Nanayakkara said EY also is seeing that the financial planning and wellness conversation is a great way to acquire female clients because male spouses tend to be much more self-directed, or portfolio-management directed, while the female client has concerns around long-term care for mom. “If the advisor is not open to that wellness conversation, the opportunity is lost. You don’t have the ability to consolidate assets.”
McAleer noted that women have a keen interest in longevity planning. He surmised that is the case because women are more involved with caregiving. “They are the ones that latch on to this whole concept of financial wellness or longevity planning, and that’s better for us,” he said. He added that everyone in the wealth management industry will need to get on board on longevity planning.
Citing data from the National Alliance for Caregiving and AARP, McAleer said caregiving is ubiquitous. According to the 2020 data, an estimated 42 million people in the U.S. provide unpaid care to those over 50, an increase of 14% since 2015; 55% of caregivers would not have identified as such before Covid-19; a quarter of dementia caregivers are sandwich generation, meaning they care for both an aging parent and a child; and a third of dementia caregivers are daughters.
Nanayakkara said she believes advisors are slow in capturing the opportunity that financial wellness presents because of its complexity; they have to think about solutions such as short-term and long-term financial needs, liquidity, banking, legacy, philanthropy and health.
“But I would argue that it’s exactly this level of complexity that precisely makes the wealth manager sort of the center of this all and wellness is really the promise of wealth management,” she said.
The challenge, McAleer said, is getting buy-in from advisors. He said it is a big change for advisors and the big issue is, “we have not digitized it enough and made it easier for advisors to access it and bundle it all together. I think that’s the holy grail for us all.”