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Financial Planning
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A Practical, Low-Cost Approach To Helping Couples Resolve Conflicts Over Money And For Working With Clients Whose Behavior Does Not Match Their Goals |
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Monday, May 07, 2012 23:19
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Tags: client communications | financial planning | hehavioral finance | investor behavior | life planning With many life-planning programs providing training to advisors to help them advise clients on the “soft side” of money, here’s a a simple but effective low-cost methdology for helping couples resolve conflicts over money and for coping with clients whose behavior is inconsistent with achieving their goals.
There is no extended training program associated with this technique and there is no certification process connected to it. It is not a proprietary program and it’s open to anyone who feels comfortable using it. If you're a private wealth advisor, please join Advisors4Advisors (A4A) to get its full benefits. Register now, and we will donate $20 of our $60 membership fee to Bubbles The Clown’s financial literacy program, and you can post an icon on your website saying you support Bubbles' 501(c)3 charitable organization. Plus, get other membership benefits, including: - Analysis daily of issues affecting advisors
- Aggregation of news from dozens of sites targeting wealth managers
- Reviews by advisors of practice management applications
- 30 independent experts blogging on advisor business issues
- 24/7 access to webinars with 50 hours of CFP® CE and 100 hours of IMCA CE
Register Now |  |
 It’s a physical card sort, a different process than a long interview or questionnaire. The approach was developed in connection with the Money and Family Life Project at the Ackerman Institute For The Family.
The cards come with a book entitled, Money and Meaning, by Judith Peck. The book comes with two sets of “Values Card” and the instructions for their use. You can find the cards online for free, but you’ll want to read Peck’s book to learn how to use them in your work with clients.
One deck of cards represents content values and the other deck represents process values. Clients sort both sets of cards into an order reflective of their value priorities, facilitating what can otherwise be a difficult conversation.
This methodology was developed by a consortium of financial planners and therapists, not by any one individual or group. I know many wealth managers who have found this methology of great value, but whether you use it would really depend on how comfortable you are tackling these issues with clients.
Please let me know how if you have questions about using the cards or helping clients with these issues.
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Here's A Chance For You To Participate In The Internet Movement To Improve Everything |
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Wednesday, March 21, 2012 19:49
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Tags: client education | family offices | fiduciaries | financial planning | investment fiduciaries | investor behavior | leadership | Offbeat | profession
Here's a pre-written email financial advisors can send to local psychologists to get them to sign a petition to create a financial division at American Psychological Association.
If you're a financial advisor who wants to be treated like a professional, here's a chance to act like a professional: email psychologists to sign a petition to create a financial division.
If you're a private wealth advisor, please join Advisors4Advisors (A4A) to get its full benefits. Register now, and we will donate $20 of our $60 membership fee to Bubbles The Clown’s financial literacy program, and you can post an icon on your website saying you support Bubbles' 501(c)3 charitable organization. Plus, get other membership benefits, including: - Analysis daily of issues affecting advisors
- Aggregation of news from dozens of sites targeting wealth managers
- Reviews by advisors of practice management applications
- 30 independent experts blogging on advisor business issues
- 24/7 access to webinars with 50 hours of CFP® CE and 100 hours of IMCA CE
Register Now | |
Please consider even sending it to psychologists you do not know but who are in your hometown.
The No. 1 stressor cited by Americans for the last two years, according to the APA’s own annual survey, is money. Meanwhile, our society’s charitable class of mega-millionaires families increasingly suffer from drug and alcohol abuse and other dysfunction.
While depression, anxiety, and other psychological problems linked to money problems are afflicting more people than ever, the APA offers no specialized training to equip psychologists to deal with money-related psychological woes.
As a financial advice professional, it is in your interest to support creating a new body of knowledge in psychology, a subsection called financial psychology.
The pre-written email below makes it really easy for you to help psychologists better understand money problems and behavioral finance issues.
Dear Psychologist:
Wealth management and psychology seem unrelated. However, the two disciplines are colliding: The No. 1 stressor cited by Americans for the last two years, according to the American Psychological Association’s annual survey, is money. Meanwhile, our society’s charitable class of mega-millionaires families increasingly suffer from drug and alcohol abuse and other dysfunction.
