Have you ever had a client who despite all efforts to implement your recommendations in their financial plan wasn’t sticking to the plan?<\/p>\n
Perhaps the client continually overspends\u2014even though you’ve\u00a0shown them the impact this is having on the plan, as well as the consequences if it doesn’t end. But the overspending doesn’t stop.<\/p>\n
The adage goes, “Treat the disease, not the symptom.” Maybe they’re spending for other reasons, using it as a way to cope, and there’s a money disorder there. In these situations, individuals need additional support, perhaps seeing a financial therapist first to then be ready to move forward with the financial planner’s recommendations.<\/p>\n
It is important to understand that not all clients need financial coaching and financial therapy<\/a>; clients may be genuinely motived and ready to take financial action. But for those who have continuous struggles or a trauma, there are options for a\u00a0better<\/i>\u00a0fit.<\/p>\n Frequently, financial planners and clients alike are unaware of how a client’s personal financial past may be affecting their current financial plan, and ultimately their progress. It is easy for each of them to blame each other, but this may really be an issue of poor alignment of needs and expertise in financial services.<\/p>\n And even though it’s important to find the right clients to work with based on your expertise and factors that feed your satisfaction<\/a>, just like in the example above, things can change.<\/p>\n Even with a comprehensive intake form and a successful first meeting, the advisor-client relationship can shift over time. The world around us changes. There is a myriad of factors that could suddenly trigger painful money experiences, a trauma, or financial anxiety. And that’s when any of your proactive efforts to screen who you are working with and helping may not be enough.<\/p>\n The good news is the financial services industry is continuously evolving. You can choose who to work with and how to align your financial planning practice to better support your clients that have money challenges that are out of your scope.<\/p>\n Due to financial coaching and financial therapy still gaining wide public recognition, many clients may find themselves in a financial planner’s office because it is the only place they know where to seek support.<\/p>\n Although clients are hiring a financial professional to grow, manage, and protect their wealth, they don’t want conversations to focus solely on the numbers. Quite often it’s the story behind the numbers they are seeking more clarity around. And interestingly, education for financial professionals primarily focuses on the numbers and the technical planning strategies. That is beginning to change, however, as the\u00a0importance of the psychology of financial planning is being recognized by the CFP Board.<\/a><\/p>\n Additionally, a recent study1<\/sup>\u00a0done with financial advisors and clients shows there is rising demand from clients to have more financial wellness discussions with their advisor. About 90 percent of clients surveyed say they are receptive to financial wellness discussions with their advisor.<\/p>\n And so while the opportunity to serve clients more holistically is there, you don’t have to take it on all yourself. This transition has been years\u2014even decades\u2014in the making and there are several governing bodies and designations that can support financial professionals and planners.<\/p>\n The convergence of financial psychology<\/a>, therapy, and financial advice occurred as professionals wanted to adapt therapeutic techniques for financial counseling and planning.<\/p>\nThe Expanding Role of Psychology in Financial Planning<\/h2>\n
Getting to Know the Players and Building a Support Network<\/h2>\n