Good Morning, my name is XXXXXXX and what I would like to do with you over the next 40 or so minutes is challenge some of your thinking and perspective on where we have been where we are and where we are heading against the background of what has been, without doubt, a challenging economic climate.Quite frankly, the game has changed – in so many ways. The way we invest, the way we make financial decisions, the way we give advice and the way we engage with our clients. If we haven’t adapted to those changes yet, we’re in for a wake up call pretty soon because the new world is coming.
Jason Robinson – League to UnionJonathan Edwards – Union to League and back to UnionAndy Farrell – League to UnionGareth Thomas – Union to League
All of this information is processed by our brains and it has been proven that the brain is split into two halves, left and right. The left brain considers all things analytical and the right brain relies on emotion. Everything that our industry produces, delivers and concentrates on is aimed at the right brain – for good reason in many cases – as we have evolved through the regulatory landscape, examination regimes and compliance guidelines. The issue is that the right brain does not make decisions in many situations – the left brain does. The heart rules the head.
As we in the UK move forward to a world post RDR, managing client relations becomes our day job. It is dificult to do that without an understanding of the factors which influence decision making. Established in 1997, the Mature Market Institute (MMI) is MetLife’s research organization and a recognized thought leader on the multi-dimensional and multi-generational issues of aging and longevity. MMI’s groundbreaking research, gerontology expertise, national partnerships, and educational materials work to expand the knowledge and choices for those in, approaching, or caring for those in the mature market. MMI supports MetLife’s long-standing commitment to identifying emerging issues and innovative solutions for the challenges of life. In 2009, the MMI published its findings on the role of “purpose”. The MMI developed a model of purpose based on the work of best-selling author, executive educator, and life coach, Richard Leider. Research for this study was conducted by the custom market research and consulting firm, Chadwick Martin Bailey. The study reveals common themes in the model of a Good Life and looks at how to achieve this, the core components and what triggers and transitions we experience in the journey.
People pursue a positive state of being, called the Good Life, by continually rebalancing their priorities among various activities that can be assigned into the four core components of Money, Medicine, Meaning, and Place. The process of pursuing the Good Life is likened to a journey made up of numerous transitions brought on by external trigger events which need to be resolved through three phases called unpacking, repacking, and limbo. Throughout this journey, people need to achieve a balanced level of vision and focus in order to appropriately make the trade-offs that allow them to live the Good Life.Analytic Method: The primary intent of this study was to explore the importance of the Good Life and the processes people engage in to attain it. This research quantitatively measured the trade-offs—choices among equally attractive options—people make in their lives to achieve or maintain their version of the Good Life. These choices represent the relative importance of competing aspects in their lives.To measure the value placed by people on the four core components, thirteen activities were identified and assigned to Money, Medicine, Meaning, or Place. These thirteen activities represent the potential areas in which trade-offs are made and were used to gauge respondents’ focus from different time perspectives in their lives. A number of sophisticated analytical methods often used in product and service research were applied to the context of life meaning, purpose, and attributes of the Good Life.
But now may well be the time to embark on a programme to deliver the certainty that everyone is looking for – it is a three stage process:ProtectGuarantee and secure your investment from future market downturns. Additional peace of mind and protection for your familyRecoverWatch your investment grow Capturing potential market growth at regular intervals.RepairHelp future income recover further by growing it by a minimum 3% annually for each year income isn’t taken.
Compliance slide and wind up.
Have you had your wake up call ?Richard Sheppard
Point of Maximum Financial Risk Point of Maximum Financial Opportunity Euphoria Anxiety Thrill Denial Excitement Fear Optimism Optimism Desperation Relief Panic Hope Capitulation Despondency Depression Source: Janus, March 2001 Investor psychology
Discovering What Matters - A Model of the Good Life Balancing Money, Medicine & Meaning Achieving a Good Life Core components Triggers & transitions
Activities Integral to the Good Life Money Medicine Meaning Place Source: Discovering What Matters: Balancing Money, Medicine and Meaning, MetLife’s Mature Market Institute, January 2009.
Relative Importance of Four Life Themes Based on Age Balancing Money, Medicine, Meaning and Place Money has LESS importance as we age Source: Discovering What Matters: Balancing Money, Medicine and Meaning, MetLife’s Mature Market Institute, January 2009. Based on points allocated to four core components.
Change of Focus Accumulation Phase Distribution Phase Return on Investment Reliability of Income
Will the Sequence of Returns Matter?1 £1 million Nest Egg £3,800 Monthly Withdrawal + 3% Inflation Compare two repeating sequences of returns 27% 27% 17% 17% 8% Average Return -20% -20% Depleted in 25 years Depleted in 30 years 1.) Source: Moshe Milevsky, Ph.D.; IFID. 2.) Assumptions: Hypothetical return of 17%, 27% and -20% in 3 year cycle for life of investment. Hypothetical investment management fee of 2.05% (0.8% fund company management fee and 1.25% WRAP fee. 3. Assumptions: Hypothetical return of 17%, -20% and -27% in 3 year cycle for life of investment. Hypothetical investment management fee of 2.05% (0.8% fund company management fee and 1.25% WRAP fee.) Figures, calculations, and graphs are for illustrative purposes only. They are based on hypothetical rates of return and do not represent investment in any specific product. They may not be used to predict or project investment performance. Unless noted, charges and expenses that would be associated with an actual investment are not reflected.
The Risks Many people greatly underestimate the time they will spend in retirement 50%chance of living beyond 25%chance of living beyond Popular retirement age Male 85 92 65 Female 88 94 65 Couple At least one person has a chance of living beyond: 65 97 92 Source:MMI Retirement Income IQ Study June 2008
Now is the Time Protect Guarantee + secure investments from future market downturns Additional peace of mind and protection for the family Recover Watch the investment grow Capturing potential market growth at regular intervals. Repair Help future income recover further
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