69 - The Couples Conundrum

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

In this latest pile of TRAP, the Trap Pack discuss

• Topical Titbits
• Meat and Potatoes: The Couples Conundrum
• Culture Corner
• TRAPist question(s) from www.twitter.com/james_bulpit

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

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Transcript

Unknown: 0:07

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

Nick Lincoln: 0:40

music, yes, indeed, dear TRAPPIST, welcome back to what many people are calling episode nerf of Le podcast, the real advisor. Podcast, tr eight beat rap. 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 and the ultra heart. Alan the storyteller, Smith and Carl the voice de la voce. Widget, Now, gentlemen, we have a show packed full of app, absolutely nothing. So let's start unpacking it straight away with some more high energy review reads, read out by my very good friend, the right honorable Mr. Andrew sane Hart, thank

Andy Hart: 1:23

you very much. Nicholas, the first review, and only review today is from Tom Robert Shaw in five stars, entitled The C, i, i, c, I S, I n, l, I B, F. Should provide credits for each episode. It's that good. Hello, Track Pack. I just wanted to say thank you for creating this show my 30 year old chartered financial planner, and before listening to this show a year ago, I was disillusioned with the career path I had taken. At this point, I had done 16 exams and had been a financial advisor for four years, and I really needed help and guidance from an experienced financial planner. I felt I wasn't offering great value to the people I served and questioned the integrity of the industry, however, trap came into my life and things changed. I've learned far more from guy, from you guys, than I have the last five years of relentless study. It's the show I always needed. I I'm now lucky enough to be self employed my own client bank, and I'm providing full fight financial planning with all of my clients, and they are loving it. The show has given me a new sense of purpose, and I now look forward to going to work and delivering real value to my clients. I really look forward to thanking you in person at trap live in May, six out of five stars. Thank you horseman, Robert Tom, Robert Shaw, back to you. Nicholas,

Nick Lincoln: 2:35

that is just an absolutely brilliant review. Thank you Tom. That really wow. That is so powerful. And thank you so much. And keep them coming TRAPPIST, they keep on saying it, but it's absolutely true we've all got. He goes, believe it or not, and they give us a real shot in the arm. We're not screaming into the void that we do have Trappists who get value from this much appreciated. And of course, Tom, we're looking forward to seeing you at trap Live, which is coming up shortly. So let's put a timestamp on this episode and move straight on to the topical tidbits for episode, nerf.

Unknown: 3:06

Hello my lovely TRAPPIST, it's TLP here, looking forward to catching up with all you miscreants on Wednesday the 14th of May at trap and live 25 many people are already calling this the biggest part of trap yet, and you don't want to miss out shits and giggles with Ultra storyteller, the voice and my imbecile of her husband. So head over to the real advisor podcast.com and purchase your tickets now. Back to the latest pile of trap. See you soon.

Nick Lincoln: 3:39

There we have it. We have, we have guys, don't we? This is in all seriousness. Now, the capacity is 150 and we have 10 ish Ultra. You're, you're on top of this. This the Douglas for this about,

Andy Hart: 3:50

about that a little bit less Nick, so, yeah, they are genuinely, you know, the last handful is available. Um, so yeah, please do grab one. It's the standard ticket price. Now the early bird has stopped, but still great value. So yeah, go to the website, the real advisor, podcast.com, and grab the final handful great

Nick Lincoln: 4:06

stuff. And then in the last week or so, we gave out half a dozen. Now it was seven in the end. Wasn't often a typical Track Pack seven scholarship, free tickets to those that applied. We had about 30 people apply. So if you haven't got an email saying you've got one, I'm sorry you haven't got one. We had to. It was difficult deciding on the, yeah, really difficult, deciding on the six and then the seven. So that's all done and dusted, and we're looking forward to those people coming along. It may well have to stand if the tickets go as they keep on going. Okay, let's move on. And who's the first one? Timeline charts from the storyteller.

Alan Smith: 4:41

Just a quick pointing out of some really valuable resource which is available. They do it every year. Our friend, actually, I've got to do the full disclosure nowadays so I don't end up on you be trouble page of new model advisor, and as does Andrew, because I'm, uh, I own. 0.0001%

Nick Lincoln: 5:02

of the timeline conflict,

Alan Smith: 5:05

our good friends, timeline, timeline tech and all the stuff that they do, friendly. You would say that there wouldn't you friend of the pod. Yes, you would. Friend of the pod. Abraham has created. They do this every year. I think it's really valuable. They provide a whole suite charts, graphs, just stuff that you can use within your business, things that you can share amongst your team, amongst your colleagues, amongst your clients. I've always got kind of two minds about charts and graphs for clients. The best thing is to just have a great conversation. But occasionally, occasionally, they can be used just to make a point, just to sort of get to the nub of the issue that you're trying to convey. So there's an entire suite of charts and graphs tables updated for 2025 available. There's a link to find it in the show notes, together with a video from the legendary Abraham, okay, Sonia, so well worth checking out, particularly in these slightly, slightly volatile times,

Nick Lincoln: 6:10

s, p, not still, not down double digits since the tariff tantrums have started. But please put out emergency podcast voice when a rule becomes a loophole. This is this sounds be still by beating heart. Yeah,

Carl Widger: 6:24

before I start, can I just say I'm getting loads of messages on LinkedIn, as I know you guys are about people who are going to come to trap live, and it's actually really inspiring stuff. And I just wanted to say in before I forget, or in case I forget that. Thank you for all those messages. I know that you guys have got them as well. And I we were talking just before we came on, you know, maybe, maybe because of the kind of demographic of the folks coming along, we might do something like talk about how we started in the business, how we got into full fat financial planning and that kind of stuff, because that seems to be what people are after and what they're looking for. But look, it's fantastic. I'm absolutely, just so, genuinely, so excited to do the event and to meet everybody. So really look forward. And also to Penny. That was an amazing piece of audio. And I just I You're sweet and Nick Lincoln are not two words that kind of go together. But it was so sweet watching the big, proud head on you as you played that. So everybody definitely watched this on YouTube. Thank you. I wasn't aware. Thank you. Well, it was lovely, and rightly so too. Anyway, you soft shite, get onto a winner. So this one is no Irish

Unknown: 7:41

pension legislation.

Carl Widger: 7:48

So this is a remember, obviously, the peers as you can put in as much you want, and loads of wealthy people were putting in 1 million. Do we remember pension, right? It was, it was fantastic, right? And it's it the market we're dealing with. So did we make our clients aware of it? And did some of our clients avail of it? Yes, they did, because they were the rules, yeah. And then there's an article in the paper quoting a inverter come as confidential revenue paper saying, you know that people you know availed of this loophole, and basically it was a joke. And I'm like, Yeah, but you told us that these were the rules. We played exactly to the rules. We did not break the rules at all. We played exactly to the rules. So now you can't come back because didn't work exactly like you. You said it. Because what is happening is some of our clients who did avail of it are going here. Hold on a second. I saw in the paper again, it's in the paper again, isn't it? And we're like, no, no, we have played exactly to the rules we have advised you based on revenue law at the time. Now, maybe if they had listened to the practitioners in our profession, we would have been able to identify some of these issues for them and say, that's probably not exactly what you're looking to do here, because here's what will happen if you bring that in. But they didn't talk because they just decided themselves to make up these rules anyway. I just wanted to say it because there's surely loads of other really great advisors out there who brought this to the attention of their clients and their clients available. But you know, we need to just be absolutely clear. We did not break any rules. Our clients did nothing wrong. They've changed the rules. Subsequently, that's fine. We will now play to the new rules. It is not a loophole. It was a rule at the time. It's all I want in

Nick Lincoln: 9:32

this country. We had the annual allowance once was 255,000 pounds a year, wasn't it? And it was always too good to be true, and it was too good to be true. And they soon changed that not quite the same frame. It's a loop. No, you've been told it's a loophole that's been exploited. But it was, you know, they obviously decided that's way too generous, because guess what? People are taking advantage of it. And it went down to 40k. Didn't it for a number of years, and it's now creep was crap, like up to 60,

Carl Widger: 9:55

still looking like but I would say, are you guys are talking a lot about, you know. The really wealthy folks leaving the UK now, right? So, so like, you know, take a step back and go look, we need to encourage people who are, you know, in a lot of cases, generating a lot of jobs, generating a lot of tax etc, etc. We got to create some, some ways for them to extract wealth in a tax efficient manner. Not all of these are bad, because if you, if you make sure, if you make sure, if you just tax and tax and tax to the hilt, well that's what's going to happen, exactly what's happening

Nick Lincoln: 10:26

in the UK. Welcome to our welcome to our world. Absolutely Okay. Thank you for that prsa corner for this episode,

Carl Widger: 10:35

and we'll be sponsored by that company, that company I won't mention again, because it wouldn't be fair, because they didn't pay us, but they got onto me. The MD was like, Hey, Karen, that was magic. Thanks very much. I said, Hey, cost you again. It'll cost you if you want another mention. So I'm not going to mention Royal London again.

Nick Lincoln: 10:54

Oh, okay, clearly, let's get away from this ultra

Andy Hart: 10:59

Okay. A couple of points to this story. There is a change happening with the IHT exemption for AIM shares. Aim shares are listed on a sort of smaller stock market, and it's younger companies, growth companies, and you know, there's a whole sort of reason to invest in them. So currently qualifying aim shares 100% offset for IHT, when you pass, but from April 2026, it's going to be reduced to 50% there's gonna be a big impact in this space and market. Myself, Nick and Alan are not too pro this strategy for reducing IHT, for various reasons, from a high point to a low point, the aim index has been is down 18% this year, which is slightly more than the sort of main market. But HMRC believes that they're going to raise about 110 million pounds, which, in the grand scheme of thing, is not too much per year, once they introduce, I

Unknown: 11:52

mean, change,

Nick Lincoln: 11:53

God,

Alan Smith: 11:55

we're talking about like you just mentioned, called government legislation. And you know, guess what? They don't really know what the hell they're doing. They come in with these crazy pension rules, then they backtrack on them, and this 110 million. I mean, I, I can't remember. I mean, that sport about that's about an afternoon of your sponsoring the NHS or something like that. Yeah, probably not even that. It's probably not even that. It's such a rounding error, but it's the message now, yeah, symbolism to me, to me, that just completely what decimates when you say, reduced to 50 reduced by 50% so it's a 20% inheritance tax charge as opposed to a 40 it was 100% exempt. Now you're right, so it sort of works out, so you remove the 40% now, now

Nick Lincoln: 12:39

it's you can interrupt the guy. So in the past, you'd have these aim isas, wouldn't you? We invested, as long as you hold them for two years, the money outside of your estate. And now you're saying you're only going to get

Alan Smith: 12:48

half the credit for that. Yes, and aim portfolios in general. So people, which have been dog for years, well, they've been terrible, but people have invested in them to remove, you could put as much as you want into an aim portfolio. And then after two years, it was, historically, it was removed from your IHT estate. And now, so now only 50% of it is removed from your HT estate. Yeah, the trade off that you are making as an investor, for investing in these super volatile and clearly very poorly performing, if you look at his low returns, you can maybe make an argument for it if you if you completely exempted yourself from inheritance tax. But now I think why would anyone do it? Is just so

Nick Lincoln: 13:29

sorry. And if you mentioned this in your when you were that retrospective, was that from all new investments into these it's just going to be half the credit you've got before. So

Andy Hart: 13:37

currently, if you die now before April 2026 all of it will be exempt, as per the current rules. The new rules are coming in april 2026 they're saying that they're going to raise 110 million. That's in year one. Then the market is going to be, as you rightly said, Alan slowly decimated, so that the take from it's going to get become less and less and less. Anyway, this article was in professional advisor.com which, out of all the news sources, I think is one of the best. So my following on point to this, to this initial point, is join new professional advisor. There's a link in the show notes professional advisor, join and they've got decent news coverage or send you like a daily email, like a roundup or something. So that's another okay point to mention. So that's in the show notes as well. Over to you. Carl, me,

Unknown: 14:31

yeah, that was amazing. That that segment. Why am I being brought in low and slow? Oh, yeah. Okay, so it's yeah.

