Financial advisor or coach meeting with clients.

How To Become A Financial Coach

Dan Rafter5-minute read
September 21, 2020

You know personal finance. Maybe you’ve paid off $80,000 of debt in 3 years. Maybe you’ve saved enough money that you can retire at 40. Or maybe you once had a FICO®credit score under 500 and now it’s a sterling 810.

You’d like to share the financial knowledge you’ve gained with others. Maybe you’d even like to build a consulting business in which you help others boost their own personal finances.

You can do this as a financial coach, someone others turn to for advice on how to solve their own financial problems. And if you’re successful, you might build a deep roster of clients, all of whom need your help with drafting household budgets, building credit scores and paying off credit card debt.

Think you have what it takes to build a career as a financial coach? Here’s the scoop on what you need to do to get started in this field.

What Is A Financial Coach?

Though people sometimes confuse the two, there’s a big difference between a financial coach and a financial advisor.

A financial coach helps clients master the basics of personal finance. They also help their clients build healthy financial habits. Coaches might work with clients who've never created a household budget. A financial coach will work with them to determine how much money is coming into their home and leaving their household each month, and then help them craft a budget.

Other clients might need help with paying down high amounts of credit card debt. A financial coach will help them develop a monthly spending plan to whittle down these debts. Others might need help improving a weak credit score. A financial coach will help these clients change the negative spending habits that led to this low credit score.

A financial advisor, though, provides more in-depth financial counseling. These professionals work with clients on long-term financial planning, such as saving for retirement, investing their wealth in the stock market or diversifying an already existing investment portfolio. They might work with clients who want to retire early, helping them hit the financial goals they need to reach this milestone.

Larry Duffany, owner and financial coach with Raising Hope Financial Coach in Thomaston, Connecticut, said financial coaches often work with people before they're ready to meet with a financial advisor. These people usually have financial challenges they’re trying to overcome. Duffany helps them work through their financial decisions.

"I work with a lot of people who have made mistakes with money," Duffany says. "They might be facing a lot of debt. They need help getting out of it. They want to know how they can build an emergency fund. People might meet with financial advisors after they've had some success and built some wealth. They meet with a financial coach when they're trying to get to that point."

Another big difference? Becoming a financial advisor is a far more complicated process, while anyone can brand themselves as a financial coach.

Do You Need A Degree To Be A Financial Coach?

You can become a financial coach without earning any specific degree. You also don’t need to be certified by any governing body. This isn’t the case if you want to be a financial advisor.

To be a financial advisor, you'll need to be licensed and registered with a governing body known as the Financial Industry Regulatory Authority. To earn their license, financial advisors must first pass a series of exams. A college degree isn't necessarily required of financial advisors, but most will have at least a bachelor's degree.

Allison Bishop, a certified public accountant and financial coach based in Portland, Maine, said that she doesn't consider herself a competitor with financial advisors. That's because the two professions are so different.

Proof of this? Bishop said that most of her clients come as referrals from financial advisors who get calls from people who want to talk about credit card debt, student loan debt, credit scores or the challenges of living within a budget.

"They often aren't good clients for financial advisors, as they either don't have investable assets or they do but they're all tied up in employer plans," Bishop said. "Honestly, this work is so rewarding, I can't imagine a better job."

What Skills Or Traits Would A Financial Coach Need?

While you don’t need any degree of specific training to become a financial coach, you will need certain skills to succeed in this field.

First, you do need to be knowledgeable of a wide range of personal finance topics, everything from credit scores and budgeting to the best methods to pay down credit card debt or the best ways to save for a down payment on a home. Clients will only work with you if you can prove to them that you can help them with their financial issues.

Experience helps, too. Clients might respond to you if they see that you went through your own financial challenges and resolved them. Being able to tell clients that you paid off thousands of dollars of your own credit card debt or that you’ve already built a retirement nest egg before you reached the age of 45 might help you attract more clients.

You’ll need sales skills, too. It’s one thing to know money. It’s another thing to attract clients. You’ll need to promote yourself through social media and traditional advertising. You’ll also need to get quoted in financial publications to build your creditability. Many financial coaches build a client base by hosting personal finance seminars at their local libraries or community centers.

You should be a people person, too. Even if you are a financial whiz, you’ll struggle to attract clients if people don’t like working with you.

Elisa Robyn, who recently transitioned from a 25-year career as a professor and academic dean into private practice as a wealth relationship expert in Denver, said that it often makes sense for people to work with both a financial advisor and a financial coach.

The advisor can help people master their investments and grow their wealth, while a financial coach can help clients learn from past financial mistakes and avoid those mistakes in the future.

A financial coach often brings life experiences with them when consulting with clients, Robyn said.

"They often have solved their own financial issues and learned how to help people in the process," Robyn said. "They usually do not advise people on specific investments, but rather link financial budgeting and behaviors with some psychological or emotional support."

Finally, financial coaches need to be skilled as educators, otherwise their lessons won’t have any impact on clients.

"To be successful, you have to be a teacher, first and foremost," Duffany said. "That's not just someone who stands in front of people and spouts off. You have to listen and listen carefully. When dealing with money, you are dealing with a lot of emotion. You need to help people work through those emotions."

Duffany says it also takes time to build your financial coaching business. You have to earn the respect of clients to steadily build a business. This won't happen quickly.

"It takes at least 4 years to be an overnight success," Duffany says.

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Dan Rafter

Dan Rafter has been writing about personal finance for more than 15 years. He's written for publications ranging from the Chicago Tribune and Washington Post to Wise Bread, and