What is the Difference Between Financial Advice and Financial Coaching?Share this post
Most professionals that work on your financial and legal affairs are providing you with advice. The Webster Dictionary defines advice as: “recommendation regarding a decision or course of conduct.” In this arrangement, most of the time you have already determined the problem or issues to which you would like a solution and you are coming to the professional to help you solve the problem. If you are paying them an hourly rate, you’d like the advice with as little of their time as possible. Advisors typically have the answers to your questions.
In coaching, everything is reversed. You have all the answers. The coach’s job is to ask the right questions. The right questions are the ones that help you discover the answers that you can’t articulate without the help of someone else.
What is the Difference Between the Questions I Ask and the Questions a Coach Would Ask Me?
When you are seeking financial advice you typically want answers to the technical questions that involve investments, income taxes, estate taxes, insurance, etc. What should I invest in? How can I save taxes? How can I minimize the amount my heirs will have to pay the government when I die?
When you are seeking financial coaching you are looking for the questions that will guide you to finding the answers that only you know. You may want to know: What is enough money for me to be happy? What do I want to do when I stop working? What do I want to leave behind when I’m gone? These are difficult questions. Finding honest answers to them may require the help of someone who can guide you through a discovery or discussion of your values and beliefs.
Why Integrate Life Coaching and Financial Planning?
One of the first steps in financial planning is being very clear about your goals in life. If you want to take this deeper you can also search for your purpose in life. It is a waste of time and money to plan or develop strategies unless you are very clear about what you are truly committed to achieving. Most people have some idea of the general direction that they would like to go; they know that they would like to be happy. However, they may not know how to get there. More profoundly, they may not know their purpose or have a clear mental picture of what they really want in life. Coaching helps you articulate your direction and write it down into a life plan.