As a ghostwriter with financial services clients, I stay abreast of developments in their professional publications. Ran across an article in Investment News on consumer-focused financial planners’ mental health challenges during this Great Recession.
The article says mental health professionals coined the phrase “compassion fatigue” to describe a syndrome experienced by caregivers of individuals facing a terminal illness. “Instead of empathizing or ‘feeling bad’ for someone, the caregiver essentially tunes out the patient in an effort to prevent himself or herself from being drawn into a pit of despair.”
The article goes on to say that “many advisers are experiencing a phenomenon known as ‘shared trauma,’ which develops when an adviser has been as victimized by the financial crisis as much as his or her clients” and says this causes some advisers to avoid client contact.”
Jeffrey Goldbert complained about that in an Atlantic Monthly article I blogged about — said he fired his broker because his broker had de facto fired him by not communicating. Perhaps his broker was suffering compassion fatigue or shared trauma, but the article gave me the impression that his broker had simply gone under a tidal wave of corporate compliance.
The Investment News article quoted Patricia Smith, the founder of the Compassion Fatigue Awareness Project in Mountain View, CA as saying advisers “need to start with the fact that [the bear market] isn’t their fault.”
Hmmm, I have mixed feelings on that point. No, it wasn’t entirely the fault of financial advisers, but most of them signed on to work in an environment where they’re expected to toe the company line, including pushing instruments at the direction of their firms. If I called my Merrill Lynch broker to ask about X fund, he would be obliged to tell me what his research department’s position is on it. Maybe his entire knowledge of fund X is limited to the firm’s position. Firms go to great lengths to assure compliant client communications.
Because it’s difficult to set up shop as an adviser without the broker dealer infrastructure, is the best conclusion that system really is rigged?
Writing Prompts: Financial Services
- With so many people trying to cast a wide net for blame, how much should be shouldered personally by advisers? Are advisers equal victims? Well-compensated pawns in the larger game?
- Should advisers pull on their big girl panties and consider this stress an occupational hazard for which they were pre-compensated during the boom?
- Do these findings give the investing public room to empathize with their advisers?
- What reforms do you anticipate between firms and their representatives?
- Will the ill will between client and adviser push investors to instruments like index funds?