Integrating Wellness Into Financial Advice

Have you noticed the number of entourage members supporting professional athletes? It takes a team of coaches, doctors, physiotherapists, psychologists, nutritionists, and legal and financial advisors to holistically manage and support an athlete’s health and well-being throughout their career.

Similarly, researchers and advisors are starting to recognize that good financial health and well-being are best achieved through an integrated approach that treats clients’ financial lives holistically. What if the financial advisor was part of an entourage that included a financial health physician, a financial mindfulness coach, and a financial crisis therapist? These professions may be hypothetical, but the thought experiment suggests real-life techniques that advisors can use today.

The Financial Health Physician

We already embrace and incorporate clients’ psychological reactions—such as how they think, feel, and process events and experiences—into financial planning. Yet, we may find it odd to consider doing the same for physiological reactions, such as our fight-or-flight responses, like heart rate, blood pressure, and muscle tension.

What role does physical health have in financial outcomes? Recent interdisciplinary research published in Financial Services Review finds that psychological and physiological responses interact with financial triggers to drive and influence our behaviors and decision-making processes. What may start as physical health stress (like sleep disturbance) can lead to mental stress (like mood swings) and a tendency to make less-than-optional financial risk-taking decisions (like panic selling during market volatility). And this effect can go the other way, too; financial stress can create anxiety, sleep disturbance, and physical unwellness.

How would a professional assist? A financial health physician mightmonitor psychological, physiological, and financial situations together in real time. This would allow them to identify core stressors at an early stage and develop an appropriate strategy to address them. For example, panic selling may be abated with a personal check-in when elevated heart rate and sleep disturbances are detected during volatile times.By attending to physical warning signs, investors could avoid costly mistakes.

The Financial Mindfulness Coach

Mindfulness is the practice of being fully aware and accepting of what you’re presently doing, feeling, and experiencing. It can enhance general well-being by reducing stress and anxiety, increasing focus, and helping regulate emotions. A new psychometric financial mindfulness scale from researchers at Cornell University and Georgetown University attempts to extend the benefits of mindfulness to financial health by focusing on the awareness of your current objective financial state (that is, how much you are spending and your financial balances) and the acceptance of that state (that is, how well you manage your emotions when engaging in financial matters).

What role does mindfulness have in financial outcomes? People can experience a disconnect between how they perceive their finances and their financial reality—you might call it money dysmorphia. This, in turn, can cause investors to feel stress and anxiety due to the perception of not having enough, regardless of their actual financial state. That can lead to clients having unrealistic financial goals, developing an inability to enjoy the fruits of their labor, and even taking on excessive debt, at the extreme.

How would a professional assist? A financial mindfulness coach would help clients identify whether they have a distorted perception of their finances. They could supply investors with appropriate measures to manage emotions and drive positive behavioral changes during periods of financial stress or discomfort. A financial mindfulness coach might also incorporate tracking and budgeting tools to drive awareness and practical mindfulness exercises to drive acceptance. By being better connected to their finances, clients could improve their financial health.

The Financial Crisis Therapist

People often need emotional, practical, or social support to manage and recover from a crisis, whether large-scale events such as pandemics and natural disasters, or personal hardships like divorce or illness. Financial crises can be just as overwhelming, so it makes sense to consider the benefits of a therapeutic approach to helping investors respond.

What role does crisis support have in financial outcomes? In times of crisis, people need support to bolster their capacity to respond to the occasion, as their emotions, thinking, and behaviors can be disrupted. As an interdisciplinary research review in the Financial Planning Research Journal demonstrates, investors look for emotional support as well as information and feedback in a crisis. As a crisis deviates further from typical circumstances, high emotions can negatively affect decision-making abilities. Support during a crisis can help investors stabilize their emotions and develop strategies to move forward.

How would a professional assist? A financial crisis therapist might support a client during a period of financial distress by helping them regain their composure and triage their issues. This kind of support would help investors gain greater resilience and improve their capacity for rebounding from setbacks.

Holistic Personalization

Clients may not be able to turn to an entourage of such professionals to improve their outcomes, but financial advisors can take on some aspects of these roles in their own practices. While you may not be taking a client’s blood pressure or making notes as they lie on a chaise lounge, you can incorporate practical tactics that incorporate mind, body, and spirit. For example, try asking clients to describe the emotions and physical sensations they are experiencing in response to their current financial state, and look for signs of distress or disconnect. Or it can be as simple as checking in with your clients about their health and whether their spending and saving goals are aligned with their values.

This kind of interdisciplinary approach integrates well with the behavioral finance practices that many advisors are already adopting. Advisors who can provide holistic support to their clients can deliver a level of personalization that unlocks not just good financial outcomes, but good life outcomes.