The roots of the financial planning industry are an eat-what-you-kill sales environment, when financial advice existed to facilitate the sale of a product, and initial survival (and eventual success) was predicated on the ability of an advisor to convince clients to buy whatever financial instrument they were selling. Which necessitated not only knowing the features and benefits of any given product, but also learning how to overcome every single objection that prospects could possibly throw at the advisor. In today’s world, though, advisors increasingly are focused on financial advice itself as the value proposition, are paid for the advice directly, and ‘just’ have the obligation to determine the best possible advice to give that helps the client achieve their goals (and keeps the advisor working with the client). Yet in practice, many advisors still think in terms of “overcoming objections” when a client doesn’t want to implement the advice they’re being given.
In our 42nd episode of Kitces and Carl, Michael Kitces and client communication expert Carl Richards discuss the key shift in mindset that advisors must go through when it comes to addressing client objections in an advice-based world, and the necessary strategies to reframe conversations by asking more questions in order to better understand a client’s needs and situation, instead of trying to overcome any resistance to taking an advisor’s advice or engaging their services.
The key to making that shift in mindset starts with understanding that a client’s (or prospect’s) objection doesn’t stem from not understanding how great the advice is that they’re getting, but rather is an indication that the advisor must be missing something important or miscommunicating somewhere along the way. After all, if the whole point of advice is to help someone achieve their goals, then a client who objects to that advice is effectively saying “that’s not going to get me to the goals that I really want to achieve… and so I’m objecting to the advice!”
Yet by taking responsibility for misunderstanding some key bit of information, the advisor can take a step backwards to start asking more questions instead, which starts back at exploring the assumptions that defined the client’s original “statement of financial purpose” (upon which all of the subsequent recommendations were based). From there, questions around what brought a client in on a particular day, or if there’s a specific thing that has changed in their lives to make them reassess their goals, can help move the conversation forward and further uncover any mid-course corrections that might need to be made. Which can even end out shifting the entire context of the conversation to figuring out if the advisor really is still the best fit for the client and their needs.
Ultimately, the key point is that the more “traditional” approach for overcoming objections was built for people that had a thing to sell (and objections to overcome to get it sold), whereas the ongoing shift towards a more collaborative advice-based client/advisor relationship means clients should naturally want to take the advice if it really gets them to their goals. Which means the starting point to overcoming an objection is digging deeper by asking more questions in order to better understand what the client’s goals – even and especially the unstated ones that may be blocking the advice process – really are in the first place.
***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 Stitcher.
- Kitces & Carl Ep 18: Talking Clients Off The Ledge From ‘Scary’ Markets
- Kitces & Carl Ep 41: How Advisors Can Help Clients Who Are Stuck In Too Much Cash On The Sidelines
- Blair Enns: Desired Future State
Kitces & Carl Podcast Transcript
Michael: Good morning, Carl.
Carl: Well, hello, Michael. Fancy seeing you here.
Michael: It's been a good day for you so far? I guess it's most of the day there. As we record this, like, it's morning here in the U.S., it's afternoon there in London. So I guess I really should have said 'good afternoon' to you.
Carl: Yeah, it's all good. It's all good.
Michael: As we kick off today, I wanted to actually dig back into something that we were talking about in the last episode. You had thrown out this comment in the context of overcoming objections when clients don't want to invest, they're in cash, they want to stay – new client in cash, wants to stay in cash – having trouble getting them on board to invest. That you had said...like, you just approached this saying, "If clients are objecting and pushing back, I assume that I missed something as the advisor. I must have missed something. Because if I really, fully understood your situation and was giving you this recommendation, you should be on board. Like, if you're not on board with my recommendation, we have to be out of whack here somewhere." So you kind of said this assumption like, "I assume that I missed something." To me, it's such an interesting way to frame it because – certainly the way I was brought up in the industry – like, we had a lot of training on overcoming objections, but it did not start with, "I missed something" unless the something I missed was another overcoming objections script that I had not properly run. So I wanted to go deeper with you today into this theme – this idea – this approach of, I guess, like, overcoming objections by assuming you missed something that they're objecting to in the first place.
Changing Your Mindset From Overcoming Objections To Figuring Out What You Missed Along The Way [02:45]
Carl: Yeah. I have found this one of the most helpful sorts of mindsets or habits that I've ever adopted. And it works in other areas of life too. But let's start with marketing because I think that's one of my favorite places. I know we talked about overcoming advice objections, and it applies there, and we can get to that. But one of my favorite places is a new client because I get asked, I don't know, a couple of times a week, for sure, "I've got this client or prospect. I've been saying this, I've been saying this – it's like 18 months and they still haven't become a client. How do I convince them to become a client?" Like, there's always these overcoming objections to going from prospect to client.