While depression, anxiety, and other psychological problems caused by money are afflicting more people than ever, the American Psychological Association offers no specialized training to equip psychologists to deal with money-related psychological woes. That’s why I am writing you.
Dr. Mary Gresham, one of your colleagues, has petitioned APA to create a financial division to promote the study of financial psychology and specialized training to clinical practitioners. Please log into APA’s website to sign Dr. Gresham’s petition to create a financial division at APA.
Please also forward this email to your fellow APA members and encourage them to sign Dr. Gresham’s petition as well. It’s just the right thing to do.
Thanks,
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Psychologist Who Developed A Model For A Healthy Relationship With Money Says American Psychological Association Ignores Mental Health Problems Caused By Money; Petitions APA To Create Division Of Financial Psychology |
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Friday, March 16, 2012 17:01
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Tags: client communications | client loyalty | client satisfaction | family offices | investor behavior | life planning | profession | Wealth Management | women investors Dr. Mary Gresham, an Atlanta psychologist who has developed a model for structuring a healthy relationship with money for individuals, says the American Psychological Association (APA) has ignored the growing problem of American mental illness caused by financial issues and is petitioning the group to start a financial division.
According to the APA’s annual survey, Gresham says, the No. 1 stressor cited by Americans for the last two years has been money. Yet the APA has no formalized training or programs dedicated to the topic, she says. “Money has placed first for the last two years but psychologists don’t have any particular training to do financial therapy,” says Gresham. If you're a private wealth advisor, please join Advisors4Advisors (A4A) to get its full benefits. Register now, and we will donate $20 of our $60 membership fee to Bubbles The Clown’s financial literacy program, and you can post an icon on your website saying you support Bubbles' 501(c)3 charitable organization. Plus, get other membership benefits, including: - Analysis daily of issues affecting advisors
- Aggregation of news from dozens of sites targeting wealth managers
- Reviews by advisors of practice management applications
- 30 independent experts blogging on advisor business issues
- 24/7 access to webinars with 50 hours of CFP® CE and 100 hours of IMCA CE
Register Now | |
Gresham, who counsels wealthy families in collaboration with financial advisors, last August formally petitioned APA to create the new division. APA, she says, has dragged its feet every step of the way. With more than 154,000 members, APA is the largest association of psychologists worldwide. (A copy of Gresham's petition is reprinted below.)
“It took six months for APA to post my petition on its website and enable electronic signatures,” says Gresham. “I called them every week for six months because if I did not do that there was no way it was going to get done. It’s a huge bureaucracy.”
Gresham says APA already has 54 divisions. Creating a new division means every existing division receives fewer dollars from APA. So the existing powers are in no rush to create a Financial Division at APA.
Yet the need is acute, Gresham argues. Gresham says recent research by AARP shows a steep decline in financial wellbeing of Americans between the ages of 55 and 65, “because so many of them have lost jobs and, with it, health insurance coverage.”
Gresham says other developed nations with stronger social safety nets — Canada, Australia, New Zealand, Denmark, Sweden, and Norway — are not experiencing the same uptick in financial stress. (Impressively, Gresham listed those nations off the top of her head when asked about comparative data in other developed countries.)
Gresham’s passion stems partly from her discontent with the current academic home for family financial research. The leading scholarly journal for academics studying family finance, The Journal of Financial Therapy, is housed at Kansas State University’s department of consumer economics, which is the old home economics department, Gresham says.
“Psychologists did all the original behavioral finance research,” says Gresham, adding that Daniel Kahneman, the only psychologist ever to become a Nobel laureate in economics.
“We do better research,” says Gresham unapologetically. “It’s scientifically more sound because our studies are of better quality.”
Gresham, who earned her Ph.D. in Psychology at Georgia State University, formerly had a clinical practice but now specializes in working with wealthy families and their financial advisors. While doing her collaborative work with advisors and families, Gresham has kept one foot firmly in academia, proposing a model for “a healthy relationship with money.”
