Unblocking Clients Who Aren’t Implementing With Psychology

Author: Michael Kitces

Team Kitces

Michael Kitces is Head of Planning Strategy at Buckingham Strategic Wealth, a turnkey wealth management services provider supporting thousands of independent financial advisors.

In addition, he is a co-founder of the XY Planning Network, AdvicePay, fpPathfinder, and New Planner Recruiting, the former Practitioner Editor of the Journal of Financial Planning, the host of the Financial Advisor Success podcast, and the publisher of the popular financial planning industry blog Nerd’s Eye View through his website Kitces.com, dedicated to advancing knowledge in financial planning. In 2010, Michael was recognized with one of the FPA’s “Heart of Financial Planning” awards for his dedication and work in advancing the profession.

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Full Transcript:

Michael: Welcome, Ed Coambs to the “Financial Advisor Success Podcast.”

Ed: Thanks, Michael, I’m excited to be here.

Michael: I really appreciate you joining us today and looking forward to the discussion around what to me is this increasingly fascinating sort of overlap and blend of, I guess as I would think about the world of financial advice and the world of financial psychology, which to me are starting to meet at this intersection of financial therapy. And I guess, in part, this is a little bit of maybe my own bias. I was a psychology major originally as an undergrad, so I’ve always…and not a finance major, so I’ve always brought a little bit more of the psychology lens than the economics lens to a lot of what we do as advisors.

And it really is a striking difference to me because just the economist look at things very differently than the financial advisors do, right? The behavioral finance realm from the econ end is essentially like, “Here’s a bunch of things that human beings do that fail to act in the completely idealized rational way that ‘homo economicus’ is supposed to work in the econ world. And then I look at this with a psychology lens, I’m like, “No, that’s pretty much like normal human because if you actually tried to be like the 100% perfectly rational being that economics predicts you would be all day every day, that sounds exhausting and not really pleasant.”

And so, as we start shifting this lens from financial advisor to financial psychology, we start ending out with different tools and a different approach. And I know you have lived this journey very directly because literally, you started your career as a financial advisor, now living in the world of financial therapist, and as I think of it, have crossed the divide, but maybe it’s not really such a divide because they’re blending together. But I’m just looking forward to talking about these intersections of financial advisor and financial psychology and how that comes together in practice.

Recognizing When A Client Is In Emotional Distress [05:15]

Ed: Yeah, well, and I think there’s an added bubble that I would even add from the financial therapy lens, at least for me as a mental health professional, is what is mental health? Right? And so, financial psychology is trying to look at, “Well, how do humans interact with money and what do they do?” What are the different emotions, thoughts, behaviors, relationship dynamics that they get into specifically related to money. But then we have this whole other part of being human, which is mental health.

And mental health ultimately is addressing what are people’s different thoughts, feelings, behaviors, relationship dynamics, and expectations. And so, that’s where things really start to get interesting is sometimes in financial psychology, even we make a base assumption that people have a certain level of mental health or mental functioning, which is not always true.

Michael: And then we see it as they show up in our office as financial advisors, it’s like, “Oh, there’s a lot of stuff going on here.” Right? I do feel like for us as advisors, you get a feel pretty quickly for clients where there’s some other mental health issues going on at the same time. Although perhaps that even overstates the matter because I think that very much lives on a spectrum, on a gradient, and some level of our mental health, I think, overlays, almost everything that happens with money. Like money is one of the leading causes of divorce, money issues are very tied to depression, there’s a whole bunch of overlaps between mental health challenges and money challenges and vice versa.

Ed: Well, that’s right and that’s what I really…part of the message that I like to try to share with advisors and with my clients even is, we want to try to move from simple causal relationships to more complex and dynamic understandings. Because complex allows us to say, “Well, there’s multiple pieces at play here.” And dynamic means that it can be bi-directional or circular. And so, it’s a complex system that we’re really interacting with. And I think for advisors especially, it’s like, “Well, how does the stock market work?” “Oh, how much time you got?” Right?

And we try to make a really complex system boiled down into something that’s understandable for our clients. And I think in the same way, that’s true for kind of financial psychology and mental health is we’re really talking about pretty complex systems and the deeper you go into it, the more complexity you recognize. And that can feel overwhelming for some folks, and I think that that’s kind of…as the advisory community is awakening to like, “Man, we really need to pay more attention to the psychology stuff,” it’s also realizing like, “Oh, man, there’s a lot more here than I realized.”

Michael: I feel like that’s the challenge for a lot of us on the advisor end, that there’s this phenomenon I see for a lot of advisors that try to start going further down this realm, right? And it usually starts with just, “There’s more to money than just money, there’s more than money than just the finances.” It often comes from…we start talking to clients more deeply about values and purpose and aligning money to values, there’s training systems out there around areas like…programs like Money Quotient, and George Kinder’s Life Planning Program that helped guide us down this road. And it leads to some pretty powerful conversations and really interesting breakthroughs sometimes for clients and some really deep relationships.

But sometimes, some other stuff starts coming out in the process of those conversations. And I know a number of advisors that started to try to take client conversations in that direction and then get a little bit uncomfortable with what started coming out from that. At least if my clients freaking out about market declines, it’s like, “Okay, we’ve done this rodeo before,” got some tools or things I figured out, got a couple of go-tos about how I talked with my clients through this. But I start having conversations about value and what’s really important to you and then like, “Well, you see family as really important,” and then we sort of reflect, “Well, your money isn’t really aligned with your family because you’re spending all their stuff,” and then they start crying and then you’re like, “Whoa! Whoa, I wasn’t ready for that. Okay.”

Ed: Yeah, it is hard. My wife and I are sitting and talking the other night over dinner and talking about sitting with people in distress. And so, my wife is a dentist, right? And she was saying, “When I first started practicing dentistry, I didn’t really pay attention to the people, how much dental anxiety people had, and I would just kind of blow through it, right? I would just be like, “Oh, it’s going to be all right and we’re going to do this.” How much I’ve influenced her and she’s influenced me, who knows? But becoming a therapist, I talk with her about what it means to sit with people while they’re in distress, how I try not to become overwhelmed by their emotional distress.

And I think that that’s really part of what I appreciate, in reflection, in training to be a therapist is that’s really one of the first skills that we start learning is how to be present for people during emotional distress. And so, I think that that’s part of that gap in some of the training is realizing when we start to talk about values and goals and then exposing where there’s misattunement or misalignment, it’s highly likely that there’s going to be some sadness, maybe even some anger or some shame that shows up around that. And it does raise an important question about, “Well, what do we do with that now?”

Michael: So, what do we do with that now? I’m really just in the personal advice realm at this point but what do we do with that now? I’m reflecting back even, perhaps, especially early days as an advisor and I feel like my advisor journey was perhaps similar to your wife’s journey through dentistry like, yeah, for the first couple of years, I was just so proud of the depth of the financial planning analysis I did and how cool the software analysis thing was that I was bringing out and shown to the client. I was so focused on delivering my plan and doing my thing and showing all the cool stuff that I found about their planning, opportunities and strategies and all the things that we can present that were going to be great for them and their financial life.

And, yeah, my head really wasn’t in the space of, “Well, how much like financial and money anxiety do they actually have that they’re even able to take all this in and figure out what to do with it?” And it was probably literally like five to seven years into my career before, I guess, the technical stuff was so…like I could do so subconsciously without needing to think about it that I can be present enough in the conversation with the client to look around and be like, “Oh, she’s looking upset, his arms are crossed in not a good way, there’s some really bad body language going on right now.” I think there’s something else going on here and then I have no idea what to do with it when the emotional distress started cropping up. So, what am I supposed to be doing in those moments as an advisor where I was trying to go deeper and ask more questions and I unearthed something? I unleashed something.

Ed: Yeah, no, and that’s a really powerful question and I think we’re trying to explore and start to define when does financial planning become financial therapy, right? So, is there a perfect black and white line? No. What I’ve grown into, is like, therapeutically, I want to go deeper, I want to open that up and move them into whatever that emotion is more fully so that they can get to the other side of it. But the reality is, as a financial advisor, that’s probably not your end goal to help them process their emotions like a therapist thinks about it.

But that doesn’t mean that we want to turn a blind eye to it either. And so, part of it is being able to just sit in the presence and let them be there. Sitting with emotional warmth, just kind of accepting them for who they are, no judgment, not kind of pulling back out of fear either internally or externally, and it’s also not rushing in to fix it and make it better. One of the things I’ve learned in working with my clients is that one of the worst things I can do for them is try to get them out of that emotion as fast as possible. They really appreciate that I can just be there. Sometimes it means sitting in silence for a few moments, maybe a minute.

And they all have their own internal process and start to realize like, “Oh, Ed’s okay with the fact that I just experienced sadness.” And what this really means in a broader mental health context is part of the reason why we experienced depression and anxiety, part of the understanding at least is because of emotional suppression or emotional overwhelm. And so, part of mental health and emotional health is the ability to actually experience your emotion fully, and then that next step is really for another human to see it and be with you through it and you realized like, “Oh, I made it, I’m okay, that didn’t kill me.” Right?

