Decoding your clients

How technology and genetics will impact financial planning

George Orwell wrote that “At fifty, every man has the face he deserves.” The expression may have surprising applications to financial planning.

Wealth management is about predicting the future. This is even more true of insurance, where mortality tables — more commonly called life tables now — have been used for centuries to determine how long someone will live. Advances in genetics, medicine and artificial intelligence (AI) are creating new possibilities for forecasting longevity on a more personal level.

S. Jay Olshansky, a professor at the University of Illinois at Chicago’s School of Public Health, says the problem with traditional methods of measuring lifespan is that no person is average.

“The information that comes from these tables is for an average individual in a population,” he says. “The variation in longevity and health that you can expect in a population varies dramatically by the personal attributes that the individual has — those that are inherited and those that are acquired during the course of life.”

Olshansky and others are offering methods to track both types of attributes in an effort to more accurately predict how long someone will live. As average lifespans extend, a common concern for clients is running out of money. Being able to forecast the number of healthy years a client is expected to live could impact various aspects of their financial plans, from the level of investment risk to insurance needs to timing pension draw-downs.

Biological age versus chronological age

If not a window to the soul, a person’s face is becoming a reliable biomarker indicating the rate at which they’re aging, Olshansky says.

“The children of centenarians throughout their lives have always looked 10, 20, sometimes 30 years younger than their chronological age,” he says. “We think this is happening because, biologically, they’re aging at a slower rate. So while somebody may chronologically be 60 or 70 years old, biologically they might be 30 or 40. And we’re picking up this signal from the face.”

Olshansky’s Lapetus Solutions offers a facial analytics tool that scans photographs, examining hundreds of regions on the face to provide estimates for a person’s lifespan and the number of healthy years they’re expected to live.

For now, it’s one of several signals Olshansky says advisors can use to predict longevity and enhance financial planning.

“While we can’t yet quantify the exact effect of the difference of face age on longevity, we’re approaching the point where we’re going to be able to do so,” he says. “For right now, if we can pick up on enough signals, like late age at menopause, young face age and family history of exceptional longevity, you’re getting some signals to indicate these individuals may [live long lives].“

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