How to become A Financial Coach

Gone are those days where humans stayed stuck in a bottomless pit of physical, emotional or financial misery. While doctors and mental healthcare experts take care of the body and the mind, financial coaching is a relatively new domain with the potential to evolve in the future. A Financial Coach focuses on the emotional and behavioural side of finance, empowering clients to recognise and emerge from the quagmire of unhealthy money habits. 

• Financial Life Coach
• Money Coach
• Finance Counselor

What do Financial Coaches do?

A Financial Coach would typically need to:

• Identify the financial problems of their clients and understand their typical behaviours and emotions in response to money matters; help them devise practical and strategic solutions
• Meet with clients and work with them to trace their spending and saving habits and pinpoint the strengths and weaknesses in their financial management
• Build clients’ financial literacy by filling knowledge gaps; answer their queries, and resolve their doubts as best as possible
• Break down complex financial processes and plans into manageable steps for clients to understand and implement, such as six-month savings 
• Play a vital role in clients’ personal development by helping them build emotional stability and mental strength to tackle money challenges
• Help clients establish financial goals, build constructive and dynamic attitudes and replace unhealthy with healthy financial habits
• Organise follow-up meetings; motivate and support clients in diverse ways to meet their goals and achieve the lifestyle they wish for

Many Financial Coaches are self-employed or typically work in the finance, banking or insurance industry. You may work in an office or from your home or visit clients.

Travelling is likely since Financial Coaches may need to attend meetings with clients at their homes or other venues.

Financial Coaches may work in part-time or full-time jobs depending on whether they are self-employed or working with an organisation. If working in an organisation, then the work schedule is typically from 9 a.m. to 5 p.m.

Self-employed Financial Coaches may work at their convenience. However, to attain a stable income, you must work six to eight hours a day and take a day off just once a week, which may not necessarily be a Sunday since you may need to set up client meetings on weekends.

Finding a new client or job might seem challenging. You can boost your client or job search by asking for referrals from financial advisors and past clients or directly contacting companies and individuals. Job fairs and inquiries at staffing agencies may yield job opportunities.

You can leverage your social media handle to locate jobs or potential clients and scale up your business as a solopreneur. You can also try getting clients with the help of podcasts and free webinars.

Financial Coaches are generally employed by:

• Wealth Management Firms
• Insurance Companies
• Banks
• Brokerage Firms

Professional associations and organisations are crucial for Financial Coaches keen to pursue professional development or connect with like-minded professionals in their occupation. Membership in one or more adds value to your resume while bolstering your credentials.

• Simultaneously wearing the different hats of a psychologist, asset manager and financial planner
• Managing client expectations, which may sometimes be far-fetched in terms of investment returns and interest rates
• Helping clients stay on track to fulfilling their long-term goals rather than reacting to every market movement
• Balancing awareness of client behaviour with the need to stay current with the latest information
• Guiding clients towards reliable data sources to avoid errors arising from misunderstandings or misinformation
• Engaging emotionally with clients to understand their money-related behaviours, habits, fears, attitudes, goals and expectations

A potential Financial Coach typically requires a duration of supervised experience, regardless of the academic qualification. Thorough research regarding the career, reading various articles, and shadowing experts working in the domain of Financial Coaching, prove your commitment towards the field to your prospective clients.

Aspiring Financial Coaches may acquire experience by managing their own or their family’s finances, to begin with, and then helping others. You may also work in part-time or full-time roles while studying or volunteer your services for a low-income family, helping them build healthy financial habits, assets and stability.

Search for opportunities that various online financial coaching firms offer via their official websites. You can search the careers tab on financial coaching websites to gain hands-on experience to start your firm later.

Financial Coach certifications typically require industry experience. Build your initial experience working in the banking sector, asset development, economic development, and related fields. It is also advisable to have experience working with budgeting, setting sustainable and long-term financial goals, and debt management of low-income families to better understand the physical and emotional demands of the career.

While there are no specific academic requirements, aspiring Financial Coaches would do well to acquire a bachelor’s degree in finance, accounting, economics, law, business, or mathematics or related subjects. A degree in psychology is helpful in understanding and dealing with client behaviour. Supplement your qualifications with online courses in investments, taxes, estate planning and risk management. Some colleges and universities offer programs in financial advising.

