Financial Coaching Research Articles

Guest Editor's Introduction to the Special Issue on Financial Counseling, Coaching, and Education: Linking Research to Practice

Guest Editor's Introduction to the Special Issue on Financial Counseling, Coaching, and Education: Linking Research to Practice

Personal Finances in the Era of Modern Technological Solutions

The purpose of the article: the aim of the article is to present the essence of personal finance management using modern financial technologies. The paper seeks to answer the question of the impact financial literacy and the growth of the fintech solutions have on personal financial management. Methodology: the analysis leads to an answer to the question of which determinants have an impact on consumers' financial decisions and what remote tools the market offers. The paper hypothesizes that the intensification of educational activities tailored to each age group by institutions offering financial services may influence the greater use of modern tools in the process of personal finance management. Theoretical considerations are based on an in-depth query of literature on the subject. Research and financial experimentation in the field of financial knowledge and skills are presented. The secondary empirical material is used to analyze the development of the FinTech industry. Results: The effectiveness of financial education is observed only in specific financial behaviors. The financial industry is shaped by recipients, who instead of financial education, look e.g. financial coaching for a specific problem at different stages of their lives. Changes in population structure (aging population) and a large group of customers from disadvantaged groups (e. i. seniors, disabled people) require the development of new, matched strategies by banks and financial services providers. Too much self-confidence and a low level of consumer knowledge of cybersecurity is becoming a challenge for modern financial technologies.

The Impact of Financial Coaching on Health and Finances in Older Scam and ID Theft Victims

Population based and clinical samples consistently demonstrate that older financial exploitation (FE) victims are vulnerable across multiple domains. Our earlier research indicated that older scam and identity theft victims were vulnerable across multiple health and mental health dimensions as compared to a control group. The current work is a longitudinal study of 20 financial coaching participants and 20 controls. Program participants received individual financial coaching to help with credit problems, reporting and collections after they were scam or identity theft victims. Both groups received baseline assessment and 6 month followups (from the time of the end of the coaching). The mean age of the sample was 69 years, with a mean of 15 years of education. Seventy percent of the sample were women and African Americans. Control participants had fewer health conditions and better memory and executive functioning at baseline as compared to coaching participants. While there were no significant health measure changes in the control group, the coaching group demonstrated significantly decreased anxiety at follow up and trends for improved executive functioning and IADLs. Further, while financial stress and social support were significantly lower for the coaching group at baseline, at followup there were no group differences in these measures. The study results provide evidence that the financial coaching program has served as a protective factor in negating many of the adverse outcomes associated with FE and supports financial coaching programs as an appropriate intervention. In addition the coaching services saved or returned monies to nearly 65% of participants.

A Short Screening Measure of Contextual Vulnerability for Financial Exploitation

Financial exploitation (FE) among older adults is an expensive personal and societal problem. Many professionals who work with older adults need fast and reliable measures to detect FE, including: APS workers, financial professionals, and healthcare providers. Very few standardized measures exist to assess an older adult’s risk for FE, and fewer still that do not require extensive training to administer. Lichtenberg et al. (in press) presented the Financial Exploitation Vulnerability Scale (FEVS), which assesses the context (i.e. financial, social, and psychological) in which an older adult is making a financial decision. This 17-item scale differentiates between older adults who’ve experienced FE and those who have not. It has excellent psychometric properties and clinical utility to detect FE beyond demographic and neuropsychological variables. We utilized exploratory factor analysis to examine the factor structure of the FEVS and reduce the number of items. Participant data (n=243) were drawn from two samples: a community-based sample and a group of individuals who were seeking financial coaching services following a financial scam or theft. Examination of the eigenvalues yielded a unidimensional scale. An iterative process was used to remove items that did not load on the single factor or with low corrected item total correlations. The final scale contained nine items and retained its ability to detect financial exploitation (AUC=0.778) and good internal consistency (a=0.845). This short form scale (FEVS-SF) is a brief, standardized screening measure to assess contextual vulnerability for FE that is accessible to professionals who work with older adults.

The Relationship Among Demographic Factors, Transition Services, and Individual Development Account (IDA) Saving Participation Among Transition-Age Youth With Disabilities

Saving participation in adolescence is crucial for young adults to achieve financial well-being over their lifetime. Yet, very little is known about the factors that encourage saving participation among youth with disability, including youth who receive supplemental security income (SSI). This study examines relationships between personal and family factors, transition services, and participation in Wisconsin Promoting Readiness of Minors in Supplemental Security Income (PROMISE) individual development account (IDA), within a sample of youth with disabilities who receive SSI. Results of the hierarchical binary logistic and hierarchical multiple regression analyses suggests that the PROMISE interventions variable sets emerged as the most frequent predictors of IDA saving participation among youth receiving SSI. Specifically, work incentive benefits consultation services, financial capability-focused financial coaching services, and self-advocacy training were significant predictors of a youth’s IDA saving participation. This study’s findings offer important implications for transition planning and building financial capability.

