Longevity is part of the strategy

Demographic shifts will change the workplace environment and also offer companies new economic opportunities.

The world is getting older. Children born in the developed world today can anticipate living to 100 and beyond, and those of us arriving at old age in good health stand a very good chance of living into our 90s.

These shifts will change the workplace environment and also offer companies new economic opportunities. The impact of what’s known as the “longevity economy” — defined as the purchasing power of those 55 and older — is more than $US7.6 trillion in the US alone. Many business leaders are recognising that there are, and will continue to be, financial reasons to pay attention to these demographic shifts.

There is a difference, however, between simply identifying opportunities for new products or services for an older market and actually making the longevity economy part of a business strategy. How do you go from product opportunity to a change in business strategy? We’ve had the opportunity to work with and study companies that are doing that.

One company that is integrating longevity is Bank of America. In 2014, it convened multiple business lines for a strategic meeting. They reviewed the new demographic changes and asked leaders from each group to consider how longevity would ­affect their business and to identify the needs and opportunities it created.

Initially, the company asked: “What is on people’s minds when they think about retirement?” Research on the question produced a comprehensive framework called the 7 Life Priorities for financial advisers that helped people reach and navigate retirement. The program enhances retirement planning by focusing beyond financial health to encompass the seven major areas in which life priorities change in retirement: family, work, health, home, giving, leisure and, of course, finances.

New initiatives were also created to enhance the use of the new framework and the institution’s longevity strategy. The goal was to be sure client and advisers could address the simple question: “Are you fit to live to 100?”

This work, led by Lorna Sabbia, head of retirement and personal wealth solutions at Bank of America Merrill Lynch, yielded six new programs that take a more holistic approach to their clients’ needs, which became the guiding principle for the company’s longevity strategy. The programs were:

A specially trained longevity adviser force: Bank of America’s Merrill Lynch wealth management team hired the industry’s first financial gerontologist in 2014 to help the financial advisers better understand the needs of clients and implement the framework. The financial gerontologist provides training and other resources to educate clients on the topics of ageing, longevity, retirement and life planning.

Tools and resources for clients to prepare for longevity: Checklists and assessments were distributed to spur conversations between Merrill Lynch financial advisers and their clients, as well as within families to help navigate planning for healthy ageing and longevity.

Forums for discussions on longevity for the public: Communities across the country have held meetings for businesses and civic and non-profit representatives to start dialogues about longevity and its impact on them.

Financial education for clients: The company partnered with Khan Academy to create ­financial literacy videos and online resources on topics such as caregiving.

Tools for the unique planning needs of women: In 2018, Merrill Lynch conducted research on women and financial wellness. It identified a $1 million wealth gap for women by the time they reach retirement. These findings led to initiatives, tools and checklists focused specifically on women.

Employer partnerships: Bank of America provides employees with caregiving benefits, including adult back-up care, access to senior care managers who can evaluate care at a home or care centre, and elder care law services.

Susan Wilner Golden is the founder of the Stanford Centre on Longevity’s Innovation Hub. Laura Carstensen is the founder and director of the Stanford Centre on Longevity.