Executive Summary
When a good-fit prospect comes along, few things feel more discouraging than having them decline to move forward after a productive discovery meeting – not because of any dissatisfaction, but simply because they're not ready to leave their current advisor. These 'soft nos' can feel both frustrating and confusing for advisors, who may be left wondering what they missed – and how to move forward productively.
In this 173rd episode of Kitces & Carl, Michael Kitces and client communication expert Carl Richards explore how to handle the disappointment of a promising prospect who chooses to stay with their current advisor, and how these situations can still create opportunities to strengthen the relationship and improve the advisor's own process. While the initial "no" may sting, it also offers an opportunity to reflect, adjust, and position more effectively for the future.
As a starting point, advisors can respond with empathy and professionalism. Instead of pressing for another meeting or probing the prospect's decision, a simple note of gratitude – affirming the door remains open and offering to stay in touch with occasional, relevant insights – helps to preserve goodwill and shows, rather than tells, what responsiveness and value look like in action. From there, a strategic follow-up approach can involve subtly nurturing the relationship without becoming salesy or overbearing. This might include adding them to a tailored newsletter list (with permission), sending personalized commentary on market events or tax changes, or sharing content that directly reflects the prospect's stated concerns or holdings. Communication doesn't have to be frequent – once a quarter is more than enough. By steadily providing thoughtful value – without overselling or overwhelming – advisors can highlight the contrast between themselves and the incumbent advisor who may not be as engaged.
Beyond maintaining contact, these interactions can also serve as useful diagnostic tools for improving the advisor's prospecting process. If a prospect is hesitant to make a change, it may not reflect on the advisor's value proposition at all, but rather on the client's readiness. Asking upfront questions such as, "Have you worked with an advisor before? What was that relationship like?" or "How did you find your current advisor?" can uncover whether the individual has personal ties or long-standing loyalties that make leaving difficult. In some cases, advisors may even ease the transition by offering sample 'break-up' language the prospect can adapt, alleviating anxiety about the awkwardness of ending an established relationship.
Ultimately, a prospect's hesitation is rarely about price or technical expertise and more about readiness and the emotional challenge of transition. By responding to a prospect's "no" with patience, empathy, and a spirit of generosity, advisors can both preserve the relationship and reinforce their reputation as a responsive, values-driven professional – the very traits that prospects will recognize when they are truly ready for a change!
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
- Financial Advicer Manifesto
- Asking "Have You Worked With An Advisor Before?" To Uncover What Prospects Really Value Most by Meghaan Lurtz:
- Kitces & Carl Ep 163: Overcoming Objections When Clients Reject The Recommendation By Asking What You Missed
- Sending (Private) Client Newsletters: How Advisors Can Do It Effectively To Reinforce Value by Ashby Daniels
Kitces & Carl Transcript
Michael: Well, greetings, Carl.
Carl: Hello, Michael Kitces. How are you?
Michael: I'm doing well. I'm doing well. It is summer season. As we're recording this, we'll be heading into the fall by the time this comes out.
Carl: Crazy.
Michael: But very much enjoying the slow summer season, the slow conference season. As much as I do enjoy hanging out at conferences and getting to talk to a lot of folks all day long, I am excited about the fact that I have not been to an airport for four weeks, and I will not be to an airport for another four weeks. I'll be ping-ponging all over the country in September, October, November as we get into the fall conferences. I'm enjoying it.
Carl: Yeah. So nice. So nice.
Michael: Yeah. It's good to be at conferences. It's good every now and then to have a little bit of time out at conferences.
Carl: Yeah, for sure. For sure. Yeah. There's a conference here this Friday that I'm speaking at in Utah, so I don't have to even go to an airport. It's going to be so fun. I'm going to just drive down.
Michael: See, I bow before the master. The real key is when the business comes to you.
Carl: You just get all the conferences to come to Utah.
Michael: The conferences come to you, right? The secret of advisor's success is when the clients just call you, you don't have to do any prospecting.
