The core value proposition offered by many financial advisors is to serve and help clients solve their complex financial issues through financial planning. As an advisory firm grows, though, so too can the pressure to onboard more remunerative clients. These tensions can be heightened when a prospective high-net-worth client decides they don’t want comprehensive financial planning at all, and instead simply requests one specific service, such as portfolio management. This can create a dilemma for the advisor who wants to serve clients and help their business grow, as agreeing to only a part of the financial planning process, without fully understanding the client’s values and priorities, can feel antithetical to an advisor’s own core values… advisors need this understanding to create meaningful plans that clients can actually use to achieve their financial goals. Even though garnering enough business to maintain a healthy flow of revenue is important to any firm, it is also critically important not to compromise the values of the advisor and the firm!

In our 83rd episode of Kitces & Carl, Michael Kitces and client communication expert Carl Richards discuss some steps advisors can take when a prospect objects to financial planning in general because they only want a particular service (e.g., investing their portfolio), how to gain a deeper understanding of why the prospective client doesn’t want financial planning in the first place, and how to understand the client’s goals and values so that the services that are provided to them align with what is most important to the client.

As a starting point, it’s important to understand that while guiding clients through a comprehensive data-gathering process can certainly lead to a good financial plan, some clients may consider the experience tedious, intrusive, and unenjoyable. This can possibly be due to prior experiences with financial advisors, negative associations that a client may make with their own financial challenges, or an unwillingness to divulge personal information with an advisor whom they may just be getting to know. In these instances, advisors can still help clients simply by having a candid conversation to learn about what’s important to the client and their reasons for seeking help with their money goals. Because without the clarity of the client’s deeper purpose, advisors might provide deliverables based solely on performance and not connected to the client’s own values, and even offer services that the client doesn’t even want or need, which can alienate the client from the relationship and eventually result in the advisor losing the client’s business.

However, by asking intentional, yet thoughtful questions to identify why the client wants help can be a great way not only to connect with a client but also to show the value of discussing and reaching financial goals, which can entice them to accept the financial planning process. Because ultimately, having conversations to really understand what’s important to a client doesn’t just help advisors do a better job servicing clients with what they really need (and want), it can also lead to more trust in the relationship, which helps build deeper and longer-lasting client relationships!

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When an advisor first opens their own firm, they are often eager to take on any willing client in order to generate enough revenue to ‘keep the lights on’. But after getting through the first few years of business, many find that the time they spend working with early clients hinders their ability to bring on new, more profitable, clients. This leaves the advisor with the option of hiring additional staff members to handle the growing client base (and perhaps taking on debt in the process) or of terminating the relationship with less profitable clients… both of which involve very difficult decisions for the advisor.

In our 82^nd episode of Kitces & Carl, Michael Kitces and client communication expert Carl Richards discuss how advisors can ‘upgrade’ less profitable clients by referring them to other advisors, why they might need to overcome the scripts in their heads to achieve better growth, and how they can use different models to help underserved populations.

As a starting point, it’s important for advisors to recognize that, given the limited number of hours in the day, they cannot serve every potential client who might need help. While serving others is often one of the primary motivations of advisors, this must be balanced with the need to run a sustainable business (because if their firm goes out of business, the advisor wouldn’t be able to serve any clients!).

For advisors who want to continue serving at least some of their less profitable clients, one option is to set a fixed number of clients in this category. Another option is to set aside a certain number of hours each week to work with clients on a pro bono or low-cost basis. These strategies can help the advisor continue serving clients in need while also keeping enough time in their schedule to serve more profitable clients (and to keep themselves in business).

Clients who the advisor can no longer serve profitably can be ‘upgraded’ to a new advisor who can meet their needs profitably. While it can sometimes be difficult for advisors to move on from long-time clients (particularly those who were willing to work with the advisor when they were first starting out), it is important to recognize that these clients might actually get better service when referred out to a different advisor who specializes in their particular needs and who has the capacity to give them more attention.

Another option for advisors who want to grow their firm but have hit a capacity ‘wall’ is to consider hiring additional staff to help service their growing client base. In cases where the advisor’s current revenue might not initially support new hires, taking out a loan can be a viable option to cover the costs. And while taking on debt to pay employees could trigger an automatic script in the advisor’s mind that they are making a bad financial move, actually running the numbers can confirm whether this option (which would potentially allow the firm to bring in new and more-profitable clients) would result in greater overall profits in the long run!

Ultimately, the key point is that while the desire to help others is one of the primary motivating factors for many financial advisors, time constraints and the need to run a sustainable business often mean that advisors can’t always serve every potential client. But this doesn’t mean that advisors have to ‘fire’ every unprofitable client; instead, advisors can choose to continue serving some of these clients while referring others to advisors who might be a better fit, or else consider options that allow them to expand their capacity (such as hiring additional staff). Which can help advisors grow their firm profitably while at the same time ensuring that all of their clients receive the level of service they deserve!

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Conventionally, meeting with a financial advisor meant meeting in-person, usually at the advisor’s office. With today’s technological advances, though, compounded by changes in social dynamics brought forth by the pandemic, meeting virtually (or mostly virtually) has become increasingly normalized, which has made it easier than ever before to accommodate more meeting time into busy schedules. But while the capacity to schedule more meetings has also given advisors the opportunity to spend time engaging more deeply with their clients, it has also meant that they may have less time to accommodate touch points with a broader range of their entire client base. One potential solution that can help advisors address this time crunch is to consider using asynchronous meeting strategies to help free up more of their time.

In our 81st episode of Kitces & Carl, Michael Kitces and client communication expert Carl Richards discuss what it means to meet asynchronously, when it is appropriate to utilize, and how advisors can use asynchronous meetings to increase touch points for clients.

As a starting point, it’s important to recognize that while advisors may still need to devote more time to certain clients with complex financial circumstances who simply require more attention, newer clients often need frequent meetings only initially in the relationship. This is because in-person meetings early on provide a space for dialogue that lets new clients build trust and rapport with their advisor in the first place. But, once a certain level of trust is established, many clients often feel that frequent meetings are no longer necessary and may actually request fewer routine meetings; in fact, they may prefer communicating only on an as-needed basis to ensure that they stay on track with their financial plan.

Furthermore, while there may still be times when synchronous meetings are the most appropriate method of contact, they are not the only way to maintain the right level of touch points with a client. For instance, asynchronous meetings can sometimes be more suitable for situations between in-person meetings or video chat sessions, when a real-time connection is not entirely necessary (e.g., answering a question about how to find information on a platform). Using asynchronous meetings to quickly address lower-priority issues helps free up time for the advisor, as it generally takes less time to record a quick, informal video response than it does to write an email or to meet in person. Asynchronous meetings also don’t require the need to schedule or prepare for an in-person meeting, which can be time-consuming and simply unnecessary (especially when a 5-minute video clip can suffice).

Ultimately, the key point is that asynchronous meetings are not meant to replace all meetings; instead, they can be used to communicate more easily and quickly with clients when an actual meeting isn’t really necessary. While there will always be pressure to maintain a certain level of touch points with clients, advisors can rely on advances in technology that have made it easier and much more affordable for them to use asynchronous strategies (e.g., recording a quick video response) to respond to their clients’ needs without having to schedule meetings. And taking less time to schedule meetings means more time for the advisor to create more touch points and provide a better client experience. Because the more touch points an advisor can have with clients, the more opportunities there are to deepen and maintain long-term relationships with those clients!

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In recent history, implementing a niche or specialization has given many financial advisors a competitive business and marketing edge over the growing number of advisors in the industry. For many, the challenge may not be so much about choosing a niche, but more about when to begin taking steps toward committing to a particular niche and how to let it evolve over time, because taking action toward any major business decision can feel scary and risky, especially when there is uncertainty as to where the business will be years down the line. Oftentimes, the fear of choosing and committing to a niche can be so overwhelming that it stalls the advisor from taking action and making progress, leading to lost business opportunities.

In our 80th episode of Kitces & Carl, Michael Kitces and client communication expert Carl Richards discuss the importance of flexibility when exploring a chosen niche, when to course correct the plan as the initially chosen niche evolves over time, and deciding how far in advance to start planning in the first place.

As a starting point, it’s important to remember that even the most well-laid, analytical plans consist only of best guesses for the future, and that there will be inevitable changes that must be considered. And while financial advisors are typically strategists that enjoy creating detailed master plans for what lies ahead, creating excessively rigid plans to implement a niche decades into the future with no potential flexibility may end out to be more detrimental than helpful. Instead, arranging plans recognizing that niches and specializations will shift and evolve (a lot like our lives and preferences!), can help advisors be more successful in a chosen niche than they could have imagined at the start.

While some advisors may have a general idea of what they want to pursue as a niche, it’s important to note that a niche worth pursuing may not always present itself until later down the road. Other advisors may choose to pursue multiple niches throughout their career and may not end with the niche they began with. But by approaching marketing strategies and niche exploration with the understanding that there is no way to know how things will end out, advisors can incorporate changes into the planning process to maintain momentum as they gather new information that will help them course correct along the way and get to the right spot in the end.

