Welcome back to the 104th episode of Financial Advisor Success Podcast!
My guest on today’s podcast is Saundra Davis. Saundra is the founder of Sage Financial Solutions, which provides training and develops certification programs to teach people the skills of financial coaching.
What’s unique about Saundra, though, is the way that she’s integrating together financial coaching with low-income financial counseling on one end, and also with financial planning for more affluent clients at the other end, and highlighting how, regardless of one’s income and affluence, anyone can struggle from time to time in their ability to align their financial behaviors with their financial goals.
In this episode, we talk in depth about what the financial coaching approach really entails and how it both differs from and complements financial planning, because, as Saundra puts it, financial planning covers the what, but financial coaching covers the why in order to jointly arrive at the how, how the process of financial coaching leads the advisor to ask substantively different questions and navigate the client discovery process in a different way, and how financial coaching helps to address the common challenge that we face as financial planners, where clients come in and engage us for financial planning and then fail to actually follow through and implement the recommendations that would clearly benefit them.
We also talk about some of the key tenets of effective financial coaching itself, including why the essence of financial coaching is not about asking questions about the client’s financial situation in order to get data but instead about asking powerful questions that both extract information for the plan and help clients make their own self-discoveries about their financial thinking. Why financial education is necessary but not sufficient to bring about financial behavior change, because, as Saundra says, you can’t do better if you don’t know better, but knowing better doesn’t necessarily mean you’ll do better. Why it’s essential to hold your clients in high esteem and not judge their prior financial decisions and actions in order to help them, regardless of what you may personally think about their financial situation, and a recognition that in the end, we as financial planners can’t actually change our clients’ financial lives, but we can help them to change their own financial lives for the better.
And be certain to listen to the end, where Saundra shares information about the FFC and APFC financial coaching designation she’s developed to help train financial planners in financial coaching skills, how Saundra drove her career success forward by making her own commitment to put $10,000 a year towards her professional education, and her advice to financial planners that the best way to really learn about the power of financial coaching is to put yourself through the process, for which she actually has coaches going through the Accredited Personal Financial Coach designation who are looking for prospective clients to practice on, for any advisors who might be interested.
So whether you’re interested in learning more about ways to help clients implement the advice you give them, how financial coaching can enhance your value proposition to clients, or various pathways for advisors who are new to the profession, then we hope you enjoy this episode of Financial Advisor Success with Saundra Davis.
What You’ll Learn In This Podcast Episode
- Why financial education is necessary but not sufficient to bring about behavior change. [14:49]
- The differences between financial counseling, planning, therapy, and coaching. [21:41]
- How to identify when a client is ready to implement change. [26:21]
- Why she puts $10,000 a year toward her professional education. [30:16]
- Where advisors can go to learn more about financial coaching. [39:24]
- Saundra’s background and pathway into financial coaching. [1:03:59]
- Ways financial planners actually harm clients – even when trying to help them. [1:08:28]
- Examples of the powerful questions that get clients to open up. [1:14:21]
- What’s next for Saundra. [1:17:06]
- Advice for advisors coming into the profession today. [1:18:35]
Resources Featured In This Episode:
- Saundra Davis
- Sage Financial Solutions
- Dr. Ted Klontz
- Ed Jacobsen
- FA Success Episode 101 with Dr. Moira Somers
- Coaching Skills for Financial Planners from Golden Gate University
- The Coaching Habit by Michael Stanier
- Motivational Interviewing by William Miller & Stephen Rollnick
- Changing For Good by James Prochaska
- Facilitating Financial Health by Brad Klontz & Rick Kahler
- Coaching Essentials by Saundra Davis
- Financial Fitness Coach (FFC)
- Accredited Personal Financial Coach (APFC)
Michael: Welcome, Saundra Davis, to the “Financial Advisor Success” podcast.
Saundra: Thank you. It is so good to be with you.
Michael: I’m really excited to have you on the podcast here. We’ve kind of gone in this directional theme with a couple of recent podcast episodes talking about the idea of financial coaching and just what does it mean not to just give someone the technically accurate advice, you know, “You should save here or allocate money there, do this, do that,” but how do you actually help people implement that advice and follow through and do all the financial things that we’re trying to get them to do? Because, you know, sometimes it’s not enough to just tell someone the right thing to do. You have to actually help them a little to get there and do it.
And I know you’ve spent a lot of your time and work on this. You’ve actually built some financial coaching designations around this. And I’m looking forward to talking a little bit today about coaching and helping clients follow through, and what we can learn of all the stuff that’s out there that I don’t think we really cover in financial advisor world. I mean, we’re starting to talk about, like, behavioral economics and client psychology and some of these dynamics, but I feel like we’re still not quite connecting the dots yet to just outright say, “It’s not enough to tell people what to do, sometimes you have to actually help them get there and do it.”
Saundra: Yeah. So, one of the things I think that is so magical about financial planning as a field is that we really have a lot of ability to help people live the life that they want to live. And that’s so much more than money. And we’re fortunate that we’ve got experts like you on a lot of areas. We’ve got the technical stuff. We really know everything in the comprehensive financial planning cycle, right? But what we also really need to focus on is not just the what, but the how. And coaching offers the how. And what that means is that if I’m talking to you about something that’s important to you and I don’t understand your why, right? You know, there’s a lot of talk about understanding the why. And that’s really where coaching begins.
And so if you think about in financial planning, when we talk about the word “discovery,” we want to make sure that we understand what a client wants to do. We’re now starting to get to, “What’s important about that?” Now, when a financial planner is having that conversation, they’re gathering facts. They want to make sure that they understand, you know, what situation the client is in financially, you know, what assets they have, all of that. When a coach says “discovery,” what we’re talking about is a deeper dive into that why.
Now, the rub is we want to be able to invite that conversation without the person, the client, in this case, feeling like they have to defend their why, which means the coach has to remain an objective observer. And that’s hard in the financial planning world because we have a lot of right answers, right? You know, financial planners know what the client should or should not do financially to achieve their goals. And sometimes the behavior and that why gets in the way. And so, to be effective as a coach, we have to really make sure that we understand where that client is, what’s under the why, and then how do we align their behavior with what they say they want?
And so even…I mean, I’m sure folks listening to this know that often, we can build the perfect financial plan and the client doesn’t take action. The client is excited about the plan. You’ve presented the plan, and then the client does nothing or does the opposite of what you’ve talked about. And coaching is about, “How do we help facilitate, number one, the client owning that plan?” And then being able to implement with support and accountability from the coach.
Michael: You know, there is an interesting framing and point to me that you made there around not just discovering people’s sort of why, why are they doing these things with money? You know, what are their values and why are they trying to get to where they’re getting to, right? I mean, I certainly feel like I see that more and more in just all the work with clients over the years. You know, early on I was like, “Tell me when you want to retire.” I was like, “Because I need me a data point,” right? Like, “Okay, 65, got it.” Plug that into the software. And we would do a projection. And it took a long time before I realized the better question or the follow-up question when we say, you know, “When do you want to retire” and someone says 65 is then to follow up and say like, “Hey, I’m just curious, like, why 65 and why not 63 or 67?” They’re like, “Oh, well, because that’s when Medicare begins.” “Oh, okay. Well, just curious. If we could show you ways to bridge health insurance if you retired before Medicare, would 65 still be the number?”
Saundra: Right. So how a coach would ask that is, “So tell me what’s important about 65.”
Michael: Okay. “So tell me what’s important about 65.”
Saundra: Right. And so I’ll get a rich, rich answer from that, right? I’ll get, “Well, you know, there’s that Medicare thing.” “Okay, so tell me what’s important about that.” “Well, I’m really worried about what my healthcare situation is going to be. I don’t want to have to think about that.” “Okay. So if you didn’t have to think about health care, what else is important about 65?”
Michael: Well, nothing. I just kind of picked it because of Medicare.
