The Difference Between a Financial Advisor and a Trading Coach

The Difference Between a Financial Advisor and a Trading Coach

Added expertise can be very helpful in making sure you’re making the right trades.

Get to know whether you need a financial advisor or a trading coach, what they do and what they cost.

What is a Financial Advisor

A Financial Advisor is a professional whose job it is to assist you in managing your savings, spending and investments.  He or she will attempt to fine-tune your strategy in order to make it more effective.

The term “Financial Advisor” takes several kinds of experts into account.  This includes professionals such as investment advisors and financial planners.  Therefore, if you decide that you should be consulting with a financial advisor, it’s up to you to not only find a pro you trust with the right amount of experience and skill, but also one whose expertise is in the specific area where you need guidance.

Furthermore, these professionals don’t work for free.  Their services come with a cost.  There are several different ways that Financial Advisors charge client fees.  Understanding specifically which types of fees are being charged can make a big difference in your ability to know if your financial advisor is working in your best interest.

Most experts recommend choosing a fee-only financial advisor if this is the type of professional you need.  They can be quite expensive, but their fees are the only compensation they receive.  This means that they do not receive any form of compensation or commission for having customers purchase certain financial products or invest in certain funds.

Types of Financial Advisor Fee Structures

Different financial planner and investment advisor fee structures can cost you more or less. Moreover, the types of fees being charged can help you to know how much you can trust the intentions of the professional assisting you.  This is not to say that all financial advisors paid on commissions are dishonest.  It is only to say that when they are not paid on commission, there isn’t any need to question their intensions regarding personal gain from a

There are three main types of fee structures for financial advisors.  They are: hourly fees, fixed fees, and asset under management fees.

Fee-only advisors are those paid exclusively by their clients and who don’t receive additional commissions for making certain recommendations for investments or purchases.

How Much Does a Financial Advisor Cost?

Financial advisor services don’t come cheap.  If you’re seeking to meet with one of these professionals a few times in order to develop a solid financial plan or investment strategy, expect to pay between £80 to £250 per hour on average.

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If your needs are for regular access to a professional who will be able to guide you, answer your questions and assist you as you implement and maintain your strategy, you’ll face a notably higher fixed fee.  Expect this to be closer to £800 to £2,500 on average.

An asset under management (AUM) fee is charged by financial advisors managing your investments on your behalf.  That will usually be charged at a rate of 1 percent to 2 percent of your portfolio.

What is a Trading Coach?

A trading coach works as a kind of mentor and guide using his or her experience, knowledge and skill to teach you how to make successful investment choices.  Among the most easily recognized examples of this type of relationship was Benjamin Graham, who was Warren Buffett’s trading coach and mentor.  Clearly, finding the right one can help to promote long-term profits and improved investment value.

The one-on-one advising and, essentially, training offered by a trading coach can also help to skyrocket the learning rate.  This helps to reduce the length of the learning curve for newer traders to absorb and apply new concepts.

As a result, it is important to choose a trading coach who offers advice you can trust and whose personal style suits your own.  A good coach will, after all, tell you the truth.  This includes both what you do and do not want to hear.  The reason is that whether you want to hear it or not, it is what the coach firmly believes will help bring you to the success you want to achieve.

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Many traders aren’t keen to spend a lot of money on learning and strategy building.  They want to save all they can in order to keep their money for investing.  That said, wise new investors understand that any skill – from sports to academics and, yes, investing – is best honed with the guidance and teachings of a more experienced professional.

Equally though, it’s not difficult to understand why, even with the understanding of the importance of coaching, financial advising fees can seem cost-prohibitive.  Therefore, a trading coach provides an alternative within closer financial reach.

How Much Does a Trading Coach Cost?

As is the case with Financial Advisors, there is a wide spectrum of possible trading coach fees.  That said, on average, trading coaches are far more affordable to new traders.  The price charged will depend on the individual professional.

That said, the final cost will depend on a range of different things.  This includes whether you are paying an hourly or flat rate, how accessible the coach is, how experienced he or she is, and what you need from him or her. For instance, if you are developing a trading strategy, you’ll likely speak to the coach a few times.  On the other hand, if you want this professional to be available to you on a regular basis to help support you as you make trading decisions over time, this will involve a different type of fee structure.

It’s important to point out that while there is a fee associated with a trading coach’s services, when the right professional is selected, it means that the advice really does pay for itself.  The reason is that the right recommendations help to substantially reduce the amount of time needed in order to reach financial objectives.  Moreover, avoidable expensive mistakes commonly made by new traders (whether they realize it or not) can be sidestepped.

Keep in mind that every trading coach is different, just as every trader is different.  It’s  key to choose the one best suited to your efficient learning and goal achievement.