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Friends, Finance, & the Future of Advice. Joseph F. Coughlin, Ph.D. Director April 29, 2009 Presentation to the Million Dollar Round Table. The ‘Me’ Generation Rewrites ‘Ritz Rules’. “The notion of what our parents wanted … is different from what today’s generation wants.”.

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Friends finance the future of advice

Friends, Finance, &

the Future of Advice

Joseph F. Coughlin, Ph.D.

Director

April 29, 2009

Presentation to the

Million Dollar Round Table


The me generation rewrites ritz rules
The ‘Me’ Generation Rewrites ‘Ritz Rules’

“The notion of what our parents wanted … is different from what today’s generation wants.”

Source:WSJ 6/23/06


Friends finance future of advice
Friends, Finance & Future of Advice

  • Women & Social Networks

  • Social Networks as Filters

  • Friends & Family as Validation

  • Looking for People Like Me

  • Boomers Need More Information

  • Future of Advice

  • Emerging Technology Platforms


1 women social networks
1. Women & Social Networks

  • Women most educated.

  • Female workforce -- all time high ~70%.

  • Live longer than men .

  • Family CEO -- place premium on solutions not products.

  • Comprehensive solution & information seekers


Implications for financial advisory practice management
Implications for Financial Advisory & Practice Management

  • Develop client relationships that build predictability – trust as well as results.

  • Provide comprehensive explanations of recommended strategies that address financial performance and larger value, e.g., how one product may benefit survivors or LTC issues, etc.


Friends finance the future of advice

2. Social Networks Information Filter

Emotional Filtering &

the Older Consumer

+enhanced

emotion-regulation &

social adjustment

–missing negative

(potentially crucial)

information


Implications for financial advisory practice management1
Implications for Financial Advisory & Practice Management

  • Emphasize positive results of planning, ‘what can be done.’

  • Address emotional concerns as well as factual impacts of planning.

  • Identify what can be done for others, e.g., legacy, reduction of financial and emotional burden on family members -- “planning is a gift to others.”


3 friends family as validation

More choice, more freedom, more to do.

Growing expectations by and for the consumer to do more, be more responsible and to balance competing demands, e.g., health, finance, work, family, caregiving, education, civic duty.

3. Friends & Family as Validation


The consumer s daily job navigating life s tyranny of trade offs

Health

Work

The Consumer’s Daily “Job”Navigating Life’s Tyranny of Trade-Offs

Marriage

Home

Civic

Engagement

Transportation

Life Planning

Friends

Retirement

Children

Education

Eldercare

Self

Faith


Consumer fatigue
Consumer Fatigue

  • 54% of baby boomers agree with the statement:

    “I am too tired to do all the things I want to do.” - Yankelovich (2006)


Implications for financial advisory practice management2
Implications for Financial Advisory & Practice Management

  • Whenever possible, ‘auto’ is everything.

  • Serve as a solutions provider, not as a planner.

  • Aggressively identify and pursue other venues for ‘time to plan,’ e.g., employer worksite, affinity events, such as college or military reunion.



Trust in a time of crisis
Trust in a Time of ‘Crisis’

  • Three Examples:

    - Watergate

    - Johnson & Johnson

    - 911

  • Focus on system trust versus individual trust

  • Current financial crisis, different tact -- focus must be on individual relationships


Implications for financial advisory practice management3
Implications for Financial Advisory & Practice Management

  • A brand name is not a guarantee for consumer loyalty without performance

  • Good performance is a given; distinguishing yourself in the market depends on the additional services and convenience you can provide

  • History is…history


Friends finance the future of advice

5. Boomers Need & Want More

Information to be Better Planners


Implications for financial advisory practice management4
Implications for Financial Advisory & Practice Management

  • Provide working actionable knowledge, not more information.

  • Present comprehensive but accessible materials.

  • Understand and be prepared to serve multiple roles -- agenda-setter, coach, teacher, expediter.



Implications for financial advisory practice management5
Implications for Financial Advisory & Practice Management

  • Engage entire household in establishing family financial strategy.

  • Become familiar with adult children or social network.

  • Read and participate in extended/virtual social networks, e.g., on-line reputation, presence, etc.


Our living room emerging technology platforms for social networking
“Our Living Room”Emerging Technology Platforms for Social Networking

  • 200 M people on Facebook

  • Now about 1.5 million female users older than 55 on Facebook

  • 550% increase over six months ago. People younger than 25 grew by less than 20%.

  • Boomers use social network sites differently than younger users -- getting to know new people and learn new things

"Boomers are really affected by what's going on, and they like not to be alone with their thoughts.”Robin Wolaner, TBD.com


On line end of life planning family financial management

On-line planning strategy

Life insurance policy bundled with 24/7 concierge services anywhere in North America.

Gateway product to develop relationship with family.

On-Line End-of-Life Planning & Family Financial Management


Implications for financial advisory practice management6
Implications for Financial Advisory & Practice Management

  • listic life planning, longevity planning, not retirement planning, e.g., starting a business, part-time work, discretionary healthcare costs.

  • Capacity to link financial planning & products with practical solutions, e.g., eldercare services.

  • Comprehension of overlapping between privately funded and publicly provided services.