Wealth Coaching: Observe a Lively Discussion

P, the Financial Advisor: What is the role of the Wealth Coach in working with an heir to a family fortune? Here is “The Case of the Isolated Heir.” I would be interested in thoughts others might have about Wealth Coaching for members of multi-generational families of wealth.
www.gifthub.org/2008/07/the-case-of-the.html

T, the Coach: The good news is that wealth coaching does not only help with the DARK SIDE as you call it, or Thayer Willis does in her book about wealth management, but also the LIGHT side of enjoying it and ones’ advisors. And then there is holding one’s self, or family, and one’s advisors or nonprofits accountable. Wealth coaches get to be cheerleaders too for simply creating lists and getting things done.

The Isolated Heir and “the busy entrepreneur” alike can use wealth coaching or money management coaching it could be called. Or it could be called, “how to choose and manage your advisors and the responsibilities of wealth.” But no, we are not about stepping into the wealth or financial management arena, unless one has those degrees as well.

The debate and dialogue continue on the importance of the Inspired Legacy 12 Steps and how to establish partnerships one needs throughout ones’ life..( Inspired Philanthropy http://www.amazon.com/Inspired-Philanthropy-Step-Step-Creating/dp/0787964107 <http://www.amazon.com/Inspired-Philanthropy-Step-Step-Creating/dp/0787964107> )

Some will need coaching, some solid mentoring by family or friends or advisors will do. But it’s great to know the options for support.

We’ve found that the use of a wealth coach can cut the delay time in half for most estate planning, so we should be celebrated by the estate planning community. We seek to be on the planning team as we can in fact, inspire and support movement for the end result, DOCUMENTS being signed and completed, TRANSACTIONS for nonprofits and others completed. As fees for wealth coaches are 1/2 to 1/3 of the attorneys and others usually at the table, we are often a practical solution for accompaniment, closure and solid planning of a different sort. It’s the personal priorities that so often get in the way, the questions of “what do I do first.” With whom should I discuss or evaluate this. We are not discouraging using one’s advisors, au contraire, we affirm what a good idea you are to be included, along with 1-2 others who are valued mentors.

P, the Financial Advisor: The opportunities here are real. So are the risks of alienating advisors. I have had advisors look at the Wealth Coaches Online and raise questions. They are puzzled at the seeming lack of quality control, or standards, really. Have Wealth Coaches been vetted in any way? And if so, what standards were used? Contrast this with what financial advisors have to go through:

• Life insurance license
• Securities registrations
• 8 college level courses in finance and economics for a CLU, ChFC
• 12 grad level courses for MSFS
• Intense multipart exam on finance, law, economics for CFP
• Practice standards and codes of ethics for CFP
• NASD and SEC and State Insurance commissioner regulation
• Compliance officer for firm
• Compliance review of all client communications
• Securities firm monitoring of all email
• Securities firm opening all mail to office
• Ongoing firm training
• Supervisory interviews
• Liability insurance
• Signed planning agreement for financial plans detailing what will be done.
• Mandatory disclosure of practice standards for Registered Investment Advisors
• Record keeping requirements
• Spot audits by home office compliance teams
• Random audits by NASD

Against that, someone calls themselves a Wealth Coach, or goes through training that neglects any understanding of money. Yet they call themselves a “Wealth Coach.” It is as if someone who can’t ski and never has seen snow calls herself or himself a “Ski Coach,” meaning that they manage the process of shopping for skis and the phobias?

It is important for me to mirror these advisor reactions for you. They are part of the cultural literacy of well-trained advisors. Some of this is turf consciousness, certainly. But in our business we know many unconscious incompetents. They end up creating trouble for all. So we tend to close ranks to exclude and shun the unconscious incompetents, lest we go down when they go down.

As a Coach, to blow off these reservations is to find yourself isolated with isolated clients talking about advisors behind their backs and creating ominous triangles. Truth be told, that is where we are, I believe. The Coach commiserates about advisors, and their “damned forms and processes.”

How many Coaches call the advisor to discuss what is going on? How many close all open loops with advisors and build the advisor up, as opposed to enabling the client’s grumbling? (“O my trust officer is like my Daddy. He manages me and I hate it. I clam up around him. I get all foggy. Can you help me?” Does the coach say, yes, I will get the advisor on the phone, or does the Coach form a triangle of shadows and silences, with the unseen advisor as “the Other”?)

