Kitces & Carl Ep 87: Balancing Optimal Advice With Recommendations That Clients Will Actually Implement

***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 86: Aligning Client Capital To Goals (Which Are Only Clarified Over Time)
• “Let My People Go Surfing: The Education of a Reluctant Businessman” by by Yvon Chouinard
• 2018 Roth Conversion Planning After The Tax Cuts And Jobs Act

Kitces & Carl Podcast Transcript

Michael: Good afternoon, Carl.

Carl: Hello, Michael. How are you?

Michael: I'm doing well. How are you?

Carl: Yeah, things are really good.

Michael: I have to admit, for our episode here, I am missing a little bit. There's no blue couch in the background. It's like where has the couch gone?

Carl: The couch is still here. It's right over there. I just didn't have time before this episode to move it in some...You know like the one time we had sideways.

Michael: Yeah, sideways, standing up, hanging from the ceiling. Well, I know it's going to be road-tripping with you soon right.

Carl: It got its first speaking request, the couch did. Yep.

Michael: That's fantastic. That's fantastic.

Carl: So, it's going to Jolt with me in Las Vegas.

Michael: Excellent. So I trust we'll see some pictures on Twitter, on social media.

Carl: Oh, Michael, you have no idea what sort of pictures you're going to see. I can't reveal all the secrets we have, but it's going to involve intentionally trolling Michael Kitces with the blue couch. It's part of our intention.

Michael: Fantastic. All right, so we'll keep our eyes peeled for the blue couch as it makes its increasingly visible appearances on Twitter. So are you getting a...are they procuring the blue couch? Are you literally moving the couch from Utah to Vegas?

Carl: That thing is coming with me, yep. I'm taking the blue couch with me.

Michael: Well, that's fantastic.

Carl: It is, it is. My wife...

Michael: All right.

Carl: Yeah, my wife has agreed with the stipulation that there's a pretty steep licensing fee, so.

Michael: Oh, fantastic. So she's commercializing this?

Carl: Yeah, of course. She's like, "If you're going to take my blue couch and let hundreds of people sit on it and take pictures so you can put them on Twitter to troll Michael Kitces, there's a fee for that." And I was like, "Fair enough, fair enough."

Michael: That seems fair. That seems fair.

Carl: Yeah.

Understanding What Delivering Optimal Advice Means [02:04]

Michael: So, for our discussion today, I actually kind of wanted to follow on the theme of what we talked about last time. You had this great discussion around just aligning our capital with our goals, which then entails actually getting clearer on our goals and goal clarification over time, and sometimes having the hard job of fire-breathing, dragon-y conversations with clients about those moments where I'm seeing you do a thing and it doesn't seem to be aligned to what you said was important. Has something changed?

And I think as you put it, like dancing with those dragons. So we had a follow-on question that had come in that, to me, sort of follows a similar dynamic in these balances that we have to go through in sort of trying to get to the right answer for clients and balancing and just the reality of client preferences and client preferences that change and sort of the murkiness of what our goals really are. So Jake had asked this question around, how do you balance giving optimal advice to a client that might be more time-intensive...?

Carl: And, Michael, clarify real quick, time-intensive for who?

Michael: I think for the client. Like, we're going to give them the advice, but it's going to take them a lot of time to implement it. Versus giving clients advice that is like...call it 80% optimal, but it's less time-intensive, sort of the implication being so the client's more likely to actually do it. And to me, there's a lot of interesting stuff that goes with this. There's sort of a whole discussion of sometimes the thing that we can determine is financially optimal from all of our financial analysis. Like I can do that, but the client's going to have to give up 20 hours of their life to do all these steps, or I can get them, as Jake puts it, 80% of the way there and give them back a whole bunch of hours in their life.

And there's just sort of that...to me, that's basically an indirect expression of goals. Clients will just have a goal of dollars and financial achievement. At best, there's dollars and financial achievement, then there's the time that I'm willing to put towards that. And if you ask more of me in time to get to the financial goal, I might not do it because that's not how I actually weigh my time relative to my financial goals. So I thought there's one interesting theme there from Jake, and I'd love to hear some of your thoughts on it.

