Kinder: Life planning can increase exit value by five times

Life planning could boost the sale value of adviser firms by as much as five times, according to George Kinder of the Kinder Institute of Life Planning.

The pioneer of life planning told an oversubscribed Institute of Financial Planning (IFP) branch meeting last week that integrating life planning into financial practices would boost referrals, inspire clients and lead to greater efficiency.

‘You tend to have clients for life, rather than clients who leave at each of the market downturns,’ said Kinder (pictured).

‘As a consequence, you do not have to go out and sell. You are closing four or five clients compared to the one out of 10 you might have done on a transactional basis. And you get much more referrals,’ he added.

Life planners who were present at the meeting charged fees ranging from £5,000 to £10,000 excluding ongoing percentages of assets under management.

The practice, which began in the US more than a decade ago, is increasingly being seen as an essential precursor to building a financial plan.

It is essentially framed around goal-setting, and involves listening, empathising and inspiring clients through structured meetings.

Arguing that the process was ‘trainable’, ‘scalable’ and more profitable than other forms of financial planning, he added:

‘Life planning is shorter than most ways of doing financial planning and far more effective and pays much more per hour than any other ways we know of doing financial planning’.

Adam Young, managing director of Kent-based firm Dragonfly Planning, also present at the meeting, said he had introduced life planning to his firm three years ago and had seen referrals ‘almost immediately’.