Coaching Ethics for Therapists: Are You Accidentally Crossing the Line?
Dr. Lisa Marie Bobby is a licensed psychologist, licensed marriage and family therapist, board-certified coach, AAMFT clinical supervisor, host of the Love, Happiness, and Success Podcast and founder of Growing Self.
If you’re a therapist who also offers coaching, there’s a good chance you’ve had at least one “Oh wait—is this even okay?” moment. Maybe it was when a coaching client started talking about their childhood trauma, or when a therapy client asked if they could switch to coaching so insurance wasn’t involved. Whatever it was, that little twinge in your gut? That’s your ethical Spidey sense tingling. And friend, you’ve got to listen to it.
In a recent episode of Love, Happiness, and Success for Therapists, I dove deep into the ethical dilemmas therapists face when they step into the coaching world. And let me tell you, the gray areas are real. So let’s break it down and make sure you’re navigating this space with clarity, integrity, and confidence.
The Insurance Trap: Are You Committing Fraud?
One of the biggest reasons therapists venture into coaching is to escape the insurance nightmare. (Because let’s be real—the struggle is real.) You have clients who don’t meet criteria for a mental health diagnosis but want to work on relationships, career goals, or personal development. They ask if you can just kind of make it work so insurance covers it. Tempting, right?
Except here’s the thing: That’s fraud. According to the APA, you can only bill insurance for medically necessary treatment of a mental health disorder. If you’re making up diagnoses to fit personal growth work into an insurance claim, you’re stepping into seriously dangerous territory. Coaching can be a fantastic alternative—but only if you do it ethically.
Scope Creep: When Coaching Clients Need Therapy
Let’s say you’re coaching a high-functioning professional who wants to level up in their career. Everything is going great until they casually mention they’ve been having panic attacks, can’t sleep, and are deeply depressed.
Uh oh.
If you’re not careful, you might find yourself doing therapy without calling it therapy. This is where it gets tricky: If your coaching client develops a clinical issue, you must refer them to therapy (and if you’re the right fit, that could be you—but only under a separate therapeutic contract in a state where you’re licensed). The National Board for Certified Counselors (NBCC) has clear guidelines on maintaining the distinction between coaching and therapy, and it’s crucial to follow them.
The Boundary Blender: Avoiding Dual Relationships
Boundaries can get real messy when you’re a therapist who coaches. Some common pitfalls?
- A current therapy client wants to switch to coaching.
- A coaching client asks if you can just do a little therapy when needed.
- A client wants to refer their spouse, best friend, or boss to you.
Even marketing can get dicey. Mainstream coaches (hello, Tony Robbins!) have free rein to ask for testimonials and share client wins on social media. But you? Nope. Therapists must follow confidentiality laws, and asking a client for a glowing review could be seen as coercive. The ACA Code of Ethics is clear: We have a different level of responsibility.
Free CE Training for Therapists!
Think You’re Coaching?
8 Red Flags You’re Doing Therapy
If you’re offering coaching without formal training, you could
be crossing ethical lines without realizing it. This training gives you the clarity, structure, and skills to stay in bounds—
and earn 1 NBCC CEU credit.
The Competency Pretzel: Are You Actually Trained to Coach?
This might be the most controversial thing I say today, but here it is: Being a therapist does not automatically qualify you to be a coach.
Oof. I know. That one stings.
Therapy and coaching are distinct professions with different methodologies. Just because you’ve helped therapy clients navigate careers doesn’t mean you’re an executive coach. Coaching psychology is a field of study, and if you’re not trained in it, you’re winging it. And that, my friend, is not ethical.
If you’re serious about adding coaching to your practice, I highly recommend getting properly certified. The Board Certified Coach (BCC) credential is specifically designed for mental health professionals transitioning into coaching and provides a structured, ethical framework to follow.
The Right Way to Do This
So how do you ethically incorporate coaching into your practice?
- Get clear on your roles. Coaching and therapy are different. Always clarify which service you’re providing.
- Have separate contracts. If you offer both, keep your coaching and therapy businesses distinct.
- Know when to refer out. Coaching clients who need therapy? Send them to a qualified provider.
- Get certified. If you’re going to do this, do it right.
Want to Do Coaching Ethically? Let’s Talk.
If you’re ready to add coaching into your practice the right way, my CE training Think You’re Coaching? 8 Red Flags You’re Actually Doing Therapy is for you. You’ll learn how to navigate ethical pitfalls, market yourself correctly, and build a thriving, integrity-driven coaching business. Plus, you’ll earn 1 CE credit for completing the training and passing the quiz.
Ethical coaching doesn’t have to be a mystery. With the right training, boundaries, and mindset, you can confidently expand your practice while staying 100% on the right side of the law and your professional values. Let’s do this the right way, together!
And hey, if we’re not already connected on LinkedIn, let’s fix that! I’m always sharing insights and (let’s be real) probably stirring up a few debates in the therapy world.
Xoxo
Dr. Lisa Marie Bobby
PS: Know a therapist who is coaching (or thinking about it)? Forward this to them! Let’s keep each other accountable and do this work with excellence.
Subscribe, Share & Follow
The Love, Happiness & Success
For Therapists Podcast