Saundra: Well, so then that’s information, right? So now I have more than a data point. Now, as you evolve in the coaching conversation, you may discover that they have a spouse that has some concerns that they haven’t talked to you about before. They have children that they want to move closer to. There could be all kinds of things in there. And so, as the coach, I want to really understand what is driving people. I want to really understand what the obstacles and the opportunities are before we build any action plan. And as the coach, I build an action plan for implementation, but I don’t do, Saundra Davis does not do comprehensive financial planning. When a client needs that, when we’re talking and it’s very clear that they need something beyond what I do as a coach, I then refer them to a financial planner. So, if someone is a financial planner wanting to build financial coaching skills in, that’s going to be a different approach than what I personally do.
Michael: So is that phrase you kept sort of repeating there, “Tell me what’s important about…” Dot, dot, dot. You know, “Tell me what’s important about…” Reflect last statement to client. “Tell me what’s important about…” Reflect last statement to client. Like, is that specifically part of the coaching technique? Like, it was striking to me even just hearing you say it and I’m only your, like, hypothetical client foil for 30 seconds, all of a sudden, like, “Yeah, I want to tell you more.” Like, “Yeah, I want to tell you more.”
Saundra: Exactly right. Exactly right. And so I’m grateful to Ted Klontz because coaching, you’ll hear when coaches talk about their work, we use the term powerful questions. And powerful questions are the questions that invite the client to explore their own thinking more deeply. It’s not for me to gather a data point. Now, will I get information? Absolutely. If I have asked a good question, I’ll get information, but more importantly, the client will get information. Because often, those questions offer insights that they have never had the time or the space to consider. And that’s what I’m pulling for. That’s the thread that I’m looking for.
And the reason I bring up Ted is that he talks about what questions do to the brain, right? And how just hearing a question can cause a person to freeze. And so rather than say, “What’s important about that,” which, of course, has a question and, as Ted says, a hook on the end, I can say, “Tell me what’s important about that.” And even in the words, you can hear the invitation to think. Now, the rub, the rub and what’s often difficult for people who are experts in their field is that then you have to shut up, right? You have to invite…
Michael: I’m not good at that at all.
Saundra: Nor am I. I mean, honestly, honestly Michael, I mean, you’ve been around me. I like words.
Michael: Your and me both. You and me both. That’s why we get along well.
Saundra: Exactly. And so I had to learn how to be quiet and to be comfortable with silence to allow clients to think, to allow them to hear their own voice and allow them to go more deeply into what they say matters to them. Because we go to that place of, “Well, you know, they said they wanted this and I gave them this and then they didn’t do it.” Well, okay, so what do we really know about what they say they wanted? What do they really know about what they say they wanted?
When I first became a financial planner, and I was fortunate, I mean, you know, as you know, I was a mid-life career changer, right? I was 40-plus when I joined this profession. And I was so lucky that Ed Jacobson, Ted and Brad Klontz, Andrea White, you know, were there to help me frame the more human side. And we treat these things….you know, and I understand and I respect there’s a lot of work about interior and exterior of finance. I don’t really have that perspective. I believe that it is all one, and it’s my job to be with the client wherever it is they go. And so I don’t have an endpoint in mind when I start.
Now, that’s a little different for financial planners. So this is the reason…you know, calling what we do coaching is not the same as actually being a coach. Using coaching skills can be very effective for financial planners, and it is not financial planning light, right? It’s not just a light touch of financial planning. I don’t think it’s a good idea for us to ever minimize the importance of comprehensive financial planning. And when we say, “Well, I’m a coach,” I think that it can sometimes detract from the importance that someone really understanding from beginning to end.
Because one of the things that I think is so important about financial planning is that financial planners may not do everything, but they must think of everything. And I think it’s a bad idea to minimize that because coaching sounds sexier or it sounds more appealing or it’s great as a marketing. If you’re going to coach and you want to be a coach, that’s wonderful. Of course, I’m all in for that. But I also think it’s important, as financial planning is kind of putting stakes in the ground about who financial planners are, what they offer, and the value that they bring, I think it’s crucial that we never water that down or minimize the importance of a comprehensive financial plan.
Why Financial Education Is Necessary But Not Sufficient To Bring About Behavior Change [14:49]
Michael: So, can you help us kind of, I don’t know, connect the dots here between how you define financial coaching versus financial planning?
Saundra: Yes. So the first thing is I don’t use the word “versus” either in financial planning or counseling. I get the same question around, you know, what financial counseling is and how coaching is different. And so my perspective is we have a continuum and that continuum has to be able to address the topics and the individual who is seeking services along that continuum, right? So in my mind, it is financial education that is, of course, the transfer of knowledge. Do you know what you need to know to make good decisions? Now, we know that knowing better does not mean doing better, right? You can know better and not do better. Just look at my collection of chocolate, right?
Michael: But if you want to make some improvement and you literally don’t know how anything works, like, the knowledge will probably be helpful.
Saundra: Absolutely right.
Michael: I usually tend to think of it as like, it’s usually necessary, it may not just be sufficient.
Saundra: That’s an excellent way to say it. Excellent way to say it. Because you cannot do better if you don’t know better, right? And so we have to make sure that the financial education literacy, whatever you want to call it. Now, this becomes important because we hear so often, “Well, financial literacy doesn’t work.” Well, that’s crazy. You know, that’s like saying a toothbrush doesn’t work. Of course, a toothbrush works if you use it and you use it well. And so it’s the same kind of idea. So financial literacy, financial education as our foundation or foundational core.
And then financial counseling. Now, counseling is often and usually, quite frankly, a little bit more direct. You come to me and you say, “Well, you know, Saundra, I really need to deal with my credit score. You know, I want to buy a house in a year.” So I’m going to be really specific with you about, “How do we get your credit score up? What are the things that need to happen to get your credit score up?” And I’m going to make sure that you understand what goes into it. So there’s an element of financial education in there. And then I’m going to say, “Okay, so these are the steps.” And I’m going to guide you through these steps.
Now, some counselors use more coaching skills, and some counselors use solutions-focused counseling, which is the core of coaching, right? We are focusing on what is moving forward. So where coaching focus on forward, therapy sometimes is looking back. So what caused you to be where you are? What are the underlying things that impacted, you know, why you spend more than you should? Coaching is really focused on, “Where are you now? Where do you want to be? And what is the vision?” Being really clear about that vision. What does your life look like when you’re there?
Michael: So playing devil’s advocate, I mean, this framing around counseling is more targeted, like, you know, I have a credit score issue or I’m working on a down payment for a house. So I feel like there’s a segment of financial planners that do hourly financial planning that would say like, “No, no, no, that’s the hourly financial planning model. That’s not counseling. Like, that’s planning.”
Saundra: Right. And so we have to separate the activity from the approach, right? And so what you’re describing there is hourly financial planners help people with very specific and sometimes discreet financial activities. Now, the approach they use is what we’re talking about when we say counseling, coaching, therapy, planning.
Saundra: Those are approaches. And so, this is where it gets a little bit sticky because, for financial planning, it is both a thing and an approach, right? Financial therapy is both a thing and an approach. And so that’s kind of how we have to be willing to be fluid based on what the client needs.
And again, you know, to an earlier conversation that you and I had, this is not to the exclusion of the other, right? And that’s why I do believe that it is a continuum. And it’s not linear. A client may move all along that continuum in their journey to financial health and wellness, whatever that means to them. And so rather than seek to exclude different things, I think if we begin to look at, “Okay, what is this person sitting in front of me need, and what is the approach that I should use with them at this time?” And that’s why… I mean, you know, you’re the guru of certifications. That’s the reason for building skills and certifications to allow us as professionals to be able to meet people wherever they are in that continuum. So it’s not about creating solid boundaries, it’s about making sure that no one falls through the cracks.
And so it’s wonderful that we’ve got hourly planners, and it’s wonderful that we’ve got… One of the things I think that your team is doing great, the XY Planning Network is doing great is to make sure that there are packages that, you know, people can engage for a period of time. And that we’ve got hourly planners with Garrett, and we’ve got, you know, the Cambridge folks, who are making sure that they cover everything. So I think that it’s really…
And then the therapists, you know, I think it’s really important that we make sure, and this was not always the case, it certainly wasn’t when I came into this field, that we don’t miss anyone, that we don’t leave anyone out. It is not possible for us as professionals to meet the need for everyone that needs what we have to offer. So we’ve got to work together better and more fluidly, if you will, so that people don’t get lost in the cracks.
