(This article is written by our guest blogger, Dave Jetson, MS, LPC-MH, QMHP) The term “financial therapy” is beginning to create a buzz in the financial and counseling world. How financial therapy is defined depends upon who is asked. For the sake of this article, financial therapy is the process where a certified financial planner (CFP) and psychological professional (counselor) work together in the same session with a client for the purpose of helping the client recognize and work through emotional obstacles that prevent them from following through on healthy financial decisions.
The process for financial therapy starts by having the client present their financial information to the CFP. While the financial information is being reviewed, the counselor monitors the interactions to determine if any emotional stress or resistance occurs. Many times the client is unaware the emotional stress or resistance exists because they have learned early in life to hide, even from themselves, the feelings that create the resistance. When the emotional stress or resistance is presented, the response can be reflective. It typically tends to be more on the defensive side because, on a subconscious level, the feelings remain hidden.
To help the client explore the feelings, the counselor uses techniques that allow the client to emotionally connect with the feelings rather than being confronted with them. Many times when a client meets just with a CFP, feelings and emotions get stirred and are ignored. When they are ignored, they continue to be present on a subconscious level. Part of the client wants to ignore those feelings due to the discomfort they create. Ignoring these feelings is a way to pretend they do not exist, and it slowly shuts their intensity down. Since the feelings continue to exist, part of the subconscious will do whatever it can to keep them hidden—even if that results in making financial decisions that are not healthy or helpful.
A common frustration among CFPs is working with their clients to create a great portfolio, getting a verbal commitment from the client to follow the plan, yet having the client fail to follow through. Intellectually, clients are able to see the benefits of the plan, yet the underlying feelings prevent them from carrying out the plan. The purpose of financial therapy is to help the client recognize these underlying feelings and emotions in a natural way, work through them to create emotional freedom, and ultimately create positive change in the client’s financial decisions.