In today’s conversation, I grab some time with Carl Richards. For those of you unfamiliar with Carl, he is a CFP and creator of the Sketch Guy column, which has appeared weekly in the New York Times since 2010. Carl and his work have also been featured on Oprah.com, and Forbes.com and he frequently keynotes at financial planning conferences around the world.
Through his simple sketches, Carl makes complex financial concepts easy to understand and these sketches have served as the foundation for his two books, The One-Page Financial Plan: A Simple Way to Be Smart About Your Money and The Behavior Gap: Simple Ways to Stop Doing Dumb Things with Money.
Brad’s favorite sketch by Carl
Today I’m excited to bring this conversation to you as I’m not sure we’ve ever done a deeper dive into the structure of a proper appointment process on this show and the psychology of why your prospects make the decision to either work with you or someone else.
Here are a just a handful of the things that you’ll learn:
- [03:46] Why it’s so important to face your fears and do the work you need to do to make the world a better place, no matter how scary it is.
- [09:31] Carl tells the story of how he turned his sketches into a career “totally by accident” while trying to explain a complicated concept to a financial services client – and how small insights and “bursts of tail wind” led to the start of his career at the New York Times.
- [20:00] The reason drowning prospects in complexity is a bad sales technique, how clients want to be treated in meetings, and the disastrous meeting with an estate attorney that made this very clear to Carl.
- [47:12] Strategies you can start implementing today to get present, be engaged, and provide better service both before and after your next meeting.
- [01:01:00] How to shift your mindset from plan to process – and how to rethink your plans in order to make them as effective as possible.
- [9:00] Why new and novel work is always scary – and why striving for perfection will never help you grow.
- [20:00] The reason drowning prospects in complexity is a bad sales technique, how clients want to be treated in meetings, and the disastrous meeting with an estate attorney that made this very clear to Carl.
- [26:59] How Carl discovered the importance of discovery meetings in financial services – and the power of asking the right opening question 3-5 minutes into his first conversation with a new client.
- [33:34] Why being vulnerable in a meeting is a sign that you’re doing something right – and how this vulnerability gives you a lens to frame everything around your clients’ goals.
- [40:32] The reason great financial services practices are more like therapy than simply a way to sell financial products.
- [44:04] Why women in financial services are often better at working with non-dominant spouses in conversation.
- [47:00] An example of the power of treating a non-engaged partner in a relationship like a human being – and the incredible insights discovered along the way.
- [56:00] How to help clients understand why they need a plan in the first place – and why they rarely want to hear the word “plan” at all.
- [01:01:00] How to shift your mindset from plan to process – and how to rethink your plans in order to make them as effective as possible.
- [1:06:00] Why Carl and his wife moved to New Zealand, and how this story reflects how impossible it is to stick to long-term plans of any kind.
THE SKETCH GUY COLUMN DIAGRAMS
Complexity Elegant Simplicity
Set Plan Time Worrying
Very Little Overlap
SELECTED LINKS FROM THE EPISODE
- Behavior Gap
- The One-Page Financial Plan: A Simple Way to Be Smart About Your Money
- The Dan Sullivan Question
- The Smartest Sales Book You’ll Ever Read
- The Checklist Manifesto: How to Get Things Right
- Deep Creek: Finding Hope in the High Country
- Off The Record: Secrets To Building A Successful Retirement and a Lasting Legacy
- Michael Hyatt (also check out Michael Hyatt on the podcast)
- Seth Godin
- Michael Kitces (also check out Michael Kitces on the podcast)
- Bill Bachrach
- John Bowen
- Simon Sinek
- Dan Sullivan (also check out Dan Sullivan on the podcast)
- Dan Solin
- Brian Koppelman
- Atul Gawande
- Pam Houston
- Adam Cufr
- Daniel Crosby (also check out Daniel Crosby on the podcast)
- Jim O’Shaughnessy
- Patrick O’Shaughnessy
- Taylor Schulte
- Justin Castelli
- Josh Brown
INFAMOUS SCENE FROM ALICE IN WONDERLAND
Alice: Would you tell me, please, which way I ought to go from here?
The Cheshire Cat: That depends a good deal on where you want to get to.
Alice: I don’t much care where.
The Cheshire Cat: Then it doesn’t much matter which way you go.
Alice: …So long as I get somewhere.
The Cheshire Cat: Oh, you’re sure to do that, if only you walk long enough.
REVIEWS OF THE WEEK
Thanks for checking out the latest show, on to this week’s featured reviews!
This week’s first review comes to us from user BenschD who says:
Dave, always awesome reading a review from someone I’ve gotten the chance to interact with personally. Love the work that you and Adam are doing out in Ohio! Crazy to think how we all met years ago after a few DMs exchanged out on Twitter. For those of you financial advisors aspiring to write a book some day, you should go buy a copy of Adam’s book “Off the Record”, one of the best financial advisor books I’ve read and great example of how to make finance interesting for your clients and prospects!
Also, for those of you all listening in that aren’t aware of the incredible #fintwit community out on Twitter, there are some absolutely incredible minds freely sharing their work you should be diving into conversations with… too many to name, but some of my favorite follows include @danielcrosby, @iancassel, @jposhaughnessy, @patrick_oshag, @DefineFinancial, @jus10castelli, @AlexChalekian, @TR401, @ReformedBroker, @MichaelKitces, @jfc_3_.
The next review comes to us from user elmorC who says:
Thanks so much for the kind words and review. It’s interesting how many times I’ve heard that the training in our industry often tends to miss the mark as often it’s focused on technicalities and details of financial products vs asking the right questions and listening in order to deeply understand your clients issues and concerns when it comes to finance. So glad to hear the show is helping you and other advisors out there bridge this gap! Thanks so much for listening in and hopefully this episode with Carl Richards helped you out even more on that front 🙂
And the last featured review for the week comes to us from BCLowrey, who says:
BCLowrey, always awesome to hear from a longtime listener so thanks for taking the time to share your thoughts on the show! Love to hear that the show is helping you along the path of transitioning from financial advisor to a true CEO that’s running a business, I find that to be one of the biggest struggles that advisors face as they grow. Also, glad to hear you’re finding the show is not only informational but also entertaining, I’ll do my best to keep delivering on that front! Thanks again for taking the time to share your thoughts.
Ok, as we wrap this show, thanks again for those of you who have taken the time to write a quick review, I love reading each and every one. In fact if you’d like to connect on a more personal level, give me a follow on Twitter, I’m @brad_johnson. Let me know you listen to the show, how you found it, who I should have… etc. I’d love to continue the conversation there!
Take the 1st Step to Building Your Ideal Practice: Apply for “Virtual Discovery Session“
For those of you that have interest in diving deeper or figuring out how you may be able to have our team help you implement many of the ideas shared on the show, my day job happens to be consulting financial advisors from all over the US on how to grow their business and design a practice that serves them, versus them serving it. Yes it’s possible to grow your business and work less, this is a model we’ve replicated over and over in markets all over the country… So, if you’d like to apply to see if it makes sense for us to have a 1-on-1 conversation on how to overcome what may be getting in your way, you can do that at bradleyjohnson.com/apply. It takes about 5 minutes to fill out the application so we can understand what your business looks like, what challenges you may be facing and how myself and my team may be able to help. We then dive into a Discovery session where we ask a lot of questions based on your survey. We do a lot of listening, and take a lot of notes to build a rough draft of our proprietary Elite Advisor Blueprint – 90 Day Plan™. Taking the first step is as simple as applying at bradleyjohnson.com/apply 🙂
Already heard it once or twice? Please leave a short review here, and tell me which guests I should have on!
- Listen to it on iTunes.
Welcome to this episode of the Elite Advisor Blueprint Podcast with your host, Brad Johnson. Brad’s the VP of Advisor Development and Advisors Excel, the largest independent insurance brokerage company in the US. He’s also a regular contributor to Investment News, the Wall Street Journal, and other industry publications.
[00:00:26] Brad Johnson: Welcome to the Elite Advisor Blueprint, the podcast for world-class financial advisors. I’m Brad Johnson, VP of Advisor Development at Advisors Excel and it’s my goal to distill the best ideas and advice from top thought leaders and apply it to the world of independent financial advising.
In today’s conversation. I grab some time with Carl Richards. For those of you unfamiliar with Carl which I don’t think will be too many of you, he is a CFP and creator of the Sketch Guy column which has appeared weekly in the New York Times since 2010. Carl and his work have also been featured on Oprah.com and Forbes.com, and he frequently keynotes at financial planning conferences all around the world. Through his simple sketches, Carl makes complex financial concepts easy to understand and these sketches have served as the foundation for his two books, The One-Page Financial Plan as well as the Behavior Gap.
