Latest / Financial Planner Life Podcast / Impact and Ethical investment focused Financial Planning career with David Macdonald of The Path

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Impact and Ethical investment focused Financial Planning career with David Macdonald of The Path · Financial Planner Life Podcast

• 0:02
  SPEAKER_02: Hi, and welcome to the Financial Planner Life podcast, where we talk to professionals at varying stages in their career about what it's like working in the wonderful world of financial planning and financial advice.
• 0:15
  SPEAKER_02: This podcast is proudly sponsored by Recruit UK, a recruitment consultancy specifically focused on the financial services.
• 0:23
  SPEAKER_02: They have a niche specialism, recruiting, within the financial planning industry, so check out their website for the latest job opportunities, hints and tips, and blog articles.
• 0:34
  SPEAKER_02: And today's guest is David MacDonald from The Path.
• 0:37
  SPEAKER_02: David today shares with us his career journey from running his own financial planning firm to watching Cowspiracy to dragging his heels into work and not really getting fulfillment anymore, to moving into the ethical and impact investment space and setting up The Path, which is a firm that specifically only deals with impact investment opportunities for their clients.
• 1:02
  SPEAKER_02: And it's a super interesting podcast because I really got to understand why David chose this route, why he chose to work in this real small narrow niche, and why we both believe that this is a growing market as consumers start to wake themselves up to the fact that their investments are invested in funds that could be negatively impacting the earth.
• 1:30
  SPEAKER_02: So he shares his journey today.
• 1:32
  SPEAKER_02: He shares why he set up the business and some of the positive aspects of impact and ethical funds, and also the difference between the two.
• 1:42
  SPEAKER_02: I hope you enjoy it.
• 1:44
  SPEAKER_02: So hi David, thanks very much um for joining me today on the Financial Planner Life Podcast.
• 1:49
  SPEAKER_02: How are you, sir?
• 1:51
  SPEAKER_00: I'm very good, Sam.
• 1:52
  SPEAKER_00: It's uh my pleasure to join you today.
• 1:55
  SPEAKER_02: Thank you.
• 1:55
  SPEAKER_02: And no, I appreciate your time.
• 1:57
  SPEAKER_02: Obviously, we spoke last week and um I sort of cloak and daggered it a bit, didn't I?
• 2:01
  SPEAKER_02: I sort of I came in there talking about the podcast and then hit you with a great candidate that could be a great fit for your business.
• 2:07
  SPEAKER_02: And I think you fully um were fully aware of my marketing tactic, weren't you?
• 2:11
  SPEAKER_00: Uh whatever works.
• 2:14
  SPEAKER_00: So you know, it's uh looks like it's a win-win at this stage.
• 2:18
  SPEAKER_00: So uh that's all good as far as I'm concerned.
• 2:20
  SPEAKER_02: Hey, listen, exactly that.
• 2:21
  SPEAKER_02: You know, I'm I'm I'm I like to learn and understand as much as I can about any uh financial planning practice out there and the individuals that run the businesses and make it tick, especially somebody who's got a background as extensive as yours of running your own practice and now moving what's really interesting to me into the the ethical and impact space.
• 2:40
  SPEAKER_02: And with the changes with method two and ESG and everything, I think there's a lot going on in that space, which is great, but also a lot going on in that space, which is really confusing.
• 2:48
  SPEAKER_02: And as a a guy who runs a recruitment company, I come across lots of financial planners and people that want to work within the ethical space, but I think maybe it could be slightly buzzworty at the moment.
• 3:00
  SPEAKER_02: And um, I want to kind of debunk some of the myths, I think, with you.
• 3:03
  SPEAKER_02: I think that would be a great place to be, and you know, and what a career as an ethical financial planner really looks like, and what you should be asking companies as well and understanding and your experience of it really.
• 3:14
  SPEAKER_02: So that's kind of why I want to get you on the podcast.
• 3:16
  SPEAKER_02: Hopefully, that's uh people to learn a bit about it.
• 3:19
  SPEAKER_02: Um, so first off, and you know, question I always ask every guest is um, how did you end up getting into the financial planning profession?
• 3:28
  SPEAKER_02: Because you've been in the profession for some time, haven't you?
• 3:30
  SPEAKER_00: Um I have longer than I probably would care to uh admit to, to be perfectly honest.
• 3:38
  SPEAKER_00: Um well, it it really came about because of where I lived.
• 3:44
  SPEAKER_00: Uh I was born and brought up in Edinburgh, and um I um went to university in uh St Andrews, didn't get on with that.
• 3:55
  SPEAKER_00: So I thought, you know what, actually I'm I'm not enjoying mathematical physics particularly that much.
• 4:02
  SPEAKER_02: Yeah, thanks for hiring.
• 4:03
  SPEAKER_00: I'd like to get out and uh uh maybe a good and a more uh sort of vocational brute.
• 4:09
  SPEAKER_00: Um and in Edinburgh at the time the two biggest employers were banking and insurance, the head offices of many companies which still exist and many of which uh don't um are or were based in Edinburgh, and just uh luck of the coin toss it came down um on the insurance side.
• 4:32
  SPEAKER_00: So I started off doing bulk buyer pensions with the Guardian Royal Exchange, which is a name we don't hear quite so much, not in its original format anyway, um in Edinburgh.
• 4:44
  SPEAKER_00: And um yeah, it turned out that that was um slightly more dull side of the business that I wanted to be involved in.
• 4:54
  SPEAKER_00: So um I it it it it struck me that um being on the at the time it was more of a sort of sales focus than a sort of financial planning um profession, if you will.
• 5:06
  SPEAKER_00: So um the fund was to be had in the sales side, I thought.
• 5:09
  SPEAKER_00: So um it didn't take me long to um find my way to London and uh doing the sort of broker consultant job um with Aegon and uh yeah it that that's that suited me.
• 5:25
  SPEAKER_00: So it was more by chance than by design.
• 5:28
  SPEAKER_00: It seemed an option to get into to one of the professions without a without a degree as was the case at the time, and went through the sort of uh vocational training and the CII exams and what have you.
• 5:39
  SPEAKER_00: So uh that was the um that was the start.
• 5:42
  SPEAKER_00: Okay, cool.
• 5:43
  SPEAKER_00: Many decades ago.
• 5:44
  SPEAKER_02: Yeah, interesting enough, it's it is still a profession.
• 5:46
  SPEAKER_02: I mean, I saw a video quite recently on YouTube that says, you know, jobs that you can earn a hundred thousand pounds a year in and don't need a degree, and financial planner was one of them.
• 5:56
  SPEAKER_00: Yeah, well, you know, it charted as a level six qualification, isn't it?
• 6:01
  SPEAKER_00: So, you know, it's uh degree equivalent.
• 6:03
  SPEAKER_02: Degree equivalent, absolutely.
• 6:04
  SPEAKER_02: Um, okay, cool, great stuff.
• 6:06
  SPEAKER_02: So yeah, so in that in that place, that is how you early got into it.
• 6:09
  SPEAKER_02: So moving into financial planning and financial advice, which is talking about pre-RDR world, aren't we?
• 6:15
  SPEAKER_02: Um, so you set up your own financial planning practice, is that right?
• 6:20
  SPEAKER_00: Uh uh yeah, I mean, uh not only pre-RDR, it was only just post-Fanancial Services Act, uh late 80s, early 90s.
• 6:30
  SPEAKER_00: So um yeah, I set up my first practice or or joined what became a practice that I um ended up as the the owner of in in in '95, in actual fact.
• 6:45
  SPEAKER_00: And um, that was around the sort of post-polarization period.
• 6:50
  SPEAKER_00: People might remember or have studied in their history books.
• 6:53
  SPEAKER_00: There was a time that um you could buy your product from a sort of virtually integrated provider, many of the names of which we don't hear so much anymore.
• 7:02
  SPEAKER_00: Allied, Dunbar, Abbey, Life, the Pearl, um or the wonderful world of independent financial advisor.
• 7:09
  SPEAKER_00: And of course, the products were all very different at that time.
• 7:12
  SPEAKER_00: So the the need arose more for the independent financial advisor rather than the product sales person, as it would have been, because making the product purchase decision was the important bit, getting a product that fitted the client uh as to what the charging structure was.
• 7:29
  SPEAKER_00: And my goodness, the charges were high back in the day.
• 7:32
  SPEAKER_00: So um, yeah, very, very long way pre-RDR and still in the realms of uh commission as the main remuneration.
• 7:40
  SPEAKER_00: Um yeah, and you know, on the transition from sales as the sort of focus into financial planning, I suppose.
• 7:49
  SPEAKER_00: And that's been the big evolution in my career lifetime has been that movement from a sales focused business, especially with the vertically integrated providers, into uh what is an extremely valuable profession.
• 8:04
  SPEAKER_00: You know, people are really engaged with their financial planners now rather than maybe avoiding someone who is moving in and stripe them up for some life insurance or whatever the fear might have been back in the day.
