For many financial advicers, helping long-time clients identify and progress toward their goals eventually transitions into conversations around the best ways to enjoy the fruits of their labor once they reach them. Yet, for some clients, making the shift into retirement (or any other new stage of their lives) can often be a challenge for myriad reasons, which places the advisor in a unique position to help these clients understand the roadblocks they face and explore ways to overcome these obstacles.

In our 134th episode of Kitces & Carl, Michael Kitces and client communication expert Carl Richards discuss the unique paradox faced by some clients who may not be ready (or willing) to step away from the work they've been doing to realize their financial goals… even after they've attained the goals they've committed to working for in the first place.

While this disconnect might seem to be a logical inconsistency, there are many reasons why clients may find it challenging to switch gears from their current work. One common reason is that they may be perfectly happy with where they're at and actually find the process of realizing their goals more meaningful than reaching the destination itself. As while many clients may look forward to retiring from their careers to spend time doing something else, others enjoy and experience meaningful satisfaction from the contribution and impact that their work may allow them to make.

Alternatively, some clients may be anxious or fearful about transitioning to a new stage due to concerns about their financial situation and whether they truly have the means to stop working. While reviewing the integrity of their financial plan can often help clients resolve their reservations, sometimes there are deeper reasons for a client's reticence to fulfill their goals. In these instances, it may be worthwhile to investigate these reasons, which may even necessitate professional counseling or therapy.

Ultimately, the key point is that while advisors often have implied permission to point out and challenge the apparent inconsistencies in their clients' behavior, keeping their own values separate from their clients' plans and focusing on what really motivates and concerns their clients will help advisors guide their clients past many of the roadblocks they face. And by ensuring that their clients are equipped with (and know how to follow!) well-designed financial plans created specifically with the client's goals and needs in mind, the advisor opens the path for clients to eventually make the transition to enjoy their realized goals, and to identify and obtain the help they may need to get there along the way!

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For many financial advisors, the traditional way of doing business has generally been based on a transaction-based service model involving functional solutions to clients' practical problems. In more recent years, though, advisors have begun to focus on developing stronger and more meaningful relationships, recognizing the advantage of better understanding clients' values and priorities when it comes to solving for their long-term goals. And with this growing realization, many advisors are also recognizing the profound impact they have on their clients' lives beyond solving their everyday financial challenges. Which begs the question: Is there a missed opportunity for advisors to market themselves as providing value that transcends solving just their clients' functional goal-based needs and that addresses their emotional, social, and even aspirational needs as well?

In our 133rd episode of Kitces & Carl, Michael Kitces and client communication expert Carl Richards explore how many of the services provided by financial advisors often align with those outlined in consulting firm Bain & Company's "Elements of Value Pyramid", a 4-tier model representing different levels of inherent value delivered by products and services. Similar to psychologist Abraham Maslow's Hierarchy Of Needs, the Elements of Value codify some of the less quantifiable concepts of what is important and valuable to clients – including those that are emotional, life-changing, and socially impactful – that are often naturally addressed (but not necessarily marketed as part of the services provided by the advisor) through the advisor's planning process, offering a potential framework for advisors to consider when deciding whether to market themselves as providing these 'higher' levels of value.

As a starting point, while clients often approach advisors with basic financial problems, there are often deeper concerns (and goals) associated with their initial requests. And when the advisor is able to gain an understanding of those underlying issues through active listening and engagement using carefully crafted questions, clients often benefit in ways that naturally address their higher-tier needs in the Elements of Value Pyramid. Which further elevates the advisor's value to encompass broader services that the client may not have even realized they wanted or needed in the first place, potentially increasing loyalty and trust within the relationship and even leading to growth of the advisor's business through increased referrals!

Advisors seeking to market these higher-tier services (e.g., providing hope and motivation, reducing anxiety, promoting wellness) may need to find a comfortable balance between explicitly communicating the intent to provide such services, versus relying on the client to recognize the added benefits as an organic by-product of the advisor's standard process. As while serving in a fiduciary capacity to create a comprehensive financial plan in the client's best interest can result in providing solutions that cascade into the emotional, life-changing, and even social-impact tiers of the Elements of Value Pyramid, sometimes without the client ever realizing they had needs in those areas.

