Pros and Cons of Financial Advisor Coaching: Should Financial Advisors Hire a Coach?
I’ll cut right to the chase…
I get a lot of questions about financial advisor coaching and whether or not it’s worth it.
After all, I am literally “THE Advisor Coach” (and darn proud of it too).
And before you start thinking, “Oh, he’s a coach… he’s going to try to sell me some coaching…” rest assured that I am most certainly NOT trying to sell you coaching.
Because I don't coach advisors.
Long story short, I have skills that can be applied elsewhere.
In other words, I can make more money applying my marketing skills to other businesses I own and control.
(I always think it’s fishy when people say they have successful businesses, yet they still coach people. Lol. If your business is so successful, why are you spending your time coaching? Hmmm. 🤔)
Plus, I don’t like the time commitments that come with coaching.
Last year, I traveled to 14 states. This year, I plan on visiting even more. If I want to drop everything on a Tuesday afternoon and fly to Las Vegas, I can do that. I don’t want to be chained to a phone or a computer to do coaching calls.
The closest thing I do to coaching these days is through my Inner Circle newsletter. It’s a way for me to leverage my knowledge and experience to many financial advisors at once instead of one at a time.
Also, I can write it whenever I want, wherever I want.
I’ve written my newsletter in Nashville, Tennessee in between bites of hot chicken. I’ve also written it while watching the sun set in Clearwater Beach, Florida.
There are financial advisors out there who want a lifestyle business, yet get coaching from people who have to be chained to a desk with coaching clients all day. 😆
Anyway, I decided to write this article because I get so many questions about the pros and cons of financial advisor coaching. That way, rather than answering the same questions over again and again, I can simply send people this article. It’s much more efficient that way.
However, I want you to know that I can only speak from my own experience. I’m sure there are a bunch of coaches and consultants out there who have different philosophies and opinions than mine.
Got it? Good. Now, here's what we'll cover in this article...
What Is Financial Advisor Coaching?
Coaching for financial advisors involves having someone (the coach) help a financial advisor with his/her business systems and processes.
For example, one of the most presses problems financial advisors have is business development. They may be very good at the financial planning part of their business but not-so-good at the prospecting and marketing part.
In my case, marketing is my specialty. Which means when a financial advisor hires me to be his/her coach, it’s typically to go in and improve the marketing.
Other coaches may focus on practice management, productivity, or hiring. But the main idea is that you hire a coach to help you with a certain area of your life or business.
I’ve personally hired coaches to help me with my diet and sleep. Those were two areas I wanted to improve in my own life to make sure I got the most out of every day. I didn’t know as much about sleep as the coach did, so I plunked down the big bucks and now my sleep has never been better. That’s the basic concept - a good coach will help you improve whatever you want to improve.
Do All Financial Advisors Need Coaching?
Yes and no.
On one hand, I’m a big believer that all financial advisors can improve. No matter how good you are right now, you can always get better. Hiring a financial advisor coach is one way for you to squeeze even more performance out of you and your business.
On the other hand, financial advisor coaching may not be the best option for financial advisors. For example, only a small group of advisors are willing to pay what I charge.
I’m sure that intellectually all advisors understand that I don’t “cost” anything (because I can help them make much more than what I charge) but they have a mental hang-up about investing that much money in themselves.
They may not truly believe in themselves to make the investment, which means they’ll likely retreat back to their comfort zone and read another $10 book or listen to another free podcast.
If you decide to hire a good coach, rest assured that the odds of success are in your favor. A 1997 study of 31 public-sector managers by Baruch College researchers found that a training program alone increased productivity 28%, but the addition of follow-up coaching to the training increased productivity 88%.
That's also why I strongly prefer that my private coaching clients have gone through some of my programs (such as How To Get Clients With LinkedIn or Appointments On Autopilot) first. That way if they have any questions, I can answer them directly and we can focus on the bottlenecks holding them back.
Financial Advisors Who Seek Out Coaching Usually Fall Into One Of Three Categories
Over the years, I’ve noticed that the financial advisors who look for coaching tend to fall into these three categories…
Category #1: Brand-new financial advisors who want to get started on the right track.
