by Cicily Carson Maton, CFP®; Michelle Maton, CFP®; and William Marty Martin, Psy.D.
Executive Summary
- In this article, the authors, long-term practitioners of a multi-faceted approach to serving financial planning clients, share their process. Their method incorporates a structured collaboration with a financial therapist who has special expertise that enhances the planning experience.
- The growing literature on life planning suggests that planners can be more effective in advising clients by addressing the "whole person"—their hopes, ambitions, life experiences, and relationships (both healthy and unhealthy) with money.
- As life planning has evolved, many planners have adopted new procedures and methods, and have sought out training to gain new skills.
- Many in the financial planning field also have embraced collaboration with financial therapists, but have been stymied in their efforts to find therapists with whom to join forces. Therapists have experienced their own frustrations in their efforts to find financial planners to whom they can refer their own clients or with whom to collaborate.
- The authors share their insights and experience on integrating a financial therapist into a planning practice.
- They offer a primer on how to best team with a financial therapist to maximize the experience for clients and, by extension, for the practice. They explore a variety of approaches to collaborating with a financial therapist; the benefits it provides to the client and the adviser; introducing the idea to clients; finding the best financial therapist with whom to team; working most effectively with each other; and jointly marketing yourselves.
Cicily Carson Maton, CFP®, is a founder of and partner in Aequus Wealth Management Resources, established in 1987. She was an early advocate and adopter of life planning. She is also an authority on the financial aspects of divorce, particularly those related to contentious financial problems and/or complicated issues related to high net worth.
Michelle Maton, CFP®, joined Aequus Wealth Management Resources in 1990 as a partner. She has pursued training in life planning throughout her career. She is also a recognized expert in taxation and pension planning.
William Marty Martin, Psy.D., is a financial coach with Aequus Wealth Management and an associate professor in DePaul's College of Commerce. His areas of practice and research include applied behavioral finance, socially responsible investing, and financial planning targeting minorities and healthcare practitioners.
Literature and evidence suggest that benefits of collaboration with
a financial therapist include more open communication with clients
and better client follow-through.
According to Merriam Webster, the word "collaborate" comes directly
from the Latin word "collaborare" and means, "to labor together,"
especially in an intellectual endeavor.
The concept of life planning, in which we consider the client's
whole person, goals, hopes, ambitions, and
relationships—both healthy and unhealthy—with
money in providing financial advice, is not new. There is a growing
body of excellent research, dating back to the 1980s, that
validates its worth (Anthes and Lee, 2001; Nixon, 2002; Dilberto
and Anthony, 2003; Kinder and Galvin, 2007). What is new, however,
is incorporating the services of a licensed mental health
professional as a full and equal collaborator in the financial
planning process (Taylor et al., 2007). We first came to
truly recognize the merits of this concept in the late 1980s, and
three years ago, we decided to seamlessly integrate a financial
therapist into all that we do. In this article, we'll share our
practical perspectives on how readers can make such a collaboration
work for their practices.
There currently is not a widely agreed upon definition of a
financial therapist, nor is there clear agreement on what to call a
financial planner engaged in a process that incorporates the
financial, emotional, behavioral, and spiritual components of the
client into a whole. What we can relate from our experience is that
some common body of knowledge is shared, but that planners and
therapists each excel at some—but not all—of the
skills, and each have areas of experience and expertise in
different aspects of the integrated planning process.
Given today's environment, it is critical that financial planners
and mental health professionals do collaborate. Previous research
has demonstrated the negative effect of stress on financial
decision making (Porcelli and Delgado, 2009), physical and mental
health (Skinner, Zautra, and Reich, 2004), and even dental health
(Genco et al., 1999). Among consumer credit counseling
clients, it was found that positive financial behaviors were
statistically associated with a decrease in financial stress (Xiao
et al., 2006). Folkman and Moskowitz (2000) discovered
that positive and negative emotions co-exist during stressful
times.
Why Collaborate with a Financial Therapist?
