10 Questions You Must Ask Your Financial Coach

A financial coach helps you to better understand your finances, set and achieve financial goals, and make smart money decisions. Right from the start, you want to be sure that your financial coach is a qualified professional who is ethically bound to act in your best interests.

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You’ve finally taken the plunge and decided that you need to get your finances in order. You understand that you can’t continue with your financial behavior and that it’s time to seek help from a professional.

But where do you start? Even though financial coaching is a great way to get your finances on track, it’s important you choose the right coach. Asking the right questions upfront will help you find the right financial coach and avoid costly mistakes.

Who is a financial coach

A financial coach helps you to better understand your finances, set and achieve financial goals, and make smart money decisions.

Financial coaches typically have a financial planning, accounting, or economics background. And some are also certified financial planners (CFPs). 

Right from the start, you want to be sure that your financial coach is a qualified professional who is ethically bound to act in your best interests. So, whether you need help with your spending or creating an emergency fund, you need to ask your coach the right questions.

Questions You Must Ask the Financial Coach Before Working with Them

#1. What are your qualifications and experience?

You wouldn’t go to a doctor who didn’t have the proper medical qualifications, would you?

The same goes for financial coaches. You want to be sure that your financial coach has the proper qualifications and experience to provide you with the guidance and advice you need. 

How long have they been working as a financial coach? Do they have any experience working with clients with similar financial profiles?

It would help if you also inquired about their professional credentials. Are they Certified Financial Planners (CFPs)? Do they have any other professional qualifications or designations?

The more qualified and experienced your financial coach is, the better your chance of getting your finances on track.

It’s also not out of place to ask for a copy of their resume or CV so that you can review their qualifications and experience in detail. Understand that you are hiring a professional to help you with one of the most critical aspects of your life—your finances. So, you don’t want to leave anything to chance.

#2. How much do you charge for your services?

Fees can vary significantly from one financial coach to another.

Some charge by the hour, while others charge a monthly or annual fee. Some will even charge a percentage of your assets under management (AUM).

Ask about all fees upfront, so there are no surprises later on.

It would help if you also inquired about the services included in their fees. Do they provide ongoing financial coaching, or is it a one-time consultation? Do they offer investment advice? Financial planning services? What other services are included?

Get a complete breakdown of all fees, so you’ll know precisely what you are paying for.

#3. Do you have clients similar to my profile?

Most financial coaches choose to focus on certain types of clients.

For example, some may specialize in working with small business owners, while others may focus on helping people save for retirement. Some may work exclusively with high-net-worth individuals, while others prefer to work with people just starting out.

The point is that not all financial coaches are a good fit for everyone. So, you want to be sure that the financial coach you are working with has experience helping people with financial profiles similar to yours.

#4. Do you offer restricted or independent advice?

Most financial coaches offer either restricted or independent advice.

Restricted advice means that the financial coach can only recommend specific products or services from a limited number of companies. Independent advice means that the financial coach can recommend any products or services from any company without being restricted.

There are pros and cons to both types of advice.

You may have fewer options with restricted advice, but you can be confident that the recommended products or services are from reputable companies. With independent advice, you have more options to choose from, but the quality of the recommendations can vary widely. 

#5. Do you have any guarantees or performance measures?

Financial coaching is not a one-size-fits-all solution. The success of the process depends on a wide range of factors, including your commitment and effort. That said, you still want to ensure that you are working with a financial coach who is confident in their ability to deliver results.

Ask your financial coach if they have any guarantees or performance measures. Do they guarantee a specific rate of return on investments? Do they have any metrics for measuring the success of their services?

By knowing what kind of guarantees or performance measures your financial coach has in place, you can have a better idea of the quality and effectiveness of their services—and what to expect when you hire them.

Questions to Ask Once You Hire a Financial Coach

After you have hired a financial coach, it’s essential to keep the lines of communication open and make sure you are on the same page. Here are a few questions to ask once you have begun working with your financial coach:

#6. What is your investment philosophy?

Your financial coach should have a well-defined investment philosophy that they are comfortable sharing with you.

While it may seem like a good idea to invest in whatever the financial coach recommends, it’s essential to understand their investment philosophy first.

You want to be sure that their investment philosophy aligns with your personal goals and values.

For example, if you are a small business owner looking to retire in 10 years, you want to ensure that the financial coach’s investment philosophy is focused on long-term growth.

Find out whether the financial coach’s investment banking is focused on long-term growth, short-term gains, or a mix of both.

You should also find out what kind of investments they recommend. Do they prefer stocks, bonds, mutual funds, or ETFs?

Do they believe in active or passive investing? What about index tracking, factor investing, or core and satellite portfolios? There are a lot of different investment strategies out there, so you want to be sure that the financial coach’s philosophy aligns with your own.

#7. Am I ready to start investing?

Before you start investing, your financial coach should assess your finances to determine whether you are in a position to do so. You’ll want to find out whether you have enough cash saved to cover any potential losses and how much risk you are willing to take on.

Your financial coach should also provide you with an assessment of your current financial situation and any steps that need to be taken before investing. This could include paying off high-interest debts, contributing to retirement accounts, or creating an emergency fund.

Your financial coach should be able to provide you with a clear timeline for when it makes sense to begin investing and what steps should be taken first. Find out whether you have any obstacles that need to be addressed first, such as a low credit score or an excessive debt load.

This discussion should also include an assessment of any existing investments, such as stocks or bonds, to ensure that they align with your overall financial goals. By clearly understanding your current financial situation, you can ensure that your investments are safe and appropriate for your particular needs.

#8. How do I clear my debts?

Debts can be a major drag on your finances. If you have debts, you will need to ask your financial coach how they will work with you to develop a plan to pay it off as quickly as possible.

This may involve creating a spending plan, negotiating with creditors, or finding other ways to free up money toward your debts.

Your financial coach should also be able to provide advice or resources on how to reduce your interest rates and lower overall costs. They should have a range of strategies to help you pay off your debts as quickly and efficiently as possible.

Finally, you should ask whether they have experience negotiating with creditors. This can be an essential skill if you cannot pay off your debts in full or need help with payment plans.

#9. How do I stick to a spending plan?

One of the markings of a great financial coach is their ability to help you stick to a spending plan.

If your finances have been all over the place, a spending plan can be a helpful tool to get you back on track.

The financial coach will work with you to create a spending plan that aligns with your income and expenses. They will also help you to find ways to cut costs and save money. The goal is to ensure that you are living within your means and only spending what you can afford.

#10. How will I view my investments/pensions and their performance regularly?

Opening a pension or investment account is just the first step. For your investments to grow, you need to monitor their performance regularly. Even if you are not actively managing your investments, you still need to stay informed.

Your financial coach should be able to provide you with the tools and resources necessary for you to view your investments and pension performance regularly. They should also be able to explain what data points you need to pay attention to and any changes you should be aware of. The ultimate goal is to ensure that your investments are growing and performing as intended.

Now that you know the 10 Questions You Must Ask Your Financial Coach, you can confidently begin your journey to financial freedom. With the right guidance and support, you can reach your financial goals and achieve financial stability.

Download the Stackin app today for more financial wellness tips, personalized advice, and resources to help you on your journey! Good luck!

Sam Garrison

Sam Garrison

Sam Garrison is the President and co-founder of Stackin, a financial wellness company. Before Stackin, Sam built and launched new ventures at BCG Digital Ventures, the venture and incubation arm of The Boston Consulting Group, where he also supported the executive team as strategic program lead. As a lifelong millennial, Sam has tried to solve most of his problems through technology instead of waiting in line at a drab office.