• 8:15
  SPEAKER_02: Yeah.
• 8:16
  SPEAKER_02: Okay, cool.
• 8:17
  SPEAKER_02: So when you prior to sort of prior to this, to the trend of financial planning, and it was mainly what I suppose nowadays, you know, you've got financial advice and you've got financial planning, haven't you?
• 8:28
  SPEAKER_02: Financial advice being typically what people think about financial advice is the the, as you mentioned, the sale of a product um uh, you know, to somebody where potentially that financial advisor might earn some commission from the product provider.
• 8:42
  SPEAKER_02: So you kind of have this financial advice, and then you've got financial planning.
• 8:45
  SPEAKER_02: There are early adopt, there were quite a few early adopters to that financial planning process.
• 8:49
  SPEAKER_02: And it wasn't unusual coming out RDR where I would speak to firms and the way they're like, we've always been financial planners, we've always been fee-based, that's all we've ever done.
• 8:57
  SPEAKER_02: Um, were you somebody like that as well?
• 8:59
  SPEAKER_02: Did you kind of were you an early adopter to that relationship-based model um where you were really kind of planning people's finances with cash flow forecasting and you know their their future planning basically, as a as opposed to just uh here's a product and um you didn't need it right now, and uh I'll sell you it and make some commission.
• 9:18
  SPEAKER_02: Well, was it a bit of both?
• 9:21
  SPEAKER_00: It's a bit of an evolution, I suppose.
• 9:23
  SPEAKER_00: But I mean, uh ultimately um a lot of people in our business are are are you know I describe myself as a people person, I think a lot of people are.
• 9:33
  SPEAKER_00: Um and there's a very high degree of trust required in our business, and I think you know, ultimately, ultimately, if you've got the client's best interests at heart, then you're aligning what you do with the expectation of having a long-term relationship.
• 9:51
  SPEAKER_00: So my journey has been one where we very much have started with the end in mind for a client, you know, long before any of the maybe more popular software tools that are out there now were necessarily available.
• 10:06
  SPEAKER_00: And um I've sort of um created this process over the years of thinking about the key elements of financial planning, and that always involves a timeline because we need to uh one of the first things I learned in my profession was that you know clients are either going to um live too long or die too soon or get sick in the meantime.
• 10:29
  SPEAKER_00: Um, and you know, every every timeline journey um ends with the expiry of the client.
• 10:38
  SPEAKER_00: So um confronting that issue and considering where we might be on the timeline.
• 10:43
  SPEAKER_00: And uh I always say by you know, I hope it's gonna be a very long and happy timeline, but we do need to consider the possibility that it might not be.
• 10:50
  SPEAKER_00: And uh, you know, you need someone who's brave enough to confront these difficult questions with you to make sure that you have got ultimate financial security, whatever happens.
• 10:58
  SPEAKER_00: So yeah, we um I always sort of back of a napkin presentation, um, set out the the timeline as a key part of financial planning, and then the tax side, which is a key part, and then where is the where is the money?
• 11:11
  SPEAKER_00: Where does it get invested?
• 11:13
  SPEAKER_00: Um so that as you go through life's journey, the right amount of money is available in the right place to give you the right result from a tax perspective and to to fulfill your needs.
• 11:24
  SPEAKER_00: So that did fit very well with um where we now are as uh a profession where I should think um well, I can't imagine anyone not having that kind of timeline-based financial planning relationship with with clients, really.
• 11:40
  SPEAKER_02: No, I think some of the struggles you you hear are that um some financial planners or financial advisors, what you want to say, um, can struggle with that relationship piece.
• 11:50
  SPEAKER_02: So sitting down with somebody and and sort of building that relationship with the client, opening them up and talking about those pain points, um, those worries, those concerns, and those fears, I suppose, about the future.
• 12:01
  SPEAKER_02: And my sort of thought process, and I've said this a few times really, if I look at, I look at when I talk to so many financial planning firms and individuals, I really do think that financial planning, um, good financial planning is a um health and well-being proposition, perhaps not health, mental health, yes, but well overall well-being proposition.
• 12:19
  SPEAKER_02: Because when you sit down with somebody, and I've been on the receiving end being the client, um, you know, I'm I wasn't perfect with money.
• 12:26
  SPEAKER_02: I run my own business.
• 12:27
  SPEAKER_02: I, you know, I had all these preconceptions and beliefs around money of whether or not I was worthy or or or what.
• 12:32
  SPEAKER_02: I don't know.
• 12:33
  SPEAKER_02: I just didn't particularly have a great relationship with money.
• 12:35
  SPEAKER_02: And when I sat down with somebody and they went through it with me and explained to me actually the psychology around money and where my beliefs come from, and um a a weight kind of lifted from me, you know, a worry, a concern, and a weight lifted from me.
• 12:49
  SPEAKER_02: And I I love that part of financial planning that you can sit down with a client who perhaps doesn't have a clue, you know, hasn't got an idea, but is possibly deeply anxious about his future or their future.
• 13:00
  SPEAKER_02: And good financial planning puts that at ease, doesn't it?
• 13:04
  SPEAKER_02: And um is one less thing to worry about because you know that somebody's got your back and they've put a plan in front of you, and you can see where your life can go around finances.
• 13:15
  SPEAKER_02: Obviously, there are other things that can happen in your life, but you certainly can park it.
• 13:19
  SPEAKER_02: And um, you know, it's definitely a well-being proposition, and and some people get quite ill over it, don't they?
• 13:26
  SPEAKER_02: You know, some it's not unusual for some people to end their lives because of their money problems.
• 13:29
  SPEAKER_02: So I think well-positioned financial planning is a well is a well-being proposition, and I just kind of always advocate that.
• 13:34
  SPEAKER_02: And um, I don't see enough of it being of enough of it being positioned like that within the financial planning planning profession at the moment.
• 13:41
  SPEAKER_00: Well, I think you know, maybe it requires a certain degree of um bravery uh and indeed skill set um and um listening skills to to do that.
• 13:56
  SPEAKER_00: Um one of the first things I was taught was that you were given two ears and one mouth and make sure you use them in that proportion.
• 14:03
  SPEAKER_00: I think that's been pretty good advice.
• 14:06
  SPEAKER_00: Um but yeah, you you know, one needs to be a a technician, um understand a little bit about tax, um to a certain extent, be a a a counsellor, a psychiatrist in some or a psychologist in some respects, you know, so just in a i in terms of as you say, um confronting the difficult questions.
• 14:30
  SPEAKER_00: And um well, I suppose to to your point about anxiety, um, and I've always said especially where pensions are concerned, uh what we do tends to be complex and boring.
• 14:45
  SPEAKER_00: And as a consequence, engagement tends to be quite low.
• 14:48
  SPEAKER_00: Um, and I think clients tend to come with a low level of or a high level of um, certainly a background level of anxiety, if you will.
• 14:57
  SPEAKER_00: Um, maybe I don't have enough being the main one.
• 15:00
  SPEAKER_00: Or um, maybe if they've got accumulated savings, I you know, maybe I'm going to lose it.
• 15:05
  SPEAKER_00: So there's frequently an anxiety around money.
• 15:08
  SPEAKER_00: Um and I think understanding that putting yourself in the hands of a competent professional in financial planning is as important as it is in any other facet of life.
• 15:26
  SPEAKER_00: Um looking at health as an example for you or um yeah, not not being relied to do on things uh by yourself, you're not on your own, as you say.
• 15:39
  SPEAKER_00: You've you've got a trusted partner who can help you.
• 15:42
  SPEAKER_00: And um, I always joke with the DIY brigade of uh clients to say, well, you know, but surely I could do this myself, couldn't I, Dave?
• 15:49
  SPEAKER_00: Well, yeah, you could, you know, if you want to spend a huge amount of your leisure time researching stuff which is complex and boring.
• 15:56
  SPEAKER_00: And I would say, um, I dare say if you had the right tools and the right camera equipment, you could do your own dentistry if you really wanted to.
• 16:03
  SPEAKER_00: But speaking quite personally, I'm that's something I'm gonna leave to the expert.
• 16:09
  SPEAKER_00: Thank you very much.
• 16:10
  SPEAKER_00: And uh that's sort of the way that I see what we do is um leave it to the professionals and get on with your life.
• 16:17
  SPEAKER_02: I think um you're right there, because I think people need reassurance no matter how much time and energy they look at something themselves.
• 16:23
  SPEAKER_02: And and as you mentioned, are like the DIY type tribe.
• 16:26
  SPEAKER_02: Um, and obviously they're out there, they get a lot of their information from YouTube and from you know, uh Instagram influencers and feel that they can do it themselves because they see a video of someone who says they can do it themselves.
• 16:37
  SPEAKER_02: Um, there was a there was a chap I spoke to earlier, um, Greg Moss, I placed him some years back, but he's coming on the podcast um next week, and he's been signing up clients that are part of the fire movement.
