Having proper guidance is essential in all fields of life. You could take up golf, learn the piano or experiment with hang gliding on your own, but you probably wouldn’t maximise your potential – and it could go horribly wrong! Learning from those with experience is likely to result in faster development and becoming proficient yourself.
Even just a few pointers can go a long way if you get stuck (perhaps not with hang gliding though!), which is why having an expert to turn to when you need them can be really useful.
When it comes to our finances, it is common to turn to friends or family who may have been through a similar experience or had to deal with a similar problem or quandary. However, situations are often different. What is right for one individual in certain circumstances may not be right for another. That’s when the guidance of a trusted third party can help – a financial coach. But what is a financial coach and how can they help you?
Financial coach definition
A financial coach is a professional who helps you understand your financial situation better and teaches you the skills to manage your finances better. They’ll help you set your financial priorities, create a financial plan, and give you support and motivation. They’re there to help you make better financial decisions to reach your goals. This might include buying a first home, saving for a wedding, or investing for retirement.
The focus is on financial health rather than wealth, so their services can appeal to people of all ages and financial situations. It’s about feeling in control of your finances rather than feeling controlled by them.
If you are looking for help to improve your money situation, financial coaching can be a valuable resource. They can help you get on the right track and achieve your goals without the additional cost and time associated with full financial planning.
What should I look for in a financial coach?
A financial coach offers a more affordable and accessible alternative to traditional, regulated financial advice.
They are able to offer guidance but cannot recommend specific financial products and services, or manage your investments on your behalf. They are therefore not suitable for those with more complex affairs who need technical recommendations surrounding retirement or tax management.
The Financial Conduct Authority (FCA) doesn’t currently regulate financial coaching, so you need to tread carefully when choosing the right service. It is best to use a coach who has financial advice training and is part of a business regulated by the FCA. Not only will you benefit from more formal experience and qualifications, but a certified financial coach can always refer you to an advisory service should the need arise.
Beware of coaches without qualifications and experience. And be very wary of unsolicited approaches regarding financial reviews more generally, they could be a scam. Self-proclaimed social media gurus might sometimes offer useful tips but some are charlatans who are to be avoided. Always question whether these people have your interests truly at heart. In particular, unrealistic promises and a focus on particular investments or services are red flags. Instead, a proper financial coach helps educate people to better manage their money and empower them to make beneficial financial decisions themselves.
You may also have heard the term ‘robo’ advice or guidance. This is an online process that offers personalised information at the point that it is required, for instance to set up an investment or savings account without the need for regulated financial advice. There is usually no human involvement with robo-guidance, so it is different to financial coaching which is very personal, but in some circumstances it can be useful for a specific transaction or one-off need.
It is also worth noting that advice and coaching surrounding debt requires a specific skillset and authorisation. If you are struggling with debt, there are lots of free advice services available across the UK that can let you get immediate, personalised help.
Is a financial coach worth it?
Coaching can be perfect if you are a financial beginner and have lots of questions to ask. You can choose exactly what you want to talk about, and it can give you the answers you need to start thinking clearly about your next steps. For the more experienced it can be valuable to have an independent person reflect on what you are doing already and what you could improve to make the most of your savings and investments.
Sorting your finances and having a clear plan can have a positive impact more broadly on life and wellbeing. What’s more financial coaching is also very accessible. We offer a free, no commitment, 15-minute call to discuss your needs with a qualified financial planner, and you can then opt for a more in-depth video call at a fixed hourly fee of £150 if you want to get the further help you need to make the right decisions.
Common financial coaching questions
Some of the most common questions our financial coaches receive are:
- How should I start investing?
- Am I saving enough for what I need in retirement?
- How do pensions and SIPPs work?
- How should I think about property and mortgages?
- How does inheritance tax work and how much will I have to pay?
Find out more about our OneStep Financial Coaching.
Nothing on this website should be construed as personal advice based on your circumstances. No news or research item is a personal recommendation to deal.
Do you have a tricky financial question?
Financial coaching can be perfect if you have lots of questions to ask. Speak to a real-life financial planner, who can help you gain clarity around your money situation and take the next steps with confidence.OneStep Financial Coaching