TRAP: The Real Adviser Podcast

65 - The Metrics That Matter

• Alan Smith; Andy Hart; Carl Widger; Nick Lincoln • Episode 65

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TRAP LIVE25 - 14TH MAY. REGISTER INTEREST HERE: http://www.therealadviserpodcast.com

In this latest pile of TRAP, the Trap Pack discuss

  • Topical Titbits
  • Meat and Potatoes: The Metrics That Matter
  • Culture Corner
  • TRAPist question(s) from Tom Brookes

Show links: http://tiny.cc/traplinks

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Unknown:

Music, welcome to the real advisor podcast, T, R, A, P, trap. Please 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 music,

Nick Lincoln:

yes, indeed, dear TRAPPIST, welcome back to what many people are calling episode 65 of the real advisor podcast, T, R, A, P, trap my name is indeed lick nincoln. And joining me once again in the digital studio of doom, are the three other Horsemen of the Apocalypse. Alan the storyteller, Smith, Carl de la vociu, the voice widget and Andy Hart, Now, gentlemen, we have a show packed full of app, absolutely nothing, so let's start unpacking it straight away with some more high energy review reads. Read up. I'm a very good friend, the right honorable Mr. Andrew saying, Hart,

Andy Hart:

I didn't interrupt you there, Nicholas intentionally, because last time you're right off kilter from the from the get go. But before we start, we talk about the Calcutta Cup, the morning of Scotland at the weekend.

Alan Smith:

You should move on honestly. But how

Nick Lincoln:

we won that? I do not, let's just leave it at that. We won. How we won it? I do not know. Calm.

Alan Smith:

It's nice to give some of the minnows. Give them a chance sometimes, isn't it? And also, Italy is great for Italy England.

Carl Widger:

Enjoy giving all of you some time

Nick Lincoln:

the little countries. Okay, we're supposed to win

Andy Hart:

against them. They thought they can make it five in a row. No chance. Absolute batteries, okay, I think you should move on. Reviews. Okay, two reviews. The first is from JM, from wanboro. Try club, mandate. Man, mandatory listening. I'm 38 years into this profession and 16 years as an owner advisor. I love this podcast, topical, relevant and straight talking. Laugh Out Loud, funny at times. It's a serious podcast. If you care about our profession, I must listen. Thanks, chaps. Next up is Bob, W, n, C, F, c5, stars. Thank you. Great podcast on the whole a great podcast which has been great for our profession. I wonder if the format could be tweaked, with the occasional guests coming on after 50 odd episodes, the content is still decent and relevant. Back to you. Nicholas, okay,

Nick Lincoln:

I thank you. I think Bob for that, when he gave a five, five out of five review, that's that's kind Yeah, we did. We have any odd guests, aren't we on now we had Barney. Barney white on the last one. He was very good value, I thought, and got a good reception from that. But do thank you for the reviews. Please do keep them coming in. We love them. Okay, let's put a timestamp on episode 65 Yes, it's 65 with some topical tidbits. What's going on? The first thing I want to lead off on is we have been promising for months that trap live is happening on May the 14th, dear TRAPPIST, bear with us. It absolutely is happening. So do put May the 14th in your diary. Underline it once, twice, twice, it will go ahead. We're just waiting some technical things in the background to set up the ticket sales. But it definitely is happening. So just that's

Carl Widger:

a bit what's what's the problem? What's the hold up? Nick, one

Nick Lincoln:

of my shareholders is an Irish guy. They'll do extra security checks. Yeah. But if you are,

Alan Smith:

if you are interested, do register your interest at the website. Which is Nicholas W,

Nick Lincoln:

which is the real advisor podcast.com, the real advisor podcast.com,

Andy Hart:

advisor with an E. Dot Yes. Thank you. Okay,

Nick Lincoln:

having got that out the way, Carl, tell us about your big missile.

Carl Widger:

Or this is the St James's place, Polaris fund, correct,

Nick Lincoln:

but I hope

Carl Widger:

so. So I just saw this article that I've shared in the show notes, which basically is saying that the Polaris funds that SJP launched in November 2022 are now the biggest funds in the UK, overtaking Terry Smith's fund. Smith. Now the the point about this, I appreciate that this is probably moving, or it not, probably this is moving other SGP funds into the Polaris funds. So it's not brand new money, but there's 30 billion in this fund. And this is one of a series. So there's Polaris 1234, which is various levels of equities, and three is the 80% equity exposure. So look, what I would say is a. Partly the Polaris funds are SJP funds and some passive funds as well. Broadly speaking, the SJP haters are going to go bananas when they hear this. It is good that there is so much money in an 80% equity fund that has at least a good dollop of passive funds there. And for me, it is better that there is more money in this fund and the associated Polaris funds than an active fund like fund Smith, for me, so I know people have their views on SGP and their fees and all that kind of stuff. But broadly speaking, most of the SGP clients seem to be going into an appropriate type of fund with an appropriate type of equity content. For me,

Andy Hart:

I think as a firm, they're sitting around 75% so that would make sense in relation to this fund. I think, yeah, it's the, individually, the biggest fund in the UK. I don't know if fund Smith actually hit 30 billion, so this might be the first fund to actually hit 30 billion. Yeah, it's overtaken fund Smith and another fund, Blackrock US equity tracker. So yeah, I mean, it's good news for UK investors that we are building up bigger funds. The funds in the US are loaded over 100 billion. So, you know, maybe within, I don't know, 510, years, one of our funds might be over, over 100 billion. Again, it's

Carl Widger:

just a but I think the Polaris funds are over 60 billion now. So like, they'll, they'll cross the under pretty it

Andy Hart:

looks like they'll get there first, if the trajectory is still the same. But, yeah, interesting. I'm not

Alan Smith:

sure these are the biggest funds, it depends on the definition, yeah,

Nick Lincoln:

so it's a fund of funds investing back into SJP zone stuff. So, yeah, it's

Alan Smith:

all different. Yeah, last time I paid any attention to this was a couple of years ago. The biggest fund in the UK retail by far, was gars. No, well, we used to be girls, and then that all blew up. No, it's, it was and is the Pru smooth managed fund, Prudential, smooth managed fund that has just got, well, billions, I can't remember. There is a much bigger number than that, whether that's classified as a life

Nick Lincoln:

fund, yeah, pension, slash life fund, so insurance and

Alan Smith:

bonds, so it might not be that, but that has got huge traction. That is, don't want to get down a rabbit hole right now. But I saw you posted something lick the other day about this smooth managed funds that you'd been had an email about somebody saying you should invest in this because it's smooth. So you're not mate, you're like standard, standard life. There's not my law. It's a different remember, we went through this last time. Don't

Nick Lincoln:

be sensitive. Alan, we've all done into the past. We're ashamed

Alan Smith:

of. Yeah, they had a smooth managed fund, or they have, or the launching or something, whereas the

Andy Hart:

latest isn't it. It's the flavor of the month. You know, it was the language of

Nick Lincoln:

the Standard Life offering. It was just the, it's like retirement glide ways, you know, let's, let's manage the declines and all this. Like, oh my God, have we learned nothing? Yeah.

Carl Widger:

And look, that's, this is, this is the reason I shared this article to say that, you know, people can be down on SJP all the time, but if most of their clients are going into a fund with 80% equities, they're actually putting their clients, the majority of their clients, at least into the right type of fund that will serve their clients, no matter what the fees are,

Andy Hart:

slightly increased fees, the returns are slightly better than the typical fund. The fees can be slightly more the net. Net is what we're more concerned about. That's it. Andy, that's it. Yeah,

Carl Widger:

smooth returns, or any that crap, yeah.

Alan Smith:

And as you refer to Carl the SJP haters, we've always think, as a podcast, been fair, been quite neutral. We've criticized for criticism as due and we've said positive things, so we thought they were worthy of mention. SGP are about to, I think, complete later this year, complete their entire repricing, re everything. It is lower fees. I think if I read it correctly, they're doing away with their initial, you know, set up costs and withdrawal charges and all exit penalties, etc. Customers only. Well, I think it's going to be more explicit, like everyone else Williams, off the top of your investment, yeah. And having met a few SJP people over the years. I think there'll be quite a force to reckon with in terms of the, you know, the the kind of infrastructure and resource and support they've got, and if they've got a, you know, a reasonably competitive proposition where the overall pricing is, let's say, called, about the same as the average IFA, I think there'll be some significant competition, but 100% time will tell. I think

Carl Widger:

it's a great business.

Nick Lincoln:

Okay, good stuff. So who's next on the agenda? It's me. So, yes, okay, mumbo jumbo, questionnaires. It's more to become a part of that sort of lexicon of our of our thing, MJ cues, and we all have views on them. I think generally in the round the track pack are pretty negative. Towards them. They may play an incidental part in the client onboarding process. Just to weed out the loons, it's also good to see that in some of our American American advisors, advisors spoke incorrectly with a no, some of our American advisors are also onto this theme. Was a guy called Eric Nelson, quite prolific on on Twitter. He's a very big DFA. DFA. He's definitely, taken the and he put a piece out saying that he stopped using mumbo jumbo questions. He doesn't use that word, but he stopped using risk attitude to risk questionnaires back in 2008 and instead, he started phrasing with your clients. Listen, the markets have these temporary declines every five to seven years on average, okay, averages skew a lot of evils to be careful, but on average, between every five seven years, you get a marked temporary decline. How much would you want Mr. And Mrs. Client, in bonds slash cash. How many years worth of income withdrawals would you want? In bonds slash cash, and we'll work a portfolio back from that. And he typically ends up with a sort of 7030, 8020, portfolio. And that's the only conversation he has really about asset allocation. And it's not even a conversation about asset allocation or risk. It's just about Mr. Mr. Client, what makes you feel? But having been through this education process with you, I've shown you the peaks and troughs over the years, what would you feel would be the right amount you'd like to have in your emergency pot? And we'll work back from that. So just a good, a good piece. I think we already read it on LinkedIn. Well, put together. Yeah,

Andy Hart:

really good. I mean, the specific word he used is he's never been able to work out anyone's risk tolerance, which is, you know, again, something that's quite hard to get your hands on. Yeah, I like the way to expect split long term buckets and and short term reserve. And he said that, I think he said the longest anyone's ever said is, I want seven years worth of my income secure so I can ride it out. Was typically, they say three or four. He was surprised at how short a typical client, you know, chose, you know, in terms of the amount of years? But, yeah, he's obviously a smart advisor, and knows a lot about investments and has had a lot so he was allocated conversations, sorry, like he was allocating roughly. Was it 5%

Alan Smith:

per year? So several someone

Andy Hart:

who said they will put every so you tell me you want put aside, so if you want three years, we'll put 15. I mean, obviously, of course, obvious exceptions apply. We know it's client specific, but generally, as a general rule, yeah. So if you want four years, we'll put 20% in the in the reserve fund, which is high quality bonds.

