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Tuesday, 29 January 2013 14:45
Interview: Life planning founder George Kinder
Now the RDR has arrived, many Financial Planners may be thinking about value-added services for their clients. George Kinder of The Kinder Institute explains what his Life Planning approach offers.
Financial Planner: Welcome back to London, how has the UK changed since your last visit and how much time do you spend in the UK each year?
George Kinder: I'm here so often I hardly know what to say. I've been spending between three to six months a year here for the past several years. My family loves it over here and it's a place of rapid growth for Life Planning.
FP: How do the UK's financial advice system and regulatory rulings compare to America?
GK: America's entrepreneurial culture and low degree of regulation has enabled a strong sub- culture of fee-only advice, including for middle income clients, to thrive for the past 30 years. On the other hand, RDR is about to bring the UK product sellers into a fee-transparent world almost overnight, something yet to happen in America. Both cultures are still dominated by large corporations that know nothing about genuine advice, financial or life planning.
FP: What is your opinion of the RDR, is it a good idea?
GK: I think the RDR is a terrific idea. It been 30- 40 years in the coming and is changing corporate culture and sales culture more rapidly towards an advice model than anything I can cite in America.
FP: For those who are unaware, what is Life Planning and how does it differ from Financial Planning?
GK: Life Planning is the front-end of Financial Planning. You can't do Financial Planning without doing Life Planning. Planners who do very little Life Planning aren't doing good Financial Planning. They do their clients a disservice and create inefficient plans because they don't know the client well enough to nail their objectives and provide the financial architecture to what the client really cares about.
Life Planning requires great listening skills and thus greatly enhances the trusting nature of the professional relationship. This enables clients to talk about what they want most to accomplish in their lives. Life Planning also requires inspirational skill sets including a positive attitude, optimism, appreciation and creativity.
There is a moment in a great Life Plan we call 'Lighting the Torch'. In that moment the client comes alive with excitement that what they've always wanted is about to happen and they will have the financial architecture in place to secure it. From that moment forward the client is the one making things happen, making their life happen.
Because of the richness of the experience of Life Planning, both clients and advisers value the process much more than the mere numbers- oriented financial process. This valuation is felt in greater enjoyment and meaning for all parties, but also rewards the adviser financially with benefits such as greater AUM, closings in the first meeting, much higher closing ratios, referrals after first meetings, greater sale value of businesses and a business process that is trainable, transferable and scalable.
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FP: What are the positives and negatives to using Life Planning techniques?
GK: I like to think that it's all positive. It's great for the client because for the first time they get to talk with an adviser about what they really want, what they really care about and then for the first time (often in decades of wanting) the client gets what they really want. So it's amazing for them.
They also get to interact with an adviser who genuinely knows them and cares about what they care about most. It's great for couples, because they see the win-win nature of great Life Plans and of money often for the first time. It's great for the adviser for all the economic benefits they receive, but also because it makes their business immensely enjoyable as well as profitable.
FP: Do you expect to see more people keen to learn about Life Planning post- RDR?
GK: We already are, the fastest rate of growth in take-up of Life Planning has been in the UK. We have 350 Life Planners in the UK and expect this to double in 2013.
The RDR has been felt as a great imposition by many advisers, forcing them to spend enormous time and money according on regulatory requirements rather than how the adviser might otherwise have spent their time and money. Post- RDR those resources of time and money are once again the advisers'. Many would have been Life Planners already but it wasn't in the course work required for designations.
RDR really sets advisers up to do Life Planning. At first advisers think RDR is all about fees and how they charge their clients. When they figure that out both as a process and as a conversation with their clients, they wake up at some point and realise that the whole game, the whole industry has changed. The power structure is shifting away from the great product companies and sales teams to advisers and clients and towards companies that truly believe in their clients and advisers who want to do best by their clients.
The conversation they want to learn is not about fees and charging but is about the client and listening and delivering to the client the financial experience of a lifetime, which is what happens when you put the client's most desired life front and centre and design the money piece to deliver that life into all the brilliance they can imagine. Financial Life Planning is that conversation, that experience and that delivery.
FP: You have spoken about how people don't trust advisers, have you heard about the Question of Trust campaign which is supported by the IFP?
GK: I've heard about it on several fronts and am eager to learn more about it. I've thought a lot about it. It's not so simple as advice versus sales, the financial culture has become so jaded and people are so cynical nowadays. It also involves Libor and insider trading and politics and money and a financial press and regulator more connected to product companies than to us.
I believe there are seven sacred things that need to be addressed and cared for that as a culture (and an industry) we have let down. They are the sanctity of markets, the sanctity of products, the sanctity of advice, the sanctity of entrepreneurial endeavour, the sanctity of free press, the sanctity of democratic government and the sanctity of leadership.
