FINANCIAL planning tends to be misinterpreted as a profession that is purely logical, one which involves analysing numbers and data, generating financial reports, putting up recommendations and facilitating the execution of financial plans.
However, from my experience over the past two decades advising clients in personal finance, I learn that personal finance is usually more ‘personal’ than is the ‘finance’.
There are so many personal emotions involved when we talk about our family matters, financial goals and important life transitions.
Given that the state of our finances is something deeply personal, it is very important for a financial planner to master the additional skills in getting clients to express what and why their finances are important to them, what they believe about money or how they are emotionally attached to their wealth.
Good advice is built not only on expertise and recommendations that measure clients’ financial capacity to achieve each of their goals but also on emotional connection and trust that allows the planner to lead clients to discover their entire vision based on their values.
In my years of advisory practice, even some of my best clients hesitate, fail to act or simply do not heed the agreed-upon action to implement planning recommendations.
Financial life coaching
In search of a better way to understand, motivate, and move my clients to action, I started to take up coaching courses and learn from life planning thought leaders such as Mitch Anthony, Paul Armson, Dr Ted Klontz and Dr Sarah Asebedo.
By adopting the “financial life coaching approach”, I found that my clients tend to take more ownership of their financial matters which thus facilitates smoother positive behavioural change and execution of their financial plan.
When a client engages a licensed financial planner with a financial life coaching approach, the relationship switches from client-adviser to coachee-coach relationship. Once a client’s goals are clearly visualised through the various coaching processes, there still remains the issue of action.
To overcome inaction and promote positive behavioural change, the planner can guide clients through areas that may be blocking their progress and taking them through “stages-of-change model”.
I have personally used this model to motivate and help overspending clients. During the strategy planning session, the planner may coach clients to identify the gap between resources they have and the areas they need to work on or to link their values to life goals and vision throughout the value track.
If a client feels reluctant or paralysed by negative emotions or self-limitation, there are coaching techniques that may help clients to release their trapped emotions and roadblock. Once the limiting belief is removed, clients will be able to focus on the implementation of financial plans.
Ultimately, the key point is that regardless of your age and stages of life, you can consider looking for a financial life coach.
Having a financial planning professional close to you is not only about the nuts and bolts of managing your money but also to help you gain clarity and ownership of your personal financial future while achieving the best life possible with your wealth. — Nov 28, 2021
Lim Hooi Hooi, CFP is the co-founder of Coreplus Advisory Sdn Bhd and a certified member of FPAM (the Financial Planning Association of Malaysia).
The views expressed are solely of the authors and do not necessarily reflect those of Focus Malaysia.