Alan Smith:

Yeah. So much of this is about framing, isn't it? Clients. He said, he said, in the pen, it is a well, and I followed him, as you say, on Twitter for a while. Yeah, he's he's relentless on the kind of the dimensional stuff, but it's good. It's good. But that is language. Because I think he put in this article something on the lines of, clients don't really know even how to answer the question. It's almost like they're trying to give you the answer you want to hear. Or I don't really know what it is, and I thought, I've never experienced it, so how can I answer it. But what they do know is how much income they want to secure put aside rainy days, sort of emergency markets are going haywire, and it's between everybody, say, three years at the short end, seven years at the long end. And so when the inevitable huge market correction collapse happens, we say, Don't worry. We've still, we've got to remember how many years they're safe for. Yeah, worry about it. Yeah, exactly it was. It was a nice bit of framing. I think it's, yeah, well worth reading, great, very good. And

Nick Lincoln:

there'll be a link to it, of course, in this so called show notes. Ah, Smithy, you avoiding capital gains tax?

Alan Smith:

Yeah, not really. But I'm going to just tell you a very brief story, personal story, personal story of mine. Come on, Nick Come on. Just

Nick Lincoln:

play it. Pressed it and I pressed it. I'm waiting.

Unknown:

All right. Hold on. We've got a delay, absolute shambles,

Nick Lincoln:

right. There we go.

Unknown:

Grab yourself a drink, a very long drink. It's story time with Alan Smith.

Alan Smith:

Ultra always disappears this moment, doesn't he? My storytelling skills. He's had enough of them in various bars and restaurants over the years. Flash pads, uh, in webinar in 2014 for multiple reasons, including to kind of diversify my own family life savings, I bought a buy to let flat in place that you guys know, just outside London Amish show, nice little village, half an hour outside of London town, and I bought it on a bike with a buy to put a deposit down. Bought it in a buy to let mortgage. And have been, you know, funding it, paying a mortgage ever since. And it kind of just about washed its face, really, in terms of money in versus money out. As you guys know, in the interim period, tax rules kind of moved against buy, to let landlords and you can't offset the cost of funding the debt or the mortgage against the overall costs. And the whole thing is a bit kind of unsatisfactory, just from a day to day as a as a that's the only. Sort of buy to let property that I owned. There wasn't a multiple landlord. I know some people take this seriously, have it as a business, set up companies and so on. This was just me. Bought it in my own name anyway, for various reasons. Fast forward to today. I'm going to sell it and sell this property. And so I was looking at the numbers recently. What I bought it for, which was in round numbers, 200 grand. And what I what the the eight just going online and getting an approximate valuation for what it would be sold for now is about 300 just over 300,000 so at first glance, that that's, you know, 100,000 pounds of gain. You think, Well, that's okay. That's not unreasonable, but then you just measure it against inflation over the period. Now I know we had a long period of flat inflation, non inflation over a period, although there was always some inflation there. Back to my my own the thing I keep coming back to is don't necessarily trust government CPI rates. Just look around you, look at your own experience and money you spend things on the rate of inflation. But if you were to apply the actual official inflation rates, that value that 100,000 is about in line with inflation. It's gone up roughly in line with inflation. So it's about held its own in terms of value in today's money versus the old thing, plus all the sort of friction and hassle. And I had a great tenant in there, but, but nevertheless, there's always something going on that you need to sort of deal with anyway, because it's not my main residential property. You come to sell it. And of course, we've now got, we've got capital gains tax due on it, and capital gains tax are at the rate of 24% So, long story short, 28

Andy Hart:

in property. 28

Alan Smith:

in property. No, is it? It's even worse then 28 in property, okay, even worse then, all right, so I haven't, I haven't, so I'm going to sell it. But so if I'm going to pay 24 or 28% tax, it is, it is, I haven't had any gain. It's worth the same amount in real terms. And I just, I think that the whole thing that the whole capital gains tax, because the same was applied to any other type of investment, like an unwrapped investment, you know, the average 6040, investment portfolio just about keeps pace with inflation, frankly. And we used to have, few years ago, thing called indexation allowance, which would sort of recognize that the actual real value has just stayed the same in adjusted for inflation, and hence the gains can be over and above that. But on a personal basis, it's been, you know, financially disastrous for me, had I not just hadn't bothered put any the deposit money I would have had into, you know, an investment account and just grown it, and even I was selling that now I'd have had a better return for less hassle and less friction. But it was just a personal experience, I thought. And there's a lot of people, a lot of our clients, have got, like, one or two buy to let properties that they rent out. And just, it was just made very real to me in that it hasn't actually gone up in real terms. It's just, it's the same value, but I'm going to lose, looks like a third of it that gain to tax. So I've been taxed effectively by inflation, that I'm taxed on that the actual return as well. So, Nick, you've got a

Unknown:

you think Ultra I think, I think it's 24 isn't

Nick Lincoln:

it? It's 24 is one of the ones in the budget. It went actually down for that particular high rate. Taxpayers went down 28 to 24 it's now a lie. It's probably the same across the board, regardless of asset, all

Alan Smith:

the techies will be messaging we're talking about anyway. I did research it, but I obviously defer to your greater knowledge, Ultra, but you were wrong. I think, I think we've

Nick Lincoln:

all got views on property in this, in the track pack, and I've, I wouldn't, is not advice. I would not touch it with not benefit of hindsight. I never liked it when it was all the rage. And you can get a you can get these buy to let mortgages, but with no proof of bloody rental income and 95% back 15 years ago, I just because I'm not, it's just not my thing at all. Now you, I don't know how you make money from it. I really want you factoring mortgages, the taxation void. But don't you think rights that have been given to tenants, you know, they've got to be basically murderers before you can evict them. Yeah, that's and the police are prosecuting for murder because they're too busy clamping down a hate crime. So it's a vicious circle. It's a vicious circle. Should

Andy Hart:

I do the next point, which is no fault, evictions are an eight year following on from another point about how, you know, being a landlord is a freaking nightmare in in most markets, but now it's got a lot worse. So no fault evictions are an eight year high as landlords brace for the ban. So no fault evictions will be will be banned at some point down the line. So the landlords are sort of getting in ahead of the change to kick the tenants out, increase the forces or sell the properties. So it's just more bad news down the pipe for landlords, as well as everything else that they've got to contend with. So I think they said there's going to be 32,000 no claim evictions lodged this year under the section 21 notices. But yeah, just. So

Carl Widger:

no blame eviction. Excuse my ignorance.

Andy Hart:

As in, you no fault. Sorry, no fault. As in, I'm the landlord. You're the tenant. I just want you out for no reasons. I either want to move in myself, sell it to my mate, rent it to someone else. Yeah, you've done nothing wrong, but I'm Yeah, you've done nothing of note, this whole, it's a whole process.

Nick Lincoln:

When the lease is up, you can't just do any time. You just say, Okay, do any

Andy Hart:

time. You can do any time, a two month notice, which is the standard sort of but

Alan Smith:

just just, just briefly. But on a broader point, my focus was more on the the fact that what your capital gain, the you know, the clues in the name capital gains, we need to just keep reminding ourselves about gains in real terms adjusted for inflation. I have had zero gains in real terms adjusted for inflation. Is the point. If anything, this could should fuel better conversations with clients around the fact that if you are in a heavily bond focused portfolio, you are much less likely to make real gains significantly ahead of inflation and net of all costs. So you may as well from a tax plan, if you just adjust subject to your risk tolerance and all those other things, look for greater growth over and above. Because, you know, I'd rather be I don't mind paying capital gains. I'd rather not, but I don't mind paying if I've had significant material gains in real terms, adjusted for inflation, but, but a lot of investment portfolios simply aren't getting that. Honestly. Track back a 6040, portfolio on which is charged with advisor fees, investment fees, platform fees, the thick end of 2% a year, most of them inflation. It's after cost observation they've got, they have not had any significant gain. Yeah. Significant gain, but they'll be paid. They will be due to pay capital gains tax Nick,

Nick Lincoln:

one of the things that Gordon Brown in the olden days, us old and remember the capital gains tax used to be linked to inflation. They would act. It was indexation. It was called, and it's quite fun to work out, actually, when you what the gain was, but you've got relief. They offset inflation against the gain. And then Gordon Brown got rid of that, which I just thought was a pretty simplified things, but it does mean that, basically, you get caught in the inflation trap, these gains, these nominal gains, get get hit with real taxation. And that's your your your place in Amersham is a prime example of that, for sure. Storyteller, I suppose the

Carl Widger:

like, we're kind of talking about two different things here, because, on the one hand, we're talking about inflated the, I suppose the cost of inflation, correct. But then on the other hand, you if you had a mortgage, right? So you obviously had gearing there, so how much did you put up? So I'm just trying to, I suppose, yeah, like, there's, there's a lot of things going on here. So if you put up 10% say, right, on a 200 grand, it's 20 grand, where you made 100 grand in the in the gain that you're paying capital gains on. And I don't know about there, but the tax here will be different in terms of the in the fund versus property and all that kind of stuff. Plus, I like, I totally take the point that, you know, the accidental landlords are the people who kind of went in and went, Oh, this might be a good idea. And it's never really a good idea, is it? So I look, I think there's given so much, yeah, yeah. But it didn't like, Hey, we are Irish, right? So we all give it a go, like and you know, if you're not on a landlord, then who are you? And certainly, that's what the financial crisis told us all. But I think there's an awful lot of different things moving around here. I I'm still, still okay with a bond portion in my portfolios, despite what you've just said there, but yeah, look, I take the point I think inflation over like, that's not that long a period of time, really, Alan, is it? It's a decade, but a decade, it'll go by like that, and all of a sudden you're going to go, Oh, right. My real return here is not what I thought it was. Yeah, exactly. Right.

