August 2022 Guest Post — From Debt to Depression in a CFP’s Profile: How to deal with the issues

By Lyle D. Solomon, Esq.

The stress level of financial planners is 25% higher than that of the typical American professional. According to a FlexShares survey of 700 planners, compliance and regulatory issues and challenges with expanding their operations were among the top concerns for planners. For more than 50% of those surveyed, these are the leading causes of stress at work. Planners face challenges balancing work and personal life, managing many tasks, market tracking, client debt issues, and client relationships.

Who are CFPs, and why do they face difficulties?

A professional qualification for consultants and other financial experts is a Certified Financial Planner (CFP). To keep their CFP certification, planners must have a particular amount of experience, pass a challenging exam, and commit to ongoing financial education. Planners engage in more than just money management. Due to the desire to assist others, client ties can occasionally grow stronger than typical business relationships. Because of this, financial planners may play various roles with their clients, including friends and therapists.

Numerous homes make up a qualified financial planner’s clientele, some of whom they may have known for many years and throughout several generations. Financial planners frequently experience stress and sadness when they learn about personal issues. For instance, a financial planner may experience emotional devastation if they find that one of their clients has been diagnosed with a fatal illness while also dealing with a severe economic issue or deep debt trouble for a prolonged period. The typical work-related stress people feel may be made worse by such a cost. When it comes to work-related stress, which can lead to depression, financial planners may struggle more than other professionals.

Depression is a mood condition that impacts your thoughts, feelings, and daily activities. The most prevalent mental diseases in the country can cause severe psychotic episodes and even suicide if untreated.

What causes financial planners to have such emotional instability? 

We must comprehend the nature of their profession and the expectations placed on them if we are to understand why. Each type of financial advisor is perfectly capable of assisting you in achieving your unique financial objectives.

Check out these 10 ways a financial planner might help you. Each of these monetary circumstances has been dealt with by a CFP:

1. Offering an analysis of financial well-being: Working with customers, a financial planner will compile data on their assets, liabilities, income, and outgoings. The customer also specifies any long-term financial obligations, forecasts retirement needs, and details anticipated pensions and sources of revenue. A customer compiles a list of all current and potential investments, pensions, gifts, and income streams. The assessment’s investing portion digs into more introspective topics like risk competence and tolerance. Knowing risk aids the planner when making decisions about wealth management investments. At this point, the expert must also be aware of their investment choices. During the initial assessment, they may examine further financial management issues, including insurance and tax liabilities. The present estate plan should be disclosed to the planner and other advisers, including accountants and attorneys. Once people are aware of the current economic condition and the projections for the future, they should be prepared to work with the planner to create a financial plan that will enable them to achieve all of their financial and life goals. Managing someone’s finances involves a lot of effort and perseverance, even with all the information available.

2. Providing the fundamentals of financial planning: Financial planning involves many aspects, including financial strategy, cash flow management, financial statement analysis, debt management, counseling, financing decisions, money concepts and estimations, economic principles, attitudes, biases, and habits. Clients with debt trouble can get the right debt repayment strategies. They can ask many debt relief questions like:

  • Is debt consolidation a good idea?
  • How does the debt settlement affect their credit score?
  • How can they find the right debt relief company?
  • When should they consider bankruptcy?

When a planner is working with customers, gathering and arranging so much information could cause some tension and irritation.

3. Giving awareness about the rules and professional conduct: Obeying laws protecting consumers, fulfilling fiduciary duties, abiding by ethical standards, and following regulations governing financial institutions’ operations.

4. Examining the client’s needs: Examine the client’s needs, their savings preferences, the workings of financial aid, gift- and income tax planning, and the means of paying for their education.

5. Finding the right investment strategies: The subjects covered are risk assessment, investing principles and return assessments, asset allocation, portfolio construction, diversification and evaluation, investment consequences of investments, stock and bond valuation, and investment methods (including alternative investments).

6. Providing risk management and insurance planning: Risk and insurance principles, analysis, and evaluation apply to all insurance needs, including health, life, long-term disability, casualty, annuities, property insurance, and business insurance.

7. Doing estate preparation: Addressing laws and rules about marriage and non-traditional partnerships, trusts, company acquisitions, estate liquidity and taxation, and property transfer tax repercussions and techniques.

8. Working on the client’s budget and saving for retirement: Offering guidance on the best plans, how entitlement programs affect retirement needs, regulatory and distribution difficulties, the best strategy for enterprises, succession planning, and analyzing retirement expenditures.