We need to close these loops and talk TO each other, not ABOUT each other. As vehement as I may seem (my natural style, I am afraid) I deeply enjoy being around the Coaches who came to Houston. They have on average far better people skills and a far better humane process than do advisors. Somehow we need to find a way to include those coaching skills in the planning process without creating triangles or unnecessary liability.

I have at certain points been asked to train Coaches in the wealth side of wealth coaching. I have hesitated because of the unconscious incompetence problem. If we train coaches and they get themselves in real trouble, what is our moral liability? Ignorance is bliss, but when clients sue, deserved or not, one begins to realize why this world of wealth planning is so hedged around with paperwork, licenses, regulations, and supervisory checks and balances.

A good starting point for tightening things up would be the contract that the client signs with a Wealth Coach. How is the relationship defined and limited? What is disclaimed? How is the client informed of the need for competent financial, tax, and legal advice? What liability coverage do Coaches carry, and does it cover malpractice in financial areas? What behavior would trip the Coach into being considered a “financial planner” under state and federal law? Do Wealth Coaches know what those laws are? Generally, I believe, you are considered an advisor if for money you give specific advice to a client about finance. That is what Wealth Coach sounds like he or she does. Not what he or she does. But it sounds that way. That misunderstanding might give a client’s attorney room to get the knife in.

T, the Coach: How is it serving you not to accept that some donors or clients want to choose simply someone who understands the issues of money or wealth psychologically and can accompany them through their to-do lists. They would rather work with someone who is NOT SELLING THEM anything and get through or get help with keeping on path with their to-dos. Why is that so threatening to Financial Advisors?

Wealth coaching is happening. You can shoot torpedoes, but it’s happening because so many advisors before you have failed to listen and help truly their clients without selling them. OR because they just want someone to remind them of their to-dos and have a safe place to think out loud on the order of those to-dos.

Have you worked with a coach? It’s a glorified and more responsive therapist without the psycho babble. Relax. Are we discrediting your field? I suggest we ADD to it and get your work DONE more quickly.

P, the Financial Advisor: Client ‚Äì Advisor ‚Äì Coach РA triangle? Or all on the same page? Say that all talk to each other openly and I am at ease. Say that Coach triangulates against the Advisor and I am not ok.

Two things in a literary mode keep insisting on being heard. The first is a saying attributed to Jesus, “Bring me the stone the builders rejected; that is the keystone.” I am feeling intuitively that the ‚Äö√Ñ√∫stone‚Äö√Ñ√π in this case is the Coach. But as the Builder, well-trained in my craft, I reject it.

The second is from Derrida, “The law of the supplement.” A supplement (Coach) graciously completes what would otherwise be incomplete. As such the supplement makes the text unstable, complete and incomplete. So too the need for a Coach does indeed call into question the “integrity” or wholeness of the team. The point is that the Supplement is subversive even as it presents itself a merely filling in a little lack. In fact, what it does it do to totally destabilize what had been seen a crystalline text.

R, Coach 2: Can’t people see that one hires a bankruptcy lawyer for bankruptcy, a real estate lawyer for real estate? Why can’t people see that you get a piano teacher for teaching you piano and a performance coach to help you manage your nerves? An image coach to style you? A wealth coach to help you deal with everything that comes up when you hit it big and you’re rolling in (probably short-lived unless you get a career coach) dough?

A responsible coach NEVER attempts to move into realms for which s/he isn’t qualified. In my own capacity as a coach to wealthy people, I do just as you say: help them clarify their objectives and analyze/eliminate their objections. I help them set priorities, outline action steps, and build in accountability and follow-up. I help them navigate the relationships that are affected by their decisions and their wealth.

In my experience, one of the most significant value-adds coaches give clients is ‚Äö√Ñ√∫permission‚Äö√Ñ√π to get lots of other help ‚Äö√Ñ√¨ philanthropic advisor, accountant, new banker, another attorney who specializes in a particular need, and another, and another. Just as you say you’re responsible for the hiring of more personal assistants than anyone else in America , good coaches to the wealthy are responsible for the hiring of many professionals and the racking up of untold billable hours for those already on board.

