If you’ve ever had a good coach, you know that they help you grow as both a player and a person, pushing you to become a better version of yourself on and off the field.
What we don’t realize sometimes is that we need coaches in every area of our lives—including money. If you want to be better with your money, you need someone who can coach you on your strategy and habits.
But you might be wondering: What kind of financial advisor do I need? Let’s talk about two broad categories—financial coaches and investment professionals—so you can make the right call for your situation.
What Is a Financial Coach?
A financial coach is someone who meets with you consistently to help you identify and achieve your money goals. They don’t have to have a background or degree in finance—or any specific certifications, for that matter. But they do need to have a passion to help others and a wealth of knowledge on how to manage money. Lots of financial coaches are self-taught, and others have gone through a program like Financial Coach Master Training, which is how we vet our coaches here at Ramsey Solutions.
What Does a Financial Coach Do?
A good financial coach helps you create and execute a financial game plan for your life. A great financial coach inspires and encourages you along the way.
A financial coach is to your money what a personal trainer is to your fitness. If you want to lose weight or get into shape, you know that you can do it alone—but your chance of success will skyrocket if you work with a trainer. They give you a meal plan, customized workouts and consistent encouragement and motivation.
In the same way, you’ll get into “money shape” much faster by working with a coach who will give you a customized plan and support along your journey.
When Should You Work With a Financial Coach?
Practically speaking, a financial coach will help you set and achieve financial goals and develop good money habits. You should work with a coach if you need help tackling these tasks:
- Getting out of debt
- Talking to your spouse or family about money
- Planning and saving for big goals—a wedding, a car, a down payment for a home
- Strategizing when and how to save for retirement
You might have big dreams for the future, but a dream without a plan is called a wish! No one wins championships by accident. Even world-class athletes have a coach, because the reality is, we never outgrow our need for guidance.
How to Choose a Financial Coach
Ready to get a coach in your corner? Let’s talk about how you actually connect with a financial coach. The first step is to understand the qualities that you’re looking for in a coach. Find someone who . . .
- Is passionate about helping others. This is the number one quality we look for in a coach. They must have a burning desire to see you succeed.
- Has experience. Has this person helped clients before? Do they have a proven track record of getting results? Evaluate their experience level before you commit.
- Is likeable. It’s not easy to talk about money, so you want to make sure that your coach is a good fit. Are you comfortable opening up about tough issues? If you’re married, you want to make sure that your spouse is on board with this person too!
- Has a plan. Does your coach know how they will help you move from point A to point B? It’s important to work with someone who displays the same character qualities they’re trying to pass on to you—discipline, focus and strategy.
Of course, you can do your research and ask around to see if someone in your circle knows a good coach. But we want you to work with the very best, which is why we recommend you find a Ramsey Preferred Coach!
What Is an Investment Professional?
Investment professionals are qualified financial advisors who offer specialized advice on investing and wealth management. They’re less involved in your day-to-day money habits and more focused on long-term, high-level strategy.
What Does an Investment Professional Do?
Investment professionals help you plan for the future and build and manage wealth. This isn’t an exhaustive list, but for the most part, an investment professional helps you with:
- Investing and building wealth
- Retirement planning
- Saving for your kids’ college
- Charitable giving
- Estate planning
Keep in mind that there’s an overlap of financial expertise in some of these areas. For example, an investment pro can offer you advice on estate planning, but you’ll probably still want to meet with an attorney and a tax pro to make sure you cover all your bases.
When Should You Work With an Investment Professional?
You don’t want to get serious about wealth-building mode until you’re on Baby Step 4. Focus on getting out of debt and building up an emergency fund before you start saving for retirement or for little Suzy’s college tuition.
Market chaos, inflation, your future—work with a pro to navigate this stuff.
But once you’re ready to invest, it’s time to call up a pro! The choices you make today about your financial future will impact your life for decades to come—so take the time to get top-notch advice.
Earlier, we compared a financial coach to a personal trainer: someone who gives you a plan and helps you stick to it. An investment pro, on the other hand, is more like a specialized physician. They have a level of expertise that’s backed by degrees and credentials, and you don’t need to meet with them as often as your financial coach.
This doesn’t mean that a pro is better than a coach—not at all! In fact, the investment pros we work with absolutely love it when their clients have already established a relationship with a coach, because it means they’re in good financial shape and ready to step up their game.
How to Choose an Investment Professional
If you’re trusting someone to help manage your life savings and your future financial stability, it pays to make sure they’re a good fit. Look for an investment pro who . . .
- Is trustworthy. When you work with an investment pro, you give them access to your greatest assets. Choose someone with high integrity who you can trust. Get references from their other clients to make sure they’ve got a solid track record.
- Wants to serve, not sell. Work with someone who cares more about your portfolio than their pocketbook. A high-quality investment pro will only make suggestions based on what you need. They see you as a person, not a pile of money!
- Is qualified. Just because your Uncle Eddy keeps up with Wall Street, doesn’t mean you should listen to his investing advice. Before you choose a pro, make sure they’ve got the right qualifications:
- Find out if they’re registered with the SEC (the U.S. Securities and Exchange Commission) or FINRA (Financial Industry Regulatory Authority). These regulatory bodies help protect your money against fraud and unethical behavior.
- Also, ask about their credentials. Investment pros come in all shapes and sizes, but two common certifications are CFP (Certified Financial Planner) and RIA (Registered Investment Advisor).
- Has a long-term mindset. Investing is a marathon, not a sprint. Your pro should encourage you to think big and set long-term goals for growth.
Step up your investing game by working with an investment professional in your area who has been vetted by our team at Ramsey Solutions.
Financial Coach vs. Investment Professional: Which One Should I Choose?
When choosing whether to meet with a financial coach, an investment professional, or both, we want you to think about what you want to achieve. Do you need help creating a financial game plan or establishing daily money habits like budgeting and getting out of debt? Work with a coach. Are you ready to hit wealth-building mode and save for your dream retirement? Then it’s time to meet with a pro.
The main difference between a coach and an investment professional is that a coach focuses on your behavior, but an investment professional will focus on your money’s behavior. You might be in a season of life where you need both—which is great! Your financial future is on the line, so do whatever it takes to get the help you need. No matter where you go, don’t make excuses—make progress!
This article provides general guidelines about investing topics. Your situation may be unique. If you have questions, connect with a SmartVestor Pro. Ramsey Solutions is a paid, non-client promoter of participating Pros.