Setting the Record Straight: Understanding Financial Advice, Coaching, and Planning

It can be frustrating when FCA-regulated financial advisers, perhaps unintentionally, look down on other financial service professionals, especially when they suggest that becoming one of them is somehow a step up. The reality is that FCA-regulated financial advice and the broader spectrum of financial services each serve distinct and important roles. Confusing the two doesn’t just miss the point—it can lead to misunderstanding what people truly need from financial professionals.

Clarifying FCA-Regulated Financial Advice

First, let’s set the record straight on what FCA-regulated financial advice actually entails. This type of advice is specifically about recommending regulated financial products—investment funds, pensions, insurance policies, and the like. These advisers act as intermediaries, helping clients navigate the myriad of financial products available on the market. It’s an important service for those who need specific product recommendations based on their personal circumstances.

However, it’s crucial to understand that not all financial advice falls under the FCA’s umbrella. In fact, the FCA itself makes this clear in its handbook (PERG 8 Annex 1), where it outlines what constitutes generic financial advice—guidance that doesn’t involve recommending a specific product. This kind of advice, which is outside the FCA’s regulatory perimeter, is incredibly valuable and encompasses a wide range of financial support that many people need.

The Broader Need for Financial Coaches and Planners

While FCA-regulated advice is essential for some, there’s a much broader demand for financial coaching and planning—services that help individuals address common financial challenges without necessarily recommending specific financial products. These services include improving financial literacy, managing budgets, reducing debt, and planning for the future, all of which are vital for financial well-being but don’t involve buying a particular investment or insurance product.

For most people, especially those in the early stages of their financial journey or those facing immediate financial pressures, the need isn’t for someone to sell them a product. Instead, they need guidance on how to manage their money better, set financial goals, and develop healthy financial habits. This is where financial coaches and planners come in. They offer a supportive, educational approach that empowers people to take control of their financial lives without the pressure to purchase something.

Why We Need More Financial Coaches, Not Just FCA-Regulated Advisers

There’s a common misconception that becoming an FCA-regulated adviser is the pinnacle of a financial services career. In truth, the financial services landscape is far more nuanced. The idea that the public primarily needs more regulated advisers overlooks the reality that in today’s commoditised market, many people can easily access low-cost, diversified investments directly from providers without the need for intermediaries.

What we do need more of are financial coaches and planners—professionals who can help people tackle everyday financial issues. This includes improving financial literacy, managing debt, budgeting effectively, building an emergency fund, and planning for long-term financial security. None of this requires recommending a specific FCA-regulated investment. Instead, it’s about providing the kind of practical, hands-on support that makes a real difference in people’s lives.

“The world needs more peacemakers, healers, restorers, storytellers, and lovers of all kinds.” – Martin Luther King Jr.

Choosing the Right Words: Coaching, Planning, and Advice

Language matters in financial services, and the terms we use can either clarify or confuse. While FCA-regulated advisers often describe what they do as “advice,” it’s important to recognise that much of this is actually sales—helping clients choose between products, often from a limited range. To avoid confusion, I prefer to use the terms “coaching” or “planning” when describing generic advice, as these terms better capture the educational and supportive nature of these services.

Similarly, the word “guidance” is often misunderstood. The FCA uses it to describe non-advised selling, but many people confuse it with non-sales advice.

The Real Risk Lies in Product Distribution

Another point of confusion is around risk. FCA-regulated advisers sometimes suggest that generic financial advice is high risk. However, it’s essential to recognise that the true risk often lies in the distribution of financial products—whether those products are regulated by the FCA or not. The complexity and potential conflicts of interest inherent in selling financial products make this a much higher risk activity than providing general financial guidance or coaching.

Conclusion: Celebrating All Financial Professionals

At the end of the day, all financial service professionals—whether they are FCA-regulated advisers, financial coaches, or planners—play vital roles in helping people achieve financial security. However, it’s important to recognise the distinct value that each brings to the table. By understanding and respecting these differences, we can better serve the diverse needs of our communities and help more people build strong, healthy financial futures.

So, let’s move past the idea that one type of financial service is inherently better than another. Instead, let’s focus on expanding the reach and impact of all financial professionals, ensuring that everyone has access to the support they need to succeed.

Q&A: Understanding Financial Services and Finding the Right Support

Q1: What’s the difference between FCA-regulated financial advice and financial coaching or planning?

A: FCA-regulated financial advice focuses on recommending specific financial products like particular investments, pensions, or insurance. It’s about helping you choose the right product based on your individual needs. In contrast, financial coaching or planning is broader and doesn’t involve recommending specific products. Instead, it helps you manage your overall financial situation—like budgeting, reducing debt, or planning for future goals. Both services are valuable, but they serve different purposes depending on your needs.

Q2: Do I need to see an FCA-regulated adviser to manage my finances effectively?

A: Not necessarily. While an FCA-regulated adviser is essential if you need help choosing specific financial products, many people benefit more from financial coaching or planning. These services can help you build financial literacy, manage your money better, and plan for your future—all without needing to buy a specific product. It’s about finding the right kind of support for your unique situation. For further information, check out Be Your Own Financial Adviser by the brilliant Jonquil Lowe.

