In this latest pile of TRAP, the Trap Pack discuss
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In this latest pile of TRAP, the Trap Pack discuss
Links referred to in the show:
Take part in the conversation! We want YOU to suggest topics and questions you’d like the Trap Pack to answer. The best way to do this is to ask them here.
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 46 of the real advisor podcast T R A P trap. My name is Luke Lincoln and joining me back in the digital studio of doom are the three other horsemen of the apocalypse Alan the storyteller Smith calm deliver che the voice widger and, and the ultra Hall Now gentlemen, we have a show packed full of app salutely nothing so let's start unpacking it straightaway with some topical tidbits to put a timestamp on episode review.
Andy Hart:For me if you
Nick Lincoln:are my friend. Yeah, I was focused on that go on crack on bit such
Andy Hart:a long time over today. The the one and only review today is from Jack Saunders via Apple podcast is entitled steaming pile of trap five stars. Our mighty profession owes a huge thanks to Lincoln and three other horsemen of the apocalypse for sharing their wisdom, experienced and honest views on all things financial planning as a young advisor, who knew there was a better way than flogging products for fees. I've been trying to get the firm I work for to change to proper financial planning for years, with some success, but not enough. You fought amazing people have helped me finally get through to the decision makers in starting this podcast. And I've been so excited to be working as a real financial adviser. Not only have you changed the outlook that my firm has on why we do what we do, you've also helped change client outcomes for the better. And I'm sure you've had a similar impact than other firms to all four of you are a true inspiration and a genuine gift to our profession. Thank you. PS after meeting Andy at home and knowing that he is just as nice in person as he used to listen to. I hope the rest of you are is great to be around.
Alan Smith:Well, he's doing so well up until then.
Unknown:Did you write that Andrew?
Andy Hart:That's a great review. Thank you very much. Jack. Back to you,
Nick Lincoln:boss. Jack Yeah, you were doing so well. Thank you. Dear TRAPPIST, please do send in your reviews five out of six out of five stars on your app of choice, which I guess is going to be the apple thing because anyone you can leave reviews on as far as I'm aware. Okay, you're absolutely right and decide to curtail your viewers ignore your review section. Let's do the topical tidbits and we'll do a recap of the last episode the last episode dear trapeze, as you might have heard, you might have heard was our live Episode Episode 45 recorded in Lola's the underground bar at the London Hippodrome. Brilliant. Well, it will, I think we're going to very quickly will comment on it just I want to thank the Trappists I want to thank everyone involved in making it what was really a special day and we're even blessed with decent weather, which has been a long, wet, miserable winter and a pretty poor spring. So so far, and in that week of the trap live, the weather wasn't great. But for that particular day, the sun shone and after the event, we can go to the rooftop bar at the Hippodrome just a really, really good time. So thanks to everybody. And guys, what are your thoughts are first on the first ever trap live event?
Alan Smith:I thought it was it was great. It surpassed my expectations, which were pretty low to begin with. But and the thing like the word I always use about this this community, it was great to have a whole lot of people there of all ages, all experiences. And they were all candidates like we're all in it together. It was I think it's the only conference I've been to which was sort of supported by alcohol and a free bar. It does help lubricate the conversation somewhat. But But you're right, there was a we retired afterwards up to the rooftop bar. And I was just there was so many great conversations happening in the room and on the bar. And so and I've had quite a lot of feedback from various people who were there at the time, and subsequently after it direct messages and LinkedIn and everything else, just saying how much they enjoyed it. So you know, for our first effort and putting it together ourselves. You know, I think it was pretty good. Andy, what do you think as a seasoned event organizer? What's your view? Yeah,
Andy Hart:we won't get into Nick Lincoln's hosting event skills, but he did a cracking job. Be careful what you're saying on the live podcast. No, it was brilliant. I think we did our best Show live. I mean, it's amazing. We did. We've done 45 episodes, and the best one we did was in front of a live audience. So it's brilliant. The venue was awesome. Yeah, people are in good, good spirits. I spent 12 hours in a casino and then place a bet. That's a first. So hopefully it's a it's a recurring event. So I thought it was a brilliant, there was a few points to note but as all sort of boring stuff in the back end, but yeah, it was a fantastic event, and everyone had a great time. Over to you, Carl.
Carl Widger:Yeah, it was just there was a great buzz. For the I suppose the whole afternoon and into the evening, it was, it was really, really good to feel the energy in the room. And I think that that probably helped us guys as well. And it was nice and relaxed. And look, I think the great thing about this podcast is we just say it as we feel it is and you know, that kind of helps the engagement with the audience. And as Alan said, that the chats afterwards, were absolutely brilliant. I met so many people who are maybe LinkedIn with but never met them before. And yeah, it was really, really good. And well done, Nick for doing all the organizing a touchy chair did really well, Nick as well. fairplay.
Nick Lincoln:Thank you very much. Okay.
Alan Smith:And can I just say one final thing, which is a shout out to the people who helped us organize it and sponsor at some degree, namely Vanguard and timeline, both of which made a financial contribution which helps us put, put the whole thing on it's surprisingly expensive. I've never done these things before, I was quite surprised by how much it costs to hire a venue, get the AV get all this and obviously, put a few drinks behind the bar for the attendees. So thanks again to Vanguard and timeline. And if you haven't yet, checked out their collateral information that they provided. For TRAPPIST, you don't have to have been an attendee at the events. If you listen to this podcast, do check out the links that we provide Vanguard are running a dedicated webinar later this month, for Trappists. All about advisor alpha. So if you're sort of getting any pushback on your value, as it stands for clients, and prospective clients jump on that webinar register for that, and they provide a hell of a lot of collateral and support and information and research and timeline the same. There's a ton of stuff out there. So do check out those those two sponsors. And thanks again to both of them for being, you know, helpful to all our efforts that we are undertaking at trap. Back to you, Nick.
Carl Widger:And also just a shout out to Dan hailers, who did a brilliant talk as well. We've done really well a lot of people commenting on that and our emcee Amelia Powell, who did a great job as well, like it's, it was definitely a big team effort. Lots of people gave lots of help to put the show on and it is as you say, out and it is surprising the the effort and the time and the input from everybody that it takes but yeah, I think we we did it. We were surprised ourselves. We did it but it was great. Really good. Really good.
Nick Lincoln:Great stuff. Okay, sticking with you watch the voice. The US trap.
Carl Widger:Yeah, so apparently we've inspired the unlock. I'm just saying that I didn't hear that from anybody else except, so the unlock is the US version of trap. It can be nothing else hosted by Josh Brown and Mike Batt, Nick, I'm sure the vast majority the vast majority of listeners to this podcast will be familiar with those guys. So they have they have other podcasts and shows and all that kind of stuff. But the unlock is their dedicated one for you know, financial planning, financial advisor practice, etc. And their opening show on YouTube was an interview with the great Nick Murray. So it's, it is look it's it's it's good to see us more and more of this kind of stuff that can inspire people to do real financial planning, I think is really good. And yeah, Nick Murray, he's he just endures in fairness to him. And the interview was about kind of financial advisor proposition that kind of stuff. So worth definitely looking at that particular episode, but I would say worth subscribing to the unlock. After all, you can get your inspiration from loads and loads of different places.
Nick Lincoln:There are funny there are funny pair black, Nick and brown, aren't they? I mean, they're terrible interviewers, they just cannot help but talk and interject and you've got this great guest here who speaks with barely a gnome or an OB, but there are gaps between his sentences and they just couldn't help but leap in and all through this interview, they were saying how much Nick Murray has changed their lives and done Isn't that all the other workers about what's happened in the market today? And I'm thinking No, that the dissonance is off the scale with those anyway they seem to be popular is I don't quite understand but at any contact with Nick Marianna is very good even It has been overlooked all the time, which is bloody annoying. Go on, Andy, you have absolutely
Andy Hart:nothing to say.
Alan Smith:It's a great thing. I fell back in love again with Nick Murray. After that first time I've seen him speak for quite a while. And he's just got such an elegant way of communicating. He's just kind of understated. says, you know, minimal words gets to his point quickly. I just thought was great. But you're right. They weren't there wasn't a great interview because they talked too much. And it's good to know that Nick Murray is appearing, albeit by live video connection at the crsi conference in October,
Andy Hart:I think. Yeah, I think a few of us are going on, or is it Manchester, Manchester?
Alan Smith:And October we'll try to time because I'm
Andy Hart:going okay. Yeah.