Like us, you will undoubtedly have had experience with clients
who behave in unusual ways when it comes to money. Anecdotes abound
about people of modest means gambling away sizable inheritances
during a single night in Vegas, or wealthy but miserly individuals
who deprive themselves and live in deplorable conditions. These
stories (albeit somewhat dramatically) illustrate a fundamental and
critical fact about human behavior and money—that it is
not always a rational relationship.
There are a host of problem financial behaviors, including
overspending, underspending, serial borrowing, hoarding, financial
incest (defined as lording money over relatives to control them),
as well as guilt or shame around poverty and wealth. (Dell'Osso
et al., 2008; Klontz et al., 2008; Vohs and
Faber, 2007). At the extreme, these behaviors can manifest
themselves in a pathological fashion. Currently, for instance, the
American Psychiatric Association is debating whether to include
compulsive buying disorder (CBD) as a psychiatric disorder in the
revised Diagnostic and Statistical Manual (DSM) of Psychiatric
Disorders. CBD, which can be treated, is estimated to affect
5.8 percent of the U.S. population (Koran et al.,
2006).
For most, pathological behaviors are, fortunately, not the norm.
However, everyone has a relationship, often a very emotional one,
with money. People experience thoughts, feelings, and physical
sensations about money, and these can help or hinder their ability
to make sound financial decisions (Lerner et al., 2004).
Without a full understanding of this relationship and how it
affects the client's whole person, it is difficult to provide
advice and/or to get a client to act on that advice.
Dubofsky and Sussman (2009), in their survey of 1,374 financial
planners, discovered that psychological issues arise in their
meetings with their clients. More specifically, in this research,
it was discovered that 10 percent of planners have dealt with
clients thinking of suicide, 3–5 percent of planners have
had clients who use drugs, and 26 percent of planners have had to
reschedule a meeting because of a client's emotional state.
Financial therapists are trained to deal with these issues:
I have deep respect for the credentials, training, and intentions of most licensed therapists. Their clinical training sets them apart from others claiming to help people, such as coaches, advisers, and mentors. I am a big believer in the professional training in a clinical field such as psychiatry, psychology, and social work. I believe that this training combined with coaching creates the best results (Siegler, 2009).
Gray (2006) admonishes coaches not trained as therapists to be
mindful of their blind spots that may result in them missing
critical indicators such as "… depression, anxiety attacks, alcohol
or drug abuse, personality disorders, or paranoia."
On the other end of the continuum, beyond focusing on money
disorders and pathological behaviors, financial therapists are
applying techniques from positive psychology that focus on four
core practices: reverse the focus from negative to positive;
develop a language of strength; balance the positive and negative;
and build strategies that foster hope (Harvard Medical School,
2008). The spotlight is on positive psychology and this is
reframing the very definition and purpose of psychotherapy as
stated by Seligman (2005) and his research team:
Psychotherapy as defined now is where you go to talk about your troubles and your weaknesses; perhaps in the future it will also be where you go to build your strengths.
Financial therapy as we practice it embraces this new reality for psychotherapy.
What Are the Benefits?
As the case studies drawn from recent client scenarios below
show, there are many advantages to clients, as well as planners, in
collaborating with a financial therapist. While these will
certainly vary from client to client and situation to situation,
benefits generally fall into two categories: (1) more open
communications and (2) better client follow-through. Some of these
benefits that we have experienced are discussed in the literature,
which has shown that a traditional coaching model rather than a
therapeutically informed coaching model results in "… serious
psychological problems, lack of motivation, unrealistic
expectations, and lack of follow-up (MacKie, 2007)," citing the
work of Kilburg (2000).
