Financial Coaching Agreement Highlights Services, Privacy Protection

There are different ways to structure a financial coaching business – entrepreneurship, nonprofit, or financial education, for example – but when clients are interested in hiring a coach’s services, it’s important for the coach to have a solid financial coaching agreement in place as part of his or her client management systems. The agreement doesn’t have to be complicated; in fact, the simpler the language, the better. However, there are some key points the contract should cover in order to maximize protection for both the client and the coach.

At present, just about anyone can designate him or herself a “financial coach.” The difference between the average and a distinguished financial coach lies in the person’s training, financial counselor certification earned, and compliance with top standards for financial coaching. These accomplishments lend credibility and assure clients that they can put their trust in the coach’s capability.

Each client has a singular set of financial habits, relationships, and situations. Therefore, the best financial coaches need varied skill sets that include knowledge of personal finance, behavioral psychology, educational methods, coaching techniques, and ethical concerns related to the industry. The coach’s training, background, and certifications should be stated upfront on the coaching website and outlined in the financial coaching agreement.

The majority of financial coaches do not supply clients with full reports. A distinguished professional coach, on the other hand, conducts meticulous and accurate measures that clarify each client’s full financial profile. Then they analyze the data to offer clients custom personal finance reports and top-quality financial counseling resources that present details about their unique situations and lay out action steps to move them toward financial wellness. The data collection and reporting features should be stated clearly in the financial coaching agreement, so the client knows what to expect.

To ensure that clients understand what the coaching relationship will entail, the financial coaching agreement should lay out exactly what services the coach will offer. That includes defining when and how often the coach and client will meet, the duration of the coaching, any communications the client will receive during the process, and the reports and educational resources the certified financial counselor will provide.

On top of clarifying the services the coach will give, both verbal communications and the financial coaching agreement also must be clear about the services a financial coach does not offer. A financial coach helps clients develop and maintain healthy money habits, and empowers them to handle their own finances responsibly. However, financial coaches do not give out investment advice. Rather, that service lies under the purview of a financial advisor, and the coach should make sure each client understands the distinction. Smart Asset goes into more detail about the difference between a financial counselor and a financial advisor.