How do you know what each professional offers and which one is the right one for you?
I am going to attempt to highlight important distinctions between the most mainstream specialties, with the agenda that you see why your world is incomplete without me in it. Fair?
The first word in a financial professional's title tells you what they specialize in or focus on: estate, investment, insurance, financial, etc. "Financial" is a very broad sweeping word, so if this is the first word, it means they help with a broader range of financial topics. "Financial" can run the spectrum of crisis management to retirement with everything in between.
The second word in the title mostly tells you about the type of relationship the professional creates with you as the client, or the bag of tools they use to help you accomplish what you are after: coach, counselor, planner, advisor, adviser (yep, spelling difference make a little difference.), agent, broker, accountant, manager. Think of it as a spectrum of involvement or teaching style.
Some titles are farther apart on the spectrum like agent vs coach; agents act on your behalf so you are free to focus on and do other things. Coaches, on the other hand, are actively and regularly involved but always stay on the sidelines; you do all the work and develop all the skills. Other titles are very broad and have blurry lines such as adviser vs planner and coach vs counselor.
Traditionally a distinction would be that advisers tend to focus more on money growth, planner tend to focus more on the "to dos" of a solid financial plan, counselors focus on the problem, and coaches focus on you. I am a practiced counselor, coach, and planner. The differences between my cohorts from each sector are not obvious to the outsider, and maybe the insiders aren't clear either.
The differences in formal education and training in the beginning can be very big, but the differences in practice are greater between two professionals in the same sector than between the two sectors. Still fuzzy?
I hope the following points give clarification of this phenomenon.
This means anyone can legally call themselves a financial adviser, financial planner, or financial coach. This model gives a lot of credit to life experience and continued learning of the each pro. Low regulation also allows professionals to create a service that is unique to which financial areas and clientele they are most passionate to help. However, this does create an industry where the client must do their due diligence in selecting someone competent in their field, as well as their ability to explain or teach what they are doing or recommending for your money.
Even if education were standardized to determine competency in financial topics, there are so many intangibles that make or break a good adviser. When choosing a financial professional, consider character, experience, references, teaching style, personality, and anything else that may be important to you.
What are your priorities for your financial adviser?
- AFCPE®, AFC®, CFP®, ChFC®, AFCC , FFC, CPFC, CFEI
- Here are 12 more for planners, and there are even more! It's a zoo!
- Visit my About page for my qualifications
Most licenses can be obtained by any professional "a la cart," if you will, which ads to the confusion and delight of the financial adviser smorgasbord.
3. Because of the diversity in life experience, culture of continued learning, low regulation, and "a la carte" licensing and certification, there is a lot more overlap in competency between the financial planning, advising, counseling, and coaching specialties than ever.
Compare to a nutritionist giving exercise advise and a fitness coach helping you create nutritious meal plans. Financial coaches can work with millionaires, investment advisors can be great with budgets, and planners can help eliminate debt.
The opposite is also true. Professionals can be good at the math part of money, but not the management of it. I know investment advisors who are great at choosing solid mutual funds, but they do not have retirement savings themselves because they cannot keep their personal spending in check. I also know accountants who are professional money trackers, but they are drowning in consumer debt. I, as a financial coach, can help you become a budget master, eliminate your limiting beliefs with money, and create a solid plan for your goals, but I'm going to refer all tax questions to another professional every time. If a professional gives advise that they themselves aren't living, take it with a grain of salt and get a specialized second opinion.
To sum it up:
Decide what level of help you need. Do you need advise once or twice or someone to really lean on? Do you want a team of specialists or a general contractor? Both have pros and cons.
List the qualifications you value in a financial adviser or mentor, and then seek someone based on those values.
When in doubt, contact me! I can guide you to the right pro.
That is my explanation of financial professions in a nutshell. Well, three nutshells I guess. If you liked my simplified breakdown, share it with a friend.
If you feel I missed anything you would like more clarification on, or if you would like to help deciding which specialty would best serve you, please contact me. If there is a topic you would like to request I cover, send me a request. As always, it is my mission to help you live abundantly. What can I help you accomplish today?
Ruth Liebel
