Professional Practice Pointers for PFMs

By Barbara O’Neill, Ph.D., CFP®, boneill@njaes.rutgers.edu

Financial educators and counselors, in general, and military Personal Financial Managers (PFMs), specifically, use a variety of skills and resources to assist individuals and families with personal finance decisions. Services provided by PFMs include helping service members prepare a budget, finance a car, financially prepare for a new baby, and draft a will. Throughout the military life cycle, especially at key touchpoints, PFMs are there for their clients.

Woman sitting at desk
Photo by Emmy E from Pexels

The Association for Financial Counseling and Planning Education (AFCPE) recently held a networking session for financial practitioners to share best practices, challenges, and resources. Participants noted that the best things about their work were empowering clients, changing lives, and creating a safe place for clients to openly discuss their personal finance concerns. Below is a brief description of some additional takeaways:

One Thing That Financial Practitioners Wish They Knew Before They Entered the Field 

  • How “personal” personal finance can be as clients discuss their “money baggage,” values, mindsets, and dreams.
  • How technically correct information can be “incorrect” with certain clients (e.g., discussing three months of emergency fund savings with clients who have no previous savings experience and/or high debt).
  • The importance of promoting small action steps instead of large goals (e.g., 30-Day $100 Savings Challenge).
  • The strong influence of behavioral finance concepts (e.g., mental accounting, loss aversion, framing/reframing, and familiarity bias) on money emotions and mindsets.
  • The impact of culture and religion on financial decisions that will not change (e.g., the high value placed on tithing, sending a portion of income home to family members, and Sharia law’s financial implications for Muslims).
  • It is much “richer” (deeper) work than expected and a lot more than just adding up numbers.
  • The much more powerful impact on clients from telling stories versus presenting facts and data.

The Biggest Challenges That Financial Practitioners Encounter 

  • Getting “buy-in” on recommended action steps from a client’s family members.
  • Making financial education fun with engaging activities.
  • Changing clients’ daily financial practices and ingrained habits.
  • Building up a high level of trust individually with each client is very time-consuming.

Recommended Best Practices for Financial Practitioners to Assist Clients

  • No “hard selling” of products, services, or action steps. Instead, listen intently to clients and build hope.
  • Listen first and develop action steps later. Have clients identify their own action steps with non-judgmental wording such as “obviously, this [e.g., new cell phone] is important to you, so let’s figure out a way to get it.”
  • Talk about the “cons” of things, even recommended steps like saving in the Thrift Savings Plan, so discussions are balanced.
  • Take the time to go through client “baggage” and do not just point out what is wrong. Identify strengths.
  • Appreciate the time that it takes to build client trust and the power that trust provides once it is achieved.
  • Use the words “spending plan” instead of “budget” because they are perceived more positively.
  • Ask for help from professional colleagues. If you are new to the profession, find a mentor to guide you.
  • Avoid feeling like an “imposter” and celebrate every time the value of your work is validated by others.
  • Help clients achieve what they want- NOT what a financial educator/counselor wants. Ask clients to set their own personal success metrics and report program impact from a clients’ perspective.
  • Make clients feel that a financial educator/counselor is their ally and that they are in a “safe space.”
  • Help clients process negative information (e.g., those who find it hard to accept the reality of their situation).

A final takeaway was the rich network of financial practitioners that AFCPE includes. Individual financial educators and counselors are not alone and can reach out to their peers for help. To learn more about AFCPE networking opportunities and member benefits, visit the AFCPE website.