What is a Financial Therapist?
A financial therapist is a certified professional who provides therapy services with the goal of changing the way clients think, feel, and behave about money. Financial therapy is a relatively new field combining elements of financial counseling services and therapy.
Certified Financial Therapists (CFT) aim to help clients deal with underlying sources of financial stress, change their future financial behavior, and explore and change their relationship with money.
Key points to remember
- Financial therapists are board-certified professionals who work to change the ways their clients think, feel, and behave when it comes to money.
- Financial therapy draws on both financial and therapeutic practices with the goal of addressing financial trauma, helping people adjust to new financial situations, and affecting an individual’s behavior with the money.
- To become a financial therapist, you must have a bachelor’s degree in a field related to finance or mental health, or another designation like Certified Financial Planner (CFP) or Accredited Financial Advisor (AFC).
- The financial therapist certification process requires educational training, hours of experience, passing an exam, agreeing to a code of ethics, and maintaining competency through continuing education.
Understanding Financial Therapists
Like traditional therapeutic practices, financial therapy aims to improve an individual’s overall well-being. Financial therapists may come from a financial or therapeutic background and must receive certification from an organization such as the Financial Therapy Association. Financial therapists typically hold degrees in a field related to finance or mental health.
Financial considerations play an important role in almost everyone’s life, and the emotional and psychological burden of money-related issues can be significant. In February 2022, 65% of Americans were stressed about money. Likewise, other emotional experiences and issues can also affect a person’s financial habits. Financial therapists help patients deal with past financial traumas and current money-related behaviors.
Financial therapists may receive certification from a regulatory body such as the Financial Therapy Association.
How to Become a Financial Therapist
Financial counselors and non-financial therapists may address some of the same topics and concerns as financial therapists, but they lack the necessary training in these two areas to become a financial therapist.
The process to become a financial therapist includes education, hands-on experience, ethical standards training, and an exam. The Financial Therapy Association offers three levels of certification for Certified Financial Therapists (CFTs). To receive certification at the first of these levels, CFT-I, an individual must have at least a bachelor’s degree in a financial or mental health-related field, or a designation as a Certified Financial Advisor (CFA) or Financial Planner. approved. (PCP).
Candidates for the CFT-I designation must complete competency-based training in the form of video courses and self-study. They must complete 500 hours of approved experiential training, including 250 in direct customer service. Professional presentations, teaching, research, and additional customer experience can make up the other 250 hours.
CFT-I candidates must also pass a two-hour, 100-question exam and know and agree to a code of ethics. CFTs must undergo regular continuing education to maintain their certification.
What to Look for in a Financial Therapist
The most important thing to look for in a financial therapist is certification from a governing organization such as the Financial Therapy Association. The Center for Financial Social Work is a similar organization in some ways. Certification is an assurance that the professional you are working with is trained in the appropriate areas and takes care to recognize and avoid ethical and other issues that may arise during therapy.
It is also essential that you feel comfortable with your financial therapist. These professionals may engage with you in very personal matters that may be traumatic or unsettling. You’ll want to make sure your financial therapist is someone you’re comfortable talking to openly.
Financial therapy is an interdisciplinary practice, and clients should seek therapists who recognize this and understand their role in an individual’s financial and overall well-being. Financial advisors and licensed therapists have unique skill sets, and a financial therapist may have some, but not all, of these skills.
For this reason, it may be more beneficial to work with a financial therapist as one of many professionals responsible for developing and caring for your financial well-being. For example, if you are working with a financial therapist with a primary background in therapy, you may also want to work separately with a financial counselor to further address the specifics of the financial side.
Since a financial therapist does not have the same skill set as a financial counselor and a licensed therapist, it may be more beneficial to seek additional support from other professionals with complementary areas of expertise.
How a Financial Therapist Compares to a Financial Advisor
As mentioned above, a financial therapist shares some, but not all, of the skills and knowledge of a financial advisor. Although financial advisors are specifically trained in the areas of financial planning and management, and related ethical and often fiduciary responsibilities, they are not trained in therapeutic practices. They may end up providing some emotional support as part of their job, but they are not allowed to offer more involved or elaborate therapy services.
Financial therapists, on the other hand, must have training in therapeutic practice to receive certification. However, they may not have the same comprehensive knowledge of financial planning and management as a financial advisor.
What is a Financial Therapist?
A financial therapist is a certified professional with a background in finance or therapy who aims to help clients cope with financial trauma or change the way they think, feel, and behave regarding money.
What is the best way to select a financial therapist?
There is no single way to select a financial therapist. Make sure any professional you work with is certified by an organization like the Financial Therapy Association. Beyond that, look for a financial therapist with whom you are comfortable talking openly and who has a set of skills and knowledge that will complement your goals.
How do you become a financial therapist?
Becoming a financial therapist requires completing educational training, accumulating hours of direct and indirect experience, learning and agreeing to a code of ethics, passing an exam, and completing continuing education programs to maintain certification.