Root Ready
A podcast for growth-minded financial advisors
Root Ready
How to Quickly Communicate the Real Value of Your Advice
Advisors often stumble when they try to prove their worth by listing services. Tax planning, investments, estate documents... it can feel like noise to a prospect who just hears “another $27,000 a year.” What really moves the needle is helping clients connect their unspoken fears and goals to the value you deliver.
The truth is, the skills that got someone to a $7 million net worth aren’t always the same ones that will protect it in retirement. They may not need you to be “okay,” but they may need you to prevent costly mistakes, relieve the burden of decisions, and help them live fully with the wealth they’ve worked so hard for.
One of the most powerful shifts: stop convincing, start listening. Let clients put their pain points into their own words. Whether it’s unease about market risk, confusion over taxes, or the mental load of managing it all, when they define the problem, your advice finally lands as the solution.
The real value of an advisor isn’t a spreadsheet. It’s framing the true costs (missed opportunities, unnecessary risks, regrets at the end of retirement) and showing how to avoid them. When clients see that clearly, your fee becomes easier to understand, and your role becomes indispensable.
How are you helping prospects connect your advice to the life they actually want to live?
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Advisory services are offered through Root Financial Partners, LLC, an SEC-registered investment adviser. This content is intended for informational and educational purposes only and should not be considered personalized investment, tax, or legal advice. Viewing this content does not create an advisory relationship. We do not provide tax preparation or legal services. Always consult an investment, tax or legal professional regarding your specific situation.
The strategies, case studies, and examples discussed may not be suitable for everyone. They are hypothetical and for illustrative and educational purposes only. They do not reflect actual client results and are not guarantees of future performance. All investments involve risk, including the potential loss of principal.
Comments reflect the views of individual users and do not necessarily represent the views of Root Financial. They are not verified, may not be accurate, and should not be considered testimonials or endorsements
Participation in the Retirement Planning Academy or Early Retirement Academy does not create an advisory relationship with Root Financial. These programs are educational in nature and are not a substitute for personalized financial advice. Advisory services are offered only under a written agreement with Root Financial.
Welcome back to another episode of the Root Ready Podcast. I'm your host, james Canole. On today's episode, we are talking about how you, as an advisor, can most effectively communicate your value to a new client early on in the process. Today's episode is based on a listener question as we read this or before we read this. If you also have a question, you can always submit it at therootreadypodcastcom. Submit your question and I'll look to answer it on a future episode, but for today, this question comes from Devin. Devin says thank you for starting this podcast.
Speaker 1:There are so many out there for us advisors, but yours is the first one I feel I truly connect with. I'm currently in a prospect situation where the prospects have done well throughout their lives. In total, they have a net worth just under 7 million and an investable net worth of just north of 3 million, all of which is in their employer plans and rollover IRAs. The discovery meeting went well and edged into being a partial planning meeting. Throughout the meeting, we complimented them on the great work they had done accumulating over their career. This led to one of the questions that they mentioned they want to discuss during our planning meeting, which is if we have done so well accumulating our assets at this point. Why, five years out from retirement, do we need an advisor? Being that they had never worked with an advisor, I wanted to approach the conversation first by asking if they have any concerns about working with an advisor beyond the initial one posed. Then I want to take a purely educational approach, highlighting the areas we can help them from what we heard in the discovery meeting estate planning, proactive tax planning, distribution strategy in retirement and reallocating their nearly 100% equity portfolio to be ready to weather volatility. We've already had a values-based call and we have learned that simplifying their financial picture, ensuring they can live a good life during retirement and leaving money for their kids are their big three in terms of things they find important.
Speaker 1:That being said, are we approaching this conversation correctly? Should I instead be asking more questions? I want to illustrate our value and why we are worth the 90 basis points, but being frugal and cost conscious. I understand the initial sticker shock of paying $27,000 per year for an advisor can be a lot to get past. Thanks again for your opinion and guidance here, so let's discuss that A lot.
