3 Ways Longevity Is Transforming Financial Advice

Today’s financial advisor focuses primarily on retirement security. Not incorrect, just incomplete. With ever-increasing life spans, today’s client is not exclusively a retirement client, but a?longevity client.?From Gen Z to the oldest Boomer, individuals and families are hacking, with little guidance, how to navigate a century long life – they are today’s longevity client. Our ideas of traditional life stages, education, career, family, and, even retirement itself, are evolving.

If life is changing for the client, is the business of advice ready??

That is the question that the MIT AgeLab set out to examine in its 2023 Preparing for Longevity Advisory Network (PLAN) Forum. MIT AgeLab invited a select group of 100+ participants from financial product manufacturers and advisory firms to participate in a three part design thinking format discussion to map how longevity is transforming the business of advice.

Top line summary: industry leaders agreed that driven by client needs, rising expectations, and in many cases, innovative advisory practices, the current business model of financial advice is set to be transformed into the more holistic business of?longevity planning. Here are three takeaways.

1. It’s About Life, Not Just Retirement

Longer lives are complicated lives. Today’s longevity client needs more than retirement planning advice that focuses primarily on a single life stage. Client trust, and ultimately retention, is not built upon an advisory firm’s brand reputation alone, it is based upon predictable behaviors witnessed and experienced across a lifetime. Clients are seeking advice to anticipate and navigate multiple life transitions that have both financial and quality of life implications. Product manufacturers and advisors seeking to engage younger clients, soon to be the beneficiaries of the great wealth transfer, must develop novel approaches to products, services, and conversations that address life now, not just retirement tomorrow, e.g., career changes, home decisions, starting new businesses, caregiving, and more.?

2. Conversations About More Than Money?

Longevity clients are seeking advice about more than money. Advice that promises financial security alone simply meet client expectations. The promise to deliver financial advisory excellence is table stakes and no more a surprise to the client than finding canned soup on a supermarket shelf. It’s simply expected. Many advisors believe their approach to financial planning, to portfolio construction, and even their use of novel apps and tools differentiates them. In short, they do not. Advice that educates and connects a client's financial strategies to solutions to life problems such as downsizing, senior housing decisions, is the true value that today’s longevity client seeks.?

3. Longevity Planning, It Takes A Team

Good news. Finance remains the core business of advice. Moreover, advisors do not need to become social workers, medical specialists, or home contractors but they do need to become team builders and leaders. Advisors routinely connect with accountants, insurance agents, tax specialists, and elder law attorneys. Serving today’s longevity client requires value-added advice that offers practical information and access to an additional range of life services that include experts that most people, even those with ample education and money, may not even know exist. These include geriatric or lifecare care managers, certified home modification specialists, senior housing consultants, and more.

Many thanks to the financial professionals and corporate sponsors that made the 2023 MIT AgeLab PLAN Forum possible. More insights and events to come.?

If you are a financial professional in the business of advice, or a product manufacturer/distributor, and want to learn more, or would like to participate in MIT AgeLab’s longevity planning research, please join Preparing for Longevity Advisory Network.?And, yes, participating in our research is free.

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