Teach clients how to solve cash flow problems

By Susan Yellin | February 20 2014 07:19PM

With total consumer debt in Canada topping $1.36 trillion in the third quarter of 2013, it’s no surprise that Canadians are big spenders. But Stephanie Holmes-Winton, CEO of the Money Finder, hopes a new designation she has created will help advisors teach their clients the best way to solve their cash flow problems.Officially launched in November, the Certified Cash Flow Specialist™ Designation Program helps plug a gaping hole in financial planning, says Holmes-Winton. Most people equate cash flow with budgeting – and many advisors already try to help their clients with this issue. But she says budgeting often fails because the behaviour of people is such that it is easy to fall off the rails.

“When a cash flow plan is set up properly, an advisor actually sets up a structure for the client so that to undo the cash flow plan the client must do it consciously,” says Holmes-Winton. “We learned that if we make it more uncomfortable to undo a plan than just follow along with a plan, people follow it and enforce it and they feel they’ve accomplished something.”

One of the strategies outlined in the course is that advisors should not allow their clients to focus all of their efforts on debt repayment and leave nothing for savings. If they do, when the inevitable financial emergency crops up, defeated consumers feel they have no choice but to put the item on their credit card.

But by setting aside some rainy day money, it may well be one of the first times in a client’s life that they will know what to do in a financial emergency.

Official designation

Holmes-Winton said the idea for an official designation was broached at her first Money Finder Bootcamp in September 2011, when she talked about the importance of cash flow plans to a group of advisors.

Her bootcamp was then accredited as a continuing education course through the Institute for Advanced Financial Education and it was the institute that she contacted to get the official CCS™ designation.

The 30-hour designation course is webinar based and advisors can go at their own pace, downloading tapes to listen to whenever they want. The classes are divided into three different workshops, which includes case studies, as well as 13 one-hour classes. During this time, advisors are expected to complete cash flow plans for their clients. Holmes-Winton also provides advisors with coaching calls to reinforce advisor learning and help answer questions.

In addition to completing annual continuing education credits, advisors must sign off on how many cash flow plans they create. “What we don’t want is a bunch of people running around with a designation but who don’t actually do cash flow planning,” says Holmes-Winton

The course costs about $5,000. As of the end of November, there were 25 people enrolled and a few were en route to taking the test because they had already gone through much of the required learning.

Holmes-Winton said the course also comes equipped with marketing tools to help advisors explain the designation and make the public more aware.