Financial Anxiety with Dr. Megan McCoy

george grombacher 0:00
Hey, what’s up? This is George G. And the time is right. welcome today’s guest strong and powerful mega McCoy. Dr. Megan, are you ready to do this?

Dr. Megan McCoy 0:08
Yes. Thanks for having me. excited to have you back on the second get ready to be high energy.

george grombacher 0:13
Perfect. I love it. Talk to you, Megan is an LM ft and EC s FCCFT dash dash i You’re gonna tell me what that one is Megan. She’s an associate professor, researcher, writer, speaker, Certified Financial therapist. I can tell us about your personal life’s more about your work, why you do what you do?

Dr. Megan McCoy 0:36
Yes, the CMT is actually the Certified Financial therapist designation by the Bucha Therapy Association. But I do sometimes feel like I just have alphabet soup back from my name, all in the quest to just learn more and connect with others and be better. But personal life is great. I know you’re necessarily favorite ages with your kids. But my kids are six and nine. And I swear they’re still have the cute cuddly Enos of a little kid. But I don’t have to get as many snacks as I used to. So a lot less physically draining.

george grombacher 1:08
That’s awesome. They’re minor six, and three. And there’s still a lot of snack getting.

Dr. Megan McCoy 1:13
I still find granola bars randomly hidden in bags and cars and all kinds of places. Yeah,

george grombacher 1:19
yeah, I certainly appreciate that. But that is absolutely my reality. So we talked a couple of years ago, and it was our first conversation on the show about financial therapy. So refresh our memory on on the discipline and and what y’all are doing? Yeah, so

Dr. Megan McCoy 1:35
financial therapy was developed at the great recession when everybody was incredibly stressed. And all these financial planners went to their mental health colleagues, and were like, I don’t know how to handle all this stress anxiety. My clients, and the mental health professionals were like, Oh, my gosh, my clients are talking about money. And I hate talking about money. So they got together and they’re like, how can we learn from each other? How can we steal the evidence based research you have and apply it to our work? And how can we collaborate together to really deal with our clients problems holistically. And since then, so much has changed? I think the CFP Board has really made a marked effort to understand the psychology of finish planning the psychology of our clients. So I’ve been very lucky that I’ve found a spot that I can do to my favorite lesson.

george grombacher 2:19
Yeah, I certainly appreciate that. So you are, well, are you constantly writing, learning, studying and researching?

Dr. Megan McCoy 2:29
Yeah, I know, I joked with you already. But hopefully your listeners think it’s funny that my favorite writing music is a song from the Hamilton play where it’s like when you really don’t. But writing is my favorite. Like I just sit on my couch with my laptop just going to town on all the cool stuff. Because there’s so much to research, there’s so much to write about in this area. And it actually previews. What I’m hoping we’ll talk about today is that I was lucky enough to be involved in grant where we collected data data on both clients and planners experiences around host of information. It was the first grant by the financial planning association with the port by Alliance. And what’s cool about is that we have a couple of papers from it. But now we’re opening up to any researcher, anybody who wants to dive more into client and planner relationships, and how to be best at financial planning.

george grombacher 3:21
Client and planner relationships. Let’s just jump into it.

Dr. Megan McCoy 3:25
Yeah, okay. Oh, I’m so proud of the paper I wrote with amazing colleagues that came out in December in the Journal of Financial Planning. Let me get the title correct. It was called was it caught? I should know the title my own paper, but it’s nice and long. Because researchers like long titles, it’s called The Science of building trust and commitment in financial planning, using structural equation modeling, to examine antecedents to trust and commitment, which is a mouthful, but it really does summarize what we did, we looked at what are the factors that increase trust and commitment in client and planter relationships. What it boils down to is we using a theory, we found that communication ability, opportunistic behavior, shared values, termination costs, and relationship benefits really, are the precursors to trust and commitment. And I was cool, because in research, you know, there’s so many, I don’t know, aspects of everything. Like if I were to say why the sky is blue, there’ll be four foundational reasons why the sky is blue. If I asked you why you’re blue, there is 100 reasons why you might be experiencing blueness. So what we found in our first study is we were able to explain about 71% of the antecedents the trust and commitment in relationship, which is amazing for exploration of human behaviors, but it wasn’t good enough. And so recently, we like dived in Are there and my background in marriage and family therapy made me especially interested in how anxiety shapes the relationship. So we added anxiety in and we were able to explain then in a paper that’s forthcoming 77% of why trust and commitment is. So there’s still more that we have to discover as a vehicle. But right now I’m really, really excited about how much anxiety impacts trust and commitment, and providing practitioners tools to improve that.

