Firing lineJan 23 2019

How to give clients the best conversation of their lives

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How to give clients the best conversation of their lives

How many financial advisers think of themselves as life planners? 

George Kinder, founder of the Kinder Institute of Life Planning, believes advisers’ assumptions about their role have been shaped by providers and their focus on financial products.

He explains: “If you think about the history of financial advice it really started with insurance and providing widows, who were devastated with the death of their working husbands, with a way of funding their lives. Life insurance was sold. It was a sales process. 

“Basically, product companies, institutions, corporations formed around all kinds of financial products. Stocks, bonds… all different kinds of products, and then their sales forces were the ones who were ultimately called financial advisers.”

He calls these companies “hierarchies of power” in his new book, A Golden Civilization and the Map of Mindfulness, which is due to be published in March.

“So the assumption was always we [advisers] didn’t listen, we delivered products in some ways,” Mr Kinder adds. 

I began training people on how to actually work with clients so that the clients were put first and that meant the money came second.George Kinder

He acknowledges: “It’s softened because a financial adviser now talks about portfolio construction and that kind of thing, and a financial planner will talk about many elements of the financial plan. 

“But it’s the life planner that really begins to… put the client first, [they ask] who are you and who do you really want to be?”

This thinking is what inspired Mr Kinder to establish a think-tank, which eventually evolved into his five-day training course, Evoke, in which advisers learn to become life planners.

Mr Kinder has always harboured spiritual aspirations and started out as a poet. As he recalls: “There was a saying back in the 1960s and 1970s that if you do what you love, the money will follow.”

“No one ever paid me a penny for my poems or my meditations, so I had to find a way to make a living,” he laughs.

Mr Kinder became a financial planner and tax adviser, based in Cambridge, Massachusetts.

“From having these passions that were not financial, but were profoundly meaningful, I intuited most people had similar aspirations,” he explains.

On this basis, he formed a think-tank – “because many financial planners didn’t know what to do with those [client] conversations”, he reasons.

“The classic thing an accountant does, and a financial adviser will do it too, is to pour a big bucket of water on anything that is dramatic and fun and challenging, that might put at risk the finances.

“Rather than thinking about, who is it that the client really has to be to live their most profound life? The financial adviser’s focus would be, how do I protect these assets? 

“[They] would classically aim at a retirement goal that was money-driven, not aspirationally driven,” he says.

He eventually split off from the think-tank and it became the Kinder Institute of Life Planning. 

Client first

“I began training people on how to actually work with clients so that the clients were put first and that meant the money came second,” he adds.

The Evoke approach to life planning is a five-phase process, although Mr Kinder notes it is more helpful to think of it as a three to five meeting process.

He sets out: “E is for exploration, V is for vision, O is for obstacles, K is for knowledge and the final E is for execution. 

“The E, V and O are a new way to do client diagnostics.”

It is a process that requires advisers to develop their listening skills, first and foremost. In the first meeting – the exploration or discovery meeting – he suggests “the client does 90 per cent of the talking”.

He notes: “At the end of that meeting the most common response I would get, the client would say, ‘if this wasn’t the best conversation I’ve ever had, it certainly was one of the best conversations I’ve ever had’.” 

But as Mr Kinder points out: “It wasn’t a conversation, they just talked. But they’d never been given that opportunity before.”

Testament to the popularity of Mr Kinder’s approach, his Evoke training courses take place all over the world, including the UK.

Mindfulness

So how does this approach, which has rather more in common with counselling and mindfulness than the traditional notion of how an adviser should interact with clients, fit alongside what is a highly regulated profession?

“The reason that it’s regulated is because of how I was describing the foundation of financial services as being largely product-oriented. 

“So when you have companies where the bottom line is delivered by the sales of products and by the profit margins on those products, the focus is clearly not on delivering this particular client into the life of their dreams,” he says.

However, he does have one criticism of the regulators: “They’re in lock-step with product companies. So that even though they’re protecting the consumer, they’re constantly responding to what it is that product companies do or don’t do well, and what advisers do or don’t do well around product companies.”

Ellie Duncan is features editor of Financial Adviser and FTAdviser

Watch FTAdviser's video interview with George Kinder here.