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.
So long as those financial coaches understand that class of product advice is equal to financial product advice in corporations law.
You can’t be unlicensed and talking to people about super contributions, or investing in the share market, or ETFs or managed funds, or purchasing income protection insurance, even if you avoid talking about specific products.
[quote=Anonymous]I believe there is a huge market for ‘financial coaches’ as well as financial advisers. Many younger people don’t need a financial planner and aren’t prepared to pay thousands of dollars per year for ongoing advice – they just need basic general advice to guide them along the way. This could be done outside of the traditional licensing landscape on once-off basis, similar to a medical appointment. No product advice, no recommendations, just explanations and suggestions for them to explore. Anything that happens from there is up to the client to act on (or not!). If the discussion gets too in depth or it’s clear the person needs advice it’s a great way to refer a warm lead to a planner.[/quote][quote=Anonymous]I believe there is a huge market for ‘financial coaches’ as well as financial advisers. Many younger people don’t need a financial planner and aren’t prepared to pay thousands of dollars per year for ongoing advice – they just need basic general advice to guide them along the way. This could be done outside of the traditional licensing landscape on once-off basis, similar to a medical appointment. No product advice, no recommendations, just explanations and suggestions for them to explore. Anything that happens from there is up to the client to act on (or not!). If the discussion gets too in depth or it’s clear the person needs advice it’s a great way to refer a warm lead to a planner.[/quote]
[quote=anonymous]yes, this is an exciting opportunity for all the advisers who still want to continue helping people but don’t want to do further study or fail the exam twice.
think that exam is going to be hard. lots of reading & comprehension & testing of that comprehension. all in 3 hours.
[/quote][quote=anonymous]yes, this is an exciting opportunity for all the advisers who still want to continue helping people but don’t want to do further study or fail the exam twice.
think that exam is going to be hard. lots of reading & comprehension & testing of that comprehension. all in 3 hours.
[/quote]
You can sit it as many times as you want mate, just pass before the due date. It won’t be that hard don’t stress so much just some basic knowledge retention and EVERYONE will be fine.
There seems to be two different elements cover in the same article:
(1) Financial coaching of clients — In the format which I have seen it is just financial planning without the compliance requirements. Basically it is no different from an unlicensed accountant given SMSF advice and therefore they should be treated the same way and banned but of course ASIC won’t do that so it is an easy way to be a pretend financial planner without any of the education and compliance requirements.
(2) Ex advisers who have made truck loads of money and are responsible for the terrible situation which the industry now finds itself and have exited because they can’t cope but believe people should listen to them. I don’t believe they will make much money because the three financial planners who are left in 10 years will be struggling to eat let alone pay a consultant to tell them they need to see clients who will pay $15,000 for advice.
yes, this is an exciting opportunity for all the advisers who still want to continue helping people but don’t want to do further study or fail the exam twice.
think that exam is going to be hard. lots of reading & comprehension & testing of that comprehension. all in 3 hours.
It’s exciting.
After all, customers don’t specifically want “product advice’ (which is the bit that requires an AFSL). They want broader support and coaching which at its heart is all around cashflow and long term vs short term planning (which doesn’t need an AFSL so long as not product specific).
SMSF accountants have shown how ASIC will acquiesce if thousands of people all claim to not give advice and the rules are grey. Their resources all go to micro-managing those who did get licensed.
Here is a thought…why don’t we just work on ways on making financial advice affordable for all by reducing red tape, Government intervention, and over regulation.
I believe there is a huge market for ‘financial coaches’ as well as financial advisers. Many younger people don’t need a financial planner and aren’t prepared to pay thousands of dollars per year for ongoing advice – they just need basic general advice to guide them along the way. This could be done outside of the traditional licensing landscape on once-off basis, similar to a medical appointment. No product advice, no recommendations, just explanations and suggestions for them to explore. Anything that happens from there is up to the client to act on (or not!). If the discussion gets too in depth or it’s clear the person needs advice it’s a great way to refer a warm lead to a planner.