Benefit #1—Opening up communications. To
achieve trust, the cornerstone of any productive client
relationship, we know that we first need to establish open
communications with our client. We also know that what clients say
they want may not be what they actually want. As George
Bernard Shaw stated, "The problem with communication … is the
illusion that it has been accomplished." However, by collaborating
with a financial therapist, we can communicate more effectively in
three ways:
- We are more adept at discussing and processing
non-technical information. A recent paper published by
Carol Anderson and Deanna L. Sharpe, entitled "Research:
Communication Issues in Financial Planning," found, not
surprisingly, that planners must be adept in communicating both
what the researchers call the quantitative/
technical and the qualitative/
functional realms. They conclude that, "Clients want and need planners who can communicate effectively in both realms and are able to integrate the two in financial planning conversations. Communication that is focused on collecting financial data or on delivering financial advice is no longer enough." - Together, we listen better. Our experience is that working side-by-side with a financial therapist takes listening one level deeper. As a result of what are often some very soul-searching conversations, we have gained some incredible insights, perhaps otherwise overlooked, into our clients' needs.
- Together, we read body language better. Based on our hundreds of hours in face-to-face meetings with clients, we can assure our readers that no matter how good you think you are at reading your client's body language, a trained financial therapist will pick up on nuances that you never before considered.
When it comes to opening up communications, financial therapists
are skilled in using tools to help people be introspective,
understand their motivations, and increase their awareness of what
their relationship to money is all about. For clients, open
communication allows them to know themselves better, become better
prepared to move forward, and readies them to make decisions that
resonate with their whole person. Couples who have undergone this
process with a financial therapist often learn more about one
another and build a stronger bond with each other. In situations in
which couples or families have seemingly conflicting goals,
involving a financial therapist can help recognize and resolve the
conflicts and thus avoid a communications stalemate.
Improved communications also have great benefits for the adviser.
It is virtually impossible to have a meaningful discussion with a
client about his or her goals if the client is unable (or
unwilling) to articulate them. With the training and expertise a
financial therapist brings to the table, we can reach a state of
open communications more quickly. Better communications lead to
trust being built faster, which, in turn, allows us to make better
recommendations so that our clients can launch their financial
planning process more quickly. Ultimately, working in this manner
provides us with the gratification of seeing our clients'
objectives realized. And isn't that ultimately what our profession
is all about?
Benefit #2— Improved client
follow-through. Andy Warhol says, "They say that time
changes things, but you actually have to change them
yourself." Many advisers find that step five of the six-step
financial planning process, "implementing recommendations," is the
most challenging one. It is the moment of truth, when clients'
motivations and intentions are really revealed. In our practice, we
estimate that roughly 25 percent to 30 percent of clients' legacy
financial plans from other advisers have never come to fruition
before they come to see us. Unfortunately, much of the good work
done by planners ends up gathering dust at the bottom of the
client's desk drawer.
Here's the rub: we must often ask clients to change behaviors that
they have had decades to perfect. Planners are most challenged when
faced with helping a compulsive spender learn to save or to
convince a life-long procrastinator to finally write a will. But it
is possible to alter clients' behaviors by working in tandem with a
financial therapist who takes an action-oriented approach. Defined
as a "therapeutic" process, the approach seeks to facilitate
changes in behavior that are aligned with the articulated goals of
clients. Financial therapists who are trained in the science of
behavioral change and counseling techniques are well suited to use
an action-oriented model to guide clients to adopt and sustain
behavior changes that can make their financial plan come to
life.
The benefit for clients is that they are encouraged to engage in
concrete behaviors that support their decisions. This results not
only in achieving a financial objective but also an increased sense
of mastery and competence. A skilled therapist can elicit emotional
commitment from the client, turn it into cognitive commitment, and
then into action that results in change. For example, if the client
needs to cut back on spending, the financial therapist has the
tools to make that happen so that, four or five months later, there
is proof positive that behavioral change has occurred. Granted,
this can be tough in uncertain times when financial anxiety can
often immobilize people. But a talented financial therapist can
also help by offering concrete stress management techniques to help
ease the anxiety and keep people moving on the right track.
It is obvious that clients who are mentally better prepared to make
changes make our work as planners easier. We can optimize our work
(knowing that clients will act upon it), we can see faster results,
and experience the satisfaction of seeing our clients move forward
toward their personal and financial goals.
