Editor’s Note: This article is based on Steve Sanduski’s podcast interview with Dr. Martin Seay, program director and associate professor of personal financial planning at Kansas State University. To access more than 100 interviews with industry leaders, subscribe for free to Steve’s podcast, Between Now and Success by clicking here.

Are your multi-millionaire clients any happier than your merely millionaire clients?

As your client’s net worth increases, have you seen a direct rise in their level of happiness?

Have you ever felt frustrated that all your hard work on the financial side of your client relationships didn’t move the needle in their sense of well-being?

Helping clients save, grow and protect their money is a service that clients value and appreciate. But there is so much more you can do to help them beyond just the numbers.

Let me ask you this: On a scale of 1 to 10, with 10 being maximum life satisfaction and well-being, what would be the impact if you could help your clients move from a 6 to a 9? Or even to a 10? How much meaning would that add to your work and how much satisfaction would it add to your client’s life?

I believe we are heading into an era where advisors will be measured by the impact they have on their clients’ lives rather than the return on their clients’ investments.

The Positive Approach

About 20 years ago, Dr. Martin Seligman rocked the world of psychology by proposing that psychologists formally study what could make healthy people healthier instead of just trying to make ill people well. This new branch became known as positive psychology.

At its core, positive psychology is the scientific study of what makes life most worth living. In other words, it seeks to understand how we can flourish in life. And hey, who doesn’t want that, right?

My recent podcast guest, Dr. Martin Seay of Kansas State University, researches how we can apply the concepts of positive psychology to the financial planning process. And it makes sense because if all we do as advisors is help people make more money with no improvement in their well-being, then what good is that?

Parallel Paths Intersect

Interestingly, Dr. Seay’s field and financial planning have both gone through evolutions in recent years. The traditional model of psychology focused on treating people who had problems or disorders, such as depression or bi-polar, in the hope of returning them to a more neutral state. But positive psychologists like Dr. Seay want to help people who start from a position of strength to move to a higher plane where they flourish in life. It’s about helping healthy people reach a higher level of meaning and well-being.

Likewise, financial planning is evolving toward putting the client’s life at the center of the conversation, not their money. This dovetails nicely with the fundamentals of the Return on Life philosophy pioneered by my business partner Mitch Anthony. Just as Dr. Seay and other researchers have found that there’s more to life than being healthy, those of us who’ve embraced life-centered planning believe there’s more to the client-advisor relationship than helping rich people get richer.  

Rather, it’s about using tools, assessments and more effective human-to-human dialogue to help clients achieve a better relationship with their money and get more clarity on their life, so they can use their money to live their best life possible right now. 

New Tools For New Thinking

Dr. Seay told me that one of the most exciting developments in positive psychology is that the research has finally matured enough to start providing tools that financial advisors can use.

A key element of positive psychology is Dr. Seligman’s Well-Being theory, which states that people will flourish in life if they have achievement in five areas:

• Positive emotion—spending time on activities that make us feel good.

• Engagement—a state of well-being where you lose yourself in an activity, like a hobby (similar to the concept of “flow.”)

• Relationships—with family, friends and community.

• Meaning—finding meaning with the way you're spending your time and the way you're spending your money.

• Accomplishment—feeling like you are moving closer to and accomplishing life goals, such as progressing in your career.

Dr. Seligman has developed a PERMA Meter that advisors can use to start a dialogue with clients about where they are in life, and where they’d like to be. My company has also created an advisor-specific tool called The ROL Index to measure a client’s well-being related to 10 aspects of life.

Even if you don’t want to use the tools of positive psychology, Dr. Seay also recommends using the PERMA concept as a way of reframing more traditional discovery questions.

“Instead of looking at a budget as purely expenditures, you can look at those as investments in different areas of your well-being capital, and that'll provide a lens to communicate through to a client,” he says. In other words, you can use positive psychology concepts to help your clients attach more emotion to their plan and increase the likelihood they will follow through on the plan’s recommendations.

Knowing Your Limits

“But Steve … I don’t want to be a therapist. I’m a financial planner.”

Picture a spectrum where therapist is on the far left and financial planner is on the far right. Applying a more positive approach to planning simply means you’re moving a little more to the left. And the degree to which you move is a function of your training, comfort level and the desire of your client.

Neither Dr. Seay nor I are suggesting that an advisor should do any true psychological work. It can be tricky to determine where moving your practice in this direction might cross a boundary that only trained psychological professionals should cross. One sign you’re beginning to cross the line is if you start unpacking your client’s past instead of planning for their flourishing future.

“Positive reshaping and reframing are likely going to be just fine,” Dr. Seay says. If you’re using the PERMA playbook or the ROL tools Mitch Anthony and I have developed to help your clients view their finances through the lens of well-being, you’re sitting comfortably at the intersection of where money and life meet. Most advisors should be able to intuit if a conversation about, say, a client’s experience of money as a child might be veering into more complex family dynamics beyond our core competencies.

But speaking of PERMA as a playbook, try to think about the advisor’s evolving role as more of a coach than a therapist. There are two sides to being a good coach: mastery of the Xs and Os, and being able to inspire players to do great things. Some players might require more drilling on the fundamentals. Others might need more help with the aspirational side. A good coach is able to tailor his or her approach to specific players, and help that player achieve.

Positive Outcomes All Around

The coaching metaphor also gets to the heart of what positive psychology provides that traditional planning—as well as robos and apps—can’t. A digital platform might draw up the right Xs and Os for an optimum ROI, but it can’t “coach up” the nervous investor who’s ready to bail on the market, or support and empathize with a long-term client who just lost their spouse.

The value add will be a huge positive for advisors who start reframing the way they think about their clients’ money. On top of that, according to Dr. Seay, science tells us that the value to clients will be even greater.

“Individuals that experience well-being, especially through experiencing positive emotion, will earn higher incomes, succeed at work and are more likely to be able to exert willpower and self-control over unhealthy urges. They're more likely to save money. There’s really clear evidence that, in ways that directly matter to a financial planner, positive psychology works.”

We’re still at the very beginning of this dynamic shift, and as researchers like Dr. Seay and advisors like you work with more clients and amass more data, together we’ll get better and better at harnessing the power of positivity.

This marriage of art and science, the head and the heart, and compassion and reason, won’t just transform the way the world plans. It will help our clients flourish. And that my friends, is priceless.  

Steve Sanduski, CFP, is the founder of Belay Advisor, the CEO of ROL Advisor, a discovery process technology system, a New York Times bestselling author, host of the Between Now and Success podcast, international speaker and blogger.