This is the first entry of a series I am providing for advisors to show you the exact prescriptions for mastering the stressors you all face in your career, once and for all!
When we think about post-traumatic stress disorder (PTSD), we typically envision tornadoes, hurricanes, combat and other life-threatening events. But PTSD is not limited to life-threatening events. For example, events threatening financial security and even career-threatening events can be very traumatic, as well.
A recent study reported in Health & Social Work examined the risk of PTSD associated with sudden and dramatic personal financial loss. The authors conducted a survey among 173 Madoff victims and found that 58 percent of the total sampled actually met the criteria for the PTSD diagnosis, 61 percent acknowledged high levels of anxiety, 58 percent were depressed and 34 percent had health-related issues. Moreover, 90 percent of these victims felt a substantial loss of confidence in any financial institutions. In short, severe economic trauma can certainly lead to PTSD.
We know from the famous work of Dr. Abraham Maslow, that when people have their security threatened through any event, all of their confidence and self-esteem can be dashed overnight, and they then focus all of their attention on desperately searching for recovery. Certainly, this holds for both clients and financial advisors, when their financial security is undermined.
A major study of the emotional well-being of financial advisors during the 2008 financial crisis (documented in the May, 2013 Journal of Financial Therapy), showed that 93 percent reported medium to high stress levels and 39 percent of the advisors reported stress symptoms at levels considered to be diagnostic of post-traumatic stress disorder (PTSD). In the case of advisors, it was not only the threat to the security of their careers, but the threat to their own portfolios, as well. After all, in an ideal world, advisors basically make the same financial decisions and use the same strategies with regard to their own portfolios, as they would make for those of their clients.
So, many advisors suffered the double whammy of major losses in both their clients’ portfolios and in their own portfolios. Added to this stress was getting bombarded with calls from frightened, disgruntled and often hostile clients, who blamed the advisor for not having seen this coming.
Diagnosing PTSD. The manual for diagnosing emotional and mental syndromes is the Diagnostic & Statistical Manual IV-TR (DSM-IV-TR). Diagnostic criteria for post-traumatic stress disorder include being confronted with an event, where one's response involves intense fear and helplessness. In addition, recurrent and obsessively distressing thoughts about the event persist and can become all consuming. It is easy to understand advisors fearing the collapse and the domino effects, and feeling helpless since they obviously have no control over such events.
People suffering from PTSD feel as if the traumatic event is still occurring or will reoccur and the psychological distress intensifies at exposure to external cues that resemble any aspect of the traumatic event. So, the traumatized advisor comes to the office each day, dreading watching the market fluctuations and even hearing their phone ring.
In order to reach the specific clinical criteria of PTSD, the symptoms must persist for at least one month, and at least two of the following specific symptoms must be present:
• difficulty falling or staying asleep
• irritability and angry outbursts
• difficulty concentrating
• exaggerated startle response