Empowering LowerIncome Individuals The Role of a Financial Counselor

financial counselor

Financial counselors may be able to help you with issues like saving, handling debt and finding affordable housing.

Discover how a seasoned financial counselor, with over 10 years of experience, can transform the lives of lower-income individuals. From expert guidance on saving and managing debt to demystifying the complexities of credit, this blog post sheds light on the vital role financial counselors play in helping individuals from all walks of life.

Financial counselors may not have the highest certifications available for financial advisors, but their expertise — especially in topics relevant to lower-income clients — may offer the help you need. Plus, you may be able to access financial counseling for free.

Financial counselor definition

Financial counselors help clients deal with financial topics like budgeting, debt and saving. Financial counselors often work with lower-income clients since their training focuses on issues that impact them most, such as navigating public benefits.

The title “financial counselor” isnt regulated, nor does it guarantee certification (unfortunately, many titles financial professionals use are not regulated). Anyone can call themselves a financial counselor. And unless a counselor is also registered as an investment advisor, they cannot give investment advice or buy and sell assets.

But there is a specific accreditation financial counselors can hold: the Accredited Financial Counselor certification. This title is offered by the Association for Financial Counseling & Planning Education and indicates that an advisor has had over 1,000 hours of financial counseling experience and that they have passed the AFC exam. You can verify a potential counselors accreditation through a directory of AFCPE-certified individuals.

» Learn more about the different types of financial advisors

What financial counselors do

Financial counselors are versed in several financial topics. Heres what a financial counselor can assist you with:

  • Understanding basic financial principles.

  • Managing debt.

  • Learning money management.

  • Coming up with financial goals and creating a strategy to work toward them.

  • Understanding how money plays into personal relationships and self-esteem.

  • Figuring out if youre eligible for certain tax credits.

  • Getting help from public assistance agencies.

  • Understanding your credit score.

Financial counselors can receive training in additional areas as well, such as military pay and benefits and helping people with disabilities navigate their finances.

Housing counselors are a specific kind of financial counselor who help people find affordable housing, navigate reverse mortgages and avoid foreclosure. The U.S. Department of Housing and Urban Development can help connect you with a housing counselor through its website.

How much do financial counselors cost?

According to Summer Red, an AFC and the AFCPEs professional development manager, the cost of visiting a financial counselor can vary, and it usually depends on where the counselor works.

“AFCs can work in a lot of areas, but most of them work in the military, at banks and credit unions, universities, nonprofits, or in private practice. If a counselor works for the military, theyll likely receive a salary through the [Department of Defense], and military members can often see them for free.” Red says university students may also be able to receive free financial counseling if their school has a money management or career center.

Red says many financial counselors who work in private practice will meet clients for the first time for free, and then charge a flat fee. That fee will vary, but may be less than the cost of working with a financial advisor or certified financial planner. Some financial counselors charge a monthly subscription or an hourly rate. According to Red, two requirements of the AFC certification are that fees must be reasonable and the client has to know what the fee structure is upfront.

How to find a financial counselor

The best way to find a financial counselor is through the AFCPEs website. That way you can be sure that the financial counselor you work with is a certified professional.

AFCPE counselors are currently offering free financial counseling for those struggling due to the consequences of the COVID-19 pandemic. A counselor will contact you within 48 hours of signing up to schedule an appointment.

If you prefer to get help from the comfort of your couch, robo-advisor Ellevest offers individual sessions on everything from budgeting to career transitions a la carte, meaning that you can buy them on an as-needed basis, even if youre not an Ellevest member.

Financial counselors vs. financial advisors

While financial counselors tend to work with lower-income clients and focus on topics like debt and budgeting, financial advisors usually offer a wider range of services and have expertise in topics that affect middle- and higher-income clients, such as portfolio management, complicated tax situations and estate planning.

“One of the major differences between AFCs and many financial advisors is that unless an AFC is also licensed to sell investments or insurance, which they are usually not, they dont handle any assets and they dont sell anything,” says Red.

If youre looking for help with things like budgeting and saving, a financial counselor with an AFC certification could be a good, lower-cost fit. If you need investment management help or assistance coming up with a complete financial plan, a financial advisor (ideally one who is a certified financial planner) might be the right fit for you.

The services below can connect you with a CFP for a low fee or for free.

» Not sure what youre looking for? Learn how to choose a financial advisor


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financial counselor

financial counselor

financial counselor