Old people rock, and they are going to rock even more in the future.
So, pay attention to them, was the message of MIT professor Joseph Coughlin
during the luncheon keynote speech at the NICSA General Membership Meeting, held from September 19 to 20th at the Hyatt Regency Boston.
During a presentation titled, "Disruptive Demographics: How Aging Baby Boomers Will Change Consumer Expectations & Markets," Prof Coughlin gave mutual fund executives a number of insights regarding the revolutionary impacts of America's changing 45-year and plus population.
How does he know this subject? Prof. Coughlin runs his university's AgeLab, designed to study the evolving behavior and needs in relation to age.
The greying of America is no joke, according to the esteemed academic. In 1900, the average American expected to live to roughly 47. Now half of the babies born today in the first world are expected to live to 100.
"There were two things we could depend upon: death and taxes. Taxes, for sure. But now, death, not so much,"he said.
To demonstrate the importance of this trend, Coughlin noted that the funeral home industry is having problems due to a drop in sales, China is experiencing a shortage of workers, and recently, the amount of adult diapers sold in Japan is now larger than those sold to babies.
With one person hitting senior status every 7 seconds or so, the demands of this aging population is nothing to sneeze at. Baby boomers, he says, were the loudest, whiniest and most demanding generation to this the U.S. They will likely be outdone by their children, the Generation Xers, and their grandchildren, the Millennials.
They are also the most educated generation, and damned proud of it.
What does that mean for financial service firms? They have to provide smarter service, for one, and be aware of the networks and family groupings that impact customer needs. They need to have information technology robust enough to handle a flood of information requests, advisors trained in customer interactions and senior needs. They need to pay attention to the growing role of women as the family CEO.
What constitutes good services is becoming more complicated and more demanding. For example, Coughlin noted that at the turn of the century, the Ritz had just 10 rules for customer service that everyone followed. Now the rules have hit 20 and are growing.
"The notion of what our parents wanted is a lot different from what this generation wants," he said.
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