Strategies to Creating Certainty in Retirement #1 – Transcript

Jamie McIntyre
Hello, everyone and welcome to Episode One of the retirement podcast series. In today’s podcast, we’re going to talk about helping clients cope with the stress of retirement. Well, that is Jamie McIntyre and I am your host of today’s podcast. I’m a financial planner and specialize in helping clients plan for retirement and enjoy the retirement that they want. My guest today is Jenny Brown. Chetty is award winning financial planner, and Beddoes most trusted advisor, Jenny is a CEO and founder of JBS financial strategists. Jenny established this business in 1992. And over 30 years has built a successful business that is client focused, and they love working with pre and post retirees. In our chat today, Jenny and I will discuss the things that cause client stress leading into and during retirement, we will focus on three key things. They one is loss of income certainty for clients. The second theme is loss of purpose for clients. And the third is having a chat about client emotions during this time, and how planners such as Jenny and myself, can help them through the retirement transition. Jenny Brown, welcome to today’s podcast.

Jenny Brown
Thanks, Jamie. It’s great to be here.

Jamie McIntyre
Let’s kick off Jen. And let’s let’s start with the income certainty thing. And tell me in your experience that you’ve had with clients over your 30 year journey, when working with them, tell me about income certainty and how that matters to clients in pre retirement.

Jenny Brown
Well, pre retirements sort of fairly straightforward where clients have a regular income through businesses that they own and run or through salary and wages. So they’re so used to, as you’d be well know, receiving a regular income that comes in week after week or month after month, however, often that they they get paid. One of the things that we have found is that it’s a matter of then transitioning the clients from getting that regular income stream from salary and wages, to understanding when that gets turned off. What happens after they stopped working. So how do we then leverage the other tap to turn on that ongoing income stream from their investments, whether it be money that they’ve got, from the sale of a business, sitting in a family trust sitting in superannuation, to getting them to understand that it can continue? But how does it actually continue on an ongoing basis?

Jamie McIntyre
I think generally speaking, Jan, in pre retirement, clients have a pretty specific focus, not just around their income, certainly because they go to work, but saving and investing the, you know, proportion of that income. And then they shipped as they’re shifting into retirement. They’ve got this fear of I don’t want to touch that money in some ways as well, because they’ve been so used to saving it. Tell me about I mean, you experienced that as well, I’m sure. And I suppose How do you help clients figure out that it’s okay to touch that money?

Jenny Brown
Yeah, it’s interesting. We we work with clients in that, you know, in that that lead up to retirement about what their spending habits are. So it no one likes the word budget. So we tend to try and avoid the word budget. But obviously, that’s just what it is. But it’s, it’s what their spending habits are. So what do they spend on everyday expenses? What are they spend on discretionary items? What do they spend on, you know, kids, and then holidays? And so getting them to understand what that is, and then how they can actually then touch that nest egg, which is all the money that they’re they’re ever going to have, again, as one client once said to us? How do they then understand that you know what these investments that are sitting in, let’s call it super, generating an income strain that’s being reinvested? Let’s divert some of that income strain into their pockets to the replace the income that they earn from salary and wages? So it’s getting their minds shift around, you know, what we it’s just a different source, and you’re just getting paid a different way. But understanding what you’re spending on a regular basis, and I think that’s really the key.

Jamie McIntyre
Yeah, I agree with you, Jen. The the most critical part for everyone to I don’t know if it’s the word understand but have a really clear view on what their intended spending is. Every 12 month period, and and also I think you’re highlighted there, things such as holidays and, and all of those other things can they give themselves permission shouldn’t do all of that with this change in income certainly, right?

Jenny Brown
Yeah, absolutely. You get on find, and I’m sure you do two opposite ends of the spectrum, you get some clients that are really hesitant to spend any money, and they don’t. And they’re very frugal, because that’s the way they’ve always worked. And then you get the other end, where they just want to spend, spend, spend, because all of a sudden, they’ve got all this time on their hands. And you’re sitting there watching them going, you’re gonna run into money if you don’t do something about it. So it’s finding that balance and trying to then coach the clients that ad spending too much, that they’re going to run out of money and having those tough love conversations. But also then explaining to those who are really frugal, you know, what, you can actually spend more than what you are. Because if you, you know, spend an extra or take an extra 10 grand or 20 grand a year, here’s the projection of as to how long your money is going to last. So it’s coaching the clients through the different, I guess, their mindset and trajectory as to what they think about money.

