How a Wall Street Psychologist Helps Advisors Cope With Crisis

Financial advisors should tell clients, “with conviction,” that they need to “have ice in their veins” to stay on track through this scary, unprecedented crisis. Only outstanding FAs who do so will continue to build their practices, argues clinical psychologist and performance coach Alden Cass in an interview with ThinkAdvisor.

Right now, he’s helping advisors themselves cope with the massive market decline set off by the coronavirus pandemic, coaching them over the phone and through video conferencing platforms like Zoom.

More than half his global Competitive Streak consultancy clients are financial advisors. Among others: the top four hedge funds, as he so defines them; traders; corporate attorneys; and athletes.

The New York City-based psychologist, 44, is known for his pioneering late-1990s research on male brokers, which found 23% of the group met diagnostic criteria for major depression — four times the incidence of men in the general population.

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In our interview, he discusses how FAs are dealing with panicky clients. His recommendation: Become a financial therapist to reassure them; then supply specific ways to manage. At this critical time, advisors need to “overcommunicate” with clients, he maintains.

The coach’s FA clients are making it through partly by telling themselves that a turnaround is likely to arrive on May 1. If that doesn’t occur, though, he expects to see a steep drop in morale triggered by advisors’ “bearish” thoughts.

Stay-at-home orders are severely cramping their style, Cass notes. In the interview, he offers ways to endure that constraint and still be productive.

The coach, who wrote “Bullish Thinking: The Advisor’s Guide to Surviving and Thriving on Wall Street,” co-authored with Sydney LeBlanc and Brian F. Shaw, numbers self-referred FA clients from Charles Schwab, Goldman Sachs, JPMorgan, Merrill Lynch, Morgan Stanley and UBS, among others.

ThinkAdvisor interviewed Cass on March 25, with a follow-up email exchange on March 31. His main message: Cater to current clients right now; worry about acquiring new ones later. And don’t “freeze” or allow yourself to feel “beaten down”; adopt a “champion mindset” versus a “victim mindset.”

Finally, facing the likelihood of some new catastrophe surfacing in the future, he suggests preparing by employing his mathematical “Happiness Formula” to come out ahead.

Here are highlights of our interview:

THINKADVISOR: Clients’ portfolios have been decimated. How are your financial advisor clients dealing with the crisis?

ALDEN CASS: There’s a lot of shock among advisors, almost like a fight-or-flight response. But the ones I work with think that May 1 will be an inflection point for both the coronavirus and the market. They’ve given themselves some hope that things can change on the upside.

Do you estimate the same timing? If not, what do you foresee?

That’s the ideal perspective. If there’s no progress or things worsen by May 1, we’re going to see a lot of bubbles pop in terms of advisor mood and how they handle things. We could be in for problems with their morale and mindset. That’s when they have to not become victims of negative — bearish — thoughts.

What should FAs try to make clear to clients right now?

That this decline wasn’t [caused by] the market, per se. It was an aberration; therefore, you can’t allow it to change your course: You’ve got to be strong and have ice in your veins to get through it.

That’s being candid, all right!

Only the best advisors who can convey that with conviction are going to continue to build their business.

In a nutshell, what’s your salient message to FAs who work with you?

I’m hammering home that they have to convey to clients that this is temporary, changeable and manageable over time — that we’ve overcome the sky falling before, and we can do it this time, too. Advisors need to hammer home that point within their own heads, too.

What’s a major issue about their practices that’s troubling them?

The thing that’s making it extra difficult is that prospecting is off the table. They’re concerned about how long this drought of being unable to bring in new business will last, and that things could get worse.

How do you coach them about this?

I say they can’t allow it to beat them down, freeze them and cause panic — because it’s just a temporary pause. I advise them to cut out their marketing budget and any extra expenses for a short run to try to insulate themselves. They’ll feel a lot more comfortable and can start rebuilding when the elevator stops going down.

Are FAs worrying that they may lose their jobs?

Surely the younger or underperforming ones are. However, this is almost like a free-pass period when they’ve got to get their stuff in order and focus on how they’re going to build their practices in the “new world.” If the way they were doing business before wasn’t working, this is a great opportunity to pivot and, for example, learn how to use technology platforms to be better at reaching new clients and bringing in new business.

What should advisors be zeroing in on most client-wise right now?

Focusing on the clients they already have. I stress that this is where their value-add comes in: being a financial therapist to current clients.

Please elaborate.

You can’t worry now about where the next client will come from. You have to focus on catering to the needs of current clients but use that as a networking opportunity [to reach] their friends, to whom you can offer the same types of services, while stressing your competence and conviction.