Speaker 1:To unpack there a long question, but I do have a lot of thoughts, and this comes down to. One of the core challenges as an advisor is how do you? You know the value you can provide, you know the things that you can do, you know what all that looks like, but you're communicating to a brand new prospective client and you have to say how do I download all this information and not just information, but the value that it will provide to them in a relatively quick period of time in order for us to determine is there a basis for a working relationship here? So as we go through this, I'm going to share with you a list of thoughts that I have about this, in no particular order. I would absolutely not recommend using every single one of these in a new client conversation, but as you, as the advisor, know your client see where the conversation is headed. These are going to be some helpful resources or helpful frameworks of looking at this that will help you to have these types of conversations to determine is there a good fit here and, if so, how do I communicate this value to my client or my prospective client? So these thoughts are in no particular order.
Speaker 1:Some may be helpful, some might not be, but the first thing is recognize this is a lot of money we are asking clients to pay. $27,000 per year is a lot of money, especially when you compound that over years and years and years, and that's going to sound obvious to a lot of us. But I think that sometimes, as an advisor, we get so wrapped up in the value we know we can provide. We get so wrapped up in the yes, I've done this a thousand times, just come on board, let's go ahead and do it that we fail to appreciate what it appears to look like, or what it's like from the prospect's end, saying I've never done this before. I feel like I've done all right up until now. Why now do I need to take what I'm doing and slap an additional $27,000 per year of costs on top of it? So this is more just a framework that all of us need to understand, not even a framework.
Speaker 1:Just put yourself in their shoes for a second, not to say they shouldn't hire you, not to say there's not value for this, but it seems like sometimes we fail to appreciate the cost of what these services are and how that is going to be felt by the prospective client. But then the second thing, and this is really where I think a lot of us should spend more time, or really where the core of the conversation should be is don't try to convince them of your value. They need to be able to be convinced on their own. They need to be able to see that on their own. And what that means is, if you just go right into this and say, $27,000 per year, well, we're going to do tax planning and we're going to do investment planning and we're going to do a retirement planning to help you avoid sequence of return risk, and we're going to do. If you just start trying to convince, you're probably missing the one or two or three core things that were actually their pain points that led them to reach out to you in the first place. Instead of trying to guess what those are, we have to let the prospective client tell us in their words what is your pain point, or in other words, what's preventing you from living this type of life that you already know you want to live. Really, a big part of this initial conversation is you deciding if you should work together you as the advisor deciding and also the client deciding. So what that means is we need to find the core reason that it would make sense or wouldn't make sense for the client to work with you and spend the time focused on that. Now, that sounds obvious.
Speaker 1:But let me go back to a piece of this question real quick. Devin says throughout the meeting we complimented them on the great work they had done, accumulating over their career. Great, they should be complimented for that. But if I'm them and if throughout the meeting I'm constantly being complimented you've done so well. Look at all the great stuff you've done. Look at what you've done on your own. My natural instinct is going to be you're right, I have done well. Why should I continue doing that? Except now add $27,000 per year of an advisory fee on top of everything. If the guy I'm coming to for guidance and advice is telling me look how great I've done, and that's all he's saying, why would I want to move forward?
Speaker 1:Now, just to be clear, what I'm not saying here is don't try to beat them down and poke holes and demean anything they've done. They've clearly done an excellent job, but there's a right way and a wrong way to frame this In the way that it was framed. I'm probably thinking do I need an advisor? And, by the way, you as the advisor, do they actually need you. I think that should go without saying. If you look at a prospect situation, they're doing strong work, they're on top of it. They don't really need someone. Don't try to sell that person on your services. That's someone that may be better off on their own and you will be better off looking for other clients to serve. But assuming I don't know enough about the specific person to know, assuming you can tell that there's some places you can add value, then here's a better way to approach that.
Speaker 1:I would start by acknowledging and this is actually right in line with Devin what you've already done. I'd say, mr and Mrs Prospect, it's really wonderful to speak with you today. Thank you for the opportunity to talk about your situation and see if we might be able to help. From what I can tell, you've done a tremendous job. You've probably worked really hard, saved really well, sacrificed a lot to get to the position you're in today. So what you're doing right off the bat is you are acknowledging, you are complimenting, you are doing what Devin did. Now, that's all you're doing. What you're essentially communicating to them is I don't see any gaps in your plan. Look at what a wonderful job you've done. Look how wonderful. Look how wonderful. I don't see any gaps. That's the message that's coming across. That's why the second step is really important here and again.
