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Podcast Episode #2: Couples & Money, Keeping Clients on the Same Page with Sonya Lutter and Michael Kothakota

Sasha Grabenstetter May 10, 2024

Heart of Advice Podcast


Have you ever served a couple who couldn’t see eye to eye on financial decisions? In episode 2 of the Heart of Advice Podcast, Connor Sung and I dive deep into keeping couples in financial alignment in your planning practice. Joining us are two guests who have tips to help you navigate challenging conversations in support of successful financial planning for couples.

First, we’ll hear from Sonya Lutter, Ph.D., CFP®, LMFT, Director of Financial Health and Wellness and Masters programs at Texas Tech University. She shares insights from her research, her training as a therapist, as well as a values exercise from her book, A Couples Guide to Love & Money.

We’ll also learn from Michael Kothakota, Ph.D., CFP®, CEO of WolfBridge Wealth and a lecturer at Columbia University. He’ll share the knowledge he’s gained from creating financial plans for people going through a divorce, incorporating nonviolent communication, and using financial planning technology to help people talk about money.

Here’s What You’ll Learn in This Episode:

Resources Mentioned in This Episode:


WolfBridge Wealth

Candid Conversations: Couples, Money, and Conflict

Texas Tech School of Financial Planning

Columbia University’s Master of Professional Studies in Wealth Management

Accredited Financial Counselor®

Psychology of Financial Planning

A Couple’s Guide to Love & Money by Dr. Sonya Lutter

Client Portal

Client Psychology

Wellbeing: The Five Essential Elements


  • “What I found—this has been my most interesting research finding to date—is that the amount that a couple argues about money early in their relationship is more predictive of relationship satisfaction down the road than an increase in arguments or how frequently they’re arguing about money down the road.” Sonya Lutter, Ph.D., CFP®, LMFT
  • “When you do work with couples so often, you’ll see that even when they’re not getting divorced, the conversation just doesn’t really occur or they need a facilitator, somebody to help them not talk past each other. Because sometimes the obvious symptom is not the symptom. And I think somebody, a third party, sometimes not even somebody trained, can notice that something’s not happening.” Michael Kothakota, Ph.D., CFP®
  • “If you’re sitting there and you’ve got the stonewaller client and then the really talkative client, it’s easy to talk with the talkative client and ignore the stonewaller. … And in fact, that’s the exact opposite thing to do. So step one, make the covert overt and ask them what it is that’s going on and if they would like to express some of their frustrations or what’s on their minds.” Sonya Lutter, Ph.D., CFP®, LMFT
  • “When you’ve got technology with great visuals—which eMoney has a ton of great visuals—you can ensure people are both seeing the same thing, but you can also have conversations to make sure they’re seeing the same thing, walking through an explanation of what a balance sheet looks like or what the cash flows look like over time. Sometimes what I’ll do is I’ll throw in an error. Sometimes I’ll throw errors in, so that it will facilitate a conversation about a particular thing, particularly if it sounds like there may have been some conflict around that topic, whether it’s a retirement account or somebody wanting to get a second home.” Michael Kothakota, Ph.D., CFP®

Full Transcript:

Sasha: Welcome to the eMoney Heart of Advice podcast. In each episode, you’ll hear eMoney experts talk with real advisors and researchers about planning for their clients.

Connor: eMoney is a market-leading provider of financial planning solutions, and we are trying to do our part to help empower financial planners to help deepen relationships and help people talk about money, starting with this podcast. I’m Connor Sung, CERTIFIED FINANCIAL PLANNER™ and director of eMoney’s Financial Planning Group, where I help clients build successful practices and deepen client relationships.

Sasha: And I’m Sasha Grabenstetter. I’m a senior financial planning education consultant with eMoney, where I support our company’s financial planning education programs. So today on the podcast, we have not one, but two esteemed guests.

So please let me introduce you, first, to Dr. Sonya Lutter. Dr. Sonya Lutter is a CERTIFIED FINANCIAL PLANNER™. She’s also a licensed marriage and family therapist. She conducts research on the relational dynamics of financial planning and is the Director of Financial Health and Wellness and Masters programs at Texas Tech University, and the owner of ENLITE, a research and training consultancy firm.

On the other side, we have Dr. Michael Kothakota. He’s a CERTIFIED FINANCIAL PLANNER™ as well as the CEO of WolfBridge Wealth. He conducts research on financial planning outcomes and is a lecturer at Columbia University.

Sonya and Mike, we are so excited to have you on. Could you just introduce yourselves and tell everyone a little bit about how you got here and what your focus is on.

Sonya: Sure. I’ll start. Thanks, Sasha and Connor. This is really fun to be with you and it’s great to have four people on the podcast. So I got into this area by accident, which is very common. But essentially, I went into financial therapy after studying personal financial planning thinking, I had no idea what I was going to talk about with couples if they started fighting or crying in my office. So that’s how I got into the therapy side of things. But that opened up a whole new window that I was not prepared for in terms of other issues that were going on for couples, in particular, and families in general, and really just thinking through the commonalities among all of the things that families are struggling with. That’s led me on a current pathway of identifying core values and how this is influencing how couples and families interact with each other within the same generation and then across generations. And this more broadly feeds into the area of financial health and wellness. So it’s really fun to lead that curriculum at Texas Tech University and help financial planners understand how to apply this in practice. And if you cannot see the video that we are recording, we’re getting lots of guns up from Sasha over there with Texas Tech. So go ahead and throw your guns up if you’re affiliated in some way.

