Financial coaching vs financial advice: What's the difference (and what does your team need)?
People sometimes use "financial coaching" and "financial advice" interchangeably. But they're actually quite different, and understanding the distinction can help you choose the right support for your employees.
What is financial advice?
Under the Financial Advisers Act 2008 (section 5), financial advice means making a recommendation or giving an opinion on a specific financial product tailored to a person's situation.
For example, "You should put your KiwiSaver in a growth fund" is financial advice. So is, "Based on your circumstances, I recommend this specific life insurance policy."
Financial advisers must be certified and follow strict regulations. When gaining their accreditation, they choose to specialise in at least one of four areas: investments, KiwiSaver, insurance, and lending.
What is financial coaching?
Financial coaching is about building capability, not recommending products.
A coach helps people improve their financial behaviours, habits, and confidence. They might work with someone to create a budget, figure out how to tackle debt, understand KiwiSaver basics, or set financial goals.
But here's what they can’t do: tell a person which KiwiSaver fund to choose, which insurance policy to buy, or which bank to use. Instead, they ask questions, hold people accountable, and help people develop their own strategies.
Financial coaching isn't regulated in New Zealand, which makes checking credentials and expertise particularly important.
So what's the actual difference?
Let's look at KiwiSaver:
A financial coach might:
Explain what KiwiSaver is and how it works
Walk through the differences between conservative, balanced, and growth funds
Show someone how changing their employee contribution rate impacts their budget
Discuss the factors to consider when choosing a fund
A financial adviser might:
Look at someone's specific situation (age, income, goals)
Recommend a particular KiwiSaver provider and fund
Suggest a specific contribution rate
Provide ongoing portfolio management
The coach helps people understand how to think about the decision. The adviser tells people what decision to make.
Here are three real-world scenarios to further illustrate the differences:
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Coaching helps: Understanding her payslip, setting up a basic budget, deciding how much to save, learning KiwiSaver basics
Advice helps: Choosing which specific KiwiSaver fund matches her situation
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Coaching helps: Planning for reduced income during parental leave, building an emergency fund, and figuring out where to cut spending.
Advice helps: Deciding which life insurance products to buy and how much coverage makes sense.
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Coaching helps: Clarifying her goals, understanding different investment options, working through her anxiety about making the "wrong" choice
Advice helps: Recommending specific investment products that match her goals and risk tolerance
When do employees need which?
Most employees need coaching more than advice, at least initially.
Research from the Retirement Commission shows only 45% of New Zealanders feel confident managing their money. That means more than half your workforce is struggling with basics: budgeting, saving, understanding how debt works, and knowing what questions to even ask.
For these employees, jumping straight to financial advice doesn't help much. If someone doesn't understand what diversification means or why fees matter, a recommendation to "rebalance your portfolio" won't land.
What this looks like in practice
Making education and coaching available to employees builds baseline financial capability. If you want to take it from there, you could connect employees to advisers when they’re facing a big financial decision, such as buying a house or choosing insurance.
Together, this approach reduces financial stress and improves engagement with benefits such as KiwiSaver. The key is understanding that financial coaching and advice are different, and most people need to walk before they can run.
Now for the important legal part: The information we provide is general and not regulated financial advice for the purposes of the Financial Markets Conduct Act 2013. Please seek independent legal, financial, tax or other advice in considering whether the content in this article is appropriate for your goals, situation or needs. The information in this article is current as at 26 November 2025.
Stephanie Pow
Founder & CEO of Crayon
