Summary - 466 Karen Eley

Financial advice is most often framed in numbers—how much to invest, how best to optimize tax strategies, or how to allocate assets for retirement. Yet beneath the spreadsheets and charts lies a hidden layer of personal beliefs, emotions, and lived experiences that govern how individuals handle money. In many cases, traditional advice focused solely on logical and external strategies may fail to generate lasting change or client satisfaction if these deeper psychological elements remain unaddressed.

Money coaching, a specialized approach that explores the emotional, behavioral, and psychological aspects of individuals’ relationships with money, offers an invaluable complement to standard financial advice. It is a field growing in popularity worldwide, and one in which a number of advisors are seeking further education or partnership opportunities. In this article, we explore the value of money coaching, its theoretical underpinnings, the framework of a typical coaching engagement, and how professionalism and ethics guide both money coaches and financial advisors in delivering the highest standards of client care.

This exploration is based in part on a conversation that took place between host James Wrigley—a financial advisor and Principal at Melbourne-based firm First Financial—and Karen Eley, a Certified Money Coach and former financial advisor with 16 years of experience in traditional advice. Karen transitioned to focus on the more personal and psychological side of finance, helping individuals and couples understand the deep-seated beliefs that shape their decision-making. Their dialogue highlights key professional considerations, including how best to serve clients ethically, responsibly, and compassionately in the realm of personal finance.

1. Defining Money Coaching

Money coaching is not to be confused with the typical cash flow or budgeting service many financial planning firms offer. While there is often some overlap, money coaching centers on the idea that one’s early-life experiences, emotional triggers, learned beliefs, and even past traumas inform the way they handle finances today. Traditional financial advice can tell you what to do—“Invest in these assets,” “Consider a specific superannuation strategy,” or “Build this insurance portfolio”—but does not necessarily address why certain individuals procrastinate on investing, persistently overspend, or shy away from decisions that would seemingly benefit them in the long run.

Money coaching leverages fields like psychology, neuroscience, and therapy-informed strategies in tandem with more practical tools. It aims to uncover and then reframe harmful money beliefs or behaviors, substituting them with healthier habits. In a professional sense, this process must be undertaken ethically and responsibly: a money coach is not a mental-health professional, nor do they attempt to replace licensed psychologists or therapists. Rather, they specialize in the nexus between financial literacy, behavior change, and personal development—referring clients out to other professionals where necessary.

Karen outlines that the formal training she received comes from institutions such as the Money Coaching Institute in California, where coaches learn a four-session framework blending neuroscience, emotional processing, and financial education. Other qualified training pathways, such as those created by Dr. Brad Klontz, Catherine Morgan, and others, also exist. The result is a structured system akin to an advice process, albeit focusing on one’s personal money story and psyche rather than purely external financial figures.

2. The Intersection of Advice and Coaching

Financial advisors are rigorously trained in technical competence: they must pass exams, keep track of regulatory updates, and follow strict compliance guidelines. Their fundamental aim is to provide high-quality, strategic financial guidance. Yet, as James and Karen’s conversation underscores, the emotional side of money can decisively impact whether or not a client follows even the best of advice.

Where a traditional advisor sees a “logical plan”—based on prudent asset allocation, taxation strategies, or risk management—a client may feel significant emotional barriers preventing them from acting. These barriers could emerge from:

1. Childhood Experiences – Observing parents argue about money, receiving messages like “We can’t afford it,” or learning that scarcity is the norm.
2. Trauma or Unresolved Conflict – Significant negative financial events in adulthood (e.g., business failure, divorce, sudden job loss) can cement fear-based beliefs.
3. Learned Avoidance – In couples, one spouse might cede all financial responsibility to the other, either from lack of confidence or a deeply ingrained notion that money is too complicated or stressful.
4. Overspending or Underspending Habits – Some clients spend in pursuit of emotional satisfaction; others hoard money out of fear that even comfortable sums will somehow run out.

Advisors frequently encounter these issues during onboarding. Karen noted that a telling sign might be “analysis paralysis,” where a client who intellectually agrees with the merits of an investment plan inexplicably does not implement it. Another might be persistent overspending—despite having a “perfect” budget. Rather than the standard approach of repeating the logic or adjusting the plan’s recommendations, it may be more appropriate to refer the client to a specialized money coach who can help address the underlying behaviors.

