, and other views that look to Him askance. One one, if a lady said, Is this a joke? So and of course, there'll be links. There'll be links to this, the tweet in, in the so called show notes, and also a link to the LinkedIn reposting of it that I put on on on LinkedIn under the trap brand. So storyteller. Where do you want to start with this one?

Alan Smith:

Well, I thought it was, it was time we kind of nailed, nailed our colors to the mask clearly and create something we just have a conversation for next 10 minutes or so that we could perhaps point people to in the future. Because this is a perennial subject. We go round and round every time. And what happens is, I see some chart or something posted, and I think, oh, that's quite interesting. And it was just, it was a chart, actually, again, our friends dimensional had produced. And all it was was, I think, 6040, 8020, few different portfolios. And again, going back over a meaning I can't remember exactly, but a meaningful time period. And I was quite struck by the difference between a 6040 portfolio. And again, all the caveats about whether it's global, s, p, whatever, but it's a thought experiment, a 6040 portfolio and an 8020 portfolio. In other words, you've got 80% of your investments exposed to equities versus 60% exposed to equities, you would think, intuitively, wouldn't make a huge difference. You'd expect of the last certainly, the way they the equity bull market has been in existence for the last dozen years or so. You'd expect it to outperform, but it the impact was quite was really, quite significant and really meaningful. And I thought that's quite interesting, if you were able to as an advisor, again, caveat all the other stuff, provided that you've done all your homework and the clients comfortable with it, if you're able to say, rather than do the default, which is a default in our sector, 6040 portfolio. Can I encourage you to think about moving to an 8020 portfolio? The impact is significant, and as often is the case, I get slaughtered by a bunch of people. But yeah, the interesting thing was, quite a number of financial planners. Yeah, that, that, that some lady financial planner also said, I don't know, it was just, is this a joke? And you kind of don't understand it, and I don't know, said something else, can't remember, but covid, you know, pretty derogatory, really personal attack. Fine. I'm used to it. Hang out with you boys. But I thought if we could just go through and let me lead it, because if we could just maybe raise amongst ourselves the questions and the pushback that happens during these conversations. Because I think fundamentally, the four of us on this are broadly in agreement. I don't think anyone's violently disagreeing. It should hold a maybe a lot. As a long term investor, should hold a higher proportion of equities than maybe 60% subject to all the caveats. So let me just pose a couple of questions, and maybe I'll just go, go round the house, if you like, and just get your views. And anyone feel free to chip in. And we can use this as a kind of template or a model for others who disagree in the future. So one of the questions, I think this lady might have said it, or someone else said something along these lines, but what if a 6040, portfolio gives you the expected returns needed to satisfy your financial plan? You understand this so Nick, you understand what that what the question is. If you can achieve what you want to achieve, the IU you on course for a successful retirement with a 6040, portfolio, why would you do anything other than than that? What are your thoughts? Nick on that?

Nick Lincoln:

Well, that's before that is, is one of the best questions you can be asked around this. I think I do. We all believe, and I'm sure the vast majority of Trappists believe that the finance that the financial plan comes before the portfolio. It's the financial plan that determines the rate of return that our clients and our friends are going to need to lead them to financial salvation over a typical three decade of time. And for some clients, perhaps the 6464 40 portfolio will, net of fees, generate a sufficient return over and above inflation, a real return for many clients, it won't flat. So that argument said, you can knock them to a cocked hat. But I also think because we believe in the in the long term advance, and that the declines really are temporary, and the advance is permanent and permanent loss in a beautifully diversified portfolio of the great companies of the world is is not a market phenomenon. It's a human phenomenon. And if we can control the human behavior, why would you not, for your clients, want to give them the chance to create something a legacy of meaning, not just dying at 100 with one pound in their pension pot? Because cash flow says just building something that's just could be something that could be passed down children and grandchildren and or for those clients who've got that charitable bent to them, want to do stuff in their lifetime with foundations and endowments and giving money away, well here's your chance to build something to give away with a warm hand in your lifetime. And I think if you we've internalized this argument that actually, you know, but the long term, real return of actors, ever bonds, is significant, a significant difference three times not give people the chance to benefit from that and and and for us to stand as a bulwark between our clients best doing the very best work for our clients, and all the nonsense you know that Morgan Stanley being A classic, just being, just being, like, holding this up to the RSO on those listings, but I'm holding my hand up to that video camera now saying, No, back off. You know, we're not, not in this world. You're not welcome here as a firewall between our our clients and the nonsense. So that's that. That would be my argument too. But in a short, short, short, short, boss, 6040, ain't going to cut it on from a financial plan point of view, either. They'll need the extra 1% potential return that's there, compounded over 30 years to get them to where they need

