Executive Summary
One of the benefits of owning a financial planning business is an advisor’s ability to control their work schedule. While some advisors might want to go full throttle, perhaps working well over 40 hours per week and taking few days off, others might prefer a more relaxed schedule, perhaps taking every Friday off or going on vacation for multiple weeks each year. But some advisors who choose to take more time off from their schedules might be concerned that prospects and clients will consider them to be less committed to serving their planning needs than other advisors.
In our 109th episode of Kitces & Carl, Michael Kitces and client communication expert Carl Richards discuss how advisors can approach decisions regarding work flexibility and tactics they can use to communicate these choices with prospects and clients.
Notably, the choice of work schedule can affect the type of client with whom an advisor might want to work. For instance, while landing an ultra-high-net-worth client is likely to bring significant revenue into the firm, such clients could prove demanding on the advisor’s time. While this might work well for some advisors willing to put in the requisite hours, it could strain other advisors seeking more flexibility. On the other hand, some prospects might prefer to engage with an advisor who works a limited number of hours to serve as a mentor, if that is their own goal for their business or career as well (in which case the advisor’s flexible schedule could actually attract more clients!).
An advisor’s desired work schedule can also play a role in how they choose to develop their client base as they build their firm. For instance, an advisor might purposefully limit the number of clients they service in order to have the flexibility of only working a certain number of hours each week (e.g., take on no more than 25 clients to maintain their 20-hour workweek). While a prospect might be concerned that their needs will not be met by an advisor working less than full time, the advisor can explain that they deliberately manage a smaller client base than other ‘fulltime’ advisors, which lets them devote their full attention to each client despite their shorter workweek.
Further, by being transparent about their flexible schedules, advisors bring the conversation into the open not only for their clients, but for other advisors as well. As while some advisors might think they are alone in considering ‘alternative’ work schedules, discussing these issues more openly can show that there are many others in the same boat. And receiving constructive feedback from supportive peers, mentors, and coaches who understand and share similar issues can help advisors decide how to meet their own needs while continuing to provide high-quality service to their clients.
Ultimately, the key point is that even though the decision to adopt a more flexible work schedule (and choosing how to communicate this choice to clients) can be difficult, advisors may find that creating the working conditions that optimally support their own work-life balance can help them not only attract new clients who appreciate the advisor’s talents (and who may even look up to them as role models and mentors helping them to implement similarly balanced lifestyles), but also to provide their clients with the support they need to achieve their financial planning goals!
Authors:
***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.
Show Notes
- Kitces & Carl Ep 76: Overcoming Imposter Syndrome By Truly Building Confidence In Your Own Value
- Kitces & Carl Ep 107: The Strategic Planning Process And Coming Up With (New) Ideas To Try
- The Financial Advisor Success Podcast
Kitces & Carl Podcast Transcript
Carl: Greetings, Michael Kitces.
Michael: Hello, Carl Richards. How are you?
Carl: I'm good. I thought we agreed, David Carl Richards III from now on.
Michael: David Carl Richards III. DCR? David Carl Richards. DCR.
Carl: DCR. You can just call me Carl. It's fine.
Michael: I will go by Carl for now.
Carl: Yeah.
Michael: It's easier to fit into the intro.
Carl: Totally.
Michael: Kitces and David Carl Richards III would not fit in iTunes.
How Fear Of Perception Can Prevent Alignment Of Values [00:39]
Carl: The Kitces and David Carl Richards III show. That's perfect. Perfect. So, I had this interesting experience when I was a young Jedi warrior, financial advisor. We were newly married and my wife had... I had this car and we sold the car. And my wife's family had this Rabbit, two-door, as I recall. Yeah, two-door Rabbit. 1980, something like that. All 3 kids had learned to drive in it. It's a stick shift. And you know what happens when kids learn to drive stick shift. This thing was beat to a pulp. They actually gave it away, and the family that took it...
Michael: This is like the old Volkswagen Rabbit.
