In just one hour advisers can revolutionise their services, regain trust and essentially deliver the best outcome for clients, according to George Kinder, the creator of the successful global movement known as “life planning”. Fifteen years ago Mr Kinder sold his advisory firm to spread the word about his client-centric philosophies and has since written several books and introduced training courses to help achieve his lofty goals.
The constantly travelling founder and president of The Kinder Institute of Life Planning said he initially became a financial adviser to “make a living” and because he was “good at mathematical thinking”. But he also could not ignore a longstanding yearning to embrace his artistic passions and dissatisfaction with how consumers were treated. It was this “real weakness” in financial services that motivated him to write his first book for consumers, and the success that followed gave him the courage to pack in his day job and dedicate his energies to engineering change.
The book, The Seven Stages of Money Maturity, exceeded expectations when it sold 40,000 copies in his native US, but what surprised him most about its success was that half its readers were financial advisers. Rather than rejecting his theories, plenty of his peers embraced them and shared a similar discontent with industry practices.
“The number one weakness in the financial services industry is the trust levels, which are abysmally low,” Mr Kinder said. “Trust is doing things in the consumer interest, but the whole emphasis on advice has been product, on spreadsheet items and cashflow, which are things the consumer does not care about. The product is the last thing. You can buy products anywhere. The question is, do you trust the adviser?”
He blamed the prevalent “product-obsessed” culture on what advisers had been taught in textbooks and urged his peers to adapt by placing a closer emphasis on listening and building relationships – approaches that are integral to his financial life-planning project. As far as Mr Kinder is concerned, the responsibility of a financial adviser goes well beyond selling products to clients and until this is fully acknowledged the “trust gap” will always exist.
In his eyes a financial life planner asks more profound personal questions on what clients want to do with their money by exploring their inspirations and ultimate life ambitions. Until this process is complete, he said, a truly holistic financial plan could not be created.
He added: “Life planning is what has to happen before a financial plan can be designed. It is about meeting the client, establishing a great relationship, gaining trust and eliciting what the client cares about most. Only once that has been established can the financial plan can be done.”
According to Mr Kinder, this process can be achieved by dedicating the first meeting to listening and avoiding sales pitches. When delivered effectively, the meeting – crucially – can help advisers overcome “half the issues needed to build trust”. Moreover – contrary to fears from some that this extra time required to build relationships will prove too costly for the average client – he said an effective life plan can be delivered in just one hour.