Nick Lincoln:We're going on. You and I are going as paying guests, Andy. And then we're going to go and carry out on zego as I believe as a speaker.
Alan Smith:That's right. We'll talk about that near the time.
Nick Lincoln:Next, next, oh, good. Oh, good. It gets better Smithy. So
Alan Smith:just on the same theme, and just picking out and Carl Carl's gonna love this. We've talked in the past. But Bitcoin and Bitcoin becoming accessible by ETS, Blackrock have now got the fastest growing ETF in history, over $50 billion in assets from launching on a couple of months ago. And up until now, UK investors have been unable to access the same sort of thing. And if they were interested in Bitcoin, you'd have to go around that circuitous route and actually buy it directly, but much to call so excitement. It's now there is now availability. Certainly in the UK, not sure about Ireland yet, although I think it is sort of across Europe as well. Several companies have now launched a Bitcoin ETF, one of which is a company called Wisdom Tree, which I've done too much about I have come across the before the do seem to offer some quite interesting investment products and ETFs and Wisdom Tree and a couple of others have launched, you can now it's an ETF listed on the London Stock market, I believe. So it is available. couple of caveats, a couple of points to follow up on that. It is only available currently to what they call professional investors. So you got to qualify as a professional investor to get access. So it's basically just
Andy Hart:fill in a really simple questionnaire online and say that you're mad about everything and then you just fly through. Right. Okay. So you have your, with your investments go to zero, yes. Are you totally happy? If your investments go? You know, yes, yeah,
Alan Smith:all that stuff. So you you sort of get yourself qualified next semester. So it's not Well, again, so if you're interested in it, who's gonna say no, but anyway, you kind of your ability to sue them for Christmas, I just want to throw something in as something interesting. And all I think about is our ability as planners to kind of defend our position should you need to or just to articulate a helpful conversation with clients. If Bitcoin continues to sort of tear away at the rate it has been doing and I know we all know it's hugely volatile. But if you look at the compound returns over the last five years, let's say it is it's enjoyed extraordinary growth, extraordinary success. I'm certainly aware of at least one discretionary fund manager in the UK in the name of Rafa, who bought a significant amount of bitcoin some time ago, as part of their diversified strategy. I'm going to guess that quite a few other discretionary managers are going to build these this ETF, whether it's 123 4%, into client portfolios, and just sort of being you know, having your conversation well thought through and well rehearsed, if a client says, you know, my pal down the proverbial pub, his funds are run by X Y, Zed portfolio managers got 5% in Bitcoin and it's really been a fantastic experience for him through this ETF, you know, why don't we allocate some some assets now that we can,
Andy Hart:of course, they're going to add to the bag of spanners with more financial trash. Yeah. But I'm still boils down to it's not a real asset class, it doesn't provide a rising income, therefore doesn't provide buyers and capital. I'm not adding any of it's my client portfolio. So I mean, it's something that's you know,
Alan Smith:not and neither are we, but it's just being prepared being forearmed having a you know, a nice Nick Murray esque style. Simple articulation as to why why we're no yes. It's gotten us 300% Two years. Yeah, it's what we do. That's it, boss. Back to whoever's next.
Nick Lincoln:Thank you Ultra.
Andy Hart:Briefly, this is Royal London came out with their recent insurance payouts for the whole year of 2023. Their payout claims record is 99%. So massive congratulations to them. Just a reminder, I suppose if hitmen see shot in the arm that insurance, life insurance, human insurance, income protection is still hugely important for our clients, sometimes advisors, wealth managers miss this. As the years roll on as an advisor, you come across more and more clients, potential clients, friends, family members that get impacted by serious medical, sort of financial impacts, etc. So they paid out over 730 million, and their claims record was 99%, which is pretty awesome. I think most of the large insurance companies are all over 90%. I think they're most of them are I think the average is about 97 98% at the moment. So it's, you know, a lot of people fear that they have a claim and they won't pay out. But, you know, the cost for them to dispute claims is more than the cost for them to pay claims, which is insane. It's like if there's a 70,000 pound payout, and they think actually the clients are on the fence with this one, to get the lawyers involved to push back against a 70,000 pound payout, they might as well just pay it before nightfall. So it's a quite an interesting business that the litigation costs way more than the payout. So yeah,
Alan Smith:anyway, plus plus the benefits, the PR benefits, or the the issues. I mean, this is classic kind of Daily Mail stuff if they don't pay out. And the benefits that you know, when they do there's, you know, there's usually there's a real challenge or a tragedy behind the claim yet, but if someone is able to, you know, get some some financial support to help them through it. It's, it's it's relatively a good news story. So
Andy Hart:yeah, I mean, good news stories, obviously in the financial world, and not nowhere, you know, not even crisp packets or chip packets. Anyway, back to you.
Nick Lincoln:Oh, good. Okay, I see in the chat that says storytellers but the question am I going to mention a story from TRAPPIST fan, Damian Clyburn, can we just say no for this episode, and we could probably build a whole episode out of that out of out of out of anonymized horror stories. For sure. Okay. What's the next thing? Okay, so I've signed up for a newsletter, I think I think these come out about once a week from a name who I will reveal at the end of my little piece here, but it comes about once a week and he was a highly respected member of the investment community. And he's put out one recently on the decline of the UK stock market, which ties in with episode 17 of the real advisor podcast if you're gonna listen to that, and we talked about it, and in this newsletters, saying, Why has the UK stock market gone from like 12% of market world market cap down to about three and a half percent over the last 2030 years. And he mentions the old Canada frs 17 being the big one this this this Maxwell pension scandal thing of matching liabilities to bonds, and that absolutely catastrophic effect is had both on DB pension schemes and, and on the UK stock market. He also mentions Brexit, perhaps not in the way that some people would mention, he says that the the apocalyptic warnings about Brexit and the dire economic consequences, which never came to pass, did mean a lot of foreign owned companies, foreign owned investors for the left the UK stock market in 2016. And then the final thing, he says there are three things IFRS, 17, Brexit and then MiFID. Two, and I liked the way the guy worked this, he says, the second event that administered the coup de gras to the already ailing market was another piece of imposed regulatory nonsense, namely referred to and he goes on talks about that. So there are three hammer blow to the UK stock market there and it is diminishing and diminishing diminishing, I would suggest you sign up to this email. It's by Neil Woodford. Okay, just throwing it out there. All right, just throwing it out there. He's, we know what happened with his company and the funds he had, okay. doesn't mean he can't still have very insightful views based on his 40 years of working in and around the UK capital markets. And I was just you have a read of that. If you haven't done it already. If you don't like it, you unsubscribe, No one's forcing you. Okay. storyteller is a spider or SPIVA? I never know.
Alan Smith:Are we missing the other one? SPIVA. I call it butts the not
Nick Lincoln:missing anything. I'm not missing anything. You paper I do with digital.
Alan Smith:s&p Dow Jones indices. Okay, this is Stiva produce reports available for free, available online. And they're updated depending on which one is updated twice a year. I think on the basis this is an independent third party research company. Like you know, it comes out and it effectively endorses one way or another are the four of us on this podcast. In terms of our broad investment philosophy. The interesting one that they came up with recently a couple of weeks ago, is what they call their persistence scorecard. And what they mean by that is the the research indicates when they look across the entire spectrum of every type of asset class, every type of fund every type of style of investing and They identify the fund managers who have enjoyed a period of outperformance over the previous 12 months. They then track them forward for the following period of time and they look for persistence on the basis that they're trying to identify whether the outperformance is down to luck or skill on the basis that if it was skill, the outperformance is likely to persist, it would stick you know, if the if the fund managers were genuinely skillful, they're likely to do it again and again in subsequent years. And they find that that is very very rare if non existence at all and so you can access this thing that the European one obviously the cover the entire globe, but this one is the European one, which includes UK funds, the Europe persistence scorecard, and as I say it measures that consistency. And just to redirect from the paper, it said it shows that regardless of asset class or style focus, active management outperformance is typically relatively short lived, with few funds consistently outrank in their peers in five of the six reported equity fund categories, and all four reported fixed income categories, not a single manager, whose performance placed him in the top quartile for the 12 month period ending December 2019. managed to remain in the top quartile for the next four years. Bottom line. Bottom line we know and some commentators will will always point these out these people be it Neil Woodford, be it Nick train, be it Terry Smith be any number of other staff fund managers, their ability to consistently outperform longer term is very limited as the data would seem to support is back to this issue of, you know, why are you trying to find a needle in the haystack? There seems to be almost zero evidence that that outperformance persists over time. So how on earth do you select from 1000s and 1000s of funds and fund managers out there? How can you select them? If it's not past performance, you have no other way of predicting future performance. And they talk also about the a lot of flat funds, which are in the bottom quartile tend to just get closed. So you got this Survivorship Bias thing. If you've got rubbish performance, it just closed them down or merge them. But those who are listening to this who are kind of reviewing their investment strategy and investment philosophy, quite helpful to check out the SPIVA Standard and Poor's Dow Jones indices, research and reports. And there's links to it in the show notes. Thanks.
