What is a Wealth Coach?
Written By Tiffany Woodfield, Financial Coach, TEP®, CRPC®, CIM®
A wealth coach is a financial professional who guides individuals or businesses to improve their financial well-being and grow their assets and net worth.
Unlike traditional financial advisors or planners, who focus primarily on investment strategies, insurance, and retirement planning, a wealth coach takes a more holistic approach.
Early in my financial career, I noticed that how much money you have isn’t the thing that gives you a sense of financial freedom. Instead, your attitude and relationship with money create true freedom.
People who aren’t conscious of their money beliefs fall into one of these categories:
- The first category is people who actively push money away, subconsciously believing money is the root of all evil and money doesn’t buy you happiness.
- The second category is people striving to get more money, thinking it will buy them the respect and recognition they seek. Think Bernie Madoff; no amount of money would fill his void.
- The third category is people with wealth who still feel poor and cannot enjoy success because they have a “lack mentality.” They experience a constant fear of running out.
In these three situations, money controls you, holding you back from happiness. In fact, it is surprising how few people have a good relationship with money.
Table of Contents
- What Does a Wealth Coach Do?
- How Does a Wealth Coach Help?
- Pros and Cons of Working with a Wealth Coach
- Wealth Management vs. Wealth Coaching
- Financial Coaching vs. Wealth Coaching
- Who Should Be on Your Wealth Team
- Why Wealthy Families Might Need a Wealth Coach
- What to Expect When Working with a Wealth Coach
- Common Issues in Managing Wealth Effectively
- Top 4 Wealth Management Mistakes Your Wealth Coach Can Help You Avoid
- How to Find a Good Wealth Coach
- What Skills and Professional Credentials Should Your Wealth Coach Have?
- Common Questions about Wealth Coach
What Does a Wealth Coach Do?
A wealth coach works with you to excavate your attitude and relationship with money and wealth.
A wealth coach will help you understand your internal programming and subconscious mind to ensure consistency with your goals. They will help you understand that wealth is about much more than money. It is about the freedom to make decisions that align with your values.
Having wealth gives you the time to do the things that bring you happiness, whether spending time with family, creating a business, giving back, or traveling.
When you don’t understand your relationship with money, particularly if you have a terrible relationship with money, you are holding yourself back from the things that bring you joy.
A wealth coach reminds you that money is only the currency of exchange, so it can’t be bad; it is what it is.
However, your relationship with money or pursuing money at all costs can be harmful. It is the impact of money that is important rather than money itself.
How Does a Wealth Coach Help?
A wealth coach helps by providing a major missing piece to the puzzle: your emotional intelligence around money. You have deep-rooted beliefs about money and money blocks that you picked up from your community and personal experiences growing up. Once these are identified, a wealth coach guides you towards releasing these beliefs and achieving financial freedom.
A wealth coach can be there every step of the way to keep you on track and ensure your decisions align with your beliefs. Wealth coaches can specialize in helping you set a budget, build wealth, or get out of financial trouble. But the major starting point is dealing with your emotional literacy around money.
Pros and Cons of Working with a Wealth Coach
It’s useful to look at various situations in which a wealth coach can help when you’re trying to decide if there’s a benefit to working with a wealth coach.
The benefits will depend on your situation, so here are three common situations where working with a wealth coach makes sense.
Wealth Coaching for Business Owners
Let’s say you’re a very successful business owner who has created wealth and is looking for strategies to avoid overpaying taxes and to create a lasting legacy for your heirs. Wealth may create complexity for your business and personal finances. You likely have a team of specialists such as lawyers, accountants, business valuation experts, and financial advisors.
The issue you face is that you need help understanding the best strategies and solutions when you are in these meetings.
On top of this, you need help managing and understanding the emotions that come with dealing with money and family. A wealth coach understands you, facilitates conversations, and acts as a sounding board. They help you understand the technical aspects as well as the emotional aspects of the financial and wealth-building strategies.
