Executive Summary
Young advisors may feel – and face – an extra burden to prove their expertise to clients. After all, it can feel odd to create an estate plan that will impact a client’s grandchildren… when those grandchildren may be older than the advisor themselves! And while any advisor needs to determine how much detail to share when explaining strategic decisions, younger advisors may feel added pressure to prove their credibility. There is a definitive difference between actual and perceived capability, and young advisors may risk overcompensating by diving too deeply into the granular details of their recommendations.
In the 164th episode of Kitces & Carl, Michael Kitces and client communication expert Carl Richards discuss how young advisors can strike the right balance between complex explanations and simplicity as they build trust and social capital. Clients don’t just need to be accurately diagnosed – they need to feel accurately diagnosed. But walking through every page of a financial plan line by line could take up an entire afternoon and often isn’t necessary. So, how can advisors strike the balance of communicating competence without overwhelming clients?
A helpful approach may be to start with a simple, high-level summary, and then let the client guide the conversation from there. Then, when clients respond with their own follow-up questions, the advisor can elaborate, demonstrating the thoughtful analysis and care behind the recommendations. Along the way, regularly checking in (e.g., "Do you want more detail here?" or "Do you have any questions about what we’ve covered?") ensures the advisor stays aligned with the client’s preferences and attention span.
Advisors can also offer the client options like, "Would you prefer to review the executive summary, or would you like to go through the full details?" This approach not only honors the client’s preferences but also signals that the advisor is prepared to explain the full scope if needed. For visual impact, advisors might also show a printed or onscreen version of a full-length plan, using it as a physical representation of the underlying work, even if the discussion focuses only on the highlights.
The reality is that a young advisor may be asked to explain their reasoning… at first. But with time and experience, those requests often decrease as credibility and trust naturally grow, and as clients internalize that the advisor is fully capable and competent. This reflects a broader truth in client communication: While technical knowledge is essential, the ability to adjust and simplify explanations based on the client’s needs becomes equally important over time. Knowing when to stop explaining – before overwhelming the client with more information than they need – can be just as important as knowing when to elaborate.
Ultimately, the key point is that deciding between complexity and simplicity is, itself, a complex and nuanced decision for young advisors. But by letting the client direct the questions and level of detail they want, advisors can showcase their competence while also building trust and credibility over the long term!
Authors:
***Editor's Note: Can't get enough of Kitces & Carl? Neither can we, which is why we've released it as a podcast as well! Check it out on all the usual podcast platforms, including Apple Podcasts (iTunes), Spotify, and YouTube Music.
Show Notes:
The Trusted Advisor by David H. Maister, Robert Galford, and Charles Green- Your Money: Reimagining Wealth in Simple Sketches by Carl Richards
Kitces & Carl Transcript
Carl: Michael Kitces, how are you?
Michael: I'm doing well, Carl. How are you?
Carl: Things are fantastic. I'm just pulling up some notes here because I took a bunch of notes because this I think will be...
Michael: Did ChatGPT help you with said notes?
Carl: Are we allowed to admit this anymore? Because, yeah, I actually loaded a whole bunch of our transcripts into ChatGPT and said, "I want to talk with Michael about something. Give me some ideas." And it gave me eight really great ideas.
Michael: Very cool.
Carl: Yeah, six really good ideas. Six really good ideas.
Michael: So, what would you like to talk about today then? Which one do you most appreciate that the artificial intelligence will take us to today?
Carl: What I normally do, and I use an AI tool every day now, probably for a couple hours a day, actually, in all of my processes, and what I normally do is give it my own context. And, of course, we all know that prompt engineering is the key here. So, I said to it, "Look, I think it'd be really fun for Michael and I to have a conversation about complexity and simplicity." And I even mentioned to it that years ago, I don't know if you remember this, but years ago, we presented together, as I recall, it was in St. Louis. We mixed our PowerPoint slides. So, you had a slide, then I had a slide.
Michael: I don't remember that part. That must have been very jarring for the audience.
Carl: Yeah, yeah. I want you all to imagine this. Let's say you're sitting in a room with a couple hundred advisors and there's two big screens up there, and Michael and I are on the stage together, and every other slide is mine, and...
Michael: It's like the white minimalist, bright blue, white minimalist, bright blue, and back and forth.
Carl: Yeah, yeah. So, there would be 17 bullet points, and then some graphs and charts, and then it would go to...
Michael: Just hit the little auto. You just type all the things you want. You press the little auto-fit thing in the lower left corner of the PowerPoint, and it just crams the text down to the size that's necessary to fit on the slide. Beautiful.