Carl Widger: 14:42

Sorry, this is about Irish investor Irish depositors, right? Are keeping their money in kind of overnight deposit accounts. Are very short term deposit accounts, and so this report reckons that they've given up by just choosing the wrong deposit type of account in. In 2024 alone, they gave up 800 million of unearned interest by just keeping it in kind of overnight deposit. Which, okay, that might be sound like a reasonably small number, but it's a big number, because Ireland is a really small country, and this goes back to what I said in the last episode, in the episode previously, like, imagine the wealth we could have we should have created in this country. But anyway, this is not a report done by matters Ireland or a stockbroking firm or a wealth manager. This is a report from the Central Bank of Ireland. Our own central bank have come out with this report. So basically, just stating facts. Here's what you could have got, here's what you did get. So come on, Ireland and come in Irish

Nick Lincoln: 15:45

rfca, which is an, you know, another bureaucratic, obviously, quango like your central bank would be, but they have recently started coming out talking using phrases about the risk of being in cash when inflation is relatively high. The one thing I say about that Carl is, so you're what the central bank is saying is people are missing out on these higher rates by languishing in low languishing in lower rates. But of course, what would happen in the real world? And these people don't often exist in the real world, do they? Because they're academics and they're unemployed in suits, if people piled their money into these higher paying accounts, those banks would then immediately drop the rates, because the markets would adjust accordingly. So there's not like a static game where, oh, you've missed out on 6.2 and you're only getting three. If everyone had piled into 6.2 that would soon be three or less, because the bank would have the liquidity it needed to offer the rate at 6.2 in the first place. So take it with our printer's salt.

Carl Widger: 16:31

I don't know some truth to that. No, I'm right. I love the way you get all the stuff in Ireland totally correct all the time. No, because Ireland only had what happened after the financial crisis is Ireland is left with two pillar banks and kind of one other smaller bank everybody, and they're just the Irish banks, of which the Irish government had to bail out, and everybody else left said, this is a shit show we're getting out of here. So what has happened over the last couple of years is the likes of Revolut have come in. And there are other banks now, like raison.ie who are European banks and are offering better rates. And yes, the aibs and Bank of Ireland, of this world have it. Have put some term deposits on so if you lock your money up for a year or two. Yes, they have brought introduced those. But there are competitors out there now who it will take time for them to start eating the lunch of the pillar banks here, but it will, it will. It will come true. It will come true. You

Unknown: 17:34

guys remember the Icelandic banks?

Nick Lincoln: 17:37

Bank, yes. Bank, seven. Ice,

Alan Smith: 17:41

yeah. Yeah. Close personal friend. Close personal story. Story for another time, the young, the young viewers, listeners will probably never have heard of this stuff in 2006 789, a population of 300,000 so it became the banking center of Europe.

Nick Lincoln: 18:01

That's right, that's right. But they, I think it's read generated itself from that car crash. And I think, once again, Helsinki is a very strong is it Helsinki? What's a couple of Rick COVID? Oh, whatever. Details. I'm not a details person. Just talk Stern is, if you know it going on about and get me through it. I remember I did when that period of time sort of 2005 to seven, when these, these banks were offering crazy and in this country, Northern Rock and so forth, yeah. And that was on the back of the when the middle of the lost decade for equities. And, you know, people say, I hold now I can get 7% guaranteed in the bank since, since March, 2000 my portfolio, my the great companies, is actually underwater. It was really, yeah, it was

Unknown: 18:47

a tough sell. It was a tough sell, yeah,

Carl Widger: 18:50

like, in response to that, then the likes of raisin.ie you know, they'll only allow you put 100,000 up to the European government guarantee in each provider. So it's, you know, it's actually limit you on that call. Yeah, they do. Oh, wow, interesting. Yeah. So it is rock solid, secure as long as you're happy with, I should, this is not advice, of course, but as if you're happy with government guarantees, well then it's as secure as you're going to get. Now it's another argument altogether about the erosion of the value of your money over time if you're only putting it on deposit. But there are better deposit rates, and the central bank are producing a report to say, yes, there are, and we're flittering away, frittering away money by not choosing better deposit rates, even within the pillar our own pillar banks. If you don't want to go to some of the new the new providers,

Nick Lincoln: 19:50

just Okay, cool stuff, right? Here's an old canal that's coming around again thanks to Ultra. Yeah, this

Andy Hart: 19:58

does the rounds, doesn't it? The safe withdraw. Rate, what percentage of your money can take out of it once you've hit financial independence and ideally, never run out of money. Monavator has done a deep dive on the UK safe withdrawal rate. Has done a two part series, though, if you boys have clicked on the link, but there's an interesting chart right at the bottom that goes back to 1870 I mean, God knows where they're getting their data from. But 1870 and then running a 6040, UK equity, UK bond portfolio, and running that over a 30 year retirement period, and it gives you which number of percentage return you could have started out by taking and sort of continued it successfully. So out of those, you know, 150 years or something, there's only been, probably about 30 years where you couldn't have taken a continued withdrawal rate of 4% so what I'm saying even on the basis of, I mean, this is a spreadsheet problem, not a real life problem. We know that. You know, humans adjust. They spend less, spend more, give money away, new money inflows come in. They, you know, downsize the house, upside, you know, stuff happens, you know, and they don't. And then they don't just drive off the cliff, you know, they re edit their behaviors. They don't drive the car off the cliff. But on spreadsheets, these, these problems are, are a math problem. But yes, it's looking quite positive for the 4% with withdrawal figure, as in, this is just UK numbers. It's not a 60% equities versus global numbers, an increased equity exposure. So yeah, it's quite good reading. If you are into this sort of stuff. I know some financial advisors love this stuff, and they, you know, discuss it at length with their clients. I mean, it's a good, you know, rule of thumb, if you've got x size of pot, you know, the perceived wisdom is, you can take this much out of it, and you're not going to run out of money. Obviously, exceptions apply. Yes, that's that motivated is good. We've spoken about them before. So that's a strong, a strong link for their blogs and research and stuff that they put out, and also a bit of update on safe withdrawal information. That's it over to you. Alan,

Alan Smith: 22:15

it's heuristic. Andrew, do you know that is a heuristic? It's a heuristic. Sort of is, it's a rule of thumb, and yeah, and that's where great financial planning is to do the work, because life is never according to a rule of thumb, never a spreadsheet problem, yeah, but it's just a conversation, and it's not bad. And so they're basically saying, Yeah, you wouldn't get too far wrong. No, withdrawing at 4%

Andy Hart: 22:39

there's been some obviously horrendous periods, World War One, World Two, but, I mean, you know, but overall, yeah,

Nick Lincoln: 22:47

interesting. Okay, I think, I think, I think Ultra was giving you a segue into your piece on Fisher, rather than just asking to talk about heuristics. But I'm just thank you, thanks

Andy Hart: 22:58

for the nudge. It's been a long it's been a long bank holiday weekend. Doesn't

Nick Lincoln: 23:03

it? Just running on fumes.

Alan Smith: 23:05

This was just, yeah, I saw this come up. I thought I'd bring it to your attention. Company called Fisher, Fisher Investments, who are a US business, and got quite a sizeable operation. Now I understand in the UK, i i We've probably all got our experiences to one degree or another. I don't know them at all. I know of Ken Fisher in the US, the founder of the organization. I know that Ken Fisher is a billionaire through and he runs, does lots of things, but he does. He runs this Ria, which is an IFA in the US, and it's a pretty big organization, but the I just kept seeing, I don't know if I'm hitting their age group, I'm in the profile. I keep seeing their adverts everywhere, everywhere they come up. You see you guys are all see them in the times. Yeah. So yeah, I just paid a little bit more attention to them recently. Quite interesting. You go on LinkedIn, and if you click the ad, it tells you how many people, because it's a classic, provide you with some material like, you know, a lead magnet. Provide you with, you know, the 10 things you need to do before you retire, as long as you've got at least 500,000 pounds, you know, big caveat in it as well. And so you download it, but it on LinkedIn, it shows you how many people have downloaded that particular thing. And I saw one article, and there was, like three and a half 1000 downloads of that document. Now, quite a few of them, I think, are other advisors having a look. But within that number, there's going to be, you're going to be a couple of 1000 leads, effectively, people who have effectively put their hand up and said, I'm quite interested in this. I pre qualified myself as having at least half a million pounds of investable assets and and they'll get a call, and they are now in the in the system. And I remember a couple of years ago, I can't, I can't remember which podcast it was on, but there. Was one American Financial podcast, and the guy, he was doing something else, but he used to work, he was like, headed up the marketing team at Fisher, and he said it was, it's just an absolute money making machine. They're so so all over, their data, their analytics, if you just, you know, if you, if you post your LinkedIn thing or your newspaper advert or whatever it is, on a on a Tuesday at three o'clock versus a Friday at four o'clock and all this stuff. And it was they just fine tuned it and fine tuned it, and they are an absolute growth machine. They are just flying in terms of business growth. I just find it quite interesting. You guys seen them, you've seen

Unknown: 25:36

it, and

Carl Widger: 25:38

very active here. We've actually gone through their process, right? So put, you have to put in a phone number, and if you put in a dodgy phone number, it won't let you through to the next stage. You put in the wrong email, right? And then they so we did do it, and you get a report, a kind of eight page report about successful investing, actually interesting Andy. Some of it's about how much you can afford to take down on retirement. That kind of stuff is really good look. We've probably because we're in the business. We know about Fisher Investments and Ken Fisher and all that kind of stuff, right? Leave that aside. If you want to grow a serious financial planning firm, you got to learn from firms like this. They are absolutely smashing it, as Alan says, yeah, they are. They're not afraid of sales. So sometimes I think we get, and I've said there's loads right too angelic about just doing financial planning and not doing marketing and not want to grow and sales, yeah, they're like, going after it. And it is incessant when they get your phone number, that your email address, they are, they're getting that meeting with you. You know, they're really

Alan Smith: 26:46

but you have, you've that that's, that's the kind of that's the bargain that you make. They've given you something of value. So they said, Oh, in return, all we want is a phone call with you, just to ask how we can, how we can help. And I tell you what it works that

Andy Hart: 26:59

they are insanely prolific, and they are all over the market. And as both of you guys have said, I think their original one, how long would 250,000

Nick Lincoln: 27:07

it was 250 it was 250

Andy Hart: 27:09

Yeah, retirement is the most success again. I don't know the comparisons, but I'm just a shame it's one of the most successful financial

Alan Smith: 27:16

No, it is. No, it's known to be the most

Andy Hart: 27:20

ever. In recent years, they've nudged up to 500,000 I think I've seen 750 again. They're just testing ABC, testing different numbers, different people, and it is a lead magnet, classic. My advice to financial advisors out there, just clone exactly what they're doing. They don't own How long will 250,000 pounds last in retirement? There's no proprietary information there, and just go all in on heavy LinkedIn campaign. I don't want to deal with 800 inbounds. I would just be too busy. But if I had a firm where I had loads of advisors that wanted to deal with that, that level of inbound and that level of client, just clone it. And therefore there's no financial promotions when you're doing when you're selling different gold funds and different periods, you have to quote a load of historical data compared to this, compared to that. This is just general high level information. More financial planning to just clone it. It's It's insanely successful.

