Managing money is stressful when you don't know how to do it. But apparently, it's stressful for the professionals, too.
A good 71% of financial advisors say they experience moderate or high levels of stress, compared to just 63% of investors, according to a survey by the Financial Planning Association along with Janus Henderson and Investopedia.
Part of the problem boils down to competition, but it's also a matter of advisors' performance being outside their control to a certain extent. After all, advisors can only make investment recommendations based on things they know, research they've done, and trends they've observed. They can't predict the market's performance, nor can they guarantee clients that they won't lose money. And if there's one thing people tend not to take kindly to, it's financial losses -- even those that are only on paper.
Sourcing clients can also be stressful for advisors who are new to the field. Networking, attending conferences, and getting out in the community can be a time-consuming endeavor, and one that doesn't always yield monetary results.
If you're a financial advisor who's been struggling with stress, there are things you can do to ease the burden and focus more on what you do best -- helping clients manage their money and meet their most important goals. Here are a few to start with.
1. Be transparent about your fees
An estimated 65% of Americans say they mistrust financial advisors to some degree, according to the American Association of Individual Investors. Earning clients' trust is crucial to growing your business and retaining customers, so to this end, aim to be extremely open about the way you get paid. If you charge a percentage fee of assets under management, say so. If you collect commissions, be up front about that as well. Any reasonable client won't begrudge you the opportunity to get paid, but you need to make your compensation structure clear so that people are comfortable with it.
2. Get comfortable asking for endorsements
Building a client base can be an extremely stressful prospect, especially when you're a relatively new advisor without the years of experience some of your competitors might have. To this end, it really helps to focus on developing a few solid client relationships, and then asking those customers to talk you up to their friends, colleagues, and neighbors. If you make it clear that you're looking for help in growing your business, satisfied customers may be more than happy to accommodate.
3. Commit to a better work-life balance
Being a financial advisor often means working after-hours, or all the time, which can make for a stressful existence. If you're used to working nonstop, start blocking off time during the week when you won't be doing that. Decide that you won't travel to meet clients on Monday and Wednesday evenings, or that you'll allow yourself to take every other Friday off in the summer to spend time with family.
This assumes, of course, that you're self-employed and therefore have the ability to set your own schedule. If you work for a company that has the right to dictate your hours, you may not have the same leeway. But if that's the case, and your employer has been making unreasonable demands, tell your manager that you're on the verge of burning out, and insist that you need to scale back.
Managing money for other people isn't easy, but you owe it to yourself to reduce your stress load and improve your outlook. Doing so might help you get better at your job, and once that happens, both you and your clients stand to win.