The Financial Therapist

by | Jul 12, 2018 | Investor Behavior

What’s in a name?  For a lot of businesses, the actual name of the business is not what is most important.

What did ‘google’ mean before there was Google?

Amazon’ was just the name of a rainforest before Jeff Bezos turned it into the behemoth it is today.

Facebook’ would just be two nouns put together without Mark Zuckerberg.

For many businesses, it’s more about the PEOPLE within the oddly-named companies than the actual name itself. But that is NOT the case for ALL industries.

In finance, as individuals are slowly beginning to realize, the title is extremely important.  There are far too many titles for someone in the industry.

  • Financial advisor, investment advisor, broker, wealth manager, money manager, financial planner, etc.

It’s no surprise clients get confused when using these different terms, and it’s extremely important to understand the differences between investment advisors, brokers, financial advisors, and any other type of finance professional.

Often times it comes down to whether or not your finance professional is a fiduciary.  Does your advisor have a fiduciary obligation to work in your best interest?  That’s something Brendan and Tom talked about in Ep. 216 of the Mullooly Asset Podcast.

I’ve been working as an investment advisor for a few years now, and whether or not a client is working with an investment advisor, a stock broker, a financial advisor, or a planner, it’s become abundantly clear to me that we ALL need to act as ONE thing: a financial therapist.


You can slice and dice a portfolio a million different ways for a client, but if you can’t get them on board with your decisions and be comfortable with the approach, it means NOTHINGAbsolutely nothing.

If I’ve realized one thing over the last few years, it’s that money makes me crazy.  Money makes people make completely irrational decisions.  Money makes people do things without thinking, and without regard to the potential consequences.

Our biggest job as advisors, or “therapists”, is to ease the anxiety and mental strain that money puts on a person’s mind.

If the market can go up and down on a daily basis, and your client’s are sleeping soundly knowing they don’t need to worry about their money, you’ve done your job.

Investment research is extremely important.  Understanding which investments will give your clients the best opportunity to reach their goals is extremely important.  Identifying which investments pose too much risk for your clients is extremely important.

However, sometimes it seems that the investment side of the “investment advisor” title is focused on more than the advisor side.

It is equally as important to research and understand human behavior.  It is equally as important to understand what makes clients uneasy about money.  It is equally as important to know how to communicate with your clients in a way that will help calm them down when the market is making them anxious.

The stock market is going to do what it does, and we cannot control that or predict what is going to happen.  It could prove more beneficial to try and focus on things you CAN control like how you interact with clients and how you communicate your message in a way that will hopefully ease the stressed mind of a nervous client.

When it comes down to it, we manage PEOPLE more than we manage MONEY.