What do financial planning and executive coaching have in common? Stated differently, how are the value propositions offered by these two seemingly different professional services similar?

I’ve coached the leaders of multiple large and small wealth management firms over the past 30 years and thus had the opportunity to examine the value proposition these firms offer up close. My conclusion is that the value propositions of financial planners and executive coaches converge in two areas:

  • Avoiding “Unforced” Errors: Successful investing is hard. It’s hard because for the most part, we are wired to make the same mistake repeatedly. We buy high and sell low because that’s what everyone else is doing. Helping clients to avoid this human tendency is a key to the value financial planners offer their clients.

Like financial planners, the best executive coaches combine technical expertise with insight into human behavior. Ideally, they have “sat in the chair” as leaders themselves and have experience creating and executing strategy, making decisions, and holding team members accountable for results.

Skilled coaches are also experts in disciplines such as counseling, behavioral economics, and personality theory. Armed with this knowledge, they help clients “vet” decisions to be sure they are being made based on sound logic and not fear or personality blind spots. They also provide experience and expertise in building and maintaining strong relationships with key stakeholders such as boards, direct reports and investors.

  • Balancing Risk and Return: A truism in investing is “the higher the risk, the higher the return”. Of course, with risk also comes the potential for loss. Financial planners, through diversification, help clients to balance risk and return. In this way, they prevent clients from taking unwise risks which could harm their financial future. At the same time, they help clients to be comfortable with enough risk to assure returns which outpace inflation and take advantage of the “miracle of compounding”.

Executive coaches help leaders to understand their innate tolerance for risk and to temper their instincts with critical thinking. This can work both ways. Some clients verbalize highly risky strategies with me and then after talking it through take a more measured approach. Conversely, when a client’s tendency is towards risk aversion, I will challenge him to think more boldly and to see more clearly the potential rewards of a potential acquisition or terminating a long-term team member who is no longer performing.

At their core, the value proposition for both executive coaches and financial planners is helping clients to make high quality decisions in service of their long-term goals, and to avoid some of the thinking errors humans are prone to make on their own. In fact, there is data-supported research that suggests that working with an advisor or coach (as opposed to without one) leads to better results.

Bottom line? If you want better results in your financial life, hire a planner. If you want to be a better leader, hire an experienced executive coach. Contact us to learn more.

You Worked Hard To Reach The Top

You Worked Hard To Reach The Top

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