Financial therapy in advisory practices; cash management for clients; direction from disinflation

PRACTICE AND CLIENT MANAGEMENT: As the ties between the fields of psychology and financial planning grow stronger, how people talk about the “more human side of money” is changing as well.

In an effort to explain the burgeoning professional interest in psychology among planners and other industry professionals, Financial Planning spoke with seven experts to compile six key takeaways. The lessons relate to practice management and professional development in ways that may be surprising to anyone who suggests that planning is primarily a numbers-driven or emotionless field of finance.

Read: 6 ways to implement psychology in advisory practices

PORTFOLIO STRATEGIES: Bill Harris, the former CEO of PayPal and TurboTax owner Intuit, thinks advisors don't always do a commendable job helping clients figure out what to do with cash.

Uninvested cash, Harris said, is too often an afterthought to wealth managers more concerned with dividing investors' portfolios up among stocks, bonds and other standard investments. That's a mistake, he said. Questions over cash management have come to the forefront over the past two years as high inflation has eaten away the purchasing power of money, yielding meager returns in standard checking and savings accounts. Meanwhile, high interest rates have money market and high-yield savings accounts' returns hovering around 5%.

Read: Avoiding the 'cash trap': Time to move clients out of money markets?

ECONOMIC NEWS: What does the Fed’s latest inflation report mean for wealth management??In May, the year-on-year change in the personal consumption expenditures (PCE) index was 2.6%, down from 2.7% in April. PCE is the Federal Reserve's preferred measure of inflation, and the Fed has insisted that it needs more evidence of cooling prices before it begins cutting interest rates.?

For investors and their financial advisors, which assets are likely to benefit from this disinflation, and which will take a hit?

Read: PCE inflation cooled in May. Is this the 'good data' the Fed is looking for?

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