A Saturday afternoon breakout session at the FPA Retreat 2013 in Palm Springs, Calif., titled “Financial Planning in the Age of Uncertainty: Welcome to the 21st Century!” was a rapid-fire delivery of all the change that is upon us.
Presented by Elizabeth Jetton, CFP, the session covered everything from longevity to Social Security, Medicare/health care, policy, regulation, technology and nanotechnology.
“We have to deal with policies and conditions as they are and use our crystal ball for what they're going to be,” Jetton (left) began. “For instance, you may not agree with the notion of man-made climate change, but you at least have to consider it, because you don’t have a right to your opinion and running with it. You have to consider the possibility you are wrong because the price of not considering it is too great.”
She noted that the chance of being “directly impacted by a terrorist event is one in 28 million, but the chances of being directly impacted by a nature-related event is one in six."
“It’s because we can put a face on terrorism and the uncertainty it brings, so all the money goes there,” Jetton added. “One in six people still believe Bernie Madoff was the sole cause of the 2008 financial crisis. Why? Because we can put a face to it, so it makes it easier to deal with.”
In addition to the items mentioned above, she included all of the possible change brought about by demographic shifts, the shift to retirement self-reliance and the shift “from three utilities to what can now be up to 10.”
“So change is coming. I think in 50 years kids will have thumbs that are shaped differently,” she added to laughter.
Jetton said that although advisors are not experts in “behavior, brains and emotions, this is the world we are living in.”
“It would have been nice 10 or 15 years ago to know that ‘Why?’ questions put clients on the defensive and shut them down emotionally, and that “Tell me about...” questions get them to open up. It would also have been nice to know that some people’s brains derive pleasure from planning and delayed gratification, and others don’t."
She implored audience members that “if there is one thing you get from this session, it's why I refer to some planners as ‘20th century planners.’ It’s if you still call it retirement planning. It just doesn’t make sense. You just ripped the joy and fulfillment rug right out from underneath your clients.”
By that, she continued, she believes workers now younger than 40 won’t work and retire, but rather work in clumps—meaning they’ll take sabbaticals and then go back to work.
“I’m fascinated by nanotechnology,” Jetton explained. “It will deliver healing and medicine and synthetic blood to all of us eventually. If clients live to age 120, they’ll get pretty bored with retirement at age 70.”
Echoing a similar complaint made by industry executive Sallie Krawcheck at last week’s Envestnet Advisor Summit in Chicago, Jetton said she’s happy with this “new focus on women, but really, where have we been? Women are not new and they are not a niche.”
Yet as an industry, only 23% of the 67,000 CFPs are women, and the number hasn’t changed in 10 or 15 years.
“It’s not whether I’m right or wrong with all of this,” she concluded. "Let’s at least have a conversation. And it might not be a pleasant conversation; it could be tough.”
View complete AdvisorOne coverage of the FPA Retreat 2013 on our Retreat landing page.