Your Best Investment Ever?
Financial Planning > Behavioral Finance
By Olivia Mellan
November 01, 2011 at 08:00 PM Share & Print
The original version of this story was published on Investment Advisor
As adults, we feel best about ourselves when we grow, change and become more whole over the course of our lifetime. It makes sense to hire someone—a coach—whose support and insight can help make this journey more successful and less lonely.
Most of us have been coached before. Maybe by Mom or Dad, by that fearsome figure in sweats blowing a whistle in gym class or by a friend helping us muster the courage to take a scary step. The coach is an iconic figure in every hero's quest.
If you've never worked with a professional coach, you're bound to have questions: What could a coach do for me? What kinds are there? How much does it cost? To help more advisors find the best kind of support for themselves and their clients, I explored some of the ins and outs of this burgeoning industry.
The Practice Management Coach
Advisor Eric Brotman believes that in business, athletics or academics, the top performers always have a coach.
Eric Brotman, a CFP who is president of Brotman Financial Group in Lutherville, Md., has been working with an executive coach for 12 years. He told me, "When we started, I was getting ready to be the junior partner in a new financial planning firm, and I thought she could help me speed up my professional development. After four years of coaching, I elected to start my own firm, and I used my coach every step of the way, from conception to design to implementation. She helped interview job candidates and was instrumental in the design of the new firm."
But that's not all, Brotman says. Over the past eight years, this coach has facilitated the firm's client advisory board meetings and quarterly employee team retreats. She's conducted one-on-one coaching for each of Brotman Financial's employees from time to time, "and has always been a sounding board for me."
Brotman considers his coach to be an invaluable member of the team. "She has helped our firm grow from a startup to a top firm within our independent broker-dealer in under a decade," he says. "When a challenge or opportunity presents itself, she is the first call I make."
To this experienced advisor, being coached can be an advantage to anyone focused on success. "In my mind, whether in business, athletics or academics, the top performers always have a coach."
The Behavioral Coach
Denise Federer says that "Eventually, we all hit the wall. My role is to partner with my clients to help them get out of their comfort zone so they can achieve that next level."
There's another type of business coach: one who helps people overcome their resistance to success, personified by Denise Federer, Ph.D., of Federer Performance Management Group in Tampa, Fla. A behavioral psychologist, Federer told me that "the person who works with me wants to understand what prevents them from taking action steps that they know they need to take." Advisory firms hire her to coach their top executives and advisors, individually or in teams. Sometimes she works directly with their clients, helping them deal with family financial issues that impact decision making.
By and large, her task is to make it possible for people to take a leap forward. "Eventually, we all hit the wall," she says. "We keep doing what we did before, but that won't get us to the next level. My role, as I see it, is to partner with my clients to help them get out of their comfort zone so they can achieve that next level."
Federer coaches individuals in two phases. "In the first phase, we identify their resistance to readiness for success and the factors that are limiting them," she explains. "We create a behavioral master action plan to help them identify their outcome goals—for example, an increase in production, assets under management or number of new clients—as well as process goals such as holding client events, doing client reviews, asking for introductions from other experts and increasing their professional expertise or areas of specialization."
In Phase Two, clients implement their new understanding, incorporating specific suggestions from people who know the financial advisory industry inside-out. Depending on the clients' need, Federer may handle this herself or refer them to a specialized financial coach.
Coaches Are Not Therapists
"Therapy deals a lot with family-of-origin material … and making peace with the past," says Lynn Grodzki. "Coaching looks at the present going forward."
Clearly, coaching entails a lot of psychology. However, most coaches don't stray over the line into therapy. "I see therapy and coaching on a continuum in terms of personal growth," says Lynn Grodzki, LCSW, of Silver Spring, Md. A clinical psychotherapist since 1988 and a master certified coach since 1996, Grodzki has taught coaching for 11 years and has written five books for therapists and coaches, including "Crisis-Proof Your Practice: How to Survive and Thrive In an Uncertain Economy."
"Therapy deals a lot with family-of-origin material that may be unconscious," she told me. "Coaching looks at the present going forward. It's often more short-term, more focused on solutions and action, and it's about living into a good future."
As a business and executive coach, Grodzki usually works with the owners or CEOs of small businesses, including advisors. Before the recession and the debt ceiling crisis, she would hear mainly about general managerial and ownership issues.
Since the market crash and recession, another theme has emerged. "Advisors are doing a lot of hand-holding with their clients, and this is wearing on them," Grodzki explains. "We discuss strategies to impart client confidence: how you talk to the client, how often, what to talk about, how to make them feel secure, how to set realistic expectations. If profits are down and everyone is working harder, how do you keep up morale?"
Burnout is a related complaint. "One of the owners I'm coaching says he never gets to go home now," she reports. "He has to work longer hours just to keep the clients he now has. And a lot of advisors had hoped to be retiring at this point, but their own investments are down. There are health issues as they age. A big part of my job is helping these financial advisors think out of the box, because the business is different now."
