Kitces.com - Advancing Knowledge in Financial Planning

Kitces & Carl Ep 161: How Valuable Is Getting Feedback About Your Original Business Ideas That Others May Not Get Anyway

April 3, 2025 07:02 am 0 Comments CATEGORY: Kitces & Carl Podcast

Kitces & Carl Ep How Valuable Is Getting Feedback About Your Original Business Ideas (That Others May Not Get Anyway)

Launching a new business venture is often a creative – and somewhat vulnerable – act. Whether it's opening a new firm, publishing a book, or even just posting on social media, each public-facing offering reflects many hours of ideation, refinement, and effort. When preparing to launch, advisors must typically answer two core questions: "Who will show up for this?" and "Will the people who do show up like it and get it?" A good way to address both questions is to ask for feedback – but the real challenge is knowing who to ask, and when.

In the 161st episode of Kitces and Carl, Michael Kitces and client communication expert Carl Richards discuss how and when to ask for feedback, how to use it constructively, and when it's better to simply act and launch.

As a starting point, gathering a sufficient volume of responses is crucial when asking for feedback. Negative feedback often feels ‘louder' than positive feedback, but a single critical opinion may not reflect a broader sentiment – people simply have a variety of preferences. Advisors can mitigate overreacting to one-off responses by ensuring they collect enough responses to identify real patterns, which can also prevent an advisor from rebuilding everything in response to a single opinion. Furthermore, ensuring that feedback is coming from the ‘right' people is just as important. For example, if a firm launches a new offering for its core clientele – dentists near retirement – then it may not be helpful to ask newly minted doctors what they think of the offering. The doctors may not find the offering helpful or relevant… and that's okay. Feedback from outside the target audience may be interesting, but it isn't always relevant!

In some cases, behavioral data may also be a helpful source of useful feedback. Observing the topics and offerings that clients actually engage with may offer better clues about what they find valuable. Doing more of what connects – and less of what doesn't – can be an easy, effective way to refine offerings over time.

Finally, there may be times when the best audience to build for is the advisor themselves. Many advisors build firms with fee service models that resonate with them. At times, what's needed isn't feedback – it's confidence. For example, there may come a point where an advisor may not need feedback as much as a rallying cry to move forward. Then, once something is launched, the advisor can watch for how prospects and clients react to their offerings and take that as implicit (or explicit) feedback.

The key point is that feedback can be a powerful tool to refine offerings and creative ventures, but only when it comes from the right people at the right stage of the process. When thoughtful feedback comes from a core part of the audience, it can be a helpful resource for advisors to shape services that resonate with their target audience. And, ultimately, those points of feedback can help advisors build a stronger, more relevant product – amplifying their impact in the long term!

Helping Clients Grasp Abstract Retirement Income Strategies With Historical Market Visualization

April 2, 2025 07:02 am 0 Comments CATEGORY: Retirement Planning

For many financial advisors, a core part of the retirement planning process involves simulating whether the client's assets will last through retirement. Traditionally, these simulations take the form of either Monte Carlo analyses – showing the percentage of simulated outcomes in which the client finishes with assets remaining – or stress tests that assess plan durability under a handful of adverse scenarios. Yet while these tools offer mathematical metrics, they often fall short in helping clients connect the numbers to their real lives. The reality is that most people struggle to make confident decisions based on abstract reasoning. Although the numbers might work out mathematically, clients still need to do the mental work of translating the numbers on the page into something that feels tangible and real – something they can imagine actually living through.

One way that advisors can help bridge this gap is by using Historical Market Visualization (HiMaV) as a more intuitive alternative for illustrating retirement income strategies. HiMaVs leverage the brain's natural preference for narrative and visual information by showing how a retirement income plan – such as a risk-based or guardrails-based strategy – would have fared during actual historical periods like the Great Depression, Stagflation of the 1970s, or the 2008 Global Financial Crisis. With reliable data from more than a century of market history, advisors can anchor planning scenarios in real events that clients may already be familiar with through lived experience or cultural memory.

What works about HiMaV is that it grounds financial projections in a story-based context. Rather than modeling a generic environment of below-average returns and above-average inflation, advisors can show how the same dynamics played out during a known time period – making the scenario more accessible and relatable. For example, when clients can see how their plan might have fared during a historical market downturn they already recognize, it becomes easier to imagine how they might respond and adapt. That emotional connection supports confidence and increases the likelihood that the client will stick with their plan and stay committed through both good markets and bad.

Retirement planning, then, isn't just about getting the math right to work out between the client's desired spending level and their income and assets available, nor is it about achieving the highest Monte Carlo score. It's about developing a dynamic spending plan (e.g., a guardrails-based strategy that adjusts spending levels if the client's portfolio either exceeds or drops below specified thresholds) that clients can understand, trust, and follow consistently. HiMaVs support this process by showing how those strategies would have played out in real-life historical scenarios, helping clients grasp when and why spending adjustments might have occurred.

