Money Angst? You Might Consider a Financial Therapist
Unconscious beliefs and emotions can mess up how people handle their finances. The hard part is finding experts qualified to handle both money and the mind.
4 min
Do you worry a lot about higher food and gas bills? Fight with your spouse over spending splurges? Fear you’ll outlive your savings?
Some people seek to ease such money anxieties by hiring a financial therapist.
The goal of financial therapists ultimately is to help people make good financial decisions, typically by raising their clients’ awareness of how their emotions and unconscious beliefs have affected their sometimes messy experiences with money.
Needs for such help often arise following a job loss, bankruptcy or marital partner’s financial infidelity—when one spouse hides or misrepresents financial information from the other. Even something seemingly positive, such as getting a big inheritance or winning a lottery, can cause financial anxiety.
“Folks are craving help with financial well-being,’’ says Ashley Agnew , president of the Financial Therapy Association, a professional group launched in 2009.
Financial therapists tend to come from mental-health and financial-planning disciplines, and there are signs that their ranks are rising: The Financial Therapy Association has 430 members, up from 225 in 2015. Still, according to the group, fewer than 100 financial therapists have completed its certification process, introduced in 2019. You can be an association member without being certified by it.
The reason for the increased interest is clear: Many Americans are worried about their personal finances. In a survey of about 3,000 U.S. adults conducted last October by Fidelity Investments, more than one-third of respondents said they were in “worse financial shape” than in the previous year. Some 55% of those respondents blamed inflation and cost-of-living increases.
Similarly, 52% of 2,365 Americans polled for Bankrate.com said money negatively affected their mental health in 2023. That is 10 percentage points higher than in 2022. Financially anxious and stressed individuals are less likely to plan for retirement, prior research has concluded.
Messy divorce
New York advisory firm Francis Financial hired financial therapist Allen Sakon last November to aid individual clients. Many are divorced or widowed women with complicated money problems.
Certain clients “don’t believe they have enough resources, even though objectively they do,” says Sakon, who is a certified financial therapist, financial planner and accountant. Meanwhile, others with limited means mistakenly believe “they can live as extravagantly as they want,’’ she says.
Sakon currently counsels a recently divorced woman who is struggling with her dramatically lower income and the imminent sale of the family’s suburban New York home. “Her world has been turned upside down” by a financially messy divorce, Sakon says.
Though the woman has stressful new money responsibilities, she long avoided financial decisions, according to Sakon. “A money-avoidant grown-up is typically someone who was excluded from money discussions as a child,” she says.
Sakon says she hopes to eventually help this client feel capable of making financial decisions based on her resources and the financial plan that Sakon created for her.
Nate Astle , a certified financial therapist in Kansas City, Mo., met nine times from May 2023 to February 2024 with Andrea and Gianluca Presti , a 30-something Texas couple who were having persistent spats over money. Andrea Presti , an email marketer, says she believed that “if we didn’t go to financial therapy, I was going to question our entire relationship and whether we could continue.”
The wife cites an argument over the possible purchase of an expensive new car to replace their decade-old vehicle as an example of the couple’s financial conflicts. They disagreed over whether to give up a car that still worked well.
The husband, Gianluca Presti, a music producer, says financial therapy taught him and his wife to communicate better through active listening. He says he stopped being the couple’s money gatekeeper, became more open-minded about spending—and agreed to pay up to $45,000 cash for a new car. “We have to be a team if we want to solve financial issues,” he now realises.
Astle helped the Prestis revamp their household budget as well. It now reflects each spouse’s interests by including expenditures, investments and savings.
Astle, who is also a marriage and family therapist, says he has seen his financial-therapy clients more than double to 43 since 2022.
Possible pitfalls
Still, there are possible pitfalls when hiring a financial therapist. One major drawback: Anyone can claim they are qualified to practice financial therapy.
No government agency regulates the young profession. Candidates for certification by the Financial Therapy Association must take online courses designed by the association covering financial and therapeutic techniques, counsel clients for 250 hours and pass a 100-question test. But you can call yourself a financial therapist and not be certified by the association.
Meanwhile, the cost of financial therapy varies widely—from $125 to $350 an hour, Agnew estimates. Insurance rarely covers the tab.
In addition, there is no broad evidence that financial therapy works well. No large-scale studies demonstrating the field’s effectiveness have been conducted.
Another potential downside is that financial therapists with mental-health backgrounds typically lack extensive financial-planning experience—and vice versa. It is wise to interview at least three financial therapists, experts suggest. Then, pick someone who admits the limits of their expertise.