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The Coach as Catalyst for Change
The pace of coaching should be based on what the person being coached needs, says Ed Modell. Fast enough that there's momentum, yet slow enough so that they have time to reflect on the discussion.
Ed Modell was a self-described "workaholic litigator" when minor surgery led to a health crisis that kept him in a medically induced coma for three weeks. After recovery, he re-evaluated his life choices, discovered that he loved coaching and now is president of the International Coach Federation. He told me, "I'm the poster child for the value of coaching in turning your life around."
To Modell, coaching is a relationship in which the coach acts as a catalyst to help clients uncover the solutions to their problems and achieve their goals. "We do this by asking what we call 'powerful questions' to help the client see the issues with a different lens, or different perspective, than before."
Modell said some people hire a coach to work on a specific issue, while others make coaching part of an ongoing support system. The frequency of sessions is a matter of negotiation between the coach and the client, varying from once a week at the outset to perhaps once a month later on.
The pace of coaching should be based on what the person being coached needs: fast enough that there's momentum, so the person can test things out and see progress; yet slow enough so that they have time to reflect on the discussion, think about new ideas and practice new behaviors before coming back to the next coaching session.
Coaches usually confer by phone. Sessions typically last from 45 minutes to an hour, and the cost may range from $100 per hour for life coaching to $500 per hour for executive coaching. Other coaches told me their usual rate is $150 an hour and up; one charges $600 per month for two sessions.
Coaching a Group
How does a person decide whether to pursue one-on-one coaching or group support and collaboration? Ginger Cockerham says it's a matter of individual preference.
Formerly a journalist, teacher and small business owner, Ginger Cockerham realized when she heard a presentation by a coach that that was her calling. Now the owner of Cockerham Coaching Group in Dallas, she has held the ICF's highest designation as a master certified coach since 1998 and has taught coaching at Columbia University.
Trained to coach individuals, Cockerham became a group coach when one of her clients, a director at Northwestern Mutual Financial Network, started a coaching program at the company to promote retention of talented women. Beginning with two groups of seven or eight participants in various offices who interacted by phone, the program expanded to 10 groups within two years.
"Here's the key: They came in by choice," Cockerham says. "When people are assigned to be there, they always have an excuse [not to participate]. But if they choose to be there, it becomes their group."
A group's objectives are sometimes quite specific. Not long ago, an insurance company brought Cockerham in to help create more top producers capable of qualifying for the industry's Million Dollar Round Table. While coaching a group like this, she will also conduct what she calls "laser coaching" with individual participants: 15-minute sessions on a specific issue.
How does a person decide whether to pursue one-on-one coaching or group support? It's a matter of individual preference, Cockerham says. She adds, "I've found that most people in financial services like to be with other peers who are doing well, so they can get the inside scoop on what others are doing and incorporate it into their own practice."
When Coaching Is Not Enough
When a client has behavioral issues, Kol Birke suggests it would be helpful to refer out to a coach or therapist, "Just as you would to a qualified estate planning attorney if your client has estate planning needs."
"A lot of times advisors feel overwhelmed with a client's struggles," says Kol Birke, a financial behavior specialist with Commonwealth Financial Network. "Maybe they're spending too much or not getting their will signed, or the husband and wife are disagreeing."
Birke has been at independent broker-dealer Commonwealth Financial for 12 years and has been coaching advisors by phone for about five years. Ideally, he says, the coach can help the advisor fix the problem; but sometimes it's beyond the scope of what an advisor can handle. He suggests, "Just as you would refer out to a qualified estate planning attorney if your client has estate planning needs, it's helpful to refer out to a coach or therapist when a client has behavioral struggles."
How can you urge a client to take this step in a comfortable, nonjudgmental way? Birke suggests saying, "You came to me to help achieve your financial goals. If you went to your doctor and needed to exercise for your health, they might refer you to a personal trainer. A number of my clients have found it similarly helpful to work with this coach."
The biggest factor for success, Birke points out, is the fit between client and coach. It doesn't matter so much what their specialty is if there's a great fit between client and coach.
Getting Started: How to Choose the Right Coach
How can you find the coach and the kind of coaching that are right for you? Here's what I would suggest:
Write down your goals, hopes, dreams and areas of struggle. What do you hope a coaching experience will do for you?
Think about whether you learn well in a one-on-one setting or whether learning in a group suits you better.
Decide how much money you can invest in being coached. In a large company, your employer may help.
Assemble a list of possible coaches to interview from friends, colleagues, articles and other research.
Once you start meeting coaches (often by phone), trust your gut. If the chemistry isn't there, it makes sense to continue shopping around.
Give yourself a period of time to try the relationship—a few months, perhaps. Then step back and ask yourself if you are getting what you want and need.
When coaching works well, you are the one crafting the life you want, with the help of a trusted professional. You will feel more self-respect and a greater sense of well-being. And that, after all, is what each of us is looking for.