Financial Coaching vs Financial Advice
So what exactly is the difference between a financial coach and a financial adviser?
Managing your money is a tricky business for most. It’s also not the most exciting topic for many people.
But busyness, distraction and temptation are just some of the things to overcome on a daily basis to stay on track to reaching your financial goals. And they are a tough force to face alone.
Whilst getting help seems like the next best step to get your finances on track the fallout from the Hayne Royal Commission into banking & financial services earlier this year has left many Australian’s concerned about making the ‘wrong’ choice.
Fair enough!
So who should you turn to for help to organise, manage and plan your financial affairs? A financial coach? A financial adviser?
Our most recent article by Rebecca Maher explores the differences between a financial adviser and a financial coach to see where you might be best looking for help with your finances given where you’re at right now.
What do financial coaches do?
A financial coach typically focuses on fundamental financial issues and your current or short to medium-term financial position.
It helps to think of them as a personal trainer for your finances. They help you set your goals, create a money plan to achieve them using your salary and other income and keep you motivated and inspired to stay the course to reach those goals.
Basically, they spend more time helping their clients understand the fundamentals of finances and managing their finances, rather than recommending specific investments, providing recommended strategies around your superannuation and life insurances.
What do financial advisers do?
Financial advisers may also offer the same help as a financial coach but in a much more limited and hands-off way.
Generally speaking, they tend to address those same money management issues in much less detail preferring to focus their advice on personalised investing, superannuation and insurance strategies to help you reach your goals over a (generally) longer timeframe as well.
They will also make specific product recommendations like which investment funds to invest in, which superannuation fund to use and what insurance policies are a good fit for you. A financial coach does not make specific product recommendations.
When should you use a financial adviser vs a financial coach?
If you need help getting clear on your financial goals, creating a personal budget & cash flow management plan, optimising your savings & debt repayment, or helping to manage your monthly paycheque – you might consider seeking the help of a financial coach.
If you are looking for specific fund recommendations on where to invest your savings, advice on whether to switch your superannuation fund or whether you have the right life insurance and recommendations on suitable policies then you may be best suited to seeing a financial adviser who can provide all those personal recommendations in a formal statement of advice.
Today, however, there are a growing number of advice businesses who offer the services of both financial coach and financial adviser.
This can be a good option for those who are at the beginning of their financial journey and want to build a trusting relationship with an adviser with financial coaching services and move to more comprehensive planning when their needs demand it and maintain the trusted adviser relationship.
Want to learn more about money and personal finance? Check out our article archive, the How To Money Podcast and the Australian Finance Podcast. Catch us on Twitter @HowToMoneyAUS and Instagram on @HowToMoneyAUS.
Important Information
The information on this blog and website is of a general and educational nature only. It does not take into account your individual financial situation, objectives or needs. You should consider your own financial position and requirements before making a decision, as we are not an advisory service. We recommend you consult a licensed financial adviser in order to assist you. The information is based on assumptions or market conditions which can change without notice, and this will impact the accuracy of the information provided. This website and blog occasionally provide links to third-party sites, aimed at helping you gather the information required to make an informed decision — we may receive payment for these referrals.