What a financial coach does, and how it differs from a financial advisor

Several times a week I get the same message on Instagram: hi, do you invest people's money? The answer is no. Not because I could not, but because that is a different job, with a different licence and a different purpose.

The trouble is that in Panama the three terms get used as if they meant the same thing. If you do not know which one you need, you end up in the wrong office, paying for something that does not solve what actually hurts.

An advisor helps you decide where to put the money you have left over. A coach helps you have some left over.

What a financial coach does

Financial coaching is guidance about the money you already have. It is not about products, it is about decisions. In a session we look at your numbers exactly as they are, find where the money that shows up nowhere is actually going, build a structure you can sustain, and then work on what makes that structure hold or break.

That last part is the one almost nobody works on, and it is the one that weighs most. You can give someone the best budget in the world, but if you do not look at why they buy when they buy, in three months they are back where they started.

What it includes

• An honest diagnosis of what comes in, what goes out and what debt exists.
• A budget built around your real life, not around a template.
• A debt payoff plan with order, criteria and a date.
• Work on habits and on your emotional relationship with money.
• Follow-up, which is the part that makes the change hold.

What it does not include

I do not recommend investment instruments, I do not manage anyone's money, I do not sell insurance or funds, and I do not promise returns. If someone promises you a rate of return, you are no longer talking to a coach.

So what does a financial advisor do?

An advisor or financial planner works on the other half of the problem: where to place money that is already in order. Investments, instruments, risk horizon, retirement. It is a regulated field and certain activities require a licence.

So the question is not which is better. It is which comes first. If you have three cards maxed out and you do not know your total debt, an investment advisor is no use to you yet: there is no surplus to place.

And the bank officer?

Your bank officer is a salesperson, and that is not an insult, it is the job. Their work is to place the bank's products: loans, cards, consolidations. Many of them are excellent people who will explain the product well. But they are not there to tell you not to take the loan.

Nobody whose commission depends on you taking credit is the right person to tell you whether you should.

How to know which one you need

Ask yourself these honestly.

1. Do you know exactly how much you owe today, to whom, and at what rate? If not, you need coaching.
2. Do you reach the end of the month with money you do not know where to put? You need an advisor.
3. Do you build a budget, abandon it, and try again every few months? Coaching, and the work is the habit, not the template.
4. Is your money already in order and you want to plan retirement or investing? Advisor.
5. Do you earn well and still fall short? That is almost always structure, not income. Coaching.

What to check before hiring a financial coach in Panama

This is a trade with no professional body regulating it, so the filtering is on you. I would look at three things.

1. Verifiable training

That they say where they trained and that you can check it. I certified at the Escuela de Coaching Financiero and the diploma is published on my site, with the date and the institution, because that seems like the minimum.

2. That they state clearly what they do not do

Someone who puts no limits on what they offer is a red flag. If one service promises to sort out your budget, clear your debt, invest your money and double it, that is not a service, it is an ad.

3. That they speak your reality

Generic translated content does not work the same. Your fortnightly pay, the thirteenth month bonus, the APC credit bureau, what a basket of groceries costs in Panama: if the person guiding you does not know that, you will spend the whole time translating advice.

What really defines the work

There was a point in my life when I earned around a thousand dollars and spent the thousand. Then I started earning two thousand and spent the two thousand. No financial product was going to fix that, because the problem was not in the product.

That is financial coaching: working on the part no bank will work on with you, because it does not suit the bank.

If you recognised yourself in this, you can see how I work in one-on-one financial coaching, or write to me and we will talk about where you are.