Advisor Wellbeing: Self-Care in Times of Financial Stress and Anxiety

Aug 7, 2020 / By Meghaan R. Lurtz
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The ongoing stress of the pandemic, crippled economy and volatile markets has everyone exhausted. To be there for your clients, you have to take care of yourself first. What are you doing to fill your own well?

Market crashes can do a real number on an advisor. A study by Dr. Brad Klontz and Dr. Sonya Lutter found that 93% of advisors who were interviewed reported medium to high levels of post-traumatic stress symptoms in the aftermath of the 2008–2009 financial crisis. And while the 2020 markets have regained most of their losses from the steep declines related to coronavirus, uncertainty looms and stress continues to run high for financial, medical, social and political reasons as well.

So how is an advisor to weather the storm while trying to support a whole practice full of clients who are also stressed out and likely turning to that advisor for direction? Below are some thoughts and practical suggestions for advisor self-care in this difficult time.

Many traditional financial planning clients—and their advisors!—tend to be high achievers, which raises a potentially critical issue about resiliency and what people use to retain a positive image of their self-worth—self-compassion and self-esteem—in the face of setbacks like severe and high-impact market declines that no one can predict or control.

Spoiler alert: trying to maintain and lift your self-esteem is actually not going to help.

Example 1: Charles is an exceptionally savvy business owner and has always prided himself on his success. He has worked closely with his financial advisor over the years, and actively participates in his portfolio decisions.

Charles feels that much of the portfolio’s past success is, in large part, a reflection of the work and ideas he contributed himself (in addition to those of his financial planner).

Yet Charles, like everyone else, did not predict the impact of the coronavirus. In reaction to the news and market activity, he bought and sold different positions without alerting his financial advisor, because he was “sure” he knew what to do. Yet, in the days following his transactions, his portfolio, unfortunately, plummeted even further in value.

When Charles finally picks up the phone to call his financial advisor, Charles is reeling from self-doubt and struggling with his own personal trauma that has arisen from his fractured self-image as a “savvy business owner”; instead, he now sees himself as a failure when his investment efforts, for the first time ever, did not yield the success he anticipated.

To understand this idea more fully, it is helpful to start with what self-esteem is and how it works. First, self-esteem is an assessment of self-worth, but one that involves subjective judgment (e.g., Charles thought he was a good businessman), is often comparison-based (e.g., Charles thought he was a good businessman because he had performed better than other investors after making trades in his portfolio)…and can be fleeting.

Basically, in order to have high self-esteem, it follows that at some level an individual believes they are better than other individuals in their peer group (or some other relevant comparison group). For Charles, once his business acumen failed him and he felt he was floundering in the market and doing worse than other investors, Charles was no longer convinced that he was any better than the average investor. This personal loss, the loss of pride and, for Charles, the lost belief that he was better than the average investor, can be very painful.

Notably, financial advisors are not immune to this either. In fact, advisors are typically trained to believe that they have the “right” answers for their clients (thus why clients pay us for our expertise!), and in many instances, pride themselves on being able to solve clients’ problems.

Yet, when the market plummets or vacillates radically, there is nothing advisors can do to really fix the problem. There may be opportunities to rebalance and talk about market corrections, but advisors cannot just make a 20% drop in a client’s portfolio go back up so the losses (and the client’s pain) go away. Moreover, for financial planners who are driven by self-esteem (and it is totally normal to be driven by self-esteem!), this volatile market is going to be hard on them, too, because there may be times they feel like they are failing their clients.

In these trying times, this means advisors may sometimes overidentify with the client and through overidentification lose their ability to be objective. Mental health professionals call this countertransference, and said another way, the issue with countertransference is that the advice given to the client may not really reflect the needs of the client, but instead the needs of the professional. What is more, if the financial advisor starts to see themselves in the client, they may even become blocked and unable to provide new solutions to the client because they themselves, the professional, are too flooded with emotion.

