Financial Education Vs Financial Advice?
Oct 04 2021 0
Oct 04 2021 0

Financial planner? Money coach? Financial advisor? There are several titles for the people who can help you manage your money, but it isn’t always clear what each one does, and more importantly, which one is right for you?

With the exception of Quebec, anyone in Canada can call themselves a financial advisor or a financial planner —there is no guarantee of expertise. The level of experience, education, professional accreditation and the range of products and services offered varies greatly. Some advisors focus only on investments and will help purchase and manage a portfolio of stocks, bonds, ETFs, mutual funds, etc. Others take a broader financial view and will advise you on investing as well offer advice on issues such as taxes, insurance, or retirement planning.

A financial coach is both educator and advisor. They use a holistic approach and take a deep dive into all aspects of your financial situation. It includes cash flow management, budgeting, savings, investing (RRSP, TFSA, income properties, other passive income investments), debt management, building credit, wills and estate planning, insurance, and retirement planning. The program is customized to each client's needs, and you have the option to go into more detail on any aspects that are particularly relevant to your case.

In addition to the scope of their advisory services, the other primary difference is that a financial coach teaches you as you move through the program. The focus is on equipping you with the confidence and knowledge to make a lifetime of informed financial decisions. A coach teaches you the facts and provides a structured plan, an impartial opinion, and plenty of motivation and inspiration – but the decisions are ultimately up to you.

Aside from the education and guidance, there are also intangible benefits to a coach. Many people have trouble shifting from the learning phase (like reading this blog) to the action phase (purchasing an index fund online for example). As with any sport or activity, the presence of a coach is super motivational, and the structure and accountability built into the coaching sessions really helps to boost confidence. A coach can definitely help turn financial complacency into actions that build a robust financial plan.

The best way to highlight how coaching helps is to look in more detail at one of our Enriched Academy clients. “Stacey” and her husband called themselves “middle-class professionals” and they are in their 30's with three kids. They were looking for solutions on how to pay back debt and build a fund for their future. Stacey felt she did not have a good understanding of their overall financial picture and was unsure where their money was going every month.

After six months of working with a coach, she felt like they had made some “serious progress” and the results supported her feelings. Their net worth climbed by $16,388.62 and they also paid-off or consolidated a lot of high-interest debt. They saved almost $3400 in interest charges over the 6-month coaching period.

Stacey noted their gains easily covered the initial cost of the program and it will continue to provide positive returns for many years into the future. She also noted that the results were "super motivating" and she is looking forward to seeing how their financial situation changes for the better over the next two to three years.


 

Coaching is not for everybody, and Stacey pointed out that she did spend a fair amount of time studying the self-help resources her coach provided as well as drilling down into the details of their finances. Enriched Academy coaches have access to a huge library of proprietary teaching resources and tools to help their clients learn, but you will need to put in a few hours each month to maximize the effectiveness of the program.

For those who would like to have more control of their finances or take over management of them completely, coaching is a great way to transition and get the ball rolling. You get a period of expert support and guidance when you may be lacking the confidence or knowledge you need, and you are steadily preparing yourself for more independent decision-making down the road.

If you would like to read more about Stacey's review of her experience with the Enriched Academy Coaching Program, click here

Learn more about our financial coaching program



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