Episode 99: property slumps, hidden fees, and scaling a financial planning firm.

The surest thing in the room is usually the most dangerous.

That was the thread running through episode 99. Three different topics, three different asset classes, three different decades. The same story underneath all of them.

The sure thing that wasn't

Carl brought two stories from Ireland that should sound familiar to anyone who lived through the UK's own version of this.

Before the 2008 financial crisis, Irish investors were buying bank branches. AIB and Bank of Ireland were selling their premises on 15 to 25-year leases. The tenant was a major bank. The income was guaranteed. Then the banks closed the branches, broke the leases, and left investors holding large, empty buildings on high streets nobody wanted.

The second story is more recent. A student accommodation scheme launched in 2018, promoted through a company called Elkstone, has left investors with nothing. The explanation from the promoters included higher interest rates, increased construction costs, and rent caps. Investors who accepted the risk of loss did not expect total wipeout.

Alan's point landed cleanly: even when the underlying asset performs reasonably well, how you own it matters enormously. Mezzanine debt, gearing structures, and complex packaging can turn a functioning asset into a total loss. The UK had the same experience with student accommodation funds and ground rent schemes a decade ago. Different names. Same outcome.

Nick added the wider context: UK property, measured in real terms after inflation, is down 15 to 20% since 2022, and over 21% in London (source: This Is Money podcast, 2025). London flats are being hit hardest. Nobody is calling it a slump, but that is what it is.

Hidden in plain sight

Alan shared a story that should make any adviser uncomfortable.

A financial planner, relatively new to running her own firm, had a friend still with her former employer, a wealth manager. The friend asked what she was paying. She was told 1% on a phone call. Then given a schedule showing 1.3%. Then, after three separate requests and some pressure, handed a full statement showing total ongoing charges of 2.4%.

The full disclosure was buried. The difference between what was volunteered and what was true was more than 100%.

Alan's point: this is a significant national business. And it is far from unique. The same firm came up in a separate conversation about a year earlier, in almost identical circumstances.

The question nobody can answer cleanly is whether different rules apply to DFMs and investment managers versus regulated financial advisers. If you know the answer, we would genuinely like to hear it.

Lift the lid before you recommend it

A TRAPist  wrote in about a BDM from Prudential who had been promoting the Pru Fund Growth range as an alternative to low-cost global index funds, particularly for short-term buckets.

Alan pulled the fund factsheet.

The Pru Fund Growth range allocates approximately 28 to 30% of assets to private markets: private equity, private credit, private infrastructure, and similar holdings. Two examples from the underlying holdings: a property investment in Helsinki, Finland, and Agrovision, described as the world's largest off-season blueberry producer, based in Peru.

These are cautious and risk-managed funds. A third of the portfolio sits in illiquid private assets.

The conclusion is straightforward. Lift the lid on anything a BDM presents to you. If you cannot explain every material holding in plain language to the client it is supposed to serve, reconsider the recommendation. 

For short-term money, 12 to 24 months, the answer is cash or short-dated bonds, not a packaged product with a blueberry farm in it.

Scaling a financial planning firm

Colin Lawson set up on his own at 25 and now runs a team of 100. Andy Hart interviewed him on episode 99.

The most transferable thing he said was about profit. He pays himself three ways: as an employee, as a director, and eventually as a shareholder. 

In the early years that third one does not exist. Everything left after the first two is the business's money. 

Most founders let their take-home rise with revenue, but eventually bad markets arrive and the cushion is gone.

Second point he made is that there is a ceiling most firms hit around £250 to £350 million AUM. 

Everything still lands on the founder's desk. Break through it and growth tends to follow. Stay stuck and it doesn't.

What else we covered in episode 99

There was more besides what is covered above: the FCA's new review into how advisers handle bereaved clients, including the genuinely unresolved question of fees and portfolio management after death. 

The cohabiting couples legislation that could fundamentally reshape the planning conversation for a significant chunk of your client bank. 

And the ECB rate decision including what it signals for the Eurozone.

Episode 99. One short of the big milestone!

Watch the full episode here: Audio / Video

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P.S. Colin's point about recruiting ahead of the curve rather than behind it is one of those things that sounds obvious once someone says it. 

Worth considering if you’re building a team.