Matthew Jarvis teaches listeners the importance of using clear-cut English with clients.

During the length of this concise talk, Matthew Jarvis recognizes that there are many different spheres of sophistication that people inhabit. Some people are good with numbers; while others can be terrible at mathematics, but are possibly harboring spatial or verbal brilliance. You may know someone who is very skilled with their hands; while you, on the other hand, couldn’t screw in a lightbulb with a set of instructions. Regardless of the variability of our intelligences, one of the morals of this episode is that the more steeped we are in a discipline, the less accessible we can grow to be in our communication with other people. In short, the more we speak financese or legalese or computerese, the higher the chance that a language barrier will arise.

Listen to a group of web developers defend their propensities for using certain web libraries or frameworks over others, and you might think you are listening to the most bizarre foreign language ever invented. But one wouldn’t expect one of those web developer to talk to a client—who has no specialized computer knowledge—in such a technical manner. And as Jarvis explains to listeners of this episode, he has been present during a few instances where financial experts have left average people in a state of discombobulation. Jarvis relays to us, how he, a financial advisor and expert in the field, would have to act as translator for these poor, confused people. Because nomenclature, jargon, and gibberish are often synonymous, Jarvis gives some very valuable advice on how to quell the urge to speak in highly specialized language, and instead, remember that most people might not understand what is being said—especially because they probably don’t have the background in finance, actuarial science, or accounting.

Now, Matt stresses that this does not mean one should talk down to a client. He acknowledges that he has clients who are rocket scientists, neurosurgeons, doctors, and holders of doctorates, but that does not mean he has an adequate excuse for using financese or legalese to these clients, just because they are really smart people. Different bits of intelligence require different approaches. And for Jarvis, it is always better to be more safe than sorry. And to be extremely safe, Jarvis gives podcast listeners nine rules for speaking clear, untechnical English to clients. It is through this list that some very interesting and surprising things are said. Only a couple will be covered here, but the rest are surely worth checking out in the episode itself.

The first important rule to follow is to “do it in crayon.” This essentially means that you boil down a complicated concept into a one-page illustration. If you cannot adequately elucidate the concept to an average person, in just one page, you need to simplify more. What this does is it forces you to think and truly pinpoint what it is you are trying to conceptually explain to the client, or your boss, or students, etc. If you can’t illustrate a complicated idea or recommendation into an easily digestible morsel, you need to work on it a little more.

A second rule that he touches on during his talk is to “not use industry terms.” To quote him directly, “using industry terms, is as close as you can get to speaking Mandarin to a client. When you say things like standard deviation, time-weighted return, alpha, beta, these are terms that the client has no understanding of.” And this goes hand in hand with fighting the urge to use technical language as a crutch because you can’t figure out how to “do it in crayon.” To further accentuate the importance of doing things in crayon, Matt references illustrator Carl Richards and how masterful he is at taking complex concepts and boiling them down to single-page illustrations. Using Richards as inspiration—even though Matt admits he is nowhere close to being able to draw like Carl—Matt actually provides a drawing of a Roth conversion, which you can access below:

And the last rule that this blog post will highlight is to focus on decisions first, and then worry about the details later. To explain this one, Matt uses the example of someone wanting to buy an SUV to haul a boat on the freeway, safely, with his kids stowed away in the vehicle as well. But instead of trying to convince the person interested in the SUV that it was a terribly dangerous idea for all involved, the car salesman started listing all of the amazing features that he would get with the SUV: the shiny red paint job, the flip-down DVD player, you name it. Long story short, in many situations where someone is dealing with trusts, or retirement plans, the benefits (the features) are usually offered first. But by the time a decision is supposed to be made, the brains of clients are reeling and overworked. And in no shape or form can anyone make an important decision in a state like that.

So, to hear the rest of the rules, and to learn a considerable amount in a short time, have a listen to this episode of the Perfect RIA podcast.

Note: If you want to read along while you listen, below is the transcript modified for your convenience and reading pleasure. We highly recommend you to listen to the audio, which includes emotion and humor that you won’t pick up in the transcript. Transcripts are generated using a combination of speech recognition software and human transcribers and may contain errors. Please compare the provided audio before quoting in print. 



