The Emerging Role Of Financial Therapy
Although the concepts behind behavioral finance (BeFi) have been around for about 20 years, there’s still so much for us to learn. At PNC Private Bank Hawthorn, the ultra-high-net-worth division of Pittsburgh-based PNC, Brian Brogan is applying positive psychology to the world of wealth management.

“The number one reason families break down is the lack of trust and rapport. We facilitate family workshops and some custom family retreats with a focus on optimization of the family,” explains Brogan, who is a fellow with the Hawthorn Institute for Family Success.

The Hawthorn/PNC model is designed to bring family harmony based on seven key aspects of family success:
1. Legacy
2. Vision
3. Communications and trust
4. Togetherness
5. Decision-making
6. Wealth and ownership/ stewardship
7. Personal fulfillment

Brogan and his team works with Hawthorn advisors to handle the two sides of wealth: technical and personal.

The technical side aligns income, assets, risks and taxes. All wealth management firms know how to do that. But in today’s competitive wealth management arena, it’s the personal side of wealth that’s driving engagement and keeping assets under management.

“On the personal side, we search for commonalities. We help each other build empathy and compassion to better understand the differing personalities across the generations. Today’s families are discussing how impact and ESG investing can impact the family wealth and legacy—so money and wealth are being very personal, and we are all getting much more comfortable talking about it,” says Brogan.

Getting Comfortable With Uncertainty—And Mortality
Part of the family conversation relates to death and dying. Few people enjoy that part of the business, but those who earned their stripes in the insurance arena are quite comfortable talking about estate planning, end-of-life care and the fact that we’re all going to die.

These conversations have become natural and authentic for John Boccio, president and CEO of NYLIFE Securities LLC, a subsidiary of New York Life Insurance Company. “Our planning approach places strong emphasis on providing peace of mind; our goal is to be trusted partners that guide clients through a range of financial decisions and life events. We help our clients with the need to protect themselves and their families to ensure they don’t lose what they have, and to prosper, by taking the right steps to ensure they can flourish across all phases of their lives.”

His message for new agents and advisors is direct and specific, but it’s hard to absorb for many young people who have not been exposed to death-related life experiences. He adds, “Because our agents and advisors have deep experience with protection solutions, many of them cite the processing of their first death claim for a client as formative experiences early in their careers. But it teaches you the importance of protecting what matters most and knowing how to talk to people about the many stages of life and mortality. It’s the death and dying part of our business that we all need to feel much more comfortable talking about if you are truly going to be a holistic and trusted partner for multi-generational families.”

Fears Of Becoming A Burden
“More than running out of money in their later years, many older people are simply afraid of being a burden to their families,” says attorney Moira Bessette Martin, senior vice president and senior trust officer at Essex Trust, in Essex, Conn. “They don’t want their kids to have to give up aspects of their lives to take care of them. And in many cases, the kids are long gone, no longer living near where the family homestead remains.”

But it’s tough to support people from afar. Most families need someone on the ground and that’s where it gets tough and expensive, because there are limited affordable options for older people.