Our RIA Hired an In-House Life Coach for Clients and Employees. Here's What Happened Next. — Barrons.com

By Andy Schwartz

A client of mine retired last year on a financial plan that worked. The math was sound. The portfolio was positioned correctly. The income streams were sequenced. By every traditional measure, he was a success story. Six months later, he was miserable. For 40 years, his career had shaped his days, his identity, and his momentum. Once the career disappeared, so did the structure.

Here's the uncomfortable truth the industry rarely says out loud: That client didn't need a better advisor. He needed someone who wasn't his advisor. Yet wealth management firms increasingly position advisors not just as financial planning experts, but also as trusted confidants who offer emotional support and life strategies. The idea that one advisor can effectively play all those roles is an appealing but unrealistic narrative and often lowers the odds of clients reaching their goals.

To bridge the gap, most firms rely on one of three shortcuts:

• Behavioral finance overlay: A CE course, a workshop, a few onboarding modules on concepts like loss aversion or recency bias. Although these are certainly useful to advisors, they are no substitute for professional coaching or counseling.
• Market volatility coaching playbooks: Scripts telling advisors what to say to clients before or during market drawdowns. Sometimes these conversations genuinely help clients to stay grounded. Other times, they are simply retention tools disguised as coaching.
• AI-driven solutions for clients: Financial wellness apps, robo-coaching chatbots, and journaling tools bolted onto client portals. The business logic is obvious -- scale the emotional side of advice without paying humans. But there is little evidence that these tools meaningfully help people navigate significant life transitions.

All of these solutions are based on the same underlying assumption: that one advisor can handle the client's financial plan, their emotional complexity, and the firm's revenue line all at once.

Life coaching isn't therapy. About 10 years ago, my firm hired Marlene Carpena, a certified life coach — not as a referral partner or outside consultant, but as a full-time employee working directly with clients and our team.

To be clear: Life coaching isn't therapy, which often focuses on healing the past. Coaching focuses on helping people clarify what they want, identify what is getting in the way, and move forward intentionally. It is structured, goal-oriented work, not clinical treatment. (When a situation requires a mental health professional, Marlene refers the individual to an external practitioner.)

Although Marlene has training in behavioral finance, her role is separate from the advisory relationship and has its own discipline, boundaries, and confidentiality standards. Session content remains private unless the client chooses to bring something into the planning conversation.

Marlene's coaching isn't reserved for moments of crisis. New clients meet her early in the advisor-client process, and existing clients often engage her when they experience life shifts, which, for most families, happens annually.

Financial plan as "tool for purpose." The client I mentioned earlier worked with Marlene to identify a sense of purpose in his postretirement years. Together, they identified a passion he had postponed for decades. Once he gained clarity around what he wanted his next chapter to look like, the advisory team rebuilt the plan to fund his second act, restructuring cash flow and updating his estate plan. In doing so, the financial plan was transformed from a monument to wealth preservation and became a tool for purpose.

Another client came to us mid-divorce with three settlement options and no clarity about any of them. Through several coaching sessions, she separated the emotional weight of the divorce from what she actually wanted for her future. Only then did she sit down with her advisor to evaluate the options financially. She ultimately chose a path very different from the one she initially favored, and she made the decision with confidence.

The piece most RIAs lack. Marlene works with people inside our firm, coaching the organization on communication, trust, leadership, and professional development.

She also works one-on-one with employees, giving them a neutral place to work through issues involving personal or professional friction among colleagues, issues relating to difficult conversations, or questions about job performance. The work isn't a performance-management tool and is confidential and separate from HR or management processes. In this way, issues that might otherwise have escalated to HR are resolved before they reach that stage.

Life-coach ROI. To my mind, the return on investment for in-house life coaching is straightforward: Wealth management is a high-pressure service business staffed by people who absorb stress for a living. The work we ask senior advisors to do — navigating difficult conversations, hearing what clients are truly asking, and sometimes telling clients what they don't want to hear — requires clarity and emotional steadiness. Those qualities aren't infinite resources. We treat them as critical inputs and invest in them accordingly.

I am not suggesting every RIA immediately hire a life coach, but I do think firms should honestly evaluate what they are asking advisors to do and whether they have actually built the infrastructure to support it.

We have stopped expecting one professional to perform two professions simultaneously. Financial plans should serve lives, not the other way around. To do that well, someone needs to be present to help clients figure out what kind of life they actually want.

Most firms don't have that seat. We do, and we intend to keep it filled.

Andy Schwartz is the co-founder, managing partner, CEO, and an advisor at OnePoint BFG Wealth Partners . He is a Certified Financial Planner with more than 40 years of experience.

Editor's note: Guest commentaries like this one are written by authors outside the Barron's Advisor newsroom. They reflect the perspective and opinions of the authors. Submit feedback and commentary pitches to [email protected].

This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.