A plan for rekindling trust? George Kinder takes his life planning message to consumers. The Mindful Money interview

2nd June 2014

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George Kinder has been an advocate for a fundamental change in the relationship between financial firms and their customers and clients for many years. He says the financial crisis has exacerbated the flaws in the existing model even more and led to a fundamental break down in trust. Yet he also believes he has a solution.

Under the banner of life planning, he has focused on convincing financial advisers to change by really getting to know their clients, detaching themselves from any product sale and restrictive tie ups with fund firms and pension companies, while ensuring they are highly qualified technically but also schooled in life planning techniques.

Now Kinder is aiming to reach out to consumers with the life planning message, having written a new book and associated website, Life Planning for You, with the typically ambitious tag line ‘How to design and deliver the life of your dreams’. With the book, he hopes to convince more consumers, investors and savers to seek out advisers they can trust.

But he is also aiming to spread life planning across all income groups. Another project aims to create a life planning firm offering a free hour-long life planning meeting to just about everyone and indeed a meeting every year if required. He also has thoughts on how life planning can reform the troublesome banks.  John Lappin interviews him below.

Mindful Money:  What has been going wrong in the relationship between financial services and clients and customers to date?

George Kinder: “The core flaw in financial services could be framed in one word – trust – or maybe two – trust and relationships. Delivery in financial services should be different from what we normally think of as advice. It has to be strongly related to the client’s life.

“The central flaw is trust. When I go into offices in the City of London, the people there ultimately come back to a focus on a product, even if they speak of how important the client relationship, client satisfaction and client service is, but they don’t see the profits in it.

“The primary flaw is trust, where you manufacture a product and take the margin you need and give your investors a profit. I am a fan of Adam Smith, but this model has failed in financial services, especially since the banking crisis.

“Higher quality advisers are embracing the idea that client service comes first and really believe in ‘knowing your client before you give advice’. That is what life planning is about. We are at the forefront of that.”

Mindful Money: So why write a book aimed at consumers?

Kinder: “My intuition tells me that if consumers knew what was available, that they could get to talk about themselves, to identify what would make them feel free in life, to get them exhilarated, they would go to a life planner. It is hard to sell a book that is selling people on going to an adviser. So the book can show people a way to find great advisers, but also how to design and deliver this for yourself.

“The book will aim to inspire people to see that money should be about living a life as close to freedom as it can possibly be. If they can’t figure out how to deliver this for themselves, then they can call one of the great life planning firms in the UK.”

“We think the new operating system for financial services has to be trust, relationships, deliver meaning and delivering freedom. It is not a cookie cutter approach. You have to listen and learn what is important to people. For most people, the most important thing is family or relationships, a strong second is their sense of values. People want to live with integrity. Creativity is important, including creativity in running businesses and giving back to community. What life planning does is it opens up a conversation that is authentic.”

Mindful Money: Life planning is often seen as very expensive. How far down the income scale can this go?

Kinder: “Not only can it reach down the income scale, but it has to go down the income scale. The banks are abandoning the middle market. I think this is designed for the middle market. I think we have a system here.

“We are working with a number of registered life planning firms to launch a larger scale registered life planning firm. One of the principles will be to offer free hour long life plans to anyone who wants one.

“You can do it extremely simply certainly, if a mid-market consumer doesn’t have a complex situation. In life planning you inspire them. You look at the obstacles and solve them. If it is getting out of debt, you refer them on to the right agencies, but you have inspired them to go there.

“I see it as something that ought to be delivered to everybody. I would hope from that we will also get support from non-profit organisations which would fund things further. A free hour is simple. It pays dividends in terms of trust and once a year they can come back.”

Mindful Money: So what should consumers be looking for in an adviser?

Kinder: “The book has a whole chapter on this. Life planners are trained to listen and search out what most inspires people. You also want someone certified or chartered. You want someone who has the best designations. You want to look at their fees and if you don’t have a lot of money to see if they have modest fees you can afford. The next thing is to check there are no product ties.”

Mindful Money: Could this approach fix the banks?

Kinder: “I think so. There are series of issues. I am writing another book – Life Planning: A Banking Manifesto. When I am dealing with bankers, sometimes at the CEO level, they have a concern about trust and a concern about the consumer, but they fall back to a product mind set. They have clearly done a terrible job and the focus has been wrong and the look and feel of those products is completely wrong. They are selling financial products as if they were couches or cars.

“In regard to product shenanigans, if banks were to change their operating system to advice, quality advice, rather than the delivery of products then it is problem solved. The fundamental flaw in financial services has been in the area of trust and relationships. The new operating system, or the real financial DNA includes three things: Trust, relationship and the delivery of consumers into their dreams of freedom, their lives of meaning. Life Planning is a systematic process – a foolproof one – that delivers these things. If the banks were systematically selling that advice package, including unbiased, unconflicted product advice, how could they fail?”

Mindful Money: Returning to the book, what if some investors don’t want to be convinced?

Kinder: “I try to be inspirational. Some people may not want to be inspired. Some think it is about products, old line financial advisers think it is still about the product, and that is what some reporters and journalists say too. That is what consumers have heard. So in a meeting they don’t trust us and they want to keep it narrow and that is it because they don’t trust us. But hopefully we can convince many more.”

Mindful Money: How would you measure success?

Kinder: “I would like to see the old ways ended. I want consumers to have an authentic conversation with their advisers and I would like to see the advice spectrum covering people who can’t afford to pay anything to people who can afford to pay a lot. I would like to see the whole system thrown over. In a more modest goal in terms of the next year or two it would be to get terrific sales of the book and website use.