Q3: Is financial coaching risky compared to FCA-regulated advice?

A: Financial coaching is not about selling products, so it carries different kinds of risks compared to FCA-regulated advice. The real risk often lies in choosing the wrong financial product, which is why FCA-regulated advisers are important for those decisions. Financial coaching, on the other hand, is about educating and empowering you to make better financial choices. It’s more about reducing risks by improving your financial habits and knowledge.

Q4: Why do some FCA-regulated advisers seem to look down on other financial professionals?

A: This can stem from a misunderstanding of the roles different financial professionals play. FCA-regulated advisers are experts in recommending specific products, but that doesn’t make them superior to financial coaches or planners. Each role is crucial in helping people with their finances, and one isn’t necessarily better than the other—they just focus on different aspects of financial wellbeing.

Q5: How do I know if I need financial coaching or FCA-regulated advice?

A: If you’re looking to purchase a specific financial product and require an expert to choose the best one for you, like an investment or pension, you’ll need the expertise of an FCA-regulated adviser. However, if you’re looking to improve your overall financial situation—whether that’s managing debt, saving for the future, or just getting better at budgeting—financial coaching might be more suitable. It’s all about what’s most relevant to your current financial needs.

Q6: Can financial influencers or “finfluencers” provide the same services as FCA-regulated advisers?

A: Finfluencers can offer valuable general financial advice and education, but they typically don’t recommend specific financial products, which is what FCA-regulated advisers are trained to do. Some finfluencers are exploring ways to expand their skills into regulated advice, but it’s important to know the difference. If you need a product recommendation, you’ll want to seek out an FCA-regulated adviser.

Q7: Why is there a growing demand for financial coaches and planners?

A: Many people are realising that managing their finances goes beyond just choosing the right products. They need help with day-to-day financial management, like budgeting, reducing debt, , increasing their earnings, earning longer, and saving for the future. Financial coaches and planners provide this support, helping people develop good financial habits and achieve long-term financial stability. As more people recognise the value of this kind of help, demand for these services is growing.

Q8: How can financial coaching help me in my everyday life?

A: Financial coaching can help you take control of your finances in practical ways—like creating a budget that works for you, finding strategies to pay down debt, or building an emergency fund. It’s about empowering you with the knowledge and skills you need to make sound financial decisions every day, leading to greater financial security and peace of mind.

These Q&As should help clarify the distinctions between different financial services while reinforcing the value of financial coaching and planning. They aim to build trust and encourage readers to seek the support that best fits their needs.

Why Financial Coaching and Planning Are More Accessible

Q9: How are financial coaches and planners more accessible than traditional financial advisers?

A: Financial coaches and planners are often more accessible because they can offer their services in flexible and affordable ways. Unlike traditional financial advisers, who typically work one-to-one and charge fees of £2,000 or more, coaches and planners can present to groups or provide ongoing support through online subscription services. This means you can access valuable financial guidance for less than £50, making it easier for more people to get the help they need without breaking the bank.

Q10: What makes financial coaching and planning more affordable?

A: The affordability comes from the way services are delivered. Financial coaches and planners can work with multiple people at once, whether through group workshops, webinars, or online courses. They can also offer subscription-based services, where you pay a small monthly fee for ongoing support and advice. This approach allows them to reach more people and keep costs low, making it possible to provide high-quality financial guidance at a fraction of the cost of traditional one-to-one advice.

Q11: Why do financial advisers charge more?

A: Financial advisers typically charge higher fees because their work is more intensive and personalised. They offer one-to-one advice that must be tailored to your specific needs, which requires time and detailed analysis. Advisers also recommend specific financial products, and their advice must be suitable for your unique situation, which involves a lot of responsibility and regulatory requirements. As a result, their services are more expensive, with fees often starting at £2,000 or more.

Q12: Can I still get personalised support from a financial coach or planner?

A: Absolutely! While financial coaches and planners often work with groups or through online platforms, they can still offer personalised support tailored to your needs. Many coaches provide one-to-one sessions as part of their services, and even in group settings, they can address individual concerns and questions. The key difference is that the focus is on empowering you with the knowledge and tools to manage your finances, rather than recommending specific products to delegators.

Q13: How can I benefit from a financial coach or planner if I only have a small budget?

A: If you’re on a budget, financial coaching and planning can be an excellent option. With services available for less than £50, you can gain access to expert advice that helps you manage your money better, set and achieve financial goals, and build a more secure financial future. Whether through group workshops, online courses, or affordable subscription services, there’s a wide range of support available to fit your needs and budget.

Q14: What should I consider when choosing between a financial coach, planner, or adviser?

A: It depends on your financial needs and goals. If you’re looking for general guidance on managing your money, improving your financial habits, or planning for the future, a coach or planner can provide accessible and affordable support. However, if you need specific advice on investments, pensions, or other regulated financial products, and want a tailored, one-to-one service, a traditional financial adviser may be the right choice. Consider what you need help with, your budget, and how you prefer to receive advice when making your decision.

These Q&As aim to clarify the accessibility and affordability of financial coaching and planning while highlighting the unique benefits of each type of service. The goal is to empower readers to choose the right kind of support for their financial journey.