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B Corp: Turning Your Financial Planning Business Into a Force for Good · Financial Planner Life Podcast

• 0:08
  SPEAKER_02: Hello, Financial Planner Life.
• 0:09
  SPEAKER_02: It's me, Charlie, and I'm here today with Seb Elwell, joining me from SwitchFit Wealth.
• 0:14
  SPEAKER_02: Thanks for joining me today.
• 0:16
  SPEAKER_02: Seb, how are you doing?
• 0:18
  SPEAKER_00: Yeah, very good, thank you.
• 0:20
  SPEAKER_00: Yeah.
• 0:20
  SPEAKER_00: Great to be here.
• 0:21
  SPEAKER_02: Yeah, thanks for joining us.
• 0:23
  SPEAKER_02: I know obviously I think I came across you on LinkedIn as I tend to with most guests I speak to on here.
• 0:29
  SPEAKER_02: And one thing that instantly caught my attention was that you are B Corp.
• 0:33
  SPEAKER_02: Now, if anyone's listened to me Natter away on Financial Planner Life, people will know I'm very heavily involved in the B Corp process for Recruit UK, who sponsors Financial Planner Life.
• 0:42
  SPEAKER_02: So I have that shared experience, but to see it in the world of financial planning is something that I love.
• 0:47
  SPEAKER_02: So instantly I just wanted to know a little bit more and dig under the surface.
• 0:51
  SPEAKER_02: But I think it'd be a good place to start to introduce you a bit to the listeners and tell them your story.
• 0:58
  SPEAKER_02: So, Seb, tell me, how did you get into financial planning?
• 1:03
  SPEAKER_00: Gosh, right.
• 1:04
  SPEAKER_00: So that was quite a long time ago now.
• 1:06
  SPEAKER_00: It was probably 2004.
• 1:09
  SPEAKER_00: Uh, after finishing uni, uh, I got a job for a bank.
• 1:15
  SPEAKER_00: So I was working for Halifax and then for Lloyd's and then for Nat West.
• 1:21
  SPEAKER_00: And as part of that, within the branch, they had financial planners, sort of in-branch financial advisors.
• 1:28
  SPEAKER_00: Uh, so I started self-studying exams and then applied for one of those roles.
• 1:35
  SPEAKER_00: Uh, and I became an in-branch advisor, selling a highly restricted range of products in a way that I didn't feel utterly comfortable with, as it turned out.
• 1:45
  SPEAKER_00: So I lasted there about a year, and that that by then that was about 2007.
• 1:51
  SPEAKER_00: Uh, and then that was obviously a great time to be jumping out and trying to establish yourself as an independent advisor.
• 1:58
  SPEAKER_00: So I joined a firm that uh was American-owned, and in the crisis, they just sold that for a pound and disappeared back to America, and we all had the choice of join the new firm that was a consolidator that I didn't really want to work for, um, or be made redundant.
• 2:16
  SPEAKER_00: So I was redundant at that point.
• 2:19
  SPEAKER_00: Um again, I I I then became a self-employed financial advisor, briefly, couldn't really quite get that to work.
• 2:30
  SPEAKER_00: Um, struggled, second child on the way, and uh went and joined a big national firm for about six years.
• 2:40
  SPEAKER_00: Um, and that that was good, that was all right, but the charges kept going up.
• 2:44
  SPEAKER_00: There was a lot of change over that time.
• 2:47
  SPEAKER_00: Um, and I think I I hit what I thought at the time was peak cynicism with the industry, with with with the way investments were done.
• 2:56
  SPEAKER_00: Uh, and I jumped shipped to join a small firm.
• 3:00
  SPEAKER_00: Um, again with slightly rose-tinted glasses.
• 3:03
  SPEAKER_00: Uh after that experience for a couple of years, I thought, no, I really have achieved peak cynicism here.
• 3:09
  SPEAKER_00: And I I I guess I had the choice of either do it the way that I wanted it to be done and see, you know, build a firm doing financial advice in the way that I think it can be a force for good, or lead the industry.
• 3:28
  SPEAKER_00: And uh fortunately for me, I chose not to leave the industry.
• 3:30
  SPEAKER_00: I thought, no, we're gonna roll our sleeves up and do this properly in the way that I want to see it done.
• 3:37
  SPEAKER_00: And that's when I founded Switch for Wealth, and that was back in 2018.
• 3:42
  SPEAKER_03: Yeah.
• 3:42
  SPEAKER_00: Um, and haven't really looked back since.
• 3:45
  SPEAKER_02: I mean, it's almost the harder path I'd I'd beg to choose, isn't it?
• 3:49
  SPEAKER_02: Leave the industry or go, actually, let's get my hands dirty here, let's create something.
• 3:53
  SPEAKER_02: And something you said there resonated, which was if you can't find something done the way you want it done, do it yourself, do it the right way.
• 4:02
  SPEAKER_02: And that's sort of the premise of what built Switchfoot Wealth.
• 4:05
  SPEAKER_02: And it can't have been an easy decision to suddenly think, right, okay, let's start my own business here, let's build this up from the ground, let's see what I can do.
• 4:14
  SPEAKER_02: And how have you found that journey going from a big national, it sounds like, and heading and then into the smaller IFA and then into your own business?
• 4:24
  SPEAKER_00: So surprisingly easy.
• 4:26
  SPEAKER_00: So by that time, I knew how to be a good financial advisor.
• 4:30
  SPEAKER_00: So I wasn't learning how to do financial advice, I was learning how to run a financial advice firm.
• 4:36
  SPEAKER_00: So it wasn't all at once.
• 4:40
  SPEAKER_00: I had the skill set there, I was just doing my day job, but I was then starting to build a business.
• 4:46
  SPEAKER_00: And actually, in the first couple of years, I was really just giving myself a job.
• 4:51
  SPEAKER_00: It wasn't really a business, it was a financial advisor plus some extra responsibilities.
• 4:58
  SPEAKER_00: And I didn't want to spend my entire time reading FCA manuals, so I chose to work with a network.
• 5:04
  SPEAKER_00: Um, and the network was very supportive in giving me templates to adapt to my own purposes and checking in that what I was doing was compliant and the right way of doing things.
• 5:17
  SPEAKER_00: So that was really useful having somebody there in the background that when I came up with an idea, they said, Well, yeah, fine, but that one you can't do, Seb.
• 5:30
  SPEAKER_00: But all these others you can if you want to.
• 5:33
  SPEAKER_00: And having that, that, that external organization to go to them and and sort of say, Well, I've got this idea of doing it this way.
• 5:39
  SPEAKER_00: What do you think?
• 5:41
  SPEAKER_00: And uh, and and you know, eight times out of ten, they were very, very supportive.
• 5:45
  SPEAKER_00: And the other two, they were going, How are you gonna make it work with this regulation or that regulation?
• 5:50
  SPEAKER_00: And that was really useful having them in the background to to have that conversation.
• 5:54
  SPEAKER_02: Yeah, definitely.
• 5:55
  SPEAKER_02: It's almost like a soundboard of I think networks are so useful for that.
• 5:59
  SPEAKER_02: We see it a lot, obviously, within the mortgage side of things that we deal with, and obviously within financial planning.
• 6:04
  SPEAKER_02: And I think for yourself, being able to go to them and say, is this right?