Leadership is key. Having a number of great and recognisable leaders in financial services and government that model integrity and deliver freedom and settle for nothing less in their companies would change the industry forever. They would transform public cynicism as long as the freedom they look to deliver is for the consumer not for themselves and as long as they understand that trusted advisers, not product companies, are at the centre of financial services. All of this is covered in my new book, Life Planning: A Banking Manifesto.
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FP: When we last interviewed you, you were about to host the first global Life Planning conferences. How was this received?
GK: They've been great so far! We've had a wonderful numbers of advisers from all over the world who practice or are eager to learn about Life Planning and the two-days are full of speakers and workshops for delegates. The conference has a strong European focus as we are seeing much growth in the European area, which is why the first two conferences were held in London. This year's event will be in Birmingham on 7-8 March.
FP: Your latest book is entitled 'Life Planning: A Banking Manifesto'. What is the book about and how can it help Financial Planners?
GK: Financial Planners will find the book to be an ideal gift to clients and friends, promoting Financial Planning and how to find a reliable financial adviser, as well as Life Planning and explaining how Financial Life Planning is dramatically different from what consumers usually think of as the sales and corruption of "financial services".
There are three segments to the book. The first is an inspiring section of client stories describing Life Planning, it's exercises and its value for the consumer. The second segment is on finding a financial adviser you can trust, where Financial Planning is described. The third is the Banking Manifesto and how the banking crisis came about as a consequence of consumer-driven, integrity- based financial advice not being at the centre of the financial industry and how a new industry is being created that "Models Integrity and Delivers Freedom."
FP: What do you see as the future for Life Planning globally over the next few years?
GK: We see Life Planning growing dramatically globally as advisers and companies come to terms with the new world of finance that places advice and the consumer above sales and products. And as consumers learn the difference between Financial Life Planning and the advice they received before they will ask for nothing less.
FP: What's the next development for the Kinder Institute?
GK: At The Kinder Institute, we have three new things that we are currently working on:
My new book, Life Planning: A Banking Manifesto should help brand Life Planning in the consumer's eye and create consumer demand for Life Planning.
LifePlanning4You, our new social media site, going live in January, will guide the consumer through their own Life Planning process, and will create demand for advisers who practice Life Planning. Our connected Life Planning Adviser Software will make it much easier for advisers to practice Life Planning, by having everything available on the web for their client engagements, and for back office requirements.
Watch for large companies buying into Life Planning across the continents.
FP: What do you enjoy doing in your spare time away from Life Planning?
GK: I am lucky to spend time in remote Hawaii and London, two places I greatly enjoy. I love time with my family and my eight-year-old twin daughters. I'm actively composing a cycle of dramatic multimedia artworks which are designed for the stage and for the iPad.
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Financial Planner: Welcome back to London, how has the UK changed since your last visit and how much time do you spend in the UK each year?
George Kinder: I'm here so often I hardly know what to say. I've been spending between three to six months a year here for the past several years. My family loves it over here and it's a place of rapid growth for Life Planning.
FP: How do the UK's financial advice system and regulatory rulings compare to America?
GK: America's entrepreneurial culture and low degree of regulation has enabled a strong sub- culture of fee-only advice, including for middle income clients, to thrive for the past 30 years. On the other hand, RDR is about to bring the UK product sellers into a fee-transparent world almost overnight, something yet to happen in America. Both cultures are still dominated by large corporations that know nothing about genuine advice, financial or life planning.
FP: What is your opinion of the RDR, is it a good idea?
GK: I think the RDR is a terrific idea. It been 30- 40 years in the coming and is changing corporate culture and sales culture more rapidly towards an advice model than anything I can cite in America.
FP: For those who are unaware, what is Life Planning and how does it differ from Financial Planning?
GK: Life Planning is the front-end of Financial Planning. You can't do Financial Planning without doing Life Planning. Planners who do very little Life Planning aren't doing good Financial Planning. They do their clients a disservice and create inefficient plans because they don't know the client well enough to nail their objectives and provide the financial architecture to what the client really cares about.
Life Planning requires great listening skills and thus greatly enhances the trusting nature of the professional relationship. This enables clients to talk about what they want most to accomplish in their lives. Life Planning also requires inspirational skill sets including a positive attitude, optimism, appreciation and creativity.
There is a moment in a great Life Plan we call 'Lighting the Torch'. In that moment the client comes alive with excitement that what they've always wanted is about to happen and they will have the financial architecture in place to secure it. From that moment forward the client is the one making things happen, making their life happen.
Because of the richness of the experience of Life Planning, both clients and advisers value the process much more than the mere numbers- oriented financial process. This valuation is felt in greater enjoyment and meaning for all parties, but also rewards the adviser financially with benefits such as greater AUM, closings in the first meeting, much higher closing ratios, referrals after first meetings, greater sale value of businesses and a business process that is trainable, transferable and scalable.
{desktop}{/desktop}{mobile}{/mobile}
FP: What are the positives and negatives to using Life Planning techniques?
GK: I like to think that it's all positive. It's great for the client because for the first time they get to talk with an adviser about what they really want, what they really care about and then for the first time (often in decades of wanting) the client gets what they really want. So it's amazing for them.