Hello everyone, welcome to another episode of the Perfect RIA podcast. I am your host, Matthew Jarvis and today, just for the duration of this podcast, I want you to go with the assumption or assume that it’s true that your clients or your prospects, do not understand 50 to 90 percent of what you tell them. So, 50 to 90 percent of the words that come out of your mouth, outside of the small talk, to clients are complete gibberish. Or we’ll use a different example, they are Chinese. Why Chinese? Well, a few years ago my wife and I had an opportunity to take our three children, who at the time were ages, let’s see, eleven, seven and five to China. We went there for three weeks, and we went all across China. From the big cities of Beijing and Shanghai to small, small, small villages that had almost never seen Caucasians.

[01:03] And it was really an enlightening experience. A life-changing experience for all of us. Not just because of what we saw, it finally gave us a chance to escape western culture. It was—being from Seattle, it was the longest I had ever gone without seeing a Starbucks. But, part of what made this an adventure was that, neither my wife nor myself spoke more than just a couple of words of Mandarin Chinese. In fact, we literally only knew just a handful of words. We knew how to ask, how much was something. We knew how to say how many people there were in our group. We knew how to say, “That’s too expensive.” So that was it. That’s all we knew. And I won’t try to butcher those phrases now because, it’s been a few years, but those were the only words in Chinese and Mandarin that we knew. And yet, we were going to places where the people there obviously, they spoke Mandarin. They might have spoken 1 or 2 or 10 words of English.

[01:57] And this created some real language barriers, as you can imagine. Mandarin Chinese is nothing like English, there are zero similarities. Not a single similarity between the two languages. To make things worse, Mandarin Chinese is a tonal language meaning that the tone in which you use when you say a word changes the meaning of the word entirely. So, whereas in English, we might have accents or dialects. In Mandarin Chinese the way that you say the word completely changes the meaning. Such that, if you say it with the wrong enunciation, the wrong tone if you will, they have no idea what you’re saying. So, this is a real language barrier between English and Chinese. And where this was most acute was when we were trying to get places. So we took every form of transportation imaginable. And by the way, we had no tour guide with us. None.

[02:45] And so, we would get to a train station, and I would have written down either in Google-translated or on a piece of paper, the city that we were trying to get too. And we would go to the ticket booth, where we were the only Caucasians in the entire train station. All my kids are towhead blondes. So we really stood out. We’re the only Caucasians at the train station. We get to the front, of course, the train—the ticket attendant doesn’t speak any English, nor really should they. And so, we would point on this piece of paper to the city we were trying to get too. And I would say “liu” for six because, there was six of us in our group. So I would say, “Duo shao qian,” which I’m butchering this pronunciation. It’s how much is it? Liu for six people. And, one of two things would happen. Either the attendant would realize that we were crazy Americans or, just not Chinese and they would be very gracious. And they would write down the number or type it on a calculator, show us the number. How much it was.

[03:41] They would point where we needed to go next. They would try to point to us to indicate that we needed to show them our passport or whatever else. They would write down the times. But they would not try to speak any Chinese to us because, it was very obvious that we did not speak any Chinese. And so, that any Chinese that they used would be a total waste. Those people were very beneficial to us, and they were able to help us survive our three weeks that we spent in China. However, those people were rather rare. What we would most often encounter is, we would go to the counter, we would say … we would point to the city that we were trying to get too, and the time that we wanted to get on the train or the bus or the subway or a taxi cab, those were the most interesting. And the person would start speaking a lot of Chinese back to us because, of course, we’re in China and we should speak Chinese, but we don’t.

And they would start rattling off in Chinese and Mandarin, I don’t even really know what they were saying, right? Because I don’t speak any Mandarin. And they were going, going, going, and I would just keep pointing to the city and kind of, have a pleading look on my face and say. “Liu. There’s six of us. Duo shao qian, how much is it?” And, either would eventually get the message and sometimes they would start speaking more Chinese. Sometimes they would bring a friend over to speak even more Chinese. Other times, they would hand us a piece of paper covered in Chinese. Sometimes they would speak louder or faster or more animated. And either they would eventually get frustrated and finally just point at things. Or we would have to walk away and get in another line and hope that we could find someone who was a little more sympathetic to our cause.

We say, “Well, based on the history of the S&P 500 and the standard deviation of this and a 40 factor Monte Carlo simulation and blah, blah, blah. And the tax and the inflation and this and this and this.” Until their heads are ready to explode. And then, we notice that they’re a little confused by this. Or they say. “Well, alright well, can I retire?” Then we launch into even more explanation. We pull out charts, and we pull out graphs, and we run illustrations, and we do 40-page financial plans.