Wealth Coaching for Successful Professionals
You have achieved financial success in your career and are wondering what is holding you back from reaching your next goal. You feel guilty spending money; although not logical, you often worry you will run out of money.
In this situation, a wealth coach can help you understand the limiting money beliefs holding you back.
You may have a “lack mentality” or a fear that your family will think badly of you if you achieve more success.
What if they think you are just chasing money and always wanting more?
Wealth Coaching for Overspenders
You are struggling to get ahead and can’t seem to stick to a budget or be able to save a dime!
A wealth coach can be an accountability partner and help you take action to be in control of your financial situation. Creating a process that first acknowledges why you are struggling and then how to move forward to financial freedom.
These are just three examples of situations where a wealth coach can be helpful, and there are many more circumstances.
The important thing is that you need to be committed to wanting to make a change. Secondly, you need to choose a wealth coach with the education, skills and background to help you.
As you can see, it is about having a coach to help you understand the thought patterns that may be limiting you and then acting as a guide for which tools to use.
Cons of Working with a Wealth Coach:
- It costs money and could be a waste if you don’t find the right coach for you and your situation.
- If you aren’t ready and willing to take the time to learn what is holding you back, having a coach won’t change that.
Wealth Management vs. Wealth Coaching
Wealth management focuses more on the technical skills of planning how to manage your wealth and often includes services such as managing your investments, retirement, estate, and tax planning. Wealth coaching is more centered on your personal money skills and beliefs, which dictate how you make decisions around money.
Financial Coaching vs. Wealth Coaching
Trying to understand all the different titles in finance may feel confusing because many overlap.
Financial coaching and wealth coaching are used interchangeably. A good starting point is understanding that when someone’s title includes “coach,” it usually means they are not licensed to help you manage your investments. They are more focused on coaching you to improve your ability to save, increase your financial literacy, or create a plan to reach your goals.
Who Should Be on Your Wealth Team
Who you should have on your wealth team depends on your assets and preferences.
Below, I’ll outline some professionals who often make up a wealth team.
Portfolio Manager vs. Financial Advisor
A portfolio manager builds an investment strategy and maintains an investment portfolio. While many portfolio managers are also investment advisors, the same cannot be said about financial advisors. A portfolio manager is held to a higher standard than a financial advisor. To become a portfolio manager, you need a more advanced level of experience and education. You also have a fiduciary responsibility to put your clients’ needs first, which means you must be completely unbiased.
A portfolio manager is a good choice for clients with a higher net worth who want a customized wealth plan.
While a financial advisor may be a good starting point for people looking to have their investments managed but who don’t need an individual portfolio manager yet.
Accountant
An unplanned taxable event (i.e. surprise taxes!) can significantly impact your financial situation, so it is essential to have an accountant who specializes in helping clients in a similar situation to yours. While you may only need an accountant to prepare your yearly tax returns, others need advice regarding business succession planning, cross-border estates or taxation of trusts.
Estate Planning Attorney
Death is a significant taxable event; if not planned for properly, the impact on your estate and your loved ones is substantial. An estate planning attorney educates you on transferring your assets at death and planning opportunities you can take advantage of while living. It is important that you don’t wait to start this process.
Financial Planner (CFP)
A financial planner helps you create a plan to reach your financial goals. A Certified Financial Planner (CFP) is a designation that formally recognizes an individual’s expertise in financial planning, insurance, taxes, estate planning and retirement planning.
Wealth Coach or Financial Coach
A wealth coach will help you to create emotional awareness of your relationship with money, which drives all your financial decisions. Working with a wealth coach helps you make sense of all the other information and tools you receive from your financial team.
Why Wealthy Families Might Need a Wealth Coach
If your family is wealthy, you likely already have many advisors to help you manage your money, protect you from liability, discuss succession plans, and make decisions to preserve your wealth. You may be wondering why you need a wealth coach.
You need someone who understands you and your relationship with money.
The wealth coach can guide you to make decisions that align with your beliefs and aspirations. They help you to create a framework so your choices come from a feeling of freedom and understanding rather than avoidance and confusion.
Think of your wealth management team like a toolbox; every tool has its purpose.
