Many financial advisors, wealth managers, certified financial planners, and others in the industry tend to claim to thrive on four to five hours of sleep daily.

In some instances, they even wear 18- or 19-hour workdays as a badge of honor.

It’s true that many people can get by on minimal sleep, sometimes for long stretches… but getting by is not the same as performing well.

When you don’t get enough sleep—roughly 8 hours per night for adults—you’re simply not performing at your best.

You may be logging long hours, but there’s a good chance that some of those are low-quality hours.

According to studies, those who are short on sleep tend to experience these negative effects:

• A decrease in response time and attention span
• Lower cognitive sharpness
• A decline in emotional control, especially emotions like fear, panic, and anxiety

All of these effects tend to show up immediately… and could end up jeopardizing the work you do for clients.

Why Sleep Matters for Financial Advisors

Many of the most respected investors, including Warren Buffett, Charlie Munger, and Seth Klarman, have spoken about the importance of controlling emotions in the markets. Investors who let feelings drive their decisions tend to make poor ones.

Fear is a good example. When markets get rough and the headlines turn alarming, it’s easy to panic-sell and miss the recovery. Staying calm under pressure is one of the most important traits in successful investing, and one of the fastest ways to erode it is to run on too little sleep.

Fatigue also dulls attention to detail. A tired mind is more likely to overlook something in the research, skim past a risk, or take on more risk than it should.

The same principles apply to financial advisors.

Your clients rely on you to provide them with sound financial advice.

When markets are volatile, clients look to you for steadiness. Your ability to stay composed, think clearly, and talk a worried client through a difficult stretch depends in part on being well-rested.

The same is true of the less visible work: reading the fine print on a new holding, stress-testing a plan, or catching the detail in a client’s situation that changes your recommendations.

It’s also worth remembering that your clients can also be impacted by lack of sleep.

An anxious, sleep-deprived client is more likely to make an emotional or haphazard decision, and part of your job is helping them avoid one.

Besides, your role as a financial advisor will include busy stretches like tax season or a volatile quarter when long hours simply can’t be avoided.

That said, prioritizing your sleep is worth the effort even if it means making adjustments to your busy schedule.

A couple of additions or changes to your daily routine could help too:

• Avoid caffeine at least six hours before sleeping.
• Stay away from mobile phone or computer screens for the last hour of your day.

Extending the number of hours you sleep may seem small. However, more of it can make a BIG difference in the quality of your analysis, decisions, advice, and even your life outside of work.

Best regards,

Joel Litman & Rob Spivey
Chief Investment Officer &
Director of Research
at Valens Research

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