Ultimately, while acknowledging a client's emotional and social needs hasn't historically been a large part of traditional financial planning, the concept of financial psychology has been gaining credence as an important aspect of financial planning. And by considering all the ways they can provide value to their clients (including the evaluation of 'higher-level' elements as outlined by Bain's Elements of Value Pyramid), advisors can be confident about marketing themselves as servicing these client needs in whatever capacity works best for them – whether it involves exploring simple questions about a client's desired future life or delving into the deeper levels of how the client perceives life-changing self-actualization or even self-transcendence!

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At the end of each calendar year, social media platforms compile a wrap-up of each user's metrics, showing a theoretical reach for every account's best-performing piece of created media content and highlighting the "Best Of The Best" on the web, while revealing social media 'superstars' who have millions of impressions and followers. But how much do these numbers really matter for financial advisors driving the growth of their businesses? While some advisors may be naturally inclined to compare these figures with the actual reach of their own content getting in front of their target client base, are these 'vanity' metrics really a useful tool in helping advisors get better results, or are they simply a noisy distraction?

In our 132nd episode of Kitces & Carl, Michael Kitces and client communication expert Carl Richards discuss how exceptionally high social media impressions or numbers of followers don't necessarily signal the authentic growth of an advisory firm's business, and why creating content that engages a specific audience that finds value in that content is what matters most for advisors whose primary objective is to increase their client base (even though they may have much fewer followers, subscribers, impressions, and other smaller metrics than the social media 'stars' with purported 6-figure subscriber lists!).

As a starting point, understanding which metrics are actually relevant to the business is crucial for advisors to discern the right path toward actively engaging an audience with their content. And that comparing what may seem to be humble numbers against the top accounts on social media will only interfere with the advisor's own journey of planning out a successful business growth strategy; instead, focusing on the creation of content that their target audience, however big or small, truly cares about and that motivates them to interact with the advisor's social media presence will lead to more valuable outcomes (including new audience members, referrals, and prospect conversion) in the end!

Importantly, appealing to the firm's particular target audience through relevant and meaningful content will be more likely to attract the right prospects to that content. Which often means more referrals and audience members, ultimately leading not just to more prospects and client conversions but also to a broader reach out to even more prospects who find value in what the advisor offers, which is often the primary goal from the start. So while a large unfocused campaign, generically targeted to hundreds of thousands of followers, might be an attractive approach to boost impressions and followers to keep up with other social media stars, the reality is that this direction doesn't yield results as valuable as highly specific messaging targeted to a smaller subset of subscribers who most resemble the firm's ideal target client. And even though this audience base may be a minuscule fraction of those who follow larger social media celebrities, it comprises individuals who are familiar with and find value in the advisor's content – and who are also much more likely to connect and engage with the advisor for their services as well.

Ultimately, the key point is that slow growth through relevant and impactful content will result in more meaningful engagement and action from a prospective client base than untargeted blanket campaigns sent to many thousands of individuals. Building a business and client base that fits within an advisor's capacity to sustainably provide clients with high-quality service is more important than having an impressive 50K+ followers, especially when those 50K+ followers only translate into single-digit numbers of individuals who actually engage with the business. And having fewer followers and subscribers who actively engage in an advisor's content because they found something they connected with on some level is exponentially more valuable than adopting a strategy that promises growth based on high numbers alone!

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When a new year comes around it is often customary to set new personal and professional goals. Yet, in the midst of the tradeoffs that come with balancing new goals and their required behaviors, the challenge of creating sensible targets with flexibility and grace can be confounded by the reality of living in a world where uncertainty abounds and complex life situations are difficult (and sometimes even impossible) to map out.

In our 131st episode of Kitces & Carl, Michael Kitces and client communication expert Carl Richards discuss the value of setting goals even when our circumstances may seem overwhelmingly complex and uncertain (and even when we know that our goals will change); as doing so helps us clarify not only where we want to go and what we want to achieve, but also what our initial first steps need to be to get to the 'nearest local optimum' that will reveal new perspectives about our journey. Because developing these new perspectives, over time, are what often reveals the true direction we need to go to realize our most fulfilling success.

As a starting point, it's important to recognize the value of taking any initial step, as without that first step, getting past the myriad choices that face us can feel overwhelming and impossible. Furthermore, giving ourselves permission to shift gears and change goals instead of sticking to a rigid and unchanging blueprint for life can help us navigate and adapt to the complex environment that surrounds us. And by continually reassessing our roadmap as we take each step, we can course correct our path, adjust our goals as needed, and solve for the next nearest local optimum that we need to target to help us progress along our journey.

