15th October, 2020 - Webinar replay

Preparing your business and your clients for 'next time' webinar w/ Carl Richards & Neil Bage

Phil Bray 0:03
Good morning, everybody. How are we all today? Welcome to our latest free webinar. The council house bells in Nottingham so it must be 11 o’clock. And I want to welcome everybody who’s here today, want to welcome our guests, Neil, Dan and Carl. Hope you’re all well. What are we gonna be talking about today? Well, we’re gonna be talking about preparing your business and your clients for next time. And what do we mean by that? Well, if we look back to March and April, huge numbers of consumers were understandably really concerned about the effect of COVID on themselves personally, and on their short and long term financial future. And in our experience, advisors and planners reacted differently and probably fell into three broad camps. The first of those was that they proactively communicated with clients. They reached out by telephone, they picked up the phone to their clients, they increased the frequency of email communications and they were there for their clients. Second, they took a more reactive approach, “I’m here for you if you want to chat”. And third did nothing. They did absolutely nothing. And while March and April was clearly unlike any period that we’ve seen before, it does appear in the UK that we’re heading back that way, in the UK, Europe and North America. And of course, stock market volatility is a permanent fixture. And so today, I want us to learn from the past, and build a blueprint for the future. And frankly, who better to do that in the company of Carl and Neil. And I’m like a kid in a sweet shop having you two on this webinar today, really, really looking forward to it. Before we get there, I want to do a bit of housekeeping. Dan Campbell is our Head of Branding, and keeps me sane on these webinars and helps control things. So Dan, can you introduce yourself?

Dan Campbell 2:12
Sure thing. Hi, everyone. So I’ll be the person to blame if anything goes wrong, so be kind, won’t you? And ultimately, in the interest of keeping good time today, we’re going to keep all the questions till the end. So we’ll have a Q&A session where you can ask anything that’s cropped up during the past hour’s session. There are two ways you can do that. So if you just want to put it in the chat function on the bottom, I’ll be keeping an eye on those and just noting everything down so I can ask Neil and Carl later on. There is a Q&A box as well, so if you’d rather do it that way, we can keep an eye on those. Whichever way you’d like to ask your questions, just put those through. The webinar will be recorded as well, so we’ll be editing that down later on today and I think that link will get sent. Is it the morning? Or later on?

Phil Bray 3:03
I’ll try and get it out tonight. Thank you, Dan. Like I said, 60 minutes of Carl and Neil. Delighted to say that they’re going to stay around afterwards to answer any questions we’ve got. So keep those questions coming. Let’s start with a couple of introductions. Carl, for anybody who doesn’t know you on the call, just introduce yourself to them, would you?

Carl Richards 3:28
Sure. Thanks first of all, Phil and Dan for putting this all together and Neil, super excited to chat with you today. In terms of introductions, I am a financial planner. I write and I try to take complex things and make them simple. And for the last couple of years I’ve been doing that all over the world, so lived for three and a half years in New Zealand. We just moved to London in January. I mean, circumstances withstanding, have loved our time here. And really excited to be chatting today.

Phil Bray 4:06
Thanks, Carl. Neil?

Neil Bage 4:08
Yes, I’m the founder of a behavioural insights company called Be-IQ. Not a great deal more to add to that. I just want to echo Carl’s opening there, and yours, Phil. This is a really exciting hour, hopefully with great conversation. And it’s great to be on the virtual stage with Carl. I think we shared a stage a few years back in a nucleus conference from from memory, but it’s great to have these conversations. So I’m looking forward to diving in.

Phil Bray 4:39
Cheers, thank you. So let’s think back to March and April. Seems a long while ago, doesn’t it? But thinking back to March and April. Carl, what do you think clients needed from their financial planner at that point?

Carl Richards 4:57
A lot. I think it’s really interesting. The only thing scarier than flying in a really small plane in turbulent weather is seeing your pilot scared. And I think you’ve got that juxtaposed against this idea that clients really needed empathy. And so it’s sort of a fine needle to thread, if you will, how can you be empathetic without transference of stress? And I think sometimes we forget, and this is true even in the UK, that first a hug and then a lecture. What clients needed was a guide, what they didn’t need was a defender of an outdated map. So real financial planners are guides and changing landscapes, they’re not defenders of outdated maps. If you understand the subtle difference there, you understand that if you’re with a guide, on a mountain. And I’ve done some guiding, I’ve been guided and I’ve been in really, really stressful situations on rivers and mountains with people, and if you’re a guide on a mountain and a storm rolls in, you don’t blame them. If you’re being guided, you don’t blame the guide for the storm. I mean, you might, because you’re scared, nervous, you might want to vent a bit. And if you do, a guide will say, “give it to me, let it out, I understand”. And they might say something like, “I didn’t anticipate that storm either”. That’s different than, “oh my gosh, I’m scared too!”. So how to be empathetic without transferring stress. And then the second piece of this guide, the thing that’s so important is if you get mad at the guide for the storm, the last thing a qualified guide is going to do is try to defend. “What do you mean, I looked at the thing, I did the thing? Don’t you realise that you missed the 10 best days of any 20 years?”. Throwing charts, spraying people with facts and figures, that’s what defenders do. What guides do is they say, “yeah, I didn’t anticipate this storm either. And to be honest, when I look at the news, I get nervous as well”. And then they reach across the thing and they grab somebody by the neck and they say, “you’re coming with me, we’re going this way. And I don’t know exactly what’s going to happen this way. But I do know, I got all these tools in my backpack and I am uniquely qualified to take your situation and what’s going on in the world and help guide you through it. Come with me”. And so that’s what I think people needed. They needed guides. They didn’t need defenders, they needed guides. So hopefully that’s helpful.

Phil Bray 8:22
Thanks, Carl. That’s really, really helpful. Neil, what do you got to add to that? What do you think clients needed from their planner?

Neil Bage 8:30
I think we’re gonna get this a lot today, Phil. I’m gonna kind of echo some of what Carl said because it kind of is from a behavioural perspective, it’s common sense. I use a different phrase to Carl, he uses the word guide. I’ve said for a long time what financial planners need during turbulent times is a navigator. They need to help clients navigate the landscape and it’s the same analogy that Carl has given as a guide. What do they need to be? They needed to be visible to start with, clients needed to know that they were there. And they needed to be reassuring, they needed someone just to say, “are you okay? I don’t want to talk to about your financial plan, I just want to know if you’re okay, because there is a lot to deal with. The markets are volatile, we’re going on a lockdown, there’s a pandemic sweeping the Earth, your partner is at home all the time”. That’s a lot of stuff to deal with. And it’s fine if we can compartmentalise and deal with that one step at a time. But when it’s dropped on our laps in one fell swoop, that’s actually quite overwhelming. And one of the things we know from a psychological perspective is we’re not very good at dealing with uncertainty and when we are overwhelmed if you like. So for me, it’s about being visible. It’s about reassuring, but just echoing another word Carl said there, it’s about being empathetic. And I’m going to break that down quickly into two. So there’s two types of empathy if you like, there’s cognitive empathy, and then there’s affective empathy. And cognitive empathy is just knowing what people are going through and recognising that they’re going through a tough time because we recognise that. Affective empathy is when we feel what other people are feeling. And I would argue since March, we’ve dipped in and out of cognitive and affective empathy. But it’s absolutely right. It’s very difficult to be empathetic with somebody and not transfer your own stresses and anxieties and worries on them. So it’s a real fine line, it’s a fine line to find a real balance that we need to have in order to deliver an empathetic outcome to clients. But ultimately, Phil, for me, it’s about just being there, and telling people that you are there, but not being paternalistic if you like and saying to people, “I know what’s going on, but you need to stick to the plan. Ignore the noise, ignore this, ignore that”, because we’re human beings. And we all navigate this world in our own unique way, and therefore having someone by your side to help you navigate through the most turbulent and horrible times can only ever be a good thing.

Carl Richards 11:07
Can I just say one thing real quick?

Phil Bray 11:09
Go for it.

