Kitces & Carl Ep 168: Do You Really Have To Go Deep With Every New Client In The First Meeting?

***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:

• Kitces & Carl Ep 167: Are Financial Advisors Less Happy When Working With HNW Clients?
• Meghaan Lurtz: Less Lonely Money
• Shaping Wealth
• Dr. Meghaan Lurtz
• Vulnerability Hangover
• Why To Use George Kinder’s 3 Life Planning Questions With Financial Planning Clients
• Kitces & Carl Ep 141: Creating The Space To Have More Meaningful Money Conversations With Clients
• Kinder Institute
• 50 Fires Krista Tippett
• The Flip (Blair Enns)

Kitces & Carl Transcript

Carl: Michael Kitces.

Michael: Carl Richards. Imagine meeting you here randomly, coincidentally in this Zoom room we scheduled ahead of time for this exact purpose.

Carl: It's crazy. I can't believe it. I just was walking in and this will be great. It's like my favorite coffee shop and I get to have a chat with a good friend, so...

Michael: It is a strange effect of the modern much more virtual world that just serendipitous conversations bumping into people just don't happen much anymore the way it used to be a normal thing.

Carl: Totally. Yeah.

The Risks Of Starting Prospect Calls With Behavioral Questions [00:48]

Let's talk...I want to kind of jump off the last conversation we had. At the end there, we talked about...and for listeners, if you want to go back and listen to the previous...you probably already have. But if you haven't, you might want to go back and just catch up. We talked about who let all the feelings in and how the dollar symbol was a provocative symbol.

Michael: And for us as advisers, right?

Carl: As well, yeah. Yeah, for us as human...

Michael: What experiences with money are you carrying with you that might be shaping your advice and your recommendations to clients?

Carl: Yeah, exactly. And to frame that conversation, I used an exercise that I often do in workshops and large presentations. And at the end there, we talked about I'm not sure how useful...the ideas are very useful. I wasn't sure how useful the actual drawing a dollar sign on the board and taking people through it.

Michael: Asking clients to say, what's the first word that comes to mind? What's the first feeling that comes to mind when you see a dollar sign drawn?

Carl: Yeah. Yeah, I'm not sure...In fact, I was not suggesting that you sit down with a prospect in the first client meeting and you draw a dollar sign on the whiteboard and say, "What do you think?"

Michael: There are literally some meeting approaches that basically do that.

Carl: That's what I want to talk about.

Michael: Maybe not maybe not a drawing because not all of us can draw...

Carl: A dollar sign.

Michael: ...as you do. I can't even make a dollar sign that's legible. My handwriting is horrible. Right. But you get background, what's important about money to you and Kinder questions. Not all of us do it with the drawing, but there are a lot of questions out there that I feel like get to a substantively similar conversation.

Carl: Yeah. They go deep pretty quick. And so I kind of wanted to talk about that, just because I had this really cool experience. Met with Dr. Meghaan Lurtz. And I've just been really impressed with her ability to...well, I'm impressed by lots of things about Dr. Lurtz, but her ability to...I'm going to use the word challenge, but it's probably more like investigate, explore, and even, I'm going to use a word here, disagree in a way that is incredibly helpful. It's very rare that somebody disagrees with me in public in a way that's useful. It's often just unthoughtful flame-throwing. Like, we like...

Michael: Yeah, right. As opposed to people that disagree with you because they're just trying to troll you.

Carl: Yeah. Any of us. Anybody who writes anything on anywhere knows that feeling. It's unthoughtful. You know, they'll say something about maybe a book you wrote that it's clear they didn't even read the book. But Dr. Lurtz is completely different. She's very skilled in entering it in a right way, but the feedback is very direct like, "I'm not sure that's right," and then exploring, and so it's very additive to the conversation. It moves the profession forward. It moved me...So one of the things she's challenged me on recently has been largely around these first meetings, which I kind of wanted to talk about. And I think she's right.

Michael: First meetings where you can do these, what's important about money to you, right? Let's get deep with the clients out of the gate.

Carl: Somebody's going to cry, and it's not going to be me. I've said that, and I've always...

