Why focus on Financial Coaching as a CERTIFIED FINANCIAL PLANNER??

What is Financial Coaching?

In my work as Personal Financial Counselor with Service Members, or as a Financial Coach, also trained as a CERTIFIED FINANCIAL PLANNER? (CFP?), I work in the realm of “education” not “advice” or “Financial Planning” in these roles. We are “thought” partners to our clients. We work around money values, behavior and mindset; not selling products, or managing investments. We are supporting clients in their development of their client-driven life plan around their day to day money; to assist in the accumulation of savings for their goals and so they are prepared to go on to working with a financial professional around investments.

Imagine, only 24% of women surveyed by Fidelity Investments in 2018 said they were "comfortable" with how much they knew about investing.

I love Financial Coaching because it encompasses the “educational” foundational aspects of “Financial Planning” that are required and taught as part of the Certified Financial Planning Designation program. Financial Coaching focuses on Financial Management & Wealth Building skills such as Cash Flow and Debt Management, and touches the softer side of emotions and mindset. These are just part of “the basic” skills we as CFP?’s use to support clients and for many, it's what drew us to the profession in the first place (relationship building, problem solving, seeing impact).

As a single mom with 2 young adults I know first-hand that "financial education" is a missing in our educational system. So I’m happy to see more of my colleagues, venues such as XYPN (XY Planning Network), and our profession focusing on these important skills – training the next generation of young adults to be financially free.

As Financial Coaches, we teach our clients to fish.

I’m doing fine/ I have an Advisor. "Why would I need Financial Coaching?"..

We all know how to go on a diet, yet why do we NOT loose the weight?

My favorite clients are those that want to “do better”. They value Financial Coaching just as they value having a mentor in their career development, in their businesses, or having a coach for their kids in sports. They want collaboration, partnership and accountability. I work a lot with Service Members and when speaking with them, I liken it to this, "If your direct commander (in the military) wanted to mentor you to be a colonel a general some day, who you say, 'no thanks, I want to be an E4?'.

Let’s face it, if you can’t manage $40K a year, the same is true if you make $400K or more a year. The same basic skills apply and many times the same issues; stress, debt, blocks around mindset, not meeting life’s goals, and marital or relationship issues around money are still there – YES, even at that greater level of income!

There are most likely "money leaks" that you haven't noticed, or maybe have chosen to ignore, behaviors that's you're not tracking. That's OK.

And what about that Pay gap for women?

"a 10% pay gap alone can lead approximately 38% less wealth by the age of 65, according a UBS report."

"While 82 cents vs. $1 may not seem like much, over the course of a lifetime, it adds up. The Bank of America Merrill Lynch study states that if a man and woman work full time until retirement, a woman will earn $411,000 less. "

Working with a Financial Coach can help identify those leaks so that you can be intentional with your money decisions and have the life you choose to create.

What does working with a Financial Coach who’s also a CFP? do for me?

Working with a Financial Coach or Personal Financial Counselor who is also trained in another modality such as a CFP?, CFA?etc. may possibly give you the benefit of a wider range of educational and professional experience and background.

Financial Planning, “as a profession”, covers 5 areas of financial education and competency; Retirement Planning, Employee Benefits, Tax Planning, Risk Management and Estate planning. It is a process structured to support clients in defining their life goals, gathering information around resources current and future that are available to meet those goals, and supporting a client – driven road-map to achieve them.

Those that are trained in the profession of Financial Planning, typically have the designation of CFP?,  (although they don’t have to), have passed a rigorous 2 day exam and have 35 hours are required continuing education requirements annually. When working in the strict role as a Financial Coach, one-time flat fees, program fees or subscription fees are charged, products are not sold, securities advice is not given and fees are not charged based on Assets Under Management (AUM). 

This makes working with a Financial Coach much more affordable for those just starting in a career, a family, in transition (divorce/widowhood, changing jobs) who may not have large assets to be managed but need that sound financial foundation, as most Financial Professionals have not traditionally focused in this space. Financial Coaching prepares client for that next level financial relationship.

