68 - Tariff Tantrums

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: Tariff Tantrums
• Culture Corner
• TRAPist question(s) from M Connor

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

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TRAP LIVE25 - 14TH MAY. Click here to purchase tickets.
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Transcript

Unknown: 0:10

Music, welcome to the real advisor podcast, T, R, A, P, T, T, 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

Nick Lincoln: 0:46

yes, indeed, dear TRAPPIST, welcome back to what many people are calling episode 68 of the real advisor podcast. My name is officially lick nincoln, and joining me as ever in the digital studio of doom, are the three other Horsemen of the Apocalypse, Alan, the storyteller, Smith, Carl, the voice de la vocci, widget and Andy Ultra heart. Now, gentlemen, we have a show packed full of that absolutely nothing. So let's start packing it straight away with some more high energy review reads from my very good friend, the right honorable Mr. Andrew ursaine Hart,

Andy Hart: 1:24

thank you very much. Nicholas, welcome everybody. The first review is from healthy piranha entitled, or five stars entitled, great podcast, great podcast. And lads personally are not a financial advisor or planner and have no plans to become one. However, I'm just a normal guy wanting to make sound financial decision decisions now that my future self will be proud of. And believe it or not, you gents have taught me a lot, and not just that. Andy is into mouth taping. Keep up the great work, lads. It's much appreciated. Regards Paul, the final review is from Ireland Fergus financial car wanted me to do it in an Irish accent, but I'm obviously not going to do that. It's entitled essential listening for real financial advisors. Each show is loaded with valuable discussion and debate from four experienced practitioners delivering in an honest zero nonsense and very a very often comedic way. Keep up the good work. Thank you. Andy. Nick Carlin Allen, over to you, Nick.

Carl Widger: 2:27

He threatened to do it in an Irish accent, and I told him, it could be a very long show if he did that. I've

Andy Hart: 2:32

been practicing for hours. But anyway,

Nick Lincoln: 2:35

yeah, thank you very much. Travis for those reviews. They are lovely. They give us a real shot in the arm. They're a real Philip to us, please do keep them coming. Six out of five stars is mandatory. Now episode 68 episode 68 of the real advisor podcast, T, R, A, P, there's a lot going on in this thing of ours, and there's a lot going on around this thing of ours, which kind of affects us. So for this episode, it's going to be a first for the real advisor podcast. We are going to have a long, extended topical tip bits. Session, there might be a meat of potatoes. For this particular episode, we want to give the meat and potatoes. It's due attention when it comes around. But we've got so much to get through. This is a topical tip bit take down. We're going to start off a triple T. I've got to be careful. We have, apparently, now, 14 tickets left. No, it's 13. The tickets going 1214. Or So tickets left for trap live 25 do have a look at the real advisor podcast.com. Get yours. You'll want to be there. FOMO will be massive on May the 14th. If you're not in NW one with the trap pack and all the TRAPPIST and all the shenanigans and hijinks, it's going to be great fun. There's a note, there's a thing here in the in the agenda, saying mention the DA DFA film showing early the same day. There's a dimensional got a showing of their movie, Alan. What's it called?

Alan Smith: 3:51

Can't remember.

Carl Widger: 3:52

Tune out the noise. No. Tune out the noise. Thank

Nick Lincoln: 3:55

you. We tuned out the title. Tune out the noise. Is showing. I imagine that DFA is off. Oh no, there's a hotel. Isn't that only go to

Alan Smith: 4:02

restaurant at the dimensional office, which is literally around the corner from the

Nick Lincoln: 4:06

venue. I'm glad we prep for next door to position. Yeah,

Unknown: 4:10

well done, lads. That was very professional. This

Nick Lincoln: 4:13

is already, what are we in? How many minutes? You know,

Alan Smith: 4:17

it's time. There are people who are going along, Nick and I, you went to see it last year. It's worth it's worth it. It's worth going along this sort of history of dimensional fund advisors from the very beginning all the way through, quite entertaining, quite useful. So there'll be people going along for that show, and if you are then, literally, when it finishes, get yourself around the corner. Pop in to the real advisor podcast, live recording. It's just kind of cross service in your territory. Andrew, it's just across the road DFAS office from the the venue. So

Carl Widger: 4:47

and I guess, I guess, if ever there was a time to tune out the noise, this is about the time.

Alan Smith: 4:55

Very good, very good. One other thing, one other thing, uh, Nick, if I may, whilst we're on Talk. And pitching tickets for the last remaining handful that are still available. We mentioned before, but not widely publicized, but the legendary Samantha Russell is also presenting on the day. She's coming along and doing a bit before we come on and do the live recording, some people will know and be aware of Samantha and her work, and some will not Nick. Do you want to interject there? Well,

Nick Lincoln: 5:25

we have a short video. I have Samantha promoting. I've uploaded this, but those listening, you can still listen. If you go,

Unknown: 5:36

would you love someone to take a look at your marketing, look at your LinkedIn profile, look at your website and just completely rip it to shreds or give you some positive feedback. I'm going to be doing just that with my friends from trap, the real advisor, podcast at the trap live recording in London in May. And I just can't wait. It's going to be such a fun night. Everyone who comes is going to get two free drink tickets. We're going to have tons of fun, and you will be able to submit live for the chance for us to pull up your marketing on stage and have a critique from yours truly. I'm Samantha Russell, the chief evangelist at FMG, and I help advisors with their marketing, and have been helping 1000s of advisors grow organically through strategies like SEO, video marketing, LinkedIn and social media strategies. And I can't wait to give you some of my very best tips and tricks for 2025 exactly what you need to know to think about where marketing is going and how you can improve yours, but the roasting is going to be the most fun and informative. And just to give you a taste of it, I thought I'd pull up our beloved Alan Smith's right here. Here's his LinkedIn page. He has a great LinkedIn headline. He doesn't just say wealth manager or financial advisor. He gives you very, very specific things about who he helps and what he does. He's got a great banner image. But there's one thing I could change. It would be this. Does anyone else think that Alan's profile picture looks like he's trying to be an angel with a little halo right above his head? I love the picture. He's got a great smile, but I tease him about that all the time. He looks a little too angelic for me. If you would like us to roast you and give you some feedback about your own marketing, then I hope you'll join us live. There are still a few tickets left, and I look forward to seeing you all there.

Alan Smith: 7:32

You're welcome for the team there giving a roast of my profile. But no, Sam is great, real expert on financial planning, marketing, and she's going to come in. It's obviously going to be done in a very, very friendly, positive, helpful way. But if you're listening to this and you want to come along to the event, if you want to submit your LinkedIn profile, your website, your social media activity, look up Samantha Russell. She's quite active on LinkedIn. Send it and send it to her, and she and we might do some stuff if you're there on the night as well. We might do some stuff kind of live and spontaneous. But to give her a bit of prep in advance, she'll take a handful and give you some healthy positive feedback, AKA a roast Andrew. And

Andy Hart: 8:19

she is moving to London, isn't she? Alan, so she's going to be a bit more present here. She one of the only people that's moving to the UK

Alan Smith: 8:28

from the US, so we've got 10,000 that are left. Samantha is here, so we're not

Unknown: 8:33

analyzed that decision yet,

Nick Lincoln: 8:36

though. She adds to voice, okay, I think one of us said it early in the week on the chat, but it's worth the price of admission to the trap is worth coming just for Samantha Russ, very good. She's really on top of her thing. So and of course, getting us for free. I mean, could life get any better? Yeah, okay, of

Carl Widger: 8:54

course, Nick, we have Amelia hosting as well. So look, we have two total experts and professionals, and then they'll hand over to us, and we'll bring the chaos from

Nick Lincoln: 9:03

the sublime to the ridiculous. Watch on the sublime scent. Right. Moving on, SPIVA. SPIVA, don't know. Don't care. Don't

Alan Smith: 9:12

tell me you've never heard of it. Nick SPIVA, but I've never

Nick Lincoln: 9:15

had it read out to me.

Alan Smith: 9:18

Okay, SPIVA, have you got done? Meet me to do this. This is at the at the risk of repeating myself again and again and again. No, this just this comes, I think this comes out twice yearly, the one for the US market. So that is SPIVA. SPIVA is the standard and pause. Standard and pause. Obviously, a analysis for consulting, huge, obviously, they run, ready to run the S, p5, 100, amongst many other indices. And they do. The good thing about them is they are impartial. They're not a fund manager. They're not, they don't have any real skin in the game other than they are, you know, a research and analysis company, and they put. Juice a report across all major asset classes and all major geographies comes out at different times, depending on which geography you're looking at different times throughout the year. But their 2024, year end report on the US, both equity and bond market has just come out, and guess what it says, Guys, they do an analysis and a comparison of active investment managers versus index the index and index funds and passive effectively, any thoughts as to who were the winners in 2024 I

Andy Hart: 10:34

think mathematically, there is only one winner, but please,

Alan Smith: 10:37

well, I mean just the headlines, 65% of all active large cap US equity funds. Obviously, they're the ones focusing on the S p5 165% underperformed, yes, and S p5 100, that's one year, one year. I mean, you'd expect what math says, that 50% should underperform over the short term, over the 50 as you get longer, as the as the term gets longer and longer than obviously, the ones who outperform the index are less and less. Over a 15 year period ended December 24 there were no categories, you know, across all asset classes, all market cap sizes, equities, bonds, etc. There were no categories in which a majority of active managers outperformed. And on it goes. And on it goes loads of other facts, data, graphs and charts. You know, this is this is the evidence. This is the facts. This is why none of us embrace active investment managers, who pick and choose, who guess the direction, the future direction of investment markets, who buy stocks and sell stocks, because year after year, month after month, the data says it's a fool's errand and not really worthwhile. So recommend put a link in the show notes. Recommend advisors, just take a look at that download, read through the the data, subscribe to their updates, because you know, you can't beat You're entitled to your own opinion. You're not entitled to your own facts. Fact, and it's the facts. So worth pointing out the latest review.

Nick Lincoln: 12:05

Okay, thank you for that. A perennial message, okay? Another perennial message in this thing of ours, in the world of money and emotions and, dare I say, greed, scams, scams that come along like clockwork, and I read something recently on the BBC website about investing. Well, the BBC, I mean, obviously takes the complete side of the people that lost the money. How are you on the BBC website there feeling okay. I was probably looking for the weather. I've got it saved from years ago. But even the weather's going left wing. When it's hot, everything goes red on the map, there's just like, red, don't they red? And they want a sickle for the sun. Anyway, that's another story they talk there's an investment scam where people have been conned into buying whiskey barrels that didn't exist, or they were sold multiple times to different investors. And the whole story is a tale of, whoa. There's no sense of agency with these with these people in terms of the report, and they know they weren't in eyes wide open. They were just duped by the comment. But it's just another sad story of greed, ignorance, yes, absolute fraud, yes, absolute rogues running these schemes, but they were promised returns of like 50% you know, it's just like, come on. Grow up. Grow up. These are all predominantly ladies, actually, they're invested in this, but they're all of a certain age. And I don't know it's sad. It is obviously sad, but it's also human nature. How do these people get through life without sticking their fingers into sockets? I don't know. It's it's a sad thing.

