It was always going to happen at some point…

Did you see the programme on television the other day about the first ascent of Everest?

It was in 1953, less than a lifetime ago, just 6 years before I was born, but a world away in terms of the technology.

You see I’ve got the climb leader, John Hunt’s book ‘The Ascent of Everest’, of 1954… and in it he proudly talks about the equipment that helped them get to the top…all pretty basic by today’s standards.

Some of you will know this, most won’t, but I travel the world going up pointy things. My kit is far, far better, far more technically advanced than theirs was in 1953. There’s no comparison. But does that eliminate risk or just provide false comfort?

A few weeks ago there was a massive upheaval in the forex markets. The events surrounding the removal of the Swiss Franc/Euro peg, and indeed the more recent Greek election, might just tell us a lot about risk management techniques and the human psyche, if we allow them to.

Few anticipated at the right time the Swiss central bank breaking the peg and as a consequence a good many – from small currency speculators to big banks – lost a shed load of money in a matter of minutes. Over a billion dollars was lost – yet everyone thought their risk management procedures were robust.

The reality is the technology didn’t work, people expected it to, but when it was needed, it failed. My view is the Swiss forex losses happened as a result of sloppiness – people chose not to spend any of their time going back to the basics – they were fixated on the profits they’d continue making as long as it didn’t happen and placed far too much reliance on the technology to protect them. They relied on the stuff the computers and mathematicians churned out. Others thought a process, of placing stop-losses, made their trades risk free.

You see people don’t change, people are inherently idle if given the choice – for example the 1920s/30s recession happened for similar reasons – the pursuit of get rich quick schemes – people get complacent, they get used to the status quo, they fail to identify and test their key assumptions because it involve doing some work. People also chose to rely on, or at least hope for, someone helping them out – in this case the Swiss central bank as it’s almost become custom for central banks to help prepare the markets in order to eliminate shocks.

There are two points… Firstly people assume – even though Assume makes an Ass out of U and Me – and because of that they ramped up their leverage, massively and ignorantly increasing their exposure. Secondly – and this is confirmed in the book ‘Manias, Panics and Crashes’ – a book I know is being read by several government ministers – people overestimate just how clever they and their systems are: that somehow this time around they won’t suffer the same disasters their predecessors did: that somehow thus time they’ve cracked it. Technology creep is a dangerous thing.

Shall I tell you what I do in the hills?

I use a combination of the old and the new. I use simple manual techniques like a map and compass, pacing, I make sure I know exactly where I am and anticipate what’s likely next, I keep a GPS close at hand to check things out if I’m uncertain, I have a full safety kit that can cope with almost any eventuality should things go horribly wrong, I keep things simple if I can – I avoid complicated systems. And I’ve practised a lot. The point is it takes hard work to stay in control and for me technology is a tool, not a crutch.

Here are a few questions for you…

What are you or your client assuming which, if it gets turned upside down, could have a major impact on the business? Is that really a Black Swan event or is it common sense that it’s got to happen at some time?

Which of your clients are thinking they’re too clever to be caught out, that their systems and procedures are bombproof?

Turning now to the Greeks…

The thing that has amazed me in the Greek crisis is just how far problems can be pushed down the road before people say enough is enough and do something about it.

To me, voting in a party that is against austerity when the country is in a neverending downward spiral was always going to happen, it was just a question of when. So what’s been going on in the minds of the Greeks that delayed the inevitable?

Fear? Pride? Denial? Uncertainty? Idleness? Lack of drive? Que sera, sera? Absence of commitment? No resilience? Unwillingness to rock the boat? Desire for an easy, uncomplicated life? Uncertainty of getting any outside support? Clinical depression? No animal spirits? Habit over change? – These are the typical things that get in the way of all major actions.