george grombacher 5:30
Nice. Alright, so I think you mentioned four things on the first paper, it was communication skills, shared values, what are the other two

Dr. Megan McCoy 5:38
opportunities cause opportunities to take behavior sorry, like that your planner thinks you have their best interests in mind more than fiduciary, but you as a human care about them as a human, then termination costs, we’re aware that Robo advising has made our job more foundationally relationship building and managing emotions around behaviors, rather than the actual investment purchase or whatever. And so we have to make sure that the value we’re bringing to the table is higher than they can get for free by going to some brokerage. And then relationship benefits, building upon those two really understanding how they get something out of being spending time with you that they enjoy their time with you.

george grombacher 6:24
Well, that’s certainly make sense. So these are the factors that initially you’re able to determine account for 70% of successful relationships. What is what is that? 70%? Yep.

Dr. Megan McCoy 6:36
So we say, if we look at the best people at these five things, what is the trust and commitment they see in their clients? And so we expect it to be 100%? Right? If it’s all the factors that lead to trust, commitment, we’re missing stuff, we’re missing some other magical ingredients that will make your clients trust you more. And that’s where anxiety came in first, that way, we can have 5% More, which doesn’t sound like a lot. But again, in social science, when you’re talking about humans, that is tremendous.

george grombacher 7:09
So when we say anxiety, what does that mean in the context of this?

Dr. Megan McCoy 7:13
So first off, I want to give a shout out to Christy Archer Leto, who I think you’ve had on your show before because it created the financial anxiety scale, which is seven items. But in reality, what it means is everybody experiences stress from now time and time again. Dress oftentimes makes us propel into good action. Stress is sometimes healthy for us. And when we call it healthy stress, we usually refer to it as us stress, which is EU stress. Which is great, right? But when stress becomes unwarranted and becomes elongated, like no longer is there a clear reason for the stress. No longer is it time captured, it becomes anxiety, this lingering fear of like I’m not okay. And there’s been some wonderful foundational work done by especially John Grable and Sonya looter around financial anxiety. And of course, Christy articulate as well, where they found that anxiety acts interesting to just like stress, anxiety might have a bell curve where too much anxiety makes us not be able to function, it makes us want to feel like an ostrich in the sand with too little anxiety and exists. Like, I’ll put that off for another day. Who cares about that? Don’t worry about that. And so it’s this balancing act that financial planners have to examine with their clients.

george grombacher 8:34
That makes a lot of sense. So the 5% bump that when you looked at anxiety in the relationships between planners and clients, is that saying that, in those examples, the planner was able to find that just right, anxiety?

Dr. Megan McCoy 8:52
Nope. And the first study we did, we just looked at high anxiety. And we found that the higher the client’s anxiety is, the lower the trust and commitment goes down. But I already knew that bell curve idea from prior work, especially again, John graybles work, but so I was interested in so we’re doing a follow up paper. And that’s where we’re examining that bell curve phenomenon. And I’m so excited to get that out to everyone. Yeah.

george grombacher 9:16
Well, that’ll be interesting to see. I think that, that you stress you stress is such a valuable thing all too often. Like when we think about stress and anxiety, we do think, oh, that’s definitely something that I don’t want. I want to avoid it. When in fact that healthy stress of improvement and pushing ourselves just slightly beyond our comfort zone. That’s how we actually make progress. Absolutely, absolutely. But we don’t want to live there because don’t want to live there anxious or stressed. And it

