76 - Drawdown Decisions

In this latest pile of TRAP, the Trap Pack discuss

• Topical Titbits
• Meat and Potatoes: Drawdown Decisions (FCA Retirement Income Advice Review)
• TRAPist question(s) from Peter Watts https://www.linkedin.com/in/peter-watts-dippfs-cert-cii-mp-23047169/
• Culture Corner

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

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Transcript

Unknown: 0:12

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

Nick Lincoln: 0:46

dear TRAPPIST, welcome back to what many people are calling episode 76 of the real advisor podcast. My name is Nick Lincoln joining me as ever in the digital studio of doom. Are the four other or the three other horsemen? They are fuck on it. Alan, the storyteller, Smith, looking tanned and slightly dusty, and the ultra heart and Carl the voice, the lucky hand slightly dusty. Now, gentlemen, we have a show packed full of app, absolutely nothing. So let's get episode 76 underway with some more high energy review reads or read, read out by my very good friend, the right honorable Mr. Andrew Usain Hart

Andy Hart: 1:26

alpha is looking good nick for those watching on YouTube. Okay, so the first review Chris Hindle is entitled, irreverent and insightful. Trap is sharp, irreverent, oh, struggle with that word and packed with real practitioner value. Expect a mix of insight industry chat and unsolicited rants. It's not always tidy, but it's always relevant. The best advisor podcast out there, mainly because it sounds like actual advisors talking and not consultants selling a framework. That is from Chris who runs the awesome firm, Fraser James with another good friend of mine, James McKay, so yeah, awesome review. Back to you.

Nick Lincoln: 2:03

Boss, excellent. I'll be getting a bit light on reviews, aren't we? Ultra

Andy Hart: 2:07

No, they're actually coming in quite thick and fast now. So panic is over. Had a good couple of about three or four coming in last week, but yep, we're still up for more reviews. We're up to about 222, I think, on the Apple platform. And it really does help with all the ranking stuff. So please do keep them coming. So okay, so I'll take

Nick Lincoln: 2:23

out the docket. Then. These are the final reviews. We're apparently up to date. Who's left? Review put in by you. I'll get rid of that line. Shall I? Yeah, get rid of that. Yeah. Okay, good. Could have done that offline. There you go. Chris, how tidy Is that done? Right? Okay. Topical tip is, let's get underway. Let's get this ball rolling. Very exciting topic I'm going to lead off with here. Ultra contain yourself. I'm not sure if the FCA levies are sent out to all firms this time of year. I tend to get mine this time of year. And I've just got my FCA Levy, FCA slash, FC, whatever it is, FC, FSCS

Unknown: 2:51

Levy. So keep it going. Keep it going up by 21%

Nick Lincoln: 2:55

over last year. But this is not a ramp, because despite that, my FCA levy is down, or what it was, say, two to three years ago, at the height of the sort of pension transfer redress thing. So if you want to just submit your information to us via the survey, I put in the IFA form, there'll be a link to it in the so called show notes as well. Just be interested to see the feel out there. Because we we have a we have ability now. We've got so many Trappists who like this show. We have the ability to get data from you that might be useful to share with us all as a community thing, because we're all about sharing and not deciding what is interesting or not to put on track. So there you go. Right. Smithy, are

Unknown: 3:30

we still talking about levies?

Nick Lincoln: 3:32

You can do, but we're gonna give it a punches there. We're not gonna be if you don't just talk about it, we can go Ultra. Might

Andy Hart: 3:36

fall asleep a levy call Alan. Bring up the bring up, bring up the vibe. No,

Alan Smith: 3:42

I think this is a worthy conversation. Actually, the the as ever, highly efficient shreen in my team. I asked her, in preparation for this conversation, how our numbers had moved. I think I shared it with you guys. Yeah, our number for 25 is, yeah, about the same sort of percentage, I think Nick as increase, but looking back, so back to, I mean, you were wondering what was happening in 2020 2021, yeah. So ours, ours is effectively half now what we were paying in 2020 but bit less than half, actually, yeah. And I think Carl mentioned it as well. What the hell was going on then? But I think that was all to do with the FSCS Levy. More than that was the FCA regulatory fee thing. And it just shows you, doesn't it that we do, no doubt we did talk about it at the time or afterwards, when this thing, this, this safety net that exists for if people are getting ripped off, and then companies closed down, and then so people want to make a complaint and get their complaint upheld, the rest of us have to bail them out. So that was what it was. So when we were paying more than double what we're paying currently to bail out all these mis selling scandals which are going on at the time. So I guess that's a good sign the trend. End is broadly down. It is higher than last year, but anything but if we're paying half what we were paying obviously, hopefully our revenues have gone up as well over that period. It's net positive where we are right

Carl Widger: 5:12

now. Question, Alan, yeah, how? How is it calculated? Is it based on aum? Is it based on turnover, or what are the metrics?

Alan Smith: 5:21

I think that the main basis of it is turnover. Turnover. Yeah, yeah. So percentage of turnover, so you most firms, you would hope or anticipate your turnovers going up every year. So if you got a pro rata increase year on year, but every now and again, you have these god forsaken scandals and things that come out blow up 10s and millions whatever to to cover the losses for people. It was so, it

Carl Widger: 5:43

was interesting. You did share it on, on in our group, and like, it was, so the increase based on the scandals, I think it was DB transfers was, it was for three, three full years. So it's like, it was a significant hit.

Nick Lincoln: 5:56

It was, it was, it was a choppy, choppy period. But that's, that's good point you raised there, because, yeah, our fees have gone up, but I'm sure all four of us have had turnover go over the last three or four years. So even if it's going up in line with turnover, the fact that the fees have gone up, my fees have gone up this year by 21% they're still way lower than they were two three years ago, and on a much bigger turnover. So you know, take the rough with the smooth, and I can definitely live with that. Okay, moving on, because we're going to be fast paced and on it today. Storyteller, funfeed,

Alan Smith: 6:24

yeah, so this was something that I saw in the city wire, magazine, newspaper, whatever it is, online website, and I thought it was worthy of conversation. There's a lot of sort of evolution, ongoing things happening in the advice market, and a lot of sort of PE backed consolidation going on, and some which is not just growth of companies, and there's an increasing number of firms which are effectively running their own investment models, investment portfolios, portfolio range, but I mean proper funds, as opposed to just buying model portfolios and putting together like we do, effectively putting together A portfolio of funds ourselves, but not actually running funds. Proper answer, yeah. So the so this was the article revealed the fees advice firms make on their in house funds. And it gives a big long list. It's a good piece of journalism, actually, because it digs down deep into all these different groups, different funds. And they say advisor funds, how much clients pay? And they give a big, long list of all these, predominantly much larger companies. And it ranges from at the top, most expensive, funnily enough, a firm I've never heard of. I think they're in Northern Ireland, Doherty PLC, which is 1.63% is the funds, SJP, St James's place, in some respects, no surprises, but it's unfair to be fair to them, to just to quote them in the same basis, because their fee is 1.61 but as we know, SJP bundle everything together in terms of advice, planning, etc, whereas I think a lot of the others are purely investment portfolio. Then it goes. Fisher Investments at 1.47 foster de novo, 1.32 and so Greystone equilibrium lows. So these fees, as I say, range from 1.63 at the top, a lot of them congregate around the 1.21% so this is for pure investment management, where the advisor. So these are not purely discretionary fund managers. These are predominantly advice firms putting together their investment portfolios and charging, you know, 1% a year, right?

Nick Lincoln: 8:26

And that doesn't include, that doesn't include custodial I never know with these things. Yeah, it

Alan Smith: 8:31

doesn't. Some of them won't, but some of them are pure advice. Which ones are which? That's

Nick Lincoln: 8:38

quite a big, 20 bits, isn't it? Typically 25 bibs. It typically 25 bibs, it kind of makes the whole thing a

Andy Hart: 8:43

bit redundant. Yeah. I mean, for example, let's take the bottom one first over 0.42 there's obviously additional charges for the client, versus, let's say one of the higher ones. So yeah. Well, look,

Alan Smith: 8:55

if you look at the higher ones, let's say Boston.

Andy Hart: 8:59

I pretty much know all the firms on this list, about five, yeah,

Alan Smith: 9:03

quite a few I've never heard of, but a lot of them are the PE backed consolidators Saltus. Ask at Lloyd AFH, and I guess that's Shackleton

Andy Hart: 9:14

Titan equilibrium. We know that. We know Colin, well, good personal friend, Adamus. We know all these Yeah. Thank you. Nick

Unknown: 9:23

Andy, the Ultra. He knows about everything. Andy can't be told anything. His name is Andrew Hart. Andrew

Andy Hart: 9:39

know about everything. Nobody knows more about in house funds than me. He

Unknown: 9:43

knows. He knows the greatest everyone. He doesn't know. They're high,

Andy Hart: 9:47

but they good. They're high, but they're good. Nobody knows more about in house funds than me. I

Alan Smith: 9:51

think, I mean, I know that. I've got a couple of things to share today, and it is about, you know, fees in general. But if you look, I mean, just bold. Park. And it's not all about the cheapest wins, etc, but there is a high correlation between higher fees and lower relative performance. We know that. It's a statement of fact. Our portfolios are about 2020, something basis points, and so these, some of these firms, are, on average, four times as high as are the portfolios that we run, which, as we know, are predominantly low cost index with some factor tilts, etc, built into them. And I don't see, however, how over any meaningful period of time these other companies are going to compete or you, you've got to have a hell of a an out performance year. It's just crazy. If it's a four to 5x just on the pure cost, you're gonna have to be some sort of exist, I believe brutal

Nick Lincoln: 10:47

call your hands raised, yeah, yeah. Question

Carl Widger: 10:50

on that, are some of the consolidators in there? Because, yes, yeah, because I know that some of the consolidators were buying up firms and then saying, Oh, by the way, you've to move to our platform and to our funds. And you know, if they're buying firms, and then insisting the clients move on to their own platform and their own funds, well, then they're in a position probably to pay a little bit more to the firm that they're buying, because they are in a break even scenario, much, much quicker. Um, well, that's exactly

Unknown: 11:21

right. That's exactly

Andy Hart: 11:23

right. That's the yeah in this list. Call are acquisitive. They're they're acquiring firms. Yeah, one way or another,

Alan Smith: 11:29

you're right, and that's part of the part of their business model. You roll the client portfolios into their funds. They take a slice of that,

Unknown: 11:38

clips of the ticket.

