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Podcast Transcript

Episode 54, Season 1

How to innovate in the retirement space, with Caitriona Wortley and Jacqui Lennon


Jacqui Lennon: 00:00 What we need to do is we need to develop some personas, so let’s stop talking about users and start talking about real people because there are humans at the end of this experience. And we started from that very point by putting the journey pages up on the wall and mapping out what do we need to do to deliver awareness or how will retirees and advisers think about it? And that really drove everything around what people will be going to need, what did the old structure look like? What were the key things we needed to deliver from a technology perspective? What did the system need to do? All those sorts of things. So it was a really refreshing way to think about building a business, not from what we want to do, but what do our clients need from us?

Fraser Jack: 00:37 Hello and welcome to the Goals Based Advice podcast, where I have conversations with pioneers of the new world of financial advice. I’m your host, Fraser Jack, and a big thank you for tuning in today. If you’re enjoying this podcast, then please help me spread the word and share with your friends and colleagues or leave me a review. I’d also to thank our supporting partner advice intelligence for powering this podcast.

 In this episode, I chat with, not just one, but two incredible and passionate superstars, who are innovating the retirement products space. Caitriona Wortleyortley and Jacqui Lennon, from Allianz Retire+ powered by Pimco.

 We chat about how to design a product for the new world of advice, and focusing on the client’s needs, not just copy the old way that everybody has done in the past. We cover many conversations that advisors have with their clients every day, including just how advisors help their clients outside of the advice or the product. So if you have any retirement clients, and there’s a good chance that you do, I know you’ll get plenty out of this episode. Let’s hit play now on my chat with Caitriona and Jacqui.

 Welcome to the show, Jacqui and Caitriona.

Jacqui Lennon: 00:37 Hi.

Caitriona Wortley: 01:45 Thanks, Fraser. Hi.

Fraser Jack: 01:46 Well, this is the first time I’ve had two guests on the show at one time. So this could be an absolute raving success or a complete disaster.

Jacqui Lennon: 01:46 Let’s go for the latter.

Fraser Jack: 01:56 Let’s do our best. Do you want to just quickly introduce yourselves to our listeners?

Caitriona Wortley: 02:02 Sure. I’m Caitriona Wortleyhortley, I’m Head of Distribution for Allianz Retire+ powered by Pimco, which is in the running for the longest company name in Australia at the moment, but it’s important because it’s essentially it’s been the coming together of Allianz and Pimco to innovate in the retirement space.

Jacqui Lennon: 02:22 And I’m Jacqui Lennon. I’ve got a long job title to go with a long business name, Head of Product and Customer Experience, but really my job is to spend time out with advisors and customers and make sure we’re designing killer products and experiences for retirees, really.

Fraser Jack: 02:36 Now, customer experience is one of my favorite things of all time because I really to try and make sure that when I’m out and about, that actually, the customer or the end user is not forgotten about. But I thought that we might start with we might just jump back in time and tell us about how you guys came to have these really long job titles at this really long business name.

Jacqui Lennon: 02:59 Do you want to go first?

Caitriona Wortley: 03:00 Yeah. Sure. Wow. God, rewind. I studied finance and French in Dublin, in Dublin City University, and I quickly decided to ditch the French and stick to finance. So I started off actually treating features after I had done a stint in internship in the Board of Trade in Chicago, which was quite an enlightening experience. So I traded futures for five years, been in futures for about six years, and I felt that it wasn’t a sustainable profession, and I was going to have to do something a little different.

 So, I found myself in sales, investment sales after having dinner with a mutual friend in London where I was at the time, who was working for Fidelity. And he convinced me that I should give investment sales a go, which I reluctantly got into. I said I couldn’t sell ice to the Eskimos, but he convinced me it wasn’t about that and it was more about actually educating people and having good conversations and building really strong relationships, which he thought I’d be good at.

 So, I gave it a go, and yeah, I loved it. So I was in London at the time, met myself an Australian husband in Clapham in London, and took the opportunity to move to Australia, which I then carried on to doing investment sales for Zurich Investments, when I landed was my first role here, which was great and gave a good understanding of the Australian market.

 And then I moved to Equity Trustees where the focus was Pimco, so Pimco at the time had sourced distribution to Equity Trustees, and I really loved fixed income in particular. So, was spent to send a number of years there before actually moving to Pimco itself when the internalized distribution.

 So that’s been the chunk of, I suppose, six years, and really then, today’s role, as I mentioned, Allianz, who actually owned Pimco, we’ve spent about four years collaborating in terms of how we can get one of the world’s largest insurance companies and one of the world’s largest investment managers to innovate in the retirement space, which sounds easy, it wasn’t so easy in reality, but it’s been a great journey. And I suppose I was involved to, at a small extent, initially just having conversations with some of our clients with regards to our plans, and really quite early on was just very passionate about what this whole business was going to be doing.

 So, I jumped at the opportunity to move across to the new business when the time came, and I moved last March, 2018, and yeah, we’ve been building out the team since, and really enjoying talking about retirement, and educated people.

