Changing Landscape of Retirement #9 – Richard McErlean – Transcript

Episode details

SUMMARY KEYWORDS

clients, retirement, people, retiree, teenage years, advisor, travel, conversation, income, comfy shoes, comfy chair, caravan, fraser, work, licensee, bit, sit, starting, fantastic, years

SPEAKERS

Fraser Jack, Richard McErlean

 

Fraser Jack 

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Fraser Jack 

Welcome back to the Expert Advisor podcast. My name is Fraser Jack and we are still talking about the old things to do with the changing landscape of retirement. I’m joined by Richard McElwain. Welcome, Richard.

 

Richard McErlean 

Thank you, Fraser. Thanks for having me.

 

Fraser Jack 

Now. Thank you for hanging out and chatting to us today about all things the changing landscape of retirement. Do you want to give everybody? quick overview of your business? at GE financial?

 

Richard McErlean 

Yes, thanks very RTG financial services, you have the fortunate position of talking to the CEO in the tea lay at the same time as I’m a main band. I have been now for quite a few years. I’ve just recently changed licensees. So that’s taken up a bit of my time over the last little while. But yeah, I’ve been been in the planning game actually, starting right back. This is scary now and actually relate this to clients. The client says how long you’ve been doing this for a few years. And I actually think back to it, and it was 2003 when I first became a risk rider with the Commonwealth Bank and signum coming up 18 years, which he There you

 

Fraser Jack 

1. Yeah, fantastic. Now Now tell me about their journey, obviously starting as a risk rider. And then now your your main process your worst retirees?

 

Richard McErlean 

Yeah, well, personally, I like problem solving. And as far as I’m concerned, financial planning is just the world’s biggest cryptic crossword. So wanted to get into it, got my foot in the door as a risk writer at CBA. And then just progress through that. I’ve worked for three, the big four banks during my as I like to say my institutional years, then had the opportunity to move out and then go work for a boutique firm, which opened my eyes immensely to what else was available. And then the opportunity presented itself and I was able to start our tg financial services, which Yeah, it’s been

 

Fraser Jack 

absolutely great for me, yeah, fantastic. I can just see this really jelled with your own personal values and beliefs and around the idea of, you know, having your own business coming from going from being told what to do in a large corporate to you know, as you said, being the CEO of your own decision making process.

 

Richard McErlean 

Yeah, I always had a very strange that. When I was working for large organizations, the answer was always whatever product they want to do to Hawk. So I always found that a bit strange, but anyway,

 

Fraser Jack 

yes, yes. Well, now Well, now you’re in trouble to your clients. And your wife and kids, I guess.

 

 

Yes.

 

Richard McErlean 

Yeah, yeah. The Never underestimate the desire to buy groceries. So yeah.

 

Fraser Jack 

Interesting. So, so essentially running a business with with yourself as the advisor. And and, you know, and doing all the other parts of the business itself, as well. And you and your typical client, the moment is retiring or about to retire in the retirement phase?

 

Richard McErlean 

Yes. So the breakdown of my practice at the moment is the typical client is a retiree that saw that recently retired or currently retired, but very much in that retiree space. Yep. And I have within that space, I have couples, I have singles. I

 

Fraser Jack 

have, I have singles that were part of couples, so on and so on. So if from that retiree side of things, I’ve pretty much got them all covered. Yep. Fantastic. And I want to explore some of the conversations you have with them around the stages of retirement in the stages of their life from sort of when they come into to see you as a pre retiree, all the way all the way through to the Aged Care conversation in I like the way that you describe this. Can you elaborate

 

