In part one we responded to the HFMWeek statements on the prevalence of coaches in the financial service industry and their take on the unique traits of financial service professionals. This section we will talk about why financial services can be such a difficult career despite the high salaries.
Downside of the Profession
Trading mistakes are very common. “The most common mistake in my experience is when traders get into a hole after having a couple of losses, which usually leads them to a downward spiral that includes sleeping less and stopping exercising.”
“Most traders think that when they have a couple of losses they should work harder, when, actually, they should pull back and get the big picture.”
We agree completely with this statement. Being an effective trader requires the ability to understand signals from a variety of sources. The neurological impact of stress is laser focus, which causes many traders to lose the capability that made them effective in the first place.
Another analogy is the marathon runner. Most marathon runners use an intermittent approach that alternates between hard training and rest. The best finance professionals are able to step away from the work and let their brains rest. One of our most successful clients suggests that several weeks of skiing each year is one key to his success.
Conflict at home and personal issues are unsurprisingly frequent but trading in an overheated state of mind would likely make matters worse. “Traders will turn to their terminal and that will make them feel better because the machine always listens to them,” adds Shull. Taking the market personally, which in psychoanalytical jargon is called a transfer, should be also considered a red flag: “It’s incredible how often traders will say that the market is ‘against them’ or ‘out to get them’.”
There is no work life balance in financial services so the best one can hope for is life “balance”. This means that a performance coach cannot ignore what is happening at home because it is deeply connected to what they are doing at work. For example, instead of having a hard conversation with a spouse, it is an easy excuse to focus on their terminal. It is also more common to be screamed at while at work in financial service companies than it is in many other industries. Some will displace the humiliation and anger of being publicly embarrassed home and take it out on the ones they love. This creates a vicious cycle in which all aspects of their life suffer.
“One of the main challenges is that a lot of hedge funds don’t even try to recoup the human capital they invested into their traders if they go off the rails. They might call me, but if their performance does not recover immediately, they would rather just let them go.”
With firms increasing use of Quants, there are fewer and fewer opportunities for financial service employment. According to CNBC, head count for traders in fixed income, equities and investment banking was down more than 20 percent from 2011 to 2016 and declined again in 2017. This further increases the performance stress because traders will not be able to replicate their income outside of their profession.
How Do Wendys Help?
Assessments and Data Gathering
Using both online tools and expert interviewing, it is important to understand clients better than they understand themselves. The experience of feeling understood, both the positives and the warts, builds trust.
The best Wendys understand selection, promotion, organizational structure, change management and can speak the language of finance. They must understand how financial service companies make money and how their talent plays into their success. If your don’t understand their world, they will assume you do not understand them well enough to help.
Applied Neurology, Psychology and Organizational Dynamics
Where many life coaches focus on meditation and other stress reduction techniques or motivation or team dynamics, the best Wendys bring all of these things together. As important, Wendys need to know when someone is not going to apply a stress reduction technique so we do not set them up for failure by prescribing one. They also need to know when a team is never going to work well together so they do not waste everyone’s time in conflict management. They only do what we know will bring results and that differs from situation to situation.
At Psynet Group, we are always learning so if you have further insights or disagree with us, please send me a note at [email protected].