Skip to main content
The Globe and Mail
Support Quality Journalism.
The Globe and Mail
First Access to Latest
Investment News
Collection of curated
e-books and guides
Inform your decisions via
Globe Investor Tools
Just$1.99
per week
for first 24 weeks

Enjoy unlimited digital access
Enjoy Unlimited Digital Access
Get full access to globeandmail.com
Just $1.99 per week for the first 24 weeks
Just $1.99 per week for the first 24 weeks
var select={root:".js-sub-pencil",control:".js-sub-pencil-control",open:"o-sub-pencil--open",closed:"o-sub-pencil--closed"},dom={},allowExpand=!0;function pencilInit(o){var e=arguments.length>1&&void 0!==arguments[1]&&arguments[1];select.root=o,dom.root=document.querySelector(select.root),dom.root&&(dom.control=document.querySelector(select.control),dom.control.addEventListener("click",onToggleClicked),setPanelState(e),window.addEventListener("scroll",onWindowScroll),dom.root.removeAttribute("hidden"))}function isPanelOpen(){return dom.root.classList.contains(select.open)}function setPanelState(o){dom.root.classList[o?"add":"remove"](select.open),dom.root.classList[o?"remove":"add"](select.closed),dom.control.setAttribute("aria-expanded",o)}function onToggleClicked(){var l=!isPanelOpen();setPanelState(l)}function onWindowScroll(){window.requestAnimationFrame(function() {var l=isPanelOpen(),n=0===(document.body.scrollTop||document.documentElement.scrollTop);n||l||!allowExpand?n&&l&&(allowExpand=!0,setPanelState(!1)):(allowExpand=!1,setPanelState(!0))});}pencilInit(".js-sub-pencil",!1); // via darwin-bg var slideIndex = 0; carousel(); function carousel() { var i; var x = document.getElementsByClassName("subs_valueprop"); for (i = 0; i < x.length; i++) { x[i].style.display = "none"; } slideIndex++; if (slideIndex> x.length) { slideIndex = 1; } x[slideIndex - 1].style.display = "block"; setTimeout(carousel, 2500); } //

“My day-to-day job is 80 per cent psychologist and 20 per cent money manager,” says Kurt Rosentreter, an investment adviser and chartered accountant at Manulife Financial Corp. in Toronto.

Michelle Siu/The Globe and Mail

Being a financial adviser isn't easy. Their clients break down in tears, they find themselves dealing with daily panic attacks, they spend hours each week keeping investors calm. As the weight of their clients' distress increases, some advisers might be feeling this is not the job they signed up for.

Effective financial advisers need the same insight, perception and ability to deal with crises as a top psychologist, especially when clients are hurting and markets are down.

"The psychology of it is amazing," says Kurt Rosentreter, an investment adviser and chartered accountant at Manulife Financial Corp. in Toronto. "My day-to-day job is 80 per cent psychologist and 20 per cent money manager."

Story continues below advertisement

It begins with managing people's expectations but quickly goes beyond that, advisers say. "Money is a personal thing, an emotional topic," Mr. Rosentreter says. "It permeates everything."

Many retirees "got the rug pulled out from under them" by persistently low interest rates, he says. When the stock market goes down, they cancel vacations and put their spouse on a tight budget. "It really can be all-consuming, destructive to people's personalities."

One way such misery can be avoided is by giving clients a steady source of income. When people retire after working for 30 years, their regular paycheques stop. "That alone is a huge stress point. They can just freak out," Mr. Rosentreter says. A good adviser or planner will anticipate this and ensure clients are invested in such a way that they continue to get a regular cheque deposited to their bank account each month, no matter what the stock market does.

"We're very conscientious about picking up where the paycheque stops and providing income," Mr. Rosentreter says.

Only then will he begin looking at portfolio construction, but even this can be fraught. New clients may be too proud to admit they cannot stand to lose money.

