Michael Kitces on the State of Financial Planning - WCI Podcast #380

Introduction to the podcast and its purpose of helping high-income professionals manage their money since 2011. Sponsored by Sofi, offering financial services for medical professionals.

Discussion on wealth being about enjoying it rather than just having it, emphasizing the importance of financial control and responsible spending.

Promotion of a podcast sale with a 20% discount on WCI courses and products using the code podcast 20. Mention of the new student course 'FYFA Fire Your Financial Advisor' with a discounted price.

Introduction to an interview with Michael Kitces, an expert in financial planning. The focus of the interview is on the state of the financial advisory industry rather than financial planning itself.

Explanation of the distinction between financial advisors and salespeople in the industry, highlighting the importance of seeking professional advice and being aware of fiduciary standards.

Insights on the preferences of consumers in the financial services industry, including the shift towards fiduciary advisors and the need for more options for 'validators' who seek financial advice but not asset management.

Discussion on the ongoing professionalization of the financial advisory industry and the gradual transition towards more fiduciary-focused practices and away from traditional sales approaches.

Tips for identifying a genuine financial advisor, including checking for fiduciary status, fee-based compensation, and reputable certifications like the CFP designation.

The importance of understanding the types of clients an advisor works with and feeling comfortable communicating with them is crucial for a successful financial advisor-client relationship.

The emergence of financial therapy in the financial advisor domain and the importance of understanding clients' money beliefs and conflicts for effective financial planning.

Considerations for determining a fair price to pay for financial planning and investment management services based on expertise, complexity, and client needs.

Insights into the hourly equivalent rates for financial advisors, the challenges of pricing models, and the impact of client segmentation on service quality and fees.

Discussion on different models of investment management services, including AUM fees, subscriptions, and hourly rates, and the factors influencing fee structures for advisors.

The value of hiring a financial advisor, including delegation of financial tasks, time-saving benefits, investment management services, and the role of advisors in supporting clients' financial well-being.

Many people hire financial advisers due to various reasons such as blowing up their finances, needing help with emotional roller coasters in investing, seeking specialized expertise, facing complex life transitions like divorce or widowhood, or requiring support during particular life moments.

The financial services industry faces challenges in gender diversity, with only 23% of financial advisers being women. Various factors contribute to this discrepancy, including stereotypes, hiring bias, unstable career environments, and difficulties in balancing family responsibilities. Over time, the industry is slowly shifting towards a more constructive environment for women in financial advisory roles.

The financial industry is gradually moving away from product sales towards advice-oriented services, attracting and rewarding professionals focused on client service and relationships. Businesses are adapting with more stable structures, offering support mechanisms like maternity leave, leading to a more inclusive and diverse industry. The term 'financial adviser' is highlighted to distinguish professionals dedicated to providing professional advice services.

The interviewee emphasizes the need for a shift in the industry towards separating sales and advisory roles. He encourages individuals to seek out reputable advisers who prioritize professional advice services and relationships. Despite the challenges in finding these professionals, efforts are being made to create a more supportive environment for advisers focused on service and relationships.