Sasha: Mike, we’d love to hear from you.

Mike: Yes. I’ll go next and last. So I don’t have an affiliation with Texas Tech other than knowing Sasha and Sonya.

Sonya: You can do guns up anyway. It’s alright.

Mike: Why not? I actually got into the therapy side and the hard advice of advice from working with couples going through divorce. Specifically, most of my training in that area had to do with a lot of nonviolent communication using the “Getting to Yes” negotiation model to facilitate a resolution. So it’s less on the side of an intact marriage, where people are trying to resolve differences. But more on the side of, how do you move forward as your family evolves to this separate sort of lifestyle. I’ve been doing that for about 20 years. And it is certainly a learning experience where you emotionally engage with clients and you deal with the crying that occurs in the room and the little bit of the yelling and the arguments too. So you get to see what works, what doesn’t work. And that’s how I’ve gotten to this side of business. That’s how I’ve grown my practice and how I work with most people.

Sasha: Like I said, we’re excited to have both of you on. I know when we were having this discussion about bringing Dr. Michael Kothakota on, he actually suggested that Dr. Lutter come on with him as well because they have very similar research interests, but they’re also very separate. I think that’s what we’re going to dive into today, and I’m pretty excited about that.

Why Money Talks Can Make or Break Relationships

Connor: Just to start us off, some of the recent eMoney research will prove that very few financial advisors actually feel comfortable having difficult topical discussions outside of their subject matter expertise, which is more around traditional financial planning. That number is 8 percent of financial advisors said that they felt comfortable dealing with many of these topics, one of which is conflict inside of the household.

For clients, it’s one in five couples that are saying that money is the biggest relationship challenge that they have inside the household. We cover quite a bit of that in eMoney’s Candid Conversations guide, but obviously, I’d love to jump in there. Sonya, why is it that so many couples, even ones that have resources, knowledge, experience, have conflict over money? Do you have any insights or conclusions from your research that shows why some of these things happen?

Sonya: Yeah. I love the research that you all have that’s coming out, and I’ll also say that some of it’s not new. We knew this information before. So 15 years ago is really when I started this research track of why is it that couples are arguing about money and what’s the influence this is having on their relationships. What I found—this has been my most interesting research finding to date—is that the amount that a couple argues about money early in their relationship is more predictive of relationship satisfaction down the road than an increase in arguments or how frequently they’re arguing about money down the road.

I think that is extremely telling to everything that you’re saying. If we can’t get on the same page in those early years, it’s going to continue to compound over the years, over the decades, and only get worse as time goes by. Why is that the case? It’s very clearly a reflection of values and how we’re spending our money. I love what you said, Connor, with resources being more broad than money because there are many ways to look at those resources and how we’re spending our time, contributing to the household financial situation.

Another impactful research finding, even today in 2024, when a woman makes more than her husband, there is an increase in arguments about money. Furthermore, when a woman makes more than her husband, she actually contributes more to household labor than the husband. So in terms of resources, we’re looking at a gender dynamic. When the woman’s making more than her husband, they’re increasing their arguments about money, perhaps due to misalignment with relationship expectations. It also seems to point at the female, that if she’s making more, she may feel guilty and therefore do even more household work than predicted purely from an economical standpoint of time constraints and who can make more in the market versus who can specialize in the household.

I think there are many interesting things going on there. If we fail to engage in these conversations early in our relationship—what is our financial situation like right now, what are our time constraints right now—what happens if circumstances change? Are we going to switch up how we think about our situation? And how do we know when to do that? So all of this comes back around to: We’ve got to have the money conversations. It’s such a hard conversation to have, clearly, we’re all working professionals, and we’re tired at the end of the day.

We were just talking earlier about how Mondays are not a good day to record a podcast because we’re coming off the weekend. But then at the end of the week, it’s no better for having a conversation with our significant other about money because we’re tired from the workweek. So it’s this effort we have to put into just starting the conversation and making it a priority for our relationship. We don’t have to have the exact same values, but we need to understand what each other’s values are and continue to have that conversation on a regular basis because our opinions can change and our situation can change. And so having our regularly scheduled time is so critical.

Encouraging an Intentional Approach

Mike: I guess I could jump in and say, I couldn’t agree more. When you do work with couples so often, you’ll see that even when they’re not getting divorced, the conversation just doesn’t really occur or they need a facilitator, somebody to help them not talk past each other. Because sometimes the obvious symptom is not the symptom. And I think somebody, a third party, sometimes not even somebody trained, can notice that something’s not happening. I think a lot of that boils down to depletion. Sonya was talking about how at the end of the day, you don’t feel like talking about it, or Monday after daylight savings time, or Friday, anytime is bad, quite frankly, because we’re depleted. And we make poor decisions. We tend to not be as understanding, and we tend to not explain ourselves as well when we are in that depleted state. So it requires intentionality, which is why you hear people talk about money dates. You hear people talk about having those sorts of conversations.