Richard McErlean 

So, as I explained to clients, especially the pre retirees, there’s no magic in retirement for me, I’ve done it, I’ve seen it. I’ve seen it work well. I’ve seen it work poorly. I do explain to them that From my own observations, people then fall into three categories through their retirement years. And a lot of this is driven by state of mind. But I start off with the teenage years. And, you know, I’ve got this belief that pensioners turn into teenagers, because they get that little bit of freedom. And they want to get out, they want to do everything they want to done yesterday, they want to travel the world, they want to travel the country, they want to see everything, they want to do everything. And they all want to do it in a short space of time. And there’s no holding them back. And you can’t tell them no, either. The more you tell them no, the more they resist. So it’s in working with them and letting them know, yes, you, you will have these goals, you will have other expenses, you will have other experiences that you want to have through your retirement years, helping them just prioritize it, highlighting the effect that is going to have on their overall retirement base. And it’s quite interesting, because I’ve discovered that people are more content with their overall retirement, when they do start to achieve their own personal goals. So for example, if they wanted to travel to Italy, if they wanted to do you know, these nice when they have achieved those things, they’re a lot more comfortable in, in retirement, and they’re a lot more comfortable about their retirement. And they don’t seem to get as hung up as what we might think, on things like oh, how’s the market going, how’s this going down, they sort of hit that calm stage of their life, or the next phase, which are referred to as the comfy shoe phase, where that’s where they like, yep, as long as I’ve got a pair of comfy shoes that can take me around, I’m very comfortable. They’ve got that, that travel bug out of them, or whatever large goals they had. This is where they might have start having some health concerns or in a couple and this is very important as well, that maybe one of them’s having health concerns, and the other one’s not. But you know, the one that has health concerns will dictate what will happen. But they really do they, they fall into that comfort mode. And that’s when they really then start to sit back, relax and enjoy retirement. That’s where a lot of them will, you know, now I look after the grandkids, and I do all of these, because then that becomes a priority. And then the last phase, as I like to call it is the comfy chair phase. And that’s where they’ve got a comfy chair to sit in, they’re more than happy, you know, they know they’re not going to be moving around doing things traveling north, or anything like that anymore. That’s where a lot more people are coming to see them and then going to see people and that comfy chair phase. They know when they hit that where their life is progressing to. But if they have achieved those other goals that they had, that’s where they sit their content. And it’s interesting, I break it down with my clients that as much as we focus on the money side of things, you know, is, As the old saying goes, there’s no luggage racks on the hearse. So people who understand, I’m here to enjoy this, make the most of it, I’ve worked hard, I want to achieve the things I want to do, then moving on to that next stage of their life. Quite content. Yeah, that’s, that’s

 

Fraser Jack 

a very, very good way of describing and I couldn’t help notice that when you describe those three stages, you’re talking about all about the emotional frame of mind or state of mind. That’s going through, you know, as a financial planner, you’re not, you know, focusing on the numbers and what that means and spending and all those sorts of things. So let’s start with the teenage years, because I want to get just go back here, I would imagine, because a lot of this is around the transition into these into these phases transitioning in and out of these phases. I would imagine you’re, you’re going you’re changing the conversation from what could be quite scary conversation of retirement and therefore going through, I’m gonna lose my identity, I’m gonna lose it, I’m gonna lose that through to quite an inviting, I think I think people living their retirement would seem quite excited about the idea of reliving some teenage years.

 

Richard McErlean 

It is interesting because as humans, we’re creatures of habit and you can’t expect someone to work for 15 years, and then just turn off the tap. I will claim retirement is keeping people engaged. Now, some people will want to play ball, some people will want to go camping, some people will, you know, want to travel overseas, whatever it is, whatever that he is, it does need to be scratched. And that’s where I find working with a client towards achieving those goals. It’s amazing that you know, like you said before, sorry, Fraser. I talked the facts and figures, but the emotion of the client is the overriding factor normal This. So, for example, I’ve had situation well, just recently, a great example of all of these is the COVID restrictions. Now, I do know, as soon as travel restrictions are lifted, I’m going to have a whole slew of clients who will head off traveling. Because one, they wanted to travel anyway, but couldn’t, or two, they’ve realized, hang on a second, maybe are not always going to be able to achieve things. And just travel at the drop of a hat and do all this kind of stuff. So I’m going to take advantage of it and do it while I can. It seems working with the client and letting them understandable, if you’re going to do that, and it’s gonna cost you X amount, this is the impact it’s going to have on your future retirement savings. And as long as people are aware of that, they’re more than happy. You know, they’ll work through it. It’s interesting, because to go the other side, I’ve got clients who had all the planes in the world to travel and, you know, do whatever. And due to factors out of their control, you know, mainly around health. They sit there, and quite frankly, are pretty miserable. Because they, you know, I’m sitting on a pot of gold, but I can’t do anything about it. You know, I can’t go on holidays. I can’t buy that caravan. I can’t do this. That’s actually, from my experience worse. Because, yeah, that emotion side is a massive, massive factor. And you and I think as advisors, it’s the one thing that that we do underestimate, oh, sorry, undersell ourselves, we deal with retirement every day of the week, you know, so we know what’s ahead of the clients, or another thing I like to tell Clancy’s, it’ll take you 18 months to ease into your retirement because you were used to getting up going to work and we’re used to doing things. And it’s like a hot bath, you don’t jump into it, you ease into it. But when you’re in you don’t want to get out.