Jamie McIntyre
Yeah, you’ve made comment there, the two, I suppose, two spectrums of those that are understanding. And you’re able to identify that through planning, and those that are overspending and that really have overspent their entire lives? What, what sort of techniques would you use? Or types of questions would you utilize for those that are overspending Gen, and putting themselves at risk of running out of money.

Jenny Brown
So, in the past, when we’ve had those sort of clients, we’ve done a series of projections to say, alright, if you’re spending, I’m gonna plug some figures here. But let’s say you’re spending, you know, drawing out 120,000 Out of your sober, if you cut back and drew out 100, this is what it’s going to do in terms of, you know, lasting your, your, your assets, how long it’s going to last if you then drew out 80,000. So you cut back by $40,000, this is how much longer it’s going to last. So, so explaining to clients that by giving a little bit now, you can actually make sure that your nest egg lasts longer than than what it would if you keep spending on the same trajectory. Here we’ve got one client at the moment that we have been talking to for four or five years. And he hasn’t, he just can’t stop spending every time we meet with him, he needs another 10 grand to pay a credit card. And it’s, it’s really sad, he was in an awesome financial position. When he stopped work about five, six years ago, now he’s in a terrible position. And he’s just, we keep raising it. But it’s, you know, he just hasn’t gotten hopefully, with our last meeting a couple of months ago, the Penny has dropped. And he did sort of open up and go through a lot of, you know, the emotional trauma that he’s been going through our sat there and listened to him offered some suggestions and, and hopefully, you know, we’ve got to check in in a couple of months, you know, he will have put some things in place. In the end, it comes down to the client, you know, you can take a walk leader was to water, but he can’t make them drink. Were they talking to this client for ages about, you know, you don’t have to buy that takeaway coffee every day. You know, treat yourself every second day, you know, just to cut back in that regard. So it’s ensuring that clients understand what the benefits of cutting back just a little bit can do in the long term.

Jamie McIntyre
Yeah, definitely. I agree with your point you you can’t lead the client to or you can’t follow them around with every action they make every day. And if we did that, financial planning would be extremely expensive. If we were you know, walking around firing clients around all day trying to stop them from overspending. Look, I think you made a really interesting comment around that and that’s you use the word emotions and in in contexts with this client, and clients can self sabotage themselves for many many different reasons. And by the sounds of it, Jan You were able to let’s go dig a lot deeper and get a deeper understanding in the most recent meeting with this client to to get closer to the bottom on what isn’t it and what you think and what sort of you’ve put around him to or him or her to to try and break this cycle?

Jenny Brown
Yeah, I think so. So the meeting before this one, we went sort of dangled a carrot and said you know what, if you you do the the budget that dreaded you know, budget word, if you do a budget and really say you understand because he’d never done a budget. And wouldn’t if you do that and understand exactly where your money’s going, we’ll reduce your feet. And so we offered to reduce juicer fees just by 100 bucks a month, hoping that that would give, you know, a little bit of enticement for him. And, you know, that we promised that two meetings ago, he didn’t do it last time. And he’d be putting off the meeting, putting off the meeting. And then he had done it for this one, he did delay a couple of times, but he’d done the budget. So we actually ended up cutting the fees by $200 a month as a as an enticement. But it was a matter of letting him talk through what was stopping him in terms of doing the budget, and also talking to his partner. So he hadn’t we’ve now wife here hadn’t spoken to her about the dire financial stress of durian because he was embarrassed about it. And he was a very successful person when he was working. And when he stopped working, he lost a lot of purpose. And I think this was all part of it. That, you know, he was dating her at the time. And I think, you know, he just the, he didn’t want to cut down on the amount of money that he was spending, because I think he wanted to impress, that that’s my feeling. And he did sort of open up and speak a lot about in our last meeting about how it’s been really tough for him emotionally, how he’s had to do a lot of soul searching. You know, how he knows that he’s letting himself down, and he’s let us down. And we’ve been speaking to him for five or six years about this. And he’s come to the realization he needs to do something about it. So there was a whole lot of things we put in place, but it was it was all of that side of things, not not how much you funds going up, because he’s funds doing really well. Thank goodness. But you know, that that wasn’t the focus of the meeting, it was very much on him and his emotions, and what stopping him from moving forward and making some serious changes to take control of his finances?