Carl Richards 11:10
One thing that I think is important, yesterday we had this conversation where I interviewed Seth Godin about his new book, and we talked about being authentic. And he calls authenticity a trap, which was really surprising to a lot of us. Because we’ve all been thinking, “oh, you’re supposed to be authentic”. And I think this is an interesting place where this comes up, right? Because internally, Neil used the word visible. It’s absolutely what clients needed. And this wasn’t one of those things, like in years past, you would call a client and go, “hey, just want to see if you’re worried about that” and the client would go, “oh, should I be?” We can count on the fact that everybody knew that something was going on, right? So this is one of those where you just call and say, “hey, I was thinking about you today. I thought I would check in”. You don’t have to say, “I was thinking about you because your portfolios down”. “I was thinking about you today, thought I’d check in”. It’s the last thing you wanted to do. Because you wanted to be under the covers, as well, right? You wanted to be in your bunker, you’re a human. Not only are you a human dealing with this, your whole business is wrapped up in it. That’s why this thing is so tough and so you didn’t feel like doing that. And this is where this authentic thing, authenticity is a trap comes in is like, internally, we can all say, “hey, I got you, my friend. I didn’t feel like it either” and then that’s the empathetic hug. The punch in the nose is, “I don’t care because it’s your job”. And I mean that gently. But that’s where Seth says authenticity is a trap. Plumbers don’t show up and go, “I’m not feeling like it today. I don’t feel like plugging a drain”. I remember in early 2009, I was in a meeting with Dan and Barbara. Dan and Barbara had never been scared before in a decade of working with me, they were terrified, I was scared. I live in Vegas, like ground zero of the housing crisis. And I remember telling them what they needed to do, which was essentially, “let me hear you, empathy, empathy, empathy. Okay, great. Let’s review the plan. Okay, cool. Let’s stay on the course”. And I remember looking at the door handle in the conference room as I shut it. And I thought to myself, for the first time in my career, “oh my gosh, I hope I’m right”, because I didn’t know. Now authenticity would have been, “Dan and Barbara, I hope I’m right. I don’t know” like, sorry, that’s not your job. Sometimes overconfidence plays a positive role, we know from some of the military strategy work. Sometimes you have to look people in the eyes and go, “I don’t know”. In your mind, you’re thinking, “I don’t know, but I’m the best one to lead you through this”. And so I think we can be authentic with each other. We can meet and have a group hug, we can do whatever we need to get through it. And then we have to say, “I’m sorry, it’s your job. You’re a plumber, and your job right now is to show up in front of the public because guess what? Those people need you”. And they don’t know where to look, they’re getting people who just spray facts and figures at them and tell them they’re dumb. What they need is somebody who says, “I understand this is serious, and I’ve got you. You’re coming with me this way”. So anyway, thanks for letting me just share a bit more.

Phil Bray 14:56
Now, it’s fascinating. Picking up from that, Carl, question for both of you. Specifically you both work with some fantastic financial planning firms, what did you see those firms do well? What are the things they did that went well, and that they should do again if we ever faced a similar situation? Neil, go for that first, if that’s alright.

Neil Bage 15:25
I guess there’s three things to them, which I think are just general, but one of them is very specific to the work that I do. So the firms I work with, I know, emails all of their clients as soon as they possibly could. But they didn’t just send out a blanket email, they sent out emails, personal emails to all of their clients, and I guess that could have been part of that text of the copy that will have been uniform. But ultimately, that message was to Neil Bage and Sandra Bage about our situation and what’s going on in our lives at that point in time. And from feedback, that seemed to land really well. The thing that I think works really well, is the firms I worked with deliver webinars to their clients, putting me directly into the living room of 30, 40, 50 clients. And me just having a talk and just saying, “if you feel anxious, and you feel worried, and you’re scared and you’re unsure, then you know what? Welcome to the world of being a human being”. Because it’s perfectly normal to feel those things when there’s so much uncertainty and noise around us. And in me engaging with real clients, if you like, and getting them to ask questions, seemed to work really well. And I know there’s a few people on this call today who did that with me and they can tell you how well that seemed to go down with clients. But from a more personal perspective, Phil, what I’ve found is the people who have worked with me and are starting to use the tools we developed, for the first time, could segment their clients by behaviour or propensity. And what that did is it gave them a map of who to speak to first and the reason why they should be speaking to them first. So what I did is, in a bank of 150 clients, it said, there are seven people who we can tell you from their unconscious behaviour characteristics, their behavioural biases and how they navigate the world, that they are currently sitting at home melting in their own anxiety. And therefore you need to get on the phone to them. But by the way, of this group of people, this small cohort, if you like, there will be people in there who when you say to them, “are you okay?”, will say “yeah, I’m fine”. But the behavioural characteristics that we revealed, will tell you that they’re not fine at all, because they have conflicting paradoxical biases going on at the time that you’re engaging with them. And the feedback from those advisory firms has been that that insight, the ability to know who to speak to, when to speak to them, and what to speak to them about, has been a godsend for them. And of course, they don’t do that in isolation, it’s a mixture of those three things. So it’s knowing who to speak to, sending a broader message out to the clients in a way where they can engage through this technology, but then reassuring them in a way that they can just sit and read an email, and those three things together tell clients that you’re in their corner, and that you’re there for them and that you will get in their corner.

Phil Bray 18:27
Melting in their own anxiety. That’s a phrase, isn’t it?

Neil Bage 18:30
I made that up. It might not work.

Phil Bray 18:37
You win today’s webinar with that phrase, that’s a fantastic phrase. Carl, what did you see that worked well, and what mistakes did you see firm planners make?

Carl Richards 18:51
Just being visible and in terms of specific tactical things that I saw people do. I think there’s a really important human element of this as to why we don’t do it. I think whenever there’s a burning building, like you feel like you have to know how to put the fire out if you’re gonna rush in, and in this case, you don’t have a solution. What people need is space anyway. In fact, they don’t really in all the wisdom traditions pointed to this, you don’t have to be of service to someone. You don’t have to solve their problems. Often, they just need to be heard and seen and given a space to talk about it. And so I think if you can understand that it will lower the pressure, because sometimes you’re like, “I don’t know what to do, so I’m not going to do it”. “Well, turns out I don’t know how to solve it, so I’m not going to do it”. Well, turns out solving is not the thing you’re trying to do. And so creating space for that to happen was on a one to one level, and that I thought phone calls are amazing to me. Just pick up the phone and call someone. And you don’t need to alert them. My favourite line, we already reviewed it, was, “hey, I was thinking about you today”. Now, you’re only allowed to say that if it’s true, but you can make it true by pulling up your list of clients and thinking about them. “I was thinking about you today, just thought I would check in”. And no need to say any more. Are you scared? Are you nervous? How are you? And, how are you? Not, “how are you?”, “fine, fine, busy. Are you busy?”, “I’m busy too”. And then so that’s one on one. A good friend of mine in the States started doing it, he called them town halls. There were just public meetings on Zoom. Look, I don’t have an agenda. I just want to talk about it. If you might have questions or concerns, let’s hop on. This is one of my favourite lines, we want to keep these intimate and small, but if you have friends or family that might benefit from being there, feel free to invite them. So that’s a way to refer somebody to you in a way that they would say “thank you”. That’s what I’m always looking for, is there a way to help them understand the value of this? So I saw a number, and participated in something like Neil did, where these were just gatherings of people who had questions and just needed a space to talk. And a planner named Justin held one and I was there and one of the questions was from somebody he had invited. They said, “we haven’t heard a word from our advisor, and here we are at a meeting with somebody else’s advisor. Give me a chance to talk about it”, and were really disappointed. And that was an interesting lesson for me that just getting out in front, creating space, giving people an opportunity to chat, realising you didn’t have to solve the problem. All people really wanted to do was be heard, ask really good questions, at least initially. So that’s what I saw that people did well. What I saw that didn’t work was when people had, it’s so easy to find places to hide right now, so please know that I I love you and I’m with you and I feel it too. I was looking out the window this morning thinking, “jeez, are we going to go into another lockdown? Am I going to be able to do it? I just want to go back to bed”. And then you think, “wait, I got a job to do, so I can be authentic later and we’ll get to work”. So yeah, hiding didn’t work. And to me, I’m hesitant to call it an opportunity, because it’s not really the tone that I’m trying to strike. But it is a massive opportunity to make a difference in people’s lives. And because very few people are doing it, and everyone needs it. So if I was a planner right now and I have an interaction with a client and we have a conversation that’s useful, as soon as that conversation is over, I would pick up my camera on my iPhone or voice memos on my iPhone and I would record that story. I would use friend instead of client. I’d say, “John, a friend of mine, we were just having a chat and he had a question about this”. These are the exact words I would use. He had a question about this, and instead of saying I answered it, I would say, “we went on to have a conversation like this”. And then I would hit save, and I would post that in public. I would send that email to 10 friends and say, “hey, I just had this conversation. You might find it useful, other people that might find it useful, feel free to share”. And I would just do that every single conversation I had because you’re having a conversation anyway, why not make a bigger difference?

