Sustainable, or...? 

Yesterday was a kind of case-study in unsustainability.  I had several meetings in Cambridge, and when the time came to leave for home, I discovered that the entire local infrastructure was in a state of gridlock.  Driving back northwards on the A14?  No can do, as the traffic was stationary leaving Cambridge, and that means that the A14 was jammed solid too.  Driving southwards on the M11?  That requires one to get through Cambridge, and now there are countless science and business parks, all spewing traffic onto already heavily-congested roads.

Indeed, Cambridge was not the end of the problem.  The southwards journey involved long periods of time in the vast car-park that is the M25, with engines switched off.  An altogether too-brief moment of elation was swiftly suppressed by twenty miles of nose-to-tail, stop-start driving on the M4.  And finally, just when one was beginning to hope that the purgatory was at an end, I discovered that the Brynglas Tunnel at Newport was closed, requiring a lengthy diversion.  A journey which, on paper, should take 3.5 hours, took twice as long.  When you get to my age, those extra hours are an increasingly valuable proportion of what one guesses that one has left.

The sobering fact is that this experience was not 'just' Cambridge, or 'just' the M25, or 'just' the M4.  It was all three of those things, covering a distance of 220 miles from one side of the country to the other.  I suspect that this kind of narrative might be extended indefinitely, and I am beginning to wonder if there are certain journeys which are simply no longer practical by car.  A little while back, I visited Colchester, which, when I was growing up, was a rather sleepy market-town with Roman walls.  Now, it is a refined exercise in the art of gridlock.  The only viable options for getting around are bicycles or Shanks Pony, and this is an area targeted for the Government's aggressive housebuilding programme.

In short:  a civilised, productive, satisfying professional existence is incompatible with the motor-car.  I predict we have only a few years until our main arterial roads function similarly to the arteries of a lifetime lard-addicted  chainsmoker.  Sustainability matters in all areas of life - and it's important that, as IFAs, we (a) want a sustainable business model, (b) have a reasonably clear idea of what that looks like, and (c) have some kind of clue of how to get there.  One way of clarifying our understanding is to focus on those elements which are unsustainable, and seek to eliminate them from our world, as far as possible:

  • An over-dependence upon a select coterie of (older) wealthy clients, from whom we derive substantial fees until they drop off the end of the conveyor belt, and are thereby relieved of the need for an expensive financial-planner;
  • A business model which is heavily-dependent upon replacing stuff, with little emphasis on creating new wealth;
  • An excessive dependence upon 'funds under management', as this makes us prone to recession-failure - and usually makes us the unwitting slaves of platform providers, in building their equity value;
  • An inflexible advisory proposition which renders us incapable of helping customers which may not fit our precise and exacting standards;
  • A business model which neither asks for referrals, nor encourages the voluntary provision of them from clients who are overwhelmed by the quality of our service;
  • An investment proposition which ultimately stands or falls on the arcane magic of market-timing;
  • The routine recourse to the kinds of products that few other advisers would utilise on a regular basis;
  • An unhealthy preoccupation with novelty;
  • Replacing rigorous due-diligence with a 'gut-feeling';
  • An exit-strategy which is heavily-dependent upon getting bought out.
Regular readers of this blog will know I'm being somewhat tongue-in-cheek, but there is a serious purpose.  We either think about sustainability, or we dismiss it as a red herring.  If the former, then we'll want to plan seriously in order to build something worthwhile which lasts.