Financial Coaching Module 1

FINANCIAL COACHING COURSE

TRAINING MANUAL: INTRODUCTION TO FINANCIAL COACHING SANLAMCONNECT ACADEMY

FINANCIAL COACHING COURSE

Curator & Facilitator Thembisa Luthuli

Curator & Facilitator Pernill Scheepers

SANLAMCONNECT ACADEMY

Table of contents MODULE 1: UNIT 1.1

Learning Outcomes

4

Introduction to Financial Coaching

5

Financial Coaching videos

6

What is Financial Coaching

8

Coaching Skills

9

Coaching Practise

12

Value Add

16

Complementary Relationship

17

MODULE 1

Unit 1.1: Introduction to Financial Coaching

Learning Outcomes:

At the end of the Unit 1.1, you will be able to...

define finanical coaching,

distinguish between financial coaching and financial advice,

identify the skills required to be a successful coach,

identify the value-added service of the new business model

INTRODUCTION Paul Kruger in his article “Do you offer financial advice or coaching?” captured the words of CFP Nigel Willmott, that post-RDR environment advice practises will have to engage with clients in a new way. He

“The biggest threat to any financial planning is your client’s behaviour,” said Willmot. And with coaching, you find that goals become more attainable and measurable. Clients gain more confidence through seeing their financial achievements. Their financial knowledge improves and they become more engaged. Ultimately, they become better buyers and more sustainable clients with improved lapse rates because they are more in control of their money.

suggested that financial coaching will need to play a more prominent role. He mentioned, that it is a process that does not just look to solve a particular problem or meet a

specific need but focuses on changing client behaviour and mindset over the long term.

There will be a need for advice. In other words, by going through a client-led coaching process you will create certain business opportunities where needs will have to be met with a practical solution. Not only does financial coaching naturally lead to these opportunities for an advisor, but it also results in better clients.

FINANCIAL COACHING

Activity 1 Watch the video clip (7 min), “What is coaching and the principles of coaching, presented by Catherine Morgen from The Money Panel.

Discussion Question:

Where and how in the 6 Step Sales Cycle can the coaching principles be applied?

FINANCIAL COACHING

Activity 2 Watch the financial coaching video clip (2:14 min), from the University of Wisconsin-Madison.

Discussion Question:

What is the purpose of financial coaching? What is the salient points of the video clip?

WHAT IS FINANCIAL COACHING? Financial coaching is a confidential, judgment-free relationship with a

Coaching delivers results because of the supportive relationship between you and the client. Coaching uses a strength-based approach and a client-driven agenda financial goals are set by the client for the client. Financial coaches fill an important role by taking a big picture approach to finances and by focusing on clients’ goals and challenges. Financial coaching fosters congruence between the clients’ financial goals and their personal goals and values. An alternative to the typical engagement model between client and financial advisor financial coaching is emerging as a distinct service. It means financial coaching is an appealing way to expand their financial planning practises as a new way of doing business.

personal finance expert to help address current and immediate issues, and then proactively map out actions needed to accomplish future financial goals. The coach will help the client clarify their goals, suggest changes as needed, and assist in aligning client-specific priorities with a financial plan to achieve major life goals. Just as athletes, entertainers, and entrepreneurs often utilize coaches to improve themselves and their ventures, a financial coach will come alongside to help individuals and families improve their personal financial situation through education, guidance, standard practices, and accountability. Financial coaches are trained to understand money and the details of managing personal finances, helping their clients identify opportunities and learn techniques to better manage their money. It's a misconception that your coach would make decisions for you, but instead of handling your money and financial decisions directly, they teach you management skills while helping you reach your financial goals.

COACHING SKILLS

A financial coach serves as a facilitator, supporting clients as they set goals, develop plans, and experience growth and learning. The collaborative approach requires interpersonal skills and communication techniques.

Activity 3 Let us listen to the 2 video clips “What is skills are needed to be a financial coaching?“, presented by Catherine Morgen from The Money Panel.

Discussion Points

Intuitive Listening Recognise own filters Reflect language Sensory awareness Questioning Holding the space

COACHING SKILLS

Some of the important skills are::

Actively listen to what clients say in order to be aware of the deeper significance of their values, behaviour patterns, and strengths and to increase client awareness. Asking thought-provoking and powerful questions. Mirroring client language and reframing perspectives, and Facilitating client goal-setting and attainment. Focuses on improving long-term financial behaviour; Facilitates clients to set and achieve financial goals largely on their own; Helps clients practice new behaviours and monitors those behaviours over time; and Targets clients with a minimum level of financial skills and experience.