Andy Hart:

to be. Andy just followed on, followed on the same point. Yeah, the real return from equity over bonds, long term is three times as much. So we know that equities are the superior wealth, building asset class. The other thing, the most detailed, complicated, accurate financial plan, doesn't factor in the unknown. So what I mean by that is, let's say the plan gets them over the line with X 100,000x million still there, as in, you know the people out. You know, the money outlasts the people. It doesn't factor in the unknown. So I'm okay investing in creating a bit more wealth for the unknowns. So the unknowns are their kids get divorced and they're going to be kicked out of a house and the school that they want, grand, etc, etc, the grandkids want to put through, put them through private school was originally that wasn't the plan. They get divorced, Mr. And Mrs. Clients, they get divorced, or a medical situation rocks up with the clients with the family. So the most accurate financial plan doesn't factor in unknown. So I'm okay creating wealth for the unknown. Obviously caveats within reason. But having switching the equity portfolio, there's no behavioral change. It's just a temperamental change. If I say, let's create more wealth for the sake of it, you need to increase your contributions by three grand a month. That's like ridiculous. That's actually going to change and impact their lifestyle. I'm saying your money's going to be invested. If you leave it in cash, you're going to run out of money if you don't out of money. If you do a 5050, there's a chart, you might run out of money if you do an 8020, it's a temperamental change, not a behavioral change. Your lifestyle is not impacted. The idea is, don't look, don't react, etc, etc. And these people that mention things on Twitter, just say to them, did your clients lose money during covid? Did they lose money? Can they ask? Can they ask? Can they even ask that question? Because they'll say, yes, they did lose money, but then they didn't. No, it's like, no, no. There was a temporary decline, then the market continued. That's another point. Carl, over to you, my friend.

Carl Widger:

Yeah, all valid points. I think that dimensional page that I spoke about actually is a really good way of setting, kind of the tone with with, particularly with new clients. And you're talking about, as you say, Nick, we always start with the financial plan so you can identify the short term money. I like the idea of short term, medium term or long term. And I think, you know, maybe there is a bond element in the in the medium term, yeah. And as you guys know. I probably more okay with a bond element than than some of you guys would be. And I think that's okay, so I but I think that that that dimensional page showing, look, we're always saying it's risk versus volatility. It is volatility. And we got it, if we show you this now and we tell you this is going to happen, yeah, but here are the long term returns. I think that's your best way of successfully investing. Andy, you have a phrase. I can't remember it, but it's something like what you just said, but you're okay with creating wealth. You know, it's like, we shouldn't shy away from creating wealth. So, like, if something is clearly long term investing, so a lot of clients, pension funds would be the way they're structured in Ireland, that you can pass them on to your spouse and then your kids. They're going to be there forever, and they're going to they're going to live way beyond you. That's equity investing. Like, there you go all the way. But I'm okay with having a some bond content there. I would if it was, if it was me with many millions, which I don't have, but if I did, I would have some bond content in there, but certainly I wouldn't have my overall portfolio at 6040 that's for sure, I'd be much higher in 40%

Alan Smith:

is a high proportion of wealth to be to be held knowing that there are better returns, albeit subject to greater volatility, particularly when most people have got other assets, they've got cash, they've got property, they might have other stuff which is less short term, volatile. The key thing here is wealth equals freedom, and who doesn't want more freedom? Why would you not? Why would you want to just get under a minimal amount of freedom that your financial plan, which, again, as Andy's talked about as well, it's ridiculous to assume, it's, you know, naive to think that I've we don't need, we don't need to do any more because 6040, gives us enough, and we die with zero or something? Okay? Oh, well, and good. So there's no safety net. There's nothing else in place. And if some of the issues, and we've talked about this in the podcast as well in the past, classic financial life,

Carl Widger:

life throws, life doesn't

Alan Smith:

take account of those, not really. Yeah, and why wouldn't you want an extra safety net? Is kind of the thing. So that's maybe, maybe, maybe we've addressed that. One other thing I've just thought about briefly as well. It's kind of this idea about inflation. You know, you need to, wealth needs to be preserved. In real terms, the cost of living is going up. Don't always believed the kind of prevailing rate that we're down back at 3% inflation or whatever. Inflation's highly personalized. Yeah, rubbish. Highly personalized. And a lot of people sort of, as they get older and go into retirement, some of that, I mean, I just think about my own circumstance. Some of my biggest expenses are things like travel. I like to go on good holidays. The cost of our holidays has gone up a lot more than 3% I can assure you, school fees, ignoring, ignoring the 18, five, 770, 10% a year, school fees and food food costs, you know, family food, that's gone up a lot more than 3% and continues to rise as well. So if you work out your personal inflation rate, particularly for those retired who like to go on holidays and things like that. I want to maybe our part funding or helping children or grandchildren with school fees and some other costs and expenses. You tend to find inflation is more like 7% 8% 9%

Carl Widger:

something like that. A person a personalized inflation rate. I love it. Alan. Well, you can

Unknown:

also i and, yeah, I've

Alan Smith:

gone to try to, you know, see if there's any online tools. Can be wary, be careful about this, because I plugged my details into the BBC. Have got a version of this, and it's bullshit. So you are the just you spit out your whatever you're eating.

