05/06/2023
🌟 Financial Coaching: Bridging the Advice Gap or a New Danger? 🌟
Hey, fellow Lamplighters! I stumbled upon an intriguing article by Moira that got me thinking about the world of financial advice. 🤔 Are we being deceived by those with vested interests? Let's dive in and explore!
First things first, what is financial advice? It's definitely not about mindlessly funneling your hard-earned money into financial product companies. In my opinion, it's about empowering individuals to take charge of their own finances. The decision to entrust others with our wealth should come much later in the journey, and only for the privileged few in the 5%. For the rest of us, the conversation starts with creating a sustainable livelihood, managing paychecks, paying off debts, building an emergency fund, and protecting our loved ones. Only when we have some short-term financial security can we focus on the long term.
The truth is, 90% of people can manage their finances with the right support. It's only during times of stress or major life changes that we may need expert guidance. And guess what? That guidance doesn't have to come from someone with a hidden agenda to sell you a product. The globally proven solution, often overlooked by the financial services industry, is to extend sustainable livelihood into old age. It's that simple, folks!
Moira's article pointed out that only 11% of adults in Great Britain have paid for financial advice in the past two years. That's because this percentage is just about right! The majority of the population either doesn't have enough investable assets or prefers a do-it-yourself approach. According to Vanguard's survey, a whopping 80% of investors actually prefer empowerment over delegation. They want to be in control!
Now, here's where things get interesting. "Financial Guidance" sounds like a broader term, right? But in reality, it's often just a fancy way of saying "non-advised selling." Yes, you heard me right. You're being shown "SELLING" disguised as guidance. What you really need is non-sales advice! It's not an advice gap that exists; it's a selling gap!
People genuinely want help, but not from product sellers. And more often than not, the solution doesn't lie in their products anyway. So, is calling it an "advice gap" a mistake? The line between advice (advised selling) and guidance (non-advised selling) is thin because both are forms of selling. Those low-cost advice services with transparent charging structures? Well, they struggled to sign up customers because you can't help people with money they haven't made yet. It's like trying to empty the pockets of people with empty pockets!
What we need is to help individuals make money and have more in their pockets. Instead of buying a product, we should be focusing on financial advice that says, "Do XYZ and see more money in your pocket!" Vanguard's recent closure shouldn't come as a shock for this very reason.
Traditional financial advisors exchange their time for money, charging high fees per hour for one-on-one consultations. But imagine this: generic advice delivered to groups, where a planner sees 100 people at once, each paying a fraction of the cost. Suddenly, advice becomes accessible and empowering! We provide tools and education to groups so they can become their own financial planners.
Now, let's talk about robo-advisers. They may seem convenient, but they have their own agenda: selling products through non-advised sales. On the other hand, financial coaches, mentors, and wellbeing experts focus on thought processes, decision making, and building confidence. They don't give you access to financial products but help you navigate the financial world. Beware, though, of the wolf in sheep's clothing!
I have to give a shout-out to Wise Monkey Financial Coaching, founded by Simonne Gnessen. They're the real deal and absolutely brilliant. Octopus Money Coaching and Claro Wellbeing are also worth mentioning, but be cautious of their guidance that might ultimately lead to product sales. Are the Octopus tentacles stealing childrens' dreams of second holiday home and sticking into a pension pot accessible in old age, or is it me? Are companies like Nudge, Otto Finance, Bippit, MyEva, and Maji really offering financial coaching, or is it just more guidance in disguise?
So, my dear Lamplighters, maybe the term "advice gap" is a misnomer. What we truly have is a confidence gap. And until there's a clear separation between advice and products, we'll continue to face a market integrity gap. It's no wonder that, as Lang Cat states, there's a trust gap in the financial services industry.
I see the financial services industry as the wild west, where the story is constantly rewritten by the so-called victors, positioning themselves as the protagonists. But hey, if you ever want a different perspective, feel free to reach out to me. I'd be more than happy to provide some refreshing insights! 😄💡
Stay financially savvy and keep shining, Lamplighters! 🌟
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