Before I became an advisor, I was a firefighter. And I don’t know when I fully learned to turn off my sadness, but I certainly would not cry after any of the firefighting calls that were difficult. And honestly, it wasn’t really until I started training to be a therapist and I was sitting in therapy training supervision talking about…and I have no idea what I was talking about, but my supervisor was just like, “What are those tears about?” “Huh?” And it totally startled me, I was like, “Oh, I actually have sadness.” And so, I think when we’re thinking about our clients, on a spectrum, our clients have very different relationships with their emotional world.

And some clients are very, very comfortable with their emotional world and the different emotions that come up and what they mean to them. And some clients are terrified of their emotional world, or they’re really familiar with their anger but not their sadness or not their shame or joy or pleasure. I often am also working on the other side of the more positively experienced emotions and clients struggle to experience positive emotion sometimes. I mean, on the planning side, we’re trying to help people enjoy their lives.

How Ed Would Handle A Client In Emotional Distress [15:34]

Michael: So, help me understand a little bit further, just what do I do? It doesn’t have to just be about me but I’m kind of feeling like personal therapy moment here or a client counseling moment. But just what should I be doing? And I’m thinking in particular just your comments earlier of like, “Look, I am wearing a financial advisor hat, I’m not wearing a financial therapy hat, this is not going to be the first of our weekly sessions for however many weeks or months as we go through the emotional baggage that I may have unearthed by asking you some of these questions about your family and money and how these are aligning.” But you’re in my office, one spouse is on the verge of tears, and the other one is looking really angry and all wrapped up. I’m like, “Okay, I just walked into something.” What should I be doing or trying to do? What tools should I be pulling out?

Ed: Yeah, in that moment, you’re out of financial planner hat and into relational…I’ll call it relational caretaker. You’re going to serve in another way as the emotional regulator, you’re going to help them come back through and get settled again. And it’s not that you’re going to resolve whatever it is that’s beneath it. That’s kind of the mindset.

Michael: Okay, I’m not trying to fix this, but I am trying to get us back to level set with, I think, the caveat that you’d said earlier where my first gut on level setting is like, “Okay, then I’m just going to move you through this as quickly as…” Like, “Okay, let’s move on from this moment.” But we’re not doing that, we are supposed to hang out in this moment.

Ed: Yeah, right, so you’re not going to switch it from like, “Okay, so now we’re going to talk about life insurance.” No, we don’t want to do that. But what we want to do if that’s the…let’s just use that scenario, the wife started to go down into tears, the husband is looking angry, right? You’re sitting there with them and you kind of maybe even internally, just take a deep breath in, get yourself settled, and realize you’re going to be okay no matter what happens, this is their conflict, not yours.

Michael: Good reminder, good reminder, their drama is not a reflection on you.

Ed: It is not. No, we only are exposing the drama that’s already there. I’m assuming we are not creating drama for them, we’re just exposing things that are already there. And it sounds really simple as you and I are sitting here having this wonderful podcast interview, right? But psychologically, we’re wired to start to blend with other people that are in the same space as us. And because you feel their emotional distress signals in your brain, emotional distress in the environment, your body starts to say, “There’s something new here, I’m alert.” And that’s where we have to try to be mindful or aware like…and that’s why I said, take a deep breath because that will get you to calm back down.

And then the approach with the couple becomes more about being present non-judgmentally, just naming stuff, “Wow, Ms. Smith, it looks like you’re feeling really sad about this, and Mr. Smith, it looks like that maybe there’s some anger there for you.” And notice in the language there…in my approach especially and I think many therapists are like this, is there’s always a bit of tentativeness, right? We’re not saying, “Wow, you’re really sad, Ms. Smith,” and, “Wow, Mr. Smith, you’re really angry.” We’re offering an observation about their emotional state and they get to either acknowledge once and say, “Yes, that is true,” or, “No,” and then you just kind of roll with whatever their response is.

But what that does when you start to name people’s emotions while they’re in emotional distress is it validates the reality, that that’s true for them. So, we’re not trying to make Ms. Smith feel happy when she’s feeling sad or Mr. Smith feel calm when he’s feeling angry. So, we’re not saying, “Calm down, Mr. Smith,” “Oh, it’s going to be okay, Ms. Smith.” That’s called emotional invalidation. So, we’re just mirroring the emotion as accurately as we can read it. And then from an advisor perspective, the next step, if you will, from a process standpoint, because I know planners love processes and steps, is…

Michael: We all say we don’t, like, “I hate scripts because it sounds so fake.” No, please give me a script.

Ed: No, please, for the love of God, give me a script.

Michael: No, please tell me exactly what to say.

Ed: And to be quite honest, new therapists, myself included, wanted scripts, wanted procedures. Look, I was trained as an advisor before I was trained as a therapist, I wanted to have a meeting agenda and to run the meeting through step by step. And for those listeners that have…

Michael: “I have like a seven-step process to solve all of your mental health issues, it’s going to be glorious.”

Ed: Right, “We’re going to get it done in four sessions and it’s going to be fantastic.” But I think from the view of the therapy world, most therapists work in a much less directive and structured path than financial planners, right? It’s kind of like, “We’re going to deal with whatever’s present today and then we’ll make a decision as we go through the session,” and it’s all game time, just playing it. And then in the next session, the same thing, wash, rinse, and repeat. There’s some bigger understanding in our mind about like, “Here’s the bigger journey or arc that couples typically go through or individuals go through,” but session to session, there can be a lot of variability.

Whereas most advisors, right? Like, “Meeting one, this is what I’m trying to do, meeting two…” And I was listening to a few of your podcast interviews before this and there’s always a pretty clear onboarding structure and process and number of meetings, and maybe there’s a little flexibility for an extra meeting or two, but by and large, it’s like, “We’re going to do five onboarding sessions and this is where we’ll be.” And it doesn’t work that way in therapy land, for the most part. And that’s okay, we just let those be differences. But as we’re thinking about working with this couple, I think the next thing that can be very validating is asking the Smiths, “Would you like to talk about what’s coming up for you, or would you like to move and talk about something else?” Right?

And then you’re putting them in the driver’s seat about whether that’s something they want to talk more about or if they would rather not. Now, what becomes really interesting is you also now have an opportunity to name and say, “Wow, something really big has come up for you here, my role as your planner is to help you keep moving forward on these important topics. I wonder if there is something more here for you, would you be open to working with a counselor or a therapist to talk about that?” Right? So, those are those transition points that I’m starting to help planners identify and bring into the conversation, and it’s easy for me to say and terrifying for advisors to think about doing.

Michael: But I’m struck by this that step, so sort of number one, let’s just name what’s going on and validate like, “Ms. Smith, it looks like you’re feeling sad and Mr. Smith, it looks like there’s some anger here.” And pause, where I’m not following that with anything yet, that’s just…

Ed: Yeah, just pause.

Michael: Say it, let it float, they’ll respond or acknowledge. So then, I’ll be like asking, open the door like, “Would you like to talk about what’s coming up for you, or would you like to talk about something else?”

Ed: Right.

Michael: And so… Well, I know what to do, if they talk about something else, then we go to something else, but if they…then, we’re back on the financial plan again. All right. But if they walk through that door here, “We’d like to talk about what’s coming up,” so where am I going with this now? It’s just like how deep am I going? Or should I be trying to go? Or what outcome am I realistically trying to get to in this meeting because I’m not their ongoing family counselor and I don’t intend to be their marriage therapist but here we are?

Ed: Yeah, but here we are, and we’ve got their stuck point. And so, I think for most advisors, right? The question is, is this something that a handful of really well-placed or asked open-ended questions may help a couple get to clarity and understanding about their differences, or is this some much longer standing and deeper issue for them? And so, what’s a topic that…let’s just make up a topic to make this even more tangible for folks, why is Ms. Smith crying and why is Mr. Smith getting angry?

Michael: So, there’s an estranged child that they had a falling out with and he’s been out of the picture for more than 10 years now, so he’s angry because he had the falling out and she’s very upset because he’s gone.

Ed: Okay. Right. And so, I love that.

Michael: I feel like that’s a…to me, those are just the…these are the kinds of family dramas that end out cropping up usually somewhere around the point where we’re trying to talk about estate planning with the clients and what’s going on with money and family and like, “Oh, out it comes.”

Ed: Yes, no, you’re exactly right. I’ve been having a lot of conversations recently with estate planning attorneys and this is exactly what’s coming up is, “What do I do when I don’t have a relationship with one of my adult children?” Right? Okay, so let’s play this out a little bit more. And I think kudos if you’ve even been able to get that information from them, right? So, this is kind of almost…now if we’re playing this out in a little richer way, in that onboarding process or in just the process of getting to know your clients, you’ve asked them about who are the family members in their life? And who is actively involved in the family life and who is maybe on the outside? Right?