When markets turn down, "people can be literally shaking," he says. He recalls a phone call from the daughter of a retired couple saying she was worried about her dad: "'He watches the market all day long, his head is three shades of red, even his doctor is worried about him,'" the daughter said.

"That's a powerful story and it happens more than you want to know," Mr. Rosentreter said. "Unless clients share with their adviser how they really feel, we'll never get to the root cause of issues."

Story continues below advertisement

Often, clients are responding to their upbringing or other events in their lives, says Ngoc Day, a financial planner and portfolio manager at Macdonald, Shymko & Co. Ltd., in Vancouver. "It may not have anything to do with investment."

She tells of an elderly client, well off, who sincerely wanted to help her grandchildren through university but just couldn't part with the money. She and her late husband had grown up during the Depression and were extraordinarily careful with money.

In such cases, visual aids such as simple charts and graphs can help, Ms. Day says. "Show her the numbers. Say, 'Look, you have more than enough to last your lifetime and beyond. Your grandchildren need help now. Wouldn't you like to see the fruit of your gift and enjoy it all your life rather than saying they're going to get it when you're gone?'"

Sometimes, an adviser can help turn a sad situation around, says Marc Henein, an investment adviser at ScotiaMcLeod in Mississauga.

"I couldn't tell you how many people start crying in meetings," Mr. Henein said. "It's a big pain point. You have to figure out what it is and try to map out a solution. Ninety-eight per cent of the time it has nothing to do with money but with a life event."

A client might come in after inheriting $500,000 from her late mother. "But she lost her mom and that sucks," he says. He might suggest she commit part of her inheritance to an insurance policy to make sure it is passed on to the next generation.

Story continues below advertisement

"Why don't we create a legacy for your mom so her grandkids will see the benefit of their grandmother's hard work over the years?" Mr. Henein says. One-hundred thousand dollars could buy a $500,000 life insurance policy that will pay out the same $500,000 to the grandchildren.

"Then the survivor feels better," Mr. Henein says. "It's all psychology."

Barbara Garbens, president of BL Garbens Associates Inc., a fee-only financial planning firm in Toronto, points to peoples' "money personalities," which are difficult to change.

Some people can't save no matter how much they earn, while others are good at squirrelling money away. Many people put off financial planning because they are afraid of what they might discover, she says. If they are 55-ish and they want to retire at 60 or even sooner, "It's too late," Ms. Garbens says. All too often, their spending goals are unattainable.

"I can see right away they won't make it." They sense this and feel anxious. "They realize they're in trouble and have to make major life changes."

Lately, advisers have had to put on their psychologist hats to keep frightened clients from bailing out of the stock market. Retail investors are prone to buying high and selling low.

Story continues below advertisement

"The role entails being a bit more of a counsellor of late," says Keith Davis, an investment adviser at TD Wealth in Kamloops, B.C. "It's understandable with such a bombardment of negative news and panic. Investors worry, so they may look to make a quick decision," Mr. Davis says.

"It's times like these that advisers will prove their worth."

Report an error Editorial code of conduct
Due to technical reasons, we have temporarily removed commenting from our articles. We hope to have this fixed soon. Thank you for your patience. If you are looking to give feedback on our new site, please send it along to feedback@globeandmail.com. If you want to write a letter to the editor, please forward to letters@globeandmail.com.

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff.

We aim to create a safe and valuable space for discussion and debate. That means:

  • Treat others as you wish to be treated
  • Criticize ideas, not people
  • Stay on topic
  • Avoid the use of toxic and offensive language
  • Flag bad behaviour

If you do not see your comment posted immediately, it is being reviewed by the moderation team and may appear shortly, generally within an hour.

We aim to have all comments reviewed in a timely manner.

Comments that violate our community guidelines will not be posted.

Read our community guidelines here

Discussion loading ...

To view this site properly, enable cookies in your browser. Read our privacy policy to learn more.
How to enable cookies