26 September 2018

Cyclical lifestyles and the future of advice

By Timothy D. Welsh

Held in early September at the fabulous Wynn resort in Las Vegas, SS&C Deliver this year was definitely future-forward, a theme captured in breakout sessions, keynote addresses and more.  This was especially true in the advisor-focused sessions.

One of the more notable displays came from famous advisor, Ric Edelman. Fresh off his years-long research and authorship of his latest book, The Truth About Your Future: The Money Guide You Need Now, Later, and Much Later, Edelman has spent numerous hours asking questions of scientists, futurists and activists to uncover what technologies will have the biggest impact. He was not only asking for people and society, but also for the future of the financial planning and investment management industries.

In Ric’s opinion, it all boils down to basically one word:  Longevity.

With all of the advancements in technology, described by Edelman as “exponential technologies,” people will have much longer life spans than most of us can imagine. As a result, “Most of the advice you are giving is wrong,” Edelman says to advisors, as a result of how massively technology will transform client lives in the near future.

Edelman’s idea is that in the coming decades, humans will be living vastly different and lengthier lives, and thus need a different approach to financial planning and investment management. Edelman provided a long list of how these exponential technologies such as 3D printing, genome sequencing, nano-technology, robotics, blockchain and Big Data would transform just about everything, including enabling clients to live beyond 120-150 years old.

“Retirement as a concept will cease to exist,” Edelman said. “The linear lifetime where people go to school, get a job and retire is dead.”

Instead, Edelman says that we will all be living a “cyclical lifetime” with multiple periods of school, jobs, re-training, then on to a new career, and so on with multi-year sabbaticals sprinkled in.  As a result, advisors will have to shift their typical approaches of college saving and retirement planning so they are able to fund multiple careers and educations over time, as well as support their lifestyles for nearly a century and a half.

As part of this shift away from traditional retirement planning, an advisor’s job will be fundamentally different as well, due to robotic automation. He cautioned that 47% of current jobs across sectors won’t exist, and not just the manual labor ones, but also white collar jobs as well. Accordingly, Edelman strongly advised advisors to start changing their approach. 

“In order to remain relevant and not get automated away, you will need to evolve your process to become career planners and healthcare advisors in order to coach, counsel and plan for clients on these longevity issues instead of just providing investment performance and price.”

While there was some fear and angst among the attendees that yes, indeed, the robots are taking over, keynote speaker Dr. James Canton, former founding Apple executive and now AI expert, delivered the good news.

“The emergence of AI brings about tremendous economic growth potential across the globe, with the majority of it accruing to the US,” he said. “We will be moving past Moore’s law that shows computing power doubling every 18 months, to doubling every 90 days, and soon in days and minutes.” 

The economics of AI, according to Canton will mean an additional $8.3 trillion in global growth by 2025.

“This vast tech horsepower will transform businesses into becoming predictive organizations with all sorts of economic and social benefits that will transform our world in many, positive way,” he says.

To learn more about what went on at the 2018 SS&C Deliver conference, check out the many tweets on the #SSCDeliver hashtag on Twitter.