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Despite big steps forward, there are still social stigmas around mental health and many people don’t reach out for the help they need.
The Mental Health Foundation estimates that around 75% of people with mental health issues in England may not get access to the treatment they require.
Mental health problems can make it harder to both earn and manage money, and anxieties regarding financial health can exacerbate existing issues, which can lead to something of a vicious cycle.
Your clients may not realise the impact that their financial security has on their mental health and might regard their struggles as just part of life. Or, they may be well aware of how much their financial and mental wellbeing are entwined, but they might find themselves feeling overwhelmed when they try to deal with it.
So, with May being Mental Health Awareness Month, read on to discover how financial planning can improve your clients’ mental health.
Research shows that financial concerns can lead to mental health issues for many people
Consistent research concludes that financial and mental health are closely linked with one another.
The Mental Health Foundation reports that 29% of adults in the UK experience stress, 34% anxiety, and 10% feel hopeless due to financial worries.
Moreover, the Money and Mental Health Policy Institute found that nearly half (46%) of people who are unable to make their debt repayments also have mental health problems.
86% of respondents with a history of mental health issues said their financial situation had made their issues worse. And 72% said that their mental health issues had made their financial situation worse.
Again, this shows the cycle that your clients can get trapped in when poor financial and mental health combine.
While there are undoubtedly numerous elements that can contribute to the mental wellbeing of your clients, it is clear that their financial situation can often be a factor.
Poor mental health could cause your clients to make bad financial decisions
People with mental health problems often report that their spending patterns and decision-making change significantly during poor mental health periods.
Common symptoms of poor mental health, such as increased impulsivity and memory issues, could lead your clients to make bad financial decisions.
The social stigma around mental health often deters people from seeking help or speaking to others about their struggles. But there are many ways that reaching out could benefit them.
Financial planning can help your clients’ emotional wellbeing and overall mental health
Working with a financial planner could offer your clients the support they need to feel they have a handle on their financial wellbeing, which could have significant consequences for their mental health.
Setting goals and creating budgets
Setting goals is a key component of both financial planning and ensuring emotional wellbeing.
Goal setting encourages people to think about who and where they want to be, which is hopefully a positive image. Once they have envisioned that dream, they must then work out practical steps of how to get there.
As they get closer and closer to their goals, achieving mini targets along the way, the growth mindset often steps in and pushes them to keep going by creating a positive feedback loop. This can be particularly beneficial for people who have become stuck in the vicious cycle you read about earlier.
A financial planner may be able to assist your clients in clarifying what their goals are and then working with them to develop a plan for how they will achieve them.
For example, creating a budget that aligns regular expenditure with long-term goals is a simple but effective way a financial planner could help your clients to get on the right track.
Building confidence and stability
A survey conducted by Royal London found that 34% of their clients felt that having contact with financial expertise made them more confident in their financial plans.
34% also responded by saying that professional financial advice helped them to feel more in control of their finances.
A financial planner could be able to help your clients regain a position of financial stability, in turn giving them confidence and security, the lack of which may have been negatively impacting their mental health.
Moreover, when working with a financial planner, your clients will likely learn more about the financial world than they knew before.
Again, this could give them a confidence boost and help them feel more capable of understanding the financial issues that may have once led to or could one day lead to them feeling overwhelmed.
Behavioural coaching
As you saw earlier, mental health issues can often lead people to make poor decisions.
A financial planner can help your clients recognise their own cognitive biases and propensity to make bad financial decisions.
They may be able to temper your clients’ impulsions by helping them to understand the negative consequences of such behaviour.
Taking a holistic approach
The Royal London survey found that 32% of their clients said that contact with a financial planner gave them peace of mind.
The holistic approach taken by financial planners ensures that multiple aspects of your clients’ lives are taken into account, including their values, relationships, aspirations, and overall health.
Get in touch
A financial planner can help your clients address the interconnectedness of their financial and mental wellbeing.
If you have any clients who you feel would benefit from a financial plan, get in touch.
Email info@blueskyifas.co.uk or call us on 0118 987 6655.
Please note
This blog is for general information only and does not constitute advice. The information is aimed at retail clients only.