But there's also just a higher overarching challenge, to me, around this, which is, there are times where we can get to a point of, "I've analyzed your situation, and here's exactly what the financially optimal path would be, and it's going to take so much I know you're not going to do it." And so as the advisor, as the professional, I just get to this, sort of, to me, awkward moment. Do I knowingly recommend suboptimal advice that I think they'll do and then wait for some future advisor to come across this and go, "What was that guy Kitces thinking? I can't believe he recommended this to the client because it's not optimal." Or, do you, as I think, like get on our professional high horse and say that this is my recommendation. If you're not willing to do this, you're not my client.

I do know a lot of advisors who're like, "If you're not going to implement my recommendations, you can't be my client. I don't want to work with people who don't take my advice." So there's sort of these two dimensions. There's how do you handle the complexity of goals when sometimes there's financial dynamics and there's time dynamics, not just of aligning capital with goals, but just like, "Is my client going to take the hours to do those transfers and make the separate accounts to do the splitting thing we're going to do?" And at what point is it okay to give, knowingly, suboptimal advice because at least the client will do it?

Carl: Yeah. It's so good. I think it's really interesting that... First, I'm super curious about...because you would... I am an 80-percenter by just, like, nature. I'm only interested in getting to 80%. I don't even care about...there's not anything in my life where I've cared about the difference between 80% and 100%.

Michael: Oh, you're just making me weep now, Carl.

Carl: I know. That's why I'm interested in your take on this because I know you're the opposite. And Yvon Chouinard, the founder of Patagonia, calls it being the joy of being an 80-percenter, and he was talking about outdoor activities. Like he's an 80% fly fisherman. I'm like 80% skier, 80% kayaker, 80% climber, and I have lots of friends that are 100% of those things. I don't have any friends who are 100% of all of them, but I have some friends who are 0-0-0, 100%, you know? And I've just always...I felt really good when I finally realized that's what this was about was, being an 80-percenter. But how do you...how does that make you feel? How do you approach... And then we'll get to your question. But I would imagine, if a client asked you a question, you were going to take the time to give them the absolute. You care about the last 10 basis points.

Michael: Yeah.

Carl: I can't even imagine not caring about the last 10 basis points.

Michael: Oh, it just makes me weep, Carl. So again, I'm just reflecting back. I think this is...well, like a lot of things, this has evolved for me as the years have gone by. Early in my career, I think I very much would have been in the...I analyzed the heck out of it. This is the best solution. If you don't want to do this, then you're just not a good client who doesn't get it. Right? You don't get it. You don't see. I gave you the answer. Your life will go so much better, your finances will go so much better if you just do...

Carl: I can save you.

Michael: ...do this thing. Yeah. Well, I don't want to say...there probably was a piece of it deep down. It was like 50% I can save you and the other 50% is why can't you see the great advice I'm giving you because I want to feel good about advice? Why won't you recognize all this great advice I'm giving you? You're not even taking it. So, part of it, to me, from my end, I feel like it's been an evolution from sort of starting there to at least getting to this acknowledgment of, "Look, there's a strategy that we can pursue here." I'm thinking back to a scenario, where I guess a bunch of years ago now, of back when we could do Roth conversions and recharacterizations, there was a whole tax strategy were like...the simple version is, you convert their account into a Roth early in the year and then you can wait the whole 12 months of the year and well into almost 10 months the following year into the recharacterization window. If the account goes up, you keep the Roth conversion. If the account goes down, you recharacterize it and you do it again.

The fancier version of that...

Carl: That's the simple version.

Michael: That's the simple version. Come on, Carl.

Carl: Whatever you say, brother.

