Time for a Change

July 21, 2010

Despite it’s never-ending and (often questionable) invention of “innovative” new financial products, services, and securities, the financial services industry is woefully behind in the area that matters most to Americans in this economy: financial counseling.

You see, there is no money in helping someone to get out of debt, or helping someone deal with a job loss, yet every day I come across individuals that are dealing with just those sorts of issues. Personally, I think every financial professional should be required to receive training in the area of financial counseling. For starters, someone dealing with high debt or low income could probably benefit the most from professional help. Secondly, we need improvement in financial literacy among all consumers in our country if it’s truly going to rebound from this difficult economy, and what a better way to do that than by having financial experts available for folks who may otherwise never work with a financial professional.

So how do you get tens of thousands of financial professionals to suddenly take interest in a group that has little to no assets to invest? Well, we could start by making it mandatory. Let’s face it, the financial services industry already requires regular compliance training and continuing education, so allowing someone to receive credit when they provide services to those in financial stress could be a win-win proposition. The financial adviser wins because they get credit toward meeting their regulatory requirements, and the clients win because they get the same quality advice that is typically withheld for clients that have more assets to invest.

Now, I know we are many years away from such an idea even having a remote chance of being considered, but the fact that I just received a full 28 hours of continuing education credit toward my CFP® requirement for securing, get this, my Accredited Financial Counseling designation, tells me that at least somewhere in this industry the practice of financial counseling has value.

For the sake of our economic future as a nation, let’s all hope the CFP® Board paves the way towards industry wide change.

Now that’s the kind of innovation Americans need from their financial services professionals ….

No more derivatives, a lot more education.