Why Financial Advisors Need Money Coaches

They’re not your competitors but they can greatly help your business, your clients and others you’d like to serve.

By David I. Leo
David Leo
David Leo

Financial advisors know the basic “secret” to creating long-term financial well-being: Have monetary inflow exceed monetary outflow, consistently save and invest the excess over time, let the effects of compounding work, and seek the leadership and education of a quality financial advisor like you. But there’s a disconnect between knowing what individuals need and being able to provide it to everyone.

Spending the time, attention and resources required to help people develop the right money habits — particularly those who don’t yet have enough assets or need for a full-service financial advisor — can leave you in an uncomfortable spot.

You have an option. It’s called a “Money Coach.”

Despite my decades of industry experience, money coach is a new profession to my ears and one I think can be of significant value to financial advisors. Most important, the money coaches I have spoken to are not your competitors.

They do not offer comprehensive financial planning or investment management services, yet they can take you off the hook by helping solve the problem and save you time you don’t have. Building relationships with these key centers of influence can help you be a hero to your existing clients. They could also provide you with a pipeline of qualified prospects as some of their clients accumulate meaningful assets.

I’ll emphasize again that money coaches are not competing for your business.  As Danielle Davis told me, “In my discovery calls I always give a disclaimer about me not selling insurance, not advising on investment strategies, and not handling any tax issues. My goal is to guide clients through their money issue such as budgeting, spending and savings, and debt management. Then I refer them to other certified professionals for tax, investment, and insurance needs. I do not compete with financial advisors, but rather, I am a source of referrals.”  

Money Coaches’ Target Clients

Many money coaches offer help to some of the 77 million-plus middle-class households who often fall through the cracks because most do not have the assets or income to “qualify” for full-service financial advisors. Money coaches focus on:

  • Individuals who often earn less than clients who work with full-service financial advisors.
  • Divorcees, some with limited assets, who are adapting to single incomes and/or are new to navigating the financial world.
  • Individuals who need help with debt management, spending and saving habits, and budgeting.

Money takes people in many different directions. Regardless of their financial resources, many individuals have poor money habits, limited experience, and can be psychologically conflicted when it comes to using their money. Face it: Many people are lousy at the basics of how they spend, save and plan their daily financial lives. Some may also struggle with family conflicts that impact their finances. But everyone deserves help with money matters from someone they can trust.

Have you ever turned down someone who inquired about your services because they didn’t meet your desired level of assets? It would be nice to be able to point them to a trusted money coach if they asked you for help. One of the financial advisors I coach recently told me he would like to help people with limited resources, but he just doesn’t have the time or support to do that.

Most financial advisors don’t have enough time or support for individuals with limited financial resources or who are just not good at basic money habits. In many or most cases, these individuals are not ready for the full-service financial advisor’s business model.

But even clients who meet your asset minimums may still need more support than you can provide. Money coaches could be a good resource for your newly divorced or widowed clients who could use some extra handholding, and for your clients’ young adult children. They may also be able to help older clients who are having a harder time with basic money-related tasks that they once easily managed themselves.

Helping The Perpetual Caretaker

Just as with financial advisors, money coaches may have specialties. One of the money coaches I spoke with, Myra Alport, focuses on helping divorced women over 50 (a.k.a. gray divorce) manage their money on a single income, although she is not limited to this niche.

Myra told me women are natural caretakers who often put the needs of everyone else before their own, at a cost to their own financial well-being. And for women who divorce after age 50, “It’s a major shock financially, emotionally and socially,” she said. She emphasized that during their marriages, women may not have been involved in the family finances or they. may have chosen to look away. They’re now solely responsible for making their own financial decisions and struggling with money conversations.

“I help women change that narrative and empower them to make informed money decisions going forward,” she said. She has helped clients reach peace of mind, money clarity, greater confidence and reduced stress, she said.

Improving Habits

Danielle Davis works with married or engaged couples generally age 23 to 48 with annual income ranging between $80,000 and $140,000. Most are educated professionals with student loans, credit card debt, mortgages and children.

“My clients often need help in shifting their money mindsets to gain clarity on any negative thoughts about money,” Danielle told me. “They may struggle with communication about money with their significant other.” Some of her clients need help with their credit scores and may have underlying issues like poor saving and spending habits.