Your accountant has a hammer, so everything is a nail. Your lawyer has a screwdriver, so everything is a screw. Your insurance advisor has a wrench, so everything is a nut or bolt. Your advisors are specialized, important and necessary for their skills.
A wealth coach is there to understand you.
Having a trusted wealth coach who knows your vision, values, and innermost desires makes every other tool and advisor more effective because they will align with your vision.
In addition, a wealth coach can help navigate difficult conversations between family members when discussing estate or business succession planning. Often, parents want wealth to help their kids rather than destroy their work ethic or negatively impact their relationship with other family members. Having a wealth coach to quarterback these conversations and create formal family decision-making strategies reduces future conflict.
What to Expect When Working with a Wealth Coach
When working with a wealth coach, you can expect them to spend time getting to know you and your situation first. They will want to uncover your beliefs around money and how they impact your decisions. The goal is to understand how you got to where you are and what is most important to you now. Once they know your foundation, they’ll devise a strategy to help you achieve your goals.
Common Issues in Managing Wealth Effectively
Money isn’t something we’re just born knowing how to manage. In fact, managing money is a skill we have to learn.
Some of the most common mistakes and issues that come up for people when managing wealth are:
- Avoiding money discussions and thinking it will just work out
- Not educating oneself and one’s family on how to manage finances
- Not addressing one’s limiting beliefs about money
- Getting stuck in a lack mentality despite having substantial assets
- Having unrealistic expectations when investing
- Underestimating the impact of taxation and paying the price
- Thinking short-term rather than long-term
- Not saving when one is in one’s prime income-earning years
- Not having a financial plan
- Not taking a proactive approach to reach one’s goals
- Not starting estate planning early enough to transfer wealth effectively and protect one’s loved ones.
- Not creating a succession plan as a business owner
- Allowing fear, rather than knowledge, to drive one’s decision-making
Top 4 Wealth Management Mistakes Your Wealth Coach Can Help You Avoid
Mistake #1: Making poor money choices due to money blind spots.
A wealth coach helps you understand how your emotions and upbringing impact all your financial decisions by helping you see your “blind spots” regarding money. A wealth coach can steer you toward a better outcome for you and your family by helping you become conscious about your money beliefs and make better decisions.
Mistake #2: Not having a plan for current and future wealth.
A wealth coach can help you follow a plan and be accountable for taking the steps to reach your financial goals.
Mistake #3: Avoiding estate planning and important money conversations.
A wealth coach is trained to facilitate difficult conversations and help create strategies so you can discuss your vision with family members. This is particularly important because one of the most common mistakes people make is a lack of communication around money.
Mistake #4: Not having the right money team to help you manage your wealth.
A wealth coach can act as a sounding board and offer insight on bringing the bigger picture together. They can then facilitate other specialists, such as your accountant, financial advisor, and lawyer, to work with you to reach your goals.
How to Find a Good Wealth Coach
There isn’t a regulatory body or formal licensing to become a wealth coach.
This means you will need to understand the background and credentials of the wealth coach you hire.
Steps to finding a good wealth coach:
1. The most critical first step when meeting with a wealth coach, whether online or in person, is determining if you could see having a long-term relationship with this person.
- Can you communicate easily with them?
- Does their coaching style fit your needs?
2. Secondly, determine what you seek from the coaching relationship and whether they have experience dealing with people like you. For example:
- Are you looking to build wealth and reach a work-optional lifestyle sooner?
- Do you wish to understand how to transfer wealth in the most tax-efficient manner?
- Do you want to understand your beliefs around money and how they hold you back?
3. Finally, understand their credentials and whether they are relevant to your situation. When you have accumulated wealth and have financial complexities, you may need to work with someone with additional qualifications to help create financial literacy. This will make you feel more confident attending some of your specialist’s meetings.
What Skills and Professional Credentials Should Your Wealth Coach Have?
A great place to start is to look at their website to understand the credentials of the wealth coach.
