HEALTH & WEALTH PLANNING
Steve Gresham
On The Eve Of Disruption
Retiring clients and their advisors want help . Don ’ t disappoint them .
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When the buyers and sellers of anything are unhappy , the invisible hand of the free market balls up into a fist and punches that industry in the face .
GUESS IT ’ S A TRILOGY NOW . CLIENTS , ADVISORS AND FINANCIAL companies .
In my day job working on “ retirement ” and in my space here at Financial Advisor , I ’ ve been challenging advisors about their readiness — and willingness — to engage with the historic wave of retiring baby boomers now rolling off the workforce at 12,000 per day . These are the most valuable clients ever and are coming in quantities no one has ever seen before . And yet …
Readiness is a problem . We can ’ t easily answer some of the burning questions posed by retirees , such as : “ How much will I need ?” “ How much will I pay for healthcare ?” And those questions should be simple , say the clients .
Willingness is becoming a bigger issue . Advisors are chasing their own retirements , after all . Many of them complain about the stress caused by the complexity and regulatory oversight of their work .
When the buyers and sellers of anything are unhappy , the invisible hand of the free market balls up into a fist and punches that industry in the face . Detroit ’ s Big Three automakers owned 90 % of the domestic market share at their peak . Now it ’ s half that level . It ’ s still a big business . But it ’ s very different from the one that produced big , four-door sedans and station wagons . There are now 23 other companies making cars for U . S . drivers .
The disruptions created in autos , beer , shopping , media and electronics are all well documented , but they were mostly underappreciated in the moment . Profits from the existing order of things too often inhibit companies ’ innovation . People should have been thinking about reinvesting those profits in product and service improvements .
The advice industry is no different . Our priorities are too often set by fluctuating markets . The current 12-year bull market in stocks has spoiled a generation of once-scrappy leaders by rewarding their inaction with higher AUM fees .
To reboot our collective industry engine , a group of more than 30 industry leaders built Next Chapter — a think tank / take action team focused on retirement . It ’ s sponsored by the Execution Project ( my firm ), Financial Advisor and the Money Management Institute , and serves 180 companies and 200,000- plus advisors .
Over the course of the past year , Next Chapter has parsed 16 different aspects of retirement and wealth management , asked clients what we could do to improve in these areas and asked advisors what would make their lives easier . In the end , we consolidated the topics into six study groups , each aimed at a specific project to kick-start the flywheel of improvement .
Here ’ s where we think the gains can be made :
1 . We need better integration and adoption of digital tools and resources .
We found that only half of advisors actively use client relationship management programs . Can that be so ? We also found that 20 % ( or less ) use full financial planning . What ?
We decided to catalog the tools we are
24 | FINANCIAL ADVISOR MAGAZINE | JULY / AUGUST 2021 WWW . FA-MAG . COM