fintech

Financial industry, baby boomers, and fintech, the next step.

No issue looms larger for the financial advice industry than demographics and the aging of the baby boomers.

Over the next several decades, the biggest and wealthiest generation in U.S. history will transfer roughly $30 trillion in assets to their Gen X and millennial children, and if studies are accurate, most of those children will promptly fire their parents’ advisors.  At the peak, between 2031 and 2045, 10 percent of total wealth in the United States will be changing hands every five years. Capitalizing on these intergenerational shifts in wealth will be critical for the long-term success of wealth management firms.

“Studies regularly show that when wealth passes to another generation, in the majority of cases, the heirs change financial advisors,” said Gauthier Vincent, head of Deloitte’s U.S. Wealth Management practice. “The relationship between assets, asset owners and financial advisors is unraveling before our eyes.”

This tidal wave is approaching like a tsunami sitting hundreds of miles offshore. You know it’s out there but many in the financial industry have not taken sufficient steps yet to weather this storm. Understandably, most are focused on generating revenue now and servicing higher net worth clients like the baby boomers. The financial advisory sector has already seen significant disruption from the fintech startups dominating the “robo advisory” space. Companies like Betterment, Wise Banyan, and LearnVest have been targeting the GenX and Millenials who were traditionally avoided by the more established advisory companies.

“Indeed, firms in all corners of the industry — from banks and wire-house brokerages to asset managers and even insurance companies — have seen the light. They are either building out digital-advice platforms, as Charles Schwab and Vanguard have done, buying them like BlackRock and Northwest Mutual Insurance did, or partnering with online advisors, as UBS recently did with SigFig. The RIAs, most of whom can’t make the investments, are accessing the fintech tools through custodians such as Schwab, Fidelity and TD Ameritrade.”

Those companies that don’t embrace fintech technology to attract the next generation of clients will likely fall behind and not survive as the last of the baby boomer clients pass away. Finding innovative ways to stay ahead of this generation wealth transfer will be paramount to succeeding. Creating engagement and value for the adult heirs of the baby boomers is critical to keeping them as clients. I do think the best way for large and often slow moving financial service firms to accomplish this is to actively work with fintech companies who are far more effective adapting to the consumer needs and putting products in the marketplace.

Tools that allow the parent and adult children to interact via an online or mobile application where the heirs see the value of what the advisor is providing to the family.  For example, DocuVital stores critical documents and information that the children will need when wrapping up the affairs of their parents. White labeled or co-branded solutions will insure the advisors stay in the mind of the consumer when they are using the products.

Inaction and indecisiveness by the financial advisory sector will surely cause significant damage and some companies will not survive if they fail to proactively mitigate the wealth transfer issue.

employee benefits

What’s ahead for 2017 and employee benefits?

Predicting or forecasting about uncertain events isn’t based on extrasensory perception or an informed guess. And it’s usually not a scientific explanation. Most of the time, predicting trends is based on experience or knowledge. In the case of employee benefits, it’s more about understanding the industry and what the players in the industry — including the workforce, employers, brokers and providers — are saying and doing.

Today’s diverse workforce, coupled with employees’ desire to choose benefits that are important to them, means that companies are recognizing the role that nontraditional benefits can play in distinguishing their employee benefits package. There’s no doubt that traditional voluntary benefits that supplement core benefits are important. However, with a workforce dominated by millennials — who clearly want it ‘their way’ — the availability of nontraditional benefits provide a way for employers to engage employees in all generations.  In broaden the horizons of wellness, employers need to focus plans not only on the physical and nutritional aspects, but also to expand into mental soundness and financial stability.

Craig Schmidt, senior wellness consultant at EPIC, has seen a strong focus around three main areas: mindfulness, stress and financial wellness.

“This is a different trend than what has been done in the past with regard to traditional wellness programs where the industry would identify a chronic disease risk and focus their efforts solely on nutrition, activity and … avoiding a chronic condition, instead of living a healthy lifestyle and improving healthy behaviors,” Schmidt says.

This year, wellness consultants maintained a growing focus on financial wellbeing. Some approached these programs by offering debt assistance programs, many directed toward assisting with student loan debt. This approach not only helps the employee with paying off a loan that could very well last decades, but it also increases retention of millennial employees who have been known not to stay with a single company for long periods of time.

