Here Comes The Certified Financial Therapist Designation

Financial planners encounter a wide variety of social dynamics when servicing clients, and it is not uncommon for them to see clients with emotional issues or conflicts that are affecting their finances, says Sarah Asebedo, a certified financial planner and president of the Financial Therapy Association (FTA). She adds that many financial planners have basic communication skills but do not have enough training to effectively service clients facing the emotional part of financial issues.

In response, the FTA has developed a financial therapy certification that will be available by year’s end.

The FTA consists of practicing financial planners, psychologists, counselors, family therapists, researchers, psychotherapists and various other professionals from a wide range of disciplines. The association does not service clients directly but simply helps develop the professionals who serve them. Its main focus is to give financial planners the tools to help clients develop positive financial behaviors through evidence-based intervention, says Asebedo, an assistant professor of personal financial planning at Texas Tech University. She previously worked as a financial planning practitioner for a dozen years, with most of that spent at Accredited Investors in Edina, Minn.

As part of its mission, the FTA plans to roll out the Certified Financial Therapist designation in three certification levels. Level I, or CFT-I, will be released later this year and will provide skills to identify emotional disorders, effectively engage an affected client and make referrals to the appropriate support professionals, among other skills. Experience and education requirements for the Level I certification can be found at https://www.financialtherapyassociation.org/certification.

Two additional certification levels will be available at a later date. CFT-II certification develops therapeutic and financial skills in depth, but does not include full therapeutic licensing.

Asebedo explains that the aim of Levels I and II is not to turn financial planners into therapists. “We are, however, creating a platform that allows financial planners to become more finessed and have greater long-term success with their clients,” she says.

CFT-III will be intended for licensed therapists who are interested in offering financial planning services to clients in addition to full therapeutic services.

Emotional conflict can prevent effective goal setting and financial planning, and if planners can’t handle a problem when working with a client, it potentially hurts their bottom line, says Megan Ford, a licensed marriage and family therapist (LMFT) at the University of Georgia and a former FTA president. Marital disputes, family disagreements and depression related to finances are problems that a financial planner needs to be able to confidently work through, Ford adds, noting that financial planners are then more likely to hold on to clients who feel their needs are being fully met.

It is becoming more difficult for financial planners to set themselves apart in the industry, says Ford. She notes that some advisors become uncomfortable when they think of therapy, but the FTA certifications should offer them an opportunity to expand their skill set and solidify a market niche.