Accordingly, setting flexible goals and reassessing their relevance from time to time can help us make sense of the mystery that lies in the world around us while bringing clarity to the adjustments we need to make to stay on a path that continues to have meaning for us. As while setting goals can motivate people to take action to achieve the plans they make for themselves, the reality is that the sense of security that comes with having goals – which is often the source of the motivation it provides – can be based on a fleeting framework that is subject to change at any time. The question to ask ourselves as we reassess our goals, then, is if the steps we are taking continue to bring us closer to something we truly want, whether that involves improving the work we do and getting to what feels right for us, and/or aiming for better financial, emotional, or mental profits?

Ultimately, the point of having goals is to keep us moving in the right direction toward the growth and progress we want to achieve. When goals become too rigid, they can inhibit our momentum and keep us from recognizing the adjustments we need to make to stay true to our values and priorities as they inevitably change over time. Which means that keeping goals flexible and constantly assessing the steps needed to reach the finish line is crucial in crafting the most useful goals. And by following a path true to our values, continually assessing (and re-assessing) the direction we're moving, and adjusting the goals along the way, we can have confidence that the road we're traveling will continue to bring us closer to a meaningful and fulfilling future!

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Few service industries have as much potential to impact lives as financial advice, and it's that very ability for financial advicers to help their clients achieve positive outcomes that can often compound for decades and beyond that make the profession deeply satisfying for so many. It's no wonder, then, that the profession attracts individuals who are highly service-minded and enjoy helping others. (It also doesn't hurt that advicers can earn a good living, and can also build their practices in any number of ways that fit their personal preferences, needs, and goals!) Not surprisingly, the most recent Kitces Research Study on What Actually Contributes To Advisor Wellbeing shows that, while advicers who have a service mentality are typically happier in their roles, service-minded advicers who are also on the higher end of the income spectrum tend to be the happiest. Which highlights an interesting tension in that some households reaping the greatest benefit from an advicer's help might not always be the most profitable for the advicer, and sometimes may not be profitable at all!

In our 130th episode of Kitces & Carl, Michael Kitces and Carl Richards explore this duality of solving for both providing service and earning income, the key metrics that separate advicers who are "thriving" from those who are "struggling", and why advicers who intentionally build towards having a highly profitable business don't need to forego being of service towards underserved individuals who truly need help with financial planning, even when those clients may not be profitable.

Conventional wisdom holds that an effective way to increase the chances of having a successful practice (and being happy) is to simply move up the proverbial food chain by finding wealthier clients and jettisoning the least profitable clients. Taken to a logical extreme, then, it would seem that the 'happiest' advicers would only serve the highest-of-high-net-worth clients. But the reality is that it doesn't take a big leap in client affluence before advicers begin achieving material gains in happiness. Notably, 'struggling' advicers had clients who averaged having $600,000 or $700,000 in assets, while 'thriving' advicers had clients with an average of $1,000,000 in assets. The difference also resulted in material benefits, including fewer hours worked, fewer clients, less overhead and staff, more autonomy and freedom, and greater profitability. 

In other words, there appears to be a threshold where, once achieved, advicers can reclaim a non-trivial number of hours each week when they can focus their efforts on other rewarding endeavors… like offering pro bono financial planning services or creating broader content that addresses the widespread need for financial education. That way, an advicer can have the satisfaction of getting paid well while still being able to serve the underserved.

Ultimately, the key point is that being a happy advicer who's paid well for doing good work doesn't necessitate sacrificing service to those who need real financial advice the most. By being intentional around building a client base of profitable clients, reasonably reducing overhead, and learning how to say "no" to prospects who aren't a good fit (and helping them find the help they need), advicers can increase their take-home pay and reduce the number of hours they work. And a focus on building a profitable business in which an advicer is paid well for the good work they do isn't only about being happier… it's also about having the satisfaction of being able to create the freedom and capacity to serve those who are truly in need

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As the beginning of the new year invites a fresh start, it's a fitting time to reflect on our own wellbeing and the elements that make us happy in life. While many believe they understand what brings them joy, it can be difficult to recognize the patterns that consistently enhance wellbeing and happiness. The most recent Kitces Research Study on What Actually Contributes To Advisor Wellbeing sheds light on this topic, revealing some of the factors that contribute most to positive wellbeing for advisors and offering insight into the common themes for advisors who enjoy their lives the most. And the truth lies in the data.

In our 129th episode of Kitces & Carl, Michael Kitces and Carl Richards discuss the latest results from the 2023 Kitces Research on Advisor Wellbeing, which analyzes over 87 different variables that contribute to an advisor's state of happiness and reveals a handful of key patterns that contribute to wellbeing.