Phil Bray 24:08
Absolutely. And Neil, you didn’t call them town hall meetings, but I know you spent a lot of time doing webinars and spending time with the clients of financial planners. Sounds like you were doing a similar thing.

Neil Bage 24:23
It actually was. Same event, but going by a different name. I didn’t go on there with an agenda, I didn’t go on there to do a presentation, what I did is I focused on the area that is my background, so I focused on the neuroscience of it, what’s going on in the brain. And how you can’t ignore the fact that we’re human at the heart of this and how the amygdala trigger, the hypothalamus will go into fight and flight. So I set the scene of this is what’s going on inside of your head that you’re not aware of. This is what’s going on in the world right now, and when those two things come together, it creates a bit of a mess. It went down really well, and a lot of the questions I had back from clients, ultimately, if I had to kind of categorise them at a high level, were “am I going to be okay?”. It was that fundamental, people clearly showed anxiety and worry about what’s going on. And incidentally, that wasn’t about their finances. We need to remember that in March, April, May time, I would argue that actually their financial wellbeing dropped down below their physical and mental wellbeing. Those three things move around, depending on what’s going on in the world. So for all intents and purposes to use the same phrase, Carl said it was a town hall-esque event where you just talk and you listen, and you engage, and you put people’s minds at rest.

Phil Bray 25:58
Just picking up on that, actually. You talked about their financial wellbeing and their individual personal wellbeing being at different levels. How do you see those two things interacting as we move into the next few months and what’s happening in the UK right now?

Neil Bage 26:13
I think the same thing will happen, Phil. We tend to talk about financial wellbeing as this cog in the wellbeing machine, if you like. That it’s this little independent thing. But every aspect of our wellbeing interacts with the other aspect, so you don’t get one without impacting the other. So we know when our financial wellbeing impacts on our mental wellbeing, we know this, and we know that our mental wellbeing has an impact on our physical wellbeing. So we know that those three things are actually intrinsically linked. So for me, it goes back to that navigator comment. It’s about advisors saying, “look, I’m here by your side and if you don’t want to talk about money, fine. Fill your boots. I’m just here, I’m in your corner. I’m here to listen to you. And if you want to vent about how you’re feeling, and your fears and your worries, or in the positive, your dreams and aspirations, of course, I’m here to listen to you”. But I think pigeonholing conversations into “I need to talk to them about their finances”, I think may just add to the anxiety that they’re feeling. But there’s another aspect of this field that harks back to the question you just asked about, what did advisors do that didn’t really work well? I do find, speaking personally here, conversations where advisors say to me, “I tell my clients what to do and they do it”, it’s paternalistic, it’s a conversation that makes me very uncomfortable. Because I don’t think we should be quote on quote telling clients what to do. And I get why that happens, there’s a lot of advisors I speak to who say, “what I’m trying to do is stop clients acting irrationally”, and I get that, I do get that. But too much of a simplistic phrase, because there’s two types of rationality. This economic rationality, which is selling at the bottom of a market when you know you shouldn’t. Is that rational? Of course, it isn’t. It is absolutely irrational to do that. When the market is cheap, or when anything’s on sale, you wouldn’t walk down the supermarket aisle and see wine that’s reduced from £8 to £3 and think, “I’m not buying that, I’m running away from that”. You would fill your trolle, yet we don’t do the same when the stock market is cheap. That whole money thing is, from an economic perspective, creates irrational behaviour. But then there’s biological rationality, which is what three and a half million years of evolution have taught us, which is a need to feel safe and secure. And the stock market has become metaphorically that lion that used to chase us across the savanna. We haven’t lost the triggers of fear and anxiety, they haven’t vanished, they’ve been replaced with modern day life. So when we see the stock market’s falling, and we hear there’s a pandemic, our biology, our evolution, our need to thrive and survive kicks in. And we behave in a way that is coldly rational. Because if it wasn’t, we wouldn’t be here today. So I think what happens sometimes in conversations with clients, is advisors focus almost exclusively on economic rationality and telling clients, “no, don’t do that”, whilst at the same time completely ignoring what’s going on inside their heads, and their biological rationality. And this is the thing that’s made us all sit here today on this call and survive three and a half million years of our evolution. So I think we need to just accept, and I know we do, but I think we need to put more of a focus on the human aspect of our relationships and not just the financial aspect.

Phil Bray 29:57
Thank you. Some great answers there to all those questions. Talking of questions, Dan, can you just remind people on the call how to leave their questions for Carl and Neil?

Dan Campbell 30:10
Sure thing. So we’ve had a few questions trickle through on the chat, nothing through the Q&A panel just yet. So if anything comes to mind as Neil and Carl are speaking, just drop those in either and we’ll get those later. We have had a few comments just echoing the themes that have been spoken about though, which have been quite interesting. So we had one from Chris saying that Neil did a talk for clients of Ovation, and it went down really well. So there was definitely value there. And also one from Dan earlier, that said, just a general comment that in the early days of the crisis, they picked up a number of new clients that basically said things such as, “I am disappointed that I haven’t heard from my advisor”, or “I have tried to contact my advisor, but they haven’t got back to me”. So that idea of just checking in, there’s absolutely value there, isn’t there?

Phil Bray 30:59
That visibility point is massive. Carl, you’re just about to open session eight of The Fellowship, the last one in 2020 I think. What are the lessons in there that planners can use to prepare for, quote on quote, the next time?

Carl Richards 31:22
Yeah, I have a bunch of questions about what Neil said, actually I have to ask one. So sorry, Phil, I’m going to take over for a minute.

Phil Bray 31:30
Go for it.

Carl Richards 31:33
Neil, could you distinguish real quickly for all of us? I know we’re on the same page, so I just want to make sure I understand. I sometimes want to be told what to do. What I want from my advisor is to understand me so completely, that they can look me in the eyes and say, based on everything I know about you, especially when I’m under stress, I have a great financial planner. Her name is Christy, she’s unbelievable. And when we’re under stress, she can look me in the eyes and go, “I got you, this is where we’re going”. I want to essentially say, what would you do if you were me? And so the idea, sometimes that gets confused. I do believe we tell people what to do, but it’s only after. So it is very much a co-pilot, co-creation sort of thing. So, are we on the same page there? Is there some clarification that I need to understand?

Neil Bage 32:30
We’re absolutely on the same page, Carl. What I mean is, if I can look at you in the whites of your eyes, and I know you, and I don’t know you at a superficial level, I know you, I understand.

Carl Richards 32:41
Both the economic and the personal, the whole thing.

Neil Bage 32:43
Everything, exactly. I know how you navigate the world, I know how you process information, I know what your unconscious mind does, more to the point, I know your values and principles. And all of those things factor into me saying “Carl, come on, this is what we’re doing, we’re going this way”. And at the heart of that statement is who you are. It’s not about who Neil is, it’s about who Carl is. Completely agree with you. What I don’t agree with is when people force their values and their principles on people and say “we’re doing this” and ignore the person. Because I think that’s wrong. So I think if the landscape is correct, and you absolutely know your client, then of course, they would expect you to say “no, come on, we’re going this way today”. And this is why, when you don’t have that intimate knowledge of the client, I think it comes across as being paternalistic and me telling you what to do because I’m right, you’re wrong.