Jamie McIntyre
Yeah, Jen, I’ve had a similar experience to that, when, generally speaking, when you’re only working with one of a couple, I know, they were building their relationship. So a little bit different to my scenario where the couple were married. You know, often one person’s not very good at this stuff to do with money, and potentially for your client. He was, I suppose it was all glossed over, whilst the ad a good strong income and successful work life. And I’ve had a similar experience with us, as as husband and wife, and the husband took the responsibility of the budgeting because he was the big income earner. And look, in the end, where we’ve landed now is we’ve figured out that he’s not the strongest one at that. And we and it took us quite a while for him to, I suppose Hand over that responsibility to his wife. And we’ve started to see some really good traction over the last 12 months that they’re living within their in their 70s. And then they’re living within their means, because we’re able to demonstrate to them that, hey, you’re going to run out. So yeah, it’s really important, I think, to get all parties together, where you can and source help. And it sounds like this guy’s partner has been a big help for that as well.

Jenny Brown
Hopefully, yes. So we have encouraged him to include her. We’ll see how that goes.

Jamie McIntyre
Absolutely. Look, income certainty is a really well, that transition from that income coming in. And being able to say, or being able to overspend if you choose whilst you’re employed. It’s and then we go into the retirement base, and which we’ve just touched on now, which is where you can have income certainty in retirement to Gen. How do you what tools do you ever will? How do you demonstrate to clients that in retirement, you can have income certainty if you’ve touched on a budget, or we call it a spending plan, but having a budget to as your starting point? How do you demonstrate to clients that they can have income certainty in retirement all the way through to our technical term we use is their life expectancy?

Jenny Brown
Yeah. So we, I guess the first step is to understand how much a client needs to you know, to live on. So what their their spending habits on we’ve gone through that, but then it’s also saying alright, so if you’ve got a pot of money, how much is that pot earning On a regular basis, and, you know, before we start investing it for them with them, you know, obviously, we use the rule of thumb, you know, this can earn 4%, or whatever it is in terms of of income, once we’ve actually then shown them and demonstrated that we’ve got these investments in plan for, you know, let’s say a couple of years, we can then prove to them that the income being generated from their investments, whether it’s being shares, or investment properties, or cash, or whatever it is, this is the actual physical income that’s come in from your investments. So by using that physical income, then we can say, well, this is your income certainty that is coming in, which means that we only need to eat into X amount of capital, or we don’t need to eat into X amount of capital, if it’s more than what they’re spending it, depending on what their pot of money is. So it’s explaining and showing them that this is the sources of the income, and you’ve got X amount coming from your shares X amount coming from, if it’s an investment property X amount coming from cash, whether or not you spend that money or not, is still going to come in. And so then by having it, we always like to have at least two to three years worth of cash cash, that I mean, you know, real physical cash, whether it be dinner, cash, or bank or term deposits, or something like that, for the for their regular pension payments, or regular spending, you know, payments. So we like to have that because, generally speaking, then with the income coming in from the investments, we can weather, any storm, that’s going to happen, you know, if you’re then adding in, you know, regular income, you’ve got three years worth of cash cash plus, then the income, you’ve got four to five years, you know, built up of cash, which means that the, we don’t have to sell assets in a depressed market, say, you know, through the GFC, or beginning of COVID, or something like that. So we can show them the clients that we have got this income cert certainty for you that you don’t have to worry about where your incomes coming from, it’s sitting here, and it’s going to continue to go into your everyday spending account. So that you know, you’ve got it there. We also explain to clients, you’re going to spend more money, generally speaking in the first 10 to 1520 years, depending on how early they retire, versus the latter years. So by then projecting that out and explaining to clients that this is what we’re going to project in the early years, and then we’ll cut it down a little bit, you know, 1520 years into retirement, because you’re not going to be spending as much we can then show them what that will do for their income coming in to fund their lifestyle. And that’s you, you often get a really pleasant surprise from clients going, Oh, I didn’t think about that. Well, no, of course, I’m not going to be wanting to do the travels through Europe when I’m in my 80s and 90s that I want to do now in my 60s and 70s. So by explaining and coaching the clients about what they want to do, and when they want to do it, you can then explained about the your assets and your investments and and how you can live off more now and less later on,

