Where financial advisors are often mistrusted by clients, a financial coach can step up and offer a holistic approach to financial planning, including coaching, counselling and education.
Professional financial advice is often met with scepticism from clients who have had bad experiences and may have developed a mistrust of financial planners. This is according to Nigel Willmott, a franchise principal at Momentum Consult. He points out that there are several types of financial professionals that can help people manage their money and investments, however, few people really know the difference between a financial adviser and a financial coach.
Willmott, who describes himself as a financial or “money” coach, explains that a financial coach will use various approaches, including (financial) coaching, counselling, education as well as financial advice as part of their holistic client engagement.
On the other hand, he says, most financial advisers will only focus on “income” producing activities (in the form of products such as policies). He adds that most financial advisers are still only rewarded when they “sell and close the deal”.
As a financial coach, Willmott can spend several months helping a client through balancing their budget, reducing wasteful expenditure and limiting credit dependency, among others. These, he says, are the hard yards that a financial coach will put in long before there is any remuneration or financial gain.
“Many will view this as altruistic and unobtainable, but for those of us that believe in the long-term journey, the way of the financial coach is the only route to go.” Willmott says his clients appreciate his approach and recognise his commitment to them.
“My primary aim is to ensure that my clients enjoy the journey. Financial planning should be better appreciated, understood and sought after. Some clients have often had a bad experience with a financial planner, they may have a distrust, and we need to help our clients overcome this distrust and rather embrace their financial planning in a positive manner.”
He says that financial planning needs to become exciting and tangible and, if a financial advisor can take the time to coach, counsel and educate, apart from merely advising, then both planner and client benefit from a more deep, holistic approach. This makes the financial adviser almost “irreplaceable”.
Willmott says there are several reasons for the move toward giving holistic advice as a financial advisor.
“For me, one of the more glaring reasons is that we are seeing a move to ‘automation’ and robots. What robots cannot replace are the human elements such as empathy, emotion, connection, leadership and coaching. Those financial advisers that readily adopt the coaching, counselling and educating mindset will not only stay in business and remain relevant, but more importantly, they will become sought after and in demand,” he says.
“While these are not new concepts, I think that gradually it is becoming more critical for financial planners to adopt and incorporate coaching aspects into their overall client advice engagement. In my opinion, South Africa has a very robust and enthusiastic financial services sector and we are seeing more focus on a hybrid, multi-talented, best of breed financial planners,” he says.
Willmott argues that a holistic approach does assist people to change their behaviour and maximise their wealth. His advice to advisers out there is that this isn’t a one-time activity. “To employ what I am suggesting can sometimes appear to be a thankless job. You also won’t get financially remunerated for doing some of the work, but look at this approach as investing in not only your own self development and value proposition, but more importantly look at this work as an investment in the client for the lifetime of the client. If we are to be the best version of ourselves then this is the only route to go,” he concludes.
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