Carl: This is one time. Garrett Financial Network, I think it is. It'd be so fun.
Michael: You are in the promised land, my friend.
Carl: Yeah.
Unpacking A Prospect's 'Soft No' When They Choose To Stay With Their Current Advisor [01:33]
Michael: So, I wanted to chat today. There was a wonderful question that had come in from an advicer, and I'm intrigued by it.
Carl: Wait, wait, wait, wait, wait, wait, wait, wait. Hold on. You're still working that advicer thing?
Michael: Oh, absolutely. You are an advice-centric business. You are an advicer. Yes.
Carl: I just didn't want to let that just slide right by or just...
Michael: No, no, we're making this a...
Carl: ...rolled off your tongue.
Michael: We're making this a word. I mean, I won't be done until I get the official Merriam Webster acknowledgement that this is a word, which is probably many, many years off, but, yes, if you really...
Carl: Okay, okay. Keep doing.
Michael: ...are in the business of giving advice, you are not an advisor. That term has been co-opted by too many people that do not advice things. You are an advicer. This is the word. This is the word.
Carl: Keep going. Keep going. I love it.
Michael: We got outreach from one of our advisors around, I just said kind of a sales marketing question. I'll queue it up for you in a moment. And I was curious to have this conversation with you because I think we will handle and respond to this situation differently, which always makes for interesting conversation. So, here's the message that we got. So, it kind of starts out saying, "Look, you all have talked about these situations where if you're working with a client and they don't implement, the implication is maybe you missed something in the meeting and didn't ask the right questions." Not to be negative on us advisors, but it's like, "Hey, let's own..."
Carl: Let's say empowering. Kind of empowering.
Michael: Yeah. Let's own the accountability here for a moment. Like, "Okay. Maybe there was something we could have done differently. Let's look back and reflect on that. And very practically, if the advice really truly is absolutely perfect for their circumstances and achieves all their goals, why wouldn't they say yes?" There has to be something else going on that they would not say yes. So we've covered this in the past in an episode about giving clients advice, and they don't act on your recommendations. There's a similar theme out there of you're sitting across from a prospect, and you've made it clear that you provide all this value that seems to be aligned to what they said. And then they don't say yes. And you're in one of those moments.
So the question we got is about one of those moments, and what do you do when you get the soft no? And so I'm actually going to share the email that he shared with us. I think it's interesting. Some folks are like, "Here, you go through and groana little," because most of us have been there, some version of this. So, it came in as a referral. They're paying, I'm just going to say, a big firm advisor. Choose your big firm enemy of choice. They're paying a big firm advisor for what's basically asset allocation and nothing else. We're almost the same price, and we do full planning. And they'd already said they weren't thrilled with the big firm.
So, he's had the meeting with the prospect, and this is the follow-up email that he gets. "Thank you so much for taking time to review our situation. The personal touch and attention are very appealing and clearly why you are so successful. After some reflection..." You feel it coming already now. "After some reflection, we feel like we need to give our current team a chance to meet our advising needs. We are happy with the breadth of portfolio options that are available through us through big firm. We would like to keep the door open with you in the future if we do not see the responsiveness we're looking for from our current advisor. Again, thank you for your careful consideration and review of our financial values and know we appreciated it."
Carl: Wow.
Michael: It's like a knife in the heart at the end, isn't it? Where they just go on their way and say, "Thank you so much for understanding our values and know how much we appreciate it. Not so much that we'll hire you or anything, but we really appreciate it." Oh, it's like twisting the knife once it's in there. So, look, so the very practical question from our advisor friend is, "So, what do you do when that's the email that you get?" So, thoughts.
Carl: Yeah, that's really fun to hear those emails just because you reflect back on the ones that...we've all gotten those. Well, I think, in my mind, this feels like a very specific situation, and I think...
Michael: So, maybe there's some specific stuff and general stuff.