Nick Lincoln:Thank you, storyteller. Sorry about that. Watch. I think I gave you a near heart attack. Then when I triggered the screen. The screen dropped. But it's woken you up, at least you can now regale us with interesting stories about the Bank of Ireland. Yeah,
Carl Widger:very, very interesting story. Yeah. So I've spoken before about Bank of Ireland and AIB not giving any return to savers here because there's no competition in the market. But revolute have, have been operating in order for a few years now. And they brought in a savings rate of I think three and a half percent. And finally, finally, finally, Bank of Ireland have made their move. So they are giving, I think, a one year and a two year fixed deposit rate. So at least savers are going to get at least some return. Now interestingly, it is only being kind of launched I think next week that maybe this week or next week, and there's an ECB rate reduction coming it seems in the very short term. So it'd be interesting to see how they change things as soon as the ECB reduce their rates so it's just interesting because competition guys it's you know it we really lack it here in Ireland in so many different financial markets. And you know, you do need it you absolutely do need it and you guys are much better placed and you know, you'd be talking about different different options that you guys have over there we just don't have it and it will be fantastic and that that's surely the whole Europe dream that we've all been sold. We should have it here but yet it does not happen. Anyway Nick, that's not a cue for you to go on about Europe and all of that but
Nick Lincoln:know what your dream is. It can
Unknown:save you save that for the watsapp group.
Andy Hart:Get to that with the meat and potatoes
Nick Lincoln:Ultra dashboards of a pension variety.
Andy Hart:I think this might be the dumbest thing I've ever brought up on track but it's like well, well well
Nick Lincoln:that's a big statement. That's a big
Unknown:more boring than the bond fund. You spoke about the last
Andy Hart:Aviva I don't even know what this is. I'm hoping next To help you I know what it is roughly but I'm sure Nick's Scottish Widows are joining pension dashboard coalition. Really
Unknown:you put that into topical, oh my god
Andy Hart:pension dashboard thing all about because it's the central place to put all of your pensions and it gives you a for everything
Nick Lincoln:I think it's there somewhere where you, you know, Joe Bloggs can log in and see all their pension pots at I think the original idea was also the state pension would feed into it as well. But it's bit like all of these awful things coming from government and NGOs. And so it's just gone on for decades. And there's God knows how much money is being
Andy Hart:spent 300 million on it already. But anyway,
Nick Lincoln:isn't it to join? Yeah, that's the one Porter where Joe Public can just log in and see all her pots effectively,
Andy Hart:I think yeah, fine. All right. Anyway, let's move on from there. Sorry about that.
Alan Smith:I think so. It's been on the blocks for years, isn't it? But what's what's the point, Andy, that they these two large organizations have joined it? Yeah. This this is officially the dumbest thing you've ever seen. That includes IKEA wardrobes that
Unknown:I sleep coat,
Andy Hart:I owned it, I owned
Alan Smith:it. Yeah. Fair enough. You did do better next time.
Nick Lincoln:We will never talk about this again. Okay, never happen. What about now next one is a zinger from me as well. It's kind of his thing. And actually, we've talked before how I think that's about four or five episodes ago that, you know, we were born known hundreds of advisors over the years that have gone from active to passive, but I couldn't name one that's gone the other way. And then I found this article about the Canadian pension plan or the Canada Pension Plan, which as far as I can understand it is a is the pot of money behind the public sector DB schemes in Canada, okay, even DB schemes have to we have to have money managed for them to make. So they got a pot to to fund their liabilities. And it's, it looks like the Canadian ones actually funded, which is quite novel, UK civil servants take note. Anyway, in 2006, the Canada Pension Fund took the exceptionally odd move to go from being largely passive slash index, whatever adjective verb you want to use to do being active. And it's been disastrous. The fund performance or maths for the Canada Pension Fund has obviously lagged behind all of its benchmarks over the last 18 years by a significant margin. And not only that, the underlying grift that goes with being active, but they had quite a lean team of administrators with an enormous fund back in 2006. Now they've got loads of employees loads of investment committees, their their fees have gone through the roof, which of course has a direct impact as well in return. So there's an example of the worm turning the other ways, the only one I know of, it's quite a big example. And it's been extremely poor. And it kind of ties in with storytellers. SPIVA, spyware persistence report card earlier in the tropical tidbits, it's just very hard after fees to just a beat the market. That's the thing I speak and you will just see.
Andy Hart:The evidence is overwhelming, overwhelming report after report, you report afternoon report. And still, behavior is not changing. I know. Alan's also as angry about this, but
Alan Smith:I'm not angry about it I used but then again, I'm not confused because it's
Andy Hart:that it's networking then it's who people know why.
Alan Smith:We know that the certain thing you know people are overweight in this country and around the world. People still care care. When there's a lot of things that rational rationally we can be because it's obvious there's so much evidence that people
Andy Hart:buy Nurofen when you can buy ibuprofen, the chemist the pharmacist will buy Bupropion was new nuraphone is still the number one seller people are still going to be out by an active funds forever because it's a marketing business. It's their life savings and they want to be told a story that dance.
Nick Lincoln:Why do people buy Viagra when they can buy what was the other stuff? Yeah, start with that. Very strange. I think what's bizarre about this one is it is it's actually going from an index viewpoint where you know, we think once you've made that switch once the mental switch has gone in your head to in you know, indexing was not sexy that kind of made me wanted more go back to go back against it.
Alan Smith:You wonder what the thought process is behind that somebody some investment committee said this is really good.
Andy Hart:When he got x billion here, it seems far too easy to put it in one fund and employee no people. Buffett says that he says he goes into enormous organizations enormous pension companies enormous countries tell it tells me exactly what to do. This is Buffett the moment he leaves the room. They bollocks it all happen to get a load of committees in and then do private equity crap hedge funds hedge fund funds, have fun runs. But Buffett says to them, here's the answer. They can't even take the answer from Buffett. So, Lincoln
Nick Lincoln:logics and a work in Lincoln luxury, they made this decision in 2006. And putting two and two together and making 17. That was right in the middle of the last decade. And I bet some consultant came in and said, your fund has gone nowhere since early 2000. You're just tracking the markets, blah, blah, blah, blah. That's all that's maybe what it was it was that right at that worst time, you know, when when when, when their lowest ebb? Yeah, if it wasn't, if it wasn't, if it wasn't the tech, boom and bust if it wasn't 11, September, if it wasn't the Iraq War, and under the great financial crisis was also coming down the line. It's just that last period, and I'm sure then active consultants, investment research analysts and their retinue of smart people with clipboards, you know, had had more of a, they had more weight on the, in the ears of these kind of enormous funds, then then they would do now you'd hope. But of course, at some stage, they're gonna have to go back and then say, well, 18 years ago, we made enormous Cockerham we're gonna go back. But that's loss of faith. It's also loss of revenue and loss of lots of perky little jobs. Being investment consultants. So the grift the grift goes on. Okay. Oh, I don't know how you say it's the Scottish word. No, you how do you say that? Brand? Aberdeen, Abdon Abdun. Gone, Prescott. Aberdeen,
Alan Smith:with their vowels missing. It's just these bits up, by the way, but some of them yeah, just these look good happens when you drop a lot of ease. Yeah, just who, for our sins, we have been using their platform pretty much from inception, and generally works. And it's okay, and is one of the larger platforms out there now. And I was just I was quite interested to see that they have slashed their fees, I mean, slashed at certain levels of, you know, reasonably sized portfolios, that kind of reduce them right down to what looks like kind of bare bones, which allows us as we know, this sort of generally three component parts to an advisory or planning proposition, which is the advisor us is the investment solution, portfolio, whatever, and as a platform or custodian to hosted administer the assets. And we've always talked about, really the investment piece, despite what a lot of the, the industry tells us, is pretty basic, straightforward. That battle has already been won, despite what the Canadian pension fund and others seem to think. And platforms as well, you know, when platforms first came up all those years ago, I think they're almost treated as a kind of product type thing, you sort of compare and contrast one platform versus another. And there's still seems to be a few who do that. Whereas really, to quote, The Right Honorable Andrew Hart is just plumbing. So the platform is the plumbing, the investment solution is increasingly heading towards just being plumbing. And you want to get the most simple, reliable, low, cost efficient, etc. It's the planning, where the value is the planning where the art lies and the creativity lies. And as a result of looking at our investment solutions, looking at the cost now for something that Aberdeen and others, you we're rapidly heading to a place where the complete the total cost, all in costs for everything is about 100 basis points, not much more than 1%. And I think when we get to that level, that is defendable all day long, that's outstanding value for the for the value that a real financial planner adds and of course, within that overall fee makeup, the planner receives the lion's share of it and rightly so because the planet adds the greatest value. There's a point at which you can't reduce fees any lower and you want your platform provider to make a margin and be making a profit and reinvesting in developing technology. But I thought that was quite interesting development from one of the larger players out there. It didn't help the fact that them that the CEO subsequently resigned the following week after making the announcement. But hey, that's another story altogether.