Carl: Yeah, Volkswagen Rabbit. They gave it away, and the family that took it gave it back to them. So, when the family that took it gave it back to them, I was like, "Hey, we'll take it," being the smart financially prudent person that I used to be, which I'm not anymore. I thought, "I'll take that." And so, I sold my little Subaru. I have this Rabbit. And I won't tell you what color it was because the way I learned what color it was, was when I got a parking ticket, and the parking ticket person wrote under color, rust. I thought it was red, but apparently, it was rust. So, I got this Rabbit. I'm working at a big firm. My shoes are probably worth more than... And my shoes weren't worth much, but my shoes were worth more than the Rabbit. And I get an opportunity to go meet with somebody who I knew had just sold... He owned 49% of a business. It was very public in our community that just sold for $1 billion. So, I don't need to do the math. 49%...
Michael: So, he's got approximately $490 million.
Carl: Yeah, yeah. So, I get this chance to go meet with him in his building. His building is up in the foothills right against the mountain. It looks over the whole valley, like, this is amazing. I drive up and I realized, "Oh, no, the parking lot is behind the building, and his office is in the center of the building looking out at the mountains over the parking lot." So, I was like, "Oh, no." So, I tried to skirt around in the parking lot and park behind some...
Michael: Because you don't want to see him get out of the rusty rust Volkswagen Rabbit?
Carl: I didn't want him to... I don't know if this is normal, or it's just me revealing my whatever fancy feelings about appearances. But it felt pretty like, "Wait, you're going to meet with somebody with $490 million. The rust-colored Rabbit. That's something worth." So, anyway, I go through this whole rigmarole to get in there, and we have the meeting. When I get in there, I look out the window, and I can see the rust-colored Rabbit right there. You know what I mean? So, when I went to leave, I was like, "Oh, no. How am I going to do this?" Anyway, I get out of the driveway. Well, that started this whole, I've wondered ever since this idea of how we live our lives, and what clients think about it. And so, I want to now flip it to the other side, right? I was always worried when I was running my own firm that when I would take... I really started to make an effort. We used to go to Kiawah Island in South Carolina, and we went for a week. And we made a goal to increase it by a week every year for a couple of years. So, we were trying to get to 4 weeks. And I remember being bashful about that. I remember not wanting clients to know because...
Michael: That you know how much time off you take because I pay you a lot in fees to take a lot of vacation on Kiawah Island?
Carl: Yeah, exactly. Exactly. And I've heard the story. In fact, I got permission to publicly call out my friend, Jeremy Walter, about this because he sent me a note once saying, "I've quietly been taking Fridays off." And I was like, "Whoa, whoa, whoa. What's the quietly part about?" And he's like, "Well, I don't want anybody to know I'm a slacker." So, there's an interesting thing...
Michael: Because he's built his practice to the point that he can take Fridays off.
Carl: Yeah. And he was being bashful and I was like, "I'm sorry. I'm going to tell the whole world that you take Fridays off because we all need permission to do what works for us. We don't need permission to take Fridays off, but we need permission to do what works for us. Where is it?" And particularly when our job, one of the things we're trying to do is help other people align their use of capital. Capital to me is time, money, energy, and attention. We're trying to help other people align their use of capital with what's important to them. And here I was taking a couple of weeks off because that was really important to me. Here's Jeremy taking Fridays off. I mean, we go through lots of examples. People who want to be home every morning until 10:00 to get their kids off to school, whatever, all these different examples.
And there's this sense of, "I don't want anybody to know because I don't want them to think I'm a slacker." And my question I want to talk to you about today was, I actually found the opposite to be true. Once I started letting people know, there was this real... And there's probably some boundary conditions around this. It may depend on the type of client you have, or what kind of... I don't know. That's what I want to explore with you. For my clients, once they found out there was actually an attraction to, "Hey, you're doing the thing that you're trying to do for us. You're aligning your use of capital with what's really important to you. I want that." So, tell me how that lands. What do you think about this problem or this question?