Carl Widger: 11:41

How can firms who, like ourselves, who extol the virtues of of index investing then decide, oh, well, I'm going to get a shitload of money to sell my firm and all my clients who I told a story to over two decades or more. I'm just going to change that story, because

Andy Hart: 11:59

incentives drives behavior when there's a massive check, people change their values.

Carl Widger: 12:04

We actually had this conversation in our own group during the week about something else entirely. You're entitled to change your mind. You're not entitled to change

Andy Hart: 12:11

your values. Many people change their values. We don't know. A lot of these

Nick Lincoln: 12:15

consolidators, we don't know if they're buying, they're not buying purely full fat financial planning firms that focus on capturing.

Alan Smith: 12:21

I think that's probably part of the story. Nick is the buying more traditional, IFA firms that are maybe outsourcing to the wealth managers and still and maybe the fees are broadly the same. The difference is these now retain some of the revenue share. But, yeah, that would be

Andy Hart: 12:37

a dilemma. But looking at the ones at the higher end here, if there's custodian fees on top and advisor fees on top, then, my lord, yeah, they're gonna, they're going to be in for two and a half 3% which we know is not the case with some of these firms I'm looking at. But interesting article nonetheless.

Nick Lincoln: 12:54

Okay, good, yeah, good stuff. Okay, talking of taking things and clipping their little share ESG in Ireland. Watch,

Carl Widger: 13:00

yeah, I just thought this was this was interesting. So Davey set up a division called Davey horizons when I suppose ESG was beginning to emerge as an option for for investors. Now look, it should be said here that people have lost their jobs so that they've axed the entire division. So obviously, that's a bad news story. Now I think some of the people who were in the division, I don't think there was that many people think some have been redeployed within the Davie group. But look, it's just more evidence, if we needed it, that this ESG investment story is it's gone from boom to bus, hasn't it? I think the big one of the death knells for this was when the EU changed this article nine and article eight. What qualified as Article Nine and article eight, because they were all saying, oh, yeah, our fund is Article Nine. And then the EU said, Well, if it doesn't do this, this, this, this. And then, like, tons and tons of funds had to drop back to Article eight, and basically go to their clients and say, Yes, sorry about that. We're actually not article eight. So look, a bad news story in terms of, you know, you never like to see divisions that were set up with really good intentions being axed. But I think it's more evidence not that we needed it. We probably knew this intuitively anyway, that the ESG investing bubble has definitely burst.

Alan Smith: 14:27

Yeah, yeah. There's no question. When you had we've talked about this in the past, haven't we? There was, God, there was a lot of bandwagon jumping, wasn't it? I remember I raised it. I think I'm right in saying that Aberdeen, for example, just reclassified a whole range of their funds and put a name, just put sustainable or something, didn't change any the

Nick Lincoln: 14:50

underlying all the cynicism. That was just

Unknown: 14:53

one example Exactly. It must

Andy Hart: 14:55

have thought it was jackpot. They must have looked at the rules and realized all these funds qualify. Why we don't need to do any work. Boom, off we go.

Alan Smith: 15:03

We hold a fund within our portfolio, which I think it was a an iShares, it was a REIT fund. And again, all of a sudden, overnight, it was just cold and it was some, I can't remember, but some sustainable.

Nick Lincoln: 15:17

They throw those two

Alan Smith: 15:18

words sustainable. Exactly We thought, honestly, we actually had some clients saying, I don't want that global sustainable. I just want a normal fund. Yes, because

Carl Widger: 15:31

there are some clients for sure, who I have an interest in this. And if there was, if there was real solutions, they would invest in them. I had a client only last week, or maybe it was before, but, but very recently, ask about something, something along these lines, right? It was more to do with geopolitical issues and defense, blah, blah, blah, right? So, but, so there is an appetite for it, but, but, you know, thankfully, there are some rules and regs now around what you can call various, you know, sustainable or, you know, they're anti green washing measures, shall we say. And that's good, because I think a lot of the fund managers were using it as a just, this is a marketing tool. Let's completely all in on this, because

Andy Hart: 16:18

not fund managers playing through the rules. Just doesn't sound like getting it, get get

Alan Smith: 16:23

ready with the drop, because the most famous of all was Black Rock. Remember, they were they were huge into ESG.

Nick Lincoln: 16:37

How's that sponsorship deal going with black it's

Unknown: 16:40

canceled,

Carl Widger: 16:42

like a lot of other things. They just switched from years. They just switched from ESG to crypto, didn't they?

Andy Hart: 16:48

They have got a load of awesome funds that do create great wealth for very low fees. They're just huge. It's an issue of scale with them, obviously, isn't it? What they at the moment, 11 trillion, still, a huge chunk of their assets,

Nick Lincoln: 17:03

you can still have a nice range of low cost funds that create value. And they say they're not mutually exclusive. They've got a load of

Carl Widger: 17:13

that's a very fair point. Andy, they absolutely do, and they're probably leading the market in a lot of those.

Andy Hart: 17:21

They're very innovative company, yeah, yeah,

Unknown: 17:24

they do get involved a lot of stuff. The thing is, without overdoing this, the whole ESG thing, I think we've been fairly consistent on this since we started this podcast, is it was always just full of conflicts and challenges. And you say, Well, I remember that the one that really stuck out to me years ago was that meta or Facebook as was, was always one of the top holds for these ESG, the tech firms were Microsoft as well. Yeah, I just, I've just got this pathological dislike and distrust of all things to do with Facebook and meta, how they manipulate people, data, everything, and the damage they've caused through that study. WhatsApp, you should, you should vote with your behavior. But

Alan Smith: 18:04

I don't live on Instagram and Facebook. I message people on WhatsApp. That's true. Tried to get you guys to move to signal, but no one was interested. Away from Zook, that was just an example of something which was full of inherent conflict, and to say, Well, I'm buying those because it's ESG, because they've ticked a few. I think a lot of these big companies knew how to game the system as well under what the rules were exactly. So we do all these things, and so therefore we should be included in portfolios. And so it was just rife with difficulty. I agree with you, Carl, there is, you know, there are sound reasons why people would wish to avoid certain types of industries or companies or invest in some but I don't think this sort of this green washing of an entire industry, which effectively did happen to a large extent the Asset

Andy Hart: 18:51

Management helps anyone. The asset management industry loves anything new. So new money can pile in new things. I can sell. It's a marketing business, not a finance business,

Unknown: 18:59

exactly, right.

Nick Lincoln: 19:01

Okay, right. Let's move this on and on to recurring theme, Fnz. Fnz, this week, had their debt downgraded by the rating agency, Fitch. Now I know we think racing agencies really are part of poo, but let's put that to one side. Pretend they did what they do is valid. Fitch downgraded. Fnz as debt, corporate debt to b minus, which means it Fitch thinks it carries a risk of default. And again, as we said in Episode 74 Fnz are a big player in the platform market in the UK and other parts of the world, I think. And they, they, they write the software that underpins Aberdeen quilter and others. So again, I would just be if I would just be nervous, very nervous if I had, if I had my my business was built around one or two platforms, and Fnz were connected to any of them presently, because it doesn't seem like a good news story. And we'll just quickly dovetail on that. Andrew, you've got a very, very interesting story related,

Andy Hart: 19:53

yeah, it's also incredibly dull. But about Fnz again? So it's

Alan Smith: 19:57

another Fnz, or Fnz as Nick just. Is alluded to, I think it's Fnz, but they're originally in New Zealand, aren't they? Nick. Nick is

Andy Hart: 20:05

dressed like a Canadian teenager, so he can speak Canadian today.

Nick Lincoln: 20:09

Well, they're from New Zealand anyway. Jesus

Unknown: 20:13

Christ,

Andy Hart: 20:14

anyway. So another bad news story coming from snz. They're hit with a 4.6 billion class action lawsuit from employee shareholders. Fnz have raised a load of capital due to recent events that are happening, and the existing shareholders are going to be diluted heavily. And if they raise more capital, the existing original employee founders might end up with zero equity in the company. So there's another lawsuit also. There's a there's a there's this new lawsuit that's bubbling in the background, just more bad news. Reference ends, back to your point that you you have raised this, and it did get me thinking quite long and hard, because you've got two companies you're dealing with, the company that you think the money's with, whatever the platform is called, and then the back end tech, people like Hargreaves, people like fund and people like transact own, their own tech. That's why I believe my personal opinion, that's where you want your money to be, yeah, but I'm pretty sure, with this, money is massively ring fenced elsewhere. So even if Fnz does go barely up, it won't be pretty but I'm pretty sure some other No, no, no, I'm just not an issue. Advisors listening and maybe end clients listening, thinking like money is going to go no, I think there'll be safeguard in place.

Alan Smith: 21:26

Fnz are definitely Fn, are definitely one of these two large to fail companies they would be in.

Andy Hart: 21:35

I mean, hopefully they don't and they can get their act together, but I'm sure there'll be someone they'll be able to save them do the right thing.

Alan Smith: 21:42

Can I just, can I say a point on this? First of all, it shows you some of the corporate shenanigans that go on once they take external investment, and you've got investors looking for preference shares, or whatever it is to get certain returns that they must receive, and that leads to dilution of other shareholders and so on and so on. That's what's got a real issue going on for them,

Carl Widger: 22:03

I think was, I think the founding shareholders are going to be wiped out here. Like, yeah, so that's what you sub optimal outcome for sure.

Andy Hart: 22:16

Yeah, their paper fortunes were enormous, and they're all of a sudden two raises, you know, yeah, accounting shenanigans before you know it.