Nick Lincoln:

I had a mint. I was just sucking on a mint, and I'm gonna spat it out, which is

Alan Smith:

yes, so be careful about these other sort of there might be, I didn't spend much time doing it, but I know for sure we've all got, well, we for sure, we depends where you spend your money, but a lot of people go into retirement have got, you just got, well, I'm beating inflation because inflation is 3% and I got 6% Well, not really. You actually, your personal inflation was 10. You actually lost money in real terms, particularly if you go ask bond exposure Nick, I'm

Nick Lincoln:

just going to do it. I'm going to do a first on track with that. I'm going to share a screen. So I'm not sure how this resonate results at your end. And obviously, if you're listening to this, it'll mean absolutely nothing. So we won't dwell on it for too long. But let me well, how does that come? That's the tweet from the lady who said a joke. Okay,

Alan Smith:

if it was, if it were this simple, why bother with an advisor? Oh, my God, I think that's the point. I think that's the point. Well, look, I'm not, this is not. This is not, unlike some of the people who commented on me, this is not a personal attack, where I want to, we want to be here as a community, kind of all help each other, support each other, the. Of us on this conversation, we've arrived at our conclusions, rightly or wrongly. Obviously, they're right, but some of the other conversations, some of the other pushbacks. So let me give you another question, or something else that I noticed on the comments box, which was, let me see Carl. I'll throw this one at, at you, because I think, I think it's Andy Andy, can you? Can you mute? What are you doing? Ultra, you're in twice.

Nick Lincoln:

We're losing you. We're losing you from Boston, The $6

Unknown:

million Man, God,

Andy Hart:

it was all going so well.

Nick Lincoln:

Andy, turn off your microphone, shocking.

Alan Smith:

Carl, the voice of reason. Someone pushed back. I said this. You know, 8020 is better than 6040, what about clients who need income now?

Carl Widger:

Yeah, so look, we've been now, I am. I'm very straightforward on this one. I know there's all this setting up portfolios with income producing blah, blah, blah, blah, right? That's, that's what financial planning is about. That's why financial planning is a process, right? It is not a one and done, and that's why, every year, when you're sitting down doing your annual planning,

Nick Lincoln:

I'm sorry, got an error message from Riverside saying Ultras browsing is preventing recording. Ask Ultra to refresh the page. Sorry. Carl, okay, also, what

Unknown:

did he

Carl Widger:

do? Yeah, I think I vote for Nick. Yeah. Can you hear me?

Nick Lincoln:

Yeah, you're okay.

Andy Hart:

My battery's dying on my laptop because I've got the wrong freaking charger. I know my phone, so I might have to bugger off. Is it doing anything?

Nick Lincoln:

Nick, John, leave. John, leave completely and come back in if you want to come back with you.

Andy Hart:

No, listen

Nick Lincoln:

to this. Can we just leave you present in the meeting twice, Andy, so if you can get yourself to bugger off, just

Alan Smith:

cut, just come up, come back in again. Let's move on. God, yeah, this, yeah, the art of financial planning. Financial

Carl Widger:

Planning being a process that you look at every single year, and therefore the beautiful software that we all have for financial planning, can look for the next 234, years, whatever you you decide is right for your business, what your house view is in terms of what cash is required. And that's also another reason, guys, why I like to have your short medium and long term, because if you have your medium and long term, you will have some bond content in your medium. Now for medium, for me, it's kind of seven, eight years, okay, so, and then after that, it's equities. It allows you then decide where you want to take your to top up your three year cash. So you could go for and take it out of your 6040, your 8020, portfolio, or you might decide to take it out of your equity portfolio, but now we've got loads of different things going on. So yeah, I can't. I'm like, when, when, when I used to think about this at the at the outset, when people were bringing in all these, you know, all the 4% rule, and you need to have your guardrails in place. What am I missing here. I think we all my stupid and I'll be reading this stuff and saying, no, no, they've never advised, never it never made sense to me, and you're adding complexity that's not required. Just invest in the global stock market. And if you wanna, you'll have your short term liquidity. And if you want to add in your bonds, which is certainly the house view in metas, that's fine. That's all you need. You don't need anything else. You do not go on. Nick, sorry, sorry,

Nick Lincoln:

sorry. So I mean in accumulation, or what human beings call the saving stage, I pretty much moved to all my clients being 100% great companies in the world, because it doesn't matter. They want volatility, right? They want the down cost out. Want discount cost averaging in the spending stage. What people who don't do our job called decumulation in the spending stage. I will have the short, medium and long term portfolios. And funnily enough, when you combine them all together, it comes in at about 8020 or a 90 or an 8550 portfolio. Anyway, when you look at everything in the round, because you do have a place for bonds there for short term, short term needs, you know. So it kind of comes back to 8020, anyway, naturally, in saving if you're doing proper financial planning, sorry, yeah. And

Carl Widger:

look, if I get, if so, you've asked two questions there. Alan, so if I can just, just kind of reiterate a point Nick made. I think the first question is valid. I do. I think it's worth a discussion around, well, if a 6040, is going to give me what I need, why would I go any more volatile? I think there's a, there's a discussion piece around that, for sure. But I don't think this if someone is in, you know, needs an income because they're in decumulation, that they need to be invested in something else, altogether different. I

Alan Smith:

do not say it, but I can't remember who said that, and I think more than one person said it. It means it tells me that they don't understand the fundamentals of real financial planning. That is kind of one of the most important things that we do is managing liquidity, managing income needs, expectations and requirements. And as we've said many times in the past, it is an art, as much as it's a science. It's a blend of both of them, and that's where the value lies. Just to say the person needs income, and assuming they're just going to take it directly from an 8020 portfolio, just cash in units to pay an income. I'm sorry, but it tells me they don't understand the real art of the work that

Carl Widger:

we do. Yeah, and Alan, go, you go. You can go a step further. They don't understand the long term nature of successful investing.