Today, I’m excited to bring this conversation to you all as I’m not sure we’ve ever done a deeper dive into the structure of a proper appointment process on the show, as well as the psychology of why your prospects make the decision to either work with you or to work with someone else. So, let’s get to the show but before we do, one last thing. In this conversation, we cover many ideas that are shared in Carl’s book, The One-Page Financial Plan so I thought why not grab a bunch of copies to share with all of you blueprint listeners? So, here’s what to do next if you’d like your free copy. All that I ask is that you leave an honest review out on iTunes for our show. To make it easy, there’s a graphic right at the top of the show notes out to BradleyJohnson.com/61, that’s 61, or if you happen to be listening in on a mobile player, simply scroll down on most of them and tap the link. Once you’ve left a review, just drop us an email via email@example.com with your iTunes username and a mailing address and we’ll drop you a copy in the mail as a thank you. That simple. Also, a quick apology to our listeners in Canada, the UK, Australia, all around the world internationally.
[00:02:24] Brad Johnson: Due to crazy high shipping prices, it just doesn’t make sense to spend $20 to $40 to ship you a $10 book so please accept my apology and just go support Carl and grab a copy at your local bookstore or out on Amazon. As always, all the additional show notes, books mentioned, people discussed as well as a full transcript of the entire show can be found at BradleyJohnson.com/61 as well. So, that’s it. As always, thanks for listening in, and without further delay, my conversation with Carl Richards
[00:03:00] Brad Johnson: Welcome to this episode of the Elite Advisor Blueprint. I have special guest Carl Richards here with us today. Welcome to show, Carl.
[00:03:07] Carl Richards: Brad, thanks for having me. I have to tell you like this is my first attempt to I always try to hijack people’s podcasts right from the beginning. I just have to tell you, in preparation for this, I went and watched, rewatched a bunch of the episodes, listened to, watched, and thanks, Brad, like the generous work you’re doing for the community is amazing. I’m thoroughly impressed. There’s a difference between, anyway, super, super good stuff. Thank you.
[00:03:34] Brad Johnson: Well, I appreciate it, man. Coming from you, a guy that’s been in this industry and then a thought leader in the space for a long time, I appreciate that. That’s humbling. Actually, we were just talking here before we went live. Speaking of humbling, so little known fact so this is going to be something new to the blueprint listeners out there. You were actually my very first podcast guest, so I think it was actually when you are putting out The One-Page Financial Plan and I had a blog at the time, I had no podcasts, and either you or someone on your team reached out and said, “Hey, I’ve got this new book coming out. What do you think?” And so, we did this kind of impromptu interview that I think was on your Skype account and it was like 30 minutes you’re the nicest ever because it was the absolute worst interview ever. I was not prepared. I hadn’t read your book. It was so bad. It was so bad, I actually took it down later, but we were just talking before and there was a serious lesson that came out of that that we were just talking about.
So, you mind sharing your thoughts? Because I know you’re a creator. You’re doing public work. What are your thoughts around just getting out there and jumping in?
[00:04:39] Carl Richards: Yeah. So, to me, it’s so funny because I was just thinking through like I don’t recall it being bad and I think that’s what’s so interesting to me about that is like if you and maybe listeners can go through this exercise, if you think about the last time you saw someone fail like maybe you saw like what comes to my mind is like a child at a performance or even an adult like the last time – if you think about the last time you saw someone “fail”, think about the emotions you felt like to me I’ve done this exercise hundreds of times with people and mostly the words that come up are like empathy or like courage, like this job like that’s what you’re feeling like you didn’t do a good job. So, that’s what we feel when we see someone else. So, you’re recalling that. I don’t remember any of those feelings. I don’t remember it being bad. I also don’t remember thinking good job because I didn’t feel like it was stumbling but when we see someone else fail, we’re like a cheerleader and like, “Go, you can do it.”
And then now let’s switch the roles like think about the last time you got out and failed, and what are the feelings there? And it’s like shame, embarrassment. I took it down later. Like all of those feelings start coming up and we’re like what if we just extended ourselves the same grace we extend others and just say, “Look, because nobody else,” and like and you hear this all the time that nobody, first of all, no one saw it. Like sorry, Brad, I know you know…
[00:06:11] Brad Johnson: I was fortunate at the time. I had probably two subscribers.
[00:06:15] Carl Richards: Your mom and your sister and your sister’s lying. If you have a sister she’s lying and so as your mom. Like she wasn’t even listening back then. So, first, nobody saw it and the people who did. So, I think the message of that like this is so important like I’m glad we get to start here is like doing public work is scary. It’s scary. Scary is built into the process. If it wasn’t scary, it wouldn’t be sort of dancing with the mystery is the way I think of it like touching because you’re literally putting something that you care about out and you’re asking people to evaluate it. Of course, that’s scary. So, just know those of you who are listening who want, you got this thing that you want to do and I hope there’s more you, especially advisors like please I know there’s something that you want to do in public. We need you to do it because you need to make a difference because there’s a lot of people not making a difference in our industry. We all know that. We need to make a difference. We got this thing. It’s scary. Just know that we all feel that. We all feel it. It’s part of the process and you’re going to be okay. No one’s going to die.
[00:07:20] Brad Johnson: You know what, it’s a great moat around your castle because those that are scared to do it, the ones that aren’t scared are the smaller percentage than the ones that are. So, if you actually do the work, go out and fail.
[00:07:32] Carl Richards: Totally.
[00:07:33] Brad Johnson: So, one of my friends, Michael Hyatt, he basically says, “Fail when no one is watching,” and that’s what you got to do. I mean, we were talking about writing which you’ve done a lot of. I guarantee the writing you’re doing today compared to the writing you’re doing 10, 15, 20 years ago, dramatically different and improved based on just getting out there and iterating and practice.
[00:07:55] Carl Richards: Yeah. I love that Michael Hyatt saying. I also think and I know he would agree, is fail when no one’s watching and then keep failing on even bigger stages like I love that sort of opposite end of that is Seth Godin, that often says, “Do things that may not work,” and if you’re going to do something in public that may not work like there’s got to be that tension. I live for that tension like I’m trying to reduce everything in my life that protects me from that tension like I want to feel that like, “Oh my gosh, this may not work but I’m going to do it anyway,” and just know that I don’t know anyone. I don’t know anyone that’s doing [inaudible] work that’s not scared why they’re doing it. So, the difference isn’t that the fear goes away. The difference is that you do it anyway. I think the reason I really will hammer that home is because if you’re thinking about doing it and you’re like, “What’s wrong with me? I’m scared,” you need to have a voice in your head that says, “Nothing is wrong with you, brother,” like just dive in. This is what it feels. The water is a little cold. Yeah. It turns out you’re human.
[00:09:01] Brad Johnson: Yeah. Actually, another Michael Hyatt. I’m just plugging him at the beginning of this conversation. He was big into really as I was diving deep into setting more profound goals for what I was doing, he said, “If you set a goal and it doesn’t scare you at some level, it’s not a good goal,” and whether that’s out in the public domain or something else with your business, I found that to be very true.
[00:09:22] Carl Richards: Yeah. Totally.
[00:09:24] Brad Johnson: Well, let’s dive in here. I love the philosophical conversation. That’s what I do going into this. It would be fun. We can take it wherever it went. So, let’s go, let’s start with the doing public work. You have made a career out of very simplistic sketches and so what I’ve never heard, I’ve seen it. I’ve seen the New York Times column. I, in fact, I’ll hold this up for those watching on YouTube, I actually have a Carl Richards print from – this is at least a decade old when you originally I think started offering them on your website so I’ve been following you for a long time, but I’ve never actually heard the origin story of how did you turn these simplistic sketches into a career and everything that’s come from there. Do you mind sharing that?
[00:10:04] Carl Richards: Yeah. Totally by accident, right, like it was just sort of playing in traffic and hoping to get hit and that’s the only thing. I’ve asked this question a lot and the only thing I have to offer is playing in traffic. So, the way that worked was I was sitting. I’m sure a lot of your listeners can relate to this, sitting at a desk when I was a financial advisor, a big brokerage firm, it will go unnamed, but has a bull as its symbol and is owned by a bank sitting at a desk trying to explain a relatively complex subject to a client and these were smart like all of our clients, smart, intelligent, successful people. So, the fact that I was getting blank stares from them was not their problem. It was mine and I thought I was pretty good at this in terms of making things simple and easy to understand and I was just getting blank stares and out of a certain act of desperation, this is not a blackboard but it was like there was a whiteboard on the wall and I jumped up and said, “No, like this,” just purely out of an act of desperation.