And it’s almost at some point that we beat them over the head enough that they sort of just give up and they just sort of hope against hope that you’re pointing them in the right direction. Because they really have no idea what it is you’ve spent the last hour or heaven forbid, hours explaining to them. So, what I want to help you do in this podcast is—and it is a core tenant of the Perfect RIA is deliver massive value to clients, but it only counts if they understand what in the world you are talking about.

And so, we want to work today on how to quit speaking Chinese. How to quit speaking gibberish to your clients. I want to give you two more specific examples of this that hopefully, you can relate too. The first happened to me a few months ago. I was meeting with a client of mine. This gentleman is a solo professional. Well, he has one employee, and they were considering starting a 401K plan for just the two of them because their CPA had recommended it.

And so, the CPA had scheduled the meeting with this professional, we’ll call him Dave and his office manager, Sue. We’ll call them Dave and Sue. So, it was Dave, and Sue, and myself, and the CPA and the 401K actuary. And this guy comes in speaking full-blown Chinese if you will. He launches into talking about the actuarial adjusted mortality benefit of this and that, and the weighted return, and the determination of the plan. And their questions were really simple, and I could see in their eyes, and in their expression, and in the questions that they asked that they had no idea what this guy was saying.

In fact, if I’ll admit, even with all my experience I was having a hard time following this guy. So, the client Dave and Sue, they would ask, they would say, “Well, what happens when we retire? How do we get our money back?” And the guy says. “Well, you know, when the plan terminates.” Right? He didn’t use their words, he says. “When the plan terminates, the actuaries will calculate the current mortality value of a series of substantially equal payments, and that will determine the lump sum that you each receive.”

Total Chinese. He could have literally spoken that in Mandarin Chinese and at least then—Actually, that would have been better. Because at least then, they wouldn’t feel bad about not understanding. They would have just said. “Boy, this guy is crazy. He’s speaking Mandarin Chinese. I have no idea what he’s saying.” Instead, he was speaking English, but he was using terminology and phrases that they had no hope of understanding. So, I realized this, and I say. “Hey, Mr. and Mrs. Client, here’s what happens. This is a 401K. You’re both going to put money into the plan.” So, they were not married and one of their concerns was, well how does the money get divided back out? “So, you’re going to both put money into the plan.” And the 401K guy says, “Well you know, it’s a 401K, these are profit sharing contributions,” excuse me, I’ve turned the story around. They were doing a defined benefit plan, they were doing a pension plan. They already had a 401K. So, they were doing a pension plan that’s what made it more confusing. That is why I say, “Well, you’ll each put your money in,” and the pension guy says, “Wait, wait, wait, wait, wait. Well, only the company is gonna put money in.” I said, “Yeah, I get that, but you’re doing that allocated based on the two.” He said, “Okay, fine.” “So, you guys are gonna put money in, and when the plan ends, when you guys both retire, when the company is sold, then we’ll divide the money up, roughly based on how you put it in.”

Now, for those of you who have experience with defined benefit plans, is that 100 percent accurate? No, it’s not 100 percent accurate. The pension guy was right, they will have to do an actuarial calculation. But, for the client, for discussion’s sake, is it close enough? Yes, it is. If we put in contributions roughly based on how much they earn, they’re going to get that proportionate amount back. Now, are there a lot of variables they need to understand? Yes, but at this point, they’re just trying to decide if a defined benefit plan makes sense. So, again, comparing this to my example of buying plane tickets, the pension guy is rattling off endlessly in Chinese.

These clients have no idea what he is saying. And he’s oblivious to the fact that they have no idea of what he’s saying, so he launches into more explanation, and pulls out more charts and more graphs, and then the CPA, seeing that they’re not understanding, she decides she’ll launch into her own explanation, that’s equally as confusing. More charts, more graphs, more terminology that no one understands, and at the end of the day, I say, “Listen, listen. I am not the expert here, but let’s just draw this out. And I grab a piece of paper, and I say, “All right. Bob and Sue, here it is. We create this defined benefit plan, this pension plan if you will so that you guys can put more money in.”