9. Managing inheritance: If you expect to inherit money in the future, you might be worried about the tax repercussions and how best to spend the funds. A financial planner, wealth manager, or financial coach can assist you in preventing the exploitation of that privilege. They can assist you in changing your financial objectives and goals and guide you on complex subjects like expected taxes. Additionally, they can guide you through the procedures to follow when the time comes.

10. Developing a tax strategy: This course covers how taxes affect corporations, trusts, property transfers, and estates and how to manage and reduce liabilities and handle charitable contributions.

What sort of expectations do individuals have for a financial planner?

People anticipate that a financial planner will be fully aware of their client’s financial situation and goals. They predict that the financial planner will utilize this data to offer suggestions for how to strengthen the financial status, such as:

Aiding in saving and budgeting. 

  • Creating plans to accomplish both short- and long-term goals. Clearly outline different account formats and investment options suitable for specific situations.
  • Deciding on the portfolio’s ideal asset allocation or investment mix.
  • Contributing to the decrease of tax obligations.
  • Responding to any other monetary questions you may have.

People desire regular interaction with a financial advisor (at least once a year). In this approach, the planner can assess the performance of their portfolio over time and determine whether any adjustments are required to meet their financial objectives.

How can a financial planner control their feelings of stress and depression?

  • Regular exercise: Financial planners may have heard this advice to exercise daily a million times. But how many of them stick to the routine? Although I wouldn’t say getting up early to exercise is exciting. But it improves mood stability and mental clarity.
  • Get enough rest: Financial advisors should have a group of friends and coworkers to discuss personal and work-related issues. A planner should take a day or two off from their everyday work and spend quality time with family, friends, or themselves if they become frustrated with their daily jobs, client and account management, growth efforts, and business administration. Taking a break from everything can provide the necessary time and space to refresh, unwind, and renew the mind. Do whatever you like — listen to music, read a book, watch a movie, play a video game — but avoid working. Financial planners can concentrate on their work and clients by doing this.
  • Be grateful: You must be thankful for who and what you are as a financial planner. Decide how unique you are and what achievements you have made in life. Write down your life’s blessings in gratitude and think about them frequently afterward. For instance, record your moments of appreciation by writing them down and storing them in a jar. Open the jar and read your joyful memories whenever you are feeling down. Reliving your uplifting experiences can inspire and uplift you. Make the most of every precious moment, whether it’s a challenge or a victory.
  • Pay attention to your life’s positive parts: Despite this worry, financial planners are primarily happy with their careers. Financial planners can reduce stress by leading a healthy lifestyle and finding joy in something constructive. Your natural endorphin levels rise when you are joyful, which elevates your mood and reduces anxiety. Also, skip the sit-down meal and go for a quick run or workout at midday to keep things exciting. Make an effort to have fun every day. Not every day will be a joyride, but even in the banalest circumstances, look for the funny. We must all find ways to laugh whenever we can. Enjoy every second of life and give thanks for all the happy times. Enjoy your cuisine and inspire others to do good deeds. Pay attention to your customers’ and coworkers’ most upsetting tales. When they need you, assist them. When you need them, they will also assist you.
  • Look for expert guidance: You might experience some immediate emotional difficulties as a financial planner throughout your profession. They could have anything to do with your job, family, environment, society, etc. When encountering any of these difficulties, you must acknowledge that you require expert assistance. Call a mental health professional and ask for advice when life becomes too stressful and you feel like the world is ending.

Conclusion: Financial planners may experience anxiety and sadness due to managing several responsibilities while juggling work-life balance, personal development, learning new skills, upholding all rules and regulations, and keeping a healthy client relationship. Many people, including various industry pros, find a turning point in their lives after using these ideas. They have discovered the importance of having someone teach them tactics and strategies for coping with difficulties and traumas in life, giving them the confidence to express their experiences in public.

About Lyle Solomon: Lyle has considerable litigation experience as well as substantial hands-on knowledge and expertise in legal analysis and writing. Since 2003, he has been a member of the State Bar of California. In 1998, he graduated from the University of the Pacific’s McGeorge School of Law in Sacramento, California, and now serves as a principal attorney for the Oak View Law Group in California. He has contributed to publications such as Entrepreneur, All Business, US Chamber, Finance Magnates, Next Avenue, and many more.