Speaking to Accountants Daily, Brie Williams, who is vice president at State Street Global Advisors and head of practice management for the Global SPDR Business, said that the accounting industry has a duty to assist their investor clients in creating a cognitive plan.
“Wealth management conversations around ageing focus on retirement income planning and investment allocations, but what’s often overlooked is plan development to manage the financial risks associated with a change in an individual’s cognitive abilities,” Ms Williams said.
“Addressing this risk should be a part of every investor’s comprehensive financial life plan.”
Ms Williams said that this is an area of advice that accountants are currently not leveraging to its full potential.
“The advisory industry has room for growth here; especially when you consider figuring out how to turn savings into income is one of the most important and complicated decisions people face as they move from middle age to elder-hood,” Ms Williams said.
Referencing the Australian Institute of Health and Welfare, Ms Williams said that by the year 2057 the number of Australians aged 65 and over will more than double. Further in 2016, 15 per cent of the population (approximately 3.7 million Australians) was aged 65 and over. Specific to brain health, nearly 1 in 10 Australians aged 65 and over had dementia in 2016.
“Avoiding the issue simply means increasing the potential for adverse financial decisions. From the client perspective, holding a clear discussion on ageing-related risks as part of the retirement planning process will not only give them the control they desire, it will be a proactive measure to protect themselves and their family,” Ms Williams said.
“Advisers and firms cannot afford to sit back. As an industry, we can make this important topic relevant by appealing to clients’ practical side. Establishing standards will help advisers not only better serve their clients, it will help advisers improve how they manage business risk.”