Michael: I've heard you actually say that. Yep.

Carl: Yeah. Yeah. So the I started thinking a while ago about this as a spectrum. Way out on the deep end of the spectrum, maybe we could put some of the life planning questions without getting really specific. Way out here on the...questions that I thought I want to ask more like that. And then over on this shallow... shallow is not the right word... less deep end of the spectrum could be something as simple as, what brought you in today? Or what's top-of-mind questions? And what Dr. Lurtz pointed out to me, which I think was just really helpful, is that often there's a presenting problem. And this is language I've been using for a long time, the presenting problem. And we need to greet that problem, that presenting problem with deep empathy. Even though we know that we want to get...many of us want to get deep. And in this age of emotional intelligence, be more human, I think there's this real aspiration, almost like this is the right way to do it, the deep way is...And I have certainly, absolutely been guilty at even probably saying that. And this is where I feel like I stand corrected in terms of it actually might be the right way for some people, especially people who are trained and have practiced that and are comfortable with that. But that doesn't make it "the" right way.

And I was particularly interested in the...Dr. Lurtz said something to me like, "Hey, it could be that we just..." and I'd made this comparison before. I used an arrow because I was remembering something silly my son had done with a bow and arrow in the backyard. So it makes no sense. But imagine there was an arrow in your arm and you go into the emergency room. You really aren't interested in the conversation about your diet or your sleep patterns, right? You're like, "Bro, get this arrow..."

Michael: I don't need a full-body MRI and scan to know that...

Carl: The arrow is in my arm.

Michael: ...there's an arrow sticking out of me.

Carl: Yeah. Yeah. Yeah. And then as we work through that over the next couple of months making sure things...infection and it heals, and maybe we get a chance to look for little opportunities to go a little deeper on, I call them crunchy bits, little opportunities to go a little deeper where you may mention something about, "Oh, man. When I grew up, there were some thin times around the house." It may not even be time yet because Dr. Lutz called this...she referenced something tangentially related of authenticity hangover or vulnerability hangover. The idea of...have you ever been with somebody at a party and you told them way too much and the next morning you were like, "I hope I never see that person again?" You know what I mean? I can't believe I gave my whole life story.

Michael: Yeah. I said a little more than I'm comfortable with. I'm not actually ready to face up to some of the things I said. So the easiest way to avoid that is I'm just going to never actually see them again, and then I never have to revisit that conversation again.

Carl: Yeah. So what do you make of all...? It's super interesting to me that maybe I was overemphasizing and over...The joke...In fact, I mentioned this in a workshop I recently taught. I said I'm not sure. I was like, "I'm not sure that we should have as a uniform goal that somebody is going to cry and it wasn't going to be me. And there was somebody in the audience that raised their hand and said, "At the firm I'm at, that is one of our driving training principles. We say, 'Somebody's going to cry.' Are you changing your mind?" And I was like, "Oh, no." I was like, "I don't know that I'm changing my mind. I'm simply saying I don't know that we should hold this up as the right way." So talk to me about this.

Developing The Skillset Of Holding Emotive Conversations As An Advisor [08:49]

Michael: So there are two different threads to this that start running through my mind. The first is very much akin to what you said. As I joke a lot, no one wakes at 2:00 in the morning in a cold sweat thinking, "I need me a comprehensive financial plan."

Carl: Right. Or I need to cry on a financial planner's couch.

Michael: Yeah. I wake up because something's going on in my financial life. Usually something is at a level of complexity that I can no longer deal with it, and there's some kind of catalyst that's making it an issue now. I'm getting divorced, and I've never been responsible for this much money before. Someone died, and I don't know what to do. I'm about to retire, and I've never lived my life without a paycheck before, and I'm kind of freaked out about how this is going to go. There's some combination of a complexity and a catalyst event that's actually making it hard for me to sleep at 2:00 in the morning and says, "I think now is the time I actually need to get myself a financial adviser for the first time, or a different financial adviser because mine is not solving this problem."