Nick Lincoln:

Yep. Good point. Good point. Okay, so what's next? It is we've done and he's no fault. Evictions. Okay, yeah. So best invest twice a year put out their spot the dog publication. Anyone can sign up to receive it. There's a link to sign up for it if you want it. So the the February 2025 edition has just come out, and it's the same old, same old. Basically, best invest, go through and just spot these, these funds that have done the worst over a three year period in the various global sectors, I imagine, the IMA sectors, and they rank it by three year returns. I just thought I picked this out really. I mean, it's just eternal, this message that active fund management in the round, you just you don't have the benefit of hindsight, you don't have a time machine. You can't go back in time. So I'm looking at the Global sector here in their in their report. This is the three year return on 100 pounds. And of course, these figures are all nominal as well. Bear that in mind as I go through some of these. The three year return. The worst fund is the Bailey Gifford Global Discovery, a global equity fund. That's fallen in value by 46% over the last three years. That's a really hard trick to pull off. If you factor in inflation, it's probably in real terms, it's probably full of about 80% because inflation is going on our right at a right click, the last three years, and the top 1415, funds on this global page here have lost money in nominal terms over three years. And the interesting thing is, most of them have these kind of words in their title. Artemis, positive future. Aegon, sustainable equity. FP, sustainability impact. AXA, people and planet equity. I mean, what the hell for amblington, clean economy. Rathbone, Green Bank, global sustainability, boil my lentils and eat my hemp. 91 global environment, Virgin Money, climate change, M and G, positive impact. So if there is a God, he's playing a long game here, and he's hurting the right people, but I think the message remains eternal, just avoid this. There's so much money in those funds. It is a joke and it's not. It's also not a joke. But, I mean, it's just this matter.

Andy Hart:

Did they pick a three year period? Nick, or did they do 357, various ones, major, but they ranked them by the three year three, threes. They're sort of Yeah. Marker, yeah. The high levels we can see without downloading the report, yeah. 137 dog funds looking after 67 billion of people's life savings, obviously getting paid handsomely to extract wealth. Yeah, terrible word. Isn't

Carl Widger:

this the thing that most of those funds now will close so there'll be no more. Yeah, they won't have to report vibe anymore. Buyers

Nick Lincoln:

switch them into another one. And I wonder why that's like because three years is a relatively short time period. I wonder if, after years of doing this guide, they realize that, and they think, Well, of course, if we do five or 10 year we rank them by that most of these funds vanish. So we're gonna Navin with the three year figures before they bugger off. That's a good point, probably. But in

Alan Smith:

any, in any historical three year period you look back, I mean, it sounded like when you read them all out, and I'm sure they populate most of your client portfolios. Nick, the people and planet. Yeah, they have hemp financial special.

Unknown:

One of the plans was made up you work out which one Yeah,

Alan Smith:

the benefit of hindsight, we can look back and say the those kind of ESG type focused funds have significantly underperformed, although, I mean, down 46% that is that's some going so they've underperformed the broad market as people kind of moved away From that theme in the

Unknown:

last some clips, significant election. Significant by about 100%

Andy Hart:

got the numbers wrong. 300% pick a number. Yeah,

Nick Lincoln:

it's really hard to do, but they pulled off. Well done, guys, well, but you're saving the planet. That's the main thing. Okay, let's, um, let's crack on with another, with another success story. Um, Ultra,

Andy Hart:

yeah, this is a story that does the rounds for certainly experienced people in the wealth management, IFA space, there's a company called net wealth, and I'm singling them out because I've had a bit of article about what they've been up to over the last few years, and the boss is basically leading with we can undercut the fun giant to look after your cash, and then they do some form of financial advice digitally, online. I don't know how much they do. A full fat financial planning coaching their clients. I know they do attitude to risk mumbo jumbo questionnaires online, and then align them with the portfolio. Do it maybe slightly cheaper than other providers out there, but is the client in the wrong portfolio. So they're very good at asset misallocation. What it's all about? Asset allocation, allocating correctly. And they've got some famous backers, and I think they wanted to be exactly they've got a billion of funds under administration, funds under influence. At the moment, I think they wanted to be, did they want to be 6 billion or 7 billion? Can some one of you help me

Alan Smith:

out? There's a five day. So at this stage,

Andy Hart:

at this stage in their journey, they wanted to have 5 billion. Funds under management. They've got 1 billion. They've got a team of 50 and famous backers. You know, in initial people that have funded it include Stuart rose, sir Harvey McGrath, who is linked with protect various other people, Michael Spence, you know, serious people that made a lot of money anyway. So they've burnt through 56 million. So they're still not profitable, which I haven't got a problem with. I'm all about startup spending money and growing and being aggressive, but they're not profitable. They want to be profitable in the next couple of years. That means add a couple of years on top of it. So they're probably not going to make any money for some time. They're looking after a billion. They've got 50 start. Members there, and they've burnt through 56 million. The lady who's the founder, was successful elsewhere. She retired early. Charlotte ransom, yeah, it's just a story that caught my eye. I wasn't going to read the article that I started going through, and I was somewhat horrified. It's all this. We can do it cheaper and better. What you're paying over there will do over here for cheaper. But I think again, they're looking at the problem, you know, they're looking down the wrong end of the telescope that, yeah, they're not doing the proper stuff. And it's very hard to scale a decent, full financial planning firm that's putting the clients in the right portfolios, charging appropriate fees and is somewhat profitable, can scale up. So, yeah, that's my

Nick Lincoln:

time. Oh, sorry, car, go ahead.

Carl Widger:

Network, it takes time, doesn't it, Andy, and it takes time to build trust one family at a time, and that's how that's the only way to scale it, if you're doing it properly. Just one thing you said there, right about it being a startup. I did read it, so I got the impression this thing was started in 2017

Unknown:

or 18. I'm sorry, 2015

Alan Smith:

cards, 10 years when you start being a startup. So, so it's a decade.

Carl Widger:

We raise together are the same size. Are probably a little bit bigger than she has.

Unknown:

Our averages are good. Averages. Give us, give us 56

Carl Widger:

million quid and see what damage we could do in a decade. We were having a laugh about this kind of privately, but we haven't spent a fiver between us to get to get to this, because we're too mean to do it right. But I just don't know what like, Oh, my God. Don't know why

Nick Lincoln:

she agreed to do the interview. It's because she's not a startup. She doesn't need the publicity. It doesn't come across as a success story. It's

Andy Hart:

obviously, uh, it's an advertisement sort of disguise. You

Alan Smith:

read through it. You sent it around earlier. I read it this morning. Yeah, no, this has not come across. Well, you're 10 years in. She says, we're hoping to hit profit a bit, break even by 2027 just two years away. We break even. Never mind growth. Yeah, my take on this is, I remember when they when they launched, and that was when nutmeg was around, and everyone else was kind of just, you get open your eyes online, and they were going to target the high net worth, ultra high net worth, big ticket clients that were fed up with paying for portfolio management. The reality is that those very people are the ones that do want a trusted advisor relationship. They want somebody they know, like and trust in their corner. They can just WhatsApp them down again and say, which is this is, this is another. It is an up market nutmeg or similar. And we know what happened to them. None of these had really survived, but it's

Carl Widger:

a bit of everything Alan, isn't it? Didn't it? Yeah, doesn't the article say that they'll deal with people from 50 grand up, right? So, and some of it is regulated advice, and some is unregulated. So this is like, we don't really know. We are

Alan Smith:

ultra high in everything. We're kind of, yeah,

Nick Lincoln:

a guidance stream and a guidance stream cheaper

Andy Hart:

and advice more expensive. But you wonder whether you know incentives drives behaviors, the incentives of the business not to provide advice, just to do it all cheap online. And then obviously the clients are, I

Alan Smith:

looked at their pricing table and and they, obviously they they've got on a basis points model. They've got tiering, and it's sort of above 5 million pounds, this, that and the other but I thought, well, we would offer actually, our fees would actually be lower, or then for in person, full, flat, all that stuff, but that should be a little bit lower than theirs. So what are you getting for us? Well, as

Andy Hart:

we spoke offline, as a general rule of thumb to buy a firm is generally 4% of the assets. So if a firm with a billion pounds AUM wanted to be sold tomorrow, it would probably be sold for somewhere between 40 million. To give you an exact number, but somewhere between 35 and 50, depending on what's going on. So they've had 10 years of output of 50 people going to work every single day to produce a negative return. It's not as if the firm is now worth, you know, 300 million, where they pumped in 100 you know, 56 anyways, a few moving parts to it. So what

Alan Smith:

you're saying you could, you could just take that 56 million and go and buy a firm with, like, 1.2 billion. AUM, yeah,

Carl Widger:

we could put Nick in charge, and

Alan Smith:

then the three of us. So launches

Andy Hart:

his hemp fund. So their entire house for the last 10 years is created, nothing simplistically,

Alan Smith:

yeah, but they burst through 10 years,

Andy Hart:

56 million to accumulate a billion of AUM. But someone could just write a check for that AUM of 40 million.

Nick Lincoln:

In their defense, it's not as if, over the last 10 years, we've had pretty much an uninterrupted bull market. Is

Alan Smith:

it? No, that's that's very, very difficult times they will be presumably built their own technology, which has got value, but I don't know, a lot of that stuff is probably pretty commodity. Size nowadays, really, to

Carl Widger:

be fair, they might have 56 million in the bank still, so

Unknown:

maybe should go and buy a firm then for a

Andy Hart:

billion. Aum, no, I mean we, we salute the entrepreneurial journey and the spirit. So I want to just put that in as a bookend. But this is our space. We know how hard it is. So we can speak, you know, somewhat negatively towards these firms that think they can do what we've been struggling with for years. And we wake up every single day, yeah, try and do it better. Well, you

Nick Lincoln:

know, look at, look how many advised platforms aren't profitable. Take forever, and that's with, that's with ifas, who love the platform, directing clients there in, you know, all their client backs towards these platforms, you know. And they it still takes these advice platforms, you know, so long, and which is why, when you get a platform that's that's profitable, you know, it's such a, such a, such a good thing, and why we're happy to align ourselves with platforms that are profitable?