How Do You Introduce the Idea to Clients?
With the proliferation of research, books, courses, and seminars
on the topic it has become increasingly apparent that collaborative
services will become more in demand. In fact, as a firm that has
fully integrated "the whole person" into our core approach for
several years, we rarely need to convince clients of its value.
Moreover, a recent survey found that the top five non-financial
issues that clients raise with financial planners are the
following: personal life goals; physical health;
job/career/profession; death of someone very close to the client;
and conflict with children (Dubofsky and Sussman, 2009). Financial
planners do not necessarily have to raise the issue but should be
open to listening and responding to the non-financial issues when
they are raised by their clients.
Still, we do encounter some clients who initially feel awkward or
intimidated about working with a financial therapist. Old stigmas
about mental health may persist. Certain people have an
exceptionally hard time talking about money, the "final taboo." Or,
one partner in a couple may embrace our process while the other
resists it. However, those barriers can be overcome by
"normalizing" the approach— in other words, by describing
how everyone can benefit from being more introspective about their
financial situation. We position the planner/financial therapist
collaboration as a way for clients to learn more about themselves
and their money. This approach is equally appealing to those who
haven't yet been able to achieve their financial goals, as well as
those who have, but are now interested in using their wealth to
live a more meaningful life.
We have also found that clients are more receptive to working with
a financial therapist in specific situations, whether a career
change, early retirement, marriage, birth of a child, divorce, etc.
Others are won over when they are introduced to our financial
therapist and find that they have access to a trained, specialized
professional with the expertise to help them understand and improve
their relationship with money for a positive outcome. We have
learned that many clients also continue to work with their
psychologists, psychiatrists, and other mental health professionals
as they work with the financial therapist because the nature of the
work is different, but interrelated.
Finally, we find that people self-select when deciding whether to
hire us. Those who are uncomfortable with the financial therapy
component, which we explain in detail in our initial meeting, will
simply seek another adviser. However, those clients who embrace it,
regardless of financial acumen, net worth, gender, or stage of
life, are convinced of its merits. For them, dealing with their
financial matters without the assistance of a financial therapist
would be like a doctor treating a seriously ill patient without
regard for that patient's emotional well-being.
How Do You Find the Best Therapist/Financial Therapist with Whom to Team?
When embarking on a collaborative relationship with a financial
therapist, the first step is to be sure that the therapist has the
proper qualifications and licenses. The second, more challenging
step is to look for someone with a background and a strong interest
in financial planning. Programs at the university level that
specialize in financial therapy are, as of yet, non-existent.
However, Kansas State offers a master's program in family financial
planning, and Texas Tech offers graduate level courses in personal
financial counseling. Business schools that offer courses in
financial planning and/or training in behavioral finance/economics
and related studies are also good places to recruit. In our
experience, partnering with a financial therapist who has an
academic grounding in financial planning ensures that you share the
same vocabulary as well as a common understanding of the industry.
While there are many different disciplines of therapy,
therapists who adhere to an action-oriented approach will often be
most skilled in coaching clients to make behavioral changes.
Financial therapists with an action-oriented,
accountability-focused approach will have had training in cognitive
therapy, cognitive-behavior therapy, behavior therapy,
brief-therapy, solution-focused therapy, and marriage/
family therapy for those who specialize in working with couples and
families.
What do these financial therapists share in common? They work to
see sustainable changes in behavior, thoughts, and feelings.
Therefore, financial therapists with backgrounds working in
employer-sponsored EAPs (employee assistance programs), for
example, are excellent candidates for collaboration. Likewise,
professionals with training in industrial/organizational psychology
or in clinical or medical social work usually make good partners
for financial planning professionals. Financial therapists who have
been trained in counseling, individual therapy, clinical social
work, and clinical psychology also have the advantage of more than
likely having taken a course in the biological basis of behavior
that is critical in working with financial planning clients, given
the aging baby boomer population, the re-entry of veterans from
Iraq and Afghanistan with traumatic brain injury (TBI), and the
finding that there exists "… a good proportion of adults in society
with slight (or minimal) damage to the prefrontal cortex system
whose financial decision-making may be less than rational (Spinella
et al., 2008).