Michael: The complex version was, "No, no, no. We're going to split your account up into four or five different buckets. So, we're going to make one bucket that's just large-cap stocks and we'll see if those go up, and if they do, we keep it, and if they don't, we recharacterize. Then we're going to make another bucket for small-cap. So we're going to make another bucket for international, make another bucket for real estate, and another bucket for commodities." And so, I'm running five different horse races at once. If anything goes up, you keep the conversion. If it goes down, you recharacterize it and do it again. And just the more ways you split this, the more economic opportunities you had to win, with the small caveat that the client has to make a new account for each of these. There, frankly, was work on us as well as the client. You've got to make new accounts, you've got to handle the transfers, we've got to withdraw the money back if it doesn't...if it doesn't work out, there's a whole bunch of stuff to track. You're going to get more logins, you're going to get more paperwork, you're going to get more statements. We're going to have to really have a longer conversation with your CPA at the end of the year in order to talk through this. And we would have clients that we would present this strategy to, and some of them are like, "This is awesome. Like, I see the vision and the dollars. What a cool wealth-maximizing thing." If anyone's listening, you can't do this anymore. They changed the recharacterization rules a few years ago, so, unfortunately, it doesn't work. It just happened to be a good example and context.

So, some clients are like, "Well, this is so cool. We never had an advisor that talks about this." We won client opportunities off this. We generated real dollars off this. And then other clients, their eyes would glass over, usually before I even got to the end of the really cool explanation, because it was a really cool explanation. It had charts and bubble drawings and everything. Their eyes would glass over, just clearly there's no way that you're going to...you're not going to do this. You're just seeing the account, the paperwork, and the new things you're going to have to do, and it was just clear they weren't going to do it. And so, maybe they wanted to do the Roth conversion, but not the fancy multi-account splitting recharacterization thing. It was just like...it kind of crystalized one of those scenarios, so I lived this over and over again, of some people wanted to do the complex thing and maximize their wealth to the nth degree, and others just weren't going there, or we'll just convert your account and we'll unwind it if it doesn't go well. It was an 80% solution.

And some clients were just willing to go there, but some clients wanted the 100-percenter and some clients wanted the 80-percenter. At least from my end, I guess for better or worse, I felt fine about it because at least I presented the 100-percenter. I told you about it, I gave you a fair swing. If you're going to choose not to do it for that trade-off, I gave it my best shot. We'll do the thing you want to do. I guess just like from my personal...professional, as professional guilt, professional provider, I did present it, I did show it. But I would point out, "But if this feels like a bit much for you to go through what it takes to do this, here's the alternative version that's a little bit simpler."

Carl: Yeah.

Michael: And got comfortable with the fact that clients would take some of each. But, at least from my end, I had to present all the options. I couldn't not present them, even...and I mean more than once, it was with a client I knew, like existing relationship. I knew they weren't going to do it. I still felt compelled to have the conversation. Maybe that's my own neuroticism that I didn't really need to do it because, at the end of the day, I probably wasted their time because I knew they weren't going to do it. But I presented the conversation, I gave them the chance, I had Plan B there and could show them, and then they would quickly choose plan B and we would move on.

When To Further Explain Details In A Financial Plan [14:05]

Carl: Right. There's so much there to break down that I think so cool. One is just I love hearing you describe that because I'm sure there's plenty of people listening, especially people who are really familiar with your work, that feel the same way, right? That are like, "I got to do this thing and I got to maximize everything." And there might be a few people that feel a little bit more like me...I mean, my eyes glazed over at the simple solution, and I'm a financial planner.

Michael: I know. I lost you on the simple one. You didn't even know I haven't even got started yet.

Carl: Let alone the client, right? So, know that this desire to optimize comes from good, well-intentioned desire to be helpful, right? But with that, let's just talk really quickly. I think we should be clear about the best advice is the advice that will get implemented, full stop, right? The best advice is what will get implemented. And that is a dance and you pointed to that dance a bunch, right? And so, then that second thing you did, which I think is really interesting, right, is just pointing to the fact sometimes it's important. Sometimes it's important for people to be aware that you know that there's a much more robust, optimal, complicated solution. And depending on the dance that you're doing, you'll know whether or not...the degree to which...I think of it as like...we could just be stereotypical for a minute, like an engineer. I may need to go a little bit more into the complex details with an engineer, not because they don't trust me, but because they like to know some of the details.

