Financial coaching: a business benefit that’s gaining serious traction in the employee benefits world, and beyond.
Demand for the service has risen exponentially. ‘Financial coaching near me’ gets searched hundreds of times a month, and 9 in 10 people would like someone to talk to about their finances. But why?
People are more worried about money than ever (in fact, 95% of people do today) yet 25% of British adults couldn’t pay an unexpected £200 bill. There’s a serious disconnect there. As employers, who impact our employee’s financial lives in so many ways, it’s our responsibility to try and bridge the gap.
Offering financial coaching in the UK as a benefit is one way of doing so. But what does a financial coach actually do, and how do you make sure the benefit will deliver the results you need?
In this blog post we’ll cover what a financial coach does, how much they should cost, the difference between a financial coach and a financial advisor, and what financial coaching courses and qualifications your provider should have on their roster.
Once you’ve finished reading, you should be able to decide if a financial coaching benefit is worth it for your business. Spoiler alert: the best financial coaching most definitely is 😉
Ready? Let’s dive in.
What does a financial coach do?
A financial coach is an expert who takes a holistic view of an individual’s finances to help them plan for the future. Financial coaches look at all aspects of their client’s financial lives: spending habits, what they’re doing with their money, and their plans for the future. They’ll use this information to come up with guidance to help their client hit their goals: what should they continue doing, and what do they need to change?
You can think of a financial coach as a personal trainer – only they’re getting your finances in shape, not you! Clients report that setting aside time to look at their financial ‘big picture’ is incredibly beneficial, and encourages them to look at the future, not just the here and now.
How much should a financial coach cost?
Naturally, the cost of a financial coaching business differs from provider to provider. It also depends on what type of financial coaching is on offer: is it 1:1 personalised advice, workshops, educational content, WhatsApp conversations, or all of the above?
Broadly speaking, clients can expect to pay around £200-£300 a year for a financial coach. A lot of providers offer a free initial consultation followed by a fixed price for a year. Another option is to pay per call or session with a coach, which costs around £50-£100 per session.
At Octopus Money, employers can choose to absorb the cost and give free financial coaching to their employees. Alternatively, employees have the option to pay for coaching services through a salary sacrifice scheme. This option will cost around £14-17 a month.
For those struggling with debt, there are plenty of free services that offer financial guidance. StepChange Debt Charity, The Money Adviser Network and Money Wellness are all good examples.
Are financial coaches worth it?
When considering if financial coaching as a benefit is worth it, we’d encourage you to think about it from two angles. Firstly, how will it make your employees feel? Secondly, how will it make them feel about your business?
The best financial coaching will impact both sides of the coin, leading to happy employees, and a happy business.
As a financial coaching business, we’ve got plenty of data to show the impact a financial coach can have on your employees, and on your business. Let’s take a look:
How working with an Octopus Money Financial coach makes employees feel:
- 81% feel less worried about money
- 81% feel more financially resilient
- 85% feel more on track for the financial future they want
How Octopus Money Financial coaching impacts business metrics:
- 76% employees feel more financially supported by their company as a result
- 72% employees know how how to make their salary stretch further in the face of cost of living increases
- 68% employees agree they can see themselves staying at their current company for longer as a result of working with Octopus Money
As an HR professional, though, we’re sure you’ll agree that facts and figures need real human voices to back them up. Let’s hear it from some of our clients:
- “Excellent and friendly advice. It has motivated us to carry out important planning and prep that we should have done years ago, and great ideas for how to plan for the future too.”
- “Great product and people that are addressing a gap in the market for people like me who don’t justify a Financial Advisor (yet!) but need more than just generic web content like ‘Don’t spend as much.”
- “The two sessions so far have made me feel like my finances are something that are under my control rather than something that I am controlled by. Very empowering to understand the bigger picture!”
What’s the difference between a financial coach and a financial advisor?
There are several key differences between a financial coach and a financial advisor. These differences will help an individual decide which service is right for them. Let’s take a look:
What they do:
Financial coaches: take the behaviours, approaches, and goals of a client into account to help them plan for the future and reach their goals. They can’t give advice on certain products or approaches; instead, they’ll run through the pros and cons of each option.
Financial advisors: tend to specialise in one specific area of financial advice. For example, they might work with a client on their tax payments, planning for retirement, buying a property or making the most of a lump sum.
Who they’re for:
Financial coaches: are available to help anyone, at any stage of their life or money journey.
Financial advisors: often have clients with minimal debt, and a minimum asset level.
Qualifications:
Financial coaches: a reputable financial coaching business will train their coaches or have them take financial coaching courses, but the profession isn’t regulated. They therefore shouldn’t recommend a specific product or course of action.
Financial advisors: are regulated by the Financial Conduct Authority (FCA). They can give specific product recommendations and answer clients’ specific questions.
How they charge:
Financial coaches: a financial coaching salary usually comes from charging per hour or per session. Employers can choose to provide free financial coaching for their employees, or offer it via salary sacrifice.
Financial advisors: usually charge a fixed fee on top of a percentage of their clients’ assets.
Do you need qualifications to be a financial coach?
The short answer: no, you don’t. It’s not a regulated profession: anybody can practise financial coaching in the UK. To set up a financial coaching business, individuals are not required to pass any type of certification.
It’s really, really, really important to do your due diligence when researching financial coaches for your business. Whether you’re looking at an individual or accessing financial coaching in the UK through a provider, it’s important to not only look at what type of coaching they offer, but also what training they’ve gone through.
At Octopus Money, for example, we put coaches through a certificate of excellence qualification. Our financial coaching courses take between four to twelve weeks, depending on experience. Once new coaches have completed the training, they must pass a final assessment.
Our training’s also independently accredited by The London Institute of Banking & Finance as well as The Initiative for Financial Wellbeing.
Offering access to a financial coach is a way of democratising financial advice. It’s an essential for any company taking employee wellbeing and DE&I seriously. Businesses that do so will reap the rewards; employees that feel in control of their finances, and boosted engagement and retention metrics. Sounds like a win-win to us.
Want to learn more about how introducing a Financial Coaching benefit can impact your business? Read Experian’s story here.