I mean, how many times have you made a referral that the client never went, you know? And I get calls all the time from some of the top financial planners in the country who have been working with a client for a while and find, you know, the issue isn’t the plan, the issue is the client is just not ready to implement, and I’m not the person to help them do that. You know, and that’s okay too. Now, some people are coming and getting those skills so that they can be able to be the coach as well. But that doesn’t mean you have to change your title. You don’t have to change your business card because it’s an approach. If we cannot focus as much on the name of what we do and just do what that person sitting in front of us or with us needs, they will be served better. And quite frankly, I think professionals would be happier.
The Differences Between Financial Counseling, Planning, Therapy, And Coaching [21:41]
Michael: So can you just kind of give me a flow then of like…? I think you’ve sort of framed as four approaches here: counseling, coaching, planning, therapy, right? I can put financial in front of each of those. Like, how do you sort of, like, quickly describe those four approaches and how they distinguish from each other?
Saundra: Okay. So counseling, more often than not, is more directive. So they want to make sure that you know what the thing is, how to do the thing. And they often provide very specific instructions on how to do the thing. Whether it’s, you know, buying a house, debt management, whatever, right? Planning, of course, is going to build…you know, do the discovery, make sure that they understand all the data points, put together a comprehensive financial plan, present it, maybe implement, maybe not, hopefully, monitor, but often not. And then, of course, therapy is when you’re actually integrating the planning piece with what gets in the way. You know, is there financial infidelity with you and the spouse. You know, are there things in your past life that impact your ability to take action on the things that you want to do or to even know what you want to do. So therapists have the ability to bring in that diagnosis and application of what needs to be addressed that gets in the way.
Now, a coach is really going to focus on, “What do you want? What is the vision? What are the opportunities and the obstacles? How do we build this action plan and what are you, client, going to do about it?” I don’t take notes in a coaching session. I don’t send reminders unless that’s part of our agreed-upon accountability. I don’t do the homework, the client does. If there’s something that they really need my more in-depth support on, we make an agreement to do that, but I’m never, never ever the only person doing the work. Never. And so my job as the coach is to facilitate that client owning their journey, identifying what’s important to them, helping them identify the gaps between where they are and where they want to be, and then helping them build their plan. Now, sometimes the thing they think is next, I don’t agree with, and we take a run at it if that’s what they’re ready to do. So I’m looking at the transtheoretical model of change. I’m making sure that I understand how people change and what my response to it should be.
So one of the things I think financial planners are doing very well is learning more about brain science, learning more about behavioral economics in finance. The challenge comes with, “How do I behave differently in light of this information?”
Michael: Yeah, it’s striking to me as you describe the four pieces. That, you know, I think at least for us coming from traditional financial planning realm, we would say we probably at least do pieces of most of them. You know, some of what we do is more counseling, more directive. Like, “Okay, I am going to help my client with the implementation. So, like, here are the next steps were going to do.” Bump, bump, bump, bump, bump. You know, I think there has certainly been at least some more of a tilt towards coaching in recent years and kind of this recognition of, “So, you know, the client came to me for a plan to, you know, retire at 65,” or whatever it is. “We did the plan. We showed them what to do to retire at 65, and then they didn’t do any of it.” It’s like, “Oh, crap, apparently we missed something else here.” And this, I think, growing recognition like, “This is where part of the coaching elements come in.”
You know, that whole phenomenon of clients come and ask us what to do, pay us to give them guidance on what to do and then don’t do it, you know, through me, you know, for a pretty big loop early in my career, just when I started watching that, I was like, “What the hell do they teach us all this stuff for if then when we tell the clients what they need to do then they don’t do it?” And then to me, there was this moment of realization like, “Oh, well, you know, I also know some people who struggle with their smoking habits and then we tell them not to smoke and then they kind of keep smoking.” And like, it’s not because they don’t know it’s bad, there’s other stuff going on.
How To Identify When A Client Is Ready To Implement Change [26:21]
Michael: And people who struggle with weight or drinking or, like, any wide range of habits, you know, sometimes there are addiction factors that go with it as well, but sometimes there’s just a difference between, “I know I probably need to do something different,” and, “I’m actually ready to do something different.” And not every client who comes with us is actually at the, “I’m ready to do something different” stage, but there’s stuff we can do to help them get there, which to me is sort of the essence of what we’re doing in coaching.
Saundra: And I would say sometimes there’s something we can do and sometimes they’re just not ready. And sometimes, and I think most times, we think that because someone comes to us and writes a check, that they are ready. And I would contend that that is true sometimes. And sometimes they come to a financial planner because they think the financial planner can fix their lack of readiness. And a financial planner cannot do anything about a client’s behavior. You can, you know, have safe withdrawal rates, you can have all of those things in place and a client’s behavior can gut all of it.
And so the question becomes, how does a planner identify when a client is ready? And coaching skills can help with that. How does a planner identify when a client needs support around becoming ready? And coaching skills can help you figure that out and practice that. And then what do you do to keep a client engaged beyond a monthly or quarterly check-in meeting that the client actually owns the plan? And then to the degree the client has requested this of you, how do you remain their accountability partner and hold the mirror up when their behavior is incongruent with what they said they want for their lives? And that’s often hard for financial planners, particularly planners who are working with high-net-worth clients. Because there’s a discomfort in saying, “So, hey, Michael, you know, I noticed that one of the things that you said you wanted to do was put away X number of dollars for this. And what I’m noticing is that, you know, when we look at your monthly spending, I’m not seeing that contribution? What’s up with that?”
Michael: Oh, I don’t want to talk about that. You’re fired.
Saundra: Exactly right. Exactly right.
Michael: Right? I mean, I think that’s our fear.
Saundra: Exactly. Of course, it is, and rightfully so, because you haven’t set the stage for that kind of relationship. The client is not giving you permission to do that.
Michael: So how do we identify when a client is ready and, you know, get permission around helping them get there?
Saundra: Are you sitting down?
Saundra: It depends.
Saundra: Yes, the standard financial planning answer, it depends, because you never know. And that’s the reason the time spent, number one, and having the skills and being comfortable with the skills, you begin to know. And you begin with remaining curious rather than having answers. And that’s hard for financial planners because we like to be experts. Spend a lot of time and money being experts.
You know, I did a master’s degree in financial planning, and I spent a lot of money at Golden Gate to be the expert. So the hardest thing for me becoming a coach was to put my expertise on the back burner and lead with my coaching. It’s not that I don’t have the expertise, I certainly have it, how I use it is what determines whether or not I’m coaching or not. And so there’s a lot that goes into understanding human behavior, you know. And so I spend a lot of time.
Why Saundra Puts $10,000 A Year Toward Her Professional Education [30:16]
I mean, I kind of modeled my life after you, right? Not as not as rigorous by any stretch of the imagination, but, you know, I’ve got the master’s in financial planning. I did the Financial Behavior Specialist. I literally do professional development to make myself better every single year. I invest usually about $10,000 a year in my professional development. And I do that because I have to be better in order to be able to move with them wherever it is they go. And I never know what that’s going to look like. I don’t know what’s going to stump them. Something that I think is difficult to do, they might do with no problem. Something that I think is easy, they might be stuck. I have no idea. And so, I have to be willing to be in that messy middle with them.
And that’s hard for financial planners because we get data points and we crank that stuff into a box, and we get some answers, and we put our expertise on top of that, and we know what things should look like, you know. I mean, we even make sure that we do a Monte Carlo analysis so that we can see all of the ranges. But that doesn’t happen in human behavior. And so coaching is kind of a Monte Carlo simulation of what is possible in a client’s behavior. And then how do we adjust? So it’s a slower process. A lot of times I’ll hear people, I was somewhere, I can’t even remember where it was now, somebody said, “Well, yeah…” They were describing coaching and they said, “Well, coaching is normally shorter-term.” Exactly the opposite. Exactly the opposite. Coaching is what it is, depending on what the client needs. I have some clients that are one and done. I have some clients that I’ve been coaching for five years, you know. So it just depends on who they are and what they need.
