Executive Summary
For most of the financial advice industry’s history, financial advisors’ success first hinged on survival… which meant getting enough clients to generate enough revenue to survive. Which meant those who survived typically had exceptional “people skills”, which gave them a leg up when convincing people to purchase whatever financial products their companies sold (even with limited industry experience). However, as the industry has become less about financial products sales transactions and more about ongoing advice relationships, financial advisory firms have increasingly needed to hire “support” advisors whose job isn’t to bring in new business, but rather to service (and be awesome for) existing clients. The good news is that these pathways have led to wider opportunities for people to enter the profession (even and especially if they aren’t necessarily business-development oriented). But because bringing in new clients is harder than keeping existing ones, those who do the former inevitably earn more than the latter. Which means that support advisors who decide that they want to level up their careers often have to learn the interpersonal skills necessary to develop (and lead) client relationships.
In our 60th episode of Kitces & Carl, Michael Kitces and financial advisor communication expert Carl Richards discuss some steps that support advisors with limited client experience can take to learn how to communicate effectively, habits they can adopt to develop their own approach when taking point on client relationships, and ways they can position themselves within their firm to get the opportunity to expand their role.
As a starting point, it’s important to recognize the amount of progress that the industry has made in prioritizing ongoing relationships with clients and that there’s no longer just one pathway into financial planning as a career. And it’s equally important to acknowledge the fact that advisors can craft a very rewarding career as a support advisor without worrying about bringing in new business. However, for those support advisors who do want to move into a lead role, developing solid communication skills is key. And while not everyone is born with the proverbial gift of gab, the good news is that striking up a conversation, listening actively, asking good questions, and building rapport are all skills that can be learned.
Accordingly, initial steps that advisors can take include joining groups and taking courses designed specifically to help get people comfortable speaking with (and in front of) strangers, communicating effectively in professional settings, and thinking quickly to respond in real-time to the unexpected (or incongruous). Some examples include Toastmasters and Dale Carnegie (for public speaking and professional training, respectively), as well as improv classes, where advisors can practice responding genuinely to what’s happening “in the moment”.
Other proactive measures service advisors can take to learn how to lead client relationships is to seek out opportunities to sit in on meetings with lead advisors (especially discovery meetings where the client/advisor relationship is just taking shape), not necessarily with an eye towards participating in the meeting, but rather simply as a silent observer to listen and absorb as much as possible. From there, advisors can look for opportunities to develop a ‘mini-specialization’ proficiency in a particular planning topic (think ESG investing, equity compensation planning, or student loan planning) and become their firm’s internal expert for a subject that’s impactful for their clients (which can help get them invited into more client meetings!).
Ultimately, the key point is that there are specific actions that support advisors can take to give themselves the tools they need (beyond “just” solid technical chops) to move into a lead advisor role. Becoming a good communicator is an essential first step, and lead advisors within the firm can be great resources to learn from as well—but developing unique expertise and bringing additional value to clients can really give those looking to advance their careers a big leg up!
Authors:
***Editor’s Note: Can’t get enough of Kitces & Carl? Neither can we, which is why we’ve released it as a podcast as well! Check it out on all the usual podcast platforms, including Apple Podcasts (iTunes), Spotify, and Stitcher.
Show Notes
Kitces & Carl Podcast Transcript
Michael: Greetings, Carl.
Carl: Hello, Michael. How are you?
Michael: I’m doing well. How are you?
Carl: I’m shocked today. I was totally expecting a different colored shirt.
Michael: You didn’t think it was going to be blue?
Carl: No, I thought it was surely, there will be a day and today will be the day. But okay, it’s fine, it’s fine.
Michael: You’re just really not a fan of this whole pattern thing. The first 12 years in a row wasn’t a hint that the 13th year might not change?
Carl: You know what’s hilarious is I somehow got tricked into having a…I won’t even tell you the whole story, but I somehow got tricked into having a conversation with a stylist, a style coach, and again, don’t ask me. He was like, “What brings us to the conversation today?” I told him, I was like, “Look, I want to open my closet and I want to see 12 of the same thing. I just have to figure out what it is, because I’ve wanted that for 20 years.”
