FIR can make you happier

REAL SOLUTION: RETIRE FINANCIALLY SECURE

People are living longer at a higher standard and the population is growing.

Retirement is the most certain risk we face – and most people find it hard to mitigate. The fourth industrial revolution (FIR) has some solutions, beginning with helping you to understand your retirement status.

We are all living longer and at a higher standard, and populations are growing, especially in Africa. At the same time, advances in technology, FIR, are actually reducing employment opportunities.

These are big problems but, as always, we shouldn’t be daunted. In fact, the FIR wealth managers offer a way to begin providing a real solution to a related challenge: how to ensure that people are able to retire financially secure.

This is a huge issue in South Africa: already over 90% of South Africans will not have the capital to retire securely and will either have to continue working as long as they can, or accept dependence on the state or their children.

Long-lived and dependent parents are not a recipe for a happy family, to put it mildly.

That pain leaches into society because each financially secure family indirectly supports another 10 directly by providing employment and indirectly by buying goods and services and so stimulating the economy. The more financially secure families there are, the stronger the economy and more chance of inclusive growth.

Rising longevity trends mean that retirement is the most certain risk we face. The solution is to give people the tools to take control of their own financial destiny – and that’s where FIR comes in.

If a healthy body is one prerequisite for making a longer lifespan enjoyable, then a healthy wallet is surely another. Cue the emerging world of wealth-creating apps.

We see the potential of apps to help clients take control of their financial affairs and really understand the impact of the choices they make now for their long-term future. We began working with such an app, appropriately called Wealthbit, some two years ago.

It became clear to us that, just as in the fitness-health area, a wealth coach is needed to help clients navigate the complex world of global investment, and create the right strategy to ensure they can retire safely. The combination of coach and app creates a powerful hybrid that can enable the creation of a population that is more financially stable – and happier as a result.

From planner to coach

All of this means that traditional financial planning has to change radically. We are actively helping our financial planners to become wealth coaches. This means reorienting themselves from their traditional role of providing a plan and then updating it once a year to helping clients co-create their own strategies, empowering them to use the app to monitor their progress and to test alternate scenarios.

The first step of this process is to help their clients understand where they currently stand in terms of their long-term financial goals, and what the effect of changing their financial behaviour now would be on those goals.

Stable and prosperous societies are built up one individual and one family at a time. Ultimately, the responsibility of ensuring that FIR benefits South Africa rests with each one of us. Get to know your retirement status and spread the word.

Alex Cook is the chief executive officer at GCI Wealth