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Weekend Reading For Financial Planners (April 26–27)

April 25, 2025 02:00 pm 0 Comments CATEGORY: Weekend Reading

Enjoy the current installment of "Weekend Reading For Financial Planners" – this week's edition kicks off with the news that a recent survey found that Americans' top "burning questions" when it comes to retirement include the amount they need to have saved to retire comfortably (with respondents expecting to need $1.26 million), whether Social Security will be there when they need it (with those in Generation X particularly concerned about this issue), and whether inflation will rise after they retire. Notably, financial advisors are well-positioned to address all three of these 'pain points' (whether by creating a retirement income plan, letting clients know about the (true) state of the Social Security system and the effects of different policy choices, or creating an asset allocation that mitigates against inflation risk), presenting an opportunity to demonstrate their ability to solve the key issues facing their ideal target clients and attract more prospects in the process.

Also in industry news this week:

The RIA channel continues to attract advisors away from wirehouses and broker-dealers, though new advisors continue to predominantly enter the industry through the latter channels
A recent Supreme Court ruling puts retirement plan fiduciaries in the spotlight with the potential for a flood of legal actions, including against sponsors of relatively smaller plans

From there, we have several articles on retirement planning:

A list of the top considerations for financial advisors and their clients when it comes to deciding whether to make traditional or Roth contributions to retirement accounts
How Roth contributions and conversions can offer both financial and psychological benefits for clients
Why pre-tax retirement contributions can potentially be a better option than Roth contributions in clients' peak earning years, even if they expect tax rates to increase in the future

We also have a number of articles on marketing:

How advisory firms can position themselves for stronger organic growth amidst a volatile market environment
How advisors can overcome the feeling of having a scattered marketing approach by defining "who" they want to serve and "how" they want to reach and engage them
What advisors are doing to attract next-generation clients, from being willing to focus on their short-term 'pain points' to meeting them in the online spaces they frequent

We wrap up with three final articles, all about artificial intelligence:

How advisors can build "custom GPTs" that can perform a variety of functions without requiring any coding experience
While generative AI tools can help individuals take on 'thinking' tasks, relying on them could reduce users' own critical thinking capabilities
Why using AI notetaking tools to record and summarize meetings could lead participants to be more cautious when contributing to discussions

Enjoy the 'light' reading!

From Emotion To Logic: 6 Questions To Help Clients Navigate Market-Related Fears Productively

April 23, 2025 07:04 am 0 Comments CATEGORY: Client Trust & Communication

During periods of market volatility, it's common for financial advisors to receive calls from clients who are nervous about what a steep market decline might mean for their portfolio and long-term financial goals. In these moments, an advisor's first instinct might be to take a logic-based approach – citing long-term market trends and encouraging the client to stay invested. But even when a client agrees with the reasoning in the moment, the anxiety often lingers. Without the opportunity to fully express their emotions and engage in their own reasoning, clients may walk away feeling unconvinced – only to call back again a few days later, still uneasy.

While it's natural to want to 'fix' a client's fear, the most effective conversations often aren't about solving their emotions – they're more about helping clients move through them. Advisors can support this process by creating space for clients to articulate what feels hardest, process their uncertainty without feeling dismissed, identify what would help them feel more in control, and reason their way toward clarity – all at their own pace. Instead of delivering answers too quickly, the goal is to build connection and help clients regain a sense of agency.

Research on self-persuasion shows that people are far more likely to believe in – and act on – conclusions they reach themselves. So rather than reassuring clients with logic alone, advisors can guide them through reflection: inviting them to revisit past challenges, express what they're thinking, and imagine how they'll feel about this decision in the future. This allows clients to hear their own words, affirm their own reasoning, and reinforce their own confidence – which is often more powerful than hearing it from someone else.

Importantly, logic still has a place in the conversation – just not at the beginning. Once clients have had space to express their emotions and think through their concerns, they're often in a better position to hear and engage with logical information. At that point, charts, data, and historical examples can be incredibly helpful – not as a rebuttal to the client's fear, but as a useful resource to support their own decision-making process. Framing this information as a tool, rather than a correction, can reduce resistance and increase its impact. One effective approach is to ask permission before introducing data ("Would you like to look at some historical trends to put this in perspective?"). When clients are invited into the conversation – and feel heard and respected – they're far more likely to see the information as empowering rather than dismissive.

Ultimately, the key point is that by following a sequence of emotion first, reasoning second, and logic third, advisors can help clients feel more grounded, confident, and committed to their financial plan. And when clients hear their own words and draw their own conclusions, they walk away feeling less stuck – not because their advisor told them what to do, but because they arrived at the answer themselves. And in times of market volatility, helping clients find that kind of self-driven clarity may be the most powerful reassurance of all.

#FASuccess Ep 434: Attracting HNW Clients By Focusing Not On Estate But Legacy Planning Instead, With Vanessa N. Martinez

April 22, 2025 07:02 am 0 Comments CATEGORY: Financial Advisor Success Podcast

Vanessa Martinez Podcast Featured Image FAS

Welcome everyone! Welcome to the 434th episode of the Financial Advisor Success Podcast!