Andy Hart: 13:30

I did see the story Nick and I remember about five, six years ago, whiskey investments were all the rage. And how do I know this? Because it's advertised to me on mainstream platforms. So the people that make a lot of money are the purveyors of this filth, who are obviously fraudsters. And then the second tier, the people that make the money, are mainstream media that advertise this far and wide, known brands, people, brands that people think they should trust. You know, like the biggest newspaper in the UK advertises heavily all of these things that blow up in the future. So my main anger is towards them. I mean, there's always going to be compete with alls and be fraudsters, you know, fooling their money, but we can at least control mainstream, known brands pumping this stuff. So yeah, it's

Carl Widger: 14:22

though, Andy, I hear your anger, I feel your pain. I think you're right, but they're never going to change, are they? It's like what they're going to whatever pays the bills is what those going to get printed.

Andy Hart: 14:35

Call. That is really great with me. These mainstream papers advertise this stuff. Keep it simple. In 2018 then they report the blow up in the same paper, inside the paper, not the advertise, you know, on the advert side, and they do a full page spread about this thing that's blown up. It's like you wankers were the ones that were promoting this stuff that allowed these people to invest. And then they invest. Yes, then you write a story saying it's all gone belly up. It's a business. Yeah, it's a business. It is a business. I'm just saying it blows my It blows my blood, because I'm in this business. And, you know, normal people are getting caught out by brands. They trust advertising this. And we all get tarnished. We all get tarnished. Yes, exactly

Alan Smith: 15:16

a couple of points. And you and I were speaking yesterday about, I mean, I'm not on Instagram. I'll get onto that social media and stuff. But no you you make the point there that like newspapers and what have you. But I think the other aspect to it, and we will talk about this as well, in terms of sort of recent or this year so far, you know, market jitters and, you know, newspaper headlines, and as Nick has referred to, you know, emergency podcasts and stuff like that. There's a sense that the stock market is really risky and volatile, and whiskey investments, and again, you know, all the ads say, whatever guaranteed 8%

Unknown: 15:52

a year, uncorrelated to the stock market, it's 12% guaranteed healing.

Alan Smith: 15:56

Because you've got newspapers talking about footsie plunges when it's like, off 1% or something like that. So there's a whole mix of different things going on here, and it's difficult, and all we can do is keep saying the same thing, flying the flag and telling people to be very, very,

Andy Hart: 16:11

very strong, protect all of our clients, get get them in a safe place, but obviously we're not going to

Nick Lincoln: 16:15

save everybody. Yeah, yeah, yeah. Okay, okay. What's the next similar thing? Well, sorry,

Alan Smith: 16:21

yeah, I was, I was going to mention this talking about, you know, blow ups, rip offs, people being defrauded, etc. It's not just little old ladies in the BBC

Carl Widger: 16:31

nick or just in Ireland, yeah, or even in the

Alan Smith: 16:36

UK. This, this was, I mean, caught my eye. It's not, it's not necessarily in our world, but it's kind of long this is about money and investing and what have you Did you see this? I mean, of all people, the mighty JP, Morgan, you know, one of the biggest banks in the world with all their kind of infrastructure, analysts, economists, PhDs and everything, research people, well, they were duped out of$175 million by a lady by the name of Charlie Javis. I vaguely remember this a few years ago. This was a sort of FinTech thing startup called Frank, and she effectively was something to do with helping students access, you know, student loans and things like that. And so she was saying, so she'd had whatever, you know, hundreds of 1000s of people signed up for this, and they were charging them a fee. Million, million, millions of people signed up for it, charged them a fee, and was raising money from the, you know, the markets and the fundraisers. And eventually, she took it to JP Morgan, and they thought, fantastic. This would fit very nicely into our overall sort of financial banking ecosystem. There's a check for 175 mil young lady, wow. Turned out it was completely fraudulent. She was making up the numbers. There was no real due diligence done, and JP Morgan were completely fleeced as a result. As a consequence. Of course, there was a legal action, and she's been found guilty, and is looking like doing a decent stretch inside. But I guess there's a lot of you know that we don't really need to take a deep dive into this, but there's a lot of things that come out of it, one of which is, it's not just sort of the humble individual who's sort of financially illiterate. It is really, really smart. I mean, you can imagine how smart. I mean, smart people had a look at that, had a look at that investment at the time, they're not going to drop nearly $200 million on something that they're not really confident in interesting. That's

Nick Lincoln: 18:22

a very good point. That's a very good point. The most fascinating one of all these ones, to me, all these scams and Ponzi schemes, is still the Bernie Madoff one, just because of the length of it, in terms of the duration of the scam, but also the kind of people he was pulling in, these were seriously well healed, you'd think, in quotes, well advised, people who were just, who were just taken for a ride by this sociopath who somehow kept it going. I mean, how he put his head on his pillow and slept at night? I I did not know. It's

Andy Hart: 18:51

similar to Elizabeth Holmes with Theranos. Yeah, due to a lot of people,

Alan Smith: 18:57

very high profile, famous, you know, billionaires, uh, invested in a number of these. I mean, ft, I mean, ex, another one. There's, yeah, there are. I mean, it doesn't

Andy Hart: 19:08

dampen the story, but hundreds, only 5 million for JP, Morgan is a rounding error. I mean, it's still fraud from her on her behalf. But, yeah, they're still gonna, you know, they'll make that back in an afternoon.

Nick Lincoln: 19:17

Not good, not good. Okay, let's go into something more positive, high performing first

Alan Smith: 19:22

is all, is it all about me? I thought you mix up the stories about

Nick Lincoln: 19:26

you. We're just living in your world. I enjoy it. Crack on you. Welcome.

Alan Smith: 19:31

This was something that caught my eye recently, quite interesting, and maybe we should do a deep dive and have a meat and potatoes or something on this, our friends, the aforementioned dimensional fund advisors, one thing that I do think, other than their investment side of things that they do really well, is they they survey their market, they ask their advisor community, both in the UK, Europe, US and around the world, lots and lots of questions. I know I probably you two guys, Andy and Nick, haven't participated. Did their survey, benchmark survey. Carl Elliot

Nick Lincoln: 20:02

sends me the email every year, in you 14 years, and I just delete it. I think

Unknown: 20:06

you have to be a certain size, sorry, Elliot, we don't we don't qualify. We'll skew the numbers. The averages are massively down this year.

Alan Smith: 20:15

Nick Lincoln submitted his right.

Unknown: 20:18

Okay, we'll focus on the median, not the average. Yeah, but

Alan Smith: 20:23

it is, it is interesting. So that there's, obviously, there's just so much data, and you can sort of click in and take a deep dive and cut and slice it any way you want, quite a lot of interesting stuff. But the thing I would want to speak about, and I'll just speak about it briefly, because I do think it's, it is interesting. They talk about what they call high performing firms. So they effectively segment the marketplace. I would say, in my experience, the average advisor firm that I've met who works with dimensional are pretty good, you know, they're generally cut above the average of, you know, various other seminars and things that you might go to in terms of the quality of the business, quality the clients, etc. So the benchmark is already pretty high, I would say, to start off with, and then you further segment that into like top is quartiles, top 25 top top 50, bottom 25 etc. And just this from the last time we participated. They've said they've updated it since then, but I'm just taking some data from the last time we participated, just a matter of interest. So high performing firms. What is a high performing firm in terms of year on year, revenue growth 14% so it's not 50% or 80% 14%

Andy Hart: 21:29

which is, you know, it's a good growth rate to have. It's not sugar lights up, but it's pretty good client retention rate. This is one where I think most advisors would do pretty well, but 99% 90 99% client retention, that's the best one. But that shows you, shows you. Alan, those firms are mainly recurring income firms. Yeah, they're almost new assets on demand, right? So the 14% is new contributions, new clients, and maybe some returns.

Carl Widger: 21:54

I don't agree. Andy, because that's not our case. Like we're still, you know, trying to grow aggressively and we participate. So it's not the case but, but equally, for us, our business model, it's it's vitally important that we retain our existing clients and make sure that those service levels don't fall we we do. We do participate out on every year, and I do a report for the board on a quarterly basis, and we decided last year, or maybe even the year before. It's probably actually the year before that. I think you're going to name out the four or five key areas, which is the growth and all that. That's what I do. My a my MD report on is those four or five key areas, because it keeps us focused on what we now know independently, have been told these are the key areas that the best firms in the world are focusing in on. So I think it's amazing, and it is a total and utter FAF. I don't do a patio Hall and providing

Alan Smith: 22:56

takes about a day to provide all the data. Yeah, exactly. Yeah. We do it every second year now. So we've decided, because Shereen says, Yeah, I've got too busy, quite rightly, yeah. So let me just so 99% client retention rate, 4% employee turnover. So there's not people generally sticking around in these companies as they're evolving and growing. Mine's higher. Sorry, mine's higher. You're for here, lower. Nick, when Nick, when you sack yourself. Operating profit. Interestingly, 40, 43% I think that's depends how you work out, operating net profit. Alan, no, we mean this is operating, operating profit. Yeah. And here's the and the last one, I'll mention, there's a ton of stuff. And again, if anyone is interested in this stuff, connect with dimensional. They'll help you run through it or come compare with your firm, with the averages. But revenue per advisor, so much per year. Take it. Take as rough. Guess what's the average for the top performing firms? Revenue per advisor in these companies? Is

Andy Hart: 23:57

it in dollar terms? Alan pounds translated, pounds, I would say, I'd say 444, 100, hundreds high, higher.

Alan Smith: 24:08

The figure quoted based on the data is 861,001 is the average revenue per advisor in the top performing firms. So that's, yeah, I think that's in the world, translated into Sterling. So they're right, punchy, punchy numbers.

Andy Hart: 24:23

That's very sorry, is that in the top slice of the survey, or the average of the survey,

Alan Smith: 24:27

that's the top perform. That's what they call high performing firms. That's the top it's the average of the top 25% of all the firms that participated. Yeah, oh, top 25% okay, so I thought was the whole thing? Yeah, average, obviously, wow, because the US

Nick Lincoln: 24:39

does have bigger figures anyway. So that was, it'd be interesting to see if they took the us out, what the figures would be. You

Unknown: 24:44

can do that. You may get that peer group as well, when

Alan Smith: 24:47

maybe we'll have another conversation about it. Because it is quite interesting. Because I kind of assume that people listen to this podcast because they're aspiring. They want to grow, they want to be the best firms, or maybe they just listen for the for the professionalism. Some of the technical advice. Most people are ambitious, right? So you want to find out, well, what are the very best firms in the entire world doing? Or you can slice it, best firms in Ireland, best firms in the UK, best firms over certain sites. The numbers can be quite skewed. I've noticed in the past, because some firms are growing very aggressively, particularly in the US through M and A the hoovering up loads of other firms. So guess what? Their AUM is growing very, very fast. But if you So, you can exclude M and A you can exclude market returns. You know, if the yes markets have got up 10% and you've only got 8% where you're sort of net fallen in terms of revenue, for example, yeah. So, yeah, quite interesting. And something to benchmark

Carl Widger: 25:38

Alan as well. It does, you know, if you're growing and you have ambitions, it gives you aspirations. And it almost kind of shows you what your, your B, hag should be, you know, this is, this is the North Star that we should

Alan Smith: 25:51

be. Think, thing is, you off. You think you're doing well. You think, oh, we're flying now. And you go, we're not, we're not close to these other cars, right? Yeah, potentially, are,

Carl Widger: 26:00

there will be some metrics are gone. We are totally nailing that. And then, like, like one thing, our profitability metrics are not where anywhere near those numbers, because we're aggressively growing. So every time we're storming, we're still hiring and high and and, you know, trying to put the team together, but, but it's really good for us to say that's what we should be aiming for. That's what good looks like. And this is what great, yeah, I didn't, does

Andy Hart: 26:27

it measure how happy the bosses are? Alan, are these firms? It does that's these high growth firms that kill in themselves, busy for well, peace report that

Alan Smith: 26:35

we are in the high performance fund to quartile. My business,

Nick Lincoln: 26:41

but these figures are not these. These not verified. Are they? I mean, I face, do have you ask any I face his or her turnover? They always believe bullshit to a degree, Yeah, but you're, I mean, that's not you do not. But you

Alan Smith: 26:52

can put in bullshit. Yeah, I guess you can put in whatever you want. Carl, I suppose. What's the point? But are you going to do that this? This is another thing I've offered you, the sum I've noticed, for fact, on some of the trade publications, when they publish things like AUM or revenue from advice firms, you can do a bit of background research. You know, it's just not true. But if you're doing this with dimensional, who are your kind of business partners? They know your AUM, they know the firm, they know the setup. You're not gonna lie to it. Yeah, they've got a good graph. So like consultants for Yeah, kind of Yeah. Anyway, it's good. It's good. Well worth what was the review? Maybe we'll come back to what the one

Carl Widger: 27:22

number that surprised me, Alan was, um, growth of 14% last year, when it was sweet spot, of all sweet spots, I honestly I thought it was going to be much higher. Be very interested to see what it is next year. Yeah, because we are now stepping into a realm of actually go and do your job. Let's see. How is it calendar year?