Sonya: I like what you said at the beginning, where you don’t have to be specially trained necessarily to start this conversation or to be that facilitator. Because there’s a difference between doing therapy, or being a financial therapist even, and communicating therapeutically. This is one of the things that our field struggles with deeply, is feeling like there’s some sort of boundary of communicating therapeutically. Really what communicating therapeutically means is to be present with that person in that conversation, listening without bias, and providing reflective feedback for them. You don’t need to be solving anything for them. You just need to be “a friend” and listen carefully and guide that conversation from a third perspective that is oftentimes very hard to see in the moment.

Connor: That’s scary though.

Sonya: Because you might cross some boundary.

Mike: So, Sasha is an Accredited Financial Counselor®. That curriculum has some of those techniques that allow you to be present and communicate in a way that is not crossing the line. I think that if you can give financial advice and communicate, you can communicate financial advice therapeutically. You don’t have to be a therapist. You just communicate the advice you’re giving in a therapeutic way. I like that, “communicating therapeutically.” That’s a great way to say it.

Sonya: Thanks Mike.

Connor: It raises a good question, and I started off talking about the 8 percent of advisors who are comfortable having some of these more difficult conversations. So clearly, it’s not a strong suit for most. And they’re shying away from it. Regardless of what I think, a lot of advisors are scared of what could happen if they ask some of these questions or where they’ll head, outside of where they feel comfortable, maybe in their own financial lives or just their own lives in general.

Financial psychology has been incorporated into financial planning curriculum, most notably into the CFP curriculum. How do you think we start to change the next generation of financial planners by creating this foundation of training them with financial psychology?

Mike: I think the next generation is probably already primed for that. These younger generations tend to be a little bit more open with their emotions. They tend to be more available. They’re thinking about how other people feel. When they have conversations, they tend to be a little bit more thoughtful about those sorts of things. So hopefully, it’ll be a natural progression. They’ll fit right into it. I think as faculty members, we need to make sure that psychology of financial planning is not just a subject area. It permeates all of the profession. It’s not like, “You’re going to learn this and that’s one aspect.” It’s in everything. And I think if you’re an instructor, it’s incumbent upon you to reiterate these points.

And one of the things that I always tell students—I talk about it usually in the context of the potential for high pay—but I tell people they have to be technically competent. And technical competence can also include making sure you understand the psychology of financial planning. Also, you need to be emotionally intelligent. You need to be able to read your clients to communicate to them, and you need to be able to help them with their emotions. So those are already two things I just added—that we haven’t been doing for the last 50 years, or at least 92 percent of people haven’t been doing. And then you also have to be able to communicate your value. Because this isn’t a field where it’s universally recognized that you need this kind of help. So these are three very difficult tasks. In many cases, they are highly paid individually. The very fact that as a financial planner, you have to excel in all three areas—that’s what it means to be one. Impressing upon the next generation the importance of these tasks is a significant step toward improving the profession.

Sonya: I don’t disagree that the next generation is more prepared, but I would give some credit also to maybe some of the more mature or long-term financial planners. Because at Texas Tech within the curriculum, there’s a fair number of people who have been practicing for 20 or 30 years and feel like they’re missing something, and they found their way into health and wellness, psychology of financial planning, financial therapy, or something else that’s similarly driven—getting at the heart of advice, everything that you all are doing here, and trying to get more information that can help them throughout the process. I really do think that it’s maybe easier for the younger or the newer financial planners, but I think there’s still an interest among some of the more experienced practitioners as well.

Mike: I couldn’t agree more. Ron Sages, for example. There are plenty of people who are older who have this mindset and know something is missing. And some people are doing these things naturally and haven’t figured out a way to formalize it. I was one of those people who thought, well, you only need to know this amount. That’s all you need to know. You didn’t need to know anything else. And my career really took off when I embraced this part. Which is another way to reach folks. But yeah. It took me a while.

Making the Covert Overt

Sasha: I just want to say that one of the reasons I became a financial counselor was because of the piece I felt was missing. I could understand the technical piece, but I really wanted to know the emotional piece. I wanted to segue into our next question. And, Sonya, this is for you. What circumstances commonly result in advisors being fired by their married clients in their early years of marriage. I’d love to hear this, especially for Connor as he is getting married very soon, we have to prep Connor.

