Money and Old Age: Third Installment


 The third May 3 panel discussed wealth and aging from the vantage point of leading financial advisors. Four successful on-the-ground advisors offered the following perceptions of the advisory business, prodded by observations from Professor Joe Coughlin, director of the MIT Age-Lab.


Investors must stay in equities longer or forever. A suggested mix for aging investors: 70% equity.


Advisors to date have sold investment advice. In the future they must offer broader services, about life. Advisors generally work with educated and financially more secure people, and since the greatest indicators of long life are money and education, planners must be very focused on the end game. It was even suggested that what advisors are now paid for, portfolios, should be given for free, and what advisors now are being pressed to provide for free should be what is compensated. Here are examples of services which advisors might need to master: housing in old age, transportation cost and availability, updating homes so people may stay in them as they age, concierge medicine, health insurance, fighting boredom and staying independent longer.


The statistic of loss of advisor business on the death of parents was stunning. It was suggested that the next generation changes financial advisors 98% of the time. The solution, says highly successful financial advisor Susan Kaplan of Newton, MA, is for the advisor to meet with, and include in all family meetings, the next generation, to create a direct bond. Furthermore, Kaplan suggests thinking of the advisor as providing, psychologically, a virtual family office.


How do advisors deliver more service than today, at economic scale? Technology, and staffing a team with varied skill-sets.


What will happen with fees, given the new concierge model of the RIA? Why base fees on AUM? No clear prediction of future fee models emerged from the discussion.


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