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- Herausgeber: John Wiley & Sons
- Kategorie: Fachliteratur
- Sprache: Englisch
Tools to help financial planners become more effective Psychology of Financial Planning: Practitioner's Toolkit is a practical, hands-on companion resource to the authors' Psychology of Financial Planning. It brings assessments, reflection and exercises that helps the financial planner better understand their own biases and behaviors as well as those of their clients. The Practitioner's Toolkit includes exercise related to all of the learning objectives in the Psychology of Financial Planning that are found on the CFP® Exam. This Practitioner's Toolkit offers a collection of tools designed to expand on aspects of the companion book, including assessments and exercises financial planners can use with their clients. It guides readers through the application of concepts explored in the Psychology of Financial Planning and encourages discussion and sharing with clients and members of planning firms. Readers will also find: * Tools and strategies to assist the financial planner in understanding client and planner attitudes, values, and biases, * Explorations of multicultural competence, behavioral finance, and helping client's navigate crisis events across a broad range of circumstances and financial planning clients, * Exercises that focus on resolving common sources of money conflict, avenues to get the client to take action, client goal-setting, and principles of effective communication and facilitating change. Designed for current and aspiring financial planning professionals and educators in financial planning across roles and business models, The Psychology of Financial Planning: Practitioner's Toolkit is a must-have on bookshelves of practitioners from firms large and small.
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Seitenzahl: 143
Veröffentlichungsjahr: 2022
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Table of Contents
Cover
Title Page
Copyright
Introduction
About This Book
How to Use This Book
Chapter 1: Client Values and Goals
Exercise 1: What Drives You?
Exercise 2: Tape Measure Exercise
Exercise 3: Incomplete Sentences Intervention
Exercise 4: Self‐Efficacy Reflection
Note
Chapter 2: Multicultural Competence in Financial Planning
Exercise 5: Your Multicultural Experience
Exercise 6: Your Current (or Future) Clientele
Majority and Minority Status That Impact Financial Planning
Exercise 7: ADDRESSING Exercise
Notes
Chapter 3: Financial Flashpoints: Exploring a Client's Financial Background
Exercise 8: Your Ancestral Flashpoints
Exercise 9: Your Financial Flashpoints
Exercise 10: The Money Egg
Notes
Chapter 4: Money Scripts: Exploring a Client's Beliefs About Money
Exercise 11: The Klontz Money Script Inventory–Revised (KMSI‐R)
Exercise 12: Money Script Log
Exercise 13: New Money Mantra
Notes
Chapter 5: Financial Behaviors and Outcomes
Exercise 14: Financial Health Scale
Exercise 15: Klontz Money Behavior Inventory (KMBI)
Exercise 16: Mindfulness Meditation
Notes
Chapter 6: Principles of Effective Communication
Open‐Ended Invitations Versus Closed‐Ended Questions
Exercise 17: Open‐Ended Invitation
Reflection
Exercise 18: Reflection Exercise
Exercise 19: Question‐Free Zone Exercise
Exercise 20: Dirty Dozen Exercise
Exercise 21: The FLOW Process
Exercise 22: Listening by Sketch
Notes
Chapter 7: Client and Planner Attitudes, Values, and Biases
The Six Main Learning Styles
A Multifaceted Approach
Exercise 23: Learning Style Exercise
Exercise 24: The 75% Rule
Attention
Exercise 25: The Distraction Checklist
Exercise 26: The Client Distraction Checklist
Chapter 8: Sources of Money Conflict: Working with Couples and Families
Exercise 27: Conversation Intervention
Exercise 28: The Conversation for Blended Families
The Self‐Aware Financial Planner
Notes
Chapter 9: Helping Clients Navigate Crisis Events
The Financial Planner's Role in Helping a Client Navigate Crisis
Notes
Chapter 10: Principles of Counseling in Financial Planning Practice
Exercise 29: The Miracle Question
Cognitive Behavioral Techniques in Financial Planning
Exercise 30: Stress Inoculation: The Worst‐Case Scenario
Positive Psychology in Financial Planning