 

Fraser Jack 

That’s a good way of looking at it. But you just interesting that 18 month transition period, I think a lot of people I’ve spoken to a very similar on that conversation, you know, probably to two years, at least depending on the person. And of course, depending on the mindset and the mind flexibility.

 

Richard McErlean 

For the other big factor in it as well is why now every advisor has been through this situation where you sit down and you start discussing someone’s retirement plans. He click your fingers, and they are two years into retirement. And you’re sitting there going, do you know you first came and saw me five years ago to start planning for this? And that’s when the mind sort of hits and it’s like, oh, I was worried back then. I’m now into it. And what was I worried about? Like, everything that you said kind of happens happened. And away we go. It’s amazing how quickly the time passes for the client. And they Yeah, they’ll fall into that retirement really quickly.

 

Fraser Jack 

Yeah. Yeah, lucky, too, they’re not gonna get out of the bath. Tell me about the gods conversation? Because I think I would just want to dig a little bit deeper on this, how do you have that conversation? It’d be at the beginning around what their goals might be, say in those teenage years.

 

Richard McErlean 

Walk bluntly, ask them what is it you would like to achieve? And let them talk? Let them it will I I’ve had it all I’ve had the travel internationally that travel domestically, you know, we want to buy the caravan and the and the Land Cruiser tell it ran Australia, I’d one lady who wanted to buy a BMW something sports car, because that’s what she always wanted, you know? So it’s just, it’s working with people, and letting them talk to you. And then just dealing back to them what the consequences are of the decision making? That’s it, you know, it’s not sitting there and tell them yes or no, because if people want to do it, hence mine, the teenagers, if they want to do it, they just gonna do it anyone. And you can either hold their hand through the purse, it’s and look after them through it, so they can make informed decisions. Because otherwise people will just go and make rash decisions, sort of thinking about today rather than down the future. And again, that’s our role as advisors is just finding that balance, keeping them informed. So sorry. So back to your initial question is, I will talk to them about what they want to do. Then we’ll talk about how it’s going to be funded, if that makes sense. You know, yes. Because that is the that’s the catalyst.

 

Fraser Jack 

Yeah. Because often people will stop saying what they want because they think they can’t afford it.

 

Richard McErlean 

Oh, of course, of course. And, you know, vice versa the other way, you know, they, you know, I want to go on a three month, first class European holiday and you they’re going on Well, you don’t have anything left. No, it is, it is saying I liken it almost to a, you become a financial doctor at that point rather than a financial advisor. So you try to just assess people through, have a look at what they are, where they are, and then hold the heat.

 

Fraser Jack 

That’s very interesting term financial doctorates. Yeah, fantastic. Now, when, when you talk about people in these, these stages, did I ask about? How long? Like, do you have that conversation about how long would each stage team?

