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Move from Client Satisfaction to Client Loyalty:The Power of the Life Planning Approach

by George Kinder and Kirk Loury

Practice in Action! is a business coaching solutiondesigned specifically for small‐ to mid‐sizedfinancial and wealth management firms seekingaccelerated business performance.

Using a unique combination of distance learningand the on‐the‐ground strength of Action! Groups(a pre‐assigned accountability group of ten peerprofessionals), topics move quickly from conceptto execution to results.

Practice in Action! focuses its content on businessplanning, time budgeting, marketing, sales,service, and execution. The program spans twelvemonths and delivers a strong ROI arising from ourextreme emphasis on execution.

1 Move from Client Satisfaction to Client Loyalty: The Power of the Life Planning Approach.

Think about the business risk with asatisfaction-level approach. Events beyondyour control, even consistent with a normalbusiness cycle, may produce unnerving“transactions.” If you asked a client abouthis or her satisfaction and were told“everything is fine,” the subsequent weeksand months could bring: 1) a period of poorinvestment performance, 2) a negativeheadline for an investment firm used in aportfolio, 3) or a delayed service response toa client’s request. That formerly satisfiedclient may be ready to shop for a newadvisory relationship unbeknownst to you.

Loyalty, as defined here, illustrates a majoradvancement from the temporal condition ofsatisfaction:

“A customer is loyal to aparticular marketer and/or serviceprovider, when he decides to staywith the marketer and buy itsproducts for a long timeirrespective of the price and othernon-monetary factors. Customerloyalty is the creation of benefitsfor customers so that theymaintain or increase theirpurchases from that organization.”(Anderson, H. and Jacobsen P. O. (2000),Creating Loyalty: Its Strategic ImportanceCustomer Strategy, Journal of MarketingManagement 10, 55.)

We can say that a portion of every advisoryfirm’s client base is loyal. However, twostrategic questions are at hand:

“Is the portion of loyal clients at asustainable level if an internal orexternal shock were to occur at thefirm?”

“Is this portion a strategic asset thatgenerates enterprise value?”

The hard edge here is satisfied clients are atrisk in the face of an uneven servicetransaction; loyal clients remain unmovedand are an asset.

Going Beyond the “Numbers” to theInner Substance of an AdvisoryRelationshipWhen it comes to wealth and itsmanagement, advisors look to investmentsolutions as the means (or the currency) thatresult in client satisfaction. After all, when aprospective client comes into a financialplanner’s office with a bundle of confusion,anxiety, and aspirations, and leaves with anelegant financial plan and a companioninvestment solution, isn’t that thecompletion of the service cycle thatmotivated the desire for advisory help in thefirst place?

Client satisfaction. Client loyalty.These two characteristics would appear to be on the samecontinuum, but are they really? Client Satisfactionresearch identifies a “satisfied” client as one in which thelast transaction (or last set of transactions) metexpectations.

Move from Client Satisfaction to Client Loyalty: The Power of the Life Planning Approach. 2

Stylistically, this may be the case. However,far deeper than style sits an inner,qualitative foundation that wealth eitherenables or hinders. An advisor that invests inbuilding this foundation acquires widerlatitude in the client’s interpretation - orcausality – of unfortunate events thatnaturally occur across a long-standing servicerelationship.

We intentionally use the term “invest” indescribing the relationship foundation. Thefact is, it takes more time and diagnosis todig deeper into the client’s motives andpurposes for needing financial advice, andthe payoff, like most financial investments,likely won’t be immediate.

Let me give you an example. A client ofmine came into my office with a clear desireto acquire a beach house for the purposes offamily gatherings. Youcould call this desire a“memory-maker” asset.Most financial planningapproaches woulddutifully go aboutfactoring theacquisition costs andthe timing.

Life Planning, on the other hand, asks thedeeper question: “What sits at the heart ofthis need for these memories?” The clientresponds, “I want to have more time to spendwith my family.” Instead of fulfilling thisdesire in the future, the far more substantivesolution finds the means to free up time andresources now so memory making isn’tartificially delayed. Life Planning works tobring the meaning of life-fulfilling goalsforward in time to the degree that resourcespermit.

To the practitioner’s self-interest, arelationship investment early on plays out ina dimension that judges you not from a

“numbers” view only but in enablingaspirations. This reflects money’s duality forthe client: while it can be a source of pain,it is necessarily an enabler of opportunity.

