By Kristy Archuleta
When I first started human-centric investing articles for Hartford Funds, I shared the four signs that a couple you are working with might benefit from financial therapy. Those signs are:
1. The couple argues, but never resolves the issue.
2. The couple plays the blame game.
3. One or both partners displays uncontrollable worry, fear, anxiety or depressive symptoms around money.
4. Only one partner contributes to the planning process.
Now, let's dig a little deeper on ways you could actually incorporate financial therapy into your practice working with clients.
You may recall I shared the story of Ray and Mary, a middle-aged, married couple. Ray is wired differently than Mary when it comes to money. He experiences intense anxiety that seems to be rooted in how he's viewed money since childhood. Mary, on the other hand, has a cool, calm, and rational approach to money, the exact opposite of Ray's anxiousness.
This creates tension and conflict for Ray and Mary and impedes their progress towards their financial goals and their financial plan. Spotting their issues — and the need for financial therapy — is easy for their financial advisor. But what about your clients? How do you identify clients who might need more help in how they think and feel about money than you can (or should) provide?
Working with a Financial Therapist
If you're like most financial professionals today, you routinely collaborate with estate planning or tax attorneys to help your clients. You can do the same when it comes to issues around money and mental health.
Engaging in financial therapy by collaborating with a mental health therapist can help to navigate the ebbs and flows, leading to more successful client outcomes and overall well-being.
Financial therapy was born from two fields: financial services and mental health therapy. Professionals from each field have traditionally not been trained in the other. For example, financial professionals are generally not trained in how to deal with couple conflict and mental health therapists are generally not trained in how to develop a budget.
Since financial therapy is an emerging field, finding a mental health professional who is trained in it could be difficult. The situation most likely would be for you to refer your clients to a traditional resource in mental health therapy. What might that look like? Researchers Gale, Goetz, and Bermudez1 have identified four distinct models for financial advisors and mental health experts to collaborate.
1. Professional Referral
Just like it sounds, this approach is a handoff from you to the mental health expert. In the case of Ray and Mary, you might share with them that it sounds to you that they have conflicts when it comes to money issues. You could explain that you know of a relationship expert who has been helpful for other couples in similar situations. Ideally, you could offer them three names of relationship therapists in your area so they have choices. The right "fit" between clients and therapist is most important to the therapeutic process.
2. Parallel Services
Here you work in parallel with the mental health expert with the same client toward the same goal, just at different times (Ross, Gale & Goetz, 2016). You and the other professional communicate about the services you are providing to help meet the common goals. Since the services are coordinated, the two professionals need to be on the same page in how they will work with the couple.
For example, when you recognize Ray's anxiety and the couple conflict, you immediately suggest that they meet with your colleague, a relationship therapist. You describe the parallel services that you and your relationship expert colleague can offer and how confidentiality would be maintained. You both ask them to sign an authorization of release of information so that there's communication between you about the services.
Both financial and relational aspects are addressed. Ray and Mary get the help they need from their therapist to manage the emotional intensity and couple conflict in their relationship. You work with Ray and Mary on how they need to adjust their retirement plan so that they can meet their retirement-related goals.
3. Consultation Services
Going one step further, this approach puts both professionals in the same room at the same time with the client. Similar to parallel services, you would share with Ray and Mary your observations and suggest that in situations like these other couples have found that meeting with a relationship expert has been helpful. You can normalize the situation by telling the couple that sometimes you invite your colleague, a relationship expert, to one or more meetings on a short-term basis, to talk about a particular issue that may help them reach their financial goals.
For Ray and Mary, a relationship expert may be invited to explore Ray's anxiety issues and engage in cognitive restructuring activities or teaching anxiety reduction techniques. In addition, the relationship expert may explore communication and conflict dynamics and teaching effective skills.
4. Integrative Services
Of all of the models, integrative services are the most collaborative. The model involves aspects of both parallel and consultative methods. The idea is that there is a normalized structure where clients may meet with both professionals (financial and mental health) for several meetings and then meet with one professional for several meetings and the other professional based upon client needs.
Utilizing this model, Ray and Mary may initially meet with both you and a mental health professional. During the meeting, financial, relational, emotional, and cognitive information may be collected. Next, you and your mental health professional colleague together would explore with Ray and Mary their goals. Everyone would work together to develop a plan to reach specific goals.
In this model, incorporating a mental health therapist into the services you provide would be a standard part of the financial planning process. Ray and Mary would know these resources are available upfront.
Primum Non Nocere ("First, Do No Harm")
Keeping the best interests of the clients at the forefront and doing no harm are imperatives for any financial therapy work. While financial planning is a process with clear start and end points, therapy doesn't necessarily follow such concrete pathways. Emotions, thought processes, behavior, and relational dynamics play tremendous roles and can be difficult to identify and address. Engaging in financial therapy by collaborating with a mental health therapist can help to navigate the ebbs and flows, leading to more successful client outcomes and overall well-being.
As a financial advisor collaborating with a mental health or couples therapist, both of you need to be very clear about how you plan to work together. The approach, communication between professionals, how information is shared with the clients, scope of practice, services provided, and how fees will be charged to the client, all must be clearly understood before you start2.
Mental health professionals have their own ethical standards to follow, including not disclosing the identity of their clients without written consent. This means that if a therapist happens to bump into a client in a store, the therapist cannot acknowledge the client unless the client acknowledges the therapist first. Of course, that isn't the case for financial planners, who may host social gatherings and invite all their clients. Ross, Gale, and Goetz2provide clear ethical considerations for implementing multiple types of collaboration.
· Recognize when your clients have issues about money that suggest there might be a need for financial therapy. Acknowledge that you are not equipped to help them but can connect them with a mental health or couples therapist.
· Determine which type of collaboration with a mental health professional works best for you and your clients: professional referral, parallel, consultation, or integrative services.
· Establish clear roles and work out all details, down to fees charged, before engaging with mental health professionals.
1Gale, J., Goetz, J., & Bermudez, M. (2009). Relational financial therapy. Family Therapy Magazine, 8(5), 25-30.
2Ross, D. B., Gale, J., & Goetz, J. (2016). Ethical Issues and Decision Making in Collaborative Financial Therapy. Journal of Financial Therapy, 7(1), 3. doi:https://doi.org/10.4148/1944-9771.1087