Ric Edelman: Retirement Won't Exist In The 21st Century

Advisors will also have to recognize the need for more planning around digital assets, as clients will leave behind not just social media accounts like Facebook profiles and Twitter feeds, but passwords and keycodes to access banking, investment and insurance accounts, he said.

Technology will also continue to change how client assets should be invested, said Edelman, as many popular industries and sectors will be severely disrupted by the rise of AI and other advancements.

“Can the stocks you’re putting your clients into survive the 21st century?” he asked. “In 1920, the average S&P 500 company lasted 65 years. Today they average 15 years. By 2025, it’s feasible that 40 percent of the S&P 500 will no longer exist. Good luck with your S&P 500 index fund.”

Automobiles replaced the horse and buggy, said Edelman, while Kodak was doomed by digital photography and applications like Instagram. Amazon is taking out brick-and-mortar retailers. The insurance industry will be threatened by self-driving cars.

At the same time, a new digital economy will replace the traditional economy, and global growth will accelerate, said Edelman.

“I’ve been investing in cryptocurrencies since 2014 and I’m a big believer in it, but we are not yet recommending that our clients buy crypto,” he said. “Our clients are mass affluent; they are not high-net-worth or ultra-high-net-worth [clients]. They therefore need to be more conservative in investing and this is the Wild West."

“The advice we’re giving clients is to get educated. Keep cryptocurrencies to 1 percent of assets, and if you’re going to do it, make sure you plan to hold for years and that you’re ready to lose 100 percent of your money. There are a lot of bad players and there are no sheriffs in town, but we think all of that is going to change. ... We think it will grow up, mature and become ready for primetime.”