No matter the industry or field, virtually all business owners have experienced the stress of just trying to stay afloat for the first (sometimes several) years of their existence. Those fortunate enough to get through those early ‘lean’ years, building a sustainable and growing business along the way, eventually feel a certain sense of relief when it’s clear they’ll “make it”, and the business can provide the income they hoped for in order to achieve their own personal goals. Yet at some point, many of those same entrepreneurs – including advisory firm owners – often then find themselves wondering “OK, but is this it?” or simply “what’s next?”… the proverbial “mid-life” (or at least, mid-career) crisis!

In our 37th episode of Kitces & Carl, Michael Kitces and financial advisor communication expert Carl Richards discuss how, at a certain point for many financial advisors, thoughts about the next stage in their careers and/or lives often turn towards expanding into wider circles and having a greater impact on the world around them…. even to the point of diminishing their involvement in the firm that they built but may no longer need to be as involved in to keep afloat.

However, the reality is that deciding on how to engage in more publicly focused work can be an overwhelming decision, as there is an endless number of ways to go about doing so, from writing books to speaking to volunteering and other ways to give back. By intentionally working on developing clarity and finding focus, though, financial advisors can begin to identify their best ideas and choose specific areas they want to act on. And allowing oneself flexibility is also important, because even as values and priorities may shift and evolve over time, so too should advisors’ long-term (and shorter-term) points of focus.

Vision statements – often used in the context of the business – can be used by advisors as personal statements of purpose, and become instrumental as “filters” for financial advisors who may feel overwhelmed by an abundance of potential ideas. As while individuals who are successful will tend to find more opportunities to choose from, making a decision that resonates with their values and priorities can be difficult without a clear vision of the direction in which they truly want to go.

Ultimately, the key point is that financial advisors who may be faced with a mid-career crisis of uncertainty, and who are having difficulty deciding how to choose the next step in their lives, may benefit from creating a vision statement based on their own true ‘why’. As while having a clear understanding of what’s most important in one’s life can serve as an effective funneling tool to rule out ideas that may simply sound good, but don’t really resonate with the advisor’s true goals, a good vision statement can keep an individual on target for what really matters most to them!

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When markets turn volatile and clients get stressed, at best, financial advisors face their own stress in trying to help clients stay the course; at worst, they absorb the ‘blame’ from clients who are unhappy with economic and market outcomes beyond the advisor’s control. And when clients turn negative, it is easy for mental exhaustion to set in and for confidence levels to take a hit. Yet when self-confidence suffers, so too can our motivation and productivity. Accordingly, taking measures to protect our self-confidence not only helps to preserve our ability to function optimally at work, but also helps to maintain our mental and emotional well-being by ensuring we focus our time on activities that bring us energy and positive engagement.

In our 36th episode of Kitces & Carl, Michael Kitces and financial advisor communication expert Carl Richards discuss how advisor self-confidence can impact productivity, offering some ideas for financial advisors to protect their personal confidence and keep a positive mindset. As for financial advisors, in particular, healthy confidence levels can help them to avoid ‘imposter syndrome’ (which can distort an advisor’s sense of personal value), grow through the business challenges they’re facing, and support their clients with the ‘rational overconfidence’ they sometimes need to display as effective leaders.

Confidence also plays a crucial role when the advisor needs to establish appropriate pricing levels for their services and value, where a lack of confidence can result in advisors discounting their own value because they fail to realize that clients are willing to pay the price the advisor is actually worth. On the other hand, advisors who are able to preserve a high level of confidence tend to price themselves and their services more fairly and will naturally find themselves facing more business opportunities. Confidence also helps advisors deal with difficult situations, such as losing clients or key employees, with more positivity and the ability to see the circumstance as an opportunity versus a setback, which can ultimately be the key that potentially distinguishes between business growth and stagnation.

Being able to recognize one’s ‘unique abilities’ (like those identified by Dan Sullivan’s Unique Ability Discovery Process program) or key strengths (such as those identified by Gallup’s StrengthsFinder assessment)  – activities that a person enjoys and excels at, and that are energizing – are key to maintaining one’s confidence and improving productivity at work. And once these ‘unique abilities’ are identified, finding the time to intentionally do those things as much as possible can help to stabilize energy levels and foster a positive mindset, which in turn tends to help maintain higher confidence levels. Equally important for protecting one’s confidence are recognizing the factors that erode energy levels and identifying how to take counteractive steps against the effects of those factors. For example, spending time outside in fresh air, going for a walk, and getting more sleep are some activities that can help prevent energy levels from dropping and, in turn, keep confidence levels from deteriorating.

