I guess it’s a trilogy now. Clients, advisors and financial companies.

In my day job working on “retirement” and in my space here at Financial Advisor, I’ve been challenging advisors about their readiness—and willingness—to engage with the historic wave of retiring baby boomers now rolling off the workforce at 12,000 per day. These are the most valuable clients ever and are coming in quantities no one has ever seen before. And yet …

Readiness is a problem. We can’t easily answer some of the burning questions posed by retirees, such as: “How much will I need?” “How much will I pay for healthcare?” And those questions should be simple, say the clients.

Willingness is becoming a bigger issue. Advisors are chasing their own retirements, after all. Many of them complain about the stress caused by the complexity and regulatory oversight of their work.

When the buyers and sellers of anything are unhappy, the invisible hand of the free market balls up into a fist and punches that industry in the face. Detroit’s Big Three automakers owned 90% of the domestic market share at their peak. Now it’s half that level. It’s still a big business. But it’s very different from the one that produced big, four-door sedans and station wagons. There are now 23 other companies making cars for U.S. drivers.

The disruptions created in autos, beer, shopping, media and electronics are all well documented, but they were mostly underappreciated in the moment. Profits from the existing order of things too often inhibit companies’ innovation. People should have been thinking about reinvesting those profits in product and service improvements.

The advice industry is no different. Our priorities are too often set by fluctuating markets. The current 12-year bull market in stocks has spoiled a generation of once-scrappy leaders by rewarding their inaction with higher AUM fees.

To reboot our collective industry engine, a group of more than 30 industry leaders built Next Chapter—a think tank/take action team focused on retirement. It’s sponsored by the Execution Project (my firm), Financial Advisor and the Money Management Institute, and serves 180 companies and 200,000-plus advisors.

Over the course of the past year, Next Chapter has parsed 16 different aspects of retirement and wealth management, asked clients what we could do to improve in these areas and asked advisors what would make their lives easier. In the end, we consolidated the topics into six study groups, each aimed at a specific project to kick-start the flywheel of improvement.

Here’s where we think the gains can be made:

1. We need better integration and adoption of digital tools and resources.
We found that only half of advisors actively use client relationship management programs. Can that be so? We also found that 20% (or less) use full financial planning. What?

We decided to catalog the tools we are working with to establish the return on investment for each. That should help us focus on the most important capabilities.

2. We need to focus on client communication: financial literacy, empathy and emotional intelligence.
A study by the Investments & Wealth Institute has shown that way too few advisors connect with their clients’ unengaged female spouses, despite the emerging wisdom that the “future is female.”

We must remember that baby boomers are on a new path when they retire, and it’s unfamiliar to them. Our first step is to define their journey. Think of it the way you would AAA’s TripTik travel planner. Better communication means you must lay out the journey for clients and show them the key stops along the way.

3. We must include financial wellness, longevity and healthcare planning.
Healthcare is the biggest concern and the biggest variable expense in retirement, but it’s not easy to discuss with clients. Our study group on the topic first worked to define the objective: What exactly is financial wellness? What planning should be done for longevity and healthcare? How would we make it easier for both clients and their advisors?

4. We must have family financial management—planning for three generations (or more!)
A great advisor once told me, “Retirement is a family affair.” You have to be able to aggregate information and account data, optimize for taxes and be able to transfer money for people of different ages. There is a blueprint here for how to do it right. So the Next Chapter team is working on a set of industry standards for “the family conversation”—the key elements of multi-generational, multi-account management. We need to know what we are solving for, and tell the clients!

5. We need centralized service and client experience—to prioritize investments across human and digital capabilities.
We need to align our abilities as human advisors with the functions of digital offerings. But what should the machines do and what should the humans do? Figuring that out requires new ways of evaluating.

Machines are better at keeping tabs on dates, following up and holding information. But human managers will have to handle the interplay between people and machines. (Consider how IRA rollovers are handled.) Stay tuned.

6. We need better integration and innovation in retirement income and protection products.
Security is paramount to most retirees, and the industry has the opportunity to head off the anxiety of clients that was heightened by the pandemic. The Alliance for Lifetime Income did a survey that showed nine of 10 investors want protected income. But capital markets and interest rates create headwinds for traditional guarantees.

What’s next? Let’s begin with the end in mind. Let’s design scoring tools that would be agnostic to planning software and products. Such tools should take into account annuities and protected income sources like Social Security as mainstream parts of portfolios. Sometimes we do that, but not always. We should make these analyses standard fare across the industry like we did with managed accounts.

While there wasn’t a game-changing solution in any of the six areas we covered, never underestimate the impact of small gains multiplied across an entire industry.

Remember, we have the most valuable clients in history, in quantities we can barely comprehend, asking simple questions and expecting simple answers, and advisors want to provide the solutions they need. It’s up to industry leadership to make that client/advisor relationship as frictionless and productive as possible. And the path is clear. Or to the disruptors will go the spoils.       

Steve Gresham is CEO of the Execution Project LLC, a consulting firm helping advisors and their companies reinvent “retirement.” He leads Next Chapter, an industry working team, and is also a senior education advisor to the Alliance for Lifetime Income. He is the author of The New Advisor for Life. See more at theexecutionproject.com.