So, you know, when you’re thinking about it in the context of planning, it’s not what you know that matters when you’re coaching other than knowing that people have a journey and knowing that you’re willing to be with them on it even when it’s challenging. And knowing that you’re not going to reach in and grab them out of their life and fix their situation. So we don’t try to fix things, which means we have to have a high degree of tolerance for uncertainty.
Michael: I think that to me has always been one of the challenges of this kind of transition we’re all collectively going through. You know, I feel like the roots on the financial planning side, like, our profession was born out of product sales. You know, my value is my company’s products are good, right? Like, if we go back 20 or 30 years ago, I mean, that was our value. I represent a company that has very high-quality products, and, you know, we would do planning and advice to try to then help clients implement our company’s quality products.
And then over the past 10 and 20 years, that’s shifted and evolved. And it’s like, “Well, no, no, no, the products are kind of commoditized. Like, I’ll get you whatever you need for a product, but, like, the value is me. It’s my expertise. It’s all this knowledge stuff I’ve got in my head. I went and studied and I learned and trained. And you come to me, you pay some money, I’m going to lay some knowledge on you.” And that’s the financial planning transaction. And then, as you noted, like, I may or may not even help you follow through on implementation or monitoring. It depends on the advisor and the model, because the primary exchange there is you pay me for my expertise, I lay some expertise down.
And now we’re sort of moving into this next domain, which is, as we said earlier, like, the information is necessary, the expertise is necessary. Like, I can’t help someone get to where they need to go financially if as the advisor I don’t actually know how finances and number things work. Like, I do need to know that stuff. But the value proposition isn’t just, “Pay me for the expertise and I’ll lay some knowledge on you.” Now it’s moving me to this next stage thing of, “Oh, I have to also do all the messy stuff of helping people actually follow through on this and implement.” And not implement from me, like, got to, you know, sell me a managed portfolio or insurance policy or whatever the thing is. Just like, from the client’s end, like, how do you actually make sure they do the things that they were going to do? And now you’re entirely in the world of messy human beings and messy behavior stuff. And, you know, I feel like at best it’s hard, and at worst we’re not particularly trained for it either.
Saundra: And both of those are true. It’s hard unless it’s not. The thing that makes it not is your expectations as the coach, right? I understand when someone sits down with me that they are having either a pain point or an opportunity that they want to follow. And so, I’m with them, you know, whatever that looks like. I’m with them when the vision is clear and exciting and motivating and they’re inspired and they’re doing their thing. And I’m with them when they’re in the midst of struggle and they are absolutely confused. They have no clue what’s next and we have to figure out what their plan should be. And I’m with them as they take steps, or not, as they make missteps, you know, as they take action and then find, “Oh my God, that’s not…I got it and that’s not what I wanted.” So we’re with them through all of that.
And here’s the thing, financial planners are too. You know, I mean, financial planners do roll with clients. How many times do you have to revamp the plan? You know, how many times are you all rejiggering some numbers because things didn’t go…? You’re doing it all the time anyway. It’s just, how do you treat it in your client experience? And see, I think this is the reason that I think coaching is so wonderful, because it’s also better for the planner because you really do own and accept that you don’t change anyone else’s life. They have to change it. And it takes that pressure off of you of, “Your value is in your doing.” Because, yes, your value is in your knowledge, your skill, your expertise, absolutely true, but the bigger part of your value is how are you going to be with them?
You are sometimes, as the planner, you’re hearing their deepest fears and their highest aspirations. So that is a sacred trust. And when we’re doing this well, when we’re sitting with them in this messy middle and we’re comfortable and we’re grounded and we’re focused in knowing our value, we don’t have to worry about, “Well, maybe they don’t see my value.” They feel your value. They know your value. They can call you when they’re afraid. They can call you when there’s an opportunity that they think is a great idea but they’re not really sure. And they can trust that you’re going to be there with them because you guys are already doing it, you know.
And so, I am not of the mind that every financial planner should be a coach. Do I believe every financial planner should have some basic coaching skills? Absolutely. It’s going to make your life better, it’s going to make your client’s life better. But you don’t have to change everything about what you do. It’s identifying the places that coaching can facilitate and support your relationship with your client and their vision into themselves. And then what I’m finding the people who take my class at Golden Gate, because that’s a different group, right? So there’s the people who…I mean, it’s all financial planners. It’s all CFPs who take the coaching class at Golden Gate. And then in my certification programs, those are often actually probably about a 9 to 1 ratio if you’re looking at 10 people in a class, they’re almost always community-based staff or individuals who have their own counseling practice that they want to do more coaching. And there might be one planner in a group of 10, you know.
And so what they’re learning how to do is just meet folks wherever they are. You know, if they’re ready, great, lay out the plan, do it. If they sound ready, do a little bit more discovery, right? Spend a little bit more time discovering from a coaching perspective, right? You don’t need me to tell you how to do the planning parts. You know how to do that. But add some of these things that can help you really understand where that client is and then really begin to build an action plan with them rather than for them, right?
Where Advisors Can Go To Learn More About Financial Coaching [39:24]
Michael: So talk to us a little bit about how we do learn some of the stuff. Because I know that’s actually the poke and the focus of your work and practice is helping to teach and train advisors. And you teach some classes and you’ve built some certification programs. So help us understand the landscape for those who’re listening to this and saying like, “Yeah, I kind of get it. I could learn more in this space. I could get better skills. I have no doggone idea where I’m supposed to go now in order to do that.” So where do we go? Like, what’s out there to learn more of these coaching skills and coaching approach to try to blend it into how you work with clients?
Saundra: Yeah. So, I mean, we’re really fortunate now because there are a multitude of things that planners can do now. I mean, there’s books. You know, my favorite book, to be honest, is called “The Coaching Habit.” And when I say favorite, it is…well, what do I mean by favorite? I mean that it is an accessible, easy book to understand why coaching matters, and what are some quick things that you can do to change or add to your existing approach? Is it going to make you a great coach? No. There are stages of becoming a coach. And the first stage is number one, understanding that you’re not coaching. That what you’re doing is something other than that. And it’s not a judgment, not a bad thing. I don’t use coaching versus other things because I think it sets up this negative connotation. And I don’t think that that’s necessary or helpful, to be honest. So there are books that you can read. There’s lots of books on coaching.
“Motivational Interviewing” is a book. If you look at that book, it teaches you some things that you can do that are very coaching-like techniques. Prochaska’s book, “Changing for Good.” Kahler Klontz book, “Facilitating Financial Health.” Now, they have a different perspective on coaching than I do. It’s kind of like financial planning light. So it’s not…I wouldn’t say full-on coaching. But what it does is get you to look at a client’s financial life as beyond the dollars.
Michael: For people who are interested, this is episode 104 of the podcast. If you go to kitces.com/104, we’ll have links out for some of the books, “Coaching Habit,” “Motivational Interviewing” and “Changing for good.” And Klontz and Kahler’s book for people who want to get some of these and dig deeper on them.
Saundra: Great. And then the “Advice That Sticks” is a newer book that is excellent for understanding kind of what some of the topics are. And she offers some really great, tangible, concrete things that people can do. So those are…you know, that’s a quick fix, right? Learn about this. Make sure that you understand how it’s different. How it’s the same. How do you build on your existing skill set?
The other is learning from actually building the skills. So my program is about a year long. And what we’re doing is actually teaching people how to become coaches. Now, many financial planners who take the program are only taking what we call Module 1, which is the core training. We call it Coaching Essentials. They get 12 CFP CEUs for this 2-day training. What we’re noticing is that people realize that, “Okay, now I’m learning about it. I see how bumpy it is.” They actually practice. Whether you take it online or in person, you actually practice the skills, and you begin to notice how these skills are different and how you can use them. So some people just do that.