“This is really important. You got to understand.” I drew like circle and boxes and some arrows or something. And they were like, “Oh, okay I get it,” and that feeling was sort of this like, “Whoa, and again, I didn’t mention over them. It wasn’t like lightning striking. It was just sort of like, “Oh, that’s interesting,” and that’s one thing I’ve really paid a lot of attention to in my career is just like little, little bits of tailwind, just little, little bits of like, “What do you make of that? That was interesting.” And so, then I did it again with the next client and again and then I started putting – I had a client who said, “Can I take that with me and show my spouse?” because I drew like at lunch on a yellow pad or something.
[00:11:49] Brad Johnson: You remember what the original sketch was, the very first one?
[00:11:53] Carl Richards: No, I think that one, I remember who it was. It was Steve and Diane without sharing their last names and I believe it was just flow of money. It was like here’s your retirement account, here’s your bank account, and we’re going to do this and then when you retire, we’ll reverse the arrow like it was just sort of a cash flow because you’ve seen the estate planners do this all the time. This is like a standard piece of estate planning engagement is that sort of the flow like the buckets of the trust accounts. And so, did that, anyway, clients says, “Can I take that home to my spouse?” and when I saw the piece of paper leave like physically like leave, I was like, “Huh, that’s interesting.” And then another every month or two of those buy-ins, somebody calls and say, “Hey, that thing you drew on the whiteboard while we’re in there, could you just scan it real quick and send it to me? Can you like redraw it?” And when I saw that digitally, I was like, “Oh, digitally.” And this was early days in the ’98, ’99 so like the Internet, the World Wide Web, you can go get a sandwich while the two pages that were on it loaded like…
[00:12:58] Brad Johnson: I was downloading Napster songs that took about 25 minutes at the time.
[00:13:02] Carl Richards: Yeah. With the modem, tu-tu-tu-tut. Like if you’re under 30, don’t even worry about it. But I remember thinking like, “Hey, I could put this up online.” So, I started putting them up and it was irrational like illogical thing and my wife and she was right. She used to say all the time like, hey, I mean I had a great business and was growing and it was like, “Well, hey, should I focus here?” and I was like, “Yeah, but there’s this thing I’ve got to keep doing.” So, we did that and then it just kept growing and literally and often when I give this talk, I actually show the email from the New York Times because it was almost like I’m not really skipping a lot of things. I did that for a while in total like no one was watching. Like my mom and my sister and it turns out my sister was lying. But then slowly more people noticed, and I got an email. It turns out an advisor named Kent I always remember because Kent changed my life and an advisor named Kent send it to – he happened to have some really casual friendship.
It’s not even a friendship. It was just Ron Lieber at the New York Times would open Kent’s emails for some reason. Kent sent it and I say that because Ron gets a bazillion emails from people like us and Kent sends a note saying, “Hey, you’ll like this, Ron.” And I still have that email because the next email was from Ron and it is the one I show. It says, “Hey, we love these. Would you do them for us?” And I knew enough at that point in my life to say yes and figure things out later. And then there’s a whole story behind that but that’s how they first sort of appeared in The Times and then now October will be 10 years.
[00:14:37] Brad Johnson: Wow. Cool. So, how long into your financial planning career were you at that point? So, that Dave and Diane meeting, the first like if you want to call it the first source sketch that I drew in front of somebody was 95. Probably like two or three years but it didn’t until like the books came out, the first book I can’t even remember, I wanted to say it could have been 12. That seems right. So, that would’ve been 12 + 7, 15, 16 years.
[00:15:08] Brad Johnson: Was the Behavior Gap always the blog where you have them? Was that where it started?
[00:15:12] Carl Richards: Yeah. Yeah, it’s funny. I registered the Emotional Gap first and then I was like, “Ah, that sounds a little soft. I don’t know what that even means,” and then we registered the Behavior Gap was like, “No, let’s do behavior,” and every domain was available back then so yeah that’s where it’s been ever since. Now, that just basically come to represent my life’s work like that’s my personal homepage.
[00:15:35] Brad Johnson: Yeah. Okay. So, here’s what I love about your work. So, I’ve been coaching advisors, independent advisors for 12 years, going on 13 now, and one of the hardest things to get them to do, which I know this will be ultra-surprising to you is to simplify the complex. I think naturally, they want to just dive in like an engineer and start plan with all the different financial tools and explaining those and your book does a great job, The One-Page Financial Plan. I love, you actually call the first appointment the same thing I tell advisors to call the first appointment which is kind of the discovery or the discovery session. So, if we can start like 30,000-foot view for these advisors that I mean they like to get down into the weeds, a lot of them. How do you zoom out and to go back simplify the complex if you don’t have the artistic skills that you do as an advisor? What are some core things that you found important there?
[00:16:31] Carl Richards: Yeah. Well, first, I have to ask were you being sarcastic about me finding that surprising?
[00:16:35] Brad Johnson: Yes, I was.
[00:16:37] Carl Richards: Okay, good. I just wanted to make sure. Good. I just wanted to make sure.
[00:16:42] Brad Johnson: Good thing we’re on video. You can see me smiling now.
[00:16:45] Carl Richards: Yeah. It’s not surprising at all like it’s the big…
[00:16:48] Brad Johnson: Now, I’ve dealt with it for 12 years. It hasn’t changed.
[00:16:51] Carl Richards: I get this email all the time from big like the head of training at huge firms that you would all recognize saying, “Could you come help our advisors learn how to talk to humans?” and there’s a bunch. I thought a lot about this. There’s a bunch that goes into it. The first thing you need to understand is why like the tactical stuff it should be obvious like I had no art skills. Come on. Like I took a pottery class when I was eight and you should see like the pieces of paper that actually – and when I present live to groups 100 people to 3,000 people like they’re just a mess like what I’m doing live. This is like 15 takes and that’s what it looks like after like draft. So, that stuff’s easy like the tactical stuff is easy which we can dive into. I think the mindset is the most important part. I think the reason that’s so hard for so many of us is we’re scared. Advisors, we as an advisor community are scared that if we make something too simple, people won’t pay for it like that somehow simplicity represents lack of value.
And another way to think about this is the book that I’m saying we have confused – we think complexity is a sign of intellectual prowess. So, there’s two ways I see this happening. One is that that we think complexity shows how smart we are. This second is an old-school sales technique that many of us that if you better have more than 15 years or so, you were taught, and I think it’s still being taught in some parts of the industry and then it’s complexities of technique like you dig a pit, throw the client into it and look down and it’s a family holding on with the rope. Complexity being the sign of how hurt you are or digging a pit and throwing somebody. One of those nobody likes to be treated that way. So, that’s where I started. You just back up and go, “How do I like to be treated as a human?” Like I’m busy. When I go meet with my attorney, this happened us. We walked into, we went to meet with our estate planning attorney.
[00:18:50] Carl Richards: My wife and I are going out of town or something for the first time with the kids. This was years ago and we met. We went and meet with an estate attorney who was a friend, well, at least before this meeting was a friend of ours and my wife and I were sitting there and he has to spell out the questionnaire in the lobby like many advisors still do. We’ve got to stop filling out the question. Nobody likes that. When you go to the doctor, you hated it when you go to the dentist and then here, we ask people to do it. So, we’re filling out the questionnaire. We go in. He reviews the questionnaire in front of us. It takes like five minutes without saying a word like reviews the question and then goes, “Okay. You have three options.” And as soon as he said three, I was like this happened with a bet too. I think it’s one of these plans. As soon as I heard the word three, I was like, “Ah,” and my wife he starts going in these complex options and my wife interrupts him. He’s like, “Hey, hey,” like option 2.5 she’s like, “Whoa, we didn’t come here for you to give us options that we’re unqualified to decide between. We came here for you to understand our situation well enough to tell us what to do.”
And I think that like the work is being relatively, I mean, I’m not dumb. I know my way around estate planning stuff, but I just want to be told what to do at the back, in that book, at the back like that’s even more basic. I just want to be told what to do. So, I think that’s the beginning is understanding how to treat humans. Let me just say one more thing about this. If you understand clients and I’m going to say this really directly. I’m hoping that it still is challenging and that people can sort of work with it a bit. So, don’t reject it out of hand. Let it sit and see how it feels. Clients do not care. They don’t. I get hundreds of emails a week from them because they’re the ones reading the New York Times. They do not care about your solutions. They don’t. They don’t care about your solutions. They care about their problems. And when you walk in, you think that someone cares, that you’re smart and you know the step backwards and forwards.
