How the Fourth Industrial Revolution can make yours a happier family

Alex Cook, CEO of GCI Wealth.

Retirement is the most certain risk we face – and most people find it hard to mitigate. The Fourth Industrial Revolution has some solutions, beginning with helping you to understand your retirement status, says Alex Cook, CEO, GCI Wealth

We are all living longer and at a higher standard, and populations are growing, especially in Africa. At the same time, advances in technology – the so-called Fourth Industrial Revolution – are actually reducing employment opportunities. 

These are big problems but, as always, we should not be daunted. In fact the Fourth Industrial Revolution 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 here in South Africa: already over 90 percent 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 the 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 the Fourth Industrial Revolution comes in. 

It is making vast amounts of computing power and data available to the man or woman in the street via easy-to-use apps. For example, apps like Fitbit make it easy for people to take charge of their health and fitness. 

But there’s another piece of the puzzle, as anyone who has used a fitness or any other such app recognises: harnessing the power of the app is more effectively done in partnership with an expert coach.

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.

“Knowing your status” is considered key in beating the HIV/ Aids pandemic because, to be successful, you need to know where you started from. The same is true for achieving financial well-being, and knowing your retirement status now should be a burning priority. 

Stable and prosperous societies are truly built up one individual and one family at a time. Ultimately the responsibility of ensuring that the Fourth Industrial Revolution benefits South Africa rests with each one of us. Get to know your retirement status and spread the word that to not know your retirement status should be treated as a sin. #knowyourretirementstatus