Carl Richards 33:48
That’s something that we talked about in The Fellowship, this idea of keep your values off my plan. And that’s tricky because we may have beliefs about paying down debt, that’s an easy one to pick on, or maybe a belief about how to fund education for a client or for a child. We may have personal beliefs, but we need to remember that the plan is the client’s plan. And what I see most often when plans blow up because of poor behaviour specifically, it’s often because there was no connection. The plan didn’t reflect the client’s values, goals, wishes, desires in the first place. So there was no emotional resonance to say, “hey, I know you’re feeling crazy, but remember this: there’s no touchstone element of that there”. To answer your question, Phil, it’s hard for me because the more I talk about it, the less it seems to help people. It’s one of those deals where you just have to experience it, but it’s 21 declarations of what it means to be a real financial planner. It’s my opinion of what it means to be a real financial planner, and a lot of those things are around this idea of guide in a changing landscape. They’re around this idea of we listen, we have empathy and mostly they’re both a calling, I’m calling you to this better place. And a reminder, I’m finding this to really be true here in the UK, because there’s so many good financial planners in the UK. And your audience particularly the concentration, like we’re all preaching the choir here. But it’s a reminder of what you’ve always known, but maybe not articulated, or maybe not seen written. And so that’s the kind of stuff, and in terms of getting you through, to me, what I need to show up and do my job is I need enough confidence. Sometimes I need enough confidence to fake it, it’s fine. Like if I just fake the fact that I’m confident. Sometimes I need enough confidence to fake it, other times I would hope that I have enough confidence to do the act. I think we can build systems into our lives to protect our confidence a bit. And things like getting enough sleep and eating well and do exercise, all those things. And another place we can get that is just a reminder of the value we provide. And that’s a lot of what The Fellowship is about, it’s this call, please remember this is your job, the people need you. So it serves as a place when I’m not feeling confident. One advisory went through it and called it a confidence for… IVs. It feels like an IV, I can hook up anytime. So that’s how that was designed to help people in times when the plan blows up.

Phil Bray 36:47
Thank you, Carl. Don’t go anywhere because I’m going to make your work a little bit harder in a second. I just want to share my screen and explain to everybody briefly before we get back to more questions for Carl and Neil. The special bundle that we’ve arranged with Carl. So the cost of The Fellowship is $500. It’s open from now, we’ll give you a link shortly. And anybody who signs up using the Yardstick link get an exclusive bundle of Carl’s sketches, not known as The Sketch Guy for nothing. We have selected three of your sketches, which we think will help financial planners prepare their clients for next time. So anybody who signs up for The Fellowship, using the link gets those three sketches. And the other thing we’ve done with them, which I think is really cool, is we’ve animated them as well.

Carl Richards 37:50
You’re giving the animations?

Phil Bray 37:55
Absolutely. And even better, you’re now going to explain those animations, Carl. So we’ve got the animations on here. And Carl, just give us a 30 second precis of this one, on why we think this particular animation and sketch is perfect for helping clients prepare for next time.

Carl Richards 38:18
I just want to understand something. So that’s a little animated video file that you get, you’ve done three of those and I can post those on social media anywhere I want to whatever, little context snacks I can use.

Phil Bray 38:33
You can do whatever you like with them. You’ve got the three animations, the three sketches and fill your boots.

Carl Richards 38:39
I’ve never heard of that, I don’t know what it means. Neil, what does fill your boots mean?

Neil Bage 38:46
Did I say fill your boots?

Carl Richards 38:48
No, you both did, you both now said fill your boots in this call in the last 10 minutes.

Neil Bage 38:57
I have a lot of these conversations with our mutual friends Daniel Crosby and Brian Portnoy, when I say something and Daniel typically says, “I have no idea what you’ve just said to me”. They’re real English phrases.

Carl Richards 39:10
Yeah, for sure.

Phil Bray 39:12
Leverage them as much as you can, take advantage of them.

Carl Richards 39:16
Well, anyway, I actually hadn’t seen these animations yet. And we’ve worked on these for 10 years trying to get animations, this is not a cheap thing to put together. So thanks for doing that, Phil. One of the things I tried to do with the images, in fact, my editor at The New York Times calls them confrontational without being off putting. Originally, these were for me with my clients, I drew these for my clients, was to point out a behaviour that is kind of silly in hindsight, but it actually gives us an easy entry to a conversation about it. So there’s a little bit of a chuckle, and this is one of the conversations that happens all the time. Clients call, “I want to get out”, and we say, “is that a permanent decision?”. “Oh, no, I want to get back in when things clear up”. When the dust settles, when things look better. And this is just pointing out a conversation that takes 20 minutes around, let’s define what it means when if we’re going to sell today, and you want to get back in when things clear up, I like to have a plan. Let’s define what it means when things clear up. I often ask, “what’s the economy going to look like? What will the news look like? What will your friends be saying?”, and then the last question always is “if the economy is better, the news is good and your friends are happy, where do you think the market is going to be?” Will it be higher? We, on purpose, are building a plan where you’re going to sell low and buy high later on purpose? Well, this is an entry point to that conversation. So that’s what that sketch is about.

Phil Bray 41:02
Thank you, Carl.

Neil Bage 41:02
Before we move on, I think what’s interesting here with this type of sketches, as a follow up, advisors can then send content around things really specific, which is what this illustration is all about. Around things like loss aversion, sunk cost, fallacy disposition effect, which actually just kind of concretes with science. What this simple, beautiful illustration is telling you gives you more depth if you like. So, there’s a lot more depth that can be derived from just this conversation, which I think is great.

Carl Richards 41:03
It’s one of my favourite things to have happened to me. I have really smart people show up and they have names for this stuff. Daniel Crosby does this to me, too. He’s like, “do you know?”, and I was like, “no, I was just drawn with a sharpie over here in the corner, leave me alone”.

Phil Bray 41:52
Let’s have a look at one of those Sharpie drawings. Here we go, here’s the next one.

Carl Richards 42:00
I love this one. I want to see if you actually were able to illustrate this right. Oh, yeah, okay. Well, that’s close. Really, really cool. So I know I am at risk of oversimplifying and that’s just the nature. You leave some nuance out when you do something with a sharpie. Of course, algorithms can get some pretty complicated stuff in them. But this was just me pointing out, algorithms are really good at solving what can fit in an algorithm. And complex, adaptive systems don’t always fit in algorithms, and humans and markets and their interaction is a complex adaptive system. And so I think that’s just my cheeky way of saying algorithms are great at solving for what fits an algorithm, but you and your money don’t always fit in an algorithm.

Phil Bray 43:09
Thank you, Carl. Last one.

Carl Richards 43:22
This was fun. People say this all the time, like, “my six year old could have done that”. Look, what you don’t know is the amount of thought and time. It’s the simplicity on the other side of complexity. So I know I’ve thought about the edge cases, I’ve thought about the nuance, and I purposely left the thing out that I didn’t think I was trying to get across. I was only going to point that out because you notice it says “good investments”, right? You could have a mediocre, by definition, average investment portfolio. And if you behave well, you’ll do better than 99% of your neighbours and in America, at least, that’s what life is all about anyway. It’s different, this could have been flipped. We could have said, “best portfolio ever created by the mind of man”. One behavioural mistake a decade in the other circle and the overlap could have been labelled, “should have just stayed in term deposits”. That’s the point here, that I’m trying to emphasise. And the circle is bigger too, great behaviour is bigger. I was trying to get across the fact that it’s the behaviour that matters more. Arguing about the investments is like arguing about misdemeanours, when most of us are still committing felonies, in the form of poor behaviour.

Phil Bray 44:53
Thank you, Carl. That’s fantastic.

Neil Bage 44:56
What’s interesting about that conversation for me is, I’ve spent the last seven years building Be-IQ out to be an evidence based behavioural insights company, which is about having an evidence based framework to understand what behaviour is and why it matters. The left hand side, you could argue, is the evidence based investing piece. So it’s about having a framework whereby that little kind of crossover there in the venn diagram is saying, if you have an evidence based investment approach and an evidence based behavioural insight approach, then actually, that middle piece becomes a really valuable part of that picture.

Carl Richards 45:37

Phil Bray 45:38
And to find out more about The Fellowship, and to access that bundle, there’s the link. Dan’s going to put it in the chat, and that offer is open until the 26th of October. And we’ll put the link in the shownotes to this when we send around the recording later on this evening. But Neil, I want to come back to you if that’s okay and just pick up something that you said earlier. You talked about some of the planners that you’ve worked with, had got a list of the clients who, I’ve written it down, melting in their living room with anxiety. Just talk to me a bit about how planning firms can plan now or can strategise for the future, for next time this happens, and how they can start understanding which of those clients are going to be melting with anxiety, to use your phrase.