Alan Smith:

They don't there's, there's no work and education needs to be done. Let me let and these

Carl Widger:

are fundamental, fundamental, yeah,

Nick Lincoln:

it's amazing. It's that's all part of life, rich pageant. It's such a such a broad church. It

Alan Smith:

is another question or pushback was, yes, yes, but what if the next 30 years are different to the last 30 years?

Nick Lincoln:

No, we cannot know. So what do you want us to do? Make policy on the hoof.

Alan Smith:

So what should we do? I mean, history is the only guide we've got, and we have got more than a century of history which does cover world wars and global catastrophes and everything else, and there may be more of that in the future, God forbid. But what else do you do but use it as a rough proxy for this, what the future might look like,

Nick Lincoln:

but Alan, Alan bond yields are higher. Haven't you seen bond yields are higher?

Carl Widger:

This time is not different. This time will never be different. It won't be the ever be the exact same? But history has an awful habit of repeating itself. But you're what we're asking people to do, what we're asking our clients to do is to invest in, yeah, the human race, the ingenuity of the human race. Are we always going to try and be progressive? We are. That's what you're buying into. Be optimistic about that into the long term, we are in the best place ever. You know, in history, we live in the best place ever. What's that one? The Rational Optimist? Yeah, yeah, exactly. And what my grandkids just like I'm I'm in a much better I live, a much better, easier quality of life than my grandparents. My grandkids, in turn, will will definitely do the same. You just spent a

Nick Lincoln:

month celebrating your 50th there's no arguing with that. My friend,

Carl Widger:

I did. And you know what, I loved it, and I'm not sorry at all, and I'm feeling very grateful. And I believe in the human race, where up be optimistic, that's the way you have to be. Yeah. Can you imagine

Alan Smith:

the technological advances and medical and know, the early advances, or the next three decades is going to be extraordinary, and you want to participate? You

Carl Widger:

have not. You have no idea like, Yeah, well, you have no idea about the leaps and bounds Ireland has gone through in the last 50 years, right? And the UK was probably much more sophisticated. So you guys haven't seen the huge, huge improvements in lifestyles. So like I've seen it, I've lived through it. Onwards we go, and they'll also, they'll also see that I was deeply uncomfortable with the content of some of today's podcast owing to the Irish versus UK cultural differences. I that just cost us money. We don't have demonetized what? Again, the other question, go on. I'll hit us. Hit us. Hit us some more. Nick

Alan Smith:

but what about Japan?

Nick Lincoln:

What about Japan? What about you? I mean, that is, was that, I

Alan Smith:

think I did that one, but that was just often that one gets brought in. There's one there's one guy again, shoulder. I've actually muted him because I can't deal with it anymore. It just does my head in every time I post anything to do with any of. You know, markets, s, p, anything else, it's but what about Japan?

Nick Lincoln:

Well, that that is actually a really good advert for what we do. Because, yeah, what about Japan? What if you put all of your all of your money, or your clients money, in, not in just a one asset class equities, but into one country's equities. Well, we wouldn't do that in a million years, not because of the Japan experience. We wouldn't do it full stop, because that's taking a massive geographical bet. And we're not doing that. We just say we want to buy the world. We want to buy human ingenuity wherever it may be around the world. And we don't try and guess where the next hot spot is or what the next hot sectors. We just buy human ingenuity en masse. So yes, Japan had that awful 30 years. There's nothing about Japan as well. It was a completely corrupt and rigged Nikkei in 1989 I mean, it really wasn't. It took decades to unwind that. So it was a bubble, a bubble, a bubble of bubbles. But yes, we don't What about Japan? Absolutely right. What about Japan? We don't want to Japan. We want to buy the global market. And yes, the global market will have severe temporary declines sometimes that will give our clients the willies. And we're there to say, hold the course. This too shall pass, and everything will come back to where it was and then go on to new plateaus. But yeah, you mentioned Japan, absolutely right. We do not do Japan. We don't do the

Alan Smith:

I suppose you could say, if your global market cap weighted, you are 60% over 60% US stock. That's that's quite a big bet for but well, but what else can you do? Anything else is a

Nick Lincoln:

what else you can do? We don't I mean, we know some ifas in the southwest of this country apparently have a crystal ball down, and they spend all their time looking at incredibly complex charts and things, because they're just gifted, but we're not. But one of the points I talked about was the mag seven dominates the market. It does absolutely maybe the values are too high to risk. The one thing I would say is that if you have a portfolio that is tilted towards certain factors, small cap, perhaps in value and perhaps momentum, that when we have these significant bear markets, those kind of portfolios, for whatever reason, the Federal technical reasons, tend to ride out better than a pure cap, weighted global equity fund. So you can even, to a degree, ameliorate that, that that's that, that stock concentration risk, which, which, which is a real present danger