And we've all been through overcoming objection training, which is just...it's just so like – you take it, it's like Jiu-Jitsu, right? Like, you absorb the energy and you turn it around. And there's all this like technical stuff and there are scripts. And I think it's so much healthier to me to...because from a marketing perspective, if somebody isn't becoming a client, there is clearly – I love this attitude – there is clearly something that we're not...they are not understanding something about me. Because if they understood, they would have – I just hope everybody believes this in their bones, especially all the people listening to this, just because we know the caliber of the people who listen to this – clearly, if people just knew what you do, there would be a line out the door, right? So if they're not becoming a client, it's simply because they're not understanding something. And then we've got to go one more step. If they're not understanding something, that is not their fault. It's your fault because you didn't communicate it effectively.
Now, I know that may not be true. Maybe they're not understanding, but what good does that do you? Totally out of your control. The thing that does do you good is to assume from the beginning that, "Oh, oh." That's the attitude I get, like, "Oh, yeah, that's right, I must have just miscommunicated. Let's back up." So it's so much...it puts you in a position of responsibility, it puts you in a position of control, puts you in a position of being able to act instead of being acted upon.
And it's also true – at least for most of the people listening here – if people just understood what you did, we know they would be better off with you than without you. The fact that they haven't made that decision... I used to use this with accountants, CPAs that did referral business with me. After I worked with them for a while and we had mutual clients, I would sit down and go...I would literally say, "The fact that you haven't referred anybody to me after I've referred three or four people to you – again, this isn't quid pro quo – I'm just demonstrating like, I trust you. The fact that you haven't simply means..." I would literally say this. I remember exactly, I remember sitting in Bob's – I know Bob's last name – Bob's office saying, "Bob, the fact that you haven't referred anybody to me simply means I haven't been effective in communicating what I do. Because if you knew what I did, you would be one of my biggest fans, because I know enough about you and how you treat people that you would. So can we just back up and can we design some experiments just so you can see how I take care of people? Because I know if you knew this, you would be like I am, which is: I spend more time selling you than I spend selling me because I know if I get somebody to you, they'll be happy, and it will reflect well on me."
So that's just an example of how that attitude can be pervasive through everything. So marketing. If somebody is resisting becoming a client, I literally would just go, "Oh, that's right, I must have missed something." So what I would say to them is, "Oh, I understand that concern. I clearly must have miscommunicated somewhere. So would it be okay if we back up a bit?" Right? And we just go back upstream. And the thing we're trying to understand is their situation. You've written a prescription – think about that with a doctor – you've written a prescription and somebody is resisting taking it, the only reason is because they feel like they haven't been thoroughly diagnosed. Otherwise, they would take it.
Michael: And is that how you actually get to the conversation? To say like, "Hey, can I just pause this for a moment and back up again because I feel like I must have missed something?"
Carl: Totally. Like, I have just found, especially that example with Bob, I can't tell you how many times I did that, where I was just honest. Like, if there's some tension, there's some resistance, I don't even mind calling like, "Hey, I'm sensing something's missing here. Because I know I can help you. I'm positive. You clearly haven't gotten there, which is totally reasonable, you're being very careful about the decision you're making. I must have missed something. So would it be okay if we back up and sort of start again? Let me just make sure I understand."
And what you're trying to make sure you understand is...we've talked about this before, but Blair Enns' term for it is you want to make sure you understand the "desired future state" that they outlined. Right? Really sort of values, financial purpose, and goals. "Is there anything I missed here?" "Oh, you know what? Yeah, we didn't talk about...we have an older son who's going to need help for a long time. And we didn't mention that." Or whatever, right? Something could come up. So that's literally what you're doing is saying, "Let's back up and make sure I understand the diagnosis clearly." And then I'll rewrite the prescription. This could happen in the second meeting. It often happens in the second meeting, right? You met, you diagnosed – thoroughly diagnosed – and they left. You huddled with your team, you designed a prescription, an investment plan, a financial plan, they come back, you present it to them, and there's some resistance. Well, the only reason there could possibly be resistance is if what you're presenting doesn't match what they want. And the only reason that would be true is you missed something.
