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In this latest pile of TRAP, the Trap Pack discuss
Links referred to in the show:
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Help us to help you! The more followers we have, the more we can do stuff going forward. So please:
Welcome to The Real advisor podcast, t r a p twerp please follow us and join in the conversation on Twitter at advisor podcast where you can suggest ideas and themes you'd like the track 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 pilot trap
Nick Lincoln:yes indeed, dear TRAPPIST, welcome back to what many people are calling episode 33 of the real advisor podcast T R A P trap. My name is Lincoln Lincoln and joining me as ever in the studio of doom are the three other horsemen of the apocalypse call the voice which are Alan the storyteller Smith and and the ultra heart Now gentlemen, we have a show packed full of absolutely nothing. So let's start unpacking it. From the get go with some effervescent high energy review reads from my good friend Mr. Andrew Hart.
Andy Hart:Thank you today we just have one review. Is my mic is okay we have one review entitled What a trap review five stars. This is from Kyle punter. It also Carpenter on Twitter and LinkedIn, a thoroughly entertaining and insightful podcast all rolled into one. As a relatively new advisor compared to these fine gentlemen. It provides great knowledge and tips as well as reassurance that you are doing the right thing in what can be a daunting industry. For people who care about client outcomes. These guys show that it's a profession for people who simply want to help others. First and foremost, the Four Horsemen simplify complicated terminology, products and investments, and do it all whilst projecting light hearted human between themselves. Just when you thought it couldn't be improved any further, I then found that RPM button which allows you to speed up or slow down the recordings. Personally, I favor the speed 1.25 which means I can squeeze the show nicely under one hour to fit into my designated gym workout. This means that Allen stories and not so long, and these cuffs are a mere throat clearance, and the voice sounds even more Irish, be warned not to go to 1.5 or above as then it can sound like a load of chipmunks having a lively debate about finance. Would you guys consider doing a live show with the audience? Maybe if you hit a certain number of downloads or the show certain significant milestone, perhaps your 50th I'm sure with the popularity of this show and the leader of a conveniently located watering hole that probably excludes Watford, sorry, lick, you will get a good crowd of people that would want to watch and be part of the show. Keep up the good work. So that's just one review today. Back to you, boss.
Nick Lincoln:Wow, what a what a brilliant, brilliant review. Thank you. Chi pants. Appreciate that. Thanks for putting your name in the review as well. That's great stuff. But that's Well, a couple of points in there. We are doing a live show next year. We've talked about this. I think it's it's I know it's amazing. May 24. I can't remember we will be promoting this more and more as we get closer to it. And we had to actually organize something and also on the download. Yeah, we are coming up to the magical six figures, aren't we we're about 94 95,000 downloads. So great, great, great guns for a podcast that is aimed at a very niche specific market. Thanks for moving that out, Andy. Okay, topical chip as well as ever. We said, the summer the summer months are very quiet. And then some stuff just happens. It's it seems in the autumn, and we've got loads to get through. So Mr. Hart you had what's the name of your conference, a human?
Andy Hart:And he talked us about it. Yeah, sure. So, two weeks ago, today, humans on the management London happened. It was our most successful conference yet. Nick and Alan were there Carl couldn't make it this year. And the you boys will say a couple of words in a second. The overall score out of 10 at the moment is 8.93, which is staggering. The top three speakers in order number three was Paul Craven. He got 9.18 out of 10 Daniel Crosby, who flew over from the States with his little boy got 9.41 out of 10. And the winner is Mr. Rory Sutherland with 9.51 out of 10. So yeah, it was a cracking day. Yeah, pretty much the biggest day of my professional career, and I couldn't have been happy with how it all went. So thank you all for those who came. Obviously the delegates make make the event. And yeah, that's it really almost the next year. So I sold it out many months before kicking off. So now I'm going to venue shopping in sort of January 2024 to find a venue that can have 500 people so it's going to be a huge undertaking for next November. So yeah, over to you and you and Alan who were here I worshipped you said During the day when
Nick Lincoln:we're close on the hump wrap up but yeah, I just want to say to all the TRAPPIST that were there, just thank you very much it was just lovely myself and and I think we're overwhelmed by Rachel throughout the day people coming up to us and saying thank you and the show is great and it's we're learning stuff from it just really, really lovely. We do appreciate it. You know, the show is for you. And to meet people is, is a real is a real privilege. Alan any any comment?
Alan Smith:I'm gonna give you a new word that you haven't heard before. liminal. Do you know what liminal means? No, didn't think so. I'm here to educate you as well as the audience. liminal Is that is that is a time or a place between between things between other things. The liminal moments and conferences are arguably as valuable, if not more valuable sometimes. And the actual the core content, the liminal part is the as we've talked about before, the waiting there that the coffee, coffee breaks, grabbing a drink, bite to eat, and these random conversations that you have, it was great. You're right. I think I'm right in saying and the this is the first time in all your hum. Conferences, which you've done 30 Now, this is the first time this was the 13th that was the 13th Lucky unlucky for some first time that neither Nick nor I did anything at any conference in any country. That's right, because we were just attendees, which was pretty good, actually. Oh, wow.
Andy Hart:We received the highest score I've ever seen. Yeah, that tells you something.
Alan Smith:Okay, never attended that. Never speak on. But yeah, you're right, the the the number of people that come up to all of us, and just we're seeing how much we're getting out of trap. And the one thing that was so many conversations, one thing just made me smile. That was lovely. It was a group of young advisors, four or five of them, they all work for the same company. And they're just like, they told me, they've got their own trap Whatsapp group, every time there's a new episode, they just discuss it this, you know, discuss the latest things we've been going on about and, and, you know, they tell me they get a hell of a lot from it. So it's lovely. It's lovely to get the positive feedback and gives us encouragement to carry on. Keep on going,
Unknown:hopefully, hopefully, we
Andy Hart:can do a trap live at home, London 2024. But obviously, we'll we'll discuss that we're going to do a separate event anyway. So yeah, enough about that.
Alan Smith:But you're doing, you're considering doing them in other cities right now we might.
Nick Lincoln:Barbados, just to say this for the hump podcast when it comes out.
Andy Hart:Let me just tie a bow. So when we just talked about this 100, South Africa is going to be on the 17th of September 2024. I'm hoping to do either Dublin or Sydney in October that I need to finalize that soon. And then London will likely be on the 14th of November. Anyway, enough about that. Thank you very much for supporting, it means a lot back to your boss. Now,
Nick Lincoln:well done, Andy. Well done indeed. Okay, we're at 500 subscribers on YouTube is quite an effort to get subscribers on YouTube and 500 is quite a decent number. So when we get to 1000, that does give us a chance to sort of monetize the show a little bit of a landmark, no need to comment on that necessarily. Voice voice, your unique ideas exchange the first one ever of its kind in Ireland, we understand and build on your call.
Carl Widger:Thursday, the 30th of November house on Leeson Street in Dublin at 6pm. If you're a principal of a financial planning firm, or have a firm that's looking to transition to financial planning, please do come along. It has been pointed out that I have perhaps inferred that this is a unique idea. I didn't think I did I apologize to anyone who was offended. I know it's not a unique idea clearly, because we've spoken about the ideas exchange here. I do know there's a couple of smaller groups in Ireland. I just thought I'd put it out there. So if you're interested, who knows where it might go, it might go absolutely nowhere, but all are welcome. And I know there's I think there's about 10 or 12 have said that they're definitely going there might be more coming along. So yeah, I'll fill you all in on the next episode as to how it went. Assuming we can tell you how it went. But anyway, yeah, looking forward to it. Looking forward to catching up with everybody and she'll be she'll be a bit of fun.
Nick Lincoln:Brilliant. Okay. Alan, you've got a bit of a what from my perspective, you can maybe disabuse me, but it's not like a horror story consumer duty update.
