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Are money matters creating major issues between you and your partner or a family member? Is stress about your financial situation affecting your mental or physical health? If so, you may want to consider hiring a financial therapist.
What is a Financial Therapist?
A financial therapist is a professional who pairs mental health treatment with financial planning services. They apply their extensive knowledge and training about the psychology of money to help clients reduce money-related stress levels and lead higher quality lives.
With a financial therapist, clients can figure out what causes them to overspend on their credit cards and why they put off saving and investing for the future. They can also help clients whose breadwinning status bothers them or who frequently argue with their spouse about money matters.
Since many financial decisions are made with emotions, working with a financial therapist can be quite beneficial. They can help clients find meaning and purpose for their money and get to the bottom of subconscious beliefs that may be holding them back from succeeding with their finances.
Financial therapists can help clients understand and accept their feelings about money and design plans to meet their financial goals like retiring or paying for college.
Some financial therapists have a counseling background and later hone in on their financial competencies. Others are well-versed in financial planning and add on counseling expertise. And an increasing number of financial professionals are becoming members of the Financial Therapy Association and pursuing their Certified Financial Therapist-I designation.
Should You Hire a Financial Therapist?
A financial therapist may be well worth the investment if your finances often affect your emotions and you feel your mental or physical health is suffering as a result. With a financial therapist’s guidance, you can:
- Alleviate Financial Stress: If you find yourself stressed about money, a financial therapist can help you uncover the cause of your worries. You can count on them to help you design a plan to alleviate your financial stress and ensure money doesn’t take a toll on your mental wellbeing.
- Resolve Money-Related Relationship Issues: Money is a significant part of most relationships. If it negatively affects your marriage, for example, a financial therapist may be a good option. They often support couples who struggle because one spouse is a spender while the other is the saver, or one spouse feels resentment toward their partner because of how much they earn.
- Stop Overspending: If you tend to overspend and/or have a track record of maxing out your credit cards, a financial therapist can help you determine why you do so. Then, they may design a game plan that allows you to take better control of your money and resist the urge to spend more than you can and should.
- Overcome a Difficult Financial Situation: There are a number of financial situations that may leave you feeling depressed and overwhelmed. If you’re facing high levels of debt, an unexpected loss of income or assets, an increase in financial responsibilities, bankruptcy, or foreclosure, a financial therapist can help you get through it.
If you simply need financial planning services, a financial therapist isn’t necessary. However, if money negatively affects your everyday life and hinders your mental health, this type of professional can certainly improve your situation.
What is a Certified Financial Therapist?
A Certified Financial Therapist is a mental health or financial professional certified by the Financial Therapy Association for their education and experience in the areas of financial therapy, financial planning, counseling and therapeutic competencies.
Those who hope to earn a Certified Financial Therapist-I (CFT-I) certification must fulfill certain requirements set forth by the Financial Therapy Association. Here’s a brief overview of the requirements:
Candidates must hold a bachelor’s degree in either a financial field like finance or economics or a mental health field such as social work or psychology. However, those who already hold a Certified Financial Planner (CFP) or Accredited Financial Counselor (AFC) designation may be eligible with a bachelor’s degree in any field.
If someone is interested in earning a financial therapist designation but does not meet any of the education requirements, they may request a special review. During the review, the FTA Committee will consider their credentials, experience, formal education, and personal references to determine if they’re a good fit.
Those who wish to become financial therapists are required to complete 500 hours of related paid or volunteer experience. While half of these hours must be direct client service, the other half can be a combination of writing financial plans, performing peer-reviewed research, conducting professional presentations, and more direct client service.
There is a comprehensive CFT-I exam that candidates need to pass to become certified financial therapists. The exam is made up of 100 multiple choice questions and must be taken online within two hours.
To prepare for the exam, candidates may complete the FTA’s educational video series and engage in additional self-study opportunities.
Candidates will need to sign an agreement that states they adhere to the FTA Standards of Practice and Code of Ethics. The agreement mentions that they’ll have a fiduciary relationship with clients and lists out acceptable forms of compensation.
Upon earning a certification, financial therapists are required to pay an annual renewal fee and submit 20 hours of continuing education every two years. They must fulfill these minimums: 8 hours in Financial Therapy (minimum of 2 hours in FTA Ethics), 6 hours in Finance, 6 hours in Mental Health.
Advanced Designations: Certified Financial Therapist-II and -III
Upon earning the Certified Financial Therapist-I (CFT-I) designation, professionals will soon be eligible to pursue Level II and III certifications planned by the Financial Therapy Association. These designations will expand upon the foundational knowledge attained in Level I with advanced knowledge and skills for those deeply dedicated to the field of financial therapy.