So, in family therapy world, for me, every first session with clients, we spent the whole hour…I’m asking them questions about, “Who are the people in your life?” I don’t even talk about the conflict unless they absolutely feel like they need to. Because I want to know who are all the people in their life, what’s the story of their life, because that’s going to start to set the context for why they’re having the fights that they’re having, right? And so, the context of Mr. Smith and Ms. Smith getting angry and sad respectively is they have an estranged son. Well, that’s understandable, that would evoke some strong emotions, right?

And so, you’re in the planning office, you’ve known this about it, and now it’s coming up again because you’re trying to help them finalize their estate plan documents, about how money will be transferred or not transferred. And I think my sense as a family therapist is, “They probably need to be in family therapy.” Now, “Okay, maybe they won’t come.” And so, as a planner, you’re sitting there, you got the anger, you got the sadness, you might be able to play it a little bit along the lines of acknowledging and validating softly like, “Mr. Smith, I imagine you felt angry about this for quite a long time, tell me a little bit more about that.” Right? And this is where the spirit of therapy at least really starts to come through is we’re just curious about the story and there’s something really powerful about having someone be curious about your story in a non-judgmental way and in a non kind of corrective or directive way.

And I think that this is where advisors can be really skilled without having to do lots and lots of training because you don’t have to do…therapists were making interpretations about why things are the way they are and then trying to do interventions to make adjustments. So, I would be trying to help Mr. Smith make meaning out of why there’s so much anger with the son not being there and how it could have gotten to be that way. Those are more advanced. But if he says, “Yeah, I do want to talk about it just a little bit more,” you can say, “Okay, well, tell me a little bit more about that, I can imagine not being in contact with your son is painful or it hurts too,” and then you shut up and let them talk.

Michael: I think it’s an interesting dynamic because there is an aspect of being an advisor and how we get…the context of our relationship and how we get higher, to me, there’s sort of this constant pressure of, “What am I doing to show value? What am I doing to create value?” And one of the most natural paths is just like, “I came up with a strategy,” “I made the recommendation, do this thing and your financial life will be better or your portfolio or your retirement will be better,” or whatever it is.

But it strikes me in the conversation that I…at least for me reflecting back, I think one of the hardest parts of finding this space, particularly in client meetings, is I feel like most of my career was built around, “how do I get to a recommendation that adds value that shows some financial planning improvement in the client’s life?” And so, the idea of like…we were literally in the middle of financial planning meeting where I was giving them recommendations and answers, and now we’re all of a sudden in the moment where I’m not supposed to give any answers and recommendations is a really hard mid-meeting pivot to me.

Ed: It’s a massive shift, absolutely. And because the value you’re creating is far more intangible, you’re now giving them relational value or relational capital and that’s a very different thing and it’s much harder to quantify. But have you ever had someone really listen to you where at the end of the conversation, you’re like, “Man, Wow, I feel like I’m in a completely different place than when I started that conversation?”

Michael: Yep. They’re so powerful.

Ed: And the elements of that experience typically are that someone has been with you, they have looked you in the eye, they have had genuine interest and genuine concern and genuine curiosity through that process often without even giving any advice or counsel about what you should do. And this is a big pivot for advisors relative to therapists is advisors are hired as external experts. And in the world of therapy, our expertise is more on the process of helping them discover their own internal expertise.

Michael: To me, it really highlights the juxtaposition between as advisors, we tend to be hired because we’re the experts and the therapy realm is trying to direct that journey back to the clients to navigate their own path. And I know some folks that have gone down to a financial coaching realm and coaching sort of draws on that same inspiration that the person you’re coaching is the best expert in their own lives and that the focus is much more about how do you help them find that path for themselves or evoke those capabilities out of them. But again, to me, it is an interesting difference and particularly when we get these moments that crop up in the middle of a…I was wearing my expert hat and the meeting just made a hard left turn and to find the space or realization to say like, “Oh, I think I need to take that hat off.”

Ed: Yeah, absolutely. I feel that on the other side, Michael, when I’m working with my clients and we’re hitting into a financial topic where I’m like, “I really want to just go into advisor mode and help them understand the role of compound interest and protecting their portfolio.” Literally, I was in a session in the last week where the couple was in a major life transition, dad has died, they got an inheritance, they’ve got a relatively young family, they’re trying to move houses, they’re trying to change jobs, right? Lots of moving pieces, all going on. And I want to whip out the spreadsheet and be like, “Okay, well, let’s run the pro forma here and figure out what’s your burn rate.”

And the thing is all of those things are really good and they’re really valuable and there’s a wonderful place for them in the process of change, right? The reason why we have planning is to help organize the chaos that’s in all of our heads. And so, it is trying to find that place, and I think that’s part of that question of financial psychology and financial therapy and money coaching, right, is, well, it’s not just always advice but it’s probably not always just processing emotions and relationship dynamics. I think that kind of leaves a financial gap as well. And so, there’s an opportunity for blending and timing that’s really art more than it is science.

Ed’s Journey From Firefighter To Financial Therapist [31:43]

Michael: So, help us understand your journey through this. I know you’ve been on the family therapy, on the financial therapy side of things for several years. That’s not where you started out in the industry. So, take us through your journey, how did you get started in financial services industry?

Ed: Yeah, that’s a great question. And I think it probably more formally started actually when I was a professional firefighter, and it was sitting around the firehouse and listening to the guys talk about their wives and money and I was 19 or 20 years old and trying to figure out money for myself. And one of those first personal finance books I can remember reading was, “How to Buy Your First House for Dummies.” Right?

Michael: Excellent!

Ed: Yeah, right? I was like, “I’m going to figure this out.” I had a very small inheritance from my grandparents that I want to use to buy my first house. I was living in Houston, Texas, and so houses were cheap. So, I was doing the very financially responsible thing and trying to figure it all out and I could hear the stress points for the guys in the firehouse and I knew within my family, there was some financial friction and stuck points. And so, I was like, “Man, I’m going to figure this out, I’m just going to read some books.” And, man, my world started opening up and I had a financial advisor, at least what I understood to be a financial advisor at the time, it was probably more of a financial sales guy, but that’s all right.

You know, 19-20 years old, I didn’t know anything about the world of advisory. I didn’t really understand what the stock market was, I don’t know that many 19-year-olds do. But what I did know is he wore suspenders and slacks and drove a nice Lexus and I did not. And so, that probably started me in that awareness about the advisory world and like he was super nice and he had all the nice tables and showed me like, “Well, here’s a large cap and a mid cap and a small cap,” and he’s explaining it to me and I’m like, “Uh-huh, okay.” Michael, I had really no idea what any of that really meant but it sounded cool, it sounded good.

So, there’s an amalgam of a lot of things going on, probably like most people, right? But I got more and more into personal finance and was realizing I did not want to be a professional firefighter for the next 30 years or 20 years. And I met my wife who was finishing up dental school and I was trying to figure out, “Well, what am I going to do with myself?” And we were talking, and I would hear about the salaries that she was making, or would make, and her friends and it just kind of was opening my mind up to, “Wow, well, I like helping people.”

Financial advisors, I’ll just own it, the marketing for becoming a financial advisor is, “You’re going to get rich, you’re going to make lots of money.” “Okay, that sounds great, you get to help people and make…” I mean, naive, I own it. So, I interviewed with a number of financial planning-life insurance companies, got offers, I was like, “Well, this is great, I’m going to get married, I’m going to have a job, and I’ll be a financial planner and make great money, life will be fantastic.”

Michael: Yeah.

Ed: But there was a major err and that is I didn’t really understand what I was selling but I had read enough books to realize I probably wasn’t comfortable with what I was offering. And so, it’s just, “Okay, well, what am I going to do?” And I had a guy I was working with say, “Well, Vanguard Mutual Funds, you might like it there better, you don’t have to sell anything,” “Well, okay.” So, I wish I could say I had this grand master scheme and plan and foresight, but it’s really been a stumbling journey to try to figure this out. But I ended up at Vanguard Mutual Funds and I pretty quickly knew I was a fish out of water.

I’d just spent the last five years being a firefighter and being in a large corporate setting was completely unfamiliar to me. But they had a great training program and I learned a lot more about large cap, mid cap, and small cap stocks and international equity, and I think emerging markets was the super hot stock, and they were teaching us like, “Well, make sure people diversify their portfolio because it was up 100% and then it was down 30%,” I was like, “Okay, sure.” But there was this internal drive for me to figure out the financial world. And so, I earned my MBA, got my CFP, wanted to do the responsible thing with money with my wife and I, and we were figuring it out.

But things were starting to happen in my life at the same time where I was realizing just knowing how money works wasn’t necessarily bringing me more financial peace and it wasn’t necessarily helping me be more effective with family members or understand why I was having a very different financial outcome than other family members. And so, more of the…I don’t know, we’ll call it the conscientious side of me was showing up and curious about, “Well, I don’t understand, this isn’t that hard, this is what you should do and if I tell you this is what you should do, then why wouldn’t you do it?” I’m a nice guy. Enter the field of psychology and counseling, which broke open a lot more about why just being a nice guy and giving good advice wasn’t going to be enough to help me work through some of my own financial anxieties, family members’, and clients’. So, off I went to get my master’s in counseling.

