What is International Financial Planning?   

As globalization becomes more apparent in our lives, there is an increase in the number of people moving around the world and owning properties in more than one country. We are all global citizens which means we have the ability to live where we choose, however, what happens to your finances and taxes when you make the big move? 

Ashley Murphy is a tri-citizen of the USA, Australia, and the UK. He has had years of first-hand experience of what it is like to not only move to another culture but deal with the side no one really talks about – finance, insurance, and tax. His niche of international financial planning developed from his experience when moving from Australia to the USA in 2005. He spent years looking for more information on international financial planning but couldn’t find what he was seeking. Murphy decided to bring the information together and help others who are in the same boat. He is a CFP in America and is currently studying the CFP in Australia which will make him one of the few financial advisors to be qualified in both countries. 

International financial planning is working with clients that have moved, are moving, or own properties, in two countries. The clients Murphy works with are in various stages of their expatriate journey, someone who has been sent by their firm to a foreign country, there has to be something already in motion, he said. Whether that is a job offer, or they have already moved, or the dream the couple had is finally being planned. The clients come to him with a set of concerns or questions, seeking the answers they need to continue their motion of moving. 

Financial Planner’s Change in Australia 

In Australia, there has been a recent decrease in the number of those working in the financial planning field due to regulation changes, Murphy explained. Last year, there were 2400 departures and just 15 entrants into the financial planning field. The commissions have now been restructured to be fee-only changing the way planners work and interact with their clients, Murphy said. This new change is difficult for any financial institutes to adopt, including CFPs.

This new commissions structure is different from how commissions work in the US. In the US there are typically three business models; the first model is commission only, the second model is commission and fee-based, and the third model is fee-only. 

Murphy shared an example with the webinar about how this new change in Australia is creating an expensive barrier. “If someone with a 401K plan is seeking advice for their average funds, they will want to move from a high-cost structure to a low-cost structure,” Murphy said. This is a relatively simple and easy answer that people are seeking the recommendations for but the high fees are creating an expensive barrier, he said. The commission restructuring has changed the way financial planners need to work in Australia.  “Having clients in different countries with different complexities, we’ve really had to tweak how we work with them to make it profitable,” Murphy said. 

Knowing Your Countries

Every country is different with their taxes, retirement plans, insurance, etc. therefore as an international financial planner it is important that you know both the countries you are working with, he said. Taking on a client with countries that you are not specialized in, nor have worked with before, is a huge challenge and it will consume your time with trying to learn and understand how it works for the client. It sounds very ethnocentric, he said, but it is important to concentrate on certain information. There is not enough time in the day to work with clients who have a multitude of living in other countries. As a planner, you must know your limits of much you can take on and help your clients. Therefore, you must know when to turn them to someone that can help them more than you can.

Murphy’s specialty in Australia and America is what makes his business effective. He understands the financial services and planning of both countries and has even had first-hand experience of living in both.  “Clients are seeking to reduce the number of contact points. People are busy, so if they can meet with someone that understands both environments and has this knowledge set, it is beneficial to them. You need the US financial knowledge, the knowledge of the foreign country, and the knowledge of how the two work together. It’s going to be unique” he said.  Every combination of countries is different which is why it is important to have your niche. 

Murphy also explained that when working with an international financial planner, it is best to work with someone who lives in the same country you are currently living in. Murphy works and lives in the US, therefore, although his knowledge of Australia’s financial planning is fantastic, it will never be quite as good as someone who is currently living there. “Someone that lives and breathes the news cycles, the updates in retirement and tax laws, they are hearing about the changes that are happening,” he said.  

Working with Tax

Each country’s tax treaty differentiates, he said. It’s important to know when the treaty came into existence in relation to the other country. This is why it is a good idea to work with a handful of tax attorneys to seek their advice and bounce it off one another as they will all have varying opinions. Further, you need to have trust in the service providers, but also in yourself. Take the time to weigh in your thoughts even if you’re not an expert by using knowledge and interpretations, Murphy said. 

“You need to be competent,” he said, “The riches are in the niches.” When a client works with someone who has made it their career to specialize in those countries, it helps them more and you. 

The Future

When many clients move across borders they have the benefits from the employer but still need help. They have tax help but it is more compliant for the employer with little to no focus on personal finances. “I think we’re beginning to see the very start of executive cross-boarding financial services,” Murphy said. 