Alan Smith:Is that a horror story that there's a couple of points I just want to raise. Here's the headlines on consumer duty just to remind you and call which who isn't affected yet. Consumer duty is a wide sweeping piece of legislation that was came into force Since July of this year, all of us just simply had to comply like all these things, you can, you don't pay too much attention till it gets close to the deadline, you say, you know shit what we're supposed to do here and you make sure it's done and credit to my colleague Shareen, who took care of it all for us. And there was a lot more actually that she did, that I wasn't fully aware of. But you know, we were compliant by the deadline Happy Days, just fast forward to present a few months later. And one of the responsibilities one of the expectations is that organizations, make sure that all their employees, all people in the team are fully conversant up to date and have been trained. So as a result of that, we're rolling out training internally here, our firm, and that includes me. And so recently, I had to spend some time going through updating my knowledge, reading, getting, and really spending quite a lot of time, a disproportionate amount of time, making sure I was really ofay with the information, the legislation what's expected of us and actually had to do a test to confirm that I had done that. And I just stopped and I thought, wow, this stuff is quite hard hitting this stuff really is kind of bigger than I had initially. Thought it was. So I'm just going to throw a couple of a couple of points out. The specifically the regulator, the FCA specifically targets, percentage charging, and fee models for advisors, and specifically uses phrases like conflicts of interest, and similar service or same service for broadly similar fees. And it really goes into quite some detail about that. It talks a lot about value for money. I know Nick will say the value is decided by the clients, but there's an increasing kind of narrative coming out of the regulator to say, you know, we will have an impact on what be perceived to be value for money. And just untying that up, as you know, giving some evidence that well, first of all, we all all of our kind of investment propositions generally for our clients. Take the view that markets are efficient and markets and stock markets and capital markets are generally forward looking, you know, all the information is currently baked into the price. And you begin to look at people like St. James's place whose share price has haft in the last few months. But they're not the only one. All the listed discretionary portfolio managers in the UK that I've looked at have had similar collapses in their share price. And it's pretty obvious to me that, you know, all the markets and the analysts and the people who look at these things in detail have are fully conversant with the legislation and saying these organizations will not be able to get away with it to the extent they have been doing. I think some of the biggest public biggest organizations that will be hit by this stuff are the traditional discretionary portfolio managers who to this day, and I look at stuff I looked at another one last week I charging between two and 3% per annum for financial advice, no financial planning for basically. Yeah, portfolio management. When you when you know, you can buy an off the peg version, which is as good as you need for 95% of the population. For you know, for pennies, really, I just don't see how these people can continue in their current format. And just to put additional bit of color on this, this is there's been legislation in the past RDR came in there was a kind of what would you call that assets review that the the FCA did a few years ago. And this is the latest one. And I initially thought this another just piece of nonsense. We're all going it's a tick box exercise, we'll tick the boxes in life, we'll move on, I'll give you some real life, evidence that there's more to it than this. In the last couple of weeks, our firm received a letter from a platform provider that we use a lot, which in turn was encouraged by the regulator. And they asked the identified, I think three or four clients. And they asked us to justify our fees for the times and all that all they looked at was the fee that we would take it as you know, we charge retainers, but the fee, we were we were taking in relation to the value of the portfolio sitting on their platform. Now, of course, they know nothing about our relationship with the client, they don't know where their other assets are held. They don't know what our arrangement for the client. And you know, they weren't saying this is awful, you can't do this, but we're saying please report back and tell us why this fee looks disproportionate. And one in particular, was an interesting one that we just took on which was we recently took on a client and they came with an exam with an ETF they already owned an ETF and as we're kind of going through and we our portfolios don't hold ETFs for various reasons. But we held whilst we were getting everything else organized as on the platform for a couple of months and of course if there are any if there's income being taken out of it that's a trade considered a trade and I think the platform charges 10 pounds a trade so they're looking at things that overtrading Why is it been four trades on this and cost the client 40 quid for this and Of course, we explain why we're going through a process, we're going to stop doing that. And in the very near future, it was never our intention, but something we inherited. But just interesting platforms are now analyzing with the backing of the regulator, looking at clients looking at portfolios looking at fee charges in relation to values of portfolios. And I think this is just the beginning of it. Long story short, I think it's actually a very good thing. And I think the ultimate beneficiary will be the customer. But it will be at the expense of a lot of the fat that exists in the industry and has done for decades, and I think long, you know, five years from now, seven years, and I'll be a far better sector, and and more people will be encouraged to seek financial advice. So, Carl, you got a point? Yeah.
Carl Widger:Just to come in. That's like, unbelievably interesting. Did I also see, Alan, that one of the points that's coming through is that they would the regulator would like to see all clients get cash flow modeling of some description.
Alan Smith:Yep. That's not the point. I posted that Yeah, exactly. Right. Like,
Carl Widger:like when I think about the Irish market, obviously, we haven't had RDR. It was being talked about, but we haven't implemented it like this is this is like, eight steps ahead of of RDR. So you could
Alan Smith:just cut out all your consumer duty. Yeah,
Carl Widger:maybe?
Andy Hart:I'll do two. Yeah.
Carl Widger:And maybe that's what maybe that's what they will do. But I think I think you're right, I think it seems a lot of it may be seems a little bit draconian, but who's going to win the client is definitely going to win here. And the question I would have is, how are they planning on regulating this on actually implementing the regulation? And will there be, you know, inspections, when the refines How was, is there any indication as to how they're going to actually implement the regulation? Yeah,
Alan Smith:the narrative that's come from the regulatory see some of the letters they've issued a dear CEO letter, you might be familiar with this concept, the right out to everyone, we've pretty much everyone has received one. And the words are pretty robust, hard hitting sort of long lines, as you know, beyond Make no mistake, we will be following this up, we'll be in axing where we see things we'll be visiting, we will be we're increasing our resources. Okay. There's another thing that they've said. It just is kind of data driven. So vulnerable clients is an issue. You know, everyone's got vulnerable clients, and you're deaf, and actually everyone according to the data, but the vast majority of human beings will be vulnerable by the definition at some point in their life. So they've done the research and something like 69% 70% of stockbrokers discretionary managers say they have 00 vulnerable clients. And by definition, that can't be right. So they're really focusing on that. And it's sort of their median. So it's only been in place, you know, a few months, and they're really coming back with it, their feedback, their data, that's the unacceptable, unacceptable. We've all been putting resources. I think it's a great thing for businesses like ours and others who will start
Carl Widger:was the point I was going to make like, I mean, surely this is, you know, if you're doing financial planning, lead, financial planning, low cost funds, that kind of stuff. Surely, this has to be a massive, massive opportunity. Essentially, Irish market? No, I think I would be gone. Yeah. I think it might even be 90%. So look, does the client win out of this? Yes, the client definitely does. Therefore, this is a good thing. I've always extolled the virtue of proper proper corporate governance, and looking after the client first, and I think this can only be a good thing. Albeit I appreciate it has meant an awful lot of extra work for everybody in the UK market. But I'd love to see the Irish regulator following suit and doing something seminar really, really, really good.
Alan Smith:Any thoughts? Nicolas?
Nick Lincoln:No, I mean, I felt my blood pressure rising as you describe your experience. I mean, I yeah, I I consumed. There are definitely people in this profession on the industrial side of what we do who charge way too much and don't offer any value for it and have done for you know, DFM decades. SFS DFM you heard of SFS DFM resorted not not for the clients but for talking and Petronella it's called visa sorted by the exorbitant fees they charge and these people can reduce to them. But if I got a letter from my platform saying justify this fee I just don't know how I react. I don't think I'd react particularly well to it. I have to say
Alan Smith:you can but you just you just you do a two line email response and then move on. That's all you need. It's all you need. And then the two word response
Andy Hart:you'll do more than enough Nick as you know, you know financial planning lead portfolios, blah, blah,
Alan Smith:of course course he is. So so we all Yeah, so you know the good the good news is if a firm like ours, which has been doing All yours gets the letter then and we're getting examined, then, you know, the rest of the market is none of this stuff what their answers are going to be will be interesting.
Carl Widger:How? What's the percentage of firms? Nevermind the D. FM's and the bigger firms but of the IFA market who are actually doing cash flow modeling real financial planning, as we would describe it, like, is there still a big lag? Is there still Yeah, one or two are not doing it?
Andy Hart:If I was being very generous, I'd probably say 20%. If I was being quite pessimistic, it could be as low as 10%. You know, we were in a slightly different bubble, aren't we? But but but a lot of them are obviously embracing it, they know it is the future. So they are accelerating that journey towards it.
Carl Widger:There's one thing knowing is the future. And there's another thing the regular telling you it is the future. And if you don't do it, you're not going to be allowed advice slides like this is massive, massive, huge, huge.
Nick Lincoln:Yeah. And now there are some well known brands in this in this country, certainly who say they do cash flow modeling and just that
Andy Hart:they pay lip service. So you think your mic is a bit your mics, a bit scratchy, so maybe trying to speak a bit quieter, anyway.
Carl Widger:Or we'll just go on to three. Really, really, really, really interesting, soft things
Nick Lincoln:in the show notes, but with the FCA letter recovered about the fee justification put in there by Smith. Okay, now, Morningstar came out with an article though they do every year she new research on safe withdrawal withdrawal rates that was put into the show notes by somebody else. But apparently I've now been tagged with it. So I can talk about it. Bizarrely, the Morningstar site, their safest portfolio for a 30 year 30 year retirement portfolio, with the highest withdrawal rate is one that has 20% in equities, and 80% in fixed income and their premises. Well, that's the current goes into yesterday, bond yields are now so much higher than they were a year ago or two years or even five years ago, you can have way more, but I still don't get it, I still do not understand how a 30 year portfolio predominantly massively in fixed income can cope with rising lifestyle costs. It just doesn't. You can obviously they got all the research and they've have these guardrails and the assumptions they make and so forth. But to me, I just think that's nonsense. And so a 20, a 2080, portfolio, 20%, equities, 8% bonds, the withdrawal rate is 4%. They say over 30 years, and you have a 90% success rate of the portfolio outliving the person. Whereas 100% equity portfolio has a withdrawal rate of 3.3%, over 30 years, I got a to me it just I just I maybe I'm thick, fixed income, rising lifestyle cost, you know, the dissonance in my head is just too much. I can't I can't compute that. I don't know if you guys have any feelings on this on this report this report.
