Financial advisors are underestimating the advances that are being made in extending people’s lives and not planning for enough years for their clients, industry thought leader and author Ric Edelman said.
Edelman, founder of Edelman Financial Engines and also a radio show host, has launched a podcast, “The Truth About Your Future with Ric Edelman,” airing five days a week aimed at advisors who are looking for the knowledge they need to properly prepare their clients, many of whom will live to be 100, Edelman said in an interview.
“There are five things that matter for the future of personal finance,” Edelman said. The podcast is designed to provide advisors and investors with information about each that is not widely known, he said.
The five, he said, are the following:
1. longevity.
2. retirement security.
3. exponential technologies.
4. blockchain and digital assets.
5. health and wellness.
“The innovations that are happening now will radically extend life expectancy. If you are alive in 2030, you will probably live to be 100 years of age or beyond. We need investment technologies that conform to that reality,” Edelman said. “A longer lifespan has profound implications for future planning.”
And yet, most actuarial tables, including that of the IRS, project life into the 80s and 90s, not 100s, he said. Financial advisors now are not planning glide paths for clients that are properly aligned with the longer lifespan and are switching from equities to bonds and other more conservative investments too early.
In addition to needing to extend life expectancy planning, the innovations that are now being developed offer vast investment opportunities, he said.
These are the types of subjects Edelman said he will explore in the podcasts, which will be five to 15 minutes long Monday through Thursday and longer on Fridays. The Friday broadcasts will include guests from a range of scientific, academic and financial fields, he said.
“Most financial planners are not aware of the exponential extension of life that is occurring,” Edelman said. In addition, “most portfolios do not include enough investments in technological innovations” that are providing opportunities.
“We need to acknowledge that the world is changing rapidly and update financial planning to include the longer lifespan and the impact such things as inflation will have on these plans,” he added. “Clients will be very receptive to these conversations as long as the conversations include hope and strategies for the future.”