Now, there are also coach training programs, web-based, and in-person. The challenge that I would say about taking a life coaching class, and I have to say I see this quite often when people think, “Okay, well, I’ll just go take a life coaching class.” Here’s the thing. Life coaching has the perspective that the client knows everything they know. The term is, you know, the client is resourceful, whole, and complete. And they know everything that they need to know. There’s no right answer, so there can’t be any wrong answer. Well, that’s not true, right? In financial topics, there are some wrong answers. So that is the reason, quite frankly, that I built a certification, because I did the life coaching route. And it’s not that I didn’t learn some really great stuff, but it didn’t apply to financial topics, because sometimes the answer is just wrong. So I don’t want to be motivating or inspiring someone to do something based on them thinking they know and me knowing they don’t.
Michael: Right. It’s an interesting distinction when you get into…I get it, like, pure life coaching, you know, you can’t or you shouldn’t at the end of the day impose your own values on someone else like, “No, no, no, your life goals are dumb. You should work towards these life goals.” Like, you know, people have their own goals, and they work towards them in their own way. And, you know, the journey towards it is part of life itself. But then when you get to the financial end, it’s like, “No, that’s really just a dumb, unrealistic, unachievable goal that will lead to financial ruin. Like, there’s not a question here. Like, you want to be $100 millionaire and you’re buying lottery tickets. Like, this is just…you are not resourceful, whole, and complete here. This is just not doing it.”
Saundra: So Michael, let me just say, we don’t say it’s a dumb idea.
Michael: Okay. We find a gentler way to make the point?
Saundra: Well, here’s the thing. A skilled coach doesn’t make the point for the client. A skilled coach facilitates the client learning on their journey in their own way. And I learned this from Ted years ago. The change talk is always more effective when it comes from the client. So I’m not, as the coach, I’m not telling the client what they need to change. I am on that journey with them as they discover it. Now, if a client is headed for financial ruin, I absolutely have a conversation. But I have that conversation not only with permission but also in a way that the client’s knowledge base increases. And so, as a coach, I’m never telling someone what they should or should not do, because, quite frankly, you know, I can’t stop people from doing what they’re going to do. I do want to make sure that I understand their thinking, because if I don’t understand their thinking and what created their choice to do this thing, I might be addressing that moment, but I’m not addressing the issue. So the coach coaches the person, not the topic.
Michael: So I know it’s kind of a somewhat absurdist extreme, but can you give me an example of, like, what this conversation would look like for the client that says like, you know, “I want to be, you know, a multi-multi-millionaire like…” Choose my favorite celebrity. “So I’m buying lottery tickets, and I swear the next one is going to be the big one for me because I’m due.” And this is what’s come forth in your financial planning process. So, you know, I think the planner’s gut response is something to the effect of like, you know, “This is not a prudent financial strategy. You need to invest more effectively.”
Saundra: We can do that if you’re willing to play with me with it. Are you?
Michael: Yeah. Yeah. I mean, what does that conversation look like? Because I think we know what it looks like from the planning end, but I don’t know what it looks like from the coaching end.
Saundra: So, I normally don’t roleplay, but I’ll do it this time because it’s you.
Michael: We’ll demonstrate our roleplaying skills to a few people.
Saundra: There we go. Exactly. All right, so you be the client and that is your goal, right? All right, tell me what we’re going for here. What are we talking about today?
Michael: I don’t like my life and the world that it’s in. You know, I look at the magazines, just, I see their lifestyle. Like, I want that lifestyle, and I don’t know how else to get to it. But, like, I’m buying lottery tickets. And, you know, I know I haven’t been winning, but, like, I’m due. You know, I’ve certainly spent enough on lottery tickets and I’m due. I think I’m going to win one of these and then I can get there.
Saundra: Okay. So tell me what there is.
Michael: Well, living that lifestyle. Like, being in the spotlight and getting the glamour. And, like, just, you know, their houses are beautiful and my house is not. And their lives are beautiful, my life is not. And I want that lifestyle, and I don’t know how else to get there.
Saundra: Okay. Okay. So when you think about that lifestyle, what about that lifestyle is really drawing you?
Michael: Well, just these beautiful houses and, you know, not having to deal with all this stuff that goes on at our place. And, you know, we’re always fixing things and everything is always broken. And, you know, their homes just, I want to live that. I want to live in that kind of house. I want to live in that world.
Saundra: Okay. So let’s put ourselves there, right? So let’s take a look at if you were living like that, what would be going on for you?
Michael: That’d be great. Like, my friends are hanging out. We get to play a lot of games or having fun. Like, just, it’s wonderful not having to deal with all the crap that we’re going through right now, and just be able to have fun and live it up.
Saundra: So one of the things that I’m hearing is you talk about what’s going on now. Tell me a little bit about that.
Michael: You know, I’ve been really stressed. You know, our house is kind of a mess, and the landlord, like, never fixes the things that they say they’re going to fix. And I’m tired of dealing with this crap. And it’s just been really stressful lately.
Saundra: Okay. So let’s take a look at this lifestyle that you want, right? This desired lifestyle where you’re chilling with your friends, you’re playing video games, you know, and you’re happy. I hear a lot about your house. It sounds like your environment is really important to you. Is that right?
Michael: Yeah. Yeah.
Saundra: Yeah. And buying the lottery tickets sounds like, for you, the way, you know, that you’re going to get where you want to go, right? This lifestyle.
Michael: Well, how else am I going to get there?
Saundra: Well, right. So that kind of sounds like the question, right? So if you were to get there, because here’s the thing that you mentioned, you mentioned celebrities. Are you talking about the lifestyle of people who won it in the lottery or are you talking about the celebrities? Tell me a little bit about that.
Michael: Well, I mean, you know, they did it with their music or their movies or…like, I’m not a…you know, I’m in kind of a dead-end job. Like, I’m not a superstar or I’m not going to make it big on the stage or on the screen. Like, that’s not my path. So I don’t know…
Saundra: Right. So for you, the lottery feels the way that it would make it accessible for you.
Michael: Yeah. I mean, I don’t have any other way.
Saundra: Okay. So when we think about where you want to go and where you are now, what do we know about the lottery winners? What can you tell me about that?
Michael: Well, I mean, they just…you buy the right ticket and you’re there.
Saundra: And then what?
Michael: And then you’re there. Like, you’ve got the money. You buy the house. Like, you can hang with your friends. I don’t have to go to the crap job anymore. Like, I’m there.
Saundra: Got it. Got it. Okay. So what I hear is how you’re living, where you’re living, the environment, being able to have a life that, in your words, is not crappy. That you are feeling energized and supported by your friends, and you’re hanging out with them. And you’re not going to this job that feels like a dead end to you. And that you really, really want to feel like you are living the life of your dreams. And that right now, the way that you’re looking at that is that if you buy the right ticket, and you feel like you’re close. You know, you’ve been buying them. You’re due, right, for a hit. That if you do that, you’ll be able to get that life. And once you get that life, you’ll be there and everything that you want will be satisfying and you’re just there, right? There’s no more to that. There’s just, like there. And so I already hear that you’re buying the lottery tickets, right? What else could you be doing?
Michael: So that’s an interesting exercise and flow to me of just, right, my default on the advisor end, I’m just…like, my brain would be going to like, “Well, what does this lifestyle cost? Or what would you need to save to get there? Like, let me just do a little bit of math for you about how not getting their lottery tickets is going to be for you.”
Saundra: And that’s because you’re focused on the topic, and a coach focuses on the client. Because it doesn’t matter what I say to you about the lottery being crazy, you’re going to do what you believe is going to get you your dream. And it doesn’t matter how many times I tell you that that doesn’t make sense. So some of the things that we might come up with is your homework might be, “Okay, let’s take a look at where you are now. What are the things that you can do right now to make your environment better?” You might say, “I have to move.” Okay, so that’s one thing. You might say, “You know what? I’m really going to hold my landlord accountable for what they say they’re going to do.” Okay, how do you get the time with your friends that you want? “You know, I need to work less. I need to find a job that gives me more.” You know, there’s a host of places that we can go, and we’re going to go those places.
Michael: And so now we’re ending on the same place. Like, I can easily end out with a plan for, “I’m going to find a new job. I’m going to try to get back to school. I’m going to get a raise. I’m going to buy a different house.” There’s, you know, years of financial planning strategies and tactics that all go with implementing those things over time.