Alan Smith:Yeah, I just it was me who put it in to the show notes, because I read it a few days ago. And I mean, these things come out all the time. It just feels somewhat distanced from the real life practical experience of working with other clients and human beings. Because there's a phrase I can't quite remember it. But it's something like, it's like naive precision, because the amount of precision is built into this. It says something like you've got this range of portfolios 100%, equities all the way through, and it's there, then it gives you in terms of that with safe withdrawal rate talks about 3.1% 3.4% 3.6% based. And it's just, it's just, it's trying to put human beings into a spreadsheet. And guess what Morningstar it just doesn't work? Because it doesn't, we've talked about this before. And no doubt, we'll talk about it again. And this is another message for the younger trappers listening in who get caught up and read this stuff, and then try to optimize for precision and efficiency and have a 3.156% withdrawal rate for their client. And then guess what the client gets ill or the client gets divorced, or the tax rates go up 10% Or just life happens. And that you often say this is this is an art as well as a science. This is the science part of it. The Morningstar, talking about fine, they provide you a ground, a framework, and some grounding. But the art part of it is far more important because the art is about the human experience. And so I would read this sort of stuff, and then dismiss it. Not not not sort of not not, you know, rudely, but I think that's interesting, but it doesn't apply to every client on a day to day basis.
Nick Lincoln:It's always done by people who aren't practitioners. I know I go on about the broken record, but this is their sort of boffins. They're the techs who come out with this stuff that just don't it doesn't have that much relation to the to the real world. You know, easy example is you got to retire a couple and maybe they were drawing at sea 7% from their portfolio, but it'll come down to four or 5% when their state pensions kick in, or when their final set. It's just this, oh, it's gonna be 4% for the next 30 years, and we think that's safe. It's just, that's just so disconnected from what we
Carl Widger:experienced, like life doesn't go on a straight line. It's not. And it's I love the science and art. But you know, do you know what this reminded me of? When I read it? It was like, probably less than before now. But like, do you remember back early 2000? Certainly, in Ireland, we had like loads of fund managers saying, here's what we're going to do, we're going to do a new strategy based on a spreadsheet that tells us if we did the strategy for the last 510 15 years, it's going to work on it never works, because things change. And as Alan says, you know, life just happens. And when when, when life goes in transition money moves, that famous Mitch Anthony phrase, you know, trying to find linear solutions in people's families, financial plans, it can't work, it does not work, it will never work. That is why financial real financial planning is a process. It is not a one and done. And I think there's some links to this in terms of a question that's going to be asked later on, because, you know, reviewing financial planning for a family on an annual basis is so, so important, and that's your AGM. But ATMs happen, you know, when when stuff happens in your life, you gotta, you gotta you gotta just step in, reviewed a financial plan and make changes like
Nick Lincoln:that car like that. Yeah, we you know, there's one world it's all just AGM and everything. everything's hunky dory. But in the real world, there's lots of EDMS that come up, Breakaway frame. Okay, so the next thing Oh, Mr. Smith, you're going to bring some filth into the conversation.
Alan Smith:I posted it in our notes. Yeah, hope the lawyers aren't listening. This is just something I just I travel, travel to London Underground and came down to the tube station the other day, a bank station in the City of London, where 1000s, hundreds of 1000s of people pass through everyday. And I see this massive billboard for a company called tick mill, tick mill.com. And effectively, they're an online trading platform. And they say Auckland accounts, takes two seconds, and make loads of money and trade trades, contact Contracts for Difference wherever they are on trade options, leveraged trading, and a borrow money and live and all this sort of stuff. And so I just I look at this as a manual, you see people looking at it, the point of advertising is it tends to work otherwise people wouldn't, you know, wouldn't advertise. And so 1000s 1000 people pass by. So you go online are quickly checked their website, you know, it does see or be it in a kind of disclaimer down the book down the bottom 70% of investors lose money using our services 70% lose, because they have to have some disclaimer, you look at it that way. That led me to look at a couple of other ones. There's another one I can't remember their name, but they say 86% of investors lose money, eventually that it depends on the time horizon, you talk yeah, it's close, closer to 99 It's close to one. And goes yeah, if you go if you go into the into the years, 99% people lose money and just a pure gambling company, and even those who make money, investors. Some other report I saw coming out of the US it's equivalent to gambling was point 0001 Whatever it was, because that's the nature of of you know, distribution of outcomes. And just Data Statistics some people some one in a million makes a fortune, you know, one to 10 million win the lottery, etc. But even those a small amount that do make money is kind of equivalent to minimum wage, you get you doing more work in in McDonald's, you know, for the for the time you spend. So earlier on, I was giving some kind of general positive faint praise towards the regulator, the FCA that now I'm going to criticize them because this this is an approved advertisement that is going to create meaningful misery, misery, negative outcomes and harm to retail customers and investors because I tell you, people are you know, it's tough times out there, there is a cost of living crisis things are going on. If you've got like a small amount to spend you think I can trade my way into good financial outcomes. And you open an account and no doubt obviously didn't do it know that it takes two seconds to open an account will be very quick and efficient and sleek, it won't be some of the stuff we have to do in the hopes we have to jump through. And so I think the regulator ought to clamp clamp down on this stuff. If you're a serious professional investor, you know, have a party knock yourself out. But if you're an average punter going through bank tube station and think that's a good idea, I'll open this up on my phone You're destined for a world of hurt my friend. So
Carl Widger:the other thing like not only will they lose their money that they put in, like, if you're doing CFDs with leverage, you're you've you've got these dreaded margin calls. Yeah. Well,
Alan Smith:it's no limits, no limits your downside, if you just put money,
Andy Hart:like someone's talking from experience their call. Just
Nick Lincoln:in the meantime, you know, just make sure you can justify your fees. Yeah, whenever
Andy Hart:there is a cost of living crisis, I could tell that Alan's a gray shirt. Anyway, back to Nick.
Nick Lincoln:session with a shirt. Okay, moving on. So advisor asset is a platform that enables you to do your due diligence and pension switch comparisons, it's got a reduction in yield calculation, I'm gonna use it for my platform due diligence, it's used by a number of ifas. And they just got a new, a new thing where they I think, on a daily basis with might be a bit too much for people, but they curate all the announcements from platforms and insurance companies in one email. So if that's a way of keeping in contact with the industry, and the professional, you might want to do that, I'll put a link to it in the so called show notes. And you just say sign me up for your communications targeting UK financial advisors is not the best landing page, you've got to type them in the box. And that will come into your inbox and as a way of keeping in touch if you don't, so I don't listen to I don't really read so much new model advisor anymore or any that those publications so much. So there you go. Just another source of data. Mr. Hart, you're now going to finagle hotel shock a lot into financial services make it relevant for our TRAPPIST audience go.
Andy Hart:Yeah, this is just a very brief point. But hotel shock allow the famous luxury Chocolatier has been recently sold to Mars for very inflated price compared to its share price before the news came out. So sold for about 500 million. And it was just the thing that struck me was the founder of this company has been very outspoken about how authentic he and his brand is. And he was sort of ganging up against Yeah, I guess. Yes. Yeah, it was a close personal friend.
Alan Smith:Nick, you're off, you're off color to
Andy Hart:Slack and his lack of Yes. So they sold to Mars for a soul to Mars for 500 million. It's the whole selling out concept that, again, financial advisor business owners have to, you know, navigate that themselves. You know, integrity will cost you a fortune, but it's worth every penny. That's this another one. Another one that you I gave you embellished anyway, so innocent drink sold to Coca Cola, Costa Coffee sold to McDonald's. You know, it's the business narrative that, you know, is ever present, isn't it? You know, new startups come along. And then, and then companies with that are slow learners with deep pockets and not buying them. gave you? That's that's basically how it works. So I just thought I'd mentioned if is in relation to financial advisors, obviously, they have that dilemma of who do they sell to? Because for years, they've been banging on about, you know, their story and the startups and you know, they do things into, you know, with high integrity, and then, you know, a big check comes along and things might change. So, yeah, that's my final point on it. anyone wish to sign it in?
Nick Lincoln:Tumbleweed. Okay. Thank you. Very interesting. Andrew, move on.
Andy Hart:You intentionally did that, lads. I'll get you back. All right.
Carl Widger:Yes, we did. Leave on our invoice leave it.
Nick Lincoln:Okay, quick plug for my if a foreign thing is now about 350 advisers and paraplanners. And people in the advice chain, a very good Google group that you might want to consider signing up for if especially if you work on your own. And you just want to have a forum where you can post questions to get answers. It just works. And I'll put a link to in the show notes. Yes, Andy.
Andy Hart:Yeah, just to follow up on that is absolutely brilliant. It's very, very technical. so practical. You know, a lot of the other forums are just, you know, high level wishy washy. This is like bang, I need a real good steer on this really technical thing that I know someone in this group is going to help me out with. So if you are listening to this, and you are a UK advisor, Irish advisor, obviously can join but yeah, definitely do. Do join and go out of your way to find out how to do it. Thanks. Thanks for sending in our.cc/ifa
Nick Lincoln:forum, but I'll put a link to in the show notes. Thank you for the kind words Mr. Hart. Mr. Smith. FinTech launch.