A money coach with a doctorate in psychology argues that the
boundary between coaching and psychotherapy is not crystal clear
(Horynak, 2002). Given this blurry edge, coaches who are
credentialed by the International Coaching Federation are more
likely to have received a reliable level of training because
coaching, unlike counseling and therapy, is an unregulated
profession (Maples, 2008) and there is also not a nationally
recognized designation. As such, it is incumbent upon financial
planners to conduct a bit more due diligence if they decide to work
with a coach rather than with a therapist. This due diligence is
critical because of the growth in the coaching profession.
Beyond qualifications, a productive collaborative relationship will
also depend on the extent to which you and the financial therapist
agree on how to structure your business model, build a joint client
process, and share responsibility for the client's outcomes. There
is typically a lot of common ground to build on as planners and
financial therapists alike are:
- Oriented to advise clients to experience a higher quality of life
- Skilled at assessing the current status of clients and then formulating a process to get clients to set goals and then accomplish those goals
- Taught to establish a relationship with the client prior to addressing the more technical aspects of the process
- Trained as professionals with an established curriculum and
licensing/
credentialing requirements
How Do You Work Most Effectively with Each Other?
As in any relationship, the planner and financial therapist need
to determine their respective roles. How these roles are defined
will, to a large degree, depend on the working styles of both
parties and individual clients' needs. They may also change over
time, as they have in our practice. As we have grown, we have
become more comfortable with our model and found more ways to
improve it. Under no circumstances, however, should the financial
therapist offer financial advice, nor should the CFP practitioner
offer therapy. You must also articulate those roles to your client,
preferably in writing, at the onset of your engagements. In
instances in which a client is also being cared for by other mental
health professionals, the financial therapist needs to be extremely
careful not to inadvertently interfere with that treatment. Any
coordination of therapies needs to be done with the client's full
consent.
Financial therapists who are licensed in their state have to be
attentive to the ethical codes of their respective professions.
Specifically, attention must be focused on three primary issues.
First, financial therapists must only engage in this work after
receiving education and training to assure a level of competency.
This is a challenge given that this is an emerging field. Second,
financial therapists must protect the confidentiality of the client
and their records. Third, financial therapists must not engage in
dual relationships (Hart et al., 2001).
There are many business models in which planners and financial
therapists can work together effectively. Others have discussed
ways in which planners and professional counselors may work with
one another (Taylor et al., 2007). We have tried a few and
are constantly refining and evolving our model. Five are described
below to offer a starting point to launch a collaboration that is
aligned with the vision, mission, strategies, and business model of
your practice.
The Referral Model. As the name indicates, in this
model, planners refer clients to a financial therapist and vice
versa. This model is similar to the relationship established with
other professionals such as tax accountants, real estate experts,
business coaches, and estate planners. The advantage of this model
is that the client benefits from tying into the referral network of
the planner. The disadvantage is that it is difficult to coordinate
and integrate services.
The Shared Space Model. In this model, similar to a coffee
chain located within a discount store, the planner and financial
therapist share space and resources, but keep their businesses
separate and distinct. The downside is that the two may not
necessarily complement one another in their work with their
respective clients. The advantage is that each of the two
businesses may benefit from the co-location of the other.
The Alliance Model. A strategic partnership is
another option. The advantage of this model is that it can be
co-branded to some extent and positioned as unique to distinguish
the planning practice from others. The disadvantage is that the
service offerings are distinct and perhaps not always completely
integrated, which can result in confusion for clients and
potentially pose a conflict between the two practices.
