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August 30, 2017

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From advisor to coach: The evolution of the modern advisor

September 7, 2017

 

In today’s environment you have to be concerned with the value of your advice when you compare it to what is available to your clients elsewhere. If you are charging for investment advice you open yourself up to being compared to the performance of markets or benchmarks.  If you provide financial planning advice, you run into advice readily available on the Internet.

 

As I work with advisors around the world, I am convinced that the most successful advisors have the best relationships.  Those relationships are based on the value that the advisor brings to the client.  Invariably, good relationships are never based on what the advisor does for the client financially but on how the client feels emotionally.

 

When that advisor is thought of as a coach, the client tends to see the relationship in more personal terms; coaching by its very nature is a closer emotional relationship than advising.

 

What do coaches do?

 

You are likely practicing good coaching skills without even knowing it.   Anytime you find yourself helping your client to see the big picture, change how they view their money, or even to set goals for the future - you are coaching.

 

While it is important to do all of these things, it is equally important to be seen to be doing them as a coach.  You want your client to think of you as an integral part of their future planning, holding them accountable, helping them to set goals and showing them how to get there.

 

When I sought out an explanation of the coaching process from the International Coaching Federation, I came across a white paper that explained it simply:

 

'The life coach or business coach often provides or facilitates: clarity, support, accountability, focus, inspiration, challenge, lightness and direction.'

 

Coaches help the client set personal goals and then focuses them on the strategy needed to get there.

 

Isn’t that what you already do?

 

You are a coach, though most advisors would not identify themselves as such.  Your clients are continually putting you in the position of questioning their decisions are acting as a sounding board.  In fact, if you haven’t made it safe for your client to look to you as a personal coach, your communication may only be at the most superficial level.

 

  • As part of the financial planning process, you clarify the client’s current situation and ensure they understand exactly where they are.  This includes helping them understand their behavioral biases and their needs, concerns and opportunities

  • As a coach, you will use your insight and experience to help clients think about the role that money plays in their future planning.  A Intuitive advisor enhances this by gaining a sound understanding of the client through the discovery process

  • The intuitive advisor works with the client on an ongoing basis to reinforce the skills needed by the client to be an effective planner and critical thinker when it comes to money.  This partnership continues in the same way that a business, personal or sports coach refocuses their client and adjusts to the changes that occur.

 

However, here’s where the disconnect occurs between what a personal coach does and how many financial advisors view this kind of interaction:

 

  • Personal coaches facilitate, motivate, educate, support and challenge their clients to build and attain their goals. Most financial advisors assume clients can do this for themselves

  • Financial advisors assume people know how to set goals and that all of their clients have a clear view and understanding of their future

  • While some advisors are educating themselves on the process of becoming a personal coach, other advisors don’t have the inclination to enter this area.  In fact, most advisors who have trusting clients are often placed in a coaching role whether they recognize it or not

  • How often has a client confided in you about an issue that is not strictly financial in nature?  They will only do so if they view you as a critical part of their decision-making.

 

The keys to becoming a coach for your clients:

 

  • Your clients must view you as a source of information on life issues (not an expert)  Remember that it is your client’s life issues that drive their internal thought process

  • You must demonstrate that you relate financial planning to life planning

  • You must be a good listener, questioner, challenger and facilitator

  • Your role is not to be a psychologist or sociologist, but a resource your clients can use on life planning issues

  • You must be prepared to insist that you can’t effectively help a client with a financial plan unless you understand relevant elements of their life plan

  • Your clients have to feel that you are there as a true partner and mentor.

 

Ten steps to becoming a coach in your client’s mind:

 

  1. Position yourself as a coach from the outset. Advisers tell clients. Coaches ask them

  2. Use the discovery process to help the client understand the key life issues that drive their financial decisions

  3. Take seriously your role as an educator to encourage your client to draw their own conclusions.  A coach is always educating because you are trying to get the client to move outside his or her comfort zone and consider other elements of life and money

  4. Run education programs that focus on life issues or the relationship between life and money. The client gains a fresh perspective on what you do and sees you as a life educator rather than just a money expert

  5. Hone your skills as a conversationalist, including being a good listener and practicing empathic listening.  Coaching isn’t an inquisition.  Your conversation should seek to understand first and to make it safe for your client to share emotional triggers with you

  6. Use the coaching questions: ‘Did you know…?’ and ‘Have you thought about…?’  You want to be a catalyst for your clients and get them to think about things they may not have considered

  7. Provide a basic structure on how to think about life and money and use that as the foundation for your coaching conversation.  A life-based discovery system will not only enhance your client’s understanding but also is an efficient way to talk about life issues

  8. Employ a meta-conversation whenever you sense the client is uncomfortable. A meta-conversation is a conversation about the conversation, for example: 'George, you seemed to be uncomfortable with your answer to my question - can we talk more about some of the concerns that you have?'

  9. Clarify your client’s life needs, concerns, opportunities and goals before moving to a financial discussion

  10. Take a coaching course through an organization like The International Coaching Federation.

 

 

 

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“There are very few people in the world who understand financial advisors and great advice as well as Barry and David. Their lifetimes of learning are now documented to help others provide the care to the folks who need it most. This is a must read for those who simply want to improve their care to clients.”