The market has been booming, so clients can’t complain. But how come advisors are feeling flat and frustrated? Negative thoughts plague them — indeed paralyze many — preventing them from even trying to invigorate their businesses.
That’s the puzzling word from New York City clinical psychologist and performance coach Alden Cass, in an interview with ThinkAdvisor. Fifty percent of his clients are financial advisors, both wirehouse reps and independent RIAs.
It isn’t Donald Trump’s alarming tweets or the Russia investigation that’s got advisors down — that’s just noise to them, says Cass. FAs are frustrated because a significant lack of new assets has meant they’re earning less than expected, according to the psychologist.
Cass, 41, is well known for his pioneering research on male brokers in the 1990s. It showed they had four times the incidence of diagnosable major depression as the general population. The most severely depressed? Reps making the most money.
Cass’s international clientele includes FAs employed by Merrill Lynch, Morgan Stanley and UBS. His Innervisions Psychological Services and Competitive Streak Consulting offices are in Midtown Manhattan, and he also does discreet coaching at isolated tables in restaurants, on boats and at clients’ beach houses.
Right now, Cass — author, with Brian F. Shaw and Sydney LeBlanc, of “Bullish Thinking: The Advisor’s Guide to Surviving and Thriving on Wall Street” (Wiley 2008) — is helping to motivate advisors by urging them into “the optimal performance zone,” just as he does with his athlete clients.
Gearing up for fall, all FAs can likely benefit from this approach; and in the interview, he discusses his techniques.
ThinkAdvisor recently interviewed Cass, on the phone from his East Side office. He stresses: Advisors need to believe they have a unique purpose in the lives of investors. Here are excerpts from our conversation:
THINKADVISOR: How’s business right now for your advisor clients?
ALDEN CASS: They’re struggling to bring in new assets. Many are treading water. They’re apathetic. Investors aren’t as willing to try out new advisors and are staying put with whomever they’ve trusted in the past. There tends to be a sweet spot where markets are less-hot yet not bearish when people are more willing to try out new advisors.
Are FAs waiting for the other shoe to drop — a correction?
Nope. But they’re frustrated they haven’t been able to take advantage of the markets going well. Their clients might be doing well, but these guys get a lot of their money through new assets, and their performance is also measured and based on that. That’s where they’re spinning their wheels.
Market strategists and the consumer press insist that a correction is imminent.
The strategists aren’t the ones that impact advisory clients’ decision-making. The market is booming for investors. They’re not really fearful of a correction as much as the people in finance are.
What’s at the root of FA apathy?
They have bearish thoughts, like: “It’s never going to get better. What’s the purpose of my going to work? There’s no reason to get up and go to the office.” Within those thoughts are cognitive errors — flawed thinking, also known as thought disorder. They’re using all-or-nothing words like, “I can never bring in new money.” “Never” almost sets up a person for a self-fulfilling prophecy of failure.
How do such thoughts affect an advisor’s success?
Bearish thoughts paralyze you by making you not want to go to work or put in the extra effort to do what it takes to build your business.
And bearish thoughts are what advisors have now?
It’s what’s underlying the disillusionment advisors feel about the growth of their business.
What illusion did they have?
That, based on their prior performance, earnings and lifestyle, there would be a lot more money being disbursed by investors into the market and that they wouldn’t be struggling so much to make ends meet.
What else can cause cognitive error?
Most of my advisors are basically perfectionists who tend to obsess over failure to a high degree and get impacted emotionally when things go against their expectations. When the expectations and realities don’t align, the repercussion is emotional, and they need help to build up emotional discipline.
What burst the advisors’ bubble of expectation?