Whenever the markets become ‘scary' due to current events, advisors can anticipate calls from anxious clients wondering what to do next. These clients are often in fight-or-flight mode, which can make it difficult to have a rational discussion or a productive conversation about their financial plan. And if an advisor jumps straight to data – trying to ‘prove' why staying the course is the right decision – the client may become even more frustrated and reactive. So how can advisors navigate these conversations in a way that helps clients regain a sense of control?

In our 160th episode of Kitces and Carl, Michael Kitces and client communication expert Carl Richards explore how empathy-centered conversations can help clients emotionally reset before engaging in rational decision-making. They discuss a structured five-step framework that financial advisors can use to guide clients from fear back to confidence – helping them feel heard first before introducing logical reasoning.

When a client calls in distress, the first step is to greet them with empathy. If the client says they are worried, it can help to reflect that concern back to them with a simple acknowledgment, such as, "You sound very worried. I feel worried when I watch the news, too." Next, creating space – such as taking a minute to grab a glass of water or introducing a natural pause – can help slow the pace of the conversation and ease tension. Once the client feels more at ease, the advisor can affirm their goals by reinforcing what truly matters to them, such as ensuring they can continue spending a certain amount in retirement. From there, the advisor can remind them that their portfolio was built to support the client's long-term goals and designed to withstand market hiccups, declines, and corrections. Finally, once the emotional intensity has subsided, the advisor can introduce data and historical patterns to provide reassurance.

Still, some clients may insist that "this time it's different". In these cases, it can help to acknowledge that while the cause of each scary market downturn is unique, the market's pattern of recovery has been remarkably consistent. Walking the client through how their individual portfolio would perform in a recession can also be reassuring. Often, the worst-case scenario isn't financial ruin – it may instead be a matter of weathering a few years without an increase to their year-over-year spending. These conversations can also be a great opportunity to affirm why portfolios are structured for risk management, especially since the same client who fears a downturn today may, in a strong market, wonder why they have to rebalance when they could be chasing higher returns!

Ultimately, the key point is that scary markets feel scary – but advisors don't need to rely solely on data to convince clients to stay the course. While historical patterns provide perspective, no one truly knows what will happen next. By leading with empathy and curiosity, advisors can guide clients through market volatility with confidence and care, ensuring they leave conversations feeling heard, understood, and reassured!

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New financial advisors often start with below-market fees – sometimes to build confidence that prospects will actually pay, other times to attract clients quickly and establish a base. But as the firm grows, so does an advisor's skill set and the demands on their time. And while new clients often come in at higher fees, early clients may still be paying well below the firm's current rates.

As such, new firms that start with low fees might make plans to raise fees quickly and, in the meantime, avoid promising clients that the fees will stay the same. But what happens when an advisor did make this promise – and now needs to increase their fees anyway? How can they handle the conversation fairly while maintaining trust with long-standing clients?

In the 159th episode of Kitces & Carl, Michael Kitces and client communication expert Carl Richards discuss how to navigate the ethics and logistics of fee increases for a firm's first clients – especially when the advisor previously promised them their fees would stay the same.

As a starting point, it's important to acknowledge that many advisors feel a deep sense of gratitude and obligation toward their first clients. These were the people who took a chance on a new firm, often building multi-year relationships with the advisor. However, it's worth distinguishing actual promises from emotional obligations – in some cases, advisors may feel bound to a commitment they never explicitly made.

It's also important to consider the business impact of maintaining lower fees for early client segments. As while one or two clients paying below-market rates may not hurt the firm's financial health, several clients for whom the advisor granted exceptions can spell trouble down the road, either by impeding the firm's growth or the advisor's own capacity to sustainably produce high-quality service.

If an advisor did make an explicit promise never to raise fees but now needs to do so, the best course of action would be to have a direct face-to-face conversation. Acknowledging the past promise and explaining why the fee needs to change with honesty and transparency can go a long way. The advisor may emphasize how the firm has grown, compare the client's fees with the current market rate for financial advice, and help them understand the value of the service they're receiving. The advisor may be surprised by how understanding many long-standing clients will be – but for clients who are unable or unwilling to adjust, the advisor may need to guide them to a firm that better fits their budget.

