Financial advice is best delivered in the context of a long-term relationship between a financial advisor and a client. Keeping a client for the duration of that financial journey can be hard work. Advisors who approach each client relationship like a coach, with a focus on helping their clients achieve positive financial outcomes and maintain their financial discipline over the long-term, will be the ones who develop a successful partnership that will stand the test of time.
A few industry thought leaders and contributing authors of the book Exploring Advice, share their thoughts about how to be a financial “coach” and the role that plays in developing long-term relationships with clients. Here are their insights and advice on the coaching skills that can help advisors connect with clients and how to keep them on track and motivated toward achieving their financial goals.
Coaching Lesson #1: Build A Deeper Client Relationship
“Financial planning is a marathon, not a sprint,” said Caroline Dabu, vice president and head of enterprise wealth planning, BMO Financial Group. “Just like training for a marathon, planning for financial success requires setting goals, creating a strategy, developing a plan and preparing for the unexpected.”
“A running coach looks at a runner’s starting point, current fitness level, racing history, performance metrics, health and injuries,” Dabu added. “Similarly, a financial coach needs to understand a client’s hopes and dreams for their current family and the next generation. They can’t be afraid to ask the questions that will help inform individualized financial plans. Whether running or investing, an overly aggressive—or overly conservative—plan may not maximize a person’s potential or allow them to reach their goals. The right balance is critical.”
Catherine Bonneau, CEO of Cetera Investment Services, adds, “A client’s financial goals will evolve over time. What’s important in one’s thirties will usually change significantly by the time they reach their fifties, and financial advice will need to adapt to these changes.”
Any number of unexpected financial changes can happen that will throw a plan off course including career advancement or loss of employment, an economic boom or downturn, marriage or divorce, the birth of children or grandchildren, or the loss of a spouse.
As financial coaches are connected to their clients, they can use the knowledge they’ve gleaned about their clients to reassure them when these life changes strike. Simultaneously, these financial “coaches” can adjust the plan and investment recommendations for the new course because they understand the clients’ full situation and long-term goals.
Coaching Lesson #2: Understand The Emotional Quotient
To effectively coach your client, you need to understand their emotions around money, including their fears, motivators and what drives their behavior.