Should You Work with a Business Coach or Financial Advisor? 

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Where do you turn for advice as an interior design firm owner hoping to grow her business? As you look toward the future and chart a path forward, should you work with a financial advisor or a business coach? Or should you invest in both? A financial advisor’s expertise typically begins and ends — you guessed it — with finance. Financial advisors focus on investment, retirement, and succession planning. They also help with tax optimization and risk management. A financial advisor will help you create a comprehensive financial plan that aligns with your long-term objectives. Alternatively, a business coach will provide a more holistic experience for the owner. Business coaches help designers grow their firms by providing personalized support, accountability, and strategic guidance. If you hope to take your business to the next level, a business coach could provide invaluable insight and direction. The decision to work with a business coach, financial advisor, or both will depend on your personal and business goals. Read on to learn more! 

Financial Advisor vs. Business Coach: What’s the Difference?

Working with a financial advisor might make the most sense if major financial decisions are on the horizon. As noted above, financial advisors are trained to guide business owners through restructuring, investing, going public, and managing assets. 

Certain advisors are also tax experts and can help entrepreneurs navigate business decisions with major tax implications. A financial advisor might help you choose the right business structure or select safe investments. However, he or she will not provide support beyond your firm’s finances. 

Business coaches take a more holistic approach but still help you meet financial goals. Coaches provide you with the tools you need to manage business finances yourself, whereas a financial advisor takes the reins. From leadership development and hiring to budgeting and vision planning, business coaches offer industry-specific guidance wherever you need support. 

Let’s delve deeper into the differences between financial advisors and business coaches, so you can determine which makes the most sense for your firm.

What Does a Financial Advisor or Planner Do? 

To achieve long-term success as the owner of an interior design firm, you cannot overlook its finances. This is where financial advisors and planners come in. 

These professionals have been trained and/or licensed to advise clients on a variety of issues. They touch on everything from restructuring and investing to managing assets and navigating major tax decisions. 

Advisors can be an incredibly valuable resource for entrepreneurs who want to make smart financial decisions and build a solid foundation for their businesses. 

A financial advisor or planner could help you:

• Position your company to sell.
• Figure out the best way to pass your business to successors.
• Switch business structures to limit your tax bill.
• Take advantage of other tax breaks.
• Invest in the stock market, options, annuities, or bonds.
• Plan for retirement. 
• Manage existing assets like REITs, commercial property, etc.

Before going any further, let’s outline the key differences between financial advisors and planners.

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Financial Planners vs. Financial Advisors

Financial planners and advisors are both professionals who offer guidance on financial matters, but there are some key differences between the two. In many cases, a financial advisor will focus primarily on investing and managing assets. Alternatively, a financial planner will examine every element of your firm’s financial picture — taking your personal finances into consideration as well. 

You might have more of a relationship with a financial planner than with a financial advisor. As Roger Ma writes in an article for Forbes, “financial advisors…may be hands-off and purely transactional or product-focused.” 

You might meet with a financial advisor each quarter to review investment performance and make necessary changes to your portfolio. Financial planners “analyze a client’s entire financial life” — typically spending more time with the client on a semi-regular basis. They act more like coaches than financial advisors do. 

Another important difference is that a financial planner typically holds a certification or has completed specialized training in financial planning. An advisor may not have any specific credentials. Additionally, financial planners are often held to a fiduciary standard. 

When it comes to choosing between a financial planner and advisor for your small business, it’s important to consider these factors carefully. An advisor can certainly help you grow your wealth and achieve certain financial goals. However, a financial planner might provide more comprehensive guidance and support. 

Bear in mind that the differences between financial planners and advisors are not always cut and dry. As Roger Ma notes in his Forbes article, “the lines are blurring.” 

Challenges and Limitations of Working with a Financial Advisor or Planner

Before working with a financial advisor or planner, interior design business owners should familiarize themselves with a few challenges and limitations. First is the scope of guidance provided by a financial advisor or planner. As noted above, neither financial planners nor financial advisors address issues outside your firm’s financial picture. 

Second, many financial advisors or planners work on commission and are employed by a brokerage company. That company might encourage advisors to push certain products and/or services. 

Third, not all financial advisors are fiduciaries — meaning they might not be legally required to put your firm’s financial health first. Dan Marticio elaborates in an article for Nerd Wallet Small Business. Marticio writes that some financial advisors are indeed fiduciaries. These advisors are “obligated to always prioritize the client’s interest.” 

One recommendation might result in a higher commission for the fiduciary advisor. However, the fiduciary advisor must push the product or service that better serves the client. 

Marticio warns that “if your small business financial advisor is not a fiduciary, you can’t be sure they’re acting in your best interest.” Given this, experts typically recommend that business owners choose fiduciary financial advisors or planners. 

What Does a Business Coach Do?

A business coach is an industry expert who draws on her successes and mistakes to provide other entrepreneurs with guidance, support, and actionable advice. Business coaches help you foster healthy financial habits, but they do not focus solely on your company’s financial picture. 

They help you position your business so you can achieve all your goals — not just those related to cash flow. Business coaches help firm owners develop team-building, financial management, vision planning, and other strategies related to career and personal fulfillment. 

An interior design business coach might help you:

• Identify your ideal client avatar.
• Define core values.
• Figure out who you need to hire and how to select the perfect applicant.
• Market your services and products.
• Allocate resources appropriately.
• Track and manage cash flow.
• Determine your firm’s capital structure and figure out when to take on debt or sell equity.
• Identify pain points.
• Create or optimize your business growth strategy.
• Appropriately schedule stages of your firm’s expansion. 
• Create or refactor your firm’s organizational structure.
• Develop skills like delegating.
• Promote, demote, or let employees go.
• Plan the sale or succession of your firm.
• Prepare for retirement or minimize your day-to-day involvement in your firm.

Challenges and Limitations of Working with a Business Coach

Of course, there are limitations to working with a business coach. For example, business coaches are rarely licensed or certified in the same way that financial advisors or planners are. They are not legally required to protect your interests as fiduciary financial planners are. However, not all financial planners or advisors are obligated to do so. 

Another difference is that business coaches typically bill hourly. They do not work on commission. When working with a business coach, you might meet one-on-one, or you might meet in a group. Joining a coaching cohort can help hold business owners accountable — ensuring they fulfill key metrics and measurables.

Last but not least, business owners should also be aware that some coaches have a specific area of focus, like finance or team-building. Others do not specialize. We recommend that firm owners work with coaches who have experience and expertise in the interior design industry. 

Final Thoughts

A financial advisor can provide invaluable guidance and support for your business finances. However, it’s important to also consider the benefits of working with a business coach. 

A business coach will help develop a great strategy for growing your business and overcoming common challenges that entrepreneurs face. Business coaches will also provide ongoing support as you achieve your goals. 

Alternatively, a financial advisor is typically more hands-off. Coaches can hold you accountable for taking action and making progress toward your objectives while offering guidance and advice along the way. 

If you are primarily focused on managing your finances and making smart investment decisions, then a financial advisor may be the best choice for you. However, you might prefer to develop a comprehensive strategy for growing your business and achieving long-term success. If so, investing in a business coaching program or mentorship could be incredibly valuable. 

In some cases, investing in both a financial advisor and a business coach will best position your interior design firm for future success. A business coach might actually recommend that you seek support from a financial advisor — or vice versa — in addition to commissioning their services. In the end, you must strike the right balance to ensure that your business is thriving and reaching its full potential.