Neil Bage 46:32
The science side of my brain is saying I’m gonna have to see if anxiety increases body temperature. I think it does, you can get to a point where you could legitimately melt. So, there’s a couple of things here, Phil. I’m going to just repeat some of the stuff I’ve already said. So for me, it’s about getting intimate, inverted commas, with the client, so that we can understand how they navigate a noisy 21st century world. How they process information, and you can do that by having a great behavioural insight into how they do that. So for example, we all know that every human being on the planet suffers with behavioural bias. And if I pick on framing bias as an example, so how we make a decision based on how information is presented to us, we all have our own unique strength of that bias from weak to strong. And if you say, from 0 to 100, every single person on this call, every human that walks the planet has a strength of framing bias. And that’s the same for every behavioural bias, by the way. Now, if I know that there are clients who have a strong framing bias, and I know that they’re on social media all the time, and I know that they also have a strong confirmation bias, then what that tells me immediately, is that the way they are navigating the world, they are going to react to the news, and they’re going to form opinions very quickly. And they’re gonna hear statistics presented by Public Health England or by the Government on the nightly news and they’re going to listen to what they hear, and they’re going to react without digging into the detail, and figuring out what the other side of the story is. So I think advisers need to accept that, just saying, “I know my client”, actually, yes, great. But having an intimate and evidence based understanding of what’s going on in their unconscious mind, absolutely moves your conversation on in leaps and bounds of your life. That’s kind of one aspect. The other aspect is, we also need to remember that we’re all unique, we all process information in our own unique way. And what you tell me, in your head as you’re saying it may make perfect sense. But as it kind of hits my oral cortex, and I start processing that information internally, I compute that in my own way. Even my wife, who knows me better than any other human being on this planet, will hear and process that information in her unique way. So we need to accept that one message never has fit all, it never has. It’s about being you, it’s about delivering a unique experience for each and every client, but you can’t do that unless you really understand, on an evidence based level, who those clients are. And the final thing I would say is more of a “be prepared” statement. It doesn’t matter how well you know a person, human beings are guaranteed to do one thing and it’s to catch you off guard and to surprise you with something. So we always need to be prepared, and if we have a structure or a framework in place, harking back to Carl’s point and telling people what to do. I know Carl from an economic perspective, and I know who he is, I know what his dreams and his aspirations are, but I know who he is from a personal perspective. And I now know who he is from a behavioural perspective, that just gives me the best chance at delivering the best outcomes for that client. It also allows me to spot the telltale signs of when I say to someone like Carl, “are you okay?” and he goes, “yeah, I’m okay” and he’s not. That’s based on those kind of lottery factors. It’s about, yes, knowing the client because you work with them, but it’s about understanding what’s going on inside of here. And carving out the difference between the subjective self, who a person thinks they are, and the objective reality of who they really are. And if you understand both sides of that story, you’re in a much better position to help and serve clients.

Phil Bray 50:44
So a genuine understanding is clearly important. Carl, you take this first, what do you think are the most effective ways of communicating with clients on being their guide? Tactically, if, and when this happens again?

Carl Richards 51:03
I think step one is get on the phone and call them. If you send an email, make it personal. And again, pieces of that could be cut and paste from something you’re trying to communicate but make sure that they know. But I think even better, just jump on the phone and call. And then we can move up the level, right? Like jump on the phone call, get on the video chat. Now in video chat, there’s a lot you can do. If you just add little improvements, little thought about lighting, and sound and looking in the camera. Seth has taught me this. He spends a lot of time here, just very close, looking in the camera and little changes in video make a massive difference. And one thing to think about too, we use a service a lot called Vidyard, you can use Loom or I think there’s one called BombBomb. I don’t know, I have a hard time even saying it out loud. But Loom, where you can record personal videos to clients and send them. Super easy to do, we do that a lot. The perceived value of video is through the roof. And if you’re good at it, and you’ve got an iPhone, it’s a crazy secret. Don’t tell anybody, but the camera on iPhone is world class, right? And so you can record some really high quality videos. This little mic, you can’t really see it here, but that’s a $10 mic that plugs into my iPhone. Sounds great, so a good quality video. So personalised messages in the medium that you’re willing to do is a place to start.

Phil Bray 51:12
I think we’ve started using video more. And it works, it works an absolute treat. It’s more efficient, but it’s so much more personal engaging. Neil, what about you?

Neil Bage 52:55
There’s not a great deal to add. I would echo what Carl said, actually. And maybe because I’ve done a great deal of filming in the past, that actually staring down the camera when you’re talking to people just instantly creates a connection, because now you’re looking directly into my eyes, virtually, you know what I mean? As opposed to talking and looking off camera all of the time and looking around, it creates a disconnect. So I agree, personalised video, and the thing is, Carl is right. My iPhone, it records in 4k and it’s ridiculous quality for the size of the device, if you like, but also I think just even recording of a verbal WhatsApp message, or, “Hi, how are you? I just wanted to…”, just so that I can hear your voice. But not just reading your words, they are hearing you and it creates that connection. But I guess I can kind of sum it up. I think people need to be clear. I think they need to be empathetic, fact based, consistent in their message. But ultimately, they just need to be human and accept that, yes, there’s a lot of stuff going on. And ultimately it boils down to one point: I have to communicate. I can’t hide, I have to communicate. And even just coming to that decision, whether it’s an email or phone call or WhatsApp message, a video message. Just reach out and let people know that you’re there.

Phil Bray 54:15
Yeah, it’s so important. I remember back in March we published our Coronavirus guide to communications or something along those lines. It was downloaded about 8,000 times, and we’re going to rewrite it. So a week tomorrow we’ll be putting out our blueprint for preparing for next time. We’ll be taking a load of the good stuff from Neil and Carl on this webinar and we’ll be publishing that next Friday. So if anyone wants a copy of that, just let us know. But tactically, what should planners be doing right now, Carl, to prepare for next time? We know some of the good things that they did, picking up the phone etc. We know some made some mistakes, which was incredibly understandable given what we were facing. But a couple of takeaways, what should they be doing now to prepare for, quote on quote, “next time”?

Carl Richards 55:13
Well, I mean, other than what we’ve already talked about in terms of being visible and communicating and clearly being in touch with clients, I think the other thing to do is to make sure that we’re on the same page as in terms of the plan, right? Like, if you haven’t had that conversation, I would imagine, given the audience we’re talking to, most people have, but if you haven’t, because there’s a huge chunk of most of the advisors in the world are not planning based, it’s still around a product, even if the portfolio is the product. There may not be some direct link to goals, and I like to think of it as there’s no statement of financial purpose. If you don’t have a statement of financial purpose for each client, whatever you call it, you’ve been given an excuse to have that conversation that you may have wanted to have but you felt a little weird because I’ve been working with you for 10 years. I’ve never asked you about your goals, you’ve never been given an excuse to do all sorts of things. You can do meetings in front of a blue couch in your bedroom, you can have the dog bark in the background. You have permission to say to a client that’s been a client for 10 years, you can say, Phil, I know we’ve been working together for 10 years, and I’m giving you the exact language. I’ve worked on this for a decade, this language. I’m pretty sure I know the answers to the questions I’m about to ask you. So you’re just pointing out the fact that even though you can say, well, you can’t say it if it’s not true, but I think you probably know, what makes them tick, financially, what their goals are, what worries and concerns, why they’re investing money. So you can say, “I’m pretty sure I know the answers to these questions, but given what’s gone on, people’s plans have changed, people’s goals have changed, their dreams, their desires, what they thought was valuable. They’d been questioning that. And so I just want to have a conversation about it real quick”. And then you dive into your favourite question, the next version of that would be, “why is money important to you?”. Or Dan Sullivan’s version of that question is, “if we were meeting three years from now, what would need to happen in order for you to feel both personally and professionally, like it was a success?”. George Kinder has gotten his version, but it gives you permission to have that conversation. Even if you’ve got an existing track record, I would be doing as many of those a day as I could right now until I’ve had that conversation with every single client, because it gives us a touchdown. And then we can say, based on what you’ve said, do the investments match what you’ve said here? Okay, they do, or they don’t, we need to make some tweaks. So get the plan in shape while you still can.

Phil Bray 57:58
Fantastic advice. Neil, what would you add to it? And then we’ll open to everybody else for questions.

