The 1980s saw the beginning of a lot of trends that are still playing out, according to George Kinder, founder of the Kinder Institute of Life Planning. “In the early ’80s you had the confluence of, for the first time, significant growth in no-load mutual funds, fee-only advisors and discount brokers.”
One of the major trends to emerge from that era was a “shift to the consumer. The consumer became an investor, and not nearly a gambler or a stock picker,” he said.
One of the themes that has marked the past 35 years is “tremendous respect” for the consumer, Kinder said. “That is just about to explode in meaning and reality across the base of financial services with the fiduciary [standard], with the fact that Obama’s taken the fiduciary concerns that most of us have seriously and has brought it into the pension world.”
Nobody had any idea what the life planning movement was in the ‘70s and early ‘80s, he said, and by the ‘90s, only a “few dozen people” were practicing it. Now advisors from “28 countries, on all six continents” have taken Kinder’s life planning courses. “The registered life planner designation itself is on five continents,” he said.
“We’re seeing significant interest not only in the independent world, but also from the larger institutions recognizing that, in fact, the fiduciary movement is a train coming down the tracks,” he said.
Kinder expects the fiduciary movement will continue to expand in the future. “You’re going to see that beginning this year that it’s mostly considered a movement having to do with pricing of our product, and the transparency of that pricing of our offering as financial advisors.”
Also over the next 12 months, the fiduciary definition will grow to include more holistic and life planning because a true fiduciary needs to consider all aspects of their clients’ lives in their accounts. “Their life planning concerns, all of their financial concerns. It’s really impossible to be a fiduciary without being a life planner.”
Kinder believes that as fiduciary becomes the law of the land, some broker-dealers will adopt that standard while others will remain focused on product.