What’s the difference between a financial coach and a financial adviser?
Financial coaching is a service similar to life coaching, providing an alternative to traditional financial advice. We look at how financial coaching differs from traditional advice.
If you're looking for help with your finances, you may be wondering whether to opt for a financial adviser or a financial coach.
We'll explore the key differences between financial coaches and financial advisers.
Financial coach vs financial adviser: what are the key differences?
Financial advisers are regulated by the Financial Conduct Authority (FCA) to give advice.
You can expect an adviser to provide specific product recommendations, while financial coaches are not regulated and do not provide guidance on products.
Instead, financial coaches take a holistic view of your financial situation, taking the time to understand your financial goals and behaviour around money.
Are you a saver or a spender? Do you struggle with sticking to a budget? Are you looking for quick wins, or do you have a long-term goal?
A coach will inform and empower you, giving you the confidence to make financial decisions.
Traditional financial advisers often require a minimum asset level to advise on investments or financial planning, while financial coaches can provide support no matter your asset level or where you are in your financial journey.
There is no hard and fast rule regarding fees, but advisers can charge either a fixed fee, hourly fee, or a percentage of assets if they manage your investment portfolio, while financial coaches charge for their time.
How much you pay varies from coach to coach, depending on their expertise and experience.
Let’s now summarise the main differences between a financial coach and a financial adviser:
A financial coach is:
Trained but not FCA-regulated.
Skilled at reviewing your overall financial situation and goals.
Able to help you develop a financial plan to achieve your goals.
Able to discuss the pros and cons of various financial products, but can’t recommend one.
Comfortable working with anyone, whatever their situation.
Going to charge for their time.
A financial adviser is:
Regulated and authorised by the FCA to recommend specific products or is independent and able to offer ‘whole of market’ solutions.
Suitable for people who have little to no debt and a certain asset level to invest.
Going to charge a fixed or management fee with initial fees on top.
Able to answer specific questions such as which pension you should take out and what your retirement income will be.
Financial coach | Financial adviser | |
|---|---|---|
Regulation | Not FCA-regulated | FCA-regulated |
Qualifications | Vary, so worth checking | Must meet FCA standards |
Focus | Your overall finances and goals | Personal recommendations on products |
Products | Can explain them, cannot recommend | Can recommend specific products |
Planning | Can help build a plan towards your goals | Can advise on pensions and retirement income |
Who they work with | Often people at any stage | A range of needs, from pensions to protection |
Choice of products | Not applicable | Independent, or restricted to certain providers |
Fees | Usually charges for their time | Fixed, hourly, or a percentage of assets, plus any initial fee |
When might a financial coach or a financial adviser suit you?
A financial coach may suit you if you want help with budgeting, clearing debt, or building saving habits, and you do not need a product recommendation.
A financial adviser may suit you if you want personal recommendations on pensions, investments, or other products. Some people start with a coach and speak to an adviser later, and some use both.
Get expert financial advice
A financial coach can help you build money habits and work towards your goals, but is not FCA-regulated and cannot recommend products.
A financial adviser is regulated and can give you personal recommendations on products such as pensions and investments.
Which suits you depends on what you need help with, and some people use both. If you want to speak to an adviser, Unbiased can match you with a qualified financial adviser to talk through your options.
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