In a world where it can take as few as 50 great clients to build a successful advisory practice, many seasoned advisors have been able to build a business around a small group of clients who they like to work with (and who like them in return). Yet advisors who are at an earlier stage of their careers don’t typically have the luxury of being so selective in picking and choosing the clients who they want to work with and like, while instead there’s even more pressure on the advisor to be “likeable” in the first place; as the common aphorism goes, a client has to first “like you” before they’ll decide to trust you and hire you. Accordingly, then question then becomes, to what extent does likeability really matter in bringing on new clients and building relationships with existing clients, and conversely, how far should you go to come across as “likeable” to clients (even if it requires doing something that isn’t otherwise natural), and how common is it for clients to fire their advisors because they are “unlikable”?
In our third episode of “Kitces & Carl”, Michael Kitces and financial advisor communication guru Carl Richards sit down to discuss the question of how important it is to be “likeable” as a financial advisor, why being your “authentic self” when it comes to communicating and interacting with clients might matter more, and why it’s important for newer advisors to avoid sending mixed signals to clients when trying to differentiate themselves.
Foregoing the (remarkably intriguing) possibility of developing a practice around the “curmudgeon” niche, the reality is that those who self-select into a career of financial advice often do so out of a desire to make a difference in people’s lives, which necessitates having some level of competency in interacting with others. Though beyond just being “likeable,” being able to connect with others is also about your style, behavior, and even your appearance… all of which might be adjusted in order to be more appealing to potential clients.
Because the reality is that it is important to tailor the way you communicate with and present information to various clients, as not all clients have the same preferences in how they want to receive advice in the first place (i.e., some clients might “only” want a big-picture summary, while others love to delve into all the gritty details).
Still, though, that doesn’t necessarily mean advisors should try to be something they’re not… and in fact, the more you try to be something you’re not, the easier it is to come off as inauthentic, instead. Rather, the key to finding people who like you and want to do business with you is by being your “authentic self,” and recognizing that, while not everyone may respond well to you, some will… and those are the people who you ultimately want to work with anyway!
On the other hand, “being your true self” doesn’t mean it’s a good idea to totally throw social conventions to the wind. Be aware that, particularly when clients come in, they expect certain things of a “professional”, and if you stray too far in an effort to try to stand out from other advisors (or just be your authentic self), then you can easily create uncertainty in the client’s mind as to whether or not you have the professionalism and competency to help them solve whatever problem it is that brought them to you in the first place.
Ultimately, the key point is that likability is important, to the extent that you need to provide great service to your clients in a way that works well for them. But, especially for newer advisors, it’s equally important to not create more barriers for yourself being inauthentic, or by trying to differentiate yourself in a way that is off-putting to clients. Because the differentiator that matters the most resides not in how you present yourself (whether by manner or dress), but in the questions you ask and the experience you create for clients… effectively differentiating on the value delivered to clients themselves, and not just by the advisor’s own style and likeability!
Kitces & Carl Video Transcript
Michael: All right. Well, welcome back, Carl.
Carl: Thank you. Michael. It’s good to be here.
Michael: We’re on, I guess, round three… you’ve thrown off our numbering because you called the first episode “episode zero,” which would make this episode two, even though it’s the third. So I’m going to pull us back into modern counting, where we just go one, two, three. So this is episode three of “Kitces & Carl.”
Carl: Yeah, now everybody’s going to be searching for the missing “episode two.”
Michael: I know. So maybe I have to go back and number them zero, one, three, and the missing episode two will just be this infamous thing that’s vanished.
Carl: We’ll do it a year from now.
Michael: So, we’ve had some great feedback from this series so far. And what we’ve been asking as we go is, if you want to hear us talk about a topic, then send in a topic for us to talk about. So I thought we would kick this one off with our first reader, or viewer suggestion, request for us to riff on.
Carl: Right. Great idea.
Michael: So, this is from…we’ll say “Doug.”
Carl: Yeah, we’re going to use… Doug.
Michael: We’ll be appropriately anonymized here. So, Doug asked this question about, likeability of an advisor, and what to do about it. So as he put it, he sent this in: “I suspect that many advisors either don’t get hired, or else get themselves fired because the client essentially says, ‘I just don’t like the guy or gal.'” And furthermore, he makes this comment, “I also suspect that unlikeability is a frequent reason for getting fired, no matter how demonstrably successful the advisor is at helping clients earn money on their investments.” And so this sort of dual-edged piece of likability to get the client on board, unlikability to get terminated as the advisor… how much does this matter? How much do you worry about this or focus on this?