Carl Widger:What are the what are the Hawks what are the fees now and whatever
Alan Smith:the so on, they had theirs was a fairly complicated a dependent on the tax wrapper and what's involved in the various various layers. Ultra Agra delivered now. The guys knocking on his door, he'll be back he'll be back soon. If you've got a reasonable sized portfolio, you're heading towards about 10 basis points for platform.
Carl Widger:This my point about competition being required, you know, worse than 40 basis points here.
Alan Smith:So hopefully, it is it is definitely a competitive market. In UK, platforms wise. Price isn't everything, by any means we all know, from favorites here or Transact. And they've never been the cheapest, but the generally pretty good. But yeah, it's just as you build everything in you recognize with all the various component parts and the planning experience. And that's where we're heading to the platform should just be, as I've always said, it should just be like the electricity, I don't know what electricity supply we use in our office, but you expect to flip a switch and the lights come on. I mean, it's kind of like that this shouldn't be a lot. So it should be largely a commoditized service and any commoditized service, you're looking for the lowest possible cost, it does the job that you wanted to precisely Yeah, but if as a consequence of this, you can head to sort of, you know, one to 1.2, all in costs for a full fat financial planning experience. And it just shows that there's huge daylight between that. And some of the really expensive options. It's not all about costs, it is about value. But we're really, really able to differentiate ourselves versus some of the kind of traditional hundreds, of course, and be pirates and pinstripes. And I
Andy Hart:think I think around the million plus level, probably quite a few advisors are already there. Typically, their fee might be about point 7.69. The platform on that for you, hopefully around about point one, five, and then you can get one fund solutions are about point one, five, but at the moment, there's still not any decent proper global equity funds that are that low, but they're coming down. You can get an s&p 500 index fund for 0.06. But that's too concentrated in the US. But anyway, we'll move on from that. So yeah, definitely 70 basis points for the advisor. Point one 5.15. Yeah, that takes you to just under 1%. And that's awesome. They get an amazing global equity portfolio, fantastic plumbing to do with all the reporting and tax and CDT and all that crap and then you as an advisor. Yeah, you're right. How can I argue with that, but I hope we'll see how we get on.
Nick Lincoln:Very good hockey ducky. So the further near the end of the topical tidbits storyteller, Moto Moto, Moto Moto,
Alan Smith:now that Sandy Yeah, mostly that's me.
Andy Hart:This is a lady who you might be familiar with Melissa kid, she's just launched a new course called ACE, your annual review, which is all about client communication has got some useful, interesting stuff. I've bought the course and then I thought I'd email her and let her know she can offer a discount to trap subscribers and she has there's no nothing in this for me. But if you wish to purchase the course it's Moto M O T E M dot credit UK sign up to a newsletter is decent. And the discount code she tells me is trapped 10 The reason why we use discount codes just to let you know so we can track staff, if I just mentioned it now and loads of people sign up. We don't know. You know where that traffic is coming from. That's why discount codes are used just a little inside track on discount code. There's obviously nothing in it for me. And obviously she's taking the 10% hit. Anyway, that's that final point. Humans under management London and Cape Town tickets are live go to humans under management.com. Cape Town has about 50 tickets. London has about 75. So yeah, we'll get back to you, Nick.
Nick Lincoln:Great. Well on that last point, Nick transferrin. Trap 10 is Ti n naught one zero the end. Great stuff, right the last one.
Andy Hart:All letters trapped NT and at the end. Thank you.
Alan Smith:Conlan. Yeah, this is just this is quite poignant. I just wanted to use this opportunity to give a shout out to big trap fan big trappers by the name of Kevin Conlon. I mentioned him in a previous episode, I track my first meeting with Kevin back to last year was it last year or the year before? When I saw at Lee Robertson's conference, progressive planners and I'd never met before and he came up to me the coffee thing and we just had a chat and he just said, but like going through the whole story again, he said it'd be very inspirational love the stuff that you guys do at trap. He had suffered some some pretty serious health challenges was in hospital. He had been a kind of city broker type guy. He'd worked for a hedge fund working crazy hours, only a lot of money, had some serious health issues, including a heart issue and unfortunately, got cancer and was in hostel recovering, and he just decided how to how to have a career change. I did mention this before, listen, it was very inspired by our ramblings on trap and any you know, so I just randomly bumped into him at this conference. And he shared that story with me, subsequently met up with him once or twice, and he's just a really lovely guy. And he's was looking to, as I say, to look to develop a career in financial planning. He's spoken to a few firms and he's kind of on the edge of getting a job and working In a planning company he passed all his exams on the rezone steam by himself anyway wanted to wanted to progress. And I just caught up with him recently I said how's things going and he said, unfortunately, the cancer has come back is pretty serious now back in hospital back in for a lot of tests back in for chemotherapy and a bunch of other stuff. And he was still pretty positive. I think I'm going to meet him again next week is kind of out and about, but going through some what sounds like, you know, pretty intensive treatment, and, you know, hospitalization and I just wanted to take this opportunity to just remind ourselves that, you know, sometimes life comes at you, and it comes at you in all sorts of negative ways. And it's just a brief reminder to us that you don't know what's around the next corner. You know, enjoy your moments, be grateful. And and really just wish Kevin all the very best, you know, he's beaten this once he can beat it again. Big shout out to Kevin Conlon and, you know, wish him all the very, very best from us at the trap podcast. Yeah,
Unknown:good luck, Kevin. Good
Nick Lincoln:luck, my friend. Well, certain good luck, Kevin. Yeah. Nice. Nice. Nicely done. Okay, so we're at 41 minutes into Episode 46 of the real advisor podcast to EP Tara, PA. I think it's time we moved on to the meat and potatoes of this show. And we had we the trap pack had some internal dialogue before the show on this subject. Do we talk about it? Do we not but I think it is so opposite. It'd be the first time in the history of crap. We've spoken about it. Because it's the first one in the history of Trump, that is a general election and the thorny subject of politics. Do you talk about it with clients? Are you on the front foot with it and acknowledge it with clients? Or do you not talk about it at all? And if you do talk about it, how do you talk about it? How partisan Do you think you should be? Should it be partisan at all? Very, very thorny subject and quickly alienate you, as the three things you don't talk about on the sex, religion and politics. Well, we're going to talk about politics, or we're going to talk about whether you should talk about politics to your clients, and I'm gonna lead off on this. Before you do that, I'll put a link to in the so called shownotes. There's a website that storyteller brought up for school, the political compass.org Takes about 10 minutes you answer about 24 questions. I think it's around that. And it gives you your political leanings and three of the Track Pack have have done this Carl, who's who's a little bit dusty today. I think we can say that no fantasy, he opened about the bottle of harvest Bristol cream lurking at the back of the drinks cabinet. And maybe had one too many of those. Yes, it is.
Carl Widger:It is a bank holiday. And I'm doing this podcast today. Anyway, I'm really really looking. It's been for
Andy Hart:a run just before the show, actually.
Nick Lincoln:So we did. Yeah. And we upgraded our schools out there. And I know we're all pretty similar. Actually. I came slightly more. What would you say laissez faire on the economics, but we're all pretty much in the middle on
Andy Hart:our I don't know how you achieved a score of what you did. Nick. So far. Right? It's unbelievable.
