Why is it important and what difference will it make?
There seems to be a lot of talk about financial coaching at the moment as if it is a new thing that everyone should be considering. Well it isn’t!
At Magenta we have always worn three hats when helping clients because we believe that this is the best way to ensure the best financial and lifestyle outcomes.
We wear our coaching hat when talking to clients about what and who is most important to them and what they want to get out of life; our planning hat, when organising their resources to most efficiently meet their life objectives and our advice hat if we need to make specific recommendations for financial products or solutions to ensure that their plan for the future will ensure they don’t run out of money.
The advice hat is the most straightforward. When we wear this, we are looking to see which products and solutions will best suit clients depending on their current situation and what they have said they want their future life to look like. The solution may include recommending investments or pensions, Wills and Powers of Attorney etc – this is financial advice and the products and solutions are just the tools we have in our bag to get the job done.
We first put on our coaching hat with a new client at our first meeting. This is because we are interested in knowing more about the client – their life, their hopes and dreams for the future, their passions – not their money! It is important for us to understand where they have come from, their past experiences, their prejudices and money blocks if they have any, as well as where they want to go in the future and what lifestyle they want to achieve.
We see coaching as a way of helping our clients explore life issues through conversation and listening. Done well, it enables an individual to articulate what matters most to them and helps them build a plan to achieve long term success.
We know that our lives are about priorities, difficult choices and considered compromises. We’re constantly juggling the demands of our families and careers, making choices about where and how we live our lives, and often our decisions are a trade-off between a number of competing demands. In these circumstances, our coaching job is about helping our clients consider the big issues in a way that helps them identify what is most important to them.
What drives and motivates our clients and genuinely matters to them in their lives might not always be immediately obvious. Getting to the heart of the matter takes careful questioning, and really hearing and understanding what they are saying, not just listening to the answers they give – this creates better empathy and trust and is essential for a great relationship. We want to allow clients to see the whole picture and, in some cases, to help unearth information, new opportunities and a new perspective on their situation that they hadn’t even considered themselves.
Typical coaching questions might be:
- What and who are the things that matter most in your life?
- What’s aspects of your life are you most happy with now?
- What aspects of your life would you change if you could?
- What are you going to regret not doing in your life, when you are at the Pearly Gates?
We have found that open conversations with clients, a proper understanding of their “money story” and a genuine interest in them and the success of their future lives, enables us to do a much better planning job when it comes to organising their resources to ensure they will always have enough money to live their dream life.
We appreciate that this is often easier said than done, but we see our coaching role as key to building a meaningful relationship with clients that will hopefully serve them well for many years to come.
We can really only don our planning hat once we really understand our clients’ priorities and the lifestyle they have now and want to enjoy in the future. When we know the current situation ie: what is their income, expenditure, assets and liabilities and what they expect to have in the future, we can crunch the numbers to help design a plan that will provide the proper funding of their lifestyle goals and ensure that they will have enough money to be secure and happy for ever.