And so, sometimes one of the solutions to this competition thing could be...I don't know that I ever did this, but...well, no, sometimes I did. I remember printing out...we used to do big, large portfolios we would do in a single fund, like the Dimensional Global Equity Fund or whatever that was 60% equity, 40% fixed income. It was one fund, and there would be lots of money in the one fund. And sometimes, people would be like, "One fund?" And we all know that that's really sliced into 17 different funds and you own like 17,000 positions.

And so, at one time, I actually printed out that kind of holdings, and it was like two inches thick. And I got it bound. And I would just occasionally pull it out of the drawer and just kind of drop it on the table when we were talking about one fund and be like, "That's..." This is just purely because...

Michael: I love that.

Carl: It's internally rebalanced, it's...I know you'll behave best with this one fund instead of me calling you and rebalancing, like all those things.

Michael: I think it's just a good tip for anyone who's listening. If you use a relatively small number of very diversified funds and clients keep saying that it seems like there aren't that many funds, print out a whole list of the holdings, bind it, and be able to thunk it on the table.

Carl: Because I used to think it was just the impact of the drop, just boom. And I would even say sometimes like, "I'm happy to go through this with you if you'd like, but just let me make sure you know." I'll go toe to toe with anybody on the investment process. You could go 17 years looking under every rock and you will not find a better way to invest than this, right? I feel like we have to have that conviction. So either we're just having that conviction, like, "Hey, I want you to know, this seems like a relatively simple solution, but it's the solution on the other side of complexity and I'm happy to take you through all that complexity if you want, but most people don't want to go through it, just like most people when they get a prescription from a doctor do not really want to know anything about the science, the academic literature, the experiments, the tests, all of that stuff, the FDA approval. They don't want to know that. They just want to know you know.

And so, the degree to which we have to prove that we know... But let's keep one thing clear about this. The best advice, the only advice worth anything, is advice that actually gets implemented. And so, the other way to approach this would be to say, "Here's the complex thing. Here's where we're headed. I'll give you a brief description of this and then I'm going to break it down for you. It may take us 18 months to get there, but know we're headed in that direction because we're going to do this first and this first and this first and this first."

So then you're sort of a little bit covered. I was never particularly worried about another advisor. I mean, it happened to me. I remember specifically. I'll give you an example. I had a client who, when we met, we used to ask in the first meeting, in an ideal world, how often would you like us to communicate? And I had this one client, we'll call him Dr. Terry. Dr. Terry spent a lot of time fly fishing and mountain biking. And I remember, he was like, "In an ideal world, I would never hear from you." And I was like, "That's really cool." So I took him at his word. And then a couple of...maybe a year or two later, we got transfer paperwork going to a...I think I might have told this story before...transfer paperwork going to a firm that I won't name but starts with an F and they swim in the sea. And I was like...I called and said, "You can't move there." Right? "If you need a different plan, I'll help you, but I'm not going to let you..." And he's like, "Can you do that?" I'm like, "Yeah, I'm not allowing you to move there." I said, "But what's up?" He said, "Well, I never hear from you."

And that was...

Michael: "You told me not to!"

Carl: And that was the lesson that I learned that we do have to sometimes thunk things on the table. We do have to sometimes say, "I know." We do have to sometimes demonstrate that we're on top of it because a lot of us are like, "Hold the course. Stay, stay stay." We're making this super simple and we don't point often enough to the complexity we went through. But in the end, I think we have to remember that the most important...the most complicated advice that doesn't get implemented is worthless. So, that's that dance.

