working with to establish the return on investment for each . That should help us focus on the most important capabilities .
2 . We need to focus on client communication : financial literacy , empathy and emotional intelligence .
A study by the Investments & Wealth Institute has shown that way too few advisors connect with their clients ’ unengaged female spouses , despite the emerging wisdom that the “ future is female .”
We must remember that baby boomers are on a new path when they retire , and it ’ s unfamiliar to them . Our first step is to define their journey . Think of it the way you would AAA ’ s TripTik travel planner . Better communication means you must lay out the journey for clients and show them the key stops along the way .
3 . We must include financial wellness , longevity and healthcare planning .
Healthcare is the biggest concern and the biggest variable expense in retirement , but it ’ s not easy to discuss with clients . Our study group on the topic first worked to define the objective : What exactly is financial wellness ? What planning should be done for longevity and healthcare ? How would we make it easier for both clients and their advisors ?
4 . We must have family financial management — planning for three generations ( or more !)
A great advisor once told me , “ Retirement is a family affair .” You have to be able to aggregate information and account data , optimize for taxes and be able to transfer money for people of different ages . There is a blueprint here for how to do it right . So the Next Chapter team is working on a set of industry standards for “ the family conversation ”— the key elements of multi-generational , multi-account management . We need to know what we are solving for , and tell the clients !
5 . We need centralized service and client experience — to prioritize investments across human and digital capabilities .
We need to align our abilities as human advisors with the functions of digital offerings . But what should the machines do and what should the humans do ? Figuring that out requires new ways of evaluating .
Machines are better at keeping tabs on dates , following up and holding information . But human managers will have to handle the interplay between people and machines . ( Consider how IRA rollovers are handled .) Stay tuned .
6 . We need better integration and innovation in retirement income and protection products .
Security is paramount to most retirees , and the industry has the opportunity
Never underestimate the impact of small gains multiplied across an entire industry .
to head off the anxiety of clients that was heightened by the pandemic . The Alliance for Lifetime Income did a survey that showed nine of 10 investors want protected income . But capital markets and interest rates create headwinds for traditional guarantees .
What ’ s next ? Let ’ s begin with the end in mind . Let ’ s design scoring tools that would be agnostic to planning software and products . Such tools should take into account annuities and protected income sources like Social Security as mainstream parts of portfolios . Sometimes we do that , but not always . We should make these analyses standard fare across the industry like we did with managed accounts .
While there wasn ’ t a game-changing solution in any of the six areas we covered , never underestimate the impact of small gains multiplied across an entire industry .
Remember , we have the most valuable clients in history , in quantities we can barely comprehend , asking simple questions and expecting simple answers , and advisors want to provide the solutions they need . It ’ s up to industry leadership to make that client / advisor relationship as frictionless and productive as possible . And the path is clear . Or to the disruptors will go the spoils .
Steve GreSham is ceo of the execution Project LLc , a consulting firm helping advisors and their companies reinvent “ retirement .” He leads next chapter , an industry working team , and is also a senior education advisor to the alliance for Lifetime income . He is the author of The New Advisor for Life . see more at theexecutionproject . com .
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