Key Points from Canada’s 2024 Federal Budget and Strategies for our clients. Click Here.

Mental health issues can affect financial planning

Mental health issues can affect financial planning

May 23, 2019

As a society we are more aware that mental health problems exist. Once a taboo subject it is now more openly acknowledged and discussed. 

The Canadian Mental Health Association celebrated Mental Health Week from May 6 – 12. This year’s theme was to #GetLoud about what mental health is. Which, as their website says, “is a state of well-being, which we can all have… whatever life’s ups and downs.” The United States assigns the whole month of May as Mental Health Month.

Compromised mental health can present real challenges to a person’s financial planning and investment decision making.

The relationship with a client and their financial advisor can come with challenges. After all, articulating your financial objectives decades in advance can be difficult. Add in the ups and downs and general uncertainty with investing, and the challenges increase. 

Mental health issues can affect a client’s behaviour and magnify the challenges. 

A report conducted for the Mental Health Commission of Canada states that half of people aged 40 and over are experiencing, or have experienced, some form of mental illness.

Citing ages of 40 and over is important here. This age group makes up a significant portion of financial advisors’ client base.

As of February 2018, firms in the United States have been required by the U.S. Financial Industry Regulatory Authority Inc. to have a trusted contact person (TCP) for each client. A client gives written authorization for the TCP to release information about them if they have concerns for the client’s mental well-being.

A proposal has been made in Canada to institute the same protocol.

We all need to be mindful of mental health issues and how they might adversely affect the financial health and well-being of a client.