Alan Smith:Yeah, just a quick one. I love the whole concept of entrepreneurship and startups and finding new ideas and new businesses is amazing. Spend a lot of my time in amongst an in that in that world. But my heart sinks a little bit when I see yet another Fintech startup. So when they call Andy tied tied Bank is a title title says it is tied, tied. So tide bank or a, you know, one of these so called challenger banks in the UK. And I just noticed in one of the tech publications last week, they've raised 3 million pounds from, you know, seed type investors to launch a new online digital wealth management to
Andy Hart:disrupt the traditional wealth management industry, you know?
Alan Smith:Yeah, yeah, exactly.
Andy Hart:Spend out further.
Alan Smith:Yeah, exactly. The, who knows, they might be the first ones to crack it. But that, again, the narrative if you read this story, and look, there are some really smart people who've had huge successes through their own sort of tech businesses and startups in the past that are throwing money into this. But once again, they're going for low cost, the same Wealth Management even
Andy Hart:even for free, Elon, even free some of the funds, it's even worse, why don't they just set up something really good digital and charge accordingly and be profitable, that the consumers are not for just paying nothing? They'll happily pay for a service? It's amazing. blows my mind? Sorry. But
Alan Smith:no, it's a couple of other points that you said. But one of the one of your phrases I'll give you this one was people don't want cheap they want safe strew. And you mentioned Andy, pension B, who charged What 7.7, which is considered to be expensive 05.
Andy Hart:And they want to be a profitable sustainable
Alan Smith:company. Yes, there seems to be I don't know if they're in profit yet. But there are listed business, they've got the list and the London Stock Exchange. And I would give them more chance of survival than some of these other companies charging zero or a couple of basis points for online services. And interestingly, I looked at something the other day, these challenger banks, tied Starling, a few others, they make a lot of noise, but they haven't made much inroad, really into the kind of retail banking segment, they're still single digit percentage of the entire market after you know, 1015 years or so. So they haven't exactly disrupted. And I think what will happen, what is happening is a lot of the incumbents, the big banks with deep pockets, listed companies, they'll begin to catch up on the tech. You know, it's great to have a competitive marketplace but you see yet another online digital platform being launched when someone like Vanguard with 8 trillion of assets under management can't make it work in the UK, we noticed that we talked about it last time. Can't remember but we but we know that they've closed down their operation in Germany, which is huge market bigger than the UK in terms of what has 100 million population so it must be a big market. Vanguard can't make it work in Germany can't make it work in the UK. But yet another startup thinks that they can come in lower cost and even Vanguard Yeah, so they're offering wealth management for free and I've got a 3 million run rate. I mean, what could go wrong either way, by the way, I just looked through my notes not tied bank tied is washing powder is tandem. Tandem bank.
Carl Widger:That's why we know why. We know why. Washing Powder came up because we believe it or not strapless. We're talking about washing powder just before we came on, weren't we Andrew?
Nick Lincoln:We were getting very childish Come on. Be nice to each other. But yes. Certainly what it is well worth putting in a white detergent.
Andy Hart:clothes in the dishwasher. Listen, listen, listen. Listen, listen. gray shirt, gray shirt. You can't
Alan Smith:say this is a gray shirt. What's the problem? All right.
Nick Lincoln:Probably is wired to go outside
Carl Widger:shambles. And make what Nick? Do you mind? If I just make one comment? I people firms who are coming in to disrupt markets, right? You're not stop saying that you're just not There's people doing it already. Like disruption of a market is not I'm going to charge less. Exactly. You know?
Andy Hart:It's like Uber. Yeah. So Uber disrupted because they charge less guy more efficient type Skype. totally new. Uber totally new.
Nick Lincoln:Totally new Uber work. Sorry. Uber work because air b&b. You don't mind the plane being delayed by two if you're told it's delayed by two hours.
Alan Smith:They did disrupt, disrupt or be disrupted the hotel sector. Those flicks disrupted those disruptors, but doing lower cost cheaper online portfolios Hargreaves Lansdown had been doing this for 30 years 1981 9091 They started it right 40 years plus and all they're doing is like a cheaper version of Hargreaves Lansdown and less effective so worse
Andy Hart:worse one the company they're amazing the admin very great to deal with. So
Carl Widger:that's your these guys will be closing.
Nick Lincoln:Yeah, thanks for that go.
Andy Hart:It's insulting actually. It's insane. wanting them coming in thinking they're disrupting just because they're doing it for cheaper is ridiculous.
Nick Lincoln:Okay, Weetabix miles. Okay, finally, final topical tidbit. 14 minutes. Give me some rope. Mr. Smith you're planning for next year?
Alan Smith:Yes, we are. At the time of recording, we're heading towards the end of 2023. And I'm just sort of throwing it open in terms of what people think about what are the what do you do for planning next year. So I have just bought three days away by myself and little cottage on the beach, where I've got time away from the office away from home life, but I've got time to this is not a story. I've got a story coming up,
Unknown:grab yourself a drink, a very long drink. It's Storytime with Ellen Smith.
Alan Smith:Once again, you were premature mr. Lincoln. Once again,
Nick Lincoln:tell me you've got a story coming up. How am I supposed to know just trust me balls got a story. But not always.
Alan Smith:I've got I've got a brief story coming up in a few minutes. But this is not a story. This is just a reflection. This is something those of us who are serious about our business lives, I think that next year will be an interesting year. I think it'd be challenging in many ways, I think the economy will be extremely challenging. There's as we already knows a hell of a lot going on in our sector in our industry. And I like to take time away because I've never given myself enough time to think to reflect and to plan and to organize. And so I'm as I say, I'm taking myself away for three days, I just booked an Airbnb cottage on the beach secret location can tell you boys could you might come and crash it and try to take me out to the pub, which I'm not you have to
Nick Lincoln:you have to crash it.
Alan Smith:Location, though I specifically removed the link,
Carl Widger:you're going on your own to reflect for three days. So you're going to talk to nobody for three days. All right. God bless cash when you get home. Yeah, I am a lot of talking he needs to get out of the system. I
Alan Smith:wasn't thinking of going on a silent retreat, no talking for seven days.
Andy Hart:You'll be kicked out in the first three hours.
Alan Smith:No, I think I mean, it just call you must be taking some time to plan you're pretty good at planning ahead organizing, you've got a big year of messes Norway next year. So what do you think I do?
Carl Widger:I do that a couple of times a year, as you know, and it is it is really good. Like, as we've got a little bit bigger, we have to do budgets and all that kind of stuff. Right? Yeah. Which means I'm sitting looking at spreadsheets a lot in the last few weeks. And really, God Almighty it is, I just hate doing it. I just hate doing it. But it has to be done. And I Oh, we're in serious. We're in serious planning mode. Like we you know, it's we've a lot more people now. So, you know, the expectations of everybody has to be very, very, very clear. And we got to be very disciplined about our approach. So rather than doing a lot of stuff, kind of off the cuff and ad hoc as we go, it's like, No, we got to plan it out. We got to know what events are on, we got to you know, so it's all a year in advance, which is which is you know, right. It's good discipline, and especially for me, because I tend to have these great ideas and just follow them. As opposed to right, let's decide now, what are we going to do? What are we going to focus on? And we'll talk about that actually a little bit more so, but going away on your own for a few days? It is just absolutely. You know, it's you got to take some time you said this to me, Alan loads, right, you got to take some time to sit at your desk with nothing on your agenda. And this is just taken that to a kind of another level just go away, be on your own go to a nice place. I went to a place in Ireland last year called Park and Scylla. I spent four or five days down a beautiful, beautiful place to kind of did a lot of walk. And in the afternoons I just sat and kind of rolled ideas. And that was at the around this time last year, I'd say yep. And we've had a great year. I don't know, because of that. But like, you know, there's lots of little things add up to make a successful business. And that's certainly one of them, I would say.
Alan Smith:Yep, I recommend it. I wouldn't ask these two jokers because they make it up as they go along. But I always like to
Andy Hart:do so I'm super excited about 20/24 It's going to be a fantastic year for for many reasons. I think we're heading into a bit of a boom period. Let's hope Yeah, I think by 2024 is pretty much sort of sketched out. I've got all my annual planning meetings between January and March. Got the conference is later on in the year and most of my training days have been booked out so I'm waking up on January the first we've pretty much you know the full agenda sorted out obviously I've got a trap every two weeks as well. So yeah, I'm not really looking for too much growth. It's more maintaining what I currently have. Yeah. Sounds interested in going away for a couple of days in your own island. I've never done it, but I travel quite a bit on my own anyway. So I've got quite a lot of thinking time. I'm certainly not having a packed diary. Next year, I'm pretty much blocking out my entire year now. So I'm trying to avoid any phone call conversations, they just ruin my flow. So it's just only important meetings to get into the diary. It's weird. I'm sort of the busiest I've ever been with the most amount of clients fuck it out.
Nick Lincoln:Name Flo, Ma, three months But
Carl Widger:in fairness, he didn't he it took him a lot. It took about 48 minutes to break, but we broke them.