And that's the thing that makes me go and say, I'm actually going to schedule a meeting with you, and we're going to do this financial planning thing because apparently that's how we're supposed to do it. But I didn't come to you for a financial plan. I came to you for a presenting problem. I came to you because someone accidentally shot me with an arrow and it's sticking out of my arm, and I'm pretty sure this is it. So can we not do the full-body exam and all the different stuff? Can you just solve the arrow that's sticking out of me? It really hurts. Yeah. And so to me, just with that lens, if financial planning wasn't my thing and delving into my money stories from decades ago almost certainly wasn't my thing, then I'm a little thrown when I come in because there's an arrow sticking out of me, and you want to know what my first memory about money is. Not even to say that's a bad thing or not a really impactful conversation with a client, but...

Carl: It's unmooring at the very least.

Michael: Yeah. Or dare I say in a not negative way to some people who've done this, you run the risk it comes across a little tone deaf in the moment. It's like, "Arrow, arm, can we deal with this? I came to you for this, and you're kind of getting some stuff that I wasn't really looking for." So on the one hand, yes, I struggle there because those don't generally feel like the types of questions that are the actual presenting problems for clients. Except, unless it actually is because that's how you market and that's what you do. There are a segment of advisors out there who lead with that focus. That's on their website. Probably doesn't say, "Someone's going to cry in the first meeting, it won't be me," but you're...although you could. If anyone's actually done that in their market materials, I'd love to see that. Right.

But you are leading with life planning, money, purpose. You've made all the money. What comes next? Because you're doing exit planning for successful business owners who really are having these questions of, oh my gosh, it's really not about the money anymore. I had the exit events, and I've never been more miserable because now my life doesn't have purpose, and I don't know what to do, and I'm in search for meaning, and apparently, you've got some meaning stuff figured out about meaning and money, and I need to have this conversation. So ironically, there are some life-planning-oriented advisers I know who do this from the very first meeting...

Carl: Me too.

Michael: ...and it's the exact right thing to do because that actually really is what their clients are coming to them for, or at least a part of what their clients are coming to them for. It's on their website. It's in their marketing materials. It's how they got referred. It's how people talk about them because they've built that brand or presence or positioning in the marketplace. And if that's really what your clients are coming to you for, go to in the first question, my friends. You have found your people, your clients have found you. This is what they're looking for. Let's go. But unless that really is your value proposition to the marketplace...

Carl: Let's put a pin in...

Michael: ...clients are looking for.

Carl: Michael, let me just put a pin in one thing. And if you are doing that, you probably have a lot of practice, a lot of skill at that thing. You practice that thing. It works for you.

Michael: Yes, with the caveat that we've all got to start someplace.

Carl: I'm sorry. What I mean is...

Michael: Many experienced folks had their first few clients where maybe they were a little less experienced. I know some organizations like the Kinder's Institute, I think, actually have you literally kind of practice this and role play it and get some reps in for the conversation, which is a discussion for another day. But, yeah, predominantly just you intend to do this and have some learning or practice or reps in or something to that effect that you're probably going to do it okay or at least you're ready to figure out how to do it as you're going because it's what you really want to do.

Carl: What I mean is that...what I should state, that is a skill.

Michael: Oh, yes.

Carl: And it takes deep practice. Some people are high emotional intelligence folks that comes relatively natural to them. But others, it takes a lot of skill. And so I think where I've landed on this is I've always said, greet the presenting problem with empathy. And maybe I've just expanded my definition of how long that may take. Somebody's going to cry in the office, it's not going to be me, maybe that's a statement over five years. Maybe it's a statement of the first meeting. And I'm just saying, I need to be a little bit more generous with the idea that greeting the presenting problem with empathy could actually take a year. And if that's the case, we slowly are earning permission to go deeper in the form of the relationship and the trust that we're building. And that is completely okay too. And I always thought the presenting problem was really just a portal. Sometimes they use the word righteous trick. It was really just the opportunity to get to what really matters. But that could take you a decade. With some clients, it could be we've just been solving presenting problem, presenting...financial planning solutions. So that's kind of where I've landed on this idea.

