Editor's note: This is the first contribution from a new columnist, Sarah Newcomb, who will be writing every other month on behavioral finance.
Jeff Bezos caught some heat recently when he asked that people stop referring to him and his peers as "rich"and to instead use the term "people of means."
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The internet backlash was vicious and full of bile, accusing Mr. Bezos of being out of touch, or worse, downright evil. The vitriol of that incident highlights an issue that's important for financial advisers to consider: Public hatred of the wealthy is one of the last bastions of acceptable prejudice in our society.
Money and judgment go hand-in-hand. We shame the rich by calling them greedy. We shame the poor by calling them lazy.
The reality is, of course, that these are just stereotypes, but being on the receiving end of a negative prejudice is painful and emotionally draining. Advisers who are attuned to this can offer the rich something more valuable than money: compassion.
For those who suffer under the chronic pressure of financial insecurity, it's easy to view people like Mr. Bezos with disdain and to judge the problems of the rich as petty in comparison with the problems of the poor. Even for those of us who work with the wealthy, it can be tempting to think they must have it made and to minimize the emotional costs that they pay for being "people of means."
Consider for just a minute: How it would feel to know that your children are most likely the target of kidnapping plots? Can you fathom what it must be like to have people blame you personally for the suffering of millions? How lonely would it be to never be quite sure if the people in your life are interested in you as a person or just for what you can do for them? How well do you think you would sleep at night if thousands of families depended on you for their paychecks, and one big mistake on your part could cost them all their livelihoods?
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These are just a few of the pressures the rich feel daily. And they have nobody to talk to about it because they know they will be met with, "Oh, you think
you have problems."
What's the difference between the "fabulously wealthy" and the "filthy, stinking rich"?
It's the attitude of the person making the judgment. If you advise people who are wealthier than yourself, you'd be wise to take a look in the mirror. Do you ever make light of client's worries with quips like, "I wish I had that problem!"
When a client feels guilty after inheriting wealth, do you inwardly roll your eyes? Do you serve your clients with a smile while envying them and wondering why they can't just be happy, since they have all the money they could want?
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Financial health is not about numbers. Financial health is about the stories we tell ourselves because of those numbers. For some, great wealth means they have achieved success and established self-worth. For others, the same numbers represent an overwhelming sense of guilt, fear or responsibility. Many who inherit wealth due to a tragedy process their feelings of loss by refusing to enjoy the money, choosing instead to give it away or leave it untouched.
Can you recognize the humanity in these behaviors rather than focus on how irrational they are? Can you see past the numbers to the person who is struggling, and help them get the support they need so they can make peace with their loss without sacrificing the financial security their loved one left behind?
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More than investment chops, listening, empathy and nonjudgment are what set compassionate advisers apart.
When Mr. Bezos asked that people use the term "people of means," what he was really asking for was to be treated with basic human dignity.
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The vitriolic response only served to illustrate the very prejudice he was asking people to rise above. In a world that demonizes the rich and minimizes their problems as immaterial simply because they are not financial, advisers who can offer empathy and compassion alongside their expertise will be worth their weight in gold.