Michael: Well, and I find there's just a powerful mindset shift, to me, that goes with this. Like, I'm having all sorts of flashbacks to like my early days of sales training in the industry and just sort of the nature of overcoming objections, which I feel like was basically built up to be like, you've got this thing you're offering and selling. It's the greatest thing since sliced bread. If your clients aren't buying and it's because they didn't understand and you didn't make it compelling enough, so when they give you this list of objections, here's how you try to overcome them to convince them that no, no, the thing that you've got to offer really is amazing, the best, will change their life, will help them achieve their goals, whatever it is. But it's sort of predicated around this idea of, well, the thing I've got has to be amazing for pretty much everyone. And so I'm just going to try to overcome every single objection that I can find and figure out how to do it and persevere because my product is great, my solution is great, my service is great. In the context of our last podcast, like, who wouldn't want to be invested in markets and get the opportunity for economic growth?
But there's this presumption, I think, that underlies all of it that, I don't know, I don't feel like I ever fully acknowledged of what we keep from the sales world until basically having this conversation today, that a part of the mindset shift that goes with this is if you're going to go deeper and start asking these questions, you have to be ready to accept the possibility that when you get to the end of the conversation – as you put it from Blair Enns – when you actually, fully understand their desired future state, it might not involve you.
Carl: Yeah. For sure.
Michael: Like, in an overcoming objections world, I've got this thing I'm offering and selling, I'm going to beat down every objection I can. I hope I get to 'yes', if I don't, I get to 'no' and move on. But like, I don't stop until you tell me 'no' in a way that I can't overcome. Like, that's sort of the nature of the transaction. I'm going to keep going until you stop me from trying to complete this sale and I get to 'no'. The nature of this, if clients are pushing back and objecting means I must have missed something, I don't fully understand what their goals really are, what their desired future state really is, means I may get to the point where I get to the end of the conversation and go like, "Well, now I understand you don't actually need what I'm offering."
The Difference Between Selling One Thing And Giving Advice [11:56]
Carl: Right, it's not a good fit. I think this is a really important point. Overcoming objection training is designed for people who have one thing to sell. Right? It's like whack-a-mole. I'm just going to keep firing away until I can get you to buy this thing. Advisors aren't that, right? And your job is to understand the client's situation and then bring a full suite of tools to bear on it. Now, you may have decided that your suite of tools only work for this specific specialization, which I'm a huge fan of, and then you get to that point where you go, "You know what? It turns out it's not a good fit between us. That's why there's tension here is you're right, it's not a good fit. I promised you I would be the first one to say so. So let me help you find a good place that is a good fit."
But if you understand that overcoming objections is for people who only have one thing to sell and that's not your job, then you're in such a different place. Like an architect. Well, you think of anybody who gives advice, right? Like, if the client doesn't like the house the way it was designed, the architect doesn't overcome objections. Right? The architect says, "Okay, what did we miss here? Like, how should we adjust it? What are you thinking?" And the architect may even say, "I know you think you want that, but I've designed a bunch of houses with that and people always afterward are like, 'I didn't really want that many stairs. I didn't know what I was saying,' or, 'I really did want the laundry room on the basement floor.' Like, I'm just going to tell you, I've seen it." Like, that's fine too, but that's different than overcoming objections. It's diagnosing thoroughly and writing a clear prescription, being the doctor.
So this thing funnels through – we've talked about marketing, but it funnels through to advice. Like if somebody doesn't take your advice, if somebody doesn't take the prescription, yeah, you just back up. If somebody comes in later and wants to sell in the middle of a scary market, you did this really well last time we talked – a couple of times ago when we talked – where you had the client that...she was really, really scared and she just gave up a couple of years of her life or whatever that was. Right? "This isn't matching. What's going on here and what I know about you is not...in our relationship, there's tension here." And tension just being a word, not like fighting. It's just a word, like 'tension' in the definition of the word. "There's tension here. I must be missing something. There must be something beneath this."
And if you can take the power...that's not even the right way to say it. If you can take the responsibility of saying, "The reason there's tension here is because there's some misunderstanding, miscommunication, I'm going to assume it's me who miscommunicated or me who didn't understand, not the client," because that's how it works, you're the advisor, you're in such a better place because you can then say, "Hey, can we back up a little? I realize you want to get out of the market right now. Can we back up a little bit?" Like, it's always the same thing? It's like, "I think I must have missed something." Right? So much better than whack-a-mole.