Ultimately, the key point is that fee adjustment conversations – especially with long-standing clients – are rarely easy but may often be necessary. By approaching the conversation with honesty, clarity, and empathy, advisors can maintain trust and fairness while ensuring their firm remains sustainable… and may even be surprised by the client's reception. At the end of the day, charging fees that align with their value allows advisors to grow their firms and continue delivering great advice to more people!

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Many financial advisors approach prospect meetings with a mindset of giving potential clients ample space to consider the relationship before making any commitments. Asking them to "think it over" after an initial meeting is a common strategy designed to help clients feel comfortable and avoid the perception of being pressured into engaging in the relationship right away. This approach allows prospects to consider if the relationship is the right fit for them while also mitigating the risk of the advisor coming across as too aggressive and ‘salesy'. As such, some advisors have formalized this step into their prospecting process.

However, what happens when an initial meeting goes exceptionally well, and the prospect is immediately ready to commit? In such cases, advisors may find themselves faced with a conundrum – should they keep their process and ask a prospect to "think it over", potentially stalling the momentum, or should they adapt to the prospect's readiness, which might introduce internal stress about compromising the process they've built and deviating from their usual routine?

In this 158th episode of Kitces & Carl, Michael Kitces and client communication expert Carl Richards debate the pros and cons of maintaining a longer prospecting process – especially when a prospect is ready to commit early in an advisor's process.

While "think it over" is often framed as a benefit to prospects, there are also compelling reasons for advisors to take their time considering the relationship before agreeing to move forward. For example, advisors operating a lifestyle firm generally have limited client capacity and may need time to evaluate whether the prospect aligns with their values and service model. Similarly, advisors who provide comprehensive plans as part of their value proposition might need time to put together the necessary information – and asking prospects to "think it over" gives both parties time to ensure a good fit.

On the flip side, being told to "think it over" can also be frustrating for prospects who have already done their due diligence and are ready to move forward. While prospecting can be nerve-racking for the advisor, it can also be challenging for prospects who feel ready to commit – they may interpret delays as unnecessary obstacles. Advisors can strike a middle ground if they want (or need) a longer prospecting process without disempowering the ready-to-commit prospect. For example, the advisor may frame a second meeting as an opportunity to review documents while having paperwork ready for those who are still ready to proceed. This can help a prospect feel empowered and heard while still giving the advisor time for their own process and consideration.

Ultimately, the structure of a prospecting process often reflects the personal style and comfort level of the advisor – while some may prefer a deliberate, multi-meeting approach, others might embrace quicker commitments when the fit feels right. The key is finding a balance that respects both the advisor's process and the prospect's readiness, ensuring forward momentum without compromising the integrity of the relationship!

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The introductory meeting is a high-stakes moment for both advisors and prospects, often nerve-wracking for both sides. Advisors must decide how to present themselves, respond to questions, explain complex issues in an engaging way, and propose and explain their long-term proposition. And at the same time, prospects are likely to feel vulnerable and equally nervous with their own set of concerns – how to present themselves to the advisor, what questions to ask, and how to explain their issues while still feeling competent. For many, this may be their first-ever meeting with a financial advisor, adding another layer of uncertainty (and potential anxiety) beyond simply evaluating fit.

In the 157th episode of Kitces & Carl, Michael Kitces and client communication expert Carl Richards discuss how advisors can alleviate a prospect's anxiety by setting clear expectations for the introductory meeting – both in terms of logistics and emotional preparedness. They highlight how even small details – such as providing directions, clarifying meeting logistics, or outlining the purpose of the conversation – can help prospects feel more in control, making the experience smoother and more productive for both parties.