Ultimately, the key point is that by taking steps to identify activities that not only drain energy levels but also increase them, financial advisors can protect their energy levels from falling, which is an important step in preserving confidence levels and a positive mindset – key elements of fruitful client relationships, successful career advancement, and overall business growth!

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Every business transaction (whether for a good or a service) moves both parties involved towards a desired state. A prospective customer or client needs something, and they also need someone to help them get it. Along the way, the person providing the good or service may or may not be successful in helping the customer or client reach their desired outcomes (whatever those may be), and one of the biggest determinants of their success is good questions.

In our 35th episode of Kitces & Carl, Michael Kitces and financial advisor communication expert Carl Richards explore their favorite questions to ask in a first meeting with a prospective client in order to get to know them better, start to establish trust, and take the initial steps towards building what will hopefully develop into a long-term, mutually beneficial relationship.

As a starting point, it’s important to keep in mind the path that the prospective client took in order to book their initial meeting in the first place (e.g., were they referred by an existing client or did they come in ‘cold’?) because that will help frame the initial conversation and give the advisor a confidence boost as the prospective client and advisor get to know each other.

Because asking good questions is about far more than checking off each box from a 17-point intake form or formulaically reciting from a predetermined script. In fact, the best questions are often ones that people have never been asked before, or are, at least, asked in such a way that offers someone a different perspective. While such questions can often create some discomfort (the best questions usually do!), they can also pave the way for some meaningful insights.

From there, perennial favorites include such questions as, “What's important about money to you?” (which helps lay the groundwork for establishing what really matters to the client and what might help keep them on track later on down the line), Dan Sullivan’s “What would need to happen in the next three years for you to deem this relationship a success?” (which provides a more concrete time frame around figuring out what their ‘desired future state’ is), and George Kinder’s famous three questions about what someone would do given increasingly narrow time frames on their longevity.

Perhaps one of the most useful questions, however, is simply, “What brought you in to see me today?” Because the disappointing reality of this business of financial advice and planning is that people don’t spontaneously come to the realization that they really need to get a comprehensive financial plan as soon as possible. Rather, there has usually been some sort of triggering event that brought them in and there’s some immediate and pressing need that they have at the moment, and understanding the triggering event accompanying their pain point can be very powerful when building trust.

Ultimately, the key point is that, no matter which questions an advisor uses in their first meeting with a prospective client, building trust is about being open to having a conversation, being comfortable and confident, and being empathetic to whatever a prospect’s pain point may be. Because, at the end of the day, the real beauty of this business is helping clients get from what they want to what we all know they need.

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As the Coronavirus pandemic has caused significant economic disruption around the world, financial advisors have been faced not only with the daunting challenge of not only how best to stay abreast of the rapidly evolving legislative landscape offering assistance to individuals and businesses in need of financial relief but also in how best to assess which clients are most urgently in need of response and critical financial care.

In our 33^rd episode of Kitces & Carl, Michael Kitces and financial advisor communication expert Carl Richards talk about these challenges, and how despite the deluge of new legislation evolving seemingly every week, the most important thing for advisors to do during these difficult times is to maintain confidence as the experts and leaders that their clients rely upon (whatever the requisite expertise of the week may be). Because the confidence of an advisor doesn’t need to based on a mastery of the current legislative provisions available to clients alone; instead, linking one’s confidence to the ability to engage with the client – in the process of meeting with them, understanding their problems, and then developing a solution – is more effective, as these are the aspects of the relationship that clients ultimately value most.

This is not to say that the information itself is not important; on the contrary, having networks (e.g., a circle of trusted experts who have collectively agreed to help each other find answers for their respective clients) and organized systems to obtain and share information (e.g., collecting relevant documents and website links, and then posting those resources to a webpage on your website that is available to clients as a resource) can help advisors stay informed themselves, and to disseminate crucial information quickly to clients who may be in critical need of guidance.

For advisors who have too many clients who need immediate attention such that they cannot get back to all of them immediately, a triage strategy can help them determine which clients they should help first. By ranking clients’ issues in terms of the risk of failure those issues pose for the client (but obviously not necessarily telling the client they are being ranked!), advisors can help clients tackle issues that are the biggest threats to their clients’ financial well-being. And by organizing a three-step communication system of 1) responding to all clients initially, 2) setting clear expectations around when they can get a deeper response (especially if the client isn’t ranked first in the triage-ranking system), and then 3) following through with each client accordingly, advisors can ensure that all their clients are getting the attention and service they need to stay successful.

