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Lumiant Update - May

G’day to all you fantastic life-first advisors,


In our latest Lumiant update, we wanted to share what we’ve been reading in the industry and give you our perspective on some of the challenges impacting financial advisors across the globe, including:


We also wanted to share with you a couple of small updates to our platform - including updates to our expected returns in our Best Life tool.


Let’s dive in!


P.S. As always, let us know what you think of this week’s newsletter


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🛠️Product Updates

Best Life expected returns updated

Each year, our team updates the capital market assumptions that inform and guide our Monte Carlo modeling module, Best Life. The modeling tool helps financial advisors and their clients understand whether they are on track, overfunded, or underfunded when it comes to living their best lives.


The module does this by running thousands of simulations to identify the 80th, 50th, and 20th percentiles to visualize optimistic, likely, and pessimistic outcomes for clients. The returns are guided by our underlying asset allocation for each risk profile, taking into account asset class correlations, capital market forecasts, and standard deviations.


Additionally, we understand that markets change and it is impossible to predict a certain future. As such, our return simulations do not remain static. Each time you run a projection, the results will differ, giving you a visual aid that brings to life the uncertainty of trying to predict the markets.


Want to learn more?




 

💡Insights

Die with Zero book by Bill Perkins

Die with Zero is a much popularized financial strategy advocated for by Bill Perkins that keeps hitting the headlines. So we thought we’d chime in with our thoughts on the philosophy and whether it should be something financial advisors should advocate to clients.


The short answer: to an extent.


While we believe his mathematical equation for retiring comfortably is overly simplistic, with a linear time horizon for the minimum we need, it does offer a good perspective on how we should get clients to think about retirement.


It’s all about living a rich life.


In this article, we argue the case for flipping the script and starting to frame the longevity conversation in financial planning as living to zero. That doesn’t mean we’re advocating for consuming all your wealth and leaving nothing in your estate. Rather, they intentionally plan what they want to do with their wealth in retirement and beyond!


And it all starts with answering the question, “How long can I live?”


How? Read the article to discover more about our philosophy of living to zero.




 

According to the Census Bureau, by 2034 older adults will outnumber children for the first time in US history. While a long life is one of humanity’s greatest achievements, not everyone will have the quality of years along with the quantity of years. This article looks at what impacts our ability to age well, from systemic inequities to healthcare and lifestyle choices.


If you’re looking for a tool to help improve your longevity planning with clients, check out Lumiant’s HALO. This powerful Health Analysis and Longevity Optimization assessment, backed by science, enables you to better understand a client’s longevity based on demographic, health, and lifestyle factors.





The article goes on to advise people to build a “longevity portfolio” to build resilience in this new era of longevity. This portfolio includes our health, education, skills, and work options, relationships and social connections, community resources, and finances.


Sound familiar?

Lumiant's eight dimensions of wellbeing
 
72% failure rate for financial planning rookies

A recent Cerulli report has found advisor headcount in the US was largely unchanged in 2023, with the number of advisors growing by just 2,706 in 2022. In fact, the number of new advisors barely offset trainee failures and retirements, emphasizing the critical need for the industry to attract and retain talent.


The report also found that the industry is set to lose 109,093 advisors, or 37.5%, to retirement putting 41.5% of assets at risk (over $10 trillion).





This is a problem Australia already faces, with less than 16,000 advisors in the industry - not nearly enough to assist Boomers with their retirement plans, let alone those who have simpler advice needs.


What can you do about it?


We believe firms have a number of different levers they can pull to help address the capacity crunch:


  1. Design an advice experience that’s repeatable, scalable and consistent. One that can be easily replicated by any member of the team, no matter how experienced the shoes are that they are stepping in to. Want to learn how to create a VIP advice engagement experience? Read more here →

  2. Implement new training programs to help upskill junior advisors. These advisors often have financial planning requirements in hand but have yet to gain enough experience in engaging and connecting with clients on a deeper level. Luckily we can train to that, something which Tom Frisby and Mark Akeroyd discuss in this Into The Lumiverse Episode → Also - any advice firm can make use of the free training that’s out there already, such as our Lumiant Academy, which has accredited courses to support advisors in delivering extraordinary advice experiences.

  3. Use technology to help you deliver personalized experiences at scale. Not only can technology provide you with tools to gather client information quickly and personalize advice but by keeping all your client information in a central location, it means any advisor can review their records and engage with them on a deeply personal level. We discuss this and more in a webinar we conducted with our partners LibertyFi, which you can watch here →

 

We hope you enjoyed this newsletter. We’d love to hear what you think and how we could make it better and support you in creating extraordinary client experiences.


So, what do you think?


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