Andy Hart: 27:43

Alan, not that it really matters, but it's 2024, the calendar,

Alan Smith: 27:46

yes, to just end December, I think.

Nick Lincoln: 27:49

I mean basically, Carl, I mean, you know, if you got an asset under management business, and you're mainly invest in the global equity, you could take on no new clients, have no new deposits, and you get an increase in your revenue of 14% last year. That's my point, yeah, I know it is, yeah, yeah, without doing anything commercial or

Unknown: 28:04

entrepreneur, yeah, yeah, yeah. Okay, right.

Nick Lincoln: 28:08

Let's have a look at the next thing, Ultra, yeah.

Andy Hart: 28:12

A couple of points here. Sort of a new area for us. I suppose there's a company in the UK called The Money charity. They do various things a link to this thing of ours. I don't know if there's a similar one. In Ireland, they produce reports, and I happen to scroll through their march 2024 report. They're more focused on the other end of this thing of ours, debt, people struggling, and they break down things in in a lot of detail, in terms of mortgage debt, unsecured debt, people on debt payment plans, loads of stuff and numbers, you know, to your blue in the face, as it were, so the UK is currently sitting on around about 2 trillion of debt. The bulk of that is mortgages, probably around 12, 13% is on is unsecured consumer debt, and then probably about a third of that is credit card. So nothing too revolutionary. Did you guys manage to scroll through that or any questions on that you aware of the money? Charity?

Nick Lincoln: 29:13

No, and no. Sorry. Okay, no.

Andy Hart: 29:17

So no, no. Okay, no worries. The one that I do want to recommend, in relation to the money charity, a company called step change. And I don't know if any of you have come across step change, they're a debt management charity that help out 1000s of people in the UK every single year, and actually helped out a good mate of mine that was in a bit of a debt hole. In the world of debt management, it's quite murky. It's quite hard to find a company that if one of your clients, if one of your clients, one of your family members, one of your friends, is in lot of debt, and there's no easy way, easy place to sort of turn. So advisors listen to this. They've got anyone that is in a bit of a pickle with debt. There's an amazing company called step change, and they do all the sort of work and services of debt management company. Fees, but they don't charge for it at all, and they can be heavy fees in this space. So it's a strong recommendation. If advisors come across anyone, the first place you want to recommend them to is a company called step change. The website is step change.org

Alan Smith: 30:15

Yeah. I mean, you have all joking aside, opened up a whole other thing there that's probably worth spending a couple of minutes on, which is, you know, we we generally, this is the nature of our business. We generally live in a bar. We live in a bubble. We work with the whole point of is, we work with affluent clients who've got money problems or money challenges or planning needs, etc, and they represent a very small percentage of the entire UK population. I was just reminded of a few years ago. Really good guy, ex colleague of mine, James Greenlee. He decided to do some work to volunteer for Citizens Advice Bureau. And that is the our office was in the City of London. It was in effectively, just beside Cannon Street, surrounded by all the skyscrapers and the stuff of the, you know, these sort of huge buildings all about money. And our closest citizen Advice Bureau was in Southwark, which is just across the bridge, London Bridge, and that is one of the poorest boroughs in London. And it's literally, if you live there, or you come out of your house, and you sort of look up and always sees, you know, the Gherkin and the all these huge, big, silver, gleaming skyscrapers all about wealth and money, quite interesting. So James, I won't go into detail, but he came back from that of just one afternoon and told me some of the stories. And you have no idea, boys, no idea about how people operate, how they live their life. He was able to help about three people do different things. Just didn't understand little things, like someone had a pension plan from donkeys years ago, but it's written in bloody gobbledygook. They talk about annuities, what? And that's not a normal word for people, and you can buy an annuity. What does that mean? And and he was able to, he's not, you know, you're not there to give advice, there to give pointers and guidance. And it was a couple of really nice stories, because people actually had money they didn't even know they had because they've got, you know, a letter. But often these letters will say, Go on, you know, go to this website or down money. But I don't have a laptop. I mean, you can try it on your phone versus download this document and fill in the form. And it's just not really because they haven't got the wealth to have all, you know, the tech to do it, or a printer, or whatever it might be. Anyway, it is quite interesting. It's a whole other world, and it's worth just sort of remembering that sometimes in all our comings and goings that we have, okay,

Nick Lincoln: 32:31

hockey. Docky, next. Next up is me. Paul Lewis. Paul Lewis, the next knack. Paul Lewis, a long term, long term, long time financial journalist. I believe he's a freelance police done loads for the BBC over the years, and he writes for newspapers and quite influential magazines. He's a bit of a bit of a lightning rod for ifas, because a lot of what he writes, well, I think he's flat out wrong. And he wrote an article which appeared what was in the Telegraph a few weeks ago, 18th of March. And the article said, cash is he wrote this, cash is king. I'll never put my eyes into the stock market. And the next line was, investments can plummet, whereas dull and reliable cash savings only grow. And that's just the start of a whole pile of woe from this leading UK financial journalist who's been on the airwaves for the last 40 years. And he lives in a nominal world. Mr. Lewis, he lives in a nominal way. He does make a reference to inflation here, and he says it's silly the way people go about inflation, because inflation can hit investments as much as it can hit cash. And I'm thinking, no Paul, no Paul. If over 30 years, say inflation is 4% a year and cash has returned 2% a year, that's a 2% annualized real loss. If your investments have returned, say, 8% a year, that's a 4% real return over and above inflation. Of course, inflation will hit the nominal value of investments, but that's not what we're on about. That's not why we get clients to invest. And he just doesn't get it, and he never has got it. And then he goes on to think about investment returns are written away by fees and charges, to a degree they are absolutely but not so much as to wipe out the equity premium over inflation over time. A terrible, terrible article, and someone on Twitter made a quip that if only Mr. Lewis had been invested in the great companies over the last 30 years, he wouldn't still be forced wouldn't still be forced to be knocking out this rubbish in his 70s to pay the bills, which I think was a very good point. And I want to thank, by the way, hat Jeff for this. I saw this article originally on LinkedIn, so a chap called James fresh, and he pointed me to it, but an example. And you know, he's worked for years and years for our national state broadcaster, you know, pumping this garbage out. So there you go. That's

Andy Hart: 34:45

the paid devil's advocate. A bit he has done a lot of good out there. He is a bit of a consumer champion. So it's a bit sad that he puts these stories out every so often. A lot of his other work does help a lot of people. It's not the first time he's been he's put an article out. About this, about how much in love it is, how much in love with cash he is. He did a more in depth one before Nick where he actually breaked it down, what the returns he did get from his cash versus his active cash, active cash versus every portfolio every month. I mean his byline. His byline is technically correct. Investments can plummet, whereas dull and reliable cash savings only grow. But that's a false dichotomy. It's assuming one or the other. We know there's a huge amount of gray in the middle.

Nick Lincoln: 35:27

You swallowed the thesaurus. That's very good, my

Unknown: 35:30

friend. That's this week's new word

Nick Lincoln: 35:34

timestamps episode. But it's not the first time

Andy Hart: 35:36

he's been pro cash. But yeah, it's it's dangerous. He's saying he's always

Alan Smith: 35:41

been pro cash. He's always been, you know, sometimes you step back from it. You think of certain individuals who have really, really helped millions of people to create financial security and independence. You think of Jack Bogle, for example. You know, the founder of Vanguard, and what he's done. And then you think, in a different way that Paul Lewis, I got nothing against him. He's fine as entitles to his own opinion, but he is a consumer champion. He's done a lot of good. He has done a lot of good, but I think all the good that he has done for like fighting for the consumer and in all these scams and scandals and what have you, is completely out undone by this. It's a shame this, yeah, which is so but because the point being, people think he's a good guy, he's one of us. He writes for the BBC. It's on the BBC, and so they believe him and project it's just, what just blows my mind is a fundamental just misunderstanding about how money works, and this thing called inflation, which, if you do nothing,

Andy Hart: 36:35

I think if people get investments, they won't be swayed by his article. If people love cash, they'll reconfirm their life. A lot of people. There's a lot of people on the you of people on the borderline. There's a lot of people sitting. I mean, what

Carl Widger: 36:45

are the numbers sitting? I don't know. I think there's enough a lot of people who just think investments are fancy things for the rich, and they won't, just don't want to get involved. Yeah,

Nick Lincoln: 36:54

but this kind of stuff doesn't help alter that perception.

Alan Smith: 36:58

Imagine he had used his influence over these

Andy Hart: 37:00

last 3040, years pro global equities, that was

Alan Smith: 37:03

explained that, yes, they go up and down in the short term, but if you take anywhere, everyone who's investing for their retirement and long term, multi decade, you are, you are pretty certain, or in other words, the balance of probabilities can't guarantee anything is very much your favor, and cash has a role, and short term liquidity needs and emergency funds and all that stuff, but it is not the foundation of your long term savings strategy. If it

Andy Hart: 37:26

says kids are reading the art his kids are reading the article thinking, Oh, shit, Dad, don't leave all in cash. Well, I'm

Alan Smith: 37:31

not even sure

Nick Lincoln: 37:32

it's not gonna wipe us out. I'm not even sure he's got kids by his tone of voice, because what he says, Well, I'm not gonna live for 16 more years, so I don't really care what the equity markets do. And of course, if you're working with clients who've got families, they do care. They love their families, and they generally want to leave a significant legacy over and above, making sure their retirement is comfortable. You don't just think about your own lifespan, typically, because you're cascading wealth down for the generations, unless you're a journalist,

Carl Widger: 37:55

unless you before we go on, because my mind, the next one is linked to that, right? Can I for our new listeners, and there, there are lots of them. You described Paul as the knacks. Knack. Okay, yeah, explain it. Explain what a what a knack is, please.

Andy Hart: 38:11

First a knack, then a next knack.