• 16:50
  SPEAKER_02: So, you know, the um retiring early, isn't it?
• 16:52
  SPEAKER_02: Financial independence retire early.
• 16:54
  SPEAKER_00: Right.
• 16:55
  SPEAKER_02: So he's actually sort of done a bit of marketing around that, and he's found that actually, although these individuals are really scrupulous around their spending and trying to reduce the amount of spending so they can retire early and have financial independence at a young age, younger age.
• 17:11
  SPEAKER_02: He said he's he's found though that they're coming to him because they are they need reassurance that what they're doing is right, or they need that financial planning piece.
• 17:23
  SPEAKER_02: And he's been really surprised at that.
• 17:25
  SPEAKER_02: And um and I'm surprised at that because I would have thought they would be fiercely against that type of thing, you know.
• 17:30
  SPEAKER_02: But actually, no, they're not.
• 17:31
  SPEAKER_02: They just they do they need almost everyone needs a bit of validation, don't they, that they're doing the right thing.
• 17:36
  SPEAKER_02: And as you rightfully say, you know, you can go onto Google and you can self-diagnose a lump on the side of your neck, but until you go to a doctor, you're never gonna know what it is, are you?
• 17:45
  SPEAKER_00: Well, that's it.
• 17:47
  SPEAKER_00: And um I was actually having a conversation with one of our planners um uh this morning who was telling me about a client who was exactly of that ilk, and um he had certain pension income and certain savings and another pension pot, which he didn't quite really understand.
• 18:08
  SPEAKER_00: And he'd figured out that um his budget for the rest of his life was 24 grand a year, and he was reasonably happy with that, he could make ends meet, life was ticking over adequately with no great luxuries, but you know, that was that.
• 18:23
  SPEAKER_00: And um after he'd finished um the session with um the planner, it was evident that on the most conservative assumptions possible that actually he could easily spend 40,000 pounds a year on his lifestyle with no question of running out of money.
• 18:43
  SPEAKER_00: Um and that allowed him to do so much more than he imagined that he would be able to do.
• 18:52
  SPEAKER_00: And um, you know, to paraphrase Mitch Anthony, it it it brings into the uh the reality the phrase of is your life about making your money or is your money about making yourself alive?
• 19:05
  SPEAKER_00: Um and you can't put a price on that, you know, when it comes to the extra fee that you might pay relative to how long of a retirement, swimming and saving to die a multi-millionaire.
• 19:19
  SPEAKER_02: Yeah, no, absolutely.
• 19:20
  SPEAKER_02: And I suppose when if someone sits down with a good financial planner and then can make that, you know, someone comes there thinking 24 grand a year, yeah, happy with that.
• 19:27
  SPEAKER_02: All of a sudden someone turns it around and says, Well, actually, you could get your 14,000 pound a year.
• 19:31
  SPEAKER_02: It's like almost winning the lottery, isn't it?
• 19:33
  SPEAKER_02: You know, you've had a kind of windfall that opens up opportunity for you in the future, do things that you possibly thought you didn't budget for or thought you could actually do.
• 19:42
  SPEAKER_00: So you know, or you know, retiring five years earlier than you thought you could before you have the heart attack in a job that you hate.
• 19:51
  SPEAKER_00: Because lots of people are in that position too.
• 19:54
  SPEAKER_02: What sounds to me is that you're somebody that cares quite deeply about the client relationship and how the client is looked after, and um how the client perceives financial planning, and more importantly, I guess with your new business, the path, um, where their monies are invested and what impact that money is actually having.
• 20:14
  SPEAKER_02: So it's an area I'd love to sort of now sort of move in on because obviously you, you know, and and to understand a little bit more as to why you set up the path, what got you on that journey to moving into more the ethical space and the impact investing space.
• 20:29
  SPEAKER_02: So um could you sort of give us a bit of an overview about how the path came about, why you set it up?
• 20:36
  SPEAKER_00: Um sure.
• 20:37
  SPEAKER_00: Um and that ties into the point you just made around uh client values and the whole value conversation, which we might come back to a little bit later on.
• 20:48
  SPEAKER_00: Um but yeah, well, I was working with um very large national wealth management firm um and uh had to build a successful uh practice up um there and um they had a great investment management approach, uh as far as I was concerned, um St.
• 21:13
  SPEAKER_00: James's place um with the investment committee and outsourcing that.
• 21:18
  SPEAKER_00: Um so I was doing a great job for clients there as far as I was concerned in terms of financial planning and plugging them into a investment management process.
• 21:28
  SPEAKER_00: But um yeah, it's got a I've got a lot of respect for that process, shall we say.
• 21:34
  SPEAKER_00: Um but um it was at a time I was getting an emerging consciousness of environmental issues and some of the challenges that the the the planet faced.
• 21:48
  SPEAKER_00: And uh the journey started actually when my eldest son said, Hey Dad, you want to watch this um documentary called Cowspiracy?
• 21:56
  SPEAKER_00: It's all about how animal agriculture and the um Methane from cow farts basically is uh uh causing yeah, a contributing factor to to climate change.
• 22:09
  SPEAKER_00: Uh and I thought, well, this is fascinating.
• 22:12
  SPEAKER_00: I had no idea that animal agriculture had such a big impact and we don't hear about it.
• 22:16
  SPEAKER_00: Um, then I discovered the executive producer of that uh documentary was Leonardo DiCaprio, and um then um it's interesting, what's he doing with that?
• 22:26
  SPEAKER_00: And then transpired that he was vegan, which I didn't know.
• 22:30
  SPEAKER_00: And that led me into researching a bit about him, and he was a big movement in the divestment movement, which is um encouraging at the time large pension funds, faith groups to move their investments from fossil fuel investment, fundamentally, investments which were um uh challenging from an environmental perspective.
• 22:51
  SPEAKER_00: And I was really starting to pay attention to my own environmental footprint and what I was doing and what individuals need to do to save the planet, not wishing to be too grandiose about it, but um and I was just dragging my heels into the office more and more.
• 23:07
  SPEAKER_00: I couldn't quite figure out what it was until I realized that actually at the time, and we're talking sort of I guess four or five years ago, the in in investment portfolios weren't particularly mindful about what they were investing in from an environmental perspective.
• 23:27
  SPEAKER_00: I mean, yes, of course, ethical funds uh per se have been around for quite a long time.
• 23:33
  SPEAKER_00: And um, we can talk to some of the taxonomy around this uh in a minute.
• 23:37
  SPEAKER_00: But um Yeah, so I was looking at these um uh funds in the in the client portfolios and you know, full of BP and Shell and Rio Tinto and you know, in the global uh ones, they know lots of animal agriculture and all that stuff.
• 23:54
  SPEAKER_00: I just thought, hmm, you know what?
• 23:56
  SPEAKER_00: Um capitalism as it's sort of currently structured puts profit before anything else.
• 24:02
  SPEAKER_00: And if that means being negative towards people and planet, then um there seems to just be an acceptance that that's the way that it is.
• 24:12
  SPEAKER_00: Um I thought, well, actually I'm part of the problem uh that I'm trying to solve because I'm putting millions of pounds every year into the very funds which people like DiCaprio are saying are a bad thing.
• 24:27
  SPEAKER_00: Um so anyway, long story short, um I thought, well, I need to just um, you know, from a moral perspective, I need to stop being part of the problem.
• 24:38
  SPEAKER_00: So that's what I decided to do, and I um I I sold that business and was actually contemplating retirement.
• 24:46
  SPEAKER_00: I didn't think, well, you know, there might be a niche business out there somewhere.
• 24:52
  SPEAKER_00: But you know, at the time, and I think to a certain extent people still do say, well, you know, ethical investments all very well, but the client has to suffer a lower degree of return and the diversification's not there, and it seemed to be a sort of established and entrenched truth.
• 25:07
  SPEAKER_00: Um, and I thought, well, let's challenge that truth, uh, which is what I started to do.
• 25:13
  SPEAKER_00: And it didn't take me long to realize that there must be a cohort of clients out there who, even if the investment returns are lower, would rather move their money into something which is trying to positively tackle climate change rather than continuing to throw money into damaging things.
• 25:32
  SPEAKER_00: So the the sort of elevator pitch occurred to me, everything else being equal, are you happy killing the planet with your money, or would you rather save the planet with your money?
• 25:40
  SPEAKER_00: And I thought, well, that's quite catchy, isn't it?
• 25:43
  SPEAKER_00: Um maybe we can actually do something to now.
• 25:47
  SPEAKER_00: This is going to sound ridiculously grandiose, but change the basis of capitalism from being profit at any cost to saving the planet at any cost.
• 25:59
  SPEAKER_00: Um, there has to be uh a niche of people that you could build a business around to do that.
