News and resources for Canada's top financial advisors
Est. 1998
That list will keep us busy writing (and, hopefully, you reading) for many months. But a column is only useful if it deals with matters that are of concern to its readers. So we welcome suggestions from you. Don’t be discouraged if your excellent idea doesn’t pop up in the next column — it takes a few months to go from beginning writing to the published piece.
Peter Drake is vice-president, retirement & economic research for Fidelity Investments Canada. With over 35 years experience as an economist, he leads Fidelity’s research efforts into examining retirement in Canada today. He can be reached at peter.drake@fmr.com.
(05/08/07)
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Why write about the economics of retirement? Why read about the economics of retirement? Aren’t there enough other, more important issues for advisors to be concerned about?
Isn’t it true that economists are much more famous for their inexact conclusions, bad forecasts and general lack of relevance to the real-life decision-making required of a financial advisor?
An advisor does have a lot to think about. But in the course of providing excellent customer service, a good advisor will think about the economics of retirement. Much of the time, the advisor may not be conscious that economics is driving the thinking behind a particular decision or piece of advice. Nevertheless, projecting a client’s income and savings, planning for protection against future inflation, making asset allocation decisions, and deciding where and when to invest all involve economics. And the really big tectonic shifts we see every so often — such as the implications of the aging and retirement of baby boomers — involve some serious economic analysis.
Yes, there are bad economists. And there is bad economics. It is hard to think of a profession or discipline where there aren’t bad actors and bad content. However, the problems that economists run into usually have nothing to do with fraud or malpractice. Economists — and economics — get into trouble most often because (a) they fail to take into account (and fail to warn others) just how hugely complicated economies are and (b) they promise far more than they can reasonably expect to deliver.
So, this is a good time to say what the economics of retirement in general — and this column in particular — will and won’t be able to deliver. It won’t be a source of short-term economic and financial market forecasts (the lead time is way too long for this column, and there are perfectly good sources elsewhere). It won’t claim that economic analysis can substitute for training, discipline, hard work, investment knowledge or any of the myriad of other factors that make a successful financial advisor. It will never use the phrase “on the one hand . . . but on the other hand,” and it won’t be afraid to point out where economics has no role at all in the retirement planning process. The latter point is especially important because economics often gets needlessly confused with other areas that can be related, such as politics, public policy (a slightly purer form of politics) or risk management (personal and portfolio).
What it will do is discuss concepts and applications of economics that are useful to advisors in their role of helping clients to plan for and prosper in retirement.
That list will keep us busy writing (and, hopefully, you reading) for many months. But a column is only useful if it deals with matters that are of concern to its readers. So we welcome suggestions from you. Don’t be discouraged if your excellent idea doesn’t pop up in the next column — it takes a few months to go from beginning writing to the published piece.
Peter Drake is vice-president, retirement & economic research for Fidelity Investments Canada. With over 35 years experience as an economist, he leads Fidelity’s research efforts into examining retirement in Canada today. He can be reached at peter.drake@fmr.com.
(05/08/07)
|
Why write about the economics of retirement? Why read about the economics of retirement? Aren’t there enough other, more important issues for advisors to be concerned about?
Isn’t it true that economists are much more famous for their inexact conclusions, bad forecasts and general lack of relevance to the real-life decision-making required of a financial advisor?
An advisor does have a lot to think about. But in the course of providing excellent customer service, a good advisor will think about the economics of retirement. Much of the time, the advisor may not be conscious that economics is driving the thinking behind a particular decision or piece of advice. Nevertheless, projecting a client’s income and savings, planning for protection against future inflation, making asset allocation decisions, and deciding where and when to invest all involve economics. And the really big tectonic shifts we see every so often — such as the implications of the aging and retirement of baby boomers — involve some serious economic analysis.
Yes, there are bad economists. And there is bad economics. It is hard to think of a profession or discipline where there aren’t bad actors and bad content. However, the problems that economists run into usually have nothing to do with fraud or malpractice. Economists — and economics — get into trouble most often because (a) they fail to take into account (and fail to warn others) just how hugely complicated economies are and (b) they promise far more than they can reasonably expect to deliver.
So, this is a good time to say what the economics of retirement in general — and this column in particular — will and won’t be able to deliver. It won’t be a source of short-term economic and financial market forecasts (the lead time is way too long for this column, and there are perfectly good sources elsewhere). It won’t claim that economic analysis can substitute for training, discipline, hard work, investment knowledge or any of the myriad of other factors that make a successful financial advisor. It will never use the phrase “on the one hand . . . but on the other hand,” and it won’t be afraid to point out where economics has no role at all in the retirement planning process. The latter point is especially important because economics often gets needlessly confused with other areas that can be related, such as politics, public policy (a slightly purer form of politics) or risk management (personal and portfolio).
What it will do is discuss concepts and applications of economics that are useful to advisors in their role of helping clients to plan for and prosper in retirement.
That list will keep us busy writing (and, hopefully, you reading) for many months. But a column is only useful if it deals with matters that are of concern to its readers. So we welcome suggestions from you. Don’t be discouraged if your excellent idea doesn’t pop up in the next column — it takes a few months to go from beginning writing to the published piece.
Peter Drake is vice-president, retirement & economic research for Fidelity Investments Canada. With over 35 years experience as an economist, he leads Fidelity’s research efforts into examining retirement in Canada today. He can be reached at peter.drake@fmr.com.
(05/08/07)
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