Financial advice could benefit from money coaches

Financial advice firms would benefit from employing money coaches to help clients understand their financial behaviours.

Karen Eley, money coach at Women Talking Finance, had worked as a financial adviser in the past but said she later opted to work as a money coach as she was frustrated by clients’ repeating the same mistakes and wanted to understand how they could change and learn from them.

She said there was a four-step process to wealth coaching which covered people’s emotions around finance, their parents and upbringing, their financial patterns, and natural skills and attributes.

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“There is not much known about money coaching, there is an assumption it is all about manifesting money,” Eley said.

“Having a financial planning background helps but the majority of advisers still don’t get it. I would like more advisers to understand it so they could have a better relationship with their clients.

“We explore the past to find out how clients can improve in the future. Clients find it very transformational, they feel more empowered and engaged with their finances.”

She highlighted much of the value of financial advice was gained from helping clients avoid mistakes which was something that could be supported by helping clients understand their emotions around finance.

With this in mind, she would like to see money coaches working within financial advice firms as an addition to financial advisers. She would also like to an association or community for money coaches to come together and learn from each other.

Money coaching was currently an unregulated practice as they did not work with products but Eley said she had kept her Australian financial services licence (AFSL) and carried out continuing professional development (CPD) in order to maintain her professionalism. She also referred clients to financial advisers to carry out any financial matters.

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The issue is how close the money coach gets to providing regulated personal financial advice without tripping over the line. There are many advisers who have not sat, or sat and failed, the FASEA exam and those who don't want to do the extra study looking at this as an "easier" alternative to maintain good relationships with their clients and hang onto their businesses. There is a fine line between providing education and talking about emotions, behaviours and good money habits but the moment a client says, "that's all great but what do you reckon I should I do?" we start down a slippery slope of unregulated financial advice. If the referral mechanisms are firmly in place (notwithstanding the consultation on proposed changes to the wording of Standard 3), it can work, but a 30 year veteran financial adviser stepping back from actually advising their clients is going to have a tough time knowing where the line is. It's also virtually impossible for a licensee's compliance team to adequately monitor and supervise. All it takes is a client that feels they received personal advice to go to AFCA and the licensee's IDR team would have very little chance of defending it.

There is no problem with providing unregulated financial advice unless you are a licensed adviser. Money coaches, unlicensed accountants, Youtube & Tik Tok spruikers, real estate agents, super call centres, and dodgy direct insurers, can easily get away with providing unregulated financial advice. It's only a problem if you do so as a licensed adviser, because regulators are focused on persecuting licensed advisers rather than on protecting consumers.

That is very true

The name says it all...women talking do you talk about finance and ensure it's not construed as advice? you can disclose to them what your service is till the cows come home but it's still an accident waiting to happen...maybe... start with how you market yourself first...women talking about budgeting...would be more true to label...

Imagine the uproar and public shaming if someone stared a coaching business called Men Taking Finance!

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