What is a Financial Counselor

Financial counselors have demonstrated they possess the content knowledge and counseling skill sets to help provide educational and emotional support guidance to their clients that helps them to confidently take effective action on their personal financial matters. What is a financial counselor if defined in their role is to understand a client’s current situation through analysis of their finances; discover their personal goals and prioritize the achievement of those objectives.  Financial counselors also provide a financial education, guidance, and help their clients work toward a state of financial and emotional wellness.

Financial Counselor Definition: Client Objectives

The NFEC conferred with government agencies, universities, and financial organizations to develop its definition of a financial counselor. Financial counseling represents the provision of regular, one-on-one client sessions to guide clients toward making financial performance improvements that meet the individualized goals set mutually between client and counselor. Certified financial counselors generally begin by analyzing a client’s current financial situation and conducting interviews to clarify his or her financial habits and behaviors, attitudes toward money, values, and emotional triggers. Then they help clients set clear, achievable objectives related to improving their financial health. The personal finance counseling process is primarily client-driven, based on the individual’s specific situation, needs, and objectives.

Financial Counselor Definition, Roles & Functions

After the initial evaluation, trained financial counselors can provide many types of guidance. For example, they may help clients develop an asset-building plan, prepare and/or file income tax returns, create estate plans, form debt reduction or debt payoff plans. It is not the financial counselor’s role to provide expertise on these issues or conduct the efforts on behalf of the client. Rather, the counselor provides education and makes suggestions to help clients manage their money effectively and responsibly, thus avoiding financial pitfalls in the future. Financial counselors offer tools and resources, guidance, and accountability to encourage clients to make self-directed behavioral changes that move them closer to their goals.

Financial counselors strive to gain rapport and empathize with clients’ current financial circumstances and attitudes. They help clients perceive and understand their own strengths and challenges related to managing money and identify any changes they would like to make. Then the financial counselor will help the client monitor progress toward his or her objectives, highlighting their accomplishments and helping them alter their behaviors as their financial situations change. Financial counselors may work with individuals alone, or in couples or small groups.