It can be confusing to know the difference between the services provided by various financial experts.
In general, the services provided by those referred to as financial advisors are for investing client’s money. Financial coach services can be much more diverse, however.
As a financial coach myself, in this post I’ll share:
- Services that financial coaches provide
- How to identify the financial coaching service to use first
- Insights for financial coach services related to investing specifically
- The financial coach service you should find and use for free
Let’s get started.
Financial Coach Services
Services offered by financial coaches will vary depending on the specific area of focus and expertise of the coach.
Below is a list of services that a financial coach might provide; A financial coach may help clients:
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- Get out of debt
- Stop spending more than they make
- Systematize savings
- Systematize putting funds into an investment account
- Identify and overcome behaviors that interfere with financial progress
- Organize finances
- Calculate monthly cash flow
- Calculate net worth
- Make career moves
- Realize their potential
- Create a financial plan
- Accountability
- Increase income
- Plan for Retirement
- Learn how to invest
Financial Coach Specialties
As you can see, the list of services is very diverse. Can one financial coach provide all of the above services?
Becoming an Accredited Financial Counselor® required learning about all the above areas. My coaching services focus more on retirement income, increasing net worth, and investing, however, because this is what I have done for myself and my family for four decades. I also truly enjoy helping others in this area.
Most financial coaches tend to specialize in only a few related areas that overlap, as I do. A financial coach can serve clients better when there is a narrow commonality between their services and their clients.
A coach that focuses on improving cash flow may also provide services to help clients eliminate high interest debt, for example, since it is such a deterrent for positive cash flow. She may also focus on ways to increase income, although increasing income is not a typical focus for most financial coaches.
Many financial coaches specialize in helping clients get out of debt and start saving. Let me clarify that this service is typically related to eliminating high credit card debt vs. debt incurred for buying a home since it’s super hard to buy a home without a mortgage unless you already have a high net worth with liquid assets. Having clarified this, I’ll also add that some people want to have zero debt, and some financial coaches can help with this, too.
Financial Coach Investing Services
Those who primarily provide financial coaching services don’t invest for their clients; they are coaches and not financial advisors. Some financial advisors (who invest your money) label themselves as “financial coaches” though.
While financial advisors can certainly help clients with any of the financial coaching services above, their area of expertise is really investing client money rather than teaching a client personal finance or how to invest.
In my humble opinion, it can be problematic when financial advisors act as financial coaches, though, and here’s why. Financial Advisors would naturally teach only one investing method, their own method. This is as opposed to informing clients about the different ways to invest and then helping them select the ideal method based on their own situation with an unbiased perspective.
I’ve explained this more in my article entitled What Is an Investment Coach?
Note that financial advisors don’t offer coaching services with bad intentions; it’s done because most financial advisors truly believe the way they invest is the best way to invest and feel no need to present alternatives to their clients when acting as a financial coach.
As someone who has used multiple financial advisors who practiced various investing methods and having invested my own money using several different methods over the years, I think it’s important for investors to be aware of the options to invest before choosing an investing method so teaching this is part of my financial coaching services.
It is empowering for investors to know the pros and cons of the various ways they can invest and select from that place of knowledge.
Investors can also choose diversification among methods when they are aware of the many ways they can invest and are educated about investing. For example, some of my financial coaching clients like to use a financial advisor who uses one investing method for a portion of their funds, and then they invest another portion of their retirement savings using another investing method.
I believe and teach that using a financial advisor is one investing method in my course, How to Retire When You Want and Fund Your Desired Lifestyle. Then that financial advisor has his own method, although the majority of financial advisors invest the same way nowadays.
Identify the Financial Coach Services You Need First
Finances can be overwhelming. As you can see from the list of financial coach services available, there’s a lot to be learned and managed when it comes to paying the bills plus saving and investing your hard earned money.
Having enough money is a very, very big deal; so each step is an important element of financial independence, the ultimate goal of having and investing money.
To help you know what financial coach service you need first, narrow in on your biggest money problem right now.
You don’t need to learn how to invest if you don’t have any savings and have negative cash flow, for example, so don’t worry about that yet.
Creating a financial plan always makes sense as a first step because it will help you identify and envision the accomplishment of your financial goals. Use a financial coach to help do this if you can, but if you have high interest debt, try to create a simple financial plan without paying for a financial coach so you can use that money toward paying off debt. You can read my article How to Create a Wealth Plan to get started with this on your own.
Eliminating high interest debt is probably the primary financial coaching service to use if you have this situation.
You can probably use free financial coaching services for debt elimination, though. Nonprofit Credit.org provides coaching services related to debt, for example. Their website says they are funded by government grants and donations.
Then creating positive cash flow and systematizing savings is the next logical financial coaching service to consider if you don’t have high interest debt.
After you’ve started saving, you are ready to invest after you’ve set up a solid emergency fund.
Identifying emotion related financial behaviors is important for most people to eliminate mistakes and behaviors that interfere with progress. This is important for every step to develop the mindset needed to move forward, whether that’s ending overspending or stopping emotional investing.
Clearing the emotional stuff usually requires a financial coach because it’s just too hard for us to call ourselves out, yet doing so can have a huge impact on progress toward goals!
Learn about my financial coaching services here.