Now, you might be thinking, “Geez, countertransference sounds a lot like empathy…and isn’t empathy supposed to be a good thing?” And the answer to that question is, yes, empathy is good, but countertransference is not. Countertransference is an overempathetic reaction and it can negatively impact the advice given to clients, as well as the communication in the client-professional relationship.

Example 2: Candace is a new client and has only been working with Penny, her financial advisor, for a short time. Candace has come in today to talk about what has been going on in the market and how to move forward.

During their discussion, Penny really starts to identify with many of the life experiences and emotions that Candace is sharing. Candace is feeling nervous. And Penny also begins to feel nervous—how could she not? She has sat through 15 of these meetings in the past week, and thanks to vicarious traumatization, Penny is as freaked out and just as tired as Candace is.

At one point, Penny does not even ask Candace to “tell her more”; instead, Penny assumes (incorrectly) that Candace is just like her and ends up giving her advice that she would have wanted to hear…but not necessarily what Candace needed to hear.

Even though empathy is generally a great quality to practice with clients, it can also have a dark side. Because if the financial advisor is too empathetic for too long without properly resting (or does not have the requisite training to handle it), it can lead to indirect trauma. In some ways, countertransference is a culmination of stress, trauma, and the drive for self-esteem all mixed together, and it is something that commonly happens in professional-client relationships.

But now for some good news! Self-compassion, instead of self-esteem, offers a better way forward, because it isn’t about judgment (am I worthy of “esteem” or not?), and it is not contingent on surpassing any other group or individual.

Self-compassion is a person’s ability or capacity to comfort and soothe themselves. It is also key to motivating oneself through pain, failure, or feeling inadequate. What is more, the research is crystal clear that self-compassion is really important to self-care and the ability to rebound through stressful, traumatic setbacks. Self-compassion has been linked to higher levels of optimism, curiosity and initiative, and, at the same time, associated with lower levels of anxiety and depression.

Self-care isn’t selfish!

There is a reason why flight attendants tell plane passengers that, in the event of an emergency, they must first put their own oxygen mask on before helping another person with their mask—people can’t help others if they have not yet helped themselves first.

For financial planners reading this—this means you!

The path to better communication, leading away from trauma and burnout, starts with you.

The good news is that we can lean on research from Dr. Kristin Neff on self-compassion and modify actual, research-based programs used by mental health practitioners to bolster our own resiliency. They have been aware of this countertransference problem for a long time (they too can feel like failures when their clients do not improve, or they do not know what to do to “fix” their client) and have identified self-compassion as a better way forward; you and your clients can, too!

Practical ways to manage volatile or bear market stress and trauma

Financial planners can cultivate self-care in a variety of ways, but a key theme is making time for personal care. If you read nothing further, please know that learning to protect your time is of utmost importance. As Carl Richards said in a recent Kitces and Carl episode on how to build resilience as a financial advisor, “time for yourself is [and should be] a prerequisite, not a reward.”

And this may be even more important for many financial planners who, in the wake of the coronavirus, are actually working from home where the temptation to work around the clock is huge because…the work computer is now right there.

The following tips are suggestions on how to protect your time for your own self-care:

Have a designated stop time. Today, at this very moment, financial planners who are reading this are challenged to decide—and then follow through—to set work down at 7:30 p.m. this evening and not look at it until tomorrow at 7:30 a.m. (or whatever times you will set from when you “wrap up” at the end of the day, until you get up and get in front of your computer to work tomorrow).

For employees, this means not taking work laptops to bed or to the couch. Leave them in designated workspaces, and stay out of that area after 7:30 p.m. This also means not responding to emails after hours! Do not read emails. Do not scan the titles of emails. You’re not going to solve a major problem late in the evening. It will be there to solve tomorrow morning. Instead, at your set downtime, simply leave your work in a different room, and rest or recharge in the way that best serves you.

For employers, this also means not emailing employees or calling them after work hours. Let your employees have their downtime.