Michael: Interesting. I just want to follow that further. So, because you get to that moment that I think a lot of us have as we come to the advisor world like, “I’ve learned some stuff, got my CFP or whatever,” it’s like, “I’ve learned some stuff, I can take a client’s information, see the gaps and problems, I give them the recommendations, and then they don’t do it.” And there’s this like, ‘Wait, I’m a nice guy and I’m giving good advice and it’s not happening.”

Ed: Yep.

Michael: So, I’m struck, so your conclusion was, “I need to go for a counseling degree?” I get it but I don’t feel like that’s where a lot of advisors end out. I’m going to assume you were not getting from the halls of Vanguard and were like, “Oh, well, everybody else in the pit, they all went and got the counseling degrees,” and you’re like, “Ed, you just have to do that after your CFP.” How did you get there?

Ed: Yes, no, that’s a great question. And you’re right, no, there’s plenty of people in Vanguard that were not like, “Oh, yeah, I’m also going to get my counseling degree.” And trust me, when I started telling people that, they were scratching their head and wondering, “What are you doing?” And look, the business, I could see the numbers and I was like, “Wait, why am I doing this? I have a very good career path here at Vanguard and there’s good income and heck of a lot better than a mental health professional.” And so, this is not really rational from that standpoint.

But just below the surface, and this is really kind of a big part of my own personal journey, is there was a lot of underlying mental health issues within me that were covered over by my nice guy facade. And so, there was a very fortuitous day at Vanguard where I was in the break room where all good things happen and one of my colleagues who I loosely knew said, “Well, I’m going back to school to be a therapist,” “Oh, okay.” Owning my own innocence slash I don’t know whatever to call it, I feel like I should know something better to call it but I’ll call it innocence, I was like, “Oh, okay, I’ll look that up.” So, I went back to my little cubicle and started looking up the school that she was talking about.

And I was kind of wrestling in angsty already and something about that really resonated for me. And with many years down the road and much great reflection, I realized now that there were a lot of precursors in my life that were probably setting me up to become a therapist, ultimately, right? That part of my own family’s values and experiences and what they highlighted as some of my strengths were always around being helpful and thinking of others and really meeting people in distress, I had been a high school lifeguard and swim instructor.

So, what I now know is there’s a large portion of our society where people were kind of conditioned, nurtured into being people helpers, whether that’s innate or socialized, maybe it’s some combination. But kind of that deeper psychology stuff is…in my own family history, my mom went to work for a therapist back in the late ’70s and he was a very, very significant and positive influence in her life and she actually named me after him. And so, when we talk about the deeper ends of psychology and unconscious influences, that was probably a factor.

Michael: So, it came from, I guess, this combination of like, “I’m a nice guy, I’m giving good advice, it’s not necessarily clicking.” Someone mentions master’s in counseling in the break room and you start looking this up and like, “Oh, maybe this is a better fit for me?” Was it pulling you in that direction?

Ed: Yes, it definitely was a better fit for me, right? I didn’t understand all the reasons why it was a better fit for me. And another factor was for me when I was coming out of high school, my favorite class in high school was psychology. And so, when I was looking at colleges before I decided to go be a firefighter, I thought, “Well, I’ll go study psychology.” And for me and my family background and context, college wasn’t a heavy emphasis and I didn’t particularly love school. And so, the idea of four years in college and then a couple of years of graduate school held no appeal to me and financially, I didn’t really know how I would navigate it.

So, there was a number of financial factors that probably steered me the other way, there was, to be honest, some love factors. I had a high school sweetheart that I ultimately chose to follow and led me down the path of firefighting initially. So, when the counseling and psychology thing popped back up for me many years later, it was really kind of coming back to my first interest for college. And now, recognizing even many years later, there was other psychological predispositions towards being interested in that field.

Michael: So, how do you make the turn at that point? What, you’re a couple of years in with Vanguard at this point?

Ed: Yeah, I go home and have some interesting conversations with my wife, who has been incredibly supportive through each of the transitions, and we have some really honest conversations. She was aware that I was doing a good job but not particularly happy and in a very loving wife way, she wanted me to be happy and she said, well, I think this is going to help me be happier and more meaningful. And we are at the point where we’re ready to start our family, and so I said, “Well, I’m going to pull the reins on working full time,” and I’ll stay home with our first child and the graduate program was on the weekends. And so, she would work during the week and I would go to school Friday night and all day Saturday and study during the week while I took care of our first child.

Michael: Very cool. And so, how long does it take to go through a master’s in counseling program?

Ed: It took about three years for me.

Michael: Okay, because you can only get there one course at a time over the weekends.

Ed: Yeah, a couple of courses a semester. And then the big part for master’s in counseling is the clinical side, so you have to get clinical hours and work with clients and be supervised around that. And so, that’s a big kind of X variable that you don’t have full control over.

Michael: It is an interesting distinction that just one of the things that therapy…because I know that therapists training requires that we don’t do on the advisor and is literally like you have to have time where you do this with actual clients or actual patients with some supervision to make sure you’re doing it okay and not hurting anybody.

Ed: That’s right. That’s right.

Michael: And you have to have actual supervised practice with real patients before you get the licensure to do it.

Ed: That’s exactly right, yeah. And so, I think in that way, it follows the pattern of a lot of other…like doctors have similar requirements, right? They have the residency requirements, and nurses have the clinical hours. Heck, even as a firefighter, I didn’t just study the textbooks on firefighting, I had to do firefighting activities during the training, go to live fires. And so, it is an interesting gap in, I think, the financial planner educational path, and I hope that it will change at some point.

Michael: So, as you went through the programming, was the idea to come out the other end of this to move back towards financial therapy and the financial realm, or up to that point, was it just like, “Hey, I’d been a financial advisor for years, now I’m down this counseling and marriage family therapy path and that’s going to be my path?” Like, “I’m past that financial advisor stage of life?”

Ed: Yeah, I think it was, it was, “I want to be a therapist, I want to work in that capacity, and understand what that means.” And after I finished with the graduate degree and started to open my private practice, there was still…honestly, Michael, I had way more questions than I had answers now and I did find the Financial Therapy Association pretty quickly and I was trying to figure out what does it even mean to help people with their relationship with money from a counseling and mental health standpoint? And so, I spent quite a number of years asking questions, reading a lot of books, finally discovering that genre books that are financial therapy-ish, not that there’s a lot of books that are titled, “How to do Financial Therapy?”

But you’d run into books like “Mind Over Money” by The Klontzes and “Facilitating Financial Health,” and you get George Kinder and the Money Maturity and it’s like, “Oh, there’s this whole other class of books out there that look at people’s relationship with money.” And so, I really kind of put myself through my own kind of graduate course, if you will, and try to understand that and figure out how do I blend this all up together into something that’s actually helpful for people.

Michael: So, out of curiosity, if someone wants to at least start exploring this realm, is there a particular book that you recommend as a good starting point?

Ed: Yeah, there’s a lot of great books. And I would say…probably the top two that I would say, and they’re written for kind of the general audience but I think they’re really solid and very, very helpful, is “Mind Over Money” by Brad and Ted Klontz and then “The Art of Money” by Bari Tessler. Those are two books that really kind of I met early on in the next phase of my growth and understanding of what it means to have a relationship with money and to explore more the psychology behind it. And then certainly, there’s a long list after that but those would be two that I would start.

Michael: Okay. So, for folks who are listening, this is episode 296, so if you just go to kitces.com/296, in the show notes area, we’ll have links out for some of those books if you want to go chase them down further and weren’t scribbling it down as we go here. So, I guess I’m trying to understand where on the journey…so you were in the financial advisor path, stepped out to the counseling path, went to school, started out as a marriage and family therapist. At some point, though, started gravitating back to the financial therapy side. So, when did you get to this…at least as I think of it, this sort of midpoint between the two, or maybe one foot in both camps of landing in a more financial therapy domain?

Ed: Well, I think it’s still an evolving process, to be honest, and that it’s…the way that I thought about it, or I realized early in my practice as a therapist is I was still trying to function more like a financial planner that did some counseling stuff. And now over eight or nine years, it’s become, “No, I am a couples therapist that has a specialty in financial therapy.” And so, really and this is what was really challenging for me is the clients that were coming to me were not coming for financial therapy, they were coming for all kinds of other issues. And so, I had to really start figuring out like what does it mean to actually help someone through an affair? What does it mean to help somebody struggling with addiction and trauma?

And in all of that, it was also the questions like, “Who am I? What’s my history?” And so, there’s quite a number of years where I was really looking deeply within myself to understand my own history and my own experiences. And this is where in therapy world, we talk about using the self of the therapist, like who we are as a person, part of that training development is… we have to do a lot of navel-gazing. We really got to get deep into understanding ourselves and our story and what’s happening in us.