Andy Hart:Anyway.
Carl Widger:So just a question. When you say block out your diary, right? Do you put in time because I know islanders this time have nothing? Because I've never I just feel guilty myself if I put in time for nothing. Definitely.
Andy Hart:Definitely. Yeah, definitely.
Alan Smith:That's that's a huge thing that I really struggled with. Because despite rumors to the contrary, I'm a I'm a worker, I've always, you know, come from humble roots that come from Scotland work.
Andy Hart:I've you said that correctly. I'm a
Alan Smith:complete worker.
Andy Hart:You're the biggest worker, I know you are the biggest worker I've ever known.
Alan Smith:But when you get but we are in thinking professional. I know Nick's gonna just eyes glaze over. And
Andy Hart:we are living, living, living.
Alan Smith:And honestly, I would just take it I've taken time out in the past trying to do it every week. But then sometimes I don't do it. And go for a walk in the park and I sit in a park bench. So just stay with this space. And I think and after all the best ideas, the best thoughts come to you're never going to get your best idea. You're never going to come up with good. Yeah. So whilst you're you know, yeah, on a computer screen, doing stuff on a phone call and zoom calls.
Andy Hart:Yeah, the more I do get out of there, see people stuff I get stuff over email, phone calls, I just sit in my office for two weeks, nothing good will happen. Nothing. Burger off for three or four days or even, you know, go away or something. Lots of stuff happened. I don't quite
Alan Smith:know. Maybe another? I don't know. I don't I don't just conversation, probably not in this one. Because we're running over time. But about optimizing and organizing your day, your week, your month. There's things that I do that didn't used to do. Yeah, which I just I'm worried that we remain in this. And I think we always will be this kind of hybrid work style. And this thing is there's locations where I optimize for certain activities, and some some not others, there's times a day. And for example, quick example, I would just avoid at all costs forever, unless it's absolutely super urgent. Any meetings, any phone calls, anything to do with anyone meeting anyone else? until lunchtime? Every day morning. If you do 234 hours of deep work, creative work, whatever it might be in the morning. And then afternoons are free for other things engagements, meetings, face to face social etc. It's for me anyway, it works. It works but rather than a jumbled up calendar jumbled up diary with a meeting here trying to write a blog article then maybe
Carl Widger:maybe this is a conversation to be developed, you know, what does the optimum water look like? You know, I'm break break it out over over a couple of months. And, and what that looks like, yeah,
Andy Hart:I start small that calls in block out every other Monday or something. And then and then I started blocking out every Monday then I started blocking out every other Friday and every Monday now just block out basically every day, the whole year.
Nick Lincoln:I mean, I do it as well, I Monday, Monday 7am till 9am in my calendar is I block it out every week, those two hours and I call it GSD getting stuff done. And I just look at the week ahead, I do the worst tasks that are coming up in the week. I do them in that mornings. on that Monday, I just get my my head organized, I see what I've got to do. And I just think about things I read. You know, I'll read financial services, stuff on the web and consume content, but I just, I don't want to be doing a client meeting first thing on a Monday. I want to get my head in order and I want to get my diary mapped out for the week and that every week. Monday seven till nine is GSD getting stuff done. The phone's in airplane mode.
Andy Hart:It's just me at 7am and 9am. Nick, like nobody listening to this would ever have a client meeting between seven and 9am 7am to 9pm. Monday now I'm now in 7am to 9am my
Nick Lincoln:client meeting is 7am till 230. That's that's that's less that's, that's that's the window you've got me in except for Monday, but Tuesday, Wednesday, Thursday,
Andy Hart:the earliest client meeting start for me is 10:10am I've
Nick Lincoln:done some 730s This year works. works. Alright,
Carl Widger:okay. We'll come back. Definitely yeah, definitely. I'm because I'm on this. I, my big thing is I'm feeling guilty if I'm not in in my diary. So I need to get over myself. And because I do know when
Alan Smith:your best work is when you're thinking,
Andy Hart:Yeah, you think I hold for a living, we think hard for a living.
Carl Widger:Okay, maybe we'll do it as a. Let's plan me out. How am I going to do it? All right,
Nick Lincoln:great. Great. Thanks, guys. So let's I think this time that we moved on to the meat and potatoes of the shows, we're 50 minutes in, and we are going to do a series of what we loosely calling marketing masterclass, episodes, probably three on the bounce, and this is the first of the three of them. And the first of those three, we're going to talk about building a repeatable referral strategy. And Mr. Smith, you're gonna lead us off on this one.
Alan Smith:Okay, I'll wait for the sharpening knives to stop. So, let everyone you speak to talks about growth. Everyone in our industry talks about growth, everyone needs to grow their business, if you're not growing, you're dying. Historically, referrals and by by referrals. Let's let's frame that from the beginning referrals. I mean referrals from existing clients, you do good work. And everyone tells you all the experts tell you that's the way to grow a business get further introductions and recognition and referrals from other clients. And the concept of having this this phrase, a repeatable, scalable systemized process for capturing referrals. I've been in many conferences over the years and people, the sort of speaker says, you know, raise your hand, if you've got what I just described, almost no one raised their hand. People say, is it the single biggest opportunity you've got? Everyone raises their hand? Yes, referrals are biggest opportunity. But but very few people have ever nailed this. We all get referrals, kind of by accident, I'll speak from for myself, we get them, of course, we get them. They're a big source of business for us. But they're kind of accidental. There's not, there's not a lot of a lot of intention around it. And I've given a lot of thought to this. Over the years, I've actually built something here called the referral strategy toolkit. And I've just gathered a lot of information. I've read a lot of books about it. And I'll highlight a couple of those in a moment. sources that you can go to watch, optimize this strategy, and I've realized a few things about referrals. Let me tell you a brief story.
Nick Lincoln:Now. Okay.
Alan Smith:True story. Last week, I was getting kicked out of the tube station, I was heading to a quite an important meeting. And I came out of the tube station. And it was the rain was biblical, it was just absolutely chucking down. And I had about seven minute walk to my destination where I was having this meeting. And trust me, it would have been I've never seen, I think was that storm, whatever it was that came through recently last week, and I've never seen rain like it, it was if I'd stepped out on that for more than 30 seconds, I might as well just jumped in the bath and then go into the meeting. It was that heavy. And I thought, right I got a couple of options here. I'm either just going to be late for the meeting, just not just not go. I didn't have the phone number of the person I was meeting so I couldn't call them and say or just go and get absolutely soaked to the skin and just arrived there like a drowned rat. And then lo and behold across the streets, this is Oxford Street and central London big shopping street across the street. I see this one of these tourist shops. Was it selling umbrellas. So with great haste to run across the street, got soaked in this sort of 30 seconds it took me to run across the street and went into him. And I said I noticed while I was waiting looking at it that he was taking his signs down. And what he was doing was taking his prices down. Because he's realized, I've got a market the market has suddenly changed umbrellas completely. So go across the road, and I grabbed this umbrella. I say how much this is? Yeah, so I say how much of this umbrella? He says 20 pounds 20 quid I thought this is an umbrella, you'd probably buy an Amazon for about 499 I reckon. 20 pounds. I think our bollocks, fine, fine, fine, fine. But I pick up the umbrella ticket to the counter. But Tommy gets to the counter. The guy at the counter says alright mate, there it is. 25 pounds. I said well, what will the guy the guy just at the your door your colleagues is 20 I'm arguing with over five is sorry, mate is 25. He's got it wrong. They made the price up completely whether I do fine. So I paid it in relation to who's quite important meetings. I was going to the point of the story here is there was urgency. I had some urgency therefore executed on a purchase decision right there. And then what I've realized that's a long winded way of getting here, but it's important because it's fundamental to referral strategy.
Nick Lincoln:Welcome to the umbrella podcast.
Alan Smith:Very rarely, very rarely got ruined running across the road very rarely is the work we do urgent if they If you have to, if it's pouring rain, you go into a meeting by umbrellas, urgent, if there's a flood in your house, getting a plumber around deserting, you're not really quibbling about it, you just go and find a plumber, or whatever, very rarely, the work that we do is urgent, therefore, you got to think differently. Because if you ask a client for a referral, it's just it's awkward, it's not urgent, and they've got to then pass it on to somebody else that they don't know their circumstances. If you ever, if you ever need advice, a financial advisor, my guy, my girl is good, you should contact them, it doesn't make any sense. So there's, you can take this a lot of different ways. But there's a, there's a couple of ways that I would suggest doing. Number one is just understanding the idea of building, building funnels, building something of value and have help for clients and prospective clients. So very simply, what you can do is you create a repository for really helpful information that's designed to be given to friends of your clients, colleagues, of your clients, etc. You've got to build relationships, what we know is very rarely, as I say, this stuff urgent. So what we're in the process of doing is building a very simple website landing page, which is a hidden page to the rest of the world. But it contains very relevant, very interesting information that clients can refer their friends to. So there will be a classic lead capture documents something of interest and relevance and and that's as we know, that sort of, and we'll talk about this more later in the in our section on content creation. We are then given opportunity in return for the client potential refer ease, email address, we get permission to drip feed, highly relevant, highly appropriate educational, helpful information, because rarely is the stuff that we do urgent. But if we can drip feed, nurture them over months, and months, maybe years, because once you create this, it doesn't doesn't matter. And so there you go, so there's just one thing to kick start this conversation, I've got quite I've got a few other things I can share with in terms of practical experiences. But the the idea of asking for referrals and client meetings makes no sense to me, it's just so obscure and weird and awkward unprofessional. But the idea of helping your clients by saying By the way, we built this piece of this digital piece of information, if you're an IT, you can make different ones, it could be a pre retirement one, it could be a number of different specific issues. But we've got some really helpful educational checklists, downloads workbooks, you name it that we've got for these friends of yours, if you want, send them a link to it. So you build it into your makeup, a repeatable system or strategy. Every time you've got an annual planning meeting, for example, every time you sending a client newsletter, for example, you send a link to this, this might be helpful, and all you're doing is capturing people's attention. And building a list that which which you can nurture over time, and that they can opt out from at any time if they're not finding it any of any value. That's the starting point. He wants to go next.
