I had to travel all the way to Birmingham, England to find one of the best conferences on the practical aspects of life planning.
I recently attended (and spoke at) one of the most interesting conferences on the planning circuit: the Back2Y conference (https://www.back2y.co.uk/) in Birmingham, England. Its producer, Paul Armson, is a pioneer of life planning (he calls it “lifestyle planning”) in Europe, charging fees for helping clients organize their financial and personal lives so that they can live (as he put it to me) “the best version of themselves” or (as he also said at the conference) “the life of Riley.”
‘Back2Y’ is shorthand for the goal of bringing client conversations “back to why” they’re on this planet in the first place.
Armson says that he created the conference in 2013 on kind of a dare. He was complaining aloud that most conferences he attended were heavily sponsored, featured sponsoring companies delivering their marketing agendas from the podium, and focused not on the important issues of improving clients’ lives, but on investing or practice management topics that he found peripheral to real planning.
So he started his own conference that would intentionally avoid all those distractions from what he felt was important. The result was 600 professional advisors, all paying their conference fee with no exhibit hall distractions, listening to speakers talk exclusively about how they delivered lifestyle planning value to their clients.
Armson also consults with advisors who want to move past asset management to a more personal financial planning approach, and has written two books for the profession: “The Financial Advisor’s Survival Guide – How to Succeed and Prosper in a Fee-Only World,” and “The 7 Habits of Highly-Successful Financial Planners – How to really matter in the lives of your clients.” He seems to have a significant following on the global financial planning scene; at the conference, I met advisors from the UK, the Netherlands, France, Australia, Canada, the U.S. and (as you’ll see in a minute) Brazil.
One of the best speakers at the meeting was Matt Anderson, a Chicago-based personal coach, talking about “The Road Rarely Taken.” The gist of it is that most people set big goals for themselves and then, when they don’t achieve them quickly, they give up in frustration.
The solution? First, set a goal, not on outcomes, but on the person you want to become. Then focus on making 1% growth toward becoming that person. Make that 1% progress continuous, day by day, month by month.
Anderson talked about retraining your subconscious mind—where, he said, 95% of our behavior is based—to believe in incremental progress. “To get through the valley of disappointment, you have to remind yourself that this process is going to work eventually, incrementally,” he told the audience. “He also recommended that we get in the habit of making ourselves somewhat uncomfortable, which helps us grow. “Top achievers view resistance differently from most people,” he said. “They understand that resistance is actually a sign that we’re on the right track.”
But how does this work procedurally? Anderson asked us to list two things that we really want to happen, and then list three reasons why we haven’t done them yet. What can we do to address those three reasons? For most attendees, the reasons actually didn’t make sense; the truth is, we were ignoring important goals in the day-to-day clutter of our lives. But articulating the reasons made it easier for us to dismiss them—or, in the few cases where they were valid, address them head-on instead of vaguely wishing that we could move forward and feeling helpless because it wasn’t happening.
A more precise recipe for moving forward came later. Anderson laid out a matrix of 1% ideas to implement. We would write down ten ideas worth doing, and for each of them, list a “first action step” that would move us incrementally closer to that goal. The first action would have a start date which we would commit to, and then, interestingly, after each action step, we were asked to think about who could help us with it.
We were given a calendar which let us list the new daily habits that would take us closer to the goals, and we would check off each day that we implemented that habit right there on the calendar, so we could see whether we were actually following through. (There was also a “habits avoided” section for those of us who want to ditch distractions that have become engrained in our schedules.)
To retrain our subconscious, Anderson asked us to write out an ideal life in the present tense (not the future tense), and repeat these things right before we go to bed, and the first thing in the morning. “Your subconscious has trouble knowing the difference between your affirmations and reality,” he said. “Before long, you’ll be living in a new reality.”
Then get in the habit of stopping yourself periodically during the day. Ask yourself: “Is this how I want to be in this moment?” “Most of the time, we are not at our best,” Anderson told the group. “So you make an instant course correction to get back on track.”
Finally, he asked all of us to “notice miracles”—that is, the many interesting and remarkable things that surround us all the time. “Get in the habit of marveling more,” he said.
Another session I found valuable was the presentation by Mitch Anthony, author of “StorySelling for Financial Advisors,” “The New Retirementality” and “Your Clients for Life,” co-producer of a coaching community called ROLAdvisor (‘ROL’ standing for ‘return on life’).
