How Financial Advisors Can Recognize When Clients Need Mental Health Support And Refer With Confidence

As financial advisors, you’re more than just a money expert. You’re a coach, strategist, sounding board, and often a trusted confidant.

Clients come to you not just for numbers but for guidance through some of life’s most stressful moments: divorce, loss, career changes, family conflict, and major financial transitions.

But some client challenges go deeper than what financial planning alone can solve.

So how do you know when a client’s concerns have crossed into the territory of mental health - and when it’s time to refer a therapist or other professional?

It’s not always clear-cut or easy. But recognizing the signs early and knowing how to refer with care and confidence is a powerful way to strengthen trust, protect your client’s wellbeing, and keep your role as their financial guide intact.

In this blog, we’ll cover:

• Why mental health overlaps with financial planning

• Signs a client may need additional support

• How to make a thoughtful, professional referral

• The do’s and don’ts of navigating sensitive conversations

• A free guide to help you build a referral process you feel good about

Let’s dive in.

The Overlap: Why Mental Health and Money Are Deeply Connected

Money is rarely just money. It’s tied to our deepest emotions: safety, security, self-worth, identity, and relationships.

For many clients, financial planning sessions become a space where emotional issues - sometimes unresolved or even traumatic - naturally surface. You’ve probably seen this firsthand:

• A client breaks down when discussing estate plans.

• Someone freezes during a conversation about investing after a major loss.

• A client repeatedly avoids key decisions, despite your best efforts.

This is normal and part of the work. But sometimes, the emotions you’re navigating signal deeper issues that require clinical mental health support.

Knowing where your expertise begins and ends is essential, for your clients’ wellbeing and your own professional boundaries.

Spotting the Signs: When Clients May Need Mental Health Support

So how do you tell the difference between “normal financial anxiety” and something that needs additional help?

Here are some common indicators:

Persistent Overwhelm or Anxiety:
Everyone feels stress around money at times, but if a client seems chronically anxious, unable to sleep, or talks about constant fear—even when their financial situation is stable—that’s a flag.

Avoidance or Inaction:
Clients who consistently miss meetings, avoid discussing certain topics, or seem paralyzed by even small decisions may be dealing with underlying issues like anxiety, depression, or trauma.

Extreme Emotional Reactions:
Sudden anger, tears, or disproportionate reactions to routine financial conversations could point to deeper struggles.

Disclosure of Personal Struggles:
If a client openly shares they’re experiencing mental health issues (like depression, grief, or addiction), take that seriously—even if it seems unrelated to your current work together.

Signs of Cognitive Decline:
For older clients, noticeable confusion or memory lapses could indicate cognitive impairment that requires medical attention.

Important: You don’t have to diagnose or solve these issues. But noticing them and having a plan for what to do next can help you feel more equipped to navigate these situations.

How to Approach the Conversation With Care

Bringing up the idea of mental health support can feel intimidating. You want to be sensitive and respectful, no offend, but also be clear and helpful.

Here are some ways to frame the conversation:

Normalize the Need for Support:
"We’ve been talking about a lot of heavy topics, and it’s completely normal to feel overwhelmed. Sometimes it’s helpful to have additional support to work through these feelings. We often refer clients to other professionals who may be of help to them. Would you like me to share those resources?”

Frame It as an Extra Layer of Care:
"Part of my role is recognizing when something might be beyond financial planning. I want to make sure you have all the support you need whether it’s financial or not."

Offer Resources, Not Directives:
"If you’re open to it, I can connect you with a professional who specializes in these kinds of situations. Would that feel helpful?"

The key is to approach the conversation with empathy, without judgment or pressure.

Making the Referral: Do’s and Don’ts

DO have a referral network ready.
Build relationships with local therapists, counselors, or even national networks who understand financial-related stress.

DO explain your reasoning clearly.
Clients want to understand why you’re suggesting this next step - frame it as part of a holistic care approach.

DO respect client confidentiality.
Never share personal details without permission.

DON’T overstep your role.
Avoid offering advice or opinions that fall outside your professional expertise.

DON’T push.
Not every client will be ready for therapy right away, and that’s OK. Your job is to offer the option then respect their choice.

Protecting Yourself: Why Boundaries Matter

It’s easy to feel like you need to “do it all” for your clients, especially when deep trust has been built. But remember: you’re a financial advisor, not a therapist.

Setting clear boundaries:

Protects your client from receiving support you’re not equipped to give

Prevents compassion fatigue and burnout on your end

Keeps your professional relationship clean and effective

A good rule of thumb: If you feel like you’re “playing therapist” in meetings, it’s time to bring in additional help.

A Free Resource to Help You Build a Referral Process

Not sure how to build a thoughtful, professional referral process?

I’ve created a free guide to walk you through it:

✔️ When and how to identify the need
✔️ Sample scripts to introduce the idea to clients
✔️ A checklist for building your referral network

👉 Download the Free Advisors Guide On Making a Referral for Therapy Here

It’s designed to make these conversations and processes easier so you can show up with confidence and clarity when the need arises.

Understand Why Your Clients THINK. FEEL. DO™

Being a trusted advisor means being attuned to your clients’ full experience, not just their finances. But it also means knowing your limits.

Recognizing when a client might benefit from mental health support, and referring them with empathy and professionalism, is one of the best ways to strengthen your relationship and truly serve their overall wellbeing. (Learn more about how financial stress can damage mental health)

But remember: You’re not meant to do it all.

Have you navigated a situation like this before? What helped you handle it with care? I’d love to hear your thoughts in the comments.