Carl Widger:Job interview for like, all great ideas clearly. Absolutely fantastic, right? For me, that's kind of like the content creation piece that we're going to talk about, because we've done
Alan Smith:some it does crossover a lot this year. But so,
Carl Widger:so look, what I thought I'd just kind of talk about is we've built this business entirely, absolutely entirely unplanned referrals. So but I'm in the same boat as you are and we don't ask for we don't ask for the referrals. Right. So one thing that I think is missed a lot is you even kind of set it out in the very start, you know, oh, do great work on the on the client referrals and calm. Don't miss the first part. do great work. So what I mean by that is how can you make the whole financial planning process really, really cool, really, really memorable? So it's obviously that's all just to your cash flow model. It's not right. And a lot of it is making the clients feel like they are hurt. Right? So it's a lot about have been brave enough. Like I remember and I've spoken about this a lot. You know, when we started talking about goals, dreams and aspirations, it was like, Holy shit, the pensions guy is talking to me about fluffy stuff, right? But actually having the bravery to go there with the clients so that when they leave the meeting, they'll walk out right and say to each other, or maybe even say to you Wow, that's an awful lot different than I thought it would be because they will then spread the word. And then it's really small things can help massively so a client comes into us recently and is talking about buying a boat and the one of the guys sat in the meeting with me sent the client an email of here's a boat for sale, you might want to look at that. Now it was a little bit of a joke because he said this massive, massive yacht right but the Point is, the client was heard. And we kind of made a little bit of a joke out of it right? Number one client came in couple years ago, I want to go to Australia and do a little bit of a tour in my motorhome. And we just sent him a book on touring Australia. So these small things, they're really small, they do not cost a lot, right. But it just tells and shows the client, I'm listening, we are listening, and what matters to you matters to us. And then you make sure obviously, that it's in the financial plan for the next time you have your AGM with them, you know, how did that go? And you have, we have voice memos after every single meeting. Because you can't remember every single case. But if you have a voice memo, here are the main things that came up. Well, then you talk to the clients again, about at the outset at the start of the meeting. Well, the last time you were in this, what we spoke about, did you go and do that or whatever. So I think don't underestimate the power of doing great, great work. And then you will be referred on right. And a couple of things that we've done. We've done lots of different events, as you know, and I think, now you learn and you develop and they get better as you go. But trying your best at the outset to do five star events. Because again, it's you know, even if it's only a small event, make sure as you think about everything, because then people have a have a good feeling have a special feeling we're dealing with matters. And that's what we want them to get out of every touchpoint they get Office. And then it's stuff like doing golf events and saying, Hey, Mr. And Mrs. Client, would you like to bring your friends Mr. Mrs. Client, you know, the kind of work that we do. And look, we'd be delighted just to have a game of golf, we won't talk business. And look, if you feel that a might fit. That has worked really, really well for us. And then countries have gone on a bit here. But the last one I talk about is I was going to mention in our topical tidbits because we had it last week. Right? So our latest client advisory panel, right? Their single biggest place where we get the best referrals from and and also for everyone and and all indicators, right. So we have for 12 or 14 of our very best clients who come along to two events every year. And we asked we tell them how we've done. We tell them what we're planning to do, which is really important to him. We're in the phase right now. And then they give us input on that. And they always they all of them are absolutely brilliant at referring clients into us. Yes, Nicholas? Sorry,
Nick Lincoln:call you tell them what you've done. So you share the business growth with them? Is that what you're saying? Yeah, nice.
Carl Widger:So we have, so we share with them a lot more than people might think. And that has evolved as well. So we weren't probably telling them a lot of the financials, client numbers, we'd like we share the actual numbers with them. So I think they feel part of the story, they feel very engaged, they want matters to do really well. And if if all of those boxes are ticked, well then and there are there are perfect type of client, remember, so they will refer their peers to us. And they just want to help and you just get that feel I got to feel, you know, over dinner. So we go to a nice hotel, we do lodge we the meeting is 2005 with a coffee break, then we have pre dinner drinks, and then we have have have have dinner, but it's it we spend a few quid on this, this is always a nice place. Always a nice venue. And we get like, obviously, when you're talking about very busy people, not everyone turns up all the time, we always get Tandel, you know, so maybe 234 Don't turn up. But we always get 10 people, that's enough to, you know, have a really, really good meeting and what's happened over the last kind of couple of years, especially post COVID, since they've got to know each other much better. They're all doing some business with each other, which is amazing. Like, that's absolutely amazing. So if I was starting out now, I would find people who maybe even aren't existing clients who I'd like to talk to, and I'd put a client advisory panel together we call a client advisory panel, by the way, just a small point, so that people don't feel like they're sitting on a board because client advisory board with the fiduciary responsibilities, whatever. So that's just a small, very small point. But I would we started that back in 2019. I think we'd be well further out in our growth phase if we start to just when we started the business up.
Nick Lincoln:That's brilliant Carlos that's man he told that story in different iterations numerous times. But it's really interesting to listen to that because it's so different suddenly when I do and and what Andy does as well which is which well, we just don't do that kind of thing because we're not that kind of business, but I can definitely see that value in what you do. And you know, when you do it, you do it. You're you're one of these guys that commits. You don't you don't sort of stick your toe half in the water, you go for it and always depend on a good event and it serves you. Well. Thank you, Mr. Hart, what referrals? How do you how do you approach it?
Andy Hart:Yeah, I was just thinking about it. So I can go on various different tangents I suppose on this, obviously, I've got various different businesses, various different things. So I do a mix of pretty much what Alan said, I've been doing that for years, obviously, capturing email addresses and then giving, you know, information to people, I get quite a lot of referrals from a client who is a client of mine, who's an accountant, and they rec recommend a lot of their clients. And that works really well. I also probably the second biggest referral channel is other advisors. And other advisors weirdly, do pass a lot of clients between each other. For example, I've passed quite a few clients to call if an Irish connection says to you know, an Irish advisor, they go to call. And again, lots of advisors contact me and say, Andy, do you know advisor and advisor in Bath, in Glasgow, in Plymouth in whatever. So, advisors do share a lot of them clients between each other, the latest Garner taken on is a very good financial adviser, they didn't want to work with someone who's so close within their family. So then they said, Well, do you know someone that can help me and my name came, came miraculously came into their brain? And they basically said, you know, this, just surprised about that. You know, this guy will look after you, you know, I think he does similar to what you know, I do in terms of financial planning, good investment portfolio, and he's going to basically give you tough financial love and gonna get you to stick to the plan, basically. Yeah, so that's on the financial advice side. In terms of my advisory focused businesses, you know, I do events, I do lots of stuff online. Yeah, there's, it's endless. It's constantly constantly working it so it's I'll keep it sort of focused on the referrals for the client side. Over to you, Nick.