Sonya: Oh, there’s so much to cover for you, Connor. But here’s what it all boils down to. And it’s easier said than done. I recognize that. This is from one of my mentors when I was in therapy school. He would say it every single day, multiple times per day. He would be watching me do therapy with clients, and then the feedback would come right after that. Or sometimes they would even call into the room and be like, “We need to take a break.” One of the things that he would always say was, “Make the covert overt.” In other words, say what’s going unsaid, say the obvious. I think that really is where couples run into problems and where financial advisors run into problems—they recognize the couple they’re working with is not on the same page, and yet they don’t say anything about it because they don’t feel qualified or they feel like that’s crossing some sort of boundary. That in and of itself is where the problem arises. We’re all just pretending like the elephant’s not there. Let’s just call the elephant an elephant and be done with it. If I’m going to call the elephant an elephant and then say, “But I don’t know how to fix your elephant,” or “Get the elephant out of the room,” that’s fine. But at least you are making the obvious known and helping that couple get on the pathway they need to go for whatever the future of their relationship is. Some relationships won’t last, and that’s the reality of this situation, right? If you ignore that conflict or emotional misalignment that you’re seeing, you’re probably going to get fired because you’re not addressing the real problem that’s in front of you. And going back to the last question on this new curriculum and psychology of financial planning, I think one of the things we tend to overlook as financial professionals is that we’re over here in the professional seat, but psychology of financial planning is about understanding the mind as it relates to the financial situation of financial planning, which is not psychology of the client. It’s the interaction between me, the professional, and the client, and how my biases and behaviors are influencing what’s going on with the client and how I’m interpreting what the client says. I think all of this, in terms of getting fired, is us not recognizing the impact that we’re having on the clients and whether that’s us placing our biases onto the client and saying they should save for retirement. Maybe that’s nowhere on their radar. They want to work until the day they die. If you don’t pause and reflect upon that, and have a conversation about that, you’re going to lose them as a client because you’re not communicating in the language that they are listening to.

The same thing goes if they’re having a conflict. If you recognize that a couple comes in one week totally different, they’re not interacting with each other as a couple the same way that they were a month ago, we can all see that. We don’t need to be a therapist to see when a couple is not getting along. Say we’re going to dinner with a couple and something’s wrong with them. It’s obvious. So, make that known by saying, “I see that something else must be on your mind. Is that something you want to discuss right now?” or “Is that something you all are discussing elsewhere?” That’s fine. And if they lead into an outpouring of what’s going on, if you’re not prepared, say, “It sounds like you have a lot going on. This is certainly beyond the scope of what I can offer. Do you want me to help you find somebody else who is appropriate for talking about those issues? Or do you already have someone?” But calling it out is the most important thing. And that’s going to help all of us from getting fired as a professional and also keep us in that relationship corner. So, remember that. Just call the elephant an elephant.

Connor: We just need to make sure I get some sort of mediator.

Sonya: Yeah. That works too. And schedule the regular conversations.

Connor: That is definitely on the schedule.

I think you talked about it a little bit, addressing the issue, or addressing things that you have seen or noticed. I think that probably gives me the most sense of angst or anxiety, actually calling somebody out and saying, “Hey, something is off.” Calling it out makes it seem like it’s a negative thing, but again, making the covert overt when faced with ambivalence or bickering between clients during meetings. Are there other strategies or techniques? How do you actually facilitate a discussion like that to help with the decision making, and promote progress as you go through a financial planning engagement?

Mike: Sure. Some of it is how you communicate. So, telling somebody “You’re making me feel inadequate,” that’s probably not the best way to approach it. Instead, you might say something like, “When you say this, I feel this way.”

It’s that shift of communicating in an accusatory way, or what we would say is violent communication, right, where you’re feeling attacked. When you’re talking about if something bothers you—we did this thing in collaborative divorce where we say, “I have a request.” We’ve done that at home: “I have a request that you put your dishes in the dishwasher.” And our daughter does the same thing to this day. It’s a way of taking the temperature down so that you can have those more difficult conversations. Making sure that it’s less about judgment, not that there’s no judgment. People say, “no judgment here,” but there’s always some judgment. Taking the temperature down so that there’s the ability to have those conversations that are difficult, talk about the elephant. To “make the covert overt,” which is just a really fantastic way of getting the conversation going. So, how you talk about things is incredibly important. If you’re really trying to get people to care about a specific topic, a lot of times, you’ll have couples where one person will be doing all the talking, and the other person will just go along with it. And they may not really be going along with it. It’s just going along with it because they’re uncomfortable or they don’t want to be there or they don’t feel heard, whatever it might be. It’s really easy for a financial planner to focus on the person who is communicating with them. And it’s much more difficult to bring in somebody who doesn’t appear to participate in the conversation. One thing to do is set expectations upfront that this is a team effort. This isn’t going to be one or two of you or one of you talking to me. It’s not going to be just me talking. It’s going to be all of us having a conversation. And then including that person, especially as you start to feel the balance shift. It’s really important to make sure that the other person is heard. I can tell you, it’s actually pretty easy in divorce because people will say something at that point. You learn to balance pretty quickly. But I think being able to make sure that person is included is key. And it might be that either you’re speaking jargon which turns people off.

The typical problem is that the financial planner, who’s statistically likely to be male, is going to be connecting with the male participant. And if you assume it’s a heterosexual couple, then the woman is getting left out of the conversation, which is just crazy to me. You have to include that person in the conversation and their needs have to be met. Otherwise, you’re just going to foment more conflict.

