Menu

Freud Meets Finance: Why Wealthy Clients Are Using Financial Advisors For Money Therapy

California sunlight is flooding into the Beverly Hills conference room where Amir Mossanen typically holds his family sessions over pizza and soft drinks. He opens a cabinet to show off the little rewards–a deck of cards, a miniature stagecoach figurine–that he gives to those who open up about their lives. Mossanen, 42, is not a psychologist but a Wells Fargo wealth advisor with $1.8 billion under management.

Several years ago, Mossanen held what some might consider a family intervention with one of his best clients, an Iranian immigrant couple living in the Bel Air section of L.A. They were worried about their youngest son, who had dropped out of USC, had little interest in the family electronics business and seemed to be drifting from startup to startup.

Mossanen questioned the young heir about his business ideas, his dreams and goals, his plan B if his startup didn’t work out and what he expected in terms of family assistance. Then Amir had another heart-to-heart talk with the parents, encouraging them to let their son continue on his entrepreneurial quest. It ended with the creation of the Tinder dating app, the crown jewel of Match Group, a Nasdaq-listed company with a market value of $6 billion.

“I think Amir helped my parents more than me,” says Tinder founder Sean Rad, 31. “The family business never really resonated with me, and I wanted to follow my own path.” In 2016, he delivered a commencement address at USC’s undergraduate business school, as his parents watched.

Gone are the days when asset allocation, investment selection and tax planning–all essentially commodities now–proved an advisor’s worth. But $30 trillion will pass to the Millennial generation in the coming decades, and according to the seminal work Philanthropy, Heirs & Values by Roy Williams and Vic Preisser, seven out of ten estate transitions fail–meaning family wealth and/or harmony declines. That has given advisors a new mission and a way to keep their hold on the $7.8 trillion of high-net-worth business. If financial advisors ignore the needs of spouses and the younger generation, industry consultant Cerulli Associates warns, the assets they manage will sink when wealth is transferred.

Mossanen realized this in 2010, when a prospective client who was selling his business for $400 million said his biggest concern wasn’t whether he could manage his new wealth but whether it would leave his adult son directionless. Finding no satisfactory off-the-shelf answers, Mossanen built his own program, done in nine two-hour-long sessions, to teach families to open up about their wealth and avoid the secrecy and resentment that inevitably bubble into a crisis.

His program begins with seminars on investing and credit, and culminates with intimate tasks like defining individual goals and forecasting possible costs or risks. Every family member has to answer the same questions. Mossanen tries to bring out disagreements and even records sessions to be replayed later. This gauntlet takes two years, with a big payoff: The patriarchs and matriarchs have opened up about their wealth, and the younger generations have a framework for making good use of it.

“[For many clients] the golden rule is he who has the gold makes the rules,” Mossanen says. “Then when the dictator is no longer, they lash out and cannot make decisions together. The kids have been suppressed because they weren’t allowed to decide anything for themselves. They’re like people who have been holding their breath for too long.”

Of Mossanen’s 53 clients, 20 have participated in his novel program. Wells Fargo (which has 13 advisors, including Mossanen’s team, on Forbes and Shook Research’s 2017 list of America’s Top 250 Advisors) plans to roll out a family-focused program nationwide. “Our clients are literally knocking our doors down, demanding help in this area,” says Katherine Dean, recently named head of Wells Fargo Private Bank’s Family Dynamics business.

UBS, too, has a dedicated unit working on family coaching. “We’re in the humanities and the emotional business,” says Judy Spalthoff, head of family and philanthropy advisory at UBS Americas.

After Ted Merchant, a cofounder of HealthCare Partners, sold the company to dialysis giant DaVita for $4.3 billion in 2012, he asked Forbes’ 55th-ranked advisor, Drew Freides of UBS Private Wealth Management, to help his three adult children adjust. “When you’re dealing with these dollar numbers, we’re living at fairly high altitude, and we need to get used to the thin air,” says Merchant, 6