Two authors of an article on behavioral finance have been selected for the Financial Planning Association’s 2018 Montgomery-Warschauer Award, the FPA announced Tuesday.
Derek R. Lawson and Bradley T. Klontz were honored for their July 2017 Journal of Financial Planning paper, “Integrating Behavioral Finance, Financial Psychology, and Financial Therapy into the 6-Step Financial Planning Process.”
The Montgomery-Warschauer Award honors the paper published in the Journal of Financial Planning that provides the most outstanding contribution to the betterment of the profession in the preceding year. The award is named for the late Henry Montgomery, who helped create the Journal, and Tom Warschauer, the Journal’s first academic editor.
The paper emphasizes the importance of integrating behavioral finance, financial psychology, and financial therapy theories and tools into the financial planning process to help clients change behaviors, reduce stress and anxiety, and embrace change, according to the FPA.
The authors argue in the paper that incorporating these principles into a holistic plan results in an improved financial planning experience for both clients and professionals and increases the chances of the clients carrying out the financial planners’ recommendations.
“Lawson and Klontz have provided a robust framework for integrating the tools and insights of the ‘interior dimension’ into the formal steps of the financial planning process,” said the Journal’s practitioner editor, Dave Yeske. “Their framework encompasses various theoretical approaches to understanding and engaging clients at the level of thoughts and emotions, as well as effective tools for facilitating appropriate action.”
Lawson is a doctoral candidate in personal financial planning at Kansas State University and a financial planner at Priority Financial Partners in Denver and Durango, Colo. His work also has been published in Financial Services Review and the Journal of Financial Therapy. He previously served as the FPA NexGen secretary, the FPA of Greater Kansas City NexGen Director, treasurer of the Financial Therapy Association and the marketing coordinator for NAPFA Genesis.
Klontz, who holds a doctorate in psychology, specializes in the practice of financial psychology, financial planning and applied behavioral finance. He is an associate professor of practice at Creighton University’s Heider College of Business, co-founder of the Financial Psychology Institute, and a managing principal at Your Mental Wealth Advisors.
Klontz is co-author and co-editor of several books on finances and behavior.
“Every financial planner can benefit from this article,” said Barbara O’Neill, the Journal's academic editor. “It provides readers with a roadmap on how to incorporate financial psychology principles into the financial planning process.”
The authors will present the article and receive the award at the 2018 FPA Annual Conference in October in Chicago.