The generation of baby-boomers is beginning to move into retirement. During this time, many decide to migrate to another country and live their dreams on a warm, tropical beach or an apartment in a European city. Retirement cross-border planning could be a niche that the financial industry may see developing in the next few years. 

About Ashley Murphy:

Ashley is a tri-citizen of the USA, Australia, and the UK. In 2005, he ventured to the United States to pursue his dreams in the San Francisco Bay Area.

He has been quoted in the Wall Street Journal and was profiled in Financial Advisor Magazine. From 2014 – 2017, Ashley taught aspiring CFP candidates at UC Berkeley Extension and Golden Gate University. Presently, he is a Knowledge Circle host for the International and Cross-Border Knowledge Circle with the FPA and a regular conference speaker. He was awarded the CFP® designation in 2012 and voted Secretary of FPA NexGen the same year. Ashley is currently undertaking CFP® studies in Australia which will make him one of the few financial advisors qualified in both countries when completed.

About the Host:

Dr. Chia-Li Chien is a succession program director at Value Growth Institute, a succession consulting practice dedicated to helping business owners increase their firms’ equity value. Before her private consulting practice, she held several senior management positions in Fortune 500 companies. Dr. Chien is a director of the financial planning program at the School of Management at California Lutheran University. Dr. Chien is a frequent speaker about succession and retirement planning at national conferences and has published three award-winning books, including her most recent publication, “Enhancing Retirement Success Rates in the United States.” Dr. Chien serves on the boards of various national financial service associations. She holds a doctorate in financial planning and is a Certified Financial Planner (CFP®) as well as Project Management Professional (PMP®).

About the Author:

Rosie Baker is an undergraduate student at California Lutheran University, graduating in May 2021. She is studying Communication with an emphasis in PR and Advertising and has a minor in Creative Writing. In July 2020, she published her first book, Mirrors & Windows: Unlocking a New Framework to Envision Your Success, with New Degree Press. 

Dr. Chien interviewed Ashley Murphy, CFP®, AIF® on “What is International Financial Planning?” on Dec 2, 2020, at 1:00pm PST.

Globalization fuels the need to move top talents to enable them to expand their markets. As a result of these talents who are working outside of their home countries, their wealth grows internationally. Hence, international financial planning becomes complex. In this session, we will discuss the following questions:

• What are clients with dual or tri-citizen typically looking for in planning?
• What can financial planning professionals do to help dual or tri-citizen clients?
• How about a non-us citizen spouse?
• Why is international financial planning in demand?

Resource: Global Financial Planning Institute

Dr. Ekta Kumar opened up the webinar by explaining the difference between the interchangeable words; shaming and guilt. Shaming she said is having a judgment on an individual. It can then be hard to make change happen when feeling overwhelmed with this emotion. For example, “I’m terrible at finances,” is a client shaming themselves. Guilt is behavioral and it can be obstructive. An example of this would be saying to a client, “Stop spending so much on shopping.” 

When a client feels shameful, an advisor should respond with empathy, explained Kumar.  Discussing money is something many Americans have been taught not to talk about with others, therefore it is often difficult to talk about with someone you do not know well. The advisor wants to emphasize and encourage a bond that together they can work on a financial plan. The thoughts about financial decisions they feel shameful about must be reminded are a skill and not a character flaw, Dr. Kumar said. 

Managing Non-Verbals

Before COVID-19, meetings with clients mostly took place in-person therefore meaning body language was very easily accessible to see. Now, the majority of meetings are virtual and I think they will be for the foreseeable future meaning different non-verbal actions are needed when in a meeting. Dr. Kumar said advisors need to think about other aspects compared to the previous in-person format when in a meeting with a client. What are your distractions while talking? What is your body language depicting to the receiver through the camera? Are you using eye-contact and visual cues such as nodding? It is important to exaggerate these in a virtual environment so they can be seen through the screen, Dr. Kumar said. 

In relation to the topic of judgment the host, Dr. Chia-Li Chien, asked what can advisors do to avoid and manage their nonverbals? Dr. Kumar responded by saying advisors need to be aware of what their biases are towards certain behaviors or individuals. “As humans every single one of us has biases and when we try to ignore any that exist, we can’t do anything about them,” she said.  Many of us refuse to acknowledge we have biases towards certain identities or characteristics, however, we all have them. Until they are recognized and understood we are oblivious to fixing them. To help understand, Dr. Kumar suggested reflecting on the situation that was tough for you. Are you aware of any biases being present? How are you going to actively work on those biases? The discussion of understanding Dr. Kumar is talking about is so important to understand no matter what industry you are working in. Especially as our world is becoming more global working with cultures literally from all over the world. 