Indicate stop and start times to others. Mark the start and stop times just committed to above, and indicate to co-workers when that downtime starts and stops. Doing so helps others know when it may or may not be OK to contact you. And may even help bolster the dedication to starting and stopping on time by actually putting those times in calendars that are shared with others.

Create white space. Holding meeting after meeting and phone call after phone call is exhausting; it can very easily put a person in a reactionary mindset, let alone take an inordinate amount of time, and possibly lead to indirect traumatization. As humans, we are simply not meant to hear sad and angry stories one after another—our minds and bodies will begin to take on that stress and pain. With this burden of vicarious traumatization, financial advisors will not be able to give their best to their clients, even when they want to.

Accordingly, the risk of indirect trauma can be mitigated by simply scheduling 15-minute breaks between all meetings, and rescheduling meetings where necessary (and possible). When it is not possible to reschedule meetings, Carl Richards suggests that advisors ask clients to wait a few minutes on hold while the advisor “grabs their folder.” Even if the advisor may not really need to grab anything, it does give the advisor (and client) the opportunity to have a moment to reset and mentally prepare for the ensuing conversation.

Resetting can include any quick activity that helps the advisor clear their mind, such as taking a walk (even if it’s just down the hall to get the “folder”), getting a glass of water, stretching, taking some deep breaths, moving away from your laptop to look outside or enjoying your lunch (not sitting in front of your computer screen).

Hold a webinar. Another time-saving strategy for advisors is to announce a virtual webinar for all clients to talk about what is going on in the markets, instead of spending time reaching out to clients individually (which won’t sound weird in light of social distancing). The one-to-many communication channel can be more time-efficient to deliver the message, and may help to buffer the advisor from some of the client conversations (if clients “just” needed information and can get it from the webinar, it saves what can still turn out in the moment to be a stressful conversation if the client gets an additional opportunity for one-on-one venting).

Let it out. Aside from time, another important thing to remember is that you are not a punching bag! And you are not invincible. Moreover, it is okay and normal if you are scared, and it is okay and normal if you are having a difficult time. This is scary. This is hard. As such, talk with your fellow advisors, talk with your friends and family. Use this time to reconnect (or get connected). Do not allow yourself to fall into total isolation where the only people you are speaking with are upset clients.

Get out of the office. With all of the social distancing going on, this might be easier or already happening. But if advisors do need to meet with their clients in person, try meeting outside of the office. Just going to the office can trigger stress, as the client knows why they are going there, and may even have memories from 2008–2009, the last time they had to sit in front of their financial advisor to talk about a crash. A change of scenery can help to ease nerves.

Stop watching the news. Just like financial advisors can take on stress from listening to their clients, both clients and advisors can take on stress just by listening to or watching the news over and over again. Clients and advisors need downtime away from the negative and scary stories. Turn off the T.V. Turn off the social media news feed.

Use the buddy system for two-advisor client meetings. Connecting and social relationships are crucial in times of stress, and advisors typically spend the most time with clients when helping them navigate difficult times. But, it is really easy to overconnect with clients as well, especially when connecting with them is crucial for trust and maintaining an ongoing relationship.

Working in advisor teams—where there are always two advisors in every client meeting—may help keep advisors from overconnecting, and thus risking compassion fatigue or vicarious traumatization with their clients. It can also help to develop additional “solutions” and discussion points. After meetings, financial advisors can check in with one another to ensure they are doing okay and not becoming too exhausted, or, as mentioned above, missing a larger issue because they stopped asking effective questions after overconnecting with the client.

Meghaan R. Lurtz, is Senior Research Associate at Kitces.com. In addition to her work on the site, Meghaan teaches at the University of Maryland University College in its CFP program. Meghaan earned her Ph.D. in personal financial planning at Kansas State University. Meghaan is also the current president of the Financial Therapy Association. She can be reached at Meghaan@Kitces.com.

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