Danielle also helps advisors get help for their client’s young adult children who aren’t yet ready to work with a financial advisor but need some guidance. A referral to a money coach who gets them started with putting their finances in order can make their parents happy and grows three relationships for you.

Highly Paid but Unguided

Money coach Christine Luken, who works with single and divorcing women and high-income professional couples usually 35 to 55 years old. Her clients are typically attorneys, doctors and business owners with annual income in the $250,000 to $500,000 range, but only about half of them already work with a financial advisor.

Christine focuses on budgeting (spending management), debt reduction and savings, and improving money mindset via healthy money habits.  She helps people make wise money decisions and coaches couples who love each other but argue about money.

“I understand the fear, shame and anxiety my clients feel when they’re struggling with finances, because I’ve been through it myself,” she said. “It’s a privilege for me to walk with my clients through emotional money messes, offering compassion and understanding, but never judgment.”

Money coach Kelley Long’s beta program is “designed for women and couples who find themselves at a point where they are no longer living paycheck to paycheck and have some savings built up, but they feel stuck with what comes next in terms of wealth building,” she said. “They know they want to start investing, but they feel like they don’t know enough and/or they are terrified of ‘losing it all.’” And they may feel overwhelmed by all of the decisions they need to make, Kelley added.

The common theme among Rick Zwelling’s clients, at Right Path Financial Coaching, “is the need to learn better financial skills so they can better clarify what is really a need vs. a want,” he said. “The primary goal is budgeting, with an emphasis on building savings. Building excellent credit is also primary. Secondarily, I would say is improving fiscal discipline. The marketplace spends billions of dollars conditioning people that what they think are needs are really wants.”

Empowering Clients

The money coaches I spoke with told me that these are some results they’ve helped their clients achieve:

  • Paying off a house in six years with no inheritances or lump sums.
  • Getting on track to pay off all debts within six months.
  • Paying off three credit cards in three months.
  • Building emergency fund within six months.
  • Achieving new levels of financial stability and mindset.
  • Paying off $51,000 debts in six months and saving $15,000 in emergency funds.
  • Improving cash flow $7,000 per month.
  • Improving net worth $56,000 in six months.
  • Increased savings by a factor of five to ten in less than a year.
  • Establishing excellent credit.

Money Coach Typical Engagement and Fees

Another thing I spoke with money coaches about is their engagements and fees. Although I’m not advocating these individuals, I felt it would be helpful to give you an idea of how some of these arrangements work.

Myra Alport’s typical engagements are three months and she provide six one-hour Zoom sessions, homework and weekly check-ins between sessions for $1,250. She also offers a one-hour session for $150 for women who are comfortable with their finances but may need clarity in one area, such as a debt plan.

Danielle Davis offers a three-month, one-on-one program (currently $1,497), which includes a discovery call, a two-hour strategy session and six 30-to 60-minute accountability sessions every two weeks. She also offers group coaching, at a lower price point, for clients who have common issues.

Kelley Long offers a six-month program starting at $2,500 and will be offering three-meeting programs in the $1,000 range.

Christine Luken’s core program is six months, with two meetings per month, for $4,997. Her optional year-long “maintenance program,” two meetings per quarter, runs $2,997. She also offers a six-module course for financial advisors and planners, “Foundations of Financial Dignity” which is available for $397 and qualifies for CE credit.

Rick Zwelling’s fee range is currently $160 for the initial meeting and then $100 per each one-on-one meeting after that. He also offers group classes in three areas: budgeting, insurance basics and building wealth. The fee for each hour-long class is $350, or $900 for all three.

Additional Reading: How to Transfer Unprofitable Clients 

You Won’t Be Replaced

More information about money coaches can be found at WealthTender. Another resource I’ve come across is Fisecal, which offers financial coaching software.

Money coaching is a newer but growing field and one I expect we’ll hear a lot more about. It won’t replace the need for financial advisors, but it can add a lot of value.

David Leo is founder of Street Smart Research Group LLC. He is an author, speaker, coach, consultant, and trainer to financial professionals. David has worked with the financial services industry for decades, originally as a consultant with IBM and then with UBS/Paine Webber before starting his own firm. If you would like more information about his services, contact him at David@CoachDavidLeo.com or visit www.CoachDavidLeo.com.



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