They also get to interact with an adviser who genuinely knows them and cares about what they care about most. It's great for couples, because they see the win-win nature of great Life Plans and of money often for the first time. It's great for the adviser for all the economic benefits they receive, but also because it makes their business immensely enjoyable as well as profitable.
FP: Do you expect to see more people keen to learn about Life Planning post- RDR?
GK: We already are, the fastest rate of growth in take-up of Life Planning has been in the UK. We have 350 Life Planners in the UK and expect this to double in 2013.
The RDR has been felt as a great imposition by many advisers, forcing them to spend enormous time and money according on regulatory requirements rather than how the adviser might otherwise have spent their time and money. Post- RDR those resources of time and money are once again the advisers'. Many would have been Life Planners already but it wasn't in the course work required for designations.
RDR really sets advisers up to do Life Planning. At first advisers think RDR is all about fees and how they charge their clients. When they figure that out both as a process and as a conversation with their clients, they wake up at some point and realise that the whole game, the whole industry has changed. The power structure is shifting away from the great product companies and sales teams to advisers and clients and towards companies that truly believe in their clients and advisers who want to do best by their clients.
The conversation they want to learn is not about fees and charging but is about the client and listening and delivering to the client the financial experience of a lifetime, which is what happens when you put the client's most desired life front and centre and design the money piece to deliver that life into all the brilliance they can imagine. Financial Life Planning is that conversation, that experience and that delivery.
FP: You have spoken about how people don't trust advisers, have you heard about the Question of Trust campaign which is supported by the IFP?
GK: I've heard about it on several fronts and am eager to learn more about it. I've thought a lot about it. It's not so simple as advice versus sales, the financial culture has become so jaded and people are so cynical nowadays. It also involves Libor and insider trading and politics and money and a financial press and regulator more connected to product companies than to us.
I believe there are seven sacred things that need to be addressed and cared for that as a culture (and an industry) we have let down. They are the sanctity of markets, the sanctity of products, the sanctity of advice, the sanctity of entrepreneurial endeavour, the sanctity of free press, the sanctity of democratic government and the sanctity of leadership.
Leadership is key. Having a number of great and recognisable leaders in financial services and government that model integrity and deliver freedom and settle for nothing less in their companies would change the industry forever. They would transform public cynicism as long as the freedom they look to deliver is for the consumer not for themselves and as long as they understand that trusted advisers, not product companies, are at the centre of financial services. All of this is covered in my new book, Life Planning: A Banking Manifesto.
{desktop}{/desktop}{mobile}{/mobile}
FP: When we last interviewed you, you were about to host the first global Life Planning conferences. How was this received?
GK: They've been great so far! We've had a wonderful numbers of advisers from all over the world who practice or are eager to learn about Life Planning and the two-days are full of speakers and workshops for delegates. The conference has a strong European focus as we are seeing much growth in the European area, which is why the first two conferences were held in London. This year's event will be in Birmingham on 7-8 March.
FP: Your latest book is entitled 'Life Planning: A Banking Manifesto'. What is the book about and how can it help Financial Planners?
GK: Financial Planners will find the book to be an ideal gift to clients and friends, promoting Financial Planning and how to find a reliable financial adviser, as well as Life Planning and explaining how Financial Life Planning is dramatically different from what consumers usually think of as the sales and corruption of "financial services".
There are three segments to the book. The first is an inspiring section of client stories describing Life Planning, it's exercises and its value for the consumer. The second segment is on finding a financial adviser you can trust, where Financial Planning is described. The third is the Banking Manifesto and how the banking crisis came about as a consequence of consumer-driven, integrity- based financial advice not being at the centre of the financial industry and how a new industry is being created that "Models Integrity and Delivers Freedom."
FP: What do you see as the future for Life Planning globally over the next few years?
GK: We see Life Planning growing dramatically globally as advisers and companies come to terms with the new world of finance that places advice and the consumer above sales and products. And as consumers learn the difference between Financial Life Planning and the advice they received before they will ask for nothing less.
FP: What's the next development for the Kinder Institute?
GK: At The Kinder Institute, we have three new things that we are currently working on:
My new book, Life Planning: A Banking Manifesto should help brand Life Planning in the consumer's eye and create consumer demand for Life Planning.
LifePlanning4You, our new social media site, going live in January, will guide the consumer through their own Life Planning process, and will create demand for advisers who practice Life Planning. Our connected Life Planning Adviser Software will make it much easier for advisers to practice Life Planning, by having everything available on the web for their client engagements, and for back office requirements.
Watch for large companies buying into Life Planning across the continents.
FP: What do you enjoy doing in your spare time away from Life Planning?
GK: I am lucky to spend time in remote Hawaii and London, two places I greatly enjoy. I love time with my family and my eight-year-old twin daughters. I'm actively composing a cycle of dramatic multimedia artworks which are designed for the stage and for the iPad.
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