• 6:08
  SPEAKER_02: Is this okay?
• 6:09
  SPEAKER_02: It then accelerates your own growth and learning because you're learning from them.
• 6:13
  SPEAKER_02: And I think one thing that we'll touch upon obviously the journey into B Corp, but when you founded Switchfoot, what would you say were the values that you set out to define it by?
• 6:26
  SPEAKER_00: Yeah, so the values were were were my values, and it it took a while to really describe them, but they've always been there.
• 6:35
  SPEAKER_00: So one of them is lifelong learning.
• 6:37
  SPEAKER_00: So I'd always felt that taking exams was really, really important.
• 6:43
  SPEAKER_00: Um, and and it's that that self-study that got me into the job in the first place, my my first foot into the industry.
• 6:51
  SPEAKER_00: Um, you know, I come from a council estate, I was a teenage parent.
• 6:55
  SPEAKER_00: I I'm you know, I'm called Sebastian because my mum's French, not because I was born posh.
• 7:01
  SPEAKER_00: And it it financial planning has been a way of changing my own life circumstances and helping that for my family.
• 7:10
  SPEAKER_00: And study has been what's driven that.
• 7:13
  SPEAKER_00: So lifelong learning is always been a core value.
• 7:17
  SPEAKER_00: And so when I set up the firm, there was nobody to tell me no, you can't do that exam.
• 7:21
  SPEAKER_00: So I started going off.
• 7:23
  SPEAKER_00: I'd I'd done the, you know, I'd I'd become a fellow already by that point of the PFS.
• 7:28
  SPEAKER_00: Uh, but I then went off and studied the STEP diploma in advising vulnerable clients.
• 7:33
  SPEAKER_00: So we did administration of estates and administration of trusts um and advising vulnerable clients, and that made me a full STEP member.
• 7:41
  SPEAKER_00: Um, and from that I went on and got solar accredited.
• 7:45
  SPEAKER_00: And I always try and do at least one professional exam a year, and always have done.
• 7:51
  SPEAKER_00: So lifelong learning to core value, and now I expect that of anyone in Switch for actually just constantly be doing exams.
• 7:58
  SPEAKER_00: We've written our employee handbook such that it says, well, if you ever run out of professional exams, which is a job to do, but if you do, then we'll give you a budget to just carry on studying something else.
• 8:10
  SPEAKER_00: I don't care what else it is, but study something.
• 8:15
  SPEAKER_00: Um, I also learned to sail during the time that I set up switch foot.
• 8:19
  SPEAKER_00: Um, and and I can't help myself because there's a series of exams that you can take.
• 8:24
  SPEAKER_00: And I think, oh, if there's another one there in front of me, I'll learn how to sail a little bit better and I'll learn how to try and pass that exam.
• 8:31
  SPEAKER_00: So that actually came into our recruitment processes.
• 8:34
  SPEAKER_00: So when we were looking for people, we tried to say, you know, how would we identify people that were really leaning into that lifelong learning core value?
• 8:44
  SPEAKER_00: Well, maybe they're the sort of people that would take exams in their hobbies.
• 8:50
  SPEAKER_00: Um, you know, so I don't know if somebody was into martial arts, well, what belt did you get to?
• 8:57
  SPEAKER_03: Yeah.
• 8:57
  SPEAKER_00: You know, it's it's that kind of concept.
• 9:00
  SPEAKER_00: Um, another one is is collaboration.
• 9:03
  SPEAKER_00: So working collaboratively with clients, with the industry, with um with everybody, it is not viewing yourself as the person that's gonna set the answers, it's viewing yourself as the guide that's gonna show people or help people on the path that they've identified.
• 9:24
  SPEAKER_00: Um, so lifelong learning, collaboration, be part of the solution.
• 9:28
  SPEAKER_00: That's a really important one.
• 9:30
  SPEAKER_00: So you're either part of the solution or you're part of the problem.
• 9:33
  SPEAKER_00: And I don't want to be part of the problem.
• 9:35
  SPEAKER_00: So we have to solve things and we have to go out there and do that.
• 9:39
  SPEAKER_00: Um walk the talk.
• 9:42
  SPEAKER_00: Walk the talk is don't just say it, actually do it.
• 9:47
  SPEAKER_00: So we we default to sustainable investments.
• 9:51
  SPEAKER_00: Um, but within our personal life and within the business life, we'll do things like put solar panels on the roof and um think about the impacts that we're having and and and truly try and live into those values.
• 10:06
  SPEAKER_02: Yeah, it's not just a ticks-tick-box approach, as I like to say.
• 10:10
  SPEAKER_02: It's not like you can just turn up to work and work somewhere that has those values and then go home and chuck loads of coal on your fire and and have your diesel engine that's thirsty as anything.
• 10:20
  SPEAKER_02: And it's very much I like that walk the talk.
• 10:22
  SPEAKER_02: I actually um spoke about this today because it's International Women's Day, and it was like I could write on LinkedIn a massive long post, but when it comes to these things, it's it's more the action than the words that speaks over that.
• 10:34
  SPEAKER_02: Um, and I think that kind of leads nicely into my next question, which is obviously you've been B Corp now for it was April last year, if I'm correct.
• 10:43
  SPEAKER_00: Yeah, April, April 22, we certified.
• 10:46
  SPEAKER_00: April last year.
• 10:46
  SPEAKER_00: And it was about it was uh May 21 when we submitted the application.
• 10:54
  SPEAKER_02: That's soothing to me because I submitted in July and I'm still in the process of assessment.
• 10:59
  SPEAKER_02: But it's one of those things where good things come to those that wait, and it's very much going to be worth it once we get to the end.
• 11:06
  SPEAKER_02: So talk me through B Corp then for with Switchfoot Wealth.
• 11:10
  SPEAKER_02: Talk me through the moment the idea sparked in your mind to where you are now and what it was like for yourself as a business owner.
• 11:19
  SPEAKER_00: I think the idea actually dawned quite slowly because I think I think we were a B Corp without ever knowing what B Corp was.
• 11:28
  SPEAKER_00: So I think these the spirit and the purpose of Switchfoot Wealth was to behave like a B Corp.
• 11:34
  SPEAKER_00: That's what we set the business up.
• 11:36
  SPEAKER_00: But I'd never heard of B Corp when I set the business up.
• 11:38
  SPEAKER_00: And then I think the awareness dawned on me.
• 11:40
  SPEAKER_00: I remember uh Tribe Impact Capital came along and spoke at an investment presentation talking about sustainability.
• 11:48
  SPEAKER_00: So, oh, by the way, we're a B Corp.
• 11:50
  SPEAKER_00: And I sort of thought, Oh, that's interesting, I wonder what that is, and didn't pursue it.
• 11:55
  SPEAKER_00: Uh and then one of our clients a year or two later was talking about their journey to becoming a B Corp.
• 12:06
  SPEAKER_00: And uh and I started looking into it and I thought, actually, that's what we do, that's who we are.
• 12:12
  SPEAKER_00: So I just sat down with a laptop and started filling in the B impact assessment.
• 12:18
  SPEAKER_00: And I did that twice.
• 12:20
  SPEAKER_00: I did it the first time round really flippantly.
