What is "life-first" financial planning?

Time is running out if you’d like to listen to Barry LaValley speak at The Evidence-Based Adviser in Birmingham on Wednesday 20th March. The event is filling up fast, and we expect all the remaining places to be booked within the next week or so.

Registration is simple: just follow this link.

Barry, an American based in Canada, is one of the world’s leading advocates of lifestyle financial planning — or, as he prefers to call it, life-first planning. He also has specialist expertise in the the latest trends in the advice profession and in preparing advice businesses for the challenges they can expect to face.

To give you a flavour of Barry’s philosophy, here’s a brief interview I’ve just conducted with him.

Briefly, Barry, what do you mean by the life-first approach to advice?

The life-first approach is the way we describe a client-centric adviser practice that focuses on a client’s life needs, concerns, opportunities and goals. The adviser’s client is a person and not a portfolio; financial issues flow from life issues. This changes the nature of client discovery, the adviser’s value proposition and how advisers position the services they provide.

You say the industry is at a fork in the road. What exactly do you mean?

Globally, business has evolved from products to knowledge to service and now to experience. The focus is now on making clients and customers feel good about their experience in dealing with a business or service. In the financial advice industry, this means moving away from providing financial solutions as the key value and towards providing a positive client feeling about the relationship with the adviser. “Money” is not what advisers do for clients, but how they do it.

You work with advisers all around the world. How common are the challenges facing advice firms in different countries?

I find it interesting that advisers around the globe are facing common challenges driven by the same disturbers: ageing population, ageing advisers looking at their own succession, the impact of women, technology, regulation and differentiation. Each of these disturbers bring challenges to an industry that has been slow in evolving over the years; the value that advisers provide, the way they get paid and the growth of alternatives to the advice they give are force change.

In your view, where is the creative destruction in advice really happening? Are there any specific firms that we can learn from?

In the US, United Capital is a leader in positioning their value in a different way than competitors. They walk the talk and their founder, Joe Duran, has gained a lot of notice for setting the standard. In Australia, Capital Partners comes to mind and Cambridge Partners and Stewart Group in New Zealand stand out. In the UK, Serenity Financial Partners has adopted a life planning approach that is different than their competitors. A lot of firms advertise that they focus on being client-centred, but their message doesn’t always get to the level of the individual adviser who focuses on positioning product to make a living.

You mentioned the impact on the profession of an ageing population in the western world. What do firms need to be doing better than they have so far?

Advisers need to have a better understanding of ageing issues that clients face. I find very few firms anywhere where training is provided on what clients go through as they get older. We use the same definition of retirement, the same rules-of-thumb that the industry has used for 50 years. The challenge that is largely unmet is that clients enter their later years with little understanding of what lies ahead for them. They aren’t looking for financial advice as much as they are seeking understanding of how their money can best be used to live the life they seek.

Something you emphasise in your book The Life-First Advisor is the value of client communication. Again, what in your view can firms be doing better?

The older clients get, the more important it becomes to make an emotional connection. In communications terms it means moving towards “right-brain communications” and objectives-based planning. Advisers become coaches, mentors and educators for clients and their meetings become far more personal than just focusing on money, financial planning or the share markets. Firms should be training advisers to have better conversations and more personal relationships.

Want to join us at The Evidence-Based Adviser in Birmingham on 20th March? Click here for full details on the event and how to register.