Mental Health & The Financial Advice Relationship

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Ralph Arnold
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1 Mental Health & The Financial Advice Relationship IFIC Ops Conference Carol Lynde, President & COO Bridgehouse Asset Managers

2 Agenda: 1. Mental Health Today 2. Research: What Advisors Say 3. Recommendations 4. Tools

3 M E N TA L H E A LT H P R O B L E M S A N D I L L N E S S E S C A N A D I A N S T AT I S T I C S 1 in 5 Canadians will experience a mental health problem or illness in any given year Mental Health Commission of Canada (2017). Strengthening the Case for Investing in Canada s Mental Health System: Economic Consideration.

4 M E N TA L H E A LT H P R O B L E M S A N D I L L N E S S E S C A N A D I A N S T AT I S T I C S By age 40 1 in 2 Canadians will have/have had a mental illness Mental Health Commission of Canada (2013). Making the Case for Investing in Mental Health in Canada.

5 5 Common Health Issues Facing Canadians Today Diminished financial capacity Anxiety Depression Substance abuse Problem gambling

6 Bridgehouse Research Qualitative Research November 2017 In-depth interviews with 16 advisors Navigator Research Quantitative Research January to February advisors Navigator Research Anne Kilpatrick, Principal, Navigator Research Advisory Panel Understand challenges to create specific tools for the client advisor relationship: December 1, 2017 Psychiatrist, Dr. Anne Ferguson Lawyer, Shelley Birenbaum Practises exclusively in health and privacy law Canadian Mental Health Association (CMHA), Toronto Branch Adam Wiseman 9 financial advisors

8 Did you know? 85% of advisors spend more time with clients with mental health issues than with other clients *Strengthening the Case for Investing in Canada s Mental Health System: Economic Considerations, Mental Health Commission of Canada, March 2017.

10 Tension & Boundaries Financial advisors experience a t e n s i o n dealing with clients displaying mental health challenges Tension to do the right thing, but not knowing roles, responsibilities & boundaries Percentage of advisors who have encountered clients with above conditions Research Sources:

11 I am hesitant about engaging too much with clients with mental health issues because I don t know the boundaries of my role as an advisor 58%of advisors agree

Your responsibilities in portfolio risk mitigation for clients who face mental health issues Your overall responsibilities as an advisor in

12 Your responsibilities in portfolio risk mitigation for clients who face mental health issues Your overall responsibilities as an advisor in response to clients exhibiting signs of mental illness 42% feel not very well or not at all informed 43% feel not very well or not at all informed

STRATEGIES/TACTICS: They are interested in strategies and tactics to assist them in their

13 PEER SUPPORT: Advisors would like to hear more about what other advisors have encountered in their practices when interacting with clients who have mental health/distress challenges (i.e., sharing of stories). STRATEGIES/TACTICS: They are interested in strategies and tactics to assist them in their interactions with clients who may be suffering from mental distress or who have mental health issues.

Significant challenges in the advisor relationship when mental illness is a factor Advisors suggested that in attempts to protect their clients, their recommendations and/or actions sometimes bring

members: Members of the client s family may feel that the advisor has not acted in the best interest of the client, leading to tension-filled interactions, and sometimes complaints to the regulator;

14 Significant challenges in the advisor relationship when mental illness is a factor Advisors suggested that in attempts to protect their clients, their recommendations and/or actions sometimes bring them into conflict with: Their clients: Some advisors described how their relationships with the clients become strained when a client is unable to engage in rational decision-making; Client family members: Members of the client s family may feel that the advisor has not acted in the best interest of the client, leading to tension-filled interactions, and sometimes complaints to the regulator; and Regulator/compliance requirements: Specific actions taken by the advisor to protect the interests of the client (e.g., placing them in annuities to ensure consistent income flow; allow higher equity weighting in a portfolio to address longevity needs) may be considered outside of KYC risk assessment.

15 Recommendations: Promoting Investor 1 Well-being ADVISOR SUPPORT Continuing Education Recognizing warning signs Responsibilities/privacy Escalation Strategies/Skills Training Adapt best practices from mental health experts Tools/Checklists

16 Advisor Support Program L I V E W E B C A S T S T O P I C S C O V E R E D C E AC C R E D I TAT I O N * June 6 (on demand) July 18 (on demand) September 18 (on demand) Find out more: bridgehousecanada.com CMHA Best Practices Recognizing mental health warning signs Advisor responsibilities Privacy Escalation process Communication skills and strategies for difficult situations Consent strategies Practical tools IIROC FPSC Advocis CSF *CE Accreditation is pending

17 B O U N D A R Y T O O L S Professional requirements & designations Firm requirements Letter of engagement Trusted Contact Person (TCP) Power of Attorney (POA) in place Know Your Client (KYC)

18 B O U N D A R Y T O O L S Trusted Contact Person Where do you to turn to get help for a client without violating the client s privacy? Trusted Contact Person (TCP) Designated person the firm & advisor can call if there is concern about a client or transactions in client s account Ideally placed person to help or get help for client

decisions or about financial abuse, I authorize my financial advisor to contact my Trusted

19 Trusted Contact Person Consent Form Should there be a time when my financial advisor is concerned about my understanding of my financial situation, my ability to make financial decisions or about financial abuse, I authorize my financial advisor to contact my Trusted Contact Person (TCP) set out below and to disclose personal information if required to assist me.