Financial wellness and college debt “is a growing concern and employers want to assist and help employees be better fiscally, but at this time its uncharted territory that we don’t know what the results of the programs are or what employees are looking for on an individual basis,” Schmidt says.

Expanding mental wellness

In an attempt to break the stereotypes and stigmas around mental health, many wellness consultants are making a push to encourage the use of mental and social assistance programs like EAPs, in the workplace. Emily Noll, national director of wellness solutions at CBIZ, says more employers are seeking mindfulness and resiliency programs on a regular basis to reduce stress and improve employee engagement.

“CEOs and CFOs are paying attention to the data on the benefits of meditation practice, yoga and other techniques that yield better focus, more creativity and make their employees better equipped to solve problems and avoid workplace conflict,” Noll says. “One HR director told me that when she boarded the train to head home in the evenings she would doze off, but after participating in a weekly at-work mindfulness program, she felt more energized during her work day and was alert even on her commute home.”

Looking ahead to 2017

When Schmidt looks ahead to the coming year, he predicts there will be more focus on mental, emotional and mindfulness in the workplace. “I see there being a focus on engaging employees in their work, and mindfulness will play a large role,” Schmidt says.

On top of an increased awareness of mental and emotional need, Schmidt says there will be more attention on corporate culture, with companies focusing on creating an environment where employees want to be at work.

“Millennials are known to be the job hoppers and millennials now make up a large portion of the workforce. Retention of these employees is going to be an important focus in the battle for talent,” he says. “Wellness will be a difference-maker to this group, as worth, value and well-being is an important focus for millennials.”

Noll agrees with Schmidt’s prediction of an emphasis on corporate culture, saying companies will need to provide more training for leaders and managers on how to improve culture, well-being and engagement. “Managers have a significant influence on their employees and developing high performing teams — team members need to be well to perform at their best,” Noll says.

Are you ready for 2017??

millenial

Why Millenials need a plan too…

Much has been made of the challenges of managing the different generations in the workplace, from baby boomers to Gen-X’ers to millenials. Without going into all the stereotypes usually associated I wanted to address one stereotype I found prevalent as I began working in the human resource space with DocuVital: that millenials don’t have very many possessions to worry about and thus they don’t need to plan ahead in case of an emergency or death.

For example, as I meet millenials they commonly state that since they don’t own a house, have little, if any, in a 401k, don’t own a car(think UBER), and have no other significant assets, that they don’t need to make a will or do any type of end of life planning. When I dig a little deeper into the conversation with them and their life, it becomes readily apparent that they have much more than they realized.

Millenials are more mobile than previous generations. A new study by LinkedIn found that young people really do change jobs a lot more than their parents did. The new normal is for millennials to jump jobs four times in their first decade out of college. That’s nearly double the bouncing around the generation before them did. What does this mean? If they acquired any benefits such as 401k, life insurance, company equity, etc., this needs to be well documented with a third party source so that if something happens to this person, their family can easily find these benefits. Otherwise significant assets can be lost and end up in state coffers.

Millenials are not just more mobile with jobs but also with travel. Millennials can afford to add extra time to their business trips, and an Expedia study found that Millennials are 62% more likely than older employees to extend a business trip into a holiday. Others may turn their business trip into a “bleisure” holiday by making the most of any downtime, using it for leisure activities or simply seeking local culture. More travel means that having secure and independent backup of documents such as passports, immigration/visa papers, wills, identifications photos, etc., becomes even more important. Imagine being stuck in a foreign country losing a passport? Having access to backup copies in an online solution can greatly reduce your problems in this situation.

Millenials are less likely to be homeowners, car owners or parents than their predecessors, but they do lead in one category: Pets. Three-fourths of Americans in their 30s have dogs, while 51 percent have cats, according to a survey released by research firm Mintel. That compares to 50 percent of the overall population with dogs, and 35 percent with cats. What does this mean? In case of an emergency or death, someone needs to be able to take care of the pets either temporarily or permanently. Millenials are obsessed with their furry loved ones and thus the need to protect them when they are gone is very strong although my experience has shown few have done anything about that. Just like the conversation parents must have to decide who will take care of their children, millenials who are pet owners must be educated to do the same. After all, most millenials consider their pets as their children.