Carl Widger:

Yeah, I would just say, you know, for our listeners, our advisors, our advisor firms in in the main and sometimes you can, you know, your head can get turned, and you can look and go, Oh my god, I'm a little bit jealous. Look what they're doing over there. That all sounds amazing. Don't just do great work for your clients day in day out. That's how you scale financial advisory firm,

Unknown:

yeah, family at a time, yep, family at time.

Nick Lincoln:

Okay, we're at 36 minutes in. A couple of more topical tidbits for episode 65 May the 14th trap live. 25 put it in your diary. May the 14th, it is happening, you will get an email in due course to purchase your tickets. Just bear with us. You're dealing with a Track Pack. Okay? It's a fascist relationship at the best of times. It's like a marriage, but without the sex. Okay? Next on this is voice card. How dumb do you have to be to invest in a meme coin? Yes.

Carl Widger:

So this was an article from the business post right following from, I'm not going to talk about this every episode, but

Alan Smith:

this is just such red red meat for the watch. No,

Carl Widger:

I mean coin. So the Argentinian President Javier millet is that his

Nick Lincoln:

name is the guy's name.

Carl Widger:

He's a bit of a bit of a character.

Andy Hart:

What he has achieved is remarkable. So go into that number

Carl Widger:

I mentioned the last and the last episode that Trump, the Trump coin and the Melania coin came out, the meme coins just before he was the inauguration, and the value drove straight up, and then it collapsed. And I would argue that they knew exactly what they were doing. And I said it was disgraceful. I think it is disgraceful.

Nick Lincoln:

But why? President, sorry, coddling what was forced to buy these things.

Carl Widger:

Okay? So just let me. Just hear me. Okay, right? So, so President mele, apparently, he endorsed a coin in Argentina called the Libra coin. And same thing happened. Value went straight up, dropped. He deleted his tweet, apparently, and said, I never did, I never did that. And that people are going, Yeah, but we have, we have the screenshot here, but we need to, we need to investigate that. Now. That's a disgrace, right? Apparently, something like this happened in the Central African Republic as well, right? My point is okay, and this was the point I was trying to make the last time, beam coins and Bitcoin are different. I know that, okay, but I don't think Joe blogs investor is aware of the difference in the whole cryptocurrency land, and I think they are. So this is my point. Nick, I think people are getting carried away thinking that this is cryptocurrency. Let's just get on and let's just go and I think people know that the values are going to be driven up, the likes of Trump and Melania and President mele, and they're just coining it. And then the value of the mean coin, yeah, the mean coin,

Unknown:

and then killing the rock.

Carl Widger:

Yeah, collapses. And I think that's disgraceful. And I was disappointed that a short clip that from a longer conversation we had in the last episode was put out that kind of alluded to I didn't know the difference between meme coins and Bitcoins. I do, and I think that meme coins are, and I think what those people in positions of power are doing are confusing investors who don't have, maybe the financial literacy, the education, the nuance to know the difference between, you know, actually trying to buy. Bitcoin, which is an asset that I don't believe people should be buying, or meme coins, which for me is absolutely pin air. It's nothing, absolutely nothing for me. So yeah, I was, I was just, yeah, it's

Nick Lincoln:

in the same it's in the same thing as non fungible tokens. Remember that two years ago, exactly? Yeah, talking about,

Alan Smith:

it's obviously almost, I mean what you said there cause is fair, it's reasonable, but it's almost like we shouldn't even be talking about this, because it's like investing in any there's always some mental thing going along. I think it's the underlying thing is called First, these meme coins. They are, they are like, almost like a commemorative thing. Back in the day, people would issue a, you know, a silver coin or something, when there was a new president or something. Now we've got these digital assets. I think, from what I've seen, I haven't spent a lot of time, but I think Malay was to put it kind of was naive. I don't believe, from what I've read so far, he personally benefited from it, but he did send out one tweet which is hastily deleted, which is bad. And then you can read between the lines on the Trump meme coin as well, but they they're just the kind of commemorative tokens and a digital format that some people want to own forever. But you're right. They there have been bad actors in place, particularly with the Argentinian one who just knew exactly what they were doing, pumped the whole thing up, pulled the rug, and, you know, retail was left holding the holding the bag. Oh, yeah, so, but, but I don't, I think that's just not mainstream. That's what you're right. There are, there are uneducated people that put a bit of money into it. I think there's, there was over four who've lost a million dollars equivalent of because you can, you know, all the data is available in public. So if you, if you put a million dollars into this Libra coin, and then it went down 96% then you're not, you're not very happy right now, but and you would think that if someone loved and it is another risk as well. I sometimes think the immediacy of social media, you can literally just put a tweet they haven't even thought about I don't think he thought about it particularly, and it's then people believe it and follow it through the analogy I thought was, imagine that the Argentinian national newspaper wanted to interview him about this coin, this this thing, this token was going to be issued. There's no question he'd have spent some time, spoken to his advisors, thought it through and given an opinion on it. It wouldn't have been an immediate tweet. I think it's a risk that people, particularly people in positions of power and authority run by sending out some message that they haven't thought through, and then seeing the unintended consequences in power.

Carl Widger:

He knows people. I mean, the same is can be said about the others anyway.

Nick Lincoln:

Step, definitely, it was a misstep. Yeah, an absolute misstep. And if Yeah, it's one thing to post, put out tweet and then delete it, but you should, you least own up to it. Don't say you didn't put the tweets out. I'm not sure if you did say that, by the way, but yeah, because everyone takes a record of it out there. These days, we've all got WhatsApp messages that we've sent that I've stored on a separate disk that I'm going to use one day when the shit is okay. So we too, baby. I we're at 43 minutes. So I think we'll just do one more typical tip, if that's okay, and he will hold over your sovereign wealth fund for the next next episode, if that's all right, just a quick one me. So we know, we know that quite rightly, quite rightly, our regulator is coming down hard on those firms that are charging for an ongoing service but aren't even offering it, let alone delivering it. And I think we've all probably got clients within our within our businesses, who don't take you up on the offer of the annual planning meeting, whatever cadence you do it. They're just, you email them. They just, they say, Nick, we're fine. Don't need it. I think, from my point of view, you've discharged your duties by offering to carry out the review or the planning meeting, whatever you want to call it. I think that largely absolves you. But after a number of years, you get to the I certainly got to point with this client. This morning, when it came up in my task management system, I had to arrange the annual planning meeting, I thought, oh God, John. He's not done this for a number of years now. I'm going to have to just sort of level with him and say, we can't go on like this. It always signed the terms of business letter each year. Always got that back to me, that bang straight back on the file, but never engaged, and got and arranged the annual planning meeting. So I sent him an email this morning saying, Hi John. There really was a dear John email. Hi John. Hope you are well. Advisors are under heavy regulatory pressure to demonstrate ongoing service to their clients. Much as I love low maintenance types like you, I'm in a pickle. If you and I don't, at least have some sort of catch up, I'll even venture over distance Albans and take you out for lunch at my expense. Otherwise, I'll be forced to resign your account with me until transact. I'm no longer your advisor. I don't want to do this, but regulatory obligations are forcing me and all other advisors down this road. And as soon as I sent this, I got a phone call from the guy I couldn't take the call, he after voicemail saying, Wow, do. Got your email, I was just about to call you. So a couple of things here. The Universe does work in funny ways. Sometimes I'm so glad this guy did come, because I didn't want to suck him. He's a nice guy. His personal circumstances aren't particularly great in terms of his his wife's health and everything else. So I'm going to I want a Zoom meeting with him tomorrow, which is lovely. So just be interested to hear from TRAPPIST how they're handling this, this sort of disengagement from clients who aren't engaged, but also just a bigger thing, and it is that somehow something works, you know, you put something out universe, and something comes back. I don't, I can't quite explain it. It's, maybe that's a little crap. Maybe it's not. But the moment I sent this email, he called me and said, Nick, I was just about to call you because

Andy Hart:

I need to disengage you. Thank God to begin with. Yeah,

Nick Lincoln:

exactly. So there you go. There's my little there's my little story.

Andy Hart:

This is an insanely interesting point for various reasons, mainly consumer Duty has bought this massively to the fore. I am a believer, really, anyone paying an ongoing fee should get an official annual planning meeting. I understand sometimes extreme circumstances. Usually it's a health issue for family members very close to them, and fortunately, there's nothing that they need to sort out with their finances. I can understand a couple slip through the net, but anyone paying an ongoing fee should have an annual planning meeting. I appreciate that some will be a bit more light touch than others that have got a lot of moving parts and a lot of things going on, but this is going to then play into there being more orphan clients that can't get looked after by advisors. For whatever reason, our regulatory burden just increases, and the advisor or the in or the out there in the real world, the wealth gap increases. I understand regulation are sort of caught in a bind where they want to increase the regulation at the same time allowing people to receive advice from more different sources. I understand there's a, you know, a couple of years for things to unravel, and then they sort of realize that things have not worked, and they try and try and try and, you know, repeat it back together. I probably think you're on the extreme level of it. Nick knowing how tight you run your business, and this one individual has been causing you a bit of, you know, mental stress, because you're thinking he has been paying. I haven't been seeing him. I have been offering. He's been turning me down. But if, you know, regulator knocks on the door. I don't think that will cut it. These days, fortunately, I don't have that many clients in that situation. But over the years, when things have been happening for a personal situation, I have offered and they said, Andy, things going on at the moment, I've got a kidney transplant going on. I don't want to come and see you. No, you have to come to see me, because my regulator says, If you don't, I'm going to disengage you at the time when you could do without all the stress in your life. Yeah. So it is an important point. Nick and a lot of advisors will be struggling with it. Carl or Alan, I know, yeah, I

Carl Widger:

think it's, I just push back maybe a small bit, right? So I have a client, one of our biggest clients, who doesn't want to see me. He's, he's gone and set up another business. And he's really, really busy setting up this other business. He He's part of our client advisory panel. He actually comes along to that participates fully in it. And then he's just not look it's I trust you, it's fine. I can see it online. And so I've got

Andy Hart:

all that to push back in our regulation, consumer duty, is so hot on all of this and all the big firms, are you? Yes,

Alan Smith:

you would, if you're in the UK, Carl, unless there was a process, there's, there's several things, but one of which you are expected to do is to undertake a suitability,

Andy Hart:

suitability of products. Update view is everything.

