Dale Jackson

Personal Finance Columnist, Payback Time

Follow|Archive

The investment industry is finding itself having to deal with a creeping concern: mental illness. The demographic bulge known as the baby boomers is getting older and more investment advisors are finding themselves in difficult situations as long-time clients slip into the grips of dementia.

According to the Canadian Mental Health Association (CMHA) one-in-five Canadians will experience a mental health or addiction problem each year. When they reach 40, half will have — or have had — a mental illness.

The CMHA says financial difficulties can be a trigger for, and a potential consequence of, mental illness. A recent survey by Navigator for Bridgehouse Asset Managers found that 85 per cent of investment advisors reported spending more time with clients suffering from a mental health issue than any other financial concerns.

Here are the key results of the advisor survey:

• 72 per cent reported encountering clients suffering from anxiety
• 64 per cent noted diminished financial capacity in some clients
• 54 per cent witnessed signs of depression
• 34 per cent suspected substance abuse

In all cases, advisors found the issue negatively affected sound financial decision-making.

Earlier this year, the Ontario Securities Commission unveiled the “Seniors Strategy” to address mental illness in aging investors, but the issue has become so urgent private investment firms like Bridgehouse have taken matters into their own hands. The survey is one of several phases of research on the theme of mental health in financial advisory relationships and Bridgehouse is proposing industry-wide initiatives including educating advisors about recognizing warning signs, responsibilities related to privacy considerations, as well as training.