In young psychiatric outpatients relatively early in their illness, moderate or greater functional impairment was associated with poorer quality of life, greater disability, unemployment and single relationship-status. Functional outcome was most strongly predicted by baseline neuropsychological functioning, controlling for initial level of functioning and concurrent symptoms. Baseline verbal and visuospatial memory, spatial working memory, and attentional switching were instrumental to socio-occupational functioning 6 to 48 months later, consistent with findings from more chronic cohorts, which have identified baseline memory 
and executive functioning 
to be predictive of later functioning across our diagnostic groups. Neurobiologically, this may reflect underlying frontotemporal changes, which underpin later functional outcome early in the course of affective and psychotic illness. In contrast, baseline neuropsychological functioning was not associated with symptomatology at baseline or follow-up, in keeping with the literature 
. Thus, memory and executive functioning are likely independent of clinical state in early-course psychiatric illness, underscoring their potential as endophenotypes.
In contrast, baseline depressive and negative symptoms did not directly predict later functional outcome. These symptoms were, however, associated with functional outcome cross-sectionally, in line with previous findings 
. Therefore, symptoms and functioning do not appear to be causally linked, but instead may be outcomes of a common pathophysiology. Similarly, the utility of diagnosis in predicting functional outcome was questioned by the current findings. Diagnosis was unrelated to level of functioning over and above the effects of cognition and clinical symptoms, implying that categorising patients based on traditional classification systems is unlikely to be informative in regards to functional trajectory. Taken together, these results strongly suggest that a traditional, or sole, focus on symptom factors is inadequate in characterising prognosis and recovery. On the other hand, the longer-term outcome of young patients presenting to mental health services with a range of disorders is best predicted by their initial level of neuropsychological functioning.
The strong cross-sectional relationship currently found between neuropsychological and socio-occupational functioning contradicts previous reports in more chronic patient populations. For instance, Simonsen et al. 
found that most neuropsychological measures were not singly predictive of functional outcome in a group of chronic bipolar disorder and schizophrenia patients in their mid-thirties. Moreover, overall neuropsychological and socio-occupational functioning were only modestly correlated. This discrepancy with the current data suggests that the influence of neuropsychological functioning on later functional outcome may be greater in the early stages of illness. That is, over time the impact of neuropsychological deficits on functioning may be diminished as the chronicity of disability is spontaneously maintained. Although this is speculative, it highlights the potential importance of early intervention, since interventions aimed at reducing disability may be particularly effective within this initial, critical period from psychiatric onset 
A major strength of the current study was its longitudinal design, providing stronger, directional evidence of the predictive utility of neuropsychological functioning over traditional cross-sectional approaches. Structural equation modelling also permitted a more sophisticated representation of how clinical symptoms, cognition and socio-occupational functioning are inter-related over time. In addition, the use of a naturalistic sample of patients suffering from a range of severe mental illnesses, and frequently with other psychiatric comorbidities, strengthens the ecological validity of the current findings.
Limitations and Future Directions
A number of limitations must be acknowledged. The current study was restricted by its modest sample size. As such, we were unable to explore whether the relationships between cognition and functional outcome differed according to traditional diagnostic categories using multiple-group modelling procedures 
. Future studies need to directly test whether diagnosis moderates
the currently observed effects, as previously demonstrated cross-sectionally in more chronically ill samples 
. Moreover, studies should include mediators of the relationship between neuropsychological and socio-occupational functioning, which have been identified in cross-sectional studies of chronic schizophrenia and bipolar disorder patients. Indeed, there is evidence suggesting that social competence 
and social cognition 
mediate this relationship. Separately, the suggestion that memory and executive functioning may be potential endophenotypes of major psychiatric morbidity needs to be verified in future studies including cohorts of unaffected family members and healthy comparison individuals.
The current study was the first longitudinal study utilising structural equation modelling to demonstrate a strong link between neuropsychological and later socio-occupational functioning in young and early-course psychiatric outpatients. Memory and executive dysfunction were linked to later disability, highlighting the potential of reducing longer-term disability through early neuroprotective strategies targeting frontal and temporal brain regions. Thus, psychiatric illness may be better viewed along a neuropsychological continuum, with those on the impaired end more likely to follow a less favourable functional trajectory. A traditional and sole focus on symptoms or syndromes is unlikely to be useful in predicting functional recovery. Compared with more chronic stages, neuropsychological functioning may be a more robust predictor of later functioning in the early stages of psychiatric disease, suggesting that cognitive remediation strategies may be most efficacious in effecting functional change in this early ‘critical period’.