Financial Advisor vs. Financial Coach
Five key differences, and which is right for you.
by Dee Zimmerman |
As a coach, I often experience the challenge of communicating how I help others. One specific challenge is explaining the differences between financial advisors and financial coaches. Many don’t know the distinctions. And many don’t know coaches are here to help in powerful ways!
So don’t miss this fall opportunity—our Retire Well group coaching program! Read on.
But first, let’s start here…
What is a Financial Advisor?
The title Financial Advisor is an umbrella term for lots of different financial experts. Examples include investment advisors, broker-dealers and brokers, certified financial planners, financial consultants, portfolio managers, and wealth advisors. Credentials differ, as well as fee structures. The most common fee structure is AUM (Assets Under Management) where the advisor charges a percentage of your total assets, annually. A cost-effective structure less common is an hourly or flat fee. And there are those that earn commissions directly from mutual funds or other financial products, which presents a significant conflict of interest.
When to work with one?
NEARING RETIREMENT: While you’re working and saving, your investment goals are pretty simple—growing your assets! You can make these grow on your own, with just a little education and a simple approach. However, as you near retirement, things get more complicated. This might be a good time to connect with a financial advisor. The best ones are Certified Financial Planners (CFP). Make sure they work solely on your behalf—no products!). And always carefully vet because there are a lot of bad ones out there, which is unfortunate for the good ones!
MANAGING EMOTIONS: You may want to work with a financial advisor even earlier if you have accumulated assets, and you believe you would react to the market emotionally with those investments. Experts can give you perspective, and help you stay the course.
When to work with a Financial COACH.
Know the 5 key differences, so you can choose what is right for you.
1 – Time and Attention
Coaches are much more hands-on, like your personal trainer in the gym—demonstrating, observing, challenging, tweaking, and encouraging. We meet frequently and are with you every step of the way, on your journey to financial health.
2 – Digging Deep
Coaches dig deep to examine and free you from the money history, perspectives, and behaviors that are tripping you up. Again, just as a fitness coach will seek to understand your unique struggles, we will do the same, and help you change your money.
3 – Comprehensive
Coaches will address every area of your money world, and help you build competency in areas that are lacking.
4 – Relationship to You
Coaches are 100% in your corner! Good advisors are fiduciary and nothing else (legally obligated to act in their client’s best interests), and so are we. But because coaches will never manage your assets, we usually work based on a monthly fee or program fee.
5 – Credentials
Coaches typically do not have the licenses and certifications of financial advisors. A coach is focused instead on helping you untangle the knots in your money world so you can save. And while a coach can educate about the investing world (as I do), they will not recommend specific stocks or funds.
What makes DZ Financial Coaching unique?
We’ll start by untangling the knots in your money world, so you can save! But we don’t have to stop there! It is a driving commitment of mine to educate you about the investing world, and guide you with retirement planning. Most financial coaches do not do this. But with my 1:1 coaching and/or Retire Well group program, you can get the education you need—while working and saving—to manage your investments ON YOUR OWN. Wouldn’t that feel great? I encourage you to learn how! It doesn’t have to be complicated. And with a cost-effective DIY approach, you can watch your savings grow even more!
RetireWell.
Curious? Learn more about our Retire Well group program, where you will create a unique vision for your retirement, and learn the best ways to get there.
https://www.dzimmermanfinance.com/events/retire-well