FINANCIAL PLANNING

Some of Our Clients Are Struggling with Addiction. We Can Help.

By Lori Eisel

As the mother of a son with substance use disorder, it took me years to learn and accept all the ways that I cannot control the situation. As a personal financial planner and NAPFA member, I’ve learned an additional lesson: There are things I can do to help my clients and their families plan for the financial impact of addiction and to find treatment.

My 21-year-old son has been struggling with addiction since he was 13. I know what this disease does to families, including their financial stability. When I heard that the Ohio Department of Commerce (which licenses financial planners in our state) was developing a campaign to educate advisors on how opioid addiction could affect their clients and how they can help, I signed on immediately.¹ 

What Does My Client’s Addiction Have to Do with My Work?

Most financial advisors don’t realize how likely it is that they could have clients dealing with addiction. According to the Addiction Policy Forum, 40 million people in the U.S. live with addiction. If you have a thriving practice, some in your client base are affected by addiction, whether their own or that of a loved one.

To those who question why a financial advisor should become involved in a client’s life in this way, I say two things: There’s a real need, and there’s a good opportunity. The need for a financial advisor’s intervention is simple: Untreated addiction, whether it’s the addiction of the client or the client’s loved one, can devastate a family’s finances, especially without financial advice and planning.

Beyond the money spent pursuing the addiction and cleaning up the damage it causes, addiction-related expenses can add up. The median impact of opioid misuse/addiction was estimated at approximately $35,000 per client per year, according to a 2022 survey of Ohio financial advisors, conducted by the Ohio Department of Commerce.

There is opportunity in the relationship we have with our clients. We know their financial habits and goals, and, in many cases, we’re friends to them and their families. This puts us in a position to notice when something has changed that could indicate the presence of addiction.

10 Red Flags for Financial Advisors

Addiction experts describe behaviors and changes that might signal addiction in a child or other loved one, such as drastic mood changes, a change in friend group, a decline in school or work performance, and spending excessive time alone.

But as financial advisors, we can look out for a whole different set of signs in the adults we work with as well as their children, which include the following:

• Abrupt changes in spending habits
• Unusual or unscheduled withdrawals
• Suspension of investments
• Unusual beneficiary changes
• Increased medical bills
• Repeated expenses for car repair or replacement
• Unexpected legal or court costs
• Uncharacteristically late payment of bills
• Unexpected new credit cards or second mortgages
• Complaints of theft within the home or family

You’ve Seen Worrisome Signs. Now What?

The first step is communicating. It might feel uncomfortable to broach the subject, but, as financial advisors, we ask difficult questions every day. The Recovery Within Reach toolkit has tips for starting the conversation, including opening the door by having signs and information about recovery support around the office.

It helps to frame things around “I” and “we”—not an accusatory “you.” You can mention that you’ve just completed a course on substance abuse disorder and its financial impact. You can say, “I want to make sure we have all our bases covered. Are there any unusual costs coming up, like medical or legal bills, that I should know about?” You can be reassuring: “Is there anything you haven’t told me because it seems embarrassing? Because I’ve probably seen it before.”

Above all, once the conversation has begun, your role is to be an active listener, to reassure clients that they can trust you with this information just as they trust you with private, sensitive financial details. What you want to convey is that your job is to see that they meet their financial goals, and success depends on factoring their addiction into the equation.

When your client is ready to grapple with the impact of addiction, Recovery Within Reach has information about the cost of treatment, where and how to access it, and ways to pay for it.

The federal Substance Abuse and Mental Health Services Administration offers a treatment-location tool that can be filtered by facility type, the type of care and services offered, and the payment or funding accepted.

Educate Yourself and Help Your Clients

I hope other states follow Ohio in prioritizing addiction-related training for financial planners. In the meantime, you might be able to find other resources at local health departments and state mental health and addiction services agencies.

As financial planners, we got into this business to help people protect what’s important to them. We all know it isn’t just their financial assets; it’s their relationships with the people they love. Addiction threatens everything a person holds dear. You can help your clients protect it.

 
1. Recovery Within Reach offers “The Ohio Financial Professional’s Guide to Servicing Clients and Families Dealing With Substance Use Disorder,” a free, three-part continuing education course that can be completed online. Each module takes about 20 minutes.

Lori Eisel, MS, CFP^®, EA, CDFA^®, is president of Arcadia Financial Partners LLC in Pickerington, OH. She works with individuals and families and specializes in planning for widows, first responders, and military survivors. Email: lori@arcadiafp.com

image credit: istock.com/Cecilie_Arcurs