• 12:23
  SPEAKER_00: I just opened it up and went, oh, could we do that?
• 12:26
  SPEAKER_00: Yeah, we could do that, could we do that?
• 12:28
  SPEAKER_00: And even though I hadn't done some of the things on there, I thought, yeah, with a with a bit of with a bit of creating this policy or writing that policy or going and measuring that, we could tip that box.
• 12:39
  SPEAKER_00: And that meant that I could get through the whole thing quite quickly and see the shape of the entire certification.
• 12:45
  SPEAKER_00: And then I had to delete all of that and go back to the beginning and do it again carefully and laboriously, and not just say, Oh, we've got a policy for this, actually make sure that we had that written um and had it applied in real life.
• 13:00
  SPEAKER_00: But there wasn't too much of that that we had to do.
• 13:03
  SPEAKER_00: We were already doing sustainable investing, we were looking after vulnerable clients as our focus, so those two things together.
• 13:11
  SPEAKER_00: We were involved in a bit of um political with a small P, not party political, but but policy and political activism in terms of um lasting powers of attorney and financial abuse.
• 13:24
  SPEAKER_00: So there were lots of things that we were already doing that ticked a lot of the boxes for the B Corp application.
• 13:31
  SPEAKER_00: Um, but there were also lots of things that we learned from that process, and it very much helped with the the next stage of business growth and the evolution from being uh a job for me into a business that we build.
• 13:50
  SPEAKER_00: Because it gives you a framework of, well, actually, across all different areas of your business, here's what best practice could look like.
• 14:00
  SPEAKER_00: And so once you've built all of those policies and seen what it is, it's not so scary to think, um, oh, what if we grow the team a bit more?
• 14:10
  SPEAKER_00: Well, we've got an employee handbook with all of our policies and procedures written.
• 14:15
  SPEAKER_00: That's one less thing to worry about, it's just easier to get on with the job.
• 14:18
  SPEAKER_00: So it was a bit of an effort doing it, but it was it was definitely worth it.
• 14:24
  SPEAKER_00: I think there are two types of B Corps out there, and I think both are equally important.
• 14:29
  SPEAKER_00: There are those companies that are behaving like B Corps already, that then use the certification as a mark, a mark of confidence and and to do a bit of learning.
• 14:40
  SPEAKER_00: And then there are companies that are fundamentally degenerative, that are destroying the world and complicit in that destruction, and they have to stop and they have to change into businesses that are regenerative, or they need to be taken out of the equation, either regulated away or out competed by better businesses.
• 15:03
  SPEAKER_00: But they we cannot afford for them to carry on the way that they are, and for those businesses, they might be using B Corp certification as a framework, as a way of changing fundamentally what they do into something that is kinder.
• 15:20
  SPEAKER_00: Um, and both of those things are really, really important.
• 15:23
  SPEAKER_00: But I think we fell into the the first category.
• 15:26
  SPEAKER_00: I'd certainly worked for companies in that second category who didn't know the carbon footprint of the investments that they're recommending and didn't care.
• 15:38
  SPEAKER_00: And there are still plenty of them out there.
• 15:41
  SPEAKER_00: Um, but they need to change.
• 15:44
  SPEAKER_02: Yeah, definitely.
• 15:45
  SPEAKER_02: I think the word framework is something I use all the time when talking about B Corp because it's like a scaffolding.
• 15:52
  SPEAKER_02: And the beautiful thing about a B Corp application is you could take it to multiple businesses, multiple industries across the globe, and it will cover all of those, this whole range of questions.
• 16:03
  SPEAKER_02: And it's about, I think, including like the disclosure questionnaire at the end, it's about 250 questions.
• 16:09
  SPEAKER_02: And some of these questions you read them, and it's almost seems like one of them is talking about healthcare.
• 16:15
  SPEAKER_02: And I remember when we were looking at it, we went, Oh, well, we have the NHS.
• 16:18
  SPEAKER_02: And then we had to stop and check ourselves and go, No, but we have the NHS, like so many other countries don't, and that's what they're looking for.
• 16:26
  SPEAKER_02: Like, does this company provide it?
• 16:27
  SPEAKER_02: So it really breaks down areas which you learn so much, and I definitely recognize that there was so much that Recruit UK was doing that was very progressive and very different, and definitely, like you said, it's it's I it's almost like slapping an organic sticker on a business, is the way I describe a B Corp.
• 16:44
  SPEAKER_02: But it's not like slapping it, is it?
• 16:46
  SPEAKER_02: It's it's a very long, lengthy process that it takes to get there.
• 16:50
  SPEAKER_02: And trickling that down, I remember you'd mentioned something in there, which was your default investments are sustainable ones.
• 16:59
  SPEAKER_02: So talking about the word sustainability, and I know when we've spoken before, you spoke about sustainable financial planning.
• 17:07
  SPEAKER_02: Um, just dive into what you mean when I say the word sustainable financial planning.
• 17:12
  SPEAKER_02: What does that mean to you?
• 17:14
  SPEAKER_00: Yeah, so sustainable in terms of um the the guiding economic theory that I've got here is Kate Rayworth and donut economics.
• 17:26
  SPEAKER_00: So that describes uh and and I'm wearing a lapel badge here, which has got the UN sustainable development goals on it.
• 17:34
  SPEAKER_00: Um, and that donut has two rings, an inner ring and an outer ring.
• 17:38
  SPEAKER_00: And that inner ring is uh a sort of a minimum acceptable standard of living for humanity.
• 17:44
  SPEAKER_00: And actually, I think financial planning fits very neatly with that inner ring when we help our clients plan for things like making sure they can afford to eat and lead a good life post-retirement or or along the way or for education or all sorts of things.
• 18:03
  SPEAKER_00: So financial planning is about living a good life, and that economic theory talks about that minimum acceptable standard living for all people across the world.
• 18:13
  SPEAKER_00: But the outer ring represents the planetary boundaries that we must live within.
• 18:21
  SPEAKER_00: And at the moment, we've got an economy which is simultaneously overshooting those planetary boundaries and undershooting on the human dignity side of things.
• 18:30
  SPEAKER_00: So it's not working.
• 18:32
  SPEAKER_00: Uh, but I think financial planning can be a force for good in two ways.
• 18:37
  SPEAKER_00: At the individual level, it can help people think about the future.
• 18:43
  SPEAKER_00: You know, when you draw a financial plan, you become a time traveler in your own life, a conceptual time traveler.
• 18:50
  SPEAKER_00: You zoom forward.
• 18:51
  SPEAKER_00: What will it be like for me in 20 years' time?
• 18:54
  SPEAKER_00: What will my life be like?
• 18:55
  SPEAKER_00: How much money will I have?
• 18:57
  SPEAKER_00: What will I want to spend my money on?
• 18:58
  SPEAKER_00: What's going to make me happy?
• 19:00
  SPEAKER_00: What's the world around me going to look like?
• 19:03
  SPEAKER_00: And at the moment, what we do with financial planning as an industry, as an industry norm, is use a set of assumptions that are reasoned and reasonable, but usually based on the past.
• 19:17
  SPEAKER_00: Well, the next 30 years are not going to be like the last 30 years.
• 19:21
  SPEAKER_00: And I think it is completely unreasonable and not appropriate to project into the future using historic data sets because we know from climate science that there are some very widely diverging outcomes.