Gresham’s Model For Healthy Relationship With Money addresses four key aspects of an individual’s relationship with money: rational and mathematical; values and spiritual issues, emotional and relational aspects, and a process for exploring each aspect of an individual.
In addition to the stress problems caused by money issues affecting millions of Americans, Gresham says American society must address the intersection of mental health with money because its charitable class is facing a crisis.
Gresham says a Boston College study of ultra-high-net-worth families worth in excess of $25 million found are facing serious psychological issues. “The American Psychological Association is doing nothing to help these families, who are some of the most philanthropic families in the country,” says Gresham. “While there are some psychologists who have made this a practice area, the field of psychology is doing little to train psychologists how to address these issues.”
Says Gresham: “Money—whether you have too much, too little, or are just in-between— is a loaded issues like sex or food.”
More info:
Petition for the Division of Financial Psychology of the American Psychological Association
Dear American Psychological Association:
We ask that you consider our petition to establish a new APA division, Division of Financial Psychology.
The APA’s annual “Stress in America” Survey and other data suggest that concerns about financial issues are significant, multi-dimensional and pervasive. Results of the APA’s surveys consistently indicate money as a primary source of stress in people’s lives. In four out of the last five years, money placed first on the APA’s Sources of Stress list, a pattern whose origin pre-dates our current recessionary times. We believe that creating a Division that specializes in the scholarly and practical study of the financial lives of individuals, couples, families and groups is of inherent benefit and value to the field of psychology.
Practitioners and researchers in the field of financial therapy and counseling will be served by this division. The recent creation of the Financial Therapy Association indicates the need for an organization that incorporates the concerns of professionals in both financial and behavioral fields. Developing theory, research and evidence-based interventions in this field will be a rich addition to the field of psychology.
The study of family businesses and their complex dynamics is considered to be a part of this division’s interests. Research on family businesses and training on best practices in family business and wealth consulting is of interest to our division.
The study of behavioral economics is both timely and relevant to our division. The growing body of research and practical interventions related to the principles of behavioral economics will be incorporated into our division.
Research and training in the field of financial literacy education and the establishment of programs in educational institutions is of interest to us as well.
Establishment of a Financial Psychology Division is congruent with the APA’s history of demonstrating leadership by addressing emerging issues and is in alignment with the guiding principles of the American Psychological Association. We appreciate your consideration of our petition to establish the Financial Psychology Division.
Sincerely,
Mary Gresham, Ph.D.
Karen Weisgerber, Ph.D.
Brad Klontz, Ph.D.
Joe Lowrance, Psy.D.
If you are a member of the American Psychological Association and would like to help us begin a new division for financial psychology, please log in to the APA website and sign the petition electronically. If you have never set up your login to the website, you can do that using the MyAPA feature. We appreciate your support and hope that you will help us with this important change.Initial dues for the first year will be $10.00
Sincerely,
Dr. Mary Gresham
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CFP Board Creates Oversight Position |
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Friday, March 16, 2012 12:56
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Tags: CFP Board | financial planning
In an effort to strengthen the CFP designation, the CFP Board has created a position to investigate infractions of the CFP’s Standards of Professional Conduct. Rex Staples, a former North American Securities Administrators Association (NASAA) head of enforcement and compliance, will occupy the new director of investigations position.
Investors have become significantly less trusting of their advisors. They also want supervisory and governmental bodies to take greater action to protect them against fraud. Investigations into breaches of the standards must balance fairness to both sides through a consistently applied and pragmatic investigative process. The CFP board joins other organizations such as the CFA Institute and the Investment Management Consultants Association (IMCA) in creating a formal process to ensure the high standards they have set are upheld by those who hold their designations. If you're a private wealth advisor, please join Advisors4Advisors (A4A) to get its full benefits. Register now, and we will donate $20 of our $60 membership fee to Bubbles The Clown’s financial literacy program, and you can post an icon on your website saying you support Bubbles' 501(c)3 charitable organization. Plus, get other membership benefits, including: - Analysis daily of issues affecting advisors
- Aggregation of news from dozens of sites targeting wealth managers
- Reviews by advisors of practice management applications
- 30 independent experts blogging on advisor business issues
- 24/7 access to webinars with 50 hours of CFP® CE and 100 hours of IMCA CE
Register Now | |
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Contrasting The 1% With The 5%; Why Some Advisors Serving The 5% Might Try Moving Up-Market To The 1% |
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Friday, March 09, 2012 14:37
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Tags: client loyalty | client satisfaction | communication | differentiation | investor behavior There’s another side to the 1%: the 5%, Middle Class Millionaires, and they are your clients. You might even serve some of the 1%. Many advisors have one, two, or three ultra-high net worth individuals as clients. This post will help you see what the 1% and mass affluent have in common and how they're different. And it highlights how advisors focusing on the mass affluent could without great difficulty move upscale to serve more ultra-HNWIs.
If you're a private wealth advisor, please join Advisors4Advisors (A4A) to get its full benefits. Register now, and we will donate $20 of our $60 membership fee to Bubbles The Clown’s financial literacy program, and you can post an icon on your website saying you support Bubbles' 501(c)3 charitable organization. Plus, get other membership benefits, including: - Analysis daily of issues affecting advisors
- Aggregation of news from dozens of sites targeting wealth managers
- Reviews by advisors of practice management applications
- 30 independent experts blogging on advisor business issues
- 24/7 access to webinars with 50 hours of CFP® CE and 100 hours of IMCA CE
Register Now | |
While there has been a lot of focus in the press in recent months on the widening disparity between America's rich and poor, few comparisons are made between the 1% and the mass affluent.
Middle Class Millionaires and the 1% have more in common than you might realize. Because of the 2008 crisis, the concerns they share have increased, such as:
· Attitudes about wealth
· Experiences in the marketplace
· Angst over how much to leave to heirs
· Succession worries
· Family squabbles over an estate
· Global investment focus
· Greater interest in alternative investments
· Children graduating from Ivy League schools
· Well-educated children who can’t find work
· Aging parents
· Damage from the 2008 crisis
· Difficulty talking about their wealth issues
Both the 1% and the 5% are concerned that wealth will spoil their children. Both seek investments that will offer more stable returns in a volatile market environment. They want to know what’s going on in the global markets and to understand the global impact on their portfolios. Both are less willing to trust; both are reluctant to spend money.
They have aging parents to deal with and adult children living at home. They are both facing their own retirement years and health issues as they age. And by and large, the wealthy at all levels are philanthropic.
And there are some things they may not have in common:
· Yachts, planes, and Ferraris
· A few zeroes
· Children graduating from Ivy League schools
· Damage from the 2008 crisis
· Two houses
· More than two houses
· Damage from the 2008 crisis
· Retirement concerns
The 5% are less competitive about having the biggest boat in the marina. The volatility of the markets impacts the lifestyle of someone with $5 million much more severely than someone with $500 million. The 5% are much more concerned about their quality of life during retirement.
A recent Boston College study asked 165 ultra wealthy about their wealth concerns. The average respondent had $78 million. Of those, 120 had over $25 million; one or two were billionaires. With society-at-large’s resentment of the 1%, it’s not exactly comfortable for the wealthy to talk about their problems. Society-at-large thinks the ultra wealthy have no problems.
Even those who had $5 million before 2008 are not exactly bursting with the news that they lost their vacation home and are now in debt as a result. And advisors of all ilk—including psychologists and therapists—may have their own biases against the wealthy. It’s becoming clear that offering the best investment management strategies may not be all wealthy clients need from their advisors.
Some advisors are teaming up with wealth relationship experts and psychologists. The emotional side of wealth has always been the greatest influence on wealth management decisions. Only now is it being taken seriously as an integral aspect of client service.
The point is that, from a service needs standpoint, it may not be as far a stretch from $5 million to $25 million plus as you might think. How many clients do you have with $10 million, $25 million, even $50 million or above? A few, most likely.
With over 40% of the 5% doing due diligence on their own, over 20% of both the 1% and 5% direct investing on their own, and only 40% or so depending on a trusted advisor, opportunity is the operative word!
How would it change your business to think about the similarities and differences between the needs of those clients? It may refine your service delivery in ways you never anticipated.
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