A mass mutual study found that fewer women than men put money in a retirement savings account (39 % vs. 58 %) or emergency fund (41 % vs. 53 %). This makes sense as many women are focused daily on successfully managing their household and family activities, plus community and other commitments.

How did I get here?

I was the CFO of my family (thanks to the lessons my grandfather instilled in me) and I wanted to make a difference in the lives of “real” people. So, in 2008 I left my life in “corporate”; transitioning mid-life, going back to school, and becoming a CFP?. 

Then, in my experience as a "Private Client" Investment Manager, I saw that many of my clients were taking on too much investment risk based on our conversations, there was a large gap in basic money management skills and confidence, single women were under-represented in the investment space.

"Only 35% of college-educated, not-yet-retired women say they're comfortable managing their investments, compared to 60% men. - according to an article in Bloomberg."

Women in committed relationships weren’t actively joining the conversations. The latter were abdicating to their spouses.

A report from UBS found that 56% of married women leave investment and long-term financial planning decisions to their husbands, and 85% of women who defer to their husbands believe their spouses know more about financial matters.

It was a male dominated role, with male dominated client demographic, with little focus on mindset and I wanted to be the change. So in 2014, I expanded my area of expertise and became trained as a CDFA? (Certified Divorce Financial Analyst) because of my own tumultuous divorce. Wanting to even better support my investment clients on the softer emotional side of life-planning, decision making and investing I went on to train as a life coach and later as a mediator to support my work with couples.

My passion was to be a Financial Coach, focusing on those core areas of financial education, but at that time, the term “Financial Coaching” was unheard of, and even looked down upon by peers because it didn’t focus on investments, and I was “shamed” into not working in an area that I knew some real work needed to be done.

So I left Investment Management in 2014, focusing on Divorce Financial Planning, tax preparation, Financial Coaching for success-minded women, folks in the military and their families. As the year unfolds, I look forward to expanding my tools in the realm of Financial Coaching and working with more women before marriage, as well as after divorce and widowhood.

At 15%, widows’ poverty rate is three times that of married women, according to data from the Center for Retirement Research at Boston College.

Education vs. Advice?

Financial Coaching is about working in the realm of “financial education”. For example, reflecting on their values and relationship with money, helping clients consider different savings/debt payoff strategies and tactics to keep them on track (accountability), understanding the differences in impacts of spending /savings choices, pros and cons they might want to explore. 

It’s NOT “financial advice”. Financial advice is typically governed by the SEC and or FINRA, even the CFP Board or another organization depending on your type of work and designations or licenses.

It can be a fine line. Click here to read more about giving financial advice without a license.

What about all these terms?

All these terms can be really confusing. There’s a difference between a Financial Coach, Financial Advisor, Financial Planner etc. All do not necessarily have the same level of education, certification , professional financial services experience, oversight or fiduciary responsibility to their clients and some many just focus on investments and or products. Here’s an article from Forbes , “ Financial Coach, Financial Advisor, Financial Planner: Which Should I use”?”  that may help to shed some light.

DISALAIMER: The title “Financial Coaching” (outside of the CFP? designation) is a relatively new term and “field”, with no required minimal educational background, testing, or consistent compliance standards, licensing or governing body such as FINRA, SEC, CFP Board etc. as there are in Financial Services. 

Working with a professional can help make sense of your individual situation in these uncertain times; to help identify these answers and support you in getting clear on your goals, where you are, where you going, your timelines (time horizons), and develop and understand your strategy. CFP.Net and FPA.org as well as FINRA.org and your state’s insurance licensing board are good places to research for a professional. 

Connect / Follow me ????   Michelle Buonincontri

Company page ???? Being Mindful in Divorce 

 This article is not meant as counseling, investment, tax or legal advice, but rather information. It is always advisable to seek out and work with a qualified professional in their area of expertise to determine your unique situation and what particular options are available to you.

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