[00:20:53] Carl Richards: And so, I think that’s the other, the more benign version of this is just a natural progression as you move along the industry, any industry, attorneys are guilty of this that any industry as you get smarter and smarter and more and more experienced, you think someone cares. I don’t mean they don’t like they care that you know but they don’t want to know. They just don’t. So, if you can get to the heart of their problems, spend your time on understanding their problems, the solution, the prescription is easy. The prescription is going to be on one page. Last point, think about a doctor. I had a doctor friend of mine who’s a client who pointed to the south to me because I was going in to like a 75-point bullet point presentation with 12-point Michael Kitces style. And he’s not good friends so it’s okay for me to beat up on it a little bit like 7-point font with like pages and pages and stuff. I was going into this to present him and he’s like, “Whoa.” He interrupts me like my wife did.
He interrupts me and says, “Hey, last time you brought your daughter to the emergency room that I was on that day. What did you leave with?” I was like, “Well, I left with my daughter like that was cool.” He’s like, “No.” “But I also left with a piece of paper with some scribbles on it that I couldn’t even read.” He’s like, “What did you do with it?” So, I went to another place and I gave it to them, a bunch of scary people in white coats and they made me sign a document that said like if she grew a third arm within that. And then I filled the prescription, took the prescription home and gave it to my daughter. He said, “Whoa, you didn’t get a second opinion?” I’m like, “No.” “You didn’t google?” “No.” He’s like, “Could you describe me the prescription?” The only reason you can write a prescription that someone can’t read is if they feel thoroughly diagnosed. That if you don’t feel thoroughly diagnosed, you get a second opinion, you google, right? But if you feel thoroughly diagnosed, you just fill the prescription.
[00:22:50] Carl Richards: And so, all I’m saying is instead of trying to appear smart, spend all that time and energy training, practice listening, asking good questions and listening. I think that’s the beginning like the other stuff like how do you draw? Who cares? Like, can we just get the mindset right? That no one cares about your solutions. They care about their problems and you need to get better in understanding people’s problems.
[00:23:14] Brad Johnson: Yeah. So, if you’re listening an advisor out there like go back and re-listen to that last five minutes because on my side, coaching advisors for over a decade, it’s like I don’t know what happens when you become an advisor. The analogy I’ve made is it’s kind of like being an emergency room doctor that’s no longer get squeamish at the sight of blood. I think we’re a bit calloused because we see the same problems over and over and we create the same solutions over and over where we forget these are human beings walking and sharing their deepest darkest secrets around money that they probably haven’t shared with anyone, including their own kids and we just treat them like, “Fill out this questionnaire,” like very mechanical and your point in the book you mentioned it’s more like a therapy session than it is a session with a financial advisor and I found the very best advisors that’s exactly the way they approach it. They’re asking meaningful questions and then listening, not spewing out a bunch of information.
So, can we go into the formation of your question that you formulated over years in this business that you would open kind of this discovery session with the very first appointment and why you settled on that question?
[00:24:27] Carl Richards: Yes. It’s really important to understand that I stole all this. I mean not carefully like the better way to say this would be like I’m standing on the shoulder to people who did it long before me. So, Bill Bachrach teaches a lesson and Bill is still around doing amazing work. So, if you’re interested in this stuff, that’s where I would go. Bill has this amazing question. And Bill I learned it from Bill from his book and then I also learned it from John Bowen and John Bowen is the one that taught me the word, The Discovery Meeting, and I know attorneys have been using that forever.
[00:24:58] Brad Johnson: Now that I know it came from John Bowen, I’m not interested.
[00:25:03] Carl Richards: I don’t know that anybody can claim credit for any of these things, but I do know that that’s where I learned what’s important about money to you is Bill or John’s question. I believe those. And I’m not a question zealot and Bill rightfully so, teaches a way to do it and he doesn’t deviate from it. It’s awesome and I’m glad. I’m not that way. I’m more just like if I were starting my firm again, I would spend the bulk of my time getting really good at that first meeting and I would find questions that work for me. So, Bill’s question Simon Sinek so what happened to me is Bill’s question, “What’s important about money?” bashed up against Simon Sinek’s work. I was reading Sinek’s where I’m like, “Wow. This question of why like start with why is so good,” and about that same time around Dan Sullivan of The Strategic Coach, actually the book called the Dan Sullivan Question, which is another great one.
Dan Solin who was a colleague of mine for a period of time, he wrote a book called The Smartest Sales Book You’ll Ever Need and then there he talks about his opening question is, “What brought you in today?” So, it doesn’t really matter but for me, it was Bachrach and Simon Sinek running into each other and so I would ask this question. This is like three to five minutes into the first time I’ve ever met someone in my office. So, none of this, “Hey, Brad, what do your kids do? Oh, cute. My kids play rugby too. Oh, that’s awesome,” like none of that. I’m doing that sarcastically I know but none of that. If you start with the premise that the goal of the first meeting is to build trust like that’s a reasonable well-intentioned goal is to build trust. That’s why I think most of us are in this industry do the 15 minutes of like look at my diplomas. We have the biggest computers. We manage tax and assets. We have 49,000 clients. That’s why I think we do that, and it’s totally misinformed.
[00:27:06] Carl Richards: And I’m going to make another really direct statement like it’s flat out it’s doing damage and here’s the reason. I realize that’s direct and I’m just asking you to sort of play with it a bit like if somebody walks into your office for a first meeting, they’re a prospective client, they come to your office for a first meeting. Unless you live someplace where the laws are different than me, they did that of their own free will. Now, you just have to remember what they had to overcome to do that to realize the position you’re in. They came to talk to you about money. They don’t talk to anyone about money, and they came to talk to you. And I just mean you part of that chemistry that they’ve read about. They overcame both those barriers and they’re still there. You’ve done something to earn that position. I know they walked in with their hands on their wallets like, “You’re not going to get this from me.” That’s why I think we need to stop with that like, “Here’s how I great I am.”
Think about going on a first date and the person at the other – and most of the women listening to this will have actually, unfortunately, had this experience of listening to somebody talk about themselves for the first half, first hour of the first date. There’s no second date. Imagine going to meet with an attorney of brain surgeons, my favorite example. Your eight-year-old daughter needs brain surgery. You go to meet with a brain surgeon and they spend the first 20 minutes talking about how sharp the scalpels are and where they went to medical school and 689 people and only two have died, like, our nurses are the best, we clean our instruments like what would you would say? “Oh my gosh, there’s something wrong. I got to find a new surgeon.” So, I just say start from that position of professional confidence and then give people like shock people. We want them to be confused by the grace that they walked into a place and for the first time in their lives, I actually most of them is because I’ve been through this with so many people, they never had a safe place to just be asking questions about money.
[00:29:07] Carl Richards: They’re scared to death. They’re not going to tell you that and even whatever high-powered bro that thinks he’s so cool, he’s scared to death. He’s even more scared. That’s what all that’s about. So, if you can just say, “Brad, thanks for coming in today. It really shows how committed you are in making good decisions with money.” Let’s start with a question. I’m going to ask you both this question and it’s the only question that you can’t help each other on. So, you sort of got to answer independently and then you have made a judgment decision already, which one’s the more verbally dominant. That’s not always the breadwinner, by the way. Which was the more verbally dominant? And you start with the ones the least verbally dominant. And you just say, “Brad, why is money important to you?” Now, you can say to Dan Sullivan, Brad, if we are meeting three years from now, what would have to happen over the next three years for you to feel like this is been a success?
And Dan Sullivan says, “Use the date.” If we were meeting, whatever, June 14, 2021, 2022, what would have to happen for you to feel successful? The last three years had been a success. I say, “Why is money important to me?” Client says something like almost always freedom or flexibility just like, “Get me out of this.” I was going to ask you if I’m going too long, but I don’t really care because this is too valuable.
[00:30:28] Brad Johnson: No, you’re good. Keep rolling.