Building Trust As An Advisor By Working With The Presenting Problem [16:38]

Michael: So I'm intrigued by your framing that, however you just said, maybe I have to earn permission over time to have those conversations, to get to those conversations with clients. I'm not sure I'm quite framing right what you said, but earn permission over time, I'm intrigued by that. Talk to me about that more.

Carl: Yeah. And again... I don't want to put a limit on the word time. There are some people...again, we know plenty of those people. I feel like this is how I did it. I still feel thrilled with how I...if I was doing first meetings again, I don't know that I would adapt that much. But so some people could earn permission to go deeper. And by earn, I just mean there's this reciprocal relationship. There's trust. There's a lot of research around the idea of reciprocal sharing, and I don't know exactly how that always works with planners. I don't know if...it's certainly not 50/50, but is there some sharing of your own experience that makes this process easier? There's some, over time, you've helped me solve problems. I came to you with a presenting problem. You showed up the way I would expect a financial planner to show up. It wasn't jarring. It wasn't unmooring. You did a great job. I've watched my wife build her interior design business, and she's done a great job on projects and projects, and now suddenly she's doing bigger houses and bigger projects and bigger project.

So I think there's that same thing of we get to know one another, and that can happen in ten minutes. It's not always a function of the quantity of the time. It could also be a function of the quality of the experience. It could also take years. And I think that could match both from the client's perspective, it could take a long time. It could also from my perspective. I'm not comfortable doing that stuff. It's not what I want to do. I think there's a lot of interplay here that leads us to this position of...and by earn permission, I don't mean I'm begging for...I just mean have trustworthy experience and trustworthy experience, an experience that feels like you're leading me on a path that I want to go on. You never pulled the rug out from underneath me. I felt safe in your guidance. And I know that's pretty loose terms, but that's what I'm pointing to.

Michael: So I love that you're you're coming to the shallow spreadsheet realm. It's a beautiful thing.

Carl: No, I'm not. I'm just acknowledging the beauty of it. I'm not coming there.

Michael: That's actually where I was going with the question I'm going to ask. So I'm struck that on the one hand, you're saying maybe more of us have to earn permission for this over time. And I also just heard you say, but if I was actually going back and doing first meeting with clients today, I, Carl Richards, I don't know that I would do anything materially different.

Carl: Yeah. I want to be clear...

Michael: We are very comfortable there still. So notwithstanding the discussion...

Carl: Listen to what we just... in the last episode, drawing a dollar sign on a thing in front of 1,800 people and taking that, I'm more comfortable than I've ever been. What I'm softening on and I think we all – not some of us – we all have to earn permission to go to those places. And sometimes that permission earning takes minutes, sometimes it takes hours, sometimes it takes weeks or years. This mea culpa, if you will, is acknowledging that's not the right solution. Because I feel like we're all...I almost feel a little frantic energy in the air around...it probably started with behavioral finance, whenever that was, 20 years ago, and it's now gotten to this...Financial therapy is amazing. It's amazing. Emotional intelligence, amazing. These deeper exploratory life coaching style questions, amazing. Sometimes there's this feeling of that's where all of this leads. It feels like a mature...levels and sort of like, "Oh, are you a level...?" "Oh, that's cute. You're a level two planner and you still talk about spreadsheets?" What I'm trying to say is maybe we need to stop that.

Carl: If you're not watching, Michael is trying to figure out exactly how to help me see.

Michael: No. I don't disagree, but to me it still feels like...and I don't mean this in a negative way too. It still feels like it comes back to, but if I could have the conversations as well as you do, I could be as good at it as you are, I could still do this in the first ten minutes every client meeting. I've accepted that I can't do this as well as you. That's why I hang out in my spreadsheets.

Carl: Yeah. I remember you saying...

Michael: I'm feeling fine, but I still...and I'm not trying to challenge you on this negatively, but it does still feel like there's an aspect of...

Carl: Aspirational?

Michael: But if you are able to have the conversations out effectively, go for it in the first ten minutes.

Carl: Yeah. That's why I want to have this conversation is we need to work on that languaging. I need to work on it. We need to work on it as an industry. Because I remember you saying that. You and Alan said something like that. Jeez. I've been back nine...it was probably 10, 12 years ago. You said, "I just want to sit in on one of your first meetings."

