Welcome to another insightful episode of Friends Talk Financial Planning! In today's special episode, we are joined by industry pioneer George Kinder to delve into the world of fiduciaries and financial life planning. Learn what it means to be a fiduciary, how to find the right financial advisor for you, and the importance of holistic financial planning.
George Kinder's new book The Three Domains of Freedom is available on Amazon. Discover how financial planning, mindfulness, and a better civilization can empower you to live a more fulfilling life.
Resources:
- Alliance of Comprehensive Planners: https://www.acplanners.org
Follow Us:
- John Scheer’s Practice: https://www.trinfin.com
Connect with us on LinkedIn:
- Bridget Sullivan Mermel: https://www.linkedin.com/in/bridget-sullivan-mermel-a72620/
- John Scherer: https://www.linkedin.com/in/johnmscherercfp/
TRANSCRIPT:
Bridget: How to find an advisor who puts your financial interests ahead of their own? I'm Bridget Sullivan Mermel. This is Friends Talk Financial Planning. And we've got a special guest today, industry pioneer George Kinder. Today we're going to be talking about all things fiduciary. I'm Bridget Sullivan Mermel. I've got a fee-only financial planning practice in Chicago, Illinois.
John: And I'm John Scherer. I've got a fee-only financial planning practice in Middleton, Wisconsin. And, George, thanks so much for being on the show here today. Really excited to hear about your take on fiduciary and how we can really, as consumers, find people that are looking out for our best interest, and looking forward to hearing about your new book as well.
George: Really a thrill to be here, John. Great to meet you. I've, of course, met Bridget before, but always wonderful to be with a team of fee-only financial planners. Right on, guys.
Bridget: Let's talk about fiduciary. When you're describing fiduciary, George, what do you say?
George: Well, first of all, I mean, you have to acknowledge that out in the Google realm, the definition of fiduciary primarily is about how you charge. And they pay lip service to put your client first. And that's the most important thing about a fiduciary. A fiduciary comes from Latin. It means trustworthy. And to be trustworthy to clients, a financial advisor has to put them first, ahead of their own product. I've been in the industry over 50 years, and for me, it means three things. It means the fee-only practice that you guys model and that I know you also belong to a great association named ACP, which is a fantastic organization of fee-only financial advisors.
So it means being a fee-only advisor. It means being someone who has a holistic understanding of money issues. And the best of that in America right now is the CFP designation, Certified Financial Planner designation. And the third thing (I'm pitching myself and to me it's the most important, it's what I've dedicated my life to) is that you want someone who really listens to you and doesn't put their agenda up front, doesn't ask you questions that are financial questions to begin with.
They really want to know who you are, what it is that you would more than anything like to be your life, how you'd like to live, all those things, because that's what money should serve. And to me, and I know both John and Bridget are very familiar with the notion, the practice of what's called financial life planning. So I think the best trained listeners in the financial world are life planners. So we have a designation called Registered Life Planner. That's like the CFP, but fewer people. But there are hundreds of people all over the world that practice it.
John: And I appreciate you having the three different distinctions. First is, are we selling products representing a company, or are we advising the clients? That level of fiduciary. Next, putting the client’s interest first all the time, then this idea of the whole person and the planning for life. There's the Registered Life Planner, sort of like the Certified Financial Planner. And from a consumer standpoint, it gives people a metric. You can say, “Oh, it sort of checks the box.” Are there other things or other places? My question for you is, with many of these designations, there's all kinds of Alphabet soup.
I've got some behind my name. Bridget has some behind her name. You go, “Yeah, I get that.” But then it can get mashed up. We know when we talk about it behind the scenes here what we're talking about. From a viewer standpoint, can you describe some of the things that are most important. You started to little bit. Maybe that's simply it, but what things should a person expect when they go to talk to somebody like Bridget or me who’s really doing that life planning or getting to the important things, that level of fiduciary you're talking about?