Jamie McIntyre
then that’s a really important part of wealth, cash flow modeling and Asset Modeling to help demonstrate to clients those changes over time, I wanted to come back to one thing that you spoke about. And Jenny, you and I have had many conversations over the years about different things, including retirement. And we’re very aligned, in the view that having each client once you’ve figured out and let’s use for the example $100,000 is required each year for spending. And then we were talking or you were talking about the three times that in cash cash were the same, we take the same view, I just thought I’d add to that. And you’d probably along with this, Jen, that by talking with clients and explaining to them that you always have $300,000 in cash in this example. And next year, you’re going to draw down $100,000 And it really doesn’t happen really doesn’t matter what the markets do, because you still got 200 And by the way, we’re going to top that up with your dividends or your rent or etc. So it’s got cash flow coming back in and then you’re able to demonstrate to them with some visuals, which we do and we use the Vanguard, the Vanguard one because it shows some great stuff about the dips and we say okay, let’s look at the GFC Yes, Your Honor shares international shares didn’t recover for three years now, does that really matter to you, when you can see the last 15 years since that what’s happened, and they’re really good visuals to support what you’re talking about there that the cash cash always needs to be fed. And I think that circles, what that does is circles back to give him the income certainty in retirement. That’s

Jenny Brown
absolutely, um, and even we, we also use the same Vanguard charts. And what happened in the beginning of COVID, when you know, so many of the companies have their dividends. And so by then explaining that, you know, what, this is the regular dividends that were coming in pre COVID, this is what happened in the first, you know, 12 months, and then we can see what happened then after that, but just knowing that it’s okay, because even though the dividends halved, they still came back up, if you’ve got quality assets, so we’re a view that you need quality blue chip assets, that you understand what you’re investing in, not these weird mezzanine finance with a twist or lemon sort of stuff, you know, that sort of stuff comes unstuck. If you’ve got quality assets and explaining to clients, you know, you’ve got quality assets that, yes, the companies have been really prudent at the beginning of COVID. But look how their balance sheets were really strong. And then they recovered through, so and some of the GFC. And we’ll use the GFC before COVID. You know, it’s explaining that and even giving clients the story that they can then relate to and understand so that they get that confidence that you know what it’s gonna be okay.

Jamie McIntyre
That’s a great summary, Genova great way to finish most conversations with a client after you’ve explained some really good things to them. And giving them that reassurance of it’s gonna be okay. And you can kind of see the shoulders drop on the other side of the meeting. Absolutely. Look, I we’ve had a really good shot of that income. Certainly, I think we’ve covered off some great things. And throughout the rest of our podcasts, we may circle back and cover off income certainty again. But let’s talk about loss of purpose, Jen. So you did touch on that with your client. He’s overspending. And, look, let’s dig into that one a little bit. In regards to the loss of purpose. Let’s dig into that a little bit more. You you all say you glossed over loss of purpose with him, because we’re talking about other things. So tell me a little bit more about how he felt about his loss of purpose. Let’s call it six years ago, when it was changing, then