Speaker 1:I don't know the full context of this specific conversation, but I would empathize with them, go from connecting about the success they've had, the work that they've done, to empathizing with some of the concerns that I'm guessing led them to reach out to an advisor, for example. I might say something along the lines of I don't know for certain, but if I'm you, mr or Mrs Prospect, I'm probably feeling some degree of confidence and even pride at what you've done, what you've done to get here, what you've sacrificed to get here. But there's probably also a growing sense of uncertainty. There's probably also a growing sense of, maybe even anxiety of a mistake at this level. Now that you've accumulated a net worth of $7 million, a mistake at this level is gonna be too costly and something you cannot afford to make. And, on top of that, you probably have some sense of what got you here. The same things you did to get to this point are not the same things that are gonna lead to success on the other side of retirement. Is that right, is that fair? And I'd put the ball back in their court. Let right, is that fair? And I'd put the ball back in their court. Let them either validate that and continue on with that line of thinking of yes, james, you're exactly right, here's some of the things we're thinking, or we don't know what we don't know, or whatever the case might be, or say no, that's not it at all.
Speaker 1:But what you're trying to do is you're trying to pinpoint. What are you actually feeling? What are the gaps? It's going back to Devin's question. He said they talked about their ideal life. They want to simplify things. They want to spend meaningful time with family. They want to leave a legacy for their family. We know what they want. What are the gaps? What are the things that are going to prevent them from getting there? And I, as the advisor, I don't know. I should not make any assumptions about what those gaps are. I want the client, or the prospective client, to say those gaps in their own words. I want to hear it from their mouth. What do they perceive to be the pain points? Because that's then going to show me where can I add value to help alleviate those pain points. So that's where I'd go.
Speaker 1:Next, I'd say you've told me what matters, mr and Mrs Prospect Living a good life, simplifying your finances, leaving money to the children what do you feel are your current barriers? What's currently standing in the way of you being able to do that as effectively as you'd like to be able to do? That's the point at which, if they say nothing, well, what led you then to reach out to an advisor, if I may ask? So they're probably not going to say nothing, but what you're trying to do is say why did you reach out If I don't know why you reached out in the first place?
Speaker 1:Don't just start to assume okay, it's about tax planning, it's about your portfolio is too much in equities. You need the 60-40 portfolio, or here's what I've done for a hundred other clients. Therefore, this is probably what you want to do as well. That may be the case, but until they say it, until it's in their own words, it's not going to connect with them like it otherwise would. So, while it's a subtle difference, I think this is a crucial difference between a client moving forward with you versus a prospective client saying no to you. It's. If you come and say this is why you need me, you're probably going to miss the mark.
Speaker 1:A lot of times, prospective clients are reaching out with a feeling that something's not quite right, with a feeling that I probably need something different, with a feeling that maybe an advisor can help. But if all that advisor does is educate, educate, educate here's the value, here's the value. Here's the value. It's not having the intended effect unless we first have a clear understanding of what are the things you need to be educated on, or what are the pain points that are preventing you from living this type of life that you've expressed you want to live. Let the client say those things, the prospective clients say those things. Then the rest of the meeting is saying as we go through our process, as we talk about the way that we help clients, I'm tying every single thing I say back to the pain points they expressed.
Speaker 1:Maybe the pain point is around taxes. Wonderful, as I explain my process about our income meeting and cash flow meeting, our investment meeting, our tax meeting, every single thing, I'm going to come back to. All those things impact taxes and I'm going to make sure to tie the connection for them or draw the connection for them, so that they can see the process we have. Yes, there's a standard process, but it's going to be applied or customized in a way or form fitted around their specific situation to address their specific pain points. Maybe the pain point is the burden of wealth? I don't want to have to think about this. We have done well, but I just don't want to have to worry about making sure that our insurance documents are in order and that our estate plans always update and that our investments are constantly being positioned the way they need to be. Whatever that case is, figure out what their pain points are, so that you can then talk about everything else in the context of that.