When it comes to being an advisor there are two strong biases at play, the rules of thumbs such as social security claiming age, and cultural biases such as paying for children’s college. “Each individual has different familiar values, different cultural values that drive their decision making, different obligations to their church or their temple, but also mental health as well. Sometimes different mental health diagnoses have different spending habits,” Dr. Kumar said. 

The Best Way to Work with Biases 

There are biases for all types of identity. In Financial Planning it is important to ask questions and understand what is important for the individual you are working with. What are the individual’s values? When they respond, good listening should be practiced to fully grasp what they are saying. Responses should be sensitive and their values should be honored. The best outcome is to meet their financial goals while honoring their values. 

The best way to work around biases is to understand where it came from and how your point of view is different from the clients. Acknowledging their position is a good place to open up a conversation on ways to meet their financial goals. The best way to achieve this is to ask additional questions to find a middle ground of compromise.  

How to Avoid Unintentionally Shaming Clients?

A question that may come across an advisor’s mind is how do you know when a client has been unintentionally shamed? There are a few potential indicators Kumar explained. Maybe your client stops attending sessions, seems checked out or you are hitting a dead end. “You’re talking about money all day but most people never talk about money. Remember those pieces,” Dr. Kumar said. Also pay attention to what your phrases are and how you feel at the end of different sessions.  

Does Being Vulnerable Help to Understand Clients?

Advisors are human too. They understand the challenges and difficulties that the client may be facing in making decisions. By recognizing that different things can be difficult it shows the client that the advisors understand emotional turmoil. By sharing experience it sheds some light on the fact they aren’t the only ones to be struggling with a certain topic or decision. 

How to Get Clients to Talk Without Shaming Them Into Talking? 

The key to getting clients to talk without shaming them into doing so is to be empathic and sensitive to their perspective. Ask questions and brainstorm with them while maintaining a neutral tone, Dr. Kumar said. You also want to monitor your facial expressions while activating listening and engaging she explained. 

Phrasing Questions

The way questions are asked and phrased will change the type of response that is received Kumar explained. “Why don’t you stop getting your nails done every week?” versus “You nails look really great, is it something you do to take care of yourself?… What about if you got them done every week and a half?” Although these two questions are looking for the same answer, they will receive two very different responses from the client. By demonstrating support and recognition of why the client is getting their nails done it opens the conversation to negotiate a middle ground, explained Dr. Kumar. “There are so many layers of identity there is room for judgment,” Dr. Kumar said.   

Discussing Savings 

Some people find it easier to talk about spending rather than saving. So, how do you engage a client to talk about saving? You want to first learn about the clients value of saving, Kumar said. Ask the client, “How important are savings to you?” This is a neutral way to have the conversation rather than pushing the concept of savings onto the client. 

Ease the Situation Into Helping the Clients Do the Right Thing

By acknowledging and giving feedback of the norms it can help ease the situation of helping the client do the right thing. You want to have awareness of potential different situations that can be around savings that you may not know about e.g. fears of banks or previous divorce, Dr. Kumar said. “To speed up the discovery, create a good environment to help the client feel comfortable to share information,” suggested Dr. Kumar in her last thought of the webinar. If they still don’t share information, it may be they just don’t want to share it.  

If you would like to learn more about careers in Financial Planning, reach out to the Financial Planning program here at California Lutheran University. 

About Ekta Kumar:

Dr. Ekta Kumar is a licensed Clinical Psychologist who received her master’s degree and a doctorate in Clinical Psychology (Psy.D.) from the University of Indianapolis. At the University of Indianapolis, Dr. Kumar was a diverse fellow and served on the Diversity Advisory Board for the School of Psychological Sciences.  Dr. Kumar has developed workshops and continuing education programs related to diversity, trauma, clinical practice for students, staff, faculty, and clinicians in Indiana and California. Recently, Dr. Kumar was the Director for Community Counseling Services at CLU and is now the Director of Diversity and Inclusion Initiatives for the Department of Psychiatry at the University of Southern California. She is also an Assistant Professor in the Department of Psychiatry and provides college students at USC with therapy services. In her private practice, she specializes in working with LGBTQIA+ individuals and POC. Dr. Kumar has a variety of training and experience providing therapy, outreach/prevention programming, and facilitation of difficult dialogue related to trauma and diversity. Finally, Dr. Kumar has presented at various national conferences and is published in the Journal of Multicultural Counseling and Development.

