Your IndustryMay 19 2023

Making the switch from financial advice to coaching

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Making the switch from financial advice to coaching
Graham Wells, a former adviser, set up GroWiser in 2021 after retraining to become a financial coach.

A former financial adviser has said that financial coaching is the way to plug the so-called ‘advice gap’. 

Graham Wells set up his financial coaching company, GroWiser Financial Coaching in 2021. 

His aim was to help empower people to make financial decisions on their own rather than having to rely on others to do it for them.

Wells, a chartered financial adviser, made the change of career after he lost his love of advice after six years in the profession back in the noughties.

Most people don’t need fully regulated advice Graham Wells

In the pre-Retail Distribution Review days, the profession was much more sales and product based.

“That didn’t resonate well with me at all,” Wells told FTAdviser. 

He initially moved into training within the sector, and after having learned a lot about “how adults learn and what motivates people”, Wells began to toy with the idea of financial coaching.

“At that point, I started to research, ‘does financial coaching even exist?’ This was about seven or eight years ago and at that time, there was really only one person in the UK that did financial coaching. 

“That's a lady called Simonne Gnessen, who founded Wise Monkey Financial Coaching. I trained with her to become a financial coach and then eventually I made the move to become a full-time self-employed financial coach,” he said.

Wells described the move as “the steepest learning curve” of his career.

“And that includes all the exams I sat to become chartered and a fellow of the Personal Finance Society. Technically that was challenging, but to set up as a coach brings a new set of challenges. 

“Becoming proficient in coaching is a shift in mindset away from advising to empowering others, and it’s a completely different way of being,” Wells explained. 

For example, deciding what to charge was difficult initially as there are limited models to copy. 

At the moment, GroWiser offers clients an initial 30-minute virtual meeting for free and if they choose to continue they will have different programmes available to them depending on their needs.

A block of six one hour coaching sessions with Wells costs £600, while a pay-as-you-go option is available for £125 a session.

Wells works with very few clients on a face-to-face basis. Generally his clients are based in the UK but he also has some scattered across France, America, Australia and Kenya. 

“With the technology that's available now, because financial coaching is generic and it's more behavioural based, it's not restricted to the UK,” he explained.

What exactly is financial coaching? 

Wells outlined how financial coaching is centred around supporting clients with their behaviours and knowledge around money.

“It operates on a spectrum really. So on one end of the spectrum it can be helping people with the practicalities of money and that might involve helping them to understand the range of financial products and helping them with budgeting. But the other end of the spectrum is more around the emotions of money,” he explained. 

This might include a person’s relationship with money and the historical ways they feel about money. 

“A lot of financial coaching can be very practical and doesn't really touch on the emotions. It's just really helping people to become more financially organised. Some financial coaches might operate more on the emotional side, quite often that's referred to as money coaching. 

“I personally sit in the middle, I span across the spectrum,” Wells said.

While financial coaching is still a relatively niche space, more big names are starting to introduce a coaching offering. 

Hargreaves Lansdown and Octopus Money are two prominent names that have begun exploring the area. 

“Most people in the UK don’t know it exists. But more and more people are beginning to realise that there is support available that isn’t advice,” Wells said. 

“What a lot of people don't realise is that when it comes to coaching, the coach is not the expert, the client is the expert in their own life. So the coach really needs to draw out the client's existing knowledge, resources and experiences and that can veer sometimes into the more psychological side of things. 

“It's worth pointing out that financial coaching is not therapy,” Wells added.

“It doesn't attempt to fix psychological problems from the past, but a lot of clients find it very therapeutic to have that time and space to talk about how they feel about money.”

Advice gap

Making the move from advice to coaching, Wells concedes, was tricky. 

“In some ways, I think it's more difficult coming from being an adviser into coaching because you're so aware of regulation that it's difficult to see how you can operate safely,” he said.

Despite this initial challenge, Wells now believes that the distinction between the two is actually quite clear and he thinks coaching, if made mainstream, can go a long way in plugging the so-called ‘advice gap’.

“The advice gap is not really an advice gap, most people don’t need fully regulated advice,” Wells told FTAdviser. 

“More and more products and support is becoming available online. It's never been easier to invest your own money with some guidance but the danger of course, is that people might jump into it too quickly and make some mistakes.”

In Wells’ view, coaching offers a space nestled between fully fledged advice and DIY money management. 

“I feel that a lot of financial coaches will come through and they will sit at different aspects of the spectrum and cater for different demographics.

"And that really will help to plug that ‘advice gap’.”