As a starting point, the research study reveals that the factor reported as most associated with advisor wellbeing was their level of autonomy when it comes to the freedom over how work and business is run and the ability to serve clients in the way one believes they deserve to be served. Having some level of freedom to structure our lives and careers has a strong impact on the happiness of advisors in the industry.

The second biggest driver of advisor wellbeing is experience, as the number of years spent serving clients and climbing the financial advisor ladder was directly correlated with happiness. More specifically, the years of client-facing experience and the ability to structure a career that promotes successful navigation of the early years of the job, which are often the most difficult, were often found to be crucial for advisors' wellbeing and helping them to develop into seasoned industry professionals who were most satisfied with their jobs.

Team support is another vital component of advisor wellbeing, as advisors with a supportive team who they could rely on to delegate tasks were found to be happier in general. By contrast, advisors without such support, working together only with other associates sharing a client list in the pursuit of their own careers, do not exhibit the same level of happiness and wellbeing. Notably, while the advisors without support didn't appear to be less happy, they simply didn't report an increase in wellbeing.

Ultimately, the key point is that advisor happiness and wellbeing are very closely related to an advisor's ability to focus on what is most important to them as individuals, structuring their lives around the ability to call their own shots, gaining the wisdom and experience that comes from sticking with a career path, and having the true support that can allow the other factors to be possible!

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Throughout history, there has been an age-old question of the difference between an investment and an expense.  Society often views expenses as a permanent fixture in life, suggesting that there is no path away from their burden. But what if there was an alternative path?  What if there was a way to shift our financial mindset about expenses from one of endless sunk costs to one of intentional investment? And what if we could apply this perspective not just to how we spend our money, but also to how we use our talents and spend our time as well?

In our 128th episode of Kitces & Carl, Michael Kitces and client communication expert Carl Richards explore how to allay the expense-centric mentality that many people apply to their finances, and consider the process of shifting into an investment-centric focus that encourages individuals to grant themselves the permission to free up time for business growth, spending time with family, and other important (and enjoyable!) activities. Identifying these investment opportunities in how we spend our time and resources can even help to enhance our performance and growth, both professionally and personally.

While spending is an ongoing and inevitable part of life, viewing it as a drain on resources rather than an investment for the future is a common trap. The ultimate goal is to realize that our allocated time and money can potentially produce meaningful benefits instead of viewing them simply as spent resources. And while the challenge in changing that mentality will be a unique process for everyone, there are many common strategies available. For example, investing time and money into scheduling multiple weekly sessions at an expensive (but highly effective) physical therapist can help alleviate chronic pain, devoting years of our life to obtain a college education can open up lucrative career opportunities, traveling in business class for international speaking engagements allows for a more comfortable and convenient flight (so that you're more energized and ready to offer a dynamic presentation upon arrival!), or simply committing to a monthly lunch date can maintain close ties with long-term friends.

One approach to help us validate the potential investments we make with our everyday spending is to consider how any potential profit to be gained from the investment stacks up against the pain of granting ourselves permission to commit to the cost of the investment. For example, a new business owner might struggle with the decision of hiring staff to cook, clean, or maintain a household to save themselves the time of doing the work themselves. And while doing so might feel like an indulgent and unnecessary expense, the potential profit to be gained from the additional time afforded by the household support can be used to significantly grow the business. Alternatively, giving oneself permission to work fewer hours by hiring support staff to help with routine tasks at work can be justified by the greater 'profit' of creating more quality time with family. Realizing the importance of the 'profit' to be made from our investments can often help us realize when it's obvious that we can’t afford not to make them!

Ultimately, the challenge isn’t so much about making the investment itself; instead, it's more about being able to identify the benefits that will result from the investment, and recognizing when the payoff will be worth the resources at stake. And by making the right investments into the things that result in outcomes that matters most to us, we can become confident in allocating our resources more intentionally – whether they involve time, energy, money, or a combination of all 3 elements – changing our view of expenses and instead filling our surroundings with meaningful opportunities for the future!

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In the world of financial advisors, tradition often emphasizes technical numbers, structure, and a firm focus on solving financial problems. However, in practice, forging a human connection – such as sitting around a fire and having a conversation, digging into emotions, feelings, and fears – and tying it to a client's mindset surrounding their financial priorities and goals can be a powerful way to encourage individuals to explore and reassess their perspectives on finances.