Nick Lincoln:No so far laissez faire. There's a there's a basic
Alan Smith:you just move on to things isn't it'd be economy or your economy
Nick Lincoln:is left, right. And then yeah, authoritarian or libertarian is north south. And we all scored south on that one, which is good under the under the line
Alan Smith:libertarians, we
Nick Lincoln:believe I was to the right reader on that line, which means I'm the minimal state minimal taxation, which wouldn't surprise anybody.
Andy Hart:I answered those questions on that persuasion, but wow, okay.
Nick Lincoln:Yeah, I mean, they're never sometimes the answers are the ones that you just choose the assets. That's the least wrong for you. You just gotta go with
Andy Hart:the answer. It's quite
Alan Smith:a good test. It's worth doing anyone's listening to this, check out the link and do your due test just to identify what your politics actually are.
Andy Hart:And even the questions it asks you you're a bit like, Oh, right. It's it's all politics. It's, it's quite insightful. From that point of view. Yeah, we
Carl Widger:got confirmation that the echo chamber is working perfectly we all believe. Confirmation,
Nick Lincoln:the echo chambers working, working, working. echo, echo, echo. Okay. So politic rallied off on this one. Did we talk about it? The fourth, the Fourth of July is going to be isn't that we all saw the chaotic announcement with the Prime Minister getting drenched. And then you had that guy playing the things going to get better tune in the background. I mean, it was just shambolic. And then the next day, soon as it goes to, like, it goes to meet some Welsh working class people. And he's obviously Ultra partially sitting down with them and saying, Are you looking forward to the Euros and someone pipes up? We didn't qualify for the Euros. And the next day, literally the next day, he goes to the shipyard in Northern Ireland where the Titanic was built. And of course, the journalist says, Oh, so you're part of the greatest sinking ship ever aren't new is that well, you've had this thing three days on the bounce of that just the most disastrous launch it is what it is. And I think that it didn't get the sleeper train
Andy Hart:up to Scotland and he flew back in a helicopter
Nick Lincoln:Oh, something like that. It's all. It's so it is it is. I mean, it's, um, one moment is one. It's funny and the most it's sad because he's he represents my country. And he's, you know, I think the general sense of malaise in the Westfall stuff. I don't think Ireland in particular great place in the UK certainly isn't. Canada isn't the USA isn't?
Unknown:No, we're just we're absolutely fine, folks. Where are you,
Nick Lincoln:what's your tastes like is on your country, my fav on international stage in recent months, but you
Carl Widger:just roll. Thanks very much.
Nick Lincoln:And I just think there's a general sense of Doom and Doom and gloom. And I think we need to be positive, I think I have this hatchet better that's going out tomorrow. And I have a disclaimer at the top saying, I think the current crop of MPs across all the parties is really low caliber. And I think if you're gonna talk politics with clients, you've got to be even handed about it, I would, I would personally say avoid being too partisan, because you're going to talk to people that's going to either not interested or we're going to just piss them off. So if you're going to take a view, take a view across the board. So I think across the board that I'm saying to my clients, yes, the politicians are really bad at this current current policies are really bad, worse, they've been in my lifetime, and I don't think they're gonna get any better on the fifth of July. Having said that, this course of great optimism, because ultimately, politicians don't change our lives that much, you you have the power to, to be the change. And that's the message I'm gonna get across to my class to talk about the election on what's going to happen. Change lives with you, okay, change be the change, you want to see you have the power to change your life, take ownership of your lives, have a plan, just because the political administration changes, we don't change the plan, political administrations last for five years. And then there's another one comes in after that, and another one after that, well, your financial plan, your life plan will last the rest of your life. And you just try and be cognizant of that. The good news is that Sunak called an election with a very short run in time. So we've only got like, five, six weeks to suffer it. The bad news is we've still got five to six weeks of suffering, right and it will be insufferable. So you know, my ongoing mantra about turning off the news. It really won't affect you. You know, to paraphrase Nick Murray, administrations are temporary financial plans are permanent. Just stick with your plan. I'm sure we're gonna get asked questions. What are labour gonna raise tax? The private school things? Yes, Andy, that seems to be their one policy, they are going to definitely go through it. But the general question will be, are labor going to raise taxes? Now? As someone who prefers a small state it would it be easy for me to say yeah, they cost a lot. So then I, you know, my answer to my client is well, actually, those in work in the UK are paying the highest tax burden since 1948. Already, capital gains tax and dividends, tax allowances under the conservatives have been slashed, they might as well get rid of them. They're meaningless corporation tax has just gone up by a third, buy to let landlords are sinking under income tax hikes and a range of perks have been taken away. There's not a lot more for labor to do would be my honest answer. If clients asked me that, I don't know. But that's why I think I don't think there'd be material hiking taxes. I think on the cultural side, if I had daughters, if I was female, I would be uncomfortable having a Prime Minister who doesn't know how to define a man and thinks that a woman can have a penis that would make me slightly nervous, but that's a cultural thing. So I just think you've got to start out by saying whatever happens, the chant, you are in charge of your life, you're politicians, you'll you'll achieve financial salvation, you'll do the things you want in your life, despite politicians, not because of them, they're not here. They don't, we don't need them. They need us far, far more than we need them. Focus on the plan, stick to the plan. Unless something materially changes. We don't change your plan in five years time, it'll be a different administration, but your plan will still be there be the change you want to see. And just try to be positive about it really, because I think it's everything doesn't just feel like a bit of a shitshow. But ultimately, it's not that relevant. It really isn't that relevant. And that's the message that I would go if people ask me and that's the message I'm going to send out to my clients with my two best videos that tomorrow, that administration is a temporary financial plans are permanent. Let SW 19 let them swim in that sewer. Nothing to do with us. Never the twain shall meet. Storyteller your digit was raised.
Alan Smith:What's SW 19
Andy Hart:Wimbledon
Nick Lincoln:isn't aware it was Westminster SW one. Oh, that's inflation for you. It was one can use it in
Alan Smith:Wimbledon for strawberries and champagne. So well.
Andy Hart:Nick, not kind of the No, that's the rule. That's fine.
Alan Smith:Yeah, I think that's very well said in the run up to election inevitably, this becomes an agenda item. Clients asked me about it you if you are if you've timed a client at an annual planning meeting with a client in the next four or five weeks? Or absolutely, you know subsequent to the general election is going to be an agenda item people are going to raise it is front of mind. And I agree with what you say, Nick. Politicians come and go. markets go on forever. People's lives go on hopefully for a long, long, long time. There is a brilliant graph image type thing which I've shared before you guys have all seen it and it's worth checking out I think dimensional produced the US version, and then the aforementioned timeline created is a UK version, and it's simply in the UK. One is that there's the footsie. 100 is one pound invested back in, I think the 1930s or 40s up until present day. The graph shows the rising line of the market returns in the footsie all share or footsie 100, whichever, and it's color coded dependent on the political party in power at the time, the points of the graph, and it's a really useful one worth digging out. And if you want to find it, go to timeline.co. And look at their graph. You can download it from there. And it just confirms the point isn't really separate and in a nice, easy to access image, which means it doesn't really matter who's in power. Yeah, there's a global events as global economies doesn't matter whether it's conservatives, labor, or whoever else, markets do what markets do. And it's just a reminder to clients, because we naturally think and to your point that you actually think, well labor or Socialist Party, the party of high taxes where they couldn't be much higher taxes and the previous administration, the current administration, so it doesn't really matter too much. I am going to single out one thing, no, and maybe it's coming from a personal perspective, this VAT on private education, it just seems like sorry to disclose it. It's just it's the politics of envy really, is that no other country in Europe fact is actually against EU legislation to impose tax on any sort of educational funding. And it just seems anathema. It just seems like such an odd thing to do to tax those people who are taking the joy out of the state system, funding education privately, and then having had, you know, put another 20% on top of it. And as someone who's got children at private school, and I know a lot of the parents there, this makes not a whit of difference to the seriously wealthy ones. But most people at private schools, vast majority in my experience, are aspiring middle class. So they are who are already paying significant amount of tax. And to put that on top of that if you've got two or three kids at private school, that seriously will challenge your your family household budget, and it may mean that people will have to take difficult choices and see at least one or more of their children out and put them into the state scheme now. That's all I'm gonna say 1000
Andy Hart:children and then as a rough guesstimate, 70,000 children are gonna leave the private system go into the states, and it's just gonna
Nick Lincoln:happen that it could it could easily be 150,000 plus, okay, which is already saying we don't have sufficient secondary school. It's insane
Andy Hart:in the current US insane. just
Alan Smith:yet, but doesn't mean there's. And I think the only other point I'll make here in relation to politics and government is it doesn't have confirmed the benefits of a forward looking, proactive financial planner, because not just the education fees, but the pension legislation. They've already talked about putting back the lifetime allowance and pensions, and a bunch of other stuff. So you want to have somebody in your court who's helping you navigate, navigate the sort of future issues and challenges. So as I say, politicians come and go, financial planners go out for life. Who's next?