Speaker 1:But if I'm going to go back to Devin's question to wrap this section up, I'm going to say that there is so much focus on complimenting what they've done which you should do, but not enough, at least as far as I can tell, in understanding what are the things preventing you from getting to where you want to go. I know where you want to go, at least very high level, but I don't know. I haven't unearthed the challenges or the pain points that you personally, as the prospective client, have expressed or standing in the way of getting to where you want to go. So the third point I have is actually a little bit redundant with that. It's just you've already had the values call. So, going back to Devin's question, you've had the values call and we're taught as advisors. You need to have that call. What are we actually planning for? What are your goals? What are your desires? What does success look like? That's only half the equation, though. Once again, we need to tie that back to what's standing in your way.
Speaker 1:A good question is what are you hoping an advisor can do for you? You've done this your whole life. You've accumulated a good amount of assets. Why now, why an advisor today? What are you hoping an advisor can do for you that you aren't already doing? Once again, just ask questions that put the ball in their court and have them tell you what is it that you can do for them. The next thing I would say about this specific topic I'm going to go back to Devin's question is he said the discovery meeting went well and edged into being a partial planning meeting.
Speaker 1:Now, this depends on the situation, but I think you need to be very, very careful here. Now we think we're doing this because, look, if I can just demonstrate value, if I can just show them what we're going to do. They're going to be convinced of what that value looks like. And if done correctly, that can be true. But too often what I find is, as soon as you jump into the planning process, it activates the analytical side of their brain. And when that side of their brain is activated, it takes away from look, what are we actually trying to accomplish here? Do you need an advisor or not? What are the pain points with your situation? What are the things preventing you from getting there? And that's where the conversation should be. That's where the decision should be made. That's where the decision should be made. That's where you, as the advisor, should be saying here's the value at a high level. Here's why this even matters.
Speaker 1:As soon as you go into the weeds, as soon as you go into the details, it activates a different side of their brain. And the second they start saying well, you're making the wrong assumption here with rates of return, or that's not actually how much we're saving, or hey, that's not actually the balance of my IRA anymore. These little things that we know as an advisor. Well, it doesn't matter. Look, doesn't. Let me just show you the plan. That's not the way the prospective client's thinking about that. All of a sudden they're saying that's not right and that's not right and can we change this? And it's taken away from where the focus should be, which is does this even make sense to engage in the first place? So this is more just a note that if you're leading with planning, it can be done right if you're doing it correctly. But you have to keep in mind the focus of these initial conversations should be what are your problems and am I the solution to those problems or not? As soon as you jump into the weeds, you're pulling away from that conversation and the prospective client's probably not going to move forward because the focus has been changed. The focus has been taken away from what it should be and it's going to leave them in a state of nothing about that told me why I should work with James. Nothing about that. Told me why I should work with Devin, and they're probably not going to move forward.
Speaker 1:The next thing that can be very appropriate to do in situations like this again, these are no particular order. This isn't a do this, then do this, then do this, then do this. These are humans. You're a human. These are different things that you can do, but you have to have the ability, as the advisor, to read the room, read the conversation. How is the flow going? When might this be appropriate? When might it not be appropriate?
Speaker 1:But one of the most effective things is how do you frame this? How do you organize the client's thinking? If you go back to one of the earliest episodes I recorded, I said what's the value of an advisor? What is your role as an advisor? It's not just tradeoffs role as an advisor, it's not just trade-offs, it's not just planning. It's helping a client to organize their thinking Meaning.
Speaker 1:So often people get into a one track line of thinking. They can't pull their thinking away from that until you help them to do so. This is a classic scenario of where that is. I can't get off the track of the $27,000 per year. How on earth are you going to justify that? They just look at. Can you possibly increase my returns anymore? Or can you quantify the exact tax savings? And those are things you should be thinking about. Those are absolutely elements that you should be held to a high standard for. How can we optimize the returns, minimize risk, optimize taxes, all that stuff? Help them see the bigger picture and do it like this. Help them understand that.