For Love or Money? Factors Associated With the Choice Between Couple-Based Versus Individual Financial Coaching

There has been much effort in recent years to address some of the damage of the recent global financial crisis with financial literacy education. Little research has been done, however, on the factors that might affect the decision to seek individual versus couples-based financial education. We used a survey instrument administered via the online labor market, Mechanical Turk, to examine factors associated with this outcome: whether members of a couple would choose individual or couples financial coaching. All participants were screened for current membership in a committed relationship for at least 6 months. Most participants reported a preference for couples versus individual financial counseling. Key factors that predicted a likelihood to opt for couples' counseling include gender, age, and satisfaction with one's relationship. Results from this study suggest that how and why consumers seek financial education may be affected by social, cultural, emotional, and relational factors as well as financial concerns. Such factors should be considered by practitioners in this field if program marketing, design, and delivery are to be relevant to participants and effective.

Financial Incentives And Nurse Coaching to Enhance Diabetes Outcomes (FINANCE-DM)-1

Financial Incentives And Nurse Coaching to Enhance Diabetes Outcomes (FINANCE-DM)-1

FINANCIAL DECISION MAKING SELF-EFFICACY IN COGNITIVELY AND FINANCIALLY VULNERABLE OLDER ADULTS

Financial decision making self-efficacy (FDMSE) is a novel construct that may influence how older adults make financial decisions. Our previous research with a community sample of older adults demonstrated that cognitive functioning and suspected history of financial exploitation were both associated with low FDMSE. We sought to replicate these findings in two clinical samples of older adults: people with mild cognitive impairment (MCI) or probable Alzheimer’s disease (PAD) and current victims of scams or exploitation as determined by a financial coach. Samples were obtained from the Michigan Alzheimer’s Disease Center and a financial coaching intervention study. All participants completed a 4-item FDMSE measure. One-way ANOVAs, t-tests and chi-square tests were conducted to test for group differences with controls on demographics. There was a main effect of cognitive status on FDMSE, F(2,138) = 8.10, p < .001, which was driven by higher FDMSE in the healthy group (N = 63) than the MCI (N = 76) or PAD (N = 28) groups. Similarly, scam victims (N = 25) had significantly lower FDMSE than non-exploited (N = 25) peers, t(48)=2.33, p < 05. Cognitive impairment and current financial scams are both associated with low FDMSE levels. Low FDMSE may exacerbate cognitive and psychosocial vulnerabilities that contribute to risk for poor financial decisions among older adults. Future interventions to enhance FDMSE may help older adults make better decisions despite changes in thinking abilities or previous negative financial experiences.

Medical-Financial Partnerships: Cross-Sector Collaborations Between Medical and Financial Services to Improve Health.

Financial stress is the root cause of many adverse health outcomes among poor and low-income children and their families, yet few clinical interventions have been developed to improve health by directly addressing patient and family finances. Medical-Financial Partnerships (MFPs) are novel cross-sector collaborations in which health care systems and financial service organizations work collaboratively to improve health by reducing patient financial stress, primarily in low-income communities. Financial services provided by MFPs include individually tailored financial coaching, free tax preparation, budgeting, debt reduction, savings support, and job assistance, among others. MFPs have been shown to improve finances and, in the few existing studies available, health outcomes. We describe the rationale for MFPs and examine 8 established MFPs providing financial services under 1 of 3 models: full-scope on-site service partnerships; targeted on-site service partnerships; and partnerships facilitating referral to off-site financial services. The services MFPs provide complement clinical social risk screening and navigation programs by preventing or repairing common financial problems that would otherwise lead to poverty-related social needs, such as food and housing insecurity. We identify common themes, as well as unique strengths and solutions to a variety of implementation challenges MFPs commonly encounter. Given that the financial circumstances and health outcomes of socially marginalized patients and families are closely linked, MFPs represent a promising and feasible cross-sector service delivery approach and a new model for upstream health care to promote synergistic financial well-being and health improvement.

A pilot study of a comprehensive financial navigation program in cancer patients and caregivers.