Andy Hart:Over briefly go the call can close this out. I have almost no conversations with clients about politics, I probably wouldn't surprise you. It's never really been an issue. You know, I've got clients of all different ages, races, political persuasions, I'm just not really too interested in it. To be totally honest. I'm interested in progress, you know, made mainly through technological innovation, which I think overrides all that and that in the long run. I'm never really impressed by that when he politicians, they never do what they're going to say all the manifestos turn out to just be, you know, PDFs as it were. In terms of actual impact on markets, thankfully, all of my clients over the years are well trained, or for one of a better phrase, and none of them are really going to be coming to me saying what are the impacts and the specific impacts about changing the taxes and stuff? Obviously, that is, you know, a continued service, you know, when the information the facts change, and obviously, you know, the advice might change. But I have very few conversations with clients about purely politics. So if there's advisors out there thinking how they're going to tackle this challenge, then you know, Nick, I'm probably assuming is quite on the front foot with the staff maybe I'm certainly not but
Alan Smith:what would you say what would you say though, and you could just again for the benefit, saying we're listening to this, and as a lot of people as we know, listen to this as somebody gets that in the next few weeks, and they have their annual planning meeting these anisette and it really is all over the news. What would you say to say, what do you think about this? What do you think if if labor get in what do you think of this? Would you think? Well,
Andy Hart:I would say how would you handle labor are getting in I you know, I'm a numbers guy. I'm looking at the I'm looking at the I'm looking at the bookies the bookies Got labour at 1.11 Point 11 which is basically Man City playing you know a shit Sunday League football team they getting the bookies can be wrong but so labor again in that it's obviously was the impact of that so it depends on the situation depends on what impact that most stuff I'm usually clients bring up things that I've got no impact on them anyway. So unless it's a specific thing that would really directly impact them I'd do what I always do and have a normal conversation with them like a human I'm gonna overthink it and come up with a plan and strategy depends on what said depends on now when
Alan Smith:we I don't think any of us have got very, very strong political views next next Scotland, he's getting it he's got a stronger view. But you, you do an open mind?
Andy Hart:I know that knows most about politics, I probably say Nick Lincoln, yeah,
Alan Smith:it would be but certainly
Andy Hart:swim in my friend.
Alan Smith:I've shared with you some of you guys, I've there's a few contexts of monitoring that any direct clients, but they send me emails from things, other articles they've read, which are pretty extreme, actually, one way or another in terms of their sort of political thinking and what they think, and kind of saying, and what do you think about this? And I'm being asked to comment on things that I've either got no real interest in, or I don't really agree with what's what's actually being put forward. And it's just, it can be a tricky one to navigate. If you've got if you had a really good client, and they got very strong with you or another. Would you just say, Look, I'm not really interested in politics, that's a bit of a cop out as well.
Nick Lincoln:Yeah, I mean, I would call up, I appreciate your, you're gonna give it an Irish slant on this. I mean, I'm sending this thing out tomorrow to my clients, and they want to subscribe to it just as a front foot thing to get it out of there. As soon as I know this is happening. And so are you ready, I would rather not talk about it probably won't happen. But I think clients are going to think it's a bit odd if you don't address it at all. So I'm just putting it out there. I'd rather be I hate them or proactive in front of me when I just want to I'd rather get it in front of them before they come in front of me. And if they want to talk about it in a bit more detail. That's fine. It is a bit tedious. And it's a lot of guesswork. And it's a lot, a lot of cynicism and negativity can go into the conversation. But I just want to get this out there. So I have done I think I've kind of take that thing off, you know, the same way. Again, if we're careful, there's, you know, when when the seventh October happened last year, I know that many advisors were thinking, Okay, I'm going to talk to them. And I would say reach out cannot remember the Four Tops. I'm going to talk in one way or another to my Jewish constituents, my Jewish clients, and just say, I'm aware of what's happened. Hope your families all right, okay, rather than them just thinking was all these little mini concepts. Now, some people might think they know that. That's nothing to do with you, blah, blah. But But I just felt I had to the habit of Jewish clients, I've got I had to be, I had to do it. I had to get something out there. And actually, I got a really favorable response to that the same with the political stuff. And I added, they never talked to me about it for the next, you know, until the fifth of July, the first budget, that'll be the name of the new administration. That will be that will be, you know, there will be some zingers in there. I'm
Andy Hart:sure. I won't be interested in the changes that they're going to implement. But again, we're just be guessing and forecasting what's going to be so yeah.
Nick Lincoln:Okay. All right. Yeah,
Carl Widger:I think it's so politics. I, I have very little interest, I have a large dose of skepticism about politics in general politics, is short term, by its nature, it is short term it is how can we stay in power, and it is always going to be kind of for years at best. So I never ever, ever get into discussions about politics. I just don't. But in terms of so after all, this is a financial planning podcast. So in terms of financial planning, I think absolutely vital that we're always you know, we know what Mike's becoming or what they're talking about in terms of manifestos, and that, you know, they just put stuff out to see oh, how will that land, and they're doing it here in Ireland at the moment. We have European elections, local elections, and as a directly elected mayor election happening in Limerick as well, that's happening actually this week. But there will be a general election, I would say in the next 12 months. So what they're doing is there's going to be a budget, and basically, they'll try and buy a whole ton of votes with, you know, let's increase the state pension, even though clearly the math tells us that we shouldn't, and we can't, yeah, but short term, you know, let's get us back into power. So we'll buy all the votes from all of the pensioners. But here we've got a we've got a kind of a disconnect between capital gains tax and exit tax, or I've spoken about this before, where capital if you buy a stock and individual stock holding is 33%. Whereas if you're in an index fund, it's 41%. It's exit tax, they're talking about closing that gap, whether they'll go all the way they're talking about increasing the standard fund threshold for pension funds from 2 million or it's actually 2.15 minutes. They're going to increase that that's the kind of stuff as a financial matter, you need to be all over. And you need to know. And that's why for me when people talk about doing it, you know, DIY people in terms of their pension funds and their investments. That's why it can't work. That's why it will never ever work. Because you can't possibly know all of this stuff that we're doing day in, day out that we're listening to day in and day out. So for me politics irrelevant, I never comment on it, you know, on social media or anything like that, and don't, you know, people often say, you know, what happens if Sinn Fein gets in here in Ireland? Right? Well, I don't know, because people are going, Oh, they're totally anti business. You're going Yeah, well, they're not stupid either. So unless not, you know, make assume what might happen and how bad it might be, etc. But yeah, financial planners need to be aware of, of, you know, policies that might be coming in, it is not hard to be, you know, to be on top of that, because they'll put it all out there before they actually introduce it just to see how it lands. So, yeah, for me, it bores me anyway, the topic, and I am a huge skeptic.
Alan Smith:You know, the thing. The thing is, though, when you have you have a general in any events, but certainly if you're gonna have a change of administration, the talk about what might happen, as you mentioned, call, and we have all these things that are forever, and you're particularly pensions in the UK, which historical, were extremely generous from a tax viewpoint and have now been curtailed and curtailed over the years, there's a lot, there's a lot more limitations. But inevitably, you get talk of the pension commencement lump sum, previously known as tax free cash and a bunch of things like that. And we always get, it's always, you know, every budget, there's a whole lot of things that may happen have been muted as happen. And I've known people who have taken action on that, to anticipate and to protect, but using current rules. And so for example, they've crystallized pensions, they've taken tax free cash from it. And I don't know about you guys, but I've always said, well, we can't, you don't know there's nothing and and often, things never change. They don't or they haven't changed, and people have taken, there's a fine line to taking sort of pre emptive action, sort of if you know something is, it's been really it's pretty much guaranteed to happen to happen. But what do you do for those? Yeah, Nick, I know you've got a point. But you just, you can only as Andy's already said, you will change when the rules change. You're alive to possibilities.
Andy Hart:Yeah. When the facts change, the advice changes. But yeah, until the facts are clear. Yeah, take an action on that is high risk, business risk.
