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One of the emotions – or more accurately, the constellation of many emotions – that financial planners often must help clients deal with is grief. It's common for people to engage a planner during times of transition and loss such as the death of a parent or spouse. Clients often need additional support and advice during divorces, the sale of a business, retirement, and other life transitions that bring up grief.
Loss is an inherent certainty of the human experience. It cannot be controlled. We cannot avoid the inevitability of losses in life. Significant ones include the loss of relationships, violations or trauma to our physical bodies, loss of autonomy or freedom, loss of valued possessions, and financial losses. Most of us will experience financial setbacks like the loss of a job, a business failure, a poor investment decision, or the loss of significant financial assets from house fires, accidents, theft, or natural disasters.
The death of a family's breadwinner is clearly a financial loss; I would go further and suggest that every personal loss such as the death of a loved one is a financial loss in some fashion. Indeed, every financial loss is a personal and emotional loss.
Many financial losses can be insured against to mitigate the financial impact. The financial compensation from homeowner's insurance, life insurance, or other protections can be of great help in coping with the consequences of a loss. No insurance compensation, though, can remove the emotional pain of that loss.
I was interested to learn recently that the Diagnostic and Statistical Manual of Mental Disorders, Fifth Edition (DSM-V), which is the bible of psychiatric diagnosis, added a diagnosis of prolonged grief disorder. According to a Washington Post article by Jelena Kecmanovic, published October 21, 2021, "PGD can be diagnosed no sooner than one year after the death of a loved one, and it is defined by a daily, intense yearning for the deceased or a preoccupation with thoughts or memories of them. Additional symptoms – three of which are required for a diagnosis – are identity confusion, disbelief, avoidance of reminders of the loss, intense emotional pain, difficulty engaging with others and with life, emotional numbness, feeling that life is meaningless, and intense loneliness."
Proponents say the inclusion will allow psychotherapists to file insurance claims for sessions with grieving clients, as well as opening funding for research into treatments. Opponents condemn labeling grief a mental illness, concerned that doing so is pathologizing what is a natural response to loss that is part of the human experience.
Either way, this diagnosis is a reminder that grief is individual. Mourners express and deal with their pain in many ways; they do not "get over it" according to a timetable or a series of stages. It is not helpful to resist, deny, or suppress the intense emotions that come with grief. Doing so only prolongs the process.
Being immobilized in grief can be deeply painful and damaging emotionally. It can be financially damaging, as well, limiting a person’s ability to make sound financial decisions that can affect their future.
This is where objective help and support is essential. For financial advisors, accountants, financial therapists, friends, or family members who are helping someone during a time of loss, it’s crucial to support that person in moving through the process of grieving. One component of such support can be trustworthy advisors with the skills, integrity, and objectivity to help with financial decisions. This can allow someone the time they need to focus on emotional healing, while also safeguarding their financial wellbeing.
Rick Kahler, MS, CFP®, CFT-I™, CeFT®, CCIM, is founder of Kahler Financial Group, a Rapid City, SD-based fee-only Registered Investment Advisor.
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