Journal of Financial Planning: April 2020
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Fifteen years ago, while I was completing my master of science in financial planning, I attended every local and national conference I could afford. In my effort to jumpstart my new career I sat at the feet (well, stood around the conference centers) with some of the top names in the profession and I observed a reoccurring theme. Despite the best efforts of the planner, there were many instances that the client didn’t follow the plan. What? No one said anything about this during my classes.
For the first time I was hearing the term “noncompliant client” and listening to the frustration the planners expressed about clients who didn’t implement their plan.
It was easy to see that despite spending time and money to be a financial expert, the knowledge I was acquiring was not guaranteed to result in clients in following the plan. It seemed I would need a different skill set. Enter FPA Residency.
During the week-long Residency program, I learned that I was not very excited about investments, taxes, or retirement planning; and I realized that my favorite aspect of this amazing profession is being on the journey with the client as they set goals and create a vision for the future. High atop the beautiful mountains in Southern California, I learned about discovery techniques to gather information about the client’s priorities. Learning to listen for the “why” became my mission and the start of my career as a financial coach.
Becoming a Coach
Sitting with a client as they face their financial missteps, shame, and limiting beliefs gives me a sense of purpose that surpasses any experience of finding “their number.” It didn’t take long to figure out that as much as I value comprehensive financial planning, my journey was going to be different. My work was going to focus on finding and supporting the client’s motivation and helping them build a strategy to change financial behaviors. I was keenly aware that I didn’t have the skills necessary to work with clients the way I wanted to, and my Psychology 101 class from 30 years ago wasn’t going to cut it.
Coaches believe that the person has the answer to their own problems but recognizes that they may need help to explore their own wisdom. So, how can a financial planner incorporate coaching skills into the client experience?
GROW with Your Clients
GROW is a simple, four-step coaching model that you can integrate into your existing process to build an action strategy into the plan. The key to a successful coaching conversation is using open-ended questions and listening with intention.
Goal. Get clear about the client’s desired outcome and what is most important to them about achieving their goals. This is different from data gathering because the focus is on the client’s vision for their future.
Reality. Do a deep dive into the current state of the client’s situation as they see it right now. This is not to say you’ll ignore what you learn from the numbers, but first get a handle on how they perceive their situation and their primary focus. This may differ from what you think is most important, so stay open-minded.
Opportunities/obstacles. Let the brainstorm begin; invite the client to share their perspective on what is possible and what they think will get in the way. When the time comes to implement the plan, this will be the information that guides you through the possibilities and the way to approach accountability.
Way/will. All of the information you have gathered up to this point informs the details of the plan and offers insights into what keeps the client motivated during the implementation stage.
Using coaching techniques to focus on the client’s perspectives and challenges isn’t a guarantee that they will always act on the recommendations in the plan, but the coach approach can help you create a partnership with the client that promotes accountability and open communication.
Saundra Davis, APFC®, FBS®, is a U.S. Navy veteran, financial coach, educator, and consultant. She is nationally recognized as an expert in the financial coaching field and for her work with community-based organizations that focus on asset building for the working poor. She is the founder and executive director of Sage Financial Solutions, which develops comprehensive financial capability programs for low- and moderate-income communities.
This article appeared in the February issue of the FPA Next Generation Planner, for which Davis writes a regular coaching column. Interested in getting your coaching questions answered? Email them HERE, and she might answer them in her next column. Download the NGP app in the Apple App Store or Google Play.