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Fee-Only Planners May Be Aging World’s Best Hope

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The aging of the world’s population pits young against old, child against parent and worker against boss, according to best-selling author Ted Fishman, who believes that fee-only planners are ideally suited to prepare their clients for the cold realities of these global trends.

The Shock of Gray and China, Inc. author, keynote speaker on opening day Tuesday of the 2012 National Association of Personal Financial Advisors (NAPFA) annual conference in Chicago, told the fee-only group that he is a big advocate of the fee-only model.

“In an aging world, what are the things that need to be said?” Fishman asked the audience of about 500 at the 2012 NAPFA national conference. “We’re hard-wired not to talk about end-of-life issues, and the fee-only model is exactly what a demographically aging world needs. It needs integrity and candor.” 

An Aging World at Peril

A former floor trader and member of the Chicago Mercantile Exchange who ran his own trading firm until 1992, Fishman pointed to a number of global trends that will have an impact on the lives of financial planners’ aging clients. He urged planners to help clients deal with the realities of demographic trends that show families all over the world are having fewer children who might help them as they grow older.

He listed the perils of an aging world as follows:

— The median age is expected to rise globally, to 39 by 2050 from 29 in 2010.

— Fertility is falling everywhere, particularly in the United States, China, Mexico, France, Spain, Brazil, Nigeria and South Korea. The fertility rate in the U.S. has held flat at 2%, while Mexico’s is dropping by two-thirds and is expected to fall below 2% by 2025 from 7.5% in 1970.

— “The arbitraging away of age-related expenses is propelling globalization,” Fishman said. In other words, jobs lost by American workers in late middle age are going to a young workforce in China.

“The financial planning question is how you prepare your clients for these circumstances,” Fishman said. “The advent of the small family is one of the most dominant trends in the United States. We can’t just rely on traditional supports. We have to rely on each other.”

NAPFA chairwoman Susan John said in an interview after Fishman spoke that she already saw the effects of those demographic trends with her own clients, mentioning a man who recently died at age 107. His 86-year-old son, who had his own aging issues to contend with, was the only family member available to care for him.

“The NAPFA members are dealing with aging, and that includes everything from how we position our clients to save more for retirement to how we facilitate our clients’ helping each other in old age,” John said.

‘Stunning’ Differences in Financial Literacy

Ted FishmanThere is a “stunning difference” between people who have even a small degree of financial literacy compared with those who have none, Fishman (left) said, pointing to a 2011 Harris poll that shows 34% of Americans have no retirement savings and 27% have no personal savings.

“Americans’ No. 1 fear is running out of money before they run out of life,” and the average American currently has only $25,000 in retirement savings, he said.

Ray Forgue, consumer representative of NAPFA’s national board, said that Fishman’s conclusions in Shock of Gray highlight the family transitions that financial planners see their clients go through as they age.

“His talk is one of the best I’ve heard at weaving the little individual decisions that people make about their families—how many kids to have, when to have them—and how the impact of that aggregates into the whole of society,” said Forgue, a retired University of Kentucky professor of family life and financial issues.

The NAPFA national conference is taking place May 8 to 11 at the Hilton Chicago. For those who can’t attend the event, NAPFA National 2012 can be followed on Twitter at, or at #NAPFA2012.


Check out further coverage about the NAPFA national conference 2012 at AdvisorOne.


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