Competing within a Tighter RangeYou, as an advisor/counselor, are aknowledge worker. The knowledge youdisplay involves topics such as economicinterpretation, capital market interactions,investment product features, technicalindicators, portfolio theory, data flows, andexecution requirements. (Note: Theknowledge you present must be at a higherlevel than the prospective client, otherwisethere would be no reason to pay for acommodity already possessed. This necessaryprecondition for seeking advice must answerthis question: “Do you have more knowledgethan me about financial planning andinvesting?”)

Unfortunately,technology andinvestment productstandardization (with agood dose of regulatoryboundaries thrown in)combine to substantiallynarrow the range of

knowledge capabilities that one advisor candemonstrate compared to another. This isnot to say that knowledge differentiation islost but the competitive range is tightening.We see this in the growing domination ofindexing and ETFs in investment solutionsand, necessarily, lesser prominence ofseparate accounts, research-drivenportfolios, and proprietary investments. Noris this a U.S. phenomenon. In the U.K., it isnow a regulatory requirement that the advicepackage be fee-only with elimination ofproduct-level compensation.

Competing as the DesignerWhile the tools of your knowledge trade arebecoming more commodity-like, your

To the practitioner’s self-interest, arelationship investment early onplays out in a dimension that judgesyou not from a “numbers” view onlybut in enabling aspirations.


creative application of these tools is not.This is the design dimension.

Two sculptorspeering at thesame block ofmarble and withthe samesculpting toolswill create twoseparate works.Say an art lovercommissions asculpture. Towin thecommission,each sculptorwill gather thepatron’spurpose and

preferences and then produce a prototype.What leads the patron to select oneprototype over another?

While both artists had the same descriptiveinputs, the chosen work produces a commonthread that enlivens the patron’s emotionalintent in the work itself. Both artistsunderstand, for example, that a face has twoeyes, two ears, a nose, and a mouth. Thewinning artist, however, takes this basicanatomy and brings forward a facialexpression indicative of a soul beneath.

Once this emotional connection is set, thepatron will be similarly moved each time hisor her eyes set upon the sculpture. Not onlydoes the artwork express the innerconnection of the patron, but the sculptorrises to a high standing as thedesigner/creator. The patron seeks thesculptor’s other works; others in the patron’snetwork hear the story of how inputs led todesign; most significantly and years later, thepatron can tell with precision the momentthe emotional connection was made. This isloyalty to the experience the sculptorcreated.

The losing prototype? It may be appreciatedfor the skill that went into making it (i.e. “Isure couldn’t do this myself.”), but it’shardly noticed thereafter. There’s a gapbetween the artist’s creativity and thepatron’s ability to value it on a personaldimension (and not in the monetary sense!).

The Real Loyalty GapAccenture, in a recently published study,identified significant perception gapsbetween what the financial advisor thoughtwas being delivered and what the clientwanted.

The loyalty proxy is best shown in thestatement: “If FA [Financial Advisor] moves,client moves too.”

This is an extreme statement, since should itbe true, the sustainability of the firm itself isreduced. (Note: this also collides with theformer firm’s risk of trade secretmisappropriation by the departed FA.) Yes,loyalty occurs at the individual FA level, butit is the firm that holds this loyalty as astrategic asset. Therefore, at the firm level,the better question is:

“Should an economic shock occur or akey employee leave, will our clientsremain loyal to what we believe in andthe solutions we’ve implemented?”


What do you see in these other gaps? I seeadvisors doing their best to identify theclient’s data points but missing the client’saspirational context beneath the veneer. Inthis gap rests a transactional relationship.Remember, satisfaction aligns with meetingtransactional expectations; loyalty createsrelationship benefits.

The Missing Emotional ConnectionProspective clients may come to you with“money” concerns (or however you want tocharacterize the motives for the office visit).Sitting down with you,the prospect describesthese concerns, oftenexpressed in numbers:

1. I make $X.2. I’d like to save

$X forretirement.

3. The cost ofcollege is $X.

4. How am I goingto retire on $X?

5. Our debt is $X.6. I have $X in my

portfolio.7. I own a home

worth $X.8. We want to give $X to our children and

grandchildren.9. We spend $X, $Y, and $Z each year.10.The things we like to do cost $X.11.Can I afford to do what I want if it

costs $X?12.Medical care is rising at X% each year.

Going back to our sculpture analogy, theseconcerns represent the block of marble andthe sculpting tools. In other words, if theprospect is interviewing two or more advisorsduring the hiring process, he or she will comeinto each initial meeting with the same rawmaterial comprised of facts, characteristics,demographics, histories, and documents.

Each advisor hearing this same raw material,though, will envision a different design.

Like the sculptor that uses the tools of facialanatomy and creates a meaningfulexpression, the advisor creating client loyaltytakes these facts and factors and writes theclient’s stories. Life Planners are storymakers.