Nick Lincoln: 28:18

Yeah. Change the name to fishing investments. How long would 251,000 pounds last time? So

Unknown: 28:27

who's next?

Nick Lincoln: 28:29

Smaller companies. The Case for smaller companies, for smaller companies, yeah.

Carl Widger: 28:34

So before I go on, Nick your microphone, is after doing that weird stuff, yeah, exactly. What it's doing again, yeah, exactly. Okay. So this is, this is a very 15 page report if you want to support the case for smaller companies. So Andy kind of mentioned it earlier on. Sometimes you might need or want to have your research done or to send a research document to a client as to why that you should you should mute Nick just for a sec. So if you, if you want proof or research as to why smaller companies might be a good idea, then this is the report for you. It's quite detailed, but interestingly, if I asked you how the S P has outperformed the Russell 2000 which is kind of the smaller companies index, obviously, because of the Magnificent Seven over the last three, three years, correct, what did it outperform over the last five years? What would your what would your instinct versus the Russell Carl, the S P versus the Russell 2000

Andy Hart: 29:43

so, well, I'm gonna say no, because you asked the

Carl Widger: 29:45

question that way, yeah. So you would actually think yes. You would actually think that the S P has, you would feel because it's Yeah, fly five years. You're right. It has over 10 years. Over 10 years. Yes, quick, yes. The S P has, and over 20 years, has the S P outperformed the Russell 2000 No, yes, yes, it has. So, so here's the thing, right? So is this, is this the dawn of a new era, right? You mean smaller value, right? Yeah. So are these tilts still worthwhile? Or are, or should we be looking elsewhere? Now, if you believe that the tilts are are definitely worth it, well, then you should be going all in on funds that have tilts towards smaller and value, you know. But also, I think you need to avoid, sometimes the echo chamber, and I think that you need to consider maybe the alternative here. And so the report does say that you should not just go into smaller companies, that maybe it's smaller companies with some active management that's a bit that we're all kind of going to go, whoa. But all I'm saying is, you know, this report basically says that it's a big opportunity for smaller companies right now, the figures would tell us that our instinct would tell us that, here's the proof behind it, here's some research behind it. But also, I think you need to challenge your own beliefs. And when does something that was historically the case become maybe not the way things are going to be going forward. And then obviously the counter argument is, oh, well, this time it's not going to be different. Well, there's 20 years of outperformance there that maybe we should be considering. So look, I'm just putting it out there as just to kind of, maybe, I don't know, prod some debate here, but it's a it was, it's an interesting report I did. I did read it to basically confirm my own echo chamber that this was the way to go.

Andy Hart: 31:52

Also, it's the emerging markets as well. You know, the emerging markets gonna

Alan Smith: 31:57

Well, here's the thing, mainstream again, I actually read that as well. Carl, um, briefly, what are they? I mean, there's a lot in there, if you want to really get into detail and unpack, one of the things they talk about, which is kind of, I think it's the it's the accepted wisdom is there's the reversion to mean, the rules is this, this thing, and sometimes the reversion can take decades, which is happening, and they're talking about that has been, I mean, I don't know what are they called, research associates, because I can't quite remember who they are. They're not fund themselves. They are proper, sort of in research, research affiliates. They Yeah, it was a well written paper. It kind of backs up you could argue. I mean, all of us, to one degree or another, embrace the DFA in a dimensional philosophy, and then the juries are as to whether they are an active manager or not, because, because they don't slavishly embrace the index or small cap or otherwise. The paper also referred to other factors, such as momentum as being an important aspect. So they're kind of alluding the way I read that was, well, if you've got some dimensional funds, and these guys are right, you're probably in the approximate right ballpark to capture some of this future potential upside with a smaller cap.

Carl Widger: 33:13

Yeah, but they're not saying you should just take a passive approach to the smaller companies that it's no more. So look, the stuff that I didn't agree with, but, but look, I don't know, because nobody knows what's going to happen next year, five years, 10 years, right? I know diversification will help you. So, you know, and that's that's in terms of styles and everything else. So I'm just saying it's good to challenge yourself, because, as I said, I went for confirmation, and I was challenged when I read the report, but I thought it was really well written, and I for one right, having supported DFA with my own pension money, like I'd love to see the Ross of 2000 performing in three years time. I'd like to be look at my gun. Jesus, remember I was questioning that. And you know, I would like to see that wheel turn sometime soon, please. Thank you very much.

Alan Smith: 34:10

Got to be patient. You got how bloody patient? Yeah, yeah, exactly. Quick, quick aside. Quick aside. On this little, little tip, I put that paper because quite a come to 27 pages or something, quite a lengthy paper, and I put it into a Google LM, then was used it, and it built immediately, straight away, a mind map. So extracted all the relevant points, and then this sort of the key three or four points, and then the sub points, quite a visual person, a mind map. If you ever come across sort of quite weighty documents, but pop them into Google, LM, Google, LM. Lm, yes, one of the Google suite of AI tools. This is the one that you can you could create a podcast from it if you wanted to, but it does lots of different summaries, short notes or but mind maps are pretty good. I think you just get,

Carl Widger: 34:55

I just wrote it down, which means I will never, ever follow it up.

Nick Lincoln: 34:59

Because you. Is down. It means you will follow it up. That's the joy of writing things down. No, you

Unknown: 35:03

don't, you don't know how this silly brain works.

Nick Lincoln: 35:07

Alright, onwards, no, I've changed microphones. Trappist. Hope that this one's more bearable. If it's not as good as normal. I apologize. Hargreaves land, oh, this got the Ultra. Yeah. Go on then. Give us. Give us your hard grease. Give us your dose of harvest.

Andy Hart: 35:20

Well, this is somewhat interesting, I find so Hargreaves, Lansdown is one of the biggest investment platforms out there. They do great work for end consumers and promote the investing culture. One of the founders, Peter Hargreaves, is going back to work at the company, or joining back join joining the board at age 78 you know, he's built the machine to allow middle England to retire. And he retired at 68 he set up another investment firm. Now he's going back to the firm that he founded after a 10 year hiatus because the firm has just been bought by private equity. Is it good to always have purpose and work, or should these individuals genuinely go off and retire? I know it's dependent on the individual, but I thought was quite interesting. I mean, why would private equity want to buy this firm after it was set up in 1981 and get the 78 year old founder back on the board?

Carl Widger: 36:20

What was the business? What was the business he set up? What was the business? He said, No, I know her,

Andy Hart: 36:26

sorry, whale. It's called Blue Whale, blue whale or something. It's like a fund manager that was heavily promoted on Hargreaves platform. I believe, all right, I think they got about three or 4 billion, like a successful company, but nothing compared to what you previously created. So it was a bit of a sort of return. I

Alan Smith: 36:42

think, I think it's well publicized that, you know, you can't, he can't forget about his baby that he created in a basement in an office in Bristol. And, yeah, he was very, very critical of the way the company was being managed. Yeah, felt really, underperformed to

Andy Hart: 37:01

go down the advice route. He didn't want tailored advice regulated. He just wanted to do everything super fast, online, digital director, consumer, obviously,

Alan Smith: 37:09

he's still of his billions. He's still got, I mean, whatever, a lot of it, if not most of it, still wraps up in shares in hl.

Andy Hart: 37:16

I think he's actually sold his last chunk. But anyways, was he's worth a few quid and, yeah,

Alan Smith: 37:22

he sees it. He sees it as a challenge, doesn't he? I'm sure he's sure he's still got the energy. He certainly, was certainly very vocal about the way the organization was being run. It's got a it's being taken private now. Yeah, sure

Carl Widger: 37:35

is something, isn't there a guy that age running America? Exactly.

Andy Hart: 37:42

Yeah. So Exactly, yeah, yeah, for sure, isn't

Unknown: 37:46

can be Terry Smith in his 70s. Never, never retired, never retired. People.

Nick Lincoln: 37:52

Jack Bose is an example where perhaps it wasn't a great thing because he hung around Vanguard, and it's quite clear it wasn't a particularly productive relationship. So you maybe got to know when you want to move on talking to which should we move on to the next point? I'm going to guess we're 37 minutes in, because I think I crashed out to change microphones at 30 minutes. Now it's only seven minutes 30 on my calculator, my timer, so 37 minutes in, okay, well, at the start, storyteller mentioned the timeline charts and how they're useful at these times where all asset classes seem to be volatile in a downward movement. And when that happens, we often get this called for alternative investment. They seem to rise to the top of the school, the cauldron. And so they have at the moment, and this article from The Wall Street Journal, I have put it into the so called show notes, and I think it's I've made it as a public article, so I shouldn't be behind the pay wall. And this is from Jason spike, who writes these weekly missives. Very good. And he starts off by saying, with the stock and bond market stumbling in unison, investment firms and financial advisors are pushing so called alternative funds harder than ever. This week, the Wall Street Journal reported that Blackstone, the private markets giant is partnering with Vanguard and Wellington management to create portfolios or mix publicly traded and private assets. And then he goes on to really slack off private assets and how the people that own them, the institutional investors, are trying to get out of these things. They're very highly liquid. He quotes the US university endowments, which are just massive. I mean, Harvard's runs into the billions and billions alone, and they invest heavily in private equity and alternative assets. And over the last decade, the average endowment the US has returned 6.7% having invested a lot in these private equity investments, whereas the SNP has nearly returned double that. And Jason spar makes the point that an ETF invested 6040 over the last two years would would have grown at 6% so there's a highly speculative, highly illiquid. You can't even if you put these into client portfolios, I'm not sure how your rebalancing process is going to work if you do it. And it's the age old thing. And this is more. This is more. The important point that I'm trying to convey is that. I don't go with what's working now, go with us. Always work, just because we've suddenly had a bit of a tremor that these things are coming to the pool, we there was an article on LinkedIn wasn't there from an advisor who follows trap, and as a fan of trap, saying that his younger advisors are coming to him asking to be put into this stuff. Which I, which I, which, I hope, I'm assuming that is the truth. I hope it isn't the truth on mass. Because I, for me, it's just, you know where this is going to go in four or five years time. You just know this will be some sort of car crash, and there where, there's where, there's where there's blame as a claim, you guys have any thoughts?