Embracing Personal Values To Attract More Ideal Clients [06:21]
Michael: Well, I feel like I got to… just offhand gut response. I do feel like I have to separate these a little bit, just like the 2 stories. So, I don't want my prospect, parentheses, my very large prospect, to see that I drive a very old, inexpensive car. To me, just that feels a little bit of a different domain than something like Jeremy's, "I don't want my clients to know that I take Fridays off." So, at least here's how I separate them. Well, I guess actually, as I'm saying that, I can put them in a similar camp. So, a lot of this feels to me, it's a function of how you're conveying it and putting it out there in the first place. So, to take Jeremy's example, there's two ways to read, "I take Fridays off." One is, sort of Jeremy's script of this, like, "People will think I'm a slacker because I don't even work 5 days a week." And then there's another version that says, "I'm one of those people that's so good at running my business, my practice, I have figured out how to cram 5 days a week into 4 days, and I can be completely effective with my clients and take Fridays off. Would you like to know how to be that effective and focused in what you do? Come on over and be my client because I'm all about how do you create the focus to have the biggest impact in the smallest amount of time so you can live the life you want."
It's essentially like, "I'm going to role model the good version of this, and if that's what you aspire to as well, well, you should only want to be my client even more." I can even tell a story of that around the Rabbit, right? There's 2 ways to tell the story of, "I drive the old really beat-up car," right? Number 1 is, "Because I don't have enough money to buy a good one," and the other is, "Because I choose not to spend my money on depreciable assets, and so, I minimize how much money I spend on cars. I'm going to help you not spend your money on things that go down in value. I'm going to help you put your money towards things that go up in value and align with the values that you believe in." And so, there's still a...
Carl: Wait. Put, real quick, a pin because there's a third one. The third one is, "I don't care what I drive. This doesn't matter to me. Right? I'll drive whatever because it doesn't matter to me." I think that's also an interesting way to view it.
Michael: So, I feel like there's a piece of that that essentially comes down to, "To what extent do I want to attract clients by being the role model of the thing that I'm espousing?" And some people will like that and some won't, right? Someone out there is going to say, "Hey, here's the deal. I want to work 4 days a week so that I can enjoy more vacation. I want you to work your backside off as my advisor to do all the awesome things you do, so I can work 4 days a week. I'm not here to learn how to do it from you. I'm here to assign you work or delegate you, or get your advice about how to do it. I don't need you to be my role model. I need you to be my advisor."
Carl: Yeah. Which is...
Michael: But I think there's a separate set that would say like, "I don't know how to do this, I don’t know how to get there. If you're living it, you have to know more than I do about the thing that I'm trying to achieve and work towards, so you are my role model, teach me, and I'm going to pursue." So, to me, it strikes me as just 2 different types of client engagements, client relationships. So, I can sort of say it's like the way you want to brand and market position yourself. You want to get nerdy from the marketing sense. But that idea of just, do you want to position yourself as the role model? I do the thing and we'll teach you how to do this too. Or are you trying to position yourself as the advisor, coach, teacher, expert thing where maybe that's still relevant, but maybe that's not? There's other ways I can convey my credibility as an expert besides literally saying, "I've tread the exact same path, and I'm doing it right now, and I'll show you how to do it while I'm walking it."
Carl: Yeah, totally. There's just a couple of quick things to comment on. So, number 1, that particular client, we'll just call that person Bob. When I asked Bob, I was like, "I want more clients just like you. If you were me, how would you go about it?" The thing I've been asking for 20 years. And he was like, "Wait, wait, wait. No, you don't." I'm like, "What do you mean?" He's like, "You do not want clients like me." I was like, "Well, what do you mean?" He goes, "Well, Carl, I know you. I know you go on 2-week trips down rivers, and you're not even... I can't even get... You're unreachable." He's like, "I've got 8 people..." He had the big stack from Goldman, and the stack from Morgan Stanley because the investment banks all knew about this transaction. He's like, "I've got 8 people volunteering to sleep with their Blackberrys." That dates that time, right? "Do you want to be on call 24 hours for people like me because that's when I'm going to call you? And if you don't answer, there's 8 other people. There's 20 other people willing to answer anytime."
Michael: Yeah. I do have a half a billion dollars in needs, and when I have that much money, I have certain expectations about timeliness that just, like, I...
Carl: Yeah. And that, obviously, reveals maybe people with $480 million are more likely to feel that way, but they don't all feel that way. I know that. We don't need to get into that whole discussion...
