Retirement experiences are “fragmenting” due to changes in how consumers spend their time and money, as well as a increase in individuals and the “declining relevance” of social norms, according to analysis from Canada Life.
The research, conducted by Trajectory Partnerships, predicted that two retirement journeys in particular are increasing “dramatically” among consumers and will “reshape” the market for advisers over the next 15 years,
It predicted that the ‘complex families, complex finances’ subset, those whose family situation complicates their financial needs and planning, will grow to be the largest group by 2035, currently accounting for 32 per cent of the over-60s market.
Late financial bloomers, those who achieved financial stability later in life and often have had less time to accumulate wealth, are also expected to become more prominent, despite making up just 6 per cent of the market currently.
Canada Life also highlighted recent data from the Office for National Statistics (ONS), which predicted that the number of over-60s is expected to grow by a third to 20.9 million people by 2035, arguing that this could present “huge” market growth as well as a “significant opportunity” for financial advisers.
The provider noted however, that the majority of advisors’ business models cater to retirees that are ‘financially mature and stress free’, despite this group representing 21 per cent of the market currently, with further decreases expected.
The analysis also identified two further retirement journeys, noting that ‘healthy but wealthy’ retirees make-up almost a fifth (18 per cent) of the current market, whilst ‘unhealthy and not wealthy’ was slightly more common, representing almost a quarter (23 per cent) of the current market.
Canada Life wealth management division, MD and Executive Director, Sean Christian, stated: “With those over 60 set to grow exponentially in the next 15 years there is an obvious opportunity for advisers.
“However, these new retirement journeys show us that the opportunity is fragmenting and focused in new areas.
“Societal changes have, and will continue to have an impact on the way we live in retirement, changing both the lifestyles and advice needs of clients.
“Unless the industry shifts its focus to support the clients that need them, we will collectively miss out on the opportunity to enable these people to have better financial futures.
“It’s essential for us to lead positive change in the industry by thinking about future generations today.”