“I am very upfront about my boundaries,” says practitioner Aja Evans , a licensed mental-health counsellor who isn’t certified in financial therapy. Evans adds that she failed the certification test but plans to take it again during 2024—and before she becomes Financial Therapy Association president in January.
She says she feels well-qualified to help clients recognise how their upbringing affects their money beliefs today. “But I am in no shape or form going to be advising you about your investments, money moves or creating a financial plan,” Evans says. For clients who want that assistance, she says, she refers them to certified financial planners and accountants she knows well.
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When will Berkshire Hathaway stop selling Bank of America stock?
3 minBerkshire began liquidating its big stake in the banking company in mid-July—and has already unloaded about 15% of its interest. The selling has been fairly aggressive and has totaled about $6 billion. (Berkshire still holds 883 million shares, an 11.3% interest worth $35 billion based on its most recent filing on Aug. 30.)
The selling has prompted speculation about when CEO Warren Buffett, who oversees Berkshire’s $300 billion equity portfolio, will stop. The sales have depressed Bank of America stock, which has underperformed peers since Berkshire began its sell program. The stock closed down 0.9% Thursday at $40.14.
It’s possible that Berkshire will stop selling when the stake drops to 700 million shares. Taxes and history would be the reasons why.
Berkshire accumulated its Bank of America stake in two stages—and at vastly different prices. Berkshire’s initial stake came in 2017 , when it swapped $5 billion of Bank of America preferred stock for 700 million shares of common stock via warrants it received as part of the original preferred investment in 2011.
Berkshire got a sweet deal in that 2011 transaction. At the time, Bank of America was looking for a Buffett imprimatur—and the bank’s stock price was weak and under $10 a share.
Berkshire paid about $7 a share for that initial stake of 700 million common shares. The rest of the Berkshire stake, more than 300 million shares, was mostly purchased in 2018 at around $30 a share.
With Bank of America stock currently trading around $40, Berkshire faces a high tax burden from selling shares from the original stake of 700 million shares, given the low cost basis, and a much lighter tax hit from unloading the rest. Berkshire is subject to corporate taxes—an estimated 25% including local taxes—on gains on any sales of stock. The tax bite is stark.
Berkshire might own $2 to $3 a share in taxes on sales of high-cost stock and $8 a share on low-cost stock purchased for $7 a share.
New York tax expert Robert Willens says corporations, like individuals, can specify the particular lots when they sell stock with multiple cost levels.
“If stock is held in the custody of a broker, an adequate identification is made if the taxpayer specifies to the broker having custody of the stock the particular stock to be sold and, within a reasonable time thereafter, confirmation of such specification is set forth in a written document from the broker,” Willens told Barron’s in an email.
He assumes that Berkshire will identify the high-cost Bank of America stock for the recent sales to minimize its tax liability.
If sellers don’t specify, they generally are subject to “first in, first out,” or FIFO, accounting, meaning that the stock bought first would be subject to any tax on gains.
Buffett tends to be tax-averse—and that may prompt him to keep the original stake of 700 million shares. He could also mull any loyalty he may feel toward Bank of America CEO Brian Moynihan , whom Buffett has praised in the past.
Another reason for Berkshire to hold Bank of America is that it’s the company’s only big equity holding among traditional banks after selling shares of U.S. Bancorp , Bank of New York Mellon , JPMorgan Chase , and Wells Fargo in recent years.
Buffett, however, often eliminates stock holdings after he begins selling them down, as he did with the other bank stocks. Berkshire does retain a smaller stake of about $3 billion in Citigroup.
There could be a new filing on sales of Bank of America stock by Berkshire on Thursday evening. It has been three business days since the last one.
Berkshire must file within two business days of any sales of Bank of America stock since it owns more than 10%. The conglomerate will need to get its stake under about 777 million shares, about 100 million below the current level, before it can avoid the two-day filing rule.
It should be said that taxes haven’t deterred Buffett from selling over half of Berkshire’s stake in Apple this year—an estimated $85 billion or more of stock. Barron’s has estimated that Berkshire may owe $15 billion on the bulk of the sales that occurred in the second quarter.
Berkshire now holds 400 million shares of Apple and Barron’s has argued that Buffett may be finished reducing the Apple stake at that round number, which is the same number of shares that Berkshire has held in Coca-Cola for more than two decades.
Buffett may like round numbers—and 700 million could be just the right figure for Bank of America.
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