Carl Richards, a certified financial planner, is best known for his decade-long New York Times “Sketch Guy” column, illustrated with his astute, doodle-like drawings that illuminate complex financial concepts.
What perhaps isn’t as widely known is his work to help financial advisors.
One of Richards’ newest enterprises does just that: The Society of Advice, which he defines as “a secret society of real financial advisors.”
“We spend a lot of time on how to give advice in the face of irreducible uncertainty,” he tells ThinkAdvisor in an interview.
Richards, 49, says the key to avoiding behavioral mistakes is being aware of goals and why one’s investment portfolio is structured as it is.
Specifically, he recommends to FAs: “Diagnose before you prescribe.”
As defined by Richards, it is the “behavior gap” that lets investors’ emotions get in the way of making smart decisions.
In the interview, he discusses The Society of Advice, about a year and a half old and which now has 325 members. After benefiting from a program detailing what makes a “real financial advisor,” members are invited to a monthly Zoom call, which Richards has dubbed “the Worldwide Chapter Meeting of the Society of Advice.”
His popular Behavior Gap blog has morphed into The Weekly Letter. He does Behavior Gap Radio, a brief private podcast, six days a week. Each episode pivots on a single topic.
He started out as an advisor with Fidelity, then moved to Prudential and on to Merrill Lynch. In 2012, he sold his own shop, Prasada Capital Management, to Buckingham Asset Management.
From 2012 to 2016, he was BAM Advisor Services’ director of investor education.
But it was his weekly New York Times essays and quirky educational sketches, from 2010 to 2020, that kick-started his now-famed franchise. He no longer gives advice directly to clients, though he maintains his CFP designation.
Spun off from his blog, Richards’ first book was “The Behavior Gap: Simple Ways to Stop Doing Dumb Things With Money” (2012).
His new book project is a coffee-table tome, due this fall, for advisors to give to clients. Only 100 copies at a time will be available for sale to each advisor — 10,000 copies will be published — owners acquire rights to use his 52 essays and 52 sketches in the book for their own presentations and marketing.
Richards, who began making Sharpie sketches to help his clients understand investing, has had exhibitions of such drawings in art galleries in the U.S., England, South Africa and other countries.
ThinkAdvisor recently held a phone interview with the CFP, who was speaking from his base in Park City, Utah.
The conversation touched on one of the “dumb things” he says investors do: buying stocks touted by “financial pornography” magazines.
He explains that term, then argues: “Financial pornography is what people think of when they think of our industry.”
Here are highlights of the interview:
THINKADVISOR: Is The Society of Advice financial advisor training?
CARL RICHARDS: It’s like, anti-training. We think of it as the secret society of real financial advisors.
You enter through a program called The Fellowship, a 21-part manifesto of what a real financial advisor is.
You get invited to a monthly Zoom call named the Worldwide Chapter Meeting of The Society of Advice. We love names here!
The call is with an author or other expert on a specific topic, and I interview them on how their work applies to the job of a financial advisor.
For the last several years, you’ve been talking with FAs around the world. What do they and the society’s members need help with most?
One area is a deep sense that nobody knows exactly where they belong. The wirehouse folks don’t know if they belong with the independents, and the independents don’t know if they belong there.
There’s a [need] for general resilience. It’s a tough job. The job that you sign up for is to help people make incredibly important decisions with incomplete information. It’s hard dealing with the unknown. You don’t know how it’s going to turn out.