Does It Matter If You’re “Likable”? [02:21]
Carl: Yeah. What a great question. So cool, because I think it matters a lot. I think Doug is right. You don’t want to work with someone you don’t like. I think liking someone would be important. I think it matters a lot. But having said that, I don’t think I wouldn’t worry about it at all. Well, I guess I would worry about it… well, if no one likes you, then…
Michael: I feel like there’s sort of two tiers of problems here. There’s, “do I convey likability effectively?” And there’s, “am I fundamentally a likable person, or kind of unpleasant to be around?” I mean, I guess there’s…we’re going to assume it you self-selected to the financial advisor profession you’ve met some minimum bar of just being…that there are some other humans on the planet you can form an effective relationship with.
Carl: Or the other good news is there’s a lot of people, and if you want to build a remote business, you can find a bunch of other unlikable people, and it would be…
Michael: Yeah, they need advisors, too, and they have trouble finding advisors they can work with.
Carl: That’s the good news. The good news is unlikeable people need an advisor, too. That’s…we could wrap. Done.
Michael: And it’s a niche. It’s a fantastic, differentiated niche.
Carl: It’s the best niche ever. I work only with extremely unlikable people. So, here’s what I need. Here’s where I would take this. There’s this movement, we see this crop up, and there’s no right or wrong to this. I’m just not smart enough for it, which is why I don’t do a lot of things. There’s this sort of training and consulting around matching, taking your personality style…or I shouldn’t say it that way. Matching the personality style of the client, and I know there’s even books written about it, and whole seminars about it. And I’m not even trying to be dismissive here, because I think there’s some legitimate work that’s there, I just…and I dove into it maybe 15 years ago. I remember trying some conference. I went, there was a thing, and I was like, I’ll go do that, and I got some training. And then what happened to me was, I wasn’t smart enough to keep track of what I was like the last time, you know? And by the way, I’m not even talking about… misleading. These are just subtle suggestions around personality style matching. So, what I decided instead is: “Look, this is the way I do things. This is who I am, this is how we run this business, these are the types of questions I ask, this is the couch you sit on….” So, I love, and I’m a huge fan of advisors that have opinions; strong opinions. And this is forcibly inserting their opinion into the world, that’s what their business is. This is how we do it. And then you’re really clear about… I understand that that won’t be a match for a lot of people.
Carl: But it will be a match for enough that I’ll have a great business, and I’ll enjoy who I work with. So that would be my take on it. How do you see that, or differ, or add to?
Communicating In A Way That Your Client Responds To [05:41]
Michael: So I come at this from a couple of different ways. Because I think about this in my own evolution as an advisor. So early on… at least for me, client conversation was… I was so in my own head just trying to figure out, am I answering their question? Did I forget that rule? Am I giving them the technically accurate advice? Really back early years, just there’s a technical competency thing where most questions, I’m just going to try to not actually eff up this answer. So, we’re not so focused on client communication and personality style fit… let’s try to find the answer where I don’t get sued, and…
Carl: I’m trying to survive here.
Michael: …and hopefully provide valuable advice. And for me, I try to think back… this was probably three to five years, realistically, of client conversations before I got my groove, my rhythm. I knew my stuff, I knew I knew my stuff, and I could get out of my head a little and have a little bit more of a situational awareness in the first place, just to start taking in… I’m giving this information, the client’s really into it. Or I’m giving this information, the client’s all bound up with arms crossed. Oh, okay, wait, this actually isn’t going well. There’s something else here. I need to get further into the conversation. And that, at least for me started to become, okay, maybe I need to get a little better at adapting communication styles, and just recognizing, okay, some clients are a little bit more big picture, so just get to the stuff, give them their stuff, what do they want to do? And then there’s the engineering clients I get along great with, “Oh, my God, you’re going to love the chart on page 52, wait until we get to it! And we can go deep. I started getting this awareness, this self-awareness, this situational awareness. Okay, this client’s more of an engineering client, we’re going to go through all the charts. This client is not… I like going through the charts, but we have to just get to the end point more quickly, they just want the big picture items, let’s get to the action items and move on.