George: Yeah, there's an alphabet soup out there, isn't there? The CFA, the CPA, the retirement specialists, and all these kinds of things. I honestly think that of the best three things, one of them isn't a designation, but is fee-only, and then there's some great associations with it. One of them is the CFP because it is kind of the standard for holistic planning, full on financial planning. And then the registered life planner, I don't think there's anything that matches it or comes close. So those are the three I stick with. But that said, there are great people who might not have any of those. There will be some. There's certainly the way I frame the fiduciary.
If you're really looking for a fiduciary and you find someone who has two out of these three, you're probably doing pretty darn well, because all three of them pride themselves on putting you first. I'm putting the consumer first. So if you get two out of three, you're going to be doing pretty well. And in terms of the life planning piece, John, everybody gravitates towards something that I've put in all my books and almost all my interviews, which is called the three questions. It's a way of asking people to think deeply about their life and share personally with the advisor so that we actually target what it is they care about most.
But I think the most important thing is listening. And so, do you find when you go into that first meeting the advisor really has zipped their mouth up? They've not brought out the spreadsheets. They're not asking you, “What do you want to do in retirement?” They're just simply asking, “Why are you here? Why have you come, and what do you want?” And the reason for such a general question is that usually as clients are driving to the meeting or preparing to enter the Zoom call, they've thought about the financial ones, and they'll throw them out: “I don't know what to do with my money. What is this? I don't understand it.”
And they'll have those kind of questions for you, but they'll also, typically, have thought about, “Oh, you know, I hope I get to talk about that cabin that I want in the woods,” or “I've never talked with anybody about how difficult my dad was around money, and he's still got money that we're all going to inherit, and it's really difficult to even think about it or talk about it.” So there are these issues that feel very personal.
“That cabin. Maybe when I retire, maybe 15, 20 years from now.” And a great life planner will listen so well that you'll want to share those issues with them. Moreover, they will then take those issues, and not in the first meeting, because the first meeting, they really want to be listening and let you roam all over the place, but they're going to take those issues and they're going to make them happen in much shorter order than you ever imagined possible. That's a great life planner. So, John, I hope I answered your question.
John: That was great. Thank you.
Bridget: One thing I think is that at different times in people's lives, they're looking for and they need different types of financial help. And so, for me, when I started working, I found that when I was talking to people, they were really clear on what they needed, and I was pretty clear about what I was good at, which was the intersection between taxes and investments and then doing the rest of comprehensive planning. But we do goal setting where a lot of the things come up. And then as I've gotten deeper relations, I've gotten to know people things become clearer. So I don't lead with trying to dig out the unsaid, but I let it kind of unfold.
But oftentimes it takes years. So that's my take on it. These things often come up naturally over the years. But some people really don't want all of that. So I had one friend from high school who said to me, I love my financial planner. They never call me. And I said to them, “They love you, too.” Those are two points on the continuum of how much coaching do you want and how much coaching does an advisor do upfront? So that's my take on it. The other thing I wanted to mention is that sometimes people want you to just answer their few questions, and I like hourly planners for that.
And then sometimes we offer a three questions session. Sometimes comprehensive planners will offer that. We're not offering it at the moment, but people can look for that, too. So I think what's important also in this conversation is just to realize that there are different types of planners. It's not one big thing. You definitely want to look for someone who's fee-only and isn't selling new products if you're looking for general advice. But if you're looking for a product, if somebody just wants insurance, if somebody wants to buy life insurance, that's a different situation. John, what's your take?
John: Yeah, actually, thanks for sharing that, Bridget. As you were describing that, it made me think of another question for you, George. When folks talk to Bridget and me (and you mentioned this), they’ve got these questions. What's that IRA thingy? And I need this and that. And my feeling is that a regular person doesn't realize the whole life planning thing, some of those other things that can go into it. I've got this focus, which is great. We need to answer those technical questions. How do people find out about these other things?
Or how does somebody who doesn't sit and watch our show know about the other things that go out there. And both Bridget and I help people to realize, “Oh, that's right. I guess I really wanted that cabin in the woods. I never really thought that I could do it in five years, not in 15.” But as Bridget just described, that’s a product of working together. And that's not what people think that folks like us can do. And maybe if you could just talk about how people know that. I don't know if maybe that ties in with the latest book you wrote here, but I'm just interested in your take on that.