 

Richard McErlean 

No, because that’s the unknown about all of this is, you know, of the who, what, why, how it’s the win, because when someone’s comfortable retiring, when they want to do whatever it is they want to do, when they moving into the next phase. And you also have to address this, especially in couples, you have to address it per individual. Because you might have a situation where, you know, you know, just go the typical husband and wife, you know, the wife might be ready to, you know, keep you know, spend more time at home, whatever. But the husband, he’s still keen on loading up the caravan, and going or the husband’s got to go in for a hip replacement. And he knows he can’t lug around this, you know, 30 foot caravan anymore. Whereas the wife’s there, I’m still comfortable, I still want to go traveling. So even from that point of view, it’s understanding what the individual within the couple wants, it’s then sent back to finding common ground and just working with the Yep, the when they’ll come to you. And it’ll be one of those things, as they start to move from the teenagers to the comfy shows, because you start to see the drop off well, or, as I like to say they’re more accessible because they’re not as why, as often, you know. So, I’ve got clients who just emailed me yesterday, who are very much in the teenage years, and they’ve hooked up their caravan, and they said, we’re heading off, and we’ll probably be back November, you know, if you need us, we’re on the email. That’s, that’s it. Whereas I’ve got other clients who’ve never done that, who were now, you know, if I drop them an email or give them a call, they’re at home, they’re accessible, because they’ve studied, they know themselves, the times come that, you know, they take and things just that little bit easier. So yes, there is no set time, unfortunately, it’s it’s all to do with the client.

 

Fraser Jack 

Yes, yes. So that time is very hard when to work out that and it always depend. But this is a really interesting point you’ve raised here around the concept of accessibility when you’re doing your ongoing reviews or ongoing conversations. If somebody is in those teenage years, it’s bit like trying to communicate with a teenager, right? It’s it’s, they’re not around or they don’t want to talk to you. Yeah,

 

Richard McErlean 

yeah, I am. And I had one client in particular, this is I take this as a good news, bad news story. I got an email from labor on holidays, and they said, Oh, Richard, our account based pension payment hasn’t gone in. Today, new does chase that up for us. And they were staying in front of the Taj Mahal. I took a photo and sent it to me and attached it to the email. So I replied back that, you know, after further investigations, retire ration, we haven’t that much fun. So the funds have been cut off. Now, replied back, and you know, that yes, it has been delayed people public holiday here in Australia, but was coming to the mat overnight. But that’s, that’s exactly. They’re on the other side of the world having the time of their life. They drop an email, and they’re like, oh, let’s rub it in and author in front of the Taj Mahal, you know, but that’s, that’s a good news because they were enjoying it, they doing what they wanted to do. That’s so good. And I actually take a bit of pride in that, because those particular clients are like our should we shouldn’t wait, they did their travels, they more than happy to Yeah,

 

Fraser Jack 

again, good old teenagers and join this part of the part of the retirement plays. So talk to me about the company shoes in the in the the last part of the comfy chair conversation because that that can be quite a very, very different level of excitement, I guess for you as a as a planner to have Converse be having conversations around, you know, the comfy chairs own

 

Richard McErlean 

well, so just to touch on the comfy shoes. That’s the majority of that, you know, the client will understand you know, they might have medical Look, condition, no, you know, Father time starts catching up with them and they do, you know, just start to slow down, that’s also the time they understand where their life is headed, the conversation will change as the priorities for the advice will change. So that’s the phase where they, you know, as I like to say, they really want the surety of income. So yeah, as long as I’m getting the money that I’m getting now, I’ll be fine is, you know, a line I hear all the time. And then as they move into the comfy chair phase, it’s making sure that they know they’re going to be looked after. And this is a real spot for them engaging the next generation because these C’s talking to the family members around, you know, how a mom and dad were they positioned, if they’ve got to move into care, this is what they’ve got it, it’s actually quite surprising. When I do have that, you know, those family conferences, as I like to call them, you’ll be sitting there with mum and dad, and, you know, son and daughter, and the son and daughter have little to no idea what mom or dad’s financial circumstances or you know, situation actually is. And, you know, while that’s, that’s fine, it is taking that time to sit down and, and explain to them will, this is what we need to look at, in the event of mom and dad needing to move into care. You know, these are the good points, these are the bad points, this is what we need to be on top of. And it is it’s that reengagement ain’t. Where it works well is in that family conference scenario. So that when does when decisions have to be made. People are making them in an informed manner. And they’ve been made aware of it up front. There’s nothing worse than a lived experience where a client, if she had a fall in the townhouse she was living in, she banged herself up quite well. And she went to hospital. And they done an aged assessment on her house. And because it was a two story, townhouse, they wouldn’t let her home. So they shipped her off to a nursing home with the first available bed. And of course, the families distraught because they turn up the hospital thinking mums going to be on the way home and she’s been loaded into a ambulance and been taken to a nursing home. So it’s, it’s at that moment that people understand that Oh, yeah, I should have had these conversations prior. going the other way, as well, also from an estate planning point of view, because, you know, you have the circumstances where people might be in a position where, you know, their money is gonna outlive them. And they want to make sure that that’s passed on, in a way that’s favorable and beneficial to their beneficiaries. Yeah. So if it’s an ongoing, evolving process, you know, it would be great if it was set and forget. But unfortunately, no, it’s not.

