Friends, Finance, & the Future of Advice

1. Friends, Finance, & the Future of Advice Joseph F. Coughlin, Ph.D. Director April 29, 2009 Presentation to the Million Dollar Round Table

3. 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

4. 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

5. 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

7. 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.

8. 2. Social Networks Information Filter Emotional Filtering & the Older Consumer +enhanced emotion-regulation & social adjustment –missing negative (potentially crucial) information

9. 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.”

10. 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

11. 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

12. 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)

13. 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.

14. 4. Trust in “People Like Me”

15. 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

16. 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

17. 5. Boomers Need & Want More Information to be Better Planners

19. 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.

20. 6. Future of Advice

21. 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.

22. “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

23. 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

24. 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.