Advice Matters

Monday March 25th 2019

For financial planners, advice is the key deliverable. We will keep you up to date regarding trends, ideas and other important issues relating to advice. Please contribute to the advice discussion and feel free to comment on any of the articles we post. We value your opinion. You’re also very welcome to share the articles with your friends or colleagues.

The latest Advice Matters articles are reflected below.

What is behavioural coaching?


In July this year, Vanguard published a paper titled the “Evolution of Advisor’s Alpha: From portfolios to people”. This document tabled all the drivers of change in the financial planning industry such as regulation, fees and technology-enabled competition.

There was nothing in this paper that we haven’t spoken about or debated before. However, what stood out is their view that the only skill or value-adding service that cannot be automated by future technological development is the behavioural coaching element.


Vanguard’s research clearly shows that all the value-added services, as listed in the diagram above, except for behavioural coaching, will be replaced by technology.

According to the Behavioural Coaching Institute, a behavioural coaching model should emphasise the following aspects of behaviour and learning:

  • Much of human behaviour is learned.
  • All behaviour leads to either positive or negative consequences for the particular individuals and those around them.
  • Individuals are systems within systems and each individual affects and is affected by these systems and the constant changes they are undergoing.
  • It’s important to define individuals’ current status and developmental progress in terms of their behaviour, rather than personality traits or personality styles.
  • Specify the target behaviour impacting, for example, a professional skill or position task.
  • Measure the target behaviour.
  • Explore and change core values, motivation, beliefs and emotions
    – which can result in significant behavioural change.
  • Assess covert behaviours (e.g. limiting beliefs, anxiety) in relation to overt actions (e.g. speaking at a meeting).
  • Access and assess emotional events.
  • Assess environmental events and the interactions between behaviour and environment.
  • Employ validated behavioural techniques.
  • Provide statistical proof of beneficial change/learning acquisition and ROI.
  • Employ sufficient follow-through monitoring and self-coaching strategies.

The definition of behavioural coaching presumes that there is a change in behaviour, which presumes firstly that we know what behaviour needs to change, have the desire to change our behaviour and then build new patterns of behaviour that will serve us better. This is, however, not an easy task. Merely knowing how and the purpose in doing something differently does not enable change.

You need consistency and repetition to create a new pattern and learn to do things differently. Let’s look at an example:

Your clients are stuck in their relationship with money. The money messages they have received while growing up have led to excessive spending instead of saving for the future. Your coaching made them realise that their pattern of behaviour needs to change to secure a financial future for themselves and their loved ones. They know they need to change their spending habits, but to change this pattern they firstly have to identify what triggers their spending sprees. It will then be easier for them to create an observation practice to break the habit and choose a different course of action. An example of an observation practice might be as
simple as a sticker in their purse as a reminder to pay attention to their spending patterns. Once an observation practice is in place, you can discuss ways of changing the pattern of behaviour. This can maybe be to pause for a minute and take three deep breaths while reflecting on questions such as the following:

  • Am I about to spend money in a way that will serve me and nurture my soul?
  • To what purpose am I spending?

Behavioural caching is not a simple task. You need to have good relationships with your clients to help them discover what is standing in their way to financial freedom and living the life they desire. Coaching is not necessarily for all clients and you would have to charge separately for this service. However, you have to add behavioural coaching to your valueadded services to ensure you meet the needs of your clients in the future.

If you have any questions or require more information on behavioural coaching, contact your financial planning coach.