Alan Smith: 22:24

But the thing is, they haven't done anything illegal, and so whoever was, you know, analyzing that

Carl Widger: 22:30

those funds, they're taking it, they're doing, they're suing them. So they've clearly, well, they have, yeah, maybe they felt they were,

Alan Smith: 22:36

that's remains. The other thing, and it's a, it's a huge subject. I remember some years ago, shout out to my colleague, Charles. Some of you guys known Charles Richards. He did a project we want because kind of, there was a time when people were getting increasingly worried about these, some of these platforms and the real kind of what happens if, let's say, Fnz, or whoever, goes under. Because, you know, it's still all in living memory, we had mainstream banks facing bankruptcy effectively, in the UK and around the world, and it is

Unknown: 23:08

impossible to find out. Let's just say, let's just say, if you've got a if you own, let's say a dimensional fund held on an, let's, for example, an Aberdeen platform, but some of the money is in cash and so on the plan that it I mean, he spent a long, long time trying to find out. And then, in the end, there was no satisfactory answer for State Street, yeah. So you've got the Switzerland, you've got custodians, they've got depositories, it depends what asset class it is. And somebody said, like, nine levels of mess. Yeah, it's a mess. And you try to get the answer to it. There was, we had to just say, all right, crossed, it's gonna be,

Carl Widger: 23:45

yeah, yeah, but, but ultimately, you're able to tell your clients that you're, you're, you are in a segregated account. So I think that was one of the that's

Andy Hart: 23:53

what they tell you, Carl, but it's like, okay, then here's a PDF that's 800 pages long, and there's another

Carl Widger: 23:58

PDF and it's 900 pages long, Yeah, hold on. So that was one of the outcomes of the financial crisis was that when Lehman Brothers went under, they had no segregated accounts. So people had to go, here, hold on. I had 200 grand in there, and they were like, ooh, hold on. We'll have to try and trace that back. So that was one of the outcomes of the financial crisis was that all similar type platforms had to have segregated accounts, right?

Unknown: 24:24

So you tell us, yeah,

Alan Smith: 24:26

yeah, but Right, but also you're assuming, because what they do, they have new money comes in every day and at the close of every business they is sweet, swept into the custodian separate account. But sometimes their systems fail, and it doesn't get swept in, and it sits on as a balance sheet asset in the event of a bankruptcy, that money's, you know, I would think at this level, I mean, you're

Carl Widger: 24:49

only if you're going to try and trace one transaction, maybe, as opposed to, you know,

Unknown: 24:54

we just hope we never have to.

Carl Widger: 24:57

I'm not underestimating that. If some if an Fnz, or. Somebody similar went under. Would it be a total, another shit show and a mess it? Of course, it

Andy Hart: 25:05

would be, hopefully, yeah,

Unknown: 25:08

balance sheet, nobody, yeah, that's which we kind

Andy Hart: 25:10

of said five minutes ago, right?

Carl Widger: 25:12

Just, just, I'm sure the TRAPPIST

Nick Lincoln: 25:13

leaving some of the more sentient members of the trap packer, which there are very few, I'm sure, the Trappists are wondering, How did Nick know that we mentioned Fnz in Episode 74 prior? Well, the reason for that is, dear TRAPPIST, that we have extensive show notes for the backlog of trap episodes going back as far as episode 53 they're all on one master Google document. So rather than having each post code, each post code, each podcast with a long list of notes. They're all aggregated in one document. So I open that up and simply search for Fnz and that well. So if you this is, we're building up a little library here with our show notes. If there's anything you want to see we've talked about the past, open up that document. There's a link to it in the show notes. Open Document up and search whatever it is you think we might have discussed it'll

Andy Hart: 25:59

bring up every, every in every episode where we discussed it on a serious note. Nick That is, yeah, that is, that's an amazing document. As I say, every single episode is going to be there, so it's going to be a treasure trove of information for advisors. Is that easy for people to find it? Because no one knew it's probably

Nick Lincoln: 26:15

some obscure link for the slower brains. There's a link to it in the show called shown us.

Andy Hart: 26:19

Okay, you got to be on the podcast. Why don't we have the real advisor podcast.com, forward slash show notes, and it'd be there anyway. We'll sort it out some

Carl Widger: 26:26

other time. Sometime it sounds awesome. Carl

Andy Hart: 26:29

can't even find the show notes. He's on the show looks

Nick Lincoln: 26:33

and I've got faith in Carl, but if he did try and fight it, he probably would, if he got some of

Unknown: 26:37

his team involved, the full transcriptions if

Nick Lincoln: 26:43

you looked at the agenda, you said, The next point is, I'm coming on to that in the last couple of weeks on the LinkedIn trap site, I think somebody said, Can we have a transcript for each show? TRAPPIST, since day one, since episode one, there is a full transcript, provided that should be in your app of choice, your podcast app of choice, there was, if not, go to the bus brow, well,

Carl Widger: 27:02

someone wants to read it. Someone wants to read it.

Nick Lincoln: 27:06

There's 70 there's 75 episodes out there in the interweb of all of our garbled nonsense transcribed

Alan Smith: 27:13

what you can do. Therefore, you can take that off the Google Doc or the or the platform thing and plug it into chat GPT or similar, and ask it to do a search for you. Yeah? That, to be fair, that is it, because all of us get quite regular. No, there's no, no, no, real problem with it. But we often get asked direct messages and stuff, questions of things, just guys, yeah, give me an I mean, so we've already had a whole episode on it, and people say, watch episode. I don't know, yeah,

Andy Hart: 27:40

but we, we can have a link on on the website. Nick the real advisor, so we'll build out the website at

Carl Widger: 27:47

some point. Right?

Nick Lincoln: 27:51

Let's move on, boys. 2028,

Andy Hart: 27:53

cars on 10%

Unknown: 27:55

4030,

Nick Lincoln: 27:56

2010, right, right. Shut up, right. Storyteller, why theme wealth management? Oh, Christ almighty, go and make it interesting. No,

Alan Smith: 28:04

this. I believe this is good. So back to the theme of fees, charges, transparency. I think it's something we have to keep banging a drum about, because it's something the industry still, despite all the regulation, fails to do particularly well. There is a company have to do full disclosure. So I don't get front page news of city wire. New modern advisor. I I'm your investor in this company. They're called y, tree, letter Y and then true. Here we go.

Unknown: 28:37

God should do

Alan Smith: 28:39

Did you cut that off early nick it was dragon. Now, just bring it back to annoy you. Yeah, thank you so, so why tree? And I've known the guys there since they started the business. And the client, this is a classic business whereby the the CEO and co founder, Stuart cash, he's, you know, super smart guy, ex partner at Goldman Sachs, and when he was looking for advice, when he was making a lot of money, he just, he felt, always a bit dissatisfied with the wealth management industry. So in pure entrepreneurial spirit, he started his own business, him and a few others. So they've got this company called y tree. So it's a very high end, ultra high net worth wealth management, financial planning company, very data driven, very digital and and really embrace this kind of it's like a high end version of what we do. It proper.

Andy Hart: 29:27

They capital competitors. What's going on here? They

Alan Smith: 29:30

were, no, we fishing in slightly different ponds, but no they, and they do similar to all of us. They do it to it. So they built their own cash flow. So they do proper cash flow models. But for, you know, super wealthy people, and they've got product they prompt predominantly invest in. Again, they've built their own models, but very low cost, predominantly index funds, etc. So they're really good company worth checking out. But they have just produced a report, and it's because they've done a big, deep dive analysis, they can tell all the on their clients. So their clients often are. Dealing with advice comes from the, you know, JP Morgan, private wealth, credit, Suisse, all those sort of companies. They've done a lot of analysis on fees and charges and costs and compared it to investment returns. So they've just published a brand new report. And I'll just the headline is this, and there's not gonna be a surprise to anyone, but 94.1% of UK wealth managers underperform according to the new review and a lot of other data in there. They've done a deep dive analysis. So here's my point. I don't think that's news to anyone. I think that when a lot of advisors go against the likes of St James's place and some others, and even some of the conversations we have here to use Ultras phrase, the guns are pointing in the wrong direction because these other organizations, these competitive, high end, high net worth wealth management firms, fundamentally, they do not do financial planning. They deliver really expensive, underperforming investment portfolio management. That's all they do. So why tree are kind of exposing that they share the same philosophies as we all do in many of the listeners to this podcast, and it's quite an interesting Deep Dive. And I just, I think, of all the sectors of our industry, that's the one that deserves more disruption than the others who are might be, you know, doing proper financial planning might be a bit more expensive that you can get elsewhere. But if you're not embracing full fat financial planning, and you're just charging an arm and a leg to run investment portfolios. There should be more of these analysis, more of these reports,

Andy Hart: 31:28

these ever since I've been in this business 20 years, these reports been coming out, and the money, the flow of money towards these ultra expensive, ultra exclusive discretionary fund managers, for example, has not slowed down. People love the status purchase. You know, there's cheaper handbags and Louis Vuitton all over the world, people are still going to spend Louis Vuitton is a really good quality, though that's the difference. Someone in the handbag game would argue that it's not. And the one down the road for 400 quids better. The status purchase is human nature, and good luck fighting against it.

Carl Widger: 32:02

I wonder, like, that's a fair point. Andy, you're at nothing trying to fight against it, because the the ultra high net worth, well, the ultra high net worth clients. I've got a we've got a few. I'm sure you do too. Like they want something sexier. They want something different. They they on. They like their financial plan. They like having their family fortress money, right? And they'll index funds that all day long. But they want more, and if you're not willing to give it to them, they will go elsewhere. And that's just the way it is. Because they they they want something different, and a lot of them are looking maybe for potentially a purpose in their life, and part of that purpose is to be looking at their investment portfolio and dabbling in a lot of things and keeping their brain ticking over. So I think it's worth don't dismiss it as what I would say Nick it was a

Nick Lincoln: 33:00

little nugget revealed in there. Because my philosophy is you don't miss and maybe for the younger Trappists who are going out their own or thinking about it is ultra high net worth can be a pain in the ass, and they will expect some pandering too. And I think you build a very good business by going for mass affluent people who just don't know if they've got enough. Just throw that out there. Okay, um, not saying turn away ultra high net worth, but they do come with their own conceptions about what you were going to give them in terms of service and so forth. And

Carl Widger: 33:28

it's not something that huge expectations of monthly reports and all that kind of stuff. Yeah, you've absolutely nailed it there. Nick like, if you're, if you're setting out, you know, and don't be, you know, don't chase that ultra high net worth, because you're probably not going to get it.