Carl: Perfect. And then the next slide would come up and it would be a hand-drawn sketch.
The Difference Between Competence And Perceived Competence As A Young Advisor [02:31]
Carl: So, these things are both really, really valuable. They're fun to compare and contrast, but they're both really valuable. And I'm curious because I know how much you love the details and the facts and the figures. But how often do you see that become a challenge for advisors? I sometimes call it a place to hide sometimes, a place to hide from doing some marketing, or a place to hide from a conversation. But that's not really what I even mean. How do we balance the technical accuracy with making sure our clients understand what we're saying?
Michael: Well, look, I don't know if I have any magic answers here. I can say my approach to this has evolved, as I reflect over the years. So, early on, as I've said in some other of our episodes, I think there's a part of me that's just wired as a debater. It would have been really interesting if I had ended up in law school. I probably would have been a litigator. So, there was a stage for me, I mean a stage, many, many years where...and I can only say this with the lens of hindsight, that delivering a financial plan amounted to like, "You told me what you wanted, I've done the analysis, I've got the recommendations about how to get you there. And my job in the financial plan is to deliver the information to prove my point." Like, "You need to save $300 a month and do a Roth conversion next year, and that will set you on a better track for retirement. And now, I need to bring the charts and analysis to prove that $300 a month is the right amount to save and the Roth conversion next year is appropriate." That should be $72,183 because, of course, I calculated it to the dollar.
And then I've got to bring numbers and charts and supporting data to make the point, to prove the point. And so, plans were fairly long. There was a lot of stuff to go through to illustrate and prove the points that I was trying to make so that they would take the recommendations that I was giving. And I think at the most fundamental level, the shift for me...and honestly, I don't know how much of this is a change in planning philosophy and approach, a change in my delivery style, or the reality that, again, at least with the lens of hindsight, it really does feel different in how I can deliver recommendations now than in the past. In the past, it felt like I've got recommendations to deliver, and I have to go through the details of the plan because I need to prove my case. Now, it feels like I can go into a meeting and... I may even bring the plan. These days, we're probably more likely to pull it up on a screen collaboratively, but I've done the analysis. If it was a few years ago, I'll plop that plan on the desk, at least for an in-person meeting. Like, "I've done the analysis. It hits the table with a thud and it's got volume because it's got density. There's a lot of pages in that thing." Like, "I've done the analysis. If you would like, I'm happy to go through as much of this as you want..."
Carl: Love it.
Michael: "...because I'm totally ready to prove every single..."
Carl: Because I would love that.
Michael: "Every single point." I would actually love to show you all the beautiful work that I did. I think the shift to me is it went from, "I need to prove that each of these recommendations is right because I'm trying to get you to take the recommendation," into something that's more like, "I still need to bring the plan or show some kind of output because I need to show that I actually did my homework. You don't want to see my homework, but I do need to at least show that I did my homework and that I haven't simplified your life down to an index card because I actually skipped all the work and just gave you an index card. I can simplify your recommendations down to an index card because there's also 193 pages of supplemental material behind the recommendations that got us here."
The other part, though, that I feel compelled to acknowledge and recognize is I don't know how to separate the fact that I've now also been doing this 25 years. I have actual gray hair, a little bit more than I wanted, but such is life. I'm at a certain stage in career. I've got even certain amount of credibility as an advisor for any client or prospect that I would be sitting across from, which means I can see that I probably went deeper than I needed to on a lot of the planning in the past, but 20-something me still calls out and says, "Dude, I'm just not sure you could have gotten away with the lighter weight thing when you were younger." And, yes, I legitimately had clients that are like, "Oh, it's so cute. Our grandkids are your age." I'm like, "Awesome. Let's do some planning for them with your giant estate because my credibility is entirely undermined by the fact that your grandchildren who will inherit this multi-million dollar estate are older than me, the person who's making the plan for it."
Just all those dynamics that were there that I feel like there was a part of getting pretty deep into a lot of the weeds to prove the analysis and the plan that I'd done for the recommendations that I was making. That is not how I would do it today, but I don't know that means I could have gotten away with doing something different in the past. I don't know if that's me over-reflecting my own young advisor experiences, but I did work in a series of firms all the way through my 20s where our average client age was early 60s at one firm and early 70s at the other firm. So, I was young. I was legit younger than their grandchildren in many cases. And that weighed really heavily on me from a credibility perspective.