Andy Hart: 40:32

Just pretty staggering numbers. Have just read the article Nick private equity firms are sitting on more than 29,000 companies valued at$3.6 trillion and they can't unload them. That's right. Obviously they can unload a few, but I can

Unknown: 40:47

unload them to retail. This is

Andy Hart: 40:51

shift in between each other. Yeah, make your PE, the PES, the PE, then then to some endowment, 29,000 companies. Wow. Samely. Big number. That

Alan Smith: 41:03

doesn't surprise me. I am, yeah, in complete agreement with this, the sentiment that you the article, first of all, the sentiment you've raised, Nick Do you know what this is? One of the really important things, I think, as thoughtful financial planners that we all are not to go with the fashion and the current trend and the latest thing. We are all now getting this stuff, this inbound from an emails from various companies. I mean, I'm, I gotta say, I'm slightly surprised by Vanguard embracing this. Yeah, you know a company, their whole ethos, their history, the whole thing low cost index, by the market, by the public markets at the lowest possible cost. This seems to just sort of be in sort of to challenge that original kind of

Nick Lincoln: 41:47

ethos. Absolutely, absolutely. If it was a classic active, you know, us massive fund like Fidelity, perhaps, or or a fisher kind of Rai pushing this kind of, you can't totally get it Vanguard and Wellington are, I mean, Wellington do active funds, but really, really cheap. You know, they embrace the bank because they kind of, they work in unison, don't

Alan Smith: 42:07

they? Well, they're very close. It wasn't Jack Bogle originally at Wellington. He went nuts

Nick Lincoln: 42:13

when they went to ETF, didn't he? He'll be going nuts over this. You

Alan Smith: 42:16

know, I think that this, this is an important point for any of our audience to listen to, because I increasingly see this stuff coming up our you know, we've got younger clients, we've got more sophisticated clients. Yeah, you know, don't accept this. You know, do your due diligence. Hold the line and say, We don't embrace this. There is no data, by the way, talking about Blackstone, check Blackstone share price in the last 12 months, it's absolutely cratered. Blackstone. Who get all the best deals? They are the best in the world at this stuff, this private equity stuff. They get access to the best deals, the best opportunities, and their own share price, which is effectively represents the quality of their deals, which probably comes

Nick Lincoln: 42:53

back to Andy's point, that SharePoint is probably plummeting because they own, they own a lot of these 29,000 companies they can't sell when, every time they every time they weekly price or monthly price, the price is going down. Oh, look, there's value over there with a massive retail market.

Alan Smith: 43:06

Yeah, there's a bug. Honestly, it's such an important point. This I see, I'm sort of aware of some of the stuff that goes on. I've got some friends that work in institutional private equity. And this, the retail market is so attractive to them billions and trillions that they can and people who actually, with all due respect, don't really know what they're doing. They don't know a good deal from a bad deal, and they're relying on these other organizations packaging up, you know, trust me, the private equity companies, they keep the best stuff for themselves. They aren't just packaging up and selling it to Van der 100 pound a month savings plans. It doesn't work like that. And so I think it's really important for advisors to hold the line to say we don't believe in this. We can't find any academic research to support the view that it makes sense. Private equity in itself, there's a strong case for if you were a shareholder, come back 1020, years of the likes of Brax, blacks Blackstone. KKR, no. Black Rob Blackstone, but yeah, KKR, Carlyle, all these big, big players, they've done superbly well. But what's attracted, the bottom line that Jason's is kind of referring to, is, what's attracted to is the kind of modern version of with profits. It's not mark to market. You don't get a daily valuation. So you're, you know, you're 10,000 you're 100,000 investments. It's still 100,006 months from now.

Andy Hart: 44:24

But is this part of a wider trend where private assets are just burgeoning and it's just they're just everywhere, and the investment companies are going to have to somehow make a decision and work out how they're going to package them, sell them to retail clients.

Alan Smith: 44:46

Yeah, but it's this is how the market works. If it's attract, if the public markets are attractive enough, you take your company public, you do an IPO, you list. I'm

Andy Hart: 44:54

asking about private assets, private equity, private property. It seems like private assets are a. Building to to an astronomical Of course, of course, we've not seen before. There's been, there's lots of package them.

Alan Smith: 45:09

Well, they're worth a lot. Why? Why are they trying to do they're trying to raise more money. You can raise money as a private company. Can't you? You can look for investors. You can have secondaries. You can have other people invest in them. But they're talking about getting access. I just see the I see the retail market is, you know, Mr. And Mrs. Middle England, who are trying to save towards their retirement. And I don't see a ready place for this. I'm not saying it's not for everyone. There are some very sophisticated investors. It's absolutely appropriate for, but they're already speaking the private equity companies. I'd rather say they're probably getting direct access to some of their deals and their company, they're not buying a package mutual fund or ETF, so you can tell my views on it. I'm not, I'm not impressed by it, and I think advisors ought to really sort of hold their ground on this and be prepared to have healthy conversations.

Carl Widger: 45:53

But this goes back Alan to you know what we've spoken about before, which is, what's your investment philosophy? And if you know and you've researched and you're comfortable with your own investment philosophy, then you know, you will remain steadfast in that. But go back to my point, it's okay to question it sometimes, and to be, you know, to and to wonder. And we also have spoken before about this playpen scenario whereby, sure, you might have private equity, you might have crypto, you might, you know, there's other stuff out there. But this whole, you know, I mentioned a couple of episodes ago about the Black Rock are talking about the new 6040, is a 5030, 20, and they're going down the private equity route. I don't know. I'd be very for the retail investors, illiquid things like private equity funds. How can it work? I just don't know. How can I work? But for Katie, yeah, but people who have, who have amassed wealth and can afford, very clearly, to put, put away 2% 3% 5% of their wealth into something for an eight or 10 year period. Well, then maybe, maybe, maybe I and maybe I agree, if I had an absolute shed load of money, maybe I would consider that, but I would be, I'd be, I'd be doing my due diligence on my provider, and I wouldn't be doing it in a 5030, 20 scenario, in a fund.

Alan Smith: 47:16

See that. That's one of the other aspects of it here is Tell me about your due diligence. Tell me about your research budget. Mr. Mr. IFA, Mrs. IFA, up and down the country, recommend this. What? How are you going to research this? Because I got, you're going to need a lot of money and a lot of time and a lot of people to do a proper deep dive analysis of all these various opportunities exist, as you said, and it's 20 odd 1000 companies. Yeah, the net ticket. So it's, it is, it may well be worthwhile, but it's, I don't think you can justify, I

Carl Widger: 47:45

know research budgets a bunch a bunch of guys here in Ireland who've decided to do it themselves. So there's kind of eight or 10 of them, and they've come together, and they've put a partnership together, and they're basically going into, it's more of a, I suppose, a VC, kind of a startup community that they've done themselves, but in it is evolved to existing businesses who are trying to drive on, and they're going, Yeah, we're back here because we, like the people,

Alan Smith: 48:10

sure, that's a slightly different conversation, and it's true. And there are people who invest in BCTs and EIS in the UK, as I've always said, like the way Angel syndicate success, yeah, but as always said on this if, and you know, I had done in the past, I've known a company and a founder, or someone who's running a business that's raising money, and you do get a useful tax break on it in the UK, and I've thrown some private, personal money at that. I know some of our clients do, but that's taking the other way around. That's not buying a package of 50 or 100, 200 companies that I don't know, but

Carl Widger: 48:40

it's just, for me, a student, a little bit differently, and I can see that, you know, if you were that would give you, that would be really, really interesting, if you're into that kind of thing. So I like that idea. I really do anyway. It's, yeah, I think we got a, you know, I nail on your investment philosophy, because for 95% of your clients, right? Your, your, your bog standard investor philosophy is going to be okay. There may be other clients, the wealthier clients, the people who've come into a lot of money, maybe they want a little bit more. And maybe you will introduce them to other people who are doing

Alan Smith: 49:15

other things, as Warren Buffett said, your investment portfolio should be like watching paint dry. If you want excitement, take up skydiving, talk computer with your investment. And he has a point. I think it'd

Carl Widger: 49:28

be easier to skydive than watch the stock market these days. With

Nick Lincoln: 49:32

that, I It's, it's, it's tricky.

Unknown: 49:38

Mr. Horns,

Nick Lincoln: 49:40

yeah, we're at 14. To quickly do your all enrollment? Or should we hold it forward to episode?

Carl Widger: 49:46

Yeah. Well, look very quickly auto enrollment is auto enrollment. Contain

Andy Hart: 49:49

the excitement to a future

Carl Widger: 49:53

episode. Basically, there's tons and tons of advisors here who are setting themselves up for auto enrollment. Here we go. I. Then the government have just said, Oh, we're going to postpone that again for about the 48th time. And it's like, what's

Nick Lincoln: 50:06

the what's the reasoning? What's the general reason for this? With Parents, I

Carl Widger: 50:10

don't really know. I think they're struggling to get providers in. They're struggling to find out who's or to to kind of establish who's going to provide the funds. But that's kind of me surmising, I charges, you know, can you put eggs and penalties, all of this kind of stuff? Is it through master? There's loads of stuff. We don't do it, so it's not affecting us. But I can see people are like, you know, this is, they're, they're waiting and waiting and waiting. There's going to be the bravy train they're jumping on. And it's like, Hmm,

Andy Hart: 50:37

to come into force. Carl, the first deadline. Oh,

Carl Widger: 50:40

probably two years ago. I would say that's a guess, right? Because two years

Andy Hart: 50:44

ago was 2020 sorry, yeah, the first deadline was 2022 or something like that. And then when was it meant coming again, September,

Carl Widger: 50:50

October, 2025 Yeah, and not given, uh, definition as soon

Andy Hart: 50:57

just a freaking nightmare, the amount of companies that have wasted time, effort, energy systems, to get all that ready, and then they just put surely again. They could just clone what the UK did. Like UK