Jenny Brown
I think at the time, he was okay with it. He was burnt hands in a very stressful executive role for a publicly listed company. So he felt that it was good to have that timeout to spend and to regroup. But what he didn’t do was he didn’t have a structure or a routine for what he was going to do when he wasn’t working in that I’m going to call it nine to five, but it wasn’t it was you know, long hours and high stress. And he didn’t have that structure or routine. He went from high pressure on burnt out, I’ve had enough. I’m going to slow down and the relationship was new with his as I said, now wife. So it was all very rosy. And that’s what he was focused on. Versus clients who though and the ones we find a successful are those that have a really good structure or routine when they finish work. So you know, they’ve got the volunteer regime, they’ve got the grandkids you know, they’ve got the travel planned or the extra game of golf, you know, they haven’t retired to golf, or to bowls or to something. They’ve actually retired and increased what they’ve been doing. And if I look at the difference, Trey the client we were talking about, yes, he loved his you know, he’s a passionate Melbourne Football Club supporter loves playing tennis. But that was that was it. He didn’t have any other structure. So what do you do? You know, during the week, you got seven days to fill your partner’s working two or three. How do you fill the rest of your time and your days and I think that was part of his his issues that he didn’t have a plan in he had a very good plan when he was running this business but not after he stepped away. So I think that making sure that you’ve got that that plan your I laugh one day when one of our clients who volunteers for popping belly and he is a again had a very, like playing stressful corporate job. When he retired he loves trains and so he started to volunteer as a I think it conductor and then he got promoted to head conductor and got promoted to station master and all this sort of stuff. But he did it because he used his He was using his brain to work out how many people you need to put in a carriage to make sure that you fill all the carriages and that you don’t overfill them and don’t overcrowd them and stuff like that. So he he had this purpose of, of getting out and, and he just filling his Wednesdays, you know, as we say, playing with puff, you know, and he was because he was he was running pumping belly in our on the station. And that gave him gives him so much joy. You know, he he had a whole his whole week mapped out, you know, Monday was the gym with his wife and Tuesdays was going into the library, I think too, because he is an avid book writer. So he’s writing a book Wednesdays popping Billy Thursdays, tennis Fridays, something else Saturday and Sunday is grandkids and spending time with his wife. So it was almost like this planned out week. And yes, it had flexibility. But he had a sense of purpose and routine that he knew what he was doing, and loved every minute of it. And if he didn’t feel like doing something, he didn’t have to do it. But just making sure that that he knew what he was doing. We’ve got another client that that he talks about. When he first retired, it’s not actually retirement, he was going into phase three. So phase three was his next stage of life, what was that? That’s that’s going to be you know, he’s volunteering. And they do, you know, fair share volunteering, he and his wife different times, so they don’t do it together. You know, he’s got, I think he’s bike riding, he’s doing a whole lot of stuff. Again, Phil’s he’s weak. But again, sense of purpose. So those clients that that are really great when it comes to you know, like mentally, and I’ve got great lives and sense of purpose with those that that had that purpose, and that they know what they want to achieve and what they want to do. And they had that routine, and the structure, but they’re not locked into doing something if they don’t want to do it. So they’re not they don’t have to be at, you know, the volunteer place every Monday. Because we’ve also found that with some clients as they don’t want to have to be locked in, they want some flexibility.

Jamie McIntyre
Yeah, I think there’s two key words there, Jen, the first one that summed up, I think a fair bit of what you spoke about which ties into purpose is having a structure everyone, everyone with the we’re referencing here are coming from a structured environment of work, and a structured environment of let’s call it going home a structured environment, that the grandkids come over on sad days, whatever that may look like. And a part of that structure is your spouse that support you as well. And then you’re shifting into the work, but it gets removed really quickly. And it’s about new structures to to find to to have new purposes. And the other word, there is flexibility. Jen, I think when we talk with clients about retiring, we really talk about being financially free to do the things that you want. And so yeah, structure and flexibility to really important elements, or, well, retirees as they’re shifting through that phase.

Jenny Brown
It is. And I think one of the things that we spend a lot of time with, with clients when they are in that, that lead up to you know, the couple of years prior to arrival, you know, knowing that they had the ability that they can pull the pin on full time paid work at any time that they want to. So they’ve got that choice is, is explaining to them that there’s an expectation that the first six months can be quite challenging, because they’re gonna go from potentially full time work, some, some might be working four days a week, but potentially most of them go from full time work to no time work. So it will be challenging doing that transition into the retirement or the face, right, as our client likes to call it. So we talk to them a lot about how other clients have dealt with that before it happens. So making sure that they’ve got that structure, and they’re going to have periods of elation and, and you know, the freedom of not having to go and work for somebody else. But they’re also going to have periods where they’re going to be questioning themselves. And they’re going to be wanting to, you know, have they done the right thing or you know, how they’re going to fill their days and what’s their purpose in life? And what are they going to do in life going forward? So I think it’s really important for us as advisors to make sure that we do position that with our clients early on, so that they can get Get their mindset into a into a routine or understanding what they’re going to do and what they’re going to retire to

Jamie McIntyre
start generally, and I do agree with you, it’s an it is really important to position with people with clients, that there is going to be significant emotional change through this period. And it’s okay to have emotional change, I think that’s a really important thing, too, is to make sure they give themselves permission to go through these change.

