Studies have shown that the United States is in a 50-year cyclical decline in trust, he said. In 1961, about 56% said "yes" when asked if they trust people, but that percentage has declined to 22% today.
"For those of us around in the 1960s, you may remember the saying, 'Don't trust anyone over 30.' Well now that we're over 30, we've just truncated it to, 'Trust no one,'" he said.
According to MIT, people trust those who are most like them. Even doctors, who work on a level of intimacy that mirrors that of financial advisors, aren't trusted the way they once were. Before going to the doctor, many patients have already made their own diagnoses after consulting the Internet. People are more likely to trust someone they know who's taking the same prescription drug they are than to trust the doctor who prescribed it in the first place, MIT said.
The most prominent demographic change that advisors must consider is the emerging dominance of the female consumer, Diehl said, and it's not because women more often outlive men.
"MIT says we have to look at the other end of the spectrum. Look at educational trends in the United States today. There's approximately three women for every two men graduating from college, 58% of all master's degrees go to women and almost half of all PhD's," he said. He added that women are responsible for 90% of all home health decisions, 85% of all home improvement decisions and even 80% of the purchases of NFL merchandise.
One of the biggest struggles women 47 to 57 will face over the next 10 years, especially if they are eldest daughters, will be caring for their parents-and possibly their husbands' parents, Diehl noted.
These women might leave the workforce for seven to 10 years, but will likely rejoin it later in a different fashion. "This nonetheless calls into question income replacement issues," he said.
Other speakers also sought to challenge conventional wisdom in the profession. Ross Levin, president of Accredited Investors in Minneapolis, asked how many attendees had ever had a client run out of money. When only a few hands went up among hundreds of advisors, Levin asked whether the profession was, consciously or unconsciously, putting their own best interests ahead of their clients' when it came to retirement withdrawals. He also acknowledged that, as one attendee quipped, clients are more likely to run out of lifestyle than money.
Later that day, Ric Edelman, CEO of Edelman Financial Services, chastised the industry and Wall Street in particular for chasing relentlessly after the wealthy while turning a cold shoulder on Middle America. Edelman found it ironic that after engaging in such behavior, financial services executives struggle to figure out why America hates Wall Street.