Alan Smith:

I get that. You know? The thing is, you've got to do the work personally to get this to understand on the the investment side of things, you know, I've talked in the past, I think, on this pod, about when we kind of saw the light after 2009 coming out of the great financial crisis. And I was just thinking, what the hell this does not make any sense to me. And so we spent such a long time, and I now feel quietly confident that we're doing the right thing. We are optimized. I think every one of us on this pod, and that quite a lot of listeners, have got what I would humbly refer to as a world class investment portfolio based on rigorous data, facts, evidence and science, it just exists. Is there a better way of doing it? I don't know, maybe, but not that I've found. And we leave no stone unturned in our quest to continually tweak, enhance or improve our investment strategy. And if you combine that with the behavioral stuff and the, you know, uniquely human stuff, you know, it's about as good as you can get, really,

Carl Widger:

yeah, and the and the other thing, Alan, I'd say, like, if, if you've been on this journey since 2009 you're, you're, you're ahead of me, right? But you should get great comfort from the fact that in 2009 you dealt with the historic data, and you went evidence based in 2009 on this way forward. You're 15 years in of proving to yourself every single day exactly right? So it's so, so it's not, it's not like that, you know? Oh, I'm hoping that the historical data you are actually living proof 2009

Alan Smith:

when we first started our journey. And it took a year for myself and my colleagues to just to go through this that 2008 2008 or 2009 is when the market suddenly recovered.

Nick Lincoln:

Yeah, but I made that switch.

Alan Smith:

But we were all kind of, you know, we never navigated our way through, but we're all quite, I suppose, shaken up by because we trusted the this is still called excellent we, you know, is well documented. I've talked, spoke about, spoken about in the past, you know, outsourced a lot of investment management to Nick's friends that what they call posh DFM or the equip, or the equivalent and but the point is, it's like a lot of things in life. It's, you've got to do the work, if you think you can, I don't know, read a couple of articles and or even go on the DFA foundation course, and you think you found the salvation and solution, you can. There's no shortcut to this. You have to. I do feel now, one of the few things I do feel very confident about in my life. If I sat down with a prospective client and they asked me to justify our thought process and why we do what we do, I would be able to confidently articulate and even share the journey that we've been on why we've done it. And I'm just saying to anyone listening to this, this podcast, this episode is not a quick fix. This episode should encourage you to go and learn more. Do you further do anything in life? You can't, you can't borrow someone else's experience. You got to, have to do it yourself. I think, yeah,

Carl Widger:

like another way of putting this right is you've you've looked, you've done the evidence based research, you've looked at what's the best for your clients going forward. And anybody say our Morgan Stanley friend who said, prepare for a 10% just correction in the market. Are your floating rate, no bonds or whatever, right? So take your own life savings and you have three options, A, B and C. You're going to go into long term. Buy the whole market. You're going to put your life savings with Mr. Morgan Stanley because he said it's going to go down 10% were you going to put it into a floating rate? No bond, right? And I'd ask Mr. Morgan Stanley man, which option he would go for. And I know it wouldn't be the gamble that between now and the next three months, which

Alan Smith:

which is, which is the Yeah, which is the other thing as well, which everyone needs to be wary of, and our clients need to be reminded of, is that all these people with their forecasts and stuff, they've got a different agenda, then they're not worth listening to it the best of times, they don't understand you Your circumstances and also get that that clearly has achieved column inches. We know for a fact, if you say, and if you predict anything particularly doom and gloom and negative, you're likely to be picked up by the press. You get and eventually some of the stuff that's the point, they will be right. Oh, Mr. Morgan Stanley, predicted 10% and 10% surely came along, if you are, if he says it every you know often enough that will that will happen, but it's entirely different. It's correctly called 10 of the last three, but it's entirely different thought process and agenda. And one thing that I will see as well as it refers to an investment philosophy. We continue to have investment committee meetings and the agenda. We got an agenda, obviously have, you know, third party support comes in and helps us and guides us through this agenda item number one on every investment committee meeting is, does this stuff still work? Is there any new evidence which has come to light, which which makes us pause for reflection, makes us explore a bit more? Whatever your deeply held beliefs are, you should always be open to challenging them or looking for new evidence to come to light in the in the, all the years we've been doing it, despite the fact that's on the agenda. Every now and again, something does come up. To be fair, there's a paper written by someone interesting. Let's explore further. And without exception, so far it's been, well, it's a six year data set. It's not long enough to, or, you know, whatever, or, or it's, or it's, they've got confused by something. There's never been sufficient independent, you know, research or data to make us change, in any way, our investment philosophy. But I think that's important to do. Don't just continually, just say, My way is the best way. All the rest of you are stupid. Be prepared to challenge your current thinking. The last question that I'm going to raise on this little excerpt, which I do think is not an unreasonable one, because someone just pushed back. So again, just just to remind you, we talk about this for a while, I think there's merit in advisors encouraging their clients who are sitting in a broadly 6040, or 5050, type portfolio to just dial it up a bit, to move to a, say, an 8021, 8020 which means the expectation is higher returns alongside some higher volatility across that portfolio. And one of the one of the pushbacks was Yes, but what if the clients can't sleep at night? Nick, but

