Post updated September 2020.
Wondering about being a Financial Coach? You've come to the right place.
As a Financial Coach I am frequently approached by folks who are interested in becoming financial coaches as well. I wanted to put all my advice in one easy place for quick reference. If after reading all this you'd still like to chat, I'd love to have you as a client in one of my programs. After all, the best way to learn about coaching is to be coached. In fact, I believe this so much I have a coach right now.
I grew up in a world where money was taboo, and I learned what I now know about finances through trial and error, reading, getting coached, and paying a CFP® a sh!t ton of money to help me out. So when the time came to look for a side hustle, I figured why not pass on what I'd learned? My clients would get the benefit of what is probably more than $100,000 in investment (not to mention the time) for a few thousand bucks, literally shortcutting what for me has been a twenty year process.
My first thought was that I might become a CFP® myself, but honestly, I think most Americans need help with the basics – getting out of debt, building an emergency fund, and taking advantage of free money at work to start building investments. The CFP® was really designed for helping people who were beyond that point. There are already a lot of people in the “helping the rich get richer” space, so I didn't see much there in the way of need or opportunity. Plus, the idea of compliance and helping people manage investments did not appeal to me at all.
I wasn't quite sure what job title went with this idea until I found this article due to the magic of Google and Kitces. Garrett Philbin does an excellent job of explaining why he became a money coach and what a financial coach does. Honestly, that article will likely address all your questions, so feel free to jump over to that site and take it from there.
Getting Started
If you are still in the “maybe” stage after reading that article, I'd suggest you join Garrett's Facebook group and the Financial Coach Academy's Facebook group for coaches. You'll be able to see the questions others are asking and the answers that have been provided. You'll also get links to lots of other resources, such as books that have been published on money topics.
If you've done a bit of reading and are still interested, you can become a money coach right now today. All you need to do is announce “I am a financial coach”. There's no regulation and no rules to follow (as of now). However, I wanted to (and I suggest you) go a bit beyond that and have some certifications and training, to prove to both yourself and others that you know what you are doing. Here's what I invested in:
1. The AFC® from AFCPE®. This is not an extremely well known credential, but for those who are familiar with it, it is well respected. You will need to pass an exam and document 1,000 hours of work. This proves that you do in fact know about finances and that you have experience.
If I ever were to hire an assistant coach, I would require that candidates pass the AFC® exam before I interview them. The experience will come with time, but there needs to be some sort of objective proof that you know about money before you enter into the field and start talking to people about money. Each of us have blind areas where we lack personal experience, and passing the AFC® proves you are familiar with even those areas.
If you are networking with Financial Advisors or Financial Planners and they give you attitude about what qualifies you to have thoughts about money, this sort of credential goes a long way toward shutting them up. I don't find clients much care about specific credentials – they just want to know if you can help them.
2. Financial Coach Academy (FCA). This is an affiliate link, but my recommendation remains the same whether you use that link or not.
If you have never done anything entrepreneurial before then FCA is a slam dunk for you. Just do it. I, however, was convinced it would be too basic for me, as we'd already started up and successfully run an IT consulting business and a vacation rental business. I was wrong. Yes, I had entrepreneurial skills, but I had not started up this sort of business before. I had a friend who convinced me to go through the class, and it was absolutely worthwhile. Why reinvent the wheel? Let someone who has already worked out the kinks show you what they've learned and benefit from that wisdom. Worth every penny you will spend.
I don't run my coaching practice the same way they suggest in terms of packages and offerings, but it's easier to take a template and tweak it than to start from scratch.
3. Networking. Honestly, this could be step 1, but whenever during the getting started process you choose to do it is fine. In person is best, but if you live in a cabin 50 miles from the next neighbors then online is better than nothing.
Why do you need to network? To convince yourself that you are a financial coach, and to practice explaining it to other people. Most of the people I speak with assume I'm a financial advisor and so will tell me that they like their financial advisor and do not want to have me manage their funds. People don't know what financial coaches do, so you practicing telling them is a key part of getting started as a new coach.
You may meet potential clients or referral partners from your networking efforts (and I hope you do), but if you do nothing other than nail down what you do so that you believe it and it sounds smooth when you say it, networking will have been worth the time you put in.
4. Coaching! This also could be step 1. Before you spend a lot of time, money, and effort on your business, it would be wise to actually help some people with their money to confirm you do in fact like doing what you are proposing doing. If you want to do free appointments with beta clients, limit yourself to 3 clients. Limit how many appointments you do for each client as well, perhaps to 3 appointments. Don't expect the free people to continue on once you start charging them (although they certainly could, most of them will not, because they will feel they already understand what you do and you have already set the value at $0).
