Distinguishing the kind of age may also help advisors have a conversation around planning for aging. For example, the public conversation around aging in the context of election season has often brought up the concept of chronological versus biological age. This distinction means that some clients may be chronologically older than others but more physically capable and resilient.
This election season, it seems like everyone’s talking about aging.[1] Both major parties have put forth some of the oldest candidates in history for the office of the President. And the conversation around aging has also been the subject of hot debate in senate races as well. Among all the election heat news about a significant statistic may have been lost. Over the next few decades, the proportion of the population age 65 or older will rise to almost 20%, according to research from the United Nations.[2] Advisors know about aging, more than most professions. According to research by Focus Financial and J.P. Morgan, 44% of RIA clients are 60 years old, or more.[3] Yet, some are still hesitant to have a full discussion on it. It may be that advisors can harness some of the public’s fever pitch on aging to help broach the conversation with wary clients. Here are a few important things to keep in mind.
Reframing the conversation is an important first step. Many clients may not want to discuss aging as a conversation about potential loss of independence and health. Advisors can collaborate with clients to address conversation about aging as more akin to the business process of future proofing. As a reminder, we wrote about future proofing in the past defining it as the process of working with the known unknowns and developing skills to make the unknown unknowns determinable. Known unknowns are those future events that could happen but might not…. Unknown unknowns are those things that could come up but can’t be planned for…. Future proofing, in other words, is the process of examining possible future events and developing processes and systems to minimize the impact of those events.[4]
Additionally, the urgency of the conversation around aging is of vital importance. Within the next few decades, the number of seniors (those over age 65) with Alzheimer’s disease may triple to 13.8 million.[5] This growth in the number of clients advisors may be assisting who could have dementia-related special needs is no longer an unknown unknown. It is a known unknown. Advisors now know there is a significant risk that their clients may struggle to comprehend their options and obligations.
Distinguishing the kind of age may also help advisors have a conversation around planning for aging. For example, the public conversation around aging in the context of election season has often brought up the concept of chronological versus biological age. This distinction means that some clients may be chronologically older than others but more physically capable and resilient. Some experts even refer to those individuals as “super agers” in the sense that they remain physically fit and energetic into their 80s and 90s. Super ager clients may need less planning around aging in place or long-term care in the near future than others whose physical health has begun to decline more rapidly.
Capacity, judgment, and executive functioning should also be a topic of any conversation on aging. Some experts have noted that older individuals may have slower recall of facts or make a verbal gaff (such as calling someone by the wrong name), yet maintain excellent judgment making skills.[6] Additionally, as clients age, nearly one third will acquire impairments in their executive functioning (ability to reason, juggle options, control impulses, and plan for the future) that are directly related to retirement investment and income management.[7] That may mean that advisors need to assess their client’s executive functioning in a similar way to how they assess a client’s financial skills. This kind of gap assessment can help advisors with how to approach conversations with clients. Advisors can have important conversations around the best method for assessing these skills.
Finally, clients may want to define “old” or “elderly” differently than advisors or other service providers. “A new study on perceptions of aging and longevity reveals that the median age that is considered “old” today is 80….”[8] Given that, some experts say that a change in terms may also be helpful. That is, advisors may want to try talking about planning for “longevity” rather than “aging.” However an advisor chooses to frame it, the need to plan for the potential physical and mental decline that comes with growing older is an important one.
[1] https://www.npr.org/sections/publiceditor/2024/03/07/1236651975/ageism-in-the-news
[2] https://www.investmentexecutive.com/inside-track_/susan-silma/5-ways-to-better-serve-aging-clients
[4] https://www.bcgbenefits.com/blog/future-proofing
[5] https://www.linkedin.com/pulse/what-advisors-responsibility-aging-clients-david-canter
[6] https://www.pbs.org/newshour/show/experts-describe-what-happens-to-our-brains-and-memories-as-we-age
[7] https://www.bbc.com/future/article/20230913-should-we-be-worried-about-older-politicians
These articles are prepared for general purposes and are not intended to provide advice or encourage specific behavior. Before taking any action, Advisors and Plan Sponsors should consult with their compliance, finance and legal teams.
Before leaping into the unknown, we recommend a thorough examination of your plan. Because we are experts in the field, we know the marketplace and know what your existing vendor is capable of offering. Through this examination, we can help you optimize the service you receive.
get xpress proposal