George: Yeah, I mean, it's really what we train. What I came to feel was that clients who came in and just had a financial question had largely accumulated that kind of question from kind of how society thinks about money. And how society thinks about money is mostly driven by the product companies. They dominate Wall Street. They dominate the Wall Street Journal. They dominate congressmen and politicians. So the laws that get passed largely come through product companies, vetting them and all of this kind of stuff.
So when they come to see us, they don't always really trust that they can talk about what their real issue is with money. And their real issue is not how did they tell what kind of IRA structure they need. Their real issue is, “I want to make sure that I get to live the best life I can possibly live. I know money is involved, and I know that these guys that I go to around money, I don't trust them. So I'm going to control this. I'm going to control the conversation. The conversation is going to be about just that IRA, and that's it.”
And Bridget's right. Over time, as you get to know everybody, people get to know you as a person, and then they realize, hey, she really cares about me. He really cares about me. And I'd like to share this one little piece. I've never shared it with him. So what we do is really quite wonderful. So we try to confront that lack of trust right from the get go by being great listeners. And so, the whole first meeting is about quality of listening, where we're asking this big general question, and if they fall into the IRA trap that we've just set for them, we say, “No, no, no. If we're going to work together for many years, how would your life change? What would happen that would be really, really cool? What could we possibly deliver that would be amazing?”
So we usually don't ask that question because usually people have been thinking about things that they're not able to share, but they would like to share. So anyway, the way we do it is we ask a very general question. What brings you here? Why are you here? And then whenever they mention something that sounds like fun for them. It doesn't have to be fun for you. You might hate gardening, but they go, “Oh, I love getting out in my garden.” We learn to be sympathetic, to be excited for them, to be inspired by what they're inspired, to go, “Oh, cool.”
And we don't ask them what kind of plants they plant or how big it is or where it is or anything like that. Just an emotional response that is really connected, lets them know we're here. And to say something similar like, “My dad was really sucky around money. Boy, he really screwed us all, the whole family. And he still does, in a way.” And for us to be able to hear that and go, “Oh, my, I'm so sorry,” without asking further questions. If we've got a series of meetings, we got plenty of time.
So basically, you put them first, going back to the fiduciary thing. How do you do that? So it's a learned skill I think. For some people it comes naturally. For some people there's bits of it that happen, and for many it happens over time. You just get it over time. But we've shortened the process in the Registered Life Planner program. I hope that answers your question, John.
George: Yeah, great. Thank you.
Bridget: With that, it's a great time to wrap it up. So I'm Bridget Sullivan Mermel. I'm at a fee-only financial planning practice in Chicago, Illinois.
John: And I'm John Scherer. I've got a fee-only financial planning practice in Middleton, Wisconsin. Our guest today has been George Kinder, an industry pioneer, one of the leaders in the financial planning industry and in particular in the life planning industry. And George has a new book out. George, could you tell folks about the book, what the title is and where they can find it?
George: I'll just show it to here. It's The Three Domains of Freedom: Each Moment is Yours, Your Life is Yours, Civilization is Yours. And your life is yours is what we've been talking about, that financial planning really does something for people that's extraordinarily valuable. Each moment is yours is actually a take on mindfulness. A mindfulness practice is really about the mastery of the present moment, finding freedom there. And then the third one, civilization is yours, is one, gosh, aren't we all really disturbed by this one right now and wondering what on earth is going on? And so, I argue that, in fact, it should be a domain of freedom and there's a way of doing it. So I hope it's inspiring for people, and so far, people have responded that way.
John: And we can find that book on Amazon, or where's the best place to find it, George?
George: Amazon is great. I hate to send more money Bezos way. He's got enough already, but it's on him.
John: We'll make sure we get the title and a link in the show notes. And thanks for watching.
Bridget: And please subscribe.
At Sullivan Mermel, Inc., we are fee-only financial planners located in Chicago, Illinois serving clients in Chicago and throughout the nation. We meet both in-person in our Chicago office and virtually through video conferencing and secure file transfer.
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