Looking to get your financial house in order with the help of an expert, but not sure if you need a financial adviser or a money coach?  As a former financial adviser and now money coach for women, let me explain the difference between them.

Both financial advisers and money coaches purpose, are to help you improve your financial position, but their approaches are quite different. 

A Money Coach helps clients better understand the basics of personal finance, starting with cashflow, financial goal setting and mindset.   Certified Money Coaches (such as myself) will start with helping you understand your current financial dynamics, mindset and habits playing out in your life.  Coaches will provide you fact-based financial information so you can make your own informed decisions.

A Financial Adviser helps clients build on existing wealth and typically require you to already have assets accumulated or high disposable income requiring financial advice.  Advisers provide tailored recommendations for how to manage your money using strategies and specific investment recommendations, that generally require ongoing management and advice.

Let’s delve further into the differences between a financial adviser and a money coach.

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FINANCIAL ADVISER

To put in basic terms, a financial adviser are licensed to provide financial advice and will give you the information they deem necessary to your situation, to assist you make financial decisions by considering your current circumstances and goals. When working with a financial adviser, ideally you'll create a long-term relationship and work together over many years. Advisers will have a more analytical and strategic approach with their work, although many take a values-based approach taking into consideration your life goals and make appropriate financial recommendations based on these.

When should you use a financial adviser?

• you are looking for specific fund/investment/insurance recommendations
• you need information and advice about switching or consolidating superannuation funds
• you want to invest your savings or a lump sum of money and need advice selecting the right investment
• you’re looking for wealth protection or life insurance advice
• you’re nearing retirement and need help planning for it
• you want to set up a SMSF (Self Managed Super Fund) or already have one
• you want to create a long-term, wholistic financial plan and have a professional manage your money for you.

A financial adviser generally charges an upfront advice fee and implementation fee and then an annual ongoing advice fee to manage your investments. This can either be a percentage of the investments they provide advice on or a flat dollar amount, which you can negotiate with your adviser.

Advisers have years of study, qualifications, knowledge and a heavy regulatory responsibility to deliver quality advice – so expect to pay for it.

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MONEY COACH

Money coaches look at the behavioural and emotional financial aspects and client’s relationship with money, in addition to financial education and knowledge building.

A money coach starts not with your income and assets but with you – your values, your financial habits, your goals, your desired future involving changing your current relationship with money. A money coach can help you:

• uncover the deep-seated money blocks that are subconsciously holding you back, personally and financially
• learn steps and strategies that leverage your strengths
• build your financial knowledge, know-how and confidence
• hold you accountable over a period of time working together and help you make shifts in your behaviour or money habits that challenge you
• develop financial and emotional strategies that create long-lasting change and maximise your financial potential and outcome
• review and structure your cashflow, income and spending to get you on a path to saving or earning more money.
• Get you ‘financial-advice/adviser’ ready

Having a money coach is great when you want to understand why you do what you do (or don’t do) with your money, or if you feel stuck in a financial position.  Things like aversion to managing money, over-spending, under-spending, financial fears, low self-knowledge or confidence.

When should you use a financial or money coach?

• if you want to become financially empowered by building your financial knowledge and personal power
• to create a budget, manage cash flow, optimise your savings
• when you want to improve your relationship with money
• when you feel overwhelmed with your current financial situation and need someone to give you more clarity and confidence to manage your own money
• you’re just starting out with a small amount to manage or save and want more guidance than advice

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Financial coaches typically charge by the hour, or for a package of coaching sessions for 3 to 6 months, and some offer 1-off cashflow sessions. 

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A collaborative approach

Often a money coach and financial adviser can work together to help individuals as their skills can complement each other.  

For example, a couple may see a financial adviser and only one of the couple are fully engaged with the finances. The non-engaged partner could work one-on-one with a money coach to uncover the reasons they’re not interested in finances, work on gaining more knowledge and confidence and then return to the financial adviser with a better understanding of their relationship with money and financial knowledge.

Conversely, many clients I work with, I refer on to a financial adviser for advice on personal insurances, managing investments either while we’re working together or often 1-2 years down the track once they’ve accumulated more assets or wealth for investing.

Money coaching is a relatively new field and isn’t regulated in Australia like financial advisers are, so it’s important you do your research when selecting a money or financial coach to ensure they have specific training in a financial background, education and experience to be able to assist you and ensure they do not delve into the financial advice space which can only be provided by a licensed and qualified financial adviser. Ideally, they will have formal qualifications or training in Money Coaching, as it is a niche area.

If you're still not sure - book a complimentary 15 min chat on my Contact page and I can answer all your burning questions.

I also know some fantastic male and female financial advisers I can share contact details with you.