Nick Lincoln: 51:08

did, I was gonna say that, and instinctively, I'm not a fan of auto enrollment, but it has been introduced in this country, what, 10 years or so ago, and it's been a success. And there's like we had to do it kind of in the dark, treading through it and get things set we as the UK, you know, the life insurance companies and the payroll and everything else, and we've done it. And you think, well, there you go, on. Just take our model and sort of just, it's part bait, just stick it in the oven, and off you go. So Nick

Andy Hart: 51:34

or Alan, can you remember? Was it postponed, or did it launch on the date? I think it launched on the date. I think

Nick Lincoln: 51:39

it launched on the date with a very soft launch, so loads of is the bigger firms first, wasn't

Unknown: 51:45

it? So it

Nick Lincoln: 51:47

was just 1% and 1% and then it became firms with 200 employees within that. So they soft launched it, which, which is

Andy Hart: 51:55

really good car, once it gets going in Ireland, and people get, like, comfortable with it, and they see their initial amount come out of their salary. They go, where the hell is this going to then they get a first statement says, Oh, I've got 3000 pounds. They get another statement, 10,000 pounds. It really does incentivize

Carl Widger: 52:11

an investigation. I suppose. My thing is, you know, if you want to do what we're doing, which is financial planning for individuals and families, right, it's a totally different business, then I'm trying to do both. I think you just

Nick Lincoln: 52:27

that's all, mate, no, I'm not. No, no, no. I'm just saying mass the UK financial services and the regulator and the government launched it pretty well in this country, but as a lifestyle, financial planning focused business, which we all are, too. I know some of us are more aspirational, but we're not. It's a it's a completely different game. It's a complete process. Admin, you won't have one to one conversation with

Unknown: 52:46

it's it's payroll. Payroll. Yes, that's exactly

Alan Smith: 52:49

what I was going to say. It's the tech that sits behind the payroll. It's just, you need to know what you're doing with that and understand all those systems we used to, back in the day, do corporate with corporate pensions or not, like we used to use first start off, did everything, you know, private medical

Unknown: 53:07

insurance? Yeah, bit by bit,

Alan Smith: 53:09

you said, Actually our small corporate pensions book was actually quite profitable and quite quite good, quite useful, quite nice to get. Like, you know, 50 man, 80 man pension scheme, but eventually you got to sell some 80 person, yeah, yes, no, not

Nick Lincoln: 53:22

anymore. 80. Man and a woman

Alan Smith: 53:25

do not, do not go there. Now, really, really, really important to know it is a different business, and you can't. And my

Carl Widger: 53:36

point is, there are a lot of my peers in the Irish market who are saying they're going to do both. And I

Alan Smith: 53:42

can if you set up another department, division or something

Carl Widger: 53:45

really small, really small businesses, I don't know that you can do it, but, but look so

Andy Hart: 53:51

it sounds like it's so September 2025 was when it went meant to be when it re, launched again. So it sounds like it's going to be 20 early 27 or something cold, ages down the line

Carl Widger: 54:01

having a clue, but you gotta get the product

Alan Smith: 54:05

providers to play ball, because the whole point is to keep it super low cost, and they're gonna work out with their margin, how they're gonna make money, how many people

Andy Hart: 54:13

are gonna roll the bulk of auto enrollment in the UK, and is with Nest, I believe. I don't know what percentage, but I reckon this is a complete separate company called set up by the government. It's like a government pension company that invests the money directly and has, like an investment analysis team and things like that. I think they've probably got 75% of the money from auto enrollment. So, yeah, I suppose you

Nick Lincoln: 54:35

could imagine the numbers nest initially, and probably still is burning cash, but in 2030, years, they'll be sat on billions of AUM, you know. But I guess you're dealing with Mr. And Mrs. Miggins paying their 3% on a salary of 15,000 euros or Sterling a year, you know. And it's like most life insurance companies, most like I faced old style Neil Bob, apparently.

Andy Hart: 54:56

Well, sorry, Nick, apparently, they've got 45 billion AUM at the moment. 45 billion AU, ever next? Okay,

Nick Lincoln: 55:01

so imagine what that's 450 in just in a blink of an eye time, in

Unknown: 55:05

terms of

Nick Lincoln: 55:08

gravity, talked about that was that was well worth finishing off the topical tidbits. And I'm guessing that we're about 54 minutes into Episode swas on nerf of the real advisor podcast. Let's move on to what many people are also calling the meat and potatoes of the show. And this is an interesting one. This one because this is a, yeah, this is a, this is an area where I certainly, I can be quite dogmatic, I know, and I like things to be black and white. This area, for me, is not black and white, and white. And I've got some conundrums going on the minute, the couples conundrum, the couples conundrum. And that could cover a multitude of sins. It could be that you've got a couple in your business, and you've had them from day one, husband and wife, he and she, whatever, but you've always, never clicked with one of them, or one that doesn't turn up for meetings. It could be another sort of conundrum where you've worked with someone who's been on their own, and then has someone come into their life, and the relationship forms, you've always got on with the person who's been in your business as a client, but the new person you know. You don't know them from Adam. They've never been through the cash flow modeling. You may not personally take to them. There might be someone who, if you, if they come to you as a couple, originally, you might have said, You know what, I don't think this is going to work out. And then you've got the for me, the third leg of this stall is where you're taking on the client, the client, the children of clients, clients you love, and you're taking on their children, which you want to do really, if you want to just protect yourself from this cascading of worth going away somewhere and but that doesn't always work out as well. Then you're in this tricky situation where you've got the clients are obviously the parents of this person. You're going to probably have to sack off and just as there are loads of things around this, so Ultra introduced this subject to the agenda for this episode, and ultra will be the good old chat to kick it off.

Andy Hart: 56:51

I'm pleased you said this is an interesting subject, because when I brought it up, you shot me down. No, I

Nick Lincoln: 56:55

didn't. I actually supported you for once, Ultra, so don't

Andy Hart: 57:00

work. I had one supporting vote that time. Okay, so this is, this is, I think, quite an interesting challenge that often financial advisors and firms have to have to have to straddle. I had a quick look before we kicked off. So two thirds of my clients are couples. So I'd look after a few individuals that are obviously single, widowed, widowed, widowed, widow, widowers. So 2000 my clients are basically couples, and it's the dynamics between it. Are their values aligned, are their goals aligned? You're right, Nick, when you have the initial meeting, I'm quite strict and dogmatic as well. If you are part of a couple, I want you to all be, both of you, to be there at the initial meeting. I try and find out who's the CMO of the couple, Chief money officer. And I do ask that sometimes in early client meetings, I say, Who's the CMO of the couple, and they go, what? Unless who's the chief money officer. They look at each other and go, him, her, or whoever. There's usually one that's a bit more more dominant when it comes to money and finances, they've got also got different communication styles. They've got different literacy. When it comes to investing and numbers and numeracy. They've got different attitudes to investing. They've got different attitudes to insurance. Some believe in it. Some don't believe in it. There's various things that crop up. There's also a lot of difference in spending patterns. Some of them are some of them are spenders. Some of them are savers. Some of them are, you know, live for the day. Others want to be planning for the future. So there's a lot of sort of dynamics going on with it. And, yeah, sometimes I'm very strict. I want to meet both of them in the initial stage, because we talk about this wealth transfer, the first wealth transfer in this business is spouse to spouse. So usually there's two spouses, and if one of them passes away, the first wealth transfer is from spouse a to spouse B. And if you don't have a relationship with both, then obviously the client may decide to find a new financial advisor or the money will, you know, leave your business the second transfer of wealth is obviously going from the surviving spouse to then the children. So yeah, that's my startup. Who are we heading over to now? To talk a little bit more about your experience with working with couples, over to you, Alan,

Alan Smith: 59:20

I'll say a yeah, let me say a couple of words. I just Just following up from what you said there. It's interesting. I didn't know what you're going to say, but this thing about engaging with, engaging with both, you know, the partners, the husband, wife, the whatever the two, the two parts to the family, the head of the family, the couple, early on, we, I think we talked about it in the past, but worth reiterating again, always, always, always, aim to meet both, but both together. Don't, don't accept just, just to meet one and and taking that to the next level, because we know that there is almost always a financially dominant of the two, without being sexist, it is usually the male, not always. Is, but in my experience that you maybe 80% of the time, yeah, it is. So we have with

Andy Hart: 1:00:05

younger clients, I'm finding it's females, okay, yeah, okay, but

Alan Smith: 1:00:10

whoever it is, but I think so just a specific that we've embraced from for many, many years in our business. So a classic discovery meeting, ideally in our case, an in person meeting. It's a relatively relaxed conversation. It's all about the kind of their values, what's important to them, the family, all those good things. But as we open it up, we do the same as you do, and we say, normally one person in the family tends to take the lead with the family finances, with the bank accounts, mortgage payments, etc. May I ask which of the two it is. And yes, you say the point one points to the other, the golf point to the same person. And then very chief money officer, very input. No, don't like that, but you, you stick to it. But then, then we but then the important thing is, there is then, but say, absolute shambles, say it is like they've pointed to the husband. So, which is often is the case. So very importantly, then to open up this conversation, you turn to the wife and say, in that case, would you mind? May I start with you with the first question, because you get them in the conversation very early on, because the first questions are very softball, very tell tell me your background. Tell me about your story. What brought you here, etc, but you bring them in. What we've what I've learned in the past is that the the non financially dominant part of the couple isn't really keen to even be in the meeting. So because they think, they think it's conversational pensions and stuff, they've been dragged along. So we want to get them involved in a conversation. And if they're in my case, in this example, the husband has been waxing on about, yeah, yeah. I did this, and I've invested in pensions, and I dabbled a bit myself, and blah, blah, blah, yeah, and the other half hasn't said a word. You know, 1520, half an hour in. It's very, very difficult to engage them in the conversation. So start very intentionally with the least financially dominant person tell me about and you realize that it's that. It's not a complicated I'm not asking you about what, what your view is on the sharp ratio,

Unknown: 1:01:58

what's your mortgage interest rate?