Dr. Megan McCoy 9:52
hurts us like we know that those individuals not even financial anxiety, people with anxiety or not able to deal with their finances, they are not able to call the credit card company or call and make a better example for planners, they’re not able to make the right investment decisions because they’re acting out of fear or scarcity mindset, rather than using their frontal lobe and their intellectual part of their brain.

george grombacher 10:22
So, when I’m anxious, and I’m suffering from anxiety, it can manifest negatively and an inability to take positive action proactively called a credit card company, because I’m just so freaked out, I know that I’m behind or whatever, but I’m just gonna put my head in the sand. And it also results in making poor investment decisions,

Dr. Megan McCoy 10:45
right selling when is low, because you’re fearful rather than holding, you’re waiting for the market to recover.

george grombacher 10:51
So we intellectually, again, I understand intellectually that I’m supposed to buy when things are low and sell when things are high, but anxiety can make me do the opposite.

Dr. Megan McCoy 10:59
Absolutely. And beyond that anxiety has been found to be linked to a host of other issues. Be physiologically like we know, there’s some preliminary studies that show that anxiety might be the largest carcinogen in our lives like that. If you are living with prostate, persistent and sustained anxiety, your chances of cancer go up. And so there’s also the host of other things like ulcers and insomnia, that we know have a ripple down effect on our physical well being. There’s also research shows that anxiety will impact that relationships. And so, especially in family dynamics, where anxiety is linked to conflict in parents, which trickles down to what’s it called, like restricted parenting ability, like if you’re super anxious, you might be on your phone instead of reading a book to your kids, or you might be snapping at them because you’re frustrated or overstimulated by all the other anxiety in your life.

george grombacher 12:00
I have heard in the past that behind infidelity, financial problems, and challenges are one of the primary reasons folks split up in their relationships. Is that true?

Dr. Megan McCoy 12:09
Yep. And what’s interesting when you mentioned infidelity is there’s also a growing body of research around financial infidelity and how that’s also linked to divorce and separation or marital distress.

george grombacher 12:22
Yeah, and that certainly makes sense. Anxiety is a carcinogen. That’s not surprising, but at the same time, surprising to hear.

Dr. Megan McCoy 12:32
Yeah, yeah. You know, our hormones are just always around us. But when we’re anxious, they are on full blast. And so the impact at the cellular level is dramatic.

george grombacher 12:46
So, just to sort of complete the circle here, when I as a financial professional, when a financial professional can have a deeper understanding of, of how to help clients manage through anxiety, that’s going to increase potentially, by 5%, the impact of the relationship or the effectiveness of the relationship. Yeah, the commitment,

Dr. Megan McCoy 13:11
the trust, and beyond that you highlighted, something I do want to hit on is the idea of helping address it. But before that is helping recognize it. In the same study, we found that planners greatly underestimated their client’s financial anxiety. For example, planners that financial anxiety impacted a little less than half their clients right around 49%. But nearly three and four clients actually reported having financial anxiety. That means that we’re not being good at asking the right questions to them. How bad are they stressing about their finances? And so the more we can recognize that financial anxiety is way too common in all humans, as even our financial clients, you might have more means than the normal population, that it may be hiding under the surface and not being shared.

george grombacher 14:01
So the question to ask is, are you freaking out about your money? Or maybe how free I love that. Let me see your nails and your cuticles. Are you chewing these up? What are

Dr. Megan McCoy 14:21
you said that because in that study I referenced earlier, and I wish I remembered all the author’s but I tend to remember the first author’s name and at all, but they found how cold the hand was, was a signal to a planner, how anxious they were, the blood rushed away from them. So they really can’t use the verbals and the nonverbals to it that Yeah,

george grombacher 14:42
well, certainly we have all of our senses available to us. So using as many of them as possible certainly make sense. So, in this particular study, around 75% of, of clients reported some kind of anxious anxiety around them. All right.