Andy Hart: 33:43

Yeah, wasted time with an experienced advisors chasing that random client they've got from a third friend of a contact that's got 50 million and they have 15 meetings. Send them a million reports. They spend half a year doing it, and in the end they say, Oh no, we're going with HSBC private. They charge 5% but I love their offices. Thanks guys.

Unknown: 34:02

I mean, just give me tickets to Wimbledon.

Andy Hart: 34:05

I know the moment any inexperience of I'm chasing this client, but just I can move on. Go for the mass after and the high net worth. We work really well. We're slightly clued up insiders, slightly clued up insiders. They've got a lot of wealth. They understand that they're expensive. They're cheap. They understand that Barclays wealth and Maven advisor can access the same firms, sorry, the same funds. They're the people that want to focus on the slightly clued up inside, as I call it,

Unknown: 34:32

hand thing up. This working well, I was going

Carl Widger: 34:35

to back you up. Andy raise his hand there before he had interjection. I don't know you did,

Alan Smith: 34:42

those of you who are listening for watching, I've got a yellow card. I've got a yellow card. Got a system of hand raising, digital hand raising. But Andy seems to have forgotten this. I

Andy Hart: 34:52

was gonna just say Charlie Munger says, put it in the too hard bucket. It's the two hard bucket. It's not for you. I mean these. I mean Alan, talk about it. All the time. These, you know, Alan and I, these large DFMS in London. This is what they do, bread and butter, day in, day out. They just swallow up all these, you know what? They call them, sophisticated investors. It means a rich idiot. Sophisticated investor means a rich idiot. They swallow up these sophisticated investors all day long. There's no chance, right?

Alan Smith: 35:24

Thank you. When I went to the US a few years ago, when I went to with dimensional, I went to their HQ and what you what, they took us out and introduced us to a bunch of different RIAs as a call over there. And we flew into Dallas, Texas, and we met this firm, and they were, you know, Dallas, and Texas being an oil rich place, and they said, and they were a firm of, you know, CPAs. They were accountants as well as advisors. And they were talking, they were telling us all about their business model and what they did. And there's a whole lot of interesting things that came through. But I always remember that they said, Look, we deal with some clients who are literally billionaires, and we also deal with what they called Mom and Pop clients. And their mom and pop client was a million dollar client that they charge 1% a year, full fat financial planning, dimensional funds, etc. And they, because they're an accounting firm, they're very, very smart, and they're very focused on their profitability per client. They said those clients are by orders of magnitude more profitable. They come in for one annual meeting. The great interest that we meet with them, though, whereas the billionaire clients, they want to meet monthly, they've got an army of lawyers and taxes advisors, etc, all coming in. You said they pay a lot of they split in accounts. Everywhere they pick they pay big fees. But you know, when you analyze the the work and the effort and the risk, then he said, we would. He said, My advice to you guys at the time is look for this million pound, million dollar clients and offer them, you know, a fantastic service. And that always stuck with me. Yeah, I thought that's quite, quite interesting. So good. It's a good sweet spot that was well worth waiting

Nick Lincoln: 37:01

for. Mr. Smith, now you can lower your hand please. Thank you. Okay, moving on.

Unknown: 37:10

Keep it up permanently.

Nick Lincoln: 37:13

That's between you and Mrs. S, right, um, let's go on to Andy.

Unknown: 37:19

It's descending into mayhem. Just been on holiday. So, yeah, everybody, my

Andy Hart: 37:26

next point is in Nick Valley path, yes, okay, so valid path are a new ish network in the UK. We know a lot of good firms that are part of them, and they launched a client buyout program, CBO, they're calling it. So Valley path will fund existing Valley path members to buy out retiring

Unknown: 37:46

value Valley path, or valid path, valid, valid, yeah, he just gives him Valley, sorry,

Andy Hart: 37:51

valid path for the buy at the buyers. So this is the challenge for the independent sector in terms of getting funding to acquire firms and grow your business. Yeah? SJP have got a whole internal system that works very well usually, but they're obviously exceptions apply.

Carl Widger: 38:12

There's a dude on LinkedIn doesn't think so. He thinks, yeah,

Andy Hart: 38:17

we we have somewhat of an option in outside of the network structure. What's the name of the firm? Alan that funds Vertis. Vertis do a lot of funding transact. Yeah, yeah. For this, they also do non transact firms as well, versus maybe

Alan Smith: 38:34

pulling back. Now, that's a whole other story, not for right

Andy Hart: 38:37

now. Anyway. So Valley, Valley Plath, the network, have set up this mechanism to provide funding for Valley path members to buy other valid path member firms, but also external firms. So I think it's any innovation that can grow the businesses of decent, full fat financial planning firms, which is most of the valid path members. I'm pro it. So that's that really and we need more innovation in this space, versus are the only player in the game, I think. And they charge something like, I'm going to get it wrong, but a big margin above base. So it is quite a sort of, you know, a heavy burden on the firms that are using their funding. But obviously, you know, if you don't want to take my funding, then you don't have to take it. But hopefully

Alan Smith: 39:20

there'll be, there's a limited range of providers, limited range of

Andy Hart: 39:23

providers. Yet we need a bit more innovation. Interest base interesting. But as we know, the fund management business is quite sticky revenue and quite known revenue. So So funders should be all over this space.

Carl Widger: 39:37

Question. Then on that, throw this open to the floor. If you were setting up in your own Would you consider buying a firm and doing it that way? Because we've lots of younger listeners who are sending us all messages all the time about, how will I do it, and what, how would I set up, and how will I get my clients? It doesn't seem to be something that's talked about. A lot, as you know, will I just buy this firm and maybe buy a smaller firm, but at least have a few clients? So I think it's a good idea. Would be my call.

Andy Hart: 40:10

I would see my hands raised, yellow card. Great question. Carl, I can personally because I looked at this. So I spoke to a lot of retired basically, I didn't have the money to contend with the big players. So when I was 35 thinking about selling a Maven advisor, I had three or four meetings with retirement advisors that Nick and Alan probably know. We sat down, they're 65 they said, Andy, this is my revenue. This is my client. Give me all the metrics I need this to buy it. There's no chance I could get that funded. And then someone else came along that was a consolidator that was not doing it in the right way, I would say. But they offered them five or six times. They offered them twice. What I could have even attempted

Carl Widger: 40:58

to write was this, was this other crowd that you're not talking about offering funding for people who are going to buy other firms. No, did I Yes.

Andy Hart: 41:06

So let's just take the value path as an example. I would set up a new firm with valid path as a valid path member of that network. They would then say, Andy, we've got this funding mechanism. Alan's retiring. Do you want to buy his book? We've got the value you've now got a huge debt on your business, wrong? I would do it all day long. Car all day long. Yeah, that's what I'm saying, yeah? Because SJP do it. And again, I could be getting the details wrong. But long story short, they don't require a personal guarantee of the person acquiring so if I did something with Virtus, I'm assuming they would want my entire life, my mum's life, my cousin's farm, everything on the line, whereas SJP, and I'm thinking, valid path won't require a personal guarantee. I mean, a personal guarantee is not the end of the world, because you're backing yourself. But if you can buy a business without a personal guarantee and take a huge loan out, and it's secured on thin air, I say thin air, it's secured on the clients over a long time. I do it all day long. There's a lot of people I know that I do quite a lot of work with younger advisors that are, let's say, 35 Carl, and they've got a 20 grand a month loan repayment coming out of their business. Keep it simple, it's bringing in 3520 goes to the loan repayment. 15 covers the business operating. But yes, I would do it. And those advisors know the exact month when that 20 grand stops. It stops in five years and three months, and when that stops, they are gravy train in the money. Let's say so yeah, I would just be aggressively acquiring businesses if I had the mechanism to do it without having the personal guarantee. Okay? Nick,

Nick Lincoln: 42:42

no, okay. So,

Alan Smith: 42:45

yeah, I'd agree with you, in terms of the personal guarantees. And I don't know a bit about this, you hopefully would avoid personal guarantees. They take what they call a debenture over the firm, so if you default, they'll take back client revenue, which is, you know, reasonable. That's fair enough. But the main thing is, they won't come and take your family house or anything like that. So it is like all these things is, guess what? It's back to this thing called Risk and reward. You can start by yourself, one client at a time. Build up slowly, but surely. It will take you get there, but it'll take you years and years and years to have a, you know, thriving, successful practice, or you just go in deep, you've read, you've got 100 clients day one, but you've got a lot of debt to service. Usually the break even is six to eight years for depending on the funding rate, what you bought, the multiple, etc, if you're playing the long game, if you are, you know, relatively young, I think you say, Look six. Six years from now, seven years from now, will be free and clear, provided we look after these clients. No one leaves us, and very few of them die. It is a it's but it's but that's true Nick because, you know, buying a book of clients, if their average age is 78 or something, you're going to get an attrition rate. Because

Carl Widger: 43:51

I set up. I did it. I did it one, one client at a time, myself, I literally set up with nothing. And Christ led start first few years was painful. It was torture. Eventually it was, Oh, my God, I wouldn't, I don't know if I

Nick Lincoln: 44:06

do that. Still clients,

Carl Widger: 44:10

so unfortunately, they went into one of the good property funds,

Andy Hart: 44:16

not the solar wind farm thing.