Nick Lincoln: 38:13

A knack is someone never advised a client. It's a phrase I actually advise. We dropped that because it was too many so it was too many everybody. It was an acronym I invented about eight, nine years ago now. But for these people, have never stood in our shoes and never looked at the world through our eyes, never dealt with real human beings who are concerned about their financial futures, never done our job and constantly telling us what to do with not an iota of experience in doing it. I don't mind a little, I don't mind a little slither of people outside of this thing of ours saying, You know what, looking in from the outside, you could do this and this better, but yeah, and I can't speak for accountancy. I can't speak for solicitors or anything else. But our profession seems dominated by this whole massive cadre of knacks telling us what to do all the time. They've never done the thing true, though, isn't it? And it gets me, it's true. I call this phrase years ago, and it's kind of, it's got some it's got some currency now, because people latch on to people think, yeah, that is Yeah. I get it's

Alan Smith: 39:10

funny. It's part of the lexicon. Now, people tell me, I meet people in events and stuff like that. Yeah, I was speaking to a knack yesterday,

Nick Lincoln: 39:18

and some knacks are better than others. Shadow of a doubt, without a shadow. A lot of people swimming behind you know, we're like, we're like, trawlers with this very expensive tuner, and we're just throwing bits over the back, and the knacks are swimming behind us, just because we're a high margin business, and these knacks are just sucking the blood out of us, right? And this, I

Carl Widger: 39:38

was at a conference in London last year, maybe the year before, and nipped across to, probably with you, Nick across to a bar. There were some other guys who were already at the bar and, and I looked over to it. Oh, hi. Anyway, yeah, couldn't be asked listening to those knacks.

Unknown: 40:02

So was this around 11am? 11?

Alan Smith: 40:06

Yeah, I know exactly what you're talking about, or 45 and just to be, just to be clear, good, this guy that we just been speaking about, Mr. Lewis, he is the knack snack. So he's the the pinnacle, the pinnacle of the ultimate yeah bodies and everything. But he's the chief, yeah, but he's

Andy Hart: 40:23

in personal finance and money. He's not in our, you know, advising space. But, yeah, I get it. If you read a trade press magazine in this thing of ours, honestly, it would be 90% full of next. You go to a typical conference, it'll be 90% next. So, you know, the more non neck content you can get. The great thing about this

Carl Widger: 40:43

free zone. Wrap up this segment. I'm sure Paul Lewis is a lovely man, Paul. I'd like to get to know you as any stage down the line, and I'd like to distance myself from those comments anyway, moving swiftly,

Alan Smith: 40:55

legal letters, isn't he would

Carl Widger: 40:57

you correct? Yeah. So good buddy come out with a report? Yeah, I'll talk about that the next time. Who's good boy? Yeah, good buddy are like, stop broking wealth manager kind of crowd. So they came out with a report, though, a good report on inheritance and estate planning. And I'm not bringing this to your attention to tell you again how great Ireland is going, because we're talking about later on, that gravy train is about to end fairly dramatically and suddenly, I

Andy Hart: 41:29

would say, look at him getting him first. Yeah.

Carl Widger: 41:33

And they'll also, they'll also see that I was decent money Nick with the content of some of today's podcast, owing to the Irish versus UK cultural differences, there's a there's a few folks from Ireland coming over to trap live, I've been told, and and a few of my colleagues as well. So we're all gonna, yay, bring Ireland flags with us, if that's okay.

Andy Hart: 42:03

Both bought their tickets. Yep, yep.

Carl Widger: 42:08

Anyway, um, yeah. So the good body inheritance and estate planning report, right? Um, says that the household net wealth has grown to 1.2 trillion. But Ireland, being Ireland, over 800 billion of that is in property wealth. So the point is about people who don't think they're wealthy making, you know, provision for estate planning, because there's going to be big, bloody tax bills come if people die and they haven't looked after. Well, what's going to happen when these big property portfolios are passed on to kids? A couple of other points, right? And the last one is kind of will I link back to the Paul Lewis article? Is that 49% of the wealth is controlled by 10% of the households. I actually thought it'd be a little bit more to be honest with you. So again, back to what we said, and Andy, what you were talking about. You know, we don't typically deal with people who have debt issues. We have people who have other types of money problems, but they're, they're not that the harsh ones that you know, we probably, if we're being honest, can't really relate to. So, you know, we have to be, you know, we have to show some gratitude towards that. But the the the net wealth is definitely skewed towards retirement, those who are retired and those who are retired, that net wealth is divided, the vast majority of it between property and just cash. There are very, very few, if you take it in the hole, in the round, very few people who have other investments rights that like the, what we'd call, you know, the great companies of the world. And I'm always when I see, when I see stats like this, Andy, I'm always kind of reminded of your point about it's okay to create wealth. And imagine if 20, 3040, years ago, as a nation, we became a nation of investors, as opposed to savers, imagine the wealth we could have created for ourselves, and that's we will touch upon. You know, looking for help from outside sources that that gravy train is going to stop, and it's such a pity. But can we learn from those mistakes? And I suppose that's what that's what our job is, is to talk, to get hold of these people, do financial plans and tell them the truth about their money, and not be afraid to create wealth over a long period of time. So I think it's very much, you know, whether there was a Paul Lewis or somebody else in Ireland telling everybody, oh, put your money in the bank. That's what everybody did, because there's, there's so much misinformation about investing. And what was Alan's point? Earlier on, you know, the, oh, the footsie plummets by 1% like, come on, you know. And it's, it's, this is our duty. This should be our purpose, yeah, you know. And it's, and, you know, to our listeners and to the new, the new guys and gals are going, I kind of like the sound of this real financial planning stuff. Do you believe that? Yeah, will you take that mission seriously? And that's how we make this a profession?

Alan Smith: 45:35

Yeah. Do you know what that's just made me think and yet, linking it to Paul Lewis. But Paul is not the only one we've got. We live and maybe we'll talk about a bit later on. But, and I know Nick your newsletter, fantastic this week, last week, or recently we, I think, and Andy's, we've all spoken about this idea of the immediacy of information and news. We're in a social media, digital everything's on, everything's in the palm of your hand, and you can read and get information in seconds, versus in the old days, you've got to wait for tomorrow's newspaper to get the update, etc. And so therefore, the role of the we'll call it the influencer, whether it's Paul Lewis or there's millions of fans and followers or whoever, people who have got following, and people who, I mean, we know we've spoken about in March, and probably, for example, Gary Stevenson is getting a lot of publicity and following seriously my Jesus, hang on, but for good, but he has got a huge following, right? I know, and and he's got a point. He's entitled to his opinion. Again, you might disagree with it was entirely a lot of people believe in what he says. Can you imagine, if you assume they do, you assume they do this, but this is the point, they generally don't. He's got, I'm happy to say, my opinion, he's got a number of fundamental issues completely wrong. He doesn't understand certain things. It's a moron. But he's condescending. Here's the point about about all this. It's the power called rage Bay. So it's worth the power of the of the influencer and people with authority and knowledge and following has never been greater. Now in the UK, we've got this crazy conversation about trying to create, like a British Isa, or to stuff UK pension funds with private come. So against it, but it's like forcing the thing against the real mission. But if there was a kind of from a senior from if you're somebody, for example, at government level, and then throughout the whole kind of economy, and then recognizing that media, and whatever way you call it, whether it's television, radio, broadcast, social media, is really, really important to everyone. If you could educate people slowly, over time to say you should be putting your money, not just in cash. You should be allocating to the great and another, and even just using language, explaining, it's not this. Don't worry about the companies and business stock market. It's organic. Do you want to tell me what you did today? Well, I went on my phone, apple. I went down and bought a coffee, Starbucks, blah, blah.

Andy Hart: 47:58

I woke up on my bed, the alarm

Alan Smith: 48:03

too, some of those things that you've just consumed today. Oh, that sounds good, but I don't want the stock market, you know, it's that, yeah, to have some education. Well, no, they buy the products

Andy Hart: 48:12

of all the stock market companies. They buy the products of every single company on the stock when you say, Do you want to stop? There

Carl Widger: 48:18

are moments in every single episode where I go, Yeah, this is exactly like being in

Unknown: 48:24

the pub, just there you get that taste in your mouth and Heineken, then you call. That's when you know,

Nick Lincoln: 48:31

yeah. Can I ask one an idiot question here? Let's talk about forcing British pension funds to invest in British companies, yeah, which British pension fund? Because most British pension funds are money purchase arrangements. They're group personal pension arrangements, where the trust that it is your pot of money you cannot you invest in the Japanese equity fund. If you want a lot of DB schemes, there are no DB schemes in the private sector. Well, there's a lot in public sector, local government, authority unfunded. So what happened? I don't, I just

Unknown: 49:01

don't you're saying, where's the remit? Where's

Nick Lincoln: 49:05

the money, where is the money they want to put to British companies. Then they have no control over GPP members, pots, nothing. They can't do anything with

Alan Smith: 49:12

those significant occupational pension schemes. They're trying to influence trustees, what have you of these pension funds anyway, going about entirely the wrong way. What they should do is just educate people. Just educate people, enhance improved knowledge. Because whether it's Ireland or the UK, any statue see around the world, the amount of money, of of surplus liquid liquid capital, is invested in cash and in the house you own. And that's pretty much it. And there's still a very, very the US being a slight exception, but in

Andy Hart: 49:43

the US, Alan, according to the Larry Fink, latest letter the cars alluding to later on, 25 trillion is in cash in the banks, yeah. So even the US, the most aggressive investment led nation per capita or whatever, they've still got shared,

Alan Smith: 49:59

yes. So. Imagine you had our job is public, but it's not, it's not Americans, really. Paul Lewis, it's not just that, though. It's imagine the firepower that gives all these listed businesses to have billions and billions going into them, funding their growth, their ideas. The language that's used, I think, you know, Nick Murray talks about, we've talked about it, is human ingenuity. Do you believe in the, you know, the human being, the spirit, the entrepreneurial ingenuity captured. Yeah, all that. It's magic. It's crazy. But, you know, we're still fighting a bloody losing battle every day. I'm gonna

Nick Lincoln: 50:29

put on my, I'm gonna put on my moderator's hat here, and just draw a line with this, because we're 50 minutes in and we're halfway down the top of the tidbits. Okay, keep an eye on that clock, right, shiny and useless, you Andy, or a certain soft metal, not

Unknown: 50:40

me. Nicholas, your rather shining head catching the sun here. So this will be a quick

Carl Widger: 50:47

there's a dangerous road. Quick. He's got purse.

Andy Hart: 50:57

The price of gold. The price of gold has skyrocketed in recent times. Obviously, we, uh, avoid investing in gold for the family's life savings that we look after because it doesn't qualify as a real asset class. A real asset class needs to provide an income, and, very importantly, a rising income over time. So gold doesn't qualify and actually costs you to store it, yada yada yada. But during tough times or times of uncertainty, it said that this is the asset class that people flock to, and the price of it has risen very aggressively over the last few years. Is this something that any of you had any encounter with, with your clients? The price has sort of doubled, not

Nick Lincoln: 51:40

the last nope, no, I guess it's been flinging into cold

Alan Smith: 51:45

next. No, no, okay, no. This is always going to be a flavor of the month, you know, gold in the last, you know, this is another thing about time horizons. You know, we measure things in such short time horizons. And another thing I've commented on the past, the media in general has got, like a daily or an hourly sort of time focus. Our clients have got literally decades. It's ridiculous, and so it's almost a fight we shouldn't be having, because they're talking about one thing. We're talking about something entirely different. Gold over the you know, for the for decades, has has largely underperformed. It's hugely underperformed the equity markets, but in the last 12 months, over 100 years, it's underperformed. It to 100 to one, right? Over 100 years? Yeah, in the last 12 months, it's outperformed, right? So, 2424

Carl Widger: 52:32

months since, basically since Andy, you did the chart, you know, and the Home Premium chart. But yeah, gold

Alan Smith: 52:37

videos, so

Unknown: 52:40

literally, I need to, I need to redo that chart.

