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.