Key Takeaways
- Financial therapists combine financial advice and therapy to help people manage money stress.
- They can work with clients to address past money traumas and change financial behaviors.
- Those wishing to become a financial therapist need certification from the Financial Therapy Association.
- Certification involves training, practical experience, acceptance of a code of ethics, and continuing education.
- Certification ensures that financial therapists are trained in relevant financial and therapeutic practices.
What Is a Financial Therapist?
Financial therapists work to change how clients think, feel, and behave toward money. These certified professionals use financial and therapeutic practices to address financial stress, help people to adapt to new financial situations, and explore and change their relationship with money.
To become a financial therapist, you must have a bachelor’s degree in a finance- or mental health-related field, or an alternate designation like Certified Financial Planner (CFP) or Accredited Financial Counselor (AFC). The financial therapist certification process requires educational training and practical experience, passing an examination, agreeing to a code of ethics, and maintaining competency through continuing education.
The Role and Importance of Financial Therapists
Like traditional therapeutic practices, financial therapy works to improve an individual’s overall well-being. Financial therapists may come from either a financial or therapy background and must receive certification from an organization like the Financial Therapy Association. Financial therapists typically hold degrees in either a finance- or mental health-related field.
Financial considerations play a large role in nearly everyone’s life, and the emotional and psychological burden of issues involving money can be significant. As of February 2022, 65% of Americans are stressed about money. Similarly, other emotional experiences and issues can affect a person’s financial habits as well. Financial therapists aid patients in addressing past financial traumas and present money-related behaviors.
Important
Financial therapists can receive certification from a regulating organization such as the Financial Therapy Association.
Path to Becoming a Certified Financial Therapist
Financial advisors and nonfinancial therapists may address some of the same topics and concerns as financial therapists, but they lack the training across these two fields that is necessary to become a financial therapist.
The process to become a financial therapist includes education, practical experience, ethical standards training, and an examination. The Financial Therapy Association provides 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 finance- or mental health-related field, or a designation as an Accredited Financial Counselor (AFC) or a Certified Financial Planner (CFP).
Candidates for the CFT-I designation must complete competency training in the form of video courses and self-study. They must complete 500 hours of approved experiential training, including 250 in direct service to clients. Professional presentations, teaching, research, and additional client experience can make up the other 250 hours.
CFT-I candidates must also pass a 100-question, two-hour examination and learn about and agree to a code of ethics. CFTs must complete regular continuing education to maintain their certification.
Choosing the Right Financial Therapist
The single most important thing to look for in a financial therapist is certification from a governing organization like the Financial Therapy Association. The Center for Financial Social Work is an organization that is similar in some ways. Certification is an assurance that the professional with whom you work is trained in the appropriate areas and takes care to recognize and avoid ethical and other problems that may arise through the course of therapy.
It is also essential that you feel comfortable with your financial therapist. These professionals may engage with you in highly personal matters that can be traumatic or troubling. You’ll want to make sure that your financial therapist is someone who you are comfortable speaking with openly.
Financial therapy is a cross-disciplinary practice, and clients should look for therapists who recognize this and understand their role in an individual’s financial and overall well-being. Financial advisors and licensed therapists have unique sets of skills, and a financial therapist may have some of these skills but not all of them.
For this reason, it can be most beneficial to work with a financial therapist as one of multiple professionals in developing and caring for your financial well-being. For example, if you work with a financial therapist with a primary background in therapy, you may also want to work separately with a financial advisor to address more of the specifics of the finance side.
Important
Because a financial therapist does not have the same set of skills as both a financial advisor and a licensed therapist, it may be most beneficial to seek additional support from other professionals with complementary areas of expertise.
Financial Therapist vs. Financial Advisor: Key Differences
As mentioned above, a financial therapist shares some, but not all, of the skills and knowledge of a financial advisor. While financial advisors are specifically trained in areas of financial planning and management, as well as related ethical and often fiduciary responsibilities, they are not trained in therapeutic practices. They may end up providing some emotional support in the course of their work, but they are not licensed 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 full 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 either finance or therapy who aims to help clients address financial trauma or change how they think, feel, and behave in regard to money.
What’s the best way to select a financial therapist?
There is no single way to select a financial therapist. Make sure that any professional with whom you work is certified by an organization like the Financial Therapy Association. Beyond that, look for a financial therapist who you are comfortable speaking openly with 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, logging hours of direct and indirect experience, learning about and agreeing to a code of ethics, completing an examination, and completing continuing education programs to maintain certification.
The Bottom Line
Financial therapists are professionals certified in both finance and therapy, aiming to help clients manage financial stress and improve financial behaviors. Financial therapy combines financial advisory and therapeutic practices to address emotional experiences related to money. Financial therapists and financial advisors have different but complementary skill sets; clients may benefit from working with both. When selecting a financial therapist, look for certification from an organization such as the Financial Therapy Association.
