Understand client behavior and apply financial psychology in real-world planning
Now in its Second Edition, Psychology of Financial Planning: The Practitioner's Guide to Money and Behavior remains the definitive resource for understanding the psychological dynamics that influence financial decision-making. Authored by three leading experts in financial psychology, this updated volume aligns with the CFP Board's expanded learning objectives and provides actionable tools for integrating behavioral insights into everyday practice.
This edition delivers expanded coverage of multicultural competence, ethical considerations, and client assessment methods. Readers gain practical insights into behavioral finance, money conflict resolution, communication strategies, and crisis management. The book addresses client and planner attitudes, values, and biases while providing principles of counseling that help build deeper, more effective client relationships.
Readers will also find:
Updated content aligned with the CFP Board's expanded psychology learning objectives for certification and continuing education requirements Practical frameworks for identifying and addressing money scripts, financial behaviors, and the psychological barriers that undermine client outcomes Effective communication strategies and counseling principles designed to help planners navigate difficult conversations and build lasting trust Tools for managing crisis events with severe financial and emotional consequences, including divorce, job loss, and sudden wealth Guidance on multicultural competence and ethical considerations essential for serving diverse client populations with sensitivity and professionalism
Psychology of Financial Planning is essential reading for financial planners, wealth advisors, and educators seeking to understand how psychology shapes money decisions. Whether preparing for CFP certification or enhancing client relationships, this book provides the behavioral insights needed to deliver more effective, emotionally intelligent financial advice.
About the Authors xv Introduction 1 The Imperfect Human 2 Our Value as Financial Planners 3 How to Use This Book 4 PART I The Psychology of Money 7 CHAPTER 1 Financial Instincts: Why We Are Bad with Money 9 CHAPTER 2 Behavioral Finance: Understanding Cognitive Biases and Heuristics and What to Do About Them 25 CHAPTER 3 The Environment 49 PART II Understanding a Client's Financial Psychology 57 CHAPTER 4 Financial Flashpoints: Exploring a Client's Financial Background 59 CHAPTER 5 Money Beliefs 73 CHAPTER 6 Financial Behaviors and Outcomes 83 PART III Principles of Counseling, Psychology, and Communication 95 CHAPTER 7 Sources of Money Conflict 97 CHAPTER 8 The Principles of Effective Communication 111 CHAPTER 9 Solution-Focused Techniques in Financial Planning 125 CHAPTER 10 Cognitive Behavioral Approaches in Financial Planning 133 CHAPTER 11 Positive Psychology in Financial Planning 143 CHAPTER 12 Working with Couples and Families: A Systems Perspective 153 PART IV Client and Planner Attitudes, Values, and Biases 165 CHAPTER 13 Multicultural Competence in Financial Planning: Understanding Your Client's Cultural Identity 167 CHAPTER 14 Financial Risk Tolerance 181 CHAPTER 15 Client-Preferred Learning Style: Capturing Attention and Deepening Engagement 191 CHAPTER 16 Client Values and Goals 201 PART V Integrating Financial Psychology into Financial Planning 213 CHAPTER 17 Getting the Client to Take Action: Motivational Interviewing in Financial Planning 215 CHAPTER 18 Helping a Client in Crisis 231 PART VI The Future of Financial Planning and Financial Psychology 241 CHAPTER 19 The Role of the Financial Planner: Ethical Considerations in the Psychology of Financial Planning 243 CHAPTER 20 Artificial Intelligence and the Psychology of Financial Planning 249 CHAPTER 21 The Financial Planner of the Future 257 References 263 Index 281
BRAD KLONTZ, PSYD, CFP, is an Associate Professor of Practice at Creighton University Heider College of Business and co-founder of the Financial Psychology Institute. A clinical psychologist and Certified Financial Planner practitioner, he received the Innovative Practice Presidential Citation from the American Psychological Association and two Montgomery-Warschauer Awards from the Journal of Financial Planning. CHARLES CHAFFIN, PHD, is a Professor of Practice at Iowa State University and co-founder of Money and Risk Inventory as well as the Psychology of Financial Planning Specialist programs. He has authored or co-authored nine books translating behavioral science into practical strategies, and coaches advisors and firms on how to understand and address client biases and behaviors. PAUL T. (TED) KLONTZ, PHD, is an Associate Professor of Practice of Financial Psychology and Behavioral Finance at Creighton University’s Heider College of Business and co-founder of the Financial Psychology Institute. He has more than 40 years’ experience in counseling and consulting.