Neil Bage 58:03
There genuinely isn’t a great deal to add to that, that was a top, super answer! I guess the only thing that I would add, is, and Carl used the word “permission”, and I’m going to use it in a different context here. I think we just need to give clients permission to be scared, uncertain, anxious, worried and fearful. We need to give them the ability to say “no, I’m not okay”. But what I would be doing practically, is I would be having conversations with clients and I will be asking – all the stuff that Carl asks – but I would also ask them, “tell your experience of what you went through over the last six months? How did you feel when this first happened? How did you feel when you saw this happen?”. And don’t just ask it for the sake of asking, ask it because it will form the basis for how you deal with a client going forward. In other words, learn from what they’ve just been through. Because if it happens, again, history is likely to repeat itself. Now I will throw an error of caution to this. Because one of the things that we know from psychology, social science, is that people will suffer with hindsight bias and people will suffer with memory distortion. So when they do remember what they did and how they reacted, yes, we can use that as a basis, but we shouldn’t use it explicitly as they will absolutely do this again, because every single moment of life is unique. Yes, history can repeat itself and things can look and feel similar, but there will always be subtle nuances that makes that experience unique in the way that we process that information in our brains. So, in essence, everything Carl said, but I would also use this time to understand how clients felt and kind of use that as a gauge to understand how they may feel going forward. That allows you to be wholly proactive, and just do that thing that Carl and I have now said, pick up the phone and say, “are you okay?”.

Phil Bray 58:19
Thank you, Neil. So, it’s been a fabulous hour. It’s delivered everything and more than I hoped it would, hope everybody else who’s on the call feels exactly the same way. Dan, questions? Where do you want to start?

Dan Campbell 1:00:12
So I think we’ll start with a question that came in from Chris. And Chris asks, “how can you tell when you might be applying your own values to a client’s situation, not theirs?”.

Carl Richards 1:00:27
My short answer is ask them. I think we can just do a lot of confirming like, “I think I heard this, did I get that right?” Because what we want to do is nail the sort of values, purpose and goals in their language. And if we do it, there will be an emotional resonance to that, like “yeah, that’s how I think that’s exactly what I said, actually”. I think it’s so funny how we feel about this, we feel like we might look dumb if we ask somebody to repeat something. Or if we ask a clarifying question, or if we say something like, “I’m not sure I understood this”. This is something I didn’t realise, I call it crunchy. Like, just pay attention to when there’s a crunchy moment, like there’s something more and so I find myself saying this all the time. I sense there’s something behind that, like, is there more there? Brian Koppelman on The Moment, I think is one of the best podcasts to listen to understand follow up questions. Because Koppelman will say things like, “go deeper”. That’s all he’ll say, “tell me more”. So I think Chris, the answer is you just ask clarifying questions. And if you’re at all worried about that, just go, “did I nail this? Or am I seeing this through my own lenses?”. That’s all I’d say.

Neil Bage 1:01:59
I agree with that. I guess the one point I would add, and it goes back to something I said earlier. Three and a half million years in the making as a species, we have become incredibly fine tuned at just looking at another human being and knowing that there’s something’s not right. You don’t even need to ask them the question, you can sense it. And you know this right from your relationships with people. You say to someone, “you alright?” and they go, “yeah”, and you kind of just know they’re not, you know there’s something there and it’s like a sixth sense, if you like. And we picked up that skill. It’s why, by the way, as a side comment, and I am absolutely adamant that Robo advice will never replace real advice, because it will never be able to replace that human aspect. We are so fine tuned that I can’t see tech ever replacing that. A computer can’t look at me through the camera and go, “you alright?”, it will just never be able to do that, I don’t think. So it’s about everything that Carl said, but I think it’s just about using these things and just observing the reaction and playing back. Have I got this right? Is this what you said? Because I just want to make sure. But you will also be able to tell the second you prod someone in a poor part of them, which is one of their values, and you’re prodding them in the wrong place, I would argue that you would visibly see the reaction. And it’ll change, there’ll be an emotional resonance to use that phrase that Carl said. And so it’s about doing it, what can I say? But I’ve also just been observing as well and giving yourself permission to change your narrative and step back and go, “oh okay, I got that wrong. Sorry, let’s get this right”.

Carl Richards 1:03:35
Let me just mention something here that it’s important to understand. Sometimes this conversation we’re having here gets painted as like, I sometimes refer to as Super California. Like, it’s “woo woo!” and it’s fancy feelings and it’s people crying and we come from an industry where we like sales and numbers and stuff and things that we can measure. And for those people that feel that, A: it’s really important understand this is where the business, the practice, the craft of financial planning is going. It’s been there for a long time, but throw that out for a minute. The single best way I know if what you care about is selling, because you equate selling to impact or maybe even more, you equate selling to the business being successful? Fine. The single best way I know is to listen to people. The single best way I know is to get somebody to talk about themselves, because the release, Neil’s gonna correct me if I’m wrong, oxytocin in their brain and that is a chemical reaction that’s designed, as I’m talking about myself, it’s designed to help me like the person who asked me the questions for me to feel an affinity to somebody who listens to me, somebody who makes me feel emotionally safe. I like them. Oxytocins, what… you can think of this as California if you want. You can also think of this as the most powerful, genetically designed, hard wired selling tool you’ll ever hear. And it turns out, they’re both right.

Phil Bray 1:05:10
Dan, let’s get through as many of these questions for people as we can, because it’s great to have Neil and Carl here.

Dan Campbell 1:05:16
Sure thing. So the next question I’m going to ask is from Richard. And Richard asks, “most of the focus has tended to be on the relationship between planners and existing clients. However, one of the biggest challenges are with the vast majority of the world’s population who have no planner, are there any suggestions you can share in trying to encourage more of the population to seek advice?”

Phil Bray 1:05:36
Who shall we start with there? Neil, have you got an answer on the tip of your tongue?

Neil Bage 1:05:43
It’s a great question. Because there’s an assumption in there, I’m not saying there is, I’m speaking out loud here. Let me think out loud for a second. There’s almost like an apply to the assumption that people need advice in the first place, and I don’t think that’s necessarily true. I think most people on this planet need help just to get their financial orders or their financial affairs in order. And actually, if you take that bunch of people, I think people just need to start saving more money and spending less. So it’s not necessarily about financial advice, per se, it’s about giving them access to an expert who can help them sort the crap out and get on a surer footing. Then later on, the advice part comes into play about right now, we’ve sorted that out, let’s plan for the future, let’s invest some money, etc, etc, etc. But I do think we have a big job to do, to portray the image of what we do as an industry. I hear this from some people that it’s still seen as like this elitist part of the profession that is only valid for rich people, and that’s clearly not true. If at our heart, we want to help people with their financial well being which has a knock on effect to their physical and mental well being, then actually, our conversations need to be much, much broader than just the investing conversation or the retirement conversation. It needs to be about debt management, spending, borrowing philanthropy, I can keep going on with that list. So I think in a nutshell, and again, I’m thinking out loud and blabbing here, but I do think that ultimately, it’s about making this industry more appealing and broadening its reach to more people. And I don’t think we’ve cracked that nut at all.

Phil Bray 1:07:38
Dan, back to you.

Dan Campbell 1:07:40
Okay, so a question from Robert here and it’s a great question, “have you got an alternative for emails that don’t start saying “hope you are well”? What’s a good way to start a personal email?”

Phil Bray 1:07:55
Carl, what do you make of that?

Carl Richards 1:07:58
That’s a really good question because we’ve seen a whole bunch of that lately. “I was thinking about you today”. “How are you?” “I read something today that I thought you would find interesting”. “Hey, John, I had a conversation with a friend today and it made me think of you”. That’s some of the ways I would do it.

Phil Bray 1:08:21
Cool, Dan, let’s keep them coming.

Dan Campbell 1:08:24
Okay, so one from Alan here. “If you’re a guide, there are times when you need to tell people what to do, even if it is telling them that they are wrong. So for example, do not step off the path here as you’re in danger of falling off the cliff. How do you communicate this without telling them what to do?”

Neil Bage 1:08:46
Let me jump on this one first. I think it goes back to the conversation that Carl and I had. In the financial sense, you could argue there’s a precipice, there’s a cliff, you could jump off at the market’s bottom and that’s your metaphorical cliff. But if you know, the client, as Carl and I discussed earlier, then I have absolutely no issue in saying to a client, “no, you should not be doing this”. As long as it completely aligns with their values, their principles and their plan, all of the things that we’ve talked about before. The financial world is one thing, but in the physical world, of course, many of us have children, and many of us don’t have children. But ultimately, there’s times when you need to reach out and say “no, you are not doing that”, because you absolutely know that the result of that action will put people in in a terrible, dangerous or perilous position. But in the financial context, all I said and all I mean when I say we shouldn’t tell clients what to do, is we shouldn’t push our values and our principles on people. We shouldn’t be telling them what to do because we think it’s right and I don’t care what you think. That for me is where it goes wrong quite quickly.

