Most aren’t consciously or deliberately seeking this change. For many, there is no choice: Their careers are becoming obsolete due to the disruptive nature of exponential technology. Advances in artificial intelligence and robotics mean workers in half of today’s occupations will be displaced by automation in the next decade or two, according to a study at the University of Oxford.

So whether by desire or necessity, we can expect lots more of our clients to switch careers in their 50s and beyond. They will find that the old linear lifeline won’t work for them. Many will take (or need) an extended break between careers, likely requiring use of part of their savings. Further education will require additional use of savings, but working well into their 70s and 80s—made possible by massive advances in medicine and health care that will slow and even reverse the aging process (so that people in their 90s will feel like they are in their 60s)—will reduce the pressure to amass by 65 all the money they’ll need to support themselves for their life expectancy.

The result: Spending fewer years fully retired, with no earned income, and allowing much of their savings to grow for 50 or 60 years instead of just 30 or 40—means it’s unlikely they’ll outlive their money, even if they do live to age 110 or longer.

So how will all of this affect the way you’ll serve your clients in the future? That was the point I made at the start of this article.

The cyclical lifeline means we are facing a paradigm shift in retirement and thus in retirement planning. And as financial advisors, we will have to incorporate this new paradigm into our repertoire of services.

Here’s what I mean. We’ve all become used to telling our 50-something clients that they need to keep doing what they’re doing for another 15 years or so. If they keep working and keep saving, staying invested in the portfolios we carefully manage for them, they’ll reach age 65 or so in fine condition to retire.

The problem is: Their career might not last 15 years because of exponential technologies. They might need to return to school to learn new skills so they can continue to earn an income. And they’ll need help anticipating this, determining what education they need, where to get it and what career to pursue upon attainment of their new skills.

In other words, we have a new planning function to perform. In addition to college planning, retirement planning and estate planning, we will add career planning. We’ll actually help our clients recognize that their current careers are in jeopardy, help them choose new careers based on their aptitudes, interests and personalities, work with them to determine where they can get the training they’ll need and calculate how to pay for that education.

If this reminds you of high school guidance counselors, you’re not far off. Essentially, that’s what we’ll become—not for teens choosing colleges and majors, but for our adult clients who are approaching midlife crossroads.

Of course, we’ll still give advice in all the traditional areas of financial planning—saving for college for children, buying houses, handling insurance needs, credit and debt management, to name a few—but retirement planning will morph into helping our clients thrive in their new cyclic lifelines.

To fill this critical role, we too will need further education and training. Like our clients, we need to go back to school to learn how to help them in the area of career planning during exponential times. Or you could join a larger firm that has the resources to help you deliver these important new services to your clients.

Either way, get ready for the new phase of the financial planning profession. It’ll be here sooner than you think.

Ric Edelman is the chairman and CEO of Edelman Financial Services LLC, a registered investment advisor. He is an investment advisor representative who offers advisory services through EFS and a registered principal of (offering securities through) Sanders Morris Harris Inc., an affiliated broker-dealer. You can connect with him on LinkedIn or on Facebook at www.facebook.com/RicEdelman. Follow him on Twitter at @RicEdelman.

 

First « 1 2 » Next