Top 10 Tips for Using a Financial Coaching Approach

Being human is still a Financial Planner’s key competitive edge and where real value can be added over clients doing it themselves using a multitude of online resources. Here are Jan Bowen-Nielsen and Chris Budd’s top 10 tips for using a coaching approach to increase client engagement.

1. Person before problem

Being able to listen is a critical skill. Understanding the person in front of you before you try to address any problems and issues they bring to the meeting allows you to know what is important to them; their goals, needs and fears. Observe how they look at their current situation and how it affects them personally, before you offer any solutions.

2. Use open questions

Closed questions and “Why” questions are restrictive and make clients feel they need to explain and justify themselves. You want the person in front of you to feel unrestricted and comfortable so they can talk about anything with you.

3. Use the same language

If you hear the words “frustrated with …” use the word “frustrated” in any follow-up question or summary. If you hear “My dream is to …” don’t talk about “objectives” in your conversation or reports. When you repeat back exact words and expressions, you demonstrate that you really listened, cared and understood.

4. Help clients create their dreams

Good listening and questioning uncovers what true motivations, needs and dreams lie beneath a client’s initial ‘objective’ such as ‘a comfortable retirement’. You can raise self-awareness and aspirations by digging several layers below the first statement. Once they (and you) understand their uniquely personal dreams and goals you are in a fantastic place to structure your plans and advice to meet these.

5. Understand what shapes decision-making

When we as humans deal with complex decisions with inherent unpredictability and uncertainty we gravitate to emotional decisions and mental short cuts. By really listening, you can build a picture of how each unique person makes their decisions, and how they are influenced by thinking patterns and biases. From these insights, you can adjust how you present your advice and options and coach them through their thinking process, so they reach a decision that they ‘own’.

6. “I’m here for you”

You can help your clients deal with money worries, a job loss, a difficult conversation with a family member or a panic reaction to a news story with empathy and saying “I’m here for you”. However, telling them “There is nothing to worry about” is not going to help. Through a coaching conversation you can be there for your client as you help them explore how best they can respond to the situation.

7. Replace old habits with new

You can help clients change ingrained habits that put their finances at risk. Through coaching you can help them change. This is a big subject but here is a quick tip: Our brains are not wired to stop doing things! Try to help your client replace any unhelpful habits with a new more helpful habit.

8. Be clear on whether you are coaching or advising

A coach never gives advice. Using coaching first to give you and your client a deeper understanding of their needs and objectives before you plan opens the opportunity for advice to be powerful. Don’t jump into giving advice too soon.

9. Coach clients to find their own solutions

Coaching can have a clear role in financial advice throughout the long-term relationship with the client where you seek to help them achieve financial wellbeing. This is where you are ‘there for them’ when they need support to find their own solutions, make decisions and implement changes in their circumstances, mindset and behaviours.

10. Treat coaching as a professional discipline

Using coaching skills alongside your financial expertise will help you deliver a truly personalised service. But beware, coaching is not easy! Treat coaching as a professional skill that requires training, time and effort to master.