The director of the Massachusetts Institute of Technology (MIT) AgeLab sees that the future for the financial advising profession may lie in taking on a new role for “longevity advisors,” according to a new white paper he published at Hartford Funds.
The paper, titled “The Future of Advice” and written by Dr. Joseph F. Coughlin, details that the combination of the increasing prevalence of education and higher general life-expectancies are quickly escalating the expectations surrounding the profession of financial advice.
“Baby boomers, Gen X, and the Millennials are more educated, more tech-savvy, and more demanding than any previous generation,” he writes. “Extended longevity, combined with the expectation to live longer and better, is driving clients to demand more from financial advice. Clients now want financial advice to identify and navigate what they may confront in middle age and as older adults.”
In order to be successful in the coming years, a financial advisor will have new expectations placed upon them to truly stand out in meeting the challenges presented by increasingly older and well-educated retirees. Dr. Coughlin notes that the commonality among baby boomers, Generation X, Millennials, and the soon-to-be-working Generation Z is that they all, “expect to live longer and better.”
Because of that, Dr. Coughlin believes there is an opportunity for advisors, particularly because “advances in technology, medicine, and everyday life have persuaded all generations that there is, or will be, a product or service to address needs that arise throughout the lifespan.” Current and future generations will likely only expect life expectancy to grow.
Additionally, Dr. Coughlin notes that successful advisors will recognize key features of future older populations in addition to longer lives and higher education levels, such as much greater levels of tech-savviness and an apparent reorientation of family dynamics. This is due to successive generations after the parents of baby boomers having less children, which is expected to impact the amount of children that will be around to take care of their parents since there are simply less children being born on average than there were in previous decades.
Dr. Coughlin also notes that many parents in middle-age “urge their children to seek opportunity in distant cities and states, only to find themselves without family nearby as they grow older.”
These ideas funnel into Dr. Coughlin’s larger idea of what he calls a “new frontier” for advice professionals, which includes “longevity solutions” that are based on the intersection between the depth of the relationship between a client and an advisor, and the client’s extended family or social network.
“The longevity solutions advisor enjoys the greatest degree of client intimacy and has the deepest relationship with his or her clients and their families,” he writes. “The longevity solutions proposition also offers the widest range of discussions and product solutions,” including “client seminars engag[ing] entire families on topics that address the broader context of living longer,” or “the future treatment and cost of managing chronic disease.”
Read the white paper in its entirety.
Written by Chris Clow