• 26:04
  SPEAKER_00: So that was the germ of the idea, and then a lot of due diligence ensued, a lot of analysis of investment returns, and it quickly became apparent actually that the the myth of reduced performance was indeed a myth, it wasn't the truth at all.
• 26:21
  SPEAKER_00: And if anything, the data was suggesting that the performance of um ethical funds, which is really where the all the data was, and to the limited extent that we could find positive impact data, was um suggesting that actually the investment returns might even be a little bit better.
• 26:37
  SPEAKER_00: And then, of course, you've got a common sense overlay of well, if you've got a SWOT analysis, strengths, weaknesses, opportunities, and threats, you know, actually um looking at um looking at investments through that sort of lens is a great way of identifying opportunities and a great way of avoiding threats.
• 26:56
  SPEAKER_00: And 2020's certainly borne that one out hugely, as we've seen the headwinds for fossil fuels transportation companies, um, banks, even um, relative to the returns that have been seen from more uh environmentally friendly companies like Beyond Me, Orsted, Tesla come to mind and the supply chains thereof.
• 27:19
  SPEAKER_00: So, yeah, it was really um, and it is also on the base of a lot of my own personal work about my own values.
• 27:26
  SPEAKER_00: So it's the emergence of my personal passion, which has led to a sense of purpose.
• 27:34
  SPEAKER_00: And uh, I think when you align passion and purpose, you've got a pretty potent uh force to be reckoned with.
• 27:41
  SPEAKER_02: When you mentioned there about towards the end of your time running your own practice and you stood watched Cowspiracy and it triggered something within you, you know, I don't know, higher state of consciousness, higher state of awareness that what you were doing, essentially, I guess, was unknowingly um contributing perhaps to a problem.
• 28:06
  SPEAKER_02: Did it make you were you at the time feeling a bit deflated with your life anyway, in respect of like because you know some people get to a point don't know where it's like I'm just trudging into work, doing the same thing, and it you know, perhaps it wasn't quite as exciting as it was when you were 21 years old or something like that.
• 28:23
  SPEAKER_02: Were you looking for that change or did it trigger change?
• 28:26
  SPEAKER_00: Did it trigger change, absolutely?
• 28:28
  SPEAKER_00: I mean, yes, I I was not um I was not skipping into the office with huge enthusiasm um every day, but I was doing a good job for for good clients and deeply appreciated as financial planners tend to be by um uh a client community who values their services.
• 28:50
  SPEAKER_00: So um I was I was sad and depressed, I think, at the fact that I um was unhappy in in doing this.
• 28:59
  SPEAKER_00: But my wife summed it up very well um a few years ago, um, before she was my wife.
• 29:06
  SPEAKER_00: And you know, she's very sort of um uh eco-minded and and and and and and and a grounded person.
• 29:16
  SPEAKER_00: Um she said to me, yeah, but David, all you do is make rich people richer.
• 29:21
  SPEAKER_00: And um I thought, well, that's uh that's an insult, isn't it?
• 29:25
  SPEAKER_00: I mean, yes, that's my job, and of course we do a great job at that.
• 29:30
  SPEAKER_00: And you know, what's wrong with that?
• 29:32
  SPEAKER_00: Um, but in a sense, that's not the kind of highest calling you could have in life, is it really?
• 29:39
  SPEAKER_00: But um when you're aligned to a more purposeful way of being, I suppose, then uh it can generate a huge amount more energy.
• 29:52
  SPEAKER_00: So I I do skip into the office with a huge degree of enthusiasm now in a way I couldn't have dreamt of a few years ago.
• 29:59
  SPEAKER_02: Your wife's right, isn't it, at the end of the day, because we spend a lot of our time in in some form or capacity chasing chasing money, whether it's making money for other people, um, improving their lives so they can make more money, improving their businesses so they can make more money.
• 30:12
  SPEAKER_02: It's it's always been, you know, a big part of capitalist society and who we are as business owners, etc., is usually driven by the pang note, you know.
• 30:21
  SPEAKER_02: And then all of a sudden, I've gone through this myself, you know.
• 30:25
  SPEAKER_02: I woke up and like woke, but you wake up, don't you?
• 30:28
  SPEAKER_02: You know, and you do sort of start realize like, well, actually, you know, this chasing this money thing is pretty like never-ending.
• 30:34
  SPEAKER_02: Um, you know, there isn't tend to be this end in sight, or the end is you one day you'll die with a load of money, you know, or um, or your health will suffer because you're just stretching your nuts out trying to chase this this figure that you think is going to make you happy, that happiness is gonna come from money.
• 30:48
  SPEAKER_02: But I um I had a period in my life where it really got me down to like, you know, really passed about it, and then all of a sudden I recognize that actually stop chasing money and start doing something that makes a difference.
• 31:00
  SPEAKER_00: Well, that's the point, you know.
• 31:02
  SPEAKER_00: The the the there's no meaning in having a bigger bank balance.
• 31:05
  SPEAKER_00: No, um, and in fact, I've watched a lot of people, um many of whom are former colleagues, get more and more irritable and bitter the the the the richer they've got because they get more and more money, and it doesn't make them any happier.
• 31:23
  SPEAKER_00: And then I think that's a cause for frustration.
• 31:25
  SPEAKER_00: So um, if you're a one club golfer, all you can possibly do about that is go out and try and earn even more money, and it just makes you more frustrated.
• 31:32
  SPEAKER_00: And uh yeah, you might get that yacht, and good luck to you if you want to do that, but there'll always be someone who's got a bigger yacht.
• 31:39
  SPEAKER_00: So if with that mentality, um, it's really counterproductive.
• 31:43
  SPEAKER_00: The um the route to happiness is through having meaning in your life, it's not through having money.
• 31:50
  SPEAKER_00: So um, this is the great epiphany for me, I think.
• 31:53
  SPEAKER_02: Yeah, and then there is uh the connection between having meaning.
• 31:58
  SPEAKER_02: So if somebody is, and we'll get on to this really is that having meaning.
• 32:02
  SPEAKER_02: So if you are investing your money, knowing where it's invested, but also knowing that where your money is investing, invested is having a positive impact, sociably, economically, um, sustainable, whatever whatever we talk about here, ESG, environmentally, that it is having an impact for good.
• 32:23
  SPEAKER_02: So when you put your head on that pillow at the end of the night and you're thinking about your future, not only are you securing yours, you know, looking after one of your total instincts in life, which is which is your security and your finances, your security instincts is covered, but also that feeling of happiness that comes from giving uh back.
• 32:44
  SPEAKER_02: And it's psychologically proven that when you give, especially collectively, when you're part of a bigger cause and a bigger cause is collectively giving, that the time perhaps and the money that you give creates way more happiness.
• 33:03
  SPEAKER_02: It just creates way more happiness up against an area that's not making an impact.
• 33:07
  SPEAKER_02: And I think again, it's an area where people are starting to see that and trust that.
• 33:12
  SPEAKER_02: And um, and I think the more you actually invest in these causes or these more awareness of what you're doing with your money and your time, the more you reap the benefits of um feeling more content and happier in your life.
• 33:27
  SPEAKER_02: Um, and it's certainly something that I've I've experienced around time, you know, this financial plan of life proposition for me, there's lots of people out there that are struggling to get into the profession, lots of firms struggling to hire people.
• 33:39
  SPEAKER_02: And um, by giving my time to people that I might not make any money out of right now, you know, I I won't make money out of helping somebody that's you know got no experience and part qualified.
• 33:50
  SPEAKER_02: But when I give them that 15 minutes of my time, I can't say all the time, but when I do, the the the gratitude that they have is phenomenal, and there's always something that I get back off of it.
• 34:03
  SPEAKER_02: Always, you know, the return on investment is huge.
• 34:07
  SPEAKER_02: Whether that's just feeling good, you know, it's nice to feel good, you know.
• 34:11
  SPEAKER_02: And um, but usually there's something that comes off of it, always like it was always something that comes off of doing good, which kind of leads me down this path with the so leads me down the path.
• 34:21
  SPEAKER_02: I keep saying that with you guys.
• 34:22
  SPEAKER_02: So obviously you've picked a good name, I think.
• 34:25
  SPEAKER_02: Yeah, the path.
• 34:26
  SPEAKER_02: I really like it.
• 34:27
  SPEAKER_02: So I guess that's an experience that you must be um witnessing daily, then from setting up your financial planning practice and choosing to be in that ethical space, that impact investment space.
• 34:42
  SPEAKER_02: So, how's that transpired across from you know the difference between SJP to running your own practice now as the path and being ethical, investment focused?
• 34:54
  SPEAKER_00: Um, yeah, well, from the financial planning side, it's the same thing, isn't it?
• 34:59
  SPEAKER_00: Delivering sensible uh advice within the parameters of a set of a good financial plan um with the client at the center of all of that.
• 35:07
  SPEAKER_00: Um the the the big difference is um around, as you say, the what the money's doing.