Ultimately, the key point is that retirement income planning is not just about statistics – it's about helping clients believe in their plan. HiMaVs give clients a powerful lens through which to view their strategy, transforming abstract probabilities into lived, relatable experiences. And when clients feel grounded in the history of what's come before, they'll be better equipped to navigate the uncertainty of what lies ahead!

#FASuccess Ep 431: Navigating Couples With Money Conflicts By Developing A New Toolset Of Questions To Ask, With Nick Rodkin

April 1, 2025 07:02 am 0 Comments CATEGORY: Financial Advisor Success Podcast

Welcome everyone! Welcome to the 431st episode of the Financial Advisor Success Podcast!

My guest on today's podcast is Nick Rodkin. Nick is the managing partner of Stoic Financial, an LPL-affiliated advisory firm based in Boynton Beach, Florida, that oversees $107 million in assets under management for 70 client households.

What's unique about Nick, though, is how, after nearly 15 years of practicing as a financial advisor, he went back to graduate school to get a master's degree in marriage and family therapy… which opened entirely new doors when working with client couples to help them better understand and resolve their own couples conflicts around money that would otherwise slow down or entirely stop their implementation of his financial planning recommendations.

In this episode, we talk in-depth about why Nick now dives so much deeper with client couples into questions about their relationship with money early on in the planning engagement (so that each partner knows where the other is coming from before more stressful situations emerge in the planning process), how Nick deploys a particular series of questions (including what money was like in their household growing up and whether they see themselves and their partners as savers or spenders) to gauge how each partner talks to each other when discussing money, and how Nick's goal is for these questions and conversations to drive more productive money discussions between client couples not just during the planning meeting but even and especially after they leave his office (as he wants couples to be what he calls "budget buddies" rather "expense enemies").

We also talk about how Nick is able to serve client couples with different levels of financial planning (and sometimes outright counseling) needs by offering separate AUM-based financial planning, flat-fee financial coaching, and for a few, hourly therapy services, how Nick segments his service model based on total client revenue generated rather than their just their assets under management (allowing him to work with clients with a broader range of financial circumstances), and how Nick uses the advice engagement tool Elements to efficiently understand a client's financial 'vital signs', especially early on in the relationship, and identify potential trouble spots to address through the subsequent financial planning process.

And be certain to listen to the end, where Nick shares why he finds that clients typically prefer their advisor to focus planning meetings on direct meaningful action items rather than just highlighting the recommended options for them to consider, how Nick finds that having money conversations with one's own spouse (as a financial advisor) can help us as advisors better unearth better questions we might ask our client couples, and how going to therapy himself helped Nick realize he didn't like the product-centric path he was on in earlier in his financial services career and inspired him to pursue what he now calls a more human-centered approach to financial advice.

So, whether you're interested in learning about ways to help improve financial communication between members of client couples, the questions that can drive these conversations, or how to incorporate aspects of financial therapy into a practice, then we hope you enjoy this episode of the Financial Advisor Success podcast, with Nick Rodkin.

Creating A Hiring Experience That Better Attracts Talent (And Can Compete With Larger Institutions)

March 31, 2025 07:04 am 0 Comments CATEGORY: Practice Management

When it comes to growing a practice for the long term, talent acquisition is just as important as client acquisition. The people who handle the day-to-day work of the firm are crucial to its operations, particularly as firm owners and other leadership focus their time on higher-level strategic initiatives rather than routine operational details. However, developing a strong hiring process can be challenging – and it's easy to overlook its importance until the next hiring need arises. A firm with a clear and well-defined hiring process can attract stronger candidates and evaluate them more effectively, creating a compound effect that strengthens the firm over time.

In this guest post, Eddy Ricci, founding partner of Lead Advisor, explores how firms can refine their hiring processes to attract top talent and how small firms can stand out in a competitive talent market.

Ideally, the interview process is mutual: the firm needs enough information about the candidate to make an informed decision, and the candidate needs enough insight into the firm to do the same. To that end, interviewers can benefit from emphasizing speed (aiming to complete the process within 30 calendar days), connection, and candidness about the firm's strengths and areas for improvement. Additionally, discussing how the firm's core processes, values, and growth opportunities may directly impact the candidate can help candidates better understand what it's like to work at the firm.

A proactive hiring process considers all components of the role, including compensation, team dynamics, and the purpose of the role (especially if it's being refilled). It also plans for a smooth onboarding experience. Ideally, the process is intentional, documented, and repeatable – minimizing internal stress and reducing the time required to make a successful hire. This foundation can be built by creating not only a detailed job description but also an onboarding plan and ensuring the team is aligned and prepared for the new hire.

Once the job is listed and an initial candidate pool is formed, the hiring process can follow three interview stages. The first stage is a brief 'same page' screening to confirm the candidate's qualifications, answer initial questions, and outline the next steps in the process. Some firms may also include a work assessment after this step. The second stage is an in-depth interview, focusing on the candidate's technical skills and alignment with the firm's goals and values. At this point, candidates can also ask detailed questions about their potential role in the firm. The third and final stage is a mutual alignment interview, which addresses any remaining questions and ensures both sides are ready to move forward. By the end of the process, both the candidate and the firm should feel excited about the decision to move forward!

