Recognising the value of coaching as ‘pre-advice’

The Quality of Advice Review should distinguish between certified money coaches and those individuals who describe themselves as ‘wealth coaches’.

Karen Eley, behavioural money coach at Women Talking Finance, said a money coach was a specific role which required qualification and training. Meanwhile, ‘wealth coaches’ or ‘financial coaches’ were often individuals or, in some cases, former financial advisers who lacked formal coaching training.

While the practice was relatively uncommon in Australia, it was widely recognised in the US and UK.

Speaking to Money Management, Eley said: “As a money coach, I am very clear on what I can and cannot do and I cannot give advice but there are a lot of people who don’t know where the line is and are influencing clients to use certain strategies and that creates an unfair playing field for advisers.

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“I would like the industry bodies to recognise the difference between certified money coaches who have done the training and ‘finfluencers’ or ‘financial coaches’ who are often people who have made money trading and are just telling people about it.”

Money coaching could be considered as ‘pre-advice’ or could work in tandem with it, particularly as advisers are encouraged to work on emotional intelligence skills.

“There are elements of it that advisers can integrate to get to know their clients and identify where they might face challenges or they can also refer them to us. The two are very complementary and can work in tandem, it is like two sides of a dollar coin, the emotional and the rational side,” she said.

“I would recommend advisers also undertake money coaching themselves to understand their own thoughts around money and avoid putting any of their own biases onto their clients.”

Areas money coaching covered included helping understand why people may be fearful of taking risk, why they may overspend, whether family events such as death or divorce had affected their view of their finance and how their finances affected their personal or family life.

In the submission to the review, which Eley submitted with three other money coaches, they said: “We believe more awareness and quality money coaching is the missing link in how Australians can improve financial confidence and capability, whilst improving their experience and tailoring their journey as appropriate within Australia’s financial ecosystem.

“The benefit being to improve the streamlining of quality advice delivery and ongoing sustainability of the profession. Ensuring clients are better prepared, informed and only engage when ready, freeing up capacity to specialize and meet more clients who are ‘advice’ ready.”