Michael: And are there particular questions that you try to ask going down that road? Or I guess it's going to be very situational, like, sort of contextually relevant, I'm sure. But when you're taking that step back like, "Hey, I must have missed something" and you sort of walk that conversation back, what comes next? Like, are you going back to some subset of tried and true questions to suss out further like, "What's actually going on here? What am I missing?" Because I'm just imagining when you say to a client, "Hey, let me just pause for a moment, I'm concerned I may have missed something because it seems like we're not connecting on this," I'm assuming you don't just then stop talking and let the client start telling you what they missed because they may or may not just process that and volunteer all by themselves.
Carl: Yeah, I think there's a lot of ways you can go, but to me, the standard, I think the default should be because of...it almost always is, back to the original diagnosis of the client relationship. That's why I think 1-page financial plans as a mindset are so important, whether you have 1 page or 10 pages, who cares? This mindset of like, scary markets, investments, specific advice, any of that, you can always say, "I totally understand, da, da, da, da, da, could we just pause for just a second? Can we back up a little bit? Let me just review my notes real quick. Right? When we first met and again, the last couple of reviews, we always talked about...you'd mentioned that spending time with your family, mainly outside, and serving in the community is the reason you're doing this stuff. We call it a statement of financial purpose. Do I still have that right, Michael?" "Yeah." "And then, okay, when we framed that out the way it sort of looks, and we put a word on these things, we call them goals, but remember how we developed them, you said you wanted to receive a check for this much in the mail, you wanted da, da, da, da, da, da, are those still true?" Right? That should be the default. There are lots of things that you'll find out later, but that should be the default.
Michael: Basically just going back through and kind of restating goals back like, "Is this still accurate? Is this right? Am I framing this back to you? If not, what am I missing? What am I not understanding?
Carl: Yeah, and even "what about this has changed?" You can say, "Has anything changed?" I love saying, "What of this has changed?" Because then that implies that there has been a change, and normally there is. You ask the question, "What was the specific event that brought you in today?" Right? That's another way. But I think defaulting just back to the base plan is a really...I think it's a really easy way to get yourself to safe ground. Right? And then once you're on safe ground, you can freestyle a bit as you get comfortable with it. But I know a lot of us aren't quite that conversational yet. So get yourself to safe ground. Safe ground has got to be, "This entire thing is built on a foundation called, for lack of a better term, a statement of financial purpose and a set of goals. Do we have that right?" And then maybe even a balance sheet? Like, "Okay, let's just review real quickly. The last time we talked over here, here, and here, the mortgage, is there anything we're missing here?" Right? "Oh, turns out that we...something's gone sideways in the business, and I've got a personal guarantee loan that's coming due." Like, maybe you'll pick stuff up there that you're like, "Oh, okay, now I get it. Let's talk about..." You're in a different world at that point. So get yourself to safe ground, and then move forward again and something will become obvious. You have to, or it's not a good fit.
Michael: Well, and again, that's the other interesting piece to me of what this takes you to is that it's not like I'm...the essence, to me, is it's not, I'm trying to overcome objections to get them to take my recommendations or to engage my services or to pick up whatever I've got for sale, product, service, whatever it is, that the context of this conversation really becomes, I'm just still trying to figure out if this is really the right fit. And the corollary to that is, if you're going to serve the client well, you have to be prepared for the outcome that it might not be a good fit.
Carl: Yeah, I like that. There's one other way you could frame it, too. You could say, "I'm trying to figure out how to be most helpful to you. The most helpful in this situation. And if that most helpful is finding you somebody else to work with, I'm going to do that independent of its impact on me." Because we all know the impact on us will be positive anyway because of all the mindset stuff we've talked about. So yeah, I like that idea of like, "I'm trying to figure out how to be most helpful here. And I'm just getting..." Like, I've had tense meetings in the last 20 years, for sure. And I've said those words, like, "Hey, I'm just getting a lot of heat right now, let's just reset for a second. I'm on your team." Right? Like, "I'm just trying to figure out how to be most helpful here. And if how to be most helpful means a loss in revenue to my company, I don't care." Right? So just back down, Turbo, let's have a chat. Like that kind of sense. It's very similar. I've used those words. I've used those exact..."Turbo, we need to back down a little. Tiger, Tiger. Hey, Tiger, we need to back down a little." Now, you have to do it with a smile. But it's the same model, the same model as like, "I'm just trying to figure out how to be most helpful here. I must have missed something."
