Financial Times - January 10, 2000
AFFLUENZA HITS THE NOUVEAU RICHE KIDS By Gary Silverman in New York
As a service to America's growing numbers of overnight tycoons, Merrill Lynch, the US investment bank, is hiring psychiatrists to help their children ward off "affluenza" - a malady that turns rich kids into spoiled brats.
Merrill's move into social work is an example of how investment banks are serving one of their fastest-growing client groups, the one-stock wealthy - typically internet pioneers or entrepreneurs who have made billions by taking their companies public or selling them for shares.
These clients are turning to investment banks for the sophisticated financial tools, such as derivatives, needed to convert single-stock positions into steady income streams. But as investment bankers become more involved in the lives of the one-stock rich, they find their work is taking a sociological, if not psychological, dimension.
Having made a great living, at least on paper, these billionaires and millionaires need help getting a life - if only so that they can make financial plans.
Scott Cooper, a Merrill relationship manager whose office group serves families worth $100m or more, said Merrill was also helping with "financial parenting" because its newly wealthy clients "are concerned about affluenza" in their children but are unsure how to respond.
David Dechman, a managing director with Goldman Sachs' private client services group, said: "What's interesting about these newly wealthy individuals is that their wealth has grown much more quickly than their lifestyles." As a result, the concept of the full-service investment banks is undergoing something of a metamorphosis.
Merrill has found it useful to hire psychiatrists to speak to children in their early teens about the responsibilities of wealth and the joys of philanthropy. "The fundamental thing we are looking to impart is the value of money," Mr Cooper said.