Dr. Megan McCoy 15:01
Yeah, it was I think it was exactly 71. But this still dramatic as you can think about our art, our sample skewed, higher wealth, older than the general public. And that makes sense based on the American Psychological Association’s annual survey that stressors, money is almost always the number one topic that is less than

george grombacher 15:20
what are some of the All kidding aside some of those questions that I can be asking to better gauge, or help my clients better self assess their level of anxiety,

Dr. Megan McCoy 15:35
I think starts with more or less of a question and more of a normalizing, like, anxiety is really key financial anxiety is really common in the US. I just wanted to check on you to see how you’re feeling. Are you losing sleep? Or? Or are you worrying about your finances between the recessions? Am I doing a good job of making you feel safe, that we have a long term plan established, so you don’t have to worry about the day to day activity of the market or the larger economic landscape? Because we have our eyes on 10 years or 15 years or 20 years from now? I think those kind of acknowledging normalizing and assessing can be really powerful.

george grombacher 16:15
Yeah, really, there’s no doubt, acknowledge normalize, and what was the last one? Assessing, assess aim? Yeah, I don’t, if you’re too direct with people now need to, to, to approach that more tactfully just make people feel comfortable and at ease, and not anxious.

Dr. Megan McCoy 16:44
Recognizing that one partner may be very comfortable, and one partner might be the anxious person, as a family therapist, I would love for every planner to get to see every couple and for every couple to not necessarily be the driver of their finances, but a participant in their finances. And so recognizing that the one partner might be hiding behind the other or presenting anxiety differently than others. You know, we present anxiety differently, especially not to BREAK GENDER down dichotomous, but men tend to externalize their anxiety meaning present with anger or frustration or aggression when they’re anxious. While women in general, again, tend to be a little bit more verbal, or, or what’s it called? Emotional, like presentations of anxiety. So some of those clients who are driving you batty with like calling you too much, or, or getting frustrated with your receptionist, or to the host of other activities might actually be anxious rather than just a jerk. Yeah,

george grombacher 17:47
that’s really make sense. That’s. And you’d almost Yeah, let’s take that, certainly. And we’re going through pretty challenging and unique times with the economy and the markets and everything else that if people weren’t a little bit anxious, I think it would probably be almost odd

Dr. Megan McCoy 18:05
symptomatic out, especially since humans are not meant for ambiguity, like there’s an old Seinfeld joke about rather be in the coffin rather than presenting in front of it, which is often alluded to the idea of not liking to public speak. But I think it also kind of hints at the fact that like, sometimes worrying about something is scarier than the actual bad thing happened. Like we’d much rather pull the band aid off and I think since 2020, the band aid has just been dangling for way too long of like, what she was gonna draw next.

george grombacher 18:40
What a great what a great metaphor that is. Just a dangling banded pull the thing off, for God’s sakes, let me have a little bit of certainty, no more just consumed by ambiguity. I love it. Well, Megan, thank you so much for coming back on where can people learn more about you? How can they engage?

Dr. Megan McCoy 19:04
Yes, my LinkedIn profiles Megan McCoy MFT I think something like that. Find me there. And also you’re anybody’s welcome to email me anytime. I love chatting, connecting. It’s Megan McCoy. Just my name that I have with you period. Edu, which stands for at Kansas State.

george grombacher 19:22
Excellent. Well, if you enjoyed as much as I did, show Dr. Megan, your appreciation and share today’s show with a friend who also appreciates good ideas. Go to or find Meghan on LinkedIn. I’ll link that in the notes of the show, shoot her an email, get in touch and the more we can learn about this kind of research, obviously, the better we’re all going to be but my personal finances and also our interaction interactions with professionals and clients. So love it. Thanks. Good Megan.

Dr. Megan McCoy 19:50
Thank you.

george grombacher 19:51
Until next time, remember, do your part by doing your best

Transcribed by https://otter.ai