Kitces: 6 steps to overcome imposter syndrome

The so-called imposter syndrome affects professionals across industries and at every stage of their careers. Generally, it describes the cognitive bias to doubt one’s own abilities and accomplishments, to the point that one can feel like a fraud — even if the reality couldn’t be farther from that.

There's a lesser-known challenge that many professionals run into once they have some education and experience under their belts: The realization that there’s still a vast ocean of knowledge and expertise between where they are now and where they need to be. This awareness can slash their confidence even as their actual skill is objectively increasing.

Known to psychologists as the Dunning-Kruger Effect, this bias manifests in distinct ways for advisors — particularly for those with just a few years of experience on the job. Here, we look at specific steps advisors can take to ameliorate feelings of inadequacy and to gain — or regain — the confidence required to effectively serve their clients.

I started out in the industry straight out of college, but I wasn’t a planning major. I was a psychology major, theater minor, pre-med student who only figured out late in his college experience that he did not want to do psychology, theater or medicine after graduation.

I was a diligent student, however, so I learned my employer’s products and eventually felt pretty confident that if any client asked, I could answer any given question about them.

Even so, clients often had questions that went beyond my knowledge base. I didn’t actually know anything about being an advisor, having only taken one economics class in my entire college career, and a couple of weeks of product training after my hire. Dispensing advice about people’s finances, in some cases about their entire life savings, made me feel like an imposter. Who was I — a 23-year-old with no education and five months on the job — to tell people who had 10, 20 or 30 years more life experience than I what to do?

That’s what led me to get my CFP certification. And yet, when I took my CFP classes and learned the curriculum, my fears only deepened. It freaked me out.

This is effectively the essence of Dunning-Kruger. When we first learn something, we feel pretty good. But as we keep learning and getting more experience, our confidence level actually starts to drop. The more we learn, the more we realize how much we’ve yet to learn.

That means that at the moment you’re getting CFP certification and a solid baseline level of expertise, your confidence is in the gutter. You certainly know more than you did before, but your confidence is not where you need it to be to best serve a client.

I’ve come to recognize a six-point approach to managing — if not outright silencing — the effects associated with Dunning-Kruger. These remedies cut across industries, but they’re particularly applicable to advisors.

1. Recognize what you know
While there are only 80,000 CFP certificants out there, there are 325 million Americans. Do the math: You’re literally one of 4,000 — or about 0.025% of the general population — who really know this stuff.

Consequently, don’t underestimate how much value you can add just by talking about what you know. You don’t have to push beyond your knowledge set, just help clients with what you already have mastered, and move forward from there.

2. Double-check your work and/or ask for help
Real experts know both what they know and what they don’t — and when they need someone to fill in the gaps. You don’t think less of your doctor because he refers you to a specialist when you have a specialized problem. Instead, you value him more for helping you find the right course of treatment.

The same rings true for us. You can always say in a meeting when a client asks a difficult question, “You know what? That’s a really complex issue. Let me research that and I’ll get back to you next week with an answer, because I want to be certain.”

It doesn’t matter whether you need to go online to the FPA or NAPFA forums and ask your peers; contact members in your study group; reach out to a trusted planning colleague; ask a fellow advisor in your office; or ask a senior advisor you work under — there’s no shame in asking for help on complex issues. That’s what diligent professionals do.

3. Keep your advice flexible
Some decisions, such as when to retire, are bigger than others, but very few are truly irrevocable. Your clients may be retiring, but perhaps they can go back to work part-time if they need to, or they can manage their spending down for a few years if they hit a speed bump. Maybe they can downsize their home or get a reverse-mortgage line of credit as a reserve. There are lots of strategies that advisors can implement.

This is mostly about managing client expectations. If you say, “I recommend that you retire now because we’ve done our analysis and you will never have to work again or have any other need or care in the world because you have more than enough money to last you forever,” that sounds pretty irrevocable. You better be right.

Then again you could say something like this, and potentially save yourself and your client a lot of grief: “Our analysis indicates that you have enough to retire. And while we can’t guarantee anything in this world, even if a problematic sequence of returns appears, we have a lot of ways to manage this risk, including modest spending cuts just to get you back on track or possibly that part-time consulting work you discussed taking up, or maybe downsizing your home. You already mentioned buying a condo close to your grandchildren, and we could free up a little bit of capital with that.”

Bottom line, you’re here to give your best advice. You’re not giving life guarantees. And as long as you keep your advice flexible and manage expectations, you and your clients can adjust if necessary.

4. Invest further in your education
From a technical perspective, Dunning-Kruger is best combatted by pushing through that experience and education curve. Keep learning. Keep reinvesting in your knowledge and education. Though the Dunning-Kruger Effect shows a decline in our confidence as we learn more, there’s eventually an increase in our confidence as we approach mastery.

That’s partly why I increasingly view CFP certification not as an endpoint but as a starting point. Once you have it, you can pursue designations or specializations that take your expertise even further.

That might take the form of a master’s degree in planning or a specialized retirement certification like RICP (Retirement Income Certified Professional), RMA (Retirement Management Analyst) or deeper investment expertise with CIMA (Certified Investment Management Analyst) certification. It might take the form of more insurance knowledge with the CLU (Chartered Life Underwriter) designation, or a more niche specialization like the CDFA (Certified Divorce Financial Analyst) designation.

This is why I personally have such an alphabet soup of degrees and designations after my name. I just stayed enrolled after my CFP certification, taking one course per term. I may have been working full-time building my career as an advisor, but staying continuously enrolled for an extended period of time added up to a lot of education. Continuing your formal learning can help build a ton of confidence.

Just as we tell clients, “The key to long-term financial success is not playing the lottery and winning, it’s saving every month and letting things compound,” the key to long-term expertise and confidence is to learn a little bit every month and let it compound. The deeper your knowledge goes, the more confidence you’ll build.

5. Narrow the scope of required expertise
One of the easiest ways to gain confidence with the knowledge you possess is to find your niche. The more specialized you get, the less you need to know about everything, and the easier it is to become a bona fide expert.

Meg Bartelt has a niche in serving women in technology firms. Because she could skip directly to the few points that were relevant for her clients, she was able to get up to speed on the tax law changes of last December very quickly. She then learned those sections inside and out.

I think that’s one of the undiscussed benefits of having niches and specializations. While by definition it means you have to go deeper in that area than anybody else, it actually makes becoming an expert easier when you limit the domain of what you need to know in the first place.

As a starting point, you can adopt a mini-specialization even in your own firm. Become the go-to expert on RMD rules for your clients or a particular investment product or strategy. My mini-specialization in the early 2000s, during the first three years of my career, was the new generation of variable annuities with living benefit riders. It gave me a lot of expertise. It netted me a lot of experience. And it eventually led me to publish my first book.

So if you’re feeling overwhelmed, focus on something you really can master — and be awesome at it.

6. Succeed with ‘simple’ clients
Particularly for up-and-coming advisors struggling with their confidence, it can help to try finding opportunities for what might be called small wins. You don’t have to devise for your first clients the most comprehensive, complex planning solutions possible. Try to work with clients who have more straightforward problems — the kind you‘re confident you can solve. As you gain expertise and do some good work, you can move on to clients who require more complex advice.

Call it paying dues if you must, but it really is an important step in the process of building confidence, knowledge and expertise. And that foundation will pay dividends — to yourself and to your clients — for decades to come.