The solution, he offered, was that the financial industry—including financial advisors—needs to be more innovative. He highlighted several areas that are ripe for innovation.
For starters, he posited, the financial services industry needs to cut the jargon and address people in ways they can relate to. Too often, he said, financial companies produce muddled messages because their compliance departments hinder the clear expression of that message.
“People want to be a collaborator in their financial plan and want to understand the language,” he said.
He added that a one-size-fits-all approach won’t cut it. Instead, products, services and advice aimed at the aging demographic should be targeted and customized to fit individual’s specific needs.
In that vein, Dychtwald said, new products are coming to market that can help advisors help their clients achieve peace of mind in retirement.
“We’ve done studies where we asked people what matters most: wealth or peace of mind. And peace of mind usually comes in eight times more important than wealth,” he explained.
He noted that the insurance industry has created some interesting “next-level long-term care and next-level annuity products and lifetime income products.”
“I think the innovations will occur at the crossroads of investments and insurance, so that people can achieve some of the gains they’re hoping for, or at least a modified version of that, but also have some assurance that if they live to 80, 90 or 100 they’ll have a paycheck for life.”