Episode summary
Helping Clients Align Their Capital To What’s REALLY Important - Kitces & Carl Ep 197
Financial Advisor Success (Kitces)
· · 37 min · Hosts: Michael Kitces · Guests: Carl Richards
Summary
Carl Richards argues that financial planning should not stop at mapping money to stated goals; it should help clients discover what is actually important to them. He says people often think they know what they want, but in practice they are discovering their real values slowly, through experience, experimentation, and reflection. The advisor’s role is to help clients get underneath surface-level goals and test whether a desired purchase or plan is really about the thing itself, or about something deeper like family, meaning, independence, or community.
He uses examples like a Myrtle Beach vacation home, a car, pottery, or a wilderness first-aid class to show how small experiments can act as “forcing functions.” These experiments do not exist for their own sake; they create new information by making clients confront questions about commitment and tradeoffs. In one story, a client realized that the true goal was family gatherings, not owning a second house, and found a less stressful and less expensive way to achieve that value.
Carl’s broader point is that advisors add value by helping clients align their use of capital—money, time, energy, and attention—with what they truly care about, and by helping them discover that with greater honesty and less assumption.
Key takeaways
- Carl Richards says advisors should assume clients do not yet fully know what is important to them, even when their goals sound specific.
- He recommends using small experiments, or “forcing functions,” to create new information about whether a goal is really a fit.
- The Myrtle Beach example showed that the real value was family gathering, not owning a second home.
- Carl argues that good planning is about aligning money, time, energy, and attention with underlying values, not just with stated objectives.
Notable quotes
“helping people align their use of capital in one circle”
“We don't know what we want. And so So and how many times have you seen this play out”
“the point of the forcing function is not the thing. The point of the forcing function is the questions it will demand of you”
“we want it to ask us questions so that we'll have some clarity based on we'll have some information that we could not have unless we actually go through the experiment”
How the episode opens
Well, good afternoon, Carl. — Hello, Michael. How are you?
I'm doing well. I'm doing well. I'm uh managing the very painfully hot season.
It is the dead of summer as we are recording this. And as we've I've probably noted on this podcast in the in the past uh I'm a native Washingtonian of DC and I love my hometown and this is an amazing place to visit, but do not come here in July and August. It's just miserable.
It's hot. It's humid. No one wants to be outside.
Uh this this is definitely the tough season for DC.
Yeah. Yeah. Yeah, I can't I can't imagine it was it's it's getting warm. We're we're having a little hot spell now, but at least it's cool in the mornings and it's not a humid. — Yes. Uh it's the humidity that sets it off. I never really appreciated the concept of it's a dry heat until I actually went out to like Phoenix my first time. I was like, "Oh, yeah, this really is different than home. Like the humidity really is awful at home. Now I understand."
For sure. — Think I got an appreciation for dry heat, but I definitely disliked the wet heat even more when I went home afterwards. — For sure. For sure. Well, what's on your mind today? — Well, I was going to ask what's on your mind. What are you pondering in financial planning world these days?
Yeah, I mean, funny you should ask. Um but I uh Let me just set up a premise here and and we can talk about it. So, my my favorite definition, and we all can define financial planning however we want. And but my favorite definition and the that's the type of financial planning that I'm most interested in
Mhm.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- client communication
- values alignment
- capital planning
- underlying wants
- commitment
Watch the episode
Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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Financial Advisor Success (Kitces), this episode and its artwork belong to Michael Kitces. Octagon is not affiliated with the show; this page is an independent summary.