Michael: I can tell you, it really is very freeing. It is freeing of the mind, it really is.
Carl: Yeah, I’m sure, I’m sure. Anyway, I’m glad to see that it’s still there. It makes me feel with all the change in the world, it’s so good to know that I can count on trash day being on Tuesday, always Tuesday, and Michael wearing his blue shirt.
Michael: Absolutely. Do we still need to solve for you? Do we need to crowdsource from the listeners, what should your 12 shirts be?
Carl: No, no, no. I think my stylist is taking care of that.
Michael: All right. If you want to add your 2 cents, @behaviorgap on Twitter, put it in the comments, we’ll take your feedback.
Carl: Yeah, memes, I’d love to see little memes, pictures, any screenshots of your favorite shirt with my head Photoshopped in, whatever you need. That would be great.
Michael: All right. I get a bad feeling now we’re going to get Carl’s head on blue shirts is what’s coming now.
Carl: Yeah, exactly. Perfect.
Michael: It’ll match your couch, so that’s good.
Carl: Exactly. Yeah. Yeah. What are we talking about?
Michael: What are we talking about today? I think it’s actually à propos, this theme of the habits we engage on a daily basis, even down to consistent clothing attire.
Carl: Nice, nice. That was well done. That was well done.
Michael: Thank you. We got this question. Following last episode, talking about finding the time to engage in good habits and daily habits or in the things that you’re trying to do and change, we got this follow-up question from an advisor that said, “If I’m in a service advisor role, support advisor, I manage some clients. I didn’t necessarily bring them in. My firm got them or brought them or gave them to me or handed them off to me. That’s usually how we end out in service advisor roles. But, I want to move into the lead chair where I take the lead, I manage the relationship as a lead, I get the clients as a lead. How do I get there? What habits or things should I be doing now as a service advisor, if my goal in the medium or long term is to be a lead advisor?”
What Habits Can Service Advisors Adopt If Their Goal Is To Become A Lead Advisor [04:06]
Michael: To me, this is a really interesting question because if you dial the clock back, I don’t know, not that long, 10, 20 years ago, frankly, to when you and I started, this question would be absurd. I don’t mean that to be negative to the person, but there was only one way you started as an advisor. A phone and a phonebook and if you couldn’t be a lead advisor enough to cold call and get your way to business, you weren’t an advisor. You didn’t learn this later, you did it to survive or you weren’t here later. To me, it’s really only this phenomenon over the past 10 years or so, that there’s been so much growth in advisory firms, particularly with the AUM model and recurring revenue model, where firms can grow to the point where you can say, “I’ve got all these clients to pay this ongoing revenue, and I don’t need someone to go out and get more clients. I need someone to be awesome for these clients, and so I’ll hire a service advisor, say, “Be an awesome financial planner for these clients. I’ll pay you a solid salary and benefits.” For a lot of people, that’s a great living and a great opportunity and a wonderful way to include people in the business who aren’t necessarily business development-oriented.
But, if you want to move up a level from there in almost any firm that does this, the next step up is about leading client relationships and leading business development. It used to be, you survived if you could sell, and then you learned to be an advisor. Now, we bring people in and you learn to be an advisor, and if you do that well, you could have the opportunity to move up someday to do business development as a lead. To me, this is a really cool question of, now that we’ve turned the advisor progression upside down, how do you progress if you start out in a support role, in a service role and you want to move into the lead advisor chair, what do you have to learn? What do you do? I love how this person frames the question. What habits would you instill now to get there in the long run?
Carl: Yeah. That is a cool question and first of all, I think, thank heavens that this isn’t an absurd question. You know what I mean? Thank heavens that things don’t work like they did 10 or 15…thank heavens that there’s a path into this industry, or at least there’s starting to be, because this is one of the most common emails I get is, “I don’t know how to start in this industry and the only place that will hire me is a wirehouse,” or whatever. It’s great that we’re starting to see this, not starting, but the last 5 to 10 years, this has started to develop. There’s still a lot of work, obviously based on the emails I’m getting from people trying to find work. But, it’s just great that this is even a thing that we’re talking about. To me, I think in terms of habits, I want to just flip it just a little, from my perspective, I think you’ll have much more to add on this. But, from my perspective, I’m assuming that some of the technical stuff is table stakes at this point, you know how to treat…
Michael: I’ll assume we’ve got the technical stuff down. Got my CFP certification, know how to do some pretty cool financial planning strategies.
