03/05/2012 04:10 pm ET Updated May 05, 2012

Wealth Managers Bring Psychologists To The Table

By Mitch Lipka
March 5 (Reuters) - When it comes to family squabbles
over money -- particularly contentious ones involving
inheritances -- you may find a new face at the mediation table
with the lawyers, stock brokers and accountants: a psychologist.
The involvement of a mental health professional isn't about
providing traditional therapy. It is more about helping those
involved to communicate. Because wealth, particularly sudden
wealth, can create anxiety and confusion.
Financial advisers say the trend is growing because of the
historic wealth transfer that is under way as the baby boom
generation ages. Baby boomers are projected to pass along an
estimated $41 trillion through 2052.
As traditional wealth managers work out inheritances, they
find they have to keep families from imploding as holdings are
divided after a parent or other wealthy relative die. And to do
that, they say they need more than just spreadsheets and stock
Psychology to the rescue.
"It's definitely a burgeoning field. It's a field that
needed to be around for a long time. But there weren't people
doing it," said psychologist Jamie Traeger-Muney, founder of The
Wealth Legacy Group. "Talking about the emotional impact of
wealth on people's lives is really new."
Traeger-Muney works alongside financial advisers, estate
attorneys and accountants who bring her in to try to ensure that
those who are about to receive large sums of money, or have
recently come into it, are able to wrap their brains around a
plan to help them hang onto to it. "It's not about what's wrong
with you -- why are you irresponsible. It's about what are your
goals and how do you get to them," she said.

If there is unsettled emotional business when a parent or
grandparent dies, the battles among family members can reach
epic proportion -- leading to siblings never speaking to each
other again, among other difficulties.
At Aequus Wealth Management in Chicago, the financial
planners embraced the idea that the psychological well-being of
the clients is intertwined with their financial success. So,
founder Cicily Carson Maton partnered with a psychologist who is
integrated into the business at Aequus.
"Who gets grandma's teapot? We emotionally attach great
value to something we can't have. It's totally out of
proportion," Maton said.
"Just having money isn't going to make people happy," Maton
added. "Sometimes it makes them very unhappy."
Between 65 percent and 75 percent of families fail in the
transition of money from one generation to the next -- either by
losing much of the inheritance because of poor planning or by
losing family harmony, according to a frequently cited study by
The Williams Group that was based on interviews with members of
3,250 families.

Involving a psychologist in the financial planning can help
avoid the sorts of conflicts that occur in many families, even
when the amount of wealth involved isn't huge, added William
"Marty" Martin, a psychologist who works with Aequus. But when
significant wealth is involved, the intensity can rise along
with it when issues aren't worked out in advance. Since
conflicts and bad feelings that can date back to childhood, it
helps to have someone to coach the family through this process.
He said that one client recently sent an email to her
sibling that she portrayed as friendly, but that he was able to
point out to her that the friendly intent of the message
probably didn't come through the loaded comments that were
embedded. He counseled her that it's best to hash these issues
out in person before it gets to the point of the dreaded email
or letter.
He also recounted a successful intervention involving a
woman who had become estranged from her wealthy father, who had
married a woman she didn't get along with. The daughter had
worked at a high level in the family business and was fired
after her father remarried and was to be cut out of his will.
Rather than sit back and wait to see what happened, Martin said
he counseled his client to keep a dialogue going with her
father, who ended up giving her a share of his wealth. "By
anticipating," Martin said, "they got to work it out."
The key to using psychology to help smooth out the
transition of wealth, he said, is to make it part of the process
rather than as a last-resort when things blow up. "I'm part of
the process. It's normalized. It's not as if they say something
and it triggers (an intervention)."

(Editing by Beth Pinsker Gladstone and Andrea Evans)