What’s the difference between a financial coach and a financial adviser?
Financial coaching is a service similar to life coaching, providing an alternative to traditional financial advice. We look at how financial coaching differs from traditional advice.
If you're looking for help with your finances, you may be wondering whether to opt for a financial adviser or a financial coach.
We'll explore the key differences between financial coaches and financial advisers.
Financial coach vs financial adviser: what are the key differences?
Financial advisers are regulated by the Financial Conduct Authority (FCA) to give advice.
You can expect an adviser to provide specific product recommendations, while financial coaches are not regulated and do not provide guidance on products.
Instead, financial coaches take a holistic view of your financial situation, taking the time to understand your financial goals and behaviour around money.
Are you a saver or a spender? Do you struggle with sticking to a budget? Are you looking for quick wins, or do you have a long-term goal?
A coach will inform and empower you, giving you the confidence to make financial decisions.
Traditional financial advisers often require a minimum asset level to advise on investments or financial planning, while financial coaches can provide support no matter your asset level or where you are in your financial journey.
There is no hard and fast rule regarding fees, but advisers can charge either a fixed fee, hourly fee, or a percentage of assets if they manage your investment portfolio, while financial coaches charge for their time.
How much you pay varies from coach to coach, depending on their expertise and experience.
Let’s now summarise the main differences between a financial coach and a financial adviser:
A financial coach is:
- Trained but not FCA-regulated.
- Skilled at reviewing your overall financial situation and goals.
- Able to help you develop a financial plan to achieve your goals.
- Able to discuss the pros and cons of various financial products, but can’t recommend one.
- Comfortable working with anyone, whatever their situation.
- Going to charge for their time.
A financial adviser is:
- Regulated and authorised by the FCA to recommend specific products or is independent and able to offer ‘whole of market’ solutions.
- Suitable for people who have little to no debt and a certain asset level to invest.
- Going to charge a fixed or management fee with initial fees on top.
- Able to answer specific questions such as which pension you should take out and what your retirement income will be.
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