For financial planners, understanding client behavior can be just as critical as selecting the right investments. This is where the discipline of financial psychology for CFPs becomes invaluable. By blending behavioral insights with traditional financial advice, planners can help clients make better decisions, stay committed to long-term strategies, and build stronger relationships that lead to enduring trust.

In a live class on Advisors4Advisors today, Frank Murtha, Ph.D., brought his deep expertise in counseling psychology and behavioral finance to illuminate how the NEO Personality Inventory—the gold standard for assessing personality traits—can be applied in financial counseling. Dr. Murtha, a gifted speaker, has spent more than two decades studying investor psychology and helping advisors develop practical strategies to manage challenging client personalities.

The class. about financial psychology for CFPs, CIMAs, CPAs and IARs subject to NASAA's Model CE rule, offers a unique blend of science, real-world experience, and actionable scripts that advisors can apply immediately. For those committed to mastering financial psychology for CFPs, the five highlight clips we’ll explore here are a blueprint for more effective, empathetic, and results-driven client engagement. 

The Power of a 72-Hour Cooling-Off Period

Impulsive clients can be among the most challenging for any advisor. They tend to react emotionally to market news, make sudden changes to their portfolios, and chase short-term trends. Dr. Murtha recommends building behavioral guardrails, one of the most effective being a 72-hour waiting period before executing major decisions. This approach not only protects clients from rash moves but also allows time for a more rational, values-based assessment.

 

The Emotional Core of Financial Decisions

Financial decisions are rarely just about numbers—they are deeply tied to emotions, values, and identity. Dr. Murtha emphasizes that recognizing a client’s emotional drivers is essential to building trust and influencing positive behavior. By uncovering these emotional underpinnings, advisors can better align financial plans with what truly matters to clients, reducing anxiety and increasing commitment to long-term goals.

Spotting a Problem Client: Key Traits to Watch

Not all clients are an ideal fit, and some may consistently resist guidance, miss deadlines, or create unnecessary conflict. Through the lens of the NEO Personality Inventory, Dr. Murtha identifies combinations of low conscientiousness, high neuroticism, and low agreeableness as red flags. Recognizing these traits early can help advisors set clear boundaries, adjust communication styles, or even decide whether the client relationship is worth pursuing.

Inside the Mind of an Ultra Competitive Client

Ultra-competitive clients often measure success not just in absolute returns but in outperforming peers or benchmarks. They bring high drive and confidence but may also have fragile egos and a tendency to overemphasize short-term wins. Dr. Murtha suggests reframing ‘winning’ to focus on sustainable, long-term success and using data-driven milestones to satisfy their need for measurable progress without compromising portfolio discipline.

Are You Walking the Walk?

Self-awareness is a cornerstone of effective advising. Dr. Murtha challenges advisors to assess their own personalities using the same tools they apply to clients. Understanding your own strengths, weaknesses, and potential blind spots can dramatically improve how you manage relationships, handle conflict, and guide clients through challenging decisions. This self-reflective practice reinforces the authenticity and trust that are central to financial psychology for CFPs.

By integrating these insights into daily practice, advisors can elevate their role from financial technician to trusted counselor. Whether it’s managing impulsivity, navigating emotional decision-making, identifying problem clients early, guiding competitive personalities, or reflecting on one’s own style, the principles of financial psychology for CFPs offer a roadmap to stronger client relationships and more consistent long-term outcomes.

The 72-hour cooling-off period is not just a delay tactic—it’s a behavioral finance technique grounded in research on impulse control and emotional regulation. Market shocks, sensational headlines, or hot stock tips can trigger the brain’s fight-or-flight response, causing clients to act on instinct rather than reason. By instituting a formal pause, advisors give clients the opportunity to move from a reactive emotional state to a reflective analytical state. This is when better decision-making occurs.

In practice, the process described in this class about financial psychology for CFPs is part of the onboarding process, explaining that any major allocation change or new investment idea will be evaluated after a brief waiting period. This sets expectations early and frames the policy as a professional standard rather than a personal judgment. For clients prone to second-guessing, the pause can also prevent regret, since many impulses fade with time.

Dr. Murtha’s emphasis on the emotional core of financial decisions reflects a growing recognition that money is deeply tied to self-worth, security, and identity. Clients may not consciously link their portfolio choices to personal experiences—such as growing up in scarcity, witnessing a parent lose a job, or experiencing a windfall—but these formative moments often shape risk tolerance and financial habits.

Advisors who surface these emotional narratives can create more resonant plans. For example, a client who fears repeating a past financial loss might resist equities even when long-term data supports them. By addressing the underlying fear rather than simply presenting charts, the advisor builds trust and opens the door to gradual, emotionally acceptable change.

Spotting potential problem clients early allows advisors to decide whether the relationship is worth the energy investment. Low conscientiousness often shows up as missed appointments, incomplete forms, or disregarded instructions—behaviors that erode efficiency. High neuroticism can manifest as constant worry or emotional outbursts, while low agreeableness may present as combative or distrustful communication.

Once these traits are identified, advisors can adapt their approach—tightening meeting agendas, documenting agreements in writing, or setting firmer boundaries. In some cases, a candid conversation about working style expectations can reset the dynamic; in others, the wisest move may be a respectful disengagement.

Ultra-competitive clients often have a win-at-all-costs mindset, which can be both a motivator and a risk factor. Their drive for top performance can push them toward concentrated bets or frequent trading, jeopardizing diversification and long-term compounding.

Dr. Murtha’s advice to reframe winning is crucial. By shifting the competitive lens from quarterly returns to multi-year goal attainment, advisors can satisfy the client’s need for victory while preserving prudent investment discipline. Dashboards, progress charts, and milestone celebrations become tools not just for measurement but for behavior management.