Carl: Yeah. Just like I think there are plenty of times where it's clear you missed something, but in this case, I'm a little bit interested in the idea of what if you just believe them? What does the email say? You know what I mean? I love all the stories we always build. "It must have been. It must have been that. It must have been this. If I could just..." What if you're just like, "No, wait. The facts on the ground, as far as you're aware, is this email."
And I can't think of anything I would say other than believing them and saying, "Hey, this is the way we treat all of our clients and, to be honest, people who are exploring being our clients. And please know we're always here for you. If I see anything that's useful to your situation, I'll make sure to pass it your way." And then I would... I guess where I'm trying to go with this is I would be generous in the assumptions. I'd be generous to me, the advisor. I'd be generous to myself as the advisor and the assumptions that I try to make in this case, because all I have is an email. Because here's the other thing you do, "Hey, did I miss something? I don't get it. Let's talk."
And all of that feels slightly vendor-y, slightly desperate, slightly like a vendor. It doesn't feel like an expert. I think an expert would say, "Hopefully, that was helpful." In fact, I'd almost be tempted to maybe even go further and say, "I hope that was helpful. I actually have had some thoughts since we last met. And I want to just pass them on. Whether you implement them with us or with your current situation, we just want to make sure that your family is in a good financial situation. And here's three things I saw that might be on the top of your list to address."
And I would be tempted to be SWOT, strength, weakness, opportunity, maybe even a threat. I would just be, "It's clear you've done this. Here's a couple of areas I could see in terms of improvement. And you could take this route and this route and this route." And again, I wouldn't go so detailed that they could just do... Actually, I would. It wouldn't even matter at this point. And then just say, "And in the future, you or anybody you can think of that needs our help, anybody you think of that would be a good fit, you know where to find me." That's where I'd be tempted. I'm so curious to see, is that right or... Sorry, not right or wrong. Is that the same or different than what you were going to reply with?
Michael: Yeah. This part I'm actually pretty similar to you in that, to me, this is not one where I hear that or I read that and I'm thinking, "Darn it. Gloves on. I'm still fighting for this one. I'm not knocked out yet. I'm getting up again. We're still going." It's a lovely positive email. They're speaking very positively about us. As I think you said, well, I'm willing to take it at face value that... I hear two things. We're not actually ready to fire our current advisor, and we're going to be judging this going forward by responsiveness. We would like to still keep the door open in the future if we do not see the responsiveness we are looking for from our current team.
Carl: Yeah. In fact, can I interrupt? Yeah. I want to update my... I would actually start treating them like they were clients without telling them. You know what I mean?
Michael: That's where I was going. So, I see this... Practically, my response is going to be something in effect of, "Respect your decision for where you are. Yes, absolutely, we can keep the door open. We'd love to work with you if the time is right. If it's okay with you, I'd love to actually add you to our firm's newsletter list so you can see a little bit of the information that we're sharing with our clients in case it's useful to you," because basically I'm trying to show them responsiveness and what we do. And then I would be putting a... Hopefully, they'll say yes. And either way, I would be putting a tickler out there that the next time something interesting happens, I don't know, if they had some tax-related thing, I'm like, cool.
I'm going to grab an article on the new tax law. I'm going to send it to them to say, "Hey, just saw this. Remembered we were talking about this tax strategy. Sending this along to you. Just thought you might be interested because it pertains to your situation." Next time markets get volatile, I'm going to forward them our company newsletter or webinar, whatever we're doing to reach out to our clients when markets get volatile, a little scary, and say, "Hey, just want to let you know we wrote this for our clients. If you're still feeling any anxiety, thought it might be helpful. Hey, we're doing this webinar next week. It's for our clients, but if you're interested, you're welcome..."
Carl: We'll make a room for you. Yeah.
Michael: I'm not putting it like, "And if you want to work with us, come work with us."
Carl: None of that.
