Why Being a Financial Expert Isn’t Enough

Brittany Curtis
Manager of Capacity Building

Being an expert in the field of finance, although crucial, is not enough to be an effective financial coach.

Financial coaching is a unique and complex endeavor. Today, financial coaches typically differ from financial educators and workshop facilitators because coaches cannot simply present financial security information to their customers and hope they take action. A workshop session on predatory lending and a summary handout isn’t enough in the eyes of a financial coach. Coaches don’t lecture on financial content, prescribe certain steps to take, or suggest “one size fits all” approaches.

So what is a financial coach for? What do they do?

Financial coaches support a one-on-one customer-led process that identifies the goals, motivations, and action plans that best keep a customer on track for building their financial security. It’s not just about someone giving you information and marching orders — it’s about developing your own skills and abilities to translate financial knowledge into improved everyday financial behaviors for meaningful and long-lasting change.

Coaches rely on their “soft skills” to make these lasting changes with customers possible. Soft skills include a wide array of interpersonal strategies that one may employ while interacting with other people, such as empathy, a positive attitude, and communication skills. Our coaches at The Financial Clinic embody the following coaching approaches and soft skills approaches with their customers every day:

  1. Building Trust and Engagement

Effective financial coaching relies on the customer feeling comfortable enough to share their personal information about a typically taboo subject. How do coaches build trust and solidify engagement? Create the perfect first meeting. A few things to keep in mind:

Learn from self-mastery: Self-mastery is the ability to modulate your internal thought processes to maintain a helpful and productive presence. When coaches understand their own assumptions and biases, they will be able to acknowledge their internal thought process and create a judgment-free zone for their customer. Accomplished financial coaches can take potentially surprising or charged statements in stride and incorporate their customer’s interests or preferences into goal-setting and action planning processes.

  • Best practice tip: Be conscientious of a customer’s personal priorities. If a customer says that being able to donate money to their church is a non-negotiable area of their spending plan, a coach will respectfully acknowledge the importance of this and help their customer find a way to include it. Even if the coach does or doesn’t think that the customer should be spending their money in that way, it’s imperative that the coach keep their own biases on the issue and remove them from the conversation.

Employ active listening and empathy: Coaches must listen to the thoughts and concerns of their customers, to allow thoughtful responses later on. It’s important to consider what isn’t being said by the customer too! Non-verbal cues can give more insight to how a customer really feels about a particular topic or idea.

  • Best practice tip: Be sensitive to aspects of active listening, including appropriate open body language, validating a customer’s concerns, and asking clarifying questions and reflecting main ideas back to the customer.

Create action-driven goals: Financial coaches take great care to find out what drives their customer. Creating action-driven goals provides immense guidance throughout the coaching relationship. At the Clinic, we encourage customers to create goals that are forward thinking, strengths-based, and passionately held. Coaches can work with a customer to move from a strategy like paying off credit card debt towards an asset-oriented goal likeincrease credit score to qualify for a car loan. Reducing debt can be a strategy that gets a customer closer to their goal, but we want the goal to be something they care deeply about (and when were you last excited to pay off your credit card?).

  • Best practice tip: Be aware of “default” goals like retiring comfortably that are important to the customer but are too general to be a source of daily motivation. Try tying in things that the customer can currently connect to.

2. Challenging Habits, Assumptions, and Thought Processes

Frequently, a customer is seeking out a financial coach because they have tried everything they could think of and are at their wit’s end for a solution. The customer might feel like they are in a crisis and may feel hopeless and dismayed when they come through the door.

“When it is obvious that the goals cannot be reached,
don’t adjust the goals — adjust the action steps.” — Confucius

The building of trust and rapport previously mentioned allows coaches to get a baseline of information about customers’ experiences, goals, and interests. The next important step with their customers is to challenge habits, assumptions, and thought processes to get them closer to their goals.

Use the goal as the driver: Financial coaches use the financial goal (or goals!) as the driver of the coaching relationship. Our simple but evocative framework of creating goals that are forward thinking, passionately held, and strengths-based can open a whole new world of possibility for a customer. These unique and personal goals, like saving up to start a jewelry-making business or securing a loan for a dream home, help customers take ownership of the coaching process, prioritize actions to take, and support them in overcoming obstacles.

  • Best practice tip: If a customer has trouble coming up with a meaningful goal, ask them to consider several different aspects of their life. What do they hope to provide for their family? What do they like to do for fun? Do they have any career or educational aspirations? What might they do to focus on their health? Goals don’t have to be traditional financial goals like saving for a home or retirement to be effective.

Ask powerful questions: Asking open-ended questions helps customers set and pursue action-driven goals. Coaches can use powerful questions with a customer to aid them in recognizing and confronting habits that may be holding them back. It’s important for customers to address their assumptions about what is and isn’t possible, and possibly reframe current thought processes to create a more supportive mental environment for effective action planning.

  • Best practice tip: Know what conversation model or questions you want to use in advance. Create a list for yourself of open-ended coaching questions. You’ll want to note questions that pull out information, create buy-in, identify significance, and more. Practice these with family, friends, or colleagues in advance so you have an idea of how someone will react.

Take a strengths-based approach: Some social service and case management programs have a tendency to focus on needs, weaknesses, and risks. In financial coaching, coaches can shift the conversation to encourage customers to take advantage of their personal strengths when problem solving. Together, the coach and customer can explore the customer’s underlying assets (ex. personal skills, resources, social network, community resources). With this approach, both coach and customer can maintain the attitude that customer has the strength and resources necessary to be successful.

  • Best practice tip: Financial coaches may recognize strengths before the customers do, so having a conversation around why that particular strength is relevant can be a helpful step in the customer coming to agreement that they identify it as a strength.

3. Mutual Accountability

At The Financial Clinic, mutual accountability is supporting customers in choosing the right path for themselves by having a broad understanding of personal finance actions and acting as a thought-partner in creating positive behavior change.

Share expertise: Strategically provide well-organized, accurate and understandable knowledge about relevant financial concepts and topics, with customer behavior change always in mind. Present all information with customer-focused language in a clear and confident manner.

  • Best practice tip: Whenever possible, provide supportive materials and information in formats that the customer can understand best. This may mean utilizing multilingual documents, finding or creating simplified charts or infographics for complex ideas, or even using videos in your session.

Hold the customer as the change agent: Understand that skill acquisition and behavior change that lead to independence are important aspects of the coaching relationship. Facilitate coaching sessions that allow the customer to test new skills and knowledge, and embrace the idea that the customer should “choose their own adventure”.

  • Best practice tip: Whenever you and your customer decide on an action for them to complete, make sure they understand the why behind each step.

Honor mutual accountability: Utilize empathy and active listening in the process to help the customer challenge their own assumptions. Hold the focus on the goal for the customer when necessary. Commit to appropriate coach action steps and uphold expectations for the customer to do their own research and take ownership of their process.

  • Best practice tip: Set the expectations of the coaching relationship from day one. Clearly define what your role is as the coach, and what their role is as the customer. Some coaches even utilize “coach contracts” to further solidify mutual accountability.

Of course, being a financial coach doesn’t end there. The most commonly overlooked aspect of financial coaching is the consistent practice of personal reflection. With customers representing different backgrounds, cultures, and personalities, coaches are challenged to meet the widely diverse nature of their work, keeping all personal biases and beliefs far from the session. Whether it’s debriefing with a supervisor, seeking the help of a fellow coach, or taking advantage of professional development opportunities, financial coaches must continuously improve their work — in equal parts financial expertise and soft skills — to ensure their customers find the path to achieve their goals. Then, you can watch the magic happen!

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