Michael: But I do think this makes a good point. You kind of worked it in there, "I don't care if it costs my company revenue. Like, just, if it's not a good fit, I'll help you find someone that is." I'm not sure that's true for all of us to actually be able to say, "I don't care." Sometimes the business just isn't in a position to...like, I need this client. I need the revenue. Right? We get our own personal financial pressures or business pressures or employee pressures or something else. I think for some of us that are not the best at marketing, like, we don't always get a lot of at-bats. So it feels really bad to finally get a prospect that you are talking to with an opportunity to do business and then get to some conversation of, "Oh, well, I've actually figured out that this prospect I finally got, I'm going to refer to someone else because they're not a fit."
How To Move Forward When Your Service Isn’t The Best Fit For The Client [22:18]
Carl: You know what feels worse is getting pecked to death by ducks. Right? You know what feels worse is bringing them on when it's not a good fit. Because you could spend years trying to bring a client on and then a decade regretting you ever did. So I get the pressure.
But I would just...and I have to be careful, I know I did not believe this. I did not believe it. I remember my trainer at Prudential Securities, Gary, who was amazing, telling me that that's not a thing. If you say 'no' because it's not a good fit, it will build your business faster. I remember that. And I was like, "Gary, you do not know what you're talking about, man. I have a kid at home, my shoes have holes in them, the car is breaking down." And I have actually seen that to be true. Like, yes, you've got to balance it. Look, I'm not saying that if things get a little sideways here and there, you're not going to work it out. But if it's clear that you have tried your best to get on the same page and what the client is wanting is not something that you can deliver, or really, really...like, you really, really don't want to deliver, like, what feels worse than the fear of letting them go and having to deal with the mortgage is bringing them on and having to deal with that feeling. Take the feeling, lean into the fear, do the thing, and you'll be rewarded. And everybody I've ever seen do it says the same thing. And we all said the same thing when we were told, which is, that's a lie. No way. But it works.
Michael: Well, and I think what it gets to is, there's kind of a corollary to this. Being comfortable with overcoming objections by asking more questions and trying to suss out if this is really, really, really the right fit, which is...maybe this will be a future conversation unto itself, like, do you have the marketing structure in place so that it's okay to walk away from the plate on this because there will be more at-bats?
Carl: It's true. It's very true. And if you don't, you absolutely can. So that's for sure. But yeah, that's really true.
Michael: I certainly find just in practice as I reflect back over the years, I got a lot more comfortable with being able to turn people away once I really knew deep down like there were going to be more prospects.
Carl: Yeah, you were going to survive.
Michael: We have a good marketing process, I've gotten financially where I need to be to be able to make the business work, like, that level of pressure wasn't the same. And then suddenly it gets a lot more comfortable saying, "Okay, I don't actually need this client. I want this client, I want to help all the people that I talk to, like, I don't need this client, and I know there will be other opportunities." Now, do you really want to go down this road with this client who might not be a good fit? And as you get better at solving for the other two, like, "Can I afford to not take this client, and am I confident that there will be other opportunities?" The whole nature of this conversation of saying, "I don't have to overcome objections to get to a yes, I'm just trying to overcome objections by asking more questions to figure out if this is a fit," that whole dynamic gets a lot easier.
Carl: Yeah. And I would only just suggest that people push really hard on that definition of where that thing happens because I think it can happen a lot earlier than we give it credit for. I fired my single biggest client that made up 25% of my revenue. And I was scared to death. When I called my wife to tell her, she was like, "Good, I'm glad you finally did that. I've been waiting. It's been driving us crazy." Right? But I was scared to death, and it worked out. Right? So we've all been through it. I would just push on the confidence, the mindset, this sort of feeling of abundance versus scarcity. And acknowledge economic reality and within ethics, obviously, sometimes you may have to do some things that aren't perfect for the business you want to build. They're still honest and ethical, but they're not perfect for the business you want to build, in order to build yourself a bridge to the one you want to, reasonable, fair enough. But none of that hurts. Like still, even if your goal is to bring in a client, I would rather say, "We must be missing something. I must have missed something. Can we back up rather than play whack-a-mole?" So even if my goal was to bring that client in, even though it wasn't a perfect fit, I'm going to serve them great, I would still rather take the approach that I'm suggesting here than play whack-a-mole.
Michael: All right, I like it. I like it.
Carl: You sound really convinced.
Michael: No, no, I do. I'm hooked on this framing of just overcoming objections by asking more questions.
Carl: Look, anything else is kind of stupid. It's built for people who have one thing to sell. If you've only got one thing to sell, you've got to get after it, but you don't, you're trying to understand a client's situation and then help them. Anyway, love it. Thanks, Michael.
Michael: Awesome. Awesome. Thank you, Carl.