I draw little arrows in with money. “You put money in. That money’s invested. When you decide to retire, or when the plan is over because you’ve both retired, it terminates, we have split the plan in half, roughly based on the contributions that have been made for each of you respectively. Does that make sense?” “Oh, man,” and they just had a sigh of relief. “Oh man, Matthew, I’m so glad you’re here.” In fact, they both called me separately later. They said, “I’m so glad you’re here. We had no idea what that guy was talking about. He just kept going on and on. You made it perfectly clear.”

So, I said, “Well Bob and Sue, here’s really the decision that you wanna make,” and we kind of outlined two or three points that were really important to understand about having a pension plan. They were not, you understand, the actuarial value of a series of annuity payments. It was, “Hey, do you want to commit to funding this plan for a couple of years. Do you want to commit to these dollar amounts, do you want to commit to the restrictions, and the risks that are involved there?” But it took me to translate that, and really that is your job as an advisor. One of your key jobs as an advisor is to translate financial information, which again for clients is about as clear as Mandarin Chinese, in trying to translate that into their language. Let me give you another example. I had just last week, which is actually what inspired this podcast. Just last week I was meeting with a client, a somewhat elderly client but very sharp, and her daughter. And we’ll call them, we’ll call the client Sally and the daughter Sue. There’s a lot of S names apparently in my practice. So Sally and Sue were there so that Sally is the client, Sue is her adult daughter that helps her out with finances and the client’s CPA. And the CPA had called this meeting because the CPA was recommending that a marital trust that Sally had been dissolved, because it was rather small in value, and it was kind of a hassle.

And so, she launches into, again in legalese, in Chinese for intents and purposes. She launches into this detailed explanation of the tax law, and the legalities around dissolving this trust, what it will mean, and apparently the trust, in addition to having some investment assets, also had several promissory notes attached to it, as a result of some pretty creative but unnecessary estate planning.

So, I look, and both Sally the client and Sue the daughter is taking notes furiously. They’re just filling pages full of notes based on what’s being told, being said. But then they would ask the most basic of questions, clearly illustrating that they did not understand what was being said, and again like our pension example, to be honest, I wasn’t even totally clear what was being said because there were so many terms being thrown out. The CPA was going so fast, she had, the CPA had this huge stack of documents in front of her. She was rustling through to get information. It was obvious that no one really understood. And I wasn’t actually even clear that the CPA understood.

What’s worse is that the CPA admitted to having not fully thought this through and really couldn’t come up with a clear recommendation. So, she jibbers at us in Chinese for 20 or 30 minutes, and the client says, “Well, you know Ms. CPA, could you just tell me what you think I should do?” And the CPA says, “Yeah, I’m not actually really clear on this myself.” Right, so we’ve suffered through all this Chinese, and no one is even really clear what’s been said, or what the next step is. So again, like the defined benefit or the pension plan example, it fell on me to translate.

So, I pull out a piece of paper. And I draw on the piece of paper. I say, “Hey, here’s this marital trust that you have, because after your husband passed away, and it has $200,000 in it. Now there are some other things going on, these promissory notes. Let’s ignore that for right now because that’s mostly paper. That’s smoke and mirrors. We’ll deal with that. So here’s your choice. Do you want to distribute this $200,000 out to your kids now, and in doing so, you’ll get rid of the cost, and the complexity and the hassle of having this trust, or do you wanna wait till another day?”

And the client, Sally, and her daughter Sue get this huge look of relief on their face. They say, “Oh my goodness, it’s suddenly clear. I really had no idea what’s going on. That’s exactly what I needed to know.” Now they weren’t ready to make a decision yet, but they left clearly understanding that having this trust was a hassle, and if they wanted to dissolve the trust, it meant distributing the proceeds out to the four adult children. That was it. That was all they had to leave with. These pages and pages of notes, this nearly 90 minutes of explanation the CPA had ultimately done, that was all for naught. All we needed to say was, “Hey, here are in plain English, what you need to decide, and here’s how this will work.”

Now, this does not mean we’re gonna skate over important details. If the client, or when the clients says, “Yeah, You know what Matthew? I want to just distribute this money out, I want to be done with the trust,” well then yeah, we need to go through some details. “Hey, all right, there’s some legal issues here with dissolving a trust, there’s some tax issues here. There’s a few other considerations.” But we need to start with the biggest points first, and not dive into the details, which again to the client, are Mandarin Chinese.