Alan Smith:

His circumstances may have changed. Stuff, yeah, and all the things that you set up, 1355, years ago may no longer be appropriate unless there's some sort of engagement. Of course, you know, it's not like, hard and fast after a year,

Nick Lincoln:

but two years later, we meet for a pint,

Carl Widger:

a good bit like,

Alan Smith:

great, but yeah, has anything changed? That's more than

Unknown:

enough. Carl, seriously, I

Carl Widger:

go, I go to rugby matches with him and his kids and stuff. So but, but it's like, I don't, and then his wife goes out to his car. Don't be talking to me about that. So I'm like, Oh, guys, come on. You know, if I had this amount of money in there, but sure, this is why we engage you. We trust you,

Unknown:

full delegators. We get full delegates.

Carl Widger:

All I'm saying is, you know, there are, I'm a little bit like, you Nick, I'm like, a little kind of guys. You've got to get in. But maybe there's over regulation, not maybe there's clearly over regulation.

Alan Smith:

It is. It's sledge hammer to cracking up the example that you've given real life example I know that you shared earlier with this Nick. We've all got versions of that, unfortunately, as has been demonstrated by the recent regulatory issues and fines by big company, this has been done at an industrial scale where there was zero attempt to get Yes, absolutely. Whilst. Fees were being taken. And, of course, us, you know, we just sort of getting on with it. I'm getting really worried that this client sort of begged to see multiple occasions just because things get on with their life. I think, I don't think you get about to get struck off anytime soon. Nick, you might only pay all the fee that you've taken from him. No,

Nick Lincoln:

okay, right? Somewhere. Okay, 5050, minutes in Track Pack. So I think we better move on to the meat and potatoes of episode 65 and for this meter potatoes, we are we've done it in a certain way before we looked at this, because it is so So, essential to both mature businesses, to start ups to multi ri firms to single advisor firms, it's having a firm and fast, firm grip on your numbers, knowing your ratios, knowing your metrics, and reviewing them and making sure you where you want to be. And Carl voice de la Bucha, you were inspired by this, by that oz streak of piss. Brett Davidoff, is that his name? Tell your story.

Carl Widger:

Yeah, I'm having a bromance with Brett Davidson at the moment, even though he doesn't know, right? But I go through periods where I get infatuated by certain people are pieces of content, and I'm reading Brett stuff, and I'm like, going, this is really, really good. And lo and behold, I mentioned him, I think, in the last episode, or maybe the one before that, I'm not sure, but he then comes out with another blog, so he reads my mind. Alan has said this before, right? He's like, managing your numbers, or knowing your numbers, I think it was called, and I was like, Yeah, I have always been literally obsessed with the numbers so I can sit in front and look at the numbers for the business. I've always been like this. And for me, it's like to look at the progress, to try and find trends when there are no trends at all. But, you know, just to really track everything as best as I possibly can, and I perhaps into the nitty gritty, didn't do that much in the last few years. And I'm kind of going, you know, I think I'll go back and start looking doing deep dive stuff. So I just thought about, you know, what would I recommend people look at are, are what has worked for me in terms of what I look at and just so I just go through a few and then we'd kind of, we'll kick this around a little bit ourselves. But for me, and I know some people go, you shouldn't look at your business in terms of a U M every day, I look at the A u m in the business. Every day, everybody in my business looks at the Aum in the business. Every day, each pod looks at the Aum they manage in our business. And it's like looking all together,

Andy Hart:

and there's music in the background, and you just know you have

Carl Widger:

to, you have to log in, right? The first thing you do when you log in is you open up what we call tishken twitch. You boys have seen this beautiful, yeah, very

Unknown:

impressive software, yeah,

Carl Widger:

and everyone opens that up. And the first big box in the top left hand corner is our assets under management. Now it is like looking at the temperature and the weather forecast on your phone, right? It doesn't give you is it raining? Is it, you know? Is it rain coming? Is a windy what is there? High pressure, low pressure. So it is just literally kind of snapshot in time, so, like, it doesn't break down. Well, what was in the last 12 months? What assets under management did we actually bring in? So what new business did we bring in versus what is the market growth? It just lumps everything in together. So obviously, then when I drill down, Patty O'Halloran is our head of finance. He does a report every month, right in terms of, well, what was our revenue for the month? What was the revenue for the last 12 months? What are the overheads for that month, for the last 12 months, and what's the salary role, including bonuses, all that kind of stuff. What's our gross profit? What's our net profit? But then we drill into what's the Aum per pod, right? So a pod, if I've said this before, is our private client manager, our financial planner and our client service person. So we put three people around every client family. So each pod manages a certain amount of assets under management. I know exactly how much each pod manages and how many relationships that each pod has. I know what's the initial income, what's the recurring income, and what's the fee income for each pod every single month. I know what that number is for the business every single month. I know what the persistency rate is across the business. Now, that's really, really good. And we spoke kind of offline about this. You know, that's one that I'd be really, really tracking for. Very, very closely, you know, to see, for example, is one particular pod, you know, having a little bit of a problem or not? Thankfully, touch wood, we haven't. But I think that that that's one I become, keeping a very close eye on as we grow the business and get bigger and bigger

Andy Hart:

in clients, leaving Cole, yeah, retention rate and stuff, yeah, yeah.

Carl Widger:

So who have we lost? And then, so I do, then, why

Andy Hart:

even big businesses? That's very low in this business, isn't it even? Even bad big, big businesses in this space? But yeah, yeah, it is, but

Carl Widger:

there are a few. And then I try and find out, well, what are the reasons? So I take it personally, yeah, no, I probably shouldn't, but I do, right? So I Yeah, and look, I know every, every private client manager goes as I have to go to card on this now, even if they lose a very small client, they still have to come and do a report and tell me why, and all that kind of stuff with a pipeline, right then, right? So, and when you click into the pipeline, so obviously, on the one hand, I have the Aum number, and then the other hand, the other corner, I have the pipeline number, okay, so that will give me what's the immediate health of the business looking like when I click into the pipeline. Then I can see where each case is, and there'll be like, there's definitely more than 100 in there, right? In terms of, have we met them for coffee? Have we signed a, have we completed a getting to know you questionnaire. Is a recommendation complete? Are we in post recommendation? Are we waiting for a decision? Are we in implementation and we put a percentage? What's the likely percentage of closing that business beside that number? So that I have a real sense of you know, not people putting in? Oh, yeah. I met Alan Smith, and he said he might do 5 million with us next. You know, it's, it's much more accurate than that. And then I think, you know, the the one which is a little bit Wolf of Wall Street, I guess, but has been hugely part of our success story, is because we're trying to grow. Alan has seen this in action because he was there when I I was we presented it to the team. Um or not, presented it, but we go through our numbers. So every single we have a big, huge board in the office, and each uh pod is listed. So the private client manager and their assets under management for the month and year to date, and their income for the month and year to date is there. And that board used to only have two, three of us. Now there's a lot more people on that board. And the the what you're trying to do is get a green so you're either green or you're red, because you're either on or above target or you're below target. And last year was enormously successful for us, and we had green the whole way across the board, which was sensational. So they're the things that we track. There's obviously there's more, but I think they're good for starters anyway,

Andy Hart:

without getting into too much detail, Carl, do you have a simple bonus structure for the more successful salespeople in your organization? Yeah? Yeah, cool. All right, fine. It's simple. Everyone knows what's going on. But here's the marker. Here's the bit above. It's not based on what you three years ago, minus this and you know, back, no, no, no, let me, let me cycles and no,

Carl Widger:

let me, let me know. No. Do you know what? Andy, that is a very fair point. I used to have, like, like, 10 years ago. And when you get beyond this now you get that, when you get and when people were walking into my office, I couldn't remember what deals they were on, right? So they were struggling themselves. So yeah, it's a very fair point I do, and it's the same across the board, I would say.

Andy Hart:

But the more successful people earn more money, they're incentivized. Clearly, yeah, yeah, good, yeah, exactly. Cool. All right, I'll take the next point as a solo advisor, I wouldn't say I'm obsessed with the numbers, but I've got a pretty good grasp of this. So in relation to my financial advice wealth management business, I use a spreadsheet, you know, if you know how to use spreadsheets, that can be, you know, amazingly effective. And obviously, Carl has more moving parts and more more people. He uses a great piece of management information software. So anyway, some numbers and things that I track the platform that the client is on. Pretty much most clients from transact. But there's obviously quite a few roads in the mix. The average asset allocation per family represented in the global equities, client family numbers and total clients. So client family number is obviously a smaller number than obviously two individuals are on there, Aum per family, income per family, a circa net worth per family, and then all of these aggregate across so averages across the board the portfolio. I remember a DFA event I was at where someone said, we try and not take on any clients that are not at least above our average. You know, if you want to be growing your firm, you know, constantly in terms of looking. After wealthier and wealthier clients and bringing in more income. Transact users. This is a massive note transact produced per firm that's on their platform, something called the transact benchmarking report. It's not like the DFA thing. It's not like what other providers do you have to contact your Business Development Manager, and they give you a full breakdown of every single rapper, every single age band, every single income level, every single percentage, Aum, at different age ranges. Insane amount of information, but you need to go out of your way to speak to your business development person to get that. I look at average ages. This is somewhat interesting. So my average age of an ongoing client used to be 61 so I intentionally spent four years trying to bring down the average age, taking on younger and younger clients, basically people in their late 40s. And then four years after me putting a load of effort into this, I I looked at what the numbers were then. And after four years of properly trying to bring this down, my average ongoing client age now is 59.9

Unknown:

I brought it down by a year. But what happened during those four years is the buggers got older by four years. I thought, I'm gonna this. This is gonna be something like stop to wait for you. Andy. So all my clients got older. So the average age of

Andy Hart:

ongoing client now, now is 59 point basically 60. I'm sure your numbers are quite similar, Nick, but

Carl Widger:

ours are pretty much the same. Andy, actually,

Andy Hart:

yeah, yeah, bang on a couple of other points, because we're talking about numbers. I use Xero, which is accountancy software linked to all of my businesses. So I spend, you know, have a diary item every, I think, two weeks on the Friday morning during your quiet time, Nick, when I go to zero on Monday, that day, I know, I know, just just jesting, and I go on and download a load of detailed reports from Xero. Also, I use notion, which is, is a piece of decent software that you can configure all you want. I use that for humans under management premium. So a couple of other bits of software that I use, but yeah, I've got a good grasp of the numbers, but it's not too detailed. Cars is a bit different. He obviously needs a little more detail, and it's also task management, so a couple of things sort of mixed in, but yeah, I do have a good grasp of the numbers that I deem are important for the business. Over to you. Alan,

Alan Smith:

yeah, this is, this is, I find this a really interesting subject, actually. And I can tell you

Nick Lincoln:

sorry, before you get going, I just clarify one one point, because I know that certain TRAPPIST will be confused. Monday for me, is getting stuff done time. Fridays is tennis doubles and never the train shall meet. But

Andy Hart:

Monday between seven and nine, no client meetings. Seven, seven. Yeah. 797, and 10. Yeah, yeah. Seven and 10? Yeah,

Alan Smith:

load of clients are gutted about that Monday morning meeting they can't

Nick Lincoln:

have. I've got three 7am lined up in the next month. You'd like it, you'd

Alan Smith:

like to have a they would like to have a Friday meeting. But tennis doubles comes first.