Writing StoriesLife Planning offers an approach that allowsyou to see the stories – the emotional content

and connections – fromthe raw material.Michelangelo said,“Every block of stonehas a statue inside it andit is the task of thesculptor to discover it.”

So it is with clients.Inside each person is aset of stories that definethe thoughts, motives,fears, temptations, andaspirations about money.The various data points,documents, facts, andfactors the prospectbrings to the first

meeting mask how these elements came tobe, and most important, how they will directthe future.

Why should you create a plan for yourclient’s life?

1. Because there is power in planning.When plans are carefully thoughtthrough and written out, they tend tocome true, whatever the obstacles.

2. Because a life plan can serve as aguide, helping you align your deepestvalues, beliefs and goals with your


earning power and financial resourcesso you can realize your dreams.

3. Because by combining proveninvestment strategies and an honest,heartfelt life planning process, you arequite likely to get where you want togo.

Life Planning is the process of melding moneywith meaning. It allows people to live richer,fuller lives – personally, professionally,financially and spiritually. For the plan toreally take hold and move forward withvelocity, the advisor needs motivation topursue these deeper dimensions and thedesigning skills to form the plan itself.

The EVOKE® Life Planning process (createdand taught by the Kinder Life PlanningInstitute) has five structural elements andeach is described briefly below.

“E”xploration: A thought-provoking set ofgoal exercises are the starting point – thefirst two steps – of the process. They includethe famous “3 Questions” 1 exercise thathelps people think both broadly and deeplyabout what matters most to them in life.

1. If you had all the money you needed,as in winning the lottery, what wouldyou do with it all?

2. If you went to the doctor and foundout you had only five or ten years tolive, how would you live it?

3. If you went to the doctor and foundout you 24 hours left to live, what didyou miss?

“V”ision: The skilled Life Planner takes thismaterial and challenges the client to sweepaway doubts and craft their ideal life in asmuch detail as possible. The rush of vigor andvitality surrounding this phase literally “lightsthe torch,” energizing clients to achieve theirvision in the shortest time possible. Goals areno longer something to be hoped for “someday” but immediate and vibrant--somethingto be worked on NOW!

“O”bstacles: “Money excuses” can bedeadly, so it is critical for the client and thelife planner to identify these and otherpotential roadblocks. The life plannerprovides vitally important support to keepthe client on track for success through thisoften difficult phase. Surprisingly, some ofthe most stubborn constraints to getting thelife we really want are internal beliefs. Byworking with a thoughtful professional whocan validate the client’s vision, thesepreconceptions can be dissolved.

“K”nowledge and “E”xecution: Once theideal life vision has been created andobstacles defeated, traditional financialplanning skills of asset allocation, riskmanagement and product selection areincorporated to complete the design andimplementation of the life plan. The uniqueability of Financial Life Planners is theirability to develop relevant financial plansthat directly support life goals—a marriage ofthe creative and the practical or a book ofinterconnected stories.

When I ask a seminar class to define financialplanning, most of the participants respondwith an answer that mentions somethingabout investing. They’re right, but onlypartly. Investing is a means to an end, andfinancial planning begins with determiningthe ends. Only when we know where we areheaded can we decide the means – this is theprocess of saving and investing – needed toget us there.

1George Kinder © 2013. This material was developed by

George Kinder and the Kinder Institute of Life Planning. It ispart of a program of trainings that lead to the Registered LifePlanner® designation. Used by permission of George Kinder.


The First Leap Toward LoyaltyWhile there are many elements to a well-rounded client relationship, it all begins (orends, if done poorly) during the first set offormative meetings, the meetings that leadto client loyalty. Let’s go through the high-level elements of this formative phase (ofwhich, a portion of the following is excerptedfrom my book, “Lighting the Torch”).

The purpose of the first meeting is to createa bond between planner and client. This iswhere you're actuallycreating a relationshipby being actively openand listening. Theclient moves in thisprocess from beinganxious to beingrelaxed. When theyfirst come in, theymay well be nervous, thinking "Who are you?"and "Will you be there for me?" When youdon't interrupt, and when you don't movequickly to your spreadsheets, flow charts, orideas about the financial plan but stayopenhearted and just keep asking the open-ended questions, the client begins to feelconnected to you simply because you areattentive and listening. That's really thesecret.