About the Host:

Dr. Chia-Li Chien is a succession program director at Value Growth Institute, a succession consulting practice dedicated to helping business owners increase their firms’ equity value. Before her private consulting practice, she held several senior management positions in Fortune 500 companies. Dr. Chien is a director of the financial planning program at the School of Management at California Lutheran University. Dr. Chien is a frequent speaker about succession and retirement planning at national conferences and has published three award-winning books, including her most recent publication, “Enhancing Retirement Success Rates in the United States.” Dr. Chien serves on the boards of various national financial service associations. She holds a doctorate in financial planning and is a Certified Financial Planner (CFP®) as well as Project Management Professional (PMP®).

About the Author:

Rosie Baker is an undergraduate student at California Lutheran University, graduating in May 2021. She is studying Communication with an emphasis in PR and Advertising and has a minor in Creative Writing. In July 2020, she published her first book, Mirrors & Windows: Unlocking a New Framework to Envision Your Success, with New Degree Press. 

Dr. Chien interviewed Dr. Ekta Kumar on “How to Counsel Clients Without Shaming Them?” on November 3, 2020, at 3:00 pm PST.

Many of us were taught not to talk about money when growing up. But, the more we make, the more we need to seek help in accumulating wealth. So we can achieve financial independence in life. In this session, we will discuss the following questions:

• What is shaming?
• How do we know we are unintentionally shaming our clients?
• How do we encourage clients to talk but not shame them when providing financial planning or counseling?
• What could financial planning professionals do to avoid shaming their clients?

Sheena Parrish found her passion for financial counseling when living abroad in Germany with her husband. During her twenties, Parrish and her husband on active duty in the air force lived overseas in many countries. In fact, during a 14 year period, she moved seven times. On the base in Germany, she got a job working in financial counseling and education using only personal experience and her background in human services. Several of her fellow colleagues mentored her and helped guide her through the roles and responsibilities. After some time, Parrish decided she wanted to be certified as an Accredited Financial Counselling (AFC). Fast forward to the present and Parrish now works as the Special Programs Manager at AFCPE (Association for Financial Counselling and Planning Education). 

Path to Counselling and AFC

Parrish’s background of working is in human services. She used to do social work with youth and be an academic advisor at colleges. She describes working with others as her intrinsic talent. Her journey to obtaining her AFC was through self-study. Anyone from any background or experience level can self-study for the AFC and it takes around two years to complete, she said. One of the requirements to earn the AFC is to have experience hours. As Parrish had no previous work experience this was the part that took the longest for her as she needed to accumulate experience. However, if you are a CFP, you can use that certification to fulfill personal financial core competencies. 

Counselor vs Coaching

A counselor earns an AFC/ AFC Canada, explained Parrish. According to Investopedia, an AFC “provides financial advisors with practical training in all aspects of personal finance.” The curriculum focuses more on middle and lower-income issues. A coach earns an FFC from the Financial Fitness Coach Program. For this certification, you need a financial foundation of knowledge, such as the AFC. 

Benefits of Having CFP of Having These Skills with Clients

“Personal finance is called personal for a reason. It is something that people sometimes have challenges talking about. They might have had personal experiences related to money in their past that were pretty unpleasant,” Parrish said. 

AFC focuses on building skills on the human side of finance, understanding that personal finance can be difficult to talk about. It requires soft skills of communication that are not often taught for the CFP.

“AFC is the ability to bring the human side to finance, it’s not just numbers. You’re sitting down with a person and they’re telling you their personal financial information. There may be some underlying factors when talking to them,” Parrish said.

The AFC designation has been around since 1993 so it is well established and known. It was accredited by NCCA which is the same as the CFP, explained Parrish. The website AFCPE.org has a lot of information as well as college courses that are available to participate in for credit. Participants are able to create their own timeline and self-study using these resources that are available just like Parrish did. 