Michael: I'm just putting it out there, because I'm going to send that, and I'm pretty sure they're not very responsive. Advisor is going to continue to be not responsive because objects at rest tend to stay at rest. So I'm going to out-responsiveness the other advisor, because they've already told me the other advisor isn't good at it, and I've already checked the boxes for the rest. So I'm just going to show what responsiveness and proactivity looks like. And they're not a full client, so I'm not doing full-on planning work for them, but I don't need to. "Here's an article you would find interesting. Here's some commentary about the market volatility that might be helpful. Here's a thing we're doing for our clients, so you can see the cool things we do for your clients. So I'm betting your advisor has done nothing like this. Come join us if you want to." And just wait for, I'm going to guess, 9 to 18 months of them seeing one of those every 3 to 6 months whenever I find an opportunity to do something. I wouldn't do anything more often than quarterly or I'm pestering.
Carl: Yeah. I think all they did was move up on my scale of warmth in terms of my list of prospects. And they just moved up a little bit. They didn't move down. And I would do the exact same thing. And I wouldn't make any mention of... Like you said, I wouldn't make any mention of other advisor working with us. It would just be, "I'm going to treat you..." If I send something quarterly to clients, I'd send it to them. I'd make it customized. If I knew their portfolio now, I would be like, "Oh, I ran across a piece of news about GE. Just thought this would be helpful."
Michael: "Hey, if you still got the GE stock, thought this might be interesting for you."
Carl: Yeah. Or diversification and why you do it. Anyway, I just think that's exactly right. They just moved up.
When The Client's Current Relationship With Their Advisor Is Complicated [14:08]
And let's just counter that though with... Let's create a situation where... The answer is you did miss something, because here's where I'm trying to... Go ahead.
Michael: I just say that being...because I want to come back to that too. I do think there's something that got missed here. Now, it's not easy to fix now because it was a miss, so I think of this more in the vein of lessons learned to change how we do this for other prospects in the future, not, "Can I necessarily save this prospect or at least the issue on this prospect?" But the other thing that I hear, I see in this response was "We weren't actually ready to break up with our current advisor. We weren't ready." So, how did you find your current advisor? "Oh, it's my brother-in-law." "Oh, okay. Well, that's awkward to fire him."
Carl: That's actually the first thought I had is this guy's his brother-in-law or the next-door neighbor.
Michael: Yeah. Questions that came into my prospect process after a couple of years of not having this exact situation, but similar situations, number one, "Have you ever worked with an advisor before? Tell me what that relationship was like," because most people say, "Yes." I'm like, "Have you ever worked with an advisor before?" "Yes." "Oh, tell me what relationship was like." "Well, he was my buddy in college, and he gave us all of our life insurance." Okay, got it. I'm going to be a little bit different than that. I'll find a nice way to say it, but, "Have you ever worked with an advisor? What was that relationship like?" Sometimes if you get a little further, like, "What do you like most about it? What's the most frustrating for you about it?" Because they're basically going to tell me exactly what they value in an advisor relationship and what aggravates them in the advisor relationship.
And if it doesn't come up through that process, would often ask, "How did you find your current advisor?" If they say, "Yes, I have one and we're working with one." "How did you find that current advisor?" Because now I really want to know, "Do you go off referrals? Do you go off of internet searches? Is it your brother-in-law?" We found him last year, and we're already out," is very different like "Oh, yeah, we found him 20 years ago. He's been with us for a long time." "Oh, why are you leaving now? Are you comfortable making a change?"
Carl: By the way, I...
Michael: There are a few folks I basically asked, "Are you actually ready to break up with the current advisor relationship? Sounds like you've been with him for a long time. That's got to be really hard to go to him after all these years and say, 'It's no longer a fit.' Are you actually ready to do that?'" And I would playfully challenge prospects sometimes, a version that, "Are you actually ready to do that?" Because sometimes either they're really not or they haven't processed that or hadn't actually registered, "Oh, God, I just had a good meeting with you. But if I say yes, I'm going to have to go back and fire Tommy. I've been working with Tommy forever. I don't think I'm ready to fire Tommy." So either I'm trying to find that out at, basically, end of first meeting if it's going well. If it's not, I don't really need to open this door with them. But at the end of the first meeting, if it's going well and trying to understand, is this going to be a blocking point?
