The Admired Advisor Podcast: Planning Beyond the First Six Months with Michael Kitces

Planning Beyond the First Six Months with Michael Kitces

Feb 7, 2022

Why are some advisors able to consistently grow their businesses, while others stagnate? Michael Kitces, Head of Planning Strategy at Buckingham, is here to define those small but powerful differences.

Like many advisors, Michael got his start in the insurance business, struggling to prospect anyone who’d listen. While his entry into the industry is certainly far from unique, the lessons he derived from a brief stint pushing product are somewhat revolutionary.

Michael believes this product-based introduction leaves advisors with unwanted professional baggage. Why? Because when it comes to building a business that lasts, propositioning every warm body doesn’t help you hone your niche or establish invaluable credibility. Becoming an expert, striving for consistency, and the practice of ongoing planning seal the deal.

In this episode, Steve and Michael discuss Michael’s other must-haves for success in the industry, his surprising take on fee compressions, planning for the long haul, and the inevitable evolution of financial planning.

Key Takeaways

[01:22] - How Michael entered the financial industry.
[06:37] - Why financial planning has evolved over the years.
[13:36] - How financial advisors are adjusting to plans that don’t result in a “sale”, and a frank discussion about the real cause of fee compression.
[21:13] - How financial planners can move beyond portfolio management.
[27:15] - Why consistency leads to customer loyalty and business success.
[42:35] - Why becoming an expert makes things simpler.
[53:23] - What inspires Michael.

Quotes

[09:53] - “Frankly I think there’s actually a bit of a gap in the marketplace today. Planning software is really good at what to do in the first three to six months of a 30-year client relationship, and kind of weak about supporting the next 29-and-a-half years.” ~ Michael Kitces

[15:50] - “When you sit in the advice model, the dynamics fundamentally shift. I don’t sit across the table from my client. I sit on my client’s side of the table. And we, sitting next to each other shoulder-to-shoulder, look at all the other product companies that are coming at us and try to make a decision about whether we should let them through.” ~ Michael Kitces

[16:41] - “There’s this huge shift that happens when we start sitting on the client-side of the table, but that doesn’t actually cause us to compress our fees, we actually cause the fee compression in the rest of the industry because we’re doing that as a way to add value to our clients.” ~ Michael Kitces

[19:42] - “As I look in the future, while a lot of the discussion over the past 10 to 15 years in the fee world has very heavily been around focusing on cost, I think you’re going to find that increasingly falling to the wayside. And not because cost and cost savings don’t matter, but when the cost of the whole system gets low enough, there are not enough cost savings on the table for cost savings to be your value proposition.” ~ Michael Kitces

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