Jenny Brown
Absolutely. And it’s an it’s finding the right things that work for them. And then what try two or three different half a dozen different things, you know, whether as I said, you know, it’s the volunteering or the grandkids or what it is. But you do know, you’re in trouble when, when you’re meeting with a client, they’ve told you that they’re painted the back deck twice, in the last six months, that that that that is then like they’re filling their days with stuff that’s, you know, almost useless, useless like, that they can’t find enough stuff to do it is a bit, it’s a trigger point that we as advisors need to understand and pick up on, you know, when when you hear a client saying that they painted a deck, and you go back to France thinking, can you tell us your paint of the deck last time? We’re caught up? You know, doesn’t really need is it really that bad? That needs to be painted? Again, I endure obviously, it’s a it’s an analogy, but it is that it is the, the, I guess those triggers that we need to listen for, to help our clients and coach them through. You know, what they’re going through?

Jamie McIntyre
Yeah, I think you make a really key point, it’s a, it’s such a significant time of change. Let’s frame that up as the three or four years leading in and probably the two years on the other side of retiring. It’s such a significant change emotionally, that you know, it, you really do need to listen well. And to be fair, probably dig deep, and probe with some pretty deep questions to understand what it is they’re going through in their words.

Jenny Brown
Yeah, absolutely. Yeah, there’s some stats, and I don’t know that off the top of my head, I should have done some research. But there’s a large percentage of especially males, who, when they retired, they have mental health issues, whether it be depression, or you know, and there’s, there’s high levels of suicides and things like that in that first six months after they retire, because of lack of purpose. So we need to be really mindful of that as well to it or to, but we’re not, we’re not psychologists and stuff like that, I get it. And we can fix their problems. But we are speaking to them on a regular basis. So we should be able to help coach them to seek advice and to seek, you know, making sure that they’ve got the the networks before they get to that stage of friends. A lot of people have networks of friends, all surrounding the workplace, or what happens when you’re not going into the workplace every day, then Have you still got that same network of friends, when you stop working? So it’s making sure that you’ve got that network of support, or the clients have got that network of support people around them, so that you that their friends can pick up, you know, when things are going astray and arise? Well, I think that’s that’s key. You know, we’ve seen a lot of that, over the years.

Jamie McIntyre
Yeah, I think we are not psychologists, but we do, we’d probably dance around in that space at times, Jen, I think we do have a great responsibility to help clients live a great life and money is a big enabler to that. So we’re good at the money side. But like, as you mentioned, there, we do hold a responsibility to ask some really good questions and, and, you know, encourage them to find those answers and seek help if required as well.

Jenny Brown
Absolutely.

Jamie McIntyre
Look, I’m gonna just pop back to you talk about these TEKS. And you’re right, we don’t have them with us to reference exactly about potentially unveils and unveil depressions and male suicide as well. With Jim, what why do you think it’s generally more males that are having the greater challenges leading into retirement?

Jenny Brown
totally unfounded, and no state no supporting evidence or documentation? Behind blobs observations,

Jamie McIntyre
Jen? Oh, yeah. See, just asking for observations that you’ve seen in your experience. You don’t have a statistical backup to it. But tell me about your observation. Yeah,

Jenny Brown
I think from my view, it’s, it’s often because the males have, they tend to have the more senior roles. In a relationship, females have tended to have more of a relationship with family, whether it be the, you know, the couple’s kids, so let’s say, you know, you used to work, I’m going to stereo talk here, your mom and dad and a couple of kids. So the mum has tended to have more of that relationship with the kids, they’ve often had more of a closer relationship with parents as well. So they’ve that had a lot more to do with, you know, family, I think from what what I’ve seen with various clients is that the moms tend to be probably more tunnel vision in terms of throwing themselves into work and just getting it done. Whereas women tend to sort of butterfly over a number of different areas. So that’s probably my my gut feel is that it’s tends to be more because there’s not as much of an outside interest, and a focus and on too busy to be able to go and spend a Sunday playing golf or take off a Wednesday afternoon, or Thursday, or whatever it happens to be to play golf or bowls or, or something in, stereotyped. Again, typically, the males tend to work a lot longer, till they’re older, whereas the females tend to stop when they’re younger. And I’m saying younger, but then got stopped at 60, you know, rather than, you know, 65, or 70, or 70, or whatever it is. They’ve also had timeout, if they’ve got families of the workplace, of the workforce, to re help raise family or to have the kids. And so they built their networks outside of work as well. So I think that’s happened, that happens a lot more in those areas. So that did just my, I guess two cents. Yeah.