Carl Widger: 44:19

No, Jesus Christ, there's news on that lately. Oh, my God. Anyway,

Andy Hart: 44:24

we've touched upon this before, but again, I'm just going to mention it again. I think you boys do various surveys every year, but typically an established financial advice wealth management business doubles in size every five years. So if you're a 50 year old, no, no, yes, turnover and assets double in size every five years. It's the rule of 7272 divided by 50 a typical financial advice firm, wealth management firms, got three forces. It's got new clients coming in. It's got. New contributions going in. It's got market returns. And typically they average 15% a year. You divide 72 by 15, it's five a wealth management, financial advice, business should double every five years. The challenge for older advisors, they're 55 their business is worth X. If they just stick it till they're 60, it will double in those five years. Those numbers, those if your business, if your business is not growing by 15% a year in the wealth management business based on new clients, contributions and investment returns, you're doing the wrong thing.

Carl Widger: 45:36

Your numbers are absolutely 100%

Andy Hart: 45:39

spot on. Thank you, Carl, I've done a lot of research into this recently, so hang on.

Alan Smith: 45:44

So based on on what, because the evidence that comes out, the research is most advanced, if you strip out market returns. I

Andy Hart: 45:52

didn't say, strip out market returns, three forces, new clients, new contributions, investment returns, fair. He did say,

Alan Smith: 45:58

Yeah, but they very few firms are growing at 15% compound, very few are

Andy Hart: 46:08

you? Course, I am.

Nick Lincoln: 46:11

My figures from 2019 20 compared to 2425 so

Alan Smith: 46:16

the other thing, and it's a huge other subject, just the aforementioned Mom and Pop classic clients in retirement, they and particularly withdrawing heroes. They're withdrawing so that you got that against you.

Andy Hart: 46:30

Thing, yeah,

Alan Smith: 46:31

that's play. So if you think your net of withdrawals and spending and gifting, you're still growing at 15% compound and you double, yeah,

Andy Hart: 46:40

well, I'd like I sit Alan, I sit down with retirement advisors and build their own financial plans. As you well know, this is the thing I do a lot of. And when I sit down with them and they say, Andy, these are the numbers I'm looking at looking after now this and they are. So what were you doing five years ago? Half what we do in five years before the market staff? Yeah, fine. New clients, contributions and investment returns.

Nick Lincoln: 47:00

Okay. Can we save this new rule of 72 podcasts being launched next week? Listen. We're a bloody 47 minutes. We still got seven items on the agenda. Can we just crack on and be like, honest? Watch Riley moynes. If I've said that wrong, I apologize. Irish names

Carl Widger: 47:15

Riley Moines. Okay, so I had have had a little bit of a concern that we've kind of got away from our raise on debt right here, right where the real advisor podcast, and we've been talking about funds and fees and the shit show that is the UK, and here is a blah, blah, blah We haven't actually been talking about Our clients, goals, dreams and aspirations and what, what's our? You love Simon Sinek, what's our why? Why do we do right? Well, this is a brilliant short video. I don't know who Dr Riley mines is. I have no idea how I found this, but I did find it on YouTube. It's the four phases of retirement, and it's really, really good if you have kind of bunch of clients who are preparing for retirement, right? I think it'd be really, really good to send to a couple who are preparing to go into their third act, as I call it, and he goes through these various phases. It's the vacation phase, where you just go on holidays all the time. And then after a while, you go, right, okay, we've enough of that shit now. Then you go loss and lost. So you feel a sense of loss. So your identity is lost, and you feel a bit lost in the world. You can't find your place in the world. You go into the next phase, which is trial and area, try a few things. You might take up golf, if you didn't golf, you might go sailing, you might, I don't know, do whatever, and you work out what's actually kind of work and what gives you a sense of purpose, what you would actually like to do over the long term. And then, if you can move through all of these phases, he argues that the phase number four is where you start to reinvent and rewire your your entire life. And if you can get, if you can move through these phases and get to phase four. He argues that they're the happiest people he's ever met. It's us. It's a brilliant show. Gonna watch that. Thank you. He delivers it so well. He's in the phase four himself, so nothing like a guy with a bit of experience. He's made a few mistakes along the way. But yeah, that's what we're ultimately. We're trying to create wealth for our client families so that they can go and live their dreams, their goals, their aspirations. Excellent. We are probably not touching off that anymore. You want me to finish now? Now, if we ever get

Nick Lincoln: 49:41

to the end of the agenda, I have a similar topical temperature in a similar vein about that which you will come to. Thank you.

Unknown: 49:47

Call another one

Carl Widger: 49:49

on the agenda. Leave it out. It's a bit crap and boring. So leave mine,

Andy Hart: 49:54

my one out. Yeah,

Carl Widger: 49:56

quickly, very quickly

Nick Lincoln: 49:57

for me. Don't you comment? But I mentioned the last episode of The. I've said before that life quote is closing down. This is where, if you're an advisor that doesn't do much protection business, doesn't want to get involved with insurance companies, you could outsource it to a third party. Well, life quote shut their doors. No reason given. I asked on the IFA forum, tiny.cc/ifa forum. I asked in the IFA forum, about 700 members a party. I asked on there and said, Is there a replacement time to put it in? Mark Robinson kindly said, Yes. There is another company that called us essential insurance. Essentialinsurance.co.uk, is Lincoln circle show notes. Check them out. They seem to be bona fide. And on it. Okay. Oh, capital Yeah. Go on. Christy, agony Andy,

Andy Hart: 50:34

okay. This is the change of capital gains tax in the UK. The title is, the article is entitled, The Wealth raid gamble that isn't paying off. This is this whole Laffer to curve. What's it called? Laugher curve? Laughter, laughter.

Nick Lincoln: 50:49

Went to work for Valley path, laughter,

Unknown: 50:54

the old Laffer curve, the more you could use with the Lapita curve. Entirely different curves. Up was gently. I need

Andy Hart: 51:03

to last on the different curves. The lack of curve, the more you tax people, the less you end up getting so CGT has declined from the last reported numbers of 14 billion down to 12 incentives drives behavior. It's like they model these situations without people changing their behavior. Obviously, you know, like, we'll just continue doing this, and this is going to continue to continue happening. Yeah, obviously, that is not the case. They said, the number of people that got caught by CGT and have to pay it did slightly increase. So there's only, or quite a lot of people. There's 700 sorry, 378,000 people in the UK that paid CGT, that could be a tenner or 100 million, obviously, you know, so quite a few people got caught up with it. So this is an ongoing thing. Obviously, we've got the the exodus of millionaires, billionaires London is falling apart, as we all know. Watch, thefts, own thefts, uproar, graffiti, 10 pounder, pint, things are not doing too well at the moment, and it's all just bad news on the horizon.

Nick Lincoln: 52:09

Well, we're always ahead of the curve, and it'll go to other smaller islands too. Are we're

Unknown: 52:13

going to hit rock bottom before the others. Yeah,

Nick Lincoln: 52:15

this capital gains tax. I'm sure you say that number of people in current capital gains tax have gone up. I'm sure there are loads of Mrs. Mickens. Don't even know now, with the 3k limit, they broached it, and I'm not sure how we're going to get through that morass, because not sure the platforms have a duty to tell them, HMRC, not sure they've got the system to do it. So yeah, it's a three case. But the good thing is, mate, when it comes to you, we'll tell you how to get out of it, because we'll be out of it by then. Okay, moving on. We're not gonna do your Google Search report. Oh, storyteller, an embarrassment, an embarrassing, clean story

Carl Widger: 52:47

under the system there, please. Oh,

Alan Smith: 52:50

my God, it's too complicated. I just want to you have to make a groveling apology. It's a bit of fun. Andy, okay, close personal friend of mine

Unknown: 53:02

get it right this time. No, hang on a minute. Yeah, you say you forgot it.

Alan Smith: 53:06

So I give a shout out to the guys. Is a big head honcho at Friends of the podcast, Vanguard, good friends and very good concentrate. His name is Doug Abbott. I

Unknown: 53:23

don't know, I don't

Alan Smith: 53:25

know why I had a bit of a brain freeze, but I'm because I mentioned him last time in sort of glowing terms, a dog, you know, because we we met and we had a conversation about a bunch of things, and I called him Doug Bennett.

Unknown: 53:38

And I happened to be in the vanguard office recently, and he was walking past Washington to another meeting, and he said, Oh, thanks for the shout out pity, but you got my name completely wrong, and now apparently he's known in the office as Doug Bennett. I'm really sorry, Doug Abbott. His name is Doug Abbott. He's a great guy, and he's dB, big fan of the pod, so apologies again, but it was hope to see you soon. Okay, Hugh,

Nick Lincoln: 54:06

great stuff. Okay, we're almost there, coming back to watch this point earlier about how really we are lost our financial planners. We shouldn't get a message too much in the weeds of funds and fees and everything. So a great tweet from the US guy we really admire, Peter maluke, and I think storyteller, you have shown us this before, it's that little video of a where you flick through a book of pre written cartoons. It creates like a moving image. And this video is of a man. He is a baby, becomes a student, becomes a man, and then when he's an adult, he starts chasing money, and he goes going through his life. And by the end of his life, he's on there to this cliff with all this money. He's lost all his hair. He's always gonna die. Sign behind him, saying the end, and he's got all this money, and he hasn't done anything with it, hasn't used that money to buy dreams and aspirations. You lose all your hair,

Unknown: 54:48

you know? Do you know what that's well, I'm

Nick Lincoln: 54:53

waiting for, I'm waiting for the regrow stuff,

Andy Hart: 54:56

to cut a teenager's cat. I'm wearing a cat. Ask Andy, where

Nick Lincoln: 54:59

you get that thing? Yeah, under the end of my life, hopefully, but no, it's brilliant. If I was building, rebuilding

Unknown: 55:05

a website, I'd probably have that

Alan Smith: 55:07

as my focus. Nick said it first that was, that's interesting. Yeah, that was my pinned tweet for about, yeah, three,

Unknown: 55:13

three years. Video, I thought you put that. I thought you created that. You

Alan Smith: 55:17

know, it's a mystery, because I've really tried hard to find out where it's like Carl says, I don't know. Wait, sometimes things just land, or you read it and I had it and I've searched, I've searched online forever trying to find the source, and I hadn't found it. A very quick side story about that exact short, 10 Nine. Hey, you know him. You know Adam. What's it? Adam? He used to be in the ix group. No,

Nick Lincoln: 55:46

it was, it was

Unknown: 55:48

an IFA, and he was

Andy Hart: 55:49

just, he quit his job after watching, yeah, I posted that

Alan Smith: 55:53

on LinkedIn couple of years ago. He saw that quit his job, moved to the States, now, doing something completely different,

Nick Lincoln: 56:01

Miami Dolphins.

