Financial advisor vs. financial planner vs. financial coach: Key differences explained

When it comes to navigating your financial future, you might encounter a variety of people willing to offer you guidance. But with terms like "financial advisor," "financial planner" and "financial coach" being used interchangeably, it's helpful to learn each role's key distinctions so that you're sure to work with the right person (with the right experience) to meet your needs.

Keep in mind: All titles are not treated the same. Some unique financial professionals may offer services you wouldn't think their title would offer. While you should always ask them to define their scope before working together, here are some general similarities and differences across the three most common titles and positions.

Financial advisors, financial planners and financial coaches all hold valuable knowledge and generally can offer varying levels of advice on topics like:

• Money management.
• Budgeting.
• Debt repayment.
• Saving for goals.

They each also help clients achieve their financial objectives, whether it's saving for retirement, planning for a child's education or managing wealth. While all reputable financial professionals will adhere to certain ethical codes, there may be different standards of care when working with clients. Nevertheless, any reputable financial professional should strive to provide a relationship centered on trust and guidance.

However, it's important to know these key differences between advisors, planners and coaches.

A financial advisor typically focuses more on investment management and insurance needs. They can recommend and manage investment portfolios, including stocks, bonds and mutual funds, while also offering protection options including life, disability income and long-term care coverage. Some financial advisors may also offer financial planning services, but it's not always the case. Financial advisors typically require licenses, such as a Series 6, Series 7 or Series 63, to offer securities, investment products and sometimes insurance products. They may be compensated in a variety of ways, which could include receiving an ongoing fee as a percentage of your assets under management, a commission for offering a product or trade, or charges based on hourly or fixed rates.

A financial planner typically takes a more comprehensive approach compared to financial advisors. In addition to items typically collected by a financial advisor (i.e., investments, income, savings goals, risk tolerance), a financial planner's focus is to help you develop a financial plan that reflects your financial situation comprehensively. This may include topics like insurance guidance, planning for retirement, tax efficiency, cash flow, net worth and estate planning. Financial planners may or may not have specific licenses but often hold advanced certifications, such as the CERTIFIED FINANCIAL PLANNER™ certification, as markers of their specific type of knowledge. While the focus of the relationship revolves around financial planning, a financial planner may also be credentialed to help you implement the financial plan by offering financial products and services, which could result in additional compensation.

Also called a money coach, a financial coach provides guidance on personal finance fundamentals. They help clients develop budgeting skills, manage debt and make informed financial decisions. Financial coaches typically don't manage investments or offer other financial products. They also don't usually require formal licenses or certifications, but some may have relevant qualifications. Financial coaches often offer hourly rates or subscription-based services. Thrivent even offers a free money coaching service through Money Canvas.

Choosing the right person to partner with on your financials depends on your specific needs. Here are some guiding questions to ask yourself:

Need portfolio guidance and insurance?

Consider a financial advisor.

Want a comprehensive long-term financial roadmap?

Turn to a financial advisor or financial planner.

Looking for help with budgeting, debt management and building healthy financial habits?

A financial coach may be a valuable resource.

Although the different types of financial professionals provide services and products related to their roles, there can be some overlap. Here are some things to know:

• A title can differ from the role one plays. For example, someone can be a financial advisor and provide long-term financial planning.
• You can work with a combination of financial professionals for a holistic approach.
• It's a good idea to interview potential financial advisors, planners or coaches to assess their experience, communication styles and fee structures.
• Don't hesitate to ask questions to ensure they understand your individual financial situation and goals.

By knowing the distinctions among financial advisors, planners and money coaches, you can confidently choose the person (or people) who will best empower you to take control of your financial well-being. For help defining your scope, consider speaking with a local Thrivent financial advisor.