Written by Kelley Holland
When I tell people I am a money coach, there are a few questions I sometimes 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 a money coach 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 money 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 investing 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.
Money coaches also help clients create happier, healthier financial lives. But a money coach starts not with your wallet but with you – your values, your goals, your desired future. A money 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 money coach will also hold you accountable for your actions, and help you lock in successes so that you create lasting, transformational change.
On occasion, when a client asks, a money 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. I’ve done that with many clients and I could do it for you if you ask. (I have a graduate degree in business from the Yale School of Management and I’m a Chartered Financial Analyst, so I have my own training.) But I don’t tell clients what to do; they identify the option that meshes with their values and goals, and in that way they “own” their solution.
A money coach can even work in tandem with a financial advisor to help certain clients. For example, if an advisor’s client is facing divorce and has never handled her finances on her own, she may work with a coach to identify her goals and priorities. Then she and the coach can identify strengths she can tap 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 develop financial strategies to put the future they want within reach. Money coaches, on the other hand, focus on helping people make changes in line with their values and priorities. Money coaching clients don’t just have healthier financial lives – they also feel better about them. So yes, a money coach is “like” a financial advisor. But only up to a point.