Sasha: Amen. Sorry. Had to. Sonya, do you want to comment on the question?

Sonya: Well, to that most recent point, I think it’s also interesting to think about socialization around money even as children. We know that parents talk to their boys differently than they talk to their girls. And this leads to men who understand personal finance more than women. And it’s nobody’s fault, per se, besides the fact that those conversations they’ve already heard in life are different depending on their gender. I think Mike’s disagreeing with me here.

Mike: I mean, it’s somebody’s fault.

Sonya: It is. For women, there is a difference in knowledge and in confidence around money. And I think it behooves us to not think about those socialization aspects and to encourage women to gain more confidence in personal financial matters. And this means communicating with them differently. And maybe there’s a newsletter that goes out just to your female clients and focused on really helping them build some of that financial confidence that maybe they didn’t get as much of when they were children. And as adults, we can start communicating with our children differently around money and having the same conversations with our boys and our girls. So that we can shift some of that trajectory.

Silent as a Stone Wall

Sasha: I really love that. I have two boys, so for me, those conversations around money started early. But I also had conversations about doing chores and we have a mini chef night, so the boys have to learn how to do some things in the kitchen. So we’re trying to diversify those conversations in my household at least.

One of the next questions we have is really about when you’re in a meeting with clients and one is stonewalling you, how do you navigate that?

Sonya: I wonder if people know what the word stonewalling means.

Sasha: We should probably define it.

Sonya: Well, I am a classic stonewaller. When I am angry, I will shut you out and I am not going to communicate with you. And I’ll show up physically, but mentally I’m not there and I don’t want to engage in conversation. This is very common with couples to have one person who is wanting to get it all out and the other person who’s running away from that conversation.

If you’ve got one stonewaller client and one really talkative client, it’s easy to engage with the talkative client and ignore the stonewaller—”They don’t want to engage with you. So let’s just leave them be.” And in fact, that’s the exact opposite thing to do.

So step one: Make the covert overt and ask them what’s going on and whether they would like to express some of their frustrations or what’s on their mind. The other thing that is really helpful when you’re dealing with stonewalling is to give people alternative ways of communication. We have ample opportunities now with the way that we interact with our clients digitally, allowing them to submit information electronically before the meeting. Ask them for responses to five questions, and then you can talk for them during that session because that’s going to give them the space to really think about what’s on their mind and put that down on paper. Even if they don’t feel like talking about it in that moment, at least you have some of the things that are going on in their mind that you can reference.

You can do this through chat functions if you’re using a video conferencing system to meet with clients. Maybe they don’t want to talk, but they’re willing to put a quick response in a chat. Or if you put up a poll. This is going to require more work on your part. But allowing them to communicate in different ways is really helpful in allowing them the space to think and then respond later.

Let’s say you do all of that and they’re still refusing to provide input. That’s quite possible with a really extreme stonewaller. Not saying that I can relate, but maybe I can. And then what you can do is you can start talking for the stonewaller and say, “Well, it seems like Sonya really feels this way about this.” And then you start making a plan based off that. If I don’t agree with you, I will stop you. That’s a nice strategy is just to start talking for them, and if they agree, then they’ll let you continue. But you could also be really extreme and put something you know they’ll disagree with, and then they will respond and correct you.

Mike: Yeah. I like that tactic. That’s a good way to get people talking who just really don’t want to talk about it. You put something really incorrect in there—“It sounds like you’re saying X”—and that is usually a really effective way to get that discussion going.

Sonya: Absolutely.

Visualizing the Financial Future Together

Connor: You touched on this in your response, Sonya, as far as different ways to facilitate discussions in that example specific to a stonewalling behavior. That leads toward additional tech resources and, eMoney being a technology company, that is near and dear to our hearts. Mike, as a user of eMoney specifically, I’d like to ask more broadly, from a technology and a facilitation standpoint, how can you use financial planning tech to help get couples on the same page?

Mike: Well, one thing is, especially when you’ve got technology with great visuals—which eMoney has a ton of great visuals—you can ensure people are both seeing the same thing, but you can also have conversations to make sure they’re seeing the same thing, walking through an explanation of what a balance sheet looks like or what the cash flows look like over time. Sometimes what I’ll do is I’ll throw in an error. Sometimes I’ll throw errors in, so that it will facilitate a conversation about a particular thing, particularly if it sounds like there may have been some conflict around that topic, whether it’s a retirement account or somebody wanting to get a second home. So if you’re looking at the purchase of a second home or something like that, what does that look like and how does that affect things. So putting errors in there usually will help. Maybe somebody said they were looking at a $200,000 mountain condo and then you put in a half a million dollar one.

Connor: Covertly making the covert overt.

Mike: Well, that is falsifying the overt. But what it will do is create that conversation. For this tactic, you cannot be afraid of making mistakes, because a lot of people don’t want to make any mistakes. But that is an obvious “mistake.” I don’t tell them I’m doing it on purpose. But that’s one way.

I think having the portal, where everybody can check and see what’s going on, will trigger conversations often.