I find that many of these things are going on in the businesses I meet in an insolvency situation. But there is always a tipping point that prompts action – and that is typically when the situation has become so desperate there’s nothing else left to do. In fact it’s not unusual for a major crisis point to have been hit 12, 18 months previously, the person has been living somewhere pretty uncomfortable for a good while until that last straw broke the camel’s back.

The reality is most people will put up with a pretty uncomfortable present rather than choose an uncertain future. They need to be standing on a burning bridge with fire all around them before they’ll jump.

Let me ask you a question …

Is it our job as trusted advisers to create a burning bridge for a client if we believe it’s in their long term interest to do so, even if they don’t quite recognise it at time?

Or should we just hang on in there, support them through each minor crisis, until the client builds the bridge themselves and then support them?

And then another…

With Europe on the brink, debt at unprecedented levels, interest rates only able to go one way, many of the tools in the armoury of the central banks played out, and international tensions high, should you and your client be doing more now to plan for that Black Swan event?

Anyway that’s me for this month…
Paul Brindley
T: 01902 672323

What else have I been getting up to?…

… Some interesting, large, members voluntary liquidations… I really appreciate advisers and their clients putting their trust in me for such assignments! They are certainly not run of the mill!
… Some interesting advisory work – not everyone is doing well right now – and it’s perhaps surprising what options small business owners have that my competitors habitually miss!

Oh… and booking up to climb the biggest mountains in Poland and Africa in coming months!

The opportunities you have been handed on a plate…


Firstly let me say, what I’m going to be telling you is 100% factual, it is not a rant. And it is very, very important you know about it.

It wasn’t all that long ago when the banks could do little wrong… no one minded they were making big profits because they were supporting us through the money they loaned out and advice they gave. But in the last few years we’ve had a glimpse of how much things have changed. I’m going to show you how the banks are now thinking …. and as we all know, thoughts drive actions.

Have you heard of the legal case Crestsign v NatWest that was decided just last month? Not many have but it’s a decision that demonstrates perfectly why the banks have surrendered their ‘trusted adviser status’. If you have trouble sleeping, follow THIS LINK to download the 46 page judgement. If you want a shorter summary, go HERE. Here’s my summary…
This was a case about a complicated product sold by a bank to a family business, which cost it a lot of money. The customer argued the bank had given them negligent advice. The bank argued they had given no advice nor made any recommendations but had merely presented options…and in any event their terms contained an exclusion clause which said that no advisory relationship existed. The judge decided that the bank had indeed made a recommendation… but the outcome of the case hinged on the written terms, which said the customer was on their own, they weren’t being given advice. The customer did not win his argument that those terms were unfair so he lost his case, the bank wasn’t liable.

What do we learn from this?
… What anyone outside of a bank considers to be advice from a bank isn’t really advice. You’d be a fool to rely on anything they tell you.
So where does that leave the banks?
… With all the credibility of a used car salesman.
Where does that leave banks’ customers?
… In need of reliable, top quality, independent professional advice from someone they can trust.

This gives accountants, financial advisers, even lawyers a great opportunity to step into the space of ‘trusted adviser’ to potential new clients and to get much closer to existing clients who up to now have been ‘a little distant’, who previously relied on their friendly local bank manager.

So how do you do it?

Advisers are already under huge financial and time pressure. I believe the only way they will ever be able to step into the breach will be by collaborating closely with others in complementary fields – otherwise how can any individual or firm ever hope to match the banks’ resources?

This is a vision that I have had for a good while now within the professions, I woke up to this possibility a good while ago after reading a book on collaboration in IT ‘Wikinomics, how mass collaboration changes everything”. I asked myself why when collaboration in IT can have such a massive impact, can’t it be done in other areas like finance or general business support?

Look at it in this way…huge international businesses like Microsoft still have a big influence on technology, but most of the real technological innovation and results in terms of the impact on people’s lives comes from the efforts of much smaller firms using free/open source software given to them by highly principled, skilled members of the gnu hack community. Just look on your computer or mobile right now, you will find numerous examples of what I am talking about – and these are not inconsequential things, it is they which make your life the way it is today.