Saundra: And the most important piece is that then I would say, “Okay, now, one of the things that you said that you really count on is this idea of the lottery. I’m going to ask you to do a piece of homework, and any time I make a request, you can say yes, no, or counter-offer. Are you willing to do that?” You would, of course, say yes because that’s what you came to me for. I would ask you to do some homework on 10 lottery winners and tell me what you find.
Michael: So now I’m going to go out there and find out those stories often don’t end out very well….
Saundra: Exactly. Exactly. Yeah. Saundra, did you know that a whole bunch of those lottery winners are worse off than what…?” You know, you’re going to come and tell me. I don’t have to tell you. Now, if you come back to me and you have 10 stories that are successful, then my homework would be, “Okay, Michael, it’s great that you found 10 successful ones. Now, I’d like for you to dig a little deeper. Are you willing to do that? I’d like for you to go find 10 lottery winners that are completely dissatisfied with what the outcome was.” And then you’re going to go do that research. And now we’re looking at a balance. But I’m not trying to get you to do anything, right? I want you to come to where you’re going to go under your own steam, or as Andrea used to say, “That’s the gas in the tank when you’re away from me.” Because I can tell you how crazy it is. I can tell you what percentage of lottery winners are worse off. I can do all of that, but that doesn’t matter because you have a dream.
Michael: Right. Well, and frankly, I mean, if I put myself back in the shoes of that person, like, realistically, if you just…I say this is what I’m doing and you come at me with, you know, lottery tickets are never going to get you there, you know, the odds of winning are nothing, you’re probably losing more money than you’re gaining, etc., etc., I imagine, like, my conclusion will basically be, “I don’t like you. You’re crapping on my dreams. I won’t be coming back to you as a financial planner anymore.”
Saundra: Right. And you will feel judged. And what I learned from Ed Jacobson that is really true, I know he got it from someplace else, but, you know, I got it from him, so that’s what I’m going with, if you cannot hold your client in perfect, positive esteem, you have not earned the right to work with them.
Michael: All right, say that again. There’s some deepness here.
Saundra: Yeah. And again, I read it. Again, I don’t know exactly where he got it from, so you’d have to ask him, but if you cannot hold your clients in perfect, positive esteem, you have not earned the right to work with them. And so what I do is I teach people how to do what I just did with you. I felt no angst in my body. I felt no tension in talking with you. Even though we were roleplaying, I don’t treat it as that. Normally I don’t roleplay for that very reason. But I felt like you were able to embody, you know. And so I don’t get myself worked up.
Now, do I feel empathy when a client is in pain? Absolutely. As you know, 90% of the people that I work with are low-income, very low-income, and often even homeless. So I have to self-manage in order to be able to be with people and remember that they really are perfect and whole and complete. They might not have all of the information that they need, but I’ve got that. But I’m not going to beat them over the head with information that may or may not really feel like something that they can do at that time. So with coaching… You know, I love financial planning. If you don’t know that by now, people aren’t listening well. I love it. I love everything about it. And dropping a big old honking financial plan on somebody, you can actually be doing the opposite of what you want to do. And so I have to be savvy enough in our engagement to know when my information is helping you and when it’s harming you. And I’m only going to know that if I’m listening to you.
Michael: And so the coaching designation programs that you built, because I know you’ve been working on a few of these, like, this is the kind of stuff that you’re teaching in those?
Saundra: Exactly. So session one, which is Core Essentials, the Coaching Essentials, is, “How do you understand this beast of this coaching thing? What are some of the core skills that you need to have?” And the bigger factor is you have to practice them, you know. So this isn’t about the theory of coaching. We have a little bit of that, but it’s very experiential. It’s very hands-on. And you grapple with the challenge of it, you know, in a very safe and, again, I’ll say sacred space, because I know the people who come to me. They’re wanting to be better for their clients. They want to be excellent. And so my job is to help them be excellent for themselves and for their clients.
And so we spend two days. It’s 12-hour training, 6 hours day 1 and day 2. And we do it online and in person. And then the second portion is all Learning Labs. And that’s where you’re learning about different topics. You’re doing your practice hours. It’s for people want to be certified. They do practice hours. They’ve got to have 250 hours total to get the certification. And then you have mentor coaching opportunities as well. And then the last part of the training is really where you demonstrate mastery. And that’s where you…there’s another day with me, and then there’s a recording that you submit and get feedback on as to whether or not you met the standard.
So the reason I partnered with AFCPE on this is that I no longer have to teach the financial content. So there are people who are not financial planners. Of course, CFPs can come straight into the coaching training, but people who do not have the CFP can get the Money Management Essentials course from AFCPE or they can get the Accredited Financial Counselor. And that meets the requirements.
Michael: So you basically have, like, financial knowledge prerequisite that people have to complete before they can then do the coaching. Because as we said, like, the knowledge is not sufficient alone to help the clients, but it is necessary so you don’t just give them crappy advice and bad homework while you’re trying to coach them to wherever they hopefully are getting to.
Saundra: And if you go to a life coaching program, that part is not there, right? So I actually do teach you how to coach financial topics. So you’re still coaching the person, and we understand that when people come to us, they come to us because we are experts. And we can’t just leave that expertise on the sideline, but we learn to offer it in a way that still keeps the client in control and in the driver’s seat.
Michael: So I know, like, you have two programs. There’s a Financial Fitness Coach, like, an FFC, and then an Accredited Personal Financial Coach. So are these basically the two tiers? Like, you go through the essentials. You get the FFC designation if you go through the full second tier of the program, then you get the Accredited Personal Financial Coach?
Saundra: No. Actually, that second one, the APFC is an even deeper dive. People who complete the FFC are competent at coaching. They understand the skills, but they’re still kind of early, right? So you have to be coaching for a significant amount of time for it to be just part of who you are. It’s no longer a thing you do. You are a coach. You know, people will say things like, “Oh, well, I’m going to put on my coaching hat. I’m going to put on my planning hat.” By the time you’re at the APFC level, you are a coach and everything that you do is coaching. And it doesn’t matter if you are offering advice or if you’re really supporting the client in a more structured way, you’re still able to use your coaching skills. And so it’s more of a…you know, it’s kind of like being a rookie planner and being a planner that’s been in the field for a couple of years or, you know, five years or more, where you have a deeper knowledge and skill and ability to be able to integrate coaching in a way that is more seamless.
Often, you know, it’s kind of like a golf swing, right? You can read a book about it. You can watch Tiger. You can do all of those things. But until you actually get out on the golf course and, you know, practice and practice and practice and practice, it never becomes part of your body. And that’s the point of having two levels. You know, we really wanted to give people, “Okay, what’s next?” Because people were getting the FFC and it’s like, “Okay, this is good and I’m having a good time, but I’m noticing I get stuck when the client comes back in and says…after all of this work and they’ve made all this progress, they come back in and say, “Hey, I’m thinking about going back to the payday lender.'” It’s like, “Argh.” But that happens.
Michael: Argh, I thought we solved this.
Saundra: Exactly. But I’ll tell you, Michael, it happens. You know, it happens, and the money is not the issue. The dollars are not the point. And the earlier we can learn that. I’m just so grateful that I learned so much of this so early in the profession that I was really able to pivot and understand that the dollars don’t matter when it comes to how people live with their money. I know people who are very, very poor who manage their money to the penny and are satisfied and happy with their lives, and they’re doing what they want to be doing. And I know people who have a lot of financial wealth and are miserable.
And coaching is about, “How do you live well? How do you create the life that you want? How do you bridge the gap between where you are and where you want to be?” Sometimes that’s making more money. But the bottom line is we know there are only three things that you can do, make more, spend less, a combination of the two. That’s it. There’s no magic, you know. But how we deliver that and how we support clients can help them set themselves on a journey that can be satisfying for them.
Saundra’s Background And Pathway Into Financial Coaching [1:03:59]
Michael: And what was your journey to come to this? Because I know you were a career changer into financial planning in the first place. Like, this is some deep stuff to get into for any advisor. Like, what was your background and pathway to doing all of this?
