Frequently, financial planners experience the frustration of clients failing to follow recommendations. A planner might spend hours reviewing the tax code, filling out paperwork, developing meeting materials, analyzing information, and developing a comprehensive financial plan. Sometimes a planner presents the plan only to have a client nod and agree but later fail to implement recommendations. This can be annoying and confusing for both the financial planner and client. It is reasonable to ask why this sometimes happens. When implementation stagnation occurs it may be time to help a client think about the ways behavioral and relational problems impact the household financial situation.
Financial therapy provides one way to help financial planners start complex behavioral questions with their clients. Financial therapy draws from research and practices in the fields of financial planning, marriage and family therapy, social work, and other fields to address complex problems that can devastate a client’s financial situation. For example, a planner may notice clients with marriage problems that are bringing the couple to the brink of divorce. Not only will divorce devastate the financial plan, it may tear apart the family as well. In this situation, a financial planner could address the financial implications of the impending divorce while a marriage and family therapist could address the relational and psychological issues present in the situation; however, a financial therapist might address the broader spectrum of issues rather than focusing only on financial or relational issues.
This semester, the Lab team has been hosting a monthly seminar series where a small group of faculty members, practitioners, and graduate students meet to discuss current research and develop innovative research ideas based on connections between allied fields.
During the most recent seminar, a group from the fields of financial planning, marriage and family therapy, and social work gathered to discuss the application of social work treatment plans to the fields of financial planning and financial therapy in order to address financial, behavioral, and relational issues simultaneously.
Social work treatment plans are frequently used to develop an effective strategy to treat problem behaviors identified by a social worker and the client. As in the financial planning process, social workers help their clients identify goals, the problem behaviors preventing the achievement of their goals, and the steps that need to be taken to reach goals. Treatment plans, like targeted financial plans, must be adapted to account for changes in circumstances and attitudes. Social work treatment plans tend to be very strategic and goal oriented. These plans leave enough room for creative development to accommodate changes needed over time. Financial planners and financial therapists can learn a lot from the way social workers interact with their clients using treatment plans.
Treatment plans have four elements: problem statements, goals and objectives, interventions, and duration of treatment. Problem statements should concisely state the problems that are identified by both the client and the social worker in a full assessment of the client’s needs and circumstances. Problems that are most urgent or have the greatest short term impact (i.e., crises) should be listed first. Problems which are the root cause of other problems should also be prioritized. Second, treatment plans list the treatment goals that address the specific problems which have been identified. Underneath each goal are the objectives, which are broad descriptions of desired outcomes. Finally, the treatment plan describes which interventions will be implemented to accomplish the desired outcomes and outlines the duration of the intervention’s implementation.
When financial planners need to address stressful situations when working with clients, the traditional financial plan may not be as useful as a treatment plan. Thinking about interventions to address behavioral issues during the planning process can help planners better serve their clients and make a more meaningful impact. Future research is needed to address the lack of evidence-based financial planning interventions available to planners. Future research should endeavor to find and test interventions and solutions which can help clients achieve lasting behavioral change and address both their financial and relational problems. Lab seminars are one way we hope to launch some of these efforts.