Financial Coaches, Counselors, and Planners: How Do They Differ and Which Might Be Right for You?
From kindergarten to college, the core of our education is focused on English, Reading, Science, Math, and History. We are taught to memorize geometric proofs and analyze Paradise Lost, but what about financial literacy? Where are we taught about budgeting, debt management, or preparing taxes? Unless we learn from our parents or study finances as adults, we typically are not taught how to manage money, let alone how to prepare for retirement or finance large purchases. Luckily, a number of different financial professionals exist to help bridge the gap between what you should have been taught and what you were actually taught.
A financial coach is a great resource for teaching you how to manage your own money. Their primary goal is to educate. They will teach you fundamental financial principles so that you can eventually make well-informed financial decisions on your own. For example, a coach may teach you how to budget by balancing your income and expenses or give you tips for tackling your credit card debt. Or if your goal is to purchase a home, they may inform you of the traditional steps it takes to secure a loan. With a coach, you will (a) always be in charge of your own money and (b) be responsible for implementing their advice.
A financial counselor, however, is a little more involved than a coach. For example, if a client tells their financial counselor “I wish to buy a home next year,” the counselor will have specific recommendations based on that client’s income, debt load, and financial stability. They would walk the client through the process of saving for a down payment and choosing the best financing plan for their needs. This approach is more hands-on than the coaching approach, but far less in-depth than that of a financial planner.
There are also some financial counselors that provide financial therapy. As the name suggests, financial therapy seeks to decode a client’s history and experiences to discover why someone might have a dysfunctional relationship with money. Financial therapists guide clients to break through personal roadblocks that may be hindering their financial success.
A financial planner, or financial advisor, provides expert-level, personalized wealth management and longevity planning. We can’t speak for all financial planners, but the ideal financial planner begins by meeting with a client (often multiple times) to really uncover that individual’s current and future needs, dreams, and goals. The client and financial planner then work together to pinpoint milestones on the path to reach those goals. Once the goals and timeline are identified, the advisor will build a comprehensive financial plan that includes investment strategizing, estate planning, and insurance coverage to set their client up for success. The advisor then executes and monitors the agreed upon plan over time to ensure that client’s plan remains in alignment with their goals.
At Northstar Financial Planning, we feel that our financial planning services are especially valuable to clients undergoing a major life transition such as death, divorce, the sale of a business, marriage, retirement , or inheritance. We are passionate about guiding our clients through these confusing times while empowering them to build a stable financial future that will accommodate their lifelong goals.
With the lack of financial education available to our youth, it’s a great thing that there are so many different types of financial professionals available to help bridge the gap when we have questions on managing our finances. But helping clients cultivate financial wellness is really at the heart of what each of the above financial professional aims to do. “Coaching,” “counseling,” and “planning” are simply different approaches that cater to different needs.
If you feel that you may be in need of a Certified Financial Planner ® to secure your financial future, our advisors at Northstar Financial Planning would love to help. Schedule a complimentary Get Acquainted Meeting with us today. We look forward to meeting you.