A man helping a woman with financial coaching

Written by 11:08 am Money & Lifestyle

The ikigai guide to financial coaching

About 6 minutes to read

How did you learn about money? 

Did you have any help when you were opening your first bank account, applying for an overdraft, taking out a credit card or paying it off? 

How about loans – for a car, for a house, for university – did someone talk you through the process? 

Or did you have to work it out on your own through trial and error?  

For most of us, we muddle along by ourselves. Sometimes our parents might help – maybe they opened your first bank account for you when you were a child, maybe they gave you tips or helped you understand your first pay slip. Sometimes this role might be played by a friend or a sibling. But a lot of time it’s just us, trying to make the best choices for ourselves and our money, figuring it out as we go.   

The fact is that there are 38 million adults in the UK not receiving any formal support when it comes to their money. That’s nearly three in four people in the UK. According to the FCA’s Financial Lives 2020 survey, just 17% of UK adults with more than £10,000 of investible assets received advice last year, with 29% saying they sought some form of guidance. 

But there’s clearly an appetite for financial advice and support. Online and on social media, we’ve seen a boom in ‘finfluencers’ – influencers focused on finance – as well as the rise of things like #stocktok and #fintok. Some accounts have tens, if not hundreds, of thousands of followers – all looking for tips and tricks to help them do more with their money, to help them take control of their financial lives. However, very little of the guidance on social media is regulated. Moreover, many of the ‘experts’ offering advice have no real qualifications when it comes to money management. 

As Angel Zhong wrote for the Conversation, “[Social media] is the wild west for financial information, with few of the checks and balances that regulate other areas of financial advice.” 

The problem is you can’t really expect anything different. People want help. We’re hungry for it. Whether it’s clearing debt, saving more, investing for the first time, or just investing in different ways, many of us want more support when it comes to our money than is freely – or at least affordably – available. Traditional financial advice or planning can feel prohibitively expensive. Why? Because for many advisers it’s just not economical to help people if they have less than £50k to invest (which isn’t exactly the majority). This is all leads to an issue known as the ‘financial advice gap’ – ie. the gap between the number of people who have access to or can afford the financial advice that they need. 

But there may be a solution. A way to bridge that gap. 

Enter: financial coaching. 

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What is financial coaching

Financial coaching is a relatively new concept. Not new new. It’s been around for a while. But it’s a much younger and growing sector of financial guidance compared to financial advisory or planning. 

In a nutshell, financial coaching is about informing and empowering you to make financial decisions. For example, a coach can work with you to better understand how your values align with your money, help you set financial goals, and support you with relevant education or information that’s specific to you and your circumstances. 

It’s like a coach in any other sense too – like a sports or business coach, a financial coach is there to help you and give you guidance. But they won’t do the work for you. That’s all up to you.


Why we can all benefit from a financial education

What’s the difference between a financial coach and a financial advisor? 

There are some very key differences between a financial coach and a financial advisor. 

“Advice is typically product-focused, and often centres on helping those with money to maximise the value of their assets. It isn’t designed to help people with their behaviour and their habits, whether that’s to do with spending, saving or budgeting.” Ellie Austin-Williams, founder of This Girl Talks Money, a financial education community, explains, “Financial coaching is about education and support, helping you to understand your financial situation and to navigate financial decisions with confidence.” 

She adds, “Advice is regulated, as advisors tell you what to do with your money and often select products for you based on your goals. Coaching often deals with emotions, rather than numbers, and helps you implement tested strategies to build new money habits.”

Financial advice is also a regulated product. This means advisors have to follow the FCA’s rules to give advice that is fair, suitable and appropriate for their clients. They also have certain qualifications to practice (at least a Level 4 within the Qualifications and Credit Framework), as well as certain controls and systems in place that allow them to best look after clients. 

Coaching is not regulated. They, therefore, can’t give you advice on choosing particular products or where to put your money and so on. But they can focus on the fundamentals of financial knowledge.

Wait so what qualifications does a financial coach have? 

A financial coach doesn’t technically need to have any qualifications, nor do they need a licence. However, there are formal training and education programmes that many coaches undertake, with several going through training for life or executive coaching on top of any financially focused courses. 

When you’re looking for a money coach, it’s pretty important to make sure that you’re speaking to someone who really knows what they’re doing. Good coaches will generally make sure it’s very clear what they can and cannot offer in terms of help and support. As Ellie Austin-Williams explains, they’re generally keen to differentiate themselves from advisors too. 

“On the whole, I think coaches do try to emphasise that they aren’t advisors,” she says. “I am in a network of other coaches with whom I trained, and everyone is very keen to promote the work coaches do and differentiate it from advice, not least of all because advice has a certain reputation! Although there are brilliant advisors out there, financial advice simply isn’t accessible or suitable for many people who are looking for support with day-to-day money management strategies, or who are seeking education and guidance on matters.” 

What are the benefits of financial coaching? 

There are so many benefits to financial coaching – whether it’s for life, business, or your money. Not only can it help give you the tools you need to succeed and reach your short or long-term goals, but it can also have significant benefits for your overall mental wellbeing. 

“Financial coaching can help you understand your financial situation and reduce the stress that money often brings,” says Austin-Williams. “For so many people, managing finances causes a huge amount of anxiety and simply sitting down to talk about money with a trained coach can help relieve this stress.” 

“Through coaching, you can identify any feelings towards money or behaviours which are causing you stress, before understanding why you feel how you do and learning techniques to move forward. Coaching can also give you the tools to make informed, confident financial decisions and weigh up the pros and cons of any situation you find yourself in, which can ultimately change the course of your life.”


What is your money personality?

How much does financial coaching cost? 

According to figures shared by Boring Money, financial coaching typically costs upwards of £50 per hour. 

This compares to financial advisors, where costs start around £150 an hour, but may vary from £75 to £350 per hour. Some advisors also charge a set fee for a certain amount of work (which can be several thousand pounds). Financial planners are similarly more expensive, sitting at around £1500 as a one-off fee, but with additional costs arising for check-ups and follow-on appointments. 

However, new tech platforms that focus on financial coaching are taking off – with many costing far less than £50 per session. Your Juno, a financial education platform for women, is an example of such platforms. Likewise, here at ikigai, you can speak to your relationship manager if you have questions about managing your money.  

How can you find a money coach? And how do you make sure they’re the right one for you? 

Finding a financial coach is relatively simple. A cursory search online will find you plenty of directories for finding someone to coach you into a better space for you and your money. The key is finding the right one for you and your needs. Some, for example, might be more helpful if you have very specific goals that they specialise in helping you achieve. On the other hand, if you have more general questions, then someone with broader expertise might be a better fit. 

At ikigai, we constantly speak with some incredible coaches, many of whom we’ve worked with in writing these articles, including the brilliant Ellie Austin-Williams, Rachel Rowley and Emma from The Money Whisperer

Austin-Williams also emphasises that when you’re finding a financial coach, it’s important to ask questions. “Remember that you need to find the right person for you, so treat finding a coach as you would a personal trainer or therapist. Most coaches will offer an introductory call to make sure you are a good fit, which can help you establish if someone is the right fit for you. Don’t be afraid to ask for testimonials too – all good coaches will be happy to connect you to a previous client or provide feedback they have received.”

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We built ikigai specifically for those who want to bring their lifestyle to the next level, by taking better care of their finances.

ikigai beautifully combines wealth management and everyday banking in one single app. And by doing so, it creates a whole new world of opportunities.

Visit https://ikigai.money to find out more.

Maurizio & Edgar, Co-Founders, ikigai

When investing, your capital is at risk.

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Tags: , Last modified: 6 August 2021