“Sometimes, it is not the money in your bank account that solves your problems, but the wisdom in your head.” – Michael Bassey Johnson
One of the greatest tools at a financial advisor’s disposal is the ability to empathize with clients to develop a deeper understanding of their circumstances. Sometimes it’s the excitement they feel over watching their financial plan come together, but it can also be about their concerns.
In some cases, these difficulties manifest as financial phobias. It’s likely that many advisors aren’t familiar with the term, but they’ve likely unknowingly encountered them before.
Here are a few ways to identify and address the fear or anxiety around money worries.
Generally speaking, they’re a class of extreme and often irrational or extreme fears related to financial matters.
They can present themselves in acute episodes, such as not opening bank statements after a severe loss, or they can be chronic, like ignoring credit card balances entirely. In either case, they most commonly involve a degree of avoidance behaviour.
The University of Cambridge conducted a study in 2003 that concluded that symptoms follow a similar pattern to anxiety:
More recently, the FP Canada™ 2025 Financial Stress Index corroborated those findings, with 52% of Canadians living in fear of making the wrong financial decisions—49% of them lose sleep over it. In fact, 42% of respondents listed money as their leading source of stress. The second top stressor, health, was a far cry away at 21%.
According to Brenan Burchell, a senior lecturer, approximately 20% of the population suffers from financial phobias. An interesting demographic trend took shape as well; the condition is more prevalent in women and younger people.
In the 2019 UK financial wellbeing survey, 61% of respondents reported money as the leading cause of stress, ahead of work, health, and relationships. Globally, BlackRock’s 2019 Global Investor Pulse found that 43% aren’t thinking about their future because they’re too worried about their current financial situation. In 2022, Capital One’s research found that a staggering 77% of Americans noted anxiety over their financial well-being, and 58% felt that finances controlled their lives.
The most common financial phobias are typically:
Fear responses vary, but one of the more universal ones is being afraid to talk about money itself. This avoidance policy can complicate any attempts to overcome your fears and hold you back from financial success.
Intense fears in general can develop at various ages, and they’re typically rooted in exposure to some sort of stressor or trauma. Isolated events (i.e., your parents lost their home) or environmental factors (i.e., money was scarce during your childhood) tend to structure behaviours, and these sources often influence how specific phobias manifest later in life.
In the first case, someone may be deeply fearful of taking on debt, and in the second example, they might resent the idea of spending a dime. Other impacts include:
The uptick in awareness (and number of cases, per Forbes) of financial anxiety has led the CFP Board to update their principal knowledge topics, and the psychology of financial planning has been introduced to the curriculum and certification exam as of 2022. Vanguard even listed behavioural coaching in their Putting a Value on Your Value report, listing the potential value-add as 100 to 200 basis points in net returns. To put this in comparison:
Clients deserve more out of their advisors than just charts and number crunching. Spending habits, money management, and finances are highly personal subjects—being able to discuss them openly with your financial advisor starts with building a relationship based on trust, open communication, and, above all else, empathy.
In fact, research shows that even working with an advisor has a remarkable effect on how confident Canadians feel about their circumstances. It might not be outright exposure therapy, but there may be fewer panic attacks along the way to reaching your financial goals and managing money-related matters.
It is important to remember that there is a difference between advising and explaining. When someone expresses their concerns, it’s often better to acknowledge them instead of dismissing or trying to describe why they’re irrational fears. Open-ended questions are better suited for allowing investors to talk through their anxieties and, hopefully, find a resolution with a financial planner’s advice, not an explanation.
There is a pressing need for advisors to help clients by listening, understanding, and asking the right questions. In a world where money makes the globe spin, discussing financial worries is a moment of vulnerability—it’s an advisor’s job to provide comfort, support, and coping strategies in those moments.
