Matthew Hammond, owner and financial advisor and at Sunesis Financial in Sherwood Park, Alta., sat down with a client about a year ago who seemed besieged by doubt. The client was in the process of investing a sizable life insurance payout and as Mr. Hammond began to draw up documents, the man started to shake visibly.
“At one point, I finally just said, ‘You know what? If you don’t want to do this, it’s cool. This doesn’t need to cause any stress,’ ” says Mr. Hammond, adding that he pushed to cheque back toward the anxious client, who then calmed down.
Although the client eventually decided to invest the money, within nine months, he panicked and changed his mind again, requiring the entire investment to be unwound.
“It’s tricky working with clients who have mental-health and depression issues,” Mr. Hammond says. “There’s a lot more to this job than just picking stocks.”
It’s no secret that the job of an advisor can be complicated, often walking the line between money management and emotional support. Financial planners, in particular, are expected to ask clients deeply personal questions not only about their money, but also about their health, dreams for the future, plans for their children and even marital breakdowns. Advisors come to know their clients well, sometimes when they’re at their most vulnerable.
That familiarity also means advisors work closely with those living with mental-health issues. According to research conducted for Toronto-based Bridgehouse Asset Managers in 2018, 72 per cent of advisors have encountered clients suffering from anxiety. In addition, 54 per cent said they had worked with clients experiencing depression, 34 per cent said they had advised clients with substance abuse problems, 28 per cent said they had clients with bipolar and psychotic disorders and 21 per cent advised clients with gambling addictions.
Dorothy-Anna Orser, portfolio manager and senior investment advisor at Echelon Wealth Partners Inc. in Toronto, says that she would have done well to get a psychology degree before she’d entered the financial services industry. And although she works with many high-net-worth clients, wealth does not necessarily inoculate anyone from depression or anxiety.
“A lot of people have a lot of money, but they’re not happy,” she says, mentioning that sometimes her assistant will ask why Ms. Orser has been on the phone with a client for so long. “It’s because he’s alone and depressed. Sometimes just making the client laugh is important.”
In a recent example, a long-time client suddenly became anxious and depressed when she discovered she had cancer. What was the point of being invested in a down market if long-term saving didn’t seem to apply to her any more, she asked? Despite being invested for years – a true saver with a healthy portfolio – the woman wanted out of the market entirely.
Ms. Orser began speaking with the client monthly rather than the more typical twice-a-year frequency and eventually helped the client realize the importance of staying invested. In fact, the client’s portfolio was changed to a more aggressive asset mix – and the cancer is in remission too.
Considering that one in five Canadians live with a mental health problem, according to the Bridgehouse research, it’s of little wonder that the industry is starting to discuss investors’ mental well-being, with relevant events and webinar series on offer for advisors. But according to Susan Latremoille, director of wealth management and a wealth advisor with the Latremoille Begg Group at Richardson GMP Ltd. in Toronto, there’s plenty advisors can do right away to be there for clients who are suffering – and help them avoid making poor financial decisions in response to their illness. She recommends taking the following measures:
Watch for signs
“[The first thing you should do] is recognize the warning signs,” says Ms. Latremoille, adding that advisors are often in a position to notice when a client starts to act differently.
Perhaps a long-time client who never needed hand-holding before starts e-mailing and calling regularly. Or someone who was formerly a conservative investor suddenly shoots you a string of rapid-fire directions to sell everything so she can buy a boat and sail around the world. Doing some research into bipolar disorder’s manic episodes, depression, anxiety and other conditions will give you a better understanding about what you might be dealing with.
Talk about it
Discussing mental illness openly may seem uncomfortable at first – and it’s tempting to assume the issues have no bearing on a client’s finances – but avoiding the conversation won’t help the client in the long run. So, it’s a good idea to discuss mental health at the same time as physical health when creating or updating a client’s financial plan.
“By putting it all on the table, you show you’ve understood their situation, you want to work with them and try to make things better,” says Ms. Latremoille.
Get others involved
Whether it’s an adult son, best friend or other person close to your client, it’s not a bad idea to set up a trusted contact person (TCP) if mental illness is an issue. Although a TCP can’t make decisions about a client’s portfolio, they can be contacted if you have any concerns about the client’s recent behaviour or are worried that she/he may be a target for fraud or abuse.
Get your discretionary portfolio manager’s licence
Working with clients struggling with mental-health issues can be tricky. You’re duty-bound to follow clients’ instructions, but sometimes illnesses can compel clients to work against their own best interests. One of the best ways to avoid this challenge is to become licensed as a discretionary portfolio manager, says Ms. Latremoille. That means you avoid having to contact the client every time you make a change to the account.
“It’s not like you can flick the switch on and say, ‘I’m discretionary.’ You have to show your capability and get credentials,” she says, explaining that you’ll have to write exams and be an apprentice for a couple of years.
Show you care
Have a client going through a depressive episode? Touch base with them more often, even if it’s just a five-minute call. Anxious clients need more hand-holding.
“Put yourself in their shoes and show compassion for their situation,” says Ms. Latremoille. “People do recognize, usually, that they’re in a bad state. A little bit of kindness can go a long way.”