The global demographic shift towards an ageing population presents challenges and opportunities for the financial services industry. As life expectancy increases, individuals live longer, healthier lives, redefining retirement. This trend, often called the "longevity economy," demands innovative approaches to financial planning and wealth management.
Key Trends Shaping the Longevity Economy:
Longer Life Expectancy: Individuals are living longer, requiring financial planning for a longer retirement horizon.
In Canada: RBC Wealth Management’s “Path to Longevity” initiative supports Canadians in planning for extended lifespans.
In the U.S.: Institutions like Merrill Lynch, Bank of America, and Raymond James are redefining retirement narratives to focus on "living longer, healthier lives."
Global Insights: A Morgan Stanley and Oliver Wyman report predicts the "longevity ecosystem" could unlock $400 billion in revenue by 2028, emphasizing the untapped potential in this market.
Healthcare Costs: Rising healthcare costs necessitate comprehensive financial planning to cover potential expenses.
Sun Life Financial: Offers integrated products like long-term care insurance and health savings accounts.
Manulife: In collaboration with TELUS Health, it provides digital tools for managing prescriptions and virtual doctor visits, aligning health and financial wellness for older adults.
U.S. Innovations: Companies like Foxo Life and Fountain Life are transforming health insurance and preventative care models to reduce long-term risks.
Digital Adoption: Older adults are increasingly embracing technology, opening new avenues for digital financial services.
Changing Retirement Patterns: Flexible work arrangements and delayed retirement are reshaping traditional retirement models.
Canadian Trends: Life-cycle funds adjust asset allocations as clients age, shifting from equities to fixed-income investments for steady income.
Challenges: Deloitte's "Running out of Time" report warns that over 55% of near-retirees may need to make lifestyle compromises or delay retirement due to insufficient savings.
Financial Services Industry Response:
Personalized Financial Planning: Tailored advice to meet the unique needs of older adults, including retirement income planning, estate planning, and long-term care.
Innovative Product Offerings: Developing products like annuities, reverse mortgages, and long-term care insurance to address specific needs.
Digital Solutions: Leveraging technology to provide user-friendly digital platforms and mobile apps for seamless financial management.
Financial Wellness Programs: Offering resources and tools to help clients make informed financial decisions and achieve economic well-being.
Collaboration with Healthcare Providers: Partnering with healthcare providers to offer integrated solutions that address health and financial needs.
By embracing these trends and adapting to the changing needs of an ageing population, financial institutions can position themselves as trusted advisors and drive long-term growth.
Source: YouAreUnltd
Comments