Ultimately, the key point is that advisors have access to networks to help them keep up with new information being released on a daily basis, and also easily accessible tools that can help them share that information quickly with their clients. More importantly, though, advisors should remember that, while clients may value the technical information their advisors provide to them, the real value clients derive from the relationship is their advisors’ ability to engage and connect with them, and to provide the leadership they need to stick to their financial plans!

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Now that the initial shockwaves of the coronavirus pandemic have passed, and individuals around the globe are adjusting to the current state of affairs, financial advisors are immersed in the process of updating clients’ financial plans to understand whether or how the recent market volatility has actually impacted them. As while the perpetual message for clients inclined to panic-sell has always been to ‘stay the course’, the reality is that, at some point, the market decline is still severe enough that at least some course correction in spending may be justified to appropriately address how to proceed in the aftermath of the down market we’ve experienced. Which in turn raises the question of how to ‘break the news’ that a spending adjustment might be necessary… and whether the discussion of focusing on spending (that can actually be controlled) may actually help further alleviate client fears.

In our 32nd episode of Kitces & Carl, Michael Kitces and financial advisor communication expert Carl Richards talk about how financial advisors can introduce discussions about sometimes-necessary spending changes, and why strength, empathy, and confidence are so important throughout the process. As importantly, even though some advisors who have stood by and defended the plans they have created for their clients may experience feelings of guilt for needing to tell their clients that some course correction is now appropriate, it is vital to remember that their clients’ financial plans have probably already accounted for the possibility of disastrous events and that these course corrections are to be expected (and may in fact be less severe than what clients fear).

Accordingly, it is not necessary for advisors to assume a defensive position out of guilt that the original plan actually does need to be adjusted; instead, they can position themselves as supportive guides for their clients, acknowledging that the turbulence has been scary, painful, and difficult, but that ultimately, they are available to work together to help the client identify if (and how) their plan needs to be adjusted. In other words, market turmoil presents an opportunity to reinforce that the financial plan is not necessarily intended as a rigid solution set in stone; rather, it is designed as a roadmap to reach a destination, and that course corrections along the way are to be expected, as ‘unpredictable’ obstacles do inevitably arise.

For clients who need to reduce their expenditures, it can be useful to point out that small, permanent cuts are generally more effective than drastic (albeit temporary) cutbacks, which can help the client maintain a better sense of control over their situation. Illustrating various ‘what-if’ scenarios (simplified by many financial planning software tools) can also have several advantages, as the process can help clients understand not only all of the different variables that can be leveraged to adjust the current projections made in their plans but also the tremendous impact that small-but-permanent long-term changes can have on their plan.

Additionally, what-if planning scenarios can be used to establish the triggers that would justify a(nother) plan adjustment (e.g., a 5% spending cut will be implemented if the portfolio falls below one threshold, or a 10% cut if a lower threshold is breached), which in practice can be helpful to alleviate clients’ anxiety (to know it’s 'only' a 5% or 10% spending cut), and to give them a sense of when it actually is important for them to check in with their advisor (and in the meantime reducing fearful phone calls and emails).

Ultimately, the key point is that financial advisors can best support their clients by proactively guiding them through the adjustments needed to keep their financial plans successful, and clarifying that these adjustments are not only normal, but also that they are not an indication that the plan has ‘failed’ and instead simply that course-corrections are a part of the process in the first place. And by practicing rational overconfidence to reassure clients, advisors can communicate that the financial plan is a tool to help them figure out what adjustments to make to stay on course, navigating the unexpected-yet-inevitable roadblocks and obstacles that arise from time to time.

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In the midst of the global coronavirus pandemic, people around the world are experiencing tremendous stress and anxiety, and financial advisors are fielding worried calls and emails from clients who need to be calmed. Yet the reality is that financial advisors aren’t immune, and are also dealing with exceptionally high levels of stress, both in being on the receiving end of clients seeking reassurance or looking to vent, and facing their own business stress in these times of extreme uncertainty. And in dealing with these prolonged periods of stress, financial advisors, as with other professionals in high-stress environments, face the crucial challenge of taking care of their own health and mental well-being to avoid burnout.

In our 31st episode of Kitces & Carl, Michael Kitces and financial advisor communication expert Carl Richards talk about the stress that many advisors face today (especially as many of their clients look to them as “release valves” for their own anxiety), and share some wellness tips that advisors can use to manage these high stress levels.

The first step in managing stress is to simply acknowledge that the stress exists, that the conditions contributing to the stress are often a challenging part of our job that must be dealt with, and that measures need to be actively taken to mitigate the impact of that stress on ourselves.