Alan Smith: 1:02:00

No, it's, yeah, exactly. It's, tell me about your background. Tell me your story. Tell me what. Tell me what does money mean to you? All those kind of softball questions. So I think that's a sort of a tactic that should be used, that it's not done for any other reason, other than to make it a much more engaging conversation for all parties. That's worked really well. The only other thing I'm going to chuck into them, into the mix here, you're right. We've had situations where people have passed on divorces. Is one people have got divorced, so therefore the money tends to get split up. It's very difficult. We've tried a couple of times to retain both the the subsequent, you know, divorcee divorce part of these couples. We've, to my knowledge, don't think we've ever made it work. Eventually, someone, one party, says, No, you, I'm going to find another advisor, which, which is, which is fair enough. And the last thing I'll say, just remembering a brief experience with back quite a few years ago, I was working with this client who was quite an elderly gentleman, and he'd never been married, and he was very well off, and out of nowhere he found himself very young partner, and all of a sudden, his spending patterns seem to go through the absolute roof. Now that is a real challenge, because we're aware of this. The guy lived a pretty humble lifestyle, frankly, silly relative to the wealth he had, and it made him

Unknown: 1:03:36

sure what that was about. But

Nick Lincoln: 1:03:37

Well, he was so easy his money and money nice. I'm doing nice things. I nice

Alan Smith: 1:03:49

things. So we had to navigate that one very, very carefully, because he was in love, and he kept repeating to me how much in love he was, and actually attended their wedding. That's

Andy Hart: 1:03:59

That's a vulnerable client now, screaming, vulnerable client, you

Alan Smith: 1:04:03

try, you try to navigate, navigate that when he says very and I'm trying to try to have a quiet word with him, but without upsetting the new, yeah, very, very awkward and difficult. I mean, it seemed to work out sort of, you know, sadly, you know, maybe seven, eight years later, the elderly client passed away and won out the and the other half inherited quite a nice touch and relocated to the United States, and we never heard from him again. So that is but you got it again. Couples, the relationship, you know, you're aware of one thing versus the other, but you can't, you can't cross that border, cross that line. It's a tricky thing, and all we can do is show up, do our best, tell our truth, try to navigate these relationships. But

Unknown: 1:04:54

it's not easy. It's not easy. It is you're right. You're right. It

Alan Smith: 1:04:57

is common sense, and just doing what you think is. Is the right thing. And, of course, and this was, this wasn't like that, don't get me wrong. But if there are things, and I have heard some pretty bad stories about whether it's, you know, abuse of one sort or another, and you've got to be, you know, take that very seriously, whether it's properly vulnerable clients. And you know that there's various safeguards and things that we all need to be aware of and put in, put in place. But no good, good subject. Just

Andy Hart: 1:05:21

before going to the next person. If I've been working with a couple for a while, and I know both of them very well, I'm okay for the less financially dominant one not to join every meeting going forward. But if it's happened agree a few times in a row, I'm like, right next time, really great to all three of us to get together again. So yeah, I'm very strict on in the initial stages. And as you said, Alan, I want the one that's less financially dominant or sort of literate to be involved as much as possible, and, you know, to ask as many questions and be as comfortable the relationship as they can be. But yeah, I'm less strict. Yeah. I agree to attend every single Yeah, yeah, follow up meeting. Yeah, okay, over to you. Carl, yeah.

Carl Widger: 1:06:06

Okay, so I was the one who said this was a terrible subject, Andy. Andy said that we should talk about couples, and I'm suffering the the brute force of karma right now. So we often come on here and say how great our lives are and how great business is, and blah, blah, blah. So I'm going to be totally honest and tell you a bit of a shitty story. So we have been working with, I suppose, elderly clients at this stage for nine years now, and unfortunately, the gentleman in the relationship passed away last year, and I got a phone call this morning from his surviving wife, who I would have thought we got on fantastically well with. And I'm going to leave out some detail if you don't mind on this, because anyway, I don't want to give away too much detail, but she basically said, we're leaving cars. We're leaving met us. We don't want you to advise us anymore. And I was shocked, taken aback, pissed off, surprised everything and and when, as the conversation evolved a small bit, basically, it was the gentleman who valued our the relationship he had with Metis. She did attend every single one of the meetings with Metis, but we didn't cover ourselves in glory. I would say, since the gentleman passed away and she made a call herself, that bugger you lot, I'm out of here. So at your peril, dismiss this subject like I did when Andrew Hart said we should discuss it. And look, I'm being a little bit facetious, because you Yeah. It's yeah, I suppose I'm not in, I'm not in the zone of sitting with the clients anymore, as much as I was. It's seldom enough that I'm doing it now these days. So it's not necessarily for me, which is probably Andy, why I dismissed it, and I must apologize for dismiss it, because this is clearly a really, really, really important issue. And, and I think further on from that, you know, when you are dealing with elderly clients, to Nick's point about dealing with, you know, well, when that, when the wealth gets passed on and all that kind of stuff. So I think it is something that you need to be very, very careful about. This is a significant family for us, and I hate losing it. And I thought, I think bringing this up today is important, you know, just to say that, you know, running a business like ours is fucking hard

Nick Lincoln: 1:08:56

describe that Carl, the gut punch, but also the anger. And it's everything, isn't it? Do you? Yeah, and it's part of you also thinking, Is there someone whispering in her

Carl Widger: 1:09:11

ear? I won't go into I won't go into more detail, but I think I know her kids, and I'll put it this way, our kids were supportive of her decision, which is a further God punch, but

Andy Hart: 1:09:24

they are making they're taking a big risk. I'm assuming she's quite elderly. Let's say she's old in the traditional sense. She

Nick Lincoln: 1:09:35

is adding up numbers as you go through

Andy Hart: 1:09:39

them together. She's been with you almost a decade, so she's taking a big risk to try and find a another full Fauci.

Alan Smith: 1:09:52

She's probably had a few chats with someone else. It's always much easier you say sorry she has or hasn't

Carl Widger: 1:09:58

she has Yes. I was I? So I did speak to her daughter as well, and probably said too much, but so they were fully frank with me as to what has evolved and what has transpired, and yeah, so it's look it just is what it is. Yeah, it

Alan Smith: 1:10:17

happens Carl, happens to all of us. The thing is to learn lessons from it. Why? Why did this have 100% after action review what would be done differently? And by the way, sometimes there's nothing you can do differently. Yeah, sometimes people want a clean break. I love your death car, love your team, love everyone else. I just feel like having a clean break. That's

Nick Lincoln: 1:10:38

really fascinating. If you know we could, we could, we could talk about just this aspect of the couple's conundrum, couldn't we the other When, when, when one of the couples passes away? How to handle it? Things to look out for changing the tone. We could if we had a trap Academy, this could be a separate module all on its own, couldn't it?

Carl Widger: 1:10:56

Yeah, that's so good idea. The Traffic Academy very very we are, we are totally going to do that because, yeah, that we have so much, we've so much experience to pass on to other people. Because I can tell you what, what should we have learned? What? What, what will we learn? Is when somebody passes away, here's what we should have done. I now know myself because they told me today. They told me,

Nick Lincoln: 1:11:23

lesson learned, right? Yeah. And unlike, you know, do

Carl Widger: 1:11:26

I hold any grudges against them? None at all. They're just beautiful, like she's a beautiful woman, a beautiful family. That's the thing. It's not, yeah, but I'm taking it personally, but

Andy Hart: 1:11:39

it's actually not, don't, don't get personal business. Yeah, it's a great saying. It doesn't happen in reality.

Carl Widger: 1:11:44

Yeah, I do. I do have one other just kind of an aside, right? Just on something Andy said, Just something a little bit, you know, that it's, it's, tends to be the male who's the dominant partner, exactly like Andy says, right? The younger people. And, I mean, I'm counting myself as a younger

Andy Hart: 1:12:01

person. Yeah, under 50 is very I'm finding that the female

Carl Widger: 1:12:06

is at least as savvy as involved as the male. I had a brilliant comment from a client a couple it's a couple years ago now, at this stage. So tea shock in Ireland is our prime minister, right? So, so I said, Who's the Minister for Finance in your house? So who does the money? And the husband went

Andy Hart: 1:12:26

like, CMO, but a variation of it, yeah? He said, Oh yeah, that's me

Carl Widger: 1:12:31

and the wife, pipe document. He's the Minister for Finance, but I'm the tea shark. Yeah, yeah. He thinks he's all the control, but basically I

Unknown: 1:12:40

can try for the money, I look after everything, but,

Carl Widger: 1:12:43

you know, but you think, I do think from a from a female point of view, I think there's, you know, it's definitely becoming more equal. And I can tell you, in more clued up, yeah, I am talking to my daughters. You know, never be dependent on anybody else. And, you know, have your own independence. So it's there is a

Alan Smith: 1:13:02

good for the better. For sure, there's research that I remember reading a while ago that said, regardless of in a face to face situation, who says the most? That 77 like 70% across the board, of financial decision household financial decisions are taken by in this case, in a normal females, yeah, humor decisions, what to do with the household,

Nick Lincoln: 1:13:21

the budget. Women make money, consumer decisions, no, that's been proven. Jordan Peterson, Cathy

Alan Smith: 1:13:29

Newman, oh, okay, yeah, yes, I wonder where you were going there. Just, I just want one last sort of throw away my own personal experience. I remember this conversation has reminded me, years ago, cat and I, my missus and I were going to get our wills updated and done, and went to a proper London law firm who had been recommended to sat there in a proper London desk office, and the guy, you know, perfectly nice male, typical lawyer, do a family lawyer, and I was a bit uncomfortable whilst he was doing it, because we just kept on just talking to me. I Yeah, eye contact to me, eye contact to me. Ignored her the whole time. And you boys know, my other half, they could add too well.

Unknown: 1:14:15

We see that one ending, well, no,

Alan Smith: 1:14:18

so we came out of that, you know, did all the you know, had all the conversation? Of course, it's funny when you have a when you engage in a conversation, because it takes a while to notice it, because someone's just talking to you, and I'm answering his questions, or what have you, and then even, you know, sort of halfway through, I'm thinking, oh, you should probably speak to her as well. We, we came, we came out of that. She just, we just walked down the street. She says, we are not using them, end of story. So, right.

Unknown: 1:14:42

I No, there's no comeback,

Alan Smith: 1:14:47

but isn't that the point? And I don't know, don't know the circumstances of I mean, I know your team, Carl, they're a great bunch of people, but who knows? Who knows if the person wasn't felt that they weren't acknowledged, weren't loved, weren't taken care of, weren't listened. Two these are the circumstances. This can happen to all of us. Yeah, pay attention to everyone in the room. Okay, Nicholas,

