Farzana Botha, Segment Solutions Manager at Sanlam
Financial advisors have a coaching role in helping clients achieve their financial goals, especially in challenging economic times, striking a balance between financial flexibility and commitment.
The financial landscape has become increasingly challenging for both clients and companies. High interest rates and financial constraints have made it essential for individuals to manage their finances effectively. Strong financial discipline and having parameters in place are essential in helping clients stay on track.
One key aspect is the value of contractual obligations and commitments. These agreements serve as reminders during challenging times, reinforcing the importance of staying aligned with one’s financial goals. It is easy to reconsider one’s position when feeling financially stretched, but having a plan in place can provide the necessary motivation to persevere.
Balancing Commitment and Flexibility – Individuals face a dilemma when deciding between locking themselves into fixed savings plans or maintaining the flexibility to adjust contributions based on their financial circumstances. While compulsory savings, such as pension funds, offer a structured approach, they may not cater to the need for flexibility during tough times.
Having an advisor as a sounding board in making these decisions can be a major advantage. Advisors can provide objective perspectives and help clients navigate challenging financial choices. Additionally, the products clients choose should offer a degree of flexibility, allowing for premium reductions or payment holidays when needed. This ensures clients have options to adapt without cancelling their plans.
Advisors should also play the role of coaches, guiding clients through behavioural changes. Financial institutions like Sanlam have a responsibility to enable advisors with the necessary tools and resources. Training and upskilling are vital components of this process, and specialised support functions are available to help advisors develop their capabilities.
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The “Advice Partner” tool at Sanlam, assists advisors in coaching clients by demonstrating potential outcomes based on different financial decisions, encouraging meaningful conversations rather than simply recommending products.
Advisors must take the initiative in upskilling themselves in behavioural coaching as the industry shifts towards this demand. Financial institutions like Sanlam are willing to partner with advisors to provide the necessary support. The awareness and commitment of advisors to meet changing customer needs are primary in this transformation.
Brokers Embracing Coaching Roles – Brokers and advisors have been evolving to meet the changing needs of customers. Many are stepping into the role of coaches and mentors, recognising the importance of building strong, long-term relationships based on trust and rapport. This shift towards a relational business practice is proving valuable in today’s financial landscape.
The financial industry is adapting to a landscape where clients face numerous decisions and choices. Behavioural sciences for advisors have become essential, as understanding consumer behaviour is crucial in helping clients navigate their financial journeys effectively.
The industry’s focus on coaching, guiding, and making a long-term behaviour change impact on clients marks a positive shift from traditional selling and advice. As financial advisors become mentors and coaches, they build enduring relationships with clients, fostering trust and becoming invaluable partners on the financial journey.
In an era of choice, the role of the financial advisor as a coach is more important than ever, ensuring that clients not only make sound financial decisions but also develop sustainable financial behaviours that lead to long-term success.