Saundra: Yeah. So I was in the nonprofit sector for about 20-odd years before I got into financial planning. And I became a financial planner because I knew that I was not going to have enough to retire. And so I took a year off. I literally just didn’t know what I was going to do. And I read a book that said… You know, my partner actually told me. He said, “Well, why don’t you become a financial planner?” I literally had never heard that word. I did not know what a financial planner was, had not heard the term. So I started doing some research, and I read a book. Well, I didn’t read the whole book. I was standing in Barnes & Noble flipping through the book. And the author said, “If you were going to hire a financial planner, hire a CFP, or better yet, someone with a master’s degree in financial planning.” So I figured, “Okay.” So I went and got a master’s degree in financial planning. Now, my goal was always…
Michael: That was a very forward-looking book. Like, do we know what book this is? That’s, like, a life-changing trajectory book that you’re flipping through in Barnes & Noble, back when we flipped through books in Barnes & Noble.
Saundra: Exactly, right? We do know the book. And what’s funny is the person was not a financial planner at that time. A very prominent author, and I’ll leave it at that, in the personal finance space. And so, I went and got a master’s. I went to Golden Gate, which had been where I got my BS, and I got a master’s degree in financial planning. And I always intended to do financial planning for low and moderate-income people. And it’s because of my background, because of where I had come from in the nonprofit space. I knew that there were things that wealthy people knew about money that middle-income and poor people simply did not know. And I thought that if I taught them that, they would go out and everybody would live a better financial life.
What Tim Kochis helped me to understand very early in my career, literally within my first class at Golden Gate was that what I was talking about was need. And what I had to learn how to do was turn need into demand. And so, I have been just so fortunate that I’ve got, you know, Dave Yeske, Elissa Buie, Holly Gillian Kindel, these people who were thought leaders way back then. I’m talking 2004, ’05, ’06, right? And, of course, I went to residency. You know, Kacy was one of my mentors, Kacy Gott. And so, I had an opportunity to learn from these folks who had been doing the right stuff for years. And they would often say about clients that were not doing the plan, you know. And so I learned really early.
And so I literally started in coaching in 2005 and ’06 and started building programs in 2007. And it didn’t matter what the dollars were. And that’s really one of the things that I learned, you know, by hanging out with those heavy hitters is that the dollars are important, but they don’t matter, not when it comes to client behavior. And so, I’ve directed all of my work in that area literally from the beginning. But I really did choose to stay in the nonprofit space. So all of my work has been in nonprofit agencies, building their capacity.
When I first started, they were helping people get into homes using adjustable rate mortgages, you know. So, of course, when 2008 hit, everybody was crazy because now they understood the mistakes that they were making in that sector. And so now here we are, fast-forward to a time when now we’re just getting to understand that every single person needs a comprehensive financial plan, including cash flow, which back when I started no financial planners wanted to talk about cash flow. No financial planners were talking about day-to-day behaviors of their clients because they felt like they had money. Their day-to-day didn’t matter. And look at what’s happening now, right? And people on the lower income, you know, nobody in the nonprofit sector was saying, “Hey, we need our clients to understand asset protection. We need our clients to understand investments.” Now we’ve got, you know, programs where people have to actually opt out of retirement plans.
Ways Financial Planners Actually Harm Clients – Even When Trying To Help Them [1:08:28]
So there’s this whole convergence of the low-income, middle-income, to high-income of understanding what people need and not basing it on the dollars that they have. They need what they need. And coaches, we don’t “should” on people. “Well, you know, you’re wealthy, you should know this.” You know, “Oh, you’re poor, you should know this.” We don’t do that. We really meet them. It is not a cliché to say, “We meet you where you are.” And it’s more than words.
My specialty is taking a trauma-informed approach to coaching. And the reason that that’s so important is I have no idea what you’ve been through. If I’m working with someone who has experienced domestic violence, and financial control was one of the ways that that happened, and the first thing I do is sit down with them and I say, “Okay, so I want you to bring in your bank statements and I want you to do this and this and this,” what does that feel like to that person?
Michael: Another person who’s trying to take control of the money left.
Saundra: Exactly. Exactly. I’ve now harmed them again in my effort to help. And so there’s just so much to know. We have to always be getting better. And so from my perspective, that’s my contribution to the field. How do I help us continually recognize that good financial planning, good counseling, good coaching starts with the human providing the service? What I do is not nearly as important as how I do it.
Michael: And I’m struck by the point that this really spans across the income spectrum. I feel like there was a point a couple of years ago where financial coaching was at least starting to creep into the financial planning realm. And maybe this was just my own perspective. But, you know, it was kind of bubbling up from organizations like AFCPE that historically have worked with more lower and middle-income. And there was kind of this perception of like, “Look, low-income folks need coaching because they have to learn these better skills, and high-income folks need financial planning because they’ve got to figure out what to do with the money that they’ve got.” And there was sort of this income and wealth-based separation. Like, not to be pejorative necessarily but just, like, different folks need different things and different stuff to help them move forward.
And now, to me, the fields are converging much, much more as there’s this recognition of, “Okay, well, on the coaching end, even for folks that are low-income, there’s still a whole bunch of financial knowledge that you need.” In fact, you know, we had Phuong Luong on the podcast a couple of months ago, and, you know, she’s talking about, like, the low and middle-income specialized community-based housing programs that they’re working with with their clients. I’m like, “Good Lord, this is more complex than just understanding mortgages and mortgage rates and ARMs in the first place. Like, this is super granular and focused, detailed technical knowledge that you need to help your client.” So it’s not just a, like, coaching at the lower end phenomenon. You need a lot of technical planning knowledge and skills down there as well.
And at the other end, I think all of us in, I even call it the traditional financial planning world have seen or come across at least a few affluent clients or prospects over the year who have a lot of income and/or a lot of wealth and still have terrible financial behaviors and are heading towards a disaster and clearly need an intervention. And it’s not just a knowledge problem. Like, I can’t lay some knowledge on them to fix it. Like, there’s other things going on that’s making them, you know, earn $300,000 a year and live paycheck to paycheck, and that there’s this need for coaching at the higher income in the same way that there’s a need for more of the planning knowledge at the lower-income level. Different knowledge and maybe slightly different issues but these both span the spectrum on both.
Saundra: Absolutely. And that’s the reason that I’m… You know, we tend to like to put things in neat little boxes. And life very seldom works that way. And so, when we talk about that continuum and the reason that… Like I said, my partnership with AFCPE is that they were willing to be flexible in us stretching those boundaries and allowing this continuum to emerge. We’ve done a couple of webinars about that. We also did a session for the students coming in at the recent AFCPE Symposium. And I’m really glad to see so many CFPs coming to the AFC Symposium because it gives them an opportunity to see how many places where our work is the same. It is not to the exclusion of the other. Most AFCs absolutely are referring people to financial planners because they don’t do investment management. They certainly don’t offer products.
And so we are not competing designations. You know, it’s the same way that, you know, a financial planner who’s serving as a quarterback for the financial team has a CPA and an attorney and all of these other partners that they work with. It really is the same. And if we can begin to do this, we’ll be more effective at serving our clients. Now, I believe all of us across the spectrum need some fundamental coaching skills because people, are different and we can’t treat them like they’re dollar signs. They’re different, and we have to be able to be with them wherever they are in this journey. And sometimes it’s very uncomfortable. And as the coach, we have to really be able to navigate that discomfort in a way that the client still walks away from us feeling powerful and confident in their ability to do that which they say is important to them.
Examples Of The Powerful Questions That Get Clients To Open Up [1:14:21]
Michael: And in essence, that all starts with the powerful questions.
Michael: Powerful, empowering questions. So out curiosity, like, are there other common, I don’t know, powerful questions or phrases or anchors that get used frequently in coaching? You know, as we talked about earlier, that kind of, “What’s important about that to you?” And just keep digging deeper on, “What’s important about that? What’s important about that?” is sort of one question path that you can go. Are there other powerful questions or powerful framings that are kind of a common coaching tool?