Some simple strategies that can help to reduce stress include basic breathwork exercises (such as taking a short break to take 10 deep breaths every 90 minutes during the day), regular exercise (taking a walk around the block), a good night’s sleep, finding healthy snacks (like no-butter popcorn or dark chocolate), and even just keeping a full glass of water within reach at all times to help stay hydrated. Because in times when everything feels out of control, having simple actions to remind us that there are things that we do still have the ability to control can be both mentally reassuring and emotionally comforting.

And even though each of these small ‘micro-actions’, by themselves, may not feel beneficial to or impactful on our health, doing them repeatedly, over time, can be effective ways to stay healthy.  Because not only will they help us create healthy habits in the long run and experience a greater sense of control in our lives, but making conscious choices that promote good health (e.g., walking, drinking water, getting a good night’s rest, deep breathing) can also help us avoid unconscious choices that are unhealthy or just serve to stress us out even more (e.g., stress eating, binge-watching or listening to alarming news all day, checking email and social media instead of going to bed at a sensible hour).

Ultimately, the key point is that as many financial advisors are currently facing high levels of ongoing stress, it is critical for them to maintain their own physical and mental health. By taking simple steps, advisors can protect their own health and mental well-being… while making sure that they’re able to continue to provide great service for their clients!

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As financial advisors everywhere are fielding phone calls, emails, and meeting requests from clients who are stressed out about the current global economic and health crisis, and also (understandably) about the safety of their retirement accounts, advisors are once again in the position of conveying confidence and reassuring their clients that the best course of action, as history has proved itself time and time again, is to stay the course and stick to their financial plans. But given the seemingly unprecedented nature of the coronavirus pandemic, how can advisors convince their clients to stay the course if they themselves have their own (natural) nagging doubts and concerns, not only for their clients, but for the viability of their own businesses, and whether the coronavirus pandemic really will be resolved in a timely manner and not compound into something even worse?

In our 30th episode of Kitces & Carl, Michael Kitces and financial advisor communication expert Carl Richards talk about their experiences in dealing with past bear markets and financial crises, and that no matter how different these events have started out in the beginning (with each event’s seemingly ‘unprecedented’ nature at the outset) or how destructive the events may have been as they ran their course, history has consistently repeated itself with respect to how these events have always ended: they eventually wind down and pass, things regrow, and life returns to normal. Yet, even so, especially in times of crises, it is sometimes impossible for individuals – even for financial advisors themselves – to be 100% confident that, even in the end, things will turn out okay.

In other words, it is normal for even advisors to experience at least some small level of doubt and fear about our now-more-uncertain future; yet, even so, we persevere through that doubt and continue to reassure clients that things will ultimately be okay,  trusting in the likelihood of a good outcome (based on the weight of historical evidence) much more than the fear of a bad outcome.

This practice of ‘rational overconfidence’ – being perhaps a little “overconfident” based on the available facts and still-limited historical data, but rationally so as a way to be a leader for our clients – is often best, simply because for unprecedented events, there usually is no truly feasible alternative plan other than staying the course, which makes the original plan (based on research using 95+ years of stock market data) the most logical (or “only” viable) course of action.

Which means that while it may not actually be possible to completely quell the doubts we as advisors may still have about future uncertainty, it doesn’t have to stop us from trying to convey confidence to clients to help them stay the course, and recognizing that often doing so is still better than any other potential alternative. In fact, asking questions such as, “How frequently in the history of modern markets, has that [alternative] solution ever really made sense? And would it really make sense to forsake the original financial plan, which can involve a whole restructuring of goals and long-term assumptions, for something that makes sense for probably just a fleeting moment in history?” can help both advisors and clients re-focus and dampen some of the alarm.

Ultimately, though, the key point is that advisors are just as prone to fear and doubts as their clients, and it is perfectly normal and okay to have those feelings of fear and doubt in the face of such uncertainty. More importantly, it is critical for advisors to acknowledge those doubts, to give them space as valid concerns, and to understand that while doubts are a natural human response to uncertainty, advisors can (and should) practice some level of “rational overconfidence” with their clients. Because in the end, clients rely on their advisors to be a confident leader during difficult times!

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Over the past several years, the media has paid plenty of attention to the so-called "Savings Crisis", as a disproportionate number of Americans haven’t saved nearly enough to handle unexpected emergencies, much less generate sufficient cashflow in order to retire. However, there’s a flip-side called the “Epidemic Of Spending”, where retirees who have been frugal for (literally) decades and have diligently saved for their retirements suddenly start spending and even dangerously splurging… potentially to the point of no longer being able to sustain the original retirement goal they so effectively saved for in the first place. Sometimes, such tendencies can be attributed to a desire to ‘just live a little’, but other times, overspending may arise for reasons other than just being faced with the temptation to splurge – for some clients, significant life events can change long-term goals and precipitate dramatic changes in spending habits.