Carl: Right. You know how to use a calculator.
Michael: Made a bunch of plans, did the paraplanner gig. I got that down. I’m trying to get to the next level beyond that.
Carl: To me, I think of three skills, two or three skills. Number one, asking really good questions and learning how to listen, and that’s really hard. It sounds so simple, but it’s really hard. Could you have a prospective client who’s never met with anybody at the firm, come in, sit down and you lead that initial, we’ll call it a discovery meeting. That, to me, the fundamental skill that we are all, as humans, and I think in our industry, we’re no exception, not particularly good at, is asking really good questions, listening… and particularly the follow-up question, because the answer’s never the answer, right? The answer we want is the one behind the first one, and so learning to do that, I think of that as the golf swing. Assuming all the technical stuff is taken care of, I think of this as the golf swing of our business. It’s the thing I would practice. It’s the thing I would get videotaped. It’s the thing I would break down with a colleague. “Did you see that there, John, where you looked away? Did you realize that you’re nodding obnoxiously the whole time they talk?” Whatever. The stuff you will learn by practicing that will blow, if you ever had your golf swing videotaped, you know what I’m talking about. You’re like, “There’s no way that’s me.” That’s asking really good questions and learning to listen, and even developing a set and a rhythm and a cadence of your own for those meetings. Understanding what it means to hold a first meeting would be one skill.
Michael: What’s my habit though to build up to that? I think for a lot of advisors, I don’t get to lead that meeting. I’m not a lead advisor.
Carl: You practice, right? I would find people in the office that would allow you to practice. I know this sounds corny, but it’s the only way. How are you going to get good at that if you don’t practice?
Michael: The only way to practice is to practice.
Carl: Yeah, the only way to practice is to practice. First, just think through, we did this in some of the workshops we hold. We literally had people script out the first 10 minutes. Literally, sit down, speak it, take the audio, record the audio and literally type it out. Pretend like it’s a play. I know that’s hard work and it’s not fun and it’s not glamorous, but neither is getting your golf swing videotaped, so that’s one. Then, the next thing that comes to my mind, from a business development perspective, is I would start as soon as I possibly could, at understanding a unique population’s problem. Finding a problem that you’d really love to solve, finding a problem you’re interested in solving, and then identify a population that has that problem. Some people call that, what do we call it here in America? A niche.
Michael: Niche.
Carl: Like a witch. In the UK and elsewhere…
Michael: Because niches rhyme with riches. That’s how you remember it.
Carl: That’s not how they say it in the UK. What they say in the UK is, “Carl, here’s how you remember it. Niche, witch. Niche, quiche.”
Michael: The point is, quiches are better than witches? Is that where we’re supposed to go?
Carl: Let’s not go there. All I’m saying is, I would start as soon as possible thinking, and my version of the way to think about a niche is to think about a group of people who have a specific problem that you’re interested in solving. The sooner you can understand that problem. How do you do that? Start having conversations with people. Tell me about it. If you know somebody who’s a dentist, ask them, “What are the biggest mistakes you see people make? What are the things that you wish they would have taught you in dental school?” Come up with a list of questions. Go ask that set of questions to an entrepreneur you know. Go ask that question to a dentist, an orthodontist, a surgeon, a business owner, a dry cleaner, whatever. Start thinking that way. You’re trying to identify, because if you can identify that, your business development stuff will explode when it’s time. It’s easy to you, I would imagine if I was the senior partner at a firm and somebody came to me and said, “Hey, look, I’ve done these seven interviews and this is the thing I’ve learned, and I think it could be really valuable if we start talking about this in public. How could we find a format for me to do that?” I’d be pretty stoked if some young planner said that to me. Those are the two things. Ask related questions. Practice listening and asking good questions. In other words, first meeting. Number two, start thinking about what’s the population you’d really like to serve, and I like thinking of that as, find a problem you’re really interested in solving. Where do you go with that question?
