Financial coaching is all about helping people get a better handle on their finances and improve their relationship with money. Professional credentials are not a requirement for launching a career as a financial coach, but getting certified could give you a competitive edge. If you’re interested in a financial coaching certification program, there are several options to choose from.
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What Does a Financial Coach Do?
Financial coaches work with clients to help them understand their financial situation and create strategic plans for reaching their goals. Some of the things a financial coach might help with include:
- Creating a realistic budget
- Developing a plan to pay down debt
- Saving for short and long-term goals
- Reframing their relationship with money
- Understanding what motivates financial decision-making
- Developing positive financial habits
Someone who’s struggling with a particular challenge may reach out to a financial coach. Maybe this person is great at setting goals, for example, but rarely achieves them. So they sit down with a coach to try to figure out what’s hindering their progress.
Are financial coaches and financial advisors the same? Not exactly.
Financial advisors may cover some of the same topics mentioned above, but also offer investment management services and can assist clients with building portfolios that further their goals. Advisors can also hold securities licenses or professional certifications, which typically determine the scope of services they offer.
A financial advisor can also be a financial coach or offer coaching services to clients. Financial coaches, meanwhile, are not always financial advisors, and may be more limited in what they can help their clients with.
Obtaining Financial Coaching Certification
There’s no single universal financial coaching certification. Instead, there are several training programs you could complete that will equip you with the knowledge you need to offer coaching services to clients.
That being said, here are some of the options you might choose from:
The Accredited Financial Counselor Certification is offered through the Association for Financial Counseling and Planning Education (AFCPE). The AFC certification is considered to be the gold standard for coaches and other financial professionals who are interested in life-cycle planning.
There are four steps to get certified:
- Satisfy education requirements
- Complete an in-person proctored exam
- Meet experience requirements (1,000 hours)
- Sign the ACFPE code of ethics
The ACFPE offers multiple pathways to complete the education requirements, including a self-study program and an accelerated pathway for individuals who hold other professional designations.
The National Council of Financial Educators offers a certification program that’s designed for people who are interested in building a coaching practice. You can choose from three coaching packages or create a custom training plan.
Coursework covers several core areas, including:
- The coaching process
- Psychological and behavioral finance aspects of coaching
- Coaching and counseling strategies
- Personal finance knowledge
- Teaching methodologies
- Coaching standards and professional conduct
You’ll have access to prerecorded training videos, live weekly webinars and course manuals. If you’d like to upgrade your coaching package you can add on other resources, including a custom website that you can use to launch your business once you obtain certification.
The Accredited Personal Finance Coach certification from Sage Financial Solutions is designed for credentialed professionals who want to expand into coaching services. To complete the program, you must have at least one approved co-requisite from this list:
- Money Management Essentials (MME)
- Accredited Financial Counselor (AFC)
- Certified Financial Planner™ (CFP®)
- Chartered Financial Consultant (ChFC)
- Chartered Financial Analyst (CFA)
- Certified Financial Therapist (CFT)
- Certified Public Accountant (CPA)
You may complete your co-requisite credential alongside your APFC certification. If you are not a financial professional, you can complete the Financial Coaching Foundations (FCF) program with no co-requisites required. Completion earns you credit toward the APFC certification.
The National Association of Certified Credit Counselors offers numerous certification programs, including one for financial and career coaching. The program is designed to enable coaches to assist clients with managing their financial and professional lives.
You’ll need to complete a prerequisite certification and pass a coaching exam. You can satisfy the prerequisite requirement by completing the NACCC’s Certified Credit Counselor or Certified Financial Health Counselor program.
Exams must be completed in person at an approved facility and the test consists of 100 multiple-choice questions. You’ll receive a study manual that you can use to prepare for the exam. You must get a minimum of 70 answers correct to pass.
How to Get Financial Coaching Clients
How you approach finding clients can depend on where you’re starting from.
If you run an established advisory business, then you may first offer coaching services to your existing client base. That allows you to test the waters to gauge how in-demand coaching might be in your niche. You can also ask clients for referrals if they know someone who might benefit from financial coaching.
When you’re starting from scratch, you’ll need to have a solid marketing plan to spread the word about your coaching business. Creating a website or blog, developing an email newsletter and subscriber list, leveraging social media and investing in digital ads are some of the ways you might promote your coaching services.
You could also try cross-promotion with other coaches or financial professionals to gain exposure. For instance, you might be a guest on a financial influencer podcast or co-host a Q&A livestream on social media to generate interest in your coaching business.
Frequently Asked Questions (FAQs)
What Is a Financial Coach?
A financial coach is someone who works with clients to help them reach their financial goals. Financial coaching draws on behavioral finance to help clients understand what motivates their decision-making when it comes to money and how to form better habits.
Are Financial Coaches also Financial Advisors?
Financial coaches may be advisors, and advisors may be coaches. But that’s not always the case. A financial coach may work with clients to help them understand their budgets or create a plan for paying off debt, but leave topics like investment management or retirement planning to a financial advisor.
How Much Do Financial Coaches Charge?
Setting rates for financial coaching can depend on the range of services you plan to offer, your professional background and how much experience you have. A financial coach may charge an hourly fee for their services, a monthly fee or sell coaching packages that include a set number of sessions for one flat rate.
Bottom Line
Financial coaching can be rewarding and potentially lucrative if you’re able to build a solid base of loyal clients. While financial coaching certification isn’t mandatory, it’s something to consider if you can afford the investment of time and money that’s required.
Tips for Growing Your Advisory Business
- Establishing a home for your business online can help you connect with prospective clients in the digital space. If you have a website, social media accounts and an email list, you’re already ahead of the game. Working with an advisor marketing platform could help you increase your visibility even further. SmartAsset AMP offers a holistic approach to advisor marketing that can help you connect with leads. Schedule a demo to learn how you can leverage it to grow your business.
- When obtaining financial certifications, whether it’s for coaching or something else, it’s important to consider any ongoing requirements. Many certifications require you to complete continuing education on an annual or biannual basis; others may require you to pay annual dues. Checking the requirements can ensure that you’re staying up to date and aren’t at risk of losing your certification.
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