I'd been researching trauma and anxiety disorders last year even before the market took its traumatic tumble. Several clients had consulted me about assorted life stressors, and they varied considerably in their reported degree of anxiety. It's interesting to wear my licensed therapist hat and study the diagnostic features of trauma and then shift over to financial consultant.
I believe it's important for advisors to be aware that the pileup of bad financial news can trigger anxieties that cross over into traumatic stress for some people. When it's traumatic stress, what's needed is more than a pat on the back and a reassuring statement.
There are many reasons to have this awareness as an advisor. The top two reasons are:
1. Your wellbeing
2. Your clients' wellbeing
The information that follows will help you be more empathic so you can pick up on clues and respond accordingly. Remember: You don't have to be a therapist to listen like one.
We all have unique genetic makeup and histories that create our mental health. Anyone's usual coping mechanisms for life's stressors have their limit of effectiveness.
What is a nuisance to one person may be experienced as acute trauma to another. You've probably noticed among your client population that some people are worriers -- no matter what is happening in the market or how many millions they have. Quite frequently, in fact, this is learned behavior from previous life experiences.
A habit of worrying can be picked up from a parent who modeled that behavior. That's an example of "money blues." However, most people cope with this effectively when reassured by a trusted advisor. This usually does not escalate into traumatic stress; but it does happen to some who have past experiences that involve multiple losses, especially when coupled with acute conflict, humiliation or a threat to personal safety.
Negative financial events are not listed in the mental health diagnostic guide for traumatic stress, but it does specifically state that the examples listed (such as combat or extreme violence) "are not limited to" only those types of events. Many have unresolved financial fears that are triggered in times like these. Additionally, traumatic reactions also may occur from witnessing
traumatic events of others. This is where the widespread media coverage of the economy's condition over recent months comes in. People are witnessing an unprecedented array of other peoples' financial traumas, which, these days, are "not limited to" foreclosures, job loss, asset loss and fraud.
The diagnosis and treatment of trauma is complex, even for trauma experts. We can't provide therapy. But it can be sufficiently reassuring to ask, "How stressful has this market and news coverage been for you personally? What kind of thoughts do you have when you see the news or a statement that's down in value?" Acknowledge their replies and say, "I understand how uncomfortable it is to feel anxious about this. Let's look at what's happening in your plan and see if we can help ease your mind a bit."
One of the best medicines we can offer is our patience and understanding. Coupled with your best information and advice, the traumatic element can be reduced down to manageable discomfort. From that place, there's a relationship that's more likely to remain in good standing while waiting for better news to come.
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