Are you in a financial spot you’re happy with?

Are you on the right trajectory to meet your goals?

If so great, you don’t need help. If not, maybe you do

What does a coach do?

I have mixed feelings about the word, financial “coach”.

But over time I’ve realized the word coach does a good job describing what a financial advisor does.

Everyone understands that a good coach can

• Bring the best out of their players
• Give them perspective
• Connect teammates and get them playing together as a unit

But everyone also knows that

• The coach can’t do these things for the player. The player must do it themselves

My experience with a fitness coach

I pay a weightlifting coach to help me with my barbell training.

He lays out the workouts each week – which are very similar. Slight adjustments in weight or reps, and infrequently adding a new exercise to the mix.

He reviews my main sets and provides commentary on form and general encouragement.

At the beginning there was a lot of correction in form. Now there is almost none – a good sign I’m doing what I should be doing.

To summarize, I’m paying someone to copy/paste workouts and say “good job!” after I do the workout.

Doesn’t seem like I’m getting much for my money.

But here’s the catch, I can count on one hand how many workouts I’ve missed in six months.

My lifts have all gone up in weight.

I feel accountable to someone and want to continue with my progression.

But I have to do all the work. It’s not the coach’s job to lift the weights.

This is exactly the outcome you should expect with this type of relationship.

It’s exactly the relationship you should expect from your financial advisor.

What should you expect from your financial advisor?

You should have similar expectations of your financial advisor as your fitness coach

You should expect that your advisor helps you with

1. Determining Your Financial Goals
2. Personalized Strategies to Meet Your Goals
3. Accountability & Support

Determining Financial Goals

When I first started working as a financial advisor the idea of asking a client what their financial goals are seemed silly. Isn’t it obvious that every client’s goal is to:

• Earn the best investment returns possible
• Earn those returns without experiencing any decline in their investment’s value
• Pay no tax on those earnings

And truth be told if you could do that you would not need to worry about anything else. You would have a wildly successful business.

The problem is that this is not possible – and anyone promising you as such is either lying or too dumb to know themselves.

Your end goal is the determining factor. It determines the financial strategies that your advisor will recommend.

If you do not know what your financial goals are a good advisor can work with you to help determine them.

Personalized Strategies to Meet Your Goals

When you start working with a fitness coach one of the first things they do is determine your physical abilities. And as important, the amount of time you’re willing to commit to exercising.

The best exercise routine is the routine you actually do. The best financial plan is the plan you actually follow.

There’s no sense talking about a complicated weight lifting routine for an underweight 15 year old. The kid just needs to get in the gym.

You wouldn’t recommend a fancy corporate tax strategy for a government employee. Even if it’s a great strategy for a business owner it has no relevance to this person.

At this stage in the relationship it is the advisor’s job to recommend the specific tactics that have the best chance to achieve your financial goals

• Should you incorporate your business?
• Should you contribute to your RRSP? If so, how much?
• Should you be splitting your pension income?
• Do you have too much or too little insurance?
• Should you make extra payments on your mortgage or buy stocks?
• Should you be utilizing an RESP for your kids’ education?
• How much of an income should you be paying yourself from your business, should you pay more salary or dividends?
• Is your investment portfolio constructed in a manner that minimizes costs, minimizes taxes and matches the time frame for your financial goals.

Accountability & Support

In our office we always joke that 30% of our job is finance, the rest is psychology.

Even the most well thought out plan will have speed bumps along the way.

If the client’s financial circumstance would suggest allocating a portion of their investments to stocks, and most do, then they are going to experience the swings of the stock market.

Clients will call in, especially new clients, and we discuss what is going on. Whether this decline means they are still on track to hit their goals.

But most importantly, to tell them this is normal.

While nobody likes to lose money, setting appropriate expectations can remove a good deal of worry and keep you committed to your long term plan.

Relating back to the fitness world, a lot of the conversations with my coach are worrying about how quickly my lifts are increasing.

“How much do you think I should be able to lift?”

“Is this a normal pace to increase the weight?”

“Should we be changing up the program?”

Remove the word weightlifting context, and you get the exact same questions clients ask their financial advisor

“Given my age and income how much money should I have?”

“Are these declines in the market normal? How often can I expect this?”

“Should we be investing in something different? I see that Bitcoin is doing well”

While I don’t like to admit it, a financial coach is a good description of what a financial advisor does.