Saundra: There are. The danger in that is that, you know, if all you have is a hammer, everything is a nail, right? So the rub that I have with leading with, you know, a list of powerful questions is that people often, you know, hammer clients over the head, “So tell me more. Tell me more. Tell me more. Tell me more.”
Michael: And at some point, it’s not actually a discovery process, it’s just kind of annoying.
Saundra: Exactly right. Exactly right. And so you want the questions to emerge from what the client says. And so I would say if there’s anything that I would offer for people to lean into is being curious. So when the client says something, rather than follow that up with an answer or a response, what’s the next step? Like what I did with you about the lottery question, right? So I didn’t launch information at you, I asked you to talk to me more, and then I listened for the thread, and I pulled the thread of the house. I pulled the thread of the lifestyle, of the time with friends, of…you know, the things that I heard. “This is what it sounds like. Is that correct?” And like Ted says, “What am I missing?” So my favorite thing to say to clients now as I’m in this engagement is, “So you say what you say, I reflect back what I heard, mirroring what you said.” And then I want to know, what did I miss? Because that’s going to give you the chance to tell me more and to correct me where I’m wrong. And a financial planner has to be okay with being wrong.
Michael: There’s a striking piece there, sort of this key to leaning into being curious. And I know it’s even my tendency and default as, you know, I come from my financial numbers sort of background, like, it’s not about being curious about the finances, it’s about being curious about the process.
Saundra: There you go.
Michael: Like, continuing to drill deeper on the questions about the person, not the numbers and the financial stuff.
What’s Next For Saundra [1:17:06]
Michael: So what’s next for you?
Saundra: Yeah. So now I’m starting to work on my succession plan. Right now, I am the lead trainer on all of the classes. And I have a cadre of young professionals that are really jamming, you know. And so, I’m excited to be building capacity to have the FFC program more widely available. I’m looking to partner…the AFCPE, of course, is my primary partner. So we’ll always be doing the live training there at the symposium. But we also are making inroads in having live training in partnership with other conferences around the country. Of course, more speaking engagements. I’m doing a lot of that right now. My focus is my five-year transition plan. And of course, since every good coach has a coach, I’m being coached about, “How do I do that?” so that I don’t shoot myself in the foot of being at a stage in my life where I no longer want to get on a plane every week and then there’s no one to continue this work. So my goal is to build a succession plan and have a cadre of trainers who can bring their own flavor to the structure that exists but really hold the standard.
You know, the AFCPE, they’ve got me covered on the financial content. People who have the CFP can already take the class. They meet that prerequisite. So that part is the easy part. But how do we put it in universities? We get a lot of requests to be able to teach it in universities. And I want to be able to do those kinds of things.
Michael: Well, very cool. So, you know, for advisors who are coming into the profession today, like, what’s the advice you give them about the roadmap, right? Because now we’re throwing a lot of stuff at them. Like, you need to be a good financial planner and a coach and get some education and get some experience, and then you’ve got to get some clients and you’ve got to get a job. And, like, there’s all this different stuff coming at them. And you’ve added, like, whole other deep life-changing layers to them here. So for someone that’s, like, coming in today, I mean, what do you see is the journey of how financial planners should be getting trained and learned across all this different stuff?
Advice For Advisors Coming Into The Profession Today [1:18:35]
Saundra: The first thing I would say is if you’re a new financial planner, hire a coach. You know, if you can’t afford to hire a coach, ping one of my coaches that are currently being trained and practice with them. They are always looking for people to practice with. So you’ll have the coaching experience and decide if you want to incorporate those skills into your work. There’s one young woman now who’s relatively new to the field, and she’s being coached by one of my APFC candidates. It was life-changing for her, so now she is becoming a coach. And so you’ll get to decide.
The wonderful thing about this profession, and I say it all the time to folks coming in, irrespective of your age, the wonderful thing about this is you get to do it exactly the way you want to. There’s nobody that has to define what you do. You get to make it what you want it to be. And I think that that’s the wonderful aspect of this profession. And I do call it a profession. I know there’s still a question, “Well, is financial planning a profession?” Absolutely, it’s a profession. Don’t be ridiculous. We have to make it the best that it can be. We have to continue to make it the best that it can be. And it is a profession if we treat it like one. It is a profession if we don’t accept mediocrity. And so every year, create for yourself a professional development plan and then follow the plan. Make sure that in addition to… And Michael, you’re, like, the top model for this. Is there ever a year that you’re not adding something to your toolkit, right? And it’s the same thing. I mean, people should follow your lead and really make sure that you’re constantly stretching yourself. Make sure that you’re doing the financial content. That’s our obligation.
And yes, we are throwing a lot of stuff out there because you know what? People’s lives matter. And how we deal with their lives can make or break their financial success. So we’ve got to be better, you know. And I believe that that comes from us making a concerted effort to be better for ourselves, which will make us better for our clients. So if you want to find out what coaching is, there’s definitely webinars that we do. You know, we even do a Facebook Live thing where people can ask questions. But you can also say, “Hey Saundra, put me with one of your new coaches. Let me be their client” And you can learn all about it.
Michael: So for folks that are interested, you know, again, this is episode 104, so if you go to kitces.com/104, we’ll have links out to Saundra and her firm, which is called Sage Financial Solutions, sort of the anchor point for all this different coaching work and training and certification programs that she does. So we’ll have some links there if you want to I guess reach out and learn more about training or, you know, reach out and get your own APFC coach and training who need practice coachees. And so you have a partnership opportunity there.
So, as we wrap up, this is a podcast about success, and one of the things that we always observe is just that even the word “success” means different things to different people, sometimes different things to us at different stages in our own lives. And so, as you’re building on this journey and looking at even your own succession plan and what comes next, I’m just curious at this point, like, how do you define success for yourself?
Saundra: So my professional success is that I have made some impact on what was my mission when I started in 2004 and remains so today. That every person, irrespective of their wealth, income, or ability to pay, have access to comprehensive, competent, ethical financial planning. And if I can do anything to continue that, and I believe so much has changed since I started. You know, so many things. You all have done an amazing job with XY. Sheryl is doing a great job with Garrett. You know, we’ve got all of these…
Michael: Alliance of Comprehensive Planners as well.
Saundra: Exactly. Exactly. Exactly. I’m relatively new to them. I don’t know as much about them. But I love that all of these programs are out there. I don’t do financial planning. I will never be a financial planner in real life as far as assets and all. I’m not going to do that. Not interested. But it’s there now. I can refer clients who have gone from deep distress to purchasing a home, to now wanting an investment account and wanting to look at estate planning. I have somewhere to refer them now. So in large part, I’ve already achieved a lot of the success. What my hope is now, I do a lot of work around the racial wealth gap, closing the women’s wealth gap and diversity in the profession. And so if I can continue to make an impact in those areas, I will consider this part of my professional journey to be successful.
Michael: And what about at the personal level? You kind of made a clear distinction there of defining professional success.
Saundra: Yeah. So I want to live outside of the country, outside of the U.S. 50% of the year. So I want to be able to have a home somewhere else and here and be able to live wherever I want at any given time. And that’s my goal, like, in the next five years. So the wonderful thing about my life is I keep my needs small so that my wants can be outrageous.
Michael: Well, I like that. I keep my needs small so my wants can be outrageous.
Saundra: Yes. And that’s how I live. So actually, I would say personally, I’m already feeling pretty doggone successful.
Michael: Well, very cool. Well, I’m thrilled you were able to join us on the podcast and share some of this. And I’ll just be curious to see where your second home actually lands. Where in the world is Saundra in five years? But thank you so much for joining us on the “Financial Advisor Success” podcast and sharing this journey, and I think just to me, expanding scope of what it means to be doing good financial planning.
Saundra: Thank you, Michael. It’s been a delight. I’ve loved watching what you’re building, and it makes me very proud that you really have held the highest standard and that you support other people in doing the same.
Michael: Absolutely. Thank you. My pleasure, Saundra.
Disclosure: Michael Kitces is a co-founder of XY Planning Network, which was mentioned in this podcast.