Today, the two give seminars and presentations to hundreds of financial advisers each year. Murtha read books and scholarly articles to bring himself up to speed on behavioral economics, then started pitching his services to financial firms. They realized, Murtha says, that financial advisers were an underserved market that could use the principles of psychology and counseling to better communicate with clients. In 2001, he and business partner Richard Peterson, MD, a psychiatrist, founded MarketPsych.
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That eventually led to a job offer with the consulting firm RHR International, where he coached business executives on how to become better managers. He'd always had an interest in business and in risk-reward psychology-his dissertation explored risks and rewards in gambling-and he began to attend meetings of APA's Div.
"The people who do it are wonderful, but it took too much out of me," he says. But after an internship running play therapy and group therapy sessions for children with emotional disturbances, he says, he decided that the work was too emotionally draining for him. As a graduate student in counseling psychology, he thought he wanted to work as a children's therapist. Murtha began his psychology career on a more conventional path. You're not financial advisers, you're financial counselors." From counseling to coaching "One of the things I tell advisers," Murtha says, "is that if you take a look at the percentage of your day that gets spent managing your clients' money versus the percentage you spend managing your clients-their emotions, their expectations-then you may discover that you and I are in the same business.
Through his seminars and individual coaching sessions, Murtha helps financial advisers recognize the real motivations behind people's financial decisions and how to help them achieve their goals. "What they missed is that ultimately making money is not the goal of investing." Instead, he says, money buys "emotional returns," such as the security of a retirement account or the satisfaction of being able to send a child to college. "The folks who've been trained as financial advisers don't have the benefit of the training we got as psychologists," he says. His company MarketPsych, based in New York City, coaches Wall Street traders, financial advisers and individual investors who want to understand why people make the money decisions they do.
Investment advisers are trained to deal with clients' money, but clients' emotions-fear, anger, even overexcitement-can leave them at a loss, says Murtha, who has a doctorate in counseling psychology from the University at Buffalo.Īs a consultant and expert in behavioral finance, Murtha helps these "numbers people" understand why their clients sometimes make irrational decisions about money. That transition has proved tough for some financial professionals-and that's where Frank Murtha, PhD, comes in. Now, Patrick says, they turn to financial advisers for longer-term advice, and financial advising has moved from being a "transaction-oriented" to a "relationship-oriented" profession. Today, investors can look up that information on their own online. The director of education and development for the financial services firm Raymond James in Tampa, Fla., Patrick says that in the 1980s, workers at a firm like his might spend much of their day making "cold calls" to sell individual stocks to potential clients.
Bob Patrick has seen enormous changes over his nearly three decades in the financial services industry.
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