What Is An Investment Coach? 

At first glance, there appears to be no difference between an investment advisor and an investment coach. It's semantics. The only common link is "investment" but the intentions are very different.

  • An Investment Advisor focuses on providing ideas and information regarding security selection for your portfolio. This advice is often given by someone who is associated with a financial services organization and as a result any advice will be tailored to the purchase of financial products by that organization, financial products that may or may not be appropriate for your portfolio.
  • An Investment Coach focuses on building a relationship with an individual to develop their financial literacy and decision making capacity to allow them to make informed investment decisions.

Traditional Investment Advisors At A Turning Point

The traditional investment advisor relationship focuses on investment product sales instead of people. It is based and delivered on a foundation of incentives that could potentially limit the depth and breadth of the financial advice you receive.

When you hire an investment advisor or stock broker your implied assumption is s/he is an "expert" at the building wealth who will guide and standy by you so you can succeed in obtaining your financial goals. That is the standard value proposition the financial institutions will always sell you on.

Unfortunately, your goals may not necessary jive with your advisor's. Financial services companies exist to make profit. They are going to build their business by selling you investment, insurance and other related products to help you reach your goals. To the extent your goals and theirs are similar there is no problem. But when your wealth building goals conflict with the advisors business profit goals which do you think will take precedence? Advisors are supposed to operate under a notion of fiduciary duty which means any advice has to be in your benefit.

To be fair, investment advisors serve a useful and important function by selling anddistributing some of the investment tools that might be useful on your journey to financial security. However, buying investment tools is not going to solve the financial problems most people face. This is proven by the fact that all the investment tools anyone could need have been available for many years and the statistics prove people are not reaching their financial goals. Something more is necessary.

How can this misalignment in goals occur? Suppose, for example you're ready to invest a portion of your portfolio in Canadian equities and your objectives can best be met by a no-fee, no-commission, low-expense product. What are the chances that a product which generates no revenue for your financial advisor will be part of your investment plan when competing, higher fee products will put money in their pocket? Would it surprise you to learn that many low-expense, no-fee products can't even be sold by certain investment advisors precisely because they don't generate revenue for the company even though they may be the best choice for you?

This is just a reality of business. Investment advisors are in business to sell investment products, and must sell products he/she can profit from or there is no business. We can't make this any clearer. It doesn't matter what is best for your profits - what matters is the broker's profits which means no fee, low cost, no commission products may not appear in your investment plan even when they may be the best choice for you. This could be viewed as a conflict of interest.

At the end it is not in the client's interest to mix the education component of finance with the investment product sales component. When the same person teaching you investment strategy is in a position to profit from selling you the tools to implement that strategy, there is a high risk that the advice you receive will be skewed to only those things that can be sold. It is just business.

There is a simple solution to address this conflict-of-interest. You must always separate out the investment strategy and education component of your wealth plan from the investment product sales component and pay for each separately. Investment coaching can educate you on your wealth building strategy without the bias of selling you an investment product.

What would really make a difference for most people is to have someone that can coach them to maneuver and synthesize the mountain of investment information to separate noise from value and leverage this information through analysis and to make informed and successful investment decisions. An investment coach can be useful as a mentor to leverage when faced with difficult decisions and having an outlet to bounce the ideas off.

You need someone on your side whose only interest is to help you - not sell you. That is the advantage of investment coaching.

The Advantages of Investment Coaching

Investment coaches work with much more than just investment products and investment "how-to" tools. They work with you. Your path to financial literacy and success will be unique to you, and the obstacles you must overcome will be yours alone to face.

If financial freedom is your goal then it is critical to find the right path uniquely fitted to your needs among all the wealth building paths available. This requires a more comprehensive model that emphasizes education and disciplined decision making. After all, there is no point in putting you on a particular path to wealth if you don't learn the first priniciples of how wealth is created and how to develop the discipline for understanding how to make those key investment decisions that will put you on the path and stay on the path long enough to succeed.

Investment coaches are educators and mentors rather than sales people. Investment coaching can educate you on what works and what doesn't while making you more street smart to deal with the noise brewing from the investment industry.

Investment Coaching

Follows the client's agenda

No specific securities recommendations

Client's have unique strategies, plans and portfolios

Client becomes expert and own authority

Relationship creates independence

Client is accountable and responsible

Asking questions and educating

Focuses on learning and growth of client

Goal is to create a fully functional, educated, independent client

No investment product sales

Teaches self-responsibility

Paid for eliciting, educating, expanding, and supporting client's whole financial success

Draws out client's values, skills, and knowledge

Client centered

Investment Advice

Follows the advisor's agenda

Specific securities recommendations

Client's strategies and portfolios look similar

Advisor is authority

Relationship creates dependence

Advisor is accountable and responsible

Telling directions

Focuses on financial product sales

Goal is to create a portfolio for a dependent client


Sells investment products

Takes away self-responsibility

Paid for portfolio advice and transactions.

Imposes advisors values, skills, and knowledge on client

Product centered

Investment coaching provides a structured and collaborative environment in which you can not only expect financial growth but personal growth and performance improvement as well. A coaching relationship often results in other aspects of their life improving along with their financial picture.

Personal investment coaching creates an environment of self-discovery, heightened focus, and a renewed openness to taking more effective actions. Through investment coaching you can develop improved self-confidence and mastery over your financial security. The result is a more successful, disciplined and independent you.

You don't need to walk the journey to financial freedom alone. You can avoid many of the mistakes and accelerate your progress with the support of your personal investment coach - and without many of the conflicts of interest inherent in traditional financial advice.

In summary, the difference between investment coaching and investment advice is simple.

Investment advice wants to sell you a lemonade; whereas, investment coaching teaches, mentors and supports you to learn how to grow your own lemons trees on your own, so that you can drink all the lemonade you want for the rest of your life.