In our 29th episode of Kitces & Carl, Michael Kitces and financial advisor communication expert Carl Richards talk about ways to manage conversations with clients who may be spending at unsustainable levels and are in danger of jeopardizing their own goals, and how important it is to understand why clients may have changed their spending habits in the first place. Notably, the most straightforward path for advisors – simply telling clients that they’re being unreasonable and that they can’t continue spending at their current levels if they want their plan to work – can result in the client simply hiding their spending from their advisor in the first place.

Instead, the importance of connecting the “no” to a bigger “yes” can help clients see a path down from the ‘branches’ of emotional decision-making back to the foundational ‘roots’ laid out in their financial plans – in other words, telling a client they need to reduce their spending should tie to their bigger financial goals that they initially identified were most important to them.

However, it’s also important for advisors to conduct conversations around spending with empathy and objectivity. Because it’s possible that changes in spending behavior are not a result of reckless irresponsibility, but instead a result from a deeper reason, such as a (not-yet-disclosed) terminal illness diagnosis, or the loss of a loved one.

When the cause of erratic spending habits is unknown, advisors can use a three-step process to better understand what may actually be happening in the client’s life that is causing the behavior change. The first step is to restate the fact pattern based on observations made by the advisor and information obtained from the client (e.g., how much is being spent each month; what the initial financial plan goals are/were); step two is to identify the story from the advisor’s viewpoint (e.g., spending at this level will deplete assets by age 70, versus age 95 as originally planned for); and step three is to ask the client to help clarify what’s really happening, offering a safe space for open discussion without judgment.

Ultimately, the key point is that, when clients exhibit unusual spending behaviors, there can be a range of different explanations. And by delving into those reasons with an objective, empathetic approach with a goal of truly understanding any possible mitigating factors, advisors can help clients either get back on track with their original plan or craft new goals to accommodate whatever changing needs they may have.

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Just about every financial advisor is intimately familiar with the overwhelm induced by an overflowing email inbox. From emails from clients inquiring about basic service requests and financial plan priorities, to team members scheduling staff meetings and service meetings, not to mention the plethora of industry newsletters, helpful educational blog updates, networking group announcements, wholesaler product reviews – on top of all the outright spam – can easily amount to hundreds of emails coming in on a daily basis!

And in addition to simply finding the time to keep up with just looking at all the email that comes in (and reading at least some of them), financial advisors also find themselves responsible for dedicating large chunks of time to actually responding to emails. Which can make it seem nearly impossible to keep up with the deluge of information that comes into an advisor’s email inbox every day! Fortunately, though, there are a few ‘tricks’ that can help keep things under control.

In our 28th episode of Kitces & Carl, Michael Kitces and financial advisor communication expert Carl Richards talk about some simple strategies they use to manage their own own sometimes-overflowing email inboxes, and the cognitive relief that a well-organized (and well-managed) email inbox can bring.

For instance, Michael has specifically configured his own system to manage the tremendous volume of email that comes in on behalf of the blog. Specifically, he has implemented a system of multiple email addresses (to route inquiries by category to different team members), inbox folders with Outlook-based “Rules” to sort email into them (for separating out newsletters to review, informational items requiring no follow-up, and follow-up items that are low- or high-priority) and a routine where email is reviewed on a daily basis.

Delegating email management can also be a very effective means to stay on top of large volumes of email, especially for busy advisors who don’t have time to review every message that comes in. An executive assistant not only can ensure that spam messages are kept at a minimum, but can also make sure that high-priority items get a timely response and, depending on the level of responsibility delegated, can even send responses on behalf of the advisor. They can also ensure that any messages that can (or should) be delegated to another team member are routed as quickly as possible.

There are also some tech tools that can aid with email efficiency, such as TextExpander (for Mac users) and PhraseExpress (for PC users), which both quickly create template language for commonly repeated email responses (which can be most useful for advisors who aren’t particularly fast typists). Microsoft Outlook has a built-in feature that allows an email account owner to designate a second person as an Assistant, who can then access the email account simultaneously from a different computer to share the responsibility of sorting through email, and helping an advisor review only the messages they really need to see.

Ultimately, the key point is that having a well-managed, organized email box allows a financial advisor to spend less time on the distracting busywork that reviewing email can be, and more time to spend on tasks that require cognitive focus and concentration – like preparing financial plans and meeting with clients. Or even to enjoy more time with friends and family!

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