So, I wanna give you nine rules for speaking English to your clients. Now unless I guess, you’re native speakers of another language, that’s fine. But for this podcast, we’re gonna assume that you are an English speaking, as is your clients, and when you speak financial language, it is about as useful as speaking Chinese. So I’ll give you nine rules to live by, and we’ll intersperse a few more examples. A pre-rule would be to never speak as fast as I speak. So, when doing podcasts, when doing public speaking, I speak very quickly as you have certainly noticed.  I’m actually an amateur charity auctioneer. I spent about a year doing charity auctions, which doesn’t help the speed of my talking, probably made it worse. If you’re listening to this in a podcast app, most podcast apps have the ability to play at a slower speed, which I would recommend. I would, by the way, never speak this fast with clients. In fact, I have little notes in my office, in my conference room, not that anyone would recognize but me, that remind me to slow down, that reminds me to breathe, that remind me to ask questions.

So, let’s dive into this. Rule number one of communicating with clients and these are in no particular order. Rule number one is to do everything in crayon. Now you don’t literally need to do it in crayon, but this idea of doing it in crayon came from a client of mine who is retired, but during his career, he managed large teams of engineers. Aerospace engineers. He would manage all these engineers and they would come to him with presentations, these elaborate PowerPoint presentations, these detailed manuscripts of recommendations, and he would refuse to look at them. He would say, “Hey, you know what? I manage a whole team of engineers,” this is how he would play it off. “I don’t have time to read this whole thing. Just on one piece of paper, write out for me in handwriting what are your recommendation is, and the pros and cons of that recommendation.

So that was his rule. He became known, despite his own brilliance, he became known as the crayon manager. If you wanted to present anything to this client, this manager, you had to do it in crayon. And what he found was not only did it make his job much more easy, much easier, work on my grammar here. It also forced his engineers to think through the problems more clearly. See, it’s very easy to do a long financial plan. It’s very easy to do pages, and pages, and pages, to give long explanations. It requires a lot of work, and a lot of focus to do it simply.

Now, the absolute master of doing things in crayon, though he doesn’t use crayons, he uses a pen, is Carl Richards, and if you can go to his site,, he has a brilliant, absolutely brilliant collection of sketches illustrating every financial concept available. And these are—you go on the website and look, these are literally back of the napkin sketches that brilliantly illustrate financial concepts. Complex financial concepts. A lot on behavioral management. And so he is literally illustrating these, not in crayon, but just in pencil on the back of a napkin. You can actually buy his sketches. I have no affiliation with Carl, but I admire his work, I admire his writing and his brilliance there.

So, when you’re getting ready to present a concept to a client, whether it’s their financial plan, a tax plan, whether they should do a Roth conversion or not, how much money they can take from their nest egg, take out a piece of paper from your desk, grab a crayon or a pen if a crayon seems a little too childish for you, and figure out how to illustrate this on a single piece of paper. If you cannot illustrate the concept on a single piece of paper, odds are that the client will not understand it. Now you do not need to use this single piece of paper, and you might have a hard time getting it through compliance, but you should be able to illustrate any concept you’re gonna explain to a client on a single piece of paper with a pen. That’s how you should do it, is in crayon.

Let me give you a real quick example of this, and I’ll put it in the show notes a sketched illustration of this. Roth conversions are something that are often difficult for clients to understand, and one of the best ways I’ve ever found of illustrating this, I believe, I apologize if I’m citing this source incorrectly. I believe it came from a presentation that CPA Bob Keebler did for to AICPA. That could be wrong but that’s where I seem to recall it.

Anyway, this example, wherever it came from, shows a farmer having four bags of seed, and the ability for each bag of seed to plant one field. And it uses this illustration to compare a traditional IRA to a Roth IRA. And so, the story goes, Mr. Client, imagine you’re a farmer and you have four bags of seed. And I draw on a piece of paper four bags. I am not good at drawing. This is not where you will see—I’m not a Carl Richards. My presentations, my drawings, will not end up in the New York Times like his do. But I draw four bags of seed, and I say, “Mr. and Mrs. Client, so these four bags of seed, this represents your IRA account. And what you can do, the IRS says, hey, you can keep those bags of seed as long as you want, but when you pull the money out,” or when using our farmer example, “When you plant your four fields, upon harvest, again pulling money from your 401K account, you will have to give us X percentage.” And I always use 25 percent because it’s easy math to follow. Four bags of seed, plant four fields, give one field to the IRS. So you’re gonna pay the devil you don’t know. The other option is we pay the devil we do know. We give the IRS one bag of seed now so that we can plant our fields, and whatever we harvest we get to keep all of it. So, in other words, we’re going to pay the IRS the taxes now, so that down the road we don’t have to pay those taxes again. And again, I’m drawing all this out on a single piece of paper. This I’ve found, is the best way to illustrate a Roth IRA conversion. And so, we can say, “Mr. and Mrs. Client, would you rather pay the devil you know, would you rather pay the IRS now, or pay the devil you don’t know, pay the IRS later?” Either way, you’re gonna pay the IRS. We know how much it will cost now, we don’t know how much it will cost later. And again in the show notes, there’s a picture of this illustration. In fact, I’ll probably do a little video recording of it, because it’s easier to understand if you’ve got the visual.