[00:30:30] Carl Richards: So, what’s happening here is any of these questions you got to feel, the reason this is scary is because you got to feel comfortable with something that you’re not – you’re comfortable talking and telling everybody how smart you are but you’re not comfortable. You got to show up with little vulnerability yourself. That vulnerability is in the fact they’re going to look at you like you’re crazy and that’s the sign. I used to think that is a sign that I’ve done something wrong. It’s the sign that you’ve done something right like when you ask a good question, a good question, by definition, is something somebody hasn’t been asked before. So, they’ll say sometimes they’ll mask back because they don’t want to be vulnerable. I mean, like well this is a dumb question. I had people say like, “Hey, man. I’m not here for your therapy session.” I’ve had somebody say that. I’m like, “Oh, I’m sorry. I must’ve misstated that,” and then I go back and say the same thing like let’s start again. Brad, why is money important to you? So, that uncomfortable nature of it, lean into it. Don’t fill that space. It’s a sign that you’re on the right track.
Somebody says freedom, flexibility and you just keep digging. “Oh, that’s interesting, Brad. Tell me a little bit more about freedom.” I’ll give you a real example. Her name is Julie. I think it’s in the book. I can’t remember. I change people’s names to try and protect them. Her actual name is Julie. So, whatever the story is it’s probably Kathy or something in the book. It’s the same story. Julie, without knowing her last name, Julie is a hard-charging emergency room doctor managing partner of the biggest emergency department in the town I lived in at the time and most of your advisors are in the states, they know like how competitive that field is like this Julie has got to be on it. So, Julie, what’s important about money to you? Her husband Steve is there. And Julie says looks a little like they come into the big brokerage firm with the bull as a symbol and they were like, “What do you got for me, kid? Like what’s your performing whatever?” And next thing they know, she was like, “Ah,” whatever. I can’t remember what she said. I think she said freedom.
[00:32:28] Carl Richards: I was like, “Okay. Freedom or security normally comes first,” and that in and of itself is a really interesting thing. Don’t make too much of it, but it’s interesting to see somebody says security versus freedom it tells you something I think. I said, “Okay. Tell me a little bit more, Julie, about freedom.” And my goal in these first meetings was someone was going to cry, and it wasn’t going to be me. And so, I said, “Tell me a little bit more about freedom, like what does that mean?” “Oh Carl, I just want a little flexibility.” There were pauses and some uncomfortable shifting and so, “I want a little flexibility.” “Okay. That could mean a lot of things to a lot of people, Julie. Let’s clarify a little bit,” and then just right back, “Why is flexibility important to you?” Longer pause and uncomfortable looking at Steve like, “Save me.” She says with a little emotion, “Gosh, I just want some time.” So, hard-charging ER doctor, medical school residency, “I just want some time and I haven’t even like I want some time.”
Like, “Okay, time that that’s really important and if it’s okay later we’ll put some parameters around that and define it. We’ll call it a goal, but for now, let’s assume you’re there. You got all like we met that goal. You got all the time that you mean when you say you want some time. Why?” Right back like why is that important? And Julie, longer pause, gets emotional and says, “Carl, I just want to have a family and I haven’t even had time to think about it.” And I’m like that’s relatively dramatic example, but of the hundreds of times I’ve done this, most of them are that far off. Some of them no one cried like the greatest generation guys that were like, “I want to serve in my community and take care of my kids.” They didn’t cry, but it was just as important to them. Julie like how could I have helped? Like we’re seven minutes into our meeting. Would that have come out into your risk tolerance questionnaire? And how could I help Julie without it, right?
[00:34:30] Carl Richards: So, that’s again not as zealot about the question but that’s what we’re trying to get to is to say, so I can look Julie in the eyes and say, “Julie, would it be okay if everything we did together was sort of through that lens of giving you the flexibility, the freedom, the flexibility, the time to have the time to ultimately have a family? Is that okay?” And she, of course, was like, “Yeah.” Now she didn’t come in and I knew by the look on Steve’s face that I don’t know that they knew that. That’s like one of the most valuable things an advisor could ever offer is goal clarification. Don’t use those words in front of a client but they didn’t know so you just clarified something that they didn’t even really know. What’s that worth? Like, forget the rest of the work you’re going to do. What was that experience worth? I’m sure they walked to the car and were like, “What just happened to us?” versus when they go to meet with your competitor who’s going to say, “You want blue? Oh, you don’t like blue? I’ve got green. If you don’t like green, I’ve got pink.” So, anyway, enough about that. Sorry.
[00:35:33] Brad Johnson: Yeah. I think the best advisors when I really deconstruct it, it’s basically they are therapists that just so happen to talk about relationships around money and that’s the very best and you hit a lot of things there, Carl. Number one is that I just want to go back and rewind these because these are really important things I run into all the time that I think advisors glance over sometimes. If they came into your office, how much work it took them just to get there? Because oftentimes what I’ll run into we’re all about the analytics and tracking your results from your marketing and your ROIs but sometimes people will discount, “Oh, they just want to get a prospect,” and they won’t actually self-assess and say, “Wait. Maybe I’m just not very good at running appointments to pull out what people need.” And so, I think when you just start just writing off people, that they weren’t a good fit, I think sometimes you need to go back and re-examine if they came in your office and they were qualified to have the asset level where you can help them, maybe it means you need to tweak your appointment process if you’re seeing the happen over and over without the results of them coming on to client.
So, I think a lot of times advisors just dismiss people like, “Oh, that was a do-it-yourselfer or whatever.” The other thing that I caught there that you said that’s really interesting I want you to dive into a little bit, you separately ask each spouse independently the questions and you also started with probably the less dominant from your read as far as who was speaking up the most. Talk about the power of that and why that’s important if you don’t mind.
[00:37:02] Carl Richards: I know advisors who will be like, “I won’t meet with you…” Well, actually, most advisors like don’t even think about this, but there are some advisors who thought about and said, “I won’t meet with you unless you’re both there,” and I admire that, and I think that can be a great practice. I wasn’t dogmatic about it. I would encourage it but if somebody was super busy and they needed help, like I just start from a place of like how can I help? How can I be helpful? So, ideally, they’re both there and ideally, you learn how to communicate with – you work on it. I think you’re really right. I that first meeting you practiced and you get training like I would record these with permission. So, I would record these and then listen to them afterwards and be like, “Oh, did I really do that?” Like, I would still re-listen to my podcast interviews and like, “Do I really hit the table and the whole camera moves like I just did?” That kind of stuff. So, I think you learn like so anyway I think having people’s spouses there I think understanding that once spouse may appear disinterested, how could they be disinterested?
[00:38:05] Brad Johnson: Well, think about it this way too. If you’re a therapist, are you going to sit there and talk to one spouse the whole time? No. But what you see, you see that happen in financial services all the time where the guy talks to the guy and I think that’s one of the key elements female advisors when you look at when I started out, it was like one out of 100 maybe was a female advisor. Now, that is massively growing. Some of our most successful, our highest growth offices or female offices and it’s because they are treating them like real human beings and having a conversation with both sides and actually asking these questions that require thought. I think the other thing that you hit on is when you ask a great question, you shouldn’t be able to respond immediately because it actually requires you to think about it. And so, that’s kind of the theme I’m hearing as well is you’re almost going into it like a private investigator trying to get to the root cause and when they give you surface-level answers, you’re like, “Well, why is that? Let’s go deeper and deeper and deeper until we get to the end root.”
[00:39:07] Carl Richards: Yeah. And that could be just come just a really fun game like I think of it as an academic trying to solve a problem like some of my favorite questions is what you just said, “Oh, I love listening Brian Koppelman has this great podcast called The Moment and you will hear him in the middle of conversation and he’ll go, “Keep going,” or he’ll say, “Go deeper,” like you just said. Just simply saying, “Oh, that’s interesting. Tell me more.” “Oh, why?” Like, we just accept like clients will say to you, like, “What was your goals?” “I need 5 million by retirement,” like sometimes clients will come in not prepared and you, “Oh, 5 million by retirement.” You never took the – all I’m saying is like, “Oh, that’s interesting. Tell me why. How did you arrive to that number? Oh, why would that be important?” Like just asking more questions and, yeah, I think just the female advisor thing, I’ve been so gratified like we have a long ways to go but my experience with women advisors is they don’t seem to have a problem engaging men in conversations.
And they don’t just put blue on it like it’s not so from the male perspective it’s not just like nothing drove me crazy. I think we’ve got passes I hope but, yeah, like 10 years ago it was like, “Oh, we just make it more female,” like, “No, that’s not even close.” It’s just engaging. In this case, I can think of plenty of cases where it wasn’t – that had nothing to do with more or less emotional and not all the standard garbage that we used to think. All it had to do with this like could you engage with them as a human? And maybe there’s a nondominant spouse. In this case, Steve was the nondominant spouse. He was the one that was the most talkative, but he was the nondominant in terms of breadwinner like Julie clearly made the money, clearly made the decisions, but for whatever reason, she didn’t feel like speaking up in that meeting and so that’s why I engaged her first. I just got that sense mainly from walking from the foyer to the office like I didn’t have any – I just guessed.
