I get this question a lot: “are you a financial advisor or financial coach?” The answer is actually, “I’m a reformed, former, financial advisor turned financial coach…and I’m SO much happier!”
I spent the better part of a decade in an advising or planning role, but I always felt the most fulfilled when I was teaching clients or working with them to find solutions to their problems. The days I spent selling investment products and only worrying about “building my book” (aka acquiring more and more clients, preferably wealthy ones), I was miserable and felt like I wasn’t serving the people I wanted to serve. I was also only working with people who could already afford expensive planning fees (normally between $4,000-$10,000 per year for planning services) or had more than six-figures in investable assets (the size of their portfolio). Again, the cost-prohibitive nature of the industry leaves millions outside the doors fending for themselves. This only aids in growing the wealth gap, and that’s just not what I’m about.
Don’t get me wrong, the past decade of my career I’ve learned a ton and become well-versed in all things personal finance, but when I discovered financial coaching, I instantly knew there’d be a massive difference in the way I could help and work with clients.
In the traditional sense, financial advisors give investment advice and manage client money. Their focus is your investment portfolio. They want to grow that money, which ultimately allows them to grow the amount they can put in their own pockets. Advisors can make money in a few different ways. They can charge commissions on the products they sell. They can take a percentage of the money they are managing for you. Or they can charge you a flat fee for their services. Some may have a hybrid version of these, some may stick to one form of revenue.
Also, pretty much anyone can call themselves a financial advisor, but the experience you’ll receive may be wide ranging. Some “advisors” do nothing but sell whole life insurance. Other “advisors” will push their company’s mutual funds, complete with extraordinarily high fees and commissions. Many advisors charge 1% or more per year of the assets they manage for you. Some will act in your best interest, others will only suggest investments and products that are “suitable” (a much lower standard to meet).
In my experience, advisors are not incentivized to teach you anything. In fact, the more in the dark they keep you, the more money they can make off of you. There are a lot of great, qualified, and super helpful financial advisors in the world who play an important role in helping folks grow and manage their money. There are also an unsettling amount of ethically questionable, overpriced, and under-qualified advisors out there. It can be really difficult to tell the difference, too.
If you’re thinking about working with an advisor, you MUST ask them how they get paid and if they are held to a fiduciary standard. If they are at all unclear in their answer - consider that a red flag.
The role of a financial coach is completely different. Our mission isn’t to manage your money for you. A financial coach, particularly a Parthean financial coach, is someone who is here to do whatever it takes to make you a confident and competent person who can manage their own finances. We’re here to teach you the foundations of good money management and to identify areas of improvement.
A financial coach is also someone who will help you see the big picture of your finances. We are goal-oriented and there to motivate you to be your best financial self. Parthean coaches have cutting-edge tools and resources at the ready. Financial coaches don’t have a hidden agenda, just a passion for education.
The financial coaching industry varies widely in price. At Parthean, it was important for us to remain affordable and accessible. We charge a monthly subscription that’s probably about a third of your Internet and cable bill. This is how we make money. No hidden agenda or fees.