Why Advisors Need to Be 'Like a Quarterback': Ken Dychtwald

“Through all the horribleness, the pandemic has been a wake-up call to talk and reflect about legacy and end of life,” Ken Dychtwald, founder and CEO of Age Wave, tells ThinkAdvisor in an interview.

What do people consider their most important legacy? “Is it the stuff, or the values and life lessons?” the gerontologist wanted to know. He found the answer in a study conducted by Age Wave and Edward Jones in September.

Perhaps surprisingly, 43% of participants said leaving a legacy of life lessons and values is more important than a legacy of money or real estate — though, of course, those are significant as well.

The survey was the most recent follow-up to the two firms’ in-depth study of 9,000 people, “The Four Pillars of a New Retirement,” released in August 2020.

In the interview, Dychtwald points out that amid the pandemic, growth in people’s “turn[ing] toward financial advisors has been extraordinary.” 

“They want a guide,” he stresses. “People are saying, ‘Don’t just manage my investments or get me the right insurance policy. Pay attention to me and my life,” the psychologist and prolific bestselling author maintains. 

His most recent book is “What Retirees Want: A Holistic View of Life’s Third Age” (Wiley, 2020), co-written by Robert Morison. 

The 2021 follow-up retirement study also found that the “greatest financial worry” of people past age 50 is healthcare costs, and that “frightens” them. Advisors ought to be “more tuned in” to this area and other issues that particularly concern older clients.

When it comes to legacy, advisors can help by starting a conversation about it with clients and suggest ways to electronically record what they have to say about their values and the wisdom they’ve acquired.

Dychtwald, 71, who has served as a fellow of the World Economic Forum and was a featured speaker at two White House Conferences on Aging, founded the consultancy Age Wave (agewave.com) (@AgeWave) in 1986. 

Back then, he was predicting that the trend of increasing longevity would put baby boomers front and center demographically. 

Age Wave’s clients include Allianz, Bank of America, Charles Schwab and Merrill Lynch.

A further opportunity for advisors in the retirement space, Dychtwald now says, lies in “the evolution” of guaranteed income and lifetime income products.

“In the future, you’ll see a piece of a lot of people’s portfolios taken up with new evolved annuities,” which are “getting more reasonably priced and simpler to understand,” he says.

Annuity companies are “stepping up their marketing,” Dychtwald says.

ThinkAdvisor recently held a phone interview with the futurist, who was speaking from Orinda, California, where Age Wave is based.

He stressed: “During COVID, a lot of Americans realized that planning to be 80, 90 or 100 years old isn’t a do-it-yourself project. “They need a trusted advisor. They want their advisor to be a kind of quarterback,” he says.

Dychtwald is set to be the first guest of industry VIP, author and radio talk show host Ric Edelman on his new national program, “The Truth About Your Future,” which airs Jan. 1.

Here are highlights of our conversation: 

THINKADVISOR: What impact has the pandemic had on Americans’ perspective about their mortality?

KEN DYCHTWALD: We’re a very gerontophobic culture. We don’t like to talk openly about aging or dying.

But when the pandemic [hit], it was like the whole world had a near-death experience, and it made everyone stop and think.

About facing their mortality?

Through all the horribleness, the pandemic has been a wake-up call to talk and reflect about legacy and end of life: Is it the stuff [assets], or is it the values and life lessons that are more important?

Tell me what the update study done by Age Wave and Edward Jones, “The Four Pillars of a New Retirement,” found.

When we asked Americans, “What are the most important ingredients in your legacy,” 32% voted it was an inheritance they might leave for their loved ones — money or real estate.

But 43% felt that their legacy — they could vote for more than one — was life lessons and values, more important than money or real estate. 

They felt their legacy wasn’t just about money or property. It was what they learned in their lives and the memories of shared experiences with loved ones.

What does that mean to the financial services industry?

This is clearly an opportunity for financial advisors because [years ago] when the area of legacy was captured by financial planners, it was all about the money. But it’s not.

While that’s certainly important, it’s not nearly as important as people finding a way to pass on their values and life lessons.

How can advisors help?

People are looking for a trusted advisor. That’s another thing that happened during COVID: A lot of Americans realized that planning to be 80, 90 or 100 years old isn’t a do-it-yourself project: They need a trusted advisor.

So the growth in the number of people who turned toward financial advisors was extraordinary.

Specifically, how can advisors serve clients when it comes to the nonfinancial aspect of their legacy?

People are saying: “Don’t just manage my investments or get me the right insurance policy. Pay attention to me and my life.”

In our study, we asked, “Do you want your advisor to be a financial planner, partner, friend, mentor, guide?”