Nick Lincoln:Okay, thank you. So I, I am pretty lacks on this. I mean, I don't I only get new clients, new families through referrals, the same way that you do car and pro and you Alan's well, but I don't actively seek them. Because I'm at that stage of my business, right? I just don't necessarily need to, I probably should be more on top of this, but I don't, I just don't need to, and I get it's funny, you know, 80% of my clients don't refer people to me, but the 20% that do do it all the time. It's just, you know, very another iteration of Pareto rule. The 8020 thing, and there's no doubt about it that referred clients you do not want we talked earlier in the show about how this this race to the bottom, the internet is obsessed with cost and getting the cheapest, the cheapest, the cheapest and you don't want web trolls coming to that's my view. You don't want people coming to you through the internet who don't know you from Adam, I've just seen your website. And that yeah, you referred clients, they come to you that they're not there's begets you can buy from the supermarket, the pocket, we'll get to that all you need to do, you don't just screw it up, all you got to do is take the big gets out and put them in the oven for 10 minutes, they almost done for you. And the refer the client is is like that, because because someone they know will be like them has the same outlook on life, probably roughly the same money situation life situation. And so this is a nick Lincoln, he seems all right. And it's validation. So people mix, like with Nike, they come to you that they're really, they're less, they're sold on you really if they're referred, and you've really got to cook it up, or there's just got to be something there. Let's do think Hold on, this isn't actually as good a fit as it could be otherwise. That's how you that's how that's what you want. And if you have a restrict strategy, which Carl does with his client, advisory boards, panels even sorry, panel, I've tried to think of a client relationship advisory panel. I think that's a better acronym. And Alan with is just giving some data out and just signing people up to an email list to it very loosely prospects, but just feeding them useful stuff that isn't salesy, but it's informative. That's another great way of just building up a bank of people that one day may well become clients, Alan, you you. I just want to give
Alan Smith:back on a couple of points in terms of real practical applications and where listeners can potentially go from here. And we do have to always bear in mind that we're all of us here are running, mature businesses and a lot of others are in startup phase and are looking for every opportunity they can to maximize opportunity. So everyone should be bit more intentional. There are surveys out there I've participated in surveys in the past where they would ask we've done it for example, you ask your clients, it's the kind of Net Promoter Score question, Would you would you ever refer us to friends, family, colleagues, etc. You generally most of us will get 90% Plus, we'll see. Yeah, would it Someone asked me, I would. And then you ask, have you ever referred as? And often you'll get responses in the 50 60%. Yeah, I have referred you and have you referred as in the last year, even then the numbers will be quite often moved on this two or three times, you know, 20% of your clients have referred you in the last year, you look at the actual referrals you received, you think, well, it's nothing like 20% of our client base, and we get inquiries from friends or family of these people. So there is an opportunity being missed, because as you know, referral could be the bumped into somebody that proverbial barbecue who? Yeah, it's Nick is a good guy, I'll give you his phone number, his email address, and no one ever follows up. So trying to
Nick Lincoln:be a bit more, the client thinks that's a roof in their mind, that's a refer,
Alan Smith:refer to give you a name to somebody, they did nothing at all with it. So I think there's that there's a couple of opportunities here. And I'm, you'd like this car. I'm a big believer in the James clear atomic habits thing, which is, don't worry about the outcomes. I've got no control over the outcomes, but try to focus on the inputs, what could what can we do to back to this word systemize? What can we actually do regularly, which will just move the dial a bit if we just if we increased our referral opportunities. If we captured even half of those ones that people had mentioned to their friend, down the pub at the barbecue, etc, then that's going to help fuel future growth. And also the other thing, of course, is to think about, I honestly believe this, as a client said to me, never forget the words you use not long ago, it's shark infested waters out there, you've saved us you've saved because it's, let's face it, this as we sort of alluded to earlier on today, some of this stuff, some of the advice, quality advice, costs of advice, etc, is not good. So I consider it helping more families. And it's our noble duty and responsibility to do our best to capture more and help more people. So try to systemize this. So for example, we've talked before about the client journey, you're going to welcome meeting you can. So that's just a we just mentioned it, our welcome meeting, often if we can organize it is social over lunch and a glass of wine, we've once we've onboard the client, and become fully embedded clients of ours, and we'll talk about that we'll go back to the conversation around how they first came to us. If they came to us by referral, we raise that the conversation is great that John referred you to us, that's how we build our business are you just drip feeding, and you're planning meetings, you're just drip feeding these conversations, and but you've got to remember to do it because easy just to forget about it. So you know, you build that into a checklist, various other points when you first meet prospective clients, if they've come to you, as referral, you say, Great Again, great that you were referred to us. That's how we get most of our referrals, you drip feeding that if they didn't come to you by referral, you actually say to them interesting, most of our clients come by referrals great that you found us on the internet, or whatever. But most of our business is that you're constantly providing this sort of feedback loop to your to your clients. And as I say focus on the inputs, and the outputs will take care of themselves. But I'm sure if you do that consistently. The last sort of action, I would say and this is a version of because not everyone either wants to has the ability, organization or budget to create client relationship advisory panels, as Nick just described them, or client advisory panels or whatever. I know alternative version of that, that anyone can do tomorrow. I'm sure I talked about this before, a pre in previous episodes of trap. But I've got a lot of time for a guy called Dan Allison, who is a US coach, I suppose who does exclusively focuses on referral strategies. And he's got this concept. And again, I can post the link in the show notes because a lot of stuff out there on the internet, there's YouTube videos, et cetera, where he just literally breaks down including scripts, what he does. So everyone think you know, everyone listening to this, think of what you would call your advocates who are the who are the clients that just love what you do not everyone absolutely loves what you do. But a percentage, it might be five people might be 10, it might be 20. They are your advocates. And you will reach out to them and offer to buy them breakfast, lunch, coffee, drink, whatever, and you've got a pre organized conversation going to have with them. Number one, you're asking for feedback. How are we doing? It? Are there any things that we are doing that you wish we weren't doing or any things we're not doing that you wish that we weren't? It's just a general feedback conversation. There's that there's another positioning conversation? It's Can I just share with you a bit it's no doubt a version of what Cole does in his group meeting with his with his clients, but it's, can I share with you what our plans are for the future? These are some of the things we currently do. This is what our plans are for the future. If they're your advocates, and they love what you do, and they really enjoy being a client. They're really happy to be part of that conversation. And the last thing you put in into this, this meeting is social and it's nothing to do with their sort of annual planning meeting etc. It's very specific conversation you're going to be having as we are planning to grow we do believe that the best opportunity to grow is through individual referrals. If your my circumstances what would you do what would you advise me how would you seek to grow that and immediately you've told advocates are didn't even realize you were they might often they will think I don't even know You're planning to grow. You always sound quite busy to me, Novick, okay, and they immediately and again, I'm sure Carl will have examples of this in his group panel meeting. But they say right, actually, I've got a few ideas, you speak to my accountant. First of all, I know he deals with a lot of high net worth, et cetera, et cetera. So you get very intention about having advocate meetings with his clients. And of course, then you must follow up with them. And again, it's a whole process. To do that. The resources I've got from this, just two or three books, you should read Nick Murray, the game of numbers, you should read a book, the guy I've mentioned a moment for Graham Eisner, who is the guy mentioned him before, is the guy that built Goldman Sachs, Wealth Management, and how to get referrals. He's got a book called just ask, which is well worth reading. And there's a guy called Steven Wirsching done a US guy, you might have seen him used to have a podcast, all about referrals. His books actually interesting called stop asking for referrals, which is older. So there's a lot of resources out there, there's a few practical things that people can do. But I promise you, if you're gonna make any success of this, you do have to be intentional, doing good work, absolutely cold, but it's a hygiene factor, I expect you to do good work, but then you can be a bit more proactive because clients do want to refer you, but they've got no framework in which to do it. So hope that helps, Nick. Okay. And, uh,
Nick Lincoln:your finger was raised.
Andy Hart:I just added a new very Scottish word to Alan Smith Scottish words Group. Group.
Nick Lincoln:Really? You might well, you might well, thanks. Thanks. That's that's certainly from from the call. And and I want to thank you for that. We are at one, one hour 16 minutes in so I'm conscious that we may have given that a damn good thrashing. That's the first three episodes. The next one is going to be centers of influence. Is that correct? And I'm asking the most Yeah. And then we'll follow up with with the content, content masterful, awesome. And what content are we doing? Why are we doing it? How do we do it? Do we outsource it? How do we distribute it? How do people consume it? So loads talk about that. So thanks very much for that. And it's just as well that we wrap it up because at the front door is posting she's called that bolting sack up my drive. And it's chance for us now to just just respond to track his questions posted by you, our beloved audience, the Trappists you are the show is a link in the pinned tweet, index, whatever you call these things. Now, submit your question there we will come to you go into a ginormous Hopper thing and we're going through the hopper as we can and this letter will I'm going to open it in a second it's a it's an enormous letters very heavy let me just read this put it on the desk that will be dropping on the desk. So this is from Master Jay. He sounds like a rap artist Master Jay. He is not got a social handle for good reason. Okay. This is another war on peace one. This is anonymous for good reason. I was recently invited to observe another advisors client meeting. As we were discussing transfer of clients from him to me, it started okay as pre meeting we looked at the cash flow. And although we use different assumptions, it kind of made sense clients already drawing on investments for living as he was between consulting gigs but now considering full on retirement. The forecast was tight with 100 grand after age 99, excluding the house, but it seemed manageable. But throughout the meeting, alarm bells started to ring. The first alarm bell was early in the meeting the adviser, not the client, the advisor brought up gifting to the family, and how 100,000 pounds might be a good plan as a gift. So a non Question Master Jay, his question is how much fat and a plan you'd like to have before giftee becomes something you raise. Second alarm bell clients discuss burning through their cash pile, meaning the outgoings were drastically undisclosed by multiple of five figures a year which is a massive, that is a massive under disclosure. After the meeting, the adviser said that was news to him. They haven't really discussed this in detail as retirement had only just come up question how far in advance of retirement you start discussing the mechanics of retirement planning and building the cash buffer reserves Jesus Christ Masterji your value here. Needless to say, I won't be taking you on his clients. But it surprised me as we talk the same game but the standards were way off where I was used to. Okay, I'll have a quick dip at this first of all, yes, it's a bit of a NAF, NAF meeting. I don't think 100 grand for me, if that's a nominal terms in 30 years time when he's 99 Or she's 99 You know, 100 grand could be worth 30k. So whether it's nominal or real 100k is tight. And why the advisor is raising gifting. If the client raises it fine that's like it's the clients meeting it's the clients time but why the advisor would raise that and that situation that wouldn't definitely wouldn't like to do that. And you're you've got an it's very hard right we have all the financials, don't we we can get the valuations of the platform, the client can tell us how much they've got in the bank and all that kind of stuff. If you haven't got just a grasp of what's going out of their bucket each year in terms of their expense, their lifestyle costs and everything else is a waste of time. I know it's very difficult to get it right because one year you're gonna have more holidays you To buy replacement cars, but you've got to have a basic grasp of what the client is spending. And if it's clear that every year they say they're spending x, but their cash savings are going down by why? Because they're spending more than they told you, then you've got to have that conversation, you've got to nail that down. So gents, a very long question there any of you want to chip in with a response to Master Jay? The hip hop star?