For most prospects, showing up comfortably and feeling their very best can be challenging when they don't know what to expect – whether it's where to park, how formal the meeting will be, or whether they need to bring any financial documents. While these details might seem minor, they can create unnecessary stress in the lead-up to the meeting. Even prospects who have met with advisors before may find that every firm runs a slightly different introductory meeting. By taking a moment to provide clarity, advisors can make a meaningful difference in setting the right tone and allowing prospects to engage with confidence.

One effective way to alleviate some of the nervousness is to give prospects a clear outline of the call in advance of the meeting. This roadmap can be as simple as a brief email (or similar document) covering basic logistics and setting clear expectations. The email may discuss practical details like directions, parking, and dress code, and include a brief meeting agenda with potential next steps. It may also include a list of which documents to review, bring, or – perhaps just as crucially – not bring. These small but thoughtful details can offer reassurance to prospects, helping to reduce pre-meeting anxiety and allowing them to focus on the conversation itself.

Ultimately, the key point is that small, intentional efforts to reduce uncertainty can go a long way in helping a firm stand out. As while prospects are often bracing themselves for a high-pressure sales pitch, a well-crafted pre-meeting email immediately signals a different experience – one that prioritizes comfort, clarity, and meaningful dialogue. By eliminating distractions and providing a clear roadmap that outlines expectations in advance, advisors can help settle a prospect's nerves the day of the meeting – which, in turn, can lead to more productive conversations and stronger client relationships!

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Since the emergence of Artificial Intelligence (AI) in the mainstream technological landscape, conversations about which areas of the financial planning industry would be most likely impacted by AI have proliferated. These discussions have ranged from questioning whether everyone would be out of a job in five years to wondering if anything of substance would change at all. However, as the public’s understanding of AI has developed, the common consensus has largely shifted to the understanding that while processes may change, the expertise and human connection offered by specialists like financial advisors will be hard to replace. In fact, AI currently seems most likely to develop into a tool that advisors can use in many parts of practice. Which, in turn, poses the question – where can AI be most effectively used as a way for advisors to leverage their time and creativity?

In the 156th episode of Kitces & Carl, Michael Kitces and client communication expert Carl Richards discuss how they use AI tools such as ChatGPT to expedite their creative and strategic processes – and how to ‘ask’ ChatGPT better questions to get more effective and relevant answers.

Perhaps one of the most impressive capabilities of programs like ChatGPT lies in their ability to serve as brainstorming partners. To use them effectively, it can be helpful to assign ChatGPT a role (e.g., “You are my executive producer” or “You are a marketing director”) and define a clear objective. Providing sample documents or links to sources for tone or substance may be helpful. For example, advisors can attach their typical “first prospect meeting” agenda, give ChatGPT the role of business development coach, and ask for feedback and what to do differently.

That being said, a common frustration when using ChatGPT or similar programs for brainstorming is that the first responses may not be exactly what is hoped for. Rather than expecting a perfect ‘call and response’, the process can be approached more as an iterative dialogue. Sharing initial thoughts, providing feedback, and curating further – such as asking variations of “I really like [this idea]; can you tell me more about it for an audience of [specific type of client]…?” – can guide ChatGPT toward more tailored results. The advisor and AI can then collaborate further to create a stronger and more relevant offering. Additionally, many AI programs now ‘remember’ what was asked of them across sessions, making it easier to build on previous conversations and reach increasingly insightful responses over time!

The key point is that with some patience and guidance, ChatGPT can be a powerful tool for enhancing many aspects of an advisory firm’s operations. Whether it’s used to help with marketing, drafting email responses, summarizing content, reviewing data analyses, or even providing feedback on client surveys, the potential applications are vast. Ultimately, the only true limitation of AI’s potential is ‘just’ a question of imagination!

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While financial advisors offer valuable services for their clients, it can sometimes be challenging to gauge how much clients actually value those services. On one hand, a client's willingness to pay an ongoing fee for financial advice suggests that they find the advisor's services worthwhile. On the other hand, the term "financial advice" often refers to much more than asset allocation and wealth management. Many firms also offer regular meetings, webinars, client portals, and other services to enhance the client experience. Yet, with so many services available, it isn't always clear which ones truly make a meaningful difference.

