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Financial Advisors Help Clients Cope During Times of Financial Stress

Emily Koochel February 1, 2023

Woman engaging with advisor as financial coping resource

A sense of ambiguity about the future and financial stress is taking a toll on our clients’ mental, physical, and relational well-being. And because you care about your clients, you are probably feeling the strain as you work to help them cope.

You’ve likely heard the saying, “what doesn’t kill you makes you stronger,” and whether it’s from the original translation of Nietzsche or the more recent adaptation by Kelly Clarkson, it’s an outlook that continues to resonate within American culture.

At the 2022 Financial Planning Association National Conference, I and fellow researchers Dr. Sonya Lutter and Dr. Megan McCoy presented research-based evidence that people who have experienced financial stress and hardship in the past are often more resilient in the face of future financial shocks.1

Financial Stress and How We Assess It

Since the World Health Organization’s declaration of the global COVID-19 pandemic, Americans have experienced prolonged mental, physical, emotional, and financial strain, compounded more recently by historic rates of inflation, political unrest, and other stressors, resulting in 81 percent of Americans reporting feelings of global uncertainty.2

Amidst all of this uncertainty, what can help individuals be more resilient in coping with financial stress? And how can financial planners help?

Using Theory to Understand How We Manage Stress

Lazarus and Folkman’s stress and coping theory suggests that when faced with a stressor or stressor event, we first go through what they call a primary appraisal. During this appraisal, we unconsciously evaluate our ability to cope or overcome that stressor event. We assess if this stressor is relevant to us, if it is positive or dangerous, how much damage could result from it, and potentially most importantly if we have ever faced and overcome a similar threat.3

When we place this in the financial context, we are referring to our money experience. Our prior experiences and exposures around money (e.g., our financial socialization) could be key contributing factors to our financial attitudes, knowledge, and capabilities.4

Using data from the CFPB’s National Financial Well-Being Survey Public Use File (PUF)5, our team hypothesized the following:

  • Stressors will have a negative effect on well-being
  • Increased prior experience and exposure will reduce the impact of stressors on well-being
  • Increased resources will reduce the impact of stressors on well-being

Key Takeaways for Financial Planners

Our results indicate that maintaining financial well-being is about more than knowledge and skill.

Specifically, financial socialization may serve as a key buffer during times of financial stress, and having access to resources—like financial planners—increases the likelihood of successfully coping with financial stress.

Takeaway 1: The Role of Our Money Memories

As financial planners engage with clients about their financial past, the client may discover positive or negative patterns and behaviors that were previously unknown to them. Such discoveries may serve as motivators for the client, encouraging them to further invest their resources.

In addition, these conversations regarding a client’s money story may enrich the planner-client relationship and improve trust, commitment, and retention.

Takeaway 2: The Role of Emotion-focused Coping

When uncertainty looms, a natural tendency can be to go directly into problem-solving mode. While problem-solving is an important coping strategy and can have positive outcomes, the results of our study suggest that sometimes just focusing on the numbers will not be enough.

Financial planners need to be aware of their role in supporting a second type of coping, emotion-focused coping, which concentrates on regulating feelings and emotions surrounding the problem. Emotion-focused coping is useful when the problem cannot be solved right away, or it is outside your control to change.

In times of financial stress, clients should be encouraged to engage in emotion-focused coping strategies—or stress management techniques—such as talking about stressors with a trusted person, journaling, talk therapy, and mindfulness.

These can be powerful tools to supplement problem-solving and financial planners should seek out opportunities to expand competency in this area.

Takeaway 3: Training on the Psychology of Financial Planning

Our job as financial planners is to help clients use problem-solving strategies to address problems they can control. It is equally important to help clients address underlying thoughts and emotions that are arising for them during a crisis or transition.

This logic is supported by the CFP Board’s recent addition of the Psychology of Financial Planning as a core competency. Financial planners do not need to be fully trained mental health professionals to broaden the discussion to include the “why” behind the behavior. There is a need to expand the focus beyond problem-solving to include listening for deep understanding and if necessary, making a referral to a specialist.

Helping Clients Thrive in Times of Financial Uncertainty

Now more than ever, financial planners can use their expertise to offer clients peace of mind during times of financial uncertainty. By engaging on a personal level, financial planners can help clients understand their money history and offer problem-solving support when times of stress might result in financial behavior that is detrimental to their future.

Individuals with more positive financial behaviors are associated with more stable financial situations, which is consequently associated with an improved sense of well-being. Improving clients’ skills and sense of confidence is a pathway toward happier clients.

DISCLAIMER: The eMoney Advisor Blog is meant as an educational and informative resource for financial professionals and individuals alike. It is not meant to be, and should not be taken as financial, legal, tax or other professional advice. Those seeking professional advice may do so by consulting with a professional advisor. eMoney Advisor will not be liable for any actions you may take based on the content of this blog.


1 Koochel Emily, McCoy Megan, Lutter Sonya. 2022. “Protecting Well-Being through Financial Shocks”

2 American Psychological Association. “Stress in America 2022: Concerned for the future, beset by inflation”. October 1, 2022.

3 Lazarus, Richard S., and Susan Folkman. 1986. “Cognitive theories of stress and the issue of circularity.” In Dynamics of stress, pp. 63-80. Springer, Boston, MA.

4 Gudmunson, C. G., & Danes, S. M. 2011. “Family financial socialization: Theory and critical review.” Journal of Family and Economic Issues, 32(4), 644–667.

5 Consumer Financial Protection Bureau. 2017. “Financial well-being in America”. Accessed March 30th, 2022.

Image of Emily Koochel
About the Author

Dr. Emily Koochel is an experienced financial professional, academic, and researcher. She currently serves as a leader for eMoney Advisor’s Financial Education and Wellness initiatives in her role as Manager of Financial Wellness. Dr. Koochel’s PhD in Applied Family Science and Master’s in Financial Planning provide a multidisciplinary lens to inform her work where she focuses on understanding the effect of financial behaviors and financial decision making on personal and financial wellness. She serves as a subject matter expert in the field, reviewing and authoring peer-reviewed journal articles, book chapters, and contributing to public scholarship. Most notably, she served as a co-author for the CFP Board’s book – The Psychology of Financial Planning - and was awarded 2020 Outstanding Research Journal Article of the Year by the Association for Financial Counseling and Planning Education. She holds the Certified Financial Therapist – I designation and is an Accredited Financial Counselor and Behavioral Financial Advisor.

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