[00:41:05] Carl Richards: But Steve appeared disinterested. Like when I asked him, he was like, “I just want to golf more,” and I was like, “Well, did you not just hear what just happened between your wife like she just said something about a family? I don’t know if you heard that part.” But engaging Steve in the level that obviously he’s interested so learning and I can just think of so many stories about spouses whether they are male or female, and unfortunately, we have a stereotype. It’s typically female that seems less interested. It’s just not true. And we need to change that and we need to get better at it but whatever spouse I can tell you hundreds of stories of spouses that appeared not interested and then when you engage them, you find out why. Let me just tell you one real quick like this is so important. I’ll make it quick. This was Courtney Poland of the story. Courtney was working with somebody. Courtney is like a coach to advisors and particularly like high-end families that really are sorted through like the psychological pieces of extreme wealth.
And he used to tell us a story about how the CEO of a public company, they had a vacation home in Hawaii and the wife wanted to buy a new home, a new vacation home, and the husband was like, “Well, we can’t afford a new vacation home,” and so the husband and the advisor a guy in cahoots like, “You need to talk to my wife. When we come in, you need to make it clear,” and the advisor, Courtney, first, I don’t remember the story about how they connected but Courtney is around and the advisor asked Courtney, “Hey, how would you handle this?” He said, “Well, has anybody asked the wife?” then he said, “Why? What were you thinking? Help us understand.” So, the next meeting they do that. They’re like, “Hey, help me understand this a bit.” This kills me. The wife says, “Hey, of course, I know.” Because the concern was we already have one in Hawaii. They were thinking we have one in Hawaii and we want to buy another one.
[00:43:03] Carl Richards: And she was like, “Of course, I know we can’t afford another one. We’re going to sell the Hawaii house because when we built the Hawaii, all the kids and I remember is you being angry because when we built that in all the years we’ve been going, you are under so much pressure that we go there because it was like I need to escape, and we get there and all we saw was you impatient and angry. And so, I want to start a new chapter in vacation homes for our family.” Like, can you imagine, every time I hear that story, I think how did we not take the time and the husband now, of course, is like, “Oh my gosh, of course. Yeah. Yeah. Advisor, make this happen,” like that’s an example of a non-engaged situation. Again, and that’s one case wherein Steve was the not engaged partner in this case the wife was not the engaged partner. Either way, what would be wrong to treat them like a human and ask these questions?
[00:44:04] Brad Johnson: Yeah. I just go back. I don’t think it’s from lack of want to. I don’t want this to be like where we’re beating up financial advisors because we work with incredible people that really do care, but it goes back to your statement that I wrote down right here. The client or the prospect they don’t care about your solutions. They care about their problems. And oftentimes we’re so worried about our solutions, we don’t actually uncover what their problems are. I can think multiple times where advisors will call in and we’ll help them actually build the plan on our side so we’re marrying insurance planning with asset management and they’ll be like, “Hey, I’ve got a great prospect. They’ve got a million bucks. They’ll give me like the details.” They’ll be like, “What should I do with it?” And I’m like, “Well, what problems do they have? What are you trying to solve here?” And it’s just this blank pause and it’s because they never actually got to the core of what they were trying to do with that money. Money is just a tool that helps you do certain things in life and they never got to that far into the conversation where they figured that out.
[00:45:04] Carl Richards: Well, and that’s just so important for like all of you listing like you have a really hard job and this is – everything we’re talking about here is just human nature. Of course, you’re excited because you know. The reason you care about your solutions is because you want to help people like you’ve seen it before. You want to jump in. How quickly can I solve this? We do this in our marriages all the time like we think that that’s her job is to solve the problem. What people really want to hear is that we just forget and it’s so easy to forget like I do it all the time. The best advisors I know do it all the time and they just have to remind themselves. So, I’m just sort of begging you gently like I’ve been a little I like to balance drill sergeants and empathetic. Like I like to get up in people’s faces and then say, “Hey, but I also know how hard it is.” All I’m asking you gently to do is just like just remind yourself of the humanity of the work you’re doing and just pause and go…
And I love that like you can go into my friend Ben here in New Zealand. He works with advisors and he likes to say, “What are you solving for?” and actually a colleague of mine here. We have Jaqueline. She’s always asking. Because I will say, “I want to do this,” and she’ll pause and go, “Hey, cool but what are we solving for?” and I think that idea of just stopping and say, “Hey, what’s the problem here? And let’s get really clear,” and that’s a skill and it involves vulnerability and to a large degree going to a first meeting sort of naked like you don’t have 12 PowerPoint slides like that’s a new skill and I’m just saying could you just slowly start to engage with that skill because I actually think to be a little drill sergeant, I think it’s going to be the only value left. And the interesting piece about our industry is you need to do that and be technically competent, like a technical pro which I think we have probably almost everybody listening to this has got that piece nailed and now we just have to engage a little bit with that art piece that’s so uncomfortable we often didn’t sign. Most of us didn’t sign up to be marriage counselors.
[00:47:09] Brad Johnson: Yeah. Are there tools, Carl, like I just go back to that emergency room doctor. He do the same things over and over. Sometimes you just get in like one, two, three like you’re just building Lego blocks over and over and you’re not realizing each individual comes in with these fears and concerns. Are there any tricks that you’ve seen advisors over the years use where they can get present and really get down to the core of, “Hey, this individual I’m meeting with I could change not only their life but their kids’ lives, their grandkids lives where they have something they do before appointments to get them in that state of mind?”
[00:47:41] Carl Richards: Yeah. I think it’s similar to I like the doctor analogy that created The Checklist Manifesto book by Atul Gawande that I think that idea of a pre-meeting checklist, I also think it’s kind of a cool to think of it as a pre-meeting ritual where you just sit down for a second and reconnect with that and maybe you’re right. A couple of things that are meaningful to you. I’ve seen advisors who do this like, remember, they don’t care about your solutions. They care about their problems like what am I trying to solve for? Treat this person like my mom like, whatever, it’s some meaningful things to you. You reconnect. So, that’s one like a pre-meeting ritual to sort of reconnecting your present, almost like a 32nd meditation and like and I love to think about it, what a sacred blessing. You have to be engaged in this process. I don’t know very many things that are more human than this unfortunate just the world we live in but this unfortunate relationship we have with money and then I think there’s the post.
Post would be really engaged in the process of feedback whether you have a coach or your assistant or a group of advisors in the office, I would create a ritual around feedback. And so, an easy way to do this where we say, “Look, we’re going to have a meeting once a week,” and let’s say there’s no advisors in your office and you go, “Fine,” like three or four other advisors outside of your office like colleagues, whatever. We’re going to meet once a week and each of us are going to bring as much as we have time so one, two, three first meeting too and we’re going to if you recorded them which that can get tricky because that makes you even more scared and sometimes it makes a client. I’ve never had to make the clients uncomfortable, but I understand advisors’ fear around that. But if you don’t record them, walk out of the meeting as soon as they leave, go sit back down the conference room, open up your voice memo app on your phone and record what happened. Record the impressions. Record the questions you asked.
[00:49:43] Carl Richards: Did they go well? Did they not go well? Just think about this is like your golf swing and then bring that to meeting and sort of post-op meeting where you sit down and get a little feedback.
[00:49:55] Brad Johnson: Yeah. Cool. All right. So, let’s dive into well, first of all, I just have to bring up this quote because I love it and it speaks to the power of a plan so it’s page 53 in your book. It’s the quote from Alice in Wonderland. Do you remember or do you want me to read it?
[00:50:10] Carl Richards: If you read it, better.
[00:50:11] Brad Johnson: If you could freestyle, I’m going to be super impressed.
[00:50:13] Carl Richards: It just depends on where you’re going.
[00:50:16] Brad Johnson: Yes. “Would you tell me please, which way I ought to go from here?” “That depends a good deal on where you want to get to,” said the cat. “I don’t much care where,” said Alice. “Then it doesn’t matter which way you go,” said the cat. “So long as I get somewhere,” Alice added as an explanation. “Oh, you’re sure to do that,” said the cat, “if you only walk long enough.” So, the whole concept of having a plan and the power of the plan. How do you start to frame that for clients because it is if you don’t know where you’re going, anywhere will take you there, right? So, as you start to go through and I know you unpacked asking the why behind that, let’s keep going down that path and helping the client understand why they need to plan in the first place because I think sometimes clients don’t even understand that when they first walk in.