How Advisor-Client Trust Can Shape Optimal Advice [20:12]

Michael: Yeah, to me, the other part of the dance...so I guess two other things that come to mind to me in this balance in the dance. And at least for me, part of why I still felt compelled, I guess, to do that part of the dance, like to talk through the strategy and, "Here's the thing," is...look, I know, when I've been out there to try to win business, we try to come to the table with some creative ideas and strategies. To me, one of the best things I can hear in a prospect meeting is, "I've never heard that from the advisor I work with." I hear that, I'm like, "This is going well. You're seeing things that you're not hearing from your current advisor. That means you're seeing new opportunities in working with us." This is a prospect meeting going well if I ever hear that come out of a prospect's mouth. And so, I just always attune...I don't want my client, who I know at some point is going to sit across from another advisor, either professionally or socially. Something's going to come up, someone may get pitched. I don't want my client to hear that. I don't want my clients to say that. I don't mind them saying, "Oh, yeah, my advisor told me about that. I didn't want to do it. It was too much of a hassle." Like, that's fine. But I don't want them to say, "I've never heard that before," because now I'm the road...you're not going to do it with the other advisor because I know you wouldn't have done it with me. But if I made the decision that you're not going to do it with me and therefore I'm not going to tell you about it, when someone else tells you about it and it makes it sound really cool, I'm at risk to lose you, even if you go there and then never do it there, because the perception was that I wasn't bringing it to the table. I think, in a similar context, what you said. Like, the client said, "I don't want to hear from you." But the truth is, the client wanted to hear from you and then be able to blow you off and not take your call, but it still mattered whether you were calling. And, in a similar manner, I may know the client's not going to pursue this strategy. I still feel like I bring value to the table by putting it on the table. So, I do agree with sort of this framing of the best advice is the advice that gets implemented, but I would say the recommendations that don't get implemented still have value. I think that's the corollary that goes with it.

Carl: Yeah, that's fair enough. I'm going to ask you a question. I'm just going to ask you to be super honest about this. And there's a little analogy here. Like, there's a lot of concern about getting eaten by a shark when you're out swimming in the ocean, but it actually doesn't happen very often.

Michael: Nope.

Carl: Right? It's really dramatic.

Michael: Most of us, right, know our business, meaning we have very high retention rates, right? Ninety-plus, some firms with 95, 97.

Carl: So how often did you actually hear either from a client, "Hey, I heard from this other person that they're doing this amazing thing," or in a prospect meeting where you're like, "Well, my advisor never talked to me about that." And, in fairness, we have to say like, "And the work was relatively good." Almost every advisor prospect meeting I have, this thing's blown up. But relatively good work. I guess the better question is...

Michael: I mean, how often do we lose clients? How often do we lose clients?

Carl: That's the better question, yeah. How often did you lose clients for that?

Michael: God, probably like two I think I can think of. Very rarely, but again, with the caveat, it's like A...

Carl: They knew you were going complex with all of them.

Michael: Well, just like, look, how do I lose anyone? It hurts. The rejection is very scarring, right? I'll describe the worst. Like, yeah, I remember pretty intimately the people who fired me, particularly that I thought I had a good relationship with, right? Those sting. You remember that a long time, just for better or worse. Pain teaches you lessons. And so, I guess including sometimes lessons we learn a little bit more than we really needed to learn because pain is just sometimes sharp that way that. Having not many experiences like that was still a few too many that made it pretty scarring. I guess just for better or worse, we want a good amount of business that way. So know the strategy works. Now, maybe that's because we were specialized that way talking to clients, talking to prospects who had advisors who were not that focused. That's why we were winning some business. But I think there's just an effect like we inflict this on ourselves.

The ways you win business tend to also be the ways you're most afraid to lose business, right? If you differentiate on expertise, you're afraid someone else is going to come in with deeper and different expertise. If you differentiate on your price, you're worried that someone is going to come in with better pricing. However it is that we show up, I think it's just sort of natural for us, "If I can win clients this way, I could be at risk to lose clients this way." And if that's what I usually take my client... my conversations to when I'm winning business, I really want to make sure I don't lose on the same terms.

So, I don't know. Maybe that's my own neurosis that I carry with it. But I do. I feel like I see that as a pattern for us that losing any clients pretty scarring. And to be fair, it's going to happen. I've certainly...like, we've had more than two clients leave the firm over the years. Just I'm remembering two that had this kind of circumstance associated with it. But losing clients are scarring. And so, for better or worse, I think most of us, you lose a client, you start looking over all the things you did in the relationship and second-guessing it, maybe sometimes unjustly and sometimes justly. But I feel like I need to lose a lot of clients to this to still be concerned about still getting credit for the recommendations that don't get implemented because they still add value for bringing the idea to the table.