Sasha: We’re really excited, obviously, about the new client portal that just released. I’m sure, Mike, that you’ve already seen it and the new features for clients. It’s a little more intuitive. It’s a little more modern looking. So we’re very excited.

Mike: I was actually doing a screen share of the Client Portal last week when the client said, “Hey, this looks different.” Well, they just changed it.

Sasha: Yeah. We did.

Connor: Good feedback?

Mike: Yeah. It was good feedback. Some people don’t like change, but she seemed pretty excited about it. I don’t know how much that was me or how much that was the technology. For the purposes of this podcast, we’ll say it’s technology.

Staying on Target With Values and Goals

Sasha: Thanks.

Sonya, I was listening to you on another podcast recently, and it actually made me want to go figure out what my values are. My husband is a financial planner. So I told him, “Hey, go do this values exercise,” because I don’t know if we’ve ever talked about our values. I just wanted to know how you recommend facilitating alignment on core goals. I would love to hear, mostly for my sake—and Connor’s sake, about values and how to make that alignment happen.

Sonya: If you ask a person what their core values are, some people can rattle them off very quickly. They know the things that are most important to them: Family, exercise, philanthropy. Some people will just give you a blank stare. And those are the ones that are really challenging because we have to start from the beginning and really identify: “What is it that gives you meaning and purpose?”

Probably on the podcast I was talking about my book, A Couple’s Guide to Love and Money. Within that, there’s an exercise where you go through and, out of a pretty exhaustive list, circle the 10 things that are most important to you, and then it narrows down to five, and then it narrows down to three. Each partner is doing this separately, and then we come together and talk about each other’s top three values. But then it gets to be challenging: How do we make a financial plan that aligns with those six values?

Hopefully, there’s some sort of overlap because you’re in this couple relationship. But probably all six values aren’t going to align. So what I like to do with couples is figure out where our similarities are within those different sets of core values. Then let’s make a bullseye. So if you’re in an in-person meeting with clients, you can draw this out on a piece of paper or on a whiteboard, or video conferencing systems have some different templates you can use for this as well. You would start with the center circle. What is the thing that is most important that we both agree on? And we’re going to put that as a label in the center of our bullseye: “family,” let’s say. And then we’re going to go out. What’s the second most important value. And maybe here’s where we’re going to start deviating in terms of what you think is your second most important value. What I think is my most important value. We might have to have some conversations about what we want to put there and maybe it’s something new that wasn’t necessarily on either list. But it identifies something that’s important for both of us with that second core value. And then we keep going to outer rings. So maybe we’ll have six rings, maybe we’ll have three rings. It’s going to vary for everyone, and each of those rings is going to have a core value listed within the ring.

Then what I would have them do on actual sticky notes is write down their financial goals. And again, you can do this digitally with different tech. We would write down whatever it is their goals are. Maybe it’s “buy a new house.” Then we’re going to put that sticky note on the ring of the bullseye that identifies with the value. And if we can’t identify where that financial goal aligns with one of those values—it doesn’t line up very neatly with any of the rings—we’ll still put it on the piece of paper, but it’s going to be outside of the rings, and we’ll come back to it.

This really allows a couple to get on the same page of why it is they’re doing the things that they’re doing with their money. If it’s not something that aligns with my values, it’s on the page, but it’s not within the rings. Let’s reprioritize and maybe we can still work toward that goal, but let’s address some of these other goals first and foremost.

It’s a really nice visual aid when new ideas pop up, whatever the newest fad is. Let’s say your friends are into cryptocurrency and they’re talking about it at the dinner party and one is like, “Oh, we should do that because we can make a lot of money doing that.” OK, well, let’s go back to our picture and identify: How would investing in cryptocurrency help us achieve one of these core values? And maybe one of your core values is adventure or innovation. Then maybe it aligns and let’s go forward with it. But if it’s not clearly aligning with one of those core values, we can still put it on the page. But let’s analyze what this investment would look like for us, and why we want to invest. And then maybe we’ll address it after we do other things. Again, it goes back to—I’ll be redundant—making the covert overt. Again, putting it out on actual paper, or digitally in front of the couple, really makes a huge difference. If you have not tried doing something like that, I highly recommend it because it’s very illuminating to see what is most important to you right there in front of you, and that we can always point back to: “OK, we already had this conversation, and this is what you told me is important to you.” And if you change your mind and you have other things that are important to you, that’s fine. But let’s incorporate it into this plan so that we can be in alignment together.

Sasha: I think we’re going to have to call this podcast “making the covert overt.”

Sonya: Let’s bring it in one more time.

Sasha: Yes, one more time. Mike, do you have anything to add, especially from your practice? I know that your research interest also is in divorce planning. So I just wanted to ask your perspective.