Carl: Unfortunately, there's no way for us to prove this because I love that. I've always wondered that myself, too. Like, "What if this is just a cute narrative that you get to tell people when you're 20 years in the industry that you should do it this way?" So, let's just try and separate it out real quick. I'm curious about this. Let's pretend like somebody came and coached you. You've been in the industry for five years. You're young. And let's say that your expertise is completely matched with the problem. So, you're not in over your head here. So, you're not...
Michael: Well, I may or may not be in over my head. The question is whether the client believes I am.
Carl: Yeah, that's why I want to try and that's... So, you're not in over your head. You understand that you're not in over your head. Somebody coaches you that you could say something like what you said, like you've printed out the two inches, and you could say, "I'm happy to review as much of this as you'd like." This is what I used to say, "Would it be helpful for us to go through this two-inch thick book, or would you like me to give you the simple answer on the yellow pad?"
Michael: Look, I think that's fair. I feel like, well, okay, I could have said it, but 100% of the answers were going to be like, "Yes, take us through it." So, I was just sure I should start there.
Carl: That's my question. That's my question. I'm curious because I do not know the answer. I think you're onto something. So, I'm not trying to be trite here. I'm curious how much of that was your own confidence and mindset. Because sitting right next door to us, right next door to us, there's a 55-year-old advisor who is saying, "Let me show you on a yellow pad." And the clients are like, "Yep, yeah, yeah, got it, got it. Thanks, guys." So, is that...?
Michael: I was at the office of some advisors that did that, I'm like, "I spent four hours on that analysis, and you literally yellow-padded it."
Carl: Yeah. And do you think...? Because every time I asked a client like, "Would you like me to go through the two-inch thick version or the version I can do on the yellow pad?" They would say to me something silly like, "Is that a question? The yellow pad." But I was saying that when I was mid-career...
Michael: Well, and with the subset of clients, again, we all have some version, I think, of a self-selection bias of who chooses us as well. My hardcore engineer that wants to do every single page of the 100-something page plan with me may have just been more likely to pick me than you in the first place because they're not going to get to go toe-to-toe on all 100 pages with you. And if they really want to do that and that's their fun thing, then I've inflicted that upon myself by showing up as a nerdy advisor that will do that.
When Is Complexity (Or Simplicity) The Right Tool For Advisors? [13:26]
Carl: Okay. Let's just try and get back to the point then. When is complexity necessary? When is simplicity the right tool? How do we think about that?
Michael: I think it's a good question because to be fair, I was like, "Reflect on that." I don't think it was ever literally about creating complexity, inflicting complexity. There is a segment of the industry that's like, "The secret to sales is making their lives seem really, really complex and then coming with the simple answer and de-complexifying..."
Carl: We're not talking about that.
Michael: "...the fears that you put on them." I guess that's a model that works. That wasn't my thing. That wasn't my angle around it. So, there was a book years ago called The Trusted Advisor by Charlie Green and others. He had some co-authors. And I still remember this really clearly. Their fundamental framework for trust was this...well, it was a math equation. So, of course, I liked it. But literally, a mathematical equation. And the equation was credibility plus reliability plus intimacy. Credibility plus reliability plus intimacy divided by... I wasn't kidding, Carl. It's beautiful. Divided by the whole thing. Divided by self-orientation. And so, the idea is, look, you build trust on three foundations, that you're credible, you know what you're talking about, that you're reliable, you do what you say you're going to do, and that you can create some intimacy. There's a relationship. And if you do those well, then things are good. But if you're super self-oriented and self-focused, you'll undermine all of that.
So, the divider part was if you're self-oriented instead of client-oriented, even if you're credible and reliable and have good relationship intimacy with clients, if you're very self-centered and it's all about you and your commissions and your comp and whatever else, this still isn't going to go well. So, credibility, reliability, intimacy, and you approach it with a client-centric fiduciary manner, this goes well. And the model had always stuck with me because it resonated well. Like, "Okay, I need to be able to form a relationship with the clients," that's the intimacy factor. "I have to do what I say I'm going to do," it's the reliability factor. "And I have to be credible. They have to believe that when I give them the advice, I know what the blank I'm talking about."
And to me, it's the credibility part of this that when I look back, I went through the full plan because I was younger than their grandchildren fighting for credibility. And when I come to the table as an advisor with alphabet soup and 20 years of experience and gray hair, I'm not in a credibility fight anymore the way that I was. I still have to do what I say I'm going to do. I still have to have good relationship intimacy. I still have to be accurate with the advice that I'm giving. But the credibility part, I think really does show up differently. And so, when I look back, I wasn't trying to create complexity for the sake of complexity, but I didn't know how to show I was credible short of getting into the complex details and showing that I knew what the heck I was talking about. I really don’t. And an unfortunate byproduct of that was a non-trivial number of clients where their eyes may have been starting to glaze over somewhere around the 90-minute mark and we weren't done with the meeting yet. I will own that that happened more often than I would probably care to admit reflecting back.
