Canadians lack readiness for aging complexities

Manulife and MIT AgeLab conducted a study on aging readiness in Canada.

Research conducted by Manulife and MIT AgeLab reveals that while Canadians actively consider their extended lifespan, many lack full readiness for aging’s complexities. The study evaluated self-assessed readiness across eight areas, yielding an average score of 60 out of 100.

Canadians who have worked with an advisor scored 63 out of 100, while those without scored 57. The highest scores were in community, social connection, and finance, while the lowest scores were in health, home, and care.

Understanding the Role of Advisors

Julie Seberras, Head of Wealth Planning at Manulife Wealth in Toronto, explained that Canadians’ preparedness for more personal and health-related aspects of aging still lags behind their social and financial preparedness. She believes that advisors have played a significant role in building confidence, but can go further to help clients build an even greater understanding of their finances.

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Seberras noted that retirement planning has traditionally focused on quantitative goals, such as determining how much to save for retirement. However, she emphasized the need for a more evolved conversation that goes beyond financial preparedness to help Canadians prepare for the personal and health-related aspects of aging.

According to Seberras, advisors can lead with statistics around the number of Canadians who will need long-term care in their later years, and share stories about other clients or family members who have prepared for this possibility. This approach can prompt clients to have conversations with family members, medical professionals, and estate lawyers to better prepare for the possibility of deteriorating health, home retrofits or relocation, or the chance that they might need long-term care.

The Importance of Storytelling

The study showed that advisors have improved their clients’ preparedness for longevity, with Canadians who have worked with an advisor scoring higher than those without. Seberras believes that advisors have the unique capacity to prompt reflections that might not happen otherwise, and can ask questions about what a client might do if they lose some mobility or have a health crisis.

Wealth may also be a factor in higher preparedness scores among advisors’ clients, given the fact that Canadians with advisors tend to be wealthier than Canadians without advisors. However, Seberras notes that higher net worth can also open up other planning challenges around longevity, such as reckoning with who they will be when they are no longer working.

As the financial advice industry continues to evolve, Seberras sees an opportunity for advisors to build deeper client relationships by understanding the financial impact of housing, care, social connections, and planning for them. By focusing on relationship-building skills and letting clients know the risks of outliving their money, advisors can differentiate themselves.

Building Deeper Client Relationships

The survey results show that advisors have improved their clients’ preparedness for longevity, but there is still further to go.

Advisors can ask about the expectations clients might have for their family, or what kind of care they might want to receive. They can ask these questions before any kind of crisis occurs, allowing for more rational and considered decisions.