Michael: Well, but I think it gets back to the same thing of, to me, what he's saying is like, "Carl, I don't need you to be a role model about how to take vacations. I need you to do..."
Carl: I need you to answer the phone.
Michael: "...advisor work, and I'm in the market to hire an advisor to do advisor work. I got a lot of people that are willing to put a lot of time in to do advisor work because I got the stack from the other investment banks that are calling on me." I think it's actually, that's a really good example in context that, look, there may be clients that... I’ll at least call it... There may be clients that want a role model, and there may be clients that just want an advisor to do things and provide expertise and service and whatever those elements are that they're purchasing. Now, relative to it's a big world out there, I think there's a lot of room candidly for both.
Carl: For sure.
Michael: And so, I don't think this has to be, like, there's only 1 way to do it. What's going to happen is, look, you do the role model thing. Bob's not going to like you. You do the advisor, I'll work your backside off. There will be clients you will not get, you'll never know because you're not going to see them, who are like, “Yeah. I can call a bunch of advisors to just spew advice at me. I need to figure out how to get unblocked, to get the thing that I want to achieve. And I don't believe anybody can teach me it unless they've done it. And so, I'm looking for a role model that's lived the path, and that's who I'm going to hire."
The Importance Of Standing Up For Personal Values As An Advisor [13:32]
Carl: Yeah. Yeah. And I would be just careful about because I know you feel the same way, but just about, I don't think I would start out with the idea of, "I'm going to be a role model." I think what this felt like to me was more a question of, "I'm going to craft the life I want to craft, and I'm going to attract the kind of people that I want to attract." It would have been terrible. And I had this experience. I spent years chasing clients that I then got to spend a decade regretting ever getting as clients. Do you know what I mean? It would have been bad for me to have gotten Bob as a client because it would have fundamentally altered how I lived my life, and then I would have been on this weird hamster wheel of whether or not I needed to stay and not stay and all that thing. I had to fire somebody very similar to Bob, not quite as big, but a quarter as big. And it was really hard because it was a big piece of the business, it was all those things. When I fired him... We'll just call him Bob Jr. When I went home to tell my wife that I had fired Bob Jr., she was like, "Whoa." And luckily to my wife's credit, she was like, "I'm glad. This has been driving us crazy, this idea that you can call in the middle of the night."
Michael: Because Bob Jr. was very, very demanding with expectations. It's that particular combination of not just the clients who want your...they don't need you as a role model. They want your advice, expertise. But clients with a lot of money who write big checks tend to have some very high demand expectations because, frankly, they can pay a lot of money for the service, and there are people who are willing to do a lot of work for that service.
Carl: Yeah, totally.
Michael: So, if you're not willing to live at that level of effort and responsiveness, there are other people who are willing to do that.
Carl: Totally. But I think back to the idea of role modeling, I think it's more a function of if... And again, what do I know? I'm just simply saying, I walked down a path, and I noticed that there was shade here and a spring here. If this is valuable to anybody listening. If this is important to you, you craft the kind of life you want to live, you get intentional about aligning your use of capital, time, money, energy, and attention with what's important to you, including how you craft the business. That doesn't mean taking time... Whatever it means to you. Right? And the amazing thing about this business is... I can give you 20 examples of people who... I mean, I've got a buddy who, as a business expense, bought a fly fishing ranch in Wyoming and he spends June, July, and August fly fishing in Wyoming, inviting his clients who all bring guests.
Michael: I was going to say, where's the business expense part because I’m liking the tax strategy on this.
Carl: Yeah. Clients who all bring guests all the time, and you're not allowed to talk about work there. But then he spends September through May meeting with the people who he fly fished with. I've got people who do that with skiing, people that... We all know the golf stories, people around art. So, the cool thing about our business is I think you can craft the business, the life you want to live really intentionally, and then you get to decide. Do you want people to know that or not? And my only point here was that it turns out, depending on what you're trying to build, that not only will it not be negative, it has the potential to be positive and be an attraction. So, rather than hanging out your shingle as a role model, it's just I was surprised when clients came to me and people, and I still get this all the time now from advisors all the time, like, "Hey, I want to do what you're doing. How are you spending time with your family? And how are you living that way?" So, I think that's interesting to me. It doesn't have to be a negative.
