Financial Planners must become coaches
01 February 2013
Nigel Willmott, Financial Wellness Solutions
As financial planners, what are you doing to help your clients in terms of their personal money management? Usually many financial planners shy away from the coaching element of monetary planning, and are more focused on the transaction side of the relationship.
If financial planners are to survive by offering a more complete planning advice process, they are going to have to become coaches, guides, educators and implementers.
According to the Founder and Managing Director of motivate | today Financial Wellness Solutions, Nigel Willmott CFP®, financial planners need to go back to the basics. "They need to reassess their overall value proposition.”
Willmott gives a few tips of what to consider:
What kind of business are you in?
* Do you help others or yourself?
* Do you have your clients’ best interests at heart?
* Do you add value?
Are you likeable?
* Why do people do business with you?
* How do you draw clientele?
* What are your clients’ opinions of you?
* Do you build on the positives and work on the negatives?
Are you…?
* approachable?
* able to treat your clients equally?
* passionate?
* positive?
* realistic?
* innovative?
* a problem solver?
"After answering the above questions, it is time to consider the client- engagement and client-coaching process. The following is an "engagement template” that can be followed and incorporated into your advice process,” he adds.
What do I need to consider? There are four key areas:
1. Getting started
2. Money DNA
3. The heart of it
4. The Next Step
1. Getting started
The meet and greet
* First impressions count - Listen and communicate clearly
* Be Prompt | Professional | Personal | Positive | Proactive | Prepared
Ask your client; "In terms of your relationship with money are you a…”
* "Doing Nothing” person
* "Occasional Planning” person
* "Organised” person
Are you…
* Serious about Money?
* Willing to recognise bad money habits?
* Prepared to change for the better?
2. Money DNA
Personal – yesterday
* Describe your upbringing
* What are your recollections about money?
* Who influenced your thinking about money?
Personal – today
* Tell me about your life up ‘till now
* Tell me about the best financial decision you have ever made
* What principles do you follow regarding money?
* Do you avoid some investments as a matter of principal?
Tell me about your family at present
* Children | Mother | Father | Siblings | Extended family
* Are there any money matters within your family?
* Have you taken financial responsibility for other people?
3. The heart of it
Willmott says you must determine the clients’ attitude towards money and how they manage their financial affairs. Also, what obstacles are in their way that should be addressed?
Questions such as:
* Tell me about you and your spouse, and your relationship with money
* Tell me about your personal money management
* What financial obstacles are in your way at the moment?
* What are you worth [simple diagnostic]?
* Tell me about your bucket list
Budgeting
* Do you budget on a monthly basis?
* Describe your setup and planning
* Does your budget balance?
Your client and debt
* What is your relationship with debt?
* Is your debt under control?
* What is your debt to your income ratio?
* How long will it take you to get your debt under control?
4. The Next Step
* Describe your financial planning advice process
* Roles and responsibilities of both the financial planner and the client
* Implementation process and expectations
* Monitoring and on-going management
"This thorough interview process must come first if you, as financial planners want to understand who your clients are, what holds them back, what their shortcomings are and what will suit their needs, desires, dreams, goals and aspirations,” Willmott concludes.
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