George Kinder shows no signs of slowing down. In fact, the prodigious author and head of The Kinder Institute of Life Planning will bring his firm’s team of instructors to conferences and trainings held by the Alliance for Comprehensive Planners (ACP), the XY Planning Network, and Buckingham Asset Management in coming months.
And many more advisors will learn about how to use life planning tools through his firm’s two- and five-day workshops held throughout the U.S., the U.K., and Australia.
Harvard-educated Kinder pioneered the life planning approach to financial planning back in the early 1990s and launched his eponymous firm, based in Littleton, Mass., around a decade later.
As far as Kinder is concerned, this approach helps greatly enhance trust between advisors and their clients. In fact, he cited the “trust gap” that remains among financial services firms and clients throughout an extended interview with RIA Intel.
Every year, Northwestern University’s Kellogg School of Management and the University of Chicago Booth School of Business survey the public to gauge perceptions about the financial industry. In the 2019 survey, just one in three people said they have a high level of trust in financial organizations. The good news: that’s up from around 20% during the economic crisis of 2008. The bad news: Two out of three consumers still lack trust in dealing with financial firms.
Think of Life Planning “as the missing piece at the beginning of the planning process,” says Kinder. Advisors that have taken his firm’s five-day course and become Registered Life Planners (RLP) conduct a series of meetings that help clients visualize their goals, fears, concerns, and values. Often times a client will come to the planning process with an expectation that they can’t accomplish their dreams, which Kinder refers to as “latent passions.”
As just one example, a client may speak of a desire to make a major career change but can’t take on the risk associated with reduced income. Life planning helps frame a set of choices to help ensure that expenses are better matched to income changes. Clients are asked to think through their responses to such questions as “what would I change now if I was told I only had five years to live?” Or “how would I pursue my dreams if money were no obstacle?”
The life planning process is structured around a series of conversations utilizing the Kinder Institute’s EVOKE framework. Each letter is a step in the process: Exploration, Vision, Obstacles, Knowledge, and Execution.
Thanks to an extensive set of writing, Kinder has already spelled out how advisors can incorporate life planning into their practices. His book, “Lighting the Torch,” provides advisors with a framework to conduct life planning, while “Life Planning for You” is geared towards consumers and advisors.
The Kinder Institute isn’t the only option for advisors looking to incorporate life planning into their practice. Portland, OR-based Money Quotient also provides a range of learning materials and seminars, all of which are structured under the non-profit’s “5-E Model.” (That stands for a series of training sessions with headings such as Explore, Engage, Envision, Enlighten, and Empower).
In a February 2018 podcast with Michael Kitces, Money Quotient president Carol Anderson noted that life planning can help clients uncover emotional roadblocks. She added that “the ability to navigate difficult conversations is an important skill for advisors to develop.” Still, Anderson noted that fraught conversations can grow unwieldy, which is why the firm sends out a series of questionnaires in advance that helps frame key issues to be explored.
Money Quotient’s Satisfaction Survey covers 20 topics that help clients assess where they are happy or unhappy with their financial lives, and through those questions, can help uncover any gaps between a clients’ perceptions and reality. For example, a client may feel insecure about their finances, even as they have a strong base of assets in place. “Our process can help bridge that disconnect,” said Anderson.
Money Quotient’s approach is backed up by a considerable amount of academic research, says Amy Mullen, Vice President of Money Quotient. These include Adult Learning Theory (an understanding of how to engage adults in the process you are exploring), Self Determination Theory, which teaches about the true motivations that underpin client choices, and Life System Theory, which looks at clients’ life history to see how they may have influenced financial choices along the way.
“We take a multi-disciplinary approach to life planning, incorporating psychology, biology, neurology and sociology,” says Mullen. In fact, she is a member of the Financial Therapy Association, which helps bridge the skills gap between therapists and financial planners.
Money Quotient’s platform is priced more accessibly for advisors, with the three-day seminars costing around $1,350. “That’s the minimum level of training we require to become a Money Quotient partner,” says Mullen, adding that trainees can then tap into a broad and growing body of research and skill development tools to deploy in their practices.
Deploying life planning at the start of the financial planning process can require several hours of conversation, according to Kinder. While some advisors charge for that extra time, others choose not to charge more, and instead focus on the potential long-term returns on the investment of time.
Money Quotient’s Mullen says that her firm’s curriculum “actually saves time in the planning process. It helps advisors to become more efficient and get key information faster.” Firms that send their teams of advisors to the training process can help “deploy a consistent client experience across advisors,” she adds.
Kinder notes that clients of life planners “tend to have so much trust in the advisor that they bring more assets to manage into the relationship.” And he adds that these often become “clients for life…why would they ever leave you once you really understand their needs?”
Kinder finishes our conversation with a mention of his newest book, “A Golden Civilization & The Map of Mindfulness.” He sees the book, and its focus on society-wide problem-solving, as a natural evolution to life planning. “If we know how to help plan for life, why can’t we also apply our values to healing other aspects of our civilization?”
David Sterman, CFP, is President of New Paltz, NY-based Huguenot Financial Planning