Personal Finance

‘Life planning includes financial planning’

Anand Kalyanaraman | Updated on August 18, 2019 Published on August 18, 2019

George Kinder, President, Kinder Institute of Life Planning.

Life planning involves discovering what clients really want, says George Kinder

George Kinder, President, Kinder Institute of Life Planning says that when people are passionate about their goals and aspirations, and they have the support of a life planner who knows about money and who supports that passion, they figure out how to do it, despite constraints. Speaking to BusinessLine on the sidelines of the CFA Society India 4th India Wealth Management conference, Kinder says that life planning is the whole engagement with clients that includes financial planning.

Edited excerpts.

Can you explain the difference between life planning and financial planning?

There are two different ways of thinking about it. One, life planning is the activity that is required before you can do a financial plan. So, it is the activity of engagement, of listening to the clients, of discovering who they really are and what they really want, and doing a really thorough job of that.

So, the relationship skills are very important. The other way is life planning — the whole engagement that includes financial planning. And from that frame, you have the beginning arc that is focused on the life-planning kind of questions, but life planning then goes all the way through to the final execution and delivery of the financial plan.

How does mindfulness fit into this?

I am the founder of the Kinder Institute of Life Planning, and we have a series of trainings which deliver a designation called Registered Life Planner. Mindfulness is part of our training. That’s because the best life planner is a great listener.

What mindfulness does is that it trains us first of all to listen deeply inside of ourselves. We learn where is it we are desirous; where we are fearful, or anxious, or frustrated; where we are present or where we are distracted.

The more we practice mindfulness, the more present we are; the more at peace we are; the more clear we are and the more focused we are. So, mindfulness makes us far better listeners, first to ourselves and then to the person we are with.

It is often observed that advice is often needed, but there is a reluctance to pay for advice. How do you address this? Is this also the case in western countries?

Very much. It’s true all over the world — in America, Europe, South Africa, Australia, South America, Japan. I think we are doing something about — both the CFP community and the CFA community have contributed by developing a body of knowledge that is demonstrably of value. So, we are seeing people of greater wealth down to middle income say ‘yes, I am willing to pay for it’.

I think the movement needs to continue and the way it will change is by building much greater trustworthiness into the advisor proposition. Right now, in most environments, products and product companies still have a huge influence.

If I am coming to you and I know you are influenced by a product company or product advisor, I am not going to trust you totally.

So, why would I want to pay you? You may have a bias that I don’t know how to measure. It’s natural to feel uncomfortable. So, I think that as we take back power and make advisors the power in the industry rather than products, it will change. And of course, building the advisory skills — that includes the life planning skills, the listening skills, the empathy skills, the aspiration skills.

In India, there is increasing concern about the retirement time-bomb — many people moving towards retirement without adequate financial planning. How do you address it?

Again, that’s true all over the world. I don’t know enough about the Indian social security system. But I imagine that it’s more problematic here because of the poverty. I think life planning is the most important thing.

I have thrown the whole notion of retirement out. It has value but I try to think outside the box and think in larger contexts, and civilization-wide.

Retirement is a term that comes up largely because our jobs are prescribed by institutions. So, we work for someone and we are looking forward for retirement when we are not working for them. What life planning does is that it begins to loosen that up in a way that is more healthy for all of us. We shouldn’t so much be working for other people as working for ourselves.

A great life planner will help you figure out a way to do that. Whether you have to be someone tied to the corporate or institutional life, or you can set up something on your own — a life planner will help you figure that out.

That begins to break this huge dilemma that civilisations have, for so long, had over retirement. Retirement is no longer so significant. So, I think life planning will be a big contributor to making that time bomb less threatening.

Is the concept of life planning applicable only for the rich who can afford it, or for everyone across the board?

We have yet to build a body of life planners who are dedicated to serving people who don’t have resources. But it is meant for everybody. One of my objectives in later life is to try and inspire that to occur. I would love to see it happen here in India. Life planning is really just about figuring out what your goals are, and then finding out what would inspire you and give you great meaning. And then having the support of someone who knows money but also is on your side. So, they would really help you figure out how to do that. Whether that helpfulness has to come through government grants, or whether people, as they retire from working with companies, are willing to go into communities of poverty and actually deliver it, it’s important that it be done.

What we discovered is that when people are really passionate about their goals and aspirations, and they have the support of someone — a life planner who knows something about money and who supports that passion — these people quickly figure out how to do it. It may be that they will have to sacrifice time to be able to do what they have to do. But because they are then passionate about doing that, they bring more passion, focus and productivity to the work. I think, we overplay the resource of money and underplay the resource of courage, action, aspiration, excitement, clarity, focus, integrity, intensity. All of these things are that we all have and the closer we are to knowing that we are going to be what we want to be, the more energy we have to make it happen.

Published on August 18, 2019
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