Where the Behavioural meets Financial Planning

It’s at times like this, amidst our COVID-19 Age, when financial wellbeing and resilience become increasingly important. This is Natalie Holt in conversation with Hayley Tink, Smith & Pinching.

Hayley Tink

Financial wellbeing plays an important role for Hayley Tink, both in her role as a Chartered Financial Planner with Smith & Pinching and as a certified money coach.

Hayley says: “Financial wellbeing for me is where the behavioural meets Financial Planning. It spans some of the areas we may not necessarily get involved with as a Financial Adviser, such as budgeting, the emotional aspects of money and the financial educational aspect as well.

“Within that emotional side of things, there’s also that idea of coping with financial stress, which of course is hugely relevant right now.”

As a starting point for those who want to explore further, Hayley recommends ‘The Financial Wellbeing Book: Creating Financial Peace of Mind’ by Chris Budd, which defines the five elements of financial wellbeing as:

  • A clear path to identifiable objectives
  • Control over daily finances
  • Being able to cope with a financial shock
  • Having financial options
  • Clarity and security for those we leave behind.

Smith & Pinching is looking at how to help clients understand where their financial behaviours come from, alongside practical things like budgeting and creating financial resilience.

Hayley says, “The question for us is, how do we as advisers and planners make sure we are covering this important aspect of financial planning, particularly at a time like this?”

Building wellbeing into our process

Hayley acknowledges that at the moment financial wellbeing is more embedded in the corporate side of the business than for individual retail clients, through the firm’s work in engaging with employees.

But they are keen to make money coaching and financial wellbeing a more integrated part of their service by next year. A big part of this work has focused on staff training.

“We’re doing a lot of soft skills development within the team around the unconscious biases we have by virtue of our own experiences with money and investing, and our own attitudes to risk.

“This also looks at advisers’ own financial wellbeing, and how has this has been informing their relationship to money.”

At a personal level, Hayley has done a lot of in-depth work on understanding her own relationship to money.

“I wouldn’t say I’ve got it all sorted and now I’m the best adviser ever. But what I do know is how to leave my own financial wellbeing at the door, and to be aware of what’s ‘my stuff’ and what’s ‘their stuff’.

“It also helps me be aware of certain things. For example, if there’s a situation that I’m feeling uncertain about financially, I know how best not to bring that into my meeting.”

Lessons learned and success strategies

The evolution of Financial Planning into areas such as financial wellbeing, coaching and behavioural finance was gaining momentum even before the strange times we find ourselves in.

Financial wellbeing may now start to feature more widely as Financial Advisers and Financial Planners deliver an even deeper level of support and reassurance to clients in what are clearly turbulent markets.

Having gone into coaching before financial wellbeing was a concept, Hayley has some tips on how best to introduce financial wellbeing to clients.

She says the initial mistake she made was thinking that everybody would want to talk about financial behaviour and their relationship with money. In reality, there are some things not all clients want to discuss, and some are wary of being subject to what they see as ‘therapy’.

“Financial wellbeing often involves talking about our emotions around money. Things like budgeting can also be quite personal for some people. Questions around whether clients have financial resilience for example – some people might be quite offended by that.”

Hayley recommends a more ‘light touch’ approach. This may be starting with providing information on financial wellbeing, and then if the client responds positively, delving a bit deeper.

“One of the strategies that’s worked pretty well for me is the concept of ‘we’re all in it together’ when it comes to our financial behaviours.”

She cites an example of a client who is very status-driven, and who is always keen to maximise what they have in the bank, perhaps unhealthily so.

“In a situation like that I’ll often bring myself into it and say something like: ‘As humans, we often tend to overestimate the impact a sum of money can have and that it will make us happy’. Bringing in this idea of we’re all human and we’re all doing this has probably been one of my best strategies.”

Hayley says phrasing the conversation like this can help avoid a teacher/child dynamic of telling someone what to do, or being seen to pass judgement.

She adds that for firms wanting to explore the idea financial wellbeing a bit more, there’s a lot of good practice to draw upon.

“There’s loads of people doing really great work on financial wellbeing at the moment. It’s interesting to see how it’s all developing. It’s an exciting time – it feels like a whole new paradigm is coming in.”

Some other resources

The Financial Wellbeing Book: Creating Financial Peace of Mind‘ by Chris Budd

Read more from Hayley Tink on how to better understand clients’ attitudes to money.

You can also find more articles on adapting to the new environment we find ourselves in on Illuminate, Nucleus’ practice development website for advisers. 

These include:

What clients need to hear in a time of crisis by Neil Bage, Founder Be-IQ

Tips on how to lead and work remotely by Kirsty Lynagh, Chief People Officer, Nucleus

Staying connected in an ‘out of office era’ by Chris Wickenden, Director & Co-Founder, The Speakers’ Gym