Money coaching could boost advice pipeline for advisers

Incorporating money coaching into the financial advice process could help advisers target a broader demographic, bring a bigger advice pipeline, and demonstrate the value of advice, according to Milford.

Last week, Money Management spoke to money coach, Karen Eley, on how she worked with clients to ease their financial burdens and recommended they worked alongside financial advisers.

New Zealand firm, Milford Asset Management, which recently expanded into Australia and had $15 billion in funds under management, said it had noticed how much time clients spent talking with advisers about non-financial issues such as physical health, life goals and their job.

With this in mind, it could envisage a “reimagined role” for financial advisers in coaching better financial behaviour which had benefits such as broader client pipeline, demystifying financial advice and was a high value-add service.

In a white paper, it said: “Financial advisers are ideally placed to help their clients achieve more positive relationships with money, not by helping them acquire more of it (although that is usually an outcome), but by fundamentally reshaping their money attitudes and behaviours, and giving them a framework within which they can make better financial decisions.

“Further emotional benefits also accrue when the advice proves itself, which reinforces a sense of achievement and progress towards goals.

“This new perspective on how advisers create value for their clients implies a much broader target audience for the advice proposition, advice relationships which start younger and last longer and fees which are unlinked from traditional product solutions and which are charged more confidently by advisers and paid more willingly by consumers.”

It said financial advisers were unlikely to need additional qualifications and that there were various ways to offer the services. These included group sessions, digital courses, subscription services and tiered models.

“There are a variety of approaches advisers could take to setting coaching fees. Importantly, if it is to be offered as a standalone service, it needs to be priced accordingly (not as a loss leader or bundled in with product or asset-based remuneration).

“One approach is based on a fixed period of engagement—e.g., $2,500 for a six-month program. Another is a monthly retainer option, or per hour/single session options. Charging on the basis of savings achieved is another option, the value of which is clear to the client.”