21 Jan 2024

5 questions to decide if financial coaching could be valuable for you

Financial coaching is not the same as financial advice. It’s estimated that less than 10% of the population receive regulated financial advice. This tends to be wealthier individuals who already have enough financial assets to meet the criteria and fees of an adviser. For those at the other end of the spectrum, in severe financial difficulty, assistance is available from organisations like the Citizens Advice Bureau and the Step Change debt charity.

For everyone else in the middle, financial coaching offers a superb opportunity to improve financial wellbeing. It could be your chance to build understanding, create wealth and become better prepared for the future. In fact, I believe the impact can be so positive, that I moved out of the regulated advice arena to dedicate my time to coaching.

My conversations with clients are now much more centred on the person, rather than the technicalities of money. Emotions come up regularly, but it’s important to understand that I’m not a therapist. Having said that, many clients find the coaching experience therapeutic. For many, it can be transformational.


So, what is financial coaching?

If it’s not advice and it’s not therapy, what is it? First of all, let’s dwell a little longer on what financial coaching is not.

Most importantly, it’s not about the sale of financial products. A financial coach will not earn commission, nor will they charge fees based upon the level of your wealth. It doesn’t matter how much or how little money you have now. In addition, a financial coach will be unable to liaise with product providers on your behalf.

Instead, financial coaching will focus more on your own financial knowledge, habits and attitudes around money. This could be looking at ways to improve your emotional relationship with money. Or it could be on a more practical level, such as finding out how to organise your finances better, increasing your income or focussing on your spending and saving. For some, it could just be taking time to understand your pensions and investments.

Ultimately, it’s about building financial confidence, changing behaviours and empowering you to make your own decisions around money.

Ask yourself the following 5 questions to find out whether financial coaching could be right for you.


1. Do you feel sceptical about financial advice or worry that you can’t afford it?


Trust is one of the most important aspects in a financial advisory relationship. Unfortunately, due to past mis-selling scandals and a legacy of commission-based sales, some people find it difficult to trust advice providers. Others feel they are not wealthy enough for an adviser, or that fees will be unaffordable.

Coaching has no link with financial products and instead, the focus is very much on you. There can be no conflict of interest around product sales or commission and you simply pay coaches a fee for their services.

Generally, because coaches are not weighed down with the costs of regulation, it can be a more affordable option too. And it’s accessible by more people because you don’t need a minimum level of savings to get started.

That’s not to say that regulated advice isn’t valuable. It is. In fact, coaching can be a stepping-stone towards advice, or even as a complimentary service.


2. Would you like to improve your financial confidence?

According to this financial capability survey for the government’s Money & Pensions Service, 47% of us do not feel confident making decisions about financial products and services. 55% of working-age adults do not feel that they understand enough about pensions. Coaching and mentoring can be an interactive and even fun way to build your knowledge, good money behaviours and confidence.


financial confidence
Financial coaching can boost confidence

For some tips on how to improve your confidence with money, read my article here.


3. Do you sometimes feel anxious or stressed about money?

You don’t need to look hard for stories and headlines about money anxiety. This news article from a couple of years ago suggests that 77% of us are stressed about money. But we don’t talk about it!

Financial coaching can address this directly, because it’s very much about bringing your money thoughts into conversation, in a comfortable, informal and confidential way.

It’s worth noting that it’s not just a lack of money that causes stress. Virtually everyone suffers from financial anxiety to some degree, regardless of their bank balance.


4. Do you and your partner disagree or even argue about money?


This is fairly common, because as individuals, we all have own financial habits and attitudes. Once you realise that our attitudes to money are pretty much set by age seven, it can be easier to understand why we have such deep-rooted differences in opinion.

In fact, money worries are the main reason for break-ups, driving one in ten married couples to split. According to this article by the BBC, the first working Monday of the year is dubbed ‘Divorce Day’ as the strain of festive finance takes its toll.

Coaching can be a great way to explore money attitudes in more depth, learn to appreciate different viewpoints and find common ground. Read more about money habits and attitudes in my blog here.


5. Are you willing to invest some time and effort into your own development?

With coaching, it’s important to understand that you will be more involved in finding your own solutions. Your coach will provide education, support and guidance, but they will not tell you what to do.


personal growth
Financial coaching can boost personal development and growth

This is about empowering you to take control of your lifestyle and your money. You need to be prepared to learn and reflect, not just about money, but about yourself. It will require a bit of effort, but it’s your actions that can create the transformational experience.

If you want to forget about money altogether and hand it over to someone else to manage on your behalf, you need a regulated adviser, not a coach.


Financial Coaching: Summary

If you answered “no” to all of these questions, then financial coaching may not be for you. You may feel that your personal finances are already in great shape. Or you might have no time or inclination to develop your own skills and prefer to hand it all over to a regulated adviser.

If you answered yes to one or more of the questions, working with a financial coach could significantly improve your financial wellbeing. Whether that be helping you develop knowledge of personal finance, building confidence or exploring your relationship with money.

Read about the Five Blocks of Financial Success to get a deeper sense of where your financial priorities might lie. And if you would like to arrange a chat to find out more, click the button below. You’ve nothing to lose, but half an hour of your time!

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