The following is a guest post from Deacon Hayes. He’s a financial coach and explains the difference between a coach and a financial planner. I learned a lot about the coaching aspect of the business and I think you might find this information quite useful.
People often wonder whether a Financial Planner or a Financial Coach is the best choice as they work to make a solid plan for their finances. In this post we’ll talk about the differences between a Financial Coach and a Financial Planner, and how you can decide if you need a Financial Coach or if a Financial Planner is a better choice for your financial needs.
Financial Coaching vs. Financial Planning
There are several differences between a Financial Coach and a Financial Planner. It’s important for people to know and understand these differences before making a decision about which type of financial help is best for them and their individual situation. Here are some of the differences between a Financial Coach and a Financial Planner:
- Help put together a budget
- Help make a plan to pay off debt
- Help find ways to increase income
- Help determine ways to decrease expenses
- Talk broadly about investments, but do not give advice on what to invest in
- Educate and give advice on investment options
- Help manage financial investments
- Are licensed and regulated by the government
- Help clients with retirement, insurance and other investment planning
As you can see, Financial Coaches and Financial Planners provide two completely different types of services. While the financial coach covers the basics of money management and wealth building, the financial planner gives specified advice on investments that they believe to be the best choice for their clients.
Neal’s Notes: The other thing a good planner does is create an overall financial plan. This is crucial. Coaches don’t do this but they work with people on their budgets and paying off debt and that’s not something most advisors do.
How Can I Know Whether I Need a Financial Coach or a Financial Planner?
It can be a daunting task to determine whether a Financial Coach or a Financial Planner is best for you as you determine how to reach your financial goals. Truth be told, there’s likely a benefit to having both in your life as you work on growing your wealth.
A Financial Coach might be best for you if:
If your financial needs center around needing someone to help you with the day-to-day management and planning as you learn how to earn, manage and spend your money wisely, and help you look at broader decisions regarding investing, a Financial Coach would likely be the best choice for those tasks.
A Financial Planner might be best for you if:
If you are looking for someone to help you learn about the specific details on different types of investments and to help you determine which types of investments are best for you, a Financial Planner would likely be the best choice for those tasks. Another benefit of going with a Financial Planner is that they can help you purchase the investments you decide are best for you as well. Good planners also should help you put together a comprehensive financial plan which is something most people really need.
As you can see, there are vast differences between a Financial Coach and a Financial Planner, and both have valuable skills that are immensely helpful in different areas for people as they look to solidify their financial situation.
It’s wise to consider taking advantage of the services of both of these financial professionals as you work to reach your financial goals.
Deacon Hayes is an experienced Financial Coach and speaker, and the owner and host of the Well Kept Wallet blog and Well Kept Wallet podcast. He and his wife Kim paid off $52,000 in debt in just 18 months, and Deacon now devotes his professional life helping others become debt free and build wealth.