How financial coaches are different from financial advisers

The majority of people can benefit from financial advice. Most of us aren’t well-versed in the intricacies of financial products, and how best to spend or invest our disposable income.

But, if you decide to get help, should you reach out to a financial adviser or a financial coach? We have a look at what each of these does, and how they can help you.

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Do you need a financial adviser or a financial coach?

Reagan Mitchell, certified financial planner and managing director of WealthyMe, notes the difference between the roles.

“Traditional financial advisers have a strong focus on the technical aspects of financial products. Their remuneration is based on the sale and advice of specific financial products,” says Mitchell.

Financial advisers, Mitchell explains, tend to deal with clients who have an established financial portfolio, or who need a financial product with little need for coaching. When a financial adviser meets with a client who needs assistance with planning, they may refer the client to a financial coach. 

Mitchell says that the role of a financial coach is to empower clients with the knowledge and tools to take control of their finances. Examples would be the creation of a budget, a debt-redemption plan or simple empowering via financial literacy. Rather than remuneration based on sales, the coach will be paid by the hour for their assistance. 

“In many instances, the coach will devise a plan that requires the implementation of a financial product. In this case, the coach will refer the client back to a financial adviser or a product provider,” Mitchell explains.

READ MORE: Everyone needs a financial adviser, not just the wealthy

“In my opinion, you should seek the help of a financial coach when you are just starting out your career, and you have little knowledge about personal finances, or when you identify trends of financial mismanagement that could lead to greater financial strain in the future,” says Mitchell.

In some cases, he adds, financial professionals will serve both as financial coach and financial adviser.

Get the help of a debt counsellor if you’re struggling with your monthly repayments.