Rule number two, practice, practice, practice. I guess this should have been the last rule, but I’m making it rule number two. If you’re gonna do an illustration or not an illustration. However you’re gonna present a concept to a client, you should practice this many times. Practice it out loud. Practice it on a recording, listen to the recording. I know that’s painful to do, but do it. If you really wanna be good, practice it in front of someone who has no financial experience. So practice it with your team, practice it with your spouse. Practice it with a teenager. This is really ideal. If you can’t get a 13-year-old to understand this concept, your clients will not understand it either.

Now, this is not intended to be disrespectful to your clients. It’s just, again like me being in China, a child in China can speak Chinese better than I can. And so, this again is not about being disrespectful to clients, it’s about communicating to them in a language they understand. So rule number two is practice. Practice before you see the client. Before the prospect, practice, practice, practice.

Rule number three, no industry terms. No industry terms. This is as close, using industry terms, is as close as you can get to speaking Mandarin to a client. When you say things like standard deviation, time-weighted return, alpha, beta, these are terms that the client has no understanding. Basis points, percentage. They just have no concept. I have this saying that every time you say percentage to a client, you might as well say marshmallow. So, you say, “Hey your accounts went up 10 percent last year,” what you’re saying is, “Your accounts went up 10 marshmallows last year.” There again, some of you might feel like this is a disrespectful attitude towards clients and it’s not. It’s accepting the reality that we speak in the finance world, a different language than clients speak. Numbers and finance run through our blood. It’s our very DNA, it’s what drew us to this industry. For clients, they don’t do that.

Imagine conversely, talking to your doctor, and he jumps into the Latin terms for every medical condition. You’d have no idea what he’s talking about. You cannot use industry terms with clients, and this is something that you’re going to practice is, all right, if I was going to say, Roth conversion, what could I say instead? Roth conversion. Well, they probably don’t know what Roth means, they’re probably not clear on conversion. What could I say instead? Oh, I could say, “Hey, a Roth conversion means paying the devil you know, right? Paying taxes today instead of paying taxes another day.” So we’re not going to use industry terms.

Rule number four. Use their language. Use their language. If they know a couple of words in Chinese, or a couple of words in finances, use those words back to them. This lesson was really driven home to me by one of the smartest financial planners I’ve ever met, Tom Gow, as part of his program was Ken Unger, the Million Dollar Producer, now called the Academy of Preferred Financial Advisors. Really a great program, I highly recommend it. And Tom Gow was a brilliant, and was so brilliant in fact that Malcolm Gladwell profiled Tom Gow in one of his books, which I’ll put in the show notes.

Tom was brilliant at repeating the clients back exactly what it was that they said. And some people, including Malcolm Gladwell, attributed this to Tom being a master persuader, but what it was is that Tom understood how clients think. People are always more comfortable hearing the words that they know. So, if a client says, “I want to make sure I never run out of money in retirement, then that’s the words that you should use. If they say, “Hey, I always want to have money to leave to my kids,” those are the words that you should use. If they say, “Hey, I don’t wanna get ripped off by the IRS,” those are the words that you should use. Always use their words back to them.

If you feel that you need to correct a client’s terminology do it very gently. Use both terms. So let’s say that they’re calling their, there’s a common area, to their joint account. Their jointly titled account, their brokerage account. And you and I know that those terms are not exactly synonymous, they’re not exactly interchangeable. So, what I would do is I’d say, “Well then in your brokerage account,” using their words, “Or your joint account, we kind of call that a joint account because you’re both on it.” In your brokerage or joint account, this, that, or the other.

