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Wealth Management 3.0: Longevity Advisors

RBC Wealth Management CEO Michael Armstrong discusses how longevity risk is turning the financial industry on its head.

By Michael Armstrong

As a child of the 1960s and 1970s, my views on retirement were shaped by my maternal grandparents who lived just up the street from my family in Grand Rapids, Mich. My grandfather left the workforce in his late 50s but died at the age of 68, leaving my grandmother to wait tables well into her 70s to make ends meet.

That’s not really what retirement looks like today. The difference, however, has less to do with a generational divide and much more to do with longevity.

My grandparents spent 10 to 20 years in retirement, which was pretty typical for their generation. Today, thanks to advances in health care and technology, Americans can expect their golden years to span two, three or even four decades.

This is turning the financial services industry—which was built with couples like my grandparents in mind—on its head.

Gray divorce. Becoming part of the "Club Sandwich Generation." Second, or even third, marriages. All of these are life events that people are increasingly experiencing after they retire, and things that my grandparents never would have conceived of. More importantly, they are all money-centric events that people expect to turn to their financial advisor to navigate.

On the whole, our industry hasn’t done a great job of anticipating these modern retirement needs.

It was in that spirit that I asked several of our senior executives to join me on a field trip of sorts to the AgeLab at the Massachusetts Institute of Technology last spring. The MIT AgeLab was created in 1999 to invent new products, services and policies that improve people’s health and enable them to be active and live the life they want throughout a longer lifespan.

AgeLab Director Joseph F. Coughlin is known for uncovering the chasm between what people in their 50s, 60s and beyond want versus what societal norms suggest they need. And I wanted my team to hear from him firsthand. He smashed all of our preconceived notions about aging and what it entails.

So much of what he said stuck with me, but these two points really stood out:

  1. As we age, we have fewer institutions, fewer friends and fewer family members to guide us, creating a virtual vacuum.
  2. There is a huge and continually growing need to fill this void, not with products and services, but with advice geared toward helping people plan and live out their ideal next chapter.

This got me thinking about how we as an industry are really on the brink of a new era—Wealth Management 3.0, if you will. We have already come a long way from the old days when serving clients was all about making opportune trades. The wealth management industry today has become less about transactions and much more about money advice.

Yes, we are still focused on helping people save enough to live a comfortable life once they leave the workforce. “Do I have enough?” is absolutely a question financial advisors should continue to help clients answer.

The real opportunity, however, lies in shifting our collective mindset and starting to think of ourselves not just as financial advisors but also as longevity coaches. We must understand that now and moving forward, it is our responsibility to help clients plan out the 20, 30 or 40 years they will be living in retirement and serve as a guide who walks alongside them.

As T.S. Eliot once wrote, “Life is very long.” And now, it’s even longer.


Michael Armstrong is the chief executive officer of RBC Wealth Management — U.S.

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