Nick Lincoln: 1:15:07

Nicholas, Nicholas, lick. Nicholas, I'll go last. I'll be quick on this. So I Yes, I've always said it. I echo what all the trap. I believe that in the onboarding process, you have both couples there, or you don't go ahead, it's an immediate red flag once they come on board and you've got a relationship. Okay, maybe every third or fourth year, one of them and step out, they're just too busy to attend, and things haven't massively changed in their financial plan. But you always address both of them. You always try and get both of them talking. You always try and get the quieter one talking, whether it's the male, whether it's the female, and you listen, and you show that you're listening. My conundrum with clients is the ongoing thing, as I said at the start of the meat and potatoes, where you've got so I've got three examples again, like you can't. So I've got to give some colors this story, but I want to give it away, kind of thing. But I've got a long term lady client who, in her 40s, married last year to a guy who perhaps, on paper, I wouldn't take on as a client, personality wise, I think we're okay, but he has come into her life. She's going to inherit some significant money, and he doesn't have much money, and you're kind of almost protecting these people as well. I was looking, if that sounds condescending, or man standing, I don't give it that. I was just part of me was thinking the back of my mind, you know, I hope that this lady's family have looked into this guy and everything. He seems actually now to be to be fine, but you just have these red flags. Now he's coming to the financial plan, but it took a while because this client, the lady's been a client of mine for years and years, and now I've got to sort of sell what I do to him. He doesn't know me from Adam. Doesn't understand financial planning. I think he's bought it. We had our first joint zoom annual planning meeting last year, and he's responded with information I requested. That seems to work well, but you got to really tread through it carefully. Second case is a lady I saw yesterday online, because I don't waste my bank holiday Mondays me, we had a Zoom meeting with this lady. She's the partner of a long standing class of mine, a widower, a guy who lost his wife, has children, and him and her are now together as a as a couple, and she wants some advice on her pensions and everything. Again, he has got considerably more assets than her in this relationship. And towards the end of the meeting, which is an exploratory get to know you, kind of meeting, I said to the lady, it'd be really good if you and your fella at the next annual planning meeting, which, like I said, were scheduled to contact your chap in in October, if the two of you can do it together. And I it was really difficult, because I said, on the assumption you're going to be together at the time you this is a long going forward relationship, you gotta, you gotta get out there. I said, basically, I said, I can't advise you in a silo, and I can't advise him in a silo. You are a couple, until you tell me otherwise, so you've really got to come on board. But my phrase, you what I witnessed as I was saying it. But, you know, so I said, just when we've done this meeting, go back and tell your chat you've met this strange guy online. Yeah, I think I can work with him. And then yes, at the next Annual Academy. See, we do it together, but it's navigate and the final one, the final this client can under business, is when you have children of existing clients, refer to you again. I don't give too much away, but they're this couple of close to being my longest standing clients, going back to the early noughties. And they referred their son to me a couple of years ago, and I've worked with him, personality wise, we're not that simpatico, but he was the son of existing clients, and I tried to give it a go. We've got our zoom annual planning meeting tomorrow. He sold a property in the last 12 months, and I know he's invested the assets elsewhere, not thrown under my horse. Under my auspices, which, which is annoying. But he's also put into a portfolio of ETFs, and he says gilts and bonds. So he's gone completely off plan with a portfolio that's completely inappropriate for his financial plan. You know, remembering at all times the plan determines the portfolio. This guy was always fee resistant. From the outset, he's probably somebody I wouldn't have taken on, but he was the child of very long standing clients, and so I think our zoom planning meeting tomorrow is going to be a case of, well, thanks, but we pass as friends and good luck. And I am a black and white, but, you know, I'm black and white, but I think all of us to agree are quite black and white. I'm very black and white. Ultra I think it's quite black and white, but there is no black and white with this. This couple's conundrum, thing from losing a partner and then dealing with the deceased one who's still on this crazy spinning globe, and making sure you deal with them properly. Having people who have their life partner coming with their lives relatively late on, when you've been working with the solo person for years, and you've got this new thing in the mix, where you've got a widower who finds somebody else, but the wealth disparity is massively different. And the children thing you know, who wants to say to your clients who you love? They're really nice people. No, I don't want to deal with your your son, he doesn't love you're going to give him the grace of at least a planning meeting. Aren't even trying to and that's where I let my guard out. But I thought I could mold this person around because I like mum and dad, and he must be like mum and dad. And it turns out there's not enough of mum and dad in him to make it work. And so I've got these three things in my head at the minute. So there we go. So I'm glad we've talked about this. I said Carl is laughing, so I'm getting an empathy open with you,

Carl Widger: 1:19:51

which is good. This guy isn't like he's not fitting into my practice, like me, so I'm firing him.

Andy Hart: 1:19:58

Firefo. Nick, I. Crazy mate, yeah, yeah,

Nick Lincoln: 1:20:02

yeah. But how

Carl Widger: 1:20:03

will that, how will that, if you fire him as a client and you're going to do it nicely, and how will that sit with your clients, his parents?

Nick Lincoln: 1:20:15

I think, I think they'll be fine. I know, obviously I'm going to, I'll part with this chat. I think, I mean, I mean, I haven't even done it yet. I mean, Christ, if it happens tomorrow, I'll do it with all the grace I can master. And I think it'll be fine. He'll be fine to go up on his own. All that manages his pension part, and he can, if he set up investments on his own, he can switch his pension to a platform on his own as

Andy Hart: 1:20:35

well. Yeah, yeah. Go on. We might be overthinking it in our world. It's like their clients for life. They can never leave us. You know, it's a personal insight. If we part relationships, was in the family like, I've decided to not work with Nick anymore. Okay, fine. We utilize, yeah, it could be a big thing. It might be quite blase.

Nick Lincoln: 1:20:51

How the parents take it. I don't, I think, I think they probably think we know our kid better than you do. We're not so badly surprised. They won't that course, but

Andy Hart: 1:21:02

they probably know he's a nightmare. And they probably, you know, they're expecting, they're expecting him to leave

Carl Widger: 1:21:08

you the world, I know we've sounds

Nick Lincoln: 1:21:13

terrible. He's just not, he's just not, not a fit. And the moment you go invest, you know, offline, you know. And he just Yeah,

Alan Smith: 1:21:20

but he hasn't. He hasn't learned how good you can be. Yeah, you sold yourself to him.

Nick Lincoln: 1:21:26

Well, I probably know, but the problem to come back, I wouldn't have if I'd met him cold without any of that. You wouldn't, I wouldn't, would not come, on, yeah, would not come but I thought, Well, okay, you know, yeah, there you go. Lesson, that one lesson that I do it again, because I don't again. You know, you got to be really careful around this. We're dealing with the people, the children of clients, are the people they love most in the world. Right? That you hope typically, right? We all love our children, and we're all one eyed about it, and we all have unconditional love. So you've got to just think, oh, no, I met your son. I suppose we have a toss up. So I'm not gonna give the grace it might not be received too well, right?

Andy Hart: 1:22:08

Final point before we wrap up, I I've certainly had four clients pass away. All four men, male and husbands and all four of the wives have continued to work with me. So again,

Unknown: 1:22:23

no

Andy Hart: 1:22:27

play it, because I've set my stall out from the beginning. Couples and family happened to me, Carl, I could have easy of lost. I'm just saying I've been very lucky that that's not happened, and it's often, and it's always, it's own. It's been four males. I've lost four, four husbands.

Alan Smith: 1:22:44

No one knows more about dealing with widows and Andy, right?

Andy Hart: 1:22:48

Yeah, I deal with widows really well. Female widows are great clients of mine. Fantastic clients. I've been working them for years. They listen to me, they understand investing. They get the caring gene. They're perfect clients anyway.

Unknown: 1:23:03

Yeah, yeah, it's not playing, isn't Nick

Carl Widger: 1:23:05

so Oh, our friend Mr. Lincoln, has dashed out. So

Unknown: 1:23:15

any, any final points

Alan Smith: 1:23:17

on that, boys? No, we should go on to the next section, the next section, which is, well, Nick, Nick's gone away to find the postman with, what with a bulging sack of

Carl Widger: 1:23:31

whatever, we are gonna go, oh jesus christ. Anyway, question, yeah, I

Andy Hart: 1:23:36

got the question. Okay, two questions, right? I'm going to read one question, the other one is lengthy, and I think we've addressed it before. So the first question is by James B his social handle is at James underscore, bull pit, gentlemen. First off, I should point out that I'm not an advisor, but a personal finance enthusiast. I've been expanding my knowledge for the last 10 years now. Struggle with one aspect of advice given in the UK as compared to the US. Why? Oh, why do a lot of advisors still recommend de risking from the date of retirement when most people no longer have a cash event at this point anyway, as in, to buy an annuity. I'm assuming nothing that asset allocation will want to be nothing that asset allocation will want to be different in the accumulation as opposed to accumulation phase. Maybe noting I still don't understand this point. US advisors do not have this opinion, probably due to historical reasons, but I can't see how it is still relevant today, after the pension freedoms in 2015 I'd love your take on this, as I just don't get it. Thanks, correct? We still have this underlying force. That does want to tweak and change couple investment portfolios or individual investment portfolios as they approach retirement, and then they live through their retirement. I mean, it is changing. It used to be this cliff edge. Have a load of money, build it up, stop at some point, use that money to buy an annuity. So therefore, approaching that point you wanted to have it as liquid as you can, ideally in cash. This has changed. Pension freedoms have been around for years before pension freedoms because we had the different rules but correct. A typical retiring couple hit age 65 there's a very high chance that one of them will make it to their 90s. So this money needs to do what the only same definition of money is, which is purchasing power, and it needs to maintain its purchasing power over multi decades. And the answer to that has been in a predominantly global equity portfolio, managing your cash flows on an annual year basis and focusing somewhat on the safe withdrawal rate. So James, it is changing. The conventional wisdom around this, as I say, is changing, and a lot of the smart advisors are now pushing back on this. But still, the default dogma is, you're in retirement, therefore you need to be predominantly in a fixed income type portfolio. But as I say, the one, the people that are being advised that are thinking about this on a sort of slightly deeper level, are still being predominantly in the global equity portfolios. Does anyone else

Alan Smith: 1:26:32

want to hazard add to that? I had to read the question twice. This is not about these, you know, phasing into pre retirement. Is it to these lifestyle funds? This is more that post retirement, and I think it's, I think it's driven by and go back, go to the roots of this. This is a regulatory slash compliance initiative. Our regulator, the FCA, undertook a significant piece of work, and it's ongoing as far as I'm aware. You know the at retirement, post retirement strategy, you know, we've all got one in one to one degree or another. Every firm should have an investment policy statement, and you're expected to have a retirement investment policy statement as well. So what are you doing differently? Commonly enough, I was just speaking to a journalist the other day. They're going to do an article about this very subject, and I was making the point, there is no, there's no difference. You're saving then you're spending. You've still, you've still got the same challenges you you do need, definitely a bit more sophistication around your planning, your spend, spending and keeping, keeping the creative. It's hard to grasp spending rather than it should be loose, yeah. But all of a sudden you haven't removed the desire to to have, in fact, if anything has changed. Now you've got an A desire to have a proper income that's fulfills your lifestyle expectations, which is rising in line with or ahead of the prevailing rate of inflation. That's your biggest number one goal. What's the biggest? What's the way you're going to achieve that? You don't achieve it by changing to good now in retirement, we've got a new investment philosophy that's made up of bonds and cash or something. And the journalists, I can't remember her name, but she she was really pushing back on this. But that's not all that all the other firms that I'm speaking to are telling me, I'm afraid this is back to the same thing. You've got an industry which is run by compliance tick box people telling you you need to have this and advisers. I go back to the private equity thing earlier on. Advisors either haven't got the ability to or they just don't want to push back and say, on what basis is it.