And to me that’s at least a starting point of…I didn’t come off of my “here’s who I am”… this wasn’t moving away from my authentic self, but just recognizing people take in information differently. I talked to an advisor recently that actually goes so far…I don’t know what the test is she used, but uses one of those tests. So there’s three ways that people learn. They learn visually, they learn auditory, or they learned kinesthetically by doing. And so she actually gives clients basically a questionnaire of this, and has essentially three different versions of her plan delivery. Same analysis, same plan, but one that she delivers that’s this whole interactive session where the client takes the mouse and does the slider things. Then there’s a different version where it’s mostly high-level items and she just talks. And then there’s one with just tons of charts and visuals because the visual clients like that.
So I don’t know if we quite even entirely answer Doug’s question with this. This is maybe we’ve morphed from likability into communication styles. But I do think there’s a realm where you start adapting communication style. And, you know, like you said, I want to remember, what I did last with this client, interacting this way, but you know, we got a CRM. I can put the CRM, you know… visual client, come with charts. And just be prepared for that and know that if I do that, if I come to that meeting with a bunch of charts, this meeting is going to go better.
Carl: Yeah, no, I think that…
Michael: Because that’s how that client likes to take in information.
Carl: Yeah, that’s a much more nuanced answer, for sure. But one hint at the divergence in our two styles would be the fact that you said chart on page 52. I was like there is no…
Michael: That’s a good chart.
Carl: There is no page 52. There’s one page.
Michael: Yeah, sure. You did actually literally make a book called “The One-Page Financial Plan,” so I lost you for the remaining 51 pages.
Carl: Yeah, exactly.
Michael: I just made clear that it doesn’t…page 52 wasn’t the last page.
Hey, Bro [10:18]
Carl: Yeah, I know. That was just halfway through. No, but I think that idea of…those are…yeah, I think that that’s a much more nuanced answer. I still stick with my answer, but I think your nuance is not…you didn’t take it all the way to there’s eight different styles, and I fit in… Which, again, wouldn’t be wrong. Some people are really good at that. But the idea of just realizing, hey, this person needs a little more detail, a little less detail, is really nuanced. But I want to, just in the short time we have left, I want to ask a different version of this, which is I’m going to just call it, “Hey, bro.” What about that kind of likeability? “Oh, your kids play rugby? My kids play rugby, too.” Do you think that…because I have a really strong opinion about this, and I’m curious. I’m saying, “hey, bro” likeability. Do you think that matters? I coordinate your social calendar, we meet for drinks afterward. Does that matter?
Michael: So, I think it does, with an asterisk. And the asterisk is that itself is a particular kind of offering in advice relationship with clients that some people like. There’s a certain psychographic that says I don’t just want an advisor, I want a friend and someone that I’m connected to, and I would love to do social things with them. And then there are other people that just, that’s not their style. “I come, I pay you money, you give me awesome advice, this is the exchange. I’m not buying a friend, I’m buying a financial advisor.” And so not to say one is right or wrong, I think the biggest acknowledgment and sort of getting back to that essence of your own authentic self. If your style is to do that social stuff with clients, do that social stuff with clients and work with clients who like that social stuff, because you’re going to get along well because you like that, and you both like that, because that’s who you’re going to attract. That’s who’s going to click. And if that’s not your style, if you’re more matter of fact, just, you know nothing about the facts, let’s get it done on this awesome planning stuff. I guarantee you there will be a client out there that’s like, “Oh, thank God, I don’t have to do your wine tasting, we can just do the advice and move on. Awesome.”
So I think every client has their own preferred style. I think the challenge, actually, that we get into sometimes is just not recognizing, maybe, that our style is spilling over into being our client’s style. And not that that’s a bad thing, that’s actually connecting to your authentic self. But just whatever you like to do, it’s okay. Do it. Just own it and go all in, and recognize that some people won’t like it, and some people will. So try to cut off the ones that won’t like it as quickly as possible and save yourself some time, and find the people who do like it and go deeper with them. But if that’s not your thing, that’s fine. I think you will still find plenty of clients that are happy with that. Look, I just want a professional relationship where ask for my advice, I get my answers back, and we move on. I got other friends I do friends things with, I don’t need you for your wine tasting notes.
