5 things financial therapists want every advisor to know

Financial therapy has become an integral part of financial advisors’ practices, and financial therapists said wealth managers should take a human approach to client relationships, prioritizing understanding their behavior and stories and to work on building impenetrable trust. 

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Financial therapy is a discipline that combines behavioral therapy with financial coaching to improve and analyze feelings and behaviors around money.

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The specialized therapists can often work with financial advisors to help clients meet their financial goals. While advisors strategize, financial therapists help regulate emotions and explore limiting beliefs around money, working to relieve financial stress. Forty-two percent of U.S. adults say that money negatively impacts their mental health, according to a 2024 report from the TIAA Institute. Financial therapists can help clients identify root causes of spending habits, building emotional resilience and set them up for long-term financial success. 

Financial Planning spoke with financial therapists about what they want advisors to know in order to strengthen client relationships and help navigate their emotions. Here are their top tips.

Learn your clients’ behaviors

People don’t actually make bad financial decisions, but are rather programmed to believe they do, said Megan Ford, financial therapist and the director of the University of Georgia’s Love and Money Center. 

Their upbringing, past experiences, current stress levels and what money personally means to them all contribute to how they view spending habits. Knowing why clients make the financial decisions that they do is crucial for advisors to deepen their client relationships so they can better work together and shape their portfolios. 

“Behavior tends to make more sense when you begin to understand the context and the stories behind it,” Ford said. 

Mastering interpersonal skills, like active listening and delving into clients’ “why,” can help advisors better understand decisions, Christine Hargrove, clinical assistant professor and assistant director of the Love and Money Center said.

One method she suggests is motivational interviewing, which involves asking clients what motivates them, closely listening and using that information to help them stay on track with their goals. 

“Even though it takes a little longer, in the end, you’re going to be more effective as an advisor if you take the extra time to really listen and first connect with the client as a person with their values, their goals, their dreams, their fears,” Hargrove said. 

Get to know clients’ full stories

Many advisors who start meetings with standard questions like “what’s your savings goal?” can elicit basic client answers like, “to pay off my mortgage,” said Ashley Agnew, behavioral scientist at Edward Jones. 

But applying the power of storytelling and asking an intentional question like, “Tell me a story that really makes you feel this saving goal is important to you,” can create a different outlook without crossing any boundaries. 

“It’s giving insight into the client’s life, and it’s showing a genuine curiosity into what their goals are,” Agnew said. “Nobody wants to be known for just their job title or just the number on their account balance. You can connect at that human level and find the money story and help reflect it back to them.”

Having tangible and direct long-term goals like wanting to be a present grandparent, or retire early comfortably, can help create a clear financial picture for clients, Ford said. 

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Prioritize trust over productivity

For clients, meeting with an advisor can be an intimidating experience – especially for the first time. They may not be used to sharing honestly or engaging fully because they are nervous and unsure of big picture end goals, Ford said.

“Their finances can feel like crossing a really foggy bridge,” Ford said. “They know intuitively that there’s a path forward, and that getting to the other side, like retirement, is important. But the problem is that clients can’t see that far ahead.”

Creating safety and trust with clients by cultivating an open relationship is just as, if not more, important than advancing a planning agenda, Ford said.

“You might have a lot of things that you wanted to cover in that meeting, but being with that person and being able to connect to what is emotional for them or what is coming up for them really does help to increase that level of trust and safety,” Ford said. 

Don’t start out with low-hanging fruit

Clients often have a foundational understanding of smart financial behaviors – save more than they spend. But problems around money usually stem from emotions, rather than application.

When advisors immediately offer straightforward, basic solutions that the client has likely already tried before, like “spend less money,” clients may think that the advisor views them as unintelligent, Hargrove said. This creates a strained and mismatched relationship right off the bat, with the client feeling patronized.

Instead of offering obvious advice, advisors should ask what saving methods or strategies they’ve already tried and explore why it didn’t work for them, Hargrove said. 

“If the financial advisor leans in with an expectation that this client is already invested in their own success, they will have a much better start,” Hargrove said. 

Go to financial therapy yourself

Because they do it all day, every day for others, financial advisors often struggle with their own financial therapy work, Agnew said.

“It’s really hard to expect a client to trust you in these deep conversations if you haven’t done the work yourself,” Agnew said. 

Good financial therapy often looks like good financial advising — visualization, trade-off analysis and crucial conversations with families and partners, Agnew said. Almost everybody could benefit from analyzing their relationship with money and the events and relationships that formed it, she added. 

“It’s like that old phrase, ‘physician, heal thyself,” Ford said. “There are lots of reasons why people gravitate toward the professional fields and the work that they do. It’s very sensible to sort of have that also carry over to the world of finances and money.”