There are many other non traditional benefits also that millenials have accrued in large numbers such as credit card rewards, airline miles, hotel points, etc. These all need to be documented and stored so that they can be passed on to loved ones. Helping your millenial employees or clients with these issues will have a big impact on their life.

religion

Religion and end of life…Do your doctors know your decisions?

Talking about death is an emotionally fraught and daunting topic, and we applaud the growing number of congregations that are giving their members tools and resources to have such conversations with their families and loved ones around end-of-life preferences.

But as important as these discussions are for families, they are only half the story when it comes to end-of-life planning.

It is also crucial that health care providers are prepared to have end-of-life conversations with their patients, especially when religion plays a role in the patient’s health care decision-making.

To be sure, the “faith factor” is not uncommon. In the United States, a country where 89 percent of people believe in God and 78 percent say that religion is important to their lives, religion will inevitably emerge in health care.

In fact, one study has actually found that 41 percent of patients can think of a time when religion influenced one of their health care decisions. The impact of religion on medical treatment can involve anything from patients’ need to have a kosher, halal or vegetarian meal when in the hospital, to their requests to coordinate medical procedures around prayer times.

The most profound intersection between religion and health care, however, may be in end-of-life care.

The truth is that religion can influence the procedures patients want to receive, or reject. Are they comfortable starting artificial nutrition, hydration and respiration, for example? Or removing these supports once they are in place? Do they accept brain stem death as the moment of death? Or do they want a religious figure to be involved in the end-of-life decision-making process?

Religious beliefs may affect patients’ beliefs about the afterlife and help frame their illness in a context that medical professionals need to understand.


And yet, health care providers are often ill-equipped to discuss religion when it does come up, with one study finding that 20 percent of medical residents reported being unprepared to care for patients whose religious beliefs affected their treatment.

This discomfort, coupled with doctors’ lack of training around end-of-life care, means that important conversations about how religion affects patients’ end-of-life decisions simply never happen.

Take, for instance, the story of Mohammad Kochi, a Muslim who immigrated to the U.S. from Afghanistan. Kochi was diagnosed with gastric cancer and his doctors recommended a continuous infusion pump for chemotherapy. When Kochi refused the continuous infusion pump, his doctors never asked why; instead, they assumed that his religious beliefs had led him to decline all medical treatment because he believed it was his time to die.

In reality, Kochi refused the pump because he wouldn’t be able to follow his practice of praying five times a day if something broke his skin, which the pump would do. (In some cases, religious authorities say that an open cut or bleeding can impede a Muslim’s fitness to pray.)

He would have accepted other kinds of chemotherapy, but they were not offered. This miscommunication, and the health care team’s failure to ask Kochi how his beliefs influenced his decision-making, led to a significant and costly delay in his care.

It doesn’t have to be this way. But it can only change if systematic, preparatory training is provided to medical students and residents, to nurses and nurses’ aides — training that goes beyond a one-off course in cultural competence.

They need expertise in taking a spiritual history — i.e., asking patients appropriate questions about whether they have religious or spiritual beliefs or practices that may impact their care — as a routine part of taking a patient’s history.

Even when patients don’t know right away what their care might entail or how religion may be relevant for them, asking these initial questions can open the door to further conversations and make the patient more comfortable voicing their beliefs if and when they become relevant. The result can lead to better care every day, and certainly as life draws to a close.

But clinicians need to learn even more. Like recognizing signs of spiritual distress so they can refer patients to pastoral care for spiritual support and guidance.

These should be skill sets that we expect from our providers, skill sets they are trained to execute, without ever imposing their own beliefs on their patients.

Today, we do see more and more organizations and communities, including religious communities, promote open, honest and proactive conversations around end-of-life preferences.

As that trend continues, it is important to make sure that health care providers are also prepared. They need the training and resources to ask about a dimension of many people’s lives that influences their health care choices, and then incorporate their patients’ religious beliefs and practices into a plan for care.

As patients and family members of patients, we should expect nothing less.

Great piece from:(Eliza Blanchard is assistant director for Workplace and Health Care Programs at the Tanenbaum Center for Interreligious Understanding)