So, aside from the, "I'm trying to create complexity so that I can sell you simplicity as a solution," that sort of sales approach, that's where the... I guess there's two parts of where the complexity challenge comes from me. One is that, how do I earn my credibility to show that I really did what I...? I really know what I'm doing when there aren't a lot of outward markers yet like gray hair, and years of experience, and wrinkles, and all that, which maybe you want to talk about separately. And sometimes it's actually really hard to get something down to its simplest form. I've always appreciated the famous Mark Twain saying like, "I didn't have time to write you a short letter, so I wrote you a long one instead." Back then, it would be like, "I made you a long financial plan because I'm trying to prove my credibility." Now, I might still bring a relatively long financial plan to the meeting because I didn't have enough time to make an elegantly simple one because I have a lot of clients to meet with and it takes a lot of time to sit down and figure out how can I make this beautifully simple.
The Process Of Communicating Competence As A Young Advisor [18:57]
Carl: Yeah, it's really true. I'm in the middle of final edits on my book, and it's...the book that comes out in October, it's 100 sketches, 100 essays, and I'm going to add...
Michael: Which took longer to write? The 100 essays or to make the 100 sketches?
Carl: Yeah, that's a really good question. But I'm going through every word right now and every line and every...and I'm surprised at how much better it seems to get if I... But that editing process and that curation, it requires you're going to leave out nuance. And when you leave out nuance and edge cases, and you edit down, you're making some opinionated decisions, and sometimes you get those wrong. And in a client's plan, it's the same thing. You're like...
Michael: You lost me at narrowing out edge cases.
Carl: Yeah, yeah, yeah, you're making some decisions. You are the distiller. You are the curator. So, here's what I would maybe leave with, which I think is really...I don't really know, but I think the honest kind of self-aware takeaway from this is to match the client situations you're... First, be sure that you're competent for the advice you're giving. If you're incompetent, if it's above your skill level, you just simply say, "I don't know," and you get the help. We've done other episodes. So, first, make sure you feel confident yourself that you're giving advice. Then print out the two-inch thick book. Drop it on the desk, like Michael talked about. Part of this is theater and it's...
Michael: Now, it's like a PDF, but, yes.
Carl: Yeah, but it's important.
Michael: You can see the page count on the PDF at the top,
Carl: But it's important because, remember, the client doesn't just need to be thoroughly diagnosed, accurately diagnosed. They don't just need that. They need a second thing. They need to feel that they were accurately diagnosed. Those are two separate things. And your skill level and reps at this are going to give you a sense of when somebody feels it and when they don't. But at first, there's part of this that is the important... Theater makes it sound dismissive. I don't even mean that. It's a really important part of making sure clients feel thoroughly diagnosed. So, metaphorically or reality, you print out the...I remember I used to do this with... I used a mutual fund. I had clients that had over a million dollars, $2 million in one fund because it was a fund that owned 18,000 securities. And the rebalancing and the cost, it was so efficient to do it. I used to print out the whole prospectus. And I would. I would drop it from a foot above the desk to just sort of demonstrate like, "I know that looks like one thing. It's elegantly simple. Do you understand what's going on behind the hood?" Same thing with the plan. So then, I think you just experiment, and you learn to pay really close attention. How deep do they want to go? And just practice. Like, "Is this helpful? How much detail would you like? What would be most helpful to you?" Ask those kind of questions.