Alan Smith: 52:45

But of course, those people on premium.com those people known as gold bugs, have come out of the woodwork and say, haha, told you we were right after all. Because in the meantime,

Nick Lincoln: 52:54

they've told us nothing. They told us something is always going to go up and something's always going to go down. If you look into one or two year windows, not it's

Alan Smith: 53:02

irrelevant. I've had zero clients flag this to be I just see it online and stuff. It's, it's classic, you know, in the public talk, someone will see, obviously, the price of gold go up a lot, and it's now that it's like Bitcoin and everything else. And they say it's interesting. It's, you know, you should have two, 2% of your investable assets in gold. Does that make the difference? Really? Gold? Gold quadruples that year, and I don't even realize pointless. I think everything should go back to first principles, thinking, What? What do you hold in your investment portfolio? What? And then, what's the purpose of it? And is it the best version of that? So with purpose of gold, clearly, it's not income producing, it's not particularly aggressive asset. So I guess it falls into the growth. The greater force in the growth bucket. You say, Fine, it does grow over, like, 100 years or something. But is it the best of all the options you've got? The answer is no, and we know what the answer really is. Therefore, through a process of elimination, there's no natural way, no obvious way, anyone to hold any gold in there. But people

Carl Widger: 53:59

who recommended Alan don't that's not the road they go down. It's like, it's a it diversifies your portfolio. What

Andy Hart: 54:04

they call, they call gold buttons. All this is gold.

Alan Smith: 54:08

I mean, interestingly, you still got some very big I mean, Ray Dalio likes to hold gold. Big institutional investors will have a 5% allocation to it

Nick Lincoln: 54:15

with respect Ray Dalio. Ray Dalio is past performance is right back in time, along with Warren buffetts. I mean, he's a spent force, and the guys are weirdo. So just because that's coming from Nick Lincoln, everybody now, as you see them, I tried reading his book. It's indecipherable. I read his biography. He's not a nice piece of work. His past performance, his good performance, is years behind him. Quite, I

Andy Hart: 54:37

quite like principles. I thought

Nick Lincoln: 54:39

was decent, yeah, I thought you would Okay, yeah, moving on. I

Carl Widger: 54:44

just like to say to Ray, that Ray, we didn't really mean that rock on with bridge Potter, we really

Nick Lincoln: 54:51

Teleport is never a legal frame of mind this week.

Unknown: 54:54

Okay, come on, guys,

Nick Lincoln: 54:57

we've got to get through this. So I couldn't. Email from my compliance outsource compliance consultant last week telling me that the FCA wants firms to use cash flow in retirement planning, to which my immediate responsible No shit. In the email, there's a line saying it's clear the FCA, FCA wants advisors to use cash flows to determine retirement income sustainability. And in the email, there was a link to a page on the FCA website about how the FCA wants cash flow modeling used nice, actually, for the FCA, it's quite useful. I think we've talked about this before in the past. Yeah, there's a link to it that circle has shown us. But again, just staggering to me, absolutely staggering to me, that anybody could even consider giving any advice without cash flow but retirement income planning advice. Ultra and I ran a buoyant online training session two weeks ago. Ish, for nine. No, it was 119 99 to 100 advisors. So it was intense. Went off for three or so hours, and we were just doing retirement modeling with these new inheritance tax rules coming in in 2027, it is mind blowing that people can do it with think they can give long term 20, 3040, year impactful advice, which could amount to 1000s and 1000s of pounds without having the suitable kit to look at what situation is now and what it could be in 30 years time with various different options. It's such a moving feast. So I mean, younger advisors, do yourself a favor. I'm sure you are looking at cash flow. I'm sure you're using it. Get it, just make it the bedrock of your business and get really good at it. Yeah, because, because this shit is coming down the down the line. If you're not doing it, there are going to be so many bad advice care that the children of pensioners who die with their pension pots, and they're going to be saying what you know, why didn't you do this with blah, blah, blah, blah, blah, it will be coming down the line, especially now the pension pots are back in the estate for inheritance tax.

Alan Smith: 56:42

There you go, Nate. Nate, just agree. Quick question, did you this three hour long, very intense, complex training session that you ran for 100 advisors got very quiet,

Nick Lincoln: 56:53

so it's just me, no, this. I think you're still there, still you did this very

Alan Smith: 56:57

complex three hour training session for 100 advisors? Yeah, was that the morning after the three of us went out and had a had a meeting? Yeah,

Nick Lincoln: 57:08

I think you're breaking up a bit there. I'd like to ask the question, but let me move on, yes. It was yes, it was early. Bye, I did leave early. Congrats. I did leave early after a few shows. Yeah, I was bright eyed and Bucha to only had two dry martinis and some wine.

Alan Smith: 57:24

Some the definition of some wine. Okay,

Nick Lincoln: 57:26

right? Let's, let's move

Unknown: 57:28

on. Dry martinis. Thank you, fellas. It's a really

Nick Lincoln: 57:34

good session, if you and boosting Ultra here. But you know his point, music online, point user group sessions are brilliant. And and ifas are funny if, I mean, we're quite outgoing at the four of us most ifas, you get them in a room and they just clam up, but on the voyant thing, there's quite a lot of interaction, they do actually open up, because people don't look stupid in front of their peers, whereas the four of us have never cared about looking stupid in front of anybody. It's what we're good at,

Unknown: 57:58

despite the success of true story.

Nick Lincoln: 58:01

Exactly, well, there they

Unknown: 58:03

are talking about shit. They don't know

Alan Smith: 58:07

what they're talking about.

Unknown: 58:09

Talking about people going, you got the detail of that doesn't really matter.

Nick Lincoln: 58:17

Come on. Larry Fink,

Carl Widger: 58:18

eyes. Larry. Larry Fink, the chairman of Black Rock, came across LinkedIn. He came he did a Chairman's letter. Warren Buffett and all these other guys that do that, this kind of thing. Yeah, it's very long, very detailed, very long. My little brain couldn't read it all, so I did a bit of skipping through it, I'll be honest, right? But the long and short of it, I can if I summarize it, is, I just gonna read a little quote from him. BlackRock has always had a foot in private markets, but we've been, first and foremost, a traditional asset manager. That's who we were at the start of 2024 but it's not who we are anymore. Basically, he's launching Blackrock into private markets. Whereas I think the previous letter probably talked about bitcoin and cryptocurrency, and the one before that was about ESG. No, once again, I'm sure Larry is very legal podcast, they they added 641 billion of net inflows in 2024 like that's like dimensional manage 800 billion. They did 641 billion of net inflows. But wait for it, but they added 1.5 trillion of AUM.

Alan Smith: 59:47

So that's we mean as well. On

Carl Widger: 59:51

top of that, 640 they've added 1.5 trillion AUM last year. Yeah. Like what you like? 10 like him or load them. And I just, I like him. Larry. Larry's loving, um, wow, this is incredible, but look for me. Does Larry chase the money? Does? Does Larry just go where the money is? Larry, yeah, he talks in the article about, you know, the the 6040 used to be the way to go, and now it's 5030,

Andy Hart: 1:00:22

2020, yeah.

Alan Smith: 1:00:24

What's the other 20? Private? So, private markets, yeah, private with a tilt towards infrastructure, Bitcoin holding, because he was bigger, big, he does talk about

Andy Hart: 1:00:35

digitization and tokenization. They've got

Unknown: 1:00:37

the other thing is going

Alan Smith: 1:00:38

to be beyond the fastest growing ETF and

Unknown: 1:00:41

history toast. Yeah,

Andy Hart: 1:00:42

I'm like Carl. I've tried to scroll through. It's insanely long. It's more like a massive sales pitch for BlackRock. He is very, very pro investing. So he's picking up, or we're picking up, on the themes that he's mentioned here. He talks about how the stock market started in the Netherlands in the 1600s moved to London, Jonathan's coffee, he does a little bit of a history lesson, which, which is quite useful. And he was saying, when it first started, there was 40 wealthy people and like five normal people that he's trying to democratize, you know, investing for everybody. It's not like the Buffett letter, the Jeff Bezos letter. That is, you know, wisdom that's evergreen. This is like what we did last year, what we're doing this year. What's hot so, what's working now? What's hot now and the next, he

Unknown: 1:01:27

ain't Yeah, yeah. Good. Flip

Nick Lincoln: 1:01:32

between ESG starting to stink. We'll just quietly drop that yes be a major component of it onto the next. As I say,

Unknown: 1:01:40

someone's entitled to change their mind, but it changes his mind

Alan Smith: 1:01:44

very frequently, annually. It's

Andy Hart: 1:01:47

Guys, guys, guys, move on. But yeah, it's worth a scroll through. Thanks,

Nick Lincoln: 1:01:52

Carl, you're welcome.

Alan Smith: 1:01:54

Andrew, I

Andy Hart: 1:01:56

am next. This is again, it's a theme for today, but during times of when it's unsettling, which it could be argued, it's always unsettling. When it's uncertain, it could be argued, there's always uncertain. I'm just seem to be bombarded a lot more by online scams, mainly on Instagram. I'm obviously connected to a lot of finance people, so maybe these finance ads find me, but it was an interesting one that I saw last night. Actually, I won't mention the name, but I'm almost certain it's going to blow up sometime in the future. They're an unregulated firm. They're pitching a family office for very wealthy families of more than, I think, 2,000,001 of the adverts, more than 5 million. Another advert, they're just trying to catch one, by the looks of it, some scams try and catch, you know, hundreds of small numbers. Yeah, this looks like it's trying to it's quite interesting. They're trying to pitch to me anyway. But the interesting thing about not working the algorithm is not working on Instagram. Let's get this schmuck sitting in our journey, because I got a few quid according to the algorithm. But I think this video was created by AI, very good looking woman, very articulate, very elegant, and it's indistinguishable from a human. So this is a scam. You know, it's very fancy, London sounding name capital. It's a video person, Lady pitching me this idea. Click this link into my details, and then I'm going to get a call from super aggressive salesman. Bloke, probably, you know, nothing changes in relation to human nature, but how these things are pitched to us? Do so again, back to the point where it's more uncertainty. Cash is king. Find alternatives. These scammers. It's like shooting fish in a barrel, just just on that which is which is bad, and it does upset me, but yeah,

Alan Smith: 1:03:58

well, the this is understanding your target audience, and I you showed it to me, and I thought, yeah, this is interesting, because they have everything they've done is recognized. And we've talked about this before, wealthy people influence. Wealthy people like things which are attractive and interesting and sexy and cool. By the way, we won't mention it, but the address, I know that address in Central Building. You're the building as well. We know this. I know the building, and I know that it's just what it's like a, you know, office share thing, people, it's like a, what do you call a brass plate type thing? Yeah, you just get it's a really fancy signing address. And if you didn't know any better, you think, Wow, this is a really high end up market. Everything about them looks high end exclusive, the name, the title, the address,

Andy Hart: 1:04:44

video pitches by a computer so nobody's accountable. Is accountant. Be very hard to find a real human to do that whole picture, go into a studio, hire somewhere. So let's just talk a load of

Alan Smith: 1:04:55

Yeah, no, but we're just moving on interest of time. The only advice. That we can give because I looked at their website and everything not FCA registered, no authorization, no number the probably one of the few defenses you can take, other than your own instincts and your views and asking around whatever is, if the firm is FCA authorized and registered, you can go on the FCA website and check that they actually exist. Still no 100% guarantee, but at least it's something more than just some fancy sounding company. It's set up, not rest, not registered, not authorized, and

Andy Hart: 1:05:28

then just some of some of them actually do, put it Alan and just put a fake number, and hopefully you need to check out a load of b That's

Alan Smith: 1:05:33

my point. You need to then take that number, go in the FCA ways they've got to register. You can be very simple to access, put the details in and check are, is this company authorized? And at the same time, is there any case history? Because all the kind of past complaints and stuff should be registered against them as well. So do a little bit of due diligence for the pretty sure anyone listening to this is not going to fall for that. But yes, if you're an in consumer but good grasp about money. We have clients, and clients have got family members and vulnerable people and so on. So just keep repeating the same message.