Mike: Values play such an important role. And I think that for us it’s always about goals. You always hear financial planners talk about goals, and that mismatch between goals and values is always kind of illuminating. So when I have my first meeting with clients, it’s usually just a conversation exploring, a meandering conversation with a few structural questions. But the second conversation is trying to get at their values. And then the third meeting is usually goals. And then much later, you start talking about the financial solutions that fit, and help them realize their values. And I think that is difficult to do because you’re talking about a long lead time to convert a client so mechanically. It’s not how we’ve been taught to prospect and convert clients historically. But I can tell you from personal experience, it makes them incredibly sticky and loyal. And it’s really interesting how, when you ask somebody about their values, and when you ask them questions that are unexpected, how highly those people think of you. You don’t have to be an investment genius with a track record that is showing that you’re beating the market for the last 20 years—that’s unlikely. You just have to care about the person and you have to ask them genuine questions about their lives. And they will create a connection and be incredibly loyal, and then they’ll also think very highly of you just for thinking of those questions.

If you’re thinking long term and you want to be in this business long term, then that’s the way to do it. You have to figure out what their values are. You can even see it in conversations that you’ll have with a client. It’s really easy to just point back to those values: “Can you help me understand which of your values that aligns with?” They might respond, “You know, you’re right. It doesn’t.” If we need to change something, maybe we’ve got the values wrong. “Let’s talk about it. You said you valued time at home. How is this giving you more time at home? How is it giving you more time with your family?” Doing it that way creates a richer relationship. And it makes the job more enjoyable. Going back to the very beginning where we’re talking about people who don’t want to get involved in these conversations. If you want to enjoy your job a little bit more, this is another way to do that. We’re not meant to be disconnected from other people.

Connor: Yeah. I think the values exercise is important for everyone. I’d even recommend that all of the advisors listening go through it. Because, as you think about, Mike, and as you were just talking about, how I make basically every decision in my life, not just financial decisions, are aligned towards my values at this point. So, the way I engage with people, the way I engage with my clients, the way that I talk to people, the way that I help deliver advice, it all leads back to fulfilling some aspect of values that I’ve defined as important to me. And again, I think understanding yourself to that degree and understanding what you get from each relationship will ultimately help you to help your clients in defining their values. And then I think it gives advisors something to lean on in basically every choice discussion. Sonya brought up knee-jerk, bad reactions to social topics, ultimately making the right decision for the client, is not always the right financial decision for the client. But it is the right combination of decisions for them.

Tracking the Terms Related to Financial Psychology

Connor: I do want to take a step back and revisit something that I’ve been trying to put together in my own head, honestly. I’ve also tried to visualize this crazy Venn diagram of terms, and some of you talked about it a little bit at the beginning, on defining different pieces of what I think all of us generally just put in this bucket of financial psychology. We use the term financial wellness as our kind of broad term. But can you help define a little bit the way that you view this Venn diagram of overlapping circles and maybe some don’t touch at all, of financial psychology, financial therapy, financial wellness, psychology of financial planning, behavioral finance. I’ll speak for myself. I am confused on where things overlap and where they don’t. But if you have an easy way to help me learn a little bit more, that’d be great.

Sonya: You can actually look at the meanings of some of these roots. So psychology means “the study of the mind.” And that’s different from the root “thera,” which means “to treat.” And that, in and of itself, we can kind of put into two different buckets. Anything psychology, we just want to understand it. We don’t need to do anything about it. We’re just trying to figure it out. And anything therapy-related, we’re actually trying to do something about it.

There is some overlap there because to do something, you need to understand a bit about it. So, there’s an overlap between anything psychology and the therapy side of things. But there’s a lot of psychology. The CFP Board has two different books with psychology in the name, Client Psychology and then Psychology of Financial Planning. And I think that’s a really huge differentiation, but we tend to use them interchangeably. Client psychology is pointing at what’s wrong with the client, and understanding the client’s mind as it relates to their situation. Whereas psychology of financial planning is about the process of financial planning. And you can’t have the financial planning process as defined by CFP Board without the planner and without the client. So it’s that interaction between the two.

I tend to think of wellness as being a little bit broader. We’re not necessarily needing to know the “why” behind something or to treat something necessarily, but really trying to achieve this holistic wellness or living with purpose and finding security in what it is that we do on a day-to-day basis.

I love Gallup’s definition of well-being. They look at five elements, financial well-being being one. And then physical, community, career, and social. And you can’t have financial well-being if you’re not doing well in your relationship. And that doesn’t necessarily mean my partner or my spouse. That could mean my relationship with my children or my relationship with my parents. And I can’t be happy in my job, I can’t have career well-being, if I’m suffering from a financial well-being perspective because maybe I’m going to work just for the sake of the paycheck without really having that fulfillment with the work.

It’s really taking a step out to consider, “What is it that I’m doing, why am I doing it, and what brings me happiness?” I was on a podcast a while back and the host was talking about humankind and what that means, and I didn’t fact-check this, but it sounded good. Humankind is “we are as humans designed to be kind.” And I think that’s what wellness is really all about, is finding kindness and happiness in all of those areas of our life. And it’s not finding pathology or trying to fix anything. It’s just being happy with where we are in those different areas. You put me on the spot there, Connor, but that’s my brief summary of definitions and where they overlap.

Connor: Thank you.

