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Millionaires turn to psychologists

2007-10-10 11:04:59

By Muralikumar AnantharamanTue Oct 9, 8:24 AM ET

The surge in the number of millionaires in the world is spawning a fast-growing

industry -- wealth psychology.

U.S. wealth managers are adding services such as psychological counseling for

wealthy clients to set them apart from the competition, experts said.

Some of these psychologists handle clients who feel guilty about inheriting

wealth. Others help with problems such as how to raise children in an

environment where almost anything can be bought, or intervene when spouses

fight over money.

"One of the biggest concerns when people become significantly wealthy is ...

'How am I going to raise my kids responsibly with all this money',"

psychologist and consultant James Grubman told the Reuters Wealth Management

Summit in Boston.

Grubman, who works with rich clients of Wachovia Corp (WB.N), the fifth-biggest

U.S. wealth management company, predicted that within 10 years most financial

management firms will offer psychological services.

"The more cutting-edge wealth management firms and banks are beginning to

realize they need to get people available and in house," said Grubman.

The wealth management division of Wells Fargo recently hired two psychologists

to meet with its clients, and is seeing demand for another new service for the

wealthy -- catering to the aging parents of millionaires.

"A growing need for a lot of business executives, entrepreneurs and other

people of wealth is somebody to handle some of their parents' needs," Dean

Junkans, chief investment officer of Wells Fargo's wealth management division,

told the Reuters Summit.

Junkans said the U.S. bank's Elder Services group offers asset management,

housing, medical care, "family communication and dynamics," and banking

services to the elderly.

"It's growing very fast, and it tends not to be price sensitive," said Junkans,

who oversees $250 billion in client assets, referring to the Elder Services

group.

The United States is the world's biggest wealth market but many players find it

hard to achieve and sustain profitability in part because they cannot

differentiate themselves, according to a recent study by Boston Consulting

Group.