If they’re calling their IRA accounts a 401K, because 401k’s a term they know, then I would say, “Hey, your 401K or your retirement accounts, or in this case your IRA,” I’d always make that connection. So for several meetings, I would say, “Yeah, you know here this account that you call your 401K, it’s technically an IRA. I’ll call it a retirement account, is that okay?” And then we would explain through it. Clients are not coming in to have their vocabulary checked by you. They’re coming in to understand their situation. So rule number four, use their language.

Rule number five. A single, you get a one page, tongue twister there. You get one piece of paper. One piece of paper. I’m well known as an advocate of the one-page financial plan, and you may not be comfortable or able to from a compliance standpoint, put your financial plans onto just one page, but you can do a one-page executive summary of any concept. There is no concept in the world that cannot be put onto a single sheet of paper. Can you cover every detail on a single sheet of paper? No. No. Can you handle all the disclaimers on one sheet of paper? No. You can’t, but you can illustrate the key points of the concept on a single piece of paper.

So, when you go to meet with a client, a prospect, if you have more than one piece of paper, you’ve done something wrong, right? And again, no matter how clear your language is, no matter how much plain English you’re using, you’re still taxing the client’s mental capacity to understand these things. You have to do it. You have to limit that. You have to limit that to an hour, and you have to limit it to one page. Now, once they understand the first page, you’re welcome to dive into as many details as you want. You’re welcome to dive into all 80 pages of your Monte Carlo illustration. Knock yourself out with that. I don’t think they’re gonna want it, but I’ll let you decide that. Do it in one page or don’t do it at all.

Rule number six. Benefits versus features. This is really an entire podcast of its own. In fact, there’s on the TPR, the Total Perfect RIA website. There’s a series of videos on this. Everyone in the world, not just financial advisors, they get caught up in features and they ignore the benefits. Let me give you one really quick example of this. A few years ago, I went to buy a new SUV. And I went to the dealership, and I said, “Hey, I need a SUV that can pull my boat at 70 miles an hour over the pass,” and I had found out how much my boat weighed. “I need to pull my boat at 70 miles per hour over the pass with the air conditioning on, without even breaking a sweat. And I need it to be comfortable for my kids to ride in.” Now, what the dealership should have said is, “My goodness. Why are you driving 70 or 80 miles an hour, pulling a boat with your kids in the car?” That’s what they should have said. But what they said instead was, “Oh, well you know come look at this red SUV.” Well I don’t really care if it’s red. I wanna know, will it pull my boat, and will it be comfortable for my kids. “Well, come look at option package seven, or the elite premium option package.” Yeah, that’s really interesting. Will it tow my boat, will my kids be comfortable in it? ” Well you know, this one has flip down DVD players and air-ride suspension.” Again, will it tow my boat, will my kids be comfortable? They were throwing options at me, features at me, and they were making me connect to the benefit of that.

You’re doing the same thing, and we as advisors are notorious for doing that, and I’ll use the Roth conversion example. “Hey, you should make a Roth conversion.” “Well, why?” “Well it has this feature and it has this feature.” “Well, I don’t really understand how this works for me.” The benefit would be, say, “Hey, you should convert money from a Roth, from a traditional IRA to a Roth IRA, so that down the road, you won’t get nailed in taxes. “Oh, okay I get that. Don’t get nailed in taxes.” That’s a benefit that’s very clear. Tax rate arbitrage, not a concept that’s clear to them. So number six, focus on benefits, ignore the features.

Number seven. Focus on the decisions first, then worry about the details. In my example of dissolving the trust, or the defined benefit plan, we needed to focus first and foremost on the decision that had to be made. Are you willing to contribute X amount a year to the pension plan? Are you willing to dissolve this trust and distribute the proceeds to the kids? If the answer is no, then none of the rest of the details matter. Right? So we start with the decision that’s the biggest decision first. If the client had said, “Matt, you know my kids are a bunch of misfits, I don’t wanna distribute the money to them right now.” Great, the whole rest of the discussion can go away. But if we start on the details first, which is what the CPA did, by the time we get to the decision, the client’s brain is so fried that they have no idea what is going on. So start with the biggest decisions first. Once they’ve made those, you can work into the little decisions. This is not, by the way, the goal of painting over the little things. It’s not about painting over the details. It’s not about ignoring important things. It’s not about abandoning your fiduciary duty. It’s just prioritizing the decision making. Prioritizing the details.