Nick Lincoln: 1:06:02

Okay, thank you, verve, consider program.

Alan Smith: 1:06:11

Sorry. I muted myself there, as we agreed to do. Just a very quick shout out. We've mentioned this before. We've got a new cohort. We're familiar with the good people at verve, and in particular, Haley. Haley rabbit runs a program called consider, and it's designed specifically, and we do have these people contact us from time to time, advisors who are thinking about setting up on their own, going out on their own, all the various kind of routes and that you can go, you're directly authorized, and what have you. So it's great to know that there's a resource which I understand is free or complimentary, that you can access just to go on there, go on the next cohort, to be part of a group of other advisors who are going through that journey setting up their advice business. And really want to understand the, you know, the pros, the cons, the issues to be considered. So there is a link in the show notes. There are, I understand there are three spaces left for the current cohort. If that is you, go to the link, click it, get in touch with the good people there and go and set up another wonderful business. Good luck. Great stuff. Okay,

Andy Hart: 1:07:13

I'll very quickly chip into the next one. Hopefully Alan can join me, or maybe Nick UK. Anyway, this is not going the times the It's entitled octopus Titan investors unhappy 162 million in past fees, total shareholder return performance is the worst of all, the smallest VCTs over one year at minus 35% according to the i Sorry Association of Investment Companies. This is a venture capitalist trust run by octopus. It's got a quoted share price. It hit a peak in december 2001 at 105 peer share. It's now at 50 P a share. So it's lost over 50% of its value. There was obviously a benefit in investing in this initially and getting a bit of a tax rebate type thing. Octopus have generated a lot of fees, 162 million in total since looking after it. So they've been highly rewarded for producing, according to the share price, spectacular wealth destruction. It has been featured in The Times. I'm not singling out octopus. I'm sure there's a lot of other companies that have had similar returns, or they'd argue, way better returns. So we have covered this before. VCT something that we have to consider for all of our clients, but we end up deciding that you're better off focusing on the great companies of the world without the tax credit. It goes on to a lot of detail about the fees that have been extract, extracted for, you know, negative performance. Yeah, any points on this

Alan Smith: 1:08:45

octopus have done nothing wrong here. The fees are not a surprise. It shouldn't be a surprise. They would disclose, disclose, quoted, updated, guess what? Quite punchy. Has been a bloody disaster. We talked about it in the past. Venture capital is a high risk environment. You know what you were doing. You should know what you're doing when you're going into this. They are widely recommended by advisors. We don't like them. I was in the meeting the smaller I was a meeting this morning with somebody who was talking about BCTs, and I said, I don't really, you know, don't embrace them, don't, you know, they don't really stack up to me with all things being considered. Octopus are not the only one, as you say here, although, without going to too much detail, you just speak in on the grapevine, a lot of other advisors. Octopus seem to be annoying a lot of people right now, and we don't use them, so I can't really give a sort of in depth commentary. But see, a lot of commentary seems

Andy Hart: 1:09:36

to be the general we won't go near him again.

Alan Smith: 1:09:39

That's not just this. There's a few other things that they're doing. Can't really see much more than that, because I don't know, but that's the feedback we've all heard. Yeah. Okay,

Nick Lincoln: 1:09:47

okay. Thank you guys. Thank you for that. Okay, so we're now at 70 minutes into the show, and we're coming to the final topic, or tip. But this couldn't, in its own sense, be its own meter potatoes, actually, and there's a lot going. On over the Atlantic with the president leading us into that. Is one of the Presidents is Carl. Is the voice talking about one of the President's closest advisors, Mr. Howard lutnic. Watch,

Carl Widger: 1:10:10

yeah. So this is, I just thought I'd mention this. So the poor man's trap the all in podcast, they interviewed Howard lutnic, who used to run counter Fitzgerald, I think. And it was just a brilliant interview. He's just such an amazing communicator. He's we've got our own brilliant storyteller on here with us. This guy is, he's different level. Oh my god. You just want to, but you know what? Right? He was so good. You just want to believe this guy, and you just want to kind of just get behind this guy. And then I was like, Oh my God, but he's in the he's like, kind of number two, I think, to Trump at the moment, and he's guiding a lot of what is happening. So the interview went along, and I just got more and more engaged. And a couple of things, he's brilliant at communicating. He also discusses how they picked the cabinet and the the the one big thing that they wanted for everybody who was going to be part of the cabinet was that you must be a brilliant communicator. And you know, if we take nothing at all out of anything else that we might say in trap, this is what all financial planners need to be, is they need to, yeah, and you don't have to be, you don't have to be the most charismatic person, but you need to have stories or examples of

Andy Hart: 1:11:44

one of us just have to get in there and just,

Carl Widger: 1:11:47

but you do need to have some stories or examples and and I guess that's going to be a little bit harder for people who are starting off, but, you know, use them from somebody else. You know, get your inspiration from from somewhere else. And the interview just went on and on and on and on, and then he totally and utterly attacked Ireland at the end, right? And he went, and Ireland has enough.

Andy Hart: 1:12:07

Call this enough as

Carl Widger: 1:12:09

a 60 billion surplus. And I'm like, No, totally doesn't. But you know what this this is, this is fake news, right? He just throws it out. But hey, it's like, don't let the facts get in the way of a really, unbelievably good story. And, yeah, I just thought, like, this is what we're being fed from the US, because they have exactly the path that they want to go down. And I just thought it'd be, it'd be, I'm only, I am only mentioning this because the all in podcast is really, really good, but this guy tells you know, he's the quintessential lesson in storytelling. But then, of course, subsequent to that, now we must say that we are recording this the day after the tariffs were announced, so where by the time this goes out? Yes, Nick, I'll pass over to

Nick Lincoln: 1:12:59

you. Yeah. Thank you, Kyle. I'm interjecting now because, yes, the the S P is not that we look at the S P on a daily basis, but on times like this is good to check in. It's just down a smidge over 4% so it's kind of taken, taken to these, um, but the time now, time discovers often

Andy Hart: 1:13:13

opens and an extreme it finishes the day. Yeah, the time has come a lot

Alan Smith: 1:13:17

more than that, or it's recovered, because we are recording a good way in advance of publishing date, so we'll have to So Carl,

Nick Lincoln: 1:13:24

thank you. Yes, I listened to Howard lutnic interview. He's a very forceful personality. The all in guys were striving to rein him in some time. But it's a, it's a tragic story as well, because, yeah, he had a he celebrated his 40th birthday party in the summer of 2001 and just a short few months later, I think, I can't remember, it's on the 17 or 27 of his guests, his friends, close friends, were dead because they worked for I think it's cancer. Twin hours, yeah, yeah, lost. He lost his clothes. He lost his best friend's brother and his his brother? Yeah, serious? Yeah, no, he's done anyway. There we go. And that's just like a lifetime ago, isn't it? It's just like we don't even think about it anything terrible. So obviously, what's going on at the minute, and what Mr. Luckn has been heavily involved in, are the are the Trump tariffs, the tariffs that the President Elect said he would bring in when he was campaigned to be president. Now he's president, he's brought in what he said he would bring in when he was president, and the whole world has gone mad about it. Story to lead us off on what we think is happening with the tariffs, we can tie this back into financial planning loosely. Oh gosh, that would kind of help,

Unknown: 1:14:34

right? Sure that in a week's time, you don't look like a fool.

Alan Smith: 1:14:42

I think tariffs are good or bad or something

Unknown: 1:14:47

or in different cut that bit out. Nick cut that bit out. Look. We

Alan Smith: 1:14:50

are recording this well in advance. What I posted on x this morning, I said, Because tariffs are complex, right? And it's just funny how. Well, everyone's now an expert. Last year, people were experts on Eastern Europe, Eastern European warfare and geopolitics. And a few years ago, we had all these epidemiologists, experts on disease and pandemics and stuff and all everyone could that's another thing about social media. Everyone's a bloody expert. Sometimes I'm not. I don't think anyone's on this panel are, what I've understood is that tariffs are incredibly complex, the whole thing, and how, and not just tariffs, but currency encouragement, currency manipulation, and all the various internal taxes that applied and external, or whether you've got a deficit and all that stuff. So it's we cannot do it justice. You have to be a sort of deep subject matter expert. But just picking up on that, because I think we all do listen to watch most of those all in podcasts, and they're doing these series of interviews. And I did watch the one with Nick. I also watched the one that, if you guys did with Scott Besant. And Scott Besant is actually the architect of all this stuff. Scott Besson is considered to be the greatest macro investor in the world. Run a run a hedge fund was actually based in London for a few years. Run a hedge fund really understands, you know, macro and almost geopolitics and the sort of global flow of capital around the world and trade and all that sort of stuff. So this is not some that made up sort of back office guy who's just giving us a go and thinking, hey, tariffs, we're going to just tax the rest of the rest of the world, and it's going to be good for America. It's a very thoughtful approach, which has been in the works for years, if not decades, actually. And we and here we are arriving at it we're yet to see. So I mean, the headlines, the headline plans, are very simplistically, if you if you raise tariffs, you it is better for consumers to buy goods and services in the US. It is better other country, countries and companies, to locate or relocate in the US and build factories and products and what have you. And that's already happening to a large extent, but it is generally considered to be inflationary. You're going to put the prices up for people, but if you're doing that at the same time, so, and by the way, it's very bad in the short term for the stock market, so expect some real, real volatility and some significant dips in the next few weeks and months, depending how this plays out. But the long term thing is, this is all about, you know, balancing the budget, ultimately, and reducing or minimizing or eliminating the deficit, and what Besant and others were talking about was, if you're able to do this and kind of restructure the economy as and at the same time, Carl's friend Elon and his gang at Doge are eliminating waste, fraud and all The other stuff that they sort of additionally inefficiencies. We're able to reduce that, and if you can reduce that, but to the tune of a trillion which these, the Elon thinks they can do whilst you're increasing the revenue and the income from it. The end effect of this is, and this is, this is what just blows my mind. If they get anything ever remotely close to this, they're talking about eliminating income tax for any US citizen earning under$150,000 and so imagine and that, in turn, fuels growth and purchasing and growth of the US economy. It seems to me like the biggest, craziest, nuttiest gamble ever history, that if they pull it off, or get remotely close to it. It's just going to change everything, sort of global economy, the dynamics of how countries, countries operate. It may not, it may go wrong. And I don't understand all the US politics. They've got midterms coming up next year, so they want to sort of fix it or reign it back before the next these can next round of elections. But it just to my simplistic mind, they're throwing everything in the kitchen sink are this entirely new economic model. They're getting a lot of flack from it. But the point being, this is not just, you know, Donald Trump making up some odd, crazy idea and tweeting about at one night at three in the morning. This has been thought through four years by people who are really, really smart and got track records of understanding how global economy works. That's all I've cracked records, but not on this scale. Alan. This is nobody understand they have they understand it. The essence never right before. He's a Democrat. He's never been in government before. Very interesting story, highest ranking ever gay politician or person in administration and government. Very interesting. But he's really, really smart, and he's run billions and billions within hedge funds and things. And so he understands how he understands how governments work. He understands how the Indians operate, the Chinese, etc, etc. So I think I'm just sitting here, you know, buying my popcorn, sitting munching my popcorn, and watching what the hell is going to happen over the next for the rest of this year and into next year. It's going to be fascinating. What are your thoughts? Anyone? Nick,