The key point is that firms that craft a repeatable hiring process can create a better candidate experience. A warm, connection-focused, and communicative interview process not only helps firms stand out to candidates but also improves the quality of their evaluations – ultimately increasing the likelihood of finding the perfect mutual fit!

Weekend Reading For Financial Planners (March 29–30)

March 28, 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 indicates that 70% of affluent financial advisory clients who believe their advisor is always obligated to act as a fiduciary indicated they are satisfied with their relationship and aren't seeking out a new advisor, while only 41% of clients who believe their advisor may put their own interests first indicated they are satisfied with their relationship. Which suggests that, amidst ongoing debate over fiduciary-related regulations, an advisor's status as a fiduciary could both lead to greater client trust (both in their individual advisor relationship and perhaps in the financial advice industry as a whole) and, ultimately, higher client retention rates.

Also in industry news this week:

A recent survey indicates that younger "DIY" investors are more likely to be interested in working with a human advisor than their older counterparts, suggesting an opportunity for advisors to tap into this demographic (perhaps by setting minimum planning fees that ensure these clients can be served profitably today while they grow their assets over time)
While a full repeal of the estate tax has the support of key Republicans in Congress, a (more limited) extension of the current exemption level could end up being part of major tax legislation expected this year, given the budgetary tradeoffs involved

From there, we have several articles on retirement planning:

Research into how "sequence of return risk" tends to decline over time, particularly for clients who make it through their first five years of retirement with investment gains in their portfolio
How using a "bucket" approach to building a retirement portfolio can help manage sequence risk and give clients greater confidence that their retirement spending needs will be met
Why rebalancing is a key element of ensuring sustainable retirement income, whether an advisor uses a 'total return' or 'bucketing' approach to portfolio management

We also have a number of articles on advisor marketing:

How advisors can use images, audio, and text found online in their own content without running afoul of copyright laws
Why video content can be particularly effective in helping advisors connect with their ideal target clients and best practices for creating videos that will attract viewers
A six-step process to creating and distributing blog content to maximize its reach

We wrap up with three final articles, all about getting better sleep:

A recent study provides an additional data point connecting low-quality sleep to potential negative health effects
How to arrange a bedroom to promote better sleep throughout the night, from bed positioning to managing the amount of light that enters the room
Seven common assumptions about sleep and why they might be counterproductive to a good night's rest

Enjoy the 'light' reading!

10 Charts To Help Address Client Concerns On Recession Fears, Tariff Risks, And Market Volatility

March 26, 2025 07:03 am 0 Comments CATEGORY: Investments

While financial markets tend to rise in the long run, short-term volatility can be alarming for investors. Recent swings have been driven by economic policy shifts, persistent inflation concerns, and geopolitical uncertainty – all of which may unnerve even the steadiest of clients. During turbulent periods like these, advisors play a critical role in helping clients maintain perspective and stay grounded.

In this article, James Liu, CEO and founder of Clearnomics, and Lindsey Bell, the firm's Chief Market Strategist, present ten charts to help advisors contextualize the current market environment. Each visual is paired with talking points designed to help advisors reframe volatility in a way that speaks to clients' concerns.

As a starting point, it's helpful to reinforce that investing success isn't about timing the market or picking winning stocks, sectors, or asset classes. Rather, it's about constructing a portfolio that aligns with a client's long-term goals. While stocks have recently declined, bond yields are above historical averages – highlighting the importance of maintaining a diversified mix. And while cash can feel safe, it often fails to keep pace with inflation, especially in turbulent markets. In that same vein, diversification remains the core of a healthy portfolio to protect against market corrections and underperformance, as no single asset class outperforms indefinitely.

It may also be helpful to discuss the drivers of current market corrections. Advisors might acknowledge that inflation and political uncertainty often elicit market reactions, and that many economic policy decisions can be controversial and divide public opinion. Nevertheless, history shows that markets have performed well under both political parties. Much of what's happening now reflects companies adapting to present-day challenges – from higher input costs to shifting consumer demand. Advisors can guide clients' attention to where growth is happening and to areas of economic resilience – such as persistently low unemployment – that are often overlooked in negative news cycles.

Finally, advisors can emphasize that while market corrections never feel good, they are a natural part of the investing cycle – just like market recoveries. And because recoveries are difficult to time, the best thing investors can do is to stay the course and focus on long-term goals. Advisors are uniquely positioned to offer not only perspective and education, but also empathy and reassurance during tough market periods when clients may need it most.

The key point is that challenging market environments give advisors the opportunity to tailor talking points to a client's specific anxieties. Being well-informed about the market influences, remaining empathetic, and maintaining a long-term perspective are all crucial to guiding clients through market corrections. And, while unpleasant, tough market conditions offer a way for advisors to explain the critical role of a well-diversified portfolio, demonstrate their knowledge, and ultimately affirm their long-term value!