What is the difference between Financial Coaching vs Financial Planning?
What is financial coaching?
It’s focused on personal money management, behavioural change and accountability to a client and where their money is going.
The aim is to improve the client’s personal and business financial situation.
Personal coaching is a partnership between a client and a coach where the coach helps clients with proven tools to develop the skills to enable them to realise their goals and dreams.
BUT, what exactly is the difference between Financial Coaching and Financial Planning?
- Financial advisors tend to focus on implementing financial products and strategies in creating the ‘financial plan’ while Financial Coaches focus on everything that’s missed leading up to engaging with your financial habits and helping you to unlock your ability to make your financial plan and relationship with money meaningful to you.
- Financial Advisors most commonly help to manage wealth that already exists through products and accounts while a Financial Coach’s job is to help the client develop the knowledge, skills and behaviours that will help them build wealth in the first place.
- A Financial Coach does not deal with products at all and does not sell insurance or manage investments. They might educate their clients on the basic concept of insurance, investing, diversification but never provide specific recommendations on where to invest because that’s Financial Planning.
- Financial Planning is prescriptive. The focus is on instructing what to do, whereas Financial Coaching focuses on the emotional, behavioural and educational side of money. This approach requires more attention, keeping the client accountable, and devising ways to help the client embrace new habits that will support their financial goals.