Financial Counseling and Planning, Volume 4, 1993.
This article as published was on pages 5-10.

Financial Counselors: The Need

Has Never Been Greater

Jerry Mason(1)

Never has there been a greater need for financial counselors. The
number of individuals and couples filing for personal bankruptcy is
approaching a rate of one million per year. Millions more stagger
under heavy debt loads, run out of money before pay day, or find
themselves unable to save. Yet financial counselors are scarce.
Currently most can be found working for the military, credit unions,
employee assistance programs, and the Consumer Credit Counseling
Service. A few are private practitioners.

Financial counselors don’t sell products, offer income tax,
investment or legal advice. They do help clients whose home is
about to be foreclosed, their car repossessed or their utilities
disconnected. While most clients may not face such dire crises,
many are buried under a pile of debt. Other clients, who can meet
their debt payments, have a difficult time making ends meet
between paydays. Some clients are primarily motivated to seek out
a counselor because they spend all they earn and are unable to save
or invest. A growing number of people who need help with their
money management problems are seeking the services of a financial

Recognizing the need for professional financial counselors to
network, in 1983 a group of professionals came together and laid the
ground work for The Association for Financial Counseling and
Planning Education (AFCPE). Recognizing a shortage of
competent financial counselors, the AFCPE membership, at their
national convention in 1989, decided to develop a program to certify
financial counselors. During their national convention in the fall of
1992, the Accredited Financial Counselor Program (AFC) was

The Accredited Financial Counselor Program has several objectives;
two are primary. One, improve the skills and abilities of existing
financial counselors. Two, greatly expand the number of financial
counselors. Other than “on the job training,” there are few places in
the United States where someone can prepare to become a financial
counselor. Only a few colleges such as University of Missouri,
Iowa State, Purdue and Texas Tech University provide course work
in financial counseling. Because of limited education and training
opportunities the AFC program was developed.

Interest in the new AFC program has raised some important

Q. How does an Accredited Financial Counselor differ from a
Certified Financial Planner?

A. Financial planners market to clients who have cash to invest,
assets to reposition, or who need to buy life insurance. Planners
help clients develop and implement retirement, estate and
income tax reduction strategies. Planners prefer individuals
who are earning more than $100,000 annually and whose net
worth is in excess of a half million dollars.

Accredited Financial Counselors work with three types of clients:

1. Those facing a financial crisis. Tomorrow their home will be
foreclosed, their car repossessed, or their utilities turned off.
Creditors’ phone calls and visits upset them because they are
past due on so many loans.

2. Those who are able to meet their debt obligations each month,
but just barely. They often spend all their money before the end
of the month. They have real problems stretching their money
from payday to payday.

3. Those who find themselves on a financial treadmill. They don’t
run out of money, but they are not able to save or put money
away for retirement and other important short and longer term

While most financial counseling clients earn less than $100,000
annually, a growing number of professionals with six figure
incomes are seeking help from financial counselors.

Unlike the planner who wants to develop a long term relationship
with the client, the AFC wants to help clients learn to better manage
their finances so that they no longer need the AFC. Financial
planners give advice and make decisions for their clients. An
Accredited Financial Counselor recognizes that his or her client’s
money problems are usually the result of one or more behavior
problems. A counselor can only help a client improve his or her
financial situation when the client takes responsibility for important

Q. Should a financial planner earn the AFC designation?

A. Anyone entering the financial planning profession would find
it beneficial to earn the AFC designation because of course
content. The first course covers personal finances and is
broader in scope than the subject matter covered by other
designations. The second course focuses on the financial
counseling process. Increasingly, planners help clients develop
budgets or plans to reduce debt loads. Planners need training
in helping client work through their financial problems. The
second course prepares planners to become more effective

Q. Where would a consumer find an Accredited Financial

A. The program is so new that the first graduation is scheduled for
November 1993. But financial counselors are currently
employed by the military, credit unions, state extension
services, Consumer Credit Counseling agencies, and employee
assistance programs. In a short time clergy, creditors, marriage
and family therapists, and most financial service firms can be
expected to employ Accredited Financial Counselors.

Q. What would a consumer expect to pay for the services of an
Accredited Financial Counselor?

A. That depends on the agency or firm offering financial
counseling and the types of services the consumer desires.
Firms that offer “crises” or credit/debt counseling, usually don’t
charge or their fees are less than $25.00 a month. A client who
needs help developing a money management program might be
charged an hourly fee based on ability to pay that could range
from $10 to $100 per hour.

Q. Who is a likely candidate to become an Accredited Financial

A. Financial planners, financial counselors employed at military
bases, credit unions, banks, finance companies, hospitals,
Consumer Credit Counseling Services, extension agents,
educators, private practitioners, marriage and family therapists.

Q. What must a person do to become an Accredited Financial

A. Candidates must meet experience, education, and character
requirements plus subscribe to a Code of Ethics. Each AFC
must earn a minimum of ten hours of approved continuing
education credits each year. To become an Accredited
Financial Counselor, an individual must have two years
experience in financial counseling or a related field, live by a
Code of Ethics, submit three letters of recommendation and
satisfy an education requirement.

Q. At present courses are offered home study. Will I ever be able
to earn college credit when completing AFC courses?

A. In 1993-94 academic year, as a pilot study, the South Plains
Community College is offering the two AFC courses. By 1996,
we hope that the AFC courses will be available on 100
community college campuses and university continuing
education programs. Anyone who wants to offer the AFC
courses should contact the AFC office at Texas Tech

Q. What other changes are planned for the AFC program?

A. A third course will be added in 1996 and a fourth in 1998. One
course will focus exclusively on financial counseling processes
and procedures; the other will be applications oriented,
requiring AFC candidates to resolve problems encountered in
case studies.

Q. What can an AFCPE member do to contribute to the success of
the AFC program?

A. One or all of the following would be helpful:

1. When you attend a professional meeting (especially
regional or national), ask to be on the program so you can
explain the AFC program. Set up a table and distribute
AFC brochures.

2. If you know of a mailing list of people, many of whom
would be interested in the AFC program, contact the AFC
office at Texas Tech.

3. If you have an idea for publicizing the AFC program, or
know a media person, contact the AFC office at Texas

4. Enroll in the AFC program, and encourage your friends to

5. Adopt the AFC text, FINANCIAL COUNSELING, the
next time you teach a financial counseling course.

1Jerry Mason, Associate Professor, Texas Tech University, Box
41162, Lubbock, Texas, 79409-1162, (806) 742-2067