Ultimately, the key point is that advisors don’t necessarily have to choose – and commit to! – a niche at the start of their careers. Instead, as opportunities to select a niche are presented to the advisor, taking steps toward a shorter 3- to 5-year plan (instead of a longer-term 20- or 30-year plan) allows the advisor to explore the niche and decide if it is a good fit. Regardless of whether the initially chosen niche is the one the advisor will stay with, the time spent exploring a niche is an investment for advisors. Because, more often than not, the true value of the process is reflected by the actionable steps that are taken as a result of exploring a niche, which will ideally leave the advisor in a better place than where they started!
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Traditionally, financial advisors built their clientele by working with anyone who had the financial wherewithal to buy whatever products or services they had to offer. And as advisor platforms have become increasingly open architecture, advisors have had an increasing number of offerings available to work with an ever-widening range of clientele. However, at the same time, the fact that ‘any’ advisor can offer almost ‘any’ product has made it more difficult for a particular advisor to differentiate themselves from other advisors. For many advisors, the solution to this challenge is to get more focused – which means choosing a specific niche or a specialization and differentiating themselves by offering an even more specific offering for their particular clientele. The idea may seem simple in concept, but implementation of a niche or specialization can feel daunting, risky, and even downright scary!

In our 79th episode of Kitces & Carl, Michael Kitces and client communication expert Carl Richards discuss how to begin the process of finding a niche, ways advisors can conduct research to decide if a chosen niche is a good fit for their firm, and, once a niche is chosen, how to begin attracting new clients.

As a starting point, it’s important for advisors to understand the types of clients they already serve. Compiling a list of existing clients and differentiating them through qualifiers such as occupation (and whether they have enough revenue to be financially viable) can give clarity as to whether a potential niche already exists. From that list, advisors can then choose 5-10 (reasonably remunerative) clients they like working with and decide if they would like to work with more of that same type of client. A good way to approach this is to consider whether there is a common problem these clients face, and if the problem would be interesting for the advisor to solve for more prospective clients who face the same challenges.

Once a set of clients has been chosen, advisors can set up meetings over coffee or lunch with the intention of learning more about the types of issues these clients face, and what it would take to attract more clients like them. By interviewing these clients and asking a predesigned set of questions, advisors can gain an understanding of the viability of the proposed niche. Taking this a step further, information gathered can be used to write a white paper that can serve as both a reference for market research, and as a handout back to the interviewed clients so that they may share it with others potentially within the same niche to help attract future clients.

Ultimately, the key point is that financial advisors considering a change in their business focus may not have to look far to find their niche or specialization. Communicating with current clients gives an opportunity for advisors to discover how they can not only help them, but future clients with similar financial planning issues. Which means choosing a niche doesn’t have to be a grandiose declaration that feels foreboding and irrevocable; it can be as simple as just taking a renewed focus on a segment of clients that are already “working” for the business and pursuing more clients just like them!

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When financial advisors are faced with the decision to relocate their firm to another state, there is often an immediate tendency for the advisor to worry about losing clients who signed on with the expectation of being able to meet with the advisor in person throughout the engagement. But in today’s environment, with the availability of convenient virtual meeting technology and the increasing normality of working from home, do advisors really need to worry that much about losing their clients due to relocation? Even with the accommodations to conduct remote meetings, advisors can still find it difficult to have the conversation of ‘leaving’ clients behind when they need to relocate – even when they intend to maintain the relationship remotely.

In our 78th episode of Kitces & Carl, Michael Kitces and client communication expert Carl Richards discuss how advisors can approach the conversation with confidence and honesty to quell the fears and anxiety of their clients, while remaining calm themselves.

As a starting point, it’s important to put the idea of jeopardizing client relationships into perspective, because even though clients may have been onboarded in person, many will likely be open to continuing the relationship on a virtual basis, especially in our current era of remote work and digital communication. And while it is easy to imagine any number of scenarios where clients may want to leave their advisor, unless there are serious issues in the advisor-client relationship itself, clients actually tend to prefer staying with an advisor they trust – regardless of where their physical office may be – and aren’t generally looking for a reason to leave the relationship at any given moment. Because the trust a client has in their advisor is usually a function of the advisor’s ability to provide outstanding service… and not so much of the physical location of the advisor’s office.

