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Financial Coaching: An Overview

Financial Coaching: An Overview. J. Michael Collins Prepared for presentation at the Centers for Working Families, July 22-23, 2010. Typical Features of Coaching. As used across fields One-one relationship over time Focus on self-actualization Practice skills and strategies with support

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Financial Coaching: An Overview

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  1. Financial Coaching: An Overview J. Michael Collins Prepared for presentation at the Centers for Working Families, July 22-23, 2010

  2. Typical Features of Coaching • As used across fields • One-one relationship over time • Focus on self-actualization • Practice skills and strategies with support • Generally goal-focused • Typical client has potential to improve performance • Non-clinical; strengths based; non-crisis

  3. Financial Coaching • Relationship-based • Client Directed’ • Self-activated goals • Goal Focused • Performance improvement • Not an ‘expert’ • Goal setting • Monitoring & Accountability

  4. Financial Capacity Building Information Models Advice Models Mechanism Models • Defaults • Automatic Deposit • Product constraints • Disclosures • Print/Web • Interactive Web • Workshops • One:One • Reminders • Technical expert (credentialed) • Transactional guide (may have sales focus) • Counseling (acute problem solving) • Coaching Therapy – diagnosis / Treatment • Self Control: External Monitoring • Executive Attention

  5. Working Definition of Coaching “a collaborative solution-focused, result-oriented and systematic process in which the coach facilitates the enhancement of life experience and goal attainment of normal, non-clinical clients” (Grant, 2003). Key Elements of Coaching • a focus on long-term outcomes (future orientation) • an ongoing, systematic, collaborative process for assisting clients to change behaviors • support to practice new behaviors • building skills and teaching content based on the client’s unique needs and goals Steps: Goal setting Action planning Monitoring

  6. Coaching Low-income Clients • Not financial or estate planning • Fewer financial assets; less likely to have employer benefits • May be eligible for public benefits or special private programs • Credit management critical • Lack of experience with financial institutions, products • Pressure on time and limited resources Appreciate and excel with financial coaching approach

  7. Coaching Models Staffing: • Pro bono expert • Paid staff • Financial professional volunteer • Lay volunteer • Setting: • Clients in Tax/IDA/other program • School/work- place based • Head Start • Other

  8. Facilitation SkillsICF Core Coaching Competencies • 3. Communicating effectively • Active listening • Powerful questioning • Direct communication • 4. Facilitating learning and results • Creating awareness • Designing actions • Planning and goal setting • Managing progress and accountability 1. Setting the foundation • Ethical and professional standards • Establishing the coaching agreement 2. Co-creating the relationship • Establishing trust and intimacy with the client • Coaching presence

  9. Outcomes • Goals – attainable, measurable • Formation of well articulated goal • Confidence • In money management • Financial Literacy • Gain knowledge about credit, budgeting and products • Self-Control • Regular savings or debt repayment behavior • Building Block for Future • Seeking additional products / services

  10. Satisfaction: Most Coached Clients Are Happy with ServicesHow satisfied are you with how well you and your coach work together to solve your problems? Source: CNM Coaching Survey

  11. More likely to have Goals and Greater Confidence will Reach Goals Source: MoneyUP Client Survey

  12. Greater Financial Security?Financial Management and Access to Benefits Source: Abt Associates CWF Survey

  13. More Likely to SaveThinking about the last year, which statement best describes your typical savings behavior? Source: Abt Associates CWF Survey

  14. Measuring Impacts? • Self report + administrative data (FICO, account balances, etc) • Valid comparison group • Ideal: Randomize offer • But coaching has intrinsic bias of most motivated clients – hard to separate service from choice to participate • Focus more on mechanism: self control and executive attention

  15. J. Michael Collins Faculty Director, Center for Financial Security University of Wisconsin-Madison 7401 Social Science, 1180 Observatory Drive Madison, WI 53706 608-616-0369 jmcollins@wisc.edu For More Information: http://www.uwfamilyfinancialsecurity.org/

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