Take some time to think about what kind of coach you want to be, what kind of services you want to offer, and which clients you want to work with. If you do FCA this will come up, but it will likely take several iterations beyond the initial work you do for you to really have clarity on this. Sometimes the best way to figure out who your ideal clients are is to work with those who are not your ideal client by accident.
While we are on the topic of ideal clients, if you want to charge for coaching, your ideal client is someone who can and will pay for coaching (spoiler alert). If you are concerned you may meet people who need help but who can't/won't pay you and you don't want to turn them away empty handed, start making a list of free and affordable resources those folks who can't/won't pay you can access. Everyone does have the choice to learn this stuff the hard way like you did, and by providing them with a list of non-profits and/or library books you are providing them with more of a jump start than you likely got.
So that's what I'd recommend in terms of prep work. Pass the AFC® so you have some proof you know about money and practice by offering to help people with money. Take FCA to get your business set up, and network in person to practice your belief and your explanation of what you do. That's really all you need to do to get the ball rolling and to start making money.
Frequently Asked Questions
1. What I really what to know is, how much money do you make, Lisa?
Wow ok rude. Didn't we just cover how I grew up in an environment where talking about money was taboo? But in the interest of full disclosure, I'll answer the question. The answer is that to date my business has had more in expenses than in revenue. So I've been losing money. But there are some things you need to understand here. My focus has been on getting my business set up, getting trained to get my skills where I want them to be, getting coached to work through some of my own money drama, and creating my course. A lot of that work (at least the coaching) I likely would have done and paid for whether I started this business or not – but thanks to this business, it's a tax write off. I didn't have to invest as much as I have, but I wanted to really start from a position of mental strength, and that meant investing in my mind. I'm also part time, as we still have our IT consulting business going. I anticipate 2020 will be the year I shift from investing into the business and myself to really working within the business by taking on more one on one clients and launching the course, which will provide mostly passive income once it is created.
For the record yes, I do have current and past paid clients for my coaching.
That's not really what you are asking though, is it? What you really want to know is, “if I, the reader, start a business doing financial coaching, will I make enough money?” If that's your question, you need a better question. Do some research into what high end coaches make (a lot. Tony Robbins doesn't work for pennies). Do some introspection into what you believe your value and worth is. And shift your thinking from employee mindset to entrepreneurial mindset. You could invest significant time and money and waste it all. Or you could end up a multi-millionaire. The potential for both outcomes exists. Your thinking will be what drives your results.
2. I see you recommended the AFC®. The AFCPE® also offer the FFC®. Do you recommend that as well? Not yet. First, you need to have at least 3 paying multi-session clients, have a fully set up business (business cards, website, legal/government/insurance stuff, beginnings of some sort of marketing practice via networking and/or social media, etc.), and most importantly, you need to have reached a point of frustration with the clients you are working with. THEN, you need to read the book Co-Active Coaching. If you read that book and think “heck yeah this is awesome and I need more understanding of how to coach this way” then the FFC® is for you.
I've found that many people who get into financial coaching are really imagining/offering something more like consulting. I know I was at first. The idea is, “hey, I've spent a lot of time figuring out how to handle my money. Other people might pay me to tell them what to do” and if that's your plan, the FFC® will just confuse you and slow you down. Don't do it now.
However, what I have learned over time is that people who struggle with money generally don't need more information. In this day and age, information is freely available thanks to Google. What the world needs is more wisdom, and that comes from thoughtful self-reflection. If you decide that is something you want to facilitate for your clients, you are crossing over more into the world of life coaching and way from the world of being the bossy budget person. Which do you want?
If you decide you really want to be a mindset coach, then yes, once you are up and running the FFC® will help you develop that coaching mentality and the skills you need to be successful with that sort of work. The first two days of in person training are truly life changing – although I think the whole 2 year program could probably be done over a three day weekend in terms of content.
3. What other training have you done that has been helpful?
In addition to the AFC®, the FFC®, and Financial Coach Academy, I've taken Leisa Peterson's Mindful Millionaire program, which was helpful in working through some of my own money mindset issues.
I've also done 4 Theta Healing classes – Basic, Advanced, Dig Deeper, and Manifesting and Abundance. It is very woo-woo, so if you are a spreadsheets and facts only person, this is not for you. I've found it to be VERY helpful in rooting out limiting beliefs and changing them instantly, but again, you and the client will have to be open to it, so it's not for everyone.
I'm currently starting training with The Life Coach School. It is EXTREMELY expensive, but I've been very impressed with the mindset of people who have been through the training. I think it will be helpful to me as I expand out of just financial coaching and into business coaching.
Hopefully that's lots of helpful information for you. I wish you the best of luck on your journey toward becoming a Financial Coach and helping the particular clients you resonate with end their financial suffering.
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