Approximately 5 years ago, Psynet Group started working with financial service companies including private equity, banks, and hedge funds. We continue to get an education from these clients as we add value, and find them to be as interesting and fun as they are challenging.
When we began this work, we had no idea that coaching for performance would become “famous” via the hit show on Showtime- Billions. This show inspired Igor Pakovic to write an article in HFMWeek highlighting the use of Psychologists in hedge funds. Below are a few interesting snippets from the article and comments on our related experience.
Prevalence of Coaches
To that end, the most effective mental skills coaching will go beyond the ideas of mental toughness and positive thinking. Although it is difficult to estimate whether hedge funds have been working more with performance coaches in recent years, industry observers believe 30% to 40% of US firms have had a professional relationship with coaches.
We think this percentage is close, but misleading. For companies that hire performance coaches, they typically do not assign one to everyone. Instead, most coaches are assigned to those believed to have high potential but continuously perform poorly. The firms that get this right will assign coaches to their best people, which keeps them at the top of their game and reduces the inevitability of a performance drop off.
Usually, they meet traders and portfolio managers during one-on-one sessions at their employers’ expense, but they also organise workshops and group trainings. Rarely, they work on a full-time, in-house basis…
In the television show Billions, The psychiatrist Wendy Rhoades is full time and received some incredible perks like a Maserati GranTurismo. However, we have not seen many coaches brought in house, nor have any of our consultants received the perks that Wendy receives. The perks we receive are generally amazing lunches in Manhattan and relationships with some really interesting people.
Traits of Financial Service Employees
They are probably the most results-orientated group of individuals. And they rely on real time data.
We work with several industries and no one receives as much constant real time feedback as financial services. The result has been a significant shortening of their time horizon. Many struggle to think months or years ahead. In a recent blog we expounded on a theory that success is correlated with how much time one can hold in mind. In financial firms, we find an exception to this rule. However, if a trader becomes a leader or attempts to shift careers, the failure to develop a long term view is a significant disadvantage.
When speaking to clients, this professional says “Negative messages are meant to help us. When you realize, for example, what you are angry about, anger usually contracts and is not as disruptive and distracting. Instead of acting out and sending out emails you are going to regret, you will make an informed decision that will probably serve you better.”
We see that many financial services professionals have a deep seated drive. It is as if they have a score to settle or something to prove. The best use this to energize their performance without being impulsive, while the worst become engulfed by it. One of our clients has said “You are only as good as your last trade. Wins don’t last, so I feel like I am always losing, even after a 7 figure year”.
Interestingly, being a psychopath often helps to be a successful trader: One of the major problems we saw in our sessions is when traders want to take revenge against the market, which is always a bad idea. But a psychopath doesn’t take anything personally because of the transactional nature of his relationships”.
Dealing with employee sociopathy is a specialty of the Psynet Group team. As a result, it is clear to us that this statement overgeneralizes what it means to be a psychopath. Most psychopaths in financial services are able to take risks that others simply refuse to take. For example, when a sociopath loses more money in a day than their parents made in a lifetime, they are unphased. For some traders without this trait, this can be overwhelming and negatively impact their performance for months.
When you understand that a big component of sociopathy is a biological need for arousal, it is easy to understand why they need the daily rush.
From our work with financial services professionals, we know that Finance Professionals have a unique style that is highly energetic. Outside one of our offices, located in the Financial District in NYC, we often see a line of delivery bikes bringing in food for those working late into the night. Those not burning the midnight oil can be seen packing the many bars in the area, eagerly conversing about their recent wins and losses (at work and outside of work). They seem, more so than any other procession, to embody the “Work Hard, Play Hard” approach to life. At Psynet Group, we thrive on their energy and enjoy the challenge of their neuroticism. We take great satisfaction in improving their performance and life satisfaction, just as they continue to help us develop and improve our firm.