Carl: Yeah. Now, that's all fair enough, I'll just give you sort of a slightly different perspective that, again, I'm sure I'm wrong about and I'm...please know that it may not apply to any of you. That's fine. But I would love to think... So two things. One, Jason Fried at Basecamp has this interesting phrase where he says, "Don't scar on the first cut." Right? And his point is if something doesn't happen all that rarely, or at least the first time it happens, we may want to be aware of it. We don't need to build whole new systems in every behavior ever because it may never happen again. And that's an interesting point. But, secondarily, and more importantly, I like to think that I...I like to think about building relationships that...because there was no way to protect against everything. I like building relationships...I'd like to think of my client, if somebody said, "Oh, what you're not doing that?" And I had a client tell me this once, and, again, it was like only one client. But I would love to think that every client said this. It was just like, "No, if that was important for me, Carl would have told me." Because I can't be there all the time, right? Like, "Oh, you should be buying gold." "Well, Carl walked me through why I shouldn't be buying gold."

So I love the idea of, like, can we get so clear. And to me, it would be really...it would be the only way to solve this problem, at least in my mind, the only other way to solve this problem would be to diagnose so thoroughly, right, to have given somebody...to have somebody know...to be so convinced that you understand them better than anyone else that they just know if that was important...and that takes time and work. But I would put my work in there in hopes... And, this is a competing idea, and I'm going to drop the two-inch-thick book on the table every once in a while. Right. And so I think that's the beautiful dance. That's the art of what we do is that... Again, we've talked in the past about punches in the face and empathetic hugs. Now we're talking about elegantly simple and deeply complex, and it's probably an "and" not an "or."

Why The Best Advice Is Not Always The Optimal Advice [28:32]

Michael: So I guess the one thing I have to ask quickly, just as we come up on time and wrap the conversation. I do worry sometimes this sort of framing like the best advice is the advice that gets implemented. I can come at this from the very constructive way. Sometimes, the 80% solution the client implements is better than the 100% solution where their eyes just glaze over it, and then they don't do anything. But I've seen, over the years, "at least the client will actually implement it" has been used as a justification for a lot of really bad recommendations...

Carl: Amen.

Michael: …and really and really questionable stuff. You know, I'm remembering back to starting out in the insurance world and having a conversation with one of the advisors there who just...like, everything was a permanent life insurance sale, right? And I asked him, just because I was learning about mutual funds and saving into retirement accounts. And it's like, "Well, why would like why wouldn't you open a retirement account for the client?" Like you use American Funds, everybody else in the firm was using American Funds. Like he was, you know, coming to Whole life insurance for absolutely everything. And his explanation was basically, "Well, you know, a lot of people screw up and they don't stick it out in their investments and they don't always save every year. But, you know what? No one forgets the premium on their life insurance policy. This is basically like a forced saving strategy. And all my clients have built up significant cash value because they don't want to fail the premium notice that comes through."

And so I'm not trying to open the whole can of worms of, are there ever times you might use permanent life insurance as an accumulation vehicle? We can do that conversation for another day. But suffice it to say, this person was doing it in a much broader context than the scenarios that you might rationalize this for. This was one like, where your only solution is a hammer, every problem looks like a nail. This was his answer for everything, and I'm quite certain it was not right for everyone, even if we're going to debate whether it's right for anyone. And his rationalization was a loosely paraphrased version of, "Well, the best advice is the advice that gets implemented. And my clients when they get that forced savings premium notice, put their money into the life insurance policy." And that was how he rationalized it and slept very well at night.

Carl: Yeah. And look, I mean, what's interesting is, number one, given that person's skillset, he's not wrong. You know, like, that's a skillset problem. You don't know how to help people behave with other more efficient vehicles. And so that's...

