The typical schooling for financial advisors is very technical, according to Garrett. While traditional financial advisors tend to ask very routine, segmented categories of questions around assets, liabilities, investments, insurance, wills and trusts and retirement savings and the like, the soft training behind financial counseling, by contrast — regarding communication, connectivity and trust-building — focuses on human capital, she noted.
"Our most important asset is our ability to make money, and our biggest liability is our penchant for spending it all," Garrett said. "That's the biggest area where a financial counselor can help."
Coaches motivate, and planners offer technical solutions, she noted. Employing the two approaches in a holistic way helps clients receive education and resources most relevant to them at a particular point in their lives.
Kris Boelte, managing member of Kristine A. Boelte & Associates, is a CFP and an accredited financial counselor, a certification offered by AFCPE. "I knew going forward that financial advice was becoming the critical component of the industry," she said.
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A financial counseling class in graduate school opened her eyes to the needs of clients at the other end of the spectrum, Boelte said. "If all you have is a Series 7, you have no experience in budgeting and income planning or leveraging tools, such as bankruptcy and credit counseling."
Boelte appreciated learning about how to provide psychological support. "The training shows you how to pull people out of that feeling of helplessness and hopelessness," she said. "Serving as a counselor conveys to them that you can get to the emotional roots of their situations."
Boelte provides a few sessions of financial counseling, often on a pro bono basis, as a value-added service to friends and relatives of clients, working with clients' children on issues such as job loss.
Jeffrey Tomaneng, financial advisor with Lincoln Investment, also holds both CFP and AFC certifications. Because the majority of his clients are public school teachers, he does more financial counseling than traditional financial planning with them, he said.