Exercise 31: The Gratitude Exercise
Exercise 32: Three Good Things
Notes
Chapter 11: Behavioral Finance: Understanding Cognitive Biases and Heuristics … and What to Do About Them
Exercise 33: Status Quo Bias
Exercise 34: Mental Accounting
Exercise 35: Endowment Effect
Exercise 36: Sunk‐Cost Fallacy
Exercise 37: Anchoring Heuristic
Exercise 38: Confirmation Bias
Note
Chapter 12: Getting the Client to Take Action
Exercise 39: Motivational Interviewing Exercise
Exercise 40: Well‐Done Exercise
Exercise 41: Professional Relationship Forensic Audit
Nine Evidence‐Based Techniques for Overcoming Client Resistance to Financial Advice
Exercise 42: Simple Reflection
Exercise 43: Complex Reflection
Exercise 44: Amplified Reflection
Exercise 45: Double‐Sided Reflection
Exercise 46: Shifting the Focus from What's Not Working to What Is Working
Exercise 47: Reframing
Exercise 48: Agreement with a Twist
Exercise 49: Emphasizing Self‐Determination
Exercise 50: Arguing Against Change
Notes
Going Forward
Exercise 51: Your Takeaways
In Closing
When and How to Refer
Ethical Considerations
Conclusion
Notes
Index
End User License Agreement
List of Illustrations
Chapter 3
Figure 3.1 Klontz‐Chaffin Model of Financial Psychology
Figure 3.2 Money Egg Example: Step 1
Figure 3.3 Money Egg Example: Step 2
Figure 3.4 Money Egg Example: Step 3
Figure 3.5 Money Egg Example: Step 4
Figure 3.6 Money Egg Example: Step 5
Chapter 4
Figure 4.1 Klontz‐Chaffin Model of Financial Psychology
Guide
Cover Page
Title Page
Copyright
Introduction
Table of Contents
Begin Reading
Going Forward
In Closing
Index
Wiley End User License Agreement
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PSYCHOLOGY OF FINANCIAL PLANNING: PRACTITIONER’S TOOLKIT
DR. BRAD KLONTZ, CFP®DR. CHARLES CHAFFINDR. TED KLONTZ
Copyright © 2023 by Brad Klontz, Charles Chaffin, and Ted Klontz. All rights reserved.
Published by John Wiley & Sons, Inc., Hoboken, New Jersey.
Published simultaneously in Canada.
No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording, scanning, or otherwise, except as permitted under Section 107 or 108 of the 1976 United States Copyright Act, without either the prior written permission of the Publisher, or authorization through payment of the appropriate per‐copy fee to the Copyright Clearance Center, Inc., 222 Rosewood Drive, Danvers, MA 01923, (978) 750‐8400, fax (978) 750‐4470, or on the web at www.copyright.com. Requests to the Publisher for permission should be addressed to the Permissions Department, John Wiley & Sons, Inc., 111 River Street, Hoboken, NJ 07030, (201) 748‐6011, fax (201) 748‐6008, or online at http://www.wiley.com/go/permission.
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Limit of Liability/Disclaimer of Warranty: While the publisher and author have used their best efforts in preparing this book, they make no representations or warranties with respect to the accuracy or completeness of the contents of this book and specifically disclaim any implied warranties of merchantability or fitness for a particular purpose. No warranty may be created or extended by sales representatives or written sales materials. The advice and strategies contained herein may not be suitable for your situation. You should consult with a professional where appropriate. Further, readers should be aware that websites listed in this work may have changed or disappeared between when this work was written and when it is read. Neither the publisher nor authors shall be liable for any loss of profit or any other commercial damages, including but not limited to special, incidental, consequential, or other damages.
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Library of Congress Cataloging‐in‐Publication Data:
Names: Klontz, Brad, author. | Chaffin, Charles R., author. | Klontz, Ted, author.
Title: Psychology of financial planning : practitioner’s toolkit / Dr. Brad Klontz, CFP, Dr. Charles Chaffin, Dr. Ted Klontz.
Description: Hoboken, New Jersey : John Wiley & Sons, Inc., [2023] | Includes index.
Identifiers: LCCN 2022040961 (print) | LCCN 2022040962 (ebook) | ISBN 9781394153343 (paperback) | ISBN 9781394161232 (adobe pdf) | ISBN 9781394161249 (epub)
Subjects: LCSH: Finance, Personal—Psychological aspects. | Financial security.