Mike: I would just say, as Connor was discussing that, my anxiety was escalating. And I was feeling confused too, even though I understand those differences. But the anxiety actually stems from having to explain it to clients. It’s really challenging to parse those things because even when you start discussing things like behavioral finance, or financial therapy, or psychology of financial planning, people tend to mix up the terms or miscommunicate them to me, which also gives me anxiety because I want to correct them, but maybe that’s not a good idea.

I think that we will work these things out over time. But I think the broader understanding, at least when we’re talking about financial planners, who are the primary users of your product, they need to know the psychology of financial planning, which means they need to understand what’s going on in these various topics. They don’t necessarily need to provide therapy, but perhaps they do need to help change behavior. So that may be something that’s important to them. So, I think it would be helpful if somebody came up with a rule book or something that everybody could follow and say that “These are the terms and this is how they apply.” But then you’re going to encounter people who say, “Well I disagree.” So it’s challenging. I do think we’ll work it out. But it can be a little anxiety-inducing when trying to figure out what those different terms are. I would say if you stick to the psychology of financial planning, understanding what’s going on, and your role in the client’s plan and relationship; that’s really where you should focus. Don’t try to be a behavioral finance expert. Don’t try to be a financial therapist unless you want to be one. Just understand your role in that process.

Sonya: It would be kind of fun to have a definitional cheat sheet. But in the end, does it really matter, as you said? And I forgot to mention behavioral finance, which is largely targeted toward clients who are not rational enough to make decisions on their own. So let’s design something to put in place to help them make the more rational decision.

And the thing with all of these different areas is, there’s a time and place for all of them. We need all of it. So they can all go into the same plan or into the same conversation. Because there’s a need for behavioral finance and there’s a need for psychology of financial planning. There’s a need for client psychology and financial therapy. So I don’t know that any one is superior. It’s just understanding when to apply them in various scenarios. And when people ask me to come speak about behavioral finance, I’ll say, sure, but I’m going to expand it out a little bit broader and talk about the psychology of financial planning. And then I’ll talk about how behavioral finance is a part of that. But it’s not the solution for everything.

Connor: To the point earlier, I think there are folks who are doing all of these things today. And part of the anxiety for me is, “What do all of those things mean? And am I doing them correctly?” And I think at the end of the day, the actual definitions don’t really matter as long as you have engaging relationships with your clients. If they feel fulfilled and you feel fulfilled, then you know where you stand with each bullet point underneath those topics.

Sasha: I was going to tease Connor that maybe he should have gone to Texas Tech and studied under Dr. Lutter.

Mike: It’s not too late!

Sasha: As we near the end of the podcast, we ask all of our guests the same question. You guys can sort out who goes first. But we just want to know, how do you define the heart of advice when it comes to financial planning?

Sonya: I’ll go first. Even though I started the podcast, I’ll finish the podcast first as well. When I think of the heart of advice, I think about survival. And without a heart, we can’t do anything. I think that’s really what we’re talking about here. If we ignore everything that we’ve discussed on the podcast today, then the plan is going to fail or it’s not going to be as successful as it could.

And it’s thinking about the life of the financial plan, and why are we doing what we’re doing? It’s what brings the clients happiness and purpose and aligns with their values. So, I think you’re on the right track, and I love what you’re doing. It’s a really fantastic name for a fantastic purpose.

Sonya: Can you beat that Mike?

Mike: Probably not. I think it’s unlikely. So when I think about the heart of advice, I think about how we talk about financial planning as personal financial planning. When I think of the heart of advice—it’s personal. It’s not an economist’s view of how people should plan their financial lives. It’s not a psychologist’s view either. We’re not looking at the median financial planning client. We’re looking at individuals who have specific values, specific needs, and unique circumstances. And we can apply all of those things to these unique circumstances, but when you really get down to it, it’s the individual, the couple, the family that you’re serving. And to truly serve them, you have to have that connection. You have to have the ability to communicate what you can do for them based on what they need. And if you can’t do that, if you’re, quite frankly, someone who is trying to force your view on how people should run their financial lives, then you’re in the wrong business. I think the heart of advice is the right way to think about personal financial planning.

Sasha: Thank you. We think so too. So that’s why we’re doing this podcast.

Connor: Mike and Sonya, we appreciate your time. Thank you so much for sharing all of your insights, experience, guidance, and some facilitation techniques. And I guess, most of all, I’ll leave it with, make sure that you bring the covert to becoming the overt.

Sonya: Thanks for bringing it back in there one more time.

Connor: I had to. Thank you so much for joining us.

Mike: Thank you.

Sasha: Thank you for coming on. Until next time.

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About the Author

Sasha Grabenstetter, AFC®, BFA™ is a Financial Planning Education Consultant at eMoney Advisor. She is an integral part of the internal and external financial planning education programs, as well as financial planning content development. Sasha won the 2020 Outstanding Symposium Practitioners' Forum Award from the Association for Financial Counseling and Planning Education. She previously co-authored “Apple Seed: A Student Guide to Pro Bono Financial Planning” and “All My Money: Change for the Better.” With close to 10 years in financial education, Sasha received her AFC® designation in 2015 and graduated with her master’s degree from Texas Tech University in 2012.

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