How Support Advisors Can Learn Critical Communication Skills [12:25]
Michael: Where would I go with this? I love the framing that the only way to practice is practice, and the only way to get experience is just spending time experiencing it. My mind goes to a couple of things here. First, there is some stuff we can do in the skills-building realm. If you don’t have opportunities to get into client meetings where you can lead discovery meetings and ask questions and practice this, my mind goes to things like Toastmasters, Dale Carnegie. There are programs that have been around for a long, long time to help get you more comfortable talking to strangers in front of crowds, asking them questions, because for a lot of us, we’re not used to that. That’s not natural. It’s very nerve-racking, so great. Go to Toastmasters, you’ll be in a room with 17 other people who are mostly as freaked out as you, or they were when they started and maybe they’re a little more comfortable because they’ve been doing it for a while. But, get opportunities to do it in spaces that are comfortable and safe, where everybody else is going through the same thing as well and they’re just as nervous as you are.
Another one even, that I’ll give a shoutout for, is improv classes. Not standup comedy, which is about being “ha-ha funny”. Improv, which is actually really just about being present in the moment and reacting in the moment and responding genuinely to what’s happening in the moment. That’s actually what you end up learning in improv, it’s not learning how to get up there and be funny. Improv training actually translates really, really well to professions like financial planning, where you need to communicate with people in real-time.
Carl: You’re not the first one to bring that up. I’m not going to say this out loud because I don’t want to get a bunch of people checking up on me and holding me accountable. But, that and learning to play the piano, improv and learning to play the piano are two things that I’ve always wanted to do that I’ve never done. I obviously don’t want to do them enough to get your emails, but I’m trying to make a point here. I think that’s a really good idea. Please remember, for almost all of us, that idea of signing up to go to Toastmasters, seriously, that’s worse than signing up to go to CrossFit. You know what I mean?
Michael: Now, you’re really going to get the angry emails from the CrossFitters, Carl.
Carl: I know, I know. Hey, before you send me any emails, remember where I come from. I’m in Park City. All I have to do is say, “Chris Spealler” and I think you guys will leave me alone, okay? Michael won’t even know what I’m talking about.
Michael: Nope.
Carl: But, if you know, you know, so just leave me alone. All I’m saying is, please know we’re all in this together. To walk into a room, to voluntarily go through that experience. Another way to practice is next time you get invited to a charity benefit or anything that’s going to have that terribly awkward cocktail hour thing that most of us really don’t…I know there’s some exceptions to this, I’ve got a friend who loves these things, but most people don’t go. Just be on the lookout for practice. Where can I go where I’m going to run into people that I don’t know, and how do I introduce myself? Don’t think of it as you’ve got to have an elevator…please, nobody’s suggesting that you go there with an elevator pitch. Just go there and talk to people. That’s another huge habit that is really hard and I think because it’s really hard, it’s really valuable if you can get good at it. I think those are some great ideas. Just know we’re in this together. It’s hard. We all know. It’s okay.
Why Support Advisors Should Sit In On Lead Advisor Meetings [16:25]
Michael: The last one that comes to mind to me is just, if you want to learn how to do well as a lead advisor, be in the room with other lead advisors doing their thing with clients, and just see and observe and absorb what they’re doing. That was hugely impactful for me early on in my career, and you’ll find your own style. I found my own style.
Carl: Yeah, you did.
Michael: Yeah, I did. But, my style, frankly, my style is like a mish-mashing together of lots of different advisors I got to sit alongside in the early years of my career and was like, “Okay, I like how John did that part of a meeting, but I really liked how Tommy did that lead into a meeting,” and then I did some of that on my own and I made it into my own over time, and I found I totally didn’t like what John did with that other thing so I made my own thing for that part of the meeting. But, most of us put this weird pressure on ourselves, I’ll own it. I put this weird pressure on myself. I have to figure out how to do all this stuff and I’ve never done it before and I don’t know what I’m doing, so this is really hard to figure out how to do it, it’s really scary to do it with a client without a net, so then I’d freak myself out and talk myself out of it. Getting to sit in the room with other advisors who have done this for a long time and are really experienced and are really comfortable and do it really effectively, just sitting in a ton of those meetings, you will absorb so much. It’s actually better if you go to the meeting and don’t plan to talk, because if you have to talk, you’re going to be spending most of the time thinking about what you’re going to say when they call on you to talk, instead of actually listening and paying attention to the meeting. When you don’t have to talk, you can actually just sit there and listen and absorb and you learn more from it.
