Money management / Planning

What is financial coaching?

24 May 2021 | Posted by Frankie Jones
Sarah, one of Claro's Financial Coaches

Financial Coaching is a relatively new service that was created to fill a gap in the traditional financial advice market. 

While Financial Advisors are typically for those looking to invest significant sums, Financial Coaches are accessible and affordable for everyone. A Financial Coach’s objective is to inform and empower you to make smart financial decisions and feel confident in your own money management. 

Keep reading to find out how a session with one of Claro’s Financial Coaches could help you.

Understand your financial situation

In order to create a realistic financial plan, you first need to understand where you are now.

Your Financial Coach will use your information to give you a clear picture of your current situation, so you can see where you might want to make changes.

Define your goals

Before your call, we’ll ask you about your financial goals. This could be learning to budget, buying a home, saving for retirement – anything you want to achieve in life. 

During your coaching session, the coach will help you flesh out your goals. How much exactly do you need to save? Which is your main priority? What might you not have considered? 

Discussing your goals with someone and setting targets and timelines helps make them more real and, ultimately, more achievable.

Explore your options

Whatever your goals, a Financial Coach can explain the options available to help you get there. 

For example, if you’re looking to buy a house, they can run through the government help schemes available, or if you’re searching for a savings account, they can take you through the different types.

They can explain ISAs, LISAs, investment funds, pension types – you name it, they’re experts.

It’s worth noting that a Financial Coach differs from a Financial Advisor in that they can’t give you specific recommendations when it comes to products and services.

Get actionable next steps

After your call, your coach will provide a list of actions based on what you discussed. 

These will be available in the Claro app as well as emailed to you, so you have a concrete list of next steps to refer back to and track your progress against.

Your coach can also set up goals for you in the Claro app.

Coaching can help you create a budget

Our Financial Coaches are experts at helping you develop better habits when it comes to your money. In one call, your coach can help you build a realistic budget that you’ll actually stick to, as well as adopt healthier habits when it comes to spending and saving.

Learn more about investing

New to investing? Your journey starts here! A financial coaching call can help you to understand the different types of investment accounts, the risks involved, the benefits of investing ethically and how our portfolios at Claro are chosen. Remember that your coach can’t recommend a specific investment for you.

If you do decide to invest, remember your capital is at risk.

Get answers to your questions

During the call, you’ll have the opportunity to ask your coach any questions you might have. If there are any confusing financial terms you don’t understand, for instance, now’s your chance to ask. This is your time, so use it wisely! You might want to make a list of questions before the session so you don’t forget them, and it might be worth checking our FAQs first.

Coaching is cheaper than a Financial Advisor

Financial Advisors are traditionally for the wealthy, people looking to invest a significant amount or those nearing retirement. In fact, the average hourly rate for a Financial Advisor in the UK is £150 (or they often charge an annual management fee equivalent to 0.75-1% of a client’s assets). A Financial Coach, on the other hand, tends to be cheaper.

Reach your goals sooner

Armed with more knowledge when it comes to your finances, just one session with a Financial Coach should set you on the path to reaching your goals sooner than you thought!

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