Carl: Yeah, I think that's important. I love that because I was actually really surprised at how often back in the day when the ACAP paperwork got...the transfer paperwork got signed, how there would... And I was surprised at this, how often this would come up with, "Oh, wait, wait, wait, wait, wait. How does this work? I'm feeling bad." And I was surprised at how often somebody wanted to talk through that. Like, "Should I feel bad?" And I would have to explain, "Well, of course, people might take this a little bit personally, but at the end of the day, there's a whole system for this. You can say as little or as much as you want. Sometimes people don't say a word. Sometimes people write a note. Sometimes people make a phone call. All of those are okay." But I was often surprised at how often people wanted coaching around that process. So I think that's a great question just of, "Oh, it's your brother-in-law. That's going to be uncomfortable. It's going to be awkward." And again, I wouldn't say it that way, but that idea of let's talk about it is smart.
Michael: And I'm going to take out one step further. I'll admit that not my process, but I do know some advisors that have done this that will take, particularly, if they are just in a space where they have a lot of competitive situations, pulling people away from existing advisors, they actually make a templated letter to give the prospect, to give their former advisor: "Dear, Bob. Thank you so much for the years of your service, but we're reaching out to letting you know that we've decided to work with another advisor going forward. You will be seeing a transfer paperwork coming shortly. Please cooperate with the transfer paperwork and my new advisor, Michael, if he calls and asks any questions. Thank you so much."
Carl: Wow. Wow. Super interesting.
Michael: I'm sure they have a slightly more eloquent way of putting it than that, but not terribly long because no one really wants to draw this out. Break-up letters can be relatively short. But for that subset of folks who are like, "Yeah. I don't know if I'm really ready to break up with Bob." And would say, "Would it be helpful if we gave you just a simple template letter that you can use? I'm not pushing on you." This isn't the, let me push across the table, you sign here to fire them. But if you're having this conversation, "Hey, it seems like we're doing really well. Are you actually really ready to break up with Bob, your current advisor? You've been talking about how long you've been working with him. We're excited to work with you on the new thing, but it sounds like that may be a little bit difficult for you to separate. Would it be helpful if we gave you just a really simple kind template of a letter that you could send Bob to make that a little... Would that make it easier for you?"
Carl: Yeah. Even to the degree of just, "Hey, you know what? Let me just tell you right now. You're not alone. This has come up before. In fact, we put together some template language that we can just send you, and you can cut and paste it and adjust as you want in an email." Just that simple of, "You're not alone. This is a normal thing to break up with Bob," because we always have break-up Bob, for sure. Yeah, that's really interesting.
Michael: Oh, Bob. Sorry to all the Roberts who are listening.
Demonstrating Quality Without Being Too 'Sales-y' [21:30]
Carl: Yeah. The other thing that's clear, just to be really direct, is change only happens when the pain of staying the same is lower than the pain of changing. Change only happens when the pain of staying the same is higher than the pain of change. Yeah. And so it was clear maybe the main issue wasn't uncovered. Maybe you got close because the letter was so nice, but maybe the main issue wasn't... But at this point, you don't... And it's not like you could have done something different, maybe even. It's just you don't have a chance to say, "Hey..." And what I want in advisor's bones, what I want you to feel is, "Oh, if they only knew. If they only knew how great it was, they would have never sent this letter." And so the way to help them at this point, to know how great it is, is just show them. Just show them.
Michael: Yeah. Again, they've given you the roadmap. They want to give their team a chance, and they're judging by responsiveness. So I'm just going to proactively out-responsive the current advisor, because I'm going to bet they're not doing a terribly good job because they already came to my office once. Clearly, this prospect is at least on the fence. So I'm just going to show them what it's like.