174 Background: Few studies have reported on interventions to alleviate financial toxicity (FT) in cancer patients (pts) and informal caregivers (cgs). We developed a financial navigation program in collaboration with Consumer Education and Training Services (CENTS), Patient Advocate Foundation (PAF), and Family Reach Foundation (FRF), to offer financial coaching, insurance navigation, and assistance with unpaid non-medical bills. We conducted a pilot study to assess feasibility of enrolling cgs with pts and to describe the assistance provided. Methods: Pts with any stage solid tumor actively receiving treatment (tx) at the Seattle Cancer Care Alliance were asked to identify a cg who could participate. Pts or pt/cg dyads received an online financial education course and monthly contact for 6 months (mo) with CENTS and PAF. Subjects were referred to FRF for assistance in paying non-medical bills. We describe pt and cg characteristics, and assistance provided by the program. Results: Of 54 pts approached, 30 (median age 59.5, 61% white, 97% stage III/IV disease) were consented. Most pts (53%) had income ≤ $25,000, and all were insured (48% commercial, 28% Medicare, 21% Medicaid). 18 cgs (67% spouse/partner) were consented. At consent, 55% of pts reported debt in the prior 3 mo. Mean score using the COST PRO FT measure (range 0-44, lower score = higher FT) was 17.4 at baseline. After pts’ physical health, out-of-pocket costs were the most stressful aspects of tx for cgs. Cgs with high financial burden from caregiving more often reported taking on new debt, dipping into retirement accounts, or changing their jobs or hours. CENTS coaches assisted with budgeting, updating wills, and employment rights counsel. PAF case managers assisted with financial assistance for drugs, cost of living (e.g. transportation), disability applications, and secured $6,950 in debt relief. FRF dispersed $4,133, primarily for housing expenses. Conclusions: Implementing a financial navigation program that engages both pts and cgs is feasible. This lower income, financially stressed population received $11,000 in financial assistance. Future work will focus on evaluating the impact of this program on financial and psychosocial outcomes in pts and cgs.

Financial Coaching and the Nudge: Examining Local Spaces of Market Agencement

AbstractFinancial coaching is intensive, long‐term counselling intended to foster “financial capability”, defined as a state of heightened self‐efficacy and knowledge that facilitates the exercise of financial agency. Coaching is a behaviourist technology intended to intervene in the cognition and affect of subjects, and that relates to neoliberal imperatives to fashion disciplined market‐oriented subjects. However, it can also be understood as a contested element of envisioned financial agencements used by local organisations to shield vulnerable financial consumers from financial predation. Analysis of policy documents and interviews is used to capture the meanings attached to financial coaching by local actors, and to offer a more textured, affectively complex description of the dilemmas of inclusion confronting financial consumers who experience the terrain of everyday consumer finance as predatory.

Assessing the Effectiveness of Financial Coaching: Evidence from the Boston Youth Credit Building Initiative

Since the 2008 financial crisis, there has been renewed interest in providing financial education to improve consumer financial decision making, especially among youth. Using a randomized controlled trial, we estimate the causal effects of a financial coaching program for young adults from linked individual‐level administrative credit reports and self‐reported survey responses. Within six months, the treatment group was 10 percentage points more likely to have access to credit compared to the control group. After 18 months, the average credit score was 26 points higher for the treatment group versus the control group, raising the likelihood of achieving a “good” credit rating by 8 percentage points. Consequently, the treatment group was less likely to rely on alternative financial services and paid lower interest rates on car loans. These impacts are largely driven by improvements in self‐efficacy, offering important insights for policymakers seeking to incorporate financial education into youth workforce development programs.

JPMorgan pledges $125 million for financial literacy initiatives

JPMorgan Chase has announced a $125 million, five‐year global commitment to improve the financial health of underserved communities. The new investment is part of the company's efforts to drive economic opportunity in cities around the world. The bank will identify, evaluate and help expand financial technology—or fintech—solutions, and financial coaching programs to help people increase their savings, build credit, reduce debt and achieve their financial goals, the company said.

Chatbots as a lever to redefine customer experience in banking

In view of the advantages of chatbots and the bright prospects of development combined with the growth of mobile utilisation, companies tend to use chatbots increasingly as tools and channels of customer relationship management. Regardless of whether they are needed to help in a purchase or manage a booking or answer a question, they are used day and night to deliver a personalised experience. Currently, banks are using chatbots mostly for non-banking services, but some of them are already exploring banking information and financial coaching.