Nick Lincoln:Oh, what are you gonna say something? I'm happy to wait.
Carl Widger:Yeah. So a perfect example of that is, so the exit tax is triggered when you draw draw money here are on the eighth anniversary. So we have this perfect an example of this, right? So client needs 200 grand out of their portfolio, and they're going to trigger a tax event as soon as they take it out. But they're in a no major rush to do it. And we're like watching the Minister for finances speech. And he's saying, This is it. This is No, he's not ever going to say straight out, we're going to reduce it. But he is basically saying it right. So where's the same to the client, just hold off. And another perfect example is they're talking about increasing the SFT of a client who's just right on and he's going should we trigger and we're going to just hold off a month or two. So. So to your point on, you don't want to be guest making guesswork, right. But if there's stuff, you're pretty sure, and really, it doesn't matter if you just hold on for a couple of months. That's the benefit of financial planning. Because if you have a client who's coming in for their annual planning meetings, you've got a really great financial plan done, it then boils down to financial engineering, and just having someone in your corner guiding you, you know, just just steering the ship as you go. So I think that's where our value is. But try to guess who might be in power or where markets might go? Not just can't do.
Andy Hart:You've mentioned a car but I'll just sort of hammering home yeah. So so the DIY no help option versus the help option. We talked about that quite a lot. But you're right when there's a change in legislation as financial planners are flapping around thinking this is going to be big, but we don't know exactly how this is going to be implemented. And then one Brightspark financial advisors so this is what I'm doing my clients so we'll go to has just this is a genius idea, we're all going to do that. Or one of the big providers comes out with a technical presentation that shows us the impacts not that bad if you just you know send this form off to this person and flick this switch over here. So usually people within the profession come up with you know, elegant solutions to these new changes but you're right, as a DIY client, no help. And there's a big change coming down the pipe. There's almost no chance you're going to find the you know, the elegant solution. So yeah, just hammering home again for on no financial advice spoke to you, Nick.
Nick Lincoln:Yeah, just maybe closing up on this. I think Alan made the point that people taking pre emptive action about what might happen, you know, crystallizing pension funds. These are massive decisions that can't be unwound. But there are other things, I suppose that people will try. And so literally this morning, when I turned my email back on, because I turned it off over the weekend and an email from a client, she said to yesterday, to me, she normally pays into her pension at the end of the tax year, despite my best efforts. And she said to me, I want to pay it in now, just in case. And that's that kind of thing is I mean, I get that kind of thing, we'll probably get some more of those. Right, there's no harm in you know, the, the earlier the clients were invested, ultimately, the better for them over time. So that kind of thing. I think that's, that's perfect, that's perfectly fine. And I'll run but I'm not gonna go out on the front foot to clients and say, I think I pay in advance to the fact because it might not happen. But if clients want to do that, nothing detrimental about doing that, and they can afford to do it crack on crack on and do it
Andy Hart:could be wrong is highly likely. But whenever there's been a change, you've always had a period to take action. I don't think they've ever said 4pm or 5pm, you know, entrepreneurs relief is gone, for example, or what
Nick Lincoln:budgets do they will do, they'll say like they dig around with the annual allowance. They'll say, from millionaire from the time of this speech, it's going from closer business tonight is
Alan Smith:going down. What he's going to do is retroactively retrospectively say, I thought there's always a period you've always got a period. These things nowadays are well flagged in advance. You've got all the various kinds of dots what exactly? Tax quangos that exists in the press, I mean, the budget, increasingly, or the autumn statement, or wherever it's been, it's increasingly an absolute waste of time. Everything's significantly flagged up in advance.
Carl Widger:Testing the water test is now we'll tweak it Yeah. How will this affect our party's position in power? So that's why it's all Yeah, it drives me
Alan Smith:interesting on the current administration's plans to introduce a British ICER which we've talked about in the past, but Labour have said if they get in they intend to roll it out. It's gonna be short lived. It's a waste of time. Don't pay any attention to it because it will never
Andy Hart:happen. This is to really revive the UK stock market isn't
Alan Smith:for all the reason why
Nick Lincoln:VC who earn all their money overseas, it's it won't raise capital for British companies it will.
Andy Hart:The footsie 100 The footsie slightly better
Nick Lincoln:period, those for those people who've got an extra 5k to invest in the ISIS shooting they've already done that 20k is a tiny percentage of the population and 5k is a piece in the wind.
Andy Hart:Do five grand to do your British ice shakes Don't worry. I'll bet you five grand to do British ISIS Don't worry. Thank
Nick Lincoln:you my friend. Thank you Moses alone and not not a gift. Okay, I'll be done. I mean, we've given that given that subject a very exciting subject that we all totally bought into a damn good thrashing. So one hour eight minutes and Carl is Carl is just just reaching for the Alka Seltzer. It's a bank holiday less than that and go back and enjoy it. Let's move on to the next section of the show. Which of course is TRAPPIST questions I was trackers questions because I can see postholing the sack up my drive and rigging the front doorbell which is refusing to ring or let's just run now to make me see me mostly up there she goes ring yet the sack is full of bulging quick there was the play caller couldn't help it. There's the sack is full of questions sent in via libre TRAPPIST the link to submit questions in the so called shownotes it's also on the pin tweet on Twitter or x or whatever you want to call it today. Please do send them in having a look at this one it's quite nice letter this is so good quality carriage envelope with with fancy handwriting looks to me like it's from a chap who's in the Shire is probably from Oxfordshire. And it is it's a good friend of the show Mr. Dominic Spaulding who's on Twitter as at dawn Spaulding. The majority and dominance question is the majority of our clients come by referrals from existing clients. Sometimes though we are referred to people who we simply can't add value to or aren't a good fit for us. How can we educate clients to refer the right clients rather than the wrong in quotes clients to the firm and this is a perennial question and then we've had it in different forms in various times over the trap episodes I'm happy to go lead off quickly on that and then pass over to somebody else in my experienced on most clients do refer the right kind of clients because like mixes with like I've said that before and I said again and I think that is the case now and again I'll get someone referred to me by this listing client is just isn't a good fit. At most you waste 10 minutes of your life I think there's this fear that we're gonna get suddenly overwhelmed with prospects who just aren't right for us and we're going to be swimming in a sea of just saying no, we can't help you know, we can't help you and the time clock is ticking. It happens so infrequently. 10 minutes polite minutes on the phone with somebody who say you know, I just don't think we've we're a fit we don't really work with with people from your, your profile, I'm not frozen. Absolutely Well, I'd have to do better speaking to the person and then on to the next one. And that's that's how I do it. It's just not an issue. But there you go, then who wants to add to that?
Alan Smith:Yes, I'll just add on that, I think you've got to start from the premise that we will help to one degree or another, anyone that we are kindly referred into, we'll help them we might not agree to work together for for years ahead, but will absolutely help them. And I think the point is, is, is to do exactly that. Obviously, depending on the circumstances, it might be, they just need a kickstart. And if you send them to a DIY platform, or Vanguard or Hargreaves or whoever, it might be no advice given. But what we found is, this is a good place to get started, or whatever it is, they will leave, you will always give your time, just have a conversation or a meeting. And you know, it might be an hour, it might be a proper call, but you will point them in the direction that they need to be pointed to. And make sure you complete the circle by going back to the original referral. And say, this is what happened. And I think you educate your clients that way by saying it wasn't a really appreciate the introduction, it wasn't a great fit for the following reasons. But we've sent them on their way. And they're quite happy with the outcome and everyone's happy from that viewpoint. I used to think that the issue was, if this happened, we haven't trained in inverted commas, trained our clients appropriately or well enough. But clients don't know each other. Even if you're good friends, you don't know the sort of intimate details of their personal finances. So you should just be grateful you've had a referral or an introduction. If they're not a great fit, send them on their way, help them point in the right direction and let the original person know. That's all we've ever done. Would you think Andy?
