Financial Coach – what are they and are they worth it?

Table of Contents

What is a financial coach? In this guide we cover what a financial coach is, what they can do – and can’t do – and why they’re useful. 

We also explain when a financial coach is worth it, how to find a good one and the differences between a financial coach and a financial advisor.

Table of Contents

What is a Financial Coach?

A financial coach in the UK is someone who helps you with your finances without giving you specific investment or financial advice.

Financial coaches may offer general guidance around budgeting, saving, investing, trading and many other financial topics. But they should not be giving you advice about which precise investments to put your money into.

Unlike financial advisors, financial coaches do not require any specific qualifications or experience. A financial coach also doesn’t have to be registered with the Financial Conduct Autority (FCA).

That’s not to say that all financial coaches are unqualified though – many are qualified financial advisors or chartered accountants who also give financial coaching.

But it does mean that you should be cautious about who you take financial coaching from.

What can a financial coach do for you?

A financial coach may offer a number of services to you. These include:

  • One-off 1:1 general coaching sessions
  • Specific 1:1 sessions for certain topics (investing, budgeting, trading)
  • Ongoing financial coaching for longer term goals
  • Classes or tutorials on financial concepts
  • Courses covering finance topics

For example, a coach may explain techniques on how to pay off debt, how to achieve your financial goals and different investing or trading strategies.

If you sign up to use the services of a financial coach it’s important that you choose a service or package that’s most appropriate for you. Usually a financial coach will offer a free introductory call for 10-15 mins to discuss their services and what they offer in more detail. 

Financial coaching sessions may be online or in person.

After the session, financial coaches may also provide written summaries of your coaching sessions so that you have actions or information that you can refer to afterwards.

What can a financial coach not do for you?

Financial coaches usually will not give you specific investment or financial advice. That’s to say they will not tell you which investments you should put your money into. 

Ideally, you will come away from a session with a financial coach with a better understanding of the options available to you, but not a specific investment that you will put your money into.

A word of warning: you should be very cautious if a financial coach does give you specific financial advice. While it’s not necessarily illegal, it’s potentially unregulated and uninsured which means it may be difficult to get compensation if you lose your money due to bad advice.

This goes for other more complicated areas of personal finance, too, such as tax, pensions and estate planning.

If a financial coach is keen to give you financial advice you should ask for proof of professional indemnity insurance. This is a type of insurance that protects individuals or companies who offer services to clients. 

It’s a type of insurance which qualified financial advisers and practising chartered accountants should have. Professional indemnity insurance protects the service provider (e.g. a financial advisor) in the event of legal action against them in relation to the services they provide.

For example, a financial advisor may advise a client to invest in a certain product or fund. If the fund were to collapse and lose the client money, there may be a case against the financial advisor if it can be shown that they did not do their due diligence on the investment. 

In this case, an insured advisor can use their insurance to fund any legal costs against them. To get professional indemnity insurance the insurer will conduct checks on the service provider, such as proof of qualifications or regulatory approvals. 

So, by having professional indemnity insurance it’s one indicator that the coach or financial advisor offering you advice is legitimate.

Pension planning

We recommend that you seek professional financial advice from a qualified advisor when it comes to your pension. 

Although a financial coach may give general guidance on pensions, they can be a complicated area of financial planning. For example, transferring a pension to a cheaper SIPP provider is not always the best move as you may lose certain pension benefits.

Pensions are one area to be very cautious in relation to using a financial coach. You should speak to a qualified financial advisor instead – we recommend Unbiased, who will match you with an appropriate qualified professional from thousands on their database.

Speak To An Expert

Find qualified, independent and regulated finance professionals.
If you’re unsure of your options or financial position you should seek professional advice. Unbiased has over 27,000 financial experts – simply enter your details and they will match you to the best financial advisor for your needs, including a no-fee initial consultation
Find qualified, independent and regulated finance professionals.
If you’re unsure of your options or financial position you should seek professional advice. Unbiased has over 27,000 financial experts – simply enter your details and they will match you to the best financial advisor for your needs, including a no-fee initial consultation

To summarise, the areas of personal finance that you should only speak to a qualified professional on include:

  • Personalised investment advice
  • Tax
  • Estate planning
  • Pensions

To discuss these areas with a qualified professional we recommend using our partners at Unbiased.

