Financial capability is a dynamic and emerging field. Financial education and coaching have proven to have far-reaching benefits for the constituents served, the practitioners who work with them, and the organizations looking to improve individual and community outcomes. Financial education provides individuals the knowledge and skills needed to manage their personal finances effectively. By providing practitioners with a framework for holding clients accountable for making long-term changes, coaching can reinforce the skills learned in financial education classes and counseling services. Professionalization through certification and standards provide a roadmap for practitioners and organizations to provide high-quality financial capability services that are consistent with best practices.

 

Importance of Training and Certification

NeighborWorks America’s commitment to financial capability grew out of our long history of training housing counselors. Financial capability is central to successful and sustainable homeownership and has always been at the core of what we teach in many of our training courses. However, the foreclosure crisis that swept the country revealed a consumer need for deeper, targeted financial capability training. It became clear that some consumers lacked financial knowledge and skills that made them vulnerable to predatory loans and others stumbled in traditional homeownership programs, as they lacked the skills to work towards long-term financial goals. Unlike housing counseling, which helps people reach a specific financial goal, financial capability services help people address the root causes that may be keeping them from achieving any long-term financial goals.

 

NeighborWorks launched our financial capability training track and professional certification to provide practitioners with the skills needed to offer the highest-quality financial capability services, consistent with research outcomes and best practices. Teaching people to become financially resilient and achieve long-term financial goals can be difficult. People need to learn basic personal finance skills for managing money, such as budgeting, debt management and credit repair, as well as how to put these skills into daily practice—a process that often involves examining attitudes toward finances and making lasting behavior changes. To provide a comprehensive set of services that address all of these needs, practitioners must develop and refine a complex skill set.

 

Financial coaching, for example, is a method of supporting clients in working towards long-term financial goals and building life-long financial resilience. Unlike a service such as housing counseling, which is based on providing a client with specific information to reach a specific goal, coaching aims to build a relationship with a client that will provide  them with the insight, encouragement and accountability that will motivate them to make lasting changes in the financial lives. This highly impactful approach relies less on content expertise and more on using specific techniques and approaches. Acquiring these coaching skills requires reflection, real-world application and ongoing feedback. Training seeks to refocus practitioners’ skills from a counseling to a coaching approach in which they actively work to resolve clients’ financial issues through facilitation rather than instruction. For instance, practitioners need to master new techniques such as:

• Acknowledging: listening to what the client says and paraphrasing it back to increase awareness.
• Bottom lining: helping clients examine discrepancies between what they say and the action they take.
• Brainstorming: working together to generate ideas, alternatives and possible solutions.
• Clearing: engaging in active listening to help clients move beyond a situation or mental state that is interfering with their ability to be present in the coaching session or take action.
• Reframing: interpreting client information another way to provide an alternative perspective.

 

For many people, especially those facing challenges, personal finance is a taboo subject. People feel ashamed, vulnerable and often helpless to change their financial situation. With predatory businesses looking to take advantage of individuals in tough situations, people often are reluctant to openly talk about their finances. By professionalizing the financial capability field, we are raising the bar on the skill set and credibility of nonprofit counselors and coaches. Clients can be assured they will receive the high-quality services and respect they deserve.

 

Foundation for Impact and Sustainability

Adopting standards for financial capability professionals creates a common framework for developing and sustaining service delivery. Many organizations are eager to develop or expand their financial capability services, but some struggle to integrate, fund and sustain them. Successful program integration requires a holistic approach that allows clients to move along a spectrum, taking financial education classes to develop a strong knowledge base and then moving to financial coaching to convert this knowledge into action. For these financial capability programs to be successful, it is essential that staff at all levels of an organization have the necessary skills and tools.

 

To help build dynamic and sustainable programs, training should build the skills of front-line staff, as well as prepare management to develop and support these programs. For example, courses geared to practitioners who work directly with clients should explore issues such as outreach and how to engage them in developing their own solutions. Courses targeted to management should focus on program design and integration, including resource allocation.

 

In addition to training, evaluation of financial capability programs is crucial to gaining insight into what works, patterns and trends among clients, and how to adjust service delivery to be more effective. Building a culture of evaluation and learning within financial capability programs is key to effective service delivery and critical to the development of the field.  Evaluation that tracks and analyzes changes in financial clients’ progress can be done in practical, systematic ways that, in turn, improve outcomes for organizations and the people they serve.

 

The Bottom Line: Consumer Confidence

Providing professional training, certification and standards through known and trusted organizations gives consumers confidence that they are getting reliable information and guidance. In a time when many families continue to struggle financially and when there are predatory organizations in the marketplace ready to take advantage of them, this confidence is critical. Professionalization of the financial capability field will demonstrate to consumers they have a trusted community resource that not only can help solve financial crises, but also build a healthy financial future. Connecting local organizations to national best practices and research through training and certification provides consumers with knowledge and tools to weather financial crises and achieve long-term goals. This gives individuals and families the skills to begin charting their own financial course and ultimately builds stronger, more financially resilient communities.