We are working to build a bond of trust. Inthe Seven Stages of Money Maturityworkshop, we say "Don't interrupt, don't plan,don't solve the problem!" when givinginstructions for the listening exercises. Weemphasize how important it is to just listento a partner's story and to try to listen fromthe heart. What happens is that thestorytellers start saying, "Wow, this isamazing-no interruptions." Meanwhile, mostof the advisers are saying, "My gosh, that wasreally difficult to sit and listen for twominutes." Just to listen is actually a difficultskill. Often, as you're listening to your client,you may recognize that you too are

experiencing some anxiety - an anxiety thatwe typically relieve by interjecting somecomment, story, or observation of our own.Part of learning to listen well involveslearning to be at ease in the midst of anxiety,whether it is coming from your client or fromyourself.

The relationship of trust is really arelationship of mutual trust. It's not justabout getting them to trust you; it's aboutlearning to trust them, as well. That means

that there's a part of youthat's anxious about whothis person is and whetheryou will still be okay if youmake a real connectionwith them. In a sense,you're testing them out,too. The first meeting isabout creating mutual

trust, mutual connection. You dive into thiswork together.

What we want to remember, then, is to allowthe conversation to flow withoutinterruption. Usually the flow of the client'scomments is leading somewhere, and veryoften it's a place with some emotionattached. It may not be an upset place-itmay be an inspired place, it may be a placeof longing, a place of yearning, or of desire,or even a place of excitement. If weinterrupt, sometimes that flow gets blocked.The client then concludes, "Oh, this person isjust like everyone else and they really don'tcare about where I'm going." The tentativesense of connection is lost. So we don'tinterrupt. It's also equally important that wedon't ask specific or detailed questions untilthey're clearly finished with the flow ofthoughts, stories, and feelings. Until then,you ask "Anything else? Is there anythingelse?"

There might be a few leading questions thatyou could ask, but only if they deepen or

While there are many elements to awell-rounded client relationship, itall begins (or ends, if done poorly)during the first set of formativemeetings, the meetings that lead toclient loyalty.


expand the flow, and only after they tell youthey have nothing else to say. For instance,"As you were describing gardening, it soundedto me as if that gives you real pleasure." I'mnot asking anything, I'm just reflecting what Iheard. I may make this comment because Isensed emotion there, and the client mayhave moved quickly away from it. I want toallow the person the room to deepen into asubject that clearly matters.

Wherever we have emotion, we're oftenscared of sharing it, of going through it. So Igive a little encouragement there. Or I mightsay, "Gosh, it sounds like the divorce wasreally hard for you." Again, I'm not asking aquestion. I'm just noticing, and also giving atouch of empathy for the difficult situationjust by recognizing it. Encouraged, feelingsupported, the client may then open up evenfurther, realizing that you're interested andwilling to hear about whatever he or shefeels is important.

In both of these instances, once the clienthas completed their description of whythey're working with me, I turn back to whereI noticed the greatest emotions (sometimesblocked) in the client. In particular, I want toconnect with what sounded like the client'saspirations, because they say somethingabout where we're headed together, whatthe shape of the financial plan might be. AndI want to connect with their greatestanxieties. "Follow the tears," one of my

teachers used to say to me, because whereemotions are troubled, the client is mostlikely to sabotage his or her plan.

So, that's all I'll do. I won't come back to myagenda. I want words to flow so I can noticewhere they clearly block themselves, wheremight they want to expand the conversation.Even so, if they spontaneously go intosomething else, I let them go.

Loyalty in a Defining SensePractically speaking, loyalty lies fallow untilactivated in the presence of choice: tocontinue or discontinue. When we’re loyal toanother person, we stand by him or her whenexternal “stuff” may otherwise cause othersto step back. We’re willing to do so becausewe have a deeper understanding of what thatperson stands for or represents. This stanceis not to say the other person is infallible,just that a greater goodness is present thanothers may see.

We talk a lot about aspiration goals for ourclients. Let’s formulate an aspiration goalfor our planning and advisory practices:

“I want my clients’ loyalty to arisefrom a belief that I understand them,care for them, and provide counsel fortheir current and long-termbetterment.”

Each client that says, “Yes, this is true!” addsto the value of your firm and to you as anadvisor. Loyalty is a currency of ourprofession.


About George KinderInternationally recognized as the father ofthe Life Planning movement, the Harvard-educated Kinder is the Founder of the KinderInstitute of Life Planning. He has been apracticing financial planner and tax advisorfor over 30 years.

His books, The Seven Stages of MoneyMaturity: Understanding the Spirit and Valueof Money in Your Life and Lighting the Torch:The Kinder Method of Life Planning, areconsidered by many to be the seminal worksin the burgeoning field of Life Planning.

The Kinder Institute trainings are recognizedworld-wide as the standard for trainings inclient-advisor relationship skills. The KIwebsite, www.kinderinstitute.com, providesa listing for the general public of over 1500trained advisors on six continents. There areover 300 Registered Life Planners® fullytrained and certified worldwide.