In our 127th episode of Kitces & Carl, Michael Kitces and client communication expert Carl Richards delve into Carl's latest project – the "50 Fires" podcast. This project, in partnership with the creative team behind "The Big Bang Theory" and featured on Chip & Joanna Gaines's Magnolia Network, centers on 'campfire conversations'. In these sessions, Carl engages in heartfelt discussions with his guests about their personal relationships with money, with the goal of providing financial advisors with ideas for integrating meaningful communication prompts into their own client meetings.

While conversations between financial advisors and their clients often focus on the quantitative aspects of a client's financial life (e.g., balance sheets, investment portfolios, and retirement projections), "50 Fires" aspires to demonstrate how the qualitative aspects of a person's relationship with money can reveal personal values and priorities that provide an advisor with important situational context of a client's financial goals. Through these discussions, Carl explores the stories and wisdom embedded in religious beliefs and family practices, uncovering poignant experiences from recognizing one's socioeconomic status in junior high school because they only owned 1 pair of jeans, to symbolic moments like cherishing an unopened can of Coke because of its representation of financial prosperity in India. These narratives not only shed light on the root of a person's financial mindset but also help to understand their financial behaviors, revealing the deeper lessons learned from these experiences.

Additionally, these conversations underscore an important takeaway: clients often value the personal connections formed with their financial advisors that are based on discussions that go beyond sharing just financial concerns. While these intangible personal connections may be challenging to market, the ability to guide clients into meaningful conversations to identify the big goals and values they have regarding money is universally appreciated. Everyone has financial concerns and yearns for genuine connections with others, even when they may not be consciously aware of these things. And experiencing such a connection with a financial advisor can significantly enhance a client's willingness to engage in the financial planning process.

Ultimately, the key point is that the ability to successfully connect with prospects and clients on an emotional level, using soft skills to navigate their relationship with money, is crucial to build trust and develop stronger relationships with clients. Carl envisions "50 Fires" as a catalyst, providing the spark to ignite millions of genuine discussions about money around the world. This initiative aims to normalize everyday conversations about money while facilitating deeper connections with clients, potentially influencing not only their thought process around finances but also shaping the financial outlook of future generations!

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Financial advisors looking to increase their firm's productivity may often start by choosing either to hire more employees as a way to delegate their workload, or to implement new technology solutions to increase the efficiency of their work processes. While the expectation is often that investing in these solutions will enhance efficiency, advisor capacity, and margins without proportionally increasing costs, the reality is that they typically have a modest impact on profitability (with no more than an estimated 10% margin of improvement). This suggests that technology alone may not be the panacea for scalability and profitability many advisors hope for. Yet, a more direct and potentially immediate revenue-boosting solution is for advisors to adjust their firm's fee structure, aligning their fees with the true value of their services – which often results in significantly higher profitably!

In our 126th episode of Kitces & Carl, Michael Kitces and client communication expert Carl Richards discuss how raising one's advisory fees may perhaps be the most efficient strategy for growth and scaling, and how advisors can justify and execute a fee increase for their own services.

As a starting point, the positive math of raising advisory fees is relatively straightforward, primarily because it avoids the same resource-intensive investment and ongoing costs that accompany other growth strategies, such as implementing new technology solutions or hiring additional staff. However, while the work of raising fees may be as 'simple' as sending an explanatory email to announce fee increases to clients, there are often psychological barriers that prevent some advisors from charging appropriately for their services. For example, many advisors may hesitate to raise fees for long-time clients who have been with them since the beginning – the ones who took a gamble on a fledgling practice and practitioner. Others may face deep-seated beliefs that clients will react badly to increased fees, and some advisors may even struggle with asserting their own value proposition.

Nonetheless, clients are willing to pay for perceived value – especially when that value goes beyond the technical aspects of financial planning (including personalized attention such as goal clarification, behavioral coaching, and empathetic listening). Which means that when advisors find themselves ready to take their next steps to growth, hiring more people or implementing new technology are not the only solutions to consider. Instead, raising fees to accurately reflect the true value of an advisor's services might be the best solution to help advisors realize their growth goals.

Ultimately, though, the key point is that whatever fee structure an advisor may choose, it is important not to underestimate one's own growth and value. By reflecting on their value, recognizing and acknowledging the complex narratives that might have limited their past pricing strategies, and embracing the worth of their services, advisors may develop a new perspective on raising fees as a growth strategy – recognizing that this approach not only serves to increase growth, but also ensures the firm's success and sustainability, serving as a win-win situation for both advisors and clients!

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