The good thing about financial advisors is that they tend to be ambitious, Type-A personalities. They want to win. The problem with financial advisors is that they tend to be ambitious, Type-A personalities who always want to win. In short, stress levels for even the most accomplished financial advisor are high — even in the best of times.
So says Dr. Alden Cass, a Manhattan-based clinical psychologist and performance coach, who specializes in treating financial advisors and helping them improve their on-the-job performance. Cass maintains that advisors are more prone to depression — both serious and mild — than the general population at large. Several years ago, as a graduate student, Cass conducted a clinical survey on the mental health of Wall Street's advisors. Published in 2001, the study, titled “Casualties of Wall Street,” examined nearly 50 reps, and found that 23 percent of them exhibited significant signs of clinical depression, while another 36 percent showed mild to moderate symptoms. Interestingly, Cass says, “It also revealed that million-dollar producers were the most dysfunctional when it came to mental health, as they were most prone to burnout.”
According to his first book, Bullish Thinking: The Advisor's Guide to Surviving and Thriving on Wall Street (John Wiley & Sons, 2008), which he co-wrote with a psychiatrist and a financial journalist: “Brokers reported abusing alcohol and other substances such as cocaine, amphetamines, marijuana, Ritalin and Ecstasy. They also used sex as well as promiscuity to cope with their unrelenting stress.”
RR: On Wall Street, I thought that money — success — brought happiness.
Alden Cass: That's the assumption, that money makes you happy. But in my study 10 years ago, one of the shocking findings that I found was that the annual salary of these advisers in my sample, their average salary, was positively correlated with the variables for levels of emotional exhaustion, their levels of depression, levels of anxiety, and levels of depersonalization, which is defined as a lack of concern for others as well as a lack of caring about oneself. It's a lack of awareness of how one's feeling — as well as the variable for number of hours of sleep per night.
So basically, those within my sample who were making the most money were experiencing the most emotional distress.
RR: Now why would that be? Your study was conducted during the great bull market; so it is kind of weird that advisors in your sample would be so stressed.
Alden Cass: It was a raging bull market for sure. But they were hustling, they were focused on one thing and one thing only, which was making money. The advisors in my study wanted to really take charge of that opportunity, all at the expense of their own insight into about how they were feeling. Fewer hours of sleep per night was a variable that was highly correlated with making more money 10 years ago. Advisors were really hustling to make money and they didn't have time for sleep. And those who were making the most money were out on business calls, networking, really trying to bring in the cash.
RR: I am amazed that you found FAs, successful FAs, to be so emotionally unhealthy themselves.
Alden Cass: But it's true. Caring for customers is key to making money, of course. And that means understanding how you are feeling too. The big take away from this was that they had high levels of emotional anxiety, emotional exhaustion, levels of depression, levels of depersonalization — those characteristics were all found to be at moderate to high levels during the time of the study. Basically, this means they were numb.
RR: That's the stereotype of Wall Street: “Greed is good and I'm an animal; I work hard, I party hard and I play hard.”
Alden Cass: Right. That is the cultural stereotype. Since the market collapse, retail investors out there don't have a lot of trust in the system any more. They're afraid and uncertain. They've lost lots of money. So they're keeping a lot of money on the sidelines, and the only way they're going to come back is if the investors start to trust their advisors, and trust the system.
So in order to really improve the likelihood of repairing that trust, advisors really need to be emotionally prepared to handle their clients' needs, meaning, improving their client-centered focus. So in order to do that, the way I work with my clients who come to me, is helping them become more aware of how they're feeling, being able to have the insight into how to become emotionally disciplined and emotionally sound, so that they can hold their clients' hand, so that they can be invested in how their clients are doing.
And it comes across. Clients know whether their advisor really cares about them or if the advisor regards them as just a number, or just another sum of assets in their book. Really, that comes across. When you're depersonalized, you become easily angered at clients. I've heard them, they name call their clients, they get annoyed, they curse about them, they are less empathetic, they get bored with them.
And you know, that's a part of depersonalization. It's just not wanting to deal any more. And it's because they haven't themselves dealt with how they're feeling. And so if the advisor can get strong and emotionally disciplined during a time period of great uncertainty, then they can really empower the investor, or the prospect, or their current clients, and to hold fast to their investment strategy and their beliefs. So what I help them do is analyze what they're thinking about, helping them understand how their thoughts can control how they feel about their job, and then bring back some of that swagger and motivation that they had in the past that's helped them bring in business and helped the clients feel safe investing with them.