When psychotherapy meets advice

Turns out advice and psychotherapy might be linked. And this is something startup advice firm Six Degrees is exploring.

The founders believe many wealth conversations rely far too much on logical and arithmetic thinking coming from the left side of the brain, and not enough on emotional and creative thinking, which is controlled by the right side.

Yet it is commonly accepted that managing money can be emotive and the industry has also been busy making links between mental health and money.

So, how can the industry make the most of what psychotherapy has to offer when it comes to giving advice?

According to Vicky Reynal, financial psychotherapist and author of Money on Your Mind, psychotherapy is "exactly where irrational money behaviours can be decoded, understood and therefore change."

She says: "Our stubbornly hanging on to one stock instead of diversifying investments could be about an anxious personality or a fear of making choices; our excessive risk-taking could be about an unconscious desire to seek punishment, or to prove to ourselves that we are ‘special’, either based on past (usually childhood) experiences; and a couple stubbornly clinging onto their different views on how/how much money should be invested could be playing out a power dynamic that could have been about any subject but found its expression in money.

"What needs to be resolved isn’t the money conflict, but the power struggle sitting behind it."

A new approach

Advisers Katherine Waller and Ollie Saiman believe there are valuable insights psychotherapy can offer for the advice process, for instance when it comes to preempting client responses. It can also help advisers to recognise and respond properly to neurodiverse clients.

With their new firm Six Degrees, which launched six months ago, the former RBC Wealth Management seniors have set out to approach advice in a different way, whereby a wealth strategy only makes sense once the true purpose of the wealth has been determined.

Financial planners and life planners may say 'that's what I do'. But while it is true that many planners dig deep to ascertain their clients' motivations for growing wealth, there is still a difference, say Waller and Saiman.

For a start, most conversations are still around products, says Waller. Whether it's to sell the best product or the product that best meets the client's needs and objectives, it's still about the product, "it is not around feelings".

This means "people make decisions based on actually things they can't control," she says, "the only thing they can control is how they're going to feel about it."

If we don't understand that client's purpose of wealth, frankly, I don't see us as being able to give any sort of insightful wealth strategyOllie Saiman

Waller believes most advisers don't really examine 'the why' in a client's financial decision - the feelings and reasons underpinning it - they may ask the question 'why?' but they don't ensure they get to the bottom of it.

"Once you understand that ['why'], it drives all the behaviour around decision making," says Waller.

Saiman explains: "In terms of what we actually do for clients, yes, we help identify the purpose of their wealth, that is the cornerstone of everything.

"And then we help them create the wealth strategy, which involves a whole number of different avenues like succession planning and structuring and tax efficiency, and the advice that underpins all of that.

"And we advise how the investments should be managed, we assess their risk profile and risk appetite and do what you'd expect wealth managers to do. We think of that as the left brain conversation. 

"But it's fed by the right brain, it's fed by the more emotive, the more creative, the more irrational, and that is where we get the conversation to, that is the depth we go into."

It is commonly accepted that the left side of the brain controls speech, comprehension, arithmetic, and writing, and therefore is generally thought to be predominantly in use during a typical wealth management meeting, whereas the right side, which controls creativity, spatial ability, and artistic skills, is often not.

"If we can come away from a conversation understanding the purpose of their wealth and that client's values and yes, all of the hygiene factor information we need to know anyway from a regulatory and common sense point of view, then we can put together a meaningful strategy," says Saiman.

"If we don't have, or don't understand, that client's purpose of wealth, frankly, I don't see us as being able to give any sort of insightful wealth strategy that's going to do anything hugely transformative for them."

A lot of Six Degrees' practice hinges on creating a space with clients that allows them to ask the right questions leading them all the way down to their inner person.

This is where psychotherapy comes in. They key is asking the right questions and challenging when the opportunity arises.

For instance, there may be questions the client hasn't thought of before about why they are doing things or why they say they want certain things.

And as many who have been through a form of coaching in their life will know, being asked questions one hasn't thought of before, analysing one's true motivation for doing things, is hard but can be rewarding.

Six Degrees also recognises the importance of the support field around the client when it comes to putting together an effective wealth strategy, be it their family or business partner or both. And it places great emphasis on the need to bring all these people into the equation.

Saiman says: "It is typical in this industry for the client to be the 'wealth creator', when actually we believe that wealth typically is created within an ecosystem, and that ecosystem is usually, but not always, a family."

The idea of interconnectedness, including the connections Six Degrees forms with its professional partners which it likes to invite to the advice process, is already reflected in the firm's name.

Six Degrees - think six degrees of separation, or the idea that all people are six or fewer social connections away from each other.

"We realised that businesses are created through the power of personal connection, and this mirrors the entrepreneurial journeys of our clients," says Saiman.

Counselling meets advice

To some Six Degrees' approach may seem closer to counselling than financial advice, and in some respects it is.

Saiman says the pair have always looked to other industries for inspiration, including the world of psychotherapy and counselling. 

His mother, in fact, is a practising psychodynamic counsellor and he says he has developed a great interest in psychoanalytic psychotherapy himself.

"It is an interest of mine from an academic, but also practical perspective. I've seen how helpful it can be in someone's life," he says.

His mind is already set on training as a psychotherapist in the future and he says he can see himself integrating this further into his financial advice practice.

"The two skills are very, very complementary to each other....principally because wealth doesn't mean what you think it does, for most people."

My family is neurodiverse. And so what comes from that is you learn different ways different people hear, see, feel, and are aware of things

Waller on the other hand has studied finance and philosophy, which she says, has enabled her to recognise how the functions of each side of her brain played into her wealth conversations. 

"Finance is a very definite answer. Philosophy is very much debate and discussion.

"And then when I came into this industry, I recognised very quickly that that philosophical, that discussion, that depth of questioning wasn't as prevalent in conversations," she says.

As time went by she ended up supporting other relationship managers at RBC on how to create successful client relationships, and how to challenge clients when needed.

She adds: "My family is neurodiverse. And so what comes from that is you learn different ways different people hear, see, feel, and are aware of things.

"Ollie and I, we recognise the importance of diversity, we recognise the beauty that comes from people and environments that are different. And in some respects, we are able to bring our differences...to the relationships that we have with others. And we're both incredibly aware of that."

Diversity of thought is particularly important to them in an industry where "all providers tend to look and sound the same and say the same things, and be from similar backgrounds."

Tackling HNW advice gap

Since launch Six Degrees has already grown faster than anticipated and is halfway along its goal for this year when it comes to client base.

It was partly set up to tackle what the pair identified as an advice gap for HNW investors, those with more than £3mn to invest, which are its target clients.

Saiman says: "For high net worth individuals, so those with more than 3mn pounds of investable assets, their first conversations typically take place with the big banks. And banks are good at lots of different things but at the end of the day they are utilities, and the conversation around wealth management tends to become very product focused.

"And so high net worth clients are immediately disadvantaged, because they go into this environment and they think that the wealth conversation is an investment conversation."

Waller explains this means the sense of purpose, which tends to be so prevalent in the businesses those HNW individuals set up and run, tends to get lost when the business is sold and the wealth created.

She says: "Most of these individuals have had a purpose driving a business. There's values and a culture in that business that they have typically bred and created. 

"And so what then happens is a liquidation event takes place and that purpose loses its way in the conversation."

It is exactly this gap which Six Degrees is trying to bridge.

Saiman adds: "It is a solution at the end of a long process of discovery and understanding.

"And we are aiming to influence the industry towards this way of thinking, because we think there's no other way to do it."

carmen.reichman@ft.com