The difference between an accountant, a financial coach and a financial adviser

 In Coaching

When it comes to managing your finances, there are several professionals who can help you achieve your financial goals. Three of the most common professionals are accountants, financial coaches and financial advisers. While all three deal with money, they have different areas of focus and expertise.
In this article, we will break down the differences between an accountant, a financial coach, and a financial adviser and discuss what each of them do.

Accountant:
An accountant is a professional who specialises in the preparation and review of financial statements.
Accountants are typically focused on accounts preparation, tax planning and ensuring that their clients are compliant with tax laws and regulations.
They also provide financial, accounting and tax planning advice throughout the year by tracking financial transactions and reporting on profits, as well as providing budgets, forecasts and cashflows.

Accountants generally work with businesses, but they also work with individuals to help them manage their personal income and taxes.
However, their primary focus is on the preparation and review of financial statements and ensuring that their clients are complying with accounting standards.
As such they are regulated by a professional supervising body such as ACCA, or HMRC and are issued a money-laundering regulation supervision certificate which must be in place to offer their services.

An accountant is:
• Skilled at tax planning, accounts preparation and financial statements.
• Able to help you plan for business and personal taxes.
• Charges for their time, by the hour, on a retainer, or for a fixed fee.
• Regulated by a professional supervisory body in order to offer their services.
• Can discuss the pros and cons of various types of financial investments and what they are but cannot recommend specific investment products or give advice on specific investment services.

Financial Coach:
Financial coaches take a more holistic approach to finances, focusing on their clients’ overall financial well-being.
They help their clients understand their relationship to money, develop a positive money mindset and adopt healthy financial habits.
Financial coaches also help their clients identify and set financial goals, develop a financial plan, and take steps towards the plan, using tracking, budgets and other financial tools.

Coaches also provide support and accountability to help their clients achieve those goals and keep their finances on track.
Coaches are not regulated by the Financial Conduct Authority (FCA), or anyone, but coaches can choose to be a member of an organisation which supervises them. Coaching supervision is a formal process of professional support, which ensures the continuing development of the coach, the effectiveness of their coaching practice and set hours of CPD per year.

A financial coach is:
• Skilled at helping you review your financial goals and your overall financial position.
• Able to help you develop a financial plan to achieve financial goals.
• Charges for their time by the hour, on a retainer, or for a fixed fee.
• Can discuss the pros and cons of various types of financial investments and what they are, but cannot recommend specific investment products or give advice on specific investment services.
• Coaches are not regulated by the Financial Conduct Authority (FCA)
• Can choose to be supervised by a professional organisation.

Financial Adviser:
A financial adviser is a professional who is authorised and regulated by the FCA to provide financial investment advice to clients. They are typically focused on helping their clients invest and manage their money through specific financial products like stocks, bonds, and mutual funds. Financial advisers may also provide advice on tax planning, retirement planning, and estate planning.

Financial advisers take a more product-focused approach to financial planning, assessing their clients’ needs and recommending specific financial products that may help them achieve their financial goals. They may also help their clients manage their investments and provide ongoing advice and support.
Financial advisors are supervised by the FCA specifically for financial advice services, which allows them to operate and recommend specific wealth investment products and services. Financial advisors typically charge commission for the products sold, a percentage of the assets they manage on behalf of their clients, or fees for specific services like financial planning or tax advice.

A financial advisor is:
• Skilled at providing financial investment and wealth advice.
• Able to help with investment, retirement, estate, and tax planning.
• Charges commission or a percentage of the assets they manage on behalf of their clients, as well as fees for specific services.
• Regulated by the FCA to operate as a financial advisor and recommend financial products and services.

Differences between an Accountant, Financial Coach, and Financial Adviser:

Area of Focus
One of the main differences between the three professions is their area of focus.
• Accountants are primarily focused on ensuring compliance with tax laws and regulations and the preparation and review of financial statements.
• Financial coaches are focused on helping their clients develop a positive money mindset, develop healthy financial habits and set goals.
• Financial advisers are focused on helping their clients invest and manage their money through specific financial products and services.

Regulation
The level of regulation involved in each profession is also different.
• Accountants are regulated and supervised by professional bodies standards such as ACCCA or HMRC.
• Financial coaches are not regulated though many coaches choose a coaching organisation to be aligned with and supervised by.
• Financial advisers are regulated by the FCA and must adhere to strict rules and regulations when providing financial advice.

Fee Structures
Lastly, there are differences in the fees that each professional charges for their services.
• Accountants may charge by the hour, on a retained basis, or for a flat fee for their services.
• Financial coaches typically charge by the hour, on a retained basis or for a flat fee for their services.
• Financial advisers typically charge commission, a percentage of the assets they manage on behalf of their clients, as well as fees for specific services like financial planning or tax advice.

In conclusion, while these three professions all deal with financial matters, they have different areas of focus and expertise. By understanding the differences between an accountant, a financial coach, and a financial adviser individuals can choose to work with different professionals depending on their differing goals and needs.

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