From today's Boston Globe:
Losses drive titans of finance to therapy
By Megan Woolhouse
For years, brokers and hedge fund managers suffered from a condition known among therapists as "sudden wealth syndrome." Some even called it "affluenza."
Not anymore. With the sinking stock market and hordes of rich, angry investors, psychologists have a new diagnosis: sudden loss syndrome. And therapists are increasingly busy trying remedy the predicament.
"I have my hands full with what's going on in Boston," said psychologist Jim Grubman, who specializes in treating wealthy patients and financial advisers. Financial "advisers don't get a lot of sympathy from people right now."
Psychologists said the hard-driving world of bull markets and power lunches is suffering from a giant bout of introspection as markets tumble. Therapists across Massachusetts, and even a few flying in from California, said they are seeing more financial industry bulldogs - or their families - cope with acute feelings of loss and anxiety over market woes.
"I think we are in the midst of a period of the fastest wealth destruction that we've seen in at least two decades," said Robert Frank, author of the book "Richistan," a bestseller about how, until recently, the number of rich people in the United States has been exploding.
The market "just seems to be making everyone depressed, from the very top to the very bottom" of the major investment houses, Frank said. "The value system was all about making more [money]. Now what's the value system?"
That may be the question for 855 registered Lehman Brothers brokers doing business in Massachusetts who no longer have jobs after Lehman, one of the country's largest investment firms went bankrupt last month. Joe Gregory, the chief operating officer of Lehman Brothers, has been forced to sell several homes, according to The Wall Street Journal, and chief executive officer Dick Fuld reportedly put his prized art collection up for sale.
"When you're losing large amounts of money, it's extremely painful," Grubman said.
Grubman said he's seen a 15 percent to 20 percent surge in clients, and about half of those patients are financial industry advisers.
"Many are perfectionists, and many are feeling very bad because they're doubting themselves and their skills," Grubman said. "It's terrifying . . . I've seen them lose tens of millions of dollars over the course of the last nine months. I don't know anybody who's talking about jumping out a window, but I know several people who are wondering if they should be in business because they feel like they're in over their head."Dennis Pearne, a clinical psychologist in Framingham, said he has also seen an uptick. Author of the book "Challenges of Wealth," which he wrote with financial planner Sharon Rich, Pearne said financial advisers are increasingly among his clients.
"The uberwealthy worry, too," Pearne said. "Hedge fund managers walk a fine line between great success and disaster anyway. That's just what they do. Naturally, they would be particularly frightened at the events of the last week," when markets continued to spiral down despite the federal government's $700 billion bailout of the financial industry.
Both Grubman and Pearne describe what they do as "wealth counseling" or "life coaching," to avoid the stigma associated with therapy. Both said they do not practice traditional psychotherapy, delving into a client's family background. Pearne said he helps his patients focus on their relationship with money.
Until recently, it was their relationship with lots of money.
The number of millionaires in the United States jumped from 3.7 million to 9 million between 1995 and 2004. Families faced choices about how to divide inheritances and whether to vacation in Switzerland or the Caribbean. Once the quest for money ends or becomes untenable, crisis ensues for many, experts said.
"It's something that I call identity dissolution, their sense of identity dissolves," Pearne said. "The primary way they defined themselves and who they were and their values - what they can and can't do in this world - disintegrates."
Could that syndrome also be called greed?
Not exactly, said Stephen Goldbart, a psychologist based in Marin County, Calif. "We have all colluded to make money way more important as a cultural value than it really is," Goldbart said. "To the men and women whose lives are all about money, this is a big wake-up call. Yes, their egos have been toppled, but that's a good thing potentially."
Many will need to relearn that they are more than what they earn, drive, and wear.
Some clients will consider a new line of work, like bartending or private consulting, during therapy, Goldbart said. Others might take up a hobby, such as pottery. And others may renew their drive to win back a lost fortune.
"I think what's scary from our standpoint is these top-level advisers have been saying, 'We'll weather this [downturn],' and they're not nervous. Now, in the last week, they're nervous," he said.
He also said not everyone in the financial industry has been devastated by the economic downfall. Many of the wealthiest advisers he treats simply want guidance handling their angry customers. And many have been extremely conservative with their personal portfolios."They don't do what the average American does and over leverage," he said. "Their debt ratio is nowhere near what these [failed] institution's have been. That lacks common sense."