In the 155th episode of Kitces & Carl, Michael Kitces and client communication expert Carl Richards discuss how advisors can look beyond engagement metrics to understand which services have the greatest impact on their clients' experience.

Engagement metrics are often used to gauge how much value a client derives from their financial advisory firm's services. For many advisors, a shift in engagement – such as a long-term client requesting fewer meetings – can be a cause for concern, as it might raise red flags signaling disengagement or even a potential move to another advisory firm. However, changes in behavior like this don't always indicate a problem. For instance, the same client wanting to reduce their meeting frequency from three times a year to just once might reflect not a loss of interest, but instead increased peace of mind, trust in the advisor, or confidence that if anything urgent comes up, they will connect with each other anyway.

This principle extends across many aspects of a firm's value proposition, from client newsletters to account log-in frequency to other common metrics of interest. While offering valuable resources to clients can make a difference, providing too many options risks overwhelming the client. Rather than reinforce the advisor's value, excessive offerings might even be a turn-off for the client, detracting from their overall experience.

This tendency to 'over-service' often comes from good intentions of providing great service and justifying the fee for financial advice, and advisors may hesitate to scale back out of concern for removing something clients value (e.g., a monthly newsletter they enjoy reading even if they never reply). To better understand what truly resonates with clients, advisors may find it worthwhile simply to start by asking. For example, sending a client engagement survey or talking with clients can provide meaningful insights. Similarly, investigating offerings that clients don't engage with – such as document vaults that they rarely use – can reveal where advisors can focus less effort, giving them more time to focus on what really does make a difference.

Ultimately, the key point is that traditional engagement metrics may fall short in capturing the true value clients place on financial advisory services. And, in a world where clients are increasingly busy and advisors face competing demands, the real opportunity lies in figuring out what truly matters to clients. By identifying the services that create the most meaningful connections and deliver the greatest impact, advisors can allocate their time and energy where it matters most – deepening trust, enhancing the client experience, and strengthening long-term relationships!

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Just a few decades ago, giving financial advice was largely a manual process – printing lengthy financial plans, processing physical checks, and managing paper files. Then, technology evolved, introducing tools like Excel, the internet, and sophisticated financial planning and CRM software that transformed how advisors deliver financial advice. Today, AI is poised to drive another transformation in financial planning – but where will AI create the most change, and where is the human advisor still indispensable?

In the 154th episode of Kitces & Carl, Michael Kitces and client communication expert Carl Richards discuss the opportunities and limitations of AI in financial advice, exploring how technology can enhance advisors' work and where its boundaries lie.

AI offers exciting possibilities as a brainstorming partner, editor, and copywriter. Advisors may find it particularly useful for drafting meeting notes, creating summary emails, generating marketing ideas, and analyzing client data for actionable insights. However, while AI programs excel at addressing technical tasks and making data-driven decisions, they often fall short in areas of ambiguity. Many client concerns are deeply personal, requiring empathy, trust, and a nuanced understanding of complex emotional and financial situations. Questions like "What's the best way to divide my estate among grandchildren with different life circumstances?" don't have clear, calculable answers. Instead, they demand thoughtful conversations rooted in the client's values. These conversations are often emotional and vulnerable, requiring a sense of safety built on years of trust that technology simply can't replicate.

Despite the significant efficiencies technology has introduced, the time saved by advisors has often been reinvested into enhancing plans and services, raising the bar for client expectations while leaving advisory firm margins relatively unchanged. While the advisor's role has remained remarkably consistent, even as support tasks have been streamlined through automation, there is still a real opportunity for advisors to use technology to focus on relationship-building and delivering unique personal value. Delegating and automating routine tasks allows advisors to spend more time guiding clients through the emotional and complex challenges of financial planning – work that requires an intimate connection and a deep understanding of each client's unique situation.