Qualified or certified financial coach

There is no official body that provides an objective ‘financial coaching’ qualification. This is why it’s better to use the services of a financial coach who has another relevant qualification, such as CFP, ACA or CFA.

Although these are not always the best qualifications for every individual circumstance, you can at least be sure that the financial coach has been through rigorous finance training. 

They will also have professional finance experience if they are a CFP (Chartered Financial Planner) or ACA (ICAEW Chartered Accountant) as practical experience is a requirement of these qualifications.

The CFA (Chartered Financial Analyst) is a qualification most widely associated with the professional investment management industry. This is where fund managers invest hundreds of millions – sometimes billions – for institutional clients such as pension funds. 

Clearly, someone who is CFA qualified will have a deep understanding of investing and the financial markets. But, what might be an appropriate investment for a pension fund worth £10bn may not be relevant to an individual with £20k to invest!

The professional qualifications of the team members here at Generation Money includes ACA, CFA and ACCA.

How to assess a financial coach

If you’re looking to use the services of a financial coach, how do you judge whether they’re actually any good?

Here’s our how-to guide on assessing a financial coach:

  1. Check their qualifications

    As we’ve just mentioned, you should check their qualifications. If they have any, a financial coach is likely to show them off. But, you should still verify them. 

    For example, if they’re currently or were previously in an FCA authorised role they should appear on the FCA register. The Financial Conduct Authority regulates financial firms in the UK.

    ICAEW Chartered Accountants are also available to view on a public register. The same goes for CFA and other types of professional finance qualifications. 

    So, if a financial coach says they have a professional qualification it should be verifiable. If they’re a qualified financial advisor then you can also ask them for a Statement of Professional Standing (SPS). We discuss this in more detail later in this article.

  2. Verify their experience

    Does the financial coach have any verifiable experience? For example, have they worked in financial services? 

    Check their LinkedIn and check the FCA register if they claim to have worked in an ‘authorised’ role. Professional experience can be harder to verify than qualifications but it’s always good to have a quick online check of any claims.

  3. Client Testimonials

    A successful financial coach will often have plenty of positive testimonials from happy clients. 

    But, in this day and age, it’s not uncommon for companies and unscrupulous service providers to buy fake testimonials or reviews. Or even just make them up. 

    So, don’t go just by the testimonials the financial coach has on their own website – see if you can verify them in some way. Sometimes, a financial coach will look at the social media of successful clients which you can verify, or have video testimonials which are harder to fake.

    Also search for the financial coach online and look for reviews/testimonials other than the ones they promote themselves. Do they look like they’re from real people?

  4. Do they sound like they know what they’re talking about?

    If a financial coach has a social media presence, they’re probably putting finance content out there. Do they seem to know what they’re talking about? 

    I can’t tell you the number of times I’ve seen videos from so-called financial coaches or financial educators who get basic financial concepts wrong or mixed up. So try to verify a few of the claims or information they give out and see if other legitimate sources agree.

  5. Will you get on with them?

    Do you think you’ll get on well with your financial coach on a personal level? Do they seem friendly? Understanding? Empathetic? 

    Often a 15 minute intro call is worth doing just to work out if you like them as a person.

    You should also get a sense as to whether they seem trustworthy. After all, you’ll be providing them with often detailed information about your own finances such as your investments and your income.

Financial coach vs financial advisor

The main difference between a financial coach and a financial advisor is not just in the services they provide. They can also differ in qualifications, as well regulatory approval and professional indemnity insurance.

Coaching vs advice

A financial coach should not be giving out personalised financial advice – that’s to say that they should not be telling you exactly which investments to put your money into.

For example, a financial coach can teach you about investing in ETFs (Exchange Traded Funds), the best ETF platforms to do so and the cheapest platforms for the level of investment you’re considering. 