Michael: Oh.

Carl: And I want to really point out, "50 Fires..."

Michael: It's not that I don't want to. We've never actually had that opportunity.

Carl: "50 Fires is...." My first question is almost always literally phrased...Krista Tippett. Krista, let's go...I'd love to go...I'd love to start at the beginning. What's your first memory of money? I love that stuff. I want to go there as fast as possible. But what I'm not saying is that everybody else should want to do that or that every client wants to do that.

Michael: I was going to say, so does that context change because they know they're coming in to have that kind of conversation with you?

Carl: I think that's why your earlier framing is really important. All of some of our favorite friends, some of our favorite planners are deep on the life planning side of things, and they have...

Michael: Freaking amazing.

Carl: Yeah. And they're upstream, and they get there fast. But the reason, most of the time, there's a thing that happens before the people get there. And my friend Blair Enns calls it the flip. There's a thing that happen...and the flip has to happen before the prospective clients arrive at your office. And the flip is, well, this one's different. This is a different thing we're going for. And so I think what you're saying is people show up as...maybe they show up as a guest at "50 Fires," and maybe they go listen to an episode when they get asked to check out if they want to come on, and they say, "Oh, that's interesting." And the people who say no probably come on and go, "Oh, that sounds really dumb," and they don't reply to us. Or maybe it's the email we send, like this is a show about money, not that kind. Like the email that we send that says we're going to have the kind of conversation you'd have around a fire or in a coffee shop. So maybe we're priming people so that works, and you can do that as an adviser.

What I'm trying to be really careful here is this is not the right way for...you shouldn't do this. Not because you're not good at it, but because you're really, really good at something else. You know? Like, it would be like me saying I want to have 16 designations and know how to build spreadsheets like Michael and know the tax rules. There's massive value there. And if I started trying to do that, I'd feel inadequate the whole time, and I'd feel like I wasn't very good at things, and I'd quit. And that's kind of what I'm saying is it doesn't mean to be like, "If you're as good as me." And I think that's crept into our industry because of emotional intelligence, being human, behavioral finance, financial therapy. And I'm just saying, hey, there's room for all of these things. And let's remember, there are some clients who no matter how good you are, you could be the best life planner in the world, and there are some clients who are just going to be like, "Bro, I don't even know what you're talking about. I'm out of here."

Making It Clear How You Want To Show Up For Clients [26:06]

Michael: So I feel like this almost then takes us to a similar place that we had towards the end of the last episode, which is be clear about which one you are or are trying to be of wherever you want to be on that spectrum and let clients just make the grown up decision about what they want because clients are also on a wonderful spectrum of things they want, and you can find your tribe of clients pretty much anywhere on that spectrum. Just make sure you're clear where you want to be and how you want to be showing up so that ideally you're getting the clients who actually want you to show up exactly that way. It reminds me, former firm, there was one adviser who was particularly good at the really technical clients. Like, he was a CFP and a CFA and a CPA, and you just kind of knew, that client got referred, guess who it's going to. Because he was good with them, and they drove a lot of other advisers nuts. But he was great with those clients because those were his people.

Carl: Yep. And I would imagine that over time, some of those clients mentioned something around the edges that maybe didn't fit perfectly in a spreadsheet, but that particular planner probably remembered them. Like, "Oh, you told me it was important to send your kids to the best school possible." My example is always Jerry and Vera. Jerry was Tom Brokaw's greatest generation, and he was like, "I never want to be a burden to the kids." Jerry was never going to cry in the office. And so you can build an insanely great business making a massive impact on people's lives by simply noticing over time what's really important to them. And noticing, "Oh, I remember Jerry. You said how important your kids are. How are the kids?" And you could actually build a massively great business that's incredibly impactful without ever saying even those things. So that's all I'm saying.