Carl: That’s perfect. I had two experiences. One… Two stories I want to tell real quick. One is a friend of mine, his actual name is Kevin, but there are enough Kevins in the world. Kevin was one of the most successful advisors I had been around early in my career. Kevin was an ex-accountant. He had seven ties, but every one of them was maroon. He drove…
Michael: That’s okay, I had 12 shirts, and every single one of them is this shade…
Carl: Yeah, yeah. Not unlike you. He drove a Toyota Corolla, right, this guy’s making crazy amount of money, super successful. But he said, “We don’t send birthday cards. We don’t send anniversary presents. We give clients rapid answers to their questions. When they have a problem, we solve it. That’s what we do here.” And then I had another client, it was a client, his name was Rick. I invited him one time to a client appreciation event, and he actually told me… Rick and I were friends. We both liked a lot of the same stuff. I realize, looking back on it, we never did any of that stuff together, and now I know why, after I tell this story. But we both liked to ski, we both liked to mountain bike…we’d never done any of it together. And I invited him to a client appreciation event, and he said, “Carl, I don’t want you imposing on my social calendar.” Right? Do your job.
Carl: And so I love, wherever you… But I think it’s also true that… I’ve got a buddy who’s built an amazing business off fly fishing right? He fly fishes all summer, and does all of his planning advice the rest of the year. And he fly fishes with clients, and prospective clients, he’s built an amazing business off fly fishing. So I love what you said, which is if it’s your thing, do your thing, you can build a great business off… Well, we both know somebody who’s built a great business off it, Nebraska, football, wine, and private pilot, right?
Carl: Yeah. So, I love this idea, we keep coming back to this a bit, which is, figure out what you’re about, and do that thing. And sort of own it, and you know, be confident in that story.
Taking “Be Your Authentic Self” Too Far [15:40]
Michael: So as we wrap up, one more question I do want to ask about this, because I’m just…I’m genuinely curious about your view. Can I go too far with this whole be, you know, be your own authentic self? I mean, I know people have gone so far as to say, “Look, if I just like chilling in, you know, t-shirt and sweats, can I just have clients come in and meet with t-shirt and sweats? If you don’t like a t-shirt and sweats, screw you.” Is there a point where this goes too far? Are there some lines that you still draw to say, be your own authentic self, but you still got to be a professional?
Carl: Yeah. Look, I think there’s two things that are worth talking about there. One is that we’ve got to get clear…I was thinking about earlier while you were talking, and I’m glad you brought it up because we’ve got…you and I feel the same way about this. Obviously we are talking to a group of people who underneath are technically competent professionals, who are honest… Because this quickly gets out to… “I take people on yacht trips and all I deal with, and I don’t know anything about it, and I could be selling shoes…I should be selling shoes.” How come I say that every single episode? “I should be selling shoes.” In this case, you should be selling yachts, right? You need to get out of our industry and stop causing us so much trouble. That’s not who we’re talking about.
Carl: We’re talking about somebody who’s technically competent, professional, honest, full of integrity, transparent, and happens to like to ski. Okay, fine. So then the second thing would be…remember “Patch Adams”, the movie “Patch Adams”?
Carl: Robin Williams was the…he dressed like a clown as a doctor?
Carl: I think there’s a level of cognitive dissonance we have to be aware of, and that we don’t want to create. Because when somebody’s coming in to see you, they’re expecting a certain thing, right? And if we go too far out of that to make… we all want to be different from the industry, but if we’re too far different we cause a level of cognitive dissonance that generates uncertainty, and people discount your value. Basically, they just… My friend Blair N. says this, that people, basically, they’re trying to decide…they’re taking their desired future state, discounted for uncertainty. And the uncertainty is whether or not you can get them there. And if you’re dressed like a clown, right, there’s a higher level of uncertainty whether you can get them there. They discounted, immediately caused cognitive dissonance, they don’t want to deal with it. So finding that line is, I think, important.
Michael: Well, and there is a dynamic. So I…this reminds me, you know, Derek Tharp actually did a piece on “Nerds Eye View” about this last year, that… So there’s this set of research in the econ world about signaling and counter-signaling in what we wear. And so the idea is, look, what we wear and how we dress is a signal, right? So I dress professionally because I want people to treat me like a professional. And there’s a phenomenon that happens to people at a certain level of success where essentially you can counter-signal. “I’m so successful I don’t wear the suits anymore.”
