The pressure to appear successful places tremendous strain on financial advisors — a burden that has ratcheted up thanks to the Covid-19 pandemic, and can sometimes lead FAs into poor decision-making, according to therapists.

“There’s enormous pressure — a lot of times self-imposed,” says New York-based psychotherapist Jonathan Alpert, who counsels advisors and other Wall Street professionals. “Or people feel … the need to compete with the Joneses or with competing firms.”

Many advisors are initially attracted to the profession in part because of the prospect of making good money, but they may not recognize the ways in which money can be a source of stress and anxiety, says Ed Coambs, a financial therapist who counsels planners in his North Carolina-based practice.

Last month, Edward Matthes, a Wisconsin-based advisor, pled guilty to three counts of wire fraud after stealing more than $2.6 million from clients, according to the Department of Justice. According the plea agreement, Matthes said “he stole the money in order to ‘keep up appearances’ that he was a successful business owner and community member.”

At times, the pressure to present a successful façade can propel advisors into bad behavior, though in cases like Matthes’s, such strains can also be a simple excuse for misconduct after the fact, says Alter.

“Financial advisors face pressure to appear successful,” says Florida-based advisor Kevin Smith, a vice president at RIA Wealthspire Advisors. “You’re trying to convince clients to hand over their life’s work or nest eggs to manage for them and to trust you. It’s hard to convince people to do that if your company appears like it’s in shambles, or not successful.”

“There’s enormous pressure — a lot of times self-imposed. Or people feel … the need to compete with the Joneses or with competing firms.”Jonathan AlpertPsychotherapist
The pandemic and the strain it has placed on businesses may intensify the strain on financial advisors, adds psychotherapist Alpert.

“There’s some pressure, especially at this time when businesses in basically every industry out there are suffering, to create an image as somebody who’s doing well,” says Alpert. “Given the current state of affairs with the economy and pandemic, there’s a lot of uncertainty in the world … and maybe they want to create an image of themselves that they’re doing well and strong; trying to project a confidence even though it’s false.”

This pressure underscores the importance of rigorous compliance programs, especially at firms where one advisor’s misbehavior could sully the reputation of other FAs, says Wealthspire’s Smith.

While advisors may sometimes grumble about compliance training, “jumping through all these hoops is so much better than having to explain to your clients [the behavior of] some rogue advisor at your firm,” he adds.

Glorifying — and vilifying — the wealthy

For advisors working with wealthier clients, part of the pressure to keep up appearances may derive from a lack of deeper understanding of how other classes function or from social mythologies about them, says financial therapist Coambs.

“We grow up in a world that send us very mixed messages about different social classes,” says Coambs. “The wealthy are glorified and vilified in the same breath, and the reality is most wealthy people live somewhere between those two polarities.”

That creates a number of potential complications for advisors, according to Coambs. For some, the glorification of wealth can create a type of “imposter syndrome” and provoke anxiety about not fitting in, he says.

“I’ve worked with a number of planners who have talked about coming from much more modest means and having that fear that if their clients really knew where they came from that they wouldn’t be accepted, even if they have all the right credentials,” Coambs says.

On the other hand, some advisors come to resent their clients’ wealth, creating its own set of pressures, he says. “I have had so many FAs explicitly talk about their frustrations — and kind of despising their perceived sense of their clients’ entitlement.”

Coambs says it can be helpful for advisors to take the time to study the culture of their wealthier clients. That can help “dispel myths” about wealthier clients and hopefully demonstrate that they have largely very universal human needs, coupled with a unique set of circumstances — their wealth — and that is the reason they are working with the advisor in the first place, he adds.

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