From a professional ethics standpoint, the advisor serves the client best by recognizing the limits of their own skill set. Financial planners are held to a fiduciary standard or similar professional code of ethics, depending on the jurisdiction. When an advisor notices that the client needs deeper behavioral or emotional support, an ethical approach involves making a referral or collaborating with a money coach trained to explore those sensitive topics. This aligns with the principle of acting in the client’s best interest and ensuring they receive the most relevant expertise.

3. Money Coaching in Practice

A typical money coaching engagement can last anywhere from several weeks to a few months, featuring regular sessions—often between four to six—where coach and client meet to explore that client’s history and the factors shaping their financial choices. Karen typically uses a three-month model with six structured sessions, integrating:

1. Discovery and Money Biography
   Clients spend time before the first session writing out their “money story” or “money biography,” which includes formative childhood memories, key teenage experiences, and life events through their 20s, 30s, and 40s. The coaching session then dives into these memories, identifying repeated themes and emotional triggers.
2. Understanding Money Types
   The money coaching community often leverages frameworks identifying different “money types,” similar to personality assessments like Myers-Briggs but focused on financial traits. Examples include:
   • The Fool – Impulsive, high-risk, short-term “fun” outlook; ignoring detail.
   • The Martyr – Putting others’ needs ahead of their own to the detriment of personal wealth-building.
   • The Tyrant – Overly controlling and fearful, often leading to power struggles or excessive hoarding.
   • The Warrior – Balanced, goal-oriented, and generally prudent.
     This knowledge helps the coach and the client create strategies that resonate with their natural tendencies. A “Fool” might need a more fun, high-level plan to stay engaged, whereas a “Martyr” might need emotional encouragement to prioritize their own wellbeing.
3. Identifying Limiting Beliefs
   Many beliefs around money, shaped early in life, no longer serve the individual in adulthood. By pinpointing these and “unlearning” them, clients see how, for example, growing up in a home where money caused arguments might lead them to avoid finances altogether.
4. Behavioral Shifts and Accountability
   Money coaching includes practical tasks and goal-setting—just like financial planning—but the accountability extends to emotional triggers. Small tasks, like logging daily expenses, setting aside “fun money,” or scheduling a weekly check-in, help clients replace old habits with new ones.
5. Preparing for Future Advice or Self-Management
   By the end of coaching, clients have reframed their internal dialogue and are more emotionally comfortable making financial decisions. At this juncture, many are ready to return to or begin a relationship with a financial advisor, now better equipped to act on planning recommendations.

Professionally and ethically, the money coach follows a structured process that is transparent to the client. Confidentiality is paramount: revelations about past traumas or family conflicts are deeply personal and must be treated with the same seriousness and professionalism as any sensitive financial information. The coach maintains clear boundaries about what they can and cannot offer, referring the client to mental-health professionals if more specialized therapeutic interventions become necessary.

4. The Ethical Imperative of Collaboration

From a professional standpoint, financial advisors working alongside money coaches or incorporating money-coaching principles into their practice is a commendable way to raise standards of client care. Collaboration adheres to fundamental ethical principles of:

• Competence
  Advisors acknowledge that while they are experts in financial strategy, portfolio construction, retirement planning, and risk management, they might not have sufficient training in behavioral psychology or coaching methodologies.
• Best Interests and Duty of Care
  If a client appears “stuck” because of emotional or psychological issues with money, the advisor’s ethical duty is to ensure that these concerns are adequately addressed. Often, a money coach can help that client make breakthroughs that enable them to implement an advisor’s recommendations.
• Confidentiality and Client Autonomy
  In a joint relationship, the advisor and money coach must respect the client’s autonomy and confidentiality. Ethical practice dictates that no information is shared between professionals without the client’s explicit permission and understanding. If a client decides they do not wish to engage in money coaching, their choices are respected.
• Avoiding Conflicts of Interest
  If an advisor is also qualified as a money coach, they must remain vigilant against conflicts of interest and be transparent about any fees, services, and responsibilities. Clear disclosure regarding where financial advice ends and coaching begins helps maintain professional integrity.