Michael: And it works. And, damn, he’s so successfully he doesn’t have to wear the suits anymore. But if you show up as a 23-year-old not wearing the suit, you just look unprofessional. There is this phenomenon that if you come to the table with enough experience, professionalism, credibility and other things, you can do something more extreme and it actually just amplifies it, right? Like Patch Adams could wear the crazy clown nose because he was also still wearing the white doctor coat, and everybody knew he was the doctor. And so then he was just being a funny doctor, we didn’t question his doctor credibility. And I don’t know if it’s an entirely fair thing, but just there is sort of this phenomenon that, yeah, I think there is a little bit more of an obligation when you’re younger and newer in the business that you have to conform a little bit more on the likability scale because you don’t have enough other credibility factors to pull off anything different. And that there’s some ephemeral point in your career where that switch flips a little bit, and now you can actually be a little bit more liberal in what you do, how you hold yourself out, the way you be your own authentic self. And suddenly, you’re no longer, a weird advisor that creates cognitive dissonance, you’re a badass advisor who apparently knows their stuff so well that they can do whatever the hell they want and still be that good.
And I’ve no idea where that line is. I know people who have crossed it, because I see them on the other side. But there is some other aspect, I think, to that, around this likeability and credibility factor that just…I’ve seen it in practice. I don’t know that I would advocate anyone trying it unless you’ve been doing it a really long time and have that level of credibility. But it does happen, it does work, there’s even some research that kind of validates the whole economic mechanism behind it. That says there’s a point where saying screw the likeability actually just makes you more likable and credible, because you’re good enough to be able to do that.
Advice To Newer Planners [20:59]
Carl: I think you cross that line when you no longer think there’s a line there. You’ve forgotten that it’s even a thing. So I don’t think you…I actually don’t think…this is my theory on this. I actually don’t think you can go, okay, cool, I can do that thing now. The only way to cross that line…there’s no fake it till you make it, there’s no accelerate it, there’s no nothing. You only cross that line when you no longer think there’s even a line, you’re just like, “meh.” Because it’s funny, I still…sometimes I still… I think advice to younger advisors about that would be don’t create any more barriers for yourself, right? Why do that? Now, that doesn’t mean wear a suit and tie. It could mean look like a nice, sharp architect in Northern California, right? It could just mean sort of matching the expectation. Because you’re already going to be different enough in the questions you ask and the experience you give, than they had at the last joker. Makes that the differentiation.
Michael: Yeah. My philosophy was always, one step up. So if everybody’s wearing the tie, I’m wearing a tie and a jacket. If everyone’s just wearing the shirt, you know, dress shirt, I’m wearing the tie. I’m a little bit younger…and early in my career. I’m a little bit younger, I got at least one step to make up because I don’t have the gray hair yet. So that was always kind of my philosophy. I’m going to dress one step up from where everybody else is to make up for the challenge of being a young advisor, and try to make myself more likable, more credible, more…
Carl: I think that’s a reasonable… It seems to me that that’s where, when Dan Solon went down this rabbit hole of trying to find research for all of this stuff, I think that’s where he came out to. Not dress to match, but dress just one step up. I think that’s where he came out. But I’m at the same place in that I find myself every time I talk to you, which is I’m just not smart enough for that. I just…so I’ll just…
Michael: There’s something to be said for just keep it simple and be who you are, and as long as someone out there, God willing, likes you, eventually they’ll find their way to you and you can work with them as a client. It’s all good.
Carl: Amen. Amen. So good. So good. Well, so I’ll tell you where you can find Michael. I think you go to…where do you go, “Nerds Eye View?”
Michael: “Nerds Eye View,” kitces.com. And so you’re off at realfinancialadvisors.com. I know you’ve got your whole, Real Financial Advisor dragon logo…
Carl: Yeah, yeah. The home of the dragon. Home of the dragon. That’s me.
Michael: There you go. Because…why the dragon? We’ve got to wrap up, but I’ve got to ask, why the dragon?
Carl: Yeah, yeah, yeah. That’s important that you ask. Dragons are the protectors of wealth. You know, Smaug in…what was it?
Michael: Oh. Yeah, he did kind of chill over protecting that giant pile of gold, didn’t he?
Carl: That’s exactly right. Dragons are the protectors of wealth.
Michael: That’s so cool. All right, so I’m now…
Carl: Plus, I wanted to finally do, Michael…we’ve got to do a whole episode on this. We’ve got to do a whole episode on this.
Michael: All right.
Carl: Like a t-shirt or a hat. Can’t we be cool again? Can’t we have a t-shirt or a hat that our 17-year-old son would wear? Can’t we have stickers?
Michael: Because of the dragons. I’m a cool financial advisor because I’m like your…I’m like the dragon for your wealth.
Carl: Because I have a dragon, that’s why.
Carl: Anyway. Good to talk to you.
Michael: Thank you, Carl. Thank you.
Carl: Okay. Bye.