CFPs, Money Coaches and More: Which Financial Professional Is Right for You?

When you read money articles online, you’ll probably see recommendations to “ask your financial advisor” about decisions like planning your budget or setting a retirement goal. These aren’t just empty words. Many families can benefit from having a professional on hand to offer tips and help keep their finances headed in the right direction.

If you’re new to working with a financial professional or not sure whether you need one, take a look at some common types of professionals who can help you manage your money.

Financial Professionals You Need in Your Corner

Not every family has the same financial set-up or the same needs when it comes to consulting an expert. Financial professionals can have a range of specialties. The best fit for you will depend on who aligns best with your goals.

Certified vs. uncertified

Some financial professions require certification, meaning people need to take special training and pass an exam to earn their certificate. Examples include a certified public accountant (CPA) or CERTIFIED FINANCIAL PLANNERTM professional (CFP®).

Certified professionals can generally offer services their uncertified counterparts cannot. For example, a CPA can prepare audited financial statements, whereas accountants may not. The organizations that certified professionals belong to may also hold them to higher standards than uncertified financial professional are bound to.

Financial planning might help you achieve a sense of validation of the actions you are taking, in addition to ongoing collaboration and support to make sure you are being proactive.

That said, certified doesn’t always mean better. Some certified professionals may only accept clients with a minimum net worth that’s too high for your family. Or they may require you to create a full-service, comprehensive plan when you just wanted a second pair of eyes to check your budget. Uncertified financial planners or coaches may hold themselves to high standards of conduct, too, even though they don’t answer to a professional body in the same way. It really comes down to who meets your needs.

Financial planner

Financial planners, such as CERTIFIED FINANCIAL PLANNERTM professionals, may be licensed to manage assets like securities on your behalf. They often look at your whole financial picture, from your daily budget to long-term plans for investments and retirement.

Financial advisor

Financial advisors often specialize in the investment side of your financial picture. In order to buy, sell or manage investments on your behalf, they need to be licensed and follow regulations. You can look up your financial advisor to check their background.

Financial coach

Financial coaches may focus more on helping you take charge of your day-to-day finances and build healthy money habits, but they cannot manage your investments for you unless they have additional certifications and licensure. Coaches can do things like help you understand your money personality and identify behavior patterns that either help or prevent you from reaching your goals. They can also help you gain your own financial literacy, from mastering your budget to understanding the types of life insurance that might be right for your family. Compared to financial planners and advisors who help take care of your money for you, many coaches aim to help educate you to do some of this yourself.

Allison Kade, Fabric’s editorial director, also offers financial coaching services. She says, “If you are feeling financially adrift, a financial coach can help you navigate your priorities. Almost like a trusted friend or confidante, a good coach can help you figure out what is most important to you and go step-by-step to help you get there—without judgment.”

Tax professional

Especially if your tax situation is complex, you might reach out to a tax professional to make sure you’re following all requirements. Tax accountants may be able to help you catch tax credits or deductions that are tougher to understand on your own and help avoid penalties from the IRS.

Credit counselor

If debt is a major issue for your family, you might consider reaching out for extra help. Organizations like the National Foundation for Credit Counseling can connect you with a certified credit counselor who can help you create a debt management plan. In some cases, a credit counselor can speak with creditors on your behalf or help you consolidate payments as part of a plan for you to get out of debt.

Should You Ask a Professional or Handle Finances Yourself?

On a day-to-day basis, most people handle money decisions without enlisting a pro. You know your family’s typical grocery run or favorite spot for a night out. You pay rent or mortgage yourself. As aspects of your financial life get more complicated, it might become more likely that you’d benefit from some professional guidance.

You might need human rather than software assistance if your financial picture includes an inheritance, sale of a business, self-employment or gig employment taxes and certain significant life events. This might include relocating states, having a baby or managing equity compensation.

Anytime you’re reviewing your finances and wondering if you’re really as on track as you think (or hope) you are, or if you’re setting up new money plans, a financial professional can offer insights and tips to consider all angles and make your plans as strong as you can.

How to Choose a Financial Professional

In some cases, figuring out what type of assistance you need is easy. For example, if taxes feel like a foreign language, call an accountant. But other times, it seems like multiple people might be the right fit—or you’re struggling to tease out what your top priority even is in the first place.

Start by thinking about whether you need to work with a professional with special licenses or certifications. If you are hoping they’ll advise you on detailed investment strategy or you prefer someone certified, you might lean toward a CERTIFIED FINANCIAL PLANNERTM professional. If you’re dipping a toe in the water or don’t want more intensive services, a good coach might be a great fit.

Next, see if you can identify a goal you’d like to work on, even your goal is simply “get a clearer sense of my goals.”

“That could be something really targeted like a specific question such as, ‘I’m inheriting money—how should I think about that?’ or ‘What are the financial aspects to consider about my job change?’ It could also be a lot more amorphous, such as the desire to better understand their money personality and gain general financial literacy,” says Kade.

Financial pros may have their own niches and specialty areas. Some financial coaches might specialize in post-divorce budgeting, while some financial advisors might focus on managing investment portfolios for high-income earners, and some CERTIFIED FINANCIAL PLANNER(TM) professionals might specialize in holistic financial planning for young families. Any of these might be the perfect match, depending on your circumstances.

Finally, do your due diligence to see how the person you’re considering works. Ask for referrals, read reviews and ask plenty of questions. You’re trusting this person with details about your money life, and you deserve to feel respected and comfortable.

While you can handle money matters yourself, many families benefit from some expert guidance. Having a trusted pro (or several) on your side may help you feel more confident dealing with money troubles or exploring new possibilities.

Fabric exists to help young families master their money. Our articles abide by strict editorial standards. This article has been reviewed and approved by a compliance professional who is a licensed life insurance agent.

Information provided is general and educational in nature, is not financial advice, and all products or services discussed may not be offered by Fabric by Gerber Life  (“the Company”). The information is not intended to be, and should not be construed as, legal or tax advice. The Company does not provide legal or tax advice. Consult an attorney or tax advisor regarding your specific legal or tax situation. Laws of a specific state or laws relevant to a particular situation may affect the applicability, accuracy, or completeness of this information. Federal and state laws and regulations are complex and are subject to change. The Company makes no warranties with regard to the information or results obtained by its use. The Company disclaims any liability arising out of your use of, or reliance on, the information. The views and opinions of third-party content providers are solely those of the author and not Fabric by Gerber Life.