Financial Coach vs. Financial Advisor

Written by Kelley Holland

When I tell people that I am a financial empowerment coach, there are a few questions I often hear. “Do you help people with investments?” is one. “Can you tell me what to do with my money?” is another. This one is my favorite: “Is that like a financial advisor?”

I like that last question because it gives me a chance to explain the difference between a financial advisor and a financial empowerment coach. Both are experts in helping you improve your financial life, but our approaches are quite different.

A financial advisor is trained to give you specific financial advice, whether it’s about paying down debt or choosing investments or saving for the future. He or she will assess your current financial state and show you what you can do to improve it, drawing on established principles of investing and personal finance. Advisors can be independent or affiliated with a financial firm, and they may help you with all of your financial life or simply give advice on investing – or something in between.

Financial coaches also help clients create happier, healthier financial lives. But a financial coach – especially a financial empowerment coach – starts not with your wallet but with you. The initial focus is on your values, your goals, and your desired future. A financial empowerment coach will help you:

  • identify what you want to achieve
  • notice and conquer money “gremlins” that keep you from moving forward
  • take action steps that draw on your strengths and move you toward your goals

A financial empowerment coach will also hold you accountable for your actions, and help you lock in successes so that you create lasting, transformational change.

Of course, no two coaches are exactly alike. I bring to my financial empowerment work a background in finance and investment management as well as my coach training. . (I have a graduate degree in business from the Yale School of Management and I’m a Chartered Financial Analyst, in addition to holding an advanced diploma in coaching from New York University.) When a client asks, I may coach may step out of the coaching role and offer a few options for dealing with a specific financial task – automating savings, setting up new accounts, and so on. But I don’t advise clients to buy or sell specific investments, and in general I don’t tell clients what choices to make. Rather, I help them identify the option that meshes with their values and goals, and in that way they “own” their solution.

A financial coach can even work in tandem with a financial advisor to help certain clients. I regularly have advisors refer clients to me. They may have a client facing divorce who has never handled her finances on her own, and I can help that client identify her goals and priorities for her money. Then we can identify the strengths and talents she can use to get where she wants to go – and she can return to the financial advisor for the actual financial plan. In other words, advisors and coaches can complement each other.

Financial advisors unquestionably provide a valuable service. They absolutely help people improve their money lives and invest their savings to put the future they want within reach. Financial coaches, on the other hand, focus on helping people make changes in line with their values and priorities. My clients don’t just create healthier financial lives for themselves – they also feel better about them, and they feel more confident and capable in other parts of their lives, too. So yes, a financial empowerment coach is “like” a financial advisor. But only up to a point.

Are you ready to take your first step towards financial wellness?

If yes, I invite you to take our Financial Fitness Assessment to help you identify where you face challenges or mindset issues that are keeping you from true financial well-being.