Carl Richards 1:09:58
Phil, I hate to interrupt, but can I just mention one more thing about the earlier question about educating people on how they need our services? I was just sitting here thinking about my conversation yesterday with Seth. He’s been writing a personal blog for every day for 15 years. I think there’s 75,000 posts, it’s the most popular individual website on the planet. And then he said, “99.9% of the American population has never read my blog”. And he said, “the truth of the matter is, most people don’t need you”. Most people won’t and yet, it’s enough. Everybody doesn’t exist, right? Everybody no longer exists. Only the somebodys that you really need to help. And so I know, that’s not exactly what the person who asked the question was pointing out at all, because I do think there’s a huge section of the population that actually does need financial advice that doesn’t know what it exists. And Neil pointed to this earlier, I always think of that as the US Supreme Court’s definition of pornography. They said, “we don’t know how to define it, but we know it when we see it”. We’ve got to give more people the experience, we don’t tell them they need it. We say, “I was having a conversation today and we talked about this, this and this”, so we point at it. We teach in parables, we teach in stories, so people can go “oh, I’ve never thought of it that way”. And then they realise, “oh, that’s what it means”. Because we can no longer say you can trust us, we can no longer say you need us, we can no longer say we’re wealth managers, we’re financial planners, none of those words matter to anyone. We can no longer put a picture of a lighthouse, or a sailboat or a compass, and hope that it means clients will suddenly sign up. So all we can do is tell them stories of what it means, let them experience it like vicariously, and then realise it’s not for them if they don’t get it. Because you don’t have time to educate the world, you’re going to help your 100 best people, that’s all you need. I’ve got advisor friends who have got 25 clients, and an 18 month waiting list. They only need 25. So it’s not for everyone. Sorry, I just had this bouncing out of my head and I wouldn’t let it go.

Neil Bage 1:12:23
There’s an element of that, Carl, as well isn’t there? About if we portray ourselves to the outside world, people will process that information in their own way. And if we’re trying to convert them to our financial advice, by relying on them on their cognitive processing, we’ll fail. But if we go after them from an effectiveness, if we try and create that emotional resonance, if we try and get them to feel that this is valuable through amazing storytelling, and they go, “oh, that’s me. That’s what I want, that feels right”. All of these words, these California words, that’s how you get people on the hook. That’s how you get people into your world by making them feel like this is something that I want to take part in. If we rely on them to process that and come to that cognitively, it’s the failing, the Achilles heel.

Carl Richards 1:13:16
Hey, Phil and Dan, I know you have some questions, but this might be really useful. So let me just tell a super quick story and, I think people will benefit from this. So here’s an example of a story. This is going to be recorded, so feel free to use this story. I had a client, his name was Dave. I heard a friend of mine tell the story about his client named Dave, and Dave was an emergency room doctor. And Dave worked at a hospital, he specifically went to work at this hospital because the emergency department was 50 yards away from some of the best trails in the country. And everybody else that works in the hospital specifically worked there as well. It was a hospital known for people who love to go out and trail, run and mountain bike because the trails were right there. One day Dave left on his lunch break, Dr. Dave left on his lunch break and as he was walking out, he looked into the break room and he saw the other doctors and some of the staff crowded around the TV watching the financial pornography network. And he went on his run, and he realised about halfway up the trail, he called my friend who was a financial planner. He called my friend and he said, “Carl, let me just tell you what just happened. I was just leaving to go on my trail run and on my way out, I looked in the room and I saw all the other doctors and nurses and staff watching the financial pornography network crowded around the room, and I realised I wasn’t there”. That’s an actual phone call. I know everybody else in that room wants to be out here too, but I wasn’t there. Look, that’s a way you could tell that story and somebody can go, “oh, that’s what financial planning means”. And I never used the word financial planning. So that’s an example, I would just be on the hunt for those stories. And then I would share them everywhere. Sorry.

Phil Bray 1:15:22
No, that adds a huge amount, Carl, and we all have a story. Thanks for doing that. Dan?

Dan Campbell 1:15:30
So the next question is from Ian. And Ian asks, “how do you get more comfortable with asking deeper questions such as ‘why is money important to you?’ And how do you then follow that conversation through?”

Carl Richards 1:15:44
Practice. Sorry, I don’t have anything else to add other than, you just practice. I promise it will feel hard at first, because these questions are designed. A good question, by definition, is a question that somebody may not have ever been asked before. When you’re asked something you’ve never been asked before, it might feel uncomfortable. Notice that uncomfortable is a sign that you’re doing something right, and then practice.

Phil Bray 1:16:17
Let’s keep going, Dan.

Dan Campbell 1:16:19
Absolutely. Okay, we’ve got a question from Dan, “what do you think about not taking on clients in the first place, if they don’t seem like a good fit?”

Carl Richards 1:16:32

Neil Bage 1:16:32
Well, I’m not a financial planner, but I can speak from an experience of having a business where we go out and see clients. Let me try and flip that into the financial planning world. Why would you want to work with somebody who is going to be a royal pain in the backside? Why would you want to work with someone who takes up 90% of your time and your effort, both physically and mentally and emotionally? To be recompense by, financially, through fees, etc.? For me, I think I only ever want to work with people who I enjoy working with, and who I can genuinely add value with, who I can genuinely have empathy with. And who will value, like that conversation Carl said about the doctor, who would recognise the value that I bring, and therefore understand that it’s about the relationship, and it’s about the experience. So for me, it’s really clean cut, or maybe I’m being really brutal. If I understood, this person is going to be too tough to work with. I would rather just say “thanks, but no thanks, go and find somebody else”. But that’s me just being brutally honest.

Phil Bray 1:17:55
Carl, would you agree?

Carl Richards 1:17:56
Yeah, the one step further would just be “I think you have an obligation” and forget, maybe, the people that you don’t like. Let’s pretend there’s somebody you do like, but they have a problem that you’re not interested in solving. In other words, you’ve defined your narrow niche, which I would suggest get narrow as possible, and they’re outside of it. They’d be a great client revenue wise, and you happen to like them. You still have an obligation, I think, to say, “look, if it’s not a good fit, I’ll be the first one to tell you”, then you discover it’s not a good fit and you should say, “it’s not a good fit, I’m not qualified to help you”. Seth said yesterday in our interview, that you should pay attention to how often you’re sending people to your competitors. It should be a good sign, because it means you’re getting this narrow thing clear: author’s blurb, other author’s books all the time. And we should be looking at doing that. So I think you have an obligation to do it. If it’s not in your niche, if it’s not a problem you’re capable or interested in solving, then you have an obligation to tell them “hey, this isn’t a good fit, and I happen to know somebody who’s really good. Why don’t you go see Alison? She’ll be great. I’ve told her you’re coming”. Or, “if it’s okay with you, I can even introduce you”.

Phil Bray 1:19:15
Dan, how are we doing?

Dan Campbell 1:19:17
Okay, one from Alan. So just going back to the Californian thing, this will work with the existing clients and perhaps even chatty new ones. But how does the panel think this best works with the stiff upper lip of Brits who could sometimes be a bit of a stone wall and who have been taught to expect to transaction baps?

