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  • I’m GF with Folio[fn]. topic next to my name today is Technology driven platforms going to speak with you about technology in the financial services sector as exemplified by the company I work for – Folio[fn] joined FFN 6 months ago. I was employee number 49, now have 150 was with JPMorgan for 14 years, met Steve Wallman - signed nda, realized huge paradigm shift Folio[fn] is an e commerce financial services firm and we could not exist without technology and the internet.
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    1. 1. and By Steven Wallman CEO The Future of Financial Planning
    2. 2. We’ve All Heard “The Numbers About the Future” But to remind us: 75 million people (Baby Boomers) will be approaching retirement over the next 25 years
    3. 3. Growth in Retirement Population (Age 65-84)
    4. 4. Growth in Retirement Population Over Age 85
    5. 5. But, Older Age and Retirement -- Is Not the Same as It Was <ul><li>Not only is life expectancy getting longer, it’s getting longer faster </li></ul><ul><ul><li>So expectations about getting older need to be reset more swiftly </li></ul></ul><ul><li>Older Americans are also healthier </li></ul><ul><ul><li>No longer does retiring at age 65 hold the promise of only a few more good years </li></ul></ul><ul><ul><li>now it’s 20 -25 years instead of 10 -15, as it was as recent as 1980 </li></ul></ul><ul><ul><li>It holds the promise of a second career, of extensive travel, of continued vitality, and continued expense </li></ul></ul>
    6. 6. And End Of Life Costs… <ul><li>Are accelerating as medical technology gets far better -- and far more expensive </li></ul><ul><ul><li>Over one-quarter of total Medicare outlays are for care in the last year of life – and this has been unchanged over the last 20 years </li></ul></ul><ul><ul><li>More importantly, an individual’s medical expenditures in the last year of life are just under the annual median income for a U.S. family of four </li></ul></ul><ul><ul><li>And overall, all spending on medical costs keeps rising </li></ul></ul><ul><ul><ul><li>from over 15.4% of GDP in 2004, </li></ul></ul></ul><ul><ul><ul><li>growing to 18.7% of GDP in ten years </li></ul></ul></ul>
    7. 7. The Implications Obviously Are Enormous <ul><li>One-third of Americans appear to be on track for a reasonable retirement </li></ul><ul><li>About a third more are, at best, playing catch-up </li></ul><ul><ul><li>they can reduce expenses and lifestyle enough, and work longer, to retire about as they would like </li></ul></ul><ul><ul><li>but they have to make those changes </li></ul></ul><ul><ul><li>will they? </li></ul></ul><ul><li>And a third are so far behind today that Social Security or friends and family are likely to be their only saviors </li></ul><ul><ul><li>almost nothing they do will let them catch up </li></ul></ul>
    8. 8. Does Anyone Care? <ul><li>Obviously, we all do – </li></ul><ul><li>But what are we doing about it? </li></ul><ul><ul><li>Governments debate how best to encourage savings </li></ul></ul><ul><ul><li>Employers seek ways to assist </li></ul></ul><ul><ul><li>Financial services firms advertise products and services </li></ul></ul><ul><ul><li>And future retirees fret </li></ul></ul>
    9. 9. The Role of Government <ul><li>This is clearly a societal concern -- effecting all of us -- and having impact as to political policy making and social stability </li></ul><ul><li>It goes to the core of what kind of a society we want to be </li></ul><ul><li>But what can government do? </li></ul>
    10. 10. Employers <ul><li>There was a time when employers might have been expected to assist – or unions </li></ul><ul><li>In 1985, almost 80% of all full-time workers were covered by a defined benefit plan </li></ul><ul><li>Today, it’s closer to a third </li></ul><ul><li>Employers know the need is great </li></ul><ul><ul><li>they would like to help </li></ul></ul><ul><ul><li>but it’s not their core business </li></ul></ul><ul><li>And they have turned to DC plans because of lower responsibility and liability </li></ul><ul><ul><li>that will not change unless the law does </li></ul></ul>
    11. 11. Financial Services Firms <ul><li>The old adage is “securities are sold not bought” </li></ul><ul><li>Prospective retirees who see their future at risk are wary of trusting their broker – the default financial advisor </li></ul><ul><li>More easily accessed/trusted financial firms – banks and insurers – are not seen as experts </li></ul><ul><li>Firms are perceived to exist to sell products and services </li></ul><ul><li>Not to assist and help as honest problem solvers finding the best solution </li></ul><ul><li>But what/who else is there? </li></ul>
    12. 12. And So, Individuals Fret Over Their Own Retirement Planning Considerations <ul><li>Income </li></ul><ul><li>Accumulation & Growth </li></ul><ul><li>Risk Management </li></ul><ul><li>Tax Considerations </li></ul><ul><li>Estate and Planning Considerations </li></ul><ul><li>Flexibility </li></ul><ul><li>Complexity </li></ul><ul><li>Uncertainty, and all leads to </li></ul><ul><li>Worry </li></ul>