[00:50:59] Carl Richards: Yeah. And be sort of aware too that they don’t even like the word, plan, like humans don’t like the word plan, mainly because, oh geez, there’s so much we can say here. So, let me just I think a couple things, mainly because I think we’re coming to a growing realization this is happening in other industries a lot faster than it’s happening in ours where people are coming this growing realization that plans are worthless without the ongoing process of planning. And so, you see this, I was just reading. I spent a lot of time setting up partnership and I was just reading about my favorite venture capitalist said that his favorite thing to do now when he gets pitch books and he’ll do it right in front of the founders that are coming to seek money. He’ll flip the projection section of the pitch book and he tears them out and throws them away like and so I think this idea we’ve sold, there’s a false sense of precision in our industry.
And again, I understand where it comes from. Humans, if there’s one thing we dislike more than anything else is uncertainty and we think we’ve been sort of taught as humans that a plan will reduce uncertainty and it’s simply not true. It gives us a tool to engage with reality, but it doesn’t change reality. And so, if we understand that the only thing we know for sure about the plan, the financial plan, this document that we call – the only thing we know for sure is that it’s wrong. We just don’t know how. I think using that kind of like understanding – this is a big kick in my leg. I’m forcibly inserting this opinion into the industry and that is that financially planning has to change and I call it reality-based financial planning. What if we just did reality-based financial plan? And you could look at other industries. The lean startup world, the software development sort of shifting from waterfall, which is where you get all this development and then boom the product to agile where you make a tweak change.
[00:53:04] Carl Richards: See, it turns out that we work in a complex adaptive system and complex means you do, A, it goes through this big thing and you don’t know what’s going to come out. That’s somebody’s life. We don’t know for sure that you do anything at B and we know for sure it goes with a system that we don’t really understand. Adaptive means that our interaction with the system changes the system so like just whenever we move, reality moves too, right? So, the only way to solve for a complex adaptive system is to take the next step and then reset. In the literature, you call it solve for the next local optimum. So, it’s make a plan so we still plan. We just release the pressure so I use the word “gets”.
It’s like, “Ah, Julie, you want to have a flexibility kind of freedom when you tap out. Let’s go back to what you said earlier. Let’s put some framework around.” This is exactly how I would’ve said it. “Let’s some put some framework around this a bit.” And in fact, we’ll even use the word for someone’s framework. We’re going to build. We’re just going to use the word it’s okay, I just like use the word “goal”. That’s exactly how I would say it. People, as soon as they hear the word goal and plan would just go, “Oh,” because they think you’re going to ask them whether utility bills are going to be 17.5, years from now. I’ve heard that like the public tells me I don’t want to see a planner. They’re going to ask me why utility bills are 17.5 a year but so we just say we’re going to use this word called goal, relax, and this is exactly what I say, “Relax. It’s a guess.” What would it have to look like? Remember she’s a client. “What would it have to look like in order for you to have the time? You mentioned time earlier? What would it have to look like in order for you to have the time and focus and have a family? Let’s put some parameters around that.” “Well, do this. My partner would have to be on board.” “Oh, what would have to happen there?” That’s not a financial goal, but it leads to a goal.
[00:55:00] Carl Richards: “Oh, so you need to have a conversation with your partner about this. Okay. Good. That’s a goal. Cool.” “How much we would need to be on track for retirement?” “Okay. Well, I can help you calculate that.” All right. We put some framework. We put some framework around the goals that our guests relax then and if you understand this process in shifting the weight from the plan to the process. It’s shifting away from the product to the relationship. This doesn’t become an event. It becomes an ongoing process, so I like to think in 90-day segments like here’s what we’re going to work on for the next 90 days and the other analogy I use quickly is pilots. Every pilot I know, every time I meet a pilot, I ask them two questions. The first one is, do you do a flight plan, a detailed site plan for every flight? And the answer without actually, with one exception, who I’d never fly with. The answer is always been yes. The second question is how often does the flight go according to the plan? And the answer is never.
So, we understand that process of like, okay, we’re still going to build this plan but we’re flexible then when we get phone calls about I got to get out of the market, we have something to go back to, “Hey, remember you told me and that involves time and on track for retirement and are we still on the same page?” “Yeah, we are.” “Okay cool.” Now, we have something to talk about why you want to get on the market. If your goals haven’t changed like we have a framework to bring them back to and that plan becomes an ongoing document like a touchstone to bring them out of the scary stuff back. If you don’t have that in place and if it doesn’t resonate deeply with them, it’s really hard to get them saying no to poor behavior.
[00:56:47] Brad Johnson: Yeah. I want to – where is it? Right here. Here you go. So, whatever this print’s name that’s kind of in your scribble and I think so for those that are just listening on audio, it’s a straight line where you are today on the left-hand side, on the right-hand side where you want to go, and in the middle how do you get there. So, a great plan is that middle portions and the very best offices we work with going back to where this all started simplifying the complex, number one, they understand what exactly that they want to solve for and then they have a plan that simplified not get down in the weeds. I think you actually even use this word snapshot in your book, but a lot of times that’s the framing they’ll use in the second visit after the first discovery session and say, “Hey, we’re kind of taking the 30,000-foot view. We’re going to look at a snapshot. Here’s where you are today. Here’s where you said you want to go. We haven’t built a full plan yet for you because you have asked us to.”
But looking at two or three strategies that we’ve used in the past with other people that have a similar issue, here’s where we think we could go with it and they’re really oversimplifying it where a lot of offices they’ll start pulling out, “Oh, here’s the three asset managers we’re going to use. Here’s the annuities for the income,” and that just completely derails everything because back to the average person, this is like anxiety to them, they are now trying to make decision points on like seven different things that they don’t even understand at the core level. So, can you speak to maybe that unpacking of here’s where you are today, here’s where you want to go, the middle ground of the very best advisors how they bridge that.
[00:58:30] Carl Richards: Yeah. I think you have to remember if people know that you know the problem, if people feel thoroughly diagnosed, they don’t really like I never believed this. I got told this by a mentor named Gary. Remember, Gary telling me, “You’re going to have clients who are never going to even know what asset managers they’re using. If you understand the problem, they don’t even want to know the details.” Now, I know like we’re going to explain it to them in compliance. There’s going to be disclosure and all that good stuff, but just believe me if you understand the problem, they don’t really need to know the details about the solution. So, I think what else happens there, and it’s really important to understand, those advisors who bring out the doc, I understand where that’s coming from. It’s a well-intentioned belief that like, “Hey, you got to understand and I’m trying to help you with,” but what happens is people want to argue. I’ve seen this over and over. We specifically in all my writing, we try to remove footnotes, references, data, and studies because the opposite of what everybody else tries to do because I find if we include that, people want to argue about the data and they miss the point. So, for clients, people want to argue about the solutions, and they missed the fact that we understood the problem in the first place.
[00:59:40] Brad Johnson: Yes. All right. So, we’re getting towards the end here and I’ve got to ask you a few philosophical questions which hopefully we can get to. We’ll have to go through these pretty quick. So, the first one I want to dive into is you’re now located in New Zealand and you didn’t used to be. You used to be a United States resident. So, tell me what happened. Why did that come to be?
[01:00:02] Carl Richards: Yeah. My wife is why that came to be. Actually, the reality is we had always – we’ve been married for 24 years in a week or so and for the whole time we’ve been married, my wife particularly had wanted to spend some time outside the country for no specific reason. Just like wanted to have the experience. And so, we looked for opportunities here and there and an opportunity opened up and we, I mean, it’s a long story, but we were going to go someplace in Europe and it just didn’t work, but we kept trying and it didn’t work, and some would say, “You should go to New Zealand,” and we’ve never been. Ten days later from that suggestion, ten days later we have plane tickets. I mean, not to leave ten days later, but ten days later we had purchased the plane tickets to leave 90 days later. If you had assets, that’s why I think this whole planning like if you think you know where you’re going to be 12 years from now, let alone 35, just to look at like you got to be honest with yourself, if you journal, go back and look at your journal three years ago.
Like, if you had told us we are going to live in New Zealand 75 days before we landed here, it would have never even crossed our minds, but that’s why we’re here. And we like to joke we’re three years into the one-year trip. We’re just enjoying ourselves. We plan on at least being over here a year. We’re just enjoying ourselves. We loved it here. New Zealand’s amazing. We’ve got some amazing people when we’re learning a lot and we’re apparently not done learning from the experience yet.