5. Practical Tips for Advisors Considering Money Coaching

1. Identify Red Flags
   Common signals that clients may benefit from money coaching include persistent procrastination, “analysis paralysis,” repeated overspending or impulse spending, high degrees of money anxiety despite abundant assets, or ongoing conflict within couples over finances. When you see these patterns, consider raising the possibility of money coaching in a professional, non-judgmental manner.
2. Incorporate Basic Behavioral Questions
   Even without formal money-coach training, advisors can add questions to their fact-finding or discovery process. For instance:
   • “What are two or three lessons you learned from your parents about money?”
   • “What were some of your earliest memories of handling or thinking about money?”
   • “What emotions come up when you think about your finances or financial decisions?”
     The answers can reveal underlying beliefs and help the advisor either tailor their communication or suggest a deeper coaching engagement.
3. Consider Completing a Money Coaching Certification
   Advisors deeply interested in the psychology behind client behavior may explore formal money coaching training. Programs vary but often include both theory (e.g., neuroscience of money habits, emotional triggers) and practical application through client simulations or supervised sessions.
4. Experience Coaching First-Hand
   Karen recommends that advisors undergo money coaching themselves. Not only does this help them empathize with what clients experience, but it may reveal personal biases or triggers that could unconsciously influence the advice process.
5. Adopt a Referral Framework
   Advisors with established referral partners—be they mortgage brokers, estate attorneys, or insurance specialists—can add money coaches to that list. Having a structured referral process, including pre-vetted coaches who share your ethical and professional values, ensures that clients receive seamless, high-quality support.
6. Maintain Professional Boundaries
   In many jurisdictions, money coaches who are not financial advisors must avoid offering specific product recommendations, investment advice, or anything requiring an Australian Financial Services (AFS) license (or its equivalent in another region). Advisors, for their part, should steer clear of practicing beyond their realm of expertise in behavioral psychology.

6. The Client Journey: A Professional Case Example

Imagine a couple—let’s call them Mark and Sarah—who have come to you, the financial advisor, seeking to make the most of their combined high incomes. Despite earning well into six figures and having manageable household expenses, they have saved little for retirement or long-term goals, and regularly struggle with credit card debt.

At the discovery meeting, you ask your standard questions:

• Income: Check.
• Assets: Limited.
• Liabilities: More than expected.
• Risk tolerance: Moderate, but uncertain.

But you also inquire, “What were some lessons each of you learned about money growing up?” Mark hesitates, eyes cast downward, explaining that in his childhood home, money discussions always ended in shouting matches between his parents. Sarah, meanwhile, shrugs and says, “I don’t know, I never really managed it—my parents just said, ‘We can’t afford it,’ or told me not to worry about it.”

Over several meetings, you notice that Mark becomes visibly stressed discussing budgets, while Sarah is uninterested in tracking spending—she rationalizes purchases by saying she “deserves” them after her stressful week at work.

After you present a comprehensive, fact-based financial plan recommending prudent measures (like building an emergency fund, reining in discretionary spending, and establishing a regular investment program), progress stalls. Mark and Sarah repeatedly put off signing paperwork and continue racking up new credit card bills. You sense that the typical approach—explaining compound interest, modeling future outcomes, stressing the importance of risk management—isn’t moving the needle.

Here, the ethical and professional approach may be to introduce the concept of money coaching. You explain that you have observed consistent emotional roadblocks inhibiting their follow-through. They may wish to spend several weeks or months with a professional who can help them understand their individual money stories, manage the anxiety triggered by discussing finances, and cultivate healthier spending and saving patterns. Once they have made headway in coaching, they can come back to you, feeling more ready to implement a plan.

Far from abdicating your responsibility, you are fulfilling your fiduciary duty—or best interest duty—by aligning them with the services they truly need. If they do complete the coaching, they often return with renewed clarity, unencumbered by the baggage that led to avoidance or overspending. This synergy of expertise respects each practitioner’s professional domain and, most importantly, respects the client’s wellbeing.

7. Professionalism and Ethics in Money Coaching

Money coaches themselves must operate within stringent ethical frameworks, even though they are not always regulated in the same manner as financial advisors. Key responsibilities include:

• Maintaining Confidentiality
  Sessions are private. Clients may share deeply personal material—childhood stories, traumatic family events, marital conflicts. These are often more sensitive than the data typically collected by a financial advisor. Coaches must secure and protect these disclosures.
• Avoiding Unqualified Practice
  A coach who encounters severe emotional, psychological, or mental health issues must consider a referral to mental-health professionals. “Scope of practice” is a cornerstone of professional integrity—clients should receive the appropriate type of help from properly qualified sources.
• Establishing Clear Contracts and Boundaries
  Coaches clearly outline the nature of the service: “This is money coaching, not financial advice.” They detail fees, session structure, and the limits of confidentiality. They also clarify that the coach will not sell financial products or provide investment recommendations.
• Fostering Inclusivity and Respect
  The coach’s role often requires considerable empathy and an impartial stance, free from judgment on personal spending habits or family backgrounds. Professional courtesy and respect for diversity—whether cultural, racial, or economic—are non-negotiable ethical imperatives.

