At the Personal Finance Society Festival of Financial Planning yesterday, three leading lights of the life planning movement gave their thoughts on why it is different from financial planning, and why it is so important. This is an edited transcript of their discussion.
Justin King, MFP Wealth Management adviser
From my experience when I was a traditional financial adviser, you would solve an issue. Whatever the complexity they came with, they came to the office to see you with, you dealt with that complexity, sorted it out with products or solved the issue. There was something missing, an element that was unfinished but I couldn’t quite find it.
There’s much more to someone’s life that just their finances. You extract and elicit out of them what true fulfilment will look like. Once you have a greater understanding of that, and the client has a greater understanding of that, you can develop a financial strategy that aligns with the life plan. It moves you away from being a transactional adviser.
Michael Fairweather, Real Life Financial Planning
Its additional to financial planning. I was already doing financial planning, it was the extra life planning and coaching bit that was new for me. Its more about coaching first, getting to know the client really well. You go deep pretty quick.
You tend to get clients for life. I started my own process six and a half years ago and I haven’t lost one yet.
George Kinder, Kinder Institute of Life Planning founder
You have got client relationships as financial planners, otherwise you wouldn’t be in business. But we think we are doing life planning. Most people are probably doing a bit in terms of how they gather data, but it’s much more powerful and deeper than that.
When a client comes in to see you, part of that is taking care of their pensions or tax or investments. They think that’s how you think about them. What’s real for them though is what that does for them, who they can be as a result of managing their money well.
Their real ideals are often unconscious. Sometimes they think: do I share it because they are going to try and sell me a product based on their plans.
Life planning delivers freedom into people’s lives. The client gets extraordinarily energised as a result of the process. Rather than the pension or product or your structure first, you put the client first. You listen. That allows the client to come forward with their real agenda. If you do it after you do the money piece, they don’t do it very well.