In this episode of Financial Planner Life, Chris Ball (CEO of Hoxton Wealth) steps in as host while Terry Smith, CEO of Fundsmith (and often referred to as the UK's answer to Warren Buffet), shares his fascinating journey from a career at Barclays Bank to becoming a widely known financial services disruptor!
Starting in banking, he worked his way through various finance roles, gaining life-long insights into investments and markets. His entrepreneurial spirit led him to leave the banking sector, jumping into the world of brokerage despite the shock of his colleagues.
Terry discusses his pivotal decision to publish the controversial paper "Accounting for Growth," which ultimately cost him his job and made him "unemployable" but opened the door to entrepreneurship. He reflects on the importance of integrity, emphasising the need for honesty in business, but also makes it clear that he is a capitalist who believes in creating both value and profit.
Living in Mauritius and experiencing life as an expat, Terry shares personal stories from managing businesses, including the importance and challenges of building trust with employees. He compares the leadership styles of running a business and managing investment portfolios, pointing out that most people in finance don't excel in both. Does Terry?
Throughout the conversation, Terry offers valuable advice to aspiring fund managers, stressing the importance of patience, proper training, and sticking to a disciplined investment approach.
He also shares his thoughts on top investment sectors, while reflecting on the moments that shaped his career and how starting Fundsmith brought him the most fulfillment.
00:00 - Introduction to Terry Smith
01:15 - Journey to Fundsmith: From Banking to Fund Management
05:30 - Investment Philosophy: Long-Term Thinking
09:45 - The Importance of Understanding Business Models
14:12 - Building a Successful Investment Team
17:05 - Challenges of Running a Fund Management Business
20:30 - The Impact of Market Trends on Investment Decisions
25:50 - Innovation in Fund Management: Adapting to Change
28:26 - Leadership Challenges: Firing Friends and Delegation
30:03 - Managing Disasters vs. Minor Issues
31:20 - Advice for Financial Planners: Patience and Experience
33:34 - The Value of Long-Term Thinking in Financial Planning
34:48 - Day Trading vs. Long-Term Investment Strategies
36:23 - Key Investment Areas: Consumer, Medical, and Technology
39:17 - Fundsmith’s Growth and the Role of Luck
40:11 - Challenges of Managing Larger Funds
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