Andy Hart:Yeah, I'll just explain a couple of points. Yeah, you mentioned it, then the key thing is spending in retirement. So yeah, with my clients that are, let's say, three years away from retirement, I've got a rough grasp of what they spend it, but I sort of, you know, increase the pressure for them to, you know, take it a bit more seriously. So at the point where they are actually in full retirement year, we've got a very clear grasp of their spending down to the nearest sort of 500 pounds, you know, 33,500 60,500, is quite quite a tight grasp. It's interesting, because he's taken over the client bank. So I think it's quite good client bank to take over if it hasn't gone so far to the point where we potentially thinking about doing it.
Alan Smith:Well, is declined. That's the point. Needless to say, I won't be taking on the clients. Well, it
Andy Hart:depends on where he is in where he is in his journey. And the fact about giving money away again, is, is an important point that I want to have quite a bit of sort of fat in the plan before they give gifting out money to the kids. You know, plan a plan A is for them to be financially, you know, financially solvent, you have a, you know, a rockstar retirement from sort of now until until they pass away. So there needs to be quite a lot of additional fat for the start giving away money. And I do use cautious assumptions on the investment returns. Yeah, so a couple of points, or
Nick Lincoln:James Carr,
Carl Widger:either couple of points, perhaps is a little bit more nuanced than the guy or girl who posed the question, because maybe this is only the second meeting. And maybe the client is only beginning to open up. So therefore, stuff like the cash burn rate, so the spending, maybe the time has gone, actually, we're spending a lot more and I think the the both of them probably missed an opportunity just to say to the client, we need to we need to this is very, very, very important. So we need to really kind of dive deep into this one, and just explore that a little bit more of what, you know, what, what are your goals, dreams and aspirations? And what you know, what's the lifestyle that you want to live? What does living your best life look like? And then kind of tease it out? I think the gifting one is, is a little bit easy. I can't
Alan Smith:for me,
Carl Widger:right and advisor introducing gifting cash to kids, when the plan is tight at the end. I can't both think that was a question that was asked prior to the meeting. And it was like, you know, can we have a look at this, like gifting, I'm assuming it's the same as in the UK, like you have lifelong opportunities for that. So postponing gifting for a few years, whilst you get into the rhythm of the plan, I think is definitely you know, I think that that's a kind of a little bit of a no brainer. But I think the the opportunity to stop and really do deep dive around the spending, that's where the real value will will will come with the financial planning process. And that you build the trust, you know, over the years, you there's no little switch that you turn on. And I just don't know, the idea of the idea of another advisor sitting in kind of critiquing my work, right? Just makes me feel a little bit ache, right. So
Alan Smith:I don't think I may get this sort of call you
Carl Widger:were just just my last point, like make me get a call or not taking a book of clients based on one meeting. If that's the fact right, you're mad,
Alan Smith:that's a mad take the clients on? Well, it depends if they're all overspending, and it's all going to be end in tears. And it's you'd be be cautious, be careful. But I think if that is the situation, one meeting client, cash flow is a bit tight. So therefore walk away from a big business opportunity. I would, I would urge caution on that perhaps go back in again, there's I've just got a couple of observations just sort of adding to what's already been said. My experience the single one of the single biggest challenges to long term Cash Flow Planning is clients under estimating their cash burn their expenditure, if you're just asking them how much do you spend on X, Y and Zed? Particularly things or holidays? Oh, we spend five grand a year in holidays you. You've just come back from three weeks in Barbados, you went business class and you spent at the sandy Lane Hotel. Oh, well, that was a one off. Oh, we did it again the year before and the year before. So getting granular of course is as life goes on. Technology helps with these things. You get access to sort of client data, bank accounts, etc. So you get a better understanding but the most dangerous thing is under estimating cash burn And then not putting enough fat and growth. And look, if you're going to retirement, let's face it, you want to live a lovely life and for a lot of people that's it doesn't involve spending money, at least for those will be called honeymoon years, as far as 1015 years post retirement, we do want to travel, you do what you don't want to stay in a one star hotel, because you've worked hard for 40 years, etc. So I think that's an area to focus on, on on that. And I'm a big believer in gifting and the idea of gifting with a warm hand as they are gifting with a warm heart and not a cold hand, as he say. So give when if somebody I mean life expectancy now as well into 80s and 90s people chilled people's kids will be in their 50s and 60s, when they reach that unnatural age of death, where they really want access to money when you when money is tight as often when you in your 30s 40s when you've got kids yourself and your school fees and mortgages and all that to pay. So if you can, rather than wait to the end, and you've got to, you know, give money on death, etc give it during that time, but you do need to have to test because gifting to children is a luxury item. You only do that if you're absolutely pretty robust and resilient. And you've got a lot of fat in them. Not if things are a bit tight on this model. And they've underestimated spending and he's talking about gifting 100 grand right now, you know, loads of red flags there. But not necessarily enough to walk away from entire business transition and taking on all the other clients. But it's an interesting and interesting question. Another example that this is an art more than it is a science. There's a lot of creativity required.
Nick Lincoln:Absolutely, absolutely. Okay, I think we've got a good answer and you maybe the client did raise it with the advisor pre the meeting, but I want to look at gifting and that's why the advisor was thought to have a thoughts of raised. Okay, let's quickly go on one hour, 26 minutes. Let's quickly go on to culture corner. Okay, so my one. Okay, so this might have been mentioned before, I'm sure you one of one of you would have if not all three of you have this the money beta log and emails really, really, really good. A lot of the content that's out there is very us focused from us advisors or US commentators, using US centric stories understandably, well, the money Vator blog and email three emails a week this Mr. UK based guy to a team of guys and girls. Just put together really good stories, good, good implement and Irish stories as well. And I would definitely subscribe to that. And there's a link to that in the so called you're loving it that can't be empathetic. So that's in the money beta.com/subscribe Smithy.
Alan Smith:Yes, very briefly keep us to time really useful source this again. This does come from the US. A guy called James Paul art, who I understand is a practicing financial planner in the US and does a lot of work though. For other planners. He's got a lot of content, a website, a podcast, he's the advisor, the advisor with always the Americans do tend to spell it, the advisor coach.com Sign up for his newsletter, listen to his podcast, he's got it. And he actually really fits in with the theme we're currently working on, which is marketing growth. He's got some interesting ideas on whether or not to outsource to third party marketing specialists. But yeah, do check out his stuff. link in the show notes.
Nick Lincoln:Great, Greg. Great voice
Carl Widger:I put up did I put up Ben Carlson's article I think that yeah, I did. Yeah, yeah. Brief History of the 6040 portfolio. Todd is really really good Ben Carson stuff in general is Yes, probably very American. But there's some really great stuff there and it's all backed up by data. And if you want some comfort around why a 64 folio 6040 portfolio will work into the future you should read that article. I know several people on this podcast do not share the same view but I thought it was really really good so but check out his stuff to subscribe to his email updates really good stuff.
Nick Lincoln:Okay, fab and finally Ultra
Andy Hart:Yeah, so this is a real life police drama series on BBC called the Met is the fourth season everyone's banging on about it. Check it out if you wish to
Nick Lincoln:text them. Thanks. That's good. Because much connection about the services hotel shocking. Okay,
Carl Widger:I think we're an idea
Andy Hart:you start your fucking backpack.
Unknown:So F bombs this week man.
Alan Smith:starts your what's your Weetabix this morning son?
Nick Lincoln:Oh yeah,
Andy Hart:don't use my ones.
Nick Lincoln:Okay, so I think it comes down to that very good Good thank you as ever, dear TRAPPIST for enduring this show if you like us, please do subscribe to the ring advisor podcast on your podcast app of choice rate and review a six out of five star review is really really good. Our average rating is very, very high and we're very appreciative of that. We're also on YouTube as well. Some people like to watch us God knows why but they do. There's enough pain and agony in the world without having our four I'd be Maxing your TV screen but it can be done. And on that note, I'm going to say adios take care out there folks, and we'll speak to you again in two weeks time and goodbye.
Alan Smith:Bye bye. Everyone. Absolute Shambles to F bomb