Empowering Communities: The Role of Certified Financial Coaches in CHIP

Welcome back to the Cultural Catalyst! In recent years, the financial landscape has shifted significantly, highlighting the critical role of certified financial coaches within the financial professional community. In today’s edition, we'll explore:

• Insights in Financial Coaching
• Certifications for Financial Coaching
• Partnership Spotlight: Sage Financial Solutions, Inc.

Insights into Financial Coaching Trends

Financial coaching has demonstrated measurable benefits:

• Increased Financial Capability: Clients working with a financial coach see an average increase of 57% in their financial capability scores.
• Achievement of Financial Goals: 75% of clients who complete two or more coaching sessions reach at least one financial goal.
• High Demand: With 64% of Americans living paycheck to paycheck, financial coaching addresses a critical need regardless of income status.

What is Financial Coaching?

Financial coaching is a collaborative approach focusing on the client’s power, and supporting people as they take control of their financial futures. Key elements include:

• Exploring Money Beliefs and Behaviors: Collaborating with clients to evaluate their current situation, setting a vision for their financial future, and determining their desired outcomes.
• Setting Financial Goals: Setting goals that support their vision for the future. From eliminating debt to saving for major purchases, retirement, or optimizing budgets.
• Creating Health Financial Behaviors: Understanding behavior and patterns that support their long-term goals and managing their saving and spending according to their goals.
• Understanding Their Financial Lifecycle: ?Implementing their financial plan, understanding how each financial planning topic impacts their entire life, and taking actions that align with clients’ goals and vision.?

Building Your Referral Team with Financial Coaching

Financial coaches can support clients as they implement their financial plans and navigate the behavior changes necessary to achieve their goals. ? A network of financial coaches can provide valuable data to enhance your practice. Here are some ways to fuel this partnership:

• Financial Talks: Collaborate with a financial coach to host educational events at community centers or other venues.
• Increase Scale: Develop and facilitate programs to help identify key pathways to building wealth.
• Certified Referral Team: Connect with a team of certified financial coaches and create a robust support network.

• Hire a financial coach as a part of your practice: Hire a financial coach for personalized implementation support for your clients or their family members??

Coaching support often helps clients feel more comfortable discussing the personal aspects of their finances and can lead to a higher retention rate for your firm.

Partnership Spotlight: Sage Financial Solutions, Inc.

Sage Financial Solutions, Inc. (SFS) is dedicated to aligning financial coaching with clients' values and goals. Founded by Saundra Davis, who holds a master’s degree in personal financial planning and is an International Coaching Federation Master Certified Coach (MCC), SFS is a trailblazer in the financial coaching industry. The organization is renowned for setting professional standards and fostering inclusion in personal finance. Here are some key features:?

• Training and Standards
• Certification Programs
• Commitment to Inclusion

Financial Coaching Certifications

Not all financial coaching certifications are created equal. Here’s a list of notable certifications:

• Accredited Personal Finance Coach? (APFC?) certificates are knowledgeable and competent in the field, capable of fostering positive financial behaviors and helping clients achieve their financial goals
• Financial Fitness Coach (FFC?) certificates have a solid foundation in financial literacy and coaching techniques to effectively support and guide clients toward financial well-being.
• Accredited Financial Counselor? (AFC?): Known as the gold standard in financial education, offering comprehensive guidance without selling products.
• National Financial Educators Council (NFEC): Focuses on practical and hands-on learning to improve financial literacy at the community level.

Importance in the Black and Brown Community

Predatory and oppressive financial systems, disparities in financial literacy, and access to quality financial advice have significantly impacted Black and Brown communities. Certified financial coaches play a crucial role in bridging this gap by offering compassionate, client-centered support and economic expertise in 1:1 engagements and group workshops.

For financial professionals, collaborating with certified financial coaches can be a game-changer. These partnerships not only help clients achieve their financial goals but also provide invaluable resources for building a strong referral network. By embracing these relationships, we can collectively work towards a more financially empowered community.

Disclaimer

The information in this newsletter, " Cultural Catalyst," is intended for educational purposes only. While every effort has been made to ensure the accuracy and reliability of the information presented, readers are encouraged to conduct their research and seek professional advice before making any financial decisions.

Reference

NerdWallet:

NerdWallet. (2024). Financial Coach Fees and Costs: What to Expect. Retrieved from https://www.nerdwallet.com/article/investing/financial-coach-fees-costs

Summary: This source discusses the cost of financial coaching, noting that fees typically range from $100 to $300 per hour due to lower educational and certification requirements compared to financial advisors.

Women's Way:

Women's Way. (2020). Financial Coaching Pilot Final Report 2020. Retrieved from https://womensway.org/wp-content/uploads/2020/12/WW-Financial-Coaching-Pilot-Final-Report-2020.pdf?

Summary: The report analyzes a financial coaching pilot program, detailing its outcomes and the effectiveness of the intervention.

Forbes Advisor:

Forbes Advisor. (2024). How Many Americans Are Living Paycheck to Paycheck? Retrieved from https://www.forbes.com/advisor/banking/how-many-americans-are-living-paycheck-to-paycheck/?

Summary: This article reports that 63% of Americans are living paycheck to paycheck, with 64% struggling to cover monthly expenses, highlighting the financial challenges faced by many.

Consumer Financial Protection Bureau (CFPB):

Consumer Financial Protection Bureau. (2024). Financial Coaching Initiative: Results and Lessons Learned. Retrieved from https://www.consumerfinance.gov/data-research/research-reports/financial-coaching-initiative-results-and-lessons-learned/

Summary: This CFPB report outlines the outcomes and lessons from their Financial Coaching Initiative, providing insights into the implementation and impact of financial coaching programs.

Urban Institute:

The Urban Institute. (2016). An Evaluation of the Impacts and Implementation Approaches of Financial Coaching Programs. Retrieved from https://www.urban.org/sites/default/files/publication/71806/2000448-An-Evaluation-of-the-Impacts-and-Implementation-Approaches-of-Financial-Coaching-Programs.pdf

Summary: This evaluation by the Urban Institute explores the impacts and implementation strategies of financial coaching programs, discussing their effectiveness and challenges.

Consumer Financial Protection Bureau (CFPB):

Consumer Financial Protection Bureau. (2021). Financial Coaching Initiative: Lessons Learned Report 2021. Retrieved from https://files.consumerfinance.gov/f/documents/cfpb_financial-coaching-initiative-lessons-learned_report_2021-05.pdf

Summary: The 2021 report provides detailed analysis and lessons learned from the CFPB’s Financial Coaching Initiative, offering guidance for future financial coaching programs.

Consumer Financial Protection Bureau (CFPB):

Consumer Financial Protection Bureau. (2024). Financial Coaching Initiative. Retrieved fromhttps://www.consumerfinance.gov/data-research/research-reports/financial-coaching-initiative/

Summary: This resource offers an overview of the CFPB’s Financial Coaching Initiative, providing context and comprehensive information on the program.