Providing Assistance for Older Adult Financial Exploitation Victims: Implications for Clinical Gerontologists

ABSTRACTBackground and Objective: Despite the growth of financial exploitation research in the past decade, almost none has focused on older urban adults, and especially urban African Americans. The Success After Financial Exploitation (SAFE) program provides individual financial coaching to older urban adults.Methods: We use community education, delivered separately to older adults and to the professionals who serve them, to raise awareness about financial exploitation (FE) and to motivate referrals for financial coaching. This paper describes the program and methodology, and uses case examples and preliminary research to investigate the intersection of FE and physical and mental health functioning.Results: SAFE participants were able to repair their credit scores, reduce new financial burdens, and even recover monies they had lost due to FE. Case examples illustrate how financial scams and identity theft impacts urban older adults. Participants were assessed prior to the provision of services, and SAFE participants performed poorer on executive functioning tasks than participants in the control group. They also reported more physical health problems and anxiety and depressive symptoms. SAFE participants also had significantly higher risk scores on a financial decision-making scale.Conclusion: Study findings advance our understanding of the impacts of FE on cognitive functioning, mental health, and financial decision-making.Clinical Implications: Clinicians need to be more attuned to the financial health of their older clients, who, if they are struggling with financial exploitation, may also be suffering from problems with cognitive functioning and physical and mental health.

Client led coaching: A random assignment evaluation of the impacts of financial coaching programs

We undertake the first rigorous evaluation of financial coaching using a randomized controlled trial at two sites. We estimate both treatment uptake and treatment outcomes, including intent to treat estimates and complier average causal effects. Data are drawn from individual-level credit reporting firm records and baseline and follow-up surveys. Results indicate that financial coaching produces a number of significant effects on behaviors and outcomes related to money management, debt, savings, and perceptions of financial well-being. Most notably, at one site, financial coaching helped participants to increase their savings and credit scores, and at the other, it helped them to reduce their aggregate and delinquent debt.

Rescaling and reframing poverty: Financial coaching and the pedagogical spaces of financial inclusion in Boston, Massachusetts

After the financial crisis, concerns about consumer financial protection and financial security in the United States (US) resulted in a renewed interest in promoting financial education. Targeting primarily low and moderate-income (LMI) participants, financial literacy and capability programs have been supported by national nonprofit organizations, as well as by city, state and federal agencies. While these programs have grown exponentially and now appear in major cities across the US, little is known about their everyday implementation. This article focuses on financial literacy and capability programs in the greater metropolitan area of Boston, Massachusetts to offer a close read of these under-examined nonprofit spaces of financial empowerment and inclusion in the US context.Based on over 180 hours of participant observation and 45 semi-structured interviews during 14 months of in-depth qualitative research, this article identifies and analyzes a recent change in financial education from group-based workshops to a model of one-on-one financial coaching. In documenting the “coaching turn”, this article offers a novel focus on the nonprofit spaces of financial inclusion and empowerment. As part of this, I examine how these programs shape personal financial habits and expand access to financial products and services for their LMI clients. By focusing on the spaces where the financial practices of populations at the margins of the financial economy are actively being shaped, this research reveals how the active growth of the financial sector is contingent upon making previously unfit market actors into viable debtors in the pedagogical spaces of financial inclusion. This research therefore shows how financial literacy and capability programs are expanding the reach of finance, especially into the lives of LMI populations. As such, this article offers insights into the evolving geographies of financial inclusion and exclusion and is an important complement to literature in geography on the social and scalar relations of financialization.

Recognizing Linguistic Cues to Align Financial Coaching Strategies with the Transtheoretical Model of Change

Financial coaching is more effective if a finance professional understands where a client is in the process of change. This article presents five mini scenarios exemplifying the stages of change as they apply to clients receiving financial coaching as well as a sampling of coaching strategies useful for helping clients move through those stages. In particular, the focus of each mini scenario is language used by clients that can provide clues about the stage of change the client is in. Financial management Extension professionals can use the information presented to recognize linguistic cues related to stages of change and align coaching strategies appropriately.

A Case Study Demonstrating the Use of Appreciative Inquiry in a Financial Coaching Program

This article presents a case study of appreciative inquiry applied to client work within the context of a solution‐focused, financial coaching program. Appreciative inquiry (AI) is a process—a generative process—wherein a client envisions, describes, and constructs a new meaning or reality through structured questions and answers, and then designs a way to get there (to their destiny). The origins, tenets, and applications of AI approach are described, followed by a case study to facilitate a client's overcoming of a specific, maladaptive money script utilizing AI. The article provides implications for financial practitioners and a foundation for future research on the effectiveness of the AI approach in financial coaching.

Pedagogical Experience of Teaching Financial Coaching

Pedagogical Experience of Teaching Financial Coaching