Why a money coach is different from both a therapist and a financial planner

Therapy office

While similar and sometimes confused, a money coach provides a unique service to clients that are not the same as a therapist or financial planner.

Everyone know what a therapist does, more or less. You may not be seeing one, but you may have at some point, and anyway, we all have “therapist” in our public consciousness somewhere, where it’s a caricature (Freud’s couch), or a media character (like Dr. Melfi from the Sopranos).

People tend to have a less-strong understanding about what a financial planner does. Fewer people work with planners than therapists, I think it’s safe to say, and there is a perception that you need to be wealthy to have a reason to work with one. In general, people tend to know that it has something to do with retirement and investments.

Both of the these professions are different from a money coach, which is what I do. But people have confused me with practicing both professions on more than one occasion. So in a spirit of not misconstruing my work, and to help you understand how a money coach is similar to and different from a therapist and a financial planner, read on.

Therapist

A therapist, to use one good definition, “is a licensed mental health professional who helps clients improve their lives, develop better cognitive and emotional skills, reduce symptoms of mental illness and cope with various challenges.

A therapist can go by many names. Counselor. Psychotherapist. Psychologist. These don’t always technically refer to the exact same profession, which is related to the other key factor, and that is licensing.

You can’t just say you’re a therapist. You have to be licensed. Some of the licenses that therapists have are:

  • LCSW – Licensed Clinical Social Worker
  • LPC – Licensed Professional Counselor
  • LMFT – Licensed Marriage and Family Therapist
  • LMHC – Licensed Mental Health Counselor
  • Psy.D – Doctor of Psychology

Therapists will often append their license at the end of their name, so as to better promote their specific training.

Differences from a money coach

There is certainly some overlap between a therapeutic relationship and a coaching relationship.

For example, if I’m working on someone’s money behaviors and build positive financial strategies, then I’m obviously helping “clients improve their lives” and “cope with various challenges”.

But while it’s impossible to separate money from emotions (despite many in the financial media who try), a money coach works with a client so that they can manage their own emotions in the service of their financial goals.

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In short, there is a money focus to all that we do. If a topic comes up that’s related to your money goals, we will tackle it.

But a money coach does not have to be licensed.

Coaching is, for better or worse, an unregulated industry. Anyone can call themselves a coach.

This is both a blessing and a challenge. As I’ve written about before, a license can show that someone has passed a certain level of requirements and showed a certain amount of competence, it cannot show that a person is right for you.

And licensing, in the U.S. is very state specific. An LCSW in Oregon, my home state, cannot work with someone in neighboring Washington, even though Washington is a only a few miles away (from Portland at least).

Whereas, I can, and do, work with people from around the country and the world. I’ve worked with folks in the U.K., in the Philippines, in Indonesia, and more. Being a coach means that I’m able to help more people.

Now, coaching does have some certifications. It’s not totally the “wild west”. I am in the process of getting my AFC® (Accredited Financial Counselor) certification. I believe that while a certification is not the crucial aspect of me being able to effectively work with you, it can’t be a bad thing, and I applaud the work of the AFCPE for helping to normalize the money coaching world.

Financial planner

Now, about financial planners. To use another good definition: “A financial planner takes inventory of your finances, then creates a plan to help you reach your goals. Some financial planners also provide investment management.

So this person takes into account the whole financial picture of a person or persons, creating a full financial plan, often including specific investment advice.

Financial planners don’t necessarily have to be licensed, but they often are. A CFP, or Certified Financial Planner, is a generalist financial planner certification, taking into account all aspects of financial life. Some also have specific licenses to sell investment products. These licenses have names like Series 6, Series 7, and Series 63.

More differences from a money coach

One big difference is that a financial planner will often sell investment products (sometimes for a commission). This is very different from a money coach. I do not sell investment products, nor do I recommend them. I do not earn commissions, and I don’t even do the investing part for you. Instead, I guide you to make the decisions that are best for you.

For me, the primary difference, for me, is that a financial planner focuses on the client’s financial situation, not the client’s relationship to that situation. So a planner will not typically focus on emotional blocks, behavioral challenges, and other emotion-centric aspects of a person’s life that may be getting in the way of their success and goals.

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If you’re a money coach, the behavior element is front and center. After all, it’s easy to know what you “must” do to build wealth. But if your actions are not aligned with your goals, there’s work to be done. And a coach can help with that.

I work with both therapists and financial planners

I am not a therapist, and I am not a financial planner.

However, I work with people in both of these professions. I see a money coach as “sitting in the middle.”

If I feel like a client would be better to work with a therapist, I will refer that person. And when someone wants specific investing advice, I will hand them off to a financial planner.

It’s not necessarily an either-or. Clients can work with all three simultaneously: a therapist, a financial planner, and a money coach.

We all provide a valuable service to you, in our own ways.

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