“Only about 20% of financial planning clients respond to logic and education”
When Sheri Reid Grant inherited millions of dollars from her parents, she went into a downward spiral.
“If I didn’t have a financial therapist to help me manage the inner chaos and stress, I would have imploded,” Grant said. “A person can benefit from financial therapy when their behaviors are not in line with their values,” said Rick Kahler, a Rapid City, South Dakota-based financial adviser whose firm, Kahler Financial Group, has employed for the past eight years a financial therapist who is both a certified financial planner and a clinical mental health counselor.
Demand for financial therapy is poised to grow, said Debra Kaplan, a Tucson, Ariz.-based licensed mental health therapist, speaker and author of “For Love and Money: Exploring Sexual & Financial Betrayal in Relationships.” Kaplan has an MBA and first got interested in the psychology of money working as a commodity options trader on Wall Street. This past decade of stock market prosperity has coincided with the rise of a generation that is open to self-reflection, she’s observed.
Kahler sees a parallel with dieting. We’re bombarded with information about calorie counts and daily walking steps to stay fit, but most Americans are still overweight. “It’s not about the money,” Kahler said. “The money is a symptom of a deeper problem. Until we get down to that emotional issue, the behavior isn’t going to change. You’re just putting a Band-Aid on it.”
The message — that she didn’t know how to handle money — later fueled her “money avoidance,” which manifested in Grant refusing to look at, for example, credit card statements. Money scripts may seem irrational to an outsider, but for the person living them, they are completely logical. Identifying them helps clients recognize the roots of their money-related anxieties, and eventually, hopefully, end their harmful behaviors around money.
There is still some debate about the best way to bridge therapy and financial planning. Financial therapists now come from one of two “home disciplines” — either the financial planning field or mental health counseling.
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