Carl: Couple of things that I think are really cool there, just a couple of comments. One is this also is upward mobility double whammy. If you go to that meeting and afterwards you say, “Hey, Susan,” the lead advisor’s name is Susan, if you say, “Hey, Susan, could I just ask you a couple questions,” and you ask thoughtful…”Hey, you did this thing. Can you just tell me more about that or why?” Or “I noticed you asked this question.” You’re doing that because you want to learn, but you may as well have a byproduct, again, upward mobility double whammy bonus points, is Susan is the lead advisor partner at the firm and you paid that much attention, Susan thinks very, very highly of you after you do that.
Then, the next thing I would say is, if you’re Susan, just a couple of thoughts real quick. What’s your job? Why are you here? Why is that person sitting over there in the room? I’m Susan saying to the client, “Hey, I’ve invited John here today. John’s a new advisor with us and John’s focus today is to make sure he takes really good notes so that you and I can have a great conversation. I don’t have to be worried about…” That’s one way to explain the fact that John’s in the room.
Michael: I like that.
Carl: Then, the last thing I’ll just mention, because I think so highly of Dan Solin and his work, S-O-L-I-N, if you haven’t run into it, he wrote a book called, The Greatest, or The Smartest? Are his books The Greatest or the Smartest?
Michael: Smartest.
Carl: Smartest. “The Smartest Sales Book You’ll Ever Read” or something. What’s so great about is Dan is the furthest thing from a salesperson, and he went and did all this research. He was like, “What does research say about sales?” One of the things to be aware of is that second person in the room. Just how you talk, the fact that they’re there does place an impediment in terms of the conversation, and so explaining their presence there will be helpful, right? I love that. I love the practicing. The two ideas of going to senior partners in a firm and saying, “Hey, I’ve been thinking about this niche. I think it could be helpful,” and also going to a senior partner…by the way, I’m not saying provide them feedback on their meeting. Please don’t misunderstand me because…
Michael: Yes. Ask them questions. Don’t criticize their process.
Carl: No, not at all.
Michael: Even if you’re right, it usually doesn’t get you invited back.
Carl: No, no. Bad idea, just generally a bad idea. I would just be like, “I noticed you did this cool thing. Could you help me understand why?” Because remember, the goal is you’re trying to get better. This asking them is just an upward mobility bonus point, right? Yeah. Anyway, I think that would be really…I know that if somebody did that to me, actually people do this to me all the time. They say, “Carl, you’re talking about this thing. Did you know it had a name? Here’s another way. Could you tell me more about it?” When somebody cares enough to ask me about my stuff, they’re my favorite person in the world. And I know why, because my brain releases oxytocin, and oxytocin is generated for me to like the person that’s asking me the question. That’s from Dan Solin’s book too, so we know why it’s happening, but it’s a powerful tool.
Why Support Advisors Should Develop A Unique Expertise [21:40]
Michael: The other thing this reminds me of, wedding a few pieces of this together, when I was in this stage early in my career, and very much where this person was, I was in a paraplanner support. To be fair, I probably wasn’t even a full-on service advisor yet, but I was in a paraplanner support advisor role, and I wanted more exposure to do this, to get to see client meetings and what was going on. The challenge I had was, I couldn’t get into the meeting. I’d be like, “Hey, John, can I sit in the meeting?” John would be like, “Yeah.” I like, “Look, I’d like to support. You have a lot of work in your current role to do. I don’t know that we have a lot of time around for you to just hang in these meetings because you’re curious and want to hang out in these meetings.” I needed a way to get myself into the meeting.