To maintain that trust, advisors can arrange a meeting or phone call with the client to discuss the transition and reassure the client that they can still expect the same level of service and attention as before. Sending an email prior to the meeting to initiate the conversation can be a good opportunity for the advisor to reassure the clients that the relationship will, in fact, continue, and to provide an overview of what, if anything, will need to change. This gives clients a chance to absorb the news and identify any questions or concerns they may have that can be discussed in more depth during the meeting.

Ultimately, the key point is that communicating with clients about intentions to move a firm begins with being honest, compassionate, and confident. Even if a few clients may be lost in the process, advisors will undoubtedly have opportunities to find more clients in their new location. But by taking to heart the tremendous value they offer to clients, advisors can trust that they will always be able to maintain their client relationships potentially anywhere they may choose to go!

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Traditionally, financial planning meetings were held in person, which created intimacy, but limited an advisor's clientele to those who could physically get to their office. Advancements in technology allowed some advisors to increase their virtual communication, but almost all advisors found themselves operating in a virtual environment at some point during the pandemic. For many advisors, this created a flux in meeting culture – while some advisors found that they preferred the availability, ease of use, and non-geographic constraints, there are still many advisors and clients that prefer to meet in person. Deciding which meeting format (in-person, virtual, or hybrid) to implement has recently become one of the more challenging aspects for advisors in developing the client experience.

In our 77th episode of Kitces & Carl, Michael Kitces and client communication expert Carl Richards discuss how the emergence of remote culture has changed the conversation about how advisors approach meetings, and the benefits and limitations of different meeting mediums.

As a starting point, it’s important to identify how each meeting format impacts communication between the advisor and client. Advisors will often work with clients that share similarities, such as age group, interests, socioeconomic status, and communication styles. Understanding these similarities can clarify which meeting style can be utilized best. For example, younger clients are more accustomed to working remotely and may be a better fit for advisors who meet virtually.

In-person meetings can provide clarity for advisors and clients in judging whether a relationship is a good fit, as it is much easier to interpret trust, emotions, or body language and can make having difficult discussions more comfortable. Virtual meetings can increase the distribution of information and allow for more flexibility and frequency in meeting times and locations, especially as the advisor-client relationship matures. The hybrid method blends meeting styles and offers benefits such as the ability to meet asynchronously, but can also add additional progress tracking and may limit advisor or client responsiveness.

Ultimately, the key point is the right decision for which meeting format to implement is up to the advisor. When designing a great client experience, instinctually, client preferences are put first. But in this case, advisors can benefit from prioritizing and internalizing their meeting preferences to develop more trust, confidence, and better expectations. After deciding the best meeting format for them (just as advisors define their niche or specialization), advisors can develop a client experience and attract clientele by being upfront, honest and clear with clients about the meeting methods utilized. Overall, the benefit of choosing a meeting format is to increase efficacy and efficiency in communication, creating a better, more meaningful experience for advisors and their clients!

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Much of a financial advisor’s work involves putting themselves out there, whether by pitching their services to a client, writing engaging pitches on their website, or promoting their own educational or written work. For many advisors, though, marketing themselves may initially feel intimidating, but the process becomes less daunting as they find success and get more experience under their belts. For many advisors, diving into new experiences may elicit feelings of “imposter syndrome” – a sense of self-doubt around one’s abilities to the extent that they may feel like a fraud – that are never actually eliminated regardless of their level of subject matter expertise or how long their track record of success gets.

In our 76^th episode of Kitces & Carl, Michael Kitces and client communication expert Carl Richards discuss their own experiences with imposter syndrome and how they – and other advisors – have successfully dealt with it.

Advisors who struggle with imposter syndrome tend to have trouble internalizing their own capabilities, despite external evidence of their success. And rather than building confidence upon their successes, advisors often find it even harder to acknowledge their skill as they accumulate successes, because they develop the sense that there is simply a further distance for them to fall. Which can present a significant trial to advisors as they progress in their career, as while some uncertainty and feelings of “I don’t know what I’m doing” are normal when first starting out (or trying something for the first time!), when those feelings are continual, they can pose a challenge for advisors to do the things that will help improve their circumstances or represent their skills adequately – such as by asking for a fair fee or promoting their educational content.

Fortunately, there are ways for advisors to mitigate – and even leverage – the effects of imposter syndrome. By first recognizing that imposter syndrome is a very common experience and acknowledging that it can often present opportunities for advisors to stretch and improve themselves, advisors can devise productive strategies to help them effectively cope with their self-doubt. For example, one advisor who had trouble assertively discussing her fees wrote up a detailed script that she pulled up and read when having the conversation with clients, to keep any unfounded reservations about her value as an advisor from discounting her services.