Nick Lincoln:

Okay, thanks. Um, well, I think if you, if you, if they're already with you, and they've been with you for a number of years, say they were with you in that crucible of 2007 to nine, you know, the the upside beforehand, and then the calamitous roller coaster ride for the next two years, and they've been with you if they didn't, if they weren't with you, then they've been through subsequent things, the Wuhan bed wetting. You know that 34% decline in 33 days the list trust attempt at rainy and spending and doing something sensible with taxation, that that was that apparently spooked the markets. And then bond, you know that will that Chao, everything we've had, I think they're going to trust you when you say to them, Listen, I, as you just said, when the facts change. I change my mind. I don't think a 6040 portfolio is really me giving me giving you the best opportunity. I think we go to 8020 and I do because it's you. If you do have clients who the extra 20% equity asset allocation would give them sleepless nights, then they're probably that's a reflection on your onboarding service as much as anything else. And you might want to disengage. The end of the day the class might say, well, it's my money, and I want it 6040 so anyway, so I'm going to keep it where it is. I'd be very surprised if just ratcheting up from 6040 I mean, God forbid, six I haven't got, I've got so few plants in 6040 I'm just trying to think. But, I mean, I imagine two or three years ago and then with that sudden rise in interest rates, where we saw Bond prices fall, I imagine there were some really difficult conversations with clients. Clients then who are maybe by nature, more nervous, so they're in a 6040. Actually had a really bad ride, because that 40% element of the portfolio that's supposed to be the bit that didn't give them the willies, had a horrendous time, didn't it? So you were talking them off a ledge probably every day. I don't think it's a problem. We're here to be we're here to help clients manage. Clients manage their behaviors through constant empathy and education and just getting them, the clients to understand that we are on your side. We have no vested interest in this. We have no skin in the game. We don't represent a fund management group. We don't work for a fund management group. We don't work for a bank. I'm giving you my best advice because you will do well by it, and if you do well by it, I will do well by it. Get out of my office. Yeah. And are

Carl Widger:

like, you know, if I invest, if I just, you know, tell you to put your money into cryptocurrency. Or Japan, I'm getting paid the same. So I'm clearly, I'm here to give you what I think is my best shot here. Okay, couple of points on that Nick That's we do have a lot of 6040 people, and I think it's we have them all appropriately invested in their medium term portfolios. That the point you just raised is the reason for people not to be moving out of 6040 portfolios right now. But yes, having the conversation about longer term stuff, certainly for new money, but you touched on exactly the point your onboarding process is really important, that you use that as your educational piece, and that you do talk about these maximum drawdowns and that it's short term volatility, but in the long term. And Andy has described this stuff really well. So spitty's not here, but, you know, it's like, do you want to, do you want to? Do you want, not a low risk growth, uh, fund. Do you want a low return fund or a high return

Alan Smith:

this rest, just reframing, you know, I'd like the high return one, please. Absolutely. It does come with a little bit more volatility. You okay, yeah, it's fine. How you frame it? Yeah,

Carl Widger:

yeah. Yeah. And let and let me show you how this. So I do think that's that's the kind of communication, the education, the honesty at the outset, the honesty to have the courage of your conviction to say this, this has happened before. It will happen again. And here are the here the ballpark numbers, so you're talking to them about it. But this is appropriate for you, because let's go back to our financial plan, and let's see when you're going to need this money. This is long term investing, so I think it's about how you're framing it at the outset. Because if you don't do that, and it's easier not do that at the start, right? Because you do inverted commas, risk losing a client, right? If, because, in case, you might scare the shit out of them, right? So you have to have the courage of your conviction to actually be brave enough to have those discussions at the outset, so that they're not then surprised when things happen, because that's when really detrimental stuff can happen, and people go jumping out

Alan Smith:

