Karen Eley is a bit of an anomaly in the world of financial advice. While many advisers are scrambling to get their equivalent degree sorted and pass the FASEA exam so they can continue practicing, she got both under her belt early. Then she quit advice.
“I don’t need FASEA qualifications but I have them,” she says. “I think it gives that extra credibility to the work that I do.”
What Eley does is provide money coaching and general advice services, predominantly to women.
After spending 15 years as an adviser and partner at Finsec Partners in Adelaide, she says she developed a yearning to help women learn about money. “It wasn’t where my business wanted to focus, so I decided to go out on my own,” she explains.
After “stumbling across” money coaching, Eley studied with Deborah Price at The Money Coaching Institute in the US and took her concept to Synchron. About 18 months ago her business, Women Talking Finance, was born.
“It just kind of happened,” she says. “I’m actually the first general authorised representative at Synchron. I’m the guinea pig.”
Being the first, Eley had to work hard to get her business concept across the line.
“We, quite frankly, do not run a general advice model,” says Synchron director Don Trapnell. “I don’t think general advice should have the word ‘advice’ in it.”
Once Eley explained the concept, however – general information and education combined with emotional and behavioural coaching – the dealer group’s executive committee was on board.
“If you’ve spoken to Karen you’d understand she knows her stuff,” Trapnell says. “She’s a very smart lady.”
Pinching pennies
What Eley provides her clients can be divided into two services; factual and general information via workshops and strategy sessions on one side, emotional and behavioural coaching on the other.
For a standard session she charges clients a fee of $260 per hour. If clients do need a financial adviser as well – Eley advocates clients use both – she’s happy to provide a recommendation. “I don’t receive any commission, of course,” she says.
A lot of the coaching work is based on neuroscience, Eley explains. It’s an area she’s fascinated by.
“We often have these blocks in our awareness like procrastination, anxiety and fear, which leads to things like overspending. They’re attached to emotions we form as children.”
Our earliest experiences form a large part of our relationship with money, she believes.
“It starts when we’re five or six years old with what we’ve observed or heard from our parents,” she explains. “I tend to find the first memories are of pocket money, a piggy bank or school banking, or maybe even pinching 50c from mum’s purse. What I’m looking for is the language that they use to describe those events.”
Rather than a statement of advice, the paperwork clients receive is a ‘money pattern grid’ on a CSV file that charts the gamut of emotions and behaviours her clients have around money.
It’s the kind of analysis most financial advisers shy away from, and she knows it. “I do the things advisers generally don’t want to do,” she says.
The new yardstick
The demarcation between general and financial advice is both clear and murky.
Theoretically, it should be simple to avoid taking personal financial details into account and stay away from financial product advice. In practice, however, the line often gets blurred – as ASIC’s February case against Westpac demonstrated.
Advisers sometimes take a dim view of money coaches given the fact that many, if not most, operate sans regulation.
Earlier this month representatives from multiple adviser associations lobbied to make the word ‘advice’ sacrosanct, only to be used for personal advice.
Eley understands the scepticism of general advice providers. In fact, she agrees with it.
Anyone can operate as a money coach, she says, regardless of their qualifications, which means consumers are at risk of getting sub-standard guidance. It’s a problem she believes ASIC should address, with educational benchmarks and a modicum of oversight being the ideal outcome.
“I know of a few money coaches that have never worked in financial services and then just set up shop and begun serving clients,” she says. “I hope ASIC get onto this one day.”
Given the regulator’s stated desire to promote scaled and/or episodic advice, Eley’s wish for a more regulated general advice sector may come true.
Asked if more general advice provision is on the cards for Synchron, Trapnell doesn’t rule it out but says he’d have to be convinced.
Eley has set bar pretty high, he reckons.
“They would have to have a very clear enunciation of their proposition and a clear understanding of the market,” he says. “Karen is the yardstick for us in terms of professionalism.”
Congratulations on this initiative Karen, this is the type of service we need to complement and assist the advisers to help the clients in a holistic manner. It is better for former advisers to do this work, than people who have no experience, as referrals to advisers will be done with insight and knowledge, and assist in breaking down the barriers to people getting advice. I also refer people to financial advisers, and they go in much more likely to understand and proceed with the process. Well done on making change happen in a positive way.