8. The Future of Financial Advisory Services

As financial planning continues to evolve, the integration of behavioral coaching, financial psychology, and money coaching points to a future where professionals must know more than formulas for wealth accumulation. Advisors who embrace this approach are often best positioned to build deeper trust, as clients sense their empathy and interest in the “whole person” rather than merely the bank balances and returns.

Financial wellbeing is increasingly seen as part of holistic wellness—much like physical or mental health. In the corporate sphere, as Karen points out, many employers and HR departments have begun offering financial wellness programs to address stress and productivity issues. Having money coaches and financial advisors collaborate in these programs ensures employees do not merely learn how to budget, but also why they might overspend or ignore key financial responsibilities.

Moreover, professionalism in this blended sphere means upholding and sometimes exceeding regulatory standards. For instance, in Australia, advisors must align with the Financial Planners and Advisers Code of Ethics, or, in other jurisdictions, comparable guidelines. While the code does not explicitly mention “money coaching,” it requires that client interests, client comprehension, and advisor competence are central. Money coaches, in turn, typically adopt a code of conduct, even if it is self-imposed or enforced by their training bodies, to ensure they practice with integrity and maintain high professional standards.

9. Conclusion: Meeting Clients Where They Are

The conversation between James Wrigley and Karen Eley invites a broader reflection on how financial professionals can ethically meet the diverse needs of their clients. At times, a solid statement of advice, step-by-step budgeting tools, and well-researched investment strategies are enough to help clients thrive. But for many, the real obstacles lie much deeper, in unseen beliefs and emotional dynamics that sabotage their best intentions or spawn chronic anxiety.

Money coaching responds to these complexities with a structured yet empathetic process that acknowledges human behavior is rarely linear or purely rational. By collaborating with money coaches—or incorporating money-coaching principles themselves—advisors can enhance their service offerings and uphold the highest ethical standards of putting the client’s needs first.

In doing so, all parties benefit. Clients gain newfound freedom and peace of mind, often overcoming habits they have carried since childhood. Advisors and coaches, working in concert, deepen their impact, foster trust, and create lasting transformations that extend well beyond a single financial plan. Ultimately, such integrative approaches point to a future in which financial advice merges seamlessly with behavioral insight, delivering results that are not only numerically sound but genuinely life-changing.

Key Takeaways for Professionals

1. Recognize the Psychology Behind Client Behavior
   Even the most thorough technical advice can fall flat if clients have deep-seated money fears, traumas, or misconceptions.
2. Adopt Empathetic Fact-Finding
   Simple yet powerful questions about childhood lessons or major money memories can clue you in on potential behavioral barriers.
3. Refer Ethically
   If you perceive a client needs specialized support, referring them to a money coach can fulfill your ethical duty of care and best-interest obligations.
4. Maintain Professional Boundaries
   Money coaches help with emotional and behavioral aspects of finance; they do not replace licensed mental-health professionals or fully replicate the scope of regulated financial advisors.
5. Invest in Your Knowledge
   Advisors seeking deeper engagement with clients’ behaviors might consider recognized training in financial psychology or money coaching, ensuring their practice remains both comprehensive and compliant.
6. Collaborate for Holistic Solutions
   Working with skilled money coaches can help your clients overcome longstanding issues and return to you more prepared to implement strategic financial decisions.

In this way, professionalism and ethics come to life: by integrating awareness of both practical numbers and the human dimensions of money, financial professionals provide empathetic, thoroughly informed guidance. Through partnerships or by expanding their own skill sets, advisors can help clients achieve not just wealth, but genuine financial wellbeing—supported by an approach that respects the complexity and dignity of each individual’s relationship with money.

Accreditation Points Allocation:

0.10 Technical Competence

0.10 Client Care and Practice

0.10 Regulatory Compliance and Consumer Protection

0.10 Professionalism and Ethics

0.40 Total CPD Points