Physicist Richard Feynman once said, “The first principle is that you must not fool yourself – and you are the easiest person to fool.” More than most, advisors understand the truth at the heart of that claim. Even in their dealings with sophisticated clients, there’s often a wide gulf between perception and reality.
We tend to view our own finances with rose-colored glasses. Nearly two in three Americans ages 45 to 65 feel they’ll have enough money to hold them through their golden years, according to a USA Today poll. The reality? The median working-age couple had saved only $5,000 toward their retirement, as reflected in a 2013 study by the Economic Policy Institute. Only a third of working Americans are contributing to their 401(k) plan, and older Americans are entering retirement with more debt than ever before. Even high earners can have difficulty projecting how much they need to maintain the lifestyle they want in retirement.
Sitting with a client 20 years ago, going through the standard first-meeting questions, Sheryl Garrett was young, smart and secretly terrified. Despite her eight years in the business, she was plagued with self-doubt about her worth to older and more experienced clients. And she hated wearing business suits.
But do humans in the financial industry have anything to fear from such new technologies? We posed that question to Paolo Sironi, a thought leader for IBM’s Watson Financial Services and the author of the book FinTech Innovation: From Robo-Advisors to Goal Based Investing and Gamification. In an exclusive chat at this year’s Morningstar Investment Conference, he sat down with us and shared why advisors should actually be excited about technology.
As the fintech revolution expands, everyone from venture capitalists and budding entrepreneurs to established industry giants is vying to cash in this industry disruption. But industry analysts at this year’s Morningstar Investment Conference point to a surprising potential winner: the financial advisor.
We’re asking some of the best and brightest financial advisors to share the toughest questions they hear from clients. This month, we talked to Jeff Landers, the founder of Bedrock Divorce Advisors, a financial advisory firm in West Palm Beach, FL, which focuses on helping women wade through the murky waters of divorce. When it comes to the drama of decoupling, he’s seen it all.