Upgrade Your Financial Planning Model: Version 3.0 to 5.0.

Scrap Heap
Work Scrap Heap

In future, automation, globalisation, living wage constantly throws mid-skilled workers on the scrap heap. Whole industries will obsolesce. People will need to reinvent themselves repeatedly, often involving an intense period of exploration, experimenting, innovating, prototyping, and re-skilling. People must frequently fund these valleys of transformation from savings as they explore exciting possibilities to reinvent themselves through learning cycles.

As financial planners focus on the 5% of the population who are wealthy baby boomers with FPv3.0 for the foreseeable future, what happens to your financial planning business pre-2040, with £6.1 trillion intergenerational wealth transfer to Gen X, Y, & Z.

FPv3.0 goes like this. Accumulate wealth in a job for life for the best part of 40 years on the bet your savings will decumulate to buy you happiness in the last 20 years.

Why does your model need an upgrade?

If ever you want to engage the other 95%, that’s not how life goes.

Half of the people born today will be still alive at age 100.

The savings rate for 40 years to fund 50% final salary for 40 years is 50% of pay, give or take, considering inflation and charges offsetting returns. The unrealistic savings rate will mean that people need to remain economically active for 60 years, or more.

People may run portfolios of work: part-time work, gigs, and own businesses. The cash flow forecast will look less like a single mountain peaking at retirement and more like a whole range of mountains across an entire lifetime.

Cash Flow Forecast v5.0

Due to scientific and technological change acceleration, periods of knowledge significance and work security are shortening. Transitions are more frequent. Not just in work life, but also in our personal life. New relationships. New locations. We need to upskill to stay relevant. We need a continuing life plan.

We need to build savings quickly. The future FPv5.0 may require delivering 2% alpha per month over 40 months rather than 2% alpha per year over 40 years.

Financial products v3.0 are less relevant.

Take pensions. A savings product that delivers 2% alpha per year over 40 years is outmoded. Illiquidity before age 55 is useless — steep drawdowns after 55 tax-inefficient. Annual allowance limitations prevent pots from being replenished as you attempt to climb the following cash flow mountain for the next transformational event in a few years. Lifetime limits are too low to fund a 100-year life. Many will still be working at the age 75 transition, when they take the tax hit.

We need a complete break from the past with different products for a different life journey.

Features of FP v5.0:

  • More planning than products.
  • “What if scenario” for our possible selves – cash modelling.
  • Building savings pots for the multiple valleys.
  • Multiple business plans, and foresight about market developments, needed to create assets from meaningful projects throughout a lifetime.
  • Products need to be flexible for repeat accumulation/ decumulation, forever accessible, allowing for contribution breaks.
  • We need life plans for the intangible assets: health & vitality, knowledge & skills, connections & diverse networks, reputation & brand.
  • We need a sense of identity – a life narrative that has coherence, continuity, and causality. We need a path that provides a sense of purpose and integrity for our life. Future stages are more likely to succeed if they are less threatening to our identity. A strong sense of who you are and what you value — continuity in the narrative about past, present, and future.

“The traditional life required only the lightest planning touch and little in the way of reflection since it had certainty and predictability baked into it.” – The 100-year life: Living and working in an age of longevity, by Lynda Gratton and Andrew Scott.

If you want to help people make the right choices, upgrade to FPv5.0 with the Game Plan.

Game plan accreditation is achieved through the Academy of Life Planning mentorship, providing on-the-job coaching and training to preserve competitive advantage.

In association with HapNav, the Happiness navigator.



Ten Things You Need To Know To Be A Non-Intermediating Financial Planner

Financial Life Planning

Were you once a financial planner? Do you enjoy working with people, but not the regulation? Do you feel you have a few more years left in you? Could you do with the extra money?

If yes, setting up as a Non-Intermediating Financial Planner could be for you.

When you remove products from the equation, the whole client-planner dynamic changes. Many people think that what you do before selling a financial product is financial planning. That’s compliance. And people expect that for free. What your client will pay for is very different.

Here are the top ten must-haves for your value-adding NIFP service.

1: Know Your Client

Sounds straightforward and familiar. But we are not talking fact finds here. Here’s the thing. How can you know the client who doesn’t know themselves?

You can begin the planning process with self-discovery questions. We identify values and gifts. From which we determine life purpose. The true goal is to use skills in the service of others according to our values.

Self-knowledge makes a life worth living. The challenge for everyone is to know our true selves and live in balance accordingly. I call it checking we are facing the right direction before we begin.

2: Set Inspiring Goals

People aren’t inherently lazy; they fail to set inspiring goals.

If people don’t set their own goals, others will set goals for them. And what’s in it for them. Not much! Allow the client to set their own goals and make sure they are inspiring. Inspiring comes from in spirit.

The greatest regret is to live the life others expect of you and not have the courage to live a life true to yourself.

3: Think Whole-Person

Balance is key. Imbalance causes suffering.

Often people set off to achieve success in one area at the expense of failure in another. For example, many choose to pursue wealth at the expense of health and happiness.

