I’ve done a lot of pioneering work in the field of uniting traditional financial planning with psychology. I am convinced that ten or twenty years from now, the best financial planning firms will offer an integrated service consisting of traditional financial planning, financial coaching, and financial therapy.
Right now, that is a pipe dream. Very few universities or colleges offer degrees where there is exposure to both disciplines. I am aware of only one or two universities that offer financial degrees which require a substantial amount of counseling education. I am aware of no university that offers a financial counseling degree or a psychology degree of any type that requires a substantial amount of financial planning courses.
You can imagine my excitement, then, when I received an invitation to attend a symposium of 30 academics representing around ten universities, financial psychologists in private practice, and financial planners. Members of the group are all considered national thought leaders in the emerging field of financial therapy. The purpose of the meeting was to get practitioners and researchers together to share their ideas and explore building financial therapy into a reputable field.
There are two similar groups currently exploring the union of financial planning and psychology. One is the Planner-Therapist Alliance, which is a Yahoo Group of planners and therapists interested in the idea. This group has about 80 members, is relatively young, and has never had a national meeting.
The other is the long-standing Nazrudin Project founded by Dick Wagner and George Kinder in 1994. The Nazrudin Project consists of mostly financial planners and a few coaches and therapists. They meet annually and have been leaders in the field of “life planning” or financial coaching, a lighter form of financial therapy.
The biggest problem with these groups is that neither has a significant representation from the academic community, which is imperative if the notion of financial therapy is ever to become a recognized discipline.
Why is that so important? Our research with the Klontz-Kahler Institute has shown that our method of combining financial planning and financial therapy works in reducing anxiety and depression around money, while improving permanent behavioral change around money skills. Currently, this approach requires the participation of two facilitators—a financial planner and a therapist. One professional with a financial therapy degree would be able to provide these services more affordably to more clients.
Since there is currently no recognized course in academia that offers training in both financial planning and counseling, obtaining these combined skills means either obtaining a double major or Master’s degree or spending a lot of time and money to obtain the skills vocationally. Hence, the pool from which to draw on to find financial therapists is extremely limited. I know of fewer than a couple of dozen financial planners and therapists nationally that have these skills. Interest from academia in providing training in financial therapy is a significant step toward making this field a practical, affordable option for more professionals.
While the forum did not agree to a definition of financial therapy, or decide if it should become a separate degree or a focus of an existing degree, the group did agree that further exploration was needed. Participants decided to explore forming a journal dedicated to publishing peer-reviewed research and white papers on financial therapy. The group also decided to set up a communications back office with a blog and list serve. Finally, they agreed to meet again for a two-day conference within the next 12 months.
It’s a start toward what may become a new profession. I’m excited to be able to be a part of it.