Speaker 1:Mr and Mrs Prospect, before we jump into this, I just want you to know there's no option here that is without cost. The difference is you're going to see my cost. You're going to see that $27,000 per year. It's going to be very tangible, it's going to be very in your face and you're going to see that. But just because you don't move forward with us, or any advisor for that matter, does not mean that there's no cost.
Speaker 1:Just what type of cost might that be? What's the cost of a mistake at this point in your life? What's the cost of not having the right portfolio allocation, going into retirement and experiencing a potential down market or experiencing a negative sequence of returns? What's the cost of not having the right tax strategy to optimize what you've done, especially considering so much of your net worth is tied up in pre-tax accounts? What's the cost of not having the right insurance coverage, not having the right estate plan, not having the right ducks in a row to ensure that you can support everything that you want to do?
Speaker 1:And, by the way, pause after a lot of these things. If you just move right on to the next thing, it's not fully going to sink in. And it needs to sink in, because it's not as easy as saying okay, there's a $27,000 per year cost for the advisory services. You need to feel what is the cost of a mistake, what is the cost of missing an opportunity to do better. That needs to be felt, and it needs to be felt because we don't think that way. None of us do and, by the way, this is a universal principle. No decision is without risk. Whether you take action or you continue doing what you're currently doing, which is probably inaction. Neither of those is without risk. Anything you do or don't do, neither of those things is without cost. It's just what type of cost are you more willing to pay? So what's the cost of a mistake? What's the cost of mistake? What's the cost of playing it safe?
Speaker 1:Mr and Mrs Prospect, so many of my clients are just like you. They got to where they are because they're frugal, because they lived within their means, because they saved first, and what that means is, when they get into their retirement years, what they actually find is they don't ever run out of money. They very rarely run out of money. The bigger thing is, they get closer to the end of their retirements and they have a tremendous amount of regret. They played it too safe, they were too cautious, they didn't take out enough money from their portfolio to actually do the types of things that lead to a more meaningful life, which, at the end of the day, is why I exist as your advisor to help you have a better life, to get the most out of life with your money. So what's the cost of playing it safe? What's the cost of playing it safe? What's the cost of missing out on opportunities, things you could have done with this wealth, but because you didn't have a plan around it, you didn't feel confident to spend on things that would have led to a tremendous amount of joy or satisfaction or contentment in your lives.
Speaker 1:What's the cost of the mental load? You want to retire and you want to travel. You want to spend time with family. You want to do things that you love doing, to retire and you want to travel. You want to spend time with family. You want to do things that you love doing. What's the cost of this mental load of carrying the burden of not making a mistake, carrying the burden and making sure that you're optimizing everything that you're doing? What's the cost of mental load on your spouse If and when you pre-decease your spouse, what's the cost to them to pick up the pieces if they're not involved as you are, if they don't have as much of a desire to be making the financial decisions as you do?
Speaker 1:So these are just a few things. Don't go through all of them. Do not talk as much as I'm talking here. I'm talking way too much. If I was in an actual prospect meeting this prospect would not be moving forward. You're not trying to overwhelm them with information here. You're trying to find the help organize their thinking, to help frame their thinking of is this worth it or not? And we're not approaching this in the sense of we have to convince them in that success and not convince them this failure we have to approach this of. We need to frame this decision correctly to see does this make sense for them? Can we add value? Can we add value that they perceive to be a value to say this is going to be a worthwhile thing for us to do. Now, just a couple more things before we wrap up today's episode.
Speaker 1:The next thing, and again this comes down to reading your client and where are they and what's their personality, but framing this to them. You don't need me to be okay. I don't know the details of this client, but they probably don't need you to be okay. They'll probably be okay without you. But my clients hire me because they're not okay just doing okay. They want to optimize everything they work so hard for. They have spent so many years getting to this point that I believe I have firm conviction that things that we can do can add value, can help them make the most of what they've worked so hard for. Yes, from a financial standpoint, first. Yes, we want to optimize the income this can create, the way you're investing the tax strategies that you're employing, but secondarily, and even most importantly, so that you can fully optimize your retirement years, so that you can be fully free to focus on what actually brings you joy and fulfillment. So frame it as such. You don't need me Devin. This client doesn't need you at least I'm going to assume that from the question to be okay. But what they probably need you for is to make the most of everything. So how can you frame it as such? Then? The final potential thing I might do here and I wouldn't do this for everyone, but why should I hire you as my advisor? The response would be, because I hope you'd want to be happier in your retirement.
