Many financial planners will tell you that their job often means taking on bit of the role of psychologist as they help clients confront financial challenges. Loren Kayfetz, president of Personal Financial Consultants took it a step further by hiring Brad Klontz, a psychologist and newly minted CFP, to serve as a money coach and financial planner. While Klontz won’t be offering psychological services (conflict-of-interest rules), he will be using his experience in psychology to help clients,
Klontz’s move into financial services came as a result of his own “undiagnosed” money issues.
“Fresh out of grad school in 2000 with a degree in psychology and $100,000 in student-loan debt, Klontz grew envious of his friends who were making a killing in the stock market. Klontz sold his most expensive possession, his truck, put all his money in stocks, and promptly lost it all when the tech bubble burst three months later. “I made all the mistakes you can imagine, that behavioral finance talks about,” he says, including buying high and holding on to stocks far too long.
He wondered “how could I do something so stupid?”
The conclusion he reached: “The average American has a disordered relationship with money,” and the problems people have with money can be separated into four main issues: feeling that money is bad or undeserved; feeling that it will solve all problems; feeling that it is a status symbol and reflects your self-worth; and feeling that having money is shameful and should be hidden.
Accordingly, he developed a set of “money scripts” to address those problems. With his father, also a licensed psychologist, Klontz co-wrote Mind Over Money (Random House/Doubleday 2009) and developed Your Mental Wealth, an online system for people to diagnose some of their own problems based on those scripts. He became an expert in the burgeoning field, treating high-profile clients, like Wynonna Judd, with therapy and workshops. Brenda, his sister, also works with Klontz and his father in Klontz Consulting Group.”