Anthony said that the key to helping clients achieve better lives is to actively listen to their goals and desires—which, he said, most of us are not very good at. Then he listed some of the inhibitors of effective advisor-client conversations:
A self-focused agenda. Anthony illustrated this with the story of two Hollywood executives having lunch together, where one of them says: “Enough of me talking about me. How about YOU talking about me for a while.”
Ego-centricity. Anthony said that we are all narcissists to some extent; we want to impress others, so we barely listen to what another person is saying while we wait for the opportunity to say something that we hope the other person will find interesting and informative. “It takes a lot of patience to let people finish their thoughts,” said Anthony.
Experiential superiority. This is the instinctive desire to decide that you know what the other person is saying without letting the other person actually tell you. It manifests when someone says “I know where you’re going here. I have a lot of experience with that. Let me talk awhile.”
This can also manifest in trying to top whatever anyone else has said. The example: someone tells you they once managed to climb to the top of Mt. Kilimanjaro, and you reply: “Oh, that’s nice. I’ve climbed Kilimanjaro five times barefoot.”
Defensiveness. If you’ve made a mistake interpreting what you heard from a client, and are corrected, you argue that you were actually right all along—hoping to make the other person give in.
Talk Show Host. Talks endlessly, falls in love with the sound of their own voice, and dominates with entertaining monologue.
The gist of it is that clients need to know that they’ve been heard, and (better) they want to feel important when you’re together with them—that you “get” them. And finally, they want to achieve mutuality: an agreement that these are the steps that you and they will take together.
At the end, Anthony talked about how he asked for a meeting with an executive who he didn’t expect to have time for him, and was surprised that the executive granted the meeting. At the end, the executive blew him away by asking:
Did this meeting meet your expectations?
Is there anything else we need to talk about?
Have you gotten everything you hoped for out of this conversation?
Anthony said that this is a magic way to end a conversation with clients, and as a bonus, if you are in the habit of asking these questions, it requires you to show up fully for the conversation.
The most interesting presentation I saw at the Back2Y meeting featured Andre Noveas, who runs a 12-year-old lifestyle financial planning firm called LifeFP, with offices in various cities in Brazil. The firm now works with 4,900 clients (that is not a typo) served by 60 planners. “We decided, from day one, that we were in the trust business, and not in the money business,” Noveas said early in the presentation. Another decision: to work with every kind of family, from those living paycheck-to-paycheck to people with significant investment assets.
That means LifeFP doesn’t bill on client assets. Instead, Noveas and his team have one of the most interesting closing techniques I have ever seen with clients.
It’s called “the bet.” For its planning services, LifeFP charges 5% of the income of both spouses, regardless of how much or little that may be. The money comes out of their credit cards every month. And this is the source of ‘the bet.’
“We say to them: Today you have 100% of all your income to live on,” said Noveas. “And you are leading the life that you are leading. If you walk away from here, you will continue to have 100% of your income and you will continue to lead the life you are leading. That is one possible future for you.
“But,” Noveas or one of his advisors will tell the prospect, “let’s imagine another possible future, where you are living on 95% of your total income. You work with us for three to four months on 95% of your income. You have a chance during that period to realize whether our services are worth retaining or not. Let’s say that within four months, you have come to realize that this is not working. It is not for you. You go back to 100% of your income, and the life that you were leading before.
“But perhaps over those four months, it DID work for you. What if you are living on 95% of your previous income, and your perception of your life changes. You’re feeling better. You have less anxiety. You have more clarity. You feel safer. You and your spouse can have better conversations about your finances. Would you continue to work with us, if that happens?
“Why don’t we start?”
And then the LifeFP advisor recommends that the prospective client not sign anything right away. “We tell them, it’s a fairly easy bet. But I want to give you some time to think,” said Noveas.
He invites them to talk with advisors at one of the big banks which dominate financial services in Brazil, and compare the offer LifeFP is making with what the banking representative will do for them. “See what is their proposition,” said Noveas. “See how they develop the conversation with you. And then focus on how you feel about the way that we talk with you and the way that the other person talks to you. We want them to do that, because we want our potential clients to have perspective,” Noveas told the audience. “We want them to hear our offer, and to hear theirs. We’re confident that they will see the contrast—and that is what they need to start the relationship with us, and actually want to buy into the process.”
