The longevity economy is headed your way; 401k advisors can respond to it, adapt to it or it will change around them.
That was the message at the Global Retirement Partners Advisor Alliance Summit in Phoenix on Friday morning. It was a rapid-fire presentation from MIT AgeLab’s Joseph F. Coughlin, an academic egghead complete with bow tie and a Ph.D. who nonetheless provided comedy and information that strongly resonated with the advisor audience.
“You are at the start of a completely new industry,” Coughlin said. “We have to come up with a better name, but it’s essentially longevity planning.”
Noting that the funeral industry is lamenting a decline in mortality due to once deadly conditions that are now considered treatable, he facetiously added that we’re “not dying quickly enough.”
War and disease used to reduce fertility rates that were then replaced, but now education and income are the most effective birth control. As they rise, fertility rates drop.”
Coughlin pointed to Japan as “a nursing home on an island,” whose immigration policy is “no,” and now sells more adult diapers than baby diapers.
“We’re not having enough babies, and it’s a worldwide problem. Russia has “Patriots Day,” and if you can prove you got pregnant on that day you get a refrigerator or something. Denmark has an ad campaign that’s essentially “do it for Denmark!” I’d show you the commercial but it’s full-on porn.”
He told attendees to mark 2047 as the date that more people will be over the age of 60 worldwide than those between the ages of zero and 15.
“And half of the children born today will live to age 100, with 140 now a distinct possibility. There are now 5-plus generations in the workforce. As an HR person, how do you manage across all that?”
It all adds up to a new longevity economy, he said, one that will produce major changes in products and processes, which includes 401k advisors. Noting that technology can, of course, be a disrupting force, he added that there are now disruptive consumers who want everything bigger, better, faster and cheaper.
It’s happening so fast that millennials are “yesterday’s news.”
“Gen Z is laughing at the millennials. What’s the first thing you do with new technology? You touch. Not so with Gen Z. If it isn’t voice-activated, it’s obsolete.”
What do these longevity changes mean for 401k advisors? If they begin a client conversation with “I’ve been in this business for 30 years” they’re in trouble.
“Women in their 50s are the demographic now with the highest divorce rate. When asked why they say they were bored. If they dumped this schlub after 30 years because they were bored, how do you think it will go over if you lead with something like that?”
With more than 20 years serving financial markets, John Sullivan is the former editor-in-chief of Investment Advisor magazine and retirement editor of ThinkAdvisor.com. Sullivan is also the former editor of Boomer Market Advisor and Bank Advisor magazines, and has a background in the insurance and investment industries in addition to his journalism roots.