The key point is that AI and other technological tools can provide significant support, they ultimately cannot replace the empathy and personalized problem-solving skills that form the foundation of the client/advisor relationship. As technology continues to evolve, advisors can seek opportunities to delegate or automate tasks, freeing up more time to do what only they can do: applying their financial knowledge to provide personalized guidance, while navigating complex emotions and building lasting relationships!

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There's an old joke in the financial planning industry that the ideal client is "anyone with a pulse". For advisors just starting out, that sentiment often rings true – every prospect willing to pay for their service feels like an opportunity. However, as their firms mature, advisors often notice a divide manifesting between newer clients paying higher fees and 'legacy clients' from the early days paying discounted rates. Continuing to serve these legacy clients can strain firm resources, limit profitability, and slow growth. Which can leave advisors grappling with the trade-off between gratitude for early supporters – clients who were willing to 'bet' on them during the firm's fledgling days – and the increasing demands of running a sustainable, profitable business. This balancing act becomes even more demanding as advisors' services and fees evolve, creating a growing gap between legacy client contributions and the cost of maintaining those relationships.

In this 153rd episode of Kitces & Carl, Michael Kitces and client communication expert Carl Richards discuss how advisors can navigate the challenge of managing underpaying clients. They explore why financial 'spreadsheet' metrics often fail to account for the emotional realities of these decisions – such as the loyalty advisors feel toward long-standing clients – and how advisors can approach this common business dilemma with greater balance and thoughtfulness.

For many advisors, determining what to do with legacy clients paying discounted rates can feel at odds with their purpose: helping people. Yet every client relationship demands resources – from staff time to infrastructure to meeting hours – and taking on too many underpaying clients can leave advisors stretched too thin. This strain doesn't just affect business growth and service quality. Over time, it can even affect the advisor's well-being, as the demands (and stressors!) take a physical and emotional toll.

Advisors facing "too much work for too many clients for too little dollars" can start by assessing the trade-offs. Saying "yes" to underpaying clients often means saying 'no' to higher-paying opportunities, greater work-life flexibility, or long-term firm growth. What matters most is making this decision consciously, with clarity and intention. Advisors who take the time to reflect on their choices can better align their decisions with their goals and values. And, in many cases, legacy clients may be willing to adjust their fees to match current service levels, providing the firm with resources to serve more clients without stretching thin.

Ultimately, there's no one-size-fits-all solution. The key point is that whichever path an advisor chooses – graduating clients, right-sizing fees, or even making no adjustments –  what matters most is that the decision is made intentionally. After all, there is a lot of power that comes with 'choosing' that course of action. Every path brings its own challenges – and its own rewards – but by taking ownership of the decision, advisors can move forward with clarity and confidence!

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How much to charge for financial advice is rarely a decision made lightly. A firm's pricing strategy often reflects both the local market (or niche-related) norms – such as the nearly-ubiquitous 1%. Others may align with broader industry trends, like transitioning to fee-only structures to buffer against market volatility. Still others may choose a hybrid model, combining AUM fees with additional charges for other services like tax planning. Regardless of the pricing structure that firms choose, Kitces research on "How Financial Planners Actually Do Financial Planning" finds that there is a gap in "fee confidence" – while some advisors charge at or beyond "market price", others consistently underprice themselves. This fee confidence gap has large ramifications in the long term, as firms with higher revenues can reinvest in growth – with hiring, marketing, and process improvements – that enhance their value proposition and attracts more prospective clients.

In this episode of Kitces & Carl, Michael Kitces and client communication expert Carl Richards discuss why this fee confidence gap exists, exploring the psychological, competitive, and practical factors that often drive advisors to underprice their services. They also suggest how advisors with unsustainably low fees can shift their mindset, embrace their value, and realign their pricing to reflect both the tangible and intangible value they actually provide to clients.

