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.
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?