At the USC Leonard Davis School of Gerontology, more than 1,245 Merrill advisors have earned financial gerontologist certificates. Like others in the business, Merrill is trying to stay one step ahead of a movement to train advisors with a series of skills that enables them to better help clients deal with longevity, mental health and parental issues.
More firms, large and small, are joining the bandwagon, with many of their advisors seeking certification from the American Institute of Financial Gerontology.
Financial planners have embraced designations like the certified financial planner (CFP) mark since the profession took off in the early 1970s. Some advisors have even voiced concern that the proliferation of designations is confusing to consumers. But as Americans' financial needs change, new designations keep appearing. Expertise in retirement income has emerged as a particularly popular specialization as evidenced by the American College For Financial Services’s introduction of the retirement income certified professional.
With more people living into their 80s and 90s, planning for clients' financial lives for the next 20 to 30 years is propelling the rise of issues involving financial gerontology.
Firms are hiring more financial gerontologists to meet a market need, said Paul Irving, a senior fellow at the Milken Institute in Santa Monica, Calif., and founder of the Milken Institute Center for the Future of Aging. “Any firm that ignores the challenges and the opportunities for new products and services that respond to this demographic shift does so at its longer-term peril,” he said.
He sees some of the larger banks as pioneers in this area, but added that a number of smaller institutions, advisors and RIAs are responding to this population shift because of “the understanding that wealth, health, work, purpose and other factors are inter-related and that products and plans must be about more than money.”
Starting in 2015, the USC Leonard Davis School of Gerontology collaborated with Merrill to develop a financial gerontology specialty. It entails 12 hours of training over the course of four to eight weeks, delivered by on-demand videos taught by USC professors and overseen by Merrill professionals. Upon completion, participants receive a certificate and up to nine continuing education credits.
The knowledge of how seniors operate as they age enhances the ability of financial gerontologists, said Maria Henke, a senior associate dean at USC. “When advising about retirement options like whether to save money by moving to a different community, a financial gerontologist would consider factors like risk of social isolation, access to healthcare or opportunities for meaningful engagement in addition to only financial impacts,” she said.
Hence, these experts consider “cognitive decline during aging and how that can affect financial decision making and preferences,” Henke said. Financial gerontologists also are trained to have heightened awareness of fraud and elder abuse, end of life planning and care and social security.
Cynthia Hutchins, the director of financial gerontology at Bank of America, said that financial gerontologists are trained to “ask the right questions of their client, the more probing and personal questions that are outside the realm of the financial.” She noted that this includes taking into consideration health issues, where they want to live, whether they want to continue to work part-time, and how they want to spend their leisure time.