 

Fraser Jack 

Yeah, the the family conferencing is really, really important. It’s an integral part, isn’t it? In our imagine there’s a lot of situations where that is not necessarily a straightforward meeting, there might be a lot of integration or tensions going on between families.

 

Richard McErlean 

Yes, it would probably make for a good reality show, to be honest. But you do have so many layers upon that, you know, where your mom or dad? Can they live with a son or daughter, you know, do they have the room? Are they going to have to go into care, where’s the nearest place? I’ve had clients who moved into state to, you know, be put into an aged care facility, just so it’s getting closer to family. It’s just those kinds of things. And it’s very much I think, as an advisor, and having, you know, experienced even saying, we do have an obligation, let people be aware of the good and the bad points of all of this. Because that to me, you know, we talked about best interest duty that’s working in the clients best interest is highlighting these things to them. And explain that, yes, you need to stop having these conversations with your family, you know, what’s your plan B. And then engaging with with the clients.

 

Fraser Jack 

So proactively getting on the front foot and getting these meetings done early?

 

Richard McErlean 

Yes, yes. By the way, they’re difficult and nobody wants to do them. But unfortunately, the reality of life dictates that, you know, this needs to be done. It is one of those C’s, especially around the estate planning, it’s little things like I said, People make sure you’ve got an up to date power of attorney. And, again, if it’s a husband and wife situation, don’t lose the husband, or the wife is the power of attorney speak with solicitor, because you need to make sure that whoever is your power of attorney that they’re not sitting there, in the room next to you, you need someone who can actually make informed decisions on your behalf, who is not going to be potentially in the same position you are, is sort

 

Fraser Jack 

of set semi detach from that really raw emotional, if, at that time. Now, obviously, it makes a lot of sense to to, to talk to clients and put things in place in these three different areas, you know, the the three different stages and the transition periods that go along with that. What how do you do that from a planning point of view? Like how do you set things up and help them get their finances in shape, so that they can, you know, go through those emotional time periods,

 

Richard McErlean 

it comes back to listen to the client and prioritizing what the goals are. So through the teenage years, you retire, you prioritize those goals, when you move into the next phase of comfy shoes, you start to prioritize those goals can’t be changed that prioritize those goals, because they will be significantly different. You know, you cannot do a whole, I believe you cannot do a retirement plane and say to someone, hey, you go, go your hardest. The chart says you’re going to go from here to here. Fantastic. See you later. Now, it is keeping in constant contact with the clients, asking them the questions, asking them the questions around health, asking them the questions around their family circumstances, asking them, you know, the questions around what, what they want later on in life? You know, do you want to be placed in K? Would you rather live with a family member? You know, it’s asking those questions.

 

Fraser Jack 

It doesn’t seem like it’s very easy to calculate then if they’re questions based on income, or money,

 

Richard McErlean 

no, but that, that then becomes the base, or the calculations for the income so on and so on, which will then dictate the advice you then give

 

Fraser Jack 

you. So what does it What does the plan look like for you? Or is it I guess it’s more it’s more casual, upfront and and tapering spending as they go?