“A model of great advice, that is personal, delivers much greater economic rewards for clients and advisers. The old banks would get one dollar or pound in six or eight from their customers. A life planner is going to get eight in eight, all the assets to advise on. Frankly how can you give advice if you don’t have the whole picture in front of you? That all has to shift. But it will shift.

“In relation to other acts of malfeasance, one of the principles of life planning is that a life planner has to live their life plan, they’ve got to walk the talk, or the client sees right through them, their lack of authenticity, their “sales” approach. A genuine life planning firm, like the one we are interested in putting together, would embed trust, relationship and the delivery of people into their dreams of freedom and their lives of meaning into the company itself. It’s extremely unlikely that in such a culture, where the leaders themselves were required to live in such a way, that these kind of ongoing scandals would continue.”

9 thoughts on “A plan for rekindling trust? George Kinder takes his life planning message to consumers. The Mindful Money interview”

  1. Steve Conley says:

    Know Your Client is not money laundering checks, or even
    a standard form about money. It’s the adviser taking account of the customer’s
    future goals and aspirations including plans for the future. It’s the customers
    goals, objectives and priorities explored fully. What George talks about here is
    what an industry forgot. Treat the customer as the client, not their money.
    Plan the client, then plan the money. Why is not every firm doing this already?

    1. Guest says:

      How can you ‘financial plan’ without knowing where the client is going? It’s like turning up to the airport not knowing your destination – do you take your skis or your surfboard!

      In the past the financial adviser just looked at the here and now without any idea of what happened next (other than utilising next year’s ISA allocation!) The financial planner shows the client what their financial future looks like because where you are going is even more important than where you are! But how do you know if that plan is going in the right direction? It’s only when you ‘life plan’ that you give real meaning and value to your client relationship.

  2. Nick Platt says:

    George and his methods are the future for financial planning worldwide – they take the adviser-client relationship to the next level and need to be considered by any financial firm interested in delivering value to their client experiences.

  3. Chris Mellor says:

    I have started reading George’s new book having previously read both his earlier publications on Life Planning. The new book is undoubtedly a different perspective and as a practicing Registered Life Planner, qualified with the Kinder Institute, the new book is causing me to reconsider how my clients perceive what I do for them. It is most refreshing and enlightening, giving me a different light in which to see m y work. The value that such a process delivers to a client is, sometimes, beyond expectation and the benefit and insight that a client gains into their own lives can be extraordinary. It leaves me ashamed that this isn’t how all Planners work. I remember when I was training that my wife was ‘..amazed..’ that what I was learning wasn’t how all Planners acted already. She was astounded that Life Planning wasn’t the underlying norm of all client/Planner relationships.

  4. Alan Moran says:

    How can you ‘financial plan’ without knowing where the client is going? It’s like turning up to the airport not knowing your destination – do you take your skis or your surfboard!

    In the past the financial adviser just looked at the here and now without any idea of what happened next (other than utilising next year’s ISA allocation!) The financial planner shows the client what their financial future looks like because where you are going is even more important than where you are!
    But how do you know if that plan is going in the right direction? It’s only when you ‘life plan’ that you give real meaning and value to your client relationship.

  5. Nigel Barker-Smith says:

    This is great stuff, the sooner the consumer understands and seeks out the service of a “life planner” the better the world will be. Sadly the term financial advisor now comes with a distrust tag. Clients perceive financial advice as boring, expensive, short-term, and something to do if they have to.
    Life planners however are trained listeners, with no agenda or judgement other than the long-term desire to support the client in them achieving all that is important to them. Let’s face it what could be more important than the rest of your life?
    Good luck George, this is the future for the financial industry, and something for clients to get excited by.

  6. Andy Nevett says:

    We have all had a bad experience with commission hungry financial advisers. If you have not spoken to a Financial Life Planner then trust 30 minutes of your time. It will probably be one of the best conversations that you have. Take control of your future now…

  7. Sam Whybrow says:

    A person has to firstly know who and where they are before they know where they want to go or who they want to be in the future. Without a doubt, Life Planning provides the basis to explore our life goals before we let ‘the money side of financial advice’ inhibit our possibilities.

    Life Planning creates a foundation for better and more accurate financial planning and is also enjoyable. Life Planning is the Sat Nav or Map for a long journey without which you are likely to get lost or run into trouble.

  8. Kevin Chalk says:

    Governments, regulators, the press and consumer groups around the globe continue to wrestle with the vested interests and wrong-doings of a financial system that seems to be malfunctioning on an unbelievable scale. Every single one of us are a part of this – we are in it together and the stakes are growing ever higher.

    At an individual level, we can choose to either lay down and be trodden on or do something about it. George Kinder’s message is one out of only a handful of global financial leaders that can be heard above the daily chatter. Simply – trust is bust – so it is time for a fundamental change in the relationship between money, people and financial services. This is not some trendy “post credit crunch” view – but one that George Kinder has consistently expressed over many years.

    As with most major shifts in our everyday lives (e.g. the internet, technology, social media) – the arrival of Life Planning into the old world of finance may not yet be seen as significant. But be mindful of what can happen if you don’t see trends and act on them. Bill Gates, former CEO of Microsoft knows a thing or two about the market he dominated, yet he failed to see the changes coming… “Google kicked our butts” 2005. The rest is history as they say….

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