Financial Coaching Standards and Code of Conduct

Giving instructors a framework for professional practice is common in many fields – education, financial services, accounting, law, and medicine, for example. Yet until now the financial education industry has provided only limited guidelines for financial education instructors and financial coaches. The NFEC changed this by publishing Financial Coaching Standards and Code of Conduct.

Helping Qualified Financial Coaches Stand Out

Anyone can call him or herself a financial coach and there is no specific regulation governing such coaches. This situation is problematic to well-qualified financial coaches, so we set out to help qualified and competent financial coaches distinguish themselves from the average.

Although the financial coaching industry is not subject to specific regulations, the NFEC has proactively developed its own set of standards to protect both coaches and their clients. These standards include a theory-based teaching framework that ensures the quality and impact of educational programming. The standards also stipulate common language as a method to improve communication; and contain an awareness tool that underscores the ultimate importance of selecting highly-skilled educators.

Financial Coaching Standards

The Financial Coaching Standards and Code of Conduct shares benchmarks with the financial coaching industry that will assist financial coaches, counselors, and consultants to become more effective and serve their clients’ best interests.

Because financial coaches deal with people’s finances – a topic which can evoke strong feelings – and because each person has pre-existing financial behaviors and a unique financial situation, effective coaching requires someone with cross-disciplinary knowledge in counseling, psychology, personal finance, and coaching techniques.

The NFEC drew upon existing policies set by reputable organizations, including the Certified Financial Planner Board, the American Psychological Association, the American Counseling Association, the International Coaches’ Federation, and the National Best Practices for Teaching Standards. Excerpts from the policies set by each of these organizations, as well as by other highly-respected groups, influenced this document.

Financial Coaching Standards & Code of Conduct

References & Influencing Standards

American Counseling Association. (2014). ACA Code of Ethics. Alexandria, VA. https://www.counseling.org/resources/aca-code-of-ethics.pdf

American Psychological Association. (2003). Ethical Principles of Psychologists and Code of Conduct. Washington, DC. http://www.apa.org/ethics/code/

Association for Financial Counseling and Planning Education. AFCPE® Standards of Practice. Westerville, OH. https://www.afcpe.org/certification/professional-standards/standards-of-practice

Certified Financial Planner® Board of Standards, Inc. (2008). Standards of Professional Conduct. Washington, DC. https://www.cfp.net/for-cfp-professionals/professional-standards-enforcement/current-standards-of-professional-conduct/standards-of-professional-conduct

Certified Financial Planner® Board of Standards, Inc. (2017). Continuing Education Policies. Washington, DC. https://www.cfp.net/for-cfp-professionals/continuing-education

Department of Labor (2017). Definition of the Term ‘Fiduciary’; Conflict of Interest Rule – Retirement Investment Advice. Washington, DC. https://www.federalregister.gov/d/2016-07924/p-25

Financial Industry Regulatory Authority. (2010). FINRA Rules, 2000. Duties and Conflicts. Washington, DC. https://www.finra.org/rules-guidance/rulebooks/finra-rules/2000

Financial Industry Regulatory Authority. (2011). FINRA Rules, Books and Records Requirements. Washington, DC. http://finra.complinet.com/en/display/display_main.html?rbid=2403&element_id=9957

Financial Conduct Authority. (2017). Consumer explanations of “advice and “guidance”. London, UK. https://www.fca.org.uk/publication/research/fawg-consumer-explanations-advice-guidance.pdf

Federal Trade Commission. (2006). Financial Institutions and Customer Information: Complying with the Safeguards Rule. Washington, DC. https://www.ftc.gov/tips-advice/business-center/guidance/financial-institutions-customer-information-complying

Federal Trade Commission. (2002). How to Comply with the Privacy of Consumer Financial Information Rule of the Gramm-Leach-Billey Act. Washington, DC.
https://www.ftc.gov/tips-advice/business-center/guidance/how-comply-privacy-consumer-financial-information-rule-gramm

International Coaching Federation. (2015). Code of Ethics. Lexington, KY. https://coachfederation.org/code-of-ethics

International Coaching Federation. (2015). Core Competencies. Lexington, KY. https://coachfederation.org/core-competencies

International Society for Technology in Education. ISTE Standards for Educators. Arlington, VA. https://www.iste.org/standards/for-coaches

Institute of Management Consultants. (2005). IMC USA Code of Ethics. North Palm Beach, FL. http://www.imcusa.org/?page=ETHICSCODE

The National Association of Personal Financial Advisors. Mission and Fiduciary Oath. Chicago, IL. https://www.napfa.org/mission-and-fiduciary-oath

National Board for Professional Teaching Standards. (2016). What Teachers Should Know and Be Able to Do. Arlington, VA. http://accomplishedteacher.org/proposition-3/

Philbin, Garrett. (2017, March). What is Financial Coaching, and Best Practices for Becoming One. https://www.kitces.com/blog/financial-coaching-what-it-is-and-how-to-become-one

U.S. Securities and Exchange Commission. (2001). Books and Records Requirements for Brokers And Dealers Under the Securities Exchange Act of 1934. Washington, DC. https://www.sec.gov/rules/final/34-44992.htm

Financial Coaching Standards & Code of Conduct

Financial coaching standards have been defined by the NFEC to help those in the financial coaching / counseling industry and the general public. The ‘Financial Coaching Standards and Code of Conduct’ outlines financial coaching regulation and provides a framework that outlines best practices.

Today, anyone can call themselves a “financial coach” or “financial counselor” – there is limited financial coaching regulation. This industry is largely unregulated– meaning there is no government oversight. Lack of financial coaching regulations has caused problems for those distinguished financial coaches who do have the education, credentials (approved financial coaching certification), and experience to work in the best interests of their clients.

The NFEC wrote the Financial Coaching Standards and Code of Conduct to help the public differentiate between people who just say they are “financial coaches” and those who have demonstrated their abilities. We share benchmarks with the financial coaching and counseling industries that will assist practitioners to become more effective and lead people toward financial wellness.

Until the NFEC developed these financial coaching standards in 2019, no other organization had addressed financial coaching guidelines.

The Financial Coaching Standards and Code of Conduct Offers the Following Benefits:

  • Coaching Framework: Framework to improve the quality and impact of financial coaches.
  • Recruiting Coaches: Guidelines for hiring and recruiting financial coaches.
  • Performance Criteria: Clear performance evaluation criteria for financial counselors.
  • Professional Development: Framework for financial coaches to develop professionally.
  • Financial Coaching Regulation & Shared Communication: Common language of the industry to serve as a resource to improve communication.
  • Measurement Tools: Tools for coaches to prepare and assess their impact.
  • Public Awareness: Differentiates between those who meet standards and those who don’t.
  • Assurance: Public assurance that financial coaches and counselors are held to the highest standards of practice.