My work at Old Mutual Wealth has centred on strengthening financial planners’ client engagement for over 15 years, developing their skills around listening more deeply, asking better questions and creating conversations that change clients’ perceptions about money.
The distinction between financial planning and financial coaching is important. Planners need to understand when it might be necessary to initiate a financial coaching engagement. To be able to do that they need to know what financial coaching is and when to use it appropriately.
Financial planning and coaching often use the same tools: budgets, cashflow models, scenario analysis, values exercises and retirement projections. The difference is not the tool itself, but the reason it is used.
In financial planning, tools support a structured process: gathering information, analysing the client’s position, testing scenarios, making recommendations and implementing the plan. In financial coaching, tools help the client see, understand or address barriers that are preventing action.
The financial planning process remains essential. It provides structure, discipline, supports compliance requirements and ensures that advice is scoped, documented and aligned to the client’s needs. When a client is clear, engaged and ready to act, the process works well.
However, many clients are stuck because there is a barrier between knowing and doing. They may understand that they need to save more, spend differently, update their estate plan or make a retirement decision but avoid taking the necessary step. This is where financial coaching adds value.
The barrier may be practical, emotional, behavioural, relational or cognitive. If the client isn’t clear, start with their goals and values to give their money purpose. If the issue is awareness, spending patterns and budgeting or scenario modelling are useful. If the client lacks confidence, provide reassurance and structure. If the client is avoiding a decision, try constructive challenge. If fear, guilt or grief is present, reflection is necessary before giving technical advice.
There are times when the barrier is attainability: a client may have a goal that is emotionally important but financially unrealistic. The coaching intervention is not simply to reject the goal, but to explore what the goal represents. For example, a retired client wishes to travel overseas regularly to visit grandchildren, but the financial plan for this level of travel is not sustainable.
A purely technical response is to explain that the goal is unaffordable. A coaching response goes further by asking what the travel would give the client. Is it connection, belonging, presence, legacy or reassurance?
Once the underlying need is understood, the planner and client can explore alternative goals that are financially attainable yet still meaningful (fewer but more intentional visits, regular rituals of connection or planning shared experiences when the family is together).
Financial coaching helps the client separate the form of the goal from its meaning. The original goal may need to change, but the emotional outcome is still honoured.
The same principle applies to a client who is not saving enough. A planner may identify the shortfall and recommend an increased monthly contribution. If the real barrier is cashflow awareness, a budgeting exercise is appropriate. But if the client has no meaningful goal, budgeting may feel like restriction. The work should focus on what the client is moving towards.
If the client has clear goals but no money available at month-end, a spending awareness activity becomes relevant. It helps the client see the link between current behaviour and future outcomes. If the client understands the pattern but still cannot change it, the barrier may be deeper. Spending may represent reward, comfort, status, care or avoidance. Reflection or constructive challenge is more useful than another spreadsheet in this case.
In a traditional financial planning relationship, the client meets with the planner once or twice a year, with additional contact when a review, product change or life event requires it. That cadence works well when the client is clear, stable and able to implement the plan.
Financial coaching requires a different rhythm. If the work is focused on helping the client overcome a behavioural barrier, build awareness or change a pattern, an annual meeting is not enough. The engagement needs to be contracted as a focused coaching journey over a defined period with regular conversations to support reflection, action and accountability.
This influences how the planner charges. A financial coaching engagement may sit alongside the existing advice fee, be charged as a separate coaching programme or built into a more comprehensive advice proposition. It is important that the client understands what they are contracting for. They are not only paying for a plan or a review but for a structured process that breaks barriers that are preventing them from acting on their plan.
Once those barriers have been addressed, the relationship returns to the normal financial planning contract and review cycle. Financial coaching is not a permanent replacement for the planning relationship; it is a more intensive phase of work used when the client needs to move from insight to action.
A practical financial coaching framework has five layers:
Awareness: what does the client need to see?
Interpretation: what does this mean to the client?
Choice: what options are available?
Action: what is the next appropriate step?
Review: what support is needed to sustain progress?
Within these layers, the planner may use different interventions:
- Directive guidance provides clarity or structure.
- Confidence-building support helps clients who are uncertain, overwhelmed or emotionally exposed by a decision.
- Constructive challenge shows the misalignment between what clients say they want and their current behaviour.
- Insight-generating exploration uses questions, tools and models to help the client see patterns, assumptions or alternatives.
- Emotional reflection creates space to acknowledge fear, guilt, grief or anxiety before decisions are made.
These interventions are not sequential steps; they are responses to what the client needs in the moment. The key question is, “What does the client need to engage with the plan?” This becomes even more important as AI forms part of the advice landscape.
AI supports financial planning through data analysis, documentation, research and workflow efficiency. It helps planners prepare, identify gaps, summarise information and communicate clearly. In the planning process, AI helps answer: what does the data indicate?
In financial coaching, AI supports a different question: what is preventing action? It helps planners prepare questions, identify possible patterns and structure conversations. However, AI cannot replace human judgement. It cannot read hesitation, silence, relational tension or emotional readiness.
It cannot know when to challenge, support, pause or return to the numbers. These moments remain deeply human.
Advice has evolved from a process that produces a plan to an engagement that supports better decisions and sustained action. The financial planning process remains the backbone. A coaching mindset improves the conversation. Financial coaching strengthens the advice relationship by identifying the barrier to action and selecting the intervention that helps the client move forward.
The objective is not only to produce a technically sound plan. It is to ensure the client understands, believes and acts on it, then sustains the behaviour required to achieve the contracted outcome.
The role of financial coaching within modern advice is not an alternative to financial planning, but an extension of it. It turns insight into action and ensures that the plan is not only correct on paper, but attainable in the client’s life.