[01:01:30] Brad Johnson: Well, what’s that meant for your family? Is your family dynamic and being out of the US?
[01:01:35] Carl Richards: It’s been amazing. And again, it’s really hard, especially from a US perspective. If you talk about the benefits of living somewhere else, people feel like you’re saying that it’s wrong to live there. I’m not saying that at all, but I am saying it’s certainly fascinating to see other parts of the world and we learned so much from here, Australia, and Southeast Asia. The people we run into like we meet people almost every day but certainly every week from all these other countries that are traveling through. It turns out people travel. They have passports and they go places.
[01:02:09] Brad Johnson: Do you find people more present and more aware in New Zealand or is it the same bustle that you find in the US as well?
[01:02:16] Carl Richards: I think those are two different questions like the present and aware piece, I don’t know. I do think that there is undoubtedly, okay, we got prefaces. I live in the South Island of New Zealand in a small town. There’s 1.5 million people in this whole island like there’s 7 million sheep. That’s true. I just hope there’s no revolt like I’m still waiting for like the sheep to knock on the door like, “Hey, man. Out.” So, this isn’t Auckland but here there is definitely a lack of static that I didn’t feel in the states like there is a sense and there’s good to that like there’s good to the hustle-bustle moves, fast. We solve some of the world’s problems because of that. It’s amazing. But seeing the other side it’s interesting too.
[01:03:03] Brad Johnson: Cool. Being a guy that’s written a few books, would you mind sharing what your favorite book, what it meant to you, or maybe there’s a most gifted book that you’ve had over the years beside your own?
[01:03:14] Carl Richards: Oh, geez, I’m trying to think through, you know what, this is kind of a crazy example, but I’ll give you the book that I recently read. Pam Houston who is a memoirist which I’ve never read like I’ve never read a memoir in my life. I mean, I’ve read a couple of biographies but I never read like a memoir. She just wrote a book called Deep Creek which was the last book I can remember that was over an inch thick that I finished. It was just a really interesting exploration of a woman who bought a ranch that she couldn’t afford in Creed, Colorado and the hardship of something you care deeply about in the world so that was an amazing book.
[01:03:51] Brad Johnson: All right, Carl. Well, I just want to say thank you. This conversation definitely lived up to my expectations. There’s so much in here to impact for advisors out there that’s going to help them a ton as they’re navigating prospects, that first visits, and all that goes into building a successful plan. So, thanks for bringing your knowledge and your work to the podcast today. I love the conversation.
[01:04:11] Carl Richards: It’s amazing. Let me wrap with this like please understand the work. Both the work that you do but more importantly, frankly, than the work you and I do, the work that you’re doing in a certain listener, watcher, viewer, I guess. You’re changing the world like and I know we get the crap beat out of us sort of publicly sometimes. I know it can be lonely work because a real financial advisor can be lonely because nobody knows what the difference is between the real and a fake one, but please keep doing it because more than ever people are walking around anxious and worried about money and the only place they have to go is you. So, please keep doing it. Please keep pushing. Please keep finding the edge. Please keep being this is important. In this age of like automated investment stuff and fast calculators and should we even use the word robo like please go the other direction like please be more human. That’s what we need in the world so thanks, Brad, for the work you do to make that possible.
[01:05:14] Brad Johnson: Truer words have never been spoken, Carl. It’s all about connection in this business. So, thanks and when you’re in the states if there’s anywhere close to the Midwest look me up. We’ll connect.
[01:05:24] Carl Richards: Amen. Thank you.
[01:05:25] Brad Johnson: All right. We’ll see you
[01:05:32] Brad Johnson: Thanks for checking out the latest show. On to this week’s featured reviews. This week’s first review comes to us from BenschD who says, “Incredible guests and insight. Five stars. Working in the financial services industry, I always appreciate Brad’s insight and ability to make the topic relevant to our field. The list of guests is incredible and there’s always at least one game-changing nugget of information in each episode. I enjoy Brad’s down-to-earth interviewing style and look forward to future episodes. Keep up the great work.” Dave, always awesome reading a review from someone I’ve gotten the chance to interact with personally. Love the work that you and Adam are doing out in Ohio. It’s actually crazy to think how we all met years ago after a few DMs exchange that on Twitter. So, funny how the world works. For those of you financial advisors aspiring to write a book someday, you should go buy a copy of Adam’s book, Off The Record, one of the best financial advisor books I’ve read and great example of how to actually make finance interesting for your clients and prospects. So, go check it out.
Also, for those of you all listening in that aren’t aware of the incredible Fintwit community out on Twitter, you’re completely missing out. There are some absolutely incredible minds freely sharing their work you should be diving into conversations with. Too many to name but just a few of my favorites. Daniel Crosby who’s been on the show, Ian Castle, Jim O’Shaughnessy, Patrick O’Shaughnessy, who also has an incredible podcast, Taylor Schulte, Justin Castelli, Reformed Broker Josh Brown, Michael Kitces. I’ve got a list of a few of them in the show notes but with their handles if you want to go joining in that community. But now I’ve taken a lot from those guys, learned a lot from those guys so definitely some great follows out on Twitter.
[01:07:17] Brad Johnson: Next review comes to us from user elmorC, who says, “New loyal follower. Five stars. Advisor turned wholesaler. Information shared routinely resonates with me on a professional and personal level. Professionally, I started listening when I began my career in financial services in 2017. Working with one of the largest if not the largest brokerage firms in the US. I found that their training was limited when it came to the most important part of the job which was having meaningful connections with your clients. I’ve gained more knowledge on that topic here than anywhere else. This has become an absolute must-listen whenever a new episode is available.” Thanks so much for the kind words and the review. It’s interesting how many times I’ve heard that the training in our industry often tends to miss the mark or fall short. It’s often focused on technicalities and details of financial products versus asking the right questions and listening in order to deeply understand your client’s issues and concerns when it comes to finance. So, I’m glad to hear the show is helping you and other advisors out there bridge that gap. And thanks so much for listening and hopefully this episode with Carl Richards really helped you out even more on that front as we obviously did a deep dive there as well.
And the last featured review for the week comes to us from BCLowrey who says, “Raise your game. Five stars. I’ve been listening to Bradley Johnson for over a year and he and his guests have really opened my mind about how to build a great business. This is a second career for me and this show is like a Masters class for financial planning and advice. Even better, the shows are always entertaining.” BCLowrey, always awesome to hear from a long-time listener, so thanks for taking the time to share your thoughts on the show. Love to hear that the shows helping you along the path of transitioning from financial advisor to a true CEO that’s running a business. I find that to be one of the biggest struggles that advisors face as they grow. Also, glad to hear you’re finding the show is not only informational but also entertaining. Glad I’m not boring. I’ll do my very best to keep delivering on that front. Thanks again for taking the time to share your thoughts.
[01:09:25] Brad Johnson: Okay. As we wrap the show, thanks again for those of you who have taken the time to write a quick review. I love reading each and every one and it helps make the show better know how I can better resonate with my listeners out there. And in fact, if you’d like to connect on a more personal level, give me a follow out on Twitter. My handle is @ Brad_Johnson. Let me know if you listen to the show, how you found it, what guests I should have on, etcetera. I’d love to continue the conversation out there. And for those, of you that have interest in diving deeper or figuring out how you may be able to have our team help you implement many of the ideas shared on the show, my day job happens to be consulting financial advisors from all over the US on how to grow their business and design a practice that serves them versus them serving it. It’s possible to grow your business and work less, I promise. It’s a model we’ve replicated over and over in markets all over the country. So, if you like to apply to see if it makes sense for us to have a one-on-one conversation on how to overcome what may be getting in your way, you can do that at BradleyJohnson.com/Apply. It takes about five minutes to fill up the application so we can understand what your business looks like, what challenges you may be facing, and how myself and my team may be able to help. Taking the first step is as simple as applying at BradleyJohnson.com/Apply. So, that’s all for this week. Thanks for listening in and I will catch you on the next show.
[01:10:48] Brad Johnson: Thanks for listening to this episode of the Elite Advisor Blueprint. For access to show notes, transcripts and exclusive content from our show’s guests, visit BradleyJohnson.com. And before you go, I’ve got a quick favor to ask. If you’re liking the podcast, you can help support the show by leaving your rating and review on iTunes. Not only do we read every single comment, but this will help the show rank and get discovered by new listeners. It really does help. Thanks again for joining and be sure to tune in next week for another episode.
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