of portfolios. I've always said the early client meetings. This is not an if, this is a when it's just a matter of when your portfolio suffers a 2025, 30% short term correction, there's never been a time in history where it hasn't recovered to greater highs, but it's a bit uncomfortable. So I'm just telling you this is, this is not it might happen, it will happen. But this is, and then you go to explore and explain that, and this is, this is the point about this. And this is the thing that kind of frustrates me, if you think across the board, and everyone gets wrapped up and you used a good sort of explanation there. Carl, words and language is so important. This comes back to this perennial subject. You can start risk versus volatility. And those risk risk. No one wants risk, no one wants volatility. But I want to have independence, financial independence. I want to help my children, my grandchildren, and all these good things. Okay, we're fine. And the truth is somewhere between the two. Now, if your client literally says I wouldn't sleep a wink at night if my portfolio fell by x, I don't even know what the data is. There can't be that much difference between a the biggest drawdown on a 6040 and biggest drawdown on an 8020 it will be material, but it won't be like three times the amount, but that's where the magic lies. Now, at the end of the day, if the client says, you know, no chance, I wouldn't sleep a wink all night. I'd be just dreadful for me. Then fine. You know, if that's the thing, we failed in our duty to educate, inform and coach. Fine, but we recognize that not everyone is rational. Some people are scared of snakes or spiders or whatever it might be, and there's not lot you can do to deal with that in the short term. And what she was saying, Nick, a man persuaded against his will is obviously the same. Opinion. So you don't want to let bro beat somebody. But this, this is why I put that tweet out, because I said you'd earn your fee 10 times over, because over the next 30 years, you're using 120 years of history as our guide. No guarantee the next 30 years will be the exactly the same. Then, no, they won't be, but they're likely to be broadly similar in that allocating some of your wealth to human ingenuity, creativity and progress is likely to provide to be rewarding. If it didn't, then the entire financial system would have broken down. That's a trade off. That's a trade off you give accepting short term volatility gives you higher returns. Yeah, if you could get higher returns for lower volatility, everyone would do it in the market wouldn't exist. So this is

Nick Lincoln:

and you wouldn't get that. You wouldn't need the compensation you cannot get pointless. And just to close, I think we should close 90 minutes in Carl used the word surprised. It's perfectly okay for your clients to be shocked when they see the valuation of their pensions or whatever ices you trust go down in value during temporary decline, because it is a shocking they must never be surprised. That's the difference. You must never not know this couldn't happen, and that's why the education cliche again, but you do the lifeboat exercise when the boat's in the still water, in the dock, you don't do it when? Yeah, Colin captain has just clipped a great big grass here, and the thing's listing is too late. People, won't

Carl Widger:

I just, I just, I know. Sorry, Nick, I just, as we're wrapping up here, right? I'm, I'd love to get, I'd love to get, you know, a debate going, a proper debate with, you know, people who believe the opposite of what we're saying, because I genuinely don't believe there are valid arguments, or that there are things that we can't explain as to why this is the best way forward. Of course, people have different views, but I'm always mind, wouldn't it just be butting it? But I'm always minded of asking these active fund managers, would you, would you invest in a capital asset management plan. I long term investment are the one that you're that you're peddling yourself. I think we

Alan Smith:

know, but we don't disclose it topically.

Nick Lincoln:

Okay, let's move on. Okay, so we're 90 minutes, and I'm, I'm proposing that we skip the TRAPPIST questions for this episode, because we still got to do culture corner. We can Jill, you'll be very patient. You're in the heart of Jill Turner. We will do you in episode 51 in terms of answering your question that's poorly phrased. Let's move on to, oh god, it's a hot day. It's 20 it's 29 internal temperature in my office. I'm just, basically, I'm just dissipating into a puddle,

Alan Smith:

but no air conditioning in Okay,

Nick Lincoln:

not in the not my office. No, we don't, okay. I'm not gonna read any price straight on to me

Alan Smith:

first. Oh, there's a book. Now, this book has been out for, I think, the best part of 40 years. I've heard about it before, but just my friend of mine when I was just up in Scotland last week, David McChrystal, shout out to David Irish man, but he's a listener. He's a listener to the podcast, despite the fact he's not in our industry at all. He's a he's a property man, as a lot of Irish people seem to be but we, we sorry about that, a glass of wine. And David likes a glass of wine. He likes several. But we're chatting about stuff and little sort of tips and tricks and sort of and he said, Have you ever read swim with the sharks without being eaten alive? Swim with the sharks without being I said, No, I have not. So he gifted me his own copy by is by a guy called Harvey Mackay, American guy, and it is dated, for sure, it's pre internet, but it is brilliant. It's just full of loads and loads of little snippets and sound bites about selling, God forbid, about working with customers, about building rapport. It's a kind of it reminded me a bit Nick of one of our favorites, How to Win Friends and Influence People. And I looked him up. He's got his own website and so on. An interesting thing he does, you can just download a template. It's called the Mackay 66 and it's just a list of things that you should know about your customer, all the things that we talked about in the past, like in your CRM system. But, you know, they're the kids, the children's names as hobbies, as clubs. He's a member of all that sort of stuff. And Harvey McKay owned, of all things, an envelope company selling envelopes. But, you know, at scale, mass stuff. And he all his salespeople would look at their 66 thing and go in, you know, old school build rapport, position, the thing, and sell their stuff. But anyway, it's a night. It's a nice book worth getting. Got it. It's available on Amazon, swimmer the sharks without being eaten alive. Thank you.