They understand the value of a strong foundation and want to make sure they build one. A financial advisor coach can help new financial advisors avoid making costly mistakes that other advisors make. New financial advisors also tend to be “coachable” because, unlike their experienced counterparts, they don’t have much to “un-learn”.
The downside is that, on average, new financial advisors are unwilling to invest much money in themselves. They have a scarcity mindset when trying to get their business off the ground, which is often counterproductive. Many experienced advisors have told me they wish they hired a coach when they were first starting out.
Category #2: Experienced advisors who’ve hit a plateau.
This is another common group that seeks out coaching because they feel as if they’re stuck with their current business. A fairly large chunk of experienced advisors will hit a plateau at some point in their career. Now, a lot of coaches will tell you that you’ll stay stuck unless you hire them.
I’ve seen many experienced advisors bust through plateaus without coaches. However, I will admit that hiring a coach allows them to get moving faster. Which means if you’re an experienced financial advisor thinking about hiring a coach, ask yourself this question: “How much do I value my time?”
Category #3: Growth-oriented advisors who want to keep growing.
These are the go-getters. The ones who play to win and want to make a big impact in the world. They understand that not only can a coach accelerate their current growth rate, but a coach can also expose them to opportunities they haven’t even considered.
There’s a huge difference between the financial advisor who is content with making $500,000 per year and the advisor who’s happy but not satisfied. That advisor is thinking, “Great, now how do I double that? Or triple that?” and wants even more growth.
Is Financial Advisor Coaching a Waste of Money?
I think you have to look at it from a return-on-investment standpoint. If a financial advisor is spending $10,000 per month on marketing campaigns and I make those campaigns 25% more efficient, I just saved the advisor $30,000 over the course of a year. If I only charge $15K to do that, it’s a screaming good deal.
Here’s another example…
Imagine a financial advisor making $200,000 per year. If I can get that financial advisor to improve a measly 10%, that’s worth $20,000 per year. Which means I could charge up to that amount and the advisor would still come out ahead. That’s one of the reasons I charge so much - because I know I can have such a tremendous positive impact on a financial advisor’s business that the advisor will still make money.
One of the biggest “quick wins” I can give financial advisors is to help them become more productive. That’s why I created Peak Productivity for Financial Advisors, but I also help them implement productivity strategies via one-on-one coaching.
Improving productivity is important because since advisors largely sell their time, they need to maximize every second of their day. A coach can help advisors set priorities and stick to their plan.
If I were a financial advisor looking to hire a coach, I would look at it for what it is - an investment. If an advisor is only making $60,000 per year, then paying me $5,000 per month for coaching may be a little riskier because it means I will literally have to double that advisor’s income just to pay for myself. However, the more successful a financial advisor already is, the less risky coaching becomes in terms of risk vs. reward.
What Can A Good Coach Do For You?
If nothing else, a good coach can help you gain some clarity on your goals. Based on what I've seen in the financial services space, that alone can be worth what the coach charges.
And even though a coach won't necessarily do the work for you, a coach can help you get to the next level in the following ways:
Red Flags That You Should NOT Hire a Coach...
I understand that some financial advisors will “shop around” when looking for a coach, which is why I try my best to help advisors make the right decision. Here are some telltale signs that some coaches probably aren’t the right fit for you…
Red Flag #1: They Don't Have Anything But Coaching
Financial advisor coaching is a great service, but you should be worried if that’s the only thing your coach offers. Why? Because then you don’t have any way to really gauge the coach’s experience and advice.
For example, I don’t offer just coaching. I have products ranging from a thousand bucks to less than a hundred bucks. Then, I have dozens and dozens of free articles and I even have my “Financial Advisor Marketing” podcast. Any financial advisor can get involved in my world and see that I’m the real deal without writing me a check that makes their hands tremble.
Red Flag #2: They Offer a Free Consultation Without An Application First
A free consultation without an initial screening process is a sign that your coach isn’t in-demand and that he/she is taking on all comers. Do you really think you’re going to be well-served by someone who doesn’t even screen applicants? Get real.
I’m reminded of this quote from the Joker: “If you’re good at something, never do it for free."