• 19:39
  SPEAKER_00: And the IPCC, uh the Intergovernmental Panel on Climate Change, publishes a set of narrative pathways that describes the future development of the economy and the implied global heating that comes associated with that.
• 19:56
  SPEAKER_00: So SSP1, which is about a rapid transition away from fossil fuels and really a race to green, gives us just about just about a chance of limiting global heating to one and a half degrees above pre-industrial levels, which is the sort of the usually the 1880 kind of benchmark.
• 20:19
  SPEAKER_00: But SSP5, which is fossil fuel development, is projecting somewhere between a three and five degree warming scenario by 2100.
• 20:29
  SPEAKER_00: Well, to put that in context, three and five degrees, um it's highly unlikely that I or any of my clients will be alive in a three and five, you know, a five degree C scenario is pretty much game over for all of humanity and most life on earth.
• 20:47
  SPEAKER_00: Um, and that's just about within the scope of a financial planning timeline now.
• 20:52
  SPEAKER_00: Certainly the perpetuity period of a trust is about 125 years.
• 20:56
  SPEAKER_00: So the future economic development, the amount of carbon that's emitted will have a dramatic effect on somebody's financial plan.
• 21:04
  SPEAKER_00: And sustainable financial planning is about two things.
• 21:08
  SPEAKER_00: It's about setting those assumptions in climate science.
• 21:13
  SPEAKER_00: Which shared socioeconomic pathway do those assumptions do we do we believe that they'll hold true?
• 21:20
  SPEAKER_00: And secondly, it's saying, well, if those assumptions are going to come to pass, what impact is that gonna have on your standard living?
• 21:29
  SPEAKER_00: Your lovely house that you say is worth a million pounds on the banks of the River Hamble, are we projecting that at 4% compound growth for the next 30, 40, 50 years and telling our clients it's worth X million pounds when they need it?
• 21:44
  SPEAKER_00: Or depending on which SSP, which shared socioeconomic pathway we go down, it could be a navigational hazard to shipping.
• 21:54
  SPEAKER_00: And we should be amortizing its rem, you know, its its value over its remaining.
• 22:00
  SPEAKER_00: Remaining useful economic life.
• 22:03
  SPEAKER_00: And ultimately, the client should be getting out and fleeing for the hills.
• 22:07
  SPEAKER_00: So that's a big example, but there's lots of things that we know we're going to need to do to adapt to climate change.
• 22:14
  SPEAKER_00: It could be, you know, the the older we are, the more vulnerable we are, um, the more at risk we are to extreme weather events.
• 22:23
  SPEAKER_00: You know, in summer last year, when we had those 40 degree heats, it wasn't young, fit, healthy people, by and large, that were dying as a result of that.
• 22:34
  SPEAKER_00: It will have been elderly people or people already in vulnerable circumstances that would have been impacted by that.
• 22:42
  SPEAKER_00: Um, or people that were in jobs where they were forced to carry on working in manual jobs outside in that heat because they had no choice, because their their financial plan meant if their their their life was so precarious that they couldn't take the day off and hide from the heat.
• 23:01
  SPEAKER_00: But what happens when those hot periods are really extended?
• 23:05
  SPEAKER_00: And I think we might see more of that this year and next year as as as the El Nino kicks in, and this year and next year projected to be quite a lot hotter than this year, hopefully not.
• 23:16
  SPEAKER_00: But um I think this year and next year will be a wake-up call to this.
• 23:20
  SPEAKER_00: So sustainable financial planning helps people think about the impacts that are likely to occur to them and what they need to do to adapt to that, what influence it has on their financial plan, and then the logical extension is then, well, then let's just make sure that my investments uh are invested in line with the shared socioeconomic pathway that I've decided is the most appropriate um path to follow.
• 23:49
  SPEAKER_00: So it's something that we as an industry, I don't think we're really doing at the moment.
• 23:55
  SPEAKER_00: We can we jump to and we need sustainable investments without going back to that why and what's the impact for the individual.
• 24:03
  SPEAKER_00: And if we build that into the financial plan from ground up, it's perfectly obvious why we need a uh an investment solution that aligns to that.
• 24:12
  SPEAKER_02: Yeah, I think I you know there's so much noise for sustainable investing, and it's something where when I started recruiting within sort of the wealth management sphere, I would look for sustainable, obviously it's a buzzword, but you look where that word is and you try and follow it, and there's not as much of that word in financial planning, it's not as widely spoken about.
• 24:33
  SPEAKER_02: I think you do get some really amazing thought leaders who do put out the energy, and you do have sort of that 5% almost of financial planning companies like yourself who've done the B Corp, who are on the path to implementing sustainability into the plan.
• 24:48
  SPEAKER_02: And I know sustainability is that word where it's you know everyone throws it around, but it's it's so true to be able to think of someone's house in 50 years, in 50 years it might not be there, or it could just be not the place you want to live at all.
• 25:03
  SPEAKER_02: And I think one thing about sustainable financial planning and looking at that whole picture is I know there will be people listening today, because we are sort of a careers-based podcast who maybe they're sort of my age and they don't think, you know, I know for me when I heard the term wealth management for the first time naively, probably about 10 years ago, I laughed and I went, Who needs their wealth managing?
• 25:26
  SPEAKER_02: I was like, Who needs that?
• 25:27
  SPEAKER_02: But as you get older, you know, coming to that decision to go to a financial advisor, plan for your future, it's very much something which comes at a time where you have put those years in and you do have that success.
• 25:39
  SPEAKER_02: Or you could be maybe entrepreneurial.
• 25:41
  SPEAKER_02: I'm sure you get a really diverse demographic of clients, but I'm sure there's lots of young people listening who are entering into the profession who are going, oh my gosh, that's so inspiring.
• 25:50
  SPEAKER_02: That's definitely something I want to go into.
• 25:52
  SPEAKER_02: And I know when we spoke last time, I actually got a bit teary when we spoke last time about this because in a good way, in a good way.
• 26:00
  SPEAKER_02: Um, because I was saying, you know, I'm sure it'd be really inspiring.
• 26:03
  SPEAKER_02: I speak to people on the daily who want to get qualifications which are geared up for, you know, climate and investments and everything sustainable that they can do.
• 26:13
  SPEAKER_02: But to hear somebody in the profession now saying this is just going to be really inspiring.
• 26:17
  SPEAKER_02: And you were like, Yeah, but it doesn't sit on their shoulders.
• 26:21
  SPEAKER_02: Like it doesn't just sit on these young people's shoulders to come into the profession, get these qualifications and solve everything.
• 26:28
  SPEAKER_02: Um, so yeah, dive into that because I know we had a great convo around that.
• 26:34
  SPEAKER_00: Yeah, so I I sit on the advisory board of SOLO, which is Society of Later Life Advisors, and um, you know, my my first expertise be beyond sustainability was was later life advice, care planning, and um, but but everything post-retirement, you know, how how to do a sustainable income.
• 26:53
  SPEAKER_00: That's that's and that sustainable income is probably where you hear the word sustainable used most in financial planning, which has got nothing to do with sustainability in terms of climate science.
• 27:05
  SPEAKER_00: They just mean your income keeps coming in.