My guest on today's podcast is Vanessa N. Martinez. Vanessa is the CEO of Expressive Wealth, an RIA based in Chicago, Illinois, that oversees $135 million in assets under management for approximately 70 client households, including 10 'core' ultra-high-net-worth families.

What's unique about Vanessa, though, is how her firm, in addition to ensuring clients have established a 'traditional' estate plan focusing on the efficient transfer of their assets, works with its high-net-worth clients on what Vanessa calls "legacy planning" in order to not only pass down their assets to the next generation, but also the parents' family values that generated their wealth as well.

In this episode, we talk in-depth about how Vanessa engages in a multi-meeting discovery process with clients (to first understand where they stand today with regard to estate planning and intra-family communication, and then to dig deeper into what the client wants to achieve through their legacy), how Vanessa has clients consider their family values for each of the accumulation, preservation, and distribution phases of their lifetimes (leaving room open to amend these values as their life and financial circumstances change over time), and why Vanessa has clients write down their values and legacy goals both to ensure their permanence (and to prevent misunderstandings that can develop when values are simply communicated verbally like the telephone game down the family tree over time).

We also talk about how Vanessa's intimate involvement in her clients' lives (from attending major life events to supporting family members going through life transitions) helps drive client referrals to their friends in similar life (and financial) situations, how Vanessa uses neighborhood-based client events (such as a 'stocks and sip' evening of financial education and wine sipping) to draw in a select group of clients and their friends (without having any awkwardness for not inviting her full client roster that don't live in that neighborhood), and how Vanessa has found success holding client events on Thursday nights given that attendees are often a good mood (with only one workday left in the week) while also avoiding filling up a valuable weekend night that prospects may not be willing to let go of to meet her.

And be certain to listen to the end, where Vanessa shares how she uses a practicing psychologist in a "Chief Clinical Officer" role to provide personality and communication assessments for her team and to facilitate communication when she brings together clients and their children in a family meeting to discuss the results of her legacy exploration exercise, how Vanessa has found that getting clients to focus on their legacy while still alive can allow them to answer questions from their children and to eventually deepen their relationship with their kids before any wealth is inherited, and why Vanessa ultimately views legacy planning as a way for clients to share their stories with the next generation so they value not just the dollars they will receive but also the emotional and intellectual wealth being passed on to them as well.

So, whether you're interested in learning about the difference between estate and legacy planning, how to engage in deep legacy planning conversations with clients, or using intimate client events to attract new prospects, then we hope you enjoy this episode of the Financial Advisor Success podcast, with Vanessa N. Martinez.

Optimizing The Planning Process To Address Challenges For Clients Who Are 1 Year Away From Retirement

April 21, 2025 07:02 am 0 Comments CATEGORY: Retirement Planning

When onboarding new clients, financial advisors often use a three-meeting cadence: a Discovery Meeting to gather information, a Presentation Meeting to discuss the plan, and an Implementation Meeting to finalize it. While this approach works for many clients, individuals who are 12 months away from retirement face a range of complex financial and emotional considerations. These clients may benefit from a more thorough process to address their unique needs, from critical financial decisions to the logistical and emotional challenges of redefining life after work.

In this guest post, Jason Siperstein, president of Eliot Rose Wealth Management, introduces his firm's innovative 10-meeting process for first-year clients nearing retirement. By dividing the planning into more focused, manageable sessions, Jason's approach gives clients space to address pressing questions like, "Can I afford to retire?" while also setting the tone for a long-term planning relationship built on trust and deeper client engagement.

Jason's process begins with a Discovery Meeting, where he forgoes pre-meeting questionnaires in favor of a more interactive, conversational approach to uncover nuanced insights into clients' goals and concerns. Subsequent meetings build on this foundation by providing clarity on financial data and priorities, introducing actionable strategies such as retirement income guardrails, and stress testing plans to ensure they remain sustainable under various scenarios. The process also includes critical discussions around estate planning and the emotional and social aspects of retirement, recognizing that this major life transition can involve new goals as clients adapt their purpose and identity to a new lifestyle.

A key factor in the success of this process is the intentional structure that Jason has developed to keep the client experience both high-touch and efficient. By setting aside Wednesdays to work 'on' the business rather than 'in' it, Jason's team continually refines the firm's workflows and processes. This focus on incremental improvements ensures a seamless client experience while maintaining the personalized service that sets his firm apart. In addition, Jason's team has built flexibility into their process, tailoring the ten-meeting structure to meet the unique needs of each client, whether they require more detailed exploration or a streamlined approach.

Ultimately, the key point is that clients facing major life transitions, such as retirement, benefit from a deeper and more structured planning process. By providing clients with a clear roadmap for retirement, reducing uncertainty, and providing a sense of control during a pivotal time in their lives, advisors can set the stage for a planning relationship built on trust and long-term collaboration. Which also gives advisors the opportunity to deliver significant value by addressing both the financial and personal priorities of a client's retirement, helping clients move forward with confidence and excitement as they embrace the next chapter of their lives!