Carl: Totally. I love that.
Michael: When you work with the firm and, to me, situations like this... I don't know. Maybe this is just my style mindset around rejection. It is a version. I don't get something like this and go, "Darn it. I got to figure out how to fight for this one. I'm not ready to lose yet." I'm like, "Okay. You stated your preference. I'm going to drip and move on." But I'm going to drip and move on, and I'm going to take a moment to reflect, to say, "Are there questions that maybe I missed?" Getting all the way back to the "Did I not ask enough good questions?" "Are there any questions that maybe I did miss?"
And it's not to save me on this one. This one's done. Journey's happened. I'll drip my responsiveness and see if I win them back. Every single one of these, though, is a chance to revisit the process, the steps, the list of questions, the conversations I have in prospect meetings to say, "Maybe I need to do this differently in the future. What's a question or two that I'm going to figure out now so that I can trot out the next time that I do this?" I only started asking questions like, "Have you ever worked with an advisor for, and tell me about that relationship?" Because I had bad scenarios where I got rejected and missed, because there was something there that I didn't uncover. And after reflection, that now became one of the questions that come out, not necessarily every time, but it's fine over time.
You build your repertoire of questions that you can pull out and use when certain circumstances start unfolding. I'm not going to do the whole, "So are you really ready to break up with your current advisor?" But if we have some conversation, you tell me it's your brother-in-law and you've been working together for 15 years, I'm going to pull out some version of that conversation because it's the elephant in the room at that point, and it is the most straightforward way for me to lose the prospect if it's otherwise going so well. So I may as well have the conversation here because it's not going to get better if I don't have it.
Carl: Yeah. No, I agree. This is one I would just count as a positive. This was not a negative thing. This was just, it moved up one notch in my warmth scale, on my prospect list. And I do think if you wanted to practice, you could, as part of your generosity campaign and responsiveness campaign, you could say, "I totally respect your feelings. Just to make your financial lives better," whatever. "Here's a recap of our meeting. Here's what I thought I heard you say." And you could say in there, "Of course, if I missed anything, make sure to let me know." But I don't even know that that's necessary. But if you just did it as part of your generosity campaign of, "Here's what I heard was important to you. Here's your major concerns. Here's two or three things that you might want to focus on."
And I wouldn't... to add a counterpoint. I don't even know that I would ask them to add them to my newsletter. What I would do is send a customized version of it, so this is customized to you, distilled a little. I remember when I had... I had a client say to me, or a prospective... No, it was a client. His name was Terry. I was like, "Hey, we're doing a client appreciation event. We're going to have a tax guy come and blah, blah, blah, blah, blah. It's going to be really great." And he replied. He was an anesthesiologist, and he was... No, he's a radiologist, and he was super direct. He's the one that told me when I said, "How often would you hear from me in an ideal world?" He said, "Look, in an ideal world, never."
Michael: Never.
Carl: But when I asked him if he wanted to come to the event, he goes, "I have an idea. Rather than me driving an hour, finding a place to park, attending an hour and a half thing, and then driving an hour home. Why don't you send me the five-minute summary that's applicable to my situation?" And I was like, "That's smart." He's like, "I don't need to hear what's applicable..." So I would take the same approach with this client. I would just be like, "I'm just going to send you things I think of that would be applicable to your situation on a regular basis." Terry is pretty mean.
Michael: I'm just envisioning it. And now you would just do a seminar to an empty room with a microphone and have an AI summary go out to all of your clients.
Carl: Take every bit of this. Take all my podcast episodes and only send the things that are actually applicable to their situation. You know their situation. Please cut it up into snippets. Yeah, exactly. Well, that's amazing, Michael. Super fun.
Michael: Awesome. Thank you, Carl. Thank you.
Carl: Yeah, cheers.
