For 15 years, Hartford Funds’ John Diehl has been collaborating with Dr. Joe Coughlin of the MIT Age Lab, which conducts some of the most interesting research regarding how America’s older population is being transformed by a host of factors. Diehl’s job, he said in an interview during the Schwab Impact conference in Washington, is to “translate” the Age Labs’ findings “into action” for advisors.
A good part of that translation revolves around how advisors’ service offerings and business models will have to change if they want to keep pace with the needs of their older clients.
Yes, advisors will continue to provide investment advice to clients, but to succeed in the future advisors will also have to educate clients about their options in their post-work stages of life and “connect clients to resources” that they’ll need to not just have a longer life, but a better life.
In a Hartford white paper on the Future of Advice, with an accompanying workbook, Diehl argues that the evolving value of an advisor will move from the financial planning realm to what he calls the “longevity-based advisor.”
The successful advisor in the (very near) future will:
- Educate clients about their options in retirement, sharing their personal insights and the lessons learned from others in similar life stages.
- Connect clients to various practical resources they’ll need in retirement, going beyond traditional referral or COI sources.
- Introduce and demonstrate technology solutions that will make older age easier (and which “Don’t shout: ‘I’m old.’” to onlookers. One example: The Apple Watch app that detects when a person has fallen.)
- Address issues that will matter personally to aging clients, including housing, transportation, health care and social connections. Self-driving cars, for example, can keep older clients socially engaged, staving off isolation.
And it’s likely clients will live longer, despite reports that Americans’ longevity has plateaued in recent years. Diehl cites one study showing that for an upper-middle-class couple aged 65 there’s a 43% chance that one will live to age 95; and by 2029—only 10 years away—that chance will grow to 50%.
But there’s a first step in that “connect-clients-to-resources” process, which Diehl compares to solving a jigsaw puzzle. To complete that puzzle, you need not only the pieces, but to “look at the picture on the box.”
Too many clients have only a vague vision of what their lives will be like after working full time, so advisors’ first job is to help clients “clarify the picture” of the next stage of life, and then “give them the right pieces” so they can complete the puzzle.
Referencing an earlier Hartford study, 8,000 Days of Retirement, Diehl said that “everybody knows what they’ll be doing on day one” of retirement, and likely on day 14 and even day 1,000. But retirement for many will last 20 years, or 8,000 days, and most clients will need and appreciate the help that a trusted advisor can provide during those days.