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It May Be Worth Paying For A Financial Advisor

Money is a major source of stress for Americans, taking second place after “work” and holding its own above “the economy,” according to the American Psychological Association. No surprise, then, that financial therapy is now a thing, joining the likes of individual therapy, marital therapy, grief therapy, and more.

But it’s worth noting that as an emerging field, financial therapy is not yet regulated by law, which opens the door to scammers and schemers, unprofessional conduct and unrepentant ne’er-do-wells. Here are some important tips that can help you choose a financial therapist that’s legit, and who’ll handle your financial issues with not only comprehensive knowledge but also compassion.


“Financial Therapist” Defined

In 2010, the Financial Therapy Association (FTA) emerged with the goal of promoting the financial therapy field and setting standards. Today, the FTA works to connect people with professionals who strive to “promote a vision of financial therapy,” including encouraging awareness of and conversations about money problems and mental health.

Members of FTA include a wide range of professionals such as a licensed social worker who holds a degree in financial planning or a chartered financial analyst with a degree in psychology. Many FTA members hold the title of certified financial therapist (CFT-I), which is granted by the association. FTA applicants usually need a bachelor’s degree or higher in a relevant field such as mental health or finance, or they can be an accredited financial counselor (AFC) or a certified financial planner (CFP) who holds a bachelor’s degree in any field. To become an FTA member, applicants must pass a two-hour exam and complete 500 hours of related service.


What You Should Look For In A Financial Therapist

Before signing on with a financial therapist, find out about their specific training so that you can ascertain whether their skill set is a match for your area of concern.

Julia Kramer, founder of financial coaching service Iaso Consulting and treasurer of the FTA, cautions that individuals looking for a financial therapist should learn about the practitioner’s specific training.

Kramer uses her own training and background as an example: She has CFT-I, FBS (financial behavioral specialist) and CPA (chartered professional accountant) certifications, and holds a graduate certificate in financial psychology and behavioral finance. She is not, however, a licensed therapist. If she finds herself working with individuals struggling with deeper issues than she is comfortable with, she refers them to a licensed therapist. Conversely, she may refer a client to an experienced financial planner if she feels that person is sufficiently capable of working on financial issues such as managing insurance and saving money.


Where You Should Look For A Financial Therapist

In her experience, Kramer has seen clients of various income brackets, genders, and ages seek financial therapy, but more often than not it’s middle-aged people and women looking for help.


She says, “A person should seek out someone like me when money — it doesn’t matter, the dollar amount — when it is keeping them from sleeping, when they have continual conflicts with their family, when they can’t bring themselves to open their bills or they neurotically check their bank accounts.”

Kramer cautions people on seeking advice from “money coaches” or other so-called “professionals” who have limited financial or counseling experience.“…anyone who promises that they can fix it in five easy lessons…I would be really suspect of,” she continues.

Professional financial therapists are listed in the FTA’s online directory. Specific filters allow you to select practitioner qualifications, specialty areas, and fee structures. Some FTA professionals charge by the hour or charge a flat rate, while others charge by assets under management or by commission.

Unfortunately, financial therapy is seldom covered by standard health insurance. Some therapists, however, may be agreeable to providing services at reduced rates or for free, depending upon the client’s situation and needs.