    13. 13. What Can Be Done To Help? <ul><li>Technology will help some </li></ul><ul><ul><li>The Internet provides an historic means to distribute information </li></ul></ul><ul><ul><li>It’s inexpensive, it’s interactive, it’s pervasive </li></ul></ul><ul><li>The pressure of the baby boomers will force markets, firms, governments and others to provide some response </li></ul><ul><li>But there needs to be a new professional that provides </li></ul><ul><ul><li>leadership, assistance and advice </li></ul></ul><ul><li>In an </li></ul><ul><ul><li>objective, </li></ul></ul><ul><ul><li>unbiased and </li></ul></ul><ul><ul><li>conflict-free manner </li></ul></ul><ul><li>To help people think about their future </li></ul>
    14. 14. This Needs A Broad Approach <ul><li>There is a real, and excruciatingly important, need to assist and provide help </li></ul><ul><li>There is a need for a professional to pull together a number of different disciplines, and interact with the professionals in each </li></ul><ul><ul><li>Medical </li></ul></ul><ul><ul><li>Legal </li></ul></ul><ul><ul><li>Insurance </li></ul></ul><ul><ul><li>Accounting </li></ul></ul><ul><ul><li>Spiritual, as well as </li></ul></ul><ul><ul><li>Investment and other Financial </li></ul></ul>
    15. 15. It Requires <ul><li>Considering the total picture </li></ul><ul><li>Realizing today’s investor is more knowledgeable and more involved </li></ul><ul><li>Revising assumptions about what a retiree will look like </li></ul><ul><li>Revising assumptions about how to meet their needs </li></ul>
    16. 16. Adapting to The Needs of The Market <ul><li>A percentage of the “retirement wave” will meet the traditional high net worth/advised client profile </li></ul><ul><li>But many will not </li></ul><ul><ul><li>Those that do not still need help/advice, and many will be willing to pay some for it </li></ul></ul><ul><ul><li>Can advisors and providers adapt their business models to meet the needs of this group? </li></ul></ul>
    17. 17. The Financial Planner Is In The Best Position To Lead <ul><li>Doctors are highly focused on their profession and its complexities </li></ul><ul><li>Lawyers are too focused on specific planning needs related to taxes and estates </li></ul><ul><li>Spiritual leaders are not trained in this arena </li></ul><ul><li>Brokers sell products – and they can adapt – but will they? </li></ul><ul><li>Financial planners are the best candidates </li></ul>
    18. 18. The Financial Planner As “ The Future Planner ” <ul><li>The job requires depth -- and breadth </li></ul><ul><li>The CFP ® certificant could add significant value by ensuring the ability of a professional who provides advice regarding future planning </li></ul><ul><li>In concept, a “Certified Future Planner” </li></ul>
    19. 19. Expectations <ul><li>Assist clients in taking inventory </li></ul><ul><ul><li>Housing </li></ul></ul><ul><ul><li>Healthcare </li></ul></ul><ul><ul><li>Lifestyle </li></ul></ul><ul><ul><li>Estate Planning </li></ul></ul><ul><ul><li>Etc. </li></ul></ul><ul><li>Assess needs </li></ul><ul><li>Manage the transition </li></ul><ul><ul><li>Rollovers and Distributions </li></ul></ul><ul><ul><li>Tax Consequences </li></ul></ul><ul><ul><li>What to do with the money </li></ul></ul><ul><ul><li>How to understand if it is enough </li></ul></ul>
    20. 20. Solutions <ul><li>Manage to the needs of the client </li></ul><ul><ul><li>Unified Approach </li></ul></ul><ul><ul><li>Transparency </li></ul></ul><ul><ul><ul><li>Fees </li></ul></ul></ul><ul><ul><ul><li>Investments </li></ul></ul></ul><ul><ul><li>Increased Diversity of Investment Selection </li></ul></ul><ul><ul><ul><li>Managed Accounts </li></ul></ul></ul><ul><ul><ul><li>Annuities </li></ul></ul></ul><ul><ul><ul><li>Alternative Investments </li></ul></ul></ul><ul><ul><ul><li>Reverse Mortgage </li></ul></ul></ul><ul><ul><ul><li>Etc. </li></ul></ul></ul><ul><ul><li>Holistic advice encompassing the client’s whole life </li></ul></ul>
    21. 21. Solutions <ul><li>Team Approach </li></ul><ul><ul><li>CFP ® professional as “team leader” </li></ul></ul><ul><ul><li>Involve other “expert” professionals </li></ul></ul><ul><ul><ul><li>Investment Management </li></ul></ul></ul><ul><ul><ul><li>Healthcare </li></ul></ul></ul><ul><ul><ul><li>Insurance </li></ul></ul></ul><ul><ul><ul><li>Attorney </li></ul></ul></ul><ul><ul><ul><li>CPA </li></ul></ul></ul><ul><li>Technology </li></ul><ul><ul><li>Enables this new approach </li></ul></ul><ul><ul><li>Tech friendly clients </li></ul></ul><ul><ul><li>Fee compression </li></ul></ul>
    22. 22. Conclusion <ul><li>Greater retirement – future -- planning need than ever before </li></ul><ul><li>Retirement needs to be redefined </li></ul><ul><li>Is this an industry prepared to meet the needs of the market? </li></ul><ul><li>There’s a need for a Certified Future Planner that can really, finally, bring this all together </li></ul><ul><li>Who can rise to this challenge? </li></ul>