The Integrated Model. The goal of this model is to
not only join together ideologically as a business entity but, more
importantly, to develop an interdisciplinary (if not
trans-disciplinary), practice with a set of associated policies,
procedures, and services uniquely designed to serve the whole needs
of clients. The major advantage is sustainable competitive
advantage as this is truly a differentiated service in the
marketplace. A major advantage for the client is access to
"one-stop shopping" so that he or she benefits from the synergistic
expertise of two uniquely trained professionals who are both
focused on enhancing the client's financial and overall quality of
life. The disadvantage is coming to grips with what the practice
model will be with regard to the actual services delivered, with
respect to clearly defined roles, and with regard to managing the
dynamics of two differently trained professionals working as a
team.
The Employment Model. This model involves
contracting with a financial therapist as a W2 employee, similar to
what a financial planning practice may do with a CPA or even an
estate planning attorney. The advantage is that the employed
financial therapist is on staff and can assume the role required by
the employing financial planner. This role could range from simply
working with clients who are referred by the planners to working
collaboratively in a trans-disciplinary fashion as was described
above in the Integrated Model. The disadvantage is that employment
may create a hierarchical relationship between the planner and the
financial therapist that becomes a barrier in establishing a
collaborative relationship.
The choice of planner/financial therapist collaborative models
depends, to a great extent, upon the strategic intent of the
planner and the types of clients currently being served or who may
be served in the future. Whatever model is adopted,
planner/financial therapist collaboration is still new, unique, and
fills a certain niche in the market. Accordingly, planners may find
that they can command higher fees.
How Do You Best Jointly Market Yourselves?
Over the years, financial planners have successfully relied on a
variety of marketing strategies including speaking engagements,
publishing articles, sponsoring client seminars, getting involved
in therapy groups, etc. But we all recognize that the most direct
results come from word-of-mouth referrals from current clients or
via other professionals. Our colleagues in the mental health arena
tend to find that the same holds true for them. By teaming together
and educating the market on all of the benefits listed above that
result from collaboration, we all have grown our respective
practices for mutual benefit. This has worked extremely well for us
when promoting ourselves jointly, such as through our Web site or
at client town hall forums.
There are a variety of ways to structure the business relationship
between the financial therapist and the financial planners. In our
experience, the best arrangement is the simplest, in which the
financial therapist is an independent contractor with the financial
planning firm and the fee for the financial therapist is wrapped
into the financial planning fee. The financial therapist is
actively engaged in three of the four financial planning meetings
(all except the initial, introductory meeting) and is paid for each
of the three two-hour sessions. If the client is in need of other
services provided by the financial therapist (such as career
management or overcoming overspending), then the client pays the
financial therapist on an hourly basis.
The financial therapist plays several combined roles in the three
two-hour sessions, including that of an observer, a facilitator, a
subject matter expert, an educator, and a coach. During each
session, the financial planner and financial therapist each will
take primary responsibility for half of the two-hour agenda.
However, over time, the financial planner and the financial
therapist inevitably integrate their respective roles into more of
a seamless and fluid interaction with the client.
The benefits of having a financial therapist in the room with the
client is that the therapist can also serve as a coach and
consultant to the financial planner if, through observation and
questioning, it seems that the client is not fully understanding
what is being explained, if the client is experiencing frustration
or other emotions that interfere with information processing and
decision-making, or if the financial planner is not connecting with
the client in an optimal fashion. The benefits of having a
financial therapist in the room with a couple are also quite
compelling in that the financial therapist and the financial
planner can model appropriate communication patterns about money,
and the financial therapist and financial planner can balance out
the energy and power dynamics among couples who are in conflict or
in crisis.
In our setting, both the financial therapist and financial planner
are seated on one side of a conference table and the client(s) is
seated on the other. While either the financial therapist or
financial planner is taking the lead, the other professional is
observing the process, jotting down notes, and occasionally
intervening to offer a different perspective, to reinforce what has
been communicated, or to clarify a point that may be confusing. On
occasion, the financial therapist will make a statement to the
financial planner that is really directed at the client(s), but it
saves face for the clients. For instance, the financial therapist
might say to the financial planner, "Can you explain that one more
time? I did not quite understand that."