Because as you go through that process as hard and challenging as that can be at times, it’s also part of what now allows me to show up and sit with somebody else as they’re kind of mucking around trying to figure out what’s going on with themselves. And it’s not as threatening for me to sit with someone that’s struggling through some anxiety or major ambivalence about a life decision or the fact that their wife just cheated on them or their husband just cheated on them. I’m not saying it’s a load of fun, but because I’ve gotten comfortable with the places of distress in my own life and brought them to a level of resolution, I have a lot more peace now about just being with people in that process of change.

Michael: So, help us understand what the practice looks like today and what you do now. You had frame that as, “I’m a couples therapist who has a specialty in financial therapy.” But just help us understand what is your business today?

Ed: Yeah, that’s a great question. So, on the counseling front, my business is I see somewhere between 15 and 20 clients a week on an hour-by-hour basis and they come in to me for a number of different reasons. So, I still get new couples coming in because someone’s had an affair, but I do get more couples coming in and saying, “I’m just so angry and fed up with the way that my partner is spending money and it’s going to ruin us.” And so, we start into a process of starting to help them unpack and explore who they are as people, what’s led them to that place, what’s going to help them start to discover, “how do we get to a more sustainable change around this pattern?” Right?

Look, therapists end up with their own ideas about the world and how people change and grow, and it all makes intuitive sense to us, but it’s a foreign culture if you haven’t lived in it. Yeah, so the day-to-day business is really helping people work through and understand what’s going on for them. And honestly, Mike, one of my deepest passions now has become around helping people connect how their childhood experiences of trauma are setting the stage for them having trouble with their finances.

Michael: So, take us further down that road, what does that look like for…because as you said, the couple that comes in, “We’re not doing well, I’m fed up with how my partner is spending money, it’s going to ruin us. Ed, help us.”

Ed: Yeah, yeah, absolutely. And please know that any stories that I’m sharing, I’m blending details so this is not one specific client.

Michael: Appropriately anonymized with healthy overlap, yeah.

Ed: Right, yes. The couple came in and the wife had really problematic shopping and he had been trying to get her to stop, they had been in a lot of conflicts, he would get angry, he would yell at her about it. At one point, they went to work with a financial advisor and they said, “Okay, well, let’s look at all your numbers,” and, “Okay, well, this is how much she can spend on the shopping, and so let’s just have her do that.” Well, that lasted less than a month. So…

Michael: I think that’s an interesting example of just where these situations may at least initially hit our radar screen, right? It’s scenarios like that, the client comes in, “Hey, we know we need to get better about our spending, we want to work with you to you formulate a better budget on where the money’s coming in while we figure out where the stuff that we’ve saved is invested,” if they’ve got some savings. And we create a plan, we figure out where the dollars are supposed to go, they’ve all said they’re good with the budget, and then a month later, the whole thing is falling apart.

Ed: Right. Yeah, that’s exactly right, and that’s what’s so challenging and frustrating for financial advisors, understandably. And it’s what’s so frustrating and challenging for clients too because they then start to beat themselves up and say, “Well, what’s wrong with me? If it’s so logical and straightforward, why can’t I get myself to do it?”

Michael: Yeah, like, “The financial advisor told me what to do, it seems so straightforward, it didn’t work, I couldn’t get it done. Okay, now I’m beating myself up, I’ve got self-doubt, now I’m piling things on myself,” from the client end, “because I feel bad that the advisor gave me the advice and I failed to implement it.”

Ed: And that’s where it’s often not an issue of logically understanding what needs to happen. And if we take just a break to think about a very simple model of the brain and the way the brain is structured, it’s called the hand model of the brain. And everyone, as long as you’re not driving with two hands on the wheel, we can walk through this pretty quickly. But basically, I want you to wrap your thumb over your palm, and then wrap your four fingers over your thumb, and so now you have a fist with your thumb kind of covered over, right?

Michael: Okay.

Ed: And if you turn it where the knuckle of your thumb is kind of facing your head, you can kind of imagine that’s your forehead.

Michael: Okay.

Ed: So, right behind your forehead is your prefrontal cortex. And this broad zone and the neocortex, which is all the outer layer of your fingers, just under your skull, right? Most of that is considered the thinking brain. And this is a rough model, it’s not a perfect model of how the brain works, so let’s just keep that in mind. But good enough, right? And so, that’s where we process most of the financial planning information that were given by advisors. Two plus two equals four, compound interest, “10% rate of return will get you blah-blah-blah from blah-blah-blah,” “Okay, yeah, check, I got it, a little fuzzy but I can make sense out of that.”

If we open up our four fingers, we’re now looking into the middle of the brain and the thumb represents what’s called the limbic region of the brain. And in this very simple model, this is generally the emotional processing part of the brain. So, this is where all of our feelings come from, and our feelings, despite what some people would like, drive a lot of our thinking and decision making. So, some people want to exclude emotions from our thinking so that we’re not clouded by them.

Michael: Pretty much the entire field of economics, yep.

Ed: Yes, right.

Michael: Those are the things that make you do it “wrong.”

Ed: That’s exactly right. That’s exactly right. And I’m not saying, “Okay, well, let’s just give life over to our emotions.” No, no, no. But we do need to understand that they play a significant role in helping us judge what we like and don’t like, what feels good, what feels familiar, what feel scary, right? And if we get a certain level of emotional arousal, we’re going to shut down from being able to do what we know we should do and we’re going to do what makes emotional sense. So, this is why people start to try to override their emotions because, “I want to do this, I want to save $200 a month, but man, I really like to go to the bar with my friends.” Or in the shopping case, “When I go shopping, I feel better.” Oh.

Well, this is also the center of where we experience relationship and the experience of feeling connected with other people and something in the field of psychology called our attachment system or bonding lives, right? So, all of us are born to a mother and we have fathers in the mix, and we’re dependent on them for caretaking. And all those memories of our caretaking gets stored…or a large portion of them start to get stored in our limbic system. So, our relationship template and our emotions are all being processed from that part of the brain. Now, if we pull our thumb back, we’re now into an open palm and we start to see down our forearm and that’s the base of our brain and down into our nervous system.

That’s all mostly instinct, fight, flight, or freeze. That system is designed to work automatically. Well, many of us that have even taken a basic psychology course in college know about Pavlov’s dog and conditioning. Well, okay, any of the technical psychologists listening, if they do listen, forgive me for any inaccuracies, but I think were going to get the point. We can get conditioned with money as a source of fight, flight, or freeze from early, early on in our childhood. Right? And that gets stored in our nervous system. Now, we’re not consciously thinking about the times that our parents scolded us around wanting to buy something in Target or the times that our parents gave us a car and then said, “Oh, you don’t want to live here anymore?” “Nope,” “That’s my car, I’m going to take it back.” Right? All the things.

Oh, all the times that dad yelled at mom for how much money she was spending, all the times that mom said, “Don’t tell Dad how much money I spent in the store.” Whatever your things were, right? That’s all much more in your limbic system and in your nervous system than it is in your neocortex or prefrontal cortex. Okay, so let’s come back to our example now. Budgeting doesn’t make a whole lot of sense, yet. Because every time I think about budgeting, I have all of these old memories. So, my client, this client that we’re making up fictitiously but has some core elements, they left the planner, they couldn’t stay on a budget.

“Oh, crap, what do we do?” “Okay, well, I’m going to go work with a therapist.” Well, what does the therapist say, that’s never really thought about our personal relationship with money and the issue of overspending comes up? “Get on a budget.” “Why can’t you just stay on a budget?” It’s logical. It’s psychological. Psychological gives us a bigger view of being human. Back to what I started, I think, the show with is psychologically, we have thoughts, feelings, behaviors, relationship dynamics, a sense of self, which is a big deal, right? We all know the word self-esteem. Our self-esteem is predicated a lot on our thoughts, feelings, and behaviors, so they’re all complexly interrelated.

And so, anyhow, as we move along in this story for this couple, they ultimately landed in my lap. And this couple when they come in, like many, she can barely even talk about the money. It’s just her hands are shaking, they come up to her face, there’s a terror, and it takes time to build trust and rapport in the relationship and asking more and more questions. And this is really from the much deeper in the heart of counseling and psychology, so please, financial planners, as you’re listening, you’re not responsible for remembering this stuff, you’re not responsible for treating it, but I am sharing this so that you know it’s there, is part of the major function of that shopping was because she felt alone in her relationship.

Now, her husband isn’t an intentionally mean nasty person, but his own psychological makeup leaves him to be more oriented to stay within himself and less available to her. Well, her whole psychological makeup is wired towards being hyper-attentive to what other people are doing or not doing or when they’re present or not. So, when he’s not available, she’s feeling alone. Well, the solution becomes, “I guess I’ll just go shopping because, wow, listening to people and seeing the pictures of people having a fun time is not as rich as connecting with my husband? It’s better than nothing.”

Michael: And then I’m imagining the fun ways this plays out in couples…frankly, I can think back to a client situation like this. So, she’s spending more so he’s stressed, so he works more to earn more to try to bring more money home, which means he’s even home less and available less because he’s more exhausted when he comes home, which makes her feel even more distant, which makes her want to shop more and they just compound in diverging directions, that makes this worse.

Ed: Hey, you’ve met many of my clients.

Michael: Yeah.