Red Flag #3: They Don't Charge Enough
Honestly, anything less than a thousand bucks per month is laughable. Don’t even waste your time. I can’t tell you how many emails I’ve gotten from disgruntled advisors over the years who have been burned by so-called “experts”, “gurus”, and “coaches”. Guess what all of them had in common? They charged a low price.
Of course, some of the blame lies with the financial advisors who hired them. They were price-shoppers looking for the best “deal”. Which reminds of yet another quote… this time from Warren Buffett:
“Price is what you pay, value is what you get.”
In the world of coaching, you get what you pay for.
Red Flag #4: They Focus On Your "Experience" Rather Than Results
Okay, here’s where a lot of people’s opinions will be different from mine…
Because I don’t really care too much about my client “experience”. I don’t take them on fancy “retreats” or anything like that. I don’t have elaborate welcome gifts or a secret onboarding process. My coaching is literally my client and I hopping on the phone and working together to solve business problems. That’s it.
Red Flag #5: They Do Group Coaching
I’m a big believer that coaching should be one-on-one. My experience also tells me that one-on-one coaching is the most effective form of coaching, especially for financial advisors.
I recently got an email from an inquisitive financial advisor, who asked:
“Do you run any mastermind groups? I know you do the one-on-one consulting and marketing critiques, but do you have any type of group coaching?”
Nope. I don’t. Because despite what most people believe, mastermind groups can do more harm than good.
If you’ve been following me for a while, you know my favorite author of all time is Napoleon Hill. He actually coined the concept of a “Master Mind group”. He says the principle consists of “an alliance of two or more minds working in perfect harmony for the attainment of a common definite objective.”
However, here’s the hard truth…
There is no such thing as a Master Mind GROUP and there never can be.
I know, I know. Lots of people talk about joining together in “groups” in order to form a mastermind. You see it all the time, especially with professional associations, conferences, and seminars.
Yet, it CANNOT happen.
Because even though Napoleon Hill wrote that “two or more” minds can create a Master Mind, earlier writings about the idea limit it to two or three people only.
I’ve found a two-person group to be the most effective.
This is also why I do one-on-one coaching and consulting. It gives the financial advisor the biggest benefit.
Think about it this way…
Have you ever been involved in any group activities? I’m talking about a lodge, a fraternity, a sorority, sports, etc.
Well, did ALL of the people in that group share “perfect harmony”?
I doubt it. And if you answered “yes”, you need to pay more attention. Because one bad apple spoils the whole bunch. Which means if your coach offers a “mastermind group”, you should probably run the other way.
Red Flag #6: They're Easily Accessible
This is a sign that your coach has nothing better to do. It’s very similar to the “free consultation” thing in the sense that it’s a dead giveaway that your coach isn’t in-demand. And who wants a coach nobody else wants, anyway?
Some coaches think they need to respond to every email within an hour. Or respond to every social media post in five minutes. Like the world will go up in flames if they’re not responding 24/7. It’s dumb.
And if you want someone who will bow down to your every beck and call, I am not the guy for you. Because if I spent all my time responding to calls, messages, and emails, I wouldn’t have any time to help financial advisors. Again, I’d rather focus on RESULTS.
Red Flag #7: They Don't Have a Specialty
Whatever you do, do NOT hire a general “life coach” or “business coach”. You should ensure that your coach specializes in working with people just like you.
Earlier in the article, I mentioned that I hired a coach to help me with my sleep. I didn’t hire a “life coach”. I hired a sleep expert - someone who does nothing but learn about sleep all day long. Specialization allows a coach to accumulate a huge depth of knowledge about a particular topic, which can help you solve your problems quickly and effectively.
The Bottom Line
So, there you have it. Hiring a coach isn’t right for all financial advisors and some financial advisors need a coach more than others.
A good coach is someone who will help you achieve your desired result. Don’t get swayed by all the smoke and mirrors because, at the end of the day, you’re hiring someone to help you achieve a specific result. Of course, it’s typically up to you to do the work but your coach can help you do the right things.
Perhaps the biggest reason financial advisors hire coaches is to make more money. However, some advisors hire coaches to help them set goals, become more confident, get outside their comfort zone, and more. Whatever your reason, I hope I’ve helped you make a more informed decision about hiring a financial advisor coach.