Incorporating financial coaching in advice

By incorporating key aspects of financial coaching but also effectively integrating it with the client, advisers can boost their service offering and strengthen client value on a deeper level.

Incorporating financial coaching in advice

Tony Zhang

Last Updated: 01 December 2020 Published: 20 November 2020

Speaking on The Goals Based Advice podcast, UK-based planner and money coach Catherine Morgan said by incorporating financial coaching across their service offering, advisers can move the client relationship to a deeper level, but the key to implementation is all with the client.

Ms Morgan said the question of how best to fit financial coaching into the client journey is completely up to the client and the adviser must be prepared to work with the client at that particular stage.

“The client has to be in a state of ambivalence, they have to be in a state of wanting to change before coaching will work,” she said.

“In our willingness to deepen our own skills as planners and advisers, we often overthink about how to incorporate this process and when to introduce it to the client.

“For me, financial coaching is about the client making that decision about wanting to be coached. Coaching is forward-thinking but also backwards reflecting.”

Ms Morgan said that advisers will need to pay close attention and be willing to have that conversation with clients once they are ready to talk about their financial habits, beliefs and behaviour.

Aligning with the client’s behaviour will also be a driving factor in the advice process and advisers can find the balance to start connecting on a deeper level.

“If the client’s behaviours are not aligned, they self-sabotage and don’t follow the financial plan. They make poor financial decisions and they make decisions based on coming away from pain rather than going towards pleasure,” Ms Morgan said.

“When we think about the differences in financial coaching and financial planning, they are very similar because they are both forward-thinking, but financial coaching has to go into an element of looking at client’s financial past and this is what advisers can get unsure of.”

Ms Morgan said advisers must be willing to work with the client at a deeper level and will need to look out for red flags and be ready to have additional support.

“Sometimes the decisions they are making and behaviours associated with money can be deep rooted in past trauma but there are lots of ways advisers can help bring awareness and curiosity into those beliefs and help them move them forward,” she said.

“Clients are constantly looking to have deeper conversations and connections with their financial adviser and they are coming to you because they have a challenge and coming to you is a big deal for them.

“By being ready to understand the clients through a deeper level, advisers can create change and take that information and make that financial plan a million times better and more powerful and valuable to the client.”