What Do Financial Professionals Have To Say About Financial Therapy?
Nathan Astle, M.S.
Nathan Astle, M.S.
Board Member, Financial Therapy Association
“Certified Financial Therapists are uniquely trained to help people stuck in the intersection of money and emotions. Education about money, budgeting, credit, loans, etc. is certainly helpful in making money decisions.
However, CFTs™ go a step further to help uncover some of the beliefs, emotions, and behavioral patterns that make implementing financial advice difficult. The end goal of financial therapy is financial health but also to increase overall well being with your financial, emotional, and mental health.”
Kelley Long, CPA/PFS, CFP®
Kelley Long, CPA/PFS, CFP®
Member, Financial Therapy Association
“Financial therapy is a quickly growing field that addresses the fact that many people’s financial situations, or at least how they feel about their financial situation, have very little to do with actual money, and are more about their unique money habits, mindsets and histories. A financial therapist can help open your eyes to long-standing patterns you are not even aware of that are getting in the way of you making progress toward financial security, and they can also help validate your concerns while helping you create a plan to work through your money challenges.
Because financial therapy is a combination of two fields, each financial therapist will have a unique way of working with clients. Some financial therapists are mental health professionals who have done additional education on personal finance concepts in order to help their clients address the mental aspects of money, while others are more traditional financial advisors who differentiate themselves from the crowded field by offering financial therapy services or using the concepts that apply to therapy to better help their clients achieve their financial goals. You can always expect a financial therapist to be prepared to help you with the psychological side of money, but depending on the professional’s practice, you will find some that are more therapy-focused while others are more financially-focused.
No matter what, you’ll want to make sure you are working with someone that you feel comfortable being yourself around – if you don’t feel like you can be open and honest, your therapist won’t be able to help you as much as you deserve. That will require you to have a certain bit of vulnerability going in, but also trust your intuition. Not everyone is a good fit, and that’s not a negative thing for either of you, there are just some people who you click with better than others – this is especially important if you’re looking to do some deep work on your relationship to money.
At the end of the day, the right financial therapist can literally change your life. It might not happen in your first or second meeting, but doing the work on your relationship with money is totally worth it – as I like to say, get ready to find your financial bliss!”
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How To Find The Best Financial Therapist For You
You’ll find a growing number of financial professionals featured on Wealthtender in 2021 who are members of the Financial Therapy Association or who have earned their CFT-I designation.
The Financial Therapy Association also maintains a list of financial therapists with details of their qualifications and whether they offer therapy at a distance online.
Remember that many traditional therapists may include finances among the things they are willing and able to help you with. This is especially true of couples therapists, given how often money becomes an issue of conflict between partners.
However not all therapists have a financial background or a thorough understanding of the emotional aspect of dealing with finances, so finding a specialist financial therapist can be worth the effort.
You should also know that not all financial therapists are state licensed mental health providers. Accordingly, you should be aware working with a non-licensed financial therapist may lack protections for you in certain areas (like malpractice, for example).
Finally, it’s important to interview more than one financial therapist to help you choose a therapist who is a good fit for you. Most financial therapists will offer a free initial consultation to help both of you ensure you’re a good match to work together.
What is a Certified Financial Therapist?
A Certified Financial Therapist is a professional who has earned the Certified Financial Therapist-I (CFT-I) designation issues by the Financial Therapy Association. Individuals who earn this designation must meet educational and experience requirements across three areas, including 1) financial therapy, 2) financial planning and financial counseling, and 3) therapeutic competencies.
How can I confirm the financial professional I’m working with holds the Certified Financial Therapist-I designation?
Visit the directory of Certified Financial Therapists on the Financial Therapy Association website.
What if I have a complaint about the Certified Financial Therapist I’m working with?
You can contact the Financial Therapy Association by email at firstname.lastname@example.org.
Where can I learn more about other professional designations held by financial advisors and coaches?
Refer to this list of popular financial certifications prepared by Wealthtender to help you learn more about each designation. You’ll find a brief description of each certification, plus links to in-depth articles if you want to learn more about a particular designation.
About the Author
About the Author
Brian is CEO and founder of Wealthtender. He and his wife live in Texas, enjoying the diversity of Houston and the vibrancy of Austin.
With over 25 years in the financial services industry, Brian is applying his experience and passion at Wealthtender to help more people enjoy life with less money stress.
Disclaimer: The information in this article is not intended to encourage any lifestyle changes without careful consideration and consultation with a qualified professional. This article is for reference purposes only, is generic in nature, is not intended as individual advice and is not financial or legal advice.