Nick Lincoln:

That's all that's already closes

Unknown:

on Wednesday, doesn't it? Nick

Nick Lincoln:

right?

Alan Smith:

Interesting. I've gone, I've literally gone full circle about three times on this number, numbers, data, metrics. When I started, I just my metric was money in the bank. Literally, I used to look at my cash balance quite regularly just say we're doing okay or not, or that's legal. A bit light.

Carl Widger:

Can I interject on that? Alex, that is such a good point, right? Yeah, when I started off, that was exactly and then, and then the accountant did the the accounts you made a last I went,

Unknown:

Yeah, no, no, I've got

Carl Widger:

six grand in the bank, and I've had it the other way around, the way it works. Sorry, you've had

Alan Smith:

great gains this year. So you've got huge tax bill. I said a bank account is empty. These games gone. That's a whole other conversation. Accounting versus kind of business owner, what does the bank had an app for the bank account, and just every day I would just check on it. Oh, that's nice. And yeah, anyway, so go from that, sorry. And then I go, like, completely nuts on this. You know, you end up you read this. There's loads of books and things about all this stuff, track your data, your metrics, and the rest of it. And at 1.0 my god, I would drive my team insane, because your system is good car, I can tell you, unless I I've missed or don't understand this. There isn't any really good aggregating software in the UK, because we've got multiple sources of data. There is one emerging which we are using at the moment, called woven. It's, I think they will admit, or Nicky, the founder, that will admit this quite there's a way to go in terms of, you know, getting more plugins and more sources of data, because we're all tracking information from multiple sources. Not, you know, Aum is quite straightforward if you look at Platform data, but there's a bunch

Andy Hart:

of things, sorry, don't be agree with you, but would intellify, push back and say no, if you put the right data in. No, we do that.

Alan Smith:

No, I and that's again, another big, complex conversation. And without going too much about in teleflow, we. Operated amongst their top, I don't mind saying this publicly, top advisors, in terms of quality of our data, and for us getting, still getting access to it, is still a bit of a fact. Seriously. Yeah, whole other conversation about the ownership of data. Who owns data, who's got permission to get access to data? Other third parties could use APIs to plug in, but there's, there's a bit of friction about doing that as well, but not just that. There's a lot of other data that isn't anything to do with, like stuff that maybe in teleflow would naturally have. And anyway, so we built this thing, this absolute monster of effectively, a mega spreadsheet, which had, I think, north of 3035, data points and data sources coming across a multiple different thing. And it was, it was practically a full time job because it wasn't automated. Someone had to manually go and extract data from bunch of other places and and the reality was, you looked at it, and a lot of it was kind of so what it's taking, the the the reward relative to the effort of creating, this was just crazy. It was nuts. So I got a full, full circle on this, and really trying to just focus on key things that are, you know, we, we've got all this information in our businesses, but things I want to see and regularly and track and understanding, the way I've sort of summarized it in my own head, at least, is two, two areas you look at, one is, one is lead metrics, and one is lag metrics. Lag is history. You can't do your AUM today or yesterday or that last week is fine. It's good to know, but it's, there's nothing you can do about it. There's no activities that you might do that was going to change that particular metric. And there's a lot of stuff Mo and what I've seen, when I see a lot of stuff being tracked in financial planner businesses, it's, it's lag metrics, it stuff has already happened. It doesn't make much difference. But nevertheless, it's good to know generally how you're tracking against various various things. So got lag metrics, but the lead metrics, if you are a growth focused business, you want to know what activities you're doing that downstream lead to new business, new clients and new revenue. So lead metrics are important. So then that depends upon where your sources of business are. So if you're tracking like website visitors would be one, if we do something and a lot of website visitors arrive, and then people subscribe to various lead magnets and various things, and it all filters through so and some of them become inquiries, and some of them become prospects, and some of them become meetings. But so become meetings. But it's a pure numbers game, so we are tracking that things, that web visitors, subscribers to our various online tools, even my podcast, even podcast numbers do have an impact on that longer term. And then the lead and lag are the two key areas, but then there's two areas. I focus on, one's growth, one's efficiency. So growth is things like, I mean, a a lag metric for growth will be things like, just revenue per period was our revenue over the same month this time last year. So that's about growth and but it's, it's, it's a lag metric. Can't do anything about it, but how did it compare to last year? So growth is one thing, and efficiency being another, a metric that we do track. And if you do this, Carl is, I think, I think Brett talks about this. Certainly Daniel Priestley does, is revenue per full time employee as a thing, for example. So some people's revenue is flying, but they've hired another 10 people, and actually net, net, you know, by comparison, they're actually worse off. Obviously, it depends on your your you might be a period of time during which you need a bunch of extra people, extra hands on deck, and then that might level off. But that's deemed to be quite a useful metric to track. Is not necessarily profit, because depends what you're spending your money on, you might be spending your money on. You might be spending a lot of money on marketing or branding or something, but gross revenue per full time employee is a useful metric. And if you have these things, and you sort of distill them all down to, in my case, maybe six different metrics that you track pretty regularly, and then you, I think you've done this. Yeah, you kind of rag rate them red, amber, green, and really focused on anything that's red is a key thing. Why? Because you have to set yourself expectations. Don't you set yourself goals going forward and if, and if they're reasonable expectations, and you're red, you've either got you've either completely misjudged what you were trying to achieve, or there's something that needs to be fixed. So ours have much more, I guess, simpler. Now, there's a lot of other stuff in the background, but the ones that I sort of spend my time on lead and lag, growth and efficiency, I think the thing and the last thing I'll throw in here, and I think Andy will push back on this, but a useful book about this for financial planners on an individual basis, more than a company or a corporate is Nick Murray. What's his book called something the numbers game of numbers, the game of numbers. And he just talks about prospecting. It's just a pure numbers game. And I can't remember exactly what he says. I read it a few years ago, but I remember thinking, this is useful. It was about the number of calls you made, the number of outbound inquiries, and if you did, you know whatever it was. 10 a week, and five were a phone call, and one converted to a client. He was just very focused on in typical Nick Murray, you know, excellent, but really, really simple. That's worth trying to find that book. Game of numbers, that's all I've got to say right now. The

Andy Hart:

principle is hugely Correct. Yeah, I can't remember, actually, what he actually calls it in the book, Nick, can you remember in terms of advisors, you know, brushing up on their business card. You know, updating the website. None of this procrastination, clients procrastination. But he calls it something like the journey, when he's always trying to, you know, get a new shiny business card, talk to people. Do you know your retirement number? Have you thought about, you know, whatever

Nick Lincoln:

thing is, Perfection is the enemy, and just, just crack on. It's that. It's that thing that that writer, who he admires greatly, says, you know that the there's this voice in your show always finding, yeah, Stephen Creston, resistant. Resistance is the enemy kind of

Alan Smith:

thing. He talks in that book about somebody who was when he started off as a financial advisor, Nick married, and this other guy was doing the same. And Nick Murray would just pick up the phone or send letters or emails or whatever it was at the time, and and the other guy would say, I will do that. I just need to get one more qualification. I just need to get one more can we go out and get another qualification? Another qualification? Yes, next year. I'm just want to get my CFP when I get my and he said Nick Martin in a very kind of put down way, you know, professional, but big put down. Last I heard from him, he was teaching financial planning at a community college in upstate New Jersey. He never won a client at all. He was teaching about financial planning because he was super well qualified. But, yeah,

Carl Widger:

meet people. Yeah, track

Alan Smith:

it. You know, if I make 10 phone calls or 10 whatever it is, that's a whole other thing to do. Just if you make 10 outbound a day a week or whatever it is, and then see your success rate. So then increase them or decrease them.

Carl Widger:

I had a boss in new Ireland when I started off as a broker consultant at the ripe old age of 22 and he said, If you can do 10 meetings a week, Carl, you'll be a huge success. And I didn't know any difference. So I went, right, that's what I'll do. See. So piss 10. So, so I did it every single week for months and months and months, and all of a sudden things started clicking. And whilst it worked as a BC, because you're going out calling around to more financial advisors, when I brought that into my IFA world or financial advisor world myself, it just, I just smashed everything out of the park because people, nobody else was doing it. And for me, it was just, this is normal. This is natural. And I've always said it to everybody who comes on board met us. You can do 10 meetings a week, whether that's with existing clients or new prospects or whatever, but do 10 sit downs talk to people every week. There is no target you cannot do, no target you cannot do.

Andy Hart:

I don't know if it's the Nick Murray isn't, but he says, Yeah, you don't learn your way to the top. In this business, you behave your way to the top. And that's a classic example. Just get out there and see people.

