Principles of counseling - CFP Psychology of Financial Planning

Principles of counseling

Applying counselling principles in a planning engagement: building rapport and trust, motivational interviewing, active listening, open questions, empathy, and recognising when a client's needs exceed the planner's competence and warrant a referral.

Motivational interviewingClient-centred counselling

Practice question for this objective

Free samplePsychology of Financial Planningmedium

Owen, aged 52, has agreed with his planner that his retirement savings rate is too low for the retirement age he wants. When the planner suggests raising his workplace pension contribution from 4 per cent of pay to 10 per cent, Owen says that advisers push everyone to save more, that he has heard the speech before, and that he will not be lectured about his own money. He stays in the meeting and does not end the engagement. Applying motivational interviewing, how should the planner respond?

ASet out the compounded shortfall in dollars at his target retirement age and repeat the recommendation to move to 10 per cent, this time with the full arithmetic attached to it
BAccept that he has declined the recommendation, drop the savings question from the engagement, and move the meeting on to the insurance review that was scheduled for later
CPoint out to him that his reaction is defensive and ask whether he is avoiding the subject because of a money script he absorbed from the way his parents handled income
DReflect back that he has heard this advice before and does not want to be pushed into it, then ask him what he would want his own position to look like by the age of sixty Correct

In motivational interviewing the planner rolls with resistance by reflecting it and evoking the client's own reasons for change rather than arguing for it. Motivational interviewing treats resistance as a signal about the conversation rather than a defect in the client. When a planner argues for change, the client is placed in the role of arguing against it, and people persuade themselves by what they hear themselves say, so the argument itself entrenches the behaviour. Rolling with resistance breaks that dynamic: the planner reflects the objection accurately, declines to take the opposite side, and then asks a question that lets the client voice his own motivation. Owen has already conceded that the savings rate is too low, so the material for change talk is present, and what he is rejecting is being told what to do. Evoking his own picture of age sixty gives him a goal he owns, and the contribution decision can then be framed as a means to it.

Why A is wrong: The projection is accurate and a planner is right to have it ready, but repeating a rejected recommendation with more evidence is arguing for change, and the predictable result is that Owen voices the arguments against it and commits himself further to the position he holds.

Why B is wrong: Not arguing is half of the technique and this option gets that much right, but rolling with resistance means redirecting the conversation rather than abandoning the goal, and dropping a topic the client has already agreed matters leaves the shortfall unaddressed.

Why C is wrong: Beliefs learned in childhood do shape saving behaviour and are a legitimate subject for later work, but labelling a client's response as defensive in the moment is a judgement he is likely to resist, and it moves the conversation on to the planner's interpretation instead of his goals.

Why D is correct: Reflecting the resistance rather than opposing it removes the thing Owen is pushing against, and the question that follows invites him to state his own goal, which is where motivation has to come from if the change is to survive the meeting.

See more CFP practice questions, answers explained.

Exam traps in Psychology of Financial Planning

Answers that look right on this material and are not. Each one is a distractor from a different question in the CFP bank for this domain.

Use solution-focused questioning, asking her to describe how she would know on waking tomorrow that the problem had gone, and build the investment plan out of whatever she describes
Why it is wrong: The miracle question is a genuine solution-focused technique and it does help a client who is stuck on a financial decision, but it is a planning tool rather than a clinical one, and using it here substitutes a technique the planner knows for the assessment her symptoms call for.
Tell her the idea is a good one and that he will look at how it could be structured, then bring up the concentration problem at a later meeting once she is less distressed and better able to hear it
Why it is wrong: Waiting for a calmer moment sounds compassionate, which is what makes this attractive. Endorsing the idea to spare her feelings misleads her at the point she is most likely to act on it, and retracting the endorsement later costs the planner the trust the endorsement bought.

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