“Security isn’t in the numbers—it’s in the mindset. If fear drives your finances, no fortune will feel safe.”
~ Carl Richards (Financial planner & author of The Behavior Gap)
Despite having significant financial resources and portfolios that could potentially secure generations, several successful families wrestle with a nagging sense of financial insecurity and vulnerability. Simply put, a sense of not having ‘enough’ isn’t mere ingratitude—it is a reflection of the deep psychological forces that shape our relationship with money. In this article, we deep dive into the physiological reasons behind this so-called financial insecurity and uncover strategies to help family enterprises build the right mindset to achieve financial confidence. Read on.
The Psychology Behind Financial Insecurity
The psychological foundations of financial insecurity among wealthy families stem from several interconnected factors that can make wealth feel precarious despite objective evidence to the contrary.
Our brains naturally gauge our position relative to others rather than by absolute standards. This comparative tendency means that even families in the top percentiles of net worth may feel they’re “falling behind” when they compare themselves to those with even greater wealth. This effect is amplified in today’s digital environment, where carefully curated representations of wealth can distort our perception of what constitutes “normal” affluence.
As assets grow, expectations and perceived needs often expand simultaneously, resulting in a shifting threshold for what constitutes “enough.”
These psychological patterns aren’t signs of character flaws—they’re natural human responses that affect individuals across the wealth spectrum, though they may manifest differently at higher levels of affluence.
When Emotions Drive Financial Behaviour
These psychological factors don’t just affect how wealthy families feel—they directly impact financial behaviour in ways that can potentially undermine long-term financial health and family harmony.
Fear-driven financial decisions often manifest as excessive caution in investing. Portfolios may be overly focused on capital preservation rather than appropriate growth, potentially increasing long-term risk by failing to maintain purchasing power against inflation. Market volatility might trigger reactive responses, resulting in ill-timed investment moves that erode wealth over time.
Avoidance patterns are equally common. Families might postpone critical estate planning due to resistance to contemplating mortality or fear of triggering family conflicts. Decision paralysis can result from overwhelming anxiety about making the “wrong” financial choice, causing missed strategic opportunities.
Status and identity concerns can drive spending patterns that may not align with a family’s stated values or long-term goals. In some cases, financial decisions become entangled with questions of personal worth, making objective assessment difficult.
Recognizing these patterns is the first step toward addressing them constructively. When families understand the emotional drivers behind their financial behaviours, they can begin to make more conscious choices that support their material security and psychological well-being.
Strategies to Achieve Financial Security
Given how deeply psychological factors influence financial behaviour, a comprehensive approach to wealth management might benefit from integrating both wealth planning expertise and an understanding of wealth-related emotional responses.
Mental health professionals with expertise in wealth psychology can enhance financial decision-making in several key ways:
- They can help family members identify emotional triggers in financial discussions and develop regulation strategies for more balanced decision-making
- They offer tools for managing family dynamics around wealth, recognizing interaction patterns, and implementing healthier communication methods
- During periods of market volatility, they can provide specific techniques to manage anxiety, preventing panic-driven financial decisions
- They can facilitate difficult conversations about inheritance, succession, and wealth transfer in ways that acknowledge emotional responses while enabling productive dialogue
The inclusion of psychological support in wealth management has become increasingly common. Many family offices now consider mental health professionals essential team members, recognizing that technical financial expertise alone may not address the full spectrum of factors influencing a family’s relationship with wealth.
Building a Comprehensive Support Team
A comprehensive wealth management approach might include several key professionals, each addressing different aspects of financial confidence:
Financial advisors provide strategic planning, investment strategies, and risk assessment based on the family’s objectives. The most effective advisors recognize when client decisions may be influenced by emotional factors rather than purely rational analysis.
Mental health professionals address family dynamics, behaviour patterns, and emotional blockages that might otherwise undermine sound wealth planning. These professionals might include financial therapists, family systems therapists, or psychologists with specific training in wealth psychology.
Estate planners develop strategies for legacy creation, tax efficiency, and succession planning that align with family values without creating unnecessary emotional strain.
Family governance specialists create decision-making frameworks, communication protocols, and conflict resolution processes that can reduce tension during family discussions about wealth.
When these professionals collaborate with an understanding of both the technical and emotional dimensions of wealth management, families often experience a more holistic form of support that addresses their complete needs.
Concluding Thoughts
The journey to genuine financial security for wealthy families often involves acknowledging and addressing the emotional dimensions of wealth alongside technical wealth planning.
Families might consider reflecting on how emotions influence their financial decisions and whether their current wealth management approach addresses both practical and psychological aspects of financial well-being. Questions to consider include: Does your advisor team recognize the role of emotions in wealth planning? Do financial discussions trigger stress responses in family members? Has your family established communication patterns that alleviate vs. exacerbate financial anxiety? Integrating psychological support into wealth management can help families understand and manage their resources more effectively, and it can support the financial security and emotional well-being goals of members and the enterprise.
ABOUT THE AUTHOR
As the Senior Wealth Advisor at Beacon Family Office at Assante, Cory Gagnon has supported successful family enterprises to preserve, protect and transition their wealth since 2011.
Cory’s personal objective as a Wealth Advisor is simple. He is committed to supporting families to take control of the areas of their lives that truly matter to them. This commitment revolves around using specific tools and strategies that enable families to take action with confidence which will support them through life’s critical transitions.
ABOUT THE AUTHOR
As the Senior Wealth Advisor at Beacon Family Office at Assante, Cory Gagnon has supported successful family enterprises to preserve, protect and transition their wealth since 2011.
Cory’s personal objective as a Wealth Advisor is simple. He is committed to supporting families to take control of the areas of their lives that truly matter to them. This commitment revolves around using specific tools and strategies that enable families to take action with confidence which will support them through life’s critical transitions.
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Beacon Family Office at
Assante Financial Management Ltd.
Suite 519, 10333 Southport Road S.W.,
Calgary, AB T2W 3X6
