Chief Executive at FEIFA / FECIF Secretary General
“The reports of my death have been greatly exaggerated”
This famous quote was a statement made by Mark Twain on hearing that he had been mistakenly announced dead. Although it is apparently a slight misquote, the meaning remains very much in line with what the great writer intended. It also came to my mind the other day when I was once again thinking about so-called “robo-advice” and the potential role and future opportunities for human advisers.
Those who know me well will be aware – probably too often! – of my irritation with the press, and the media in general, that far too often use misleading and sensationalist headlines that are mostly somewhat contrary to the key points in the content that follows - in my humble opinion. But this editorial is not focusing on that personal bête noir – you are no doubt pleased to read! My thoughts here are related to the “writing off” of the advisory sector by some people, its prospective “death” if you like – and my contrary opinion that it has, at least potentially, a very bright future.
A recent survey conducted by The Economist Intelligence Unit and sponsored by Swiss Life confirmed that approximately 20% of the citizens of Austria, France, Germany and Switzerland are aged over 65 – and that this figure will rise to 25% by as soon as 2030. The figures for many other European countries, including the UK, are apparently similar. The survey also confirmed that much of Europe is simply not in a position to properly address the issues of such ageing populations.
This represents considerable opportunities for advisers and, according to one article, “suggests that longevity concerns should be at the heart of most client-adviser conversations, even many years ahead of the client’s planned retirement age”.
The report that resulted from the survey confirmed that people across Europe place great value on living independent lives that they are in control of, when they are older. The main requirements of this desired independence were mostly centred on physical and mental health, and having adequate financial resources.
This is a phenomenal opportunity for advisers, particularly those in countries with the most obviously ageing populations, and with the subsequent greatest longevity problems.
Some of these individuals will want to obtain “advice” or, more likely, guidance via digital means (at least partly so) but present evidence shows that most will want to receive “human assistance” – from advisers that understand their needs and requirements, empathising in a way that a computer cannot. There is also considerable evidence that it is with regards to such matters that consumers perceive the greatest value of advice.
To adapt Mr Twain’s quote significantly further: the reports of the death of the advisory sector have been greatly exaggerated.
“Why financial advisers must prepare for a longevity revolution”