Ed: Yes, absolutely. And the challenges as we go into this cyclone further and further, each partner looks more and more villainous and more and more horrific and more and more narcissistic and more and more dependent personality or needy, whatever clinical diagnosis or everyday diagnosis. Either one, I hear them all. They look anything but like a human that they once loved. And so, that really becomes the primary task for me with my clients is taking them on a journey and often it’s a long journey back to seeing each other’s shared humanity and recognizing that each of them are people with a complex set of feelings, thoughts, and behaviors and relational expectations, much of it is predicated on their developmental history. And this is where the psychology of attachment theory is so very important.

This is, right, the study of how human bonding gets taken into our mind and brain and sets the stage for how we expect relationships to be in our adulthood. And so, for me, as a therapist and a couples therapist, in particular, I really like to look at, within attachment theory…you know, planners are very aware of personality types. So, attachment theory is not a personality type system, but it is a categorization of the way people experience relationships and it starts to really frame very important understandings about what are our fundamental needs as humans and how do we start to restore that.

Helping Clients Recognize When They May Need Financial Therapy [1:01:55]

Michael: The interesting thing this highlights for me when I think about it from the financial advisor end…So, I can sort of break clients into two groups, really overgeneralizing.

Ed: Sure.

Michael: People for whom I give the advice and they take it and the ones who don’t. And the ones who take it, they’re pretty straightforward to work with. Frankly, for most of us, these are the great clients.

Ed: Those are the A clients.

Michael: People who take all your advice and otherwise don’t call with many questions, like great clients, love working with them. Then we get to clients at the other end of the spectrum where we give the advice and they don’t take it. And one of the things that had become fascinating to me pretty early on because part of my early career journey before I landed on the financial advisor realm was that I thought I was going to go into medicine and I was a pre-med student and spent a couple of years as an EMT. And medicine has an interesting lens for this because in the financial advisor realm, when we give advice to a client and they don’t take it, we tend to characterize them as a bad client.

Ed: Yep.

Michael: “I don’t like working with them, it’s not enjoyable, I’ve given the advice, they didn’t take the advice,” it’s like not really fun to beat your head against the wall. Like bad client, just move on. I know advisors who go so far as to basically say things on their website and their materials like, “What makes you a good client is, when we give you the advice, you’ll take the advice and if you’re not ready to take our advice, please don’t engage our services.” Just don’t want to work with them. And medicine has a fundamentally different lens to this. It frankly tends to shift a lot of the burdens and say like, if you’re a doctor and you gave the prescription to the patient and they didn’t take the prescription, that’s on you, it means you didn’t give the advice, you didn’t give the recommendation to the prescription properly, you need to deliver your prescriptions to patients in a different way so that they will better adhere to what you prescribe to them. And to me, it’s an interesting lens to think about it in this context because I’m struggling with it as well.

On the one hand, I do think there’s an interesting aspect of that for us as advisors, like at what point is, “I gave the client the advice and they didn’t take it,” perhaps at least maybe a little on us that we didn’t deliver the advice in the right way or the way the client needs to hear or the way the client needs to engage with it in order to get there. But then as you’re highlighting like, well, sometimes that’s because there’s a whole bunch of other issues that you just barely scratched the surface on and I’m built to be a financial advisor, I’m not built to do the level of ongoing therapy that you’re talking about. So, I think I’m just trying to reconcile, how should we be trying to draw that line for where we go with clients, right? Like the group where we give the advice and they take it, I know how to handle that. Great clients.

Ed: Right. Right.

Michael: The ones that are like I gave the advice, and they didn’t take it, at some point, there’s a place where you’re like, “Well, it’s either me or it’s them, I didn’t give the advice well or they got some other stuff going on.” How am I supposed to figure out which is which, right? Because I’m wearing my advisor hat, I’m not going to go the therapy route, so I do need to figure out if this is how I’m giving the advice or if this is a therapy issue for them. How am I supposed to get there and reconcile this?

Ed: Well, I hope that this is not hubris, but it may be, so forgive me if it is. I would just start with the assumption that there probably are therapeutic needs there. Now, let me backpedal that a little bit and just say not everybody is going to go to therapy. And I think that sometimes we have this bias that things have to be really bad or really severe to go to see a therapist and that is just not true. That’s actually part of the mental health crisis in our society is we wait way too long because we normalize stress and discomfort in relationships. “Well, that’s just the way it is, relationships are just hard, they’re just challenging, it’s normal to feel a little lethargic.”

Michael: Yeah, humans are going to human sometimes.

Ed: Oh, yeah, and trust me, I am up there with the best of them. So, this is not an easy space, but I would say, you have to kind of take stock for yourself, hearing what we’re talking about and asking yourself, “How far am I comfortable trying to go into this?” And in some ways, we might say, well, those advisors that are setting those really strict harsh…in my language, harsh boundaries, are probably doing a lot of people a service because they’re not setting up false expectations or rejecting clients because they won’t do what they’re saying. Right?

And looked at it that way, on the other side of it is like I think that there’s a lot of planners that really genuinely want to help people and get more and more curious about, “How do I help people at a different level than giving them advice about what to do with their money, but more about advice on how to live life?” And I think that’s more often where it starts, right? And that’s where we see the conversations moving into like values-based conversations, goal-setting conversations, and advisors really loving that space and there’s a great need for that as well.

Michael: So, I guess if we get to that crossroads…to me, at the core, you’re kind of giving us a different tool in the toolbox, so just that situation of like, “I gave the recommendation, they didn’t do it,” I probably at least tend to…I usually take a second try like, “Okay, maybe I didn’t serve this stuff well, let’s try this again.”

Ed: Yeah, absolutely.

Michael: And at some point, there’s like a second or a third time, it’s like, “Okay, it’s just clear this isn’t sticking, we’re making a recommendation, they’re not doing it,” or they do it and they immediately fall off the wagon in that we made the budget and then they fell off the spending wagon almost immediately. On the one hand, I had already gotten to that point, I guess, fairly early on of recognizing that sometimes the best thing we can do in that moment with clients is just to stay in the moment like you’ve come to my office a couple of times to talk about this, and we formulated a plan that seemed like we were all together with the plan. And now you come back to my office again and it’s still not working, or you haven’t implemented it or you did it but it keeps running askew. What’s going on here that you keep saying you want to do it and then it’s not going well or it’s not happening at all? Because you keep coming back to my office, you keep coming to ask, and then it’s not happening. Let’s just recognize that for a moment and ask what’s going on here?

Ed: And I think that’s really even doing clients a huge service is to be able to name that in a non-judgmental way, not in like, “Well, what’s wrong with you?” Or going into the self-deprecating or self-loathing, “Well, there there’s something wrong with me, tell me what I’m not doing right for you.” And it can be more of a collaborative compassionate conversation about, “I’m curious, we’re working together, my perception is you trust me, I trust that you want to do this, do you have any sense for what’s making it difficult for you to stick with this?” And for clients that have higher amounts of insight, they may really be able to describe that.

Michael: So, what happens when I…or I guess I’m wondering, if I open this door, I can also envision sometimes perhaps they’ll be able to name it and we can just kind of move on there, sometimes that’s all it takes. Other times, I’m envisioning either they’re going to basically say like, “I have no idea,” because there’s deeper stuff there to process, or they have a lot of ideas of what it is and a whole bunch of drama starts coming out pretty quickly. And so, I guess I’m just trying to envision from your end as the financial therapist, if I have this realization as we go in, “Okay, there’s stuff here you got to go deeper on,” do you got to go deeper because you can’t figure out what it is or you got to go deeper because there’s a lot of stuff that’s coming out that’s beyond what we’re going to do in an advisor-client context? How do I set up that conversation that basically say like, “You need to meet my friend, Ed?” How do I turn this into a referral in a positive way for the client?

Ed: Absolutely, yeah. And I really appreciate you asking that question, it’s one that I talked with advisors a lot and actually, we’ll do training with them to help them get comfortable with doing this. But in a very practical sense, what I encourage advisors to start to do is on all new client onboarding, this is for…so, easy for new clients to do this, right? But it’s just to say, “Hey, this is our firm, this is what we do, we recognize that people often have a number of different professionals in their life.

Do you have an accountant that you work with? Do you have an attorney you work with? Are there other professionals I need to know about that you work with?” And then you just say, “We often find that the topic of money and families can get complicated sometimes and there can be some difficult emotions. Are there any mental health professionals or family counselors that you work with or have worked with? Is that something you would be open to talking about?” And so, you’re just saying in a very normal, non-judgmental way, and it’s just kind of folded into like, “We care about our clients,” and the whole thing and you’re naming what is true for a lot of clients.

Michael: So, do I… I’m just trying to process really practically, like is that a conversation in new client? Is this on my onboarding form? Like, there’s just, “Who are your other professionals like CPA, attorney, broker?” We often have a bunch of blanks for this already, so I add a line for your mental health professional and then like a little checkbox of, “If you don’t have anyone in this area, are you open to being referred someone in this area?” And they can check it or not?