Michael: So, it reminds me, I was having a conversation with an advisor friend a ways back who, bizarrest of connections, she was talking to a prospect who apparently decided to vet the industry and understand how financial advisors work by listening to our Advisor Success podcast. First time at least I'd heard of a consumer literally just listening to the podcast just to understand life, not because they want to become an advisor because they're trying to understand how advisors work to hire one. And so, the particular episode that the person had heard was from an advisor who's very consciously built a lifestyle-oriented practice, very limited client base, makes good dollars, does not work a lot of hours, goes and does some other cool stuff. I don't know which advisor it was because we've had a few like that over the years. It was one of the advisors in that camp.
And this advisor, we'll call her Leah, Leah was doing something similar. She's building a very consciously-designed limited client base. It's probably going to be 20 or 30 clients. She lives in a pretty affluent, dense metropolitan area, so there's a lot of money around to find 20 or 30 really awesome clients and have a great business. So, she's talking to this prospect who had heard my episode and knew Leah was doing something in this direction and said something in the effect of, "Look, I've known you for a lot of years, and now I'm in the market for an advisor, but I just don't think I can get comfortable with an advisor who only works half time." It was a version of this, "I just have certain expectations around what my advisor is going to do for me and the availability. And I'm not really comfortable working with an advisor who only wants to work half-time."
And so, I thought Leah had a really interesting reframing around this, which to say, "No, no, no. I don't work half as hard for my clients as other advisors. I work 100% as hard for every client. I just only take half as many. So, I'm not working 50% for 100% of my clients. I'm working 100% for only half the client load, so I can give all of the attention that you would get at any other firm, in fact, probably more because I'm not going to be distracted by a whole bunch of other clients who I probably shouldn't have even taken in the first place. I'm only going to work with," I forget her number, "25 great clients that I can service 100% or 110% because that's all I need to do what I want to do." But it took this reframing of because it was a version I think of Jeremy's fear as well, the client that perceives, "Well, if you're not putting in all the hours of all the time, you must not be working as hard."
And so, in her context, it wasn't to be a role model. She's not building a practice that's all about, "I figure out how to get a full-time job out of working only half the days of the year, and I'll teach you to do it too." It's nothing like that. She runs a fairly traditional advisory firm offering. She's just figured out, "25 clients that have a couple million dollars each, the math is great. I've done that with larger firms. I'm just going to do that now with my small subset of clients." But she did have to talk through a version of, I think, the fear that Jeremy had, which is how are clients going to perceive this? But it did ultimately come down to, you just have to explain it or, "I don't drive a cheap car because I'm not successful. I drive a cheap car because I don't believe in spending on expensive ones. I don't take the vacation because I'm slacking. I take the vacation because I really believe that much in aligning money and values with life. Would you like to be part of that journey as well? Or I don't work half time. I work 100% of the time, but I only take half the client load."
How To Align Advisor Values By Gaining Perspective From Trusted Sources [21:42]
Carl: Yeah. Yeah. Super cool. Super cool. Let's just wrap with one little thing. I do think that there's another part of Jeremy's story, to pick on Jeremy, that is valuable and that was sort of the signaling to the rest of us advisors that it's okay. Right? If that's what's valuable to you, let's normalize the idea that putting family or health, or community as a priority is okay. Right? And I think we need more people waving that flag a little bit, at least just to each other, like, "Hey, I had somebody call me..." Well, yeah. Now I can tell the story. I had somebody call me the other day that almost everybody listening to this would recognize the person, so influential in our industry. Just a dynamo. And now after that Super Bowl ad about rock stars, I can't use the rock star term, but just a rock star. Right? And she called to talk about, "I'm so..." I think the word she used was, "I'm so sick..." and she used some colorful language. "I'm so something, something sick of hiding a part of what I value because I feel like it's unsafe."