Andy Hart: 56:03

F1 then Miami

Alan Smith: 56:05

is living a dream, all down to me. Yet another one added to the list

Andy Hart: 56:09

just on that. Peter maluke, he did another tweet. I thought you're going to link to Nick I know we've got time. I know if Carl spoke about it. Long story short, he did a tweet because he's working with Charlie Bilello, yeah. Of so creative planning. Nvidia now is one stock represents 8% of the s, p5, 100. It's the first time a stock has got to 8% representing one stock. Isn't it insane? At 4.3 trillion, how did you allude to this somewhere

Carl Widger: 56:36

else? It's in that Goldman Sachs report that I said skip over but it'll be in the short company, 8%

Andy Hart: 56:43

turnover and profit of it

Alan Smith: 56:45

is it's 3.5 or three and a half times the entire FTSE 100 that was

Andy Hart: 56:51

one company, one company. I

Carl Widger: 56:54

thought it'd be much more, yeah.

Unknown: 56:56

By the way, the

Andy Hart: 56:58

entire UK stock market makes up 90% the other 10% getting back into the weeds

Nick Lincoln: 57:04

and shit and stuff. And next to be reading out which markets have done best of the last six months for three hours. Okay, so we're at it was common. Wasn't this seven minutes in? Shoot me. Topical tidbits will carry forward, the Goldman Sachs one, yeah, we'll forget the Woodville Irish Times. Yeah, forget it. Okay. Let's move on into the next part of the show, which many people do call the meat and potatoes. And our regulator in the in the UK, the FCA. Carl, what happens here can sometimes happen to you, so I hope you and your Irish listeners will will take some value from this as well. Our regulator, the FCA, has done yet another review this time it's into the retirement income advice landscape. I can't say it's extensive, because, given there are, God knows, X number of 1000 ifas in this country, and hundreds of firms, they did this review on 28 firms. So I wouldn't say it's it's categorical or encompassing, but their retirement income advice review found three, three key areas. And some of it I agree with some I think, yes, spot on. There's one area I think they're so spot out, it makes everything else almost redundant. But let's look at the two positive things. So three key areas, number one, information collection and record keeping, that the FCA found good practice where ifas had detailed information on all assets and income for both the client and their partner, as well as documenting clear retirement objectives. Now to me, that's just, that's basic hygiene stuff. I mean, who wouldn't be doing that? And they said poor practice is where they have insufficient information on file, particularly regarding income and planned expenditure. And I'd be thinking, holy shit, you've got to be a really rubbish IFA, if you're doing retirement income advice, you don't have the client income and expenditure. Client's income and expenditure, so I don't know, you start, I know. I mean, poor practice, yeah, yeah.

Carl Widger: 58:50

Here's where you start. You go. I know the best pension fund, yeah.

Nick Lincoln: 58:54

Well, that's right, Carl, that may be what it is, but I'm, I'm amazed, and I'm hoping the FCA is going back to those firms that don't have sufficient income out of clients, liabilities, income expenses. Say, listen, sonny Jim, or Sonny Joanne, pull pull your knickers up, or pants. Keep digging.

Unknown: 59:11

They talked about, which I kind of

Nick Lincoln: 59:13

agree was, this is the third thing I'll come back to second minute. Well, sustainability of income withdrawals, good practice, the FCA says is using cash flow modeling to project the impact of withdrawals, considering all assets and trusted stress testing scenarios. Again, to me, that's just like, holy crap. Are people giving advice without using fit for purpose cash flow model? Basic, highest 28 firm, extensive review of the entire UK advice market, but it's just incredible. But again, poor practice was they still using cash flow modeling without a clear rationale for the underlying assumptions, and projecting income withdrawals that clearly unsustainable, which okay, that I don't know, because I model things I'm sure we all do. So I have loads of cash flows, loads of clients with live plans where we are having. A an unsustainable rate from a particular pot, because the idea is we're going to strip that pot down, and then later on, turn on the income tap some other pots. But if they're saying here, no, the this the sustainable rates across a client's invested portfolios to say eight, 9% that's clearly unsustainable. But maybe there are underlying reasons for it. But I mean, you obviously wouldn't do that as your base as your base plan as well, where I think the FCA and this is never the twain shall meet on this is the second of the three outcomes they were looking at client risk profiling. And once again, the FCA, I think, are looking at this through the wrong end of the telescope. We, all four of us, I will talk for all of us here and most of the Trappists. The biggest risk for our clients is clients running out of money right before they run out of life. The FCA is focused on a totally different kind of risk. Their definition of risk is volatility in investments, short term short term volatility. And the FCA say that the good practice is using bespoke retirement focused questionnaires, reviewing the assumptions behind risk profiling tools and simulating market falls to assess the impact on client funds. Wrong, wrong, wrong. You don't change the risk assessment question there. Just because a guy who was 59 yesterday, or a girl who's 59 yesterday is now 60 they're still going to have three to four decades ahead of them. Risk tolerance tends to be immutable. It doesn't change over time. So why are we thinking that it's going to change? The FCA thinks people's risk tolerance, risk tolerance, risk attitude changes, and again, marketing these declines as permanent losses, which is wrong, which is where this capacity for loss thing is is so regarding and wrong. And now people will be compliance. People out there will be screaming, well, that's fine, that's your view, but you've got to comply with what the FCA says. Yes, of course I do. I do it as much as I possibly can, but I do it through gritted teeth, because I, I, I care about client outcomes. I really care about client outcomes, not what you think they are in your ivory tower, but what they actually are. Because these people pay my income right? They keep the roof over my head, so I am duty bound, from a moral point of view, to have client outcomes to the front and center of everything, and this part of it is absolutely rubbish. And the FCA then says area for improvement would be failing to reassess a class attitude to risk and capacity for loss as they transition into decumulation, again, a word nobody should use, especially when their circumstances change, wrong, wrong and wrong. So for me, there's good and bad in that, obviously it reinforces what we do. We all do full file financial planning. It's all based around a cash flow forecast. It's all about marrying the client's objectives and dreams with their assets, okay, trying to get them there. The fact that some people aren't doing even that, I think, is frightening, but this, this risk profiling thing, honestly, I'm gonna go to my grade batting this, and I think you, all three of you will as well. It's still a massive clash of tectonic plates, as far as I'm concerned. But hey, good for the FCA for looking into this. Good in parts, bad in others. No hands are raised. Any thoughts,

Andy Hart: 1:02:52

just very briefly, you said 28 firms. I knew a firm, and you guys know the firm, the clue is going to be JJ, so they were one of the 28 firms, they've got this survey

Nick Lincoln: 1:03:02

JJ. JJ gets reviewed with everything

Unknown: 1:03:07

you know. Who? Yeah, first name did the survey view, yeah. And they're a cracking firm. I'm amazed at 28 and they were on the 28

Andy Hart: 1:03:17

list anyway. So sorry, that's a side point. Nick, you pretty much nailed it, but it is the meat and potato, so we might as well have a few records here. Yeah. I mean, risk profiling is misconception mirrors that I've spoken about. You call them mumbo jumbo questionnaires. It's this sort of false comfort, and the FCA is just the same pillars that they go back to risk profiling capacity for loss, which don't really work in the real world. We know that they might work on a spreadsheet, risk profiling tools, you know, measures, feelings, not facts. They're unreliable, outdated. The capacity for loss thing is so vague, and it just leads to, you know, excessive caution, poor decisions and outcomes. And it's this, this obsession with, you know, with with risk, which leads clients to fear volatility rather than understand it. And there's no, you know, retirement is not one off. It's constantly evolving. It's a living strategy that we're always working with with our clients. So again, yeah, guns can focus in the wrong direction. I think the regulation will be better focused on trying to get clients to understand, you know, simplicity, long term thinking, you know, not just more and more layers of confusion. So, yeah, well done for them to try and have an, you know, to try and have a look at it. And they've mentioned some okay points, but real advisors, you know, we're on the on the front line with all these clients retiring, and we're massively focused with real outcomes, better client outcomes, and we have to pander to the regulation, but at the same time, you know, our Ultimate Duty is with the clients. The point you made

Nick Lincoln: 1:04:56

there and is very well made. And even the FCA in recent months. Has made move to saying we've got to educate people about the risk of having money in cash and so forth, as has Rachel Reeves, our current chancellor. And they say that with one mouth, one side of their mouth, and then come out with this on the other side of their mouth. So it's like, these are tech these are these are massive buttressing tectonic plates that never the twain shall meet, and one's got to give over the other, because we're going to go around in circles with

Andy Hart: 1:05:18

this dela bocci No, sorry. One more point we've had, we've had real examples to test capacity for loss, and nothing's happened. Covid, the market went down by minus 35% in in in 30 days, everyone's capacity loss, according to a survey, would have been tripped. Nothing happened. We had another one in April this year. The market went down by 19% in a week. Lots of capacity. Philosophers would have been tripped. Nothing happened. Why do they never take a historical order of a historical order of history, and then change their way that they think about these things? So we've had real examples where their theory has just been proved completely incorrect. Why do we not talk about it more? Carl, sorry,

Carl Widger: 1:06:01

I scanned the report. I think the report was shockingly amateur. I think I

Unknown: 1:06:07

really do. I can say that from his ivory tower,

Carl Widger: 1:06:11

they're not your regulator. Yeah, no, I can, and I wouldn't be stupid enough to say that if it was the central it was like, it was like a students, are teenage students, exam questions, reply, it was, yeah, it was so bad. Yeah, it was really bad. There's, it was very short, so it was easy. And on the one hand, they're talking about, Oh, you must do cash flow modeling, and you know, you've got to get better and do it if you're not doing it. And then it goes on to the risk profile questionnaires. Now look, we have to risk profile questionnaires. We do them for every single client, and we're always going to tick that compliance box. We're not going to be idiots, but we've spoken about this a million times before that if you're doing cash flow modeling, you always know what cash you need in the next three years. So therefore you are avoiding any issues that short term volatility is going to bring. So for the FCA to write a really short report, and these two to be two out of, I think, three points, they totally they contradict each other entirely. So it's absolutely 100% demonstrating that the civil servants in their ivory towers do not understand what they do. And I look forward to applying for our British license.

