DEFINITION of 'Wealth Psychologist'
A wealth psychologist is a mental health professional who specializes in issues relating specifically to wealthy individuals. Wealth psychologists are also called money psychologists or wealth counselors. Wealth psychologists help their ultra-rich clients deal with issues such as the guilt they feel about being wealthy, or advise on inheritance issues and counsel parents on how to raise children who are not spoiled by money.
BREAKING DOWN 'Wealth Psychologist'Many modern wealthy families built their wealth in one generation. They may not be comfortable with all aspects of being rich, and may have a lot of guilt associated with it. Even for those people who find themselves financially prepared, more are beginning to realize they may not be psychologically or emotionally prepared to cope with wealth. Ample evidence points to the notion that, the more people are prepared in this way, the happier they are throughout their remaining life stages. The younger people are when they begin to work toward full preparation, the more productive their lives.
Wealth Psychology’s Role in Holistic Planning
Financial planning that emphasized the quantitative side of life has given way to a practice intended to broaden the scope and clarity of one’s vision of the future, and the values that drive the commitment to living a full and complete life. Expectations of longer lives, uncertainty over a frail economy, fear of market risk, disillusionment with government and concerns over world chaos are contributing factors to new attitudes about money and happiness.
Some private wealth management and financial services firms retain wealth psychologists to train their financial advisors or provide individual counseling to clients. Wealth psychologists are increasingly included as a part of a client’s advisory team engaged in a holistic financial planning process. Their focus is on helping clients better understand their values, attitudes and beliefs about money to better cope with self-limiting or self-destructive behaviors at the center of their relationship with money or with a family of wealth.
Preparing Future Generations for Wealth
Wealth psychology is becoming more prominent in legacy planning, preparing family members and future generations for the emotional transfer of wealth. While the precepts for effectively maximizing the transfer of assets are well established within the traditional wealth management community, the guiding principles for preparing family members and future generations for the emotional transfer of values and beliefs are often minimized or ignored. The role of the wealth psychologist is to help families bridge the communication and trust gap for building solidarity of vision and purpose among disparate family members and generations.