You'd better be careful how you talk to me Mr. Ape Man..I might have to enter therapy because of this market!
And here I thought it was all in my head.
cbs.marketwatch.com
Women warm to financial counseling
New niche tackles self-defeating money behaviors
By Kristen Gerencher, CBS.MarketWatch.com
Last Update: 1:00 AM ET Mar 7, 2001
SAN FRANCISCO (CBS.MW) -- Just as women are more likely to suggest marriage counseling, many also are seeking therapy for their money misgivings.
A new niche is growing in the space between a financial planner's spreadsheets and a psychologist's couch. Financial counselors -- also known as money mentors, coaches or financial recovery counselors -- offer basic education on matters such as how to stick to spending and savings plans, and women in particular are responding to the evolving practice, experts say.
For an average of $30 to $100 an hour, counselors try to help consumers overcome costly habits such as compulsive buying, money quarreling and falling short of their earnings potential. Unlike certified financial planners (CFPs) and credit counselors, coaches don't sell products or make debt repayment their primary business. Instead, they take a holistic approach that has as much to do with a client's childhood as his or her checkbook.
"Money problems are never about the money -- they're about bigger life things," said Steve Rhode, president of MyVesta.org, formerly Debt Counselors of America. "Simply balancing your checkbook or coming up with a budget is not going to solve those issues."
Women typically embrace the idea of financial counseling before men do, said Karen McCall, executive director of Financial Recovery Counseling Institute, a training center in San Anselmo, Calif. that's certified about 20 counselors.
"Usually women seek help sooner or more often than men," she said. "It's easier for them to ask for help. They also do not have the borrowing power or the earning power that men do, so they get in trouble faster."
Filling a hole in the market
The trend toward addressing the touchy-feely aspects of money management first arrived with best-selling author Suze Orman's popular pleas to "turn towards your money." Even academia is paying attention to the emotional underpinnings with the advent of "behavioral economics," the subject that garnered two Americans the Nobel Prize in Economics last year.
"There's this whole set of middle-income people who aren't candidates for heavy wealth management... but they still have questions."
What's more, the as-yet unregulated profession of financial counseling is taking off just as the Senate considers cracking down on bankruptcy-filers. The bill, approved by the House in a 306-108 vote last week, would require debtors to attend educational seminars.
Several start-up trade groups including McCall's and another called the Association for Financial Counseling and Planning Education are lobbying to have the U.S. Justice Department list them as alternatives should the bill pass.
At Columbus, Ohio-based AFCPE, the majority of the 700 "accredited financial counselors" work with military agencies and non-profit groups, executive director Sharon Burns said. To receive the AFC designation, they're required to have two years of experience in a related field and pass two exams.
Because it's an emerging practice that's just starting to standardize, consumers should choose counselors carefully since anyone can claim to be one, Burns said. Still, demand for coaches is booming.
"There's this whole set of middle-income people who aren't candidates for heavy wealth management that traditional financial planners serve, but they still have questions like 'How much should I save for retirement or for my kid's college education?'"
While most financial counselors aren't qualified to run technical analyses such as determining if clients can afford to retire early, they can get to the root of self-esteem problems that hinder long-term financial success, McCall said. Their recommendations can complement a CFP's work because clients often have deeper issues that prevent them from applying the best-laid plans.
Writing a "money autobiography" and keeping extensive records helps consumers discover their own solutions, she said. Older women, for example, sometimes have to work through outdated expectations that a man will provide for them, a message that also keeps men from seeking their own cures.
"Men have a lot of pressure to take care of women," McCall said. "They're supposed to be strong and competent and not need help."
For all the cultural and personal baggage that needs confronting, some old-line services still aren't sold on the new approach. The Credit Union National Association, which represents 10,000 U.S. credit unions, is sticking to debt consolidation and fee-based financial planning, Susan Tiffany, CUNA's director of consumer publications said.
"There's always been an element of hand-holding, cheerleading and skill-building" with traditional financial planning, she said.
Financial planners learn counseling skills on the job, and coaches offer little added value, said Connie Nadrowski, a CFP in Orlando. But the difference lies in access: Nadrowski said she prefers to work with clients who have investable assets of at least $100,000.
People of average means who want help working through a mental money block may be better served with coaches, and more are on the way, Burns said. "There are a lot of people who can pay 50 bucks an hour for advice, but there's nowhere to get it |