• 35:15
  SPEAKER_00: Um and that brings us on to the the values piece that I sort of alluded to um earlier.
• 35:23
  SPEAKER_00: It's and you know we only deal with clients who find us because they've got largely because they have got some environmental concern or they particularly want uh an ethical financial advisor.
• 35:37
  SPEAKER_00: And uh I think it's important to um touch on some of the language around this stuff at some point because um ethical is absolutely not impact as far as we're concerned.
• 35:50
  SPEAKER_00: Um but yeah, you you're connecting with the client at a deeper level.
• 35:55
  SPEAKER_00: It's now not just about making them more money, but it's about making them more money which is aligned to their values, and that can deepen the relationship with the client very much, and um, it can also enhance the uh speed at which trust is earned and demonstrated actually by the care that you're taking in asking the client about something which might not have been asked um of them before.
• 36:18
  SPEAKER_00: Um and it's back to this win-win principle again.
• 36:24
  SPEAKER_00: There's no uh reason why they shouldn't make perfectly good investment returns whilst the money is doing something at a higher purpose as well, if I can put it in that type of language.
• 36:34
  SPEAKER_00: So yes, they can go to bed at night feeling that they've have done some good and empowered them in a way as well.
• 36:45
  SPEAKER_00: The uh Nordaea study that um a lifetime's pension saving um in positive impact funds has got 27 times the impact of every other carbon saving activity that you've got in your life combined is is quite astounding.
• 37:02
  SPEAKER_00: If you look at the metrics on the portfolios that we run compared to a traditional investment portfolio, every£100,000 moved into our methodology has got the carbon equivalent of taking about six cars off the road.
• 37:20
  SPEAKER_00: Um, now you think of that in the context of not buying a few avocados or uh saving a single-use plastic bottle um or even going vegetarian or vegan.
• 37:33
  SPEAKER_00: Um it's enormous.
• 37:36
  SPEAKER_00: Uh you know, saving that one flight every year compared to just moving your, you know, doing your ISA in a positive impact fund or take a car off the road, boom.
• 37:45
  SPEAKER_00: Um, it's a powerful message.
• 37:48
  SPEAKER_00: Um, and you know, the the this also for people who really care about uh environmental incomes, um, it really is um something which is so important to them that you know, even if we were presenting with lower investment returns, I think they'd still do it, but they're not.
• 38:08
  SPEAKER_00: So uh there's really nothing to lose for people who care about this stuff.
• 38:12
  SPEAKER_00: And the only way you know, of course, is to ask them.
• 38:15
  SPEAKER_02: And do you position the um impact and ethical?
• 38:20
  SPEAKER_02: I'm gonna talk impact investing.
• 38:22
  SPEAKER_02: Do you do you position that with clients that have never invested in ethical or impact investment um funds?
• 38:33
  SPEAKER_02: Or do you tend to find the client that comes to you is already clued up after doing some research and they're a bit more aware of you know the damage perhaps their investments are doing?
• 38:47
  SPEAKER_02: Are they coming to you knowing or are you teaching?
• 38:51
  SPEAKER_00: Well, a bit of both.
• 38:52
  SPEAKER_00: Um, because we're in the realm of the unknown unknowns, like uh and we've got a very sophisticated uh digital um marketing um uh exercise which allows people to come to us for finding uh something uh that what they're looking for, but you don't know what you don't know, and the the the sort of people don't really, in my experience, massively yet go out looking for um positive impact financial advice, for example.
• 39:23
  SPEAKER_00: That's not a not a very common search term because the positive impact language hasn't really permeated into the sort of consumer uh lexicon yet.
• 39:34
  SPEAKER_00: So most people will come to us because of uh uh an ethical related search, if you will.
• 39:41
  SPEAKER_00: So they're already in the right kind of space, if you will.
• 39:45
  SPEAKER_00: Um, but we just think when you present to them so okay, um now let's just touch on some of the language here.
• 39:53
  SPEAKER_00: So ethical um S-R-I-E-S-G, call it what you will if I bunch them together in a in a in a group, um would generally be uh a screen out of something negative.
• 40:08
  SPEAKER_00: So for people who don't want to profit from lung cancer and warfare, if you will.
• 40:13
  SPEAKER_00: Um so you got the screen out of the big ones, the tobacco, um, alcohol, arms, um, and what have you.
• 40:20
  SPEAKER_00: Um but plenty of so-called ethical or ESG funds have got no problem, um, despite the E of investing in fossil fuel.
• 40:31
  SPEAKER_00: We we find lots of instances where fossil fuel companies are in there.
• 40:36
  SPEAKER_00: And a lot of the fund managers will say, Oh, well, yeah, we've got to engage with the boards of these companies, you know, and we can influence behavior as part of our shareholding, yadda, yadda, yada.
• 40:46
  SPEAKER_00: Well, I don't buy that, and nor do any of our clients.
• 40:49
  SPEAKER_00: They um for everyone, every single client we deal with, uh, fossil fuel is a red line.
• 40:54
  SPEAKER_00: Um, and you find that in ethical funds.
• 40:58
  SPEAKER_00: But what positive impact does is go that bit further.
• 41:01
  SPEAKER_00: It says, not that we're going to not invest in companies which are doing harm to people and planet, but we're going to invest in funds whereby the underlying companies have got a positive screen in for things which are helping solve the climate challenge and inequality and uh bringing people out of poverty and helping socially with investment.
• 41:28
  SPEAKER_00: So I think when you when you present that to someone who is open-minded to their money doing good, and you can present something which is like better, I suppose, and go, well, you know, um, well, better in every sense.
• 41:42
  SPEAKER_00: The performance seems to have been better up to this point.
• 41:44
  SPEAKER_00: The um ethos is better.
• 41:47
  SPEAKER_00: I mean, everything else being equal, what why wouldn't you use your money in a way which can help people and plan it whilst you profit too?
• 41:55
  SPEAKER_00: You you don't have to go to the extent of philanthropy, you can just use this money that's here to accelerate the demise of companies who are not behaving and encourage the ones which are that are having a positive impact across all areas.
• 42:11
  SPEAKER_02: No, I get that.
• 42:12
  SPEAKER_02: I didn't, it was news to me because when I hear when I hear like ethical, I assume that this it is, you know, I assume that the funds and the companies within are having a positive impact on the environment or everything else that goes with it.
• 42:28
  SPEAKER_02: But uh what I'm learning is that is just not the case.
• 42:31
  SPEAKER_02: And I'm learning as I learn more about it, I learn about this greenwashing and and I'm sort of understanding that people are jumping on this bandwagon and whacking ethical on everything, and and it's very misleading um to the end consumer in multiple different markets of different products and whatever, but especially within financial services.
• 42:51
  SPEAKER_02: Um, and I think the educational piece around it needs to be lifted, I think, um, definitely, because people think they're investing ethically, but possibly not in line with what they think is ethical, you know.
• 43:07
  SPEAKER_02: In my thought.
• 43:08
  SPEAKER_00: Yeah, we we can we can set all of that out, and then um the client can decide where where they sit on that spectrum.
• 43:17
  SPEAKER_00: But um we only deal with clients who are prepared to have all of their portfolios in in positive impact, and uh we don't see any inhibition to that.
• 43:27
  SPEAKER_00: Um it might be assumed that clients might put a percentage of their portfolio in that.
• 43:33
  SPEAKER_00: Well, we say no, it's perfectly functional to um have all of it in positive impact.
• 43:38
  SPEAKER_00: Um and yes, you you you're right, the the language and the education piece around this are very important.
• 43:44
  SPEAKER_00: Um and um the the the greenwash or uh as I call it the 50 shades of green question.
• 43:54
  SPEAKER_00: Um because um the the the the lines are not very uh the lines are very fuzzy, shall we put it that way, uh, around you know what does sustainable mean?
• 44:06
  SPEAKER_00: Uh what does ethical mean?
• 44:08
  SPEAKER_00: How do you define and measure that?
• 44:10
  SPEAKER_00: And you know, said you can't manage what you can't measure.
• 44:13
  SPEAKER_00: Well um the boundaries need to be quite um a lot clearer than I think they are at the moment.
• 44:22
  SPEAKER_02: You can get away with labeling something um something which yeah as you say is a a greenwash or an impact wash even uh is a new uh uh term that uh uh viewers might be uh familiar with um and this is another reason for where you absolutely need advice because um however many funds are available in the UK it's a big job to do all of that analysis and look under the bonnet you know quick sniff test does it look like it says it's doing what it says um and then a a deeper dive into well how committed is the fund manager what do the companies in the portfolio look like how committed are the companies what's their carbon footprint what's their intentionality there's a great deal to uh tackle in all of that and again if financial planning itself wasn't hard enough to do yourself then you come into this space and it gets a whole lot tougher and is there you know I had a guy called Jeremy Korn on the podcast who had a platform called Impact and Invest and his sort of model was to consolidate all the firms that have a positive impact and put them all into one place so financial planners and sophisticated investors can go to one place and see a kind of overview of the company what they do and what impact they're actually having um historically that's one thing but you know he's done that because he felt there wasn't enough out there doing that type of thing to be able to consolidate and give somebody a clear idea of what these companies are actually doing.