Michael: Interesting. That's a skillset problem.

Carl: It could be. I'm being generous in my assumption. Maybe it's just flat out, "I have the skill, but I just want to make more money, whatever." I don't know. But I'm thinking...because I was thinking through. I remember an experience with that exact...I knew that was the example you were going to bring up and I'm glad you brought it up because I'm making an assumption about this audience, and I think it's really good to clarify that. But I'm making an assumption about this audience that we're not playing that game, that we're thinking the best advice is the best advice that will also get implemented. And we're always trying to optimize both of those things. But it is interesting when we think about...I know of examples where that has actually been true, where, you know, neighbors and friends have been always chasing the best, most efficient thing and the best thing, and then one other neighbor, I can remember specifically a dentist, who was like, "My guy told me to buy whole life for 30 years and I got more money than any of my friends."

Well, could that advice...? Well, yeah, I mean, that's a good example. But could that same person have had twice as much if they'd been slightly more efficient in their suggestion? Yes, we all know that. So I often think of that as a skillset. That advisor didn't know how to help people behave using other tools. And that's probably being generous, given the circumstance you're pointing out, is it was probably just because they wanted to sell a policy that paid them a bunch of money.

So all that's to say, I think you and I are talking to people who are saying the best advice is the best advice that would also actually get implemented. And if I can't get people to behave with... For instance, we may know... I think we kind of know, and if we even bring this up, we're going to get into the weeds. So let's not get there. But we may know, about dollar-cost averaging. It's a great example. And dollar-cost averaging, we know dollar-cost averaging is statistically an inefficient way to invest money.

Michael: Yeah, market goes up more often than it goes down. It is mathematically better to just dump it in and pray it works out. It works out more often than it doesn't.

Carl: Absolutely. So dollar-cost averaging actually is not a spreadsheet solution, it's a behavioral solution.

Michael: It's a regret minimization solution.

Carl: Yeah, and that's a really good example of a righteous trick that might be a good example of something that we do that is not the best advice on the planet, but it's what will actually work over time. So that's a good example. But you are pointing to an example where we can take that too far and go, "Yeah, nobody does this ever because they're all dumb. So we just buy whole..." You know, whatever.

Michael: So I think I think that's a good way to frame it in wrapping it up. So takeaways for me is like the best advice is the advice that gets implemented, recommendations that don't get implemented still have value. I think we can acknowledge that. Yes, we have a burden to try to give the most optimal advice that we can. It's okay if the optimal advice...if the clients can implement the thing that's not optimal if they're going to implement it, but that doesn't alleviate the pressure on us to say, "Are you sure there isn't a way you can up your own game and your own skillset to get to the point where you could get the client to actually implement the more optimal thing?" And that, to me...that's a nice way to challenge ourselves to say is there a way we can lift our own skillsets to get to the point where we can get the client to do the thing that's even more and more optimal.

Carl: To me, that point is just, can you become a better chess player? Right? You actually stink at chess, so can you get better? Yeah. And I mean, another phrase I like to use for that is, can you become a better righteous trickster? Like, what righteous tricks can you pull off, as opposed to bait and switch, right? Righteous tricks are in service of the client. Can you get better at pulling righteous tricks that help the client be more efficient? And that's a whole game. It's my favorite game that goes on behind the scenes of like, "Okay, how do I help this client?" And, obviously, there's no rule of thumb for that. It's like, well, this client is going to just invest the whole pool because they can handle it. This client, we're going to dollar-cost-average over six months. This one, we may dollar-cost-average over 12 or 24 months, because that's as close as I can get. Can I get any closer? What can I do here? Like, do they need to take 10% of Robinhood just to get this out of their system? Like, don't lose the war just because you want to win a battle. You know, so I think that's the beauty of all of this. So I love that framing at the end, like just get better at playing righteous tricks.

Michael: All right. Awesome. Awesome. Thank you, Carl.

Carl: Super fun, Michael. Thank you.

Michael: Absolutely. Enjoy your trip with the blue couch.

Carl: Amen.