Life Coaching’s Hidden MLM Scheme: Turning Clients into Coaches
The life coaching industry has a secret that few people talk about: many life coaches don’t just sell coaching—they sell becoming a coach. (For a deeper understanding of the potential pitfalls in life coaching, read this article). This creates a multi-level marketing (MLM)-style recruitment cycle, where the real money isn’t in coaching clients but in convincing new people to become coaches themselves. This practice is one of the biggest reasons the life coaching industry lacks credibility.
How Life Coaching Becomes an MLM Scheme
Many life coaches make most of their income not by helping clients but by enrolling others into coaching certification programs, mentorships, or business-building courses. The cycle looks something like this:
- A person hires a life coach, hoping to improve their career, mindset, or personal growth.
- The coach encourages them to take a coaching certification or a “coaching business accelerator.”
- The client-turned-coach is then told they can make six figures by coaching others.
- The new coach struggles to find clients and is advised to start selling coaching certifications to others instead.
- The cycle repeats, with each new wave of recruits selling the same dream.
This MLM-like structure prioritizes recruitment over actual coaching—just like pyramid schemes.
Why This Model Is a Red Flag
1. Coaches Make More Money from Selling Coaching Than Coaching Clients
A legitimate profession should generate revenue from the core service it offers. (To explore the ethical concerns surrounding life coaching practices, click here). In life coaching, however, many coaches earn far more from teaching others how to become coaches than from working with actual clients.
- If coaching were truly profitable on its own, why would so many coaches need to sell coaching certification programs?
- Many coaches boast six-figure earnings, but a large percentage of that income comes from recruiting new coaches, not providing valuable coaching services.
2. Coaching Certifications Are Overpriced and Unnecessary
Many life coaching “certifications” cost thousands of dollars, yet they hold no real value or accreditation. Unlike therapy, which requires extensive training and licensing, anyone can become a coach overnight—no certification needed.
- The International Coaching Federation (ICF) is often cited as a leading coaching certification body, but its credentials are not required to practice.
- Many coaching programs promise that certification will lead to high earnings, but they don’t guarantee clients or success.
3. The Industry Is Saturated with Coaches Who Can’t Find Clients
Because the life coaching business model relies on recruitment, there are more coaches than clients. The industry is flooded with:
- Coaches who were convinced they could earn six figures but can’t find paying clients.
- Newly certified coaches who were sold the dream but lack the skills to build a sustainable business.
- Coaches who only make money by selling certification programs—not by coaching.
If a business model is only profitable when people keep buying into it, it’s not a real profession—it’s a recruitment scheme.
The Ethical Problem: Selling a Dream, Not a Service
Many life coaches claim they’re selling “personal transformation,” but in reality, they’re selling the idea of success, not a concrete service. (Learn more about the psychological tactics used in the coaching industry by reading this article). This leads to:
- Financial exploitation: People invest thousands in courses that don’t lead to real careers. For a discussion on how to identify and avoid business coaching scams, read this article.
- False promises: Many coaching programs claim to guarantee financial freedom, but most coaches struggle to earn a stable income.
- A never-ending cycle: Instead of helping clients improve their lives, many coaches turn them into recruiters for the same overpriced system.
How to Spot an MLM-Style Life Coaching Program
If you’re considering hiring a coach or becoming one yourself, watch for these red flags:
- The coach spends more time promoting their certification program than actually coaching.
- They promise six-figure earnings but provide no realistic business plan.
- There’s pressure to “invest in yourself” by paying for expensive training.
- The only way to make money seems to be by getting others to join.
Final Thoughts: Choose Coaching Wisely
Not all coaching is bad, but if a coach is more focused on selling coaching certifications than coaching itself, it’s a problem. A legitimate coach should offer a valuable service to clients—not just a recruitment pipeline into an oversaturated industry. If you’re seeking ethical coaching practices or have questions, feel free to contact me.
If you’re looking for personal development, consider whether coaching is truly about growth—or just another MLM-style money grab.