• 45:55
  SPEAKER_02: So traditional sort of financial planning and research and everything using all these different platforms is probably a lot easier than trying to do the research around um ethical and impact investment opportunity so how do you go about doing that is it a lot of is it a labor of love you know have you got guys that are just traoling all these companies or is there a list of them how how do you go about doing that type of research to make sure that actually the company is having a positive impact as they say they are um yeah well it it's such a big of a job that we actually um effectively contract that out to um specialist analysts um and there that there are uh a few tools that we can work with so um I would point to um EQ investors as having uh positive impact portfolios which are incredibly well researched uh tribe impact capital um similarly peerless credentials uh and both of them have got um reasonably long track records in this space uh bearing in mind it's a relatively emerging and new um discipline um Worthstone is a great uh place to go to for resources of having screened out um funds and um SRI services as well Julia Drebelo so that there are quite a lot of resources out there um I think a lot of existing advisors and firms have a embedded way of being and an existing investment management approach and I think it can be quite difficult to fit something like that this into that um but I I do think that firms are gonna have to have a credible offering in this space because to my mind yes ESG is the new trendy bandwagon if you will um but I I don't I don't think it's a flash in the pan I think it's the uh the the the start of um a mega trend and I think that impact investing is not far behind that.
• 47:59
  SPEAKER_00: So uh it's certainly for people who are not thinking about their investment proposition or the questioning around the client's values I I think that's a uh dangerous place to be in as the market um moves.
• 48:15
  SPEAKER_02: So what advice would you give to other financial planning companies or individual financial advisors around their knowledge and understanding of impact in ESG?
• 48:25
  SPEAKER_02: What advice would you give them at this stage right now?
• 48:28
  SPEAKER_00: Well I just think it's um there was some data around this that 75% of advisors this is a couple of years ago don't instigate these conversations but 90% of the investing public want to have them.
• 48:41
  SPEAKER_00: So there's an obvious disconnect.
• 48:44
  SPEAKER_00: So if you're that disconnected to your clientele I would say you you know you probably want to think about getting the um some degree of knowledge up or even just questioning the clients around it anyway it it it would be a it would be an area to have some answers to the questions because um where the question is asked and there isn't an adequate answer.
• 49:13
  SPEAKER_00: I think where the purpose and morals are concerned that even where client relationships are good you can't really put a price on someone's morality and uh sense of purpose.
• 49:31
  SPEAKER_02: So um there are there are headwinds and threats I think if this is not acknowledged uh as an area to um find some solution in and have some conversations around yeah so it's preparing it also into your fact find or initial uh consultation with the client perhaps building some content around it that sits on your website that educates people that are coming over to have a look at who you are because they might well be wanting to turn their head and as you said 90% of people want to talk about this.
• 50:07
  SPEAKER_02: They're probably thinking are they doing anything in the ethical space, in the impact space?
• 50:12
  SPEAKER_02: But also just simple things like just doing a questionnaire I guess isn't it you know you've got an existing client base.
• 50:16
  SPEAKER_02: Why not go out to those clients?
• 50:18
  SPEAKER_02: It's a great conversation piece it's a reason to have a conversation with them isn't it and just sort of say looking at how do you feel about this this is the type of thing that we're uh that we have you know which is which is available these are the changes that are happening why it's coming into place what are your thoughts and feelings about it and opening up those lines of communication um and then sort of educating I suppose as to the the feel good factor that comes with with doing this and dispelling any myths associated with lack of performance and lack of profits that come off the back of um investing uh in impact and ethical um solutions um because um I think that's probably one of the barriers isn't it if you're being told all the time that it's not as profitable then why are you going to even talk about it as a financial planner because you're you're worried aren't you that you're concerned that your client might not want to use your service because you're not getting the best returns because I don't know there's some stigma attached to it um which is as you've rightfully said through your research and and and experience now of of providing these 100% these services it's just not true that um the returns are there.
• 51:19
  SPEAKER_02: So it's definitely an educational piece isn't it it's a conversational piece and um it's positioning yourself to be able to do it.
• 51:24
  SPEAKER_02: And with the MiFID II um changes you have to don't you you know you have to be you have to be talking about it.
• 51:31
  SPEAKER_02: You have to be seen to be providing those and as you say I can only see it grow and and I spend a lot of my time researching companies.
• 51:39
  SPEAKER_02: So financial advisors and financial planners tend to kind of live in their bubbles really whereas I see the market as a whole and what financial planning firms are actually doing.
• 51:48
  SPEAKER_02: So I can see trends as they're starting to appear because I'm constantly looking at different websites and researching and stuff like that.
• 51:54
  SPEAKER_02: And there is um my research you know is into this is there's not a great deal of people in the space of of of of impact and ethical you know you mentioned EQ investors I actually phoned them up today and had a chat with them today um briefly um and we're having a further chat as well um and there's a couple you know there's a handful of other people that are out there doing it.
• 52:13
  SPEAKER_02: But I think there will be an absolute appetite not only for the next generation of financial planners to be they're more aware they're more savvy they're more they're more understanding of ethical and impact and they want to be providing that especially that that sort of next generation I think without a shadow of a doubt.
• 52:29
  SPEAKER_02: So they're going to be wanting also as they come into the profession and establish themselves as financial planners they are going to be wanting to align themselves to a firm that also um is aligned to their personal values as well because it's way way more of a woke generation isn't it um yeah why wouldn't you want your profession to be optimally aligned to your uh value uh and it's not just the advisor community as well you know and um it's the um it's the client community um we had a um millennial come to us um last week whose um dad had uh left her a million quid um um or indeed gifted her a million quid I can't quite remember but she was like the one thing that is not happening to that money is that it's staying invested in um tobacco and alcohol and climate change because you know um why would I invest in something which is going to damage the future of the planet that I'm hoping to inhabit.
• 53:44
  SPEAKER_00: So his money is moving the minute I get authority on it.
• 53:49
  SPEAKER_00: So um yes there'll be a new generation of uh people for whom these are more or less sort of in many cases more more sort of embedded values really um but also the client community so if you are one of the older generation of financial advisors in a somewhat siloed and um more rebut you know bubble um then you better watch out because it was it keeping the money as it's passed down to the next generation uh maybe a challenge.
• 54:24
  SPEAKER_02: Um especially with this transition of wealth that we're going through and will be going through this greater level of transition of wealth you know you need to be have one foot in one camp and kind of one foot in the other really and be prepared for that transition over to somebody that's values are completely different perhaps to the client that you were used to dealing with.
• 54:42
  SPEAKER_02: But I think it's probably short sighted and also slightly arrogant to think that just because somebody is older that they don't aren't they aren't aware now of the impact that potentially their investments are having because you know if someone's in their 70s the likelihood is they might well have children those children who've got you know grandchildren we're aware that you know with the rise in technology and medicine that those grandchildren are living a little a lot longer.
• 55:05
  SPEAKER_02: Now I'd like to you know my father is far more aware now because I've got my daughter and he loves my daughter four years old loves her.
• 55:13
  SPEAKER_02: So he's far more aware of his impact now on my daughter's life whereas before he might have felt quite selfish about his own personal gain, you know so I think there's something there as well isn't it it's there is ignorant and arrogant to think that just because someone might be a bit older that they're happy to beat him tobacco and whatever.
• 55:30
  SPEAKER_00: But I don't think that's probably true is it well it's not true because but when you bring it to their attention then um I think it it it's a conversation that that that should be had.
• 55:39
  SPEAKER_00: So what we find actually is a as a generality um millennials are completely tuned into this but so are a lot of um people with grandchildren it's probably actually the it's probably the middle ground where you know I'm not saying there isn't an appetite for this but the the the obvious ones are the the the younger generation and those with grandchildren because they're really looking at this um and they're looking at quote the you know the the David Attenborough program which says isn't it perverse that the banks and financial institutions would invest in fossil fuels and the very things which would ensure that there wouldn't be a future for the savings that they're in.
• 56:27
  SPEAKER_00: You know and you know to your dad's point, you know, of course he wants to do what he can to um make the world a better place for his grandchildren um you know who will be living at the turn of the next century.
• 56:45
  SPEAKER_00: And you know we look at the climate change predictions for that it's potentially not going to be a great place to be unless we do something about it now you know at a pace and with huge purpose.
