Recently I interviewed a special guest, Sonya Britt Lutter, who is a co-founder of the whole financial therapy movement and of the Financial Therapy Association.
Sonya described her path to financial therapy as a long and winding road. She originally went to Kansas State intending to be a speech language pathologist, until she found that the science required for that profession was not a good fit for her. The financial planning program was in the same academic building, so she moved to financial planning. As she said, “I like numbers. And both fields have the same outcome, where you get to help people and help them live authentically and happily.”
Also located in the same academic building was marriage and family therapy, which is how she found her way into a master’s program in therapy from 2003 to 2005. This made her one of the few professionals at that time with degrees in both financial planning and therapy.
She realized that many of her colleagues in therapy knew essentially nothing about personal finances. So they were terrified to have conversations about money, particularly with their couple clients, even though money is a common source of conflict for couples.
Similarly, she realized that her colleagues in financial planning were at a loss for what to do when clients started arguing, crying, or otherwise getting emotional during financial planning meetings. It was eye-opening for her to realize how big of a disconnect there was at that time between financial planning and therapy.
After some experience with the workshops on healing money issues that Dr. Ted Klontz and I did through Onsite Workshops, Sonya decided to get a PhD and do more research in financial therapy at Texas Tech. She then began teaching in the financial planning program at Kansas State, where she became program chair for a department that included financial planning, early childhood education, conflict resolution, marriage and family therapy, family consumer sciences, education, human development, and family studies. She described this experience as “fantastic in terms of the holistic vision of financial therapy because it’s never just the finances and it’s not just the therapy elements.”
During this time, she and two colleagues, Christie Archuleta and John Grable, decided to explore forming the Financial Therapy Association. The initial meeting was held in 2008 in California. The 30-some professionals who attended agreed to form an organization, and the Financial Therapy Association was created in 2010. Sonya was its first president and served in that role for three years.
In the years since, one of the issues and challenges has been clearly defining what financial therapy is and who is a financial therapist, especially as the field of financial planning has moved toward addressing more of the emotional concerns that affect people’s money behavior. One issue is where on the continuum from financial planning to financial therapy does an individual professional want to practice.
As an example of this shift, the CFP Board recently published a book titled The Psychology of Financial Planning (Sonya was an editor and I was a contributor for the book.). Sonya pointed out an important distinction between the psychology of money and financial therapy. Psychology is the science or study of the mind, particularly as it relates to your behaviors and emotions. Therapy is the means to treat.
Psychology merely implies that you recognize what’s going on and that you know how to make a recommendation for treatment. Can a financial planner treat clients? Probably not, unless they have training for the financial therapy end of the continuum. It is similar to a financial planner having the skills to recognize what clients need and, rather than drafting contracts or preparing tax returns, referring clients to attorneys or other appropriate professionals.
Check out The Financial Therapy Podcast by Rick Kahler concerning this topic.