Advisers should broaden value conversation

Offering clients personal coaching and mentoring in addition to financial advice could provide advisers with an opportunity to attract younger clients, according to one psychology researcher.

Intentionomics founder David Penglase, who describes himself as a “financial advice advocate” and is completing academic research in applied psychology, said the latest research on applied positive psychology from the University of California shows there is a growing gap between the value of financial advice and the value of trusted professional advice.

Trusted professional advice can relate to lifestyle and work-life balance issues as well as personal coaching and mentoring, he said.

Often undervalued by financial advisers, Mr Penglase believes that in the client’s mind, this non-financial advice is actually perceived as the more valuable part of the overall offering.

“While the financial planning industry continues to operate in the restrictive paradigm that [advisers'] value is in their financial advice, the potential of the industry to grow and create more meaningful value through extending their brand alignment beyond pre- and post-retirees, will continue to be restricted,” he said.

Mr Penglase believes offering more than just financial advice enables advisers to broaden their client base to include Gen Y and Gen X.

These demographics, he said, have traditionally been outside the ‘preferred client model’ because they generally have a lack of substantial savings or investments to manage and don’t view themselves as potential clients of financial advisers due to branding and value mis-alignment.

“The ability to attract and retain profitable Gen Y and Gen X clients is where potential and significant growth is possible, and will create longer relationships with clients, which means more revenue over a sustained period of time.”

This will also mean more value for clients for a longer period of time, Mr Penglase said – and not just from financial advice.

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