As I stated above many people have heard of the term financial advisor but have you ever stopped and thought... what is a financial advisor? According to https://www.sokanu.com/careers/financial-advisor/ (check out the link for a more detailed description) a typical financial advisor is one who helps their clients with investing stocks & bonds, gives advice on tax laws, and guides insurance decisions. Most advisors are licensed to directly buy and sell financial products and are usually paid in three different ways which are: The Commission Model (they are paid a commission based on the financial products they sell), The Asset-Under-Management Model (AMU) (they collect a percentage of the asset(s) they manage based on the growth of the asset), and The Fee-Only Model where they collect a fee for financial advice. A good financial advisor should recommend investments to match their client's goals, invest their client's money (based on the client's decision), and overall guide their clients to make the best financial choice for their situation using the proper product.
What if a prospective client of a financial advisor is not the best at making money decisions and has a negative net worth? Or has a credit card vice? Or spends more then they earn consistently each month? Or may not understand the concept of an emergency fund? Or feels like their financial situation is too daunting to over come? Or doesn't know the first question to ask a financial advisor during the interview process? YES, you should definitely interview anyone advising or working for you on anything; I've done the opposite and the results were dismal. If you are a believer take it a step further and pray before & after the interview. Excuse my digressing, but seriously... DO IT! Now, the question becomes would a financial advisor work with people in these type of situations? Maybe in the fee-based model, but in most cases no; simply because the type of client above is probably not a good fit for a financial advisor in their current financial state. No need to fret, in comes the financial coach.
A financial coach is someone who teaches their clients to understand personal finance basics and collaborates with them to create budgetary plans that meet their clients goals and values over a set amount of time. Financial coaches also give financial advice to their clients in more of a service role rather than selling a financial product. A good coach gives their clients the tools and processes to make wise financial spending decisions, answers their clients financial questions, holds their clients accountable for their financial decisions, encourages their clients growth in financial education, and helps their clients to get to the root of their financial problem(s). A financial coach can have many names such as a financial counselor, a financial life coach, a financial consultant, and a money coach to name a few. In short a financial coach should educate, empower, be an accountability partner, and genuinely care about their client's financial well being. Think of us as the personal trainers of the financial world that can continue to work with clients to help them grow and build their financial muscle in any stage of their wealth building journey.
If you are in need of financial coaching in the Kansas City area please email me at:
foffcoaching@gmail.com
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F.O.F. Financial Coaching LLC
"Where you choose Faith over Fear for your Finances"
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