• 27:07
  SPEAKER_00: Um, but climate change is often portrayed as an issue for the young.
• 27:14
  SPEAKER_00: You know, this is this is a this is for young people to solve.
• 27:17
  SPEAKER_00: Young people are going to have to solve the world.
• 27:19
  SPEAKER_00: Um, well, young people haven't yet messed the world up.
• 27:23
  SPEAKER_00: They might go on to do that, but but right now it's not really fair to lay the responsibility on young people to change the world.
• 27:33
  SPEAKER_00: The older you are, the more likely you are to have assets.
• 27:36
  SPEAKER_00: Um, the more likely you are to vote.
• 27:38
  SPEAKER_00: Maybe that's not true anymore.
• 27:40
  SPEAKER_00: It shouldn't be true.
• 27:42
  SPEAKER_00: Um, but older people have the money, they have the assets, they have the political power, they're in positions of leadership in their businesses um right now.
• 27:56
  SPEAKER_00: Uh, and it's for people that have power right now, that have the responsibility to make the change right now, not put that burden on the next generation.
• 28:06
  SPEAKER_00: You know, it's it's my generation and older that have emitted the carbon.
• 28:12
  SPEAKER_00: It's our job to sort it out.
• 28:15
  SPEAKER_00: I was really moved by uh it was Carl Sagan who talks about the cosmos from the 70s.
• 28:22
  SPEAKER_00: He was he was a an American um science journalist.
• 28:29
  SPEAKER_00: Um he gave evidence to a Senate select committee describing in detail uh the greenhouse gas effect and what the consequences would be.
• 28:41
  SPEAKER_00: Uh, and there was a young senator there uh called Al Gore, who went on to make a bit of a name for himself.
• 28:48
  SPEAKER_00: And he he gave the sort of scientific speech that you would get from any climate scientist today, but he did it in 1985 when I was four.
• 29:01
  SPEAKER_00: It's not like people didn't know.
• 29:04
  SPEAKER_00: It's not like they weren't told, but they've chosen to ignore it.
• 29:07
  SPEAKER_00: Now I didn't have any power as a four-year-old when I was young into the profession.
• 29:12
  SPEAKER_00: Do you know what I learned about the greenhouse gas effect when I was in secondary school?
• 29:15
  SPEAKER_00: I think it was year nine science.
• 29:18
  SPEAKER_00: Um, it's not like I didn't know, but I was a teenage parent with no money, lived in a caravan for a period of time on first training contracts because we didn't just couldn't afford to have a proper house.
• 29:33
  SPEAKER_00: Um, and I was just concentrating on other things and doing exams.
• 29:36
  SPEAKER_00: So it was when I was in a position where actually no, I can start my own business, it really started to dawn on me that it's my responsibility to change this now so that my kids have got a chance you know to wait for my children to grow up is just morally bankrupt.
• 29:58
  SPEAKER_00: Um, you know, so if you're in a position of power or influence in whatever shape, however small or big, then it's your duty to act now.
• 30:09
  SPEAKER_02: Yeah.
• 30:10
  SPEAKER_02: I just think it's so comforting, and maybe there's other young people who'll be listening to this.
• 30:16
  SPEAKER_02: For I think I learnt about climate change when I was 15, 14, 15, and I've done, you know, a zoology degree, I've done a sustainability degree.
• 30:26
  SPEAKER_02: I have died, I dove into that world and I've ended up in recruitment, wouldn't change it for the world, because I'm a great believer, whatever space you go into, you can make that space a better space and you can turn things into a power for good.
• 30:38
  SPEAKER_02: And I think if there's somebody listening who you do get climate anxiety, it's so real because you sometimes feel like no one's listening.
• 30:45
  SPEAKER_02: But to know that there are people like yourself who are recognizing that and are adhering to that and taking that into the business, turning a business into a force for good.
• 30:55
  SPEAKER_02: You know, as individuals, we can do great things, but when you're on that collaborative scale, you can do even better things.
• 31:01
  SPEAKER_02: And looking back at what we've done, just because it's the way it's always been done, it doesn't necessarily mean it's the way it should be.
• 31:07
  SPEAKER_02: Um, and that leads me on to another thing that is very interesting when we spoke about the zeitgeist risk.
• 31:14
  SPEAKER_02: And this is for people who obviously talking about financial planning, you talk about risk, what is suitable.
• 31:21
  SPEAKER_02: So, talk to us about the Zeitgeist risk.
• 31:25
  SPEAKER_00: Okay, so the Zeitgeist is the spirit of the age.
• 31:30
  SPEAKER_00: I think it's a sort of a German philosophy term.
• 31:33
  SPEAKER_00: Uh, and the idea behind zeitgeist is it changes over time, that there is our our concept of what is moral behavior changes um uh as as history sort of moves on.
• 31:47
  SPEAKER_00: So 300 years ago, you'd have had the uh East India Company representing something like half of UK or 250 years ago, or about half of UK GDP was the East India Company.
• 31:59
  SPEAKER_00: And now we look back on that and think that was horrendous.
• 32:03
  SPEAKER_00: You know, that that was that that that wasn't just criminal, that was truly horrid.
• 32:09
  SPEAKER_00: Um bringing that sort of example into modern times, over the past 30 years, Russia's behavior um has become increasingly um difficult and increasingly immoral from a Western liberal democracy perspective.
• 32:28
  SPEAKER_00: So you could say if you're invested in, say, uh an emerging European fund with plenty of exposure to Russian equities, you could almost sense that zeitgeite risk building.
• 32:39
  SPEAKER_00: But at what point do you get out?
• 32:41
  SPEAKER_00: At what point do you say, no, no, we better sell our holdings because their behavior's a bit immoral?
• 32:46
  SPEAKER_00: Because if you hadn't sold it by the 23rd of February 22, then those Russian holdings were going to zero and never coming back.
• 32:54
  SPEAKER_00: So I think it's a feature of Zeitgeit risk that it builds slowly over time, that it's really obvious that it was there with hindsight, um, but it crystallizes fast.
• 33:07
  SPEAKER_00: Um, uh other sort of contemporary examples where you can feel the zeitgeite risk building, but not yet see it crystallize would be over China.
• 33:17
  SPEAKER_00: You know, China's behavior towards the Uyghur Muslims, uh, China's threat over Taiwan.
• 33:25
  SPEAKER_00: You can feel that zeitgeit risk building, but it it could potentially crystallize very, very quickly, uh, and the impacts of that would be devastating.
• 33:36
  SPEAKER_00: Um, but most obviously to me is climate change and exposure to heavy carbon.
• 33:41
  SPEAKER_00: You know, that young Senator Al Gore went on to say recently in a BBC documentary that the chiefs of big oil were morally akin to war criminals.
• 33:55
  SPEAKER_00: And I think he's right.
• 33:57
  SPEAKER_00: I think he's wrong in that actually they're worse and that they will end up probably killing a lot more, and they knew what they were doing.
• 34:07
  SPEAKER_00: So, at what point do we stop throwing billions of pounds and millions of pounds in bonuses and saying you're such wonderful capitalists?
• 34:16
  SPEAKER_00: And at what point do we throw them in prison for eco-cide um and for the devastation that they've unleashed?
• 34:22
  SPEAKER_00: Inevitably, it will happen.