• 56:58
  SPEAKER_02: So uh yeah but maybe they're not quite so exposed to the possibility of understanding that um so um yeah you're absolutely right one should not make these uh assumptions and I think when um when the education piece you know back to the unknown unknowns oh who would think that your pension fund could be impactful in terms of uh combating climate change until someone points it at you hey I've been in the business for how long the penny only dropped for me a few years ago yeah I think that's one of the because I I did pick that up a little while back you know the 27 times more um more impactful than going vegan you know and I think people kind of latch onto whatever the trend is because they think and it's a good thing to to take in whatever capacity as you say saving your plastic bottles whatever but I think there are other ways that we could rapidly increase that um but it's also looking as well and I think I just spoke to this this couple of um these these guys that run this charity is philanthropy charity it's about um going into like investment banks big banks coops that sort of thing getting them um to understand the power of of philanthropy and where your monies are invested so they can then be trained to then pass on that knowledge to their clients to hopefully help influence that top percentile of higher net worth and ultra higher net worth clients to make changes with their money which ultimately will be a a a faster and speedier impact to to to change and I found those guys were really really easy and I said sort of challenges I said what you up against he goes well so you know so in the UK we tend to be a socialist society.
• 58:34
  SPEAKER_02: We expect our government to make changes as opposed to ourselves make changes and I found that quite interesting because I never really thought about it that way that we think our government should make the changes we're not prepared to kind of do it ourselves and we're starting to do that.
• 58:46
  SPEAKER_00: We're starting to take responsibility but we've always been like well no our government should do it they'll they're the ones they'll they'll sort it out and she that's like kind of but they won't you see and that's one of the main reasons I set the path up if we wait for government and for regulation who you know um doesn't matter what colour of government they are um they're short termist in nature by and large uh and a lot of the choices that we face are not vote winners necessarily so um that's why capitalism as a force if it can be channeled into being a force for good will be by far the most dynamic and effective way of affecting the change that we need.
• 59:29
  SPEAKER_02: As a company do you involve do you get involved in um sort of workshops or educational pieces or committees or um you know communities around um around impact and ethical in investment do you sort of because that's quite an interesting job and I suppose when it comes to gener when you're a financial planner the aim is I know you've got an effective digital marketing strategy you positioned yourself really well.
• 59:52
  SPEAKER_02: I can see that because I found you nice and easy but at the same time I think with a financial planner choosing a career path and the route they want to go down a big part of of it is that they they want to go down a route where they know that they can generate good quality clients and and you know the traditional route of accountants and solicitors can be quite you know diluted you know and and and and is there a different approach to business development when it comes to the the the path for example financial you know ethical and impact is there different doors open with different introducer relationships does business development become easier or harder or the same oh I think it's I think it's easier at every end up um first of all um being a a specialist or in a niche makes you far more referable than being a generalist if if your sales pitch is hey I can do anything for anyone who can you introduce then nobody comes to mind right you're going but I can do anything for anyone where are all my referrals well it's because you're far too broadly spread um but if you're like well we're we're a niche within an a niche uh you know like who who's the um you know you need a heart operation who do you want to go to the most knowledgeable effective uh heart surgeon right so you you you find um you find that tight niche uh and and then go to the most informed uh and effective person and and so it is so in actual fact paradoxically the the the the tighter your niche the the the easier it is to to to mark it um then you've got the differentiation as you said earlier there's precious in a few enough people in the um ethical space and if you view impact as a subset of that and I would argue with that definition but to some extent you could do that then you're a a a a niche within that niche and it's it's a differentiating factor.
• 1:01:54
  SPEAKER_00: I mean um hey um I can make you a little bit richer than the next financial advisor because why I'm an ISI guy.
• 1:02:03
  SPEAKER_00: I I'm a member of the same club that you're you know what you know you're just a um you're you're a Jaffer as I call it just uh another financial advisor there's a missing F there.
• 1:02:15
  SPEAKER_02: Um so you've got that differentiating uh thing of you know if if this is what clients care about then um who's the go-to guy in in that space and then it's interesting okay so um the the the challenge of launching a business into the sort of uh COVID era has been that we can't get out and do events and and and seminars but um when we talk to what we do it's immediately interesting people go oh you know I'd never thought about that that would be really interesting to look can you come and talk to our group so yeah I think it opens up a whole uh gamut stuff um and and different marketing opportunities and actually the accountant and solicitor and sort of um that that that's probably it's probably not the route to go because you are a niche so um it's one to you know traditional isn't it I suppose the accountancy is very traditional they don't want anything to sort of rock the boat and um I suppose sort of a couple of you know their impression is like welly wearing dungry wearing financial planners coming in you know with their dreadlocks telling them what to do.
• 1:03:24
  SPEAKER_02: Yeah am I gonna pass my client to this bunny hugger guy well no the the reputational damage is going to be bloody vegan so you know let that let that so that's but yeah I I would say you can get very creative around the the the market it lends itself credibility social channels um so yeah get getting the message out there is um probably quite relatively easy and that's what I see that's exactly what I see is that that is it's a definite sort of vertical where you know you can create so many opportunities and I think the narrower your niche the narrower your vertical the better things the better things are the easier it is for you to even kind of understand who you are as a financial planner as well.
• 1:04:06
  SPEAKER_02: It's one of those paradoxes uh it's like as you were saying earlier that the the more you give away the more you get back um you know the the the tighter you are on the niche that I think actually the easier you are to find less is more one question I will ask you and um this is something about the future um if you think about it too too much but um what do you think about the fickleness if you like of clients of the future and perhaps now in the sense that what I mean by that is that you don't have as many loyal clients I can imagine in the future as you would in the past.
• 1:04:46
  SPEAKER_02: So someone might have used their financial planner for 30 years yeah whereas now like someone will go right okay what Netflix or I'll go over to Prime I'll go over to Amazon Prime right now that they're cheaper and they've got a better selection and it's brighter and it looks nicer and they've got the latest technology and they've got this and that.
• 1:05:00
  SPEAKER_02: The rise of technology I suppose and the ability to bring um financial solutions to the masses and to simplify it and make it cheaper do you feel that there is a does that concern you about the future of keeping clients and and and ensuring that they stay with you?
• 1:05:20
  SPEAKER_02: Do you do you have that kind of worry and does impact investing kind of I don't know create that connection deeper than traditional planning?
• 1:05:30
  SPEAKER_00: Well it's always good to have an eye to the future I think in the um in the present there isn't a particular threat to to to that um certain ETFs and passive funds would perhaps suggest that they've got a ESG bent uh but none have got real credibility in the um impact space uh as far as I'm concerned.
• 1:05:55
  SPEAKER_00: Um and the degree of research to get through the fifty shades of green I mean, question uh does require a certain degree of human intervention.
• 1:06:04
  SPEAKER_00: So I think at fund level, um, we're not seeing that threat emerging just yet.
• 1:06:11
  SPEAKER_00: Um, and indeed at financial advisor level in terms of um investment management approach, it's such a dynamic space at the moment with um uh new entrance to the market and the qualitative and quantitative assessment that needs to be done around funds that uh keeping on top of that is uh at the moment, it's not a job that AI, I would say, can particularly do.
• 1:06:37
  SPEAKER_00: Um, and then there's just the personal touch with clients around keeping their investment plan on track and being so closely aligned, not only with our values, but we build a client and advisor community, and that's the way that we think about our relationship with our clients.
• 1:06:55
  SPEAKER_00: So we ask the community to build the community by making referrals, and when um COVID rules allow, we want to have events uh and annual client um uh meeting, for example.
• 1:07:10
  SPEAKER_00: So, yeah, look, AI will develop, Robo Advice will develop, um, and our services modular in terms of cost, as far as we're concerned, people can opt in and out of the various different services that we want.
• 1:07:26
  SPEAKER_00: Um we haven't lost a client yet in touch with.
• 1:07:29
  SPEAKER_00: Um so um yeah, we'll we'll we'll see, but I think this is such a um complex uh environment and one where values and the value-based relationship with clients are such that it's a threat which should trouble us later than the wider advisor community.
• 1:07:52
  SPEAKER_00: I trust, would be about the best visionary uh observation I could have on that.
• 1:07:57
  SPEAKER_02: Yeah, and that's again where I sort of applaud being you guys being in the space where you are right now because you have that differentiator that builds deeper trust, I think, and deeper meaning with the client.
• 1:08:09
  SPEAKER_02: If you've got that deeper trust, deeper meaning with the client, they feel valued that they are being a looking looked after by you guys and getting return on investment, but also having a positive impact on the future of the world.
• 1:08:21
  SPEAKER_02: I mean, that's a deeper, more meaningful connection.
• 1:08:25
  SPEAKER_02: So you're probably less likely to lose a client.
• 1:08:29
  SPEAKER_02: Probably it creates a better relationship and a more solid relationship.
• 1:08:33
  SPEAKER_02: And I think that's where other financial planning firms will struggle is because as people become more aware of where their monies are invested, they will turn to someone like yourself and you're beautifully positioned to do so.
• 1:08:44
  SPEAKER_02: Where do you think what's the future look like for the path then?
