Kitces and Carl - Real Talk for Real Financial Advisors
Oct 1, 2026 · 36 min · 10 segments
In the 200th episode of *Kitces and Carl*, Michael Kitces and client communication expert Carl Richards discuss the value of financial planning and their current approach to communicating that value…
Michael KitcesHostCarl RichardsHost
So I thought it would be fun to reflect back on the conversation we actually had in episode one.
Because it's been seven and a half years, and I think our take is going to be a little bit different.
So I went and looked it up because it was seven and a half years ago, so I got to remember.
So seven and a half years ago, our inaugural episode was how to value the value of financial planning.
What is the value? How do you explain the value? And if you may remember what was going on in our professional world at the time, this was when Morningstar had done its paper on Advisor Gamma.
I think InvestNet called it Sigma because everybody's got to put a Greek letter on it.
It was all these different... studies that were coming out trying to quantify the value of financial planning with like what we save on the behavior gap and good savings advice and good tax advice and being more tax efficient with the portfolio and like more studies added in more layers.
And depending on whose study you read, it was something on the lines of we add one and a half percent to 3% of additional value add every year You know, good news, that's more than the roughly 1% many of us charge.
You had then also layered in a conversation of, hey, aside from just the dollar value that we're calculating, like a portfolio ROI on, there's just the reality, like we create this space for clients to talk about a really challenging, taboo topic of money that has a lot of baggage with it.
Mm-hmm.
That often people have no, no other place to have those conversations, but with us as advisors.
And that's a really, that's a really powerful thing unto itself, right? We, we have, we help client, we have, I think one of the things you even said, like we, we help couples have better conversations about money.
So they're not as awkward, right? You can figure out for yourself with your spouse what the value of that is.
But if that allows you to have marital harmony and not marital strife, that's probably a pretty valuable thing, even if I can't directly quantify the number of marriages that did not end out in divorce thanks to my valuable financial planning, creating alignment with couples and a better plan that moves them forward.
So I would then just bring the conversation back to you now to say, so bring us present.
Has any of that changed for you in how you think about the value of financial planning and the way we value it to clients?
So I thought it would be fun to reflect back on the conversation we actually had in episode one.
Because it's been seven and a half years, and I think our take is going to be a little bit different.
So I went and looked it up because it was seven and a half years ago, so I got to remember.
So seven and a half years ago, our inaugural episode was how to value the value of financial planning.
What is the value? How do you explain the value? And if you may remember what was going on in our professional world at the time, this was when Morningstar had done its paper on Advisor Gamma.
I think InvestNet called it Sigma because everybody's got to put a Greek letter on it.
It was all these different... studies that were coming out trying to quantify the value of financial planning with like what we save on the behavior gap and good savings advice and good tax advice and being more tax efficient with the portfolio and like more studies added in more layers.
And depending on whose study you read, it was something on the lines of we add one and a half percent to 3% of additional value add every year You know, good news, that's more than the roughly 1% many of us charge.
You had then also layered in a conversation of, hey, aside from just the dollar value that we're calculating, like a portfolio ROI on, there's just the reality, like we create this space for clients to talk about a really challenging, taboo topic of money that has a lot of baggage with it.
Mm-hmm.
That often people have no, no other place to have those conversations, but with us as advisors.
And that's a really, that's a really powerful thing unto itself, right? We, we have, we help client, we have, I think one of the things you even said, like we, we help couples have better conversations about money.
So they're not as awkward, right? You can figure out for yourself with your spouse what the value of that is.
But if that allows you to have marital harmony and not marital strife, that's probably a pretty valuable thing, even if I can't directly quantify the number of marriages that did not end out in divorce thanks to my valuable financial planning, creating alignment with couples and a better plan that moves them forward.
So I would then just bring the conversation back to you now to say, so bring us present.
Has any of that changed for you in how you think about the value of financial planning and the way we value it to clients?
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