My two cents on the Future of Retirement
In thinking about today's environment, we all have many unanswered questions... how, and to what extent, will the major economies be structurally different than they are today? To what extent will online learning for K-12 and universities remain important, either during traditional school years or as supplemental enrichment during summer vacations? To what extent will white-collar workers continue to replace at least some of their “at-the-office work” with work from home. Will the use of the digital meetings cut down on business travel, or will the experience with digital meetings during the crisis make us appreciate in-person meetings more? Or, a prolonged period of stay-at-home orders will undoubtedly stimulate new approaches to work as well as new services to be provided by ingenious entrepreneurs? and many more...
But I have been also asking myself... what retirement would look like? how can we better prepare to "live in Retirement"? will financial institutions evolve?... the current situation has and may continue devastating individuals’ savings for quite some time, and among the most profoundly affected are those at or near retirement who counted on their savings to pay basic living expenses, including me.
Definitive answers to these questions are impossible – indeed, answering with undue confidence risks locking our views into an ill-conceived approach that lacks adaptability.
"For myself I am an optimist — it does not seem to be much use being anything else" Winston Churchill.
The need for new and innovative products and services that provide greater security for retirement income is a future growth opportunity. As a result, Asset Managers, Pension Administrators, Insurance Firms, Banks, and Financial Services organizations in general, have an opportunity to do some things differently, for instance:
- Revisit and improve the Client Experience – analyzing the behavior of their customers over 50, with a focus on unmet needs and expectations.
- Reconsider the approach to Advice – understanding how their particular sector will be affected, and considering retirement planning more of an educational process and a goal-setting process; they also have an opportunity to win younger people who are not participating and will now worry about their financial future.
- Innovate the Delivery Model – developing a new ecosystem that incorporates FinTech and Analytics, especially to reach less affluent customers.
- Expand Products – considering new asset payout products and insurance for retirement risks; develop simple unbundled products that can be sold a la carte or bundled in solutions with partnerships.
One thing for sure is that the retirement income market will require financial services firms to cross their organizational silos. I am currently researching and developing innovative strategies on these topics and invite you to share your thoughts and ideas.
Amigos, clearly the post-crisis world will look quite different, and I feel the responsibility to address The Future of Retirement now.
Stay safe, stay strong!
design for the outliers, get the average for free
4 年All excellent questions Jairo. I've worked a lot with investments and pensions businesses lately. It's an industry ripe for change. For many, I'm not sure the concept of retirement as it is today will be a reality in the not too distant future, it's also an rather inflexible concept for the industry. Likewise, a pension is quite possibly the most boring financial product, despite what it enabling being some of the most exciting and liberating life experiences. Some in the industry are doing some very smart things to change legacy organizations not used to change, and there's also fun new people coming in to show how it can be done differently. Check out Grandhood, partly because they've created a brand that better represents that later stage of life rather than retirement. And also because they're making complicated and boring things much more engaging and interesting. https://www.grandhood.dk/