The Mental Health Crisis in the Advisory Profession
Advisor Perspectives welcomes guest contributions. The views presented here do not necessarily represent those of Advisor Perspectives.
When tennis star Naomi Osaka courageously revealed her struggles with anxiety and depression, she destigmatized the previously taboo subject which plagues many professional athletes. Her withdrawal from the 2021 French Open so she could prioritize her mental health issues was a turning point in bringing the prevalence of mental health concerns to the general public.
I’ve seen nothing comparable in the financial services industry, for good reason. An advisor who admitted to having mental health issues could find that disclosure to be a career-ender that could scare away clients.
Yet, it appears there are serious, well-documented mental health issues suffered by financial advisors that have been exacerbated by the pandemic.
Now is the time to discuss and address them.
The Australian study
A fascinating study was conducted in Australia by the E-Lab and Deakin University. It was tasked with determining the well-being, mental health, quality of life, work life balance and levels of stress among financial advisors in Australia, among other issues.
The findings were troubling.
Almost 75% of advisors surveyed experienced “high levels of burnout from work” and 33% were seeking medical care to manage their stress-related symptoms. An astounding 67% of advisors experienced some level of depression, with 17% of them reporting they were depressed “most of the time or all of the time.”
Almost 77% of advisors felt “high levels of stress” with their work.
The mental health of advisors surveyed was much worse than the average Australian, based on a comparison of this data with the larger population.
The most surprising statistic in the study was that 42% of advisors were considering leaving the profession due to stress-related issues and an additional 17% were unsure if they would remain.
Financial advisors in the U.S. also report high levels of stress and depression. One report found stress levels of financial advisors to be 25% higher than the norm for U.S. workers.
Another study (discussed here) by the Financial Planning Association, Janus Henderson and Investopedia, found that 71% of advisors reported moderate or high negative stress. These advisors were more stressed than investors. Only 63% of investors reported similar levels of stress.
This mental health crisis is accelerating. More than 25% of advisors felt higher levels of stress than they did a year ago and 44% are experiencing more stress than five years ago.
More AUM. Better Relationships.
My micro-learning course will increase your AUM and deepen your relationships.
If not, I’ll give you a 100% refund of the $29.95 cost.
Volume discounts are available.
Although we keep hearing about how profitable the advisory business is and the big multiples being paid to acquire them, only 18% of advisors were satisfied with their profitability and only 15% with their growth.
According to Michael Futterman, who was involved in the survey (quoted here): “We don’t know for sure why, but stress levels are going up.”
Anon’s 2021 Global Wellbeing survey noted the challenges of managing employees in a “physically disconnected” workforce contributed to higher potential for employee burnout and poor mental health.
The Anon Survey found 74% of employees in financial services (pre-pandemic) believed employers should be doing more to address mental health issues, but 40% of employers reported having other priorities they needed to address first.
Among the suggestions for addressing this issue were better communication and more tools that give employees control over their health and well-being. A critical finding focused on the importance of “ensuring that employees have a greater sense of work-life balance.”
The Australian study found that advisors who coped better with mental health issues has “had strong wellbeing ... and work life balance.” They also had more psychological flexibility and were more adaptable than those with more serious mental health issues.
There’s a saying among mental health professionals that “if you can name it, you can tame it.”
Let’s name it: Being a financial advisor is a stressful profession, with a high incidence of mental health issues, including stress, anxiety, burnout and depression.
Now the hard work begins.
Dan trains executives and employees in the lessons based on the research in his latest book, Ask: How to Relate to Anyone. His online course, Ask: Increase Your Sales. Deepen Your Relationships, is currently available.