Life is more complex than ever. In the past, people studied, worked, married, retired, and died. In that order. In a straight line. Now people study, work, marry, divorce, study, work, live with a new partner, get retrenched, emigrate, study, work, perhaps retire, and die. All in an unpredictable pattern. Stop, start. Add longevity and the complexity compounds. Every new life phase introduces multiple choices.
Money becomes more complex than ever. And there are more money decisions than ever. Because change requires decisions about money.
Can I afford to change my career at fifty?
How do we as a blended family live together but keep our money separate?
What do I do to get back on my feet after retrenchment?
How do I ensure that my divorce doesn’t ruin me financially?
If you tell me to prepare to live to 100, what do I do with all that time, and will my money last?
These are all questions few people needed answers for 100 years ago, even 50 years ago.
The social divide complicates it further. Wealthy people have even more choices.
How much can I afford to spend on setting up my children financially?
How much can I give to a cause that matters to me but still ensure my own financial security?
Often, these decisions have nothing to do with financial products. It just involves the intersection of money and life and what to do. Sure, some financial expertise may be required to calculate how long your capital will last, or what the best way is to split your assets during divorce, but it’s not always the case.
Who will help you think through these questions?
This is where the future and the skill set of financial planning is beginning to grow. In our own business, we’re seeing our role expanding – increasingly we are helping our clients think through the financial implications of life decisions or life events. We’ve been learning about the best way to play this role and have had to go back to study too, just like our clients. To learn how to best fulfil this role. It’s walking away from the singular role of being an expert professional towards becoming the thinking partner skilled in exploratory conversation and seeking solutions.
Life will not become less complex. Change is likely to speed up and with it, complexity too. The relationship between clients and financial advisors must evolve too to thinking partnerships so that it can serve the complexity of the complex and changing future life.
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