Understanding the emotional impact of wealth creation

Wealth Solutions

Understanding the emotional impact of wealth creation

Attaining significant wealth can generate a variety of emotional issues – especially if the financial event was sudden and/or unexpected.

UNDERSTANDING THE EMOTIONAL IMPACT OF WEALTH CREATION

Attaining significant wealth can generate a variety of emotional issues – especially if the financial event was sudden and/or unexpected. Many studies have shown that people who receive large amounts of money often experience anxiety, guilt and confusion as the reality of their new situations sink in. But emotional impact is not limited to the person receiving the money. A particularly unfortunate – but not uncommon – occurrence is jealousy on the part of siblings and other relatives. Psychologists have identified a condition called “sudden wealth syndrome.” Wealth recipients display this condition by acting in irrational ways that range from reckless spending to withdrawing from friends and family. Because of the emotional impact that your clients – and possibly those around them – may experience, you might suggest including an impartial specialist as part of the advisory team, especially if you anticipate difficulties in dealing with family issues. The emotional issues surrounding the creation of wealth are easier to handle when everyone acknowledges that they are real and takes steps to deal with them appropriately.

Here are some common financial oriented examples that your clients may have on their mind. The Financial Advisor is there to support and encourage these conversations, as well as guide them to explore the emotional aspects of these financial issues.

Encourage your clients to share their concerns proactively, and use this as an opportunity to become a valuable part of the wealth planning process.



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