Rule number eight. Assume that your client, no matter how smart they are, no matter how professional, no matter what profession they are in, no matter how many advanced degrees they have, assume that they know nothing about finances. Now, this again could strike you as being demeaning towards a client, being disrespectful to clients, but that’s not the case at all, right? I mean I have clients of all sorts of education levels. Rocket scientists, cardiologist, cardiac surgeons, brain surgeons. I mean I have clients of incredible technological expertise. I have clients that have been incredibly financially successful, entrepreneurs, but once we pull back the layers and a lot of them, this is where we get thrown off the scent.

A lot of them know a good handful of financial terms, and so we kind of assume, just like the people in China did, they would hear me say two or three phrases in Chinese and they would assume that I spoke fluent Chinese. That’s not the case at all. I just tricked them by knowing a couple of key phrases. Clients, especially your smarter clients, your more successful clients will often trick you into thinking they understand what you’re saying, by being able to recite a couple of key phrases. Reply with a couple of key phrases. Assume that your clients know nothing about finances. Start at the most basic level every time. Do not abandon the one-page financial plan, do not abandon the doing it in crayon, just because they have a finance background, just because they’re an engineer, and accountant, whatever the case may be. Assume that they know nothing about finances and explain it to them at that level. Why is this so important? If you skip ahead levels, you will lose them, and they won’t tell you because they feel like they should be smart enough to know these things. So where some people might be generous enough to say, “Boy, Mr. Client, excuse me, Mr. Advisor, I didn’t really understand what you’re saying,” these sort of smarter, these better-trained people, they are too prideful to admit that, and so they will either not work with you or they’ll make the wrong decisions, because they have no idea what is going on. So assume that they don’t know anything about finances. Always err on the side of simplicity, and you will be well rewarded for that.

Rule number nine, the last rule for today and then we’ll wrap up this podcast episode. In every communication, you need to demonstrate your value. There’s this saying, what I never really understood. The saying, it says, “If a tree falls in the woods and no one’s there to hear it, does it still make a sound?” And again, I was always told that as a kid, I really don’t understand it. Maybe you can put it in the comments if you get that one. But I’ve adapted that saying to if you provide value to a client and then don’t see it, it doesn’t count. So, if you review the tax return for a client and they don’t know what you’ve done with it, and they don’t know why that’s important, it doesn’t count.

So, in every communication, you have to demonstrate to them how it is that you’re providing value. Why this is valuable to them, why it’s valuable for them to use you. I’m never bashful to say, “Hey, you know this is why you have me. Part of my job is to translate this for you. Part of my job is to make sure you can understand these things.” Sometimes I’ll say, “Hey, I speak finances, I speak legalese, and my job is to translate this into plain English for you.

So those are your nine rules. Rule number one, do it in crayon. Number two, practice. Number three, no industry terms. Rule number four, use their language. Rule number five, do it in a single page. Rule number six, focus on benefits, not on features. Rule number seven, focus on the biggest decisions first, and then the details. Rule number eight, assume that they know nothing about finances. And rule number nine, demonstrate your value in every discussion.

So, here’s your assignments from this podcast. Assignment number one, go to, Carl Richards site that I mentioned earlier and look at every single illustration he has posted on there. Any of them that really stand out to you, just pay the 100 bucks and buy it, and use it in your presentations, especially if you’re not artistically inclined. Just use his illustrations. Buy them, right? License them. Use his illustrations. Otherwise, practice on yourself, come up with your own illustrations, or talk to the most successful advisors you know and say, “Boy, how do you illustrate this concept to a client? How do you talk to a client about a Roth conversion? How do you talk to a client about a defined benefit plan, or their estate planning or life insurance? Show me how you illustrate that.” And I would early on, I would make copies of that.

I would have an advisor sketch that out for me, and I would take a copy of it, and I would keep it in my drawer, and/or on my computer now. And when a client was gonna come in to discuss that situation, I would pull that illustration out, and I would practice drawing it. And that might sound silly, but I’m telling you this is the path to success. So visit, start practicing your illustrations, and talk to other advisors. And figure out how they do it. You don’t need to invent the wheel. It’s always easier to borrow than to create.

So, thanks a lot for your time today. Remember, do not speak Chinese to your clients, speak plain English. I’m Matthew Jarvis, and I’ll see you again next time.

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