Ric Edleman spoke at the t3 conference in

During a session at his T3 advisor conference in Ft. Lauderdale, Florida, on Tuesday, Joel Bruckenstein warned that the next generation of investors is telling advisors to “communicate with me the way I want to communicate.” That’s why, the advisor turned advisor tech-guru Bruckenstein said, “It’s incumbent on you to be ahead of where your clients are, not behind.”

If advisors are hesitant to invest in a better digital experience for their clients, Bruckenstein suggested there’s a very good business reason to do so. “Look at the biggest, most successful firms: they embrace technology” in their practices, he said, like Ric Edelman of Edelman Financial Services.

On Wednesday morning, Edelman began his keynote speech with a blunt warning. “Most of the advice you give clients,” he told the audience of advisors, “is fatally flawed,” even “criminally negligent,” he charged, and predicted that if advisors keep providing the same advice “you’ll be out of business.”

That’s because the standard advice is suitable for the world as it is, not as it will be in the very near future. Edelman joked with Bruckenstein that he should even change the name of his conference from “Technology Tools for Today,” to “Technology Tools for Tomorrow.”

So what’s the problem?

Edelman said that unlike most advisors who are “ignorant on technology,” he has long embraced tech tools in his practice, and had been searching for nine years to determine how those technologies experiencing rapid growth, known as “exponential” technology, would affect personal finance “and the advice we give to our clients.” He found the answer, he said, partly through discussions with Ray Kurzweil, cofounder of the Silicon Valley think tank Singular University, and expounded on it in his latest book, The Truth About Your Future.

Quoting the “greatest financial planner of all time, Yogi Berra, who’s credited with saying ‘the future is not what it used to be,’” Edelman argued that the forces in Moore’s Law—Intel founder Gordon Moore’s 1965 observation that the number of transistors that could fit on an integrated circuit doubled every year, with no end in sight to the improvement—will change the lives of advisors’ clients so significantly that advisors must change their advice. (Moore’s Law is also known as the law of exponential growth.)

How will clients’ lives change?

1) A steep jump in life expectancy. “What’s the life expectancy you assume for clients—85-90, 100? Your clients will live to be 120.” Moreover, “we will be living long, healthy lives,” due to…

2) A sharp increase in health, even in old age. Due to cost-effective technology improvements (Moore’s Law again) in robotics, nanotechnology, 3-D printing and especially gene therapy, Edelman said that by 2030 “we will be able to cure, though gene resequencing” the major causes of death: including cancer, heart disease, obesity and addictions of all kinds. “Aging will become a disease, not a part of life,” he predicted, and that it “won’t be long till we reverse aging.” That development would lead to…

3) Work life changes for people (and clients) of all ages. Edelman says the “Hollywood model” of work will surpass the traditional “New York” model, citing the major increases in the sharing economy and the gig economy, where people take on shorter-term projects that meet their needs. It would be a mistake to think of the gig economy as applicable only to younger workers. That’s because, Edelman suggests, that…

4) “Retirement as we know it is gone.” The traditional idea that people “‘retire at 65; die at 85’” is just plain “wrong. The linear lifeline is dead.” Instead, Edelman encouraged advisors to think of a cyclical lifeline instead, where over a lifetime a person will go to school, work, and take regular sabbaticals of even two to three years. “That will be what everybody does,” Edelman said. (Last week Edelman took a public policy position on retirement). One implication for retirement planning is that…

5) For many clients, their earned income (as they age) will provide as much of their income as their investments.

The implications for advisors, Edelman says, include:

  • “College planning is irrelevant,” since he predicts that within five years every state university system will offer free tuition.
  • “Forget long-term care insurance,” since the combination of artificial intelligence, robotics, self-driving cars (and self-flying cars) and gene therapy will make for a healthy older life for all.
  • “You won’t need automobile insurance” because “self-driving cars don’t get into accidents.”
  • There’s also a case to be made for investing in exponential technologies. Edelman said he approached BlackRock about creating an ETF on these next-generation technologies, Morningstar created the index, and he said the iShares Exponential Technologies ETF  (ticker: XT) now has $1.2 billion in assets. “There are probably a dozen such funds now—high risk, but they can be appropriate for many clients.” In fact, Edelman said most of his clients are invested in that ETF.

Instead, Edelman suggested that advisors focus on helping clients with their lifelong career planning, starting with asking clients now how likely it is that their jobs will disappear because of robotics and artificial intelligence. “They need to identify it now and figure out what they’re going to do,” Edelman said. Providing such services “is becoming an integral part of the work we do” at Edelman Financial Services. The key for clients, he concluded is lifelong learning, retraining, and constantly going back to school.”