Of course, clients can cancel the arrangement at any time; Noveas tells them that ‘it’s easy to get in, and easy to get out.’ He told the audience that three out of seven clients will cancel the arrangement in the first six months, but after that the renewal rate is over 80%. Because the clients are so diverse, they are paying very different rates, but the average monthly fee is 180 British pounds, US$230.
What does the planning process look like? “There are three kinds of problems that we encounter,” said Noveas: “External problems, internal problems and what we call philosophical problems.”
Clients come to LifeFP with external problems. “It may be: I have debt. I’m not sure about my investments. Or: my spouse and I are arguing about money,” said Noveas. “The internal problem is: if I can’t have a good conversation with my spouse about money, our relationship is not healthy and it flows over into intimacy problems.”
The LifeFP planner will spend the first half hour focusing on identifying problems that can be solved. “You help your clients realize the problems that they have,” said Noveas. “We tackle the manifestation of the problems, and gradually we bring up the philosophical problems that we all face: which is, basically, am I living the best version of my life?”
The acronym description of the process is PSA, which stands for ‘problem, solution, aspiration.’ “In each meeting, we try to articulate a sentence, one sentence, which says: This is the problem you are facing, this is the solution that we want to propose to you, and if that happens, this is how your life would look like,” said Noveas. “With each client, they need to see what is behind the solution, and it can be quite powerful. You help your potential client articulate the problems they are facing, and then you know how to say: this is the solution we have for you—which you don’t deliver because they haven’t hired you yet—and then you show them what their life will look like once the solution has been delivered. I believe,” Noveas continued, “and our numbers prove it, that they have a higher chance of hiring you and a better understanding of your value proposition if you craft that important sentence.”
Noveas said that many of his planners have stopped using ‘the bet’ because so many of their clients are telling their friends about it. “Usually you need to do that bet with your first 10-15 clients,” he said. “After that, your clients tell everybody they know about the bet that they made a year ago, and people call you and ask about life planning.”
The business of trust
But… the firm doesn’t manage client assets? No, it doesn’t. “We might go to meetings with their broker-dealers,” said Noveas, “but we sit on the same side of the table, and the money manager sits on the other side. People tell us that we’re leaving money on the table,” he added, “but in our view, the more money we leave on the table, the more our clients trust us. You have a decision about what kind of business you’re in. Are you in the business of money or in the business of trust?”
Later, Noveas pointed out that he and his firm can’t control the markets. “So,” he said, “how can we be compensated based on something we can’t control?” Instead of an assets under management formula, he said, LifeFP operates under a “dreams under management” formula, where instead of talking about performance relative to the markets, his planners talk about whether to reinvest or spend any extra money that comes in.
“We might say: How about if you dream a bigger dream?” Noveas added. “We say, You are on track to be able to afford one, but what is it? Our favorite conversation is: How could you spend the money now? That is not a conversation you want to have if you are working for assets under management,” said Noveas. “But we often recommend gathering up your kids and going on a family trip. Those are much better conversations to have.”
There are several other aspects to Noveas’s formula. One is that all of his planners are getting their own life-centered planning from other people in the firm; at one point, Noveas said that he made the intentional decision not to be a life-centered planning firm, but a firm of life-centered planners.
Noveas also has a brilliant process for recruiting. Some years back, he created something called the Life Academy, which trains laypersons to be financial planners. This is a profit center: more than 1,000 people a year sign up for one of four online courses, which also have a life planning component to them.
Yes, Noveas admitted, he is training his competition, and he proudly boasted that many of the people with the CFP certification in Brazil today are graduates of his Life Academy.
But here’s the key: Noveas will hand-select which of the aspiring planners he wants for his firm. He wants, he said, people who want to become the best versions of themselves, and want to help others achieve the same thing—and those, he told the group, tend to be rare and hard to find.
The Noveas presentation was the buzz of the conference, but many of the 600 attendees at the Back2Y meeting seem to be on a similar path, all comparing notes on how they can create a viable business helping themselves and others be their best selves.
I had no idea that life planning had taken such a strong hold internationally, but my sense is that the overseas market for the next stage of great planning work is just as strong as it is in the U.S.—which means that a small but significant number of people are exploring better ways to tie their financial advice to client life goals, and help their clients live better lives.
Back2Y was one of the “best” conferences that Michael Kitces recommends each year, and I second his recommendation.