Carl Widger:

Yep, Nick Murray gets the credit for it now, right? Even though I said it

Nick Lincoln:

so, I think I'll wrap up on this. And we're 7073, minutes in. So I will keep it brief. So numbers, numbers are important. I don't obviously, Andy and I are solo advice firms, unlike Alan and Carl's, which, which, obviously you need to be on top of the metrics, and you need to, you need to know where you are at any moment in time. I do not keep track, really of any metrics. I've got a very high profit margin. I couldn't tell you what it is. It's about 80% 85% before I paid myself. I use Andy, uses Xero, I use free agent, which I love, this online banking thing. I do keep an eye on that. For me, the numbers started when I started when I started the business and I gone about this, but this is, this is because it's the truth for me, it's my truth that you begin with the end in mind when I set up my business in the late 2008 I work back, okay, I've got lifestyle cost of X. I'm just picking these numbers out and say your lifestyle cost is 80,000 pounds a year net. You because people don't live off gross, they live off net, right? I need 80k a year, net to live off. Okay, what do I need to earn to get 80k a year? Let's say 140k before tax, okay, 140k before tax, then you got a factor, incorporation tax. Okay? So I need to be, I need to sort of have any gross turnover for my business to generate 140 of gross income plus 40, as it was then, 40k pension contribution. Now, 60k I need to be turning over about 300k a year. Okay, so how many families can I handle to generate 300k to eventually net me 80k a year from the business I could probably handle about 75 Okay, so my minimum fee per family is four grand, or, you know, whatever it is. Just do the numbers and then work back from that. And that's that's how I set up values, division in 2008 things have moved on since then in terms of my metrics. But I don't that's all that. That's have a plan at the outset. Have a goal to go for in terms of what you need to turn over and whether you do it by the flat fee. I don't give a monkey's whether you do it for the per diem basis. That's percentage in Latin. For you, Andrew, it doesn't really matter, but make sure you know your numbers at outset. And then as a solo it's so easy to say that I don't have to worry about whether my pods are doing X, Y, Z, or what their attention is with that particular advisor, because it's all me, and that's one of the joys of being a solo advisor. I just focused on having a really clear business plan and just saying, right, I've got to get X number of clients, and I've got to be charging them a minimum of that. I don't care where that minimum comes from, whether it's assets under management, it's a standing order, it's charging for a financial plan. They're not doing that off a number of years, because I've got the assets under management have work backwards, work backwards, and then you'll find out what your number is in terms of turnover, and then you can, then you can start building your business. And that's all I really look at.

Alan Smith:

But now you're through, but then you don't track that. Now, do you need? You've kind of, you largely there. So you don't do you tracked. You give yourself any sort of goal target. This year, like to pick up five new clients, seven. You know, it just no

Nick Lincoln:

it happens organically. It's a really good question. I generally pick up more more clients through the year than I lose through attrition. That's mainly people just, I just, I don't lose clients. But obviously people die and pass away. But I generally, each year, I'm slightly higher in my number of founders I'm looking after, but I've got, I could lose half of them now, and I would still hit my bedrock turnover target to give me the income I need, and the 60k company pension contribution. And being blunt about it, just not thinking of these people as human beings. That's, that's all that matters. I've got quite a corporate the markets could tumble by 70% and I'd still have my bedrock income coming in to fund. That's all you know. So that's as deep into it as I get it. But, but sorry, final thing as and when and if I ever sell, I will use, I will get that thinking, transact that you've got, and I'll use that's going to help people purchase my business. Look at the metrics, you know, income by age and that kind of income by tax wrapper, I haven't got a clue really about that. I just, I don't care. It does

Andy Hart:

surprise me. Nick, first of all, you've got through the survival stage stroke, you know, surviving versus thriving, and now you've made a success of it, God knows how. So you still now don't look at these numbers, as you've mentioned, because you're looking at free agent, which is revenue coming in per month. You're looking at cost, looking at not net, net profit per month. So you have got a somewhat grasp of this, and you seem like someone who can be very analytical when you choose to be, but you've chosen to not focus on too much of these numbers. I know I do love looking at

Nick Lincoln:

the balance sheet and the profit loss. I do because this is because I'm a business owner, and that's not but I don't, I don't know how the income is derived, in terms of what strata or age of client generating, what that kind of stuff, okay,

Andy Hart:

all right, but you've got a rough idea of average income per client that you look after.

Nick Lincoln:

No, not really, okay,

Unknown:

all right? Like, I

Carl Widger:

find this fascinating. And this is just, this is beautiful, because this proves there is no right way of doing this. These things, right? It's, it's do whatever works for you. I could not possibly set out in a year without a goal. Like I had, not only have goals, I have bee hags for everybody in the business, right, including myself, right? Play

Unknown:

the sound. Nick play the sound, and it's got a B hag sound. Who don't know what a B hag is big. We'll stop in about five seconds. Two, one,

Carl Widger:

yeah, but I'd love to be as sanguine as you seem to be about the whole thing. But hey, that's, that's why we're all we're all different. It's like, it's really cool to hear that really, really cool. Thank you. I started off exactly the same as you. I know I had four kids, and I needed eight grand a month to survive, and by Christ, that that's some motivation to make sure that you do not fail in the in the first six or 12 months.

Nick Lincoln:

Yeah. I mean, that doesn't mean I'm not driven. I absolutely am driven, but I'm just in the situation now where I know I'm feeding enough into the furnace for myself now and my future self, and if I can build up a bigger business and bigger pots, you know, for my son or what have you all, the better. But I'm not gonna, I'm not gonna drive myself into an early grave in just just acquiring extra assets under management. Then I'm not denigrating it's not dig at your tool card, because I know you're very conscious of your health and everything else and mental health. So, so, yeah, so that's where I'm at, the wolf a

Carl Widger:

little bit. Rick, yeah, it's, it's, yeah, I tell you, My ambition is to be Nick Lincoln. I never thought

Alan Smith:

you too could be Nick. You

Unknown:

too. Nick Lincoln,

Nick Lincoln:

okay, Listen, guys, that's a thrashing. That's a really good meat of potatoes, actually. And that was your idea car. So thank you for thank you for throwing that into the hopper. Okay, let's move on to the next section of the show. Because I can see at the front doorbell, there's poster horn in the bulging sack of TRAPPIST questions up my driveway. And of course, TRAPPIST, you can see. Submit questions to us the Track Pack. We'll answer them in due course. Just click on the link in the so called show notes and or click on the X in tweet, or click on the tweet in X, which everyone do submit your question. It goes into a hopper that's in my back garden. I go out there now and again, I look at it, and I liaise with the post office, and it's all a bit of a mess. But we will get to you where I think we're from. September last year. We're going through the questions and this first question, let's have a look and see who this one's from opening up with my letter on letter opener. This is from Tom Brooks, who's on LinkedIn, and we'll put a link to his social bio in the so called show notes. Excuse me, I've got a bit of a cold Trappist. I do apologize, right guys, thank you so much for putting this podcast together. I've learned more from this than from this than I have from years of advising. Just an aside that's just amazing. We're getting so many of those kind of comments, which is lovely and just thank you, right? I'll try to keep this brief so I don't suffer from Nick's usual interjection about the length of my two sorry Nick questions. Dom thin ice, already. First one, ultra important. No, that's not you. Andrew. He means ultra important this point. Can someone please explain what the F, U, C, K, the Metis Norway joke is about? Pretty certain. Nobody has ever explained that one. So ponder that as we go through our memory banks, I'll go into question two key for you guys to delve into, the mumbo jumbo questionnaires, a bit more recurring theme. Do any of you still use them for compliance, even if you then follow a discussion with the client. Understand that Andy has made his own question there on his website. What do you use to show different maximum drawdowns of your various portfolios might be one for full meat and potatoes, since I think a lot of advisors agree that they're crap, but need guidance on how to get rid of them. So much. Keeping it brief, indeed, Tom, but nevertheless, thank you for your input and your two questions there. Who wants to have first stab at that? Happy while you while

Alan Smith:

you guys have a think about that, because I'm looking at mainly Nick and Andy to answer that in detail, because I know you've got very strong opinions. I'm going to reflect but on Metis Norway and I remember the conversation that we had. I think it was me who said, when I was getting to know Carl and what's the name of your firm, Metis Ireland, I said, what have you, why? What's the Ireland? Watch out branch in Germany, Norway, Switzerland. And this is just to be clear, this is the mettis Ireland.

Carl Widger:

And they'll also, they'll also see that I was deeply uncomfortable with the content of some of today's podcast. Still do the Irish versus UK cultural differences.

Alan Smith:

That's that was all it was, wasn't it? It was a bit of obviously superfluous

Carl Widger:

one country, yeah. But there's a reason we're called matters Ireland. So this is like, you know, when you go, when you go into a business journey, there's lots of kind of interesting things that happen along the way. So we were called, well, first of all, the company was called wager, financial planning. So off the who. So then I went, right, that's fucking terrible. So meres is the Greek goddess of good, counsel and wisdom. So I went, that is right. And then we'll call it Life met us life, right? So we went, Yeah, right. That's it. We're calling it Metis life, and we progress then, for how many years, and everyone started known as as met us life. And then I started getting these emails, which I thought were spam, so I was deleting we're going to sue you for using our name. And I was like, Yeah, whatever, right. So I was deleting them. So then I got this registered post letter to our company solicitor who I didn't even really know. I just kind of put them in there. You're being brought to the High Court by met in New York for for using their name. I was like, No, immediately I went, that's that's a disgrace. That's a joke. We'll take them on. You. Did you think that, you know, Met Life, met his life, where they I was like, maybe Okay, and he went and, by the way, they'll go all the way. So you're talking about Supreme Courts here, if you want to, to take them on, so they'll win. So then we had to call it something else. So then we called it I was, like, at this stage, probably quite busy in work and lots of things going on, and this is, like, just a pain in the ass. I mean, I'll just call it matters Ireland. So there you go. There's the story about me as Ireland started slagging me. But matters Norway. Hearing

Andy Hart:

that story is probably the best compromise. That was a long chapter and verse for Tom Brooks, but I think probably the best compromise, I think it was unique that probably carried the joke on. Sounds like a

Nick Lincoln:

Yeah, what I think Norway was on our mind, because that might have been talking about something back then, or I can't

Alan Smith:

show somebody I can't remember was in Norway.