The whole-person paradigm understands that we are multi-faceted beings. We are mind, body, heart, and spirit. Failure in one aspect is a failure in all.

Balance helps you live long and prosper.

4: Plan Your Client

Most planners know about life coaching and life planning – aiming to plan the client before planning the money. Money is a means to an end and not an end in itself. The point is the life you want to live. Plan your client.

It would help if you were a coach and a planner. A coach is someone whose job is to teach people to improve in life. A planner is someone who makes plans. If you want to improve things, you need a coach; if you’re going to achieve goals, you need a plan. Goals without plans are just dreams.

The crucial point is, the client is at place A; they want to get to a different place B, and need a plan to get from A to B.

If your client doesn’t want change, walk away.

5: Plan Your Project

If you fail to plan, you plan to fail.  Let the plan do the work. Use project planning and management skills from business to up the ante and meet the bar. Don’t lower the bar to satisfy the ante.

6: Remove Asset Bias

The conversation stops being just about financial assets and starts to be about all holdings. We become asset-neutral and asset-friendly – removing all asset bias. We talk about property, businesses, occupational pensions, physical assets, non-regulated financial assets, do-it-yourself financial assets, intellectual property, and more.

It would help if you learned about these assets and how to plan them.

7: Forecast Wealth

Wealth will outlive people, or people will outlive wealth. It would help if you had a lifetime wealth forecast to know which one.

Unfortunately, the popular forecasting tools are for one-to-one meetings with a planner.

It would be best to have a user-centred planning tool for groups or as part of a Netflix-style subscription. That’s why we launched HapNav. The happiness navigator.

We put the tools in the hands of people.

8: Create Wealth

Nine in ten people have insufficient wealth for future financial security or freedom. The planning community underserves this group. What this market need is more wealth. Business plans create wealth, not products.

The plan might include a business plan that gives the best revenue growth for the least risk of failure. What the client needs is a solid proposition development framework.

9: Educate

Today, financial assets are commodities. Hand-holding is non-intermediating financial planning.

Technology can do intermediation for free in seconds. Do wealth with clients, not for them.

10: Execute

Execution is where those coaching skills come in.

These skills are all covered in the Game Plan of the Academy of Life Planning.

For more details, please visit our website.


A New Movement In Financial Planning

The Happiness Navigator – HapNav

Our mission at the Academy of Life Planning is to make you happier, healthier, and better equipped to face the future – whatever it holds. So, I’m excited to announce that The Happiness Navigator (or HapNav, as we call it) is live.

HapNav is a financial planning tool for DIY investors. It’s an intuitive, touch-friendly experience that simulates your family’s financial future to help you navigate life on your terms. In other words, it empowers you to plan your finances and realise your full potential.

How simulation can help you navigate the future

Life is easier to navigate if you have a realistic view of what your future might hold. That means simulating realistic chances of real-world life events. HapNav’s simulation is based on what you tell us about yourself and your family, and other data from trusted sources. We use these inputs to model hundreds of different alternative futures for you.

Simulation is only part of the process. To help you plan for the future, we take the results of the simulation and use them to answer three questions for you:

  1. Will we be able to do the things we care about in our future?
  2. If not, why not?
  3. And – perhaps most important of all – what can we do to fix it?

You no longer need to rely on complicated planning tools provided by banks and asset managers that are simply trying to sell you their products. You own the tool. You own the data. And you’re able to set your own goals based on your own unique circumstances.

Fueling a movement

HapNav complements Non-Intermediating Financial Planning (NIFP), an incredible movement that’s growing rapidly. Unlike traditional financial planning – which involves huge value leakage via multiple layers of intermediation and fees – NIFP enables people to plan for the future without paying through the nose for it.

This idea is so powerful, we’re building a business around it. Academy of Life Planning (AoLP) is the world’s first global digital support network for non-intermediating financial planners. We’re pioneering the NIFP movement with a disruptive business model that places information at the fingertips of the public. In an asset-biased market where information asymmetry can prioritise the distributor or provider, we’ve decided to put the end user first.

Plugging the advice gap

AoLP is asset-neutral and we don’t seek to manage financial assets for fees. We sell plans, not products. And we place the tools of financial intermediaries directly in the hands of the end user, enabling you to navigate Direct to Consumer platforms and alternative asset management strategies.

Launching HapNav is a crucial part of our vision to change the way financial planning is done. The product is designed for data to be inputted and owned by users rather than intermediaries. And economies of scale achieved by delivering financial planning to groups brings down the cost, making financial planning accessible and affordable for all.

Users can complement the planning tool by attending workshops and subscription models run by Academy members with any number of clients simultaneously, or they can opt to keep data private. By supercharging our disruptive business model with technology, we can plug the global advice gap and help a neglected segment of the population plan for a happier life.

To bring HapNav to market we’ve partnered with Envizage, a London-based fintech that’s reinventing the way people plan for the future. Envizage serves clients worldwide, helping them to engage their end customers so they can achieve better life outcomes.