Alan Smith: 1:07:42

Andy, you've got greater experience or exposure to lots of, IFA firms you do training for. Well, I thought that's maybe it's a sort of self selecting audience you've got. But what's your estimate as a percentage of the total number there's, there's about 5000 firms in the UK. How many as a percentage do full fat financial planning, detailed cash flow modeling, using software for every client.

Andy Hart: 1:08:08

I would say there's 25,000 advisors just to do it like that, because that's easier on my brain. I would say probably 10% are doing it a decent level. Then maybe another 10% so two and a half 1000 are doing it very well. The other two and a half 1000 are dabbling, yeah, so that's about 20% I probably still think 50% don't do any form of it. I mean, they'll say, we do a bit of it. We got a spreadsheet. Yeah, you have to use a tool that is fit for purpose. And I'm sorry, the only tool for purpose at the moment is the one that we all know. I'm not going to mention the name again, but you know, it's called voyant. There's a few that kick about anyway.

Unknown: 1:08:52

Sorry, the names, the name, the name, is utterly irrelevant. I would use any system that was fit for purpose, right? So, but he, but he, but here's my point on this. You've said you do have a lot of knowledge about it, and at best, 80% of the market, or at worst, aren't losing either nothing at all, or are dabbling. And I've

Andy Hart: 1:09:15

heard, why doesn't the regulator make it mandatory? That's where we're heads for putting your

Alan Smith: 1:09:20

hand up every time one of these, because exactly my point, when you when you make this mandatory, and you say, in order to answer all the questions you that they have analyzed in this report, if you said that, and here's some core, I mean, some, of course, you have to work out what their assets, liabilities, income and expenditure. You can't build a model without those things. So it's predicated on knowing that you build a model and it's and it's it should be essential for everyone and about the vast majority. And my my own experience, my anecdotal experience, and we recruit people. We hire people from firms that purport to do financial planning. When you speak to some of these people who are para planners, you. Work at other firms to say, not really. Sometimes, if a client asks for it, no client ever asked for it. So that's the first thing.

Unknown: 1:10:07

But so just on that

Andy Hart: 1:10:08

Alan, they are firms are introducing internal rules. Large networks are now requiring any retirement income, retirement planning advice to have a cash flow. So it's not been mandated by the regulator, but probably about 40 or 50% of the market now, because they work for these firms I know that are mandating it. Are saying, if you're doing any retirement income planning, advice, tax free, you need to have a full cash

Nick Lincoln: 1:10:36

if I owned a network, I would bloody well would want it Mandarin. So the large network sleep at night, not so it started

Andy Hart: 1:10:45

with the DB work. They said, if you do DB work, you have to destroy cash flow. Then the second area of advice is now retirement income. It will only be a matter of time before every firm, every network, every Support Service says everyone who's doing retirement income advice needs to do a cash flow and then it'll get to the point of saying, if someone's paying you from going advice, you need to do financial planning, full time financial planning with them. We are getting there slowly. But, you know, I've been in this business 15 years, and I've been using buoyant 15 years. I thought surely everyone's going to be using it. And we're still at the point now where 5060, 70% of people are not going

Nick Lincoln: 1:11:21

to touch it. So anyway, Carl, you're very patient that your hand was raised. Take it down. You got some say? I forgot.

Carl Widger: 1:11:28

Can I? Can I just add something? He answered my question. Yeah.

Alan Smith: 1:11:32

Add something else, which is which kind of relates somewhat to the this paper that the regulators put out and this conversation you guys familiar with an advisor in the US. Post, quite a lot on LinkedIn. Eric Nelson, yes, servo, S, E,

Nick Lincoln: 1:11:47

R, V, O, massive D,

Unknown: 1:11:50

big DFA advisor. But he, I like his post. They're very thoughtful, and I would suggest that he's shares broadly the same philosophy as we all do. And he questions risk profiling, questionnaires, not all that sort of stuff. But he posted something quite recently. I thought that's that's interesting, in terms of this attitude to risk, how much can you afford to lose all these like ridiculous questions that we are compelled to ask our clients? He said, just in a conversation style, with a client, how much future income in terms of by by years do you wish to set aside in the event that we have 2008 all over again, or anything else? How much income would you feel comfortable? Is it two years income? Three years, five years? What do you feel and I think his average was about three to five years was people would feel comfortable that there's a big market decline, and that drove their asset allocation. Because if everything goes and you've got four years worth of your next four years expenditure at your current rate, and as we've talked about in the past, lifestyle does change. And if we are having a sort of Armageddon period, and people will tighten their belt a bit and live but just on your current normal level of expenditure, you've got, let's say, whatever you feel comfortable. I've got four to five years, and that's in that's in short, dated bonds, and the rest is my is my fuel for my longer term. But I think that I really like that as a rule of thumb, at least, to have a conversation with a client, as opposed to tick this box. And I'll give you what the box says, even though you don't understand the questions in the

Carl Widger: 1:13:22

first place, nonsense. Well done. Ultra Yeah,

Andy Hart: 1:13:25

absolutely right. Alan, and you could tell a real advisor came to that conclusion. Yeah, exactly. Not the civil servant, a real advisor, after 20, 3040, years in the business, pulling his hair out or whatever, and has got to the conclusion that the elegant, simplistic, best question to ask someone entering retirement is this one question, and then everything else can be built around it. So, yeah, great

Nick Lincoln: 1:13:47

point. Great stuff. Okay, we've given that that was good. That was good meat, potatoes. We've given that damn damn good thrashing. We are at 74 minutes into Episode 76 of the real advisor podcast. So I think, well, actually, I don't get to determine this, because this next section is determined by when the poster is turning up on her front door, and there she is. She's holding up the bulging sack of TRAPPIST questions to the front of Lincoln Lodge. If you want to submit a question to the trap pack, please do so in the pinned tweet on x, or the pinned X on tweet, there is a link, and you click on that and you deposit your question. I mean, we do get to it. Today's question is from January this year. And let's see actually who this question is from. I gotta get my trusty letter opener. Letter envelope, open it out. This is from a Peter watts, his social handle, LinkedIn. Social handle is there and that will be in the so called channels. Peter says and admits, this is more of a rant than a question. But hey, obviously, back in January, we must have been talking about the bane of our lives, lifestyleing funds. And Peter says, oh my god, timely with discussion on lifestyle Scottish Widows, pension protector fund, prime example, misleading name of funds. They talk about green washing, but the regulator really needs to get a handle on poor and misleading naming of funds for the retail investor. Investor, the non adviser, customer, this Scottish Widows fund is down in the last four months, 9% and over five years, 32% Wow. It really has protected those clients. Money invested in this fund. Reason for me highlighting it is I recently met a client who wishes to retire and understand how the best way is to go around it. Guess what? Cash Flow highlights a need to work for another two years this fund, the Scottish Windows fund, has 1.2 billion in IT, 1% charge and actively managed. I appreciate the fund's objective, which is about reducing annuity risk, but really what is very interesting is that the FE risk score for this fund is 128 compared to the Vanguard life strategy, which is total equity of 99 over five years, the Vanguard equity is up 50% versus this pension protector Fund, which is down 32% Sorry, I had to rant somewhere, and most likely you get a lot of these messages, because it's so easy to come across trust like this, yeah. Well, listen, we're preaching the converted. There piece definitely. And we all know what happened with annuities and index linked annuities, especially two or three years ago, they fell off a cliff, and they still haven't really recovered. And it's these funds. They come from a time where people would generally annuitize in retirement advise clients. I don't think it happens. It happens very rarely now that clients annuitize. So take it on board. Guys, quick comment on Peter's post.

Alan Smith: 1:16:19

It's about last time I looked at the data. It's about 9% of people in Utah. Is usually small pots, yeah, and they annuitize. So nine over 90% of the market doesn't do this activity for which these funds were designed for yet another example of what we've been saying, well, pretty much since we started this podcast, designed by people who don't sit in front of clients regularly. And it's a solution to problem that doesn't really exist for the vast majority of clients and customers. So, well said. Peter, nothing else to add. Ultra

Nick Lincoln: 1:16:51

muted, ultra classic. Oh, I hope you're watching this on YouTube because Ultra is having

Carl Widger: 1:17:04

a meltdown. Let's hope it's no you're

Nick Lincoln: 1:17:05

muted in Riverside, mate. You're muted in Riverside, not on your by the way, my microphones got crossed through. So you're muted on Riverside, on Riverside. Oh, and he's left, all right.

Carl Widger: 1:17:19

Could I just say, like, if anybody has any tech issues, Andy is like, oh my god, this is

Unknown: 1:17:28

frustrated.

Nick Lincoln: 1:17:30

So hopefully

Unknown: 1:17:32

see you next time. Oh, Andy,

Andy Hart: 1:17:36

anything to add? Yes, can you hear me first? Yes, almost, yeah. Peter, thanks for sharing that I've saved multiple clients six figures by turning off lifestyle. No, no, it's important. It's important. No, no, no, no, all good advisors have saved clients six figures by turning off lifestyle in even more. Now, if I look at these numbers that have come in recently, what I'm saying about that, that's why we don't charge per hour. Wisdom is not sold per hour? That's one question. That's one answer, yeah, absolutely, totally. Wisdom is not sold per hour. That's right. So that's it. That's right. Okay, great stuff.