At the end of this financial planning process, the financial
therapist writes up the beginning part of the comprehensive
financial plan. This section is entitled "Goals and Values" and it
is the essence of the life-enhancing financial planning process.
This section is then communicated to the client during the plan
presentation session. During the entire process, the financial
therapist and the financial planner are discussing the facilitating
and inhibiting factors regarding the formulation and implementation
of the client's financial plan and whether a different set of
financial behaviors is required for the client to execute their
financial plan. The financial therapist also serves as a sounding
board and source of support for the financial planner when
encountering difficult clients or other issues.
Summary
Humans have an emotional relationship with money. It is often a
complicated relationship, rooted in our nurture and perhaps, as
cutting-edge economic research suggests, even in our nature. At
times, this relationship prevents people from realizing their
dreams even though those dreams may be perfectly within their
grasp.
As financial planners, we cannot ignore this reality. Instead, we
need to work with the whole person to better understand his or her
relationship with money. In this context, financial therapists can
offer an undeniable and distinctive contribution. They have the
analytical skills, the process skills, and the tools to get to the
core of our clients' thinking. They can help us facilitate better
communication and more effective action planning. But finding the
right person to partner with takes time, mutual understanding, and
a shared mindset. Likewise, establishing a truly collaborative
relationship between a planner and a therapist, no matter how you
structure that relationship, can be challenging. In this article,
we have shared some of our own experiences— the why, who,
what, and how— with the intent to guide you down the
collaborative path. The end goal is that we can engage our clients
in reasonable thinking, rational problem-solving, and clearer
decision-making. And that's good for our clients … and also good
for all of us.
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Sidebar
Case Study: Alienated Spouses Learn to Communicate on Common Ground
An older woman, an investment novice and recent recipient of a
sizable inheritance, sought financial planning services from our
firm. She wanted to involve her husband, a retired stockbroker of
the "old school." But he was unwilling to participate as he felt
our approach was much too introspective. Needless to say, without
the husband present, the process was cumbersome with the wife
shuttling data and information requests back and forth between us
and home. With coaching, however, and armed with extensive
materials we provided, she would present her husband with data and
ask questions to keep the discussions moving along. When the
husband finally, but rather reluctantly, agreed to participate, it
was to attend the plan presentation.
During the presentation, the couple initially sat apart from each
other, leaning in opposite directions across the table from the two
of us—the planner and the financial therapist. All
comments were directed to one of us with little interaction between
the couple. Both of us used eye contact and inclusive hand gestures
that signaled, "We are all here together," and directed our
comments to the husband and wife. After a while, the couple began
to lean toward each other, talk directly to one another, and, by
the end of the two-hour session, had even pulled their chairs
closer together with his hand leaning on her chair and touching her
shoulders. They fairly quickly agreed on the way forward and are
today working on implementing that plan as a partnership.
Would this breakthrough have occurred without a financial therapist
in the meeting? While we and the wife all knew that the husband
needed to be part of the planning process in order for it to
succeed, we couldn't have made it happen without this
collaboration. The financial therapist was able to (1) prepare the
wife for her interactions with the husband to let him know how
important this was to her, (2) build credibility for our process by
advising the wife on how to remain patient and non-emotional as she
went back and forth, (3) use his listening and questioning skills
to successfully facilitate the initial meeting with the husband,
and, finally, (4) apply a family therapy technique called sculpting
to model family relationships and help the couple through this
impasse.
Case Study Two: OCD-Challenged Client
An introverted saver, with an apparent obsessive-compulsive
disorder, sought our services to develop a plan to invest an
inheritance and to test out new behaviors.
It was evident in the very first meeting with our planner and
therapist present that the client was nervous in any social context
and experienced extreme distress in dealing with money. He was
fidgety and showed physical signs of anxiety whenever the
conversation focused specifically on money. In addition, the
therapist noted that he wrote down every single word as a way of
fully absorbing the conversation. Cued in on this, the planner
slowed down the conversation and, in future meetings, provided
written outlines showing tasks broken down into checklists and
step-by-step action items so that the process would be less
overwhelming. The client was reassured by both the adviser and the
therapist that he was under no pressure; that he could commit to
accomplishing one step at a time whenever he felt ready.
