Financial advisors wear many hats. Aside from knowing about investment and insurance products and wealth-planning strategies, they also often act as counsellors, nudging clients toward good money management habits and away from detrimental decisions.
And when a client suffers from a mental illness, the advisor faces a delicate balancing act. Lori Eisel, president of Ohio-based Arcadia Financial Partners, drove that point home in a recent piece on Financial Advisor IQ. She shared her experience with a client who, in their initial meeting, described herself as “crazy.”
“She had a big, fun personality, and I assumed she was joking,” Eisel wrote. “As we worked together over the following months and I got to know her better, I came to understand that she truly was dealing with mental health issues.”
The client had been on medication for bipolar disorder but didn’t like how it made her feel, so she was experimenting with different medications. Eisel did some research on the condition; finding little literature on how financial advisors should deal with clients living with mental illness, she found herself reading more information directed toward friends and family members.
“Then one day I got a call from her in the midst of what was clearly a manic episode,” Eisel said. “She told me she wanted to sell off her whole portfolio, go to Europe, buy a new house — basically upend her entire life.”
Not following the client’s instructions could have exposed her to serious legal consequences, but she also knew the instructions were also against the client’s interests. Thinking quickly, she remembered that the best way to deal with people cycling through a manic episode was to give them time. She stalled by asking a lot of questions, advising her client to do look into certain financial products and strategies, and agreeing to talk in a few weeks once they had both done a little more research.
The next time they spoke, the client had abandoned all the notions she entertained during her episode. The two of them spoke frankly about the client’s illness, and Eisel asked if there was anyone she could contact in case a similar incident happened in the future.
“I was worried that she'd be offended or feel like I didn't trust her,” she said. “But she told me she appreciated that I'd asked and gave me the name and contact information of a lifelong friend.”
Advisors with mentally ill clients ought to read up on their condition, Eisel said, because even a little knowledge could go a long way toward creating a compassionate and responsible working relationship.
“I've also found that this lesson applies to aging clients who are losing some of their mental capacity,” she said. “It can be hard to have conversations about mental illness and cognitive decline, but if that information is on the table, both you and your client will be better off.”
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