As a Financial Coach, I feel it’s important that people understand how coaches differ from advisors and why you might seek the help of one vs. the other.
The mission of the Financial Coach
To educate clients on the basics of personal finance. To work with them to create a financial plan that reflects the values and goals of the client. They also empower their clients to take responsibility for their decisions, support their continual learning and growth, and serve as an accountability partner throughout the process.
Ultimately, after 3 to 6 months, clients should have improved their financial literacy and be well on their way to achieving their financial goals.
Financial Coach vs. Financial Advisor
There are a couple of main differences between a Coach and an Advisor.
A Financial Coach works with clients who have limited assets and need basic financial help. They might help clients save money, get out of debt, or guide them towards starting a retirement account.
A Financial Advisor works with clients who have more assets and need help managing and investing those assets. An Advisor provides options for how to build wealth for their clients and to meet future financial goals. Advisors may require a minimum asset level.
The goal of the Financial Coach is for the client to become self sufficient.
An important note to mention is that Financial Coaches are not licensed to provide financial advice and therefore cannot provide specific product recommendations. Coaches can provide basic advice on the concept of investing, but they cannot recommend how to allocate your assets. They can suggest saving money in a high-interest savings account, but they can’t recommend a particular account.
Coaching also differs from advising in that coaching tends to be a limited time arrangement, helping the client to achieve financial literacy and learn to manage their own finances.
Advising, on the other hand, is an ongoing relationship in which the Advisor continually manages the client’s financial portfolio for them. The relationship is based on the understanding that the Advisor will make all the financial decisions on the client’s behalf and with their best interest in mind.
Many clients choose to have very little involvement, trusting their Advisors completely.
I hope that helps clarify the difference between Coaches and Advisors.
If you’re just starting out and need some guidance, finding yourself a good coach to point you in the right direction can save you countless dollars and many years.
If you would like to set aside an hour of time to speak with me, send me a message and let’s find a time to connect!