Investor Behavior: The Psychology of Financial Planning and Investing

CHAPTER 12

Financial Counseling and Coaching

John E. Grable

Professor and Athletic Association Endowed Professor of Family Financial Planning, University of Georgia

Kristy L. Archuleta

Associate Professor, Personal Financial Planning, Kansas State University

INTRODUCTION

We were headed for bankruptcy. We had an immense amount of debt. We were fighting and I felt depressed. I couldn't sleep and it became difficult to make decisions, even if they were minor ones. We didn't know what to do. Then, we learned about financial counseling. . . .

A financial counseling client

The term financial counseling, and by extension, activities performed by financial counselors, has evolved over the past century. In the early- to mid-twentieth century, financial counseling was a phrase most closely associated with investment guidance. Those working as a financial counselor were essentially performing what today might be described as investment advisory functions. Financial counselors were primarily interested in helping clientele increase their wealth through the design and implementation of investment strategies. By the 1960s, the names used by investment professionals to describe their business activities grew to such an extent that few advisors referred to their work as financial counseling. Instead, they adopted titles such as broker, investment representative, investment advisor, financial planner, and money manager to help consumers better understand the services being provided by a firm. ...