View more on these topics

Alistair Cunningham: The bizarre and worrying rise of the life coach

Financial planner and life coach roles require very different skill sets and trying to master both can draw advisers into conflicts of interest

Alistair-Cunningham-700.jpgWhat do you do? Or, rather, what do your clients think you do? There are many facets to our roles and different individuals will value different aspects. But in a rush to differentiate, some firms are spreading their net too widely and either not focusing on where they excel or avoiding the areas their clients value altogether.

Historically, advisers tended to be generalists, equally dealing with many areas of advice: mortgages, investments, pensions and protection. From this, we were encouraged to specialise and find our marketing niche – after all, the man who chases two rabbits catches neither.

However, this trend seems to be reversing. Indeed, while many firms focus on specific client profiles, the services provided have become wider.

Some individuals are holding themselves out as life coaches, financial planners and financial advisers; roles that require quite different skill sets and may in fact draw the adviser into conflicts of interest.

There has been a particular rush to “soft skills”. Some advisers feel threatened by technology. I get that. If your total value to a client is risk profiling, supplying a valuation and selecting funds then, sadly, a robot can do your job. Often better if human foibles can be removed.

Go-to guys: How to carve a niche for your advice firm

But even selecting a tax-wrapper is far from simple these days, with five different flavours of Isas, the vast array of transitional and tapering rules affecting pensions, and second-guessing how a withdrawal strategy might work in the future. When coupled with a robust long-term cashflow plan that is regularly reviewed, this should be enough to keep an adviser in work year after year.

What I find particularly bizarre is the rise of the life coach.

I have heard some advisers proudly boasting of invoking emotions in their clients at both ends of the spectrum: joy and tears. I find it strange that this is desirable. Surely the role of the adviser should be to gather information and objectives to disseminate and analyse, then present conclusions? The greater the neutrality and impartiality we present this information, the better. How the client takes the information is down to them.

Several firms explain that their primary aim is to help clients “live the life they want without fear of running out of money”. But I see the financial planner’s role as one which builds a plan with a series of steps towards achieving the client’s goal. If those steps are followed, the likelihood of remaining on track is high.

What the plan shows would either increase or decrease any fear in the client, and only the ongoing review and maintenance of that plan will give any assurance over the validity of assumptions.

Roderic Rennison: Ten key challenges for advice firm owners

Financial planning has raised its standards over the last 30 years, with the pinnacle of qualification now being chartered financial planner. But there is often an inverted snobbery in the circles I highlight above. There is a perception that if you are not focusing on the “big picture” emotional stuff then you are not doing the right job, irrespective of your qualifications.

The irony is, despite the focus on the alternative skills required for coaching and lifestyle planning, the level of qualification in this area is thin, beyond the inevitable annual conference.

An over-heavy focus on product outcomes is undesirable but so is skewing the other way. The advice element may be commoditised in the future and, if a client wants or needs a coach, they may not logically search for a financial planner.

It is the strangest hypocrisy that despite the dislike of product sales that surrounds the demography of the lifestyle coach, the greatest proponents show the thinnest substance behind their promises: light on detail, heavy on emotion.

Alistair Cunningham is director of Wingate Financial Planning

Recommended

Malcolm_Kerr_EY
5

Malcolm Kerr: What makes the perfect adviser?

I have met many advisers in my career, starting as a broker consultant back in the 1970s (when they were product salesmen) and continuing as a “big four” consultant since, working for those involved in the long-term savings, investment and protection sectors. In that time, I have also moderated dozens of adviser workshops at various […]

Chartered-Insurance-Institute-CII.jpg
8

CII to ramp up chartered status requirements in standards overhaul

At least half of the advisers within corporate chartered firms must be chartered individuals by 2020, under overhauled standards for chartered firms unveiled by the Chartered Insurance Institute. Previously, the CII required chartered firms to have at least one board member with the chartered financial planner title, and for 90 per cent of customer-facing staff […]

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

There is one comment at the moment, we would love to hear your opinion too.

  1. Some get so bloody precious it’s nauseating. Life coach! So they advise on health and medicine? I expect to see them in shorts and trainers.

    If they provide financial advice why can’t they just say so, or are they ashamed of what the actually do?

Leave a comment