• 34:24
  SPEAKER_00: You know, uh, you look at the forecasted temperatures of the world, you look at the impact that that's going to happen.
• 34:31
  SPEAKER_00: At some point, we will put these people in prison rather than throw them millions of pounds.
• 34:36
  SPEAKER_00: When that crystallizes, who knows?
• 34:39
  SPEAKER_00: Now, hopefully it doesn't, you know.
• 34:41
  SPEAKER_00: Hopefully, we all sort things out really, really amicably and come up with solutions and solve climate change.
• 34:48
  SPEAKER_00: Um, but we know at this point that even if we threw absolutely everything at solving the problem, impacts would just get worse over time because of the amount of carbon that's baked in.
• 34:58
  SPEAKER_00: You know, the the the gas that's already been emitted will continue to drive climate change for years to come.
• 35:06
  SPEAKER_00: Um, the energy that's already been absorbed by the oceans will come back out into the atmosphere.
• 35:11
  SPEAKER_00: So it seems to me ridiculous to invest in you know big listed oil companies whose balance sheet is made up of an asset.
• 35:25
  SPEAKER_00: You know, there's I think it there's something like seven times as much known reserves owned than we can possibly afford to burn to keep within the carbon budget to keep it, give us a chance of staying within 1.5 degrees.
• 35:42
  SPEAKER_00: So there's going to be big write downs on these companies' balance sheets.
• 35:46
  SPEAKER_00: They're currently valued very, very highly.
• 35:49
  SPEAKER_00: That's that that's known within investment circles and in traditional ESG models.
• 35:55
  SPEAKER_00: We would describe that as either physical risk or transition risk.
• 35:59
  SPEAKER_00: But I think zeitgeit risk is something beyond physical risk or transition risk.
• 36:04
  SPEAKER_00: It's when the public mood changes.
• 36:17
  SPEAKER_00: The moment an activity becomes illegal from an investment perspective, it becomes worth zero.
• 36:23
  SPEAKER_00: Um, you know, plenty of people make plenty of money out of illegal activities, but you can't hold it in a pension fund.
• 36:30
  SPEAKER_02: Yeah, I just every time I hear that, it blows my mind because you said earlier you're a conceptual time traveler as an advisor, and to picture obviously things that in the past were so wrong, and they obviously continued and then stopped, to consider that maybe in my lifetime, probably not my parents' lifetime, but in my lifetime, maybe if I go on to have children in theirs as well, that there could be this, you know, imagine watching somebody from Shell go on trial for EcoSide.
• 36:59
  SPEAKER_02: That would be surreal.
• 37:01
  SPEAKER_02: And to see that the world goes to that sort of accountability phase of climate change would be great.
• 37:06
  SPEAKER_02: And obviously, the world of financial planning, the next few years for any industry is really very critical of what we do to change.
• 37:15
  SPEAKER_02: So, where do you see the future of financial planning going over the next five years or so?
• 37:20
  SPEAKER_02: And you can obviously incorporate switch foot into this as well because I believe you will be a great driver in the change.
• 37:28
  SPEAKER_00: So I mean, will it change?
• 37:31
  SPEAKER_00: Could it change?
• 37:31
  SPEAKER_00: It could.
• 37:32
  SPEAKER_00: You know, we're not a very diverse community.
• 37:35
  SPEAKER_00: Um, I think the average age is something like 55.
• 37:38
  SPEAKER_00: It's the the gender balance is what it is is it's International Women's Day as we're recording this.
• 37:45
  SPEAKER_00: Um, and I'm in an industry that is something like you'll probably know the numbers better than me, but 75-80% male still.
• 37:55
  SPEAKER_00: Um, you know, and and and all I can do in that is try and be, you know, I'm not adding to diversity, gender diversity by being a man, um, but I can try and be a good ally in that.
• 38:06
  SPEAKER_00: I think it's important to get diversity and inclusion into the advisor force so that we have some diversity and inclusion of the advisors, uh, you know, their their view on the world, because I think we have we have investments being influenced subconsciously by the views of a very small minority of people.
• 38:30
  SPEAKER_00: Um, so there's a lot of unconscious bias in what we do as advisors.
• 38:34
  SPEAKER_00: So I talk about the the default bias or the or the status quo.
• 38:39
  SPEAKER_00: And very in many ways, that's why switchfoot is switchfoot.
• 38:41
  SPEAKER_00: Switchfoot was deliberately set up to take a new stance on things.
• 38:46
  SPEAKER_00: Switchfoot literally is a term from board sports where you jump around on your board and and point your feet in the other direction and and literally take a new stance.
• 38:58
  SPEAKER_00: Um, so we at the moment have a way of providing advice that says there's this thing called traditional investing, and then there's this moral outlier choice called sustainable investing.
• 39:11
  SPEAKER_00: But sustainable investing isn't really a moral outlier choice.
• 39:15
  SPEAKER_00: 196 countries around the world have signed up to the Paris Accords and have tried to agree to limit global warming to well below two degrees, ideally below 1.5 degrees.
• 39:29
  SPEAKER_00: And that's my definition of sustainability.
• 39:31
  SPEAKER_00: Actually, are we are we on course for 1.5 or not?
• 39:35
  SPEAKER_00: Um, so that's the agreed future of the global economy.
• 39:40
  SPEAKER_00: So really that should be the default.
• 39:43
  SPEAKER_00: A 1.5 aligned portfolio should be the default agreed future of the global economy.
• 39:48
  SPEAKER_00: That's how we should all be investing.
• 39:49
  SPEAKER_00: And we shouldn't be asking people, do you have any particular ethical, moral concerns that you want reflected in your portfolio?
• 39:58
  SPEAKER_00: We should say, Well, we're going to invest you in line with 1.5.
• 40:01
  SPEAKER_00: Have you got any particular unethical or immoral concerns that you want invested in your portfolio?
• 40:09
  SPEAKER_00: Logically, it's the same question, but it just implies a different default bias.
• 40:14
  SPEAKER_00: It it's just as compliant within the rules as the other question, because all you're doing is asking your clients about their views and it giving them the chance to express it.
• 40:25
  SPEAKER_00: If you phrase it that way round, 95% of your people say, No, I mean, obviously, I want to be invested in line with 1.5.
• 40:32
  SPEAKER_00: Show me the detail.
• 40:33
  SPEAKER_00: Does it actually work?
• 40:34
  SPEAKER_00: And you can get into that conversation.
• 40:36
  SPEAKER_00: If you spin it on its head and don't bother to ask the question, uh, you know, phrase it the traditional way.
• 40:43
  SPEAKER_00: Is there anything the people just say, Oh no, I don't, I don't want to, I don't want to do anything too complicated.
• 40:48
  SPEAKER_00: I just want to solve the problem that's in front of me.
• 40:52
  SPEAKER_00: So that default bias of the advisor and the advisor community and the way our systems are built.
• 40:58
  SPEAKER_00: You know, you get a template for building your central investment proposition.
• 41:01
  SPEAKER_00: That template will say, Oh, and have an option for those people that want to do something sustainable on the edge.
• 41:07
  SPEAKER_00: The template is rarely built with, we'll start off with 1.5 aligned and then ask people to green it up or grubby it down as an exception process.
• 41:16
  SPEAKER_00: But that's the way I think the industry should be built.
