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Three Steps To Adviser Heaven: Part 1 – Coaching For Advisers

Over the course of four articles Chris Budd, MD of Ovation Finance Ltd, introduces the concept of coaching and how advisers can use it to help clients. The first article looks at the three stages of financial planning.

Stage 1: Advice

In the old days there was a very simple process for providing financial advice: Fill out a factfind, get all the information about the client. Go through it, see what gaps there are (no life assurance, not enough pension) and then recommend the product to fill the gap.

Let’s call this Advice. It could also be called selling. That’s not a dirty word. Remember the old adage that ‘pensions are sold, not bought’. Sometimes selling skills are needed to give people what is best for them.

Stage 2: Planning Then Advice

These days there is a second stage in the process that happens prior to giving Advice. Let’s call this Planning.

Financial planners will ask for the client’s objectives, maybe set up a cashflow model to demonstrate how it might be achievable and what assumptions are required. They then move to the Advice stage to recommend appropriate products and investments in order to bring the plan to fruition.

There are many advantages to planning for the practice as well as the client, based around enhanced client loyalty and improving/protecting income streams. Many firms have taken the leap from Advice to Planning-Then-Advice. Many more have not.

This isn’t the future, it is the now. The regulator, clients, your competitors, all see objective based financial planning as the most appropriate way of advising clients.

Stage 3: Coaching Then Planning Then Advice

There is, however, a third stage in the process, one that comes before Planning and Advice. Let’s call it Coaching.

Coaching is the use of interpersonal skills in order to help a client better understand themselves.

When a client responds to your request for their objectives, what is their answer based upon? Chances are it will be influenced by factors such as

• Their current perception of their wealth

• Permission (from upbringing, from family, from themselves)

• Conforming ie. what they expect you want to hear or what others would say

• Their current knowledge of financial issues

• Never having had their assumptions challenged

• Not actually having given the idea much thought.

There are all sorts of motivations and values going on behind our objectives. Coaching will help the clients to understand themselves better. It can unlock new objectives. We can dare our clients to dream a little.

Only once we have explored objectives and motivations, through Coaching, should we move into the second stage of Planning, to help map out a path to see if those dreams could become reality. We might return to coaching during this stage, for example if the cashflow forecast reveals greater possibilities than the client imagined.

Advice follows at the end to provide the tools to make it happen.

In this way we create a financial plan for our clients designed to make them happier, rather than just wealthier.

In part 2 we’ll look at the benefits that a coaching approach can deliver to the practice.

As well as being managing director of Ovation Finance Chris Budd is a Diploma qualified business coach.

Visit website on training in coaching skills for advisers 

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