Speaker 1:I then go on to say a lot of my clients have gotten to the point where they're not really worried about running out of money. Yes, that's their number one concern because, rationally, all of us have a little bit of that, or maybe irrationally, all of us have a little bit of that, but really they know they're probably going to be okay. They're more concerned about, they're more focused on, what are the things I can do with my money to have the most meaningful, to have the most enjoyable retirement possible. And so, mr and Mrs Prospect, let's just play a game. Indulge me for one second. What if I told you there was something you could purchase? Because, again, a lot of my clients are saying what can I do with my money? What can I purchase with my money that will lead to more happiness, more meaning, more purpose, all those things which are wonderful things.
Speaker 1:So if I could show you that here's something you could spend money on that's going to make you happier, that's going to lead to higher quality of life, that's going to lead to more peace of mind and, by the way, there's a good chance, it actually improves your financial outcome after you spend money on it. Is that something you would want to spend money on? If so, how much would you be willing to pay for that? The answer is anything. If I could do something and it's going to improve at least potentially improve my financial outcome as a result of doing it and it's going to lead to more happiness, more peace of mind, more contentment, more enjoyable retirement, why wouldn't I spend money on that?
Speaker 1:Well, that's how I would frame hiring an advisor, not just because I say that, but there are so many studies Now. A lot of these are done by financial institutions, so take that with a grain of salt. But the CFP board, angie Herbers and co I think other institutions as well put out studies showing that typically, once someone surpasses the one to 2 million of investable assets range, there's a higher degree of happiness they have in working with an advisor than not. So I believe, as an advisor, that what we're gonna do is actually going to optimize your finances. I do think you're gonna be better off at the end of the day, paying for our services, net of our fee, than you would be without them. And, by the way, if this can also increase happiness, isn't that what we're trying to do with our money anyways. Find the things that we can spend it on to do that. So this very much strikes me as a win-win If you can see if there's things that we can do here to optimize your finances and also optimize your happiness, which isn't just me saying that.
Speaker 1:That is shown by various studies. That's how you should perceive an advisor. Don't just view it as an extra fee on top of what you're already doing. This is a fee that you are paying to optimize every component of what you're doing, not just investments. And, by the way, the real benefit isn't even on the financial side. The real benefit is you being able to be able to fully focus on what you want to do in retirement be happier, be more content, have greater peace of mind, knowing that that's really crucial part of your life your finances is taken care of so that you can focus on what actually matters. So those are a few things that could be really effective, depending on how the situation is going.
Speaker 1:But the last thing I'm going to say and this isn't a tactic, this is more of something that if you don't read Nick Murray, read everything Nick Murray has ever put out that newsletter is probably the single greatest source of information for how you can be a better advisor, and one of the things he says is I don't think I'm going to quote it perfectly, but something along the lines of there's an inverse relationship between the number of words you speak and the effectiveness of those words. So I just spent 25 minutes 30 minutes talking about words. If you go into a meeting and say exactly what I said and don't give your client a single chance to speak, they're not going to move forward. That's not effective. Take all this pick and choose things that you think could be effective based upon the situation, but do not talk too much. I have a tendency with clients to talk too much.
Speaker 1:Feel like I need to communicate value. I need to show you every single thing that we're going to do to communicate value. Here's what this is going to look like. Here's why you're going to be happier. We have to train ourselves, we have to discipline ourselves not to do that.
Speaker 1:If a prospective client asks us why should I work with you? You'd be far better off saying something super basic like hey, the skills that got you here are not going to be the same things that get you through your retirement and then stop. Super basic, I would go beyond that, but that is better than rattling off for 20, 30 minutes all the things that you're going to do. You're going to overwhelm them. They're going to say, let us think about this, and you're never going to hear from them again. But if you think you can add value to a client, if you think there's things that you can do to make their lives better, you owe it to them to figure out how to best handle that conversation so that you can partner with them and help them do the things that are gonna lead to a long-term better situation.