COACHING SKILLS

Goals of Coaching:

Typical Coaching Activities:

Achieve client-defined goals Address immediate issues Support specific actions to meet goals Improve financial situations Change financial behaviours Facilitate decision-making Provide tools, resources, and referrals clients say in

Alliance with the client Set goals Develop action plan Identify resources, tools, and services Monitor client progress Make referrals as needed

COACHING PRACTISE

A financial coach doesn’t do the work for a client but rather helps empower the client to implement important changes and processes to improve their financial fitness. Help clients clarify their goals and priorities, then focus on all tasks through that very personal lens. Has the best interests of the client at heart. This may or may not be what the client wants to hear, but it should definitely be what the client needs to hear. · What makes a good successful financial coach? ·A great financial coach takes the time to understand the client's specific situation holistically, works with them to clarify concerns, goals, and dreams, and then makes sure all discussions are in the context of the client’s personal priorities. A great financial coach applies his/her coach skills to market a product. ·Provide unbiased guidance that is always in the best interest of the client. ·A great financial coach has life experiences and has specifically learned from, from and corrected, past mistakes. No one is perfect and challenges in the past can make a financial coach more understanding and compassionate. A financial coach should be a model for clients and have their own financial house in order. Our financial coaches all practice what they preach. ·

COACHING PRACTISE

What makes a good successful financial coach?

·A coach will help you understand and navigate all the options so that you can make the best-informed decision possible for your finances. ·A coach will help you understand and navigate all the options so that you can ·make the best-informed decision possible for your finances ·Empowering clients using coaching strategies Difference between financial coaching and financial advice?

·

Financial coaches focus more on the basics of personal money management, behavioural change, and accountability to

Financial advisors tend to focus on implementing financial products and strategies.

a client-driven spending plan.

COACHING PRACTISE

Difference between financial coaching and financial advice?

A financial coach’s job is to provide a client with the knowledge, skills, and behaviours that will help them build wealth in the first place. A financial coach has no tie in with products at all; they do not manage investments, nor sell insurance. We might educate our clients on the basic concepts of insurance, investing, diversification, etc., but we never provide specific recommendations on where to invest.

Financial advisors most commonly help to manage the wealth that already exists

Financial advisors have ties with an investment house or insurance company. They focus on the technical side of the products/solutions.

COACHING PRACTISE

Difference between financial coaching and financial advice?

Financial coaching will allow you to dive into the emotional, behavioural, and educational side of money. This approach does require more hand-holding, keeping the client accountable, and devising ways to help the client embrace new habits that will support their financial goals. That is because the ultimate goal of coaching is to teach clients how to fish—to get them to the place where they have the basics down, and don’t need my help anymore.

Financial advisors focus on the benefits and how the product works. Followed my annual reviews

Financial advisors are regulated. Commission

Financial coaches have not a regulated body. Fee

VALUE ADD

What is the value-added service financial coaching offer?

According to Garrett Philbin, financial coaching focuses on…

Fears and anxiety about money change lives by uncovering critical beliefs and issues, reduce anxiety by overcoming obstacles, and help the effective use of money in alignment with real goals. financial decisions money beliefs and emotions goalsetting educating clients on the basics of personal finance, creating a spending plan that will reflect on values and goals, creating positive habits, setting financial goals, determining client behaviour, empowers clients to take responsibility for their behaviours and decisions exploring the client's money habits, decision-making by taking a holistic view of the financial situation, supporting the client’s continual learning and growth and serving as an accountability partner throughout the process, holding them accountable to their stated goals and directives (which can change with time). So, for example, they will ascertain if you are a saver or a spender, or if you like sticking to a budget to help empower and give you confidence to make your own financial decisions. This could be done by using a financial tool.

COMPLEMENTARY RELATIONSHIP What is the parallel or complementary relationship between financial coaching and financial advice? Both disciplines provide distinct services. Financial advisors need to be armed with coaching principles, strategies, and tools. On the surface, offering this service to individuals who don’t fit the mould of typical clients, might seem like a less valuable use of your time as a financial advisor, however, what you’re doing is planting the seeds of trust for future engagement with this audience demographic. By providing both services, you will be able to better meet your client’s needs while increasing your own marketability. Your clients will benefit from having access to both services, as they can get the strategic advice they need while also learning how to make better decisions and build strong habits. Financial coaching improves their knowledge and become more financially aware, whilst also breaking down barriers around what a financial advisor can do for your wealth long-term.