How Financial Coaches Can Talk About Investing Without Crossing the Line

The Debate: Should Coaches Talk About Investing?

There’s often pushback from financial advisors who say coaches have no business discussing investing. In fact, it’s not uncommon to see newer coaches get berated in online communities for even asking about this topic. However, we disagree with this stance.

As coaches, we’re uniquely positioned to have great conversations with clients about all aspects of their financial life, including investing. These conversations help clients:

• Develop confidence with money
• Ask better questions
• Become more engaged in their financial life
• Make more committed financial decisions

By talking about investing, we help clients become better, more committed investors. This is actually great for financial advisors, as clients feel more equipped to seek guidance and educate themselves further. Often, coaches serve as a bridge, helping clients feel ready to have conversations with advisors or take their first steps into investing.

The Coach’s Role in Investing Conversations

As coaches, we’re not here to tell clients what to do about investing. Instead, our job is to:

• Help clients determine what they think about investing
• Identify their next best step
• Help them see the role of investing in their financial life
• Support them in envisioning their path towards the future

We can do all this without crossing the line into investment advising. Our role is to help clients think about what they want, explore their vision for the future, and know how to gain the knowledge they need to take action.

Four Key Topics for Investing Conversations

1. What Retirement Means to the Client

Start by exploring what retirement means to your client. This is a whole coaching conversation where you explore their thoughts and feelings about retirement. Ask questions like:

• What comes to mind when you think about retirement?
• What age do you associate with retirement?
• How do you envision your life in retirement?

Plant seeds about different possibilities for retirement. It could mean having enough savings to live without further income, pursuing passion projects, or simply making work optional. The goal is to help clients imagine possibilities beyond the traditional view of retirement.

For example, you might say, “What if retirement meant you have enough money to survive without any further income? Or what if it meant you could pursue your passions without worrying about the income side of things?”

2. Assessing Current Knowledge and Actions

Get a sense of what the client already knows and is doing about investing. This helps you see where you can fill in gaps in their understanding. Ask questions such as:

• Are you already investing? How?
• Do you know how much you’re currently investing?
• How familiar are you with different types of investment accounts?
• Do you have a financial advisor? How often do you meet?
• Did you grow up in a house that talked about investing?

Be careful not to overwhelm the client with too much information at once. Move them forward one step at a time. Remember, many clients feel investing is over their head or that they should know more than they do. Create a safe space for them to be vulnerable and admit what they don’t know.

3. Future Goals and Plans

Based on their vision for retirement and current actions, discuss what the client wants to do going forward. Are they interested in early retirement? Do they want to plan for a temporary break from work? Do they want to transition to more fulfilling work?

Help them articulate their goals, even if these may change over time. The more they envision and talk about their plan, the clearer it becomes as they get closer to retirement.

4. How to Get Started or Get Help

Educate clients about different paths they can take:

a) Self-investing: Managing their own retirement investments independently. This tends to be the least expensive option but places the most responsibility on the client to educate themselves.

b) Fee-only or advice-only financial advisor: Paying for strategy sessions to get professional guidance. This could involve annual sessions or using platforms like Hello Nectarine for one-time advice.

c) Traditional financial advisor: Working with someone who actively manages their investments, typically charging a percentage of assets under management.

Explain the pros and cons of each option and provide resources for further education. It’s important to help clients understand how advisors are paid, especially with traditional advisors where fees may be less visible.

Practical Tips for Coaches

1. Don’t give too much information at once. Clients don’t need to learn everything in one conversation.
2. Be prepared to share all different paths or options, regardless of what you do for your own investing.
3. Have a network of trusted financial advisors you can refer clients to if needed.
4. Provide resources for clients to educate themselves further, such as books, podcasts, or reputable websites.
5. Warn clients about potential red flags or “get rich quick” schemes they might encounter.

As financial coaches, we play a crucial role in helping clients engage with investing as part of their overall financial picture. By having these conversations, we can support clients in gaining clarity, confidence, and commitment to their financial future—all without crossing the line into financial advising.

Remember, our job isn’t to be the expert on every investment strategy. Instead, we’re here to help clients understand their options, clarify their goals, and take their next best step towards a secure financial future. By doing so, we can work alongside financial advisors, creating a more financially literate and engaged client base for everyone.