Nick Lincoln: 1:18:10

Thank you, Peter for your rant. Got us got our juices, fine, got Andy and a tears with the technology, which is always worth the price of admission. Okay, let's move on to what many people call culture corner. Okay,

Alan Smith: 1:18:26

I would like to point you to a podcast, a new podcast called Manana, and it has been created by a very experienced financial advisor called Roy McLaughlin. I've known Roy on and off for many, many years. It's been around the block, and he's really focused on for most of his career, on protection. Interestingly, you know, life insurance, protection, all that sort of thing. And he just launched a new podcast. And there's a bit of a link between all this, because I listened to the podcast when I was on holiday, and it was really, really good. And I actually, if you boys cast your minds back to the famous, or shall I say, infamous, hum, Dublin. When was that?

Unknown: 1:19:12

A few years ago, Carlos the date, does it? He called the date.

Carl Widger: 1:19:15

Move on. My therapist has bluffed.

Unknown: 1:19:19

It was a cracking conference. People

Alan Smith: 1:19:21

don't worry. Great, great conference. So I my award winning talk. I think it got the best talk of the day. But that was I talked about the art of storytelling. And I actually used the story, because Roy had told me this story, which was then covered on this podcast. And it's actually joking aside. It's really, really sad story, because some of you guys will know or remember the sky sports journalist, reporter Simon Simon Thomas, whose wife, very sadly, was diagnosed with cancer and was dead within three days. Yeah, unbelievable, tragic story, and the story you. That he and on this podcast, I think it's the first or second episode, um, because Roy is his financial advisor. And when they were, when he was giving advice, setting up, you know, life assurance products, etc. And Simon was the main breadwinner, obviously. And his wife was a stay at home wife, and they had a small child they were bringing up. And he said, Well, we don't need to cover Gemma. I think her name is, we don't need to cover her because she doesn't make the income. But Roy said, and he told the story about it because he had another client this happened to, he said, I really would encourage you to do so, to cover the spouse as well, even though the non, non breadwinner. And then, as it worked out, and she tragically did pass away, he was able to, you know, not worry about the finances, because if you pay down their mortgage, had enough money. And obviously he's freelancing, doing sky, Sky Sports. But he goes through the story again, and it's really quite a profound story. It's well worth listening to every now and again. We mentioned this podcast that life assurance and protection and what have you, and listening to that story list, you know, reiterated by Simon, the guy who was obviously part of the the entire thing. It was a Sally to remind I think it's a really well done podcast. It was a really good interview. Of course, Simon's a broadcaster himself, so he's very good at sort of sharing stuff in a, sort of in a good and elegant way. So I would recommend you check out the podcast and the, oh, the other thing that is worth saying that they refer to as well, because when you have that mess and somebody passes away, particularly if it's very sudden, there is a lot of just paperwork, isn't it, admin and stuff. You guys may well know this. I knew, but forgot about it. This online service called tell us once Yeah, heard of that? Yep, yep. So if something happens to somebody passes away in that rather than have to tell your 50 different agencies and companies and organizations and what have you go on that website tell us once, and you provide all the details, and at least it sort of reduces some of the admin burdens. Who refers to

Andy Hart: 1:21:49

that? And it's called sad men?

Nick Lincoln: 1:21:55

Yeah, that's so true. It

Andy Hart: 1:21:57

hits people hard. It's, I'm sorry about your terrible news. Now you've got to do 4000 things over the next two weeks and talk to hundreds of people in call centers that you don't know what's going

Nick Lincoln: 1:22:07

on anyway. So podcasters, podcast platforms, right? Me next. Okay, so I want to give a shout out to this guy, because he's got a StartUp podcast and he's struggling to get traction. His name is Pete Matthews. It's the meaningless money podcast. He's only on episode 583, he did one on family protection trusts involving McClure solicitors. McClure solicitors went belly up, and they were trustees on all these trusts they set up, and people are trying to unwind them. Family Protection trusts, as far as like, and I'm not very good on I find trust give me the willies right, Life Assurance trust I'm happy with. Beyond that, they give me the bloody willies. These family protection trusts seem to be a way of making, of trying to make sure the family home was outside of the estate for care home assessment. They haven't worked. They've been a complete balls up. And now you've got loads of families they can't sell these homes that they can't even when people have cast where they can't sell them, because they need the trustees consent. The trustees aren't around and well, obviously Peter pro what he does, and he goes through this very well. He teases this out. He's interviewing a guy who's going through this with his own family. Well worth listening to As a quick side note. On the IFA forum, china.cc/if a forum, there are so many questions about trusts, bonds and taxation, I would urge younger Trappists who are being encouraged by Life Assurance companies to think investment bonds. Investment bonds are the panacea. Now the capital gains tax regime is less beneficent, just to go in with your eyes open in terms of setting up life insurance bonds and trust, because you are stuck with that f being provider for the rest of your bloody days. Okay, my

Andy Hart: 1:23:35

God, is it messy, right?

Carl Widger: 1:23:38

I've got two Diary of a CEO Stephen Bartlett. Haven't listened to him in a while. Actually went kind of off him. Don't know why, but this one is an interview with Kevin O'Leary, who's a sharp Shark Tank guy from the States, Dragon Zen guy, absolutely brilliant. It's really, really good. He kind of goes through what the traits of an entrepreneur are. So if you're embarking on wanting to be a business owner, you should listen to this. Talks about, see, he worked for Steve Jobs, right? And talks about the fact that he was a genius, but probably not a very nice guy. Talks about maybe what we would put inverted commas, woke ism, and talking about nice versus respect, and about hard work and about work life balance being bullshit if you're setting up a business, kind of talking my language a little bit, and he has some very good investing advice, even though I wouldn't agree with it all, he was Big on discipline, and, you know, putting money away. And then he speaks Alan, you'd love it about the power of AI, which I think I'm pretty much sold on at this stage. So really, really, really good, really interesting guy, and, well, able to tell his own story. And then a second one, this one, because I don't look at the show notes ever, so I'm not sure is this one? Has, has this one come up? Hot money, agent of chaos. I

Andy Hart: 1:25:03

love hot money. It's got three series. This is the third one. Yes, the wire. This is the wire card, yeah, the American, the German company, yeah, yes. Matt wire

Carl Widger: 1:25:13

card. Jan Mar select, right? Yeah, guys,

Unknown: 1:25:15

is this the it thing? Yeah, you Yeah. That's been out for a while,

Carl Widger: 1:25:19

isn't it? It is absolutely. It's like a James Bond story in your ears. It is wild. One

Nick Lincoln: 1:25:28

of them living in China. Thank you for

Carl Widger: 1:25:30

that. Belarus, I reckon he's, yeah, somewhere like that. Wow. It is absolutely amazing. And it happened on on your doorstep. It happened in London. Yes, good. And like, he had anyway, I won't ruin it. It is, it is amazing, like a brilliant, brilliant podcast, podcast series to listen to over the summer. You know, just amazing.

Andy Hart: 1:25:51

The previous hot moneys. I think one of them was about the porn industry. Sounds better than it is. And the other one is about crypto and crypto, crypto and Angel coin. So, yeah, hot money is

Nick Lincoln: 1:26:03

an awesome, great hot money, or agent of chaos that should be searching for him. Hot money, hot money series, definitely subscribe to that now. Carl, yeah, cast and download everything. Yeah, season

Carl Widger: 1:26:14

three. Show Notes, you could just click on the link that I put in, but anyway,

Andy Hart: 1:26:17

not Yeah. Show Notes are just the website. Now, I've done that while we were

Nick Lincoln: 1:26:21

speaking. It's not as good as us. Remember our show notes in one magnificent document that's going to be the mother lode, the Wikipedia of UK financial services news to come. Okay, listen, I think we are. Andy, sorry, mate. Cut

Andy Hart: 1:26:32

you off. That's fine. Yeah. Mine is a Netflix documentary series, Docu series called American manhunt. Osama bin Laden, do watch it. It's full of a lot of interesting stories, obviously, historical perspective, but it's how the Americans reacted to it. They were just hell bent on getting Osama bin Laden, regardless of the collateral damage and just the whole mess that they were creating. So it's a good insight into the human psyche and human nature. But, yeah,

Carl Widger: 1:27:00

there's a brilliant movie on that isn't there? It's kind of a docu movie, if that's the worst. This is it. Oh, that's it. I thought Andy said it was a series. No, three,

Andy Hart: 1:27:10

three episodes. I don't know if it's new. It's new.

Alan Smith: 1:27:15

Yeah, Nick, Nick's friend Chamath Polly put the kettle on. He was talking about it. That's an all in thing.

Carl Widger: 1:27:23

Really good. Okay, there's a movie as well. You'd love if you like that, but that's absolutely brilliant. Yeah,

Andy Hart: 1:27:28

check it out. Thank you. Good

Nick Lincoln: 1:27:29

stuff. Good stuff. That was a really good episode, guys. Thank you for that. So we're at 80 when the 88th minute, God help us. So, dear Trappists, there you go. Episode 76 has come to a close and is sliding down the U Bender far the time. And thank you for your precious time. Please do leave a review. Six out of five stars on your app of choice. Keep them coming in. Keep keep the questions coming in. We're only as good as you guys, really, and girls really. So let's keep on. Let's keep on building this out. Subscribe to our YouTube channel, well over 1000 subscribers now going great guns on that, but until the next time from the Track Pack TRAPPIST, it's adios. Take care out there, and we'll see you in episode 77

Carl Widger: 1:28:06

where we might have a guest. Oh, yeah,

Unknown: 1:28:10

see ya. Not too bad. Is

Andy Hart: 1:28:17

that out for AI nick or real?

Nick Lincoln: 1:28:22

I credit could ever reply? I.