 

Richard McErlean 

Well, I like to use the term surety of income. So people want to know that, as long as I’ve got the amount I’ve got last year, I’ll be okay. They adjust the living standards to the income they receive. So, especially people transitioning from the teenage years to the comfy shoe period, that moment, you almost need to realize what the income requirements are only because in the teenage years, they have spent time you know, traveling or you know, playing golf or whatever, is that starts to wind back. There’s other needs that come in, you know, there’s medical costs that show into the entertainment expenses they once had, and, you know, that kind of thing. So it’s recalibrating where they actually are, and then starting afresh, and working from that,

 

Fraser Jack 

and where we go, and how do you then provide that surety of income because obviously, interest rates and helping us at the moment?

 

Richard McErlean 

No, and that’s why things such as an annuity do falling quite nicely, because you can use that to provide that surety of income, where if you can maximize a client’s Centrelink benefits, if they’re eligible for you know, the situation, we’re going to start out, if you can maximize it, the same length benefits, and then also provide them with a regular income that they know is going to hit their account every week. When you start them break that down and go, okay, have your income earnings and audit a quick calculation on one of my clients and husband and wife. They require $50,000 a year, you know, to live on, we’ve been able to maximize the pension. And with some annuity income 80% of the income natans is coming to them in the form of the pension that’s being maximized, and the annuity. So, you know, 80 cents in the dollar is coming to them regardless of market conditions, regardless of other decisions they make, whether they take money out, do whatever they want to do. That surety gives them a great deal of comfort. That becomes the new pay packet for one of a better term that allows them to then sit back and go, this is what we’ve got. This is how we’re going Don’t leave yet we were going great. And they have been able to utilize other money for holidays and golf for medical costs, whatever. And away we go.

 

Fraser Jack 

So that incline terms, that’s that shirt is really there. There’s certainty filling their emotional boxes. But from a financial planning term, I guess that’s defensive term offensive assets or how do you? What do you say?

 

Richard McErlean 

Well, yeah, again, it comes back. When you utilize an annuity, it has to be dealing with their overall needs. Okay. And annuities aren’t for everyone. There’s a variety of reasons why, but understanding? Well, you have a look at the client’s situation, what’s most important to them? Can we maximize Centrelink benefits? Can we utilize a portion of the funds that would have been directed towards defensive assets? To be parking, you know, placed into an annuity? What’s the benefit of that the clients received? And that’s where, as an advisor, especially one for myself, I have to be honest, I’m very annoying to my challenge mediums, because I’ll give them scenarios to work through modeling and in so forth to say, Hey, here’s the client circumstances, will they be better off with X, Y, or Z? And they’ll work through things with me, you know, as the as the tea lady in the state and the CEO. Anything that I can ask somebody else to do is great for me. So it’s engaging with them? And giving them a scenario, Hey, is this worthwhile? What are the good points? What are the bad points, let’s start working through it. Doing that

 

Fraser Jack 

then allows you to make an informed decision for the client, and then pass it on to the client and go, Okay, you’ve told me These are your needs in retirement, this is a way we’re going to look to go about achieving that. Yep. You mentioned planning standing. And I think surety of income is is a is a great term. But obviously, you need to do some sort of, you know, educational process with the clients, as you as you’re explaining this, how do you find a lot of them understand that or you know, that that process or what that means to them?

 

Richard McErlean 

Yep. And client education is a huge part of any part of financial planning. You know, it’s our job to educate the client, because the more educated the client is, the more buy in they have. And the more they take your advice on board, the excuse my own experiences. So when working with a client and their retirement needs, whether it’s an account based pension, whether it’s an annuity, whether whatever source of income, you need to educate the client, on that portion of it, and then how it fits into an overall strategy. So to use a term, that analogy, it’s, it’s like a jigsaw puzzle, you’re trying to put it together, and you need to place them right, in order to make sure the overall picture comes through. And then it works. You know, unfortunately, the days of, she’ll be right mate are long gone. That being said, clients are a lot more savvy than than they’ve ever been, they asked a lot more questions, clients will want to know, why are we doing this? What was the alternative, likely going with, you know, company x, y, Zed? What do you know about them, all that kind of stuff, which in years gone by was never added. Now clients, they do want to be educated is a bit a little bit of knowledge, and they want that to grow. So it’s then breaking it down and explaining to a client? Well, let’s have a look at your overall retirement needs. This is what we’re gonna look to do. We’re gonna solve it with this, this in this in a way, we

