New Manulife survey finds advisor success in longevity planning, Julie Seberras highlights where advisors can still improve
A study from Manulife and the MIT AgeLab released today found that Canadians are thinking about their longevity but aren’t necessarily prepared for everything that comes with ageing. Grading Canadians’ self-reported preparedness for old age across eight categories, the survey found an overall score of 60 out of 100. Breaking out Canadians who have worked with an advisor from those who haven’t, the score split. Canadians with advisors scored 63 out of 100, while those without scored 57. For the total respondent cohort, scores were highest in community (75), social connection (69), and finance (66). Scores were lowest in health (55), home (53), and care (40).
Julie Seberras, Head of Wealth Planning at Manulife Wealth in Toronto, explained some of why she believes Canadians’ preparedness for more personal and health-related aspects of aging still lags behind their social and financial preparedness. She outlined the role advisors have played in building confidence to the state it’s in today, while sharing how she thinks advisors can go further and help clients build an even greater understanding of their finances.
“Retirement planning for so long has been a question of what age do you want to retire and our time value of money calculations to determine how much do you need to be saving between now and then to hit those very quantitative goals,” Seberras says. “And I think that what really stands out for me is that although we might have these longer lives, we're not necessarily all going to be living our best lives. Financial advisors need to have an evolved conversation beyond the quantitative to really help Canadians prepare for this.”
How to talk about health, long-term care as a financial advisor
Seberras attributes the broadly low scores on health and care related metrics to the simple fact that advisors role is focused on financial preparedness. Offering health advice or guidance can be tricky at best and topics around health decisions are far from advisors’ expertise. There is also an element of squeamishness among advisors and clients about topics like long-term care. Seberras accepts that the ambiguities and difficulties of a long period of time in some kind of assisted living is a risk that many people don’t want to reckon with. However, that is a risk with financial implications and those financial implications can open up a conversation for advisors.
Rather than offering health advice, Seberras believes advisors can lead with statistics around the number of Canadians who will need some kind of long-term care in their later years. They can tell stories about other clients or family members that demonstrate the value of preparing for this possibility. She emphasizes the power of storytelling as a motive force for clients, prompting them to have conversations with family members, medical professionals, and estate lawyers and better prepare for the possibility of deteriorating health, home retrofits or relocation, or the chance that they might need long-term care.
Advisors’ role in longevity preparedness
The study showed that, on the whole, advisors have improved their clients’ preparedness for longevity. While Seberras says there is still further to go, she said that advisors have the unique capacity to prompt reflections that might not happen otherwise. DIY investors, she says, may view retirement purely in its positives without being prompted by an outside voice to consider some of the harder parts of growing old. They can ask about what a client might do if they lose some mobility, or if they have a health crisis. They can ask about the expectations they might have for their family, or what kind of care they might want to receive. Crucially, they can ask these questions before any kind of crisis occurs, allowing for more rational and considered decisions.
Wealth may also be a factor in higher preparedness scores among advisors’ clients, given the fact that Canadians with advisors tend to be wealthier than Canadians without advisors. That higher net worth can help with overall preparedness, Seberras admits, but she believes it also opens up other planning challenges around longevity. Many higher net worth Canadians are business owners or professionals whose lives and identities are closely tied to their work. For that cohort, longevity planning also means reckoning with who they will be when they are no longer working, another area where an advisor’s thoughtful questions can prompt reflection and positive decision making.
The results of this survey also show just how far the financial advice industry has come, from distributing mutual funds to planning for clients. Seberras says she has seen that transition over the course of her career and notes that more and more advisors and dealers now understand that the path to deeper client relationships runs through their financial plans. She’s seen how advisors have added hard and soft skills to their own repertoires to build comprehensive plans and prepare their clients for what’s to come.
“This is really about those relationship building skills. So I think that's where we can always evolve. I think advisor upskilling is really understanding the financial impact of these things that we need to be thinking about: housing, care, social connections, and planning for them,” Seberras says. “But also, really letting clients know the risk of outliving your money, that risk of not feeling that purpose and identity and mattering, the risk that you're going to have a crisis scenario that you have not planned for. I think it’s the relationship side of things. We're in a relationship business and that's what's really going to differentiate advisors.”
