Even in normal times, financial discord is a problem for many couples. Today, tensions may be especially high as more people are facing layoffs, pay cuts and the unnerving exhaustion that so easily clings to us during periods of lingering uncertainty. Add to that the close quarters of sheltering in place, and you've got a recipe for some very emotionally charged financial conversations.
Financial teamwork is a skill
Disagreements are bound to happen in any partnership, whether personal or financial. Money is especially tricky to discuss, though, because it carries heavy implications of personal, social, and cultural significance.
What can advisers do for clients who are out of sync with their partners financially? This is what financial therapy was created for: to bridge the gap between financial and relational well-being, helping people to manage their lives and their money from a whole-person perspective rather than compartmentalizing and separating monetary, relationship and life goals.
Financial therapy is a real thing
Don't let the name fool you: A person doesn't need to be in a financial or emotional crisis to benefit from financial therapy. Megan McCoy, a professor in Kansas State's graduate program in financial therapy, says she wishes people viewed financial therapy services less as a last resort, and more the way they see auto maintenance services. If your car went years without an oil change, it wouldn't be surprising if the engine seized.
"We often assume we have to be broken or things have to be horrible to go to talk therapy," McCoy said. "But if we addressed our mental and relational health right away, we wouldn't have to live with weeks, months, maybe even years of struggling."
Certified financial therapists are financial planning professionals who also have deep training in mental health concepts and interventions. Because of their dual expertise, financial therapists can recognize unhealthy communication and attitudes as well as unhealthy financial behaviors. That helps them zero in on the issues that financial partners need to address and how to approach them.
Financial therapists can work with couples and families to help people to understand their own perspectives, values, hopes and fears, and talk about them in a way that's productive and solution-focused. When all parties can communicate their thoughts and emotions well, solutions are far easier to find.
[More: Coaching clients through fear]
Financial therapy tools for ‘regular’ advisers
You may not be looking for a career change to financial therapy, but you can still benefit from the work being done in this fascinating field. If clients you serve are experiencing severe depletion of their quality of life as a result of financial conflicts or disagreements, you might consider referring them to a financial therapist directly, or even to a marriage and family counselor.
If you want to expand your own knowledge of the field, the Financial Therapy Association publishes a free, open-source journal of field studies and commentary for clinical practitioners and professionals. Learning how other practitioners are applying themes from psychology to enhance client communication and well-being is a good place to begin.
DIY financial therapy
Morningstar's Behavioral Insights Research and Development lab recently teamed up with financial therapists to create a digital tool that brings financial therapy to the general public. We've digitized the initial conversations that a financial therapist might have with someone needing a bit of light coaching in this area. The result is a self-help tool for couples who want to try a different way of approaching their financial disagreements.
Led by a robot avatar named Mo, "MoneyTalk" is a free, chat-style app that walks users through a few talk therapy sessions centering on the topic of financial disagreement. The person using it is meant to do the first three sessions (they take about five to 10 minutes each) alone, so that they can examine their own thoughts and feelings about the issue first before involving the other person. Mo then supplies users with notes and tips from those solo sessions that can be printed out or referred back to when talking with the other person. In an ideal case, both partners would talk to Mo first, and then to each other.
While a digital tool will never replace the services of a licensed and experienced counselor, MoneyTalk may still be useful to many. At the moment, we know that millions of couples are spending lots of time in close quarters while also under the strain of financial stress and uncertainty. If that is you or your clients, please consider registering for the beta trial of MoneyTalk. We would love to see if Mo can help.
If you want to try it yourself, we would be thrilled to have you try the beta version.
[More: Fear sells, but excitement buys]
Sarah Newcomb is a behavioral economist at Morningstar Inc.
Younger heirs may “be more dubious about forming traditional client-advisor relationships, having grown up with different expectations about financial guidance”.
It's about EQ not just IQ - four advisors look back at their own careers while offering hope for the new wave of talent coming through.
With targeted "comfort calls" and strategically automated follow-ups, advisors who leverage their CRM systems effectively can show up when clients need them most.
The plan could offer $24,000 in relief for some taxpayers, but experts warn of consequences.
"I've seen lots of denial in this business but this GPB thing take the cake," says one industry executive.
In an industry of broad solutions, firms like intelliflo prove 'you just need tools that play well together'
Blue Vault Alts Summit highlights the role of liquidity-focused funds in reshaping advisor strategies
