Advertorial: what is financial coaching and how can it help you reach your goals?

A financial coach could help you to make smarter financial decisions and feel confident in your own money management.

Financial coaching is a relatively new service that was created to fill a gap in the traditional financial advice market.

But what is that gap?

Financial advisors are typically used by those looking to invest significant sums of money, but that can be a bit of an exclusive club.

Financial coaches, however, are open to anyone that’s interested in taking control of their finances and learning about how to better manage their money, regardless of their income or savings.

A financial coach’s objective is to inform and empower you to make smarter financial decisions, and to feel confident in your own money management.

It’s the financial equivalent of getting a personal trainer.

With over 15,000 users since launching last year, Claro Money is the UK’s first financial coaching app.

It’s easy to get started.

All you need to do is download the app, sign up and you can book a 45-minute session with one of Claro’s in-house expert financial coaches for a time that works for you.

These sessions are currently free, but the company will start charging from June. 

How is it different from financial advice?

Financial coaching has the potential to help anyone, regardless of how big or small your savings pot is.

Coaching services are geared towards helping you to better understand your finances, then using that guidance and support to build a plan suited to your specific needs and goals to take control of your financial situation.

It’s a ‘Do it with me’ kind of service, whereas financial advice is more ‘Do it for me’, often suited to individuals with substantial capital to invest.

Advisors will sometimes research the market and suggest investment options for their clients, with little focus on self-sufficiency.

Traditional advisers are regulated by the FCA, which allows them to sell specific products, banks or platforms to their clients.

By contrast, financial coaches aren’t regulated to do that, and wouldn’t necessarily want to, either.

A financial coach’s end goal is to inform and empower you so that you feel confident enough to make your own financial decisions.

Like a trainer, they can support you but not lift the weights for you.

So how do they make money?

Financial advisors charge a management fee, which comes from taking a percentage of their client’s assets.

In general, it is only profitable for financial advisors to work with people with upwards of £100,000 to invest over a minimum of 5 years.

Alternatively, financial coaches simply charge for their time, meaning it’s an accessible and affordable option for everyone.

Think of it as the financial equivalent of getting a swimming lesson.

Once you’ve got the guidance that you need, you’re ready to get out there on your own.

How a financial coach can help you

A financial coach will help you to take stock of your current situation, then define your goals for the future and build a realistic plan to achieve them.

Let’s say you want to save money for a mortgage deposit.

A financial coach can help you to understand the Government’s ‘Help to Buy’ schemes that are available to you, explain the different types of savings accounts that you can use to get there and also run through other savings options with you, such as ISAs, LISAs, investment funds and more.

In light of historically low interest rates for savings accounts, perhaps you want to start investing your money.

A financial coach can help you to understand the different types of investments that are out there by introducing you to the terminology and demystifying common concepts so that you can get started.

It can be a daunting task to do this research on your own, so that’s where talking to an expert comes in.

Maybe you simply want more security and the ability to manage your money in a smarter way.

A coach will be able to assist you with improving your financial confidence and suggesting the best ways to build a safety net for things like retirement or emergency funds.

The aspects with which a coach can help you are as varied as people’s individual situations.

Once they get a sense of your personal circumstances and your goals, they can tailor your options accordingly.

The benefits of financial coaching

In addition to the main goal of regaining control over your finances, the everyday benefits of financial coaching are plenty:

•           Improved financial literacy;

•           Confidence in managing personal finances;

•           Improved emotional wellbeing;

•           Access to hard-to-find information;

•           Feeling comfortable enough to ask ‘silly’ questions;

•           Improved relationship with money.

How to find a financial coach?

Claro Money is the UK’s leading financial coaching app and multi-category British Bank Award 2022 finalist for Best Personal Finance App, Best Investments Provider, Best Newcomer and Innovation of the Year.

Claro Money was crowned Best New Investment Platform 2022 by Boring Money.

You can arrange a one-on-one session with an experienced financial coach when you download the Claro app today.

This is a paid promotion from Claro Money. The views expressed in this article do not necessarily reflect those of loveMONEY.