Remember, you’re hiring them to be your guide to help you reach your financial goals. If you have a more straightforward situation, your coach’s financial services credentials may not be as crucial as their emotional intelligence and ability to help uncover what’s holding you back.
When your situation becomes more complex and you have accumulated wealth, it becomes more important to look at their professional credentials in the financial services industry.
Some of the designations that would be useful to look for are:
- Portfolio Manager
- Investment Advisor
- CFP Certified Financial Planner
- TEP Trust and Estate Practitioner
- CRPC Chartered Retirement Planning Counselor
- BComm or relevant degree
- Master’s degree
Like anything else, personal preference also comes into play, so you are looking for someone with the technical knowledge and soft skills to be your guide. While they won’t be the ones to create a financial plan for you or invest your money, their background and experience will help them educate you in these areas.
Common Questions about Wealth Coach
What are some of the most common issues families have when effectively managing their wealth?
The most common issues I find families have when effectively managing their wealth are centered around a fear of how to talk about money. This leads to a lack of understanding. It is important to communicate your vision and values around managing wealth.
Is a money coach or wealth coach worth it?
A money coach or wealth coach is worth it as long as you are willing to take the action steps they suggest. You must be committed to the process to get the most out of it.
Why is it important for wealthy families to invest in these coaching services?
With increased wealth comes increased complexity, and a lack of a clear family vision can lead to significant problems.
Is wealth coaching only for wealthy families, or are there benefits for families of other financial means?
Wealth coaching benefits families of all means. Families who are building wealth benefit because a coach can keep you on track to reach your financial goals and increase your financial literacy. A coach can also create strategies and an action plan to move you closer to financial freedom.
What does a wealth coaching consultation entail?
A wealth coach will first do a discovery meeting. They will want to understand where you currently are, your main obstacles and where you want to go. This initial meeting will give you an understanding of the coach’s services and style and whether they fit your objectives.
How does the process unfold, and what should families expect?
A wealth coach will initially discuss different options and packages depending on your desired outcome. A family should expect a coach to create a proposal after the initial consultation. It will include how involved you want them to be.
For example, some people only want an initial plan and to check in monthly. Others will want their wealth coach to meet with them weekly, which can include working with family members. The more complex your situation, the more you’ll want to work with your coach.
What is the job of a wealth coach?
The job of a wealth coach is to help you reach your financial goals, whether that’s to reduce debt, increase your savings, or implement a family succession plan. A wealth coach focuses on soft skills and helping you understand your relationship with money first. Then, they help guide you toward solutions and are an accountability partner.
What is the difference between a money coach, a wealth coach, and a financial advisor?
A money and wealth coach can be used to describe a similar service, which is coaching you on your relationship with money. They can also help with budgeting and identifying the money blocks holding you back from financial success. Coaching is about learning your behaviours around money. A financial advisor has the licensing to manage your investments, while a wealth or money coach usually does not.
Who is the most famous wealth coach?
Some of the most famous wealth coaches are Suze Orman, Benjamin Graham, Dave Ramsey and Warren Buffett. When you research these wealth coaches, you will notice a few are economists, financial advisors, consultants and investors. Their coaching style may be focused on education through books, podcasts, and websites to increase general knowledge. Dave Ramsey has a program with individual coaching from people who have learned from Ramsey’s principles.
How much should I pay a financial coach or wealth coach?
This will depend on your situation; some coaches charge an hourly rate, while others charge a flat rate for several sessions. What you pay will depend on the experience of the coach and your budget.
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About the Author
TIFFANY WOODFIELD is a financial coach, cross-border expert, and the co-founder of SWAN Wealth based out of Kelowna, BC. As a TEP and associate portfolio manager, Tiffany has extensive experience working with successful professionals who want to leave a legacy and enjoy an adventurous, work-optional lifestyle. Tiffany combines extensive knowledge from her background as a financial professional with coaching and her passion for personal development to help her clients create a unique path that allows them to live their fullest potential. Tiffany has been a regular contributor to Bloomberg TV and has been interviewed by national and international publications, including the Globe and Mail and Barron’s.