Sandro Forte’s money advice for the rich and famous

Sandro Forte

Sandro Forte is an author, entrepreneur, inspirational speaker, and Managing Director of Forte Finance. He makes regular appearances on television and radio; performs speaking engagements for companies like Virgin Atlantic, Apple, Mercedes, and Microsoft; and gives financial advice to celebrities, sports stars, and high net worth individuals.

Sandro took some time out of his busy schedule to tell BLM about his career so far and give his top tips for financial success.

Can you tell me about your background?

With a surname like Forte its probably inevitable I’m going to be associated with the (once) biggest hotel chain in the world. Part of the reason I didn’t follow in my family footsteps is that my father passed away from lung cancer when I was 9 years old – and the eldest of 5 children. My mum, a widow at 29, wasn’t able to financially support the family; the house was sold and we spent the next 13 years living as a large family in a small council house.

By the time I went into business at the age of 21 – and started running my own at the age of 23 – my mother had remarried and I made a promise to myself that I would do everything I possibly could to ensure that if anything should ever happen to my mum or step-father I would take financial responsibility for my siblings.

Sadly my step-father was diagnosed with – and passed away from – cancer but it was then I discovered the secrets of life in business: If you really want something you’ll find a way and if you don’t you’ll find an excuse. So I found ways to develop a really strong mind set and created a ‘perpetual motion’ action plan which allowed me to fulfil my promises to my family.

What are your main ventures now?

Broadly speaking there are three things I focus on from a business perspective. Firstly, I run a financial consultancy/wealth management business specialising in working with high net worth individuals, sports stars, celebrities, entrepreneurs, whether they run start-ups or established businesses.

The relative success led to a number of speaking engagements which have multiplied in number over the last 20 years, to the extent that I now help other people to become successful through keynote presentations and workshops covering 77 countries!

Finally, the speaking then led to the idea that I should create a podcast series, which has been running weekly since October 2018. As if that’s not enough I’m about to start hosting my own hour-long radio show whilst attempting to write my second book.

What do you think people should look for when choosing a financial advisor?

Having been in the business for a long time I have come across some really good advisers – but I’ve also met some pretty awful ones too. For that reason, it’s no surprise that the profession has its fair share of critics.

Putting aside a degree of competency (which is, of course, a pre-requisite) the two things you cannot teach someone are honesty and integrity. If you can find someone who is personable, transparent, trustworthy and is committed to providing a long term service then, in my opinion, it doesn’t matter too much whether they are independent, work in a restricted adviser space or affiliated to one particular company.

The adviser’s complaints history and the things their existing clients say are a pretty good way to gauge whether they will honour their commitment to do a good job.

As an advisor to high net worth individuals, how do you create a wealth strategy for a client? How do you tailor your plans?

Any wealth creation strategy has to be unique – and therefore every solution is bespoke. But, in general terms, we’d normally focus on the following:

  • Emergency funds: There’s no point in having a future financial planning strategy in place if you haven’t got the bases covered.
  • Use of reliefs and exemptions: It amazes me how many successful business people miss out on valuable tax breaks. Within about an hour of meeting any new prospective client I can normally identify ways to save between £5,000 and £50,000.
  • Regular reviews: A financial plan is one thing but if you don’t constantly adjust the strategic plan, there is a very good possibility the original financial objectives will not be met. For that reason, an adviser’s service proposition is every bit as important as their competencies.
  • Financial education: The benefits of financially educating clients should not be underestimated. Most advisers simply tell people what they ‘need’ rather than focusing on what they want. Financial education does not mean my clients want to become financial experts but a better idea of what they’re doing – and why – always leads to better financial outcomes.

What are your top considerations when picking investments?

A few simple rules here:

  • Follow the fund manager, rather than the fund: Whilst we know that ‘past performance is not necessarily a guide to the future’, a fund manager that has done well over the short, medium and long term is unlikely to suddenly stop becoming a good fund manager.
  • Understand the balance between risk and reward: We all want ‘maximum return, minimum risk’ but it doesn’t work like that; simply ask yourself whether you’re willing to risk X in order to achieve Y.
  • Diversify: Equities, stocks and shares and property are two of the better-known asset classes – but neither of these rise in value in a straight line, nor do they outperform other asset classes every year. Generally speaking the greater the diversification the lower the risk.
  • Use tax wrappers: £1 invested and subject to tax will always be worth less than £1 which isn’t. Simple.
  • Understand the effects of inflation: Many people wrongly assume that if they’ve got slightly more money in their bank account at the end of the year than they did at the beginning then they’ve ‘made money’. However, the ‘buying power’ of money is eroded over time by the effects of inflation. So, however risk averse you might be, find an investment solution which at least covers inflation.

What are your thoughts on values-based/impact investment?

I think this is a matter of personal preference. I have my own Charitable Foundation – and do a lot for many other charities – because I choose to make a difference in the world. If I can find an investment opportunity which allows me to fulfil some of these objectives then that’s going to be of particular interest to me. But if I am looking purely at an investment in financial terms then I need to separate logic and emotion.

Are there any investments you would warn people away from?

  • Anything that is unregulated.
  • Anything that promises unrealistic returns (right now I’d be extremely wary of anything which promised growth in excess of 5% per annum which was described as something other than extremely high risk.
  • Anything which has not been properly tested in law.
  • Any investment you don’t understand (e.g. BitCoin).

What advice would you give to someone at the beginning of their journey to building wealth?

I know from experience it’s really easy to get ‘busy’ and therefore overlook some of the fundamentals. One of those is to put a structured financial plan into place as early as possible. I’m not suggesting you compromise yourself by putting every spare penny into pensions, investments and insurance arrangements but building the right foundations at the beginning will produce considerable benefits further down the road.

However much or little you might be earning, take 10% of it (if you can) and put it aside for the future. A vast majority of us would not choose to reduce our incomes by 10% but if that happened we would still cope – and that’s simply because the majority of us spend what we want, rather than what we need. The effects of compound growth on a small amount saved regularly, over time, will have a tremendously positive impact on future financial security.

What are some of the most exciting developments currently in the investment space?

Apart from meeting new people the most interesting part of what I do is finding out about new strategies and solutions – and something new seems to come along almost every day. Whilst every asset class will hit highs and lows, it’s probably worth considering the other things which are most likely to grow expediently in the next 5 – 10 years: medical science (pharmaceuticals) and technology but ‘blue chip’ companies for less volatility and smaller companies for greater risk/potential reward.

What are your top three money tips for high net worth individuals?

  • Use all your reliefs and exemptions because there’s a lot more to be saved than you think!
  • Find a really good adviser.
  • Take a long term view and stick to the plan!

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