• 41:19
  SPEAKER_00: So I suppose my theory of change, the the way I would want to see the industry change is to default to that concept of sustainability.
• 41:31
  SPEAKER_00: Um, and in order to do that, then I need to try and get into the room with the people that write the rules.
• 41:38
  SPEAKER_00: Um, they don't necessarily want to let you in.
• 41:42
  SPEAKER_00: So you have to work out, well, what is it that we need to do in order to persuade them that they want to let me in and have that conversation with them.
• 41:53
  SPEAKER_00: Um, and I don't think it's it's it's possible for any one firm or individual to influence the industry like that.
• 42:01
  SPEAKER_00: But the more we give out this message, the more others um hear that message and put their spin on it and repeat it.
• 42:10
  SPEAKER_00: Um and the the more of us that start shouting this way.
• 42:14
  SPEAKER_00: Um so it comes back to a really simple concept for me.
• 42:19
  SPEAKER_00: I I think we we get tied up in our own little industry view of the world, but it's not suitable for our clients to live in a world that's gonna be hotter than 1.5 degrees C above pre-industrial average.
• 42:35
  SPEAKER_00: So, therefore, how could it logically be suitable to invest for a world that's gonna be more than 1.5 degrees C?
• 42:43
  SPEAKER_00: But that's not what suitability means.
• 42:45
  SPEAKER_00: You know, suitability, I've spoken to people that know all about suitability, and suitability is about term and risk and charges and performance and tax, but it's not about well, actually, is this in line with a 1.5 degree C world?
• 43:02
  SPEAKER_00: That's not a matter of suitability.
• 43:06
  SPEAKER_00: But if you believe that investments have a real world effect eventually, then for me it is a matter of suitability, and and hopefully the rules the rules should be changed to bring that into account, in my view.
• 43:23
  SPEAKER_00: That's my personal view on it.
• 43:25
  SPEAKER_00: Because only through changing the rules can you force the laggards out of the way.
• 43:31
  SPEAKER_03: Yeah.
• 43:32
  SPEAKER_00: Um and the and the the alternative, if we're not successful, you know, what if we're wrong?
• 43:39
  SPEAKER_00: What if what if climate change isn't really a thing and we're wrong?
• 43:44
  SPEAKER_00: And we make the world a bit cleaner and a bit less polluted.
• 43:49
  SPEAKER_00: Um but if we're right then the uh and we fail, well then everyone you know and love, you need to drop a pin on the end of their financial planning timeline.
• 44:00
  SPEAKER_00: Sometime around 2050, 2060.
• 44:03
  SPEAKER_00: Well, that's a pretty miserable thought.
• 44:06
  SPEAKER_02: Yeah.
• 44:07
  SPEAKER_02: It's like the future of financial planning and the future of everything.
• 44:11
  SPEAKER_02: It's you like you said, you could look at it through this narrow scope of the industry, the suitability, but it's waking up to the fact that when you go home from switching off from being a financial advisor, everything else is going to be affected by this, if not already being affected by this.
• 44:27
  SPEAKER_02: And I loved that when you said, you know, what if we just make the world a bit cleaner and it's not a real thing?
• 44:31
  SPEAKER_02: Is that such a bad thing?
• 44:33
  SPEAKER_02: Oh no, it's not.
• 44:34
  SPEAKER_02: It's looking after it and it's just being conscious with it.
• 44:37
  SPEAKER_02: And I think as an advisor, obviously talking about how you worked through the profession and got to a point where you were feeling frustrated.
• 44:44
  SPEAKER_02: I'm sure there's probably other advisors that are potentially going to like listen and resonate with that.
• 44:50
  SPEAKER_02: So, what would your advice be to advisors who might be struggling with sort of the ethics and the morals of the industry that they might be finding themselves in as somebody who's managed to break out that mold and pave their own path?
• 45:07
  SPEAKER_00: Well, it's now mandatory to ask the question of your clients.
• 45:12
  SPEAKER_00: So it's easier for clients in firms to drive change simply by making sure they have those conversations with their clients.
• 45:22
  SPEAKER_00: Because if the clients come back, if you know how to have that conversation, when the clients come back and say, actually, yeah, I I I really would like to see a world that that's survivable post-2050, 2060.
• 45:37
  SPEAKER_00: Um, if you have those conversations, then as a matter of suitability, if you've documented that client need, then you're going to have to address that.
• 45:47
  SPEAKER_00: Of course, the problem is that we're not trained on how to have those conversations.
• 45:52
  SPEAKER_00: Um, so you can just you can just change what you do, you know, and no longer is it acceptable to a firm to say, well, we just don't deal with that.
• 46:00
  SPEAKER_00: Uh they'll have to come up with some sort of solution.
• 46:03
  SPEAKER_00: And if you're doing that enough and frequently enough, and enough of you within your firm are doing that, then they'll need to adjust their central investment proposition or their process to take account of that.
• 46:15
  SPEAKER_00: But if you're in a firm that just fundamentally doesn't believe in this stuff, where the owners of that firm don't get it, are unwilling to learn and unwilling to change, then vote with your feet and move.
• 46:29
  SPEAKER_00: That that's that's what the point of B Corp is, is to preference sustainable and ethical businesses over the non-ethical ones.
• 46:42
  SPEAKER_00: It's it's not entirely altruistic.
• 46:46
  SPEAKER_00: It's people, planet, and profit.
• 46:49
  SPEAKER_00: It is still a model of capitalism, it's stakeholder capitalism, but it's saying, well, we either need to encourage people to change and to become regenerative businesses, or we need to put them out of business by being better, um, and allowing customers to choose us and staff.
• 47:08
  SPEAKER_00: And you know, one of the advantages of the B Corp is staff retention is easier, staff attraction is easier, and right now there's a real shortage of financial advisors, isn't there?
• 47:21
  SPEAKER_00: There's there's um being a financial advisor is one of the most impactful jobs that you can possibly have.
• 47:31
  SPEAKER_00: You know, um I measured the carbon footprint of switchfoot in its first two years working from home, bat bedroom number two.
• 47:41
  SPEAKER_00: And using scopes one and two, it was about half a ton for two years.
• 47:46
  SPEAKER_00: It was nothing because the house was here anyway.
• 47:49
  SPEAKER_00: And the the you know, which cup of tea was business cup of tea, and which cup of tea was personal cup of tea.
• 47:55
  SPEAKER_00: You can't really describe it.
• 47:57
  SPEAKER_00: The next two years we bought an office, we put on solar panels and battery and air source heat pumps and car charger, electric car charger and um all sorts of energy efficiency projects.
• 48:08
  SPEAKER_00: Uh, we spent about 50 grand doing that.
• 48:10
  SPEAKER_00: We got some grants for it.
• 48:12
  SPEAKER_00: It it the building now uses, uh produces more energy than it uses.
• 48:18
  SPEAKER_00: And so the next two years measuring our scopes one, two, and three carbon emissions, which is the direct energy that we use, but also the upstream and downstream um things that we buy and what we spend our money on.
• 48:32
  SPEAKER_00: Well, that came to about 30 tons of CO2, but then I measured the carbon footprint, scopes one and two of my clients' investments portfolio.