Nick Lincoln:

Great stuff. I've actually just bought it on Kindle for seven pounds 99 and the book came out in October 1989 which that. Was when the New World was coming in, when the when the burning wall was just about to come down, and Eastern Europe was just a different world. Completely different. One amazing. Okay, my culture corner. Does it have anything with people with with our things? Think of ours. And finance, a little bit certainly has a lot to do with human beings and mistreatment of human beings around money, the post office versus or Mr. Bates versus the post office was the ITN three part that came out a few months ago about the scandalous and the worst scandal is ever used sometimes. This was an absolute scandal, the horizons computer scandal, the Fujitsu horizon computer scandal. And this is the story of it, and it is just heartbreaking. And it, it's, it's just, it beggars believe. I think we all know what happened. These sub postmasters were given this very, very poor computer software to use in 1999 stroke 2000 they were given minimal training and told to use this. And these, the reason this isn't this is this is so sad, is that sub postmasters the kind of people who are the they are the community for a lot of these, these little villages, I'm sure it's the same. Maybe in Ireland, it's the same that the post office is where you know, you have the board, the notice board, you know, lost property, whatever the sub customer, most of knows it. Knows everybody. These may not be high alpha people, okay? They may not be technically that great, but they're just good. They're the good little people, okay? And they were, they were absolutely screwed over a barrel by Fujitsu when this system wasn't working and they couldn't reconcile it daily, they had to pick up the losses. And these losses got bigger and bigger and bigger. And every time one of these poor buggers phoned Fujitsu the helpline, they were told no other sub postmaster has reported a fault. Yeah, it must be down to you. Scandalous. And people lost their lives. They lost their names. Loads of people lost money, and in the end, it came good. But the book is brilliant. It's 500 pages, and the last quarter is heavy on the legal stuff, but it's very well documented. But if you want to see how rotten our establishment is and how they went to they all en masse, came together to make sure these sub postmasters never had a fair chance for years and years and years. Read the great post office scandal by Nick Wallace, it's, it's just an eye opener, it it's a real scandal, right? There we go. Voice,

Carl Widger:

you shouldn't have called me. I was like because I knew clearly, do business, do life. Brad Johnson, I've mentioned him before, try on my holidays to listen to stuff that's maybe a little bit different. So why were you listening to a financial planning podcast to hear you say it's actually a little bit about his personal story and some of the struggles he had in terms of work, life balance, in terms of setting up a business, feeling the pressure of a business. And his message is kind of everybody, every entrepreneur or business owner, or whatever you want to call it, should be in some type of therapy. Now, he does qualify by saying you should have a coach. You should have a mentor. You should have someone that you can talk to. I firmly believe he's correct. I have probably all of the above, and by God, I'm happy I do, and I'm in a much better place for it. And I think anybody who's struggling a little bit in business, have a listen to that and then take his advice. I think, I think it's a really good episode and just worth hearing sometimes that if you're having a little bit of a struggle and it seems that everyone else around you has been, you know, massively successful, that's just not the case. And go and talk to somebody, and you'll be amazed how that will help you through the bad times to get to the good times, because good times are ahead. I promise you

Nick Lincoln:

interesting. I had one session with a therapist once, then she probably retired. I wouldn't say my call got my number.

Carl Widger:

I don't think she retired. I think she's in therapy herself.

Alan Smith:

I agree you should. You should have a therapist, not here. Nick is mine. Nick is mine. Every time I've got something on my mind, send him a little WhatsApp, and he tells me to sort myself out

Nick Lincoln:

fully, a self heart isn't here to give his one shot. Probably annoy Ultra but dirty pop, Netflix, I do know about about this is this. This is the pop the boy pop impresario Lou Backstreet Boys who NSYNC and Backstreet Boys. It's a very good, apparently, Netflix documentary. This guy was a complete Ponzi scheme in terms of what he's doing with the money. But maybe we'll let Ultra give it justice when he returns to it. What a tech snafu from the tech wonderful as well. Miami, wrong charger, flat battery, wrong microphones,

Alan Smith:

absolutely. Anyway, it

Nick Lincoln:

is what it is, absolute, absolute shambles,

Alan Smith:

absolute shambles. There we go. We done,

Nick Lincoln:

absolutely shambles, okay. I think we had okay. So we are at

Alan Smith:

one day, one day, 100% perfectly. No tech balls ups. But.

Nick Lincoln:

I think it's the the overseas trails do tend to for what better

Alan Smith:

do, what Carl does. Just saying, Yeah, stop talk. Yeah. Have

Carl Widger:

I not proven at this stage, for Christ's sake, to

Nick Lincoln:

goof up, but it's coming. It's coming. Without a doubt. You

Carl Widger:

did you at the cleaning lady and everything coming into you in Sicily when you got stuck there?

Nick Lincoln:

I worked that into comedy gold. That's the, that's, that's the skill, you see,

Carl Widger:

right? Depends on your definition of belt out

Nick Lincoln:

come. We gotta, we gotta get it. We gotta do this. Otherwise we'll be all day. That is a wrap for the episode. Thank you, dear trappers for leaving. Please do leave a six out of five star review on iTunes, like and subscribe to our YouTube channel. I think we're 860 subscribers now, so we're getting very close to hitting the magic 1000 and then still earning any money, because we get demon size anyway. So until the next time from the trap pack, it's adios. Take care of there, and we'll see you on the other side. Goodbye.

Carl Widger:

Bye. Bye. You.

Alan Smith:

Yo, what happened to heart? I.

People on this episode

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Nick Lincoln

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Alan Smith

Co-host
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Andy Hart

Co-host
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Carl Widger

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