How important is life planning in the future of financial planning?

Money Marketing Interactive 16 -19 November 2020

There are three key reasons why life planning is now the must learn skill for financial planners, discover more by joining me at Money Marketing Interactive 16 – 19 November 2020. Find out more and register at

The three key reasons are:

The commoditisation of investment returns.

The underserved need a life plan in these challenging times.

Non-intermediating financial planning can be delivered digitally to larger audiences.

What I mean by that is …

1. Because of the commoditisation of investment returns.

Would you agree, advisers are either people centred, or money centred. That is, as a regulated adviser in the UK, as an adviser-distributor, you are either leaning towards life planning, or towards product distribution. Do you know people like that, one or the other? I’m not saying you can’t be both. It’s just that problems may arise when you say you’re doing one thing, when in fact you are doing the other. Yes or no?

In the UK, 9 in 10 adviser incentives reward product distribution. Do you agree that incentives drive outcomes? That is asset-based fees drive more asset sales? So, your service could be leaning one way, whilst the way you get paid could be leaning the other.

Have you ever met a client that has their money tied up in a workplace pension, residential property, with a discretionary manager, or on a D2C platform, looking for financial advice, and you can’t figure how you are going to get paid? There’s no sniff of new assets, and you conclude perhaps that client isn’t right for you?

Don’t worry. I don’t anticipate any time soon there will be dramatic changes from the Financial Conduct Authority (FCA) for 2021 on fees. Though things have changed in other markets, such as Australia and India, I don’t see the UK’s FCA changing anything, any time soon. What was mentioned in June’s Policy Statement, disappeared from September’s “Call For Input: The Consumer Investment Market”. That is the topic of conflicted remuneration, and in particular the separation of advice and distribution or the prospect of yearly opt-ins.

According to The Transparency Taskforce, “It is obvious that market dynamics, incentives and vested interests have an impact on market behaviour, market conduct and decision-making. We believe this helps to explain why many value leaks (such as conflicted remuneration) are not being given the attention they deserve.”

“Sometimes, it is worse than “ignoring”, that is there is unjustifiable push back to maintain the status quo. This is not because of a flaw in the solution (in this case fee-for-service) but because the merits of the solution somehow represent an “inconvenient truth” for incumbent parties such as the existing asset managers, custodians, trustees, financial advisers, other services providers and so on.”

The key driver for change on fees for 2021 will be, in my opinion, the commoditisation of investment returns, following Vanguard’s pension launch in Dec 2019. Would you agree that investment returns are now commoditised? Yes or no?

UK intermediaries serve the 5% with investable assets over £100k (source: ONS), and it will be increasingly difficult to justify the cost of intermediation as a percentage of assets to a savvy investor in a commoditised market. Especially with the ascent of quality information on the internet and D2C platforms. Do you agree?

So, the life planning service, including cash flow forecasting, will be more important for your savvy wealthy investors who will be increasingly looking to pay on a fee-for-service basis, would you agree?

2. Because the underserved need a life plan in these challenging times.

Advisers can continue to serve the wealthy with life planning. That leaves 95% underserved on account of their limited wealth. Unfortunately, that also means if they lose their job, like many have now, it’s time to panic, because money can run out quickly when there are no more pay cheques to fund their lifestyle.

Would you agree with me that products manage wealth, and no products create wealth – people do with their creativity, entrepreneurial spirit, industry, and planning. As Robert Kiyosaki says, the rich don’t work to get rich, they create assets.

Would you agree that what the 95% need urgently are plans to create assets, like business plans, what we need to sell to the underserved right now are plans not products? Plans to improve wealth over the next few years in a post coronavirus economy. More so than plans to create wealth for a rainy day in the distant future. Isn’t that rainy day here, right now? Yes or no?

Research shows that one-in-two working adults are considering a career change as a result of the coronavirus pandemic, in the next 12 months. Most financial planners are looking at a time-line of five years plus, yes or no? What we do at the Academy is identify the client’s life purpose and preferred vocation, and where wealth is required we produce a three-year P&L of a side hustle to drop into the cash flow forecast. Is this something you could add to your financial planning tool kit?

This produces a growing income-producing asset to increase financial security short-term and begin to move the client to greater financial freedom in the long-term, where eventually they can stop working for a living and start living the life plan from the wealth they create.

You see, a non-intermediating financial planner (NIFP) sells plans not products.

3. Because non-intermediating financial planning can be delivered digitally to larger audiences.

When you remove product advice from financial planning what you are left with is life planning.

By removing personal recommendations NIFPs can advise groups. When we remove the need for wet signatures NIFPs can deliver digitally. When we remove selling, we remove the risk of mis-selling and that is why financial planning is a non-regulated activity that can be delivered at scale. But most importantly, when we remove products what we are left with are plans. Would you agree?

Would you agree that it is challenging for a regulated adviser to make more than 60 to 100 personal recommendations a year? When you exchange your time for money, your time is limited and so is your capacity and the money. Yes or no?

NIFPs exchange their knowhow for money. That is, generic advice and financial information. Knowhow can be delivered digitally online via eBooks and video courses. Your knowhow is unlimited, so is your audience. And, when your audience grows, the cost can drop, and you can serve many hundreds of underserved at lower cost. You can even serve while you sleep! Yes or no?

But financial planning should include cash flow modelling, do you agree? And, it would be challenging to do 100 Voyant reports all at the same time, or even while you sleep. Yes or no?

So, would you agree that what you need is a different process? A new, disruptive App perhaps, where many clients can enter data all at the same time in an online Masterclasses or while working through a workbook? A client-centred cash flow modeller, as you deliver your lessons on evidenced based investing, ESG filtering, behavioural investing, etc., your audience inputs data that they don’t even need to share. Data that they could share with other advisers, if they wished to. An app that is integrated with open banking applications and a host of other apps, that is portable from one adviser to the next. An app that avoids the value leak that is client churn! Would that be helpful, yes or no?

Well that’s exactly what we offer at AoLP. We have successfully democratised financial planning for the underserved, and our portable processes and revolutionary applications are available to plug the advice gap with a vastly different client-centred planning approach. We call it the GAME Plan.

If you would like to know more, please join us at Money Marketing Interactive or message us for more details.

If you want to become a non-intermediating financial planner contact us today to find out how the Academy of Life Planning can help you.

☎️ 07850 10 20 70
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