Step 4: Developing and presenting Financial Plan
This step is a technical activity from financial planning‟s point of view and though coaching process is not going to have a direct impact, it enhances the quality of the plan as it would be made with an in depth understanding of the Client‟s needs, as facilitated by the coaching process.
Step 5: Implementing Financial Planning recommendations
THE crucial step in the financial planning process, wherein the recommendations made in the financial plan needs to be implemented. There are many instances, where the financial planner could be required to do this activity as a one time task and the onus of maintenance with the client thereafter. However, the ongoing nature of the coaching process, could prove crucial in the success of the plan.
Relationship with money, the heart of the financial planning process, ends up being bigger than that for most clients. The expanded awareness and greater clarity of self and true vocation bought forth by the coaching process would have highlighted certain ongoing behavioral changes for the Client. The ongoing nature of the coaching process proves to be a great benefit, in ensuring the identified behavioral changes are sustained and does not fizzle out.
Step 6: Monitor Progress
The ongoing nature of coaching brings better focus on monitoring progress. The constant probing keeps the client engaged with his self and creates a feedback mechanism to monitor deviations from expected actions.
Questions like
- Were you able to follow-up on stated actions?
- If yes, how does that make you feel?
- If no, how does that make you feel?
- If no, what were the major causes/impediments for inaction?
- What kind of support could be provided by the coach to increase focus on action?
Goes a long way in achieving better end objectives, normally may not be in the domain of regular financial planning.
Case study:
Feedback from a Client, after coaching based financial planning exercise
The sessions have gone so far beyond my initial objectives. Though I started off with the objective to be able to manage my finances better, it has been an extraordinary journey which has taken me from steady practical progress to new worlds of self-discovery. The ‘little stuff’ has been life changing: bank statements, mortgages, tax benefits, systematic investment plans, filing things, knowing what’s in our accounts, managing a house-hold budget, sorting and separating our finances. Understanding that money is not maths.
The ‘bigger stuff’ has been quite magical. the wheel of life – Life Planning process has been one of the most inspirational and valuable things I have ever done. I’ve never felt greater clarity about my goals and who I am. I found it truly transformational and have felt a great sense of presence and calm after each session. Now when I look around I can realize everyone has emotional baggage surrounding money and are not even aware of them. Interestingly, the different investment products etc., that I thought would be daunting was very simple to understand and I was able to easily accept that investments don’t talk about guarantees but about probabilities. I guess, I had become quite keen to understand also. I understood quickly, how having more credit cards is actually credit negative even if there are no annual fees and that I would term that as a big benefit. But the biggest surprise to me, is how the sessions have made me bold enough to pursue my passion in photography. The changes and benefits have been surprising, multi-layered and intertwined. I have significantly more confidence overall and a greater sense of self-efficacy. All sorts of things have started falling into place that seemed unconnected to my initial objectives
Conclusion
Generally coaches address issues of emotions, values and goals more deeply than traditional planners, and coaching allows for a greater emphasis on client accountability.
Traditional financial planners might be viewed as being more technically and advice-oriented, while coaches more process-oriented.
Planners create task-oriented documents (financial plans) that enable clients to carry out specific actions on their own. Coaches provide support to clients to help them implement their plans.
Planners and coaches also differ in the nature of their relationships with clients. Planners tend to operate on a professional-client relationship basis around the development of a plan, while coaches work under a more collaborative model involving regularly scheduled sessions.
Both types of relationships can be ongoing, but the focus is different. Planners provide the tools for clients to reach their goals, while coaches give clients the support and motivation to ensure that their goals are realized.
While many clients of financial planners may only seek and receive one-time advice and written recommendations, professional planners tend to prefer ongoing relationships with clients with regular contact (at least once per year). Planners seeking to enhance their relationship with clients may be trained explicitly as coaches. Having the combination of the technical skills of a financial planner and the facilitation skills of a coach would prove to be more successful for a growing number of planners. By acquiring coaching designations, planners can attract new clients into their services, provide more intensive services (often producing more revenue), and receive more personal fulfillment from their work.