The Differences Between a Financial Coach and Financial Advisor

Nov 13, 2020 | Investing, Personal Finance, Personal Finance Podcast | 0 comments

What is the difference between a Financial Coach and a Financial Advisor?

If you are ready to improve your finances and are currently in search of the right professional to help you reach your financial goals. Then you might be wondering what the difference is between a Financial Coach and Advisor?

This is a question we get a lot. Financial Coaching is a new addition to the Finance Industry. Having grow in popularity over the past few years, many people get Financial Coaches confused with Financial Advisors and CFP’s or Certified Financial Planners. But the difference between a Financial Coach and a Financial Advisor is quite significant. Each professional serves their clients in very different ways and at different stages in their financial journey.

What is a Financial Coach?

A Financial Coach focuses on helping you optimize your income and creating a strategy that improves your financial well-being.

Every Financial Coach has a slightly different approach. But most work on helping you with the basics of budgeting and paying off debt.

At R&D Financial Coaching however, we take it a step further. We start by learning about your daily habits with money and helping you create a financial foundation by building healthy money habits. As your Financial Coach we teach you how to do things like:

  • Increase your cash flow 
  • Improve your credit score
  • Optimize your insurance strategy
  • Eliminate debt
  • Grow your Income and  
  • Increase contributions to investments

Ultimately, a Financial Coach helps you start on your journey to creating wealth. In our opinion, a good financial coach takes a holistic approach to their advice and helps you improve your overall money mindset. So that is the approach we take and it has lead to massive life transformations for our clients.

What is a Financial Advisor?

Financial Advisors on the other hand help you manage existing wealth.

They assist you with your strategy for retirement and manage your investments using the money you have already accumulated with the goal of continued growth and comfortable retirement. They can also advice on tax strategy to help you save money and invest in a way that is tax advantaged. This makes a good Financial Advisor or Planner an important part of your wealth building team.

But a financial plan is more than making sure your money is in the right investments.

A good advisor, in a way, is a coach in their own right. They address their client’s concerns related specifically to investing and your retirement goals. Helping you feel comfortable and confident in your investment strategy that gets you to your goals.

What is the difference between a Financial Coach and a Financial Advisor

The biggest differences between a Financial Coach and a Financial Advisor are:

  1. Who they help
  2. What they help you with

Financial Coaches serve clients who want to be better at budgeting, managing their cash flow, paying off debt, investing and accumulating wealth. The role of a Financial Coach does not directly involve managing of investment accounts, making recommendations about stocks or index funds to invest in etc. A Financial Coach educates their clients on ways to get started investing. Providing them with the encouragement and support they need to reach their goals of investing in their future.

Financial Advisors serve clients who are doing well enough at budgeting and investing and have enough money in their retirement accounts to have their investments managed for them. Their clients are already regularly contributing large amounts of money each year to retirement accounts. Clients of a Financial Advisor are looking for assistance on deciding what to invest in based on their age, goals, risk tolerance, and many other factors.

Since a Financial Advisor helps you manage the wealth you have created, working with them comes further along the journey.

The best time to meet with one of these professionals is when you are debt-free and ready to make consistent contributions to your retirement accounts. You will also find that Financial Advisors usually work with high Net Wealth individuals. Until you get to that point, optimizing your retirement benefits with your employer, using a robo-advisor or learning to invest yourself are excellent ways to invest until you are ready to work with a Financial Advisor.

That is another key difference between Financial Coaches and Financial Advisors  – Financial Coaches help you achieve a high Net Wealth where Financial Advisors help you maintain that wealth.

Who should you work with?

Both play a separate role in your financial journey. But if you are just getting started or you want to talk about more than just retirement, it’s a good idea to work with a Financial Coach.

Not only does a Financial Coach help you create a strategy that will get you budget, save more and make consistent contributions to retirement. A Financial Coach helps you establish the behaviors necessary to reach Financial Freedom and ultimately Financial Independence. 

Trying to decide if you should work with a Financial Coach? Here’s how to find the perfect Financial Coach for you!




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