You are called the ‘Father of Life Planning’. How did you develop this concept?
Well first of all, let’s consider what is life planning? It is the basis of great financial planning. You can’t do financial planning without doing life planning first. You won’t know where you’re aiming. You won’t know what your client really wants, so you won’t have done your due diligence or your fiduciary responsibility towards the client. You’ll be flying by assumptions that haven’t really been tested. Your ladder is on the wrong wall. It’s the wall of money rather than the wall of the client’s aspirations.
Many clients won’t tell a financial adviser what they really want out of life, because they still think of financial advisers as primarily product sales people. They don’t trust us, and as a consequence we end up doing a poor job for them because they don’t give us adequate context for the financial decisions that need to be made. And we also have had no training in really listening, inquiring or caring. We sell them a mutual fund when what they really want is more time with their kids. A great financial adviser would figure out how to get them that time with their kids, given their financial constraints. A mutual fund might or might not be part of the package.
I developed the concept of life planning through two contexts. One of them was professional. I was a tax planner and 500 of my 1000 clients were among the best psychologists in the New England area. In order to help them and find appropriate deductions for them, I needed to understand their business well. So I attended many of the workshops and trainings that they attended or taught, their professional education seminars. I learned a tremendous amount from them about listening skills, emotional intelligence, empathy and unconditional positive regard. Each of which are critical for a great life planning engagement. Each of which are elements of a life planner’s training.
The second context was my own life. When I graduated from Harvard, I wanted nothing more than to be an artist and a meditator. There was a saying going around in those days, “Do what you love and the money will follow” but I found no one who was willing to pay me for my poems or for my meditations. I was precocious in mathematics, and minored in economics, although I finally majored in literature at Harvard. So I decided to take my math skills and develop a business in tax accounting which would allow me both time off and the ability to control my schedule. Both of which I desired in order to continue my passion for the arts and meditation. My tax accounting business transformed itself into financial planning as I followed the needs of my clients. But what I discovered in my clients matched my own experience. As I got to know them I discovered that each of them had a secret aspiration that was unfulfilled, or a secret sorrow that was unresolved - constrained as they were by money to toil away in jobs that weren’t always completely fulfilling. For myself, when I committed to doing accounting, I swore to myself that I would never give up my passion for the arts or for meditation, and so my life was rich with my aspirations, even as I made a living as an accountant. I always maintained a strong portion of my day for what I cared about most. That’s good life planning. And as I worked with clients I realized I could help each of them keep their aspirations alive and resolve their sorrows by teaching them what I had learned for myself. The clients I worked with loved getting their finances to support what they cared about most, rather than merely chasing or saving money. For the first time they felt their lives had real meaning, they found vigour and vitality in their lives, they lived with passion and purpose rather than just going to a job.
Globally, what has been the response from advisers for life planning?
Well, it’s been enormous. We have advisers in 30 countries on all 6 continents. India is the fastest growing of all our countries, which is very exciting. And its rapid growth means that it is now our fourth largest community, trailing only the US, the UK and the Netherlands. When you think about countries that have stood for freedom, even, in India’s case, for thousands of years, those four countries are often in the top of our lists. So it’s no wonder that life planning which delivers people into their lives of freedom has become strongest in those countries. Currently we have 153 people from India who have taken at least one of our programs.
Do you still face challenges in communicating the concept of life planning among advisers?
Of course! We are small, compared to the huge banks, brokerages and insurance companies that tell advisers that financial services are all about product sales, or even financial planning associations that focus mostly on spreadsheets, and targeted financial recommendations. But, particularly amongst the financial planning profession, life planning has become well known, and when a good adviser hears what we do, they are always interested, even excited by it. The best advisers universally do some elements of life planning. They tend to be good listeners already. We take it up a notch, as any adviser will tell you. We bring the focus to the clients dream of freedom, and we create the most extraordinary relationship between an adviser and their client.
How are you going about promoting this concept in India? How has been the response from Indian advisers?
We have formed a great alliance with Sadique Neelgund and Network FP. This is the third year Kinder Institute has given programs in India, and the enthusiasm of Indian advisers has grown and grown. It’s natural that it would, with your regulatory movement towards a fee-only, client-centered approach, and your long time historical practices of meditation which are the basis for great listening skills. I wouldn’t be surprised if in five years we were to say that India is the strongest financial life planning culture in the world.
This is the first part of the interview. Watch this space for more as George Kinder reveals how financial advisors can become expert life planners.