And the one thing this leaves us hanging on that I think we just need the table for another discussion is last time when we talked about those words that came up, like insecure and desperate, is it...and we said something like, I would imagine if we didn't know that about a client...We were framing it as advisers, if we didn't know that about ourselves. But I think it's also true if we don't know that about clients, are they making financial decisions based on that scripting that would be rather challenging to unwind unless we knew that? And now suddenly are we back at this everybody should do financial therapy?

Michael: Well, as you said, you earn permission over time, some of this unfolds over time. I could think over the years of the client that says, "Being on track for retirement is really important." "Great. So you need to save this much more to your 401(k) plan." And they said, "Great. We're going to do that." And then a year goes by and they come in for a review, and it's like, you didn't change your savings to your 401(k) plan. And I think we did this a couple of months ago. And in my early days, I would have said something in the effect of, "You need to be a better client and do the things that I recommended to you." And then I went for through a phase for a while of, okay, apparently I'm a terrible financial planner because I can't convince my clients to do anything that I'm telling them to do.

And then there was another stage that I got to eventually of, okay, well, you said this was important to you, but you're not actually doing the things. So maybe it's not actually the most important thing. Like, maybe I missed something, or maybe I didn't ask deeply enough, or maybe I even just have a need to have a conversation with a client to say, "You said saving more and being on track for retirement was really important for you, but you haven't made any progress on it over the past year, and you weren't even able to get your 401(k) savings turned on. So it seems like there's something else that's part of the picture and I'd just love to understand more of what's going on in your world because it just seems like there's a tension there for you between what you're saying and how you're showing up." And just have that conversation, and basically I'm going to find out that there's something else in this picture besides just what they said.

Now, per your comments, it's so not my style to say, "I feel like there's something else missing. What's your first memory of money? Tell me about what's important about money to you." I'm not trying to make light of the questions. Just I still don't quite know how to get some of those questions sometimes in an elegant enough way. But I can see, okay, I've been working with this client and they're saying this goal is important, and they're not doing the things. Maybe there's something else going on in this picture that I just need to ask about, not in a negative way or an accusatory way, but just, "You said this was important and you're doing that. Help me understand what's driving the decision right now."

Carl: It's so good. Yeah. I guess maybe where I would wrap up is...

Michael: Otherwise, they're going to screw up my spreadsheet.

Carl: I cannot have that.

Michael: We're off track from the spreadsheets. It's been a year, the lines are diverging. This is bad. I have to solve for this.

Carl: I guess where I would wrap up on this is just I really appreciate people like Dr. Lurtz, you're this way too, who care enough about all the work we're doing to keep pushing, and to appropriately challenge, and to disagree thoughtfully. That's a whole other skill, right? How to appropriately challenge and disagree thoughtfully so we can move the profession forward. Because it turns out, I think we know close to nothing about what we're really doing. And we're just going to keep trying and keep trying because we're dealing with humans and feelings and markets, and you couldn't make a more complex adaptive mixture. And so the more I'm involved, the more I'm realizing I have no idea what I'm doing, and that's okay.

And I think that's maybe where I wanted to wrap is keep trying experiments. You'll hear something from somebody and you're like, "That sounds really good. I like that." Well, go try it. Design a little experiment. Role play with somebody in the office. Try it with the next prospective client. Maybe that's one single little question in the middle of a...I run lots of experiments where I pay attention to a single question and just see what shows up. So just keep realizing you know...since I feel like I know next to nothing, you probably know more than me. So we're all in the same boat. Just keep trying, for the sake of people. Because at the end of the day, all I know is it's not getting any better out there in terms of people's feelings about their relationship with money. If I brought up that list we had last time, it certainly wasn't 50/50 of the people who said freedom and happiness. It was way more skewed towards...and I think that's generally true.

And the only way I know to solve that is in conversations and how they present, looking for opportunities to make a difference here and there. Sometimes going right there. Sometimes I call this the punch in the nose or an empathetic hug. Sometimes it's checkers. Sometimes it's chess. And some of you are so good at checkers. It's up on the page, you can just go straight there. And some of us, we play chess. They're both amazing, so just keep doing it.

Michael: Awesome. Thank you, Carl.

Carl: Cheers, Michael.

Michael: Cheers.