Ed: That’s right, yeah. And I think it’s really about…and the culture is shifting pretty quickly now. I realized that there’s still many people that are uncomfortable with mental health, but there’s no judgment in that, right? There’s no intended…we didn’t realize that people may take some judgment in that and that’s why we’re giving the option to say, “Yes, I’m open to talking about it,” and even on the intake form, so, you have that presumably before you even have the first conversation, now you know are they open to having this conversation or not.

If they don’t check their box and they leave it blank, then you just go on about doing your business as normal. And if they mentioned it, then you just say, “Hey, I noticed you put down so and so for CPA, so and so for this, so and so for a counselor, if we get to a point in talking about your finances, is that something that we can talk about when is the right time to get that help for you?” And it’s from caring and compassion, no judgment.

Michael: So, how do I navigate this when I didn’t do that 1, 2, 3, 5, or 10 years ago when I first started working with this client, but I’ve come across the issue now that I need to deal with. So, how do I broach this conversation here?

Ed: Yeah, I think the first time that you broach this conversation is not in the moment when you think they need it. So, that’s the big key. Right? If you have existing clients and it might even be in your annual review, just start folding in some language that says, “Hey, as a firm that is growing and we’re understanding our client’s needs better, look, we just came out of this big COVID era, we realize a lot of people are working with mental health professionals and that money can be really stressful. Is that something that’s relevant for you? Is that something that you’re open…or maybe even not relevant, but is that something you’re open to talking about?”

And that way, you’re using cultural context and normalizing that more and more people are doing it and as a firm, you’re aware of it, and if they want…I think most planners are perceptive enough to realize like, “Yeah, they’re totally not going to…they don’t want to do that.” But if you present it in a way where you’re not anxious about it, I think planners will be really surprised at how many people appreciate that they’re at least thinking about it. Right? Because I think the other side of it is think about it from the client side, how much would you love to be able to talk with your planner and be able to acknowledge, “Yeah, I have this issue,” or, “I can tend to feel really depressed when my mom calls and ask for another $200, I just don’t know what to do with her?”

Yeah, I’m making something up, right? But I know that there has been many times where I wish that my planner were more comfortable talking about the reality of mental health issues. I have struggled with pretty profound PTSD and depression at times that’s really impacted my ability to show up in my family’s financial life but I didn’t feel like I could talk about it with the planner without them getting completely uncomfortable. And so, maybe a little bit of this is coming with my own agenda too but I think…and that’s not to say I want my financial advisor to deal with my mental health issues, but just for them to know that that’s something that’s significant for me, no different than if you think you’re going to place insurance, you’re going to start to find out, “Do they have a cancer history? Do they have diabetes? Do they have other major health risk factors?” Even if placing insurance and a lot of times, right, your mental health becomes a part of that criteria, right?

Michael: And so, then what do I do if I…like I do find myself in the moment, right? We’ve gone here, what were we saying earlier, you’ve been coming in to implement this but it seems like it’s been a struggle to follow through with what’s been difficult for you to stick with this, and stuff starts coming out and it’s like, “Oh, okay, this is more than my scope as a financial advisor.” How should I try to handle that in the moment if I didn’t have a history of talking about mental health with clients? So, that groundwork wasn’t done in the past but I’m here now.

Ed: Michael, can we try something? Can we just do a very short little roleplay?

Michael: Sure.

Ed: So, can you be that distressed client, and I’ll try to be the financial advisor?

Michael: Sure, sure. So, had my budget recommendation or what we picked on the budgeting already but…so, we can maybe even do something a little bit more directly, I guess, tangible for a lot of us. So, I was supposed to get the paperwork to roll over the 401k plan and still haven’t gotten it, keep saying I want to work with you but haven’t gotten the paperwork.

Ed: Yeah. Hey, Michael, it’s good to see you today. We’ve been working on your 401k and getting that rolled over. How’s that been going for you?

Michael: I keep meaning to get the paperwork cracked up but things have just been really hectic at work lately, so I’m sorry, I haven’t gotten around to getting the forms I have to get from HR.

Ed: Oh, so things are really hectic for you at work right now?

Michael: Yeah, just it’s been really busy, there’s a big project we’re all working on and I know I’m supposed to get the paperwork done, I’m so sorry I keep screwing this up.

Ed: Wow, it sounds like you feel pretty bad about screwing this up.

Michael: Yeah, I know we are supposed to get this done and I’ve been meaning to fix it for a long time but it’s just been so busy.

Ed: Michael, I’m wondering do you have any other ideas about why you might be stopped in getting this taken care of?

Michael: Well, I guess it just feels weird doing the rollover from my old 401k, I was really attached to the company for a long time and we didn’t end on really good terms. And so, it’s just a lot to deal with right now.

Ed: Oh, it sounds like there’s some deeper emotional meaning for you about having worked at this last company and not ending on good terms and maybe you’re a little…it sounds like you’re stuck in that.

Michael: Yeah, it got really, really messy at the end, there was a bunch of drama with my boss and one of our co-workers and I just had to get out of there.

Ed: Oh. Wow, I can imagine in some ways you may not think about it this way, Michael, as traumatic, but it sounds like that may have been a little traumatic for you even.

Michael: Yeah, I guess it was in retrospect.

Ed: Michael, I can appreciate that I get to work with a lot of clients who have gone through some difficult transitions and sometimes they get stuck a little bit. And in my past experience, they’ve appreciated even talking with a counselor about kind of their work history and what’s going on there. And then sometimes for my clients that work a lot, there’s other issues in their life that have maybe led them to working a lot and making it hard to attend to other details that they say are important. Would you be interested, or have you ever talked to a counselor in the past?

Michael: No, I haven’t but I guess that’s kind of true for me.

Ed: Yeah, and there’s no judgment. From my standpoint as a planner, my job is to be here to help you with your financial life and to make transitions and I can help you start to think about how to find a counselor if you want or if you want to do that on your own, I respect that. But it’s something I just want to put on the table for you to consider.

Michael: Well, I guess I could try it. I don’t know where to get started, though.

Ed: I can appreciate that. We have a couple of counselors here that we know in the community. Some people like to even use “Psychology Today,” it’s a website with a bunch of different counselors and you can look at the different profiles and start to see who might fit well for you. But I know that there’s a lot of counselors that work really great with clients who have stress around work and feel overwhelmed by it and may even have some past painful stuff around work.

Michael: All right, I can try that.

Ed: Great.

Michael: Interesting, interesting. So, now reflecting on the conversation in the end and the flow of just bring that back to sort of naming what’s going on and acknowledging it and validating it and creating the space.

Ed: Yeah, that’s right. That’s right. I hope that there was no…you heard no judgment in my voice and as I just kind of name and validate it and then went quiet, it allows you space to elaborate a little bit more and that’s where that kind of spilling out comes. And I think what we can trust as financial advisors is there’s always a more complicated story than the one that’s being told. And part of the reason that is, is a lot of times, we don’t need to tell the whole backstory to get the message across and the details done.

But when people are stuck, there is an important backstory that is likely stopping them from moving forward and that’s what we’ve been talking about through this whole podcast, right, is when do we try to open up that backstory a little bit more and try to be helpful with it and when do we just say, “Whoa, okay, now there’s more backstory, let’s find a mental health professional?” Because mental health professionals, that’s our bread and butter, that’s what we love doing, right? Advisors love putting together portfolio recommendations and integrating with tax efficiency and all of that stuff, bread and butter for you at some point. Working with backstories and helping people move forward is bread and butter for a therapist.

Michael: I really like that framing of…how did you say it? Like, there’s always a more complicated story than the one being told and when people are stuck, it’s usually the backstory that’s keeping them from moving forward.

Ed: That’s exactly right, yeah. And that’s just one of those general rules of thumb that we can have is as humans, we only let people into our story as much as we can trust them and we all have more complicated backstories than what meets the eye, right? People may feel like, “Oh, well, I know Ed pretty well, man, he shared a lot on this podcast,” and that is true but there’s still so much you don’t know about me. And Michael, right, in the context of you’ve been interviewing me, so I’ve been sharing more of my story, I feel like I know you, I feel like I really like you, but I know there’s a lot more to Michael than what I’ve learned here, right?

And so, I think that we can just trust as advisors and as therapists that there’s always a more complicated backstory than what meets the eye and than what’s being told and that doesn’t mean that people are trying to be deceitful or overly private. We earn the right to hear people’s stories, especially for clients that are more reserved in sharing their story. Sure, there are some people that will tell you their whole life story without thinking twice about it, but there’s plenty of others that will be more guarded or graded in how much they share.

The Surprises Ed Encountered On His Journey [1:21:56]

Michael: So, as you’ve gone down this path, what surprised you the most about trying to build a business around this?

Ed: Oh, man, I can tell you probably the hardest part and it’s in retrospect now of understanding some of this, marketing financial therapy in the first four or five years was absolutely painful and there was two sides to that coin. One, I was painfully insecure and uncertain about what I meant by financial therapy. And the other side of it is the industry because my brilliant business plan is, “Well, I’m going to come out, I’m going to razzle and dazzle all these financial planners with my education and they’re just going to be so excited to send me clients because they don’t want to deal with this stuff.” Right? That was kind of the concept. And, well, that just didn’t prove to be true in any stretch of the imagination and I had to beat my head against that wall for years.