My Business Resuscitation work is my own personal effort to inhabit the collaborative, highly principled trusted adviser space. So what are you going to do to inhabit that space? And if you choose not to inhabit it, who will do so for your distanced clients, how are you going to attract quality, appreciative, new clients to you in what may be a reducing market?

You see the world is changing – or I should say it’s changed – and it’s now time for the professions – accountants and others involved in finance, and yes even you lawyers – to step into the breach for all of their actual clients, not just the few paying higher fees, and also for potential new clients.

But here’s a word of warning…I’m seeing a growing number of accountants and lawyers telling people they walk the journey with their clients as ‘business advisers’. But they do nothing to back it up – it’s just sales hype. In fact get some of my better leads from the clients of such firms, they come to me direct with two things: major problems and a willingness to pay my bill. You see they were attracted to that particular firm because they needed more than a stereotypical reactive service, yet when they asked for it they found it had never existed. And because aggrieved clients tell on average 10 other people, it gives the competition an opportunity to differentiate themselves and attract appreciative, ‘adviser fee friendly’ clients.

So what’s your plan for taking advantage of the banks’ and your over-hyped competitors’ own goals?
Paul Brindley
Licensed insolvency practitioner, chartered accountant and trusted adviser
(and if you want evidence, read our testimonials – click here)
Tel: 01902 672323

Mom and Dad's bathroom tiles and the OMG moment they created!


I’ve recently lost both my Mom and Dad. When I went around the family house last night, the quietness hit me, and writing of Mom’s eulogy has got me thinking. Yet standing there in the bathroom, tinged with sadness, I couldn’t help but chuckle. And I’m going to share why. And later on in this newsletter I’ll be sharing something else, something pretty big, that few of you know about me because it’s highly relevant right now…

But first, the story of the tiles… back in the ‘70s when I was barely in my teens, I negotiated with my Mom and Dad to tile the bathroom in return for some money towards a youth hostelling trip. This, my first major DIY project, was going great, I was really proud of my work, that was until my Uncle Terry popped by to see how I was doing…

You see, Uncle Terry was a DIY expert, he’d taken his old 80 year old terraced house and turned it into a veritable palace. We thought that what he didn’t know about DIY wasn’t worth knowing…

He came into the bathroom. The picture in the heading of this email is what he saw. (and yes all my handiwork is still there!)

‘You’ve not fitted them with the ‘Chick pattern’ showing!’ Here is a close-up:

Close up of the chicken tile

Have you ever had one of those OMG moments which live with you forever? Well, this was one of mine.
And every tile is the same… only neither I nor my Mom or Dad noticed… and I’d already tiled half the room.

Having exhausted the dictionary’s stock of expletives and a few more, my parents and me consulted… should I carry on, ignoring the chicken, or not. I carried on…

As I fitted every tile, all I could see were chickens, facing left (arguably properly), upside down and facing right, lying on their back or suspended face down. Those bloody chickens still haunt me to this day as I sit or stand in the loo!

The point is once you’ve ever had such a wake up ‘OMG’ moment like that, it can never be reversed, once the cat it out of the bag, it’s out forever. Never again can you look at things in the same way. You’re haunted.

And I’m haunted by some of the things I’m seeing happening in the professions nowadays …

The banks have had a really tough time reputationally in recent years. They got found out for the ‘traders’ they are. Banking is no longer one of the professional pillars of society. Instead they’re the people skulking in the corner of the kitchen at parties. I’m not here to knock the banks, that’s far too easy and cheap a shot, I’m talking about some of the things that are happening in other professions, particularly in my own of insolvency, and in accountancy, where similar things are happening as have happened in the banks. Let me explain…

I’ve just finished reading the book ‘the Wolf of Wall Street’. Incredibly it’s the biography of a real – and totally dispicable – fellow called Jordan Belfort. He was a financial expert who’s probably best summed up by his closing words at the meetings he held to stir up his sales people – ‘now go rip their (sic his clients’) f—ing eyes out’. He’d talk about his staff being the hunter, the clients their prey.