Questions To Ask To Tell When To Keep Explanations Simple (And When To Go Deeper) [22:16]
Michael: Yeah. That to me, I guess if I could go back to me 20-something years ago to channel that, I think that's the advice I would at least probably give young me in retrospect is...so, as I commented, I sure I could have asked every single client, "Would you like me to go through all this and show you the analysis that I did?" I'm pretty sure the answer is going to be yes because they're trying to just judge if the person younger than their grandchild actually knows what he's talking about or not. And I still should have asked. There's nothing wrong with asking. There's no harm in asking, to say like, "Hey, we've done a lot of analysis. I've got some recommendations to share with you and a lot of analysis at how we arrived at those recommendations. How much of this would you like me to go through with you?" I just let them say. If I'm fighting for credibility, I'm going to be like, "All right. Yeah, you can take me through your process. You can take me through your thing. Okay, all right." Then I'm going to roll up my sleeves and do my big plan presentation. There would have been nothing wrong with giving them the chance, and I'm betting the answer would have changed at some point
Carl: And check back in as you go. Like, "Hey, just want to check in here. Is there anything here...?" I love the question of, "Hey, we just went through 15 minutes of stuff. What's the one thing that stuck out to you?" And I love hearing people say it out loud because not only do I learn, but it reinforces something they learn. That's a Michael Bungay Stanier trick, suggestion, not trick. So, checking back in like, "Hey, am I covering enough here for you? What else would you like to see?" I sometimes would even ask like, "Hey, are you a bottom line kind of person? Would you like me to review this entire thing, or would you like an executive summary?" is a nice way to ask, too, instead of saying yellow pad. Sometimes that feels a little casual. But executive summary has a nice ring to it. That's what an executive would have. Like, "Would you like to review the whole thing, or would you like me to review the executive summary?" Or you can make an assumption. This is another good way to do it. "Hey, I've got the whole document here, and I would be thrilled to review the whole thing. Why don't we start with the executive summary, and you can tell me where you'd like me to go deeper?" I like that, too.
Michael: And again, what strikes me about asking if, say, look back in retrospect, maybe I'm wrong and totally off base and still over-projecting my young advisor fears. But I'm really pretty sure everyone back then was going to say, "Yes, take me through it," because they're still trying to judge whether I really know what I'm talking about. But I'm also quite certain there's a point that would have changed. And I would have started hearing more clients say like, "It looks like you did your work. Just give me the high-level summary, like what should we do." I'm pretty sure I would have gotten that change sooner than when I actually started changing how I was showing up.
Carl: I think this conversation has taught me that I'm going to make that my new default. My new default assumption is that actually, there is something about being a younger advisor that means you're probably going to need to prove a little bit more than you normally do. I actually don't know that I believed that before this conversation. I probably was saying, "It's all in your head, it's all in your head, it's all in your head." I've adjusted my assumptions. And I think the new default assumption for me is, "Yeah, you know what? You're younger. You probably need to do more of that." And great news, it's good practice. It's good reps. It's good learning. And then start paying attention, and you should still ask the same questions.
Michael: Yeah. And don't do more of it than you need to. One of my early mentors would very often say or remind me, because I would really get going on on some of these plans, "Don't talk past the sale." And it wasn't even a sales context. The sale wasn't selling a product at that firm. We were an RIA. It was selling the client on the recommendation. And he would make the comments from time to time like, "They were already convinced to do it 15 minutes ago, and you're still going, dude." So, you can bring some of that. And I like both how you frame it, Carl, like, "Would you like me to review this entire thing? Would you like the executive summary?" And, "Hey, we just went through 15 minutes of stuff. What's the one thing that stuck out for you? Hey, we just went through 15 minutes of stuff. Do you want to keep going at this level of depth, or do you want me summarize some of the other sections? Just give clients the chance to make that call, and then you'll really find out how deep you need to be on these because my default was like, "I got my routine. I know how I do my 100-page book," and they were long meetings, and I probably often talk past the sale because I've actually made the credibility case I was trying to make, and I was still going.
Carl: I totally agree. And I think if you start asking those questions early on, the very simple ones of like, "Would it be helpful to go through the executive summary? And then tell me where you want to go deeper," you'll start noticing patterns. I would very much treat this like... The analogy is kind of funny, but I'd treat this like the experience of prompt engineering with AI. Like, "Let's pay attention to what produces what result. And what are we learning? And what do we...?" Or another way to think of it, I used to say this all the time, like, "Pretend like you're a drama student, or pretend like you're a professional...play like you're an actor. Pay attention. Notice the scripts. Get training. Practice." This is the most valuable...other than your technical skill, sorry, Michael, arguably more than your technical skill because without it, you're not going to get to do your technical skill.
Michael: I'll allow it. Valid point.
Carl: Okay. So, let's just say they're equally as important. So, pay attention as early as you can, realize that, yeah, you're going to need to get the reps in, ask the questions, pay attention, see what you learn, and I think you're going to find over time, I bet you find, a very similar trajectory, which is, "Man, it's so interesting. People are starting to trust me now."
Michael: Yeah. I actually don't have to prove myself that much anymore. How about that?
Carl: Yeah, love that.
Michael: awesome. Thank you, Carl.
Carl: Okay, Michael. Cheers.
Michael: Cheers.