Andy Hart: 1:28:29

But also, investment firms are manufacturing products to fit within the client, compliance narrative, smooth returns, time and income portfolios,

Alan Smith: 1:28:38

exactly. They're just building something to fit, rather than why we're doing this in the first place, they're saying, Oh, here's one of these things you could have the the green portfolio of the blue portfolio. They tick that box. And so everyone's happy to have a but it's the it's the main thrust of being a high quality, real financial planner. You still, you stick within the rules and regulations. Of course you do, but you have a thoughtful approach to this, and say quite believe that you need to adhere to this. It's not a strict rule. Need to be aware of it. But I'm not sure what he's referring to. The market in the States, they probably just don't do this at all. In the US, they just keep fully invested by the sounds of things. Yeah, and

Carl Widger: 1:29:18

back to Nick's point. You know, between art and science, right? I think your point is perfect Island. It's this is what real financial planning is. And I know the detractors will go, Oh, there's the guys on trap going, the answer to everything is real financial planning, but it actually is. And to your point about spending, I think that the spending patterns need to be nailed before retirement. It's too late to be doing it in retirement, because you can't really do a plan for retirement, or third act, or whatever you want to call it. You know, you got to start fine tuning that. And what we found is, over time, your financial plan might be a little bit kind of loose. Juice at the start. But year on year, it gets tighter and tighter and more accurate. It's right, it's and then, you know, you you come to, you know, you might well decide to draw down your pension at 60. But, but in Ireland here, you know everybody, every advisor, not every advisor, lots of advisors tell their clients, oh, bail out at 60 and take your tax re lump sum, and then you have to invest the balance in what we call an approved retirement fund. We had pension freedoms way before you guys did. So you copied us on that, which is totally fine, right? But, but you can, you can invest in, you can invest in. My screen has gone off behind me, as I said, you can try

Andy Hart: 1:30:41

and fix it, mate,

Carl Widger: 1:30:44

but, but you can. You can your pension fund grows tax free, right? So, but once you draw it down, then you got to start paying tax on the drawdowns, and you got to take 4% a year before your it doesn't really matter. This is, this is what financial planning will dictate, exactly what you need when you get it, but, but the answer to every question, because the answer to I we probably are having time to do the next question, but, but it's about attitude to risk. The answer to every question is, do your financial plan and the the answers become apparent that the financial plan tells you what the answer is going to be every, every question in terms of families, finances can be answered by doing a long term financial plan. It will tell you into the long term, broadly speaking, how you're fixed. But it can get very accurate in the short term, very accurate, I think,

Alan Smith: 1:31:36

I think this is, and we will, I mean, it's the name of this bloody podcast, after all, and we will keep banging on about this forever, and I think this is the underlying pod. Quite a few of these questions come up, and all roads lead back to the same answer, yeah, actually. And I do feel for and it's not this particular guy is not an advisor. He's a he's just an interested observer. He's interested in personal finance. But I have had conversations with other advisors. I think we all have, and particularly with larger firms, there is a kind of dictatorial policy. You need to do this. You need to tick this box, the client's going to retirement. You need to get into this fund, or this structure, this thing. Because everything, if you do things at scale and mass. And I think this, this is a point as well. We are dealing with our firms in particular, but dealing with affluent clients that the commercials work out you can't afford to get really, really bespoke, really sort of personalized, highly personalized financial planning and all the things we've talked about. If you're trying to do this stuff at scale with 10s of 1000s of clients, you probably can't therefore, so maybe that's where there's a crossover some of the firms working with 1000s and 1000s of clients, maybe they have to, by definition, do tick the box. Put them in this risk profiler. Put them in this retirement account because there isn't enough time in the day to do this art and science experience. Yep, Nicholas, and they just want

Unknown: 1:32:54

to pick their battles, don't they? Okay, I'll just close up

Nick Lincoln: 1:32:56

on this one some sure you can hear me. Thank you for stepping in then. But I think virgin broadband are doing work in the area. So my internet is very, very spotty. Yeah, interesting. A guy completely outside of this thing of asking look into it and see exactly what some of us have been saying for a long time. I think we'll close it on there. We're all broad agreement about this. James, you're absolutely right. James, underscore, b, u, l, p, i, double C. It's not a painful name. Our thoughts go up to you. Okay, let's move on to we'll do the second question. Is a massive one. So Lewis, M or the first day anonymous, and they tell me, M, Lewis will do your question in the next episode, maybe episode anybody couldn't lose. We'll do we'll do your we'll do your question in the next episode, after slash on the half, that'll be set something. Okay. Let's move on to what many people call culture. Oh, my God, where the hell is there? Is culture corner dude with Christ. So this is what, right. Okay,

Alan Smith: 1:33:55

okay, technical troubles, Lincoln, I think today. Okay, okay,

Andy Hart: 1:34:01

so I want to be the Virgin Media engineer is outside soon

Unknown: 1:34:05

as this call ends, hiring for a chairman. We're driving up and down the streets trying to find the

Nick Lincoln: 1:34:19

Virgin the MD of trap. I might, I might. I'll do the hiring myself. Now crack on with it. Storyteller, right?

Alan Smith: 1:34:27

I would like to recommend a book by a gentleman called Anthony Pompliano Andy. You ever heard of him? I know the other two. Sounds amazing, real legend of a person. So he's got a book. I've been following him for quite a while. Quite active social media, quite a high profile person, very interesting character. But his book, this is an interesting one. I think even Carl might be interested. He started writing a book when he had children, just kind of advice to my kids, and he sort of, and he's like, you know, write one a day or one a week or something. He's now got 65 of these, just sort of short, just two or three. Pages of 65 kids.

Unknown: 1:35:02

No, he was allowed to give each of more than one piece of advice. Book of 65 letters, by the looks

Alan Smith: 1:35:10

of the link, yeah, how to live an extraordinary life. So very simple. It's like one of these classic you know, letters to my younger self, letters to my children. But of course, letters to all of us. And I just, I bought it. Read it in about one or two sittings just, it's just really beautifully written. Loads of really, you know, nuggets of wisdom, golden bits of advice that he's given to children now, sharing it with the world. And it's, as I say, it's an easy read. Download it, read it, listen to it. Highly recommend it. How to live an extraordinary life. By Anthony, I'm

Carl Widger: 1:35:41

definitely downloading that right up my street, as is icky guy, which is Nick nearly getting were you laughing or getting sick there? Do you remember Andy? We debated Eckhart Tolle, the power of now is no and you loved it. And I was like, Oh, I found it really tough going. Well, if, like me, you found Eckhart Tolle stuff kind of that was hard going. This is a milder version, but some of it gets a bit mad, right? But it's the Japanese. Ikigai is a Japanese word or phrase for what's your purpose or the meaning to your life. But they they they go to this community in Okinawa in Japan, and they study, you know, all these really old people and how they're, you know, finding meaning and purpose in their life. It's really, it's, it's, it's really good. And the more I kind of, the more I'm trying to reading these kind of books tomorrow, I'm realizing, hmm, are you looking for something? You're searching for a bit of meaning there, Karen and I probably am. And does that come at a particular hour of your life? I don't know, but I thought this one was really good, which is why I'm definitely going to read Alan's book. Because this is

Andy Hart: 1:37:02

on the audible link. House, really short, three hours and 20 minutes, yeah, yeah,

Alan Smith: 1:37:06

I forgot that beside my bed, actually bed. It says it's a short book, isn't it short? Yeah, light blue book. Start, really, yeah, quickly, really, really, really good. Like, yeah, that's the icky guy at the what is it? What the You start reading

Andy Hart: 1:37:19

it now you might, you might finish it by October. Alan, who's next, I

Nick Lincoln: 1:37:24

don't think it was three Ultra. Three Ultra. Let's crack on. Three hours

Andy Hart: 1:37:28

on Audible. Okay. Me, this is a strong recommendation this book. It's called Confessions of an advertising man. It's by David Ogilvy, who is muted, or is known as being one of the greatest advertising men to ever exist. He's the original Mad Men. It's a brilliant book. It's very relevant for our business, how to win clients, how to keep clients, how to manage teams. It's an awesome book. It's not that big. You get through it quite quickly. He's a he's a great wordsmith. Uses amazing words, words that I can't pronounce or read, but it's a strong recommendation from the Confessions of an advertising man, David Ogilvy, good Scotsman, advisors should definitely

Nick Lincoln: 1:38:11

sales. We need everything. I read that book years ago. So, very, very good book salesman.

Unknown: 1:38:18

End of this mess. Nick, please.

Nick Lincoln: 1:38:21

Yep. Okay, all right. Mine is my culture corner. Is a podcast, city wire podcast. Listen to it today. The two sort of eminent Greece is at City wire, Daniel grote and Lawrence lever. Daniel groat has written a long piece about the SGP charges, their revised charges, which came out last year. And I thought I better listen first time. Try and understand them. For the first time in my life, listen to it. Still don't understand them, but have got a better understanding. And it's clearly Daniel grow who's written this long piece, doesn't quite there's still a bit of a mess. But basically, on ices, which are 20% of the SJB book, they've got rid of the half percent initial charge. We should go straight to SJP. Wow. And the initial charge the advisors can levy is now capped at 3% and the ongoing all in charge is 1.59% and on pensions and life, which is the massive part of their book, they waive the 1.5% initial charge, which is to go straight to SGPs back pocket, that's gone and again, the initial advice charge is capped at 3% or less, If you want to. And the ongoing charge is 1.67% a year, and they've got rid of the exit charges. So it's a big turnaround. I wasn't quite clear where the fund charges. Daniel Groce, these figures, the ongoing charges are kind of fixed. I was thinking it sort of depends what underlying fund you go into, because that's part of that mix. But I listen to I didn't quite get it. Their charges have come down little bit, but not by a great deal, but they have weighed the exit charges, which is a good thing. So if you want an explanation of it, classic media brand though, city wire, all they are is a media brand, and they talk about this long piece that Daniel wrote. You look at the show notes, and there's no link to it. So a bit of a fail from city wide. Apart from that,

Carl Widger: 1:39:59

what a. What a wonderful culture. Corner Nick, thanks for sharing. Yeah. Well,

Nick Lincoln: 1:40:03

you know, I'm an icky guy. I should

Unknown: 1:40:07

have said. I should

Nick Lincoln: 1:40:10

have kept quiet and just let you guys talk about um, yeah, living extraordinary lives with icky guys, but um, there we go.

Andy Hart: 1:40:20

Right. Thank you. Okay, are we done? Go

Alan Smith: 1:40:23

and shout at your virgin. Yeah, there's something happening with

Nick Lincoln: 1:40:28

it, because it gives he's gonna be speaking around the streets of Watford looking for the Virgin. I have to say, having not even a microphone in front of me is a bloody liberating thing. Having, I don't care the court is not as great. This is so much easier, right? There's episode Sloss on nerve comes to a sticky, pleasant end, another pile of trap slides down the U Bender, Father, thank you. Do leave a review. False rate and leave us a review. Six out five stars is mandatory. Like and subscribe to our YouTube channel. Buy those remaining trap live tickets, which are going and like, three and a half grand a pop. Now that is the demand true story. So until the next time from the trap pack, it's Adios, take care of there, and we'll see you on the other side. Good

Unknown: 1:41:07

bye. Goodbye, goodbye. Ciao, what fucking mess that was.