The more that I work with people and their money, the more I am reminded of electricity. Money carries with it an incredible emotional charge, with the result that financial professionals must work daily with the emotional equivalent of live electrical wires. Most days, we emerge unscathed. Other days, we arrive home somewhat scorched.
In my practice as a wealth psychologist, I find that the emotional charge around money most often goes into the High Voltage Zone when parents talk about financial issues surrounding their kids (especially adult kids who are struggling in some way). It also makes itself known as clients talk about taxes, fees, inheritances, rates of return on investments, which party in the marriage is “right” in his or her view of things, and all manner of purchases, gifts, and expenditures.
We can all get zapped by the emotional current that flows through money. We can find ourselves tensing in anticipation of meeting with clients who have given us static during previous encounters. Our excellent financial advice can get burned to a crisp by the emotions surrounding money AND by the unskilled handling of them.
It’s not just clients’ emotions about money that can zap us; our own feelings can, too. I was zapped unexpectedly just this week while visiting a beautiful hotel, when my experience of delight and gratitude did an abrupt back-flip into guilt and unworthiness. Advisers tell me about having strong emotions of their own, triggered by events including clients’ overspending or underearning, a colleague’s landing of a big account, or their own teenagers’ apparent lack of appreciation for how good they’ve got it.
Whether talking about clients or themselves, financial professionals have a tendency to view emotion as the enemy. One of my own favourite books, Daniel Kahneman’s Thinking Fast and Slow, has contributed to the unfortunate demonizing of emotion in our community. Emotions mess with good financial decision-making, we are told. They make us short-sighted, they contribute to bias, and they lead us to overlook vitally important information.
Yup, they do. And electricity causes fires and can blow holes in a body. No doubt about it.
But just as we don’t dispute the tremendous benefits of electricity, so, too, we shouldn’t demonize the energy that exists around money. Emotion itself is not the problem, here. It’s just the sway of short-term emotions that we need to be on guard for, so that we don’t over-react to temporary or irrelevant stuff.
Emotion is a valuable force that can be harnessed to accomplish important goals in clients’ financial lives. It undergirds their beliefs and their values, and signals them when something is threatening those things. It provides motivation to begin their journey towards financial security, and helps them persist in the face of setbacks. Emotion leads people to buy life insurance and write wills. It funds symphonies and ballets and theatres. It feeds the hungry.
So what should you do when you get zapped? The most important thing is to acknowledge the presence of strong emotion. If you’re with clients, say something like, “It seems that we’re onto something important here. Tell me what this issue means to you. What do I need to understand about this in order to be a good adviser to you?”
If you’re on your own when you get zapped, resist the urge to dismiss, blunt or even analyze your reaction. Just notice it with curiosity and compassion. Give it the full force of your attention, and wait for it to subside. Then you can begin the work of figuring out what, if anything, you are being signalled to pay attention to. It might be really important. Or, as Ebenezer Scrooge says, it could just be a bit of undigested beef.
Best not to confuse the two.