There are more people alive today than ever before, and those individuals are living longer on average and demanding much more in their later years than any generation before them.
Speaking at the 2018 Health and Wealth Leadership Forum, an event hosted by InvestmentNews and the Big Brothers Big Sisters of Massachusetts Bay, Joseph Coughlin, director of MIT's AgeLab, explained how these factors are going to fundamentally change the way advisers work with aging clients.
Advisers in the near future will need to be providing much more than financial advice, Mr. Coughlin said. They will have to have conversations that help clients navigate longevity — topics like geriatric care, transportation and housing — or they risk being replaced by a firm that does.
"The consumer is now demanding deep conversations, not about their money but how they are going to live," Mr. Coughlin said.
He calls it the "experience economy" where people want an adviser who can help them live happy and healthy as well as financially secure.
This is especially important for wealthy individuals, who are living even longer than the rest of the population, according to Mr. Coughlin's research at MIT.
"You need to become advisers with solutions, not just advisers with information," he said.
A team of leading financial advisers joined him on the panel and shared ways they have formed deep relationships with clients outside of providing investment advice.
Susan Kaplan, the president of Kaplan Financial Services, said she is increasingly helping her clients with Medicare, finding a concierge doctor and other healthcare needs.
"We have to understand more of the world than we did before," Ms. Kaplan said. "It's not just the portfolio. In fact, that fades to the back and they are happy with that."
John Hyland, the founder and managing director of Private Advisor Group, and Chuck Bean, the founder and CEO of Heritage Financial Services, said technology and teams will be critical for firms to adjust to this new paradigm.
The conversations and services that Mr. Coughlin suggested will require valuable adviser and client time, and a collaborative team structure is critical to make it possible.
When asked what advice he would offer advisers, Mr. Coughlin recommended they identify three experts in the fields of transport, senior housing and home modification, and make them a part of the team.
Even if it's just as a consultant, these people will help advisory firms answer the questions that will be most pressing to aging clients, Mr. Coughlin said.