Jamie McIntyre
That’s, I mean, I’ve, I suppose I’ve observed similar, that’s the era, the genre that’s changing. Now, we want to say it’s changing, men and women are both working in really high level jobs now. And I mean, I have more younger couples, who were the female is the higher income earner and the males during the supporting role. So I don’t think it’s really stereotyping. I think it’s just more the Let’s go, the baby boomer generation is what that traditionally has been Gen, let’s talk about client emotions, when it comes to having a nest egg or a big lump of money that they’ve built to their retirement. And let’s talk about the emotions and how you need to have conversations with them about investing to make sure that they have the capital of the income, to see them through their will their retirement years.

Jenny Brown
It’s interesting, the number of times and the number of conversations that we’ve had to have with clients who are in their 60s, and, and their retirement date is fairly, you know, imminent. And all of a sudden, they, you know, they’re the great balanced or, you know, growth investors 7030 Split growth to conservative assets to good portfolios, and by what a pullback, and they want to go more conservative, because it’s like, well, I’m not going to be adding to this anymore, I’m not going to be making contributions anymore into you know, let’s call it their, their super nest egg and, and all of a sudden, they’re saying, Well, what if the markets, you know, tank, what if, what if, what if it’s always these what ifs, and so it’s then working with them and talking them through that, you know, what, yes, there will be some what ifs, and yes, we pull out that Vanguard chart again, you know, the markets gonna go up and down, it’s never gonna go on a straight track trajectory, you know, upwards, you’re gonna have good years and you’re gonna have not so good years, but that’s okay. Because if you do go more conservative from when, or you might go to a 6040. But if you then pull it all out and go more cash and flip it around, your money’s gonna get eaten away by inflation, and you are gonna run it money. Whereas if you can have a good quality portfolio that’s got a really nice mix, and you’ve got the cash cash that we were talking about earlier. And you’ve got those two to three years worth of cash to fund your retirement income stream. And then you’ve got the rest of via investments to generate the income into that retirement stream, does it matter if we’ve got a slightly negative year one year, and then a good growth year the next, because we’ve still got those dividends coming in. So it’s explaining to clients that if we keep this portfolio structured the way it is with good quality blue chip assets, that you know what they do, and you know that you’ve got regular income stream coming in, then it doesn’t really matter if you have one or two negative years, because over the longer term, you’re gonna have, you know, good quality return see year after year, on average. So it’s making sure that they understand that, you know, it’s okay to, you know, to have that portfolio of still growth assets. Because after all, they’re investing for the rest of their lives. Every day, you’re investing for the rest of your life. Generally speaking, if you’re retired 60, you’re, you’re investing for 30 to 40 years. So you need to make sure that you’ve got that quality portfolio is going to deliver you the income that you you’ve got to want and have, you know, to do the things that you’ve you’ve set your goals around? Yeah,

Jamie McIntyre
I think something that I’ll lean into there, Jen, and this is there’s around emotions, the mainstream media applies their trade on. Maybe attacking is not the right word, but getting deep into people’s emotions to get a reaction. And that’s a big part of their business model. They do great things, mainstream media, but that’s one of the significant things that they do. And because of that, a lot of people receive their if I could say in inverted commas, their financial education from those sources, outside of good sources like ourselves, right. So they have an emotional attachment to being, I suppose, having a regular feed from the mainstream media that that gives them a range of emotions. And coming back to the chart that demonstrates what the chart really demonstrates more than anything is volatility. When we talk about the return charts, it doesn’t necessarily demonstrate risk. But however, most clients see that as risk, right. So I think it’s really important that I know we do a lot around this, we talk around volatility, and just change that language from the word risk is that sort of something that you do. And I think you’d agree with me, the mainstream media definitely does put their own their own views on

