What’s The Difference Between a Money Coach and an Independent Financial Adviser?

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I sat and pondered this question recently, so I thought I’d share my ponderings! I’m going to a lot more networking meetings, and it struck me that some people didn’t “get” what I did. I’m not an IFA (independent financial adviser), so what am I then?

Money coaching is becoming more and more needed as we find ourselves in a situation nationally of having small numbers of IFAs compared to the vast number of individuals who feel they need help.

Money coaches are not regulated, but some have done formal coaching qualifications. We do a lot of our own study to do what we do, but many coaches go into their work due to experiences they have had themselves in the past – the best teachers often come from those who have had to face financial problems and have come out on the other side.  

What Does A Money Coach Do?

A money coach helps to guide people through the confusing complexity that is the financial world. They can educate, inspire and support. But they cannot advise on specifics. So a money coach cannot tell you what to invest in specifically, but they can help point you in the right direction for you to do your own research.

The way I see this in terms of my medical knowledge, is the difference between a midwife and a doula. A midwife is a professional who is highly regulated in order to practice in the community or on labour wards. They offer support, but continuity is often a problem. 

Labour wards are busy places, often necessitating a midwife to be with more than 1 woman at different stages. I know that midwives dislike this way of working, and would love to be able to dedicate more time to their ladies, but the current state of affairs dictates otherwise.

So a pregnant woman may feel that she  wants more support, and might employ a doula as well. A doula is someone who provides guidance and support during pregnancy and labour, but they aren’t necessarily trained formally in obstetrics. They may have felt called to their vocation based on their own experiences. They are highly helpful to the right person, but they generally wouldn’t be involved in the actual birthing of the baby.

This is the same with money coaches and financial advisers. They can work well together and as I see it, have different things to offer.

What Does A Financial Adviser Do?

A financial adviser can be independent (can use any supplier for investing/savings products etc), or restricted (limited to the institution they work for, so can only advise on these products). 

They are regulated by the FCA (financial conduct authority) which means they must meet strict criteria to be able to advise on what to do with your money, keep up to date with the latest guidance, and are held accountable when things go wrong. This is partly to blame for why there are fewer financial advisers around. 

Many advisers would say that they find it hard to offer help to those who have no money to invest or save. The regulation and paperwork involved simply does not make it cost effective. They generally will charge a flat fee for their service +/- an ongoing percentage of your portfolio.

While there are many awesome female advisers coming through who are approaching things with a fresh perspective, they are few and far between. I’m sure many of them would love to help people at the start of their journeys too, but as with midwives, dwindling numbers and regulation make it difficult.

How Do I Pick??

So here are my suggestions for how you might pick:

What is your current financial situation?

If you:

  • have just inherited a huge sum of money, get yourself an IFA
  • are about to retire and want help with tax planning or moving your pension, speak to an IFA
  • have a complex situation with multiple assets in multiple countries – get an IFA

Basically – if it’s complicated, get advice. Use https://www.unbiased.co.uk/ or ask me for a recommendation and I’ll put you in touch with ones I trust.

However, if you are at the start of your journey and have nothing saved or invested yet (or very little saved/invested <£40,000) then find a money coach. Even if you have just come into an inheritence, you may want to educate yourself first before speaking to an advisor to feel more able to make empowered choices.

IFAs can only work as well as the information you give them, so if it’s organised and clear, they’ll be able to do their job far better.

Do you gel with the person?

Does this individual speak to you on your level? Do they make you feel safe and not patronised? Gone are the stuffy suit days – you don’t have to go with someone who makes you feel stupid. What does your gut feeling say when you talk to the person? Do they make you want to work with them, or do they make you feel icky?

How long have they been around?

Are they established? Do they have testimonials or offer you testimonials if you ask for one? Don’t go on appearances alone – they may have a flashy website, but what’s underneath the surface? Equally, they may not have the best looking website, but may be golden when it comes to helping you with your money! Join their groups, follow what they do and you’ll get a feeling about whether you would want to work with them or not.

Who do they love helping?

For me personally, I love helping women who are at the very start of their wealth journeys, particularly those with an entrepreneurial and heart-centred spirit. These women are not yet investing, but want to, may have debt and want to get out of it, feel confused and stuck about how to arrange their finances, and want help and support to navigate through their mindset blocks, so that they can live life on their own terms.

Every money coach is different though, so who you choose to help you comes down to personal preference. Do you prefer male or female? Young or old? There are lots of options out there!

How do you like to work?

One to one? In a group? Online through self-study? Every money coach has their own teaching style, so if you love being online, find one who can help you this way. If you’re going with an IFA, do they help you to understand what they are doing? If they are leaving you mystified, find another one.

Final Thoughts

Ultimately, it comes down to you and your personal situation and preference. I will say this. Don’t be tempted to give all your power away. Be mindful of the little voice inside telling you that you cannot do it yourself and you just need to give your money away to someone to manage. 

You need to have a basic understanding of what an IFA is doing with your money, so if it helps you to learn first, find a money coach you can trust to teach you the basics, then in the future, if you employ an IFA, you know the questions to ask to be in control. You then hold the power and are making conscious choices with your money.

Good luck on your wealth journey!




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