• 1:08:47
  SPEAKER_02: Because obviously, you know, you're a growing fern.
• 1:08:49
  SPEAKER_02: It sounds like you're doing really well, you're growing quite rapidly.
• 1:08:52
  SPEAKER_02: I spoke spoke to Ashley, you're not, you know, you're not shy of clients, people are using your services, you're becoming better established.
• 1:08:58
  SPEAKER_02: Where do you want to take this?
• 1:09:01
  SPEAKER_00: Well, we want to, you know, ultimately we want to be a voice which is really listened to in the industry and amongst the um wider investing public.
• 1:09:15
  SPEAKER_00: And um we've got scalable uh and effective um digital marketing channels which bring us a steady flow of um people highly aligned to our uh purpose and our ethos, and uh we want to build the um advisor community to you know at pace to fulfill the demand that is out there.
• 1:09:43
  SPEAKER_00: Um so we're very open and receptive to um advisors who want to work with us because we want to get to a position of considerable influence.
• 1:09:56
  SPEAKER_00: And um and we have to do it at speed for the sake of the planet.
• 1:10:00
  SPEAKER_00: I mean, we know we can't afford to hang about here.
• 1:10:02
  SPEAKER_00: It's go fast or go home time.
• 1:10:05
  SPEAKER_00: So we want you know that that's where we're at, and it's an exciting space to be in.
• 1:10:10
  SPEAKER_00: We're finding the advisors who can align their uh values with the the a corporate ethos, which is so sharp and tight.
• 1:10:21
  SPEAKER_00: Um is uh incredibly again, it's back to the win-win, which we sort of has been the sort of theme part of this this conversation, really.
• 1:10:30
  SPEAKER_02: Absolutely.
• 1:10:31
  SPEAKER_02: And I think um that's the what about the sort of technology and things?
• 1:10:34
  SPEAKER_02: Do you embrace technology?
• 1:10:36
  SPEAKER_02: Do you you do you embrace improving processes?
• 1:10:38
  SPEAKER_02: Because a big thing for financial planners is they need to be out there speaking to more and more people, don't they?
• 1:10:42
  SPEAKER_02: So you want to grow your business, and you you're kind of limited, I suppose, in the type of financial planning that you can take on.
• 1:10:48
  SPEAKER_02: Because if there is somebody who's got 20 million under management or something like that, and it's not all invested ethically or impactfully, it might be a disadvantage to take that that person on, or that person might not be aligned to your values as a business.
• 1:11:01
  SPEAKER_02: Um, so I suppose also as well, you've got to think about that, but also the guys coming into your coming into your practice.
• 1:11:08
  SPEAKER_02: I know that one of the major things that people are keen to have is a firm that has really slick process, really slick technology, but are innovators in the space.
• 1:11:18
  SPEAKER_02: So innovators in respect of your ethos, but also innovators in respect of making business easier to do, um, not slowing down the process, improving the process.
• 1:11:26
  SPEAKER_02: So, are you quite into that sort of thing?
• 1:11:28
  SPEAKER_02: Are you got you know any tech or any experience within improving the process of quite a slow profession sometimes?
• 1:11:36
  SPEAKER_00: Oh well, I think it can be, and actually um moving from St.
• 1:11:39
  SPEAKER_00: James's place to uh what we've set up here, it's been a sharp learning curve.
• 1:11:44
  SPEAKER_00: Um, you mentioned you'd spoken to Ashley, um, his background uh is in AI, and um we've got a we've got a big team of uh people available to us, and uh we built our own CRM uh originally because um what we could find in the marketplace just wasn't fit for purpose.
• 1:12:07
  SPEAKER_00: But we're just about to uh roll out the next uh iteration of that, which is going to be able to um link our digital marketing into the CRM and then all through the um journey, which is all digital through to um execution, which will all be paperless.
• 1:12:28
  SPEAKER_00: Um and actually the the whole business was set up.
• 1:12:31
  SPEAKER_00: You know, we were using Zoom before people had heard of Zoom because we wanted to cut down on our carbon footprint.
• 1:12:36
  SPEAKER_00: We've been using DocuSign from the get-go because we wanted to cut down on our carbon footprint.
• 1:12:41
  SPEAKER_00: We can take on clients in Aberdeen because we don't have to drive there and see them, which was okay, everyone's moved to that new model there because they've been forced to.
• 1:12:48
  SPEAKER_00: But yeah, I mean we're we're gonna be able to, you know, track back um through our lead flow, even through to the pages that people have been viewing uh on their browsing history.
• 1:12:59
  SPEAKER_00: So if they're particularly interested in solar projects in Namibia with the search, so we'll be able to talk to them about that um as they they come in.
• 1:13:09
  SPEAKER_02: So yeah, we I would say we're uh we're all over that in terms of uh the really joined up uh process and and and minimizing the time-consuming aspects of um the data, data being a big part of that by the sounds of it, and um Ashley's background's data, isn't it, as well?
• 1:13:27
  SPEAKER_02: Like um works in sort of data management, not data management, but analyzing data, um, which um I think you know, if any financial planning firm can get their head around that and start in, and especially one of your size, actually.
• 1:13:38
  SPEAKER_02: That's what I like about your business.
• 1:13:40
  SPEAKER_02: It's like it's definitely forward thinking, but you can I can just see it explode, like it can get so much bigger, but not bigger to the point where it's um grotesque, but bigger because it's because it's purposeful.
• 1:13:55
  SPEAKER_02: So the bigger you get, the more impact you make.
• 1:13:58
  SPEAKER_02: And I like that, you know.
• 1:14:00
  SPEAKER_02: It's like I can't see you getting fatter.
• 1:14:03
  SPEAKER_02: Do you know what I mean?
• 1:14:04
  SPEAKER_02: I can see you getting healthier and happier and and and more purpose to your life.
• 1:14:08
  SPEAKER_02: And as a business owner, I think, yeah, I want to be a part of that, you know.
• 1:14:11
  SPEAKER_02: And that's what you've got to get is that buy-in, is that people see you, listen to you, meet you guys, and go, yes, I love your journey.
• 1:14:17
  SPEAKER_02: I want to be a part of that as well.
• 1:14:19
  SPEAKER_02: And um, it's a beautiful thing, I think.
• 1:14:22
  SPEAKER_00: Um, no, it is, and uh really that um that uh combination of um purpose, purpose, and passion, it's really uh uh it's great.
• 1:14:35
  SPEAKER_00: And you know, there's a great deal of satisfaction in watching the client's reaction as they finally find someone who can fulfill what they want, and it's the same with the advisor community, you're not now just grinding something out for the sake of it.
• 1:14:54
  SPEAKER_00: Um there's a there's a bigger picture.
• 1:14:57
  SPEAKER_02: It's identity and finding your tribe, isn't it?
• 1:15:00
  SPEAKER_02: As soon as you can find your tribe, as soon as you identify with your tribe, you feel amazing.
• 1:15:04
  SPEAKER_02: You feel like, oh my god, I found the people that actually think like me, but all they just think like me that can actually elevate how I can take how I feel and put it into practice and guide me.
• 1:15:13
  SPEAKER_02: And and and that's a great thing.
• 1:15:15
  SPEAKER_02: And you guys, you know, I wish you all the best, really.
• 1:15:16
  SPEAKER_02: It sounds like a great firm, you know.
• 1:15:18
  SPEAKER_02: Um really glad I've I've I've I've I've met you guys, and I really want to kind of build a longer relationship with you because I I believe in what it is you're doing.
• 1:15:25
  SPEAKER_02: Um, and it sounds um sounds really great.
• 1:15:28
  SPEAKER_02: So, you know, before I close this off, is there anything else at all you want to you want to say to the listeners?
• 1:15:34
  SPEAKER_00: I think um we've done we've covered quite a lot of ground, haven't we?
• 1:15:41
  SPEAKER_02: Yeah, we've done all right.
• 1:15:42
  SPEAKER_02: Like I did say to you, I just sort of um we have a conversation and we see where it goes, but I feel like it's covered a lot of ground, and um, you know, I think it's gonna be really beneficial for anybody at any level to listen to this.
• 1:15:52
  SPEAKER_02: It will certainly open up some uh some ideas and some thoughts to the listeners, and I think um we'll see more of you guys without a doubt in the future.
• 1:15:59
  SPEAKER_00: Yeah, well, you know, it feels like we're on the sort of um uh sh shallow part of the adoption curve, and um it's just a mega trend which will unfold.
• 1:16:11
  SPEAKER_00: So uh yeah, we'll see.
• 1:16:13
  SPEAKER_02: I think so.
• 1:16:14
  SPEAKER_02: Brilliant.
• 1:16:14
  SPEAKER_02: Um, David, thank you so much for your time today.
• 1:16:17
  SPEAKER_02: And um, yeah, take care.
• 1:16:19
  SPEAKER_00: You're very welcome.