Financial coaching - license / certificate?

Non-investing personal finance issues including insurance, credit, real estate, taxes, employment and legal issues such as trusts and wills
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Neoseo1300
Posts: 15
Joined: Sat May 12, 2018 8:46 am

Financial coaching - license / certificate?

Post by Neoseo1300 » Thu Nov 08, 2018 11:50 am

Hi everyone,

Quick question: Do you need any kind of license / certificate to start a personal finance coaching business? I would believe you don't given the nature of the business itself (helping people look at their finances, not selling any kind of particular product). Where it gets tricky though is, what happens if I advise someone to invest for the future through ETFs as a way to save for the future, the bogglehead way. Is it considered "selling a financial product" here? I would believe I'm merely recommending options but I'm not the one selling the product itself, and I don't make any money on the sale itself (although I do helping the person). In this context, would my status change? Would I become a broker / financial advisor or any other title requiring some sort of legal certification / status?

Thanks

texasdiver
Posts: 2719
Joined: Thu Jun 25, 2009 12:50 am
Location: Vancouver WA

Re: Financial coaching - license / certificate?

Post by texasdiver » Thu Nov 08, 2018 12:50 pm

Turn the question around. If you were shopping for a financial coach and planning to spend a meaningful amount of money for that advice, what qualificiations would you look for? And what combinations of qualifications and experience would you use to distinguish between potential candidates?

If I were seeking financial planning advice and could pick from anyone in my greater metro area to provide those services I'd most certainly be looking for someone who was a fee-for-service certified financial planner who followed a fiduciary standard and who came highly recommended.

Anyone short of that might be worth a beer to hear what they have to say, but that's about it.

As for licenses and certificates. This is what the law says here in Washington state:

https://dfi.wa.gov/investment-advisers/registration

JoeRetire
Posts: 1645
Joined: Tue Jan 16, 2018 2:44 pm

Re: Financial coaching - license / certificate?

Post by JoeRetire » Thu Nov 08, 2018 12:57 pm

Neoseo1300 wrote:
Thu Nov 08, 2018 11:50 am
Quick question: Do you need any kind of license / certificate to start a personal finance coaching business?
No.

Just hang out your shingle announcing "Coach Neoseo: Personal Finance Coach" and you're all set. See: https://www.kitces.com/blog/financial-c ... ecome-one/

Now asking if someone would actually give money to such a coach is a far different question. Or maybe you were thinking of doing this for free?
Where it gets tricky though is, what happens if I advise someone to invest for the future through ETFs as a way to save for the future, the bogglehead way. Is it considered "selling a financial product" here? I would believe I'm merely recommending options but I'm not the one selling the product itself, and I don't make any money on the sale itself (although I do helping the person). In this context, would my status change? Would I become a broker / financial advisor or any other title requiring some sort of legal certification / status?
Yup. You'll have to be very careful or you could be sued. Talk to your lawyer who specializes in this sort of business. You'll need a professional coach regarding what your coaching business can safely do and not do.
Last edited by JoeRetire on Thu Nov 08, 2018 1:00 pm, edited 1 time in total.

PFInterest
Posts: 2533
Joined: Sun Jan 08, 2017 12:25 pm

Re: Financial coaching - license / certificate?

Post by PFInterest » Thu Nov 08, 2018 12:59 pm

Neoseo1300 wrote:
Thu Nov 08, 2018 11:50 am
Hi everyone,

Quick question: Do you need any kind of license / certificate to start a personal finance coaching business? I would believe you don't given the nature of the business itself (helping people look at their finances, not selling any kind of particular product). Where it gets tricky though is, what happens if I advise someone to invest for the future through ETFs as a way to save for the future, the bogglehead way. Is it considered "selling a financial product" here? I would believe I'm merely recommending options but I'm not the one selling the product itself, and I don't make any money on the sale itself (although I do helping the person). In this context, would my status change? Would I become a broker / financial advisor or any other title requiring some sort of legal certification / status?

Thanks
you dont need anything to give general financial advice and charge for it (max your 401k, use your rIRA, dont spend more than 2x income on a mortgage)
however once you give specific advice that you receive compensation for (pick this fund in your 401k) you need to register and have a series 65.

venkman
Posts: 708
Joined: Tue Mar 14, 2017 10:33 pm

Re: Financial coaching - license / certificate?

Post by venkman » Thu Nov 08, 2018 9:45 pm

PFInterest wrote:
Thu Nov 08, 2018 12:59 pm
Neoseo1300 wrote:
Thu Nov 08, 2018 11:50 am
Hi everyone,

Quick question: Do you need any kind of license / certificate to start a personal finance coaching business? I would believe you don't given the nature of the business itself (helping people look at their finances, not selling any kind of particular product). Where it gets tricky though is, what happens if I advise someone to invest for the future through ETFs as a way to save for the future, the bogglehead way. Is it considered "selling a financial product" here? I would believe I'm merely recommending options but I'm not the one selling the product itself, and I don't make any money on the sale itself (although I do helping the person). In this context, would my status change? Would I become a broker / financial advisor or any other title requiring some sort of legal certification / status?

Thanks
you dont need anything to give general financial advice and charge for it (max your 401k, use your rIRA, dont spend more than 2x income on a mortgage)
however once you give specific advice that you receive compensation for (pick this fund in your 401k) you need to register and have a series 65.
I'd be careful charging even for general advice, unless you're presenting it to a general audience (book, seminar, etc.) If you have individual clients paying for advice, there's an expectation that your advice will be tailored to their individual needs. If it's advice that can easily be obtained for free, why would anyone pay for it?

If you're serious about getting paid for giving financial advice, take the Series 65 exam. It's not a high bar to get over.

PFInterest
Posts: 2533
Joined: Sun Jan 08, 2017 12:25 pm

Re: Financial coaching - license / certificate?

Post by PFInterest » Fri Nov 09, 2018 7:27 am

venkman wrote:
Thu Nov 08, 2018 9:45 pm
unless you're presenting it to a general audience (book, seminar, etc.)
thats what i mean.
think of white coat investor

Freefun
Posts: 381
Joined: Sun Jan 14, 2018 3:55 pm

Re: Financial coaching - license / certificate?

Post by Freefun » Fri Nov 09, 2018 7:38 am

Remember when you wanted what you currently have?

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