 

Fraser Jack 

mentioned the generational changes that happen from you know, parent to child, and the fact that the baby boomers are never going to want the same thing that their parents went through. And as you mentioned, that you know, more information. And I think we live in a world now where information is still easy to come by. So people are getting information from all different angles. And whether it’s the Uber driver or whether it’s a Google search or whatever might be so there’s plenty of information out there, I guess, translating the information and then pointing it back to how that suits their current situation. And these’s is

 

Richard McErlean 

is the role. Yeah, um, one thing retirees the place, they’ll get a lot of their information from his other retirees, they’ll want to know how come friends of theirs are able to do all this stuff, you know, why are they able to travel all the time? Or how come they’re getting so much more pension than mean? It’s, it’s those kinds of questions as well, that you’ll get, and again, it comes back to the education part of it. And it’s very much around the strategy and the tactics of the retirement planning. So Though it’s, this is what we’re looking to do. These are the reasons why. And this is going to be the the the outcome that we’re going to be marked by, you know, and with retirees, I found that the income that they’ve received is the mark they want to be assessed on. So how have they received enough? Has it maintained a comfortable lifestyle with them before them? And how’s it has it allowed them to achieve those little goals? They wanted to? You can’t just sit back and push something across the desk and say to someone, you know, yeah, she’ll be right, mate, she’ll be fine. No, doesn’t work like that? Never has, you got to engage the client. And you do have to take things to a date? Don’t you know, you do have to explain to the client, you know, why are we recommending a reversionary beneficiary explaining to them? You know, especially in the couple’s scenario, these are the reasons why, you know, this, if by chance one of you was to pass, you want to make sure that you can can keep continue receiving this pension payment, so on and so on. When you’re stuck into the comfy shoes, and especially the comfy chair face, well, maybe they want to change their beneficiaries, you know, maybe they want to start leaving it to their state, rather than to a surviving partner who might be wanting to maximize settling benefits at that time, and actually don’t really require a whole heap of assets been your lift to them?

 

Fraser Jack 

Yes. So and I guess the biggest, the biggest conversation that we had around that is the idea of forward planning, not not putting out fires.

 

Richard McErlean 

Oh, 100%. Yes. A good financial plan have always said you should never know that you’ve been through it, because you’ll just sit back and go, Oh, gee, that was easy. You know, you got Yeah, that’s the whole point of it. If you didn’t want it to be easy, we would have just never addressed it. You wouldn’t know one. Yeah. Yeah. The other side of it?

 

Fraser Jack 

Yes. Fair enough. So So I mentioned this a lot of change going on, with the retirement of baby boomers coming through that it’s not always going to be the way it used to be and what do you see some of the major changes coming through the

 

Richard McErlean 

well, constant is the only change. You know, I jokingly say to my clients, if they left things alone for 12 months, I wouldn’t know what to do with my free time I you know, it’s ways as advisors will even as a you know, a much larger, you know, all involve the superannuation industry as a whole. We’ve got Remember, the baby boomers are the first real cab off the rank, so to speak. So there’s going to be continual tinkering with it. To use an analogy, the Model T, Ford is a car. And you know, the Tesla x is also a car, but there’s been massive changes along the way. But the car’s still the car. And I say to my clients, the only constant is going to be changed, change is going to be put upon you, rather than you actually looking to make it, whether it be legislative changes for superannuation, whether it’s going to be changes to Centrelink rules, whether it’s going to be tax law changes, all of these things are going to have a much bigger impact on their future decision making, then then the decisions that they will actually want to make. So it’s also explained to the clients. Flexibility is a very underrated commodity and all of this, you need to make sure that they are well positioned to zig and zag. If need be. So yeah, changes the

 