Oh, and a postscript: My philosophy about coaches and their qualifications: it’s up to the client to determine what the objective is and who the best coach is to help meet that objective.

Someone can be credentialed respectably and be a terrible match. Some people are great natural coaches with decades of relevant life experience and no ‚Äö√Ñ√∫official‚Äö√Ñ√π coach credential. Others have every coach credential under the sun (there are over 160) and still can’t coach because they can’t get their own ego out of the equation.

So it’s up to the client ‚Äö√Ñ√¨ how much does a credential mean? What kind of credential? (ICF is the prevailing credential in the U.S. , but it’s relatively new, and they grandfathered in a lot of people who hold the highest designations without having had to prove themselves according to the credentialing standard)

The right tool for the job, they say. The right lawyer for the case – criminal? Civil? Patent case? Intellectual property? Domestic? Estate? Etc. Same with hiring/using a coach. Pick the right coach for the situation at hand. I have had as many as three coaches at one time because each one was working on something different with me – one was a product development specialist, one was my regular coach, and the other was working with me to develop a nonprofit program.

P, The Financial Advisor – I have been reflecting on my own emotions and their ferocity. Generally, when I feel this upset, it is because I am missing an important point. I finally came to see certain things. In our society philanthropy is often “gendered female,” so are feelings, often, and ideals. These critical elements of our humanity, let alone our financial and estate plans, are often dismissed by financial, tax, and legal advisors as “touchy feely.” By the same token, all too often women of wealth are not actively engaged in managing their money. A husband may do it, an advisor may do it.

As Helen Hunt wrote in a wonderful article, “Will Women Fund Their Own Revolution?” (link provided below), it is as if many a wealthy woman were consigned to the front parlor with a small budget for philanthropy, or household expenses, while the husband, trust officer, father or brother manages the real money in “the counting house.”

I can well see why in such a situation, the woman migh hire a wealth coach to help her navigate her own feelings and her own “next steps, as she tries to break into the counting house as a peer and a decision maker. In that light, I applaud coaches and only hope that they will succeed in opening communication with advisors, so that the wisdom of the excluded party, often a woman or heir, is fully heard at the planning table, and integrated into the final plan. That attornies, for example, often do not listen well is a sad fact. (See link provided below.)

Coaches, if they can participate on the planning team openly, not from the shadows, could add a great deal. Yes, there are turf issues all around that table. Parents may not want children present. Husband may not want wife present. But we need the wisdom that coaches and the marginalized stakeholders (often women and heirs) can and will bring. Let us all try to be more welcoming to this productive diversity and to build more responsive and open teams.

So, you can say I have had a “mind shift” because of this conversation. I hope other advisors will as well. By the same token, I hope that coaches who specialize in wealth coaching will take basic financial planning courses so that they know what they don’t know and acquire an understanding of the process in which they are intervening. What a wealth coach should model, in part, is the learning of basic finance. A coach whose client is phobic about money can model a healtheir relationship with money by getting a basic grounding in finance herself or himself.

As for the coach choosing advisors, beware! That would imply that the coach is an expert in advisors. I am not sure that a coach could be unless the coach is well versed in the disciplines or very well networked. When you start recommending the hiring and firing advisors, you are feeding pretty high on the foodchain, and your position may be challenged. Best to claim little, be humble, listen a lot, close open loops with advisors, and coach the client to make his or her own decisions, with advisor input, I would think.

When, in a couple, he has a trusted advisor, maybe a high powered attorney, and she has a wealth coach, and the wealth coach and advisor never talk, and the wife is not included in the husband’s planning sessions with the advisor, and the husband is not included in the wife’s sessions with her Coach, then it seems likely that the end result will be dysfunction, disharmony, and in extreme cases, maybe a divorce. Let’s encourage clients and advisors to close all open loops with each other, so we can function better as a team.

Links of interest

http://www.wie.org/j39/voices-hunt.asp <http://www.wie.org/j39/voices-hunt.asp

http://www.pw-mag.com/articles/178/1/Square-Peg-Round-Hole/Page1.html