Kitces: A cure for advisor depression?

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In this topsy-turvy profession, emotional support tends to come from the same people who help us through all the ups and downs of life: our spouse, family members and close friends.

Yet these people, however dear, may not know much about the advisory business, and may not be able to provide the kind of advice that can truly improve an advisor’s situation. That’s why it’s critical to have a multi-tier support system. Like tracking your business metrics in prospecting and sales, these support systems should be checked in on regularly and listened to carefully. It’s simply part of doing our job well.

Here are sound strategies for not only building these support networks, but for nurturing them even when we don’t explicitly need them.

Are you receiving fewer prospect inquiries than you were in the past? Is your lead flow trending downward? Are you getting leads and inquiries, but they’re not closing? What’s the conversion rate? What’s been your sales and marketing activity? Are you just passing through a streak of bad luck? Like in baseball, random slumps happen in our business.

But setting aside the tracking and measuring of these metrics, the critical question underlying these queries is, when instability comes knocking — as it inevitably does — what do you do to maintain your own mental and emotional stability?

After the financial crisis, a study found that 93% of advisors were exhibiting symptoms of post-traumatic stress disorder. The symptoms were traced essentially to providing so much emotional support to clients; we were performing a critical role in a trying time. However, the mechanisms for managing and calming our own emotional stress are not always so clear. That’s why I’ve become such a big proponent of this multi-tier support system — and why I see value at each and every level.

We’re social animals who rely on our relationships. For many of us, our spouses are our deepest confidants and greatest sources of support. For others, it’s a group of close friends or maybe one particular friend who you seek out.

After the financial crisis, a study found that 93% of advisors were exhibiting symptoms of post-traumatic stress disorder.

But since these people may not know much about our business, the best you may get is an outside perspective that you might not have otherwise considered. That’s not to devalue such a relationship; it can be refreshing to hear, “You need to get over yourself,” or, “You need to stop freaking out,” every once and a while. Alternatively, it’s heartening to also get an empathic ear: “That’s pretty rough. You want to talk about it?”

These are the people who fulfill what I’d call first-tier level of support. They’re not hard to find, and they’re supportive when we need to talk through a challenge.

Sometimes the best people to go to for support are our peers who have similar experiences.

Having friends in the advisory business who are familiar with the challenges we commonly face is invaluable. This second-tier level of support is equipped to give context for whether when something is really a big deal or not. If you’re in a large RIA or wirehouse, coworkers may have the insider’s perspective and trained ear that can truly benefit your situation. Even within independent broker-dealers in a branch with many other advisors, there may be peers and colleagues with whom you can connect and talk to when you’re struggling with something.

For the more independent advisors though — whether they start their own independent practices under a broker-dealer without being in a big branch or those who start as an independent RIA — this can be very tough. And if you’re just starting up, you might be working alone from home, where second-tier support may seem entirely absent.

This is actually one of the reasons why I’ve become a strong advocate for advisor networks and associations. Groups like Garrett Planning Network, Alliance of Comprehensive Planners and our own XY Planning Network thrive in part because we represent a community of advisors — almost all of whom are solos who otherwise might not connect with one another.

Membership associations like the Financial Planning Association or NAPFA are similar. The latter group not only has a national community with forums, but also facilitates local meet-ups in many larger metropolitan areas. And the FPA has almost 90 chapters across the country, and draw out dozens or even hundreds of advisors at a time for scheduled events.

Younger advisors even have sub-communities under FPA and NAPFA — either FPA NexGen or NAPFA Genesis — to help support them with their own specific set of challenges. A deep second-tier support system like this can benefit a young, upstart advisor for decades to come.

For most advisors however, just being in an office or in a member association doesn’t supply the support needed when the tough times inevitably come. Seeing these folks in the hallway, at the water cooler, maybe occasionally at a chapter meeting every few months, or in an online forum can make the support value feel somewhat limited.

That’s why I also advocate for study groups — also sometimes called mastermind groups, because the peers and colleagues within can challenge you, hold you accountable for improving yourself and your business, and be a support system when you need a little lift.

I’ve been involved in a study group — which ultimately has become a massive source of support — since very early in my career, when most of us were in our late twenties and early thirties. We were almost all starting out as employee advisors at mid- to large-size independent firms, where support was thin on the ground outside our firms.

However, when the problem you’re dealing with arises from the firm itself, you can see how solving it could be tricky. Even in a good firm, everyone gets frustrated from time to time — whether with the firm itself or with a coworker. The bonds I created with my group back then have only strengthened in the intervening 12 years. We keep a private mailing list, and there are still 11 of us meeting in person twice a year.

The bonds I created with my group back then have only strengthened in the intervening 12 years. We keep a private mailing list, and there are still 11 of us meeting in person twice a year.

The key distinction is that the smaller and more committed the group, the deeper the mutual trust — and consequently, the quicker you can let your guard down. If you’re not comfortable making yourself vulnerable and actually talking about your problems, anxieties, struggles and where you’re hurting, you’ll never get the feedback and support you need to improve.

But let’s say you don’t have a study group in your area. Make one. The process isn’t that complex. Find half a dozen advisors or so whom you want to trust and get to know better, invite them into a group, start meeting regularly and start building those connections. There are lots of different formats and approaches for structuring a study group. For example, some meet regularly in person, whereas some prefer monthly or even weekly video check-ins. There’s no right way; the important thing is to find the way that feels right for you.

All that being said, not everyone likes to interact in a group setting, even when it’s a relatively small, close, more intimate one. For some, the most comfortable way to connect is one-to-one, which to me feels synonymous with mentorship. As an aside, for those who want to learn more about mentoring and forming a such a relationship, I highly recommend picking up The Heart of Mentoring by David Stoddard. Apart from helping you identify, find and reach out to a mentor, the book does an amazing job telegraphing the wisdom and perspective that can come from a mentor’s experience. A mentor may discern whether a problem is really a problem, or whether it’s just a slump you need to be patient with and work through.

Yet it can be difficult to find a mentor — and when you do, they may not be an especially good one. That’s why some advisors find greater value in seeking out an executive coach, who actually has training and experience in that very role.

A note here that I would never conflate executive coaches with consultants, and you shouldn’t either. An executive coach doesn’t tell you how to optimize this or that. Rather, this person helps you better realize what you want for your business, and more broadly for your career. They also help you be accountable to yourself and sometimes offer emotional support. Granted, coaches aren’t cheap, especially in the advisory industry, but a skilled coach can have a truly transformative impact on your practice and your emotional wellbeing.

For most of us, being an advisor is our livelihood. It also may be our employees’ livelihood. We may be responsible for dozens or even hundreds of clients and their life savings. If we didn’t feel occasional pangs of stress about these things, we wouldn’t be human.

That’s why we need to do a better job of building support — and getting the word out that asking for support is a sign of strength, not weakness. Whether it’s a spouse, family or friends; colleagues or peers in an advisor network or association; a study group that you join; a mentor that you find or an executive coach that you hire, keep them close. Not only are we doing a service for ourselves, we’re doing a service for our entire profession.

So what do you think? Is being an advisor an inherently stressful role? Does being a business owner compound the stress of being an advisor? Who do you turn to when you need help dealing with the stress of your business? Please share your thoughts in the comments below.

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Stress management Work-life balance Quality of life Practice management Client communications RIAs Independent advisors Mentoring Professional development FPA