Most adults in the United States skipped “Money Management 101” and it’s causing a crisis. According to the NFEC, financial illiteracy cost Americans roughly $352 Billion collectively in 2021.  With financial literacy in a downward spiral, financial advisors are being called upon to pick up the slack.  In order to serve clients and the larger community, money managers are having to play a lot of different roles.

The Therapist

Money is an emotional issue for almost everyone under normal circumstances.  Combine that with economic uncertainty and financial illiteracy, and you have the perfect recipe for shame, denial, and anxiety.  As a culture, Americans are taught not to talk about money.  A CNBC article revealed “44% of Americans surveyed would rather discuss death, religion or politics than talk about personal finance with a loved one.”  Before any investing or planning can take place, financial advisors have to first establish trust, break through the wall of silence, and diffuse any fears or anxiety.

The Teacher

When 60% of adults don’t use a budget, financial advisors have their work cut out for them explaining complex investment concepts.  They have to first assess their client’s financial knowledge.  Then, start filling in the gaps by giving them smart financial tools (like a budget) and breaking down industry jargon into easily digestible information.  Teaching clients also helps with the emotional side of financial planning.  Clients often feel more engaged and confident when they are learning something they didn’t know before.

The Community Leader

In most states, personal finance courses are not required for high school students.  Even if they have access to these courses the majority of students are not taking them.  Given their expertise, financial advisors are being encouraged to fill in the gap by volunteering in their local communities, offering free online seminars, or advocating for government programs.

Long gone are the days when just being a good financial analyst qualified you as a good financial advisor.  Now, money managers need to add the roles of therapist, teacher, and community leader to their professional profile.