Psychology of Financial Planning

CHAPTER 13Multicultural Competence in Financial Planning: Understanding Your Client's Cultural Identity

A woman and her husband sat in front of their financial planner in awkward silence. They were in conflict around their approach to money and had come to the financial planner for advice. The woman described herself as “thrifty” and “frugal” and wanted to save as much money as possible. In contrast, whenever they got money, her husband wanted to spend it on items of varying necessity. In fact, he had a garage full of items that he wasn't using but still thought were of value. The planner hypothesized that the husband was an overspender, and that he was maybe even struggling with a hoarding disorder. The conflict between the husband and wife was evident in their meeting with the planner. The planner agreed with the wife and, in a kind and professional manner, suggested that the husband's mindset around money was unreasonable, recommending that he stop “overspending” and save more money. The husband left the meeting feeling disrespected, while his wife felt vindicated that a professional took “her side” in their ongoing financial conflict.

Sounds simple, right? But there is much more to the story. Since the financial planner didn't consider the cultural background of the clients, he missed an opportunity to help them come to a deeper understanding of their cultural identities and how they factored into their relationship [115]. It turns out that the woman was raised in a Midwestern, ...