Unknown:

It was you. Alan, you were doing the bloody Yeah,

Alan Smith:

yeah. Somebody me, yeah, I did. And there was this big sign in Norway, but messes, there is a message Norway, they might be suing you next.

Carl Widger:

There's a guy came to trap life and he went Whereabouts is your

Alan Smith:

guy who's and

Carl Widger:

he's like, what? Oh my god. Like, I'm actually so embarrassed. Chaotic answer to your

Unknown:

question, hopefully being given more succinct answer, well,

Nick Lincoln:

we've given my jumper question as a pretty good flashing earlier on in the show. I on in the show, actually, didn't we a piece from everything else. So Andy, Andy's got one. I've got one. I know Carl will use one. I know Alan. We use one in different I think Andy and I use them, or certainly I use mine, just to weed out the weirdos, make sure they're not sort of financially enumerate they want impossible things. I don't want anybody on my five questions, and one of them says, Do you want above I'm paraphrasing here, do you want above average returns with no volatility? It's not quite that blunt, but it's like that. If they say yes, you know you're dealing with a window liquor, right? That Yeah. And so we just, Okay, well, we need to have a chat. We're just not going to come on board full stop. So that's what I use it for, just, just to, just to make sure I'm not dealing with nut jobs

Andy Hart:

Ultra follow Yeah, on the onboarding process, I do an investor profile which covers off everything I need to do from a compliance point of view. And every year we revisit it and update it. But yeah, I try and keep it as frictionless and painless as possible for all sentient human beings that we look after as possible. But, yeah, that's, that's what I do. But again, we could talk about it a lot. Is quite boring. Now let's just move on. They end up with a portfolio. They stick with it. They get great returns. Financial Planning LED. The

Alan Smith:

point is, and to also point. And I think this is we kind of, I think we do take it for granted that we sort of, you know, begrudgingly, go through this and all the points that Nick said, I gotta tell you, there is a significant part of the advisory population, and it's probably more driven through compliance than anything else, which says, you get the client to tick this, you tick the box, it leads to an asset allocation, a 6040, and that's what you've got to and if you want to disagree with that, you got to fight take on compliance. And people got, you know, I can't be asked. I'll just run with it where

Andy Hart:

and then and then down the corridor. Consumer duty. All about better client outcomes. Yeah, it's worse client outcomes.

Nick Lincoln:

Yeah, never the train show me with that approach. Electronic plates crashing into each other. But we won't talk about it because compliance will, yeah. Long story short, Tom, the plan determines the portfolio. Okay, and most clients need a return over and above inflation of, say, three to 4% probably in the round I'm throwing out figures here, you ain't gonna get that unless you got a portfolio chock full of the great cups of the world. And I don't give a damn what your risk assessment question then, mumbo jumbo question there says, really? Carl, anything to

Andy Hart:

add? We do have to take somewhat of a professional risk in this space, and that is the game the people that are often full fat financial planning are signed up for. So there is always going to be a discrepancy between what your compliance function wants you to do and what you know is the right thing to do via the client. So we are taking a bit of a professional in this space.

Alan Smith:

There is, let's face it, there's an extra layer of I'll call it friction, because it there's a nice, seamless tick that box, fill that portfolio tick everything file is compliant, simply easier legal and compliant fired. So the friction you're going to self create, because you want good client outcomes is, hang on, Mr. Client, I know you've ticked this. However, if we go down that route, this is the eventual outcome you're not going to achieve all the things you want to achieve. You're not going to achieve financial freedom and independence. Therefore, can we have a further dialog? Can we kick this around? Can we have a human to human, adult to adult conversation, and blah, blah, blah and all that stuff. Keep going back to that's the art science we've identified. Tick that box, but no one really understands it. Back to Eric's point and his LinkedIn or Twitter post that he made, clients don't really understand it. So you are intentionally creating another layer of, if you like, complexity, friction, conversation. But my God, are you adding much more value?

Nick Lincoln:

It's worthwhile. Can I just quickly, just tie a bow on this? Because I think it's really important how you where you've introduced the mumbo jumbo question in the in the onboarding chain. I always do it after doing the cash flow, after talking about the dangers of inflation, how cash is the silent killer, how real risk is running out of money. And then I get, I'm kind of leaving it with this questionnaire then, so then, oh well, Nick's just okay. You know what I mean, it was if you gave him the risk assessment questionnaire out of the blue at the very first thing, and they're going to go shit. I don't want any risk, because risk is losing money, which we know is impossible in the Versailles portfolio, but until they've had that education process with you and had the cash flow and the financial plan,

Andy Hart:

they're somewhat informed, but

Alan Smith:

that's I know you want to be on a wrap up now, but that's really interesting, what you have said there, because we don't. Now that you just said it, I think that's worthwhile, considering we're asked, we're doing a risk profiling questionnaire relatively early on, and our thought process part was almost like an engagement. It's a bit of glue earlier on so we can get to know us, and then we'll have the conversation afterwards. You're doing the other way around. You're having the conversation building a model, building a plan, and saying, Oh, by the way, can we just sense test it with this questionnaire out there? More educated, more informed, but

Nick Lincoln:

I don't send them the risk and actually, they've agreed to go ahead, they've agreed to the fees, and they've agreed to go ahead. That's when we get the risk assessment questionnaire. Well, you've built,

Alan Smith:

you've built the investment proposition, sort of, yeah, you've kind of reverse engineered it. In order to achieve the things you need to achieve, you need to get 3% above inflation. This is the optimum portfolio

Nick Lincoln:

if they're going to come if they've been through the financial plan, they haven't sort of run away from me as a complete weirdo, and they're happy with my fees. I know they're going to be great. They're going to ask the right questions, the risk assessment questionnaire, and they're going to be comfortable with a portfolio. That's

Andy Hart:

the definition of a questionnaire. Nick is but five questions is on the line. I know

Nick Lincoln:

I can't I can't go down to one yet.

Unknown:

Right fill in my ribs. Profile question, Nick, let's move to another page. Let's move on christate culture corner, and

Nick Lincoln:

I'll be quick on this one. It's me off the mark. It's Lincoln in lane. One off to a good head. It is the latest. Roby Sutherland, he hasn't got a book, actually, so I don't know why he's did one, but he's done one on the modern wisdom podcast with Chris Williamson. It's over two hours. Rory can sometimes be a loose cannon and go off on just tangents, and doesn't always come back that quickly. But here in this one is really on point through it the two hours races by. So the most one of the most recent modern wisdom podcast, Rory Sutherland, corralled very well by Chris Williamson, who just about keeps him in line. That's mine.

Alan Smith:

Yes, he was. I think that's the seventh conversation that Chris Williams has had with Rory. I think he's finally learned to manage him. No, it's very It's very good. My contribution this week in the world of like, two hour podcasts and Joe Rogan, three four hour podcasts. Who's a guy. Lex Friedman, five hour podcast is insane. I'm quite attracted to 10 minute podcasts. There is a new podcast come out a guy, a guy who I know mainly through through LinkedIn. Jeremy Connell, wait Is his name, and he he's all about, did it do storytelling? And he has a podcast which is 10 minutes long each one, but it's about the kind of the art and science of storytelling in order to support persuasion and a bunch of other things. At the end of the day, we're all we're still in the persuasion game, whatever you might, whatever it might be, and it's just brand new podcast. He's done a handful of episodes so far, but keeps it short and sweet, 10 minutes long. He talks about the episodes I heard Steve Jobs. And Steve Jobs did this commencement speech at Stanford, which is considered to be the best commencement speech ever. Jobs had never done, one ever before, and this was the first and only one he ever did, you know. And the thought process behind that, what he went through, how he created it, and it was all about storytelling. And he talks about another guy who who has been given the longest standing ovation of all TED talks that have ever been given in public. He's been long, and he was all about persuasion. So what did he do? How did he arrive at how did he frame the conversation? Stuff? 10 Minute sound bites worth checking out is called Truth in 10. Truth in 10 by Jeremy Connell, wait. Looks good. Looks good. Thanks. Helen, okay,

Carl Widger:

that sounds brilliant. Love the idea of short form in this era of yeah, very, very, very long, we're probably going on way too long today the entrepreneur experiment. Gary Fox has 400 episodes, I think done. He's always one, two or three in terms of business podcasts in Ireland, absolutely brilliant interview with a girl called Amy Connolly, who's sculpted by Amy is her business. And I just think, just an entrepreneur story that has just built on, you know, graft from an early age, and just just sensational stuff and how, you know, through really, really hard work, but obviously very, very, very clever person as well that she's built a brilliant, brilliant business, very interesting conversation and a little bit like what I was saying earlier on, I've started to listen to a lot of Gary's podcasts. The last file, some really, really good stuff in there. I would highly recommend it.

Andy Hart:

Final one from me is a book recommendation called weapons of math destruction, M, A, T, H, awesome book by Kathy O'Neill, the world of AI, the world of mathematical models, organizations, governments, plugging in some algorithm to pop out a number, and then, you know, the top 50 teachers get fired in New York because the spreadsheet says it. It's a really decent book, weapons of math destruction, insanely higher recommendations on Amazon. Have you heard face? Nick

Nick Lincoln:

No, nothing. I just, um, well, the title weapons of math destruction, i. Um, your, your, your link goes over three bullet points. Is that just an error in the show notes? It's not a second culture corner.

Andy Hart:

Yeah, I did see it was quite a long link. Nick, is that okay? Well,

Nick Lincoln:

no, you got a base paste together, mate? You got I'm not, I didn't

Unknown:

do that. Yeah,

Carl Widger:

right. Very interesting stuff.

Nick Lincoln:

Yeah, yeah. Well, luckily, oh no, we haven't, because we're still going TRAPPIST, and thank you, dear Jackson, for bearing with us. There we go as episode 65 comes to a close, and another pile of trap slides down to you bend as far the time. Thank you, dear TRAPPIST, as ever for your time and input on the show. Do leave a review. Six out of five stars is mandatory. Trap live is happening. May the 14th. Have faith with us. It will happen, but until the next episode. Trappist is adios from the trap pack. Take care of there, and we will see you on the other side. Goodbye. Bye, bye. Goodbye,

Unknown:

Julio. How

Alan Smith:

long was that?

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Nick Lincoln

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Andy Hart

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Carl Widger

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