• 48:43
  SPEAKER_00: So there was 30 tons for two years, and then I looked at one year's worth of data, just scopes one and two for my clients' funds, and that amounted to about 1,160 tons per year, just scopes one and two coming from their portfolios.
• 49:01
  SPEAKER_00: Now I couldn't measure the scope three of all of their existing holdings.
• 49:05
  SPEAKER_00: Um, I I can for stuff that we recommend, but clients are often in legacy products uh and and and there isn't the data out there consistently at the moment to measure scopes one, two, and three.
• 49:17
  SPEAKER_00: But using my estimates, when we do measure the scope three emissions, when we're able to, the scope three emissions are typically about 10 times larger than the scopes one and two.
• 49:27
  SPEAKER_00: So, you know, conservatively, we're estimating that the scope three emissions from the investments that our clients hold is about 12,000 tons a year.
• 49:41
  SPEAKER_00: The average UK person is said to emit something like eight to ten tons a year.
• 49:47
  SPEAKER_00: So an average UK pension pot of 35,000 pounds is doubling your carbon footprint.
• 49:54
  SPEAKER_00: Now that's of our that's of our clients' investments, and our clients' investments are significantly below the industry average.
• 50:01
  SPEAKER_00: So if I was an industry average advisor that had never thought about sustainability, you know, it's probably going, it could well, it could be multiple, multiple times the size of that.
• 50:16
  SPEAKER_00: So each individual advisor that buys into sustainability then goes on to influence millions of pounds of assets.
• 50:27
  SPEAKER_00: And those millions of pounds of assets have a real world effect, and they have a real world effect um both in both in the the the carbons that are emitted from from that business activity, but also if we start to see at scale an asset allocation shift of money towards the better businesses, um, then that will provide the political cover for the politicians to drive the change.
• 50:53
  SPEAKER_00: I I genuinely believe that financial planners are a huge part, they're not alone.
• 51:00
  SPEAKER_00: There's this is you know, billions of tiny decisions have got us to where we are now, and it's going to take billions of tiny decisions to solve the problem.
• 51:11
  SPEAKER_00: But financial planners have a particular responsibility because of the amount of money that they influence where that's invested.
• 51:19
  SPEAKER_00: So if we can change the minds of even a small number of financial plans at a time, that has an effect that is absolutely massive.
• 51:28
  SPEAKER_00: I did a back of the fact packet calculation, and it is a back-of-the-fact packet calculation, but using the um stats that make my money matter use, we figured that if we changed the minds of 500 financial advisors based on average funds under management per advisor, it would be equivalent to persuading three million Brits to give up flying, uh, give up driving and turning vegan.
• 51:58
  SPEAKER_01: Wow.
• 52:00
  SPEAKER_01: Wow.
• 52:01
  SPEAKER_00: And there are only what 30,000 financial advisors, regulated financial advisors in the country.
• 52:08
  SPEAKER_00: So it doesn't seem like such a huge thing to do to reach 30,000 people.
• 52:16
  SPEAKER_00: And we don't even need to reach 30,000 people.
• 52:18
  SPEAKER_00: Once we reach a certain percentage of that, the call for change will become so inevitable that the rules will change and force the laggards to retire or or get out the way, you know.
• 52:30
  SPEAKER_00: I'm about to launch into a Bob Dylan song there.
• 52:34
  SPEAKER_02: Um that's that is a crazy statistic of back of a fag packet calculation type thing, but still, like that ripple effect, um, it's very inspiring as well, considering how niche financial planning is, and sort of even this podcast, we were talking about it earlier, is it's such a niche community of people.
• 52:54
  SPEAKER_02: A majority of people I speak to in financial planning are all driven by wanting to help people.
• 52:59
  SPEAKER_02: It's a massive motivator for the majority of people.
• 53:02
  SPEAKER_02: And also, one thing I find quite nice is quite a lot of people in financial planning, when you ask them how they got onto it, a large proportion say, Oh, I just kind of fell into it.
• 53:11
  SPEAKER_02: Like they just kind of fell into it, but they really want to help people.
• 53:14
  SPEAKER_02: And actually, like my dad's always said it, go where the money is, and that's when you're going to make real change.
• 53:19
  SPEAKER_02: And having businesses turn into a force for good turns money into a force for good.
• 53:23
  SPEAKER_02: And I think that's really beautiful.
• 53:25
  SPEAKER_02: Um, and we always like to round up the podcast episode, Seb, by talking, uh asking one question, which is what would your advice be to somebody who is just about to start their career in financial planning?
• 53:40
  SPEAKER_00: Um, keep studying.
• 53:44
  SPEAKER_00: People take you more seriously the more qualifications you've got.
• 53:47
  SPEAKER_00: Whether that's sensible or not, it's true.
• 53:49
  SPEAKER_00: Uh, so it you'll you'll learn more.
• 53:51
  SPEAKER_00: Don't don't think that, you know, when I first started, you could you could get away with having a certificate level exam.
• 53:58
  SPEAKER_00: Uh, and and people would go, oh, Seb's a bit of a technical expert.
• 54:02
  SPEAKER_00: He started studying a diploma level exam.
• 54:05
  SPEAKER_00: And then diploma became the minimum.
• 54:07
  SPEAKER_00: Uh, but by which by which time I was well on the way to being chartered, and I was I thought, okay, they're gonna make this the minimum.
• 54:13
  SPEAKER_00: I better get chartered really, really quickly, and then up to fellowship.
• 54:18
  SPEAKER_00: Um, but just don't don't let yourself fall off that study bandwagon.
• 54:23
  SPEAKER_00: Um that would be my first advice.
• 54:27
  SPEAKER_00: Uh, and and secondly, don't compromise your own ethics.
• 54:32
  SPEAKER_00: Money shouts really loudly, so make sure it's shouting something positive and doing some good in the world.
• 54:40
  SPEAKER_00: Um, and if it and find the firms that will let you do that.
• 54:46
  SPEAKER_03: Yeah.
• 54:47
  SPEAKER_00: I think those would be my two top advices.
• 54:49
  SPEAKER_00: But but definitely do it, definitely join the industry.
• 54:52
  SPEAKER_00: Definitely, if you want to make change happen, I really believe this is one of the most impactful things that you can do.
• 55:01
  unknown: Yes.
• 55:01
  SPEAKER_02: Oh, I'm gonna message Sam after this and say, sorry, Sam, I quit on becoming a financial advisor.
• 55:07
  SPEAKER_02: Oh, well, thank you so much.
• 55:09
  SPEAKER_02: Mission accomplished.
• 55:11
  SPEAKER_03: Mission accomplished.
• 55:12
  SPEAKER_02: Oh, thank you so much for joining us today, Seb.
• 55:15
  SPEAKER_02: I am always so inspired when I talk to you.
• 55:17
  SPEAKER_02: I can't wait to see where SwitchFit goes.
• 55:20
  SPEAKER_02: And I hope that there's been a beautiful butterfly effect from this conversation when it reaches the masses.
• 55:24
  SPEAKER_02: And even just one person thinking, I'm gonna do something different today that really aligns with me.
• 55:29
  SPEAKER_02: I believe that's gonna happen.
• 55:31
  SPEAKER_02: So thank you very much.
• 55:33
  SPEAKER_00: Thank you very much for having me on.