With the position comes continuous growth and learning about personal finance knowledge and working with others, she explained. AFC’s are always self-accessing to reflect and work out how to work better with clients. The key is having good communication and listening skills to effectively understand and help the client or person they are working with, she explained.

AFC Places of Work

There is a range of capacities that an AFC can work in from the government to non-profits as well as assistant programs. “It’s a variety of different job titles in a variety of different fields,” said Parrish. Here are some examples that Parrish listed:

• Military
• Housing Counsellors
• Non-profit organizations
• Banks
• Credit Unions 

How Have CFPs Structured Practice to Improve AFC as Part of Their Service?

When a CFP (Certified Financial Planner) is also an AFC they broaden their reach on who they can serve from those who are low-income to high-income. The CFP and AFC complement each other nicely and work well together. What CFP’s may not realize, Parrish said, is that they are counseling a lot already in their jobs. 

“Any of us could find ourselves in an unexpected place with anything that is going on in the world, like 2008 or 2020. As professionals it’s nice if we can meet clients where they’re at and shift to support them with whatever may be going on,” Parrish said.

Advice for Counselling and Coaching

The webinar ended with parting advice from Parrish to those who are interested in earning the AFC. 

“Follow your heart and do what you want to do. If you have a heart for helping people this could be something to explore and a way for you to combine your already established talent and interest with personal finance or with something else you would be very good at combining the two. Follow your heart. Look for opportunities to grow. Get connected to expand your network. Join AFCPE, it’s all designed for people to become more well-rounded professionals,” she said.

About Sheena Parrish:

Sheena Parrish, AFC® is the Special Programs Manager for the Association for Financial Counseling and Planning Education (AFCPE®). In this role, she manages grant-funded projects and serves as the liaison for AFCPE Registered Education Programs, focusing on increasing engagement with college and university students. Sheena obtained her Accredited Financial Counselor (AFC®) certification while working overseas for the U.S. Air Force as a Department of Defense civilian providing financial counseling and education to members of the Armed Forces. She has a BS in Human Ecology from The Ohio State University and a Master of Human Relations from the University of Oklahoma. Becoming an AFC allowed her to combine her passion for helping professions with her interest in personal finance and financial wellness.

For more information about AFC and AFC registered programs like California Lutheran University. You can contact Ms. Parrish directly at:

Sheena Parrish, AFC®
Special Programs Manager
sparrish@afcpe.org
614-368-1132

About the Host:

Dr. Chia-Li Chien is a succession program director at Value Growth Institute, a succession consulting practice dedicated to helping business owners increase their firms’ equity value. Before her private consulting practice, she held several senior management positions in Fortune 500 companies. Dr. Chien is a director of the financial planning program at the School of Management at California Lutheran University. Dr. Chien is a frequent speaker about succession and retirement planning at national conferences and has published three award-winning books, including her most recent publication, “Enhancing Retirement Success Rates in the United States.” Dr. Chien serves on the boards of various national financial service associations. She holds a doctorate in financial planning and is a Certified Financial Planner (CFP®) as well as Project Management Professional (PMP®).

About the Author:

Rosie Baker is an undergraduate student at California Lutheran University, graduating in May 2021. She is studying Communication with an emphasis in PR and Advertising and has a minor in Creative Writing. In July 2020, she published her first book, Mirrors & Windows: Unlocking a New Framework to Envision Your Success, with New Degree Press.

References:

Cussen, M. (2020, August 28). Accredited Financial Counselor: An Introduction. Retrieved October 29, 2020, from https://www.investopedia.com/articles/financialcareers/11/accredited-financial-counselor.asp

Webinar Description:

Dr. Chien interviewed Sheena Parrish,  Accredited Financial Counselor (AFC®) on “Why CFPs should consider AFC into their business model?” on October 7th, 2020 at 1:00pm PST.

The financial planning/service industry adapts quickly to consumer needs. The traditional commission-based business model (or transaction-based) faced compressed commissions. As a result, many CFPs transitioned into either fee-based or fee-only business model. Yet, many still struggle to figure out how to add new profitable service into the overall revenue that would meet the demand from consumers. In this interview, Dr. Chien will help financial planning practitioners to discover the value of AFC (Accredited Financial Counselor).

• Why should CFP consider having AFC?
• How will AFC increase the financial planning practitioner’s revenue?
• What is the difference between AFC, AFCC, and FFC?