20 B O U N D A R Y T O O L S Engagement Letter Outlines services Professional requirements Other expectations: When you will/will not execute client instructions Good place for TCP & POA Set your boundaries: request in advance & in writing

B O U N D A R Y T O O L S Know Your Client Sets Baseline & Boundaries A change with client could trigger: Tool to establish a baseline Basis for a financial plan Keep

21 B O U N D A R Y T O O L S Know Your Client Sets Baseline & Boundaries A change with client could trigger: Tool to establish a baseline Basis for a financial plan Keep client on plan through: Market events Life events Mental/physical health events Update KYC Get client back on plan Reflect change in plan Advise firm Reach out to TCP

B O U N D A R Y T O O L S Professional Responsibilities You are a financial advisor, not a therapist Client first Provide sound advice to clients regarding their financial goals Your

22 B O U N D A R Y T O O L S Professional Responsibilities You are a financial advisor, not a therapist Client first Provide sound advice to clients regarding their financial goals Your designation requirements (CFP, CIM, CHS, CLU, etc.) Recommend financial plan/vehicles Encourage client to stick to plan Monitor/update financial plan (living document) in collaboration with client

25 Now total up all the points you have to find your score. 150 points or less means a relatively low amount of life change and a low susceptibility to stress-induced health breakdown 150 to 300 points implies about a 50% chance of a major health breakdown in the next 2 years 300 points or more 80% chance of health breakdown in the next 2 years, according to the Holmes-Rahe statistical prediction model

26 CONVICTION Convinced FRUSTRATION EMPOWERED Ambivalent LACK OF KNOWLEDGE Powerless CYNICISM SKEPTICISM Unwavering CONFIDENCE

observations made by the advisor ASSESSMENT Synthesis of S & O What

27 Practical Tool -- To Help Your Client & Protect Yourself SUBJECTIVE Client reports on what he/she is experiencing OBJECTIVE Factual observations made by the advisor ASSESSMENT Synthesis of S & O What do you believe these observations mean? PLAN Recommendations and next steps

28 When you do what s right, you should feel good but do you? UNDERSTAND BOUNDARIES KNOW WHAT TO DO This is awful, but I know what to do get my client help

29 Rational detachment Ability to control own behaviour & not take hostility personally Remain professional How to detach RATIONALLY Roles, responsibilities, boundaries Escalation to firm & debrief Self-care

30 Advisor Research & feedback from advisors tough position EAP Bounce back ( Mindfulness (apps such as Headspace or Calm) Properly identify your emotions Mindfulness reset Do things you enjoy Focus on appreciating opportunity & not fearing challenges The National Standard of Canada for Psychological Health and Safety in the Workplace

Escalation process Case review (no-name basis)

31 Recommendations: Promoting Investor Well-being 2 FIRM/PEER SUPPORT Investor Well-being Roundtables Escalation process Case review (no-name basis) Management/peers Legal/compliance Experts: psychiatrists/ mental health specialists

investor policy Guidance on Trusted Contact Person

32 Recommendations: Promoting Investor Well-being 3 INDUSTRY SUPPORT Incorporate mental health into investor policy Guidance on Trusted Contact Person (TCP)/Power of Attorney (POA) Implement Safe Harbour TCP Client Advisor

33 Firm & Industry Follow-up Engaging in systematic follow-up to encourage firm & industry support Met with regulators, SROs, Ombudsman, industry to encourage guidance & direction: o Specifically on privacy exemptions, consent, capacity, boundaries & responsibilities o IIROC, MFDA, OSC, IAG, OBSI, IIAC, Advocis, FPSC Met with educators (Moody s CSI, FPSC) on including in credentialing, designations, CE credits Positive reception topic of high interest

34 Bridgehouse Leadership Continue webinar series CE credits Webinar 3 covering balance, boundaries & burnout: Skills & tools, Confidence-Conviction Model, Rational Detachment Continued work with Canadian Mental Health Association- Toronto on skill/knowledge transfer Additional advisor research Q and Q Advisory Panel Q4: CMHA-Toronto, legal, psychiatric, health professionals

35 M E N TA L H E A LT H P R O B L E M S A N D I L L N E S S E S C A N A D I A N S T AT I S T I C S By age 40 1 in 2 Canadians will have/have had a mental illness Mental Health Commission of Canada (2013). Making the Case for Investing in Mental Health in Canada.

Why Advisors Are Beneficial Financial advisors who deal with people over the long term and with multiple family members or generations are in a really unique

36 Why Advisors Are Beneficial Financial advisors who deal with people over the long term and with multiple family members or generations are in a really unique position professionally to see people at different stages and can identify changes in a person s personality. Dr. Anne Ferguson Advisory Panel, December 2017

37 Thank You! Brought to you by: Follow us on LinkedIn and Twitter Bridgehouse Asset Managers is a trade name of Brandes Investment Partners & Co. (Bridgehouse). The information has been gathered from sources believed to be reliable; however. Bridgehouse is not responsible for any errors or omissions contained herein. Bridgehouse assumes no liability for any loss or damage suffered as a result of the use, misuse or reliance on the information and content herein. This material is not intended to provide legal, financial, medical or other advices, and may not reflect the thoughts and opinions of Bridgehouse. Information provided is not a substitute for professional advice. If you feel that you may need medical advice, please consult a qualified health care professional. Speakers subject to change. Permission must be obtained if the material is to be reproduced in whole or in part. (2018)

Making Choices: Ethics and Professional Responsibility in Practice

Making Choices: Ethics and Professional Responsibility in Practice Making Choices: Ethics and Professional Responsibility in Practice Summary Value of Ethics Introduction Learning Objectives Ethics and