Developing fee confidence may pose a real challenge, especially for advisors in the early stages of their careers or struggling to 'keep the lights on'. Pricing the impact of financial planning can be challenging, because many of its benefits – like peace of mind – are intangible, compelling in value but difficult to match with an exact price. For newer or less confident advisors, underpricing can seem like a necessary compromise to compete with more established firms. For example, an advisor may think, "The standard advisor charges a 1% AUM fee. But since I'm not as experienced as the average advisor, I'll charge 0.8%", even when they know that this underpricing decision could severely impact business development in the long term!

To develop fee confidence, it may help to begin with gathering external evidence. Researching what peers are charging is a logical first step, but what may be even more effective is reviewing feedback from clients and others who have worked closely with the firm. Have clients described the advice as "life-changing"? Are they raving about the advice and guidance they've received? These affirmations can reinforce the advisor's value, serving as powerful reminders that help the advisor gain the confidence to charge more. Saving such feedback in a "stoke file" – a catch-all collection of notes, comments, and positive feedback – can provide a helpful confidence boost when doubts arise.

Ultimately, though, fee confidence begins internally. And while external feedback can help, an advisor's true confidence comes from recognizing their unique strengths and understanding how they uniquely help their clients. By internalizing this value, advisors can confidently charge what they're truly worth, paving the way for success in the long run!

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As the financial advice industry began shifting from a sales-based model to a more sustainable asset management approach, advisors found their roles shifting along with it. With revenue rooted in more predictable, recurring income, many advisors were able to step off the relentless 'treadmill' of constant sales, allowing them to invest in growth by hiring staff and delegating tasks. Effective delegation, in turn, created a positive cycle, freeing advisors from lower-value activities so they could work on building and scaling their firms. "Delegate and let go" became a common mantra, with advisors encouraged to focus only on the highest-value tasks. Yet, even for advisors who understand the value of delegation, actually letting go is often easier said than done.

In the 151st episode of Kitces & Carl, Michael Kitces and client communication expert Carl Richards discuss the psychological challenges advisors often face when it comes to delegating tasks and the strategies that can make delegation more effective.

Despite the potential upsides of delegation, advisors typically face 3 psychological hurdles to overcome in order to delegate effectively. First, it can be hard to imagine that doing all of an advisor's least favorite tasks would be someone else's dream job (after all, if doing those tasks were so enjoyable, then advisors wouldn't be trying to delegate them in the first place!). Second, people generally enjoy working with those similar to themselves, which can make it tempting to hire a 'mini-me' with similar strengths and inclinations. However, doing so can unintentionally reinforce the advisor's reluctance to delegate disliked tasks. Finally, even if an advisor dislikes a particular task, they may still be the fastest (and most skilled) at completing it, creating an argument for the advisor to continue doing it. Together, these elements create a compelling case for not delegating at all. In reality, though, holding onto these less-favored, non-growth-related tasks can limit a firm's long-term capacity to scale.

The first 2 barriers can be addressed by hiring an 'opposite', rather than a 'mini-me'. For example, while it might seem natural to hire someone similar, bringing in someone who has complementary strengths – such as an operations-focused person who thrives on detailed follow-through – ensures that tasks the advisor may find draining are handled by someone who enjoys them. The third barrier – that no one else can complete a task as well or as quickly as the advisor – may hold true and can be challenging to overcome. Yet, advisors may still benefit from delegating the work, as once a task is offloaded, an advisor's time is freed up for more productive work – or even for taking additional time off! A highly leveraged advisor has more flexibility in shaping their day-to-day business operations.

Ultimately, advisors aiming to delegate effectively can benefit from focusing on a new hire's ideal strengths and aptitudes. Hiring and working with an 'opposite' can feel counterintuitive at first – a checklist-oriented person, for example, may 'just' complete their assigned tasks without exploring beyond the to-do list, which could feel foreign to an ideas-driven advisor. However, this dynamic can also be incredibly freeing. After all, someone who enjoys a particular set of tasks is more likely to take ownership and improve that process – and, by extension, contribute to the firm's long-term success!

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