Michael: Well, I think the challenge for some of us, we so don’t want to deal with this stuff that we don’t even want to open those doors sometimes in the client conversation or as noted, if we do, we’re trying to move on from it as quickly as possible as opposed to saying, “Oh, yeah, let’s hang out in this space for a while.”

Ed: Yes, absolutely. Right? And I think that that’s something that I kind of appreciate and it took some time and maturity. And I think, fortunately, now many years down the road, where I do know what I mean by financial therapy and I can speak to it confidently and from a place of experienced practice, that makes things a lot easier. And concurrently, the field of financial therapy and even financial coaching, which is, I think, more amorphous, has continued to grow and the language and the idea at a cultural level is becoming more widespread, so that’s certainly helping with the business-building side of things.

And then as a business owner, my self-concept as a business owner has matured, and working with my own therapist and my own business coach and learning about practical things like SEO and also just hiring somebody else to help me with SEO was a game changer. And I think I tried to network my way to client success and that just wasn’t taking off and working with some really great website SEO folks, especially around therapy, really was where I got a lot of that traction. And so, fortunately, now my caseload stays full for the most part.

The Advice Ed Would Give His Former Self [1:24:20]

Michael: So, what else do you know now you wish you could go back and tell you from like 10-15 years ago when you were starting into the financial advisor world?

Ed: Oh, man. I hope that I would have been able to understand this as a framework but I think…I’ve become a really big fan of growth frameworks, right? And I think most people first think of like Maslow’s hierarchy of needs, but it’s like we start out not even knowing what we don’t know. But saying like you’re going to go through that phase and then you’re going to go through this phase where you start to realize that you don’t know that much and it’s going to feel terrifying and overwhelming and that’s okay, there are lots of people out there that want to actually help you succeed.

And then you’re going to start to learn and know things and develop your confidence but that insecurity from phase two is still going to linger around and make it hard for you to feel confident about what you really know and that you have learned some things. But then in the fourth phase is really knowing what you know and being comfortable with the reality that there are things that you don’t know and that you may never know, and that’s okay.

Michael: Okay, this rings a bell, this is the whole like I’m unconsciously incompetent, then eventually, I’m consciously competent because I figure out my stuff. It’s that progression.

Ed: That’s the progression, right? And so, I don’t know how much 22-year-old or 25-year-old me could have wrapped my head around all of that because that’s one of those things that’s like as we grow into that wisdom and we can look backward and say, “Well, here’s the path that I traveled,” it’s really hard to see that on the forward side.

The Low Point On Ed’s Journey [1:26:01]

Michael: So, what was the low point for you on this journey?

Ed: Well, I want to be very conscientious of your listeners, but I do want to own in full transparency. I mentioned that I’ve struggled with major depression. And so, there was a period of time after coming out of grad school where I really knew like…in that framework, right, I realized, “Man, if half of what I just learned is actually true, I got a lot of stuff to figure out.” And so, I really went on a quest to try to understand where is my pain in my life because I had a period of time where it’s like nothing bad happened to me, I had a good family, I don’t have any trauma. And there was a period of time where I was deep in my own depression and working with a therapist and trauma-focused, and there was some very, very painful childhood trauma that came up that just rocked the foundation of my world and my understanding of myself and my family, and it took a long time to put all the pieces back together through that.

I’m grateful to say…you know, it’s one of those things where you’re not grateful for it when you’re going through it but on the backside, you are, as cliche as that is. And I write about it in my book, “The Healthy Love and Money Way,” my own story of really finding my way to the bottom of my own pain. There’s that cliche phrase, “You got to find your rock bottom before you change.” And I didn’t hit it through addiction, but I did hit it through searching out for my own trauma and I got there. And so, that’s not really exciting stuff to hear if you haven’t been on that kind of transformational journey. It may even scare a bunch of folks and I’m sorry if that’s what I’m doing, but that’s at least my truth and the truth that seems to be true for many other people that go on to really be able to have a profound impact in other people’s lives.

The Advice Ed Would Give Advisors Considering Integrating Financial Therapy [1:27:45]

Michael: So, what advice would you give someone that wants to go…wants to start going down this financial therapy route in their own learning or journey?

Ed: Yeah, absolutely. So, I’m deeply involved with the Financial Therapy Association, I’m on the board there. And I would say that it’s an incredibly supportive community of professionals that are both financial planners and therapists, and many of them have been on their own healing and transformational journey both with money and life in a larger context, and many of them are kicking the tires on it and trying to figure out what that means for them. And so, I think from…taking a transformational journey, nobody else can do it for you, but it certainly helps to have people around you.

The Next Steps In Ed’s Journey [1:28:31]

Michael: So, what comes next for you?

Ed: Well, I appreciate you asking that. I just mentioned my book. I have a new course that I’m putting out for couples called “The Couples’ Guide to Financial Intimacy,” which really puts on the table for couples’ major psychological elements that are blocking them from fostering financial intimacy in their life. And then getting to speak at large planning conferences, going in-house to planning firms, and providing training, whether that’s group training or one-on-one coaching and mentoring for financial planners that want to really dig deeper into this material, I’ve started to do more and more of that work and it is incredibly rewarding to see financial planners start to connect links between their own relationship with money and their own money history. And there’s nothing more painful than as a financial planner to not be able to get along with your partner around your finances.

Michael: As a planner.

Ed: As a planner. I think there’s a special type of pain around that because it’s like, “Wait, but I have all this training and all this knowledge and we still can’t get on the same page?” Right? You can’t cry, “Mea culpa, I don’t really know what to do with money.” No, you know what to do with money but if you can’t execute that in your own life, that’s a really painful place to be. And so, I’ve been very fortunate to work with planners within the therapy context both individually and in their intimate partnership. And one of the most important things for planners to realize if they haven’t realized it already is you cannot be your family’s financial planner, you just can’t see it clearly enough. You may see some of the number details but you’re just going to miss so much of your partner’s details, views, values, it’s too muddy. That’s why I can’t do couples therapy with my wife and I despite me trying for probably too long and not formally, of course.

Michael: Of course, of course.

Ed: But I would ask way too many family of origin questions and…yeah. So, my encouragement, if you’re a financial planner and you’re struggling to do planning in your own family, please get your own financial planner. And if that doesn’t help, please come see a financial therapist.

What Success Means To Ed [1:30:37]

Michael: So, as we wrap up, this is a podcast about success and just one of the themes that comes up is the word success means very different things to different people. And so, you’re on this fascinating path to success in your own business in building this direction, but how do you find…how do you define success for yourself at this point?

Ed: Well, so I’m 41 at this point in my life and I think about success a lot more now and what…I mean, maybe I’ve been thinking about success the whole time, but the way I think about it continues to evolve. And so, I think that’s successful, in its own roundabout way, is seeing the evolution of how I think about success. So, I shared earlier in this podcast, I was so focused on becoming wealthy and I was so enamored with how much money I could make as a financial planner that I really miss some of the deeper meaning and value. And so, my success now, I put it in two buckets.

One is more of the professional side, and it’s incredibly gratifying to sit with a client who has been working on a complex family dynamic and they get the courage to have the difficult conversation with a family member and they just say, “I feel free, I’m not burdened by this anymore, I know that I can survive, and I can do what I need to do.” And you give them a huge high five and, man, that lights me up big time. So, professionally, when I see people get through their trauma, through their depression, and through their anxiety, the relationship conflicts, man, that is huge success in my book. More on the personal side, if it’s just Ed, if I’m riding my mountain bike, man, that’s a huge success. I love mountain biking but I have three boys and I have a wife, and so they’re really the reason why I’m doing all of this. And success is when I get home and read a book and put the kids to bed, it’s getting them to bed without a major meltdown or brawl.

Michael: Because you have three young boys, so that really is a thing to get all of them down without a brawl.

Ed: Yeah, and I mean, let’s be really practical, Michael, if my wife and I get to sit on the couch and have a glass of wine and talk for more than 5 or 10 minutes before one of us falls asleep, that’s a huge win.

Michael: Amen. As a parent with three young children as well, I definitely can appreciate that.

Ed: So, yeah, that’s the practical…really, the practical stuff, I think, more personally, is watching my family grow and mature and being able to play my role of leadership alongside my wife’s role of leadership and helping to form the young kids that we’re raising because they’re the next generation, right? And that’s the nice part of being at this point in life is you start to realize like, “This isn’t fully about me.” It doesn’t mean that I don’t get to make some things about me, but there’s a lot that’s really just not about me.

Michael: Well, very cool. Well, thank you so much, Ed, for joining us on the “Financial Advisor Success Podcast.”

Ed: It’s been a great gift to spend time with you, Michael, and I appreciate your thought leadership and just genuineness, that’s a huge gift to the field of financial advisors.

Michael: Well, thank you. Thank you.