As the number of Boomer husbands who pass away increases dramatically, their spouses will take control of wealth assets on a scale never seen. By the end of the decade, women will control an estimated $30 trillion, a reality that will transform financial services.
Demographics, culture, investing preferences, and shifting financial needs will impact every investment professional. At the center of those forces lies retirement-income distribution, the emperor of all planning needs.
Q4 2021 hedge fund letters, conferences and more
No investment professional, organization or channel owns a call option on success in retirement-income distribution. RIAs, especially, are misaligned for success. With a willingness to alter their business strategy, just a bit, RIAs can position themselves for robust achievement. However, RIAs must align their communications, planning methodologies, and product set with the needs of retirees, especially women, whose chief priority is reliability of income more than return on investment.
Will RIAs make the necessary changes? This is high-stakes decision.
In my Advisor Perspectives article, The Trial of Ken Fisher for Crimes Against Annuities, I charged the well-known public figure, Ken Fisher, with three crimes against annuities:
- Misleading the public in a manner that causes incomplete or inaccurate understanding of annuities;
- Issuing a blanket condemnation that misrepresents the features and benefits of many annuities; and
- Depriving your clients the continuing income they will need to meet their essential expenses in retirement.
I found Fisher to be innocent of the three charges. Why? This is how I explained my decision:
To be clear, I believe your advertising is appalling and very likely does not meet fiduciary standards, but rather than lay blame at your feet, I am placing most of the onus on the annuity industry that by implication you so unfairly castigate. I assign blame to the annuity industry because it is at least indirectly responsible for your annuity perspective.
It is ironic that the annuity industry may well owe Ken Fisher a big “thank you.” His high-profile criticisms were so widely broadcast and over the top, that they inflicted damage to such an extent that Fisher has helped foster a genuine reinvention of annuities.
Annuity providers are strategically focused on the sales potential of the RIA channel. Two reasons make me eager to see annuities become widely accepted there. Both RIAs and their retiree clients will gain substantial benefits. Most significantly, clients will enjoy enhanced retirement security. And as their share of the vast retirement income opportunity expands, RIAs will profit from steadily increasing AUM.
Numerous benefits radiate to other annuity industry constituencies, including a first-ever consumer-driven demand for annuity products, especially those that provide lifetime guaranteed income.
Consider my vision for how differently the financial planning profession will look in just a few short years.
Read the full article here by David Macchia, Advisor Perspectives.
