Are you looking for ways to start a financial coaching business this 2020? If you are an aspiring financial coach, running such an enterprise is a lucrative venture nowadays.
On a 2019 survey by Bankrate, 78 percent of adults in the US are losing sleep because of financial problems. People who do not have $1000 in both their savings and checking accounts are at around 56 percent. Furthermore, 62 percent of Americans cannot even rake up more than US$1000 for emergency funding. And 35 percent of adult Americans have debt in collections.
On the other hand, only one out of three Americans keep a budget for the household. And lastly, one in three adults do not have a retirement plan. With all these financial stresses mounting by the day, the need for financial coaches is exceptionally high.
Who Is a Financial Coach?
Financial coaches are responsible for educating clients with the basics of personal finances. Through a strategic spending plan that is realistic and attainable, the coach can help empower the client to become responsible in their spending habits. Furthermore, encouraging growth and learning, as well as becoming an accountability partner throughout this learning process.
In the same way that a person gets a personal trainer for workout goals, a client may need the help of a financial coach to achieve financial wellness.
What Are the Common Misconceptions About Financial Coaches?
Before you start a financial coaching business, it is only best that you should know about common misconceptions people have about this profession.
- First, there are no formal schools for becoming a financial expert. Yes, there are short courses that may help. But you do not have to be trained in handling advanced tax planning or setting up Roth IRA ladder conversions to be qualified.
- There is a difference between coaching and advising. People often exchange these two terms, but they are different from each other. Financial coaching focuses more on implementing personal money management, encouraging behavioral change, and being accountable to a client-driven expenditure plan. Meanwhile, financial advisors focus on assisting in managing existing wealth by offering financial products and strategies such as insurance.
- You do not have to have all the financial coaching abilities to help people. If you can do your research and learn new skills, then you can be a coach.
- Moreover, being a financial coach is not a competition. You do not have to be the greatest in the field. All you need is to build up your reputation and expertise through experience.
- Likewise, being a financial coach does not mean that you have a tremendous economic status. But do not let this hinder you from helping others.
Lastly, starting your career as a financial expert does not require a lot of planning. That is why, through this article, you will discover what careful steps you need to take in reaching your goal. So, to learn more about these, just read on.
Steps to Becoming a Financial Coach
Start a financial coaching business without a hassle. If helping people is your passion, then indeed, this career path is right for you. With the following steps, you will have enough guidance in doing it the right way.
1. Know your purpose.
The first thing that you must have in mind is your purpose. Be clear of your intentions when starting this business. So that when faced with challenges and hard work, you will have the drive to carry on because you know your purpose.
2. Get training and certification.
Getting the appropriate training and certification is a must in every entrepreneurial venture. Moreover, achieving the required competencies are as important as all the knowledge you can get from reading books.
Learn new skills in behavioral psychology, financial law, practical pedagogy, and best coaching methods. You may also enroll in a business coaching certification program and become a Certified Personal Finance Consultant. Complete the 180-hour training and practice program, and pass the proctored test to become certified.
Learn how to conduct coaching sessions, establish healthy coach-client boundaries, and set up a retirement plan and avoid bankruptcy through this certification. Potential clients will see that you meet industry standards. Thus, assuring them of your competence and professional capabilities.
3. Earn practical experience.
Study how to guide and educate clients in achieving financial freedom effectively. Learn financial coaching and counseling tactics. Gain content understanding of personal finance questions. Know the behavioral and psychological finance characteristics of coaching.
Through a training program, you will have hands-on experience in financial coaching. A superior or mentor will guide you throughout the process.
4. Discover management resources and tools.
To start a financial coaching business, having the education, experience, and certification is not enough. You also have to have the right management tools to help you with your entrepreneurial venture. Set up financial review systems, reporting software, and client-relationship management resources to coach clients confidently and efficiently.
Look for computer software that allows you to organize client information such as bank balances, insurance, credit reports, and investments. Install anti-malware and anti-virus programs into your computer and ensure data protection to clients. To provide clients a physical copy of their financial plan and report, you also have to have a computer system complete with printers and photocopiers.
Furthermore, bookkeeping programs, scheduling applications, point-of-sale systems, digital contract signing tools, and telecommunication software are also essential to making your job easier. A fully-functional office would be ideal whether you want to start your consultancy services at home or an office setting.
5. Execute a financial coaching business plan.
It does not matter whether you start a financial coaching business immediately or start your way up as an employee first. Before transitioning to establishing a coaching enterprise, make sure that you have outlined a precise plan.
Document client results and develop case studies if possible. However, you must not disregard confidentiality and data protection guidelines. Know whether your programs are sufficient for individual clients, corporate entities, and prospective employers. Through these, you will show people that you are a distinguished financial coach.
6. Launch online presence, marketing, and brand awareness.
When starting a business, ensure that developing a clear business plan is on top of your priorities. The business model you have planned out must be executed early on during the setup process to ensure success. By leveraging proven models, you can achieve a growing enterprise and a status as a successful coach.
One proven business model that you can take advantage of is online marketing. Campaign for brand awareness online and let this be your official storefront.
Demonstrate your expertise by creating a professional website and contribute to it white paper articles and blog posts too. Gather an audience and create a network through social media such as Facebook, Twitter, and YouTube, and create a customer acquisition funnel online. Also, set up automated communication systems with the use of messenger bots in social media platforms to increase click conversions.
These, however, would depend on what your target audience would be: individual prospects, community groups, and corporate clients. With today’s innovations, you can afford marketing strategies that will connect you to a vast number of clients, even beyond your locality – all these without costing you a lot.
Be invited to social events and get speaking opportunities. Increase referrals, earn PPC and achieve NFEC promotions too. These are only some examples of what you can attain with an established online brand.
7. Ensure commitment to excellent service and results.
Your main goal is to help clients achieve their financial goals after having setbacks. Moreover, you have to take responsibility for keeping them motivated.
Hence, there would be times when you will become exhausted and frustrated with a client. But do not let this stop you from doing your job as a coach. Let these be opportunities for you to grow and learn professionally.
Continue to commit yourself fully, have compassion during obstacles, and celebrate your client’s successes. When you get to help someone, the experience would be enriching.
Financial coaches are more than educators. You will be a mentor, a partner, and even possibly, a friend who will show clients how to make life-changing decisions through guidance while supporting their values and goals. Through these foundational steps, start a financial coaching business and helping people achieve freedom from debt and bankruptcy in this new decade.