They can even discuss various types of ETFs and which ETFs may give exposure to specific assets or themes. But they should not be telling you which ETFs to put your money into. It should be clear that any decision to invest is yours, and only yours.

In short, a financial advisor can give you coaching or advice. A financial coach should only give you coaching.

A financial coach should be able to help you with sticking to short and medium term goals, such as saving and investing each month (but not which investments you choose). They can help you to keep on track via regular 1:1 sessions and review meetings.

These tend to be cheaper than regularly seeing a financial advisor, and a financial coach may be better placed to help with the psychological aspects of finance. For example, helping to overcome bad habits and develop good habits. 

If you’re looking for financial coaching for investing and trading, then you can discuss your investment process with a coach or mentor. A financial advisor may be less inclined to do this, as one of their objectives is to sell you their own financial advice.

Qualifications and regulatory approval

A qualified financial advisor should have a relevant qualification from a recognised industry body, such as DipFA (Diploma in Financial Advice) or IAD (Investment Advice Diploma). 

The highest form of qualification for a financial advisor is Chartered Financial Planner (CFP). But they should also have authorisation from the FCA and they should have professional indemnity insurance.

Insurers will only provide indemnity insurance to qualified and verified financial advisors – they will not provide insurance to someone who they think will give poor financial advice. Simply because the insurance company would probably end up paying out lots of money to their clients for poor advice that has lost them money.

A reputable financial advisor will be able to get professional indemnity insurance and show you their certification. 

You can also ask a regulated financial advisor for a Statement of Professional Standing (SPS). UK retail Investment Advisers for retail clients operating in the UK are required by the FCA to hold an SPS in order to practise.

Remember, giving financial advice is a regulated activity and should not be done without FCA authorisation. Financial coaching is not a regulated activity and you should not be receiving financial advice from an unregulated financial coach.

Financial Coach Pros and Cons

Financial coach pros

  • Can help you with a wide range of financial topics, not just investing
  • Often cheaper than a financial advisor
  • Can provide ongoing support and mentoring
  • Can provide you with a general understanding of your investing options

Financial coach cons

  • Will not (should not) give you financial advice, i.e. they should not tell you where to put your money
  • Some financial coaches have no verified credentials (e.g. CFP, ACA, CFA)
  • Can be hard to verify a financial coach’s skills and experience

When to get a financial coach

There are many reasons you may want or need the help of a financial coach. These include help with managing your debts, budgeting and saving. Or it could be to get general guidance on how to start investing or trading.

The important thing is to find a coach who has the right experience and, ideally, relevant qualifications. 

Financial coaching is often cheaper than financial advice, so if you have questions but don’t think you need specialist advice then you may be better off with a financial coach.

If you think you will benefit from ongoing support, such as managing debt or budgeting for a particular goal, then you may want to seek regular sessions with a financial coach.

Always do your due diligence on a financial coach before signing up with them – as we outline above.

Final word

So, that explains what a financial coach is. 

They’re different to financial advisors because they do not give personalised financial advice. A financial coach can help you with budgeting and saving, and managing debt. 

They can also give you general investment guidance, such as explaining different types of investments and the different investment platforms available. 

You should always check the credentials and claims of a financial coach before signing up for their services. A financial coach with relevant qualifications such as CFP, ACA or CFA is likely to be better placed to give you guidance on your personal finances.

If you want qualified financial advice, seek out an FCA regulated professional. We recommended Unibased who will connect you to a qualified and regulated financial advisor for your specific needs.

Speak To An Expert

Find qualified, independent and regulated finance professionals.
If you’re unsure of your options or financial position you should seek professional advice. Unbiased has over 27,000 financial experts – simply enter your details and they will match you to the best financial advisor for your needs, including a no-fee initial consultation
Find qualified, independent and regulated finance professionals.
If you’re unsure of your options or financial position you should seek professional advice. Unbiased has over 27,000 financial experts – simply enter your details and they will match you to the best financial advisor for your needs, including a no-fee initial consultation
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Speak to an expert

Get personalised financial advice from a regulated financial advisor including a no-fee initial consultation with our partners at Unbiased.

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