A firm that specializes in assisting advisors communicate better with investors has acquired a technology platform that offers a retirement planning tool that estimates a person’s life expectancy.
Lumiant, an advice and client engagement platform originally based in Australia, acquired Genivity, a longevity and health planning solution for financial advisors based in Chicago. The deal will enable Lumiant to offer its clients Genivity’s signature product: the Health Analysis and Longevity Optimizer (HALO).
HALO, which is a proprietary product that Genivity created, presents probabilities about a person’s life expectancy so advisors can factor that into a retirement plan as well as any potential healthcare costs, which is one of the primary causes of bankruptcy in retirement, according to Heather Holmes, chief executive officer and founder of Genivity.
HALO allows clients to answer questions about their health, including their current health, family health history, and their current lifestyle. Through an algorithm, the tool uses that information to list the probability a person will reach a certain age.
The advisor and client can then use that information to build an accurate financial plan. HALO provides a realistic idea of what potential costs could look like, while offering suggestions on how to maximize those costs throughout retirement. It also lists ways a person can improve their projections.
“One of the powerful parts of HALO is the ability to see in real-time what happens if you make lifestyle changes that could then increase that probability even further,” Holmes said. “We then provide detailed eldercare and healthcare projections with the related costs so the advisor has customized projections for the client's financial plan.”
Advisors can use this technology and overlay it onto their own website or service so clients or potential clients can gain insight into what they might need for retirement. HALO will expose advisors to additional features outside of the traditional Monte Carlo assumptions, according to Blake Wood, CEO at Lumiant.
“In addition to the traditional levers such as spending more or less, saving more, retiring later or earlier, HALO now offers lifestyle levers such as exercising more, eating healthier, and quitting smoking,” he said. “These new features allow clients to understand how their lifestyle choices can impact their longevity and healthcare costs.”
Longevity has been a question for advisors and clients and many worry about having enough money to sufficiently fund their retirement. One of the biggest unknown expenses pertains to the costs of healthcare once in retirement. Health-related conversations are a critical component of the financial discussion, Holmes said.
“If you are just using a standard actuarial table or an average, you’re really putting a lot of clients’ plans at risk,” she said. “You want to have better numbers to start with to create a better plan.”
Discussing healthcare is not just difficult for the advisor, but it is also difficult for a family. By using HALO, advisors present important information in a format that clients will understand using verbiage they can follow and share with the family, according to Wood.
“We’ve been very focused around building a language and a tool that is in a way the same language that clients in the household are using,” he said. “It’s a way that will engage both of them and bring them to the table.”
Lumiant, which was founded in 2021 in Australia, before opening a location in the United States last year in Evanston, Ill., provides tools and resources for clients to help them better engage with their clients. Genivity, which is short for Generations in Longevity, launched last year as a technology platform that helps advisors protect their clients from burdensome healthcare costs in retirement.
As part of the merger, Lumiant will continue to offer HALO as a standalone product and provide it as an extra component for its advisory clients at an additional cost. That extra cost has yet to be determined, Wood and Holmes said.
Holmes will join Lumiant as a member of its executive leadership team as chief evangelist officer and be appointed to the Lumiant board as an executive director.
The merger will give Lumiant’s advisors access to tools and resources that many of their competitors do not have access to, according to Wood.
“It helps our advisors separate themselves from others that are doing that traditional goals-based planning which is table steaks at this point,” he said. “We need to elevate that to include health and well-being.”