Classification: LCC HG179 .K5738 2023 (print) | LCC HG179 (ebook) | DDC 332.024—dc23/eng/20220923
LC record available at https://lccn.loc.gov/2022040961
LC ebook record available at https://lccn.loc.gov/2022040962
Cover Design: Wiley
Cover Image: © VectorMine/Shutterstock (modified by Wiley)
Introduction
Many of us know what we should be doing around money, but we fail to put this knowledge into action. Consider the following examples:
Our epidemic of overspending and undersaving
Buying when the market is high and selling when it is low, doing the exact opposite of what's in their best interest
Trying to get rich quick
A lack of diversification
Saying they want one thing but failing to follow through
Having trust issues around money
Blowing a bonus, inheritance, lottery win, or even a big sports contract
Failing to put a Will or Trust into place
Getting rid of money out of feelings of guilt
Providing financial support to adult children when the client can't afford it and/or the children misuse the money
Having trouble saying “no” to requests for money from family and friends, even when they know they should
Chronic money conflicts with spouses, partners, and family members
Lying about, or hiding, financial actions from a partner or spouse around money
Failing to follow through on financial advice, even when they requested it
Feeling too anxious to spend money even when they can afford to
Sacrificing health, relationships, and emotional well‐being in the pursuit of more, even when by all objective evidence they have enough
Avoidance around money issues
A lack of motivation, creativity, and passion in occupational pursuits
Many of these difficulties are due not to a lack of financial literacy, but to a client's psychological conditioning. As such, a basic knowledge of a client's financial psychology – their instincts, biases, beliefs, and behaviors – is essential to provide comprehensive, effective financial planning services. As technology advances and many financial services are becoming more and more commoditized, it has never been more important for financial planners to demonstrate their value in helping improve clients' financial lives. With the inclusion of the psychology of financial planning in the list of topics financial planners need to know, the field has evolved to serve clients more holistically. This evolution is less an aspirational call to action and more a recognition of the critical role financial planners have been playing in their clients' lives for decades. Including psychology in financial planning helps equip financial planners with a better understanding of their clients' values and attitudes and provides the tools they need to be better communicators and to help their clients manage money conflicts and navigate crisis events.
About This Book
This book is designed to be a companion to Psychology of Financial Planning: The Practitioner's Guide to Money and Behavior. Here we focus on applying the knowledge, tools, and techniques from the book into action. Our approach throughout both books, as well as in our education programs, is not to learn theory for the sake of defining terms (or earning continuing education credit), but rather, to help advisors learn new tools and refine old ones to help engage their clients in more meaningful ways. In each chapter we include a basic overview of the content so that you don't need to constantly flip back and forth between the two books. However, deeper explanations and contexts are provided in Psychology of Financial Planning: The Practitioner's Guide to Money and Behavior.
The Practitioner's Toolkit is designed with over 50 assessments and reflection exercises. You may find it more rewarding to complete many of the exercises with a colleague, sharing the results and brainstorming about ways that you can refine your work and impact your clients. If you are a student, all of the exercises and scenarios that are part of this book can help you in developing your “toolbox” of skills and techniques. We also strongly encourage you to do these exercises yourself. This will not only increase your level of confidence in using the techniques, but reflecting on your own financial psychology will have a positive impact on how you engage your clients in the future. Regardless of where you are in your professional journey, we hope that both of these books give you the knowledge and tools you need to build deeper and more effective relationships with each of the clients you serve.
To help you learn new approaches and refine old ones, we must first begin with a bit of a self‐assessment. That self‐assessment spans two different areas. First, it is an assessment of elements of your current practice, questioning what is working as it relates to communication, cultural competence, and getting your clients to take action. Second, and perhaps more importantly, the self‐assessment helps you take an honest look at your own biases and worldview; specifically, your relationship with money and your financial beliefs and behaviors. Your financial psychology will have a profound impact on your work as a planner. Self‐awareness is critical in making you an even more effective financial planner. Written as a companion to Psychology of Financial Planning: The Practitioner's Guide to Money and Behavior, this book focuses on the application of the tools, assessments, and reflections provided here that will help you with everything from deepening your sense of cultural humility to helping you get your clients to take action.
We are all planners. So as you work through this toolkit, we invite you to document what you learn about yourself as an individual and as a planner; opportunities for your firm to improve; and where you would like to see your practice in the near and distant future. The results of these discoveries can create a living document for you and your firm and, hopefully, a toolbox of knowledge, reflection, and techniques that can only improve your impact and, most importantly, the lives of your clients.
As the field continues to evolve, so does our understanding of the psychology of financial planning. For the latest developments make sure to visit us at www.psychologyoffinancialplanning.com.
How to Use This Book
This book is designed to help you (or your firm or, if you are a student, your class) better understand yourself – specifically, your biases, experiences, and background and how all of those impact the lens that you bring to your current or future practice. There are a series of assessments and reflection exercises that require you to seriously consider the worldview that you bring to your clients. We have included exercises that can be used with clients, and we encourage you to complete them first on your own. Readers may also find it helpful to share some of their experiences and self‐discoveries with a colleague, classmate, or loved one.
Although we provide short overviews of main topics that impact the exercises, we recommend that you consult Psychology of Financial Planning: The Practitioner's Guide to Money and Behavior for additional tools, full definitions, and a broader context around the topics.
Chapter 1Client Values and Goals
In this chapter, we provide tools that you can use with clients to help them gain clarity around their values and goals. But before we do that, let's focus on what drives you in your professional and/or educational pursuits.
