Financial advisors can help clients “give themselves permission to place proper importance on their wealth accumulation,” planner Preston Cherry said.
“When it’s attached to a purpose, then it has a meaning,” said Cherry, CEO of Green Bay, Wisconsin-based registered investment advisory firm Concurrent Financial Planning and a former president of the Financial Therapy Association. “It’s very important to know that it’s OK to have money. I would say that it places proper importance on growing your money to fund your ‘enough.'”
For planners like Cherry (who’s also writing a book on the distinction between wealth and well-being), the question of defining when a client becomes “wealthy” reflects the psychological underpinnings of a profession devoted to improving peoples’ lives. The slideshow below displays the many different factors that he and seven other advisors and industry executives say are connected to the meaning of wealth.
There are as many types of clients as there are types of relationship with money. Clients who come into an advisory practice may be searching for everything from peace of mind around financial affairs to advice on a hot stock to buy or a clever tax strategy.
People often discuss wealth and income “interchangeably, highlighting a common misunderstanding of the distinct roles they play in our financial lives,” said Anh Tran, the managing partner of Irvine, California-based advisory practice SageMint Wealth.
“While many of us work hard to earn a steady income, transforming that income into lasting wealth is a journey that requires strategic planning and discipline,” she said. “By understanding the key differences between income and wealth and how to manage each effectively, you can take steps to plan your financial future and potentially leave a legacy for generations to come.”
Financial Planning spoke with Tran, Cherry and the following six planners and executives about how to guide clients in finding a larger meaning behind the goal of attaining and enjoying wealth:
Louis Barajas, co-founder of Irvine, California-based RIA firm International Private Wealth Advisors, CEO of Business Management LAB and an “opportunity coach” on the PBS television show, “Opportunity Knock$”Peter Mallouk, CEO of Overland Park, Kansas-based RIA aggregator Creative PlanningEmlen Miles-Mattingly, founder of Madera, California-based RIA firm Gen Next Wealth and host of the “Hello Retirement” podcastChloé Moore, founder of Atlanta-based RIA firm Financial StaplesAbby Salameh, chief growth officer of Birmingham, Alabama-based hybrid RIA firm RFG AdvisoryPalash Islam, principal of San Ramon, California-based RIA firm Synergy Financial Group
Planners have been homing in on long-developing fields such as behavioral finance, financial therapy or any manner of psychological concepts related to money for decades — to the point that an understanding of them is required for advancement in business and the profession.Since 2021, the CFP Board has included “the psychology of financial planning” as one of the “principal knowledge topics” covered by its examination for aspiring certified financial planners. Legends of the profession like George Kinder and Dick Wagner, the writer of a seminal 1990 article in the Journal of Financial Planning titled “To Think … Like a CFP,” have taken planners to areas far outside stock returns yet fundamentally tied to personal finance.
Those pursuits have not only expanded into new areas of research about how best to serve clients, but also paid off in business and portfolio gains, too. At up to 200 basis points above what customers would otherwise not have without hiring an advisor, “behavioral coaching” represents the biggest boost to clients’ wealth from hiring a professional to manage their finances, according to the Vanguard Advisor’s Alpha report.
In an often-cited 2007 commencement speech called “Enough” that he later adapted into a book with the same title, Vanguard founder John Bogle shared an anecdote about measuring success in money, business and life.
“At a party given by a billionaire on Shelter Island, the late Kurt Vonnegut informs his pal, the author Joseph Heller, that their host, a hedge fund manager, had made more money in a single day than Heller had earned from his wildly popular novel ‘Catch 22’ over its whole history,” Bogle said. “Heller responds, ‘Yes, but I have something he will never have … enough.'”
For eight views on the nature of wealth from financial planners and other experts in the field, scroll down the slideshow. For other coverage at the intersection of behavioral finance, professional development and planning, see: