Financial coaching a potential ‘saving grace’ for advice

Even if experienced advisers exit the industry and cease to be authorised representatives, more of them are occupying a space where they can come back into the fold and draw from their experience in coaching new advisers on areas like client engagement, XY Adviser co-founder Adrian Patty told ifa.

He noticed a lot of content and discussion throughout its recent roadshow about financial coaching from experienced advisers at all of the events, saying it could be “a bit of a saving grace” for the industry.

“A lot of regulation that's come in just really has a cost to advice. It shuts a lot of potential consumers from good financial advice and coaching out of the financial advice industry. Good financial mentorship; I think it's a really great thing that's evolving,” Mr Patty said.

Mr Patty noted that one of the advisers on a panel in the Gold Coast leg of the XY Adviser roadshow works with practices as a financial coach that supports advisers on the month-to-month management of cash flow, something he says a lot of practices don't have within their service proposition.

He also believed more advisers will be turning into financial coaches within the next generation of financial advice, especially as cash flow management becomes a more prominent service offering for clients within practices.

“More practices are really focusing on it being the cornerstone that enables everything for them to do with all their strategies and any product advice – moving towards cash being the foundation and a stronger focus on a really good proposition around that,” Mr Patty said.

Centrepoint Alliance chief executive Angus Benbow said he embraces the concept in terms of knowledge transfer to the next generation of advisers.

However, he also said the standards and the licensing around financial coaching need to be up to scratch, and that if they don’t meet the defined professional standards that it shouldn’t be a way for someone to provide advice even though they’re not authorised.

“I think we need to be very careful with setting those models up and make sure that they are set up with the right intent and they're not misused in terms of advisers who don't meet the education standards to still be providing advice to their clients but through a proxy,” Mr Benbow said.

“I'm absolutely supportive of the mentorship. I'm quite passionate about the role that our senior advisers play in passing down their knowledge to the generations that are coming through, but we need to do that in the right way.”

This is an edited excerpt from a feature that will appear in the July magazine issue of ifa.

Adrian Flores

Adrian Flores is a deputy editor at Momentum Media, focusing mainly on banking, wealth management and financial services. He has also written for Public Accountant, Accountants Daily and The CEO Magazine.

You can contact him on [email protected].