Makin' Money

The need for "navigators of longevity"

Chris Farrell Mar 2, 2011

The numbers of boomers who expect to kick back and retire anytime soon are shrinking fast–real fast. A lifetime of poor savings habits coupled with the devastating impact on retirement portfolios of two bear markets in eight years (and two recessions) has convinced many boomers that they’ll have to put in more time working.

One underappreciated implication of the trend is that it will also change the nature of personal finance advice. Aging boomers will want very different insights from professionals. Most of the industry is behind addressing the different needs of an aging-and-working population. Joseph F. Coughlin, director of the MIT AgeLab, has been thinking about it. He’s a leading researcher into the behavior of the 45-and-older population.

The name of his blog gives an idea of what interests him: Disruptive Demographics: Global Aging, Technology & Innovation.

In an interview with Elizabeth Wine in onwallstreet magazine he answers 5 questions about the future of financial advice. Among his answers is this insight:

What we currently have are advisors who are exceedingly skilled at talking about the benefit of a particular product or a particular way of planning. But what baby boomers and the next generation are looking for is a navigator of longevity. We need to plan for events, not some ambiguous number. Twenty or 30 years ago the idea was: “What’s the number I need to retire?” That notion is outdated. People are much more likely to plan or save for a purpose, like staying in their home or paying for a grandchild’s college, rather than an ambiguous number. That requires far greater sophistication in advisors-not just to be knowledgeable about products, but also longevity

When looking for a financial advisor it’s increasingly important to see if the professional can address these broader lifestyle issues.

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