Andy Hart:Yeah, Dom's a very experienced advisor. So don't think we're going to send say anything too revolutionary for him. And he's also at trap life. So thank you very much for supporting. Yeah, a bit of a mix of what you boys have said, I get a load of different referrals from a load of different people. One story that's sort of front of mind at the moment was, I look after a couple one is a civil servant, and one is a lawyer. The civil servant passed me to clients, and I thank them on email, and then the lawyer part, the couple Call me later on that day. And so just just so I know, because she also does quite a lot of networking with other lawyers. She said, What type of clients are you looking for, because obviously, her partner's past two civil servants, and she's smart enough to know that they're probably not my ideal clients. And I was like, I'm happy to have it, I'm happy to jump on a call with anyone. As Alan said, we'll help our people be pointed in the right direction, you know, give them 510 minutes, 20 minutes, 30 minutes, or wisdom that will, you know, hopefully guide them directly or whatever. And I basically said to me, I'm looking for clients sort of about 10 years away from retirement. And ideally, I've got a few quid probably minimum about, you know, half, you know, half a million pounds to invest or whatever. Again, it doesn't matter if you'd be a bit bit more specific with the numbers. So yeah, a bit of a bit of a mix of everything there. Over to you, Alan. Call.
Nick Lincoln:No, no, I just, I just had one last look, and there was a loss.
Alan Smith:Yeah, no, he just can't wait to finish. We won't be long now call almost there, hang in there. One last thing that I think can be quite helpful. So we do get some people who are referred to as what I would call very early days of their investing journey. And the honestly, they don't really need us. You know, we help people solve complex problems. That's kind of what we do, and somebody with a relatively early on, but I think if we've created it in the past, we probably need to dig it out and updated again. But almost like a cheat sheet, a one pager a PDF, which says the basics, get a will get lasting power of attorney, you know, start saving low costs and monthly contributions. You know, there's maybe about 10 basic rules of the road, as you're early on your journey. And that's just a nice thing to be able to do in those circumstances, send this across to you. Here's a list of things to do. Here's here's some links to whatever it is the various kinds of organizations that exist to allow them to do it at farm and you know, kind of at least keep in touch that kind of broad, broad approach can be a nice thing to do to help people all right.
Nick Lincoln:Okay, excellent. Right. Listen, we're at one hour, 14 minutes in Yeah, if you listen to this, do watch the YouTube video but he's just seeing a man slowly die on screen Carl is going through different shades of skin color as we talk. He's now on peace. Let's go on let's go.
Alan Smith:Call got worried he thought it was him. So it is not his face. We don't worry, culture corner. Interesting things we come across which are worth checking out. I've been subscribing and reading to a weekly blog slash newsletter called banker on wheels.com. Which was is the guy have actually spoken with the author? He is historically has been a portfolio manager and investment manager. Close books quite an expert. Yeah, I think he's becoming a close personal friend. I think he is his early days we've only met once, but that counts. Like he takes. Yeah, it's really up to you usually don't even have to meet them out or not. No, no, that's a whole other story. Oh, I got the tear whisperer. Oh, no, it's it's comes out every I think Saturday morning, I tend to read it is quite in the weeds, but it's a lot of stuff. He the guy's an expert. And he's now actually on it, he and he's got to remain anonymous, because he's still on some noncompete from the organization who used to work for BBB out of that soon. But he's is a deep subject matter expert on a lot of things in our world. And he writes some really interesting, it's sort of collates, if you like all the stuff that's come out over the previous week, all of areas that are newsletters and articles. Some of it is extremely detailed. Some of its just quite interesting in any financial planner who wants to sit on having to trawl through dozens of newsletters you might subscribe to on a weekly or monthly basis. Subscribe to banker on wheels.com. And there you have a cup of coffee in a Saturday morning and read through the notes. There's definitely some really, really good stuff in there. Highly recommended. I thank you.
Nick Lincoln:Excellent, thank you. I've just actually signed up for that as you were talking now, because I like art. There's these curation sites. The one in the UK is the money beta one, which is very good, although there's loads of links, a lot of which are well worth clicking through to so thank you for that. Okay, mine's next. And it's an old one. It's known either very good either. The the fairly successful us copy of our show. The old podcast, the most recent episode are two things. Yes. They talk about the US election. I'm sorry. If we think our election matters here. We think the Irish elections matter. The big one matters over over the Atlantic. And it's happening this year. Interesting how all four of them. Maybe David Sachs, not so much. But the other three are all kind of classic Silicon Valley liberals. And they're all kind of thinking, Hmm, not sure what that quite sits with me anymore. Even people like Chamath probably put the kettle on, who is not a political person is expressing his expressing views so interesting. They also handle that, like, I know this is a trigger thing for me. But even slippery lefties like Calacanis now saying, Oh, I knew it wasn't the wet market. We knew it was kind of the level that you didn't know it. You like that? They're trying to go back in time. But it's interesting how that is now floating around Fauci made that noose close, ever tighter. Okay, another thing is, if you're
Andy Hart:a fan of Nick, this is if you're a fan, or if you're a fan, I love it. Yeah, what?
Nick Lincoln:diverse views and there are times some people listen to us, I'm sure they are thinking most of the time that Nikki is great, but the other three are bozos or maybe not in that ratio. But it's a mixture, isn't it? And it's a great show, but it's a good episode. The best
Alan Smith:review we ever had was when somebody referred to this podcast as a pawn shop version of the all in podcast. Yeah. Yeah.
Nick Lincoln:This is generous. 50. And that, that, link to that and everyone scrap that. Okay, that's me done.
Alan Smith:Who's next?
Carl Widger:To me, yeah. Okay, so I'm rereading, never split the difference. We're all negotiating all of the time. And this book I read, probably three or four years ago at this stage. And I've been involved in a few kind of tricky discussions over the last while and I felt Ginola, I need to reread this book. So I started again, it's by a guy called Chris Voss, who's an ex FBI negotiator. And it's really, really good. And there's definitely, there's stuff that you can actually implement into any discussions you're having. And they do work for absolute sure they do work. So I highly recommend everyone reads or listens to that book,
Andy Hart:just out of interest call. Are you listening to it or reading it? So you know, you've got an audible link there?
Unknown:Let's listening.
Andy Hart:Yeah, I'm just, you know, I was,
Alan Smith:again, I was struck by that which is detail oriented, just to listen to it. And it's a little bit of fiction. Just on that, and I'd endorse, I think we've all read it. I've read that as well. I've seen him on podcasts and things like that in the past. Very, very good, good response. The one direct thing that anyone listening to this could take away from it. If you've ever been ghosted by a prospect, you've had a good conversation or a good meeting. And then you No question nothing. And he's got this just like giving up on his radio, radio silence. There is an email wording that he provides within the book, which is worth the cover of the book alone, which just, it tends to work nine times out of 10. If nothing else to flush out this prospect from taking the decision if they're just not responding to, in any way. So this direct application to the work we do, yeah. Good shout call you've
Andy Hart:typed the wrong amount is Hi, Alan. Have you given up on this project now? Kind regards? Something like that?
Alan Smith:Well, there's a whole is a bit there's a lot of behavioral science around it that he learned from hostage negotiation. Yeah, human beings do not like to say yes, to anything. Pay simple to most things. Certainly, if they're in a position where they're going to decide whether to engage in a, we'd like to say no, he's got a range of wordings, which can be adapted to all worlds, which is yeah, very applicable. So what's yours? Mr. Hart?
Andy Hart:Oh, over to me to close the show out. It's a podcast recommendation from a Ram ogunsanya I believe it's called advisor 3.0. It's one of the founders of octopus and octopus are an incredibly entrepreneurial company. They've set up 10s of companies and various different businesses and industries. They're an awesome company. Huge now in the energy space, and they also own Seco which is a company that will be making waves within our space. So Abraham in his full glory interviewed Simon Rogerson of the octopus group if you're into business and business stories, it's definitely worth a listen. Much better than bulletproof entrepreneur. Okay.
Alan Smith:I know Simon how to get him on the award winning spurs preferred cast and talking of that is also what I haven't listened to it yet but the Ferguson offset was also interviewed by ABC
Andy Hart:in Ireland man Come on. Son is out what could have been one thanks very
Unknown:much for that was alright,
Alan Smith:we're all done.
Nick Lincoln:Let's get out of here. All right, it's good. Okay. All right. That is cold cold content. Is a wrap for this episode. Dear trapeze. Thank you for your precious time and your input into the show please, please please do rate and leave a review six out of five stars but even more importantly, make sure you subscribed via your podcast app of choice. every other Thursday morning. A fresh part of track will land in your phone you don't need to do anything just sleep 1am There it is. Also do likewise with a YouTube until the next time the Trappists take care of their heavy OS and we'll see you on the other side. Goodbye. Goodbye.
Unknown:Thanks guys. I really enjoyed that. Thank you
Nick Lincoln:it's your stupid buddy bank holidays don't blame us. 27 year