Remarkably, the client now has a healthy control over his finances
and shows few signs of anxiety.
Would this outcome have been as positive without the involvement of
a financial therapist at every step? More than likely, the answer
is "no." The client revealed that he had already unsatisfactorily
interviewed a number of advisers prior to deciding on our
collaborative approach. While he recognizes that the financial
planning process will certainly not help him manage all of his
issues (nor is a "cure" the intent), he is grateful that he has
gotten beyond his OCD tendencies to get his financial house in
order and to begin to move ahead in other aspects of his life.
How Do You Structure Client Meetings?
The chart below illustrates how we typically structure our first four meetings with clients. Our process, which has been refined over the years, involves the financial therapist in all but the introductory meeting. There are two good reasons for not including the therapist in the first meeting. First—this initial session can be very overwhelming for the brand new prospect. For many, simply coming to the first appointment is a big step. We are very cautious about not loading prospects up with too much information, so we keep the meeting focused by having fewer people in the room. Second, we use this first meeting to fully explain our process. We allow the prospect the choice to opt out of seeing the therapist. Although few actually do, it is less likely they would do so if the therapist were in the room. We prefer to think of these meetings as flowing conversations, rather than an orchestrated dance. While the financial therapist is present primarily to ask about (and listen to) the client's goals, values, and emotions, we often find that this process is most effective when we do not box ourselves into our respective roles but rather complement each other in learning about the client as we go through the process. The financial therapist is also noting the degree to which money is resulting in the forfeiting of time, the forfeiting of integrity, and the forfeiting of health as described by De Vries (2007).
How/Where to Learn More
For those wishing to learn more about life planning or wanting to take their practice to the next level, the following books and resources may be helpful. We have personal experience with all of the experts listed as resources from having attended sessions of these thought leaders and training providers.
Training and Materials
• The Kinder Institute, George Kinder, www.kinderinstitute.com
• Rick Kahler and Ted Klontz, www.klontzkahler.com/
• www.onsiteworkshops.com/
• Sudden Money Institute, Susan Bradley, www.suddenmoney.com/
• Money Quotient, Carol Anderson, http://www.moneyquotient.com/
Books
- Seven Stages of Money Maturity—Understanding the Spirit and Value of Money in Your Life by George Kinder
- Sudden Money—Managing a Financial Windfall by Susan Bradley
- Facilitating Financial Health—Tools for Financial Planners, Coaches, and Therapists by Brad Klontz, Rick Kahler, and Ted Klontz
- Financial Planning—The Next Step: A Practical Approach to Merging Your Clients' Money with Their Lives by Roy T. Diliberto
- Why Smart People Make Big Money Mistakes and How to Correct Them: New Lessons from the New Science of Behavioral Economics by Gary Belsky and Thomas Gilovich
- Your Money & Your Brain: How the New Science of Neuroeconomics Can Help Make You Rich by Jason Zweig
- Nudge: Improving Decisions About Health, Wealth, and Happiness by Richard H. Thaler and Cass R. Sunstein
- Appreciative Moments: Stories and Practices for Living and Working Appreciatively by Edward A. Jacobson
- Stumbling on Happiness by Daniel Gilbert
- Happier: Learn the Secrets of Daily Joy and Lasting Fulfillment by Tal Ben-Shahar
- The Resilience Factor: 7 Essential Skills for Overcoming Life's Inevitable Obstacles by Karen Reivich and Andrew Shatte
- Why Zebras Don't Get Ulcers: An Updated Guide to Stress, Stress-Related Diseases, and Coping by Robert M. Sapolsky
- Changing for Good by James O. Prochaska, John C. Norcross, and Carlo C. DiClemente.
- The Couple's Guide to Love & Money by Jonathan Rich, Ph.D.
- Mind Over Money: Match Your Personality To a Winning Financial Strategy by John W. Schott, M.D.