In Jordan’s world, every client was treated as a ‘transaction’ – even though his people – the so called experts – gave the impression there was a real relationship with the client. The purpose of this masquerade was to extract maximum fees from the client regardless of whether what they were selling them was right or wrong for the client. Giving the client the impression the expert cared for their best interests was all part of the game.

Jordan also talked about ‘plausible deniability’ and ‘rationalising, justifying and denying’ to anyone decrying what they were doing … all things it seems to me the professions are doing nowadays to try to best protect their elevated position. How many times have you heard a profession shout down proposals to change how things are done? How many times have you seen sales people within a profession advise on a particular course of action? – are they really the best people to advise?

The problem many people have when taking advice from experts is we live in a highly complex world where there is often no readily visible benchmark to compare advice at the relevant time. And that’s what some accountants and insolvency practitioners are doing right now – feigning an interest in the wellbeing of the client, giving them appalling advice which digs the client into an even bigger hole yet earns the giver of advice maximum fees.

In my blog of recent weeks you will find 3 links to articles I’ve written on this topic, eachdemonstrating the pain felt by real people who have come to me for advice after having been given ‘plausible advice’ from other experts. Please take some time to read these – you may know someone who is in this position right now. You may even have introduced them to the insolvency practitioner.

So why’s this happening?

It’s simple really… for some, doing the right thing has become far less important than lining their own pockets. It comes down to the driving force behind the person.

I’m going to tell you something now that few outside of my profession know. It’s what’s determined what I do and how I do it for the last twenty years…

In the 90s I joined a firm. The role had fantatstic promotion prospects, keep my nose clean and partnership, my main aim in life at that time, was virtually assured. Soon after I joined I found that one of the owners of that business was working with other professionals – bankers, agents, etc – to seize people’s businesses, massively defrauding the rightful owners of those businesses of their livelihoods. The problem for the person in my firm who was heavily involved in this was I had a ‘role model’, and if ever I encountered any sort of problem, I’d ask myself what he would do in those circumstances. And I then did it. For my role model doing the right thing was always more important than doing the thing that makes you most money.

To cut a long story short, I reported the guilty partner to the regulator – not an easy decision despite the fact that my role model happened to be the chair of my regulator’s ethics committee at the time. It was a terrible time for me personally when every sinew of what I was all about was tested – after all I’d come from a working class background and about to break through into the big time. The guilty guy was sacked from the firm and cut a deal with the regulator to accept lesser charges in return for handing his licence back quietly. The whole episode was hushed up and for a while I was shunned by some in the insolvency profession – you see no one likes a whistle blower. For a good many years afterwards people would ring me from insolvency firms around the country asking for my advice on how they should deal with major issues going on in their firm – they knew they could trust me, they knew I’d encountered similar problems.

It’s been a few years since I last saw Roy, my role model – the last time was at the Baggies when I went up him, shook his hand, thanked him for the fact that unlike many of the class of ‘85 I was still working and not living it up on some beach somewhere but that I was so very glad because I could sleep properly at night. Whenever I have seen him in the last 20 years I have always thanked him for having taught me what’s right and what’s wrong. He’s been a father to me in business.

It might be me, but right now I’m not seeing many role models of the calibre of Roy. In fact I see far too many Jordan Belfort type characters.

Do I regret standing firm when it was far easier just to walk away?

Not one bit, you see it’s part of who I am, it’s something they can put on my tombstone when my time comes: ‘He always did the right thing’ will suit me fine.

Here’s a question for you …Are you dealing with a Jordan Belfort or a Roy? Do you know?

Your turn to do some thinking…
Paul Brindley
– Chartered Accountant, Licensed Insolvency Practitioner, and much much more!
Midlands Business Recovery
Tel 01902 672323