Why you should partner with a financial coach

People make decisions about money and handle money every day. A financial coach helps them optimize their money by guiding them to the microhabits that lead to improvements in their financial situation.

Kelsa Dickey, founder of Fiscal Fitness PHX in Phoenix, described how she helped more than 1,000 clients reduce stress, pay off debt and save money. Dickey outlined the advantages of financial coaching during the National Association of Insurance and Financial Advisors Apex conference.

Dickey became a financial coach 16 years ago, after working as a financial advisor for more than two decades. As a coach, she focuses on four core areas with her clients: income, spending, savings and debt. The goal is to optimize those four areas as quickly as possible – turning things around in as little as 30 days.

“Imagine clients holding a big ball of yarn, all tangled up. They pull on one string and the ball of yarn gets tighter,” she said of her clients’ financial problems. “My job is to pull all the threads at once and unravel that ball of yarn.”

Coaching is different from advising, she said. Coaching is about spending and saving in the “here and how,” while advising is about long-term planning.

Dickey works with clients on what she called “real-time goal changing.” In the beginning of her work with a new client, she will talk with them nearly every day about the financial decisions they need to make that day – whether it’s about which debt to pay off first or how to pay an emergency expense.

“We begin with a client on payday,” she said, “and we plan it out. We talk about what’s happening in the next week, the week after that and eventually plan out the entire year. I tell them, ‘The moment something happens that violates that plan, call me.’ When that happens, I ask them what’s going through their mind, how I want them to think and how they can stay grounded.”

Many of Dickey’s clients are high income earners who are in a lot of debt. She said 42% of people who earn $100,000 or more annually report living paycheck to paycheck.

When people can’t get a handle on their spending, they often become overwhelmed and that leads to what Dickey called deferred maintenance – of their house, their car, and their physical and financial health. “My job is to help people get ahead of those things,” she said.

Providing coaching options

Most of Dickey’s clients are referred to her by financial advisors. She told the audience they are in a perfect position to provide coaching services to their own clients and presented three options to do so.

1. Add coaching to your service model – for a fee. Design an annual fee and design the service you will offer.
2. Hire a paraprofessional coach. Administrative assistants who already work in your make good coaches, but you must get them the tools and teach them how to use them. Coaching is unregulated and the barrier to entry is low, with zero licenses and regulations, she said. “We’re not doing investments; we’re not talking about life insurance.”
3. Partner with a financial coach. Before agreeing to work with them, ask some questions. What’s your philosophy about talking with your clients about investing or long-term goals? What’s your philosophy on financial advising? What strategies or methods do you use when coaching your clients? How do you support your clients in getting results? How often do you call your clients?

“Clients are yearning for better conversations around money,” she said. “They are yearning for people to talk through their decisions with them.”

 

© Entire contents copyright 2024 by InsuranceNewsNet.com Inc. All rights reserved. No part of this article may be reprinted without the expressed written consent from InsuranceNewsNet.com.