Carl Richards 1:19:39
I was the one that opened this door. So, look, I realised that that can be a challenge. And what’s funny is I hear this cultural thing. I don’t know if you know this, but every place I go in the world tells me the same thing. We’re too buttoned up for that, too formal, and I actually, for the first time after living in London for a while, maybe I’ll believe it. When they told me that in New Zealand, I was like, “no, I don’t think so”. But it’s a human problem, people don’t have to cry in your office, it doesn’t have to be that deep. But I would say just keep going back. When they’re expecting a transaction, I know they come into your office for that, if that’s the look they got on their face, like, “what have you got for me, kid?” And they want to sort of have a nice healthy debate about plane, train or automobile. And you just have to find ways to creatively say, “hey, before we have that debate, which by the way, I’m really good at. I know, my cars, I know my trains and I know my aeroplanes. I’m really, really, really good at it. I don’t think I can go anywhere else to find somebody that’s good at this. But before we do that, it’d be a disservice if we didn’t have a conversation about where you’re going. Before we decide which mode of transportation to take. So believe me, we’ll get there. But first, could you help me understand where you want to go?” Like, sometimes we call that goals, let’s talk about that. Why are you doing this? So maybe you soften it a little bit and you don’t say, “why is money important to you?”. But I think if you do it right, you can play the dance correctly. This is the craft. That just takes some practice, but don’t let them change it on you. You’re the doctor, they aren’t. You’re the one who knows how to diagnose, not them. And let me give you one last example. If somebody is insistent on this, it’s about performance portal. Hey, listen kid, I’m not here for this California conversation, as we’re calling it, just tell me what you got. My favourite way to handle that was to say, “okay, gotcha”. If you’ve tried two or three times, I call it the last arrow. The last arrow is “I got you, now explain again why you came in today?” “Oh, well, the guy down the street has been terrible”. Like, “my performance has been terrible”. “Okay, so performance has been bad from the guy down the street. Okay, got it. Just help me understand how did you find them? How did you get introduced to them?”. So probably, what they’re going to walk you through is, “I went in, we talked about it, he showed me some great performance portfolios”. And then you can essentially say, “oh, got it, and now you’re unhappy? Got it”. And you want me to repeat the same experiences you had with them, and you’re expecting it? Again, it’s the last arrow, this may mean they leave, it’s fine. You want me to repeat the same experience and expect a different result? And then I would say, “can I humbly suggest there’s a slightly different way. If we went about this a different way, we might have a chance of getting a different outcome, which is what I want for you”. So that’s how I’d handle that.

Neil Bage 1:22:58
I just want to answer this, there’s two things that pop into my mind here. So this brute, this stiff British upper lip, which, of course, is a thing that I’ve grown up with all of my life. It’s like cognitive behavioural therapy. It’s about giving people permission just to speak and be themselves. And I think a lot of the conversations have happened in days gone by haven’t done that. We haven’t even broached that subject. So I think it’s about creating a safe space where people can just be themselves, you can open up. And if you ask the proper questions, and you construct those questions in the right way, then they will, I think, to varying degrees, open up with you and let you in a little bit. But if that fails, and you need to understand what’s going on inside of their heads. And I’m not plugging anything here, but that’s kind of like the last seven years of my life, is trying to figure out, how can you put people through a digital process that’s fun and engaging, that doesn’t scream right or wrong with them, but reveals who they are? And then at least you’re armed with that information so the stiff upper lip is intact. They don’t want to let you in, but you can get in through a different route, if you like, and still learn about who they are and how they navigate the world. But echoing what Carl said, as well. But for me, it’s about creating that safe space and giving them permission just to be who they want to be, when they want to be it.

Carl Richards 1:24:29
Yeah, amen.

Dan Campbell 1:24:31
Okay, so one in from Ross. And Ross says, “one of my biggest frustrations is having a really productive meeting with a client where we discuss lots of things that that client could and should be doing to help them meet their personal objectives. Only to then have the same meeting 6 or 12 months later, and discovering they haven’t done any of those things. How do you get clients to follow through with the great advice that you’ve given them?”

Carl Richards 1:24:57
You repeat it. I used to get frustrated too and then I realised that’s kind of my job, especially for that specific client. I had a client, her name was Martha, I figured out my job for Martha was to pick up the phone once a month when she called because she was scared about something in some far flung part of the world. It took me a couple of years. Like, “wait, I told you last time!” It took me a couple of years to realise, “oh my gosh, I guess that’s my job with Martha”. And so you just do what you can. I mean, “you decide, you don’t follow my advice, get out”. That’s one way. Another way would be, “I’m just gonna chip away at this. I’m here for you. We’ll just keep repeating it”.

Neil Bage 1:25:39
I think we need to remember as well in this conversation that when I walk out of my financial planners office, Neil Bage’s life continues as it was before I walked in the office. All of the other million and one things I have to deal with in my 24 hours are still there, they haven’t vanished, I just have to now slot in other things that are the outcomes of my financial planning meeting. So I think we need to also be conscious that the financial plan, the advice we give people and the steps we get them to take, aren’t the only things that they’ve got going on in life. So I think having that getting on the phone or just saying, “just checking in, how are you? How are you getting on with that thing I asked you to do?” just gives people that little nudge they need in order to reprioritise again. But I think if you can create that emotional attachment to the things that they’re doing, the evidence suggests that there’s more a stronger likelihood that people will follow through with the action if they feel that there’s an emotional attachment and it resonates with them. So I think there’s two things, it’s about just constantly saying, “have you done it? Have you done it? Have you done it?”, because people will procrastinate because life takes over. But also trying to make the steps bitesized, and give each of them almost like their emotional resonance at the same time, because then there’s a likelihood that they’ll follow through.

Dan Campbell 1:27:04
Absolutely. So I think many of the other questions follow similar themes that we’ve already covered. We do have one question, though, that we can have as a final one. And this is from Carolyn. And Carolyn says, “do you have any final recommendations on hardware for video, so for example, that microphone that Carl mentioned? Or the camera on an iPhone, also editing programmes and software, so those sorts of things that people can easily use”.

Carl Richards 1:27:33
I’ll do mine real quick because I do a lot of it and I embrace constraints. So I try to use the simplest possible tool. So this I have a RØDE, it’s R-Ø-D-E and I think it’s called their smartLav. It just plugs in here on my shirt. It’s so small that I can take it with me, so if I’m doing something on my phone, I can just hold the mic. So that goes a long way. The mic on your phone is already pretty darn good on iPhone. The camera on the iPhone with a tripod, so I’ve just bought a selfie stick, my daughter just rolls her eyes every time she sees it, but a selfie stick with a tripod. So I’ll just set up the phone, plug this RØDE mic in, do the video, hit stop. I try to be one take Frank, Frank Sinatra, so I don’t need any editing. But if you need editing, we all know people who do a good job with video. You upload the video to Dropbox once a week, they go through and clean them all up, send it back to you, post it all over the internet, you say “if you liked this, you’d love my stuff here”, you point to your landing page. This is all stuff Phil and Dan do all day long. But tech stuff, the phone, a RØDE mic, a Logitech webcam, those three things will put you in the top 1% of all Zoomers and you don’t have to worry about the rest. I mean, there are obviously things you can do better than that, but the things you can do worse are infinite.

Neil Bage 1:29:03
I use my iPhone a lot for conferences and send videos. I’ve video edited as a hobby for over a decade now so I have editing studio in the house. I use Final Cut Pro X as my editing software, but actually even on an iPhone, iMovie is great if you want to edit something. And I was introduced recently to an app for the iPhone called Filmic Pro, which is an amazing app. So I use exactly the same mic as Carl, the RØDE Lav mic, but when I’m recording my voice when I need to be seen, I also use a Yeti Pro, proper microphone as well. It’s a great omni directional microphone as well. But also, it goes back to what I said earlier, the iPhone records in 4K, it’s absolutely phenomenal quality. So even just doing that and using the mic on the iPhone, as long as you’re in a quiet environment, of course, you can get some great videos. And actually, if you do it in a way where the world is seeping in, it creates an authenticity about it too, as well. So there’s so much amazing tech out there. Maybe I can share with Phil, what I use and Phil, you can push something out there maybe, but there’s the several things I usually see.

Phil Bray 1:30:23
I think if you do that, both of you, I’ll put it in the blueprint we’re going to publish next week. Dan, is that it for questions?

Dan Campbell 1:30:32
I’d say that’s been a fair representation of everything, yeah.

Phil Bray 1:30:36
Right, I just want to say thanks to everybody. It’s been a fabulous 90 minutes listening to Neil and Carl, it’s been absolutely superb. And I really hope everybody who’s spent the last hour and a half with us has got as much value out of it as I have. We will be sending the recording tonight, and we’ll put links in there to The Fellowship and Neil, if it’s okay with you, we’ll put links in there to Be-IQ as well so people can go and see what you guys are doing and the fabulous stuff there. And then next Friday, a week tomorrow, we’ll publish the Yardstick blueprint for the things you can be doing to prepare you and your clients for next time. And we’ll be leaning a lot and very heavily on things people have said in this webinar. But lastly, a massive thanks to Dan today for supporting me. And for Neil and Carl for the value you’ve added over the last hour and a half. It’s been absolutely superb. Thanks, guys. Cheers.

Carl Richards 1:31:32
Cheers, everyone. Thank you.

Neil Bage 1:31:33
Thanks. Take, care.

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