Jenny Brown
markets, absolutely. Look, we’d probably don’t use the word risk, but we do use the word volatility and the markets will go up and the markets will come down. And that’s happened through history. But we also show clients that, you know, it does go up and down. But on the long term, if you do have enough ups and downs, you still going to have a and you’ve got quality assets, is still going to have an upwards trajectory in terms of, of the returns and what the markets are doing. So it’s, it’s making sure that the clients can sleep at night and, and that’s something that we use a lot is, is that it, we’re happy to make changes to clients portfolios, if it will help them sleep at night. And if they are uncomfortable being in more of a growth portfolio, that’s okay. But you need to understand the consequences if there are some of being in that type of portfolio. So it’s, it’s, it’s then giving them the education and the facts and the projections or whatever they need, whoever the client is giving them the information so that they can make an informed decision as to where they’re invested. There are I am, I go back to you know, we had a had a client once, oh, I don’t know, least half a dozen years ago. And he was referred to us he was gung ho, we did the statement of advice. Back then it was probably a financial plan or whatever, he was really happy to do the investments. He was ticking off all these other goals that he was gonna do. But when it came to the meeting, where we were signing the paperwork to, to make some rollovers because he had supers all over the place. So we wanted to do some consolidation. He wouldn’t make the decision and he sat there in the boardroom. And I remember at the time, he said, This is all the money I’m ever going to have. I’m not going to be able to add to this. And you know, he was like he was stressed out massively because he went, well. What am I gonna do and how’s this, this nest egg gonna grow? And we tried as much as we can But to explain that, well, if you leave it in cash, because it was all sitting in cash at the time, he’d sort of sold it all down because he’d gone conservative. And I think at the time, the markets were having a bit of a dip. If you get if you’re going to leave it in cash, then you’re not going to be able to retire on the income that you want, or your money’s going to run out, take your pick. But if you if you make the changes, then this is where your bae he couldn’t get his head around the fact that he had that, you know, he had to put some money into the markets to invest to generate an income. We ended up saying, Look, you know what, we’re not the right advisors for you, basically, you’re not the right client for us. That, you know, we, we just said, we can’t help you. We just can’t help you, because you’re not prepared to help Help yourself. So we had that tough conversation, you’re gonna get those sort of clients every so often. Fortunately, I think we’ve only ever had one of them. There are people out there who really shouldn’t be managing their own money, they just should have it, you know, a government pension really? Because they can’t make the decisions. They’re not comfortable making the decisions.

Jamie McIntyre
Yeah, look, possibly some, a solution for someone like that, too, is something more that gives them more of a certain nature, but by the sounds of it, they were reasonably skeptical about most things in the world except the bank account. Right?

Jenny Brown
And, yeah, that was about a bank account. Property. Yeah. And look, we can’t we can’t

Jamie McIntyre
help everyone. And as much as we all want to help every Australian with a good financial plan. Amen. I’m not gonna connect with everyone I meet with and yourself as well. So yeah, look, I’m sure that client or ex client has found the right solution that gives them comfort. Yeah, absolutely. Jen, it’s been a pleasure. Having a good chat with you today, throughout this podcast, we really got to hear some nuggets of gold from you that I hope the listeners are able to all take something Roman, and use in their lives or in their practices to improve what they’re doing. We talked about loss of income certainty that clients experience and we spoke about some techniques of of how to give them comfort. And that’s really about being able to demonstrate to them that they do have enough income in retirement or alternatively, hey, you’re sabotaging yourself, you need to cut right back and let me demonstrate to you and it’s a big, I suppose what we’re talking about here, it’s a big education phase, through the pre retirement and retirement. Whilst purpose I think to sum that up, we spoke about connection, making sure you have the right social connections, emotional connections, family connections, to have on the other side of work, life is really important. And it’s okay. Your emotions aren’t going to be their pre retirement and post. And it’s okay to work through that transition. And it’s okay to reach out for help with your financial planner. It’s okay to be more engaged with your spouse or your girlfriend in the example that you spoke about to get that support you need. So Jen, thank you so much for your contribution today. And it’s been great and looking forward to catching up with you again soon.

Jenny Brown
Thanks, Jamie. It’s been absolute pleasure having a chat. And yeah, I hope the listeners got something from it.

Jamie McIntyre
I’m sure they have Jen. You have plenty of nuggets in there. Well done. Thank you.