Ultimately, the key point is that imposter syndrome is deep-rooted and challenging for many advisors, but developing coping mechanisms and leveraging the challenges that are presented to advisors can help them advance themselves and elevate the value they offer to clients. Because the advisor who can look back and realize how far they’ve come can increase their confidence over time – and genuinely embrace their expertise!

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When it comes to retaining clients, financial advisors benefit from focusing on gaining both the client's confidence and trust. Because while a client may be confident that an advisor can develop a workable financial plan, they will not feel compelled to stay with the advisor unless they can also trust that their advisor has their best interests at heart throughout the process. And even though it is important to have a well laid-out financial plan, it is equally (if not more!) important for advisors to understand the client’s underlying motivation to ensure the plan is relevant and to help clients stay on track with their financial goals. To this end, a statement of financial purpose helps the advisor to create a meaningful plan for the client, and also helps the client stay focused on taking action on the plan and staying the course.

In our 75^th episode of Kitces & Carl, Michael Kitces and client communication expert Carl Richards discuss the difference between a “statement of financial purpose” and a “mission statement,” the psychology behind why a statement of financial purpose helps to instill clients with confidence and trust in their advisors, and the importance of crafting statements of financial purpose by first helping the client understand their own “financial why.”

As a starting point, it is important for advisors to begin the financial planning process by understanding the deeper reasons that explain why their clients are seeking advice in the first place. By encouraging clients to take time to carefully reflect on what it would mean for them to achieve their financial goals, financial advisors can discover insight into the client’s motivation to help them craft a relevant and meaningful statement of purpose (written in the client’s own words) that crystallizes why the financial plan is meaningful and important to the client.

Merely creating the statement of financial purpose isn’t enough, though, as clients need to review, reflect upon, and update it periodically, using it as a guide to steer the financial plan, keeping it on track. Advisors and clients can use the statement of purpose as a reminder that all the financial work being done is indeed serving a greater purpose. Additionally, a statement of financial purpose creates an opportunity for advisors to gain trust with clients, by reassuring them that what matters most to them is of paramount importance, and that following their plan (and sticking to it even through the most turbulent times) will help them attain their financial goals.

Ultimately, the key point is that a statement of financial purpose is a living document that helps clients stay focused on their most important goals and encourages them to stick to their plan. At the same time, it also helps to foster greater client trust and confidence in their advisors, facilitating stronger and more open communication channels, which presents advisors with the added bonus of better and deeper connections with their clients!

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While it was once a common practice for financial advisors to apply cold-calling strategies to attract any client willing to engage with them, framing their value in terms that clients would understand was often a challenge for advisors positioning themselves as experts able to solve all of a client’s financial problems. But when clients have financial issues that aren’t clearly obvious or understandable to them, they are generally not very motivated to have an advisor help them address their problems, especially when they don’t understand the specific services – beyond the commonly offered (yet vague) “peace of mind” promise – the advisor can provide.

In our 74th episode of Kitces & Carl, Michael Kitces and client communication expert Carl Richards discuss strategies that motivate clients to seek financial planning services, and how identifying the right areas of specialization can help advisors to better communicate how their services can help clients address their unique problems.

As a starting point, it is important to acknowledge that clients often don’t seek out help unless their problem becomes a critical pain point. For example, while regular auto maintenance is important to prolong the life of a car, it is often not considered a high priority. By contrast, being stranded with a flat tire in a strange area needs an immediate solution. Similarly, clients who don’t seek financial planning services may not have any critical needs to address; this isn’t to say they are not in need of service, they may simply not consider the service immediately relevant.

However, when a client’s problems escalate to a high level of urgency, they can become very motivated to seek out a clear solution to their issue. Accordingly, advisors can benefit from understanding these truly critical issues that matter most to their own clients and aligning the solutions they provide to their current and future clients. This can present a significant opportunity for the advisor to enhance and improve their business strategy, as communicating specific solutions available to critical problems that clients care about can minimize the indifference many clients (current and prospective) have with advisors who don’t clearly identify the solutions they offer.

Ultimately, by communicating specific solutions that are relevant to their clients’ critical issues, advisors can help clients better understand the value that they offer and enhance opportunities to expand their business. And by asking clients the right questions to identify which issues are most critical to them, advisors not only strengthen their relationships with their clients but also have the opportunity to proactively develop planning and communication strategies to attract more clients. Which, in the end, allows them to refine their financial planning services to best meet their clients’ needs!

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