Nick Lincoln: 1:19:43

I don't know a great deal about tariffs, just just from a personal point of view. I am a sort of classic liberal, so I'm a massive advocate for free trade and property rights. I think it's the greatest thing that we can do to humanity is to transport that around the world. It lifts. It's lifted. Millions out of poverty. And I don't think tariffs are the answer to that. I would say, I think Mr. Trump, who is putting America first, has looked at countries all around the world that have, for years, for decades, imposed tariffs on the import of US goods. And he's just saying enough is enough. He wrote that book The Art of the Deal, all those many decades ago. I think this is a move. He wants to get people's the negotiation table to say, Listen, we've just put a tax on the European Union of say, whatever. It's 20% let's have a let's start having serious talks now about you getting rid of the tariffs on our meat running at 25% on our dairy at 25% on our bourbon and rye at 50% okay, for the for the for the bleating to come out about what Trump has done. And I'm picking on the EU here, because I've just, I've read about it, but that is the biggest protectionist block in their world. Okay, they have free trade within the countries within the EU, but you try and import into it, the US try and import into it. They have been turned over for decades. So I just think he's trying to rebalance the equilibrium, and I'm hoping he'll get negotiations going where trade tariffs are reduced around the world because that will that will be good, and that's about as far as I go on it. Long story short, I'm not a fan of tariffs, but for the for people to scream, especially on the left, about what Trump's done, we live in tariff Central. There's a continent next door to us, which is tariff Central. The rest of the world is tariff Central. The US has been turned over, and he's just putting America first. Might be a bit gauche, might be a bit ungainly. He's still bringing in tariffs that are way less than the tariffs that are generally imposed on us, imports into countries around the world. I don't see a great ethical problem with it. I do see a long term economical problem if these tariffs get put in place and stay in place. Bottom line is, though, the US import just exports everywhere. You know, if you got a gang up on the US, you've got to do it as a globe, and that ain't going to happen. And that ain't gonna happen.

Carl Widger: 1:21:49

What? Yeah, I tend to agree with you largely here. I think number one, he said he was going to do this, and he's done it. So, like, Why is everyone so surprised? I'm like, but sure we all knew this is gonna do. I do think this is I watched it. I watched the 50 odd minutes, right? And it was like watching a reality TV show or something. It was bizarre. The whole thing was bizarre. Did you see him coming out with the poster of the didn't watch it? Of the countries with

Andy Hart: 1:22:20

his theater all over the globe today. Boom, every single paper full stories. But I think,

Carl Widger: 1:22:25

and he was, and it was, it was all this. It was on the roll zone, wasn't it? And it was supposed to be, you know, they were playing music. And he people with hard hats. And then he had a dude who was worked in a car factory in Detroit, and he's, he said a few things. It was like, I'm like, This guy is actually changing the world economy here, and he's got some dude from Detroit up saying, you know, we got our factories back of

Nick Lincoln: 1:22:52

village. People doing

Carl Widger: 1:22:55

happy. You never believe the cabinet was all sitting in front of him. And he was like, they were all clapping. Elon wasn't there, though, there's trouble in the camp with Elon, I promise you. But no, but yeah, I think they put a tariff of 10% on some island that's uninhabited. This is to get people to the table for absolute sure. Yeah, they had a this poster thing. It was so bloody unprofessional. If someone had met us did a presentation like that, I'd kill them like it was just terrible. It was shockingly bad, but an absolutely brilliant move to just go we're just doing it because the guy has form in we're just doing it. So I think it's a bargaining tool. I can see why he's trying to do this to protect America. I suppose, I think the whole of Ireland was June tuned in because we were absolutely breaking it whether he would, you know, disrupt the taxes that we get from the apples of this world and also the pharma sector as well. But they didn't. They just, he just said, Right? EU, 25% tariff. So I think no matter what we say now, it's going to be totally and utterly out of date by the time we actually air this, because so much is going to change. And I think we got to all get used to I mean, as financial planners, right? What do we do, or what should we be talking about, I think volatility is here to stay. I think that's okay, because we kind of had it very easy for the last few years, and we got to earn our money now, and we got to go and field the questions, talk to our clients, keep them in their seats, no matter what happens, keep them in their seats. Yeah. And you know, you can look back to COVID. You can look back to the great financial crisis. Keep people in their seats. This will pass. It is not any different this time, and I think that's the strong message I will be coming out

Alan Smith: 1:24:56

with. I just want to do a very quick point before we hear from you. Is one tariffs, Mr. Ultra. Just to give you time to think, wait for it. Just, I think you make you just reminded me a very good point. Carl, I we said, well, as a time of speaking, as of tomorrow, I got client communication going out, and it's back. You know, we don't often talk about this stuff, about volatility, but it's kind of timely, because it's round about now, almost with, give or take, a few weeks that we had, you know, the COVID crash. And it was the fastest ever, you know, bear market. We fell 30 the s, p fell 34% in a matter of, you know, a few days, really. And we all sort of, you know, short enough time we could all remember that. And we all stuck to our guns. And it was a bit uncomfortable for a bit. So we've got a mini version of that going on. You know, nothing like it, but you know, lots of volatility. So it's a quite a nice I've got a message going out to all our clients tomorrow, just reminding them of that time five years later we went through that. We'll go through this. Don't worry about it. Carry on. You know,

Andy Hart: 1:25:54

are you you sending the don't panic memo? No. Ultra, okay, just to pick up on the technical thing you said earlier, we actually are part of Europe. Nick, we're not part of the EU, so we're part of the European continent just

Nick Lincoln: 1:26:08

for the no, we're not. We're separated by water. So

Unknown: 1:26:12

to break that to

Nick Lincoln: 1:26:14

the European land mass, but no, part

Alan Smith: 1:26:17

of the Europe not. We're not running out of time.

Andy Hart: 1:26:22

Yeah. Not too much more to add from what you've always said. Alan put it very delinquently. So did Nicholas. I'll do it in a Donald Trump style. Nobody knows more about

Nick Lincoln: 1:26:32

terrorists than me, great tariffs.

Andy Hart: 1:26:36

But the thing that us, the thing that the US are hugely vulnerable to is this enormous trade imbalance with China. That's their biggest trade imbalance. Obviously, China's got a huge surplus every year, predominantly from the US, and then China is basically buying US Treasuries with that difference. So they do want to try and aggressively attack the imbalance with China, good, good, and then rebalance everything else with all the smaller countries. But the China is there is the big domino that they're trying to try to address. Yeah, you're right. It is front of clients minds. Yet we've had it quite calm for the last two calendar years. 2025 has been a a lot more volatile than what we're used to. Who knows what's around the corner, but again, it's social media age screaming from the every digital channel you can think of. So again, our jobs are never done. We're always there to try and as Carl said, keep our clients in their seats. You know, why should the last 30 days of news impact your 30 year retirement plan? But people are humans. They can't retain this stuff, and they're fearful in the moment. So, yeah, it's just again, more banging the drum for keeping clients on track. That's

Alan Smith: 1:27:49

the point. In some ways, you know, this is part of our world. In other ways, it's not. Because I think the message has got to be to advisors listening to this is, don't try to be a sort of global economic macro, tariff expert, it is beyond complex in terms of how different countries operate, etc, but the fundamental is the same. You've got choppy, volatile markets, you've got a crazy media news flow. Just keep in touch with clients. Keep in touch. Reassure just

Nick Lincoln: 1:28:17

by, just by pure coincidence, because I didn't even know this thing was happening today, because I don't follow the news, per se, but I sent out an essay. Didn't only this, one of my hat chip essays called tariff tantrums, about the fact that commentators were nervous about the fact the S P had gone down by 10 percentage over a period of weeks, and then just saying, God, when we have a next serious temporary correction, you know, hold on to your hats, and how's it going to be? And so maybe we're entering that, that that zone. Now I don't know right

Carl Widger: 1:28:43

Nick Can I just How would people sign up to your essays? Well, the links

Nick Lincoln: 1:28:48

in the show notes, my friend, if they click on to it, if they haven't signed up already, there's a sign up box will appear and you just put, you just put your email in. I would

Carl Widger: 1:28:55

urge every financial planner on who watches or listens to this, to this podcast to do exactly that. I think it's your best work yet, and I think it's essential reading for absolutely everybody in the current environment. I really do mean that. Thank you, mate.

Nick Lincoln: 1:29:10

I really appreciate it. Thank you very much.

Andy Hart: 1:29:12

Google group with me. Nick

Nick Lincoln: 1:29:16

boys, the Google group's doing well, Nick, 700 people now, and sometimes it feels like 7000 but it's busy, but it's it's good. It's a resource, for sure. It's also a window into a different world with some final,

Andy Hart: 1:29:29

final point on the final point, the s, p, and the day we are recording this, it is now down 12% from its previous all time.

