The costume is part of what the client pays for, if it suits the occasion. My most lucrative gigs are adult birthday and holiday parties (Halloween in particular has become my favorite holiday ever), and being hired as an entertainer means the client is happier seeing someone who looks like they're into the role- in the bluntest terms, I'm basically a mentalist party clown in most of my gigs, and I'm being paid to look the part- the client would rather I show the guests a good time than actually be right about my readings. Though of course, I -am- right about my readings- guess that psych degree finally came in handy for something, dad.
(Though, if I'm being paid for a private reading instead of a party, or if I'm off the clock and flipping a few cards as a bar trick, I'll wear people-clothes.)
And no, you're not wrong, acting as a therapist with little more than a bachelor's degree to back me up would be shady as hell if my clients were looking for a therapist, but they're not. They're looking for psychics, and that can be pretty dangerous depending on who they find. To that end, I feel like offering legitimate life advice and phrasing it as an ominous prediction like telling a recent divorcee that "new adventures lie ahead" or telling someone who's miserable at their job that "personal needs must be investigated and addressed" is at least as responsible as shaking a magic eight ball and telling them their grandpa buried the leprechaun's gold in Mobile, Alabama.
As far as being upfront about my abilities, if they ask me "is this for real?" I tell them the truth- I'm a tarot reader. I can't communicate with their dead relatives, I can't give them hard yes or no answers about the future, and if they try to show me their palm I will give them a high five, but the cards have something to say to everybody, and if they sit down and listen, they're going to be glad they did.
The cards are pretty damn cool like that.