And I get there's a whole bunch of other things going on here. In some cases, it is indeed unsafe to say, "I value this." And in some cases, it results in you being fired and that's, obviously, stuff we're all working on changing. But her struggle was, "I just want to be able to do this thing." Right? And it could be something as simple as, "My daughter's soccer games are at 3:00 on Thursdays, and I need to leave at 1:30 to get there. And I want to raise my hand at my firm and say, "I want to go do it." And so, I think the fact that there's so many of us that still feel that way, we can't do a thing, is another little piece of this that I think we should get better at normalizing this idea that you work, whatever, 50, 60 hours, and you're on call all the time and they're like, "That's not good for any of us." And so, the idea that, "Hey, I want to take Fridays off. Hey, on Thursdays, I want to go to my daughter's soccer game. Hey, Monday and Tuesday, I make breakfast for my son." Whatever it is, I do think there's another little piece of role modeling there that I think is important.
Michael: So, where do you draw the line? Not to open the whole can of worms. You made, I think, the tough, but true distinction, like, sometimes it really is problematic to open the door on some of these...
Carl: I know. I know.
Michael: ...with clients or firm, if you're an employee context.
Carl: Yeah, I know.
Michael: And I think it's easy for us to have the fear of not wanting to share any of this with anyone, which is why you didn't want the client to see the Rabbit, and Jeremy didn't want folks to know that he takes Fridays off. So, how do you draw the line between "I'm afraid to tell anyone because I should be," and "I'm afraid to tell anyone because it really might just be in my head, like, this might be a story I'm telling myself. If I just change the script of what I tell, right, it's because I'm frugal with cars, it's because I value family. I work 100% for 50% of the client load." Where do you draw the line between you just need to change the script and, no, you're actually right to be afraid, tread carefully on that one.
Carl: Yeah. This is such a great question because I've really been taught through a number of experiences the last 2 or 3 years by people who've helped me understand the real risk. And I'm thinking, particularly, women in our industry, planners of color in our industry who have pointed out to me through some really heartbreaking and personal stories where I'm like, "Yeah, there's a whole element of this discussion that is a privilege to even be having. And I acknowledge that." And I say to those people, especially the ones that have shared their stories with me in a loving kind way, it was never in a rebuke, I'm like, "Man, thank you for having the guts to play that chess match." I could give specific names. In some cases, they're doing it a punch in the face. They're just doing it, and I'm just like, "Wow." You know what I mean?
And in other cases, it's a really carefully thought-out chess match behind the scenes. And that's like, wow. And I don't know the answer on how to draw a line, except if you feel like it's actually certainly the term dangerous, then please be careful, right? My encouragement continually all the time is, like, "Do your thing. Do your thing in public. Do it." And then I have to temper that with, "Except in cases where it doesn't make sense." And then if you need encouragement behind the scenes, please know that there are people, me being one of them that would love to empathetically be of any value I could there. But, yeah, I think that's a really important thing for people like me who are running around saying, "Do your work in public. Embrace imposter syndrome." Sometimes there's a real good reason for that fear. And it might even be, I've had a couple people point out, multi-generational reason, that my grandparents are only alive because they didn't stick their heads out, because they stayed in line, because they stayed quiet. Wow. So, to those people, I just say, "Thank you for sharing your stories, and for doing whatever you can in any way you can because it's an inspiration to me."
Michael: To me, it comes down to... I mean, you've talked about a version of this in the context of our creative endeavors, just the recognition that there comes a point where we're not always the most objective observer of our own situations, and that to me, at least what I'm trying to figure out where these lines are that it's about, can I find my mentor, my guide, my confidants? Many of us, most of us have a few people that can be our go-to's to talk about the really, really challenging stuff that we want to talk through, and just have someone that can be that sounding board, and be that thinking partner to also be that gut check, like, "I'm really concerned about telling my clients this, sharing that with the industry," whatever the thing is. Do you have someone that you can talk it through with just to figure out, “Do I really need to hide this from my clients, or is it possible this is just me with my own kind of limiting beliefs around it, and I just need a friend, a colleague, a family member, a peer, a mentor to say, ‘You might be a little wrapped up in this one yourself. It's okay. And here's a way to think about how you would talk it through with clients?’”
Carl: Yeah, I think that's smart. Amazing. Michael that was super fun. Thanks for having that conversation.
Michael: Absolutely. Thank you, Carl.
Carl: Cheers.
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