Nick Lincoln: 1:29:38

12% Yeah,

Carl Widger: 1:29:41

8% today. So, yeah, look, my final thing is, like Trump was fated for driving the economy on, making everyone a little bit richer the last time around. That's what he wants to do this time around. It's the economy, stupid. Yeah, go into recession. Everything. Things starts costing more. The stock market is doing crap. It is

Andy Hart: 1:30:04

early days to turn America around in any way. You've got to give it a lot of time. This is the months in to turn this oil tanker, of oil tankers in a different direction. They need time. It's barely 100

Alan Smith: 1:30:16

days in. This is the point he had to do this. Now he's got four years. Yeah, that's right, the way the markets volatile and inflation will go up would be very, very difficult. But if,

Nick Lincoln: 1:30:25

I mean, it's got balls. Pundits say the s, p is over value, blah, blah, blah, but America is our powder keg. It could be exploit in a fiscal you know, it's got this 25 trillion in cash, oh, trillions of money flowing into

Alan Smith: 1:30:41

invested the way this technology, AI, the sort of opportunities that exist. Larry

Carl Widger: 1:30:47

Fink wants everyone to go into private markets. By the way, just connected the dots here. I'm on to you. Larry, people are

Nick Lincoln: 1:30:56

vetted against the USA for last 150 years and lost bear that in

Andy Hart: 1:31:00

Christ saying, isn't it? Yeah, the American tailwind. The American tailwind, as Bucha calls it. That's why he's worth 200 billion. The American tailwind,

Nick Lincoln: 1:31:08

greatest tariffs ever. They're saying it greatest. What they're saying the greatest tariffs ever. TRAPPIST questions, because post

Unknown: 1:31:14

giant the door, China, very bad sack of

Nick Lincoln: 1:31:17

TRAPPIST questions. Let's question to us, please do by the pinned tweet on X or the pin index on tweet, the link is in there. The question we're asking today is from October last year. So we are getting through them. They go into the sack, and eventually I pull one out. Just just give it time for yours to pop up. Let's see who this first one is from. This is Trappists are still singing. Let them keep on going. This one is from Connor. This Thank you. I'm just opening the letter. Appreciate that. Thank you. Oh yeah, this one's from Connor. M previously worked for brackets, october 2024 Yeah, thank you. They're my notes not to be read out. I previously another war on peace effort here. I previously worked for wealth management arm for wealth management arm of an investment bank in the city, and left after 10 years as we were being asked to push structured products more and more on retail clients who just didn't need this trash Connor M distinct lack of punctuation in that opening sentence. I moved into financial planning with a large firm on a self employed basis with next to no support. I find your podcast invaluable as a result, to hear from experienced members of the profession. My question is, proper financial planning doesn't seem to be as widespread as it should be. Most people are selling products and not planning holistically. When you draw up a plan, is there a specific structure you use? How long should it be? Ideally? Is it all based around the cash flow models? Again, painfully underused. Thanks, gents. Keep up the good work. Conor M, you got about 17 questions in there. Who wants to go first? I'm guessing Ultra might want to leap in. Is

Andy Hart: 1:32:49

he talking about how we build a financial plan with the client? He said

Nick Lincoln: 1:32:53

about raising goldfish.

Unknown: 1:32:55

Oh, nobody knows more about goldfish than me. He's talking

Alan Smith: 1:33:01

about kind of what is our financial plan, really? Is it big? Is it? Let me give it a crack.

Andy Hart: 1:33:06

Let me give it a crack. Well, there's two distinctive parts here. He's separating the plan with the cash flows, for me, saying

Alan Smith: 1:33:12

his cash flow of the plan is going to how big a part is it? Is it just yeah, if you read the question,

Andy Hart: 1:33:20

all right. Alan, over to you. How long is a piece of string? There are not that long. If there are people who, and I've seen this done, do create a one page financial plan. That's quite Oh, my God. I've seen people. I think we my firm. We've got the world record we once created. And I already did a 92 page financial I've done a 425, of course you have, if you've been a Tenerife, and he's been to 11 a reef, the client got 2000 pages. Yeah. Okay, so that's not really the question that I think the fundamental is the importance of a financial plan. And actually just reading into the question, it's a little that would be a good story. It's a little glimpse, though, isn't it, to this industry worked, works at the wealth management part of an investment bank, and all they wanted to do was sell structure products. I mean, the bank was, we probably know the idea, but got a good idea. They used to have a zebra. Can't get the lawyers call them again. You start, can't be quoted. Yeah, come on, boys. Anyway. So that's little glimpse into it, plus then he's working another firm with no support, also another glimpse into the world out there. No, it's like, what is a financial plan? What To what extent is the cash flow? Every financial plan, let me, let me have a stab, at least directly answering the question. He says, When you draw up a plan, is there a specific structure you use? Yes, I build all of my initial plans live with the client. So I say, right, we're going to build your plan today. We're going to sketch out your financial life plan, your financial master plan. Hopefully you've got all your financial data together. That will be a good start. I then say, right, we got to get a rough grasp of what you're spending every single year just to sketch that out. Okay, you want to spend seven grand a month the rest of your life. I can just put that in as a marker. That's what we're trying to hit. Then I'm going to look at their incomes, various different incomes throughout their lives, state pensions, employment earnings, rented income, final salary, anything income related. Then I'll put in all of their assets, what their contributions are towards their assets. So it's a holistic financial plan. Every single thing requiring time, money and planning is built into the plan. The plan, based on the financial data, spits out a cash flow graph, which is income and expenditure, and it spits out an asset graph. And those are the two graphs that I'm concerned about that I'm managing for the client. We can then look at, well, here's your status quo. Here's where you're heading without my intervention. Let's say, let's have a look at a few what if scenarios. So you know, strategy planning on different things. What if you did this? What if you finished work sooner? What was if you worked longer? What if you sold your house? What if you bought a bigger one? You know, all of the financial goals and transitions that they were looking to achieve. I sketch them in as well. And it depends. It takes me about an hour to build the initial financial plan with a client, and it depends on how many questions we then have with that client. I'm going to move on to Nick because my dog's barking, right?

Nick Lincoln: 1:36:07

Okay, I think what he's asking, Connor M, he's separating the financial plan from the cash flow. Don't do a financial plan. Don't give don't give him a written report. Do not do that. Connor Yes, the cash flow is integral. It's underused, which is using it way more. The cash flow is the pan, and you do it live in front of the clients all the time. No exceptions, right? Carl, anything to add? I

Carl Widger: 1:36:27

do actually. How would someone attend one of the sessions that you two guys do on voyant?

Andy Hart: 1:36:36

It gets emailed to everyone. Carl, you and your team have attended previous ones. You're not

Carl Widger: 1:36:41

asking for me, right? Yes, he's asking, your team has a table before I know they have, but I How would Connor attend one of those sessions? Is my question. He

Andy Hart: 1:36:51

would go to the voynis.com and pop his email address in somewhere you go.

Nick Lincoln: 1:36:56

Okay, thanks, Connor. We gave that down with thrashing. I think we're going to have a punch up after this, aren't we online, which I'm very much looking forward to. Okay, let's quickly move on to what many people call culture corner. If I can find the bloody drop, oh, there is,

Andy Hart: 1:37:11

right. Can I do my one and just leave? Yeah, you can. Modern wisdom podcast, truth about human nature. Modern wisdom positive cast with Chris Williamson, naval Ravikant, right? I'm going to drop

Nick Lincoln: 1:37:29

the dog back. Go drop your dog, and we'll see you later. Thanks. Thank god he's got, I never liked him, right? Who's next voice?

Carl Widger: 1:37:38

So I was looking at the reason, BYD were out performing Tesla, by the way, wouldn't you hate to own a Tesla? No, see you later, Andy,

Nick Lincoln: 1:37:51

but there's wankers who are king then it's bloody disgusting, exactly.

Carl Widger: 1:37:55

Yeah. But anyway, I came across then the algorithm YouTube gave me this video, which is basically 20 minute long, on um Shenzhen in China, which is the home of BYD. And if you want to see where the world is headed and what modern city living is going to look like, this shits real. And it's in this video for 20 minutes. I I'm a little bit scared by it. To be frank, I don't know. Is it going to be good for the human race? We're probably, will it be real in the next 10 years? I don't know, but, but, but I'll probably be surprised. Maybe it will. It's scary shit. I does. There's some good stuff, clearly. But, you know, talk about every single movement. Everything is going to be tracked, because everything will be digital. Everything is going coming,

Nick Lincoln: 1:38:48

coming back to our previous very quickly. Sorry, this thing about terrorists, I think this Chinese issue, and I'm not talking about the Chinese people. Talk about the Chinese Communist Party. It is a malignant force in the world. I think that's one of the reasons Trump is doing this thing, and that the Chinese ascension, the World Trade Organization in 2001 yes, we had September 11 in that year, terrible event. But I think longer term, the biggest impact was China doing that. We ushered them in, people, the globalists, the Neo liberalists like Blair, wanted China, and they came in. They've stolen IP. They had that they didn't give a damn about anything. They don't give a damn about workers rights, and they have got, like, a 50, 6070, year plan they're working to. And these, these horrendous city, when the Wuhan lab league happened, we saw how they locked people into those tower box, didn't they, yeah. I mean, they give a damn. They do not give a damn about their own people whatsoever. Not good, right,

Carl Widger: 1:39:38

right. Sorry. That concludes Michael corner, say some more. I wasn't I'd like to just say, China, I think you're great,

Alan Smith: 1:39:51

right? Interesting, that's I'm going to watch that I've actually, you would be surprised to hear I've actually been to Shenzhen. It's on the border with Hong Kong.

Nick Lincoln: 1:39:59

Oh my goodness. Yeah,

Alan Smith: 1:40:00

really, yeah. Although, when were you there? To be fair, it was about 20 years ago. So I guess it's changed, yeah, but changed quite a

Carl Widger: 1:40:06

lot. The guy who does the video lived there 10 years previously, and he went, oh my god, yeah. Really see some of the tube stations and stuff, right? He then goes to Beijing, and, you know, nothing much has changed there, but this place is absolutely incredible. I'm going to watch, you know, the drone delivery. So we have mana drone delivery here, and they're like, you've got drone delivery, yeah? And they're just managers, you should look at them, yeah, really great company. But these guys are already doing it. These guys are already doing it. And Nick's,

Alan Smith: 1:40:35

Nick's getting edgy again, literally, 100 minutes. I mean, just finished. I've got, I couldn't choose, I've got two very, very quickly. Well,

Nick Lincoln: 1:40:44

now's the episode to do two, maybe do five.

Alan Smith: 1:40:49

There is, let me start first. There is a new podcast. You guys in Nick You know this guy called Dan, I think he said so pronounced his name, needle, yeah, Dan. Needle, who's a tax guru, tax expert, very active on Twitter, LinkedIn and so on. I think I like him. I think it's quite good. He gives a sort of objective view on tax. Everyone gets excited about tax. He tells the, you know, he's a tax expert. He's got a new podcast out. I think there's only six episodes, three listeners out so far. But the first one he's done that I've listened to is all about the laugher curve. You know, the famous laugh occur. So he sort of explores that, whether it's true or not, what the facts are, and explains how the whole thing came about. Guess what? By invented by somebody called Mr. Laffer. Quite interesting. And he's got the six different episodes worth seeing. Another thing I've got last one is a sort of digital tool. It's called napkin.ai. I'm a big believer in using graphics imagery, if you can explain something, instead of reading a whole page of text, if you explain it in an image or a graphic, yeah, napkin.ai. Put your words, you know, a whole page of text or something, into this, and it will create an image, an infographic, any number of different sort of structures, or give it offers of how you could articulate and explain I already started using it, and I think there's a lot of application for client presentations. Instead of trying to explain really complex words and language, if you just show a nice, simple, crisp image that is automatically created using the technology, worth having a look@napkin.ai i Thank you. Thank you. Thank

Nick Lincoln: 1:42:22

you. And mine is the book by Ayn Rand called Atlas Shrugged, which came out in 1957 I'm rereading it for about the third or fourth time. If you haven't read it, I suggest you read it. If you have read it, you'll know exactly why I'm rereading it. And that is the end of episode 68 of the real advisor podcast T, R, A, P, trap. Thank you very much, dear trappers, for your precious time, another part of trap has slid down the U bend of Father Time. Please do leave a review on iTunes or your podcast app of choice, if it allows you to six out of five stars is mandatory. Like and subscribe to our YouTube channel. We're well over 1000 subscribers now by some bizarre fate of God. So until the next time from the trap pack, it's take care out there, adios, and we'll see you on the other side. Goodbye, goodbye, don't forget

Alan Smith: 1:43:04

to get your tickets for travel live.

Unknown: 1:43:11

Oh, I'd like to apologize.