By: David Macchia
Advisor Perspectives | November 29, 2021
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In terms of their future success, financial advisors have reached a “life or death” moment as they think about how they will operate their business over the next 5-15 years. Depending upon the decisions advisors make in the near term, their practices will either be setup for monumental growth or inevitable decline.
I know this sounds dramatic but let me make my case.
One-hundred years ago, the Roaring Twenties era was a period of economic prosperity, rapid social change, the emergence of new technologies, and a stock market that had reached never-before-seen highs. Sound familiar? The Roaring Twenties didn’t end well, of course, and it took an event as dramatic as World War II to pull the U.S. and the world out of depression.
Today’s world is in some ways quite different and in other ways eerily similar. In the 1920s, economic growth was generated by savings and investment – capitalism. In the 2020s, economic growth is generated by an entirely different system based upon credit. The economist Richard Duncan calls today’s economy system creditism. This is a monumental shift that I will further explore in this article.
Whether or not you agree that we are paralleling the Roaring Twenties, thoughtful financial advisors must ask themselves three important questions:
1. Are you confident about your prospects for continuing professional success over the next decade?
2. Are you intending to ”follow the money” by making income planning a focal point of your business strategy?
3. Are you male?
- Women are less knowledgeable than men about investing
- Her silence means agreement;
- It is acceptable, albeit unintentional, to talk down to her or make her feel undervalued;
- They naturally understand and are respecting her life journey and its implications;
- Women who are mothers think the same way as women without children; and
- Grandmothers want to support their grandchildren in a specific way.
We stand at the threshold of an unprecedented growth opportunity. Getting it right with income planning in general and for Boomer women in particular is your best path to a bright and prosperous future.
David Macchia is an author, retirement income industry entrepreneur and founder of Wealth2k, Inc. He is the developer of the widely used The Income for Life Model® as well as the recently introduced Women And Income™, the first retirement income solution developed for women investors.
1The portfolio has an asset allocation of 42.5 percent large company stocks, 17.5 percent small company stocks, and 40 percent intermediate-term government bonds and is rebalanced annually. The initial withdrawal amount was $1,686 per month, or for the first year $20,235 or 4.00% of beginning assets. The individual retiree withdrew the same dollar amount within each calendar year and adjusted annually for the prior calendar year’s inflation rate. The cost of funds in the portfolio is 100 bps annually. Fund returns are from Ibbotson, Morningstar.
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