Weekend Reading For Financial Planners (April 19–20)

April 18, 2025 02:04 pm 0 Comments CATEGORY: Weekend Reading

Enjoy the current installment of "Weekend Reading For Financial Planners" – this week's edition kicks off with the news that as total household financial wealth grew to a record high of $90 trillion at the end of 2024, so too did the number of households advancing up the wealth ladder, with the High-Net-Worth (HNW) category of households with at least $5 million seeing a significant gain. Which could create opportunities for firms to seek opportunities to move 'upmarket' by trying to add new HNW clients who might not have an advice relationship (or whose current advisor doesn't provide sufficiently comprehensive service). Which, according to Kitces Research on Advisor Productivity, can lead to higher productivity for advisor teams (but can require an investment in staffing and higher-end planning services to meet their complex planning needs).

Also in industry news this week:

According to a recent survey, 40% of financial advisory clients would switch to an advisor who offers estate planning services, with help with specific tasks like beneficiary designations or tax strategies as the most sought-after service among respondents
RIA M&A activity set a first-quarter record to start the year (following a record-setting 2024), as private equity-backed buyers and sellers looking to grow within a larger firm have driven the deal market

From there, we have several articles on investment management:

An analysis of a variety of portfolio rebalancing strategies finds that not rebalancing at all could lead to the highest returns (particularly for clients with longer investment horizons)
While a review of research on the topic suggests that portfolio rebalancing might not lead to better risk-adjusted returns, it could still prove to be a valuable tactic for advisors, particularly when it comes to aligning a client's portfolio to their risk tolerance and capacity
How portfolio rebalancing can provide a psychological (and potentially financial) return for clients during market downturns, particularly for those nearing and in retirement

We also have a number of articles on cash flow planning:

How financial advisors can help clients evaluate the decision of whether to pay off their mortgage early
The financial (and psychological) considerations surrounding the decision of whether to put down more than 20% when buying a new home
While clients might think buying stocks on margin is too risky, they might not realize they are engaging in similar risk-taking behavior when they do so "on mortgage"

We wrap up with three final articles, all about having 'enough':

How the "Jevons Paradox" explains why, despite many technological advances over the past century that have made work and other tasks more efficient, many people are busier than ever before
Why having an "outcome orientation" could be a solution to information overload in the modern age
Why finding a purpose after achieving financial independence can help individuals get off of the path of always seeking 'more'

Enjoy the 'light' reading!

Kitces & Carl Ep 162: Avoiding Staff Management Duties You Don’t Want By Paying A Virtual Assistant For Only What You Need

April 17, 2025 07:01 am 0 Comments CATEGORY: Kitces & Carl Podcast

Hiring a contractor is an exciting step for many advisory firms. It represents a chance to delegate tasks, step away from day-to-day operations with more peace of mind, and pass a key milestone of (traditional) firm growth. However, hiring contractors isn’t without its complications. Even outsourced support requires some oversight, and delegation doesn’t always go as far as some might hope. So, how can advisors best leverage contractors, and how can they evaluate the value of such work (especially against the prospect of hiring a full-time employee)?

In the 162nd episode of Kitces & Carl, Michael Kitces and client communication expert Carl Richards explore how to master delegation, measure success with contractors, and weigh the cost of outsourcing versus hiring full-time to determine what’s actually ‘reasonable’.

Before an advisor can truly evaluate a contractor’s value, they must challenge themselves by looking inward. Delegation can be deceptive: Advisors may believe they’ve delegated more than they have, or that tasks only they can do are more essential than they really are. Taking time to interrogate those assumptions – by asking what can be delegated or even eliminated – can help free up more time than expected.

From there, an advisor can focus more on the art of delegating well. Creating style guides or video tutorials can streamline both training and follow-up questions. Advisors can also use these materials to communicate the firm's values and purpose – both for conveying firm culture and reducing the time advisors need to spend reviewing and correcting work done by others.

Eventually, advisors may wonder if it’s still worthwhile to ‘just’ hire a contractor, or if it’s time to bring on a full-time employee. There are certainly different ways to evaluate the all-in cost of a contractor versus an employee; both approaches will be the ‘right’ answer for different firms depending on the unique circumstances and challenges faced by advisors. While a contractor's hourly rate is often higher, the firm foregoes the additional cost of benefits, downtime, and in-depth people management. In fact, when considering the real cost of a full-time team member – including salary, oversight, and overhead – a contractor can be more cost-effective, especially when an advisor only pays for what they need. And, if an advisor is looking to manage costs more precisely, they may want to segment tasks by outsourcing low-cost work to one contractor and higher-skill work to another – without needing a single full-time hire.

Ultimately, the key point is that outsourced contracting can be a great tool to better leverage and reclaim an advisor’s time – when used well. With thoughtful and continual delegation, clear communication of the firm’s ‘why’ and unique values, and an eye toward iterative improvement, advisors can focus their energy where it’s needed most: on the work that only they can do!