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ost research into the health effects of money focus on the lack of it.
But according to Dr Ronit Lami, head of the Allenbridge Affluenza
and Wealth Service, it can be just as damaging - psychologically at
least - to have too much money as too little.
The Allenbridge group's main business is providing
financial advice and performance analysis of financial products
but an increasingly high-profile sideline consists of psychological
counselling for those afflicted by the burden of extreme wealth.
This is not as ludicrous as it may seem: in this year's Forbes 400
list of the richest Americans there's more money at the top than
ever before - a combined $1.2tn. But there's also a good deal more
anxiety and guilt.
Lami, who was born in Israel and attended Bar-llan
University before taking a PhD in psychology at Hull University in
the UK in 1999, says: "Making or inheriting a large sum of money
creates emotional and social challenges. We can offer to help to educate
the children of very wealthy people to ensure they lead a relatively
normal life."
Lami began her career working for PepsiCo
in Tel Aviv where she was responsible for employee assessment and
development. She became interested in "change work" - a euphemism
for therapy - and began to offer counselling in what Allenbridge terms
affluenza - the sudden wealth syndrome.
Excessive wealth can cause misery she says
in a range or circumstances such as when wills are being drawn up.
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Some members of the family may feel slighted by the prospect of receiving
what they regard as an unfair portion of the inheritance, compounded
by emotional issues such as how they cope with the death of their
benefactor.
Lami's solution is to get the family together
so they can discuss how to arrange their inheritance. She says the
children of the very wealthy should be encouraged to participate
in charity work in order to get a better perspective on their own
financial situation.
Her client base is international. "Many are from the US,
although there are increasing. numbers from Europe," Lami says. "The US
is better than Europe at dealing with issues caused by excessive wealth
and Europeans are not yet good at dealing emotionally with this problem.
However the situation is gradually improving and is better than it was
10 or 15 years ago."
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So what can IFAs and other advisors do to make their
high net-worth clients - and indeed other customers - more comfortable?
"First, financial advisors should try to avoid technical language and
communicate better by using terms their clients can more easily understand.
Often clients are too embarassed to ask their advisor what the various
pieces of financial jargon actually mean. This is stressful for the client and
results in a lack of understanding."
Lami also believes that fund managers need to provide
their clients with information more frequently. "Sometimes, they see their
clients only once a year and that is not enough."
Psychological problems are not a prerogative of investors,
notes Lami, pointing to the implications of the terrorist attacks on the
World Trade Center for the financial community at large. "Those that are
left behind will experience much grief and even guilt and shame," she says.
"It is important that the companies involved provide some form of support
for the bereaved families."
There may also be emotional difficulties for relatives
of those who died suddenly perhaps even intestate, as a result of the
attacks. Some people are likely to have to face the stress of bereavement
of a relative or partner as well as the daunting task of having to deal with
a large amount of wealth.
"The children and partners of those who died will
especially need counselling," says Lami. "Unfortunately they will have
suddenly realised that living in a rich, developed country does not
necessarily guarantee security."
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