Fraser Jack 

only constant. Fantastic. I couldn’t agree more. And I love the comment about flexibility too. As far as change goes, what about you personally, in your business? Is there anything on the horizon? Yeah, well, I’ve

 

Richard McErlean 

started with a new licensee, which is fantastic. The previous licensee arrangement I was under was not the best is what I’ll say. And it’s actually very refreshing to now be with a licensee that, as I like to say is as client focused as what I am, and is more will is very much focused on advice, rather than where things apply. Because I’ve always said the advice should work. Regardless of where the money’s actually placed, you have the right strategy and it all works out. So that’s that’s very reassuring. That being said, I do have plans for growth over the coming years. I would have liked to have achieved that growth by now but I’ve had you know a couple of years of we’ve all had a couple of years of a lot of change and a lot of other lot of other priorities popping up so yay. Good word other priorities popping up so few decisions that that aren’t in one of my mind but I’m in on seven glad that have been Yep, but Yay, onwards and upwards. Yeah, fantastic. Obviously, all the new requirements that we have to go through now I’ve passed the phasor exam, I knock that over last year, and then the phaser extinction subject as well knock that over. So all of these things, you know, we can all grumble and groan about them, but the sooner we knock them over and, you know, just go back to concentrating clients, because I think there’s a huge untapped market out there. And the vast majority of my clients come from referrals from current clients. And they come about because back to a comment earlier, but people have a little bit of knowledge. There’s a lot of people out there who think they have too much money for the pension, so they won’t even apply for it, you know, and they’ll be drawing down on their money for years, without understanding what the rules are around sembalun. Plenty of people still think the family home is Canada’s an asset. Oh, so I’ve got too much or I can’t do that. Or they might be working part time or because I’m working. I’m not eligible for the pension. So it’s when you actually sit down and you start discussing these things with clients, they actually comment I get is why do I talk to you years ago? Now? Yes, yes. Yes.

 

Fraser Jack 

I think that’s a very common thing across a lot of people I speak to all the time, it’s the best time to start having the conversation was many years ago. But yes.

 

Richard McErlean 

Or the other one is, when did they make that change? And I go, No, it’s always been that one. Oh,

 

Fraser Jack 

no, very good. Well, thank you very much, Richard. So if someone wants to continue the conversation with you, what’s the best way for them to reach out if

 

Richard McErlean 

they just want to send an email through to admin at RTG? Financial services.com.au. I’m more than happy to discuss things further. We’ve been, that’ll be great.

 

Fraser Jack  

Fantastic. So you’re the admin in this in the in the CEO and everything.

 

Richard McErlean 

Yeah. So what I’ll do is I’ll pretend to forward it on to the CEO and then I’ll just come back and read it.

 

Fraser Jack 

Thank you so much, which really appreciate your time.

 

Richard McErlean 

No worries. Thank you, Fraser.

 

Fraser Jack 

There you have it another episode of The X Y advisor podcast. I’m Fraser Jack and I’m joined by Emily. Hello, Emily.

 

 

Hey, Fraser. Well,

 

Fraser Jack 

it’s time it’s time that we do the shout outs and we’ve got a bit of an extra special shout out or announcement little thing this week, don’t we?

 

 

Yes, we definitely do it. This is a big shout out and a big welcome to our newest head of growth Danny vis are super excited about this. Danny is an absolute legend. She’s renowned in financial services has been doing amazing work both with advisors and corporates and everyone in the like and she has brought a great energy and enthusiasm to x y and we’re really really excited to have her on board. So Danny, welcome looking forward to it.

 

Fraser Jack 

Yeah, I’m super excited as well. I think I’ve known Danny for about 15 he’s also like when she was at the Believe it or not Junior underwriter with with with the one with the insurance companies definition say which one and then and then yes, you know, back in the year she’s from she’s a local Brisbane night so Queenslander and lives in Sydney obviously these days but yours so excited to have Danny on board here at x y welcome Danny and if you if you know Danny then jump on her LinkedIn page, reach out to let her know take congratulations and in dobber In fact, she’s been given a shout out on the x y advisor podcast