One of the few Wall Street firms I respect is McKinsey & Company, which is part think-tank and part strategic consultants. They have recently published a new strategic study, identifying four "super" trends, which will shape our civilization over the long-term. They expect these trends are so powerful that "we are in the midst of change 300 times more powerful and 10 times faster than that of the first industrial revolution."
The four super-trends are:
1. Globalization -- (sorry, Mr. President! The Principle of Comparative Advantage can only be slowed but not repealed.)
2. Technology accelerators -- not technology per se but its accelerators -- like Amazon.
3. Global age wave -- the average age is rising worldwide, and may be impacting productivity.
4. Increasing Urbanization -- only 3.5% of America's land mass is in cities where almost half of us live -- 46 of the world's 200 cities will be in China by 2025
But, how does that impact the job of financial planners?
1. Job obsolescence risk -- we must help clients explore and understand the vulnerabilities of their job security.
2. Changes in investing strategies -- reconsider the holy 60/40 portfolio, Monte Carlo analysis, asset allocation, etc.
3. A different old age -- our life expectancy has increased ten years since 1960, increasing Social Security obligations and the burden on our "nest eggs."
4. Behavioral finance is more important -- the 24/7 onslaught of news makes clients too pessimistic - they need coaching as much as expertise.
The four super-trends are:
1. Globalization -- (sorry, Mr. President! The Principle of Comparative Advantage can only be slowed but not repealed.)
2. Technology accelerators -- not technology per se but its accelerators -- like Amazon.
3. Global age wave -- the average age is rising worldwide, and may be impacting productivity.
4. Increasing Urbanization -- only 3.5% of America's land mass is in cities where almost half of us live -- 46 of the world's 200 cities will be in China by 2025
But, how does that impact the job of financial planners?
1. Job obsolescence risk -- we must help clients explore and understand the vulnerabilities of their job security.
2. Changes in investing strategies -- reconsider the holy 60/40 portfolio, Monte Carlo analysis, asset allocation, etc.
3. A different old age -- our life expectancy has increased ten years since 1960, increasing Social Security obligations and the burden on our "nest eggs."
4. Behavioral finance is more important -- the 24/7 onslaught of news makes clients too pessimistic - they need coaching as much as expertise.