In addition to his trainings, Kinder hasdelivered keynote addresses at financialinstitutional conferences on four continents,most recently the annual Pims Conference2009 in the U.K. He has been the keynotespeaker at the Institute of Financial Planning(IFP) and will deliver at the Personal FinanceSociety (PFS) in London and the EFPA inMadrid this November. In 2005, FidelityInvestments sponsored a seven-city U.K. tour,with Kinder as a keynote presenter. In theU.S., Charles Schwab, Smith Barney and theFinancial Planning Association, among manyothers, have invited him to speak at theirnational conferences.

Kinder has appeared on many radio andtelevision programs and has been profiled ina variety of publications over the pastdecade, including The Wall Street Journal,the Financial Times, Citywire, New ModelAdvisor, Money Marketing, IFA Life, AdviserMagazine, Time Magazine, International

Herald Tribune, Businessweek, Newsweek,The New York Times and Money Magazine.

Winner of numerous industry awards, in 2006Kinder won the first-ever "Heart of FinancialPlanning Distinguished Service Award" fromthe 30,000-member Financial PlanningAssociation for his work as an 'innovator andinfluencer' in the profession. He is frequentlycited as “one of the most influential peoplein financial services in America.” LeeEisenberg, author of the best-selling TheNumber, devotes 20% of his book to Kinderand the Life Planning movement. He writesabout him as “…a dynamic, captivatingpresenter of ideas…dazzles a crowd.”

In 2007 Kinder released a new title, A Songfor Hana & the Spirit of Lehoula, a love storytold in lyric prose and poetry with over 100scans and photographs of a mile of the Hana,Hawaii coast. The book represents Kinder’slife-long dream to create a work of beauty,spiritual depth, artistry and literary quality.

Kinder currently spends several months peryear in Europe and divides his time betweenhis offices in Massachusetts and Hawaii.

About the Kinder InstituteThe Kinder Institute of Life Planning providesworkshops, intensive trainings and consultingservices to financial advisors worldwide. Ourexperienced professionals have presented togroups on four continents with a particularfocus on the U.S., U.K., Europe, and SouthAfrica. The Institute’s work has been profiledin The New York Times, The Wall StreetJournal, Morningstar, TIME, Business Week,Money Magazine, the Financial Times,Financial Advisor, New York Magazine,Harvard Magazine, the LA Times and more.

We also provide ongoing support andeducation for the 1,500+ advisors who havetrained with the Institute and adopted ourclient-centered Life Planning methodologies.


If you would like to speak to an advisor aboutLife Planning, we invite you to use oursearchable database. Some of our advisorshave completed our entire course of studyand training including an intensive 5-dayadvanced training and a subsequent 6-monthmentorship program. These advisors earn ourRegistered Life Planner® designation whichsignifies that they have become Life Planningexperts.

The Institute founder, George Kinder CFP®, isthe father of the Life Planning movement andthe recipient of numerous awards forleadership in the financial planning industry.He is the author of three books, most notablyThe Seven Stages of Money Maturity andLighting the Torch: The Kinder Method of LifePlanning.

About Kirk LouryA thirty-year investment advisory, financialservices, and technology veteran, Kirk Louryhas worked across the industry as a chiefinvestment officer (alternative andtraditional investment firms), strategicconsultant, chief marketing officer (mutualfunds and venture capital), and the founderof two financial technology companies. Asthe founder of Wealth Planning Consulting,Inc. (WPC), he has developed two major,high-value components for financial andwealth management firms.

The Balance Sheet Methodology (BSM)is a cloud-based financial planning,investment, portfolio, rebalancing,trading/execution, and monitoringplatform with unprecedentedintegration and economic value.These qualities are noted in BSM’s “nocompromises functionality”™ and “5-pillar integration”™ market standards.

Practice in Action! is a businesscoaching solution designed specificallyfor small- to mid-sized financial andwealth management firms seekingaccelerated business performance.Using a unique combination of distancelearning and the on-the-groundstrength of Action! Groups (a pre-assigned accountability group of tenpeer professionals), topics movequickly from concept to execution toresults. Practice in Action! focuses itscontent on business planning, timebudgeting, marketing, sales, service,and execution. The program spanstwelve months and delivers a strongROI arising from our extreme emphasison execution.

Loury earned his B.S. in marketing from theUniversity of Colorado, Boulder and hisM.B.A. from the Harvard Business School.

888-229-2272enroll@advisorbusinesscoaching.comwww.advisorbusinesscoaching.com

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