Financials, Across our Life Course: Fusion and Confusion of Terminology – Part 3

fusionFinancial planning. Financial security. Financial literacy. Financial gerontology. Is it any wonder there is confusion with all this terminology floating in our heads? Not to forget the fusion. As we complete our current series on this subject, maybe it’s not a coincidence that we are now entering the year-end income tax season in Canada.

You can count on a barrage of advertising and news editorials to start any time now, reminding consumers about their retirement plan contributions and other related financial considerations. Turning our concern to personal financials however, should not be a once a year high anxiety moment; nor is it strictly a retirement discussion. Attention to financials issues cuts across our life course.

As a financial planning consultant, Marie says in part one of this series (Nov.30, 2015), personal financial planning is the process of helping individuals and families to use their income and assets to be meet their life goals now and in the future. In that same post, as the researcher and social gerontologist, Suzanne adds that economic and financial issues are important in people’s lives on the journey of aging, but they are also important as public policy issues.

Financial gerontology – public policy issue

Sticking with this term financial gerontology, Marie picks up here by saying that in the macro sense it is an urgent public policy issue. Financial gerontology should become the study of aging and the implementation of measures that will meet the needs of Canadas’ aging demographic. For example, financial, psychological, and general health planning to encompass all citizens from native peoples to immigrant and ethnic communities. The risk is that it will become yet another means of marketing financial products.

The problems associated with an aging demographic are not confined to governments to solve. To be sure, there are roles for all levels of government, but there are also roles for dedicated private groups and for individuals and families. Older adults must also be part of finding their own solutions.

Since we have scarce resources, what is the best use of public monies to meet the unique needs of an aging population? Given the shift and size of aging demographics, it would be very easy to allocate too many scarce resources to satisfying the needs of the aged at the expense of younger people. For example, reducing education funding for younger taxpayers. In consideration of how to determine the best use of these public resources for everyone, would it not be more beneficial that we have a creative inter-generational dialogue?

If financial gerontology is a society-wide, broadly based approach to the costs of aging, then personal financial planning is the specifically focused approach to an individual’s finances – whether they are young or old.

Improving public awareness of how these two professional fields work, (both separately and in fusion), is the challenge, and worth repeating, says Suzanne – financial and economic issues, such as low-income seniors, pension plans and retirement savings are gerontological issues, and they are important personal and public policy issues. Financial security is important for quality of life, and this cuts across our entire life course. However, quality of life goes beyond financial considerations.

Financial & gerontological collaborations

So how do we square the circle around the potential good coming from financial & gerontological collaborations? Let’s go back to the American Institute for Financial Gerontology and their aim to educate a Registered Financial Gerontologist (RFG) on how to “deliver financial solutions in a comprehensive manner with increased knowledge of the older client’s broad based needs.”

There is one significant difference where we say, Suzanne suggests, develop innovative ways on how to better serve “unique needs”, as opposed to deliver solutions to “broad based needs”. Terminology again. When you serve, you determine needs and respond; it is person focused. When you deliver solutions, you provide a product.

So is it possible to effectively combine Financial + Gerontology for older adults; or is it better that two different specialists are required for older client’s broad based needs?
From Marie’s viewpoint as a financial planning consulting – good advisors keep themselves up to date on developments in the financial world, and on general issues of aging, from senior housing to risk prevention in public and private spaces.

But the financial advisor is not in a position to give comprehensive advice about such things as behavioural issues, or health impacts on communities. The gerontologist can offer good background information to the financial advisor, just as the financial planner can offer realistic advice on basic financial issues for the benefit of the gerontologist.

We live in a world of specialization – mainly because there is so much knowledge out there that we cannot be effective if we try to offer services beyond our competency. Keeping up with our own specialties is a full time job!

We are also in the world of collaboration! That is the joy of thinking and writing this series together.
Marie Howes & Suzanne Cook