The way I got myself in the meeting was actually a mini version of the niche scenario that you’re talking about. This was back in the early 2000s in the heyday of variable annuities with living benefit riders, the first generation of all the variable annuities with living benefit riders were coming out. Everybody was coming out with a new one every three months. They were changing them every six to nine months, because the products were getting iterated on really rapidly, and basically nobody could keep track of all of the different annuity contracts from all the different annuity wholesalers that were being pitched, and how they were changing on a continuous basis. I made the giant spreadsheet that just dissected them all. I got all of the annuity product information, I got the prospectuses that went through them, I got the product information. I pulled it all together, I put it all in one giant spreadsheet to try to figure out this one’s better for this type of client and this one’s better for this type of client. In the span of about two or three months of working my butt off on that, I became the expert in the firm on all the different annuity products.
Now, when we needed to talk to a client about an annuity product, it was suddenly like, “We should bring Kitces into this meeting because he knows all the product-y things cold. He can just say, ‘This rider works this way and that rider works that way,'” because they knew I knew my stuff. All of a sudden, I was getting invited to sit in the meeting and it was particularly good because at the end of the day, this is a two-hour meeting, at some point around hour 1:40, someone’s going to ask a question about the annuity stuff and it’s game on for me for about three minutes until I wrap up my little spiel, and the remainder of the two-hour meeting, I just get to sit there and observe and do all the learning stuff that we’re talking about and try to figure out how would I handle that, what would my groove be and learning the style. Because we had multiple advisors in the firm and I was the one go-to expert, I got to sit with multiple different advisors who each ran their client meetings differently and got exposed to a lot of different styles, all built off of, I made my own little mini-expertise.
This was early in my career days. If you asked me anything in that meeting besides a question about one of the annuity products I had researched, I was going to clam up and freak out and I’m sure just lose all ability to communicate like a rational human being in a giant ball of fear and anxiety. But, ask me about the annuity thing, I knew that stuff cold. I studied my backside off. I knew those questions. I knew I knew how to answer those questions, and so I could answer those confidently enough to get through that moment. Then, the rest of the time, I just got meeting time and that was how I got my foot in the door to be able to get the client-facing time over and over and over again, and suddenly I went from couldn’t convince them let me to sit in a client meeting, to all of a sudden, I got to sit in on half a dozen client meetings a week, and then the learning curve takes off.
Carl: Yeah, that’s amazing. I just want to point something out. We could spend a whole episode on this, but that’s so cool that you did that. The idea of… since we are also talking about upward mobility, moving from service advisor to lead advisor, noticing a problem, noticing something that…and by problem, I just mean it in a definitional sense, like a math problem. I don’t mean emotion. There’s no emotion. The problem here was, there’s a lot of annuities to keep track of, and noticing a problem and then just deciding to solve it and showing up one day and going, “Hey, I built this spreadsheet. I think you guys might like it.” I was thinking through being the firm expert on ESG right now, understanding all the socially responsible, environmental, sustainable products. You and I could make a list of 20 things off the top of our heads that could be potential problems. That’s a habit, right?
Michael: Yup.
Carl: It’s a habit, if you can look around and notice, “Hey, every time somebody goes to get a copy made of something, this thing happens.” Hey, I fixed that. Look to become a valuable resource and you did this in your, like you said, you worked your backside off. You studied, you learned. People…we always think nobody notices. Oh my gosh, people notice. Anyway, I think we packaged together a couple of things…
Michael: Couple of things.
Carl: …that really help with beyond just service to lead, just the idea of upward mobility within a firm. Make yourself valuable. The last thing I’ll say on this, I’ve also noticed some people who are really good at deflecting credit and accepting blame. I love that idea too, like looking for ways to make the lead advisor look good, and not needing…because the lead advisor will know exactly who deserves credit for knowing all the annuity products. They’ll know. Nobody else…looking to make the lead advisor look good is another habit that I would cultivate if I was looking to have upward mobility in a firm.
Michael: Awesome. Thank you, Carl.
Carl: Pleasure. Super fun, Michael. Talk to you next time.
Michael: As always.
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