While not mandatory, certification demonstrates a Financial Coach’s competence in a skill set, typically through work experience, training, and passing an examination. Successful certification programs also protect public welfare by incorporating a Code of Ethics. The Certified Financial Planner accreditation is a valuable and globally accepted certification for individuals seeking to illustrate their commitment as Financial Coaches.

Individual government entities conduct the licensing process. It typically requires the passage of an examination in addition to the fulfilment of eligibility requirements, such as a minimum level of education, work experience, training, or the completion of an internship, residency, or apprenticeship. Since travel to clients’ homes is typically required, possessing a full driving license is useful. 

Performance, experience, and the acquisition of professional qualifications drive career progression. Employees with consistently high levels of performance may be eligible for promotion every two to three years.

As you gain experience and rise to senior positions at a large firm, you may earn an annual bonus in addition to a high base salary. Financial Coaches may also work their way up the ladder towards high net worth clients, which raises their yearly compensation.

You may use your personal financial experiences to find your niche, such as extracting your clients from debt, managing cash flow, or even financial planning related to separation or divorce.

Once you have built a network of contacts and clients, you may work independently in a small office space or launch a website to work with clients. You may earn more than by working in a regular job with financial firms. 

Candidates who consistently upskill themselves depending on various market requirements and have relevant experience, qualifications and solid financial literacy have the best job prospects.

Continuing professional development (CPD) will help an active Financial Coach build personal skills and proficiency through work-based learning, a professional activity, formal education, or self-directed learning. It allows you to upskill continually, regardless of your age, job, or level of knowledge.

Read books and blog posts, and listen to podcasts related to finance. Teaming up with certified professional advisors and working together is another option to engage in professional development. Once you are employed in a corporate setup, working with clients from different financial backgrounds also helps you expand your knowledge and skills.

Financial Fitness

A Financial Coach is akin to a fitness coach, except that the entity in question is financial wellbeing rather than physical health. Fitness trainers help clients build a positive relationship with food and exercise, encourage them to take active charge of their overall wellbeing while supporting and motivating them through the process. Similarly, Financial Coaches help clients cultivate a healthy attitude towards money matters, empower them to take effective charge of their financial management goals and strategies while counselling and guiding them on their journey.

Financial Advisor vs Financial Coach 

The careers may sound similar but, at best, are two sides of the same coin. While financial advisors help clients with their financial planning, investments, taxes, estates, insurances, and other similar matters, they are not concerned with the clients’ emotional or behavioural relationship with personal finances.

The average person is plagued by credit card debts, raising funds for emergencies, and inadvisable spending habits. It takes a Financial Coach to address these matters rather than create investment strategies or financial plans. 

Financial coaching aims at helping clients develop the tools to balance the behavioural and economic aspects of money management by encouraging financial literacy, helping them resolve their cash flow problems, and building a healthy relationship with money. Financial Coaches also work with low-income clients. Once these clients make enough money, they can use a financial advisor’s services to decide where to invest to grow their money.

Potential Pros & Cons of Freelancing vs Full-Time Employment

Freelancing Financial Coaches have more flexible work schedules and locations. They have full ownership of the business and can select their projects and clients. However, they experience inconsistent work and cash flow, which means more responsibility, effort and risk.

A full-time Financial Coach, on the other hand, has company-sponsored health benefits, insurance, and retirement plans. They have job security with a fixed, reliable source of income and guidance from their bosses. Yet, they may experience boredom due to a lack of flexibility, ownership, and variety.

When deciding between freelancing or being a full-time employee, consider the pros and cons to see what works best for you.

Only about a third of adults across the world have a grasp of basic financial concepts.

Educating and counselling clients, empowering them towards making independent, well-informed and mature financial choices that reflect their values and short- and long-term goals, helping them overcome cash flow hurdles - with that many duties as a Financial Coach, you can hardly complain of monotony. Armed with sharp financial acumen and a strong desire to help people, you are on a path that leads to your own and your client’s monetary success.

Before launching your career as a Financial Coach, clearly identify your reasons for doing so as they will guide your future decisions. Build trust by telling the story of your financial journey. Charging your clients is beneficial to both you and them - it makes them accountable and proves that you know how to keep your finances in order. Liaise with people who would provide excellent referrals.