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
• Generally goal-focused
• Typical client has potential to improve
performance
– Non-clinical; strengths based; non-crisis
Financial Coaching
• Relationship-based
• Client Directed’
• Self-activated goals
• Goal Focused
– Performance improvement
• Not an ‘expert’
– Goal setting
• Monitoring & Accountability
Financial Capacity Building
Information
Models
• Disclosures
• Print/Web
• Interactive Web
• Workshops
• One:One
• Reminders
Therapy –
diagnosis /
Treatment
Advice
Models
• Technical expert
(credentialed)
• Transactional
guide (may have
sales focus)
Mechanism
Models
• Defaults
• Automatic
Deposit
• Product
constraints
• Counseling
(acute problem
solving)
• Coaching
• Self Control: External Monitoring
• Executive Attention
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:
1. Goal setting
2. Action
planning
3. Monitoring
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
Coaching Models
Staffing:
• Pro bono
expert
• Paid staff
• Financial
professional
volunteer
• Lay
volunteer
Setting:
• Clients in
Tax/IDA/other
program
• School/workplace based
• Head Start
• Other
Facilitation Skills
ICF Core Coaching Competencies
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
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
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
Satisfaction:
Most Coached Clients Are Happy with
Services
How satisfied are you with how well you and your coach
work together to solve your problems?
Source: CNM Coaching Survey
More likely to have Goals and
Greater Confidence will Reach
Goals
Source: MoneyUP Client Survey
Greater Financial Security?
Financial Management and Access to Benefits
Source: Abt Associates CWF Survey
More Likely to Save
Thinking about the last year, which statement best
describes your typical savings behavior?
Source: Abt Associates CWF Survey
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
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/