Fraser Jack: 06:00 Thanks. And J?

Jacqui Lennon: 06:03 Cool. My story takes place all in Sydney. I, straight out of uni, ended up with a job in [A&P 00:06:09]. I realized, actually, when I was thinking about this, I could have had a job in FMCG and my career could’ve been totally different, but I didn’t want to work in Parramatta. So that was the sole reason I made my career decisions and took a job in the city with A&P.

Caitriona Wortley: 06:22 Sorry, Parramatta?

Jacqui Lennon: 06:23 Yeah. I didn’t know, I was young back then, and I didn’t have a car, so I was quite worried about how to get there.

 But anyway, I started with A&P, and I spent five years in A&P moving around in a whole range of jobs, spent a lot of time in corporate super, but also managed to run the graduate recruitment program for a year and work internally in internal consulting. I then moved from A&P to APRA and spent two years in APRA, which was a fascinating experience intellectually, maybe the most interesting job that I’ve had, but culturally really different to who I am as a person, so I actually really found that quite difficult, although interesting. After leaving APRA, I moved to Macquarie, and I spent the next 10 years and Macquarie again doing a range of jobs. That was always the great thing about working in big companies, it’s the opportunity to move around.

 So I started heading up the risk and compliance team, which I think everyone who knows me now would think is quite hilarious. So I ran risk and compliance for a while and then I moved into deals, so I did M&A work for a few years, moved into a strategy role, and then had the great opportunity to move into customer experience in the personal banking space, and like you were saying, Fraser, once you see the world from that perspective, it’s really hard to go back. So I really unleashed this deep passion for design thinking and customer experience.

 So I did that for a few years at Macquarie, and then I hit 10 years at Macquarie and I went, “There has got to be something else out there.” So I quit with no job to go to and an expectation of buying a bookshop and selling wine. But that didn’t how it turned out. I then actually went into software design and spent two years working with financial planning software and spending a lot of time with advisors really trying to understand the process and the value that they’re giving back to clients and how technology can help them or hinder them in that process, and really trying to build a better technology solution to facilitate that conversation.

 And after a couple of years of software design, I had the great opportunity to be employee number one here at Allianz Retire+ plus. Of anyone that’s ever worked in customer experience, the opportunity to design a business from customer first principles is amazing. Most customer experience people have this horrible job with fixing legacy problems. So the fact that we could start with a fresh piece of paper and do it right from the first time, it was an offer too good to refuse.

 So, two years later, here we are, with a team of about 60 of us around us. My passion for the customer has not abated, and I annoy, I think, most of my colleagues with my constant ranting about how important customers are and retirees are and advisors and any investors. But yeah, it’s been a really great journey.

Fraser Jack: 09:05 Yeah. I have to say Jacqui, I feel exactly what you’re coming from with that. I love the idea of trying to work out how we can create technology and make it really fit the client experience, and I’m just really interested in how that your story went through to APRA and then all the way back, it felt like a pendulum swinging as you were telling that story.

Jacqui Lennon: 09:27 Yeah. It was funny because APRA was such a terrible cultural fit. And then when I was applying for jobs at Macquarie, they later told me that they weren’t going to hire me because I thought that I was too conservative and too APRA-like, I was like, “No, no, APRA weren’t my people, you’re my people. You’re my people.”

 So, I was really pleased that I managed to get through that process.

Caitriona Wortley: 09:46 But it’s even interesting about pendulum. I knew Jackie a little bit just from being around the Pimco office, but when I heard her title being Head of Product and Customer Experience, I was like, “What? How can they go together? They’re quite polar opposites,” in my head because, and this is part of the, I suppose the learnings of this journey is that, I think maybe we can delve into this bit more later, but I think usually that product design within financial services in particular, it doesn’t really involve customer experience. So it is just a very technical area that they’re coming up with product concepts. And yes, they may be tested in the market, but it doesn’t start with the customer experience, and I think that’s been really, for me personally, a great experience to really just witness, and I would say it’s become really part of the DNA of the business in terms of even within my team, the distribution team, we really do focus a lot more on retirees on those end investors than certainly what I’ve ever done in any other services job.

Fraser Jack: 11:01 Yeah, yeah. I couldn’t agree more. The idea of customer experience and a product owner or product developer going together. Once you silo, and then you realize, well, how can it not go together? How can [crosstalk 00:11:15] the lead.

Caitriona Wortley: 11:22 And it’s the little things for me, because big companies, it’s siloed and so you do have product battling with customer experience. What have I realized having this job is sometimes you’re there with your product hat on, but you’re making decisions that have massive customer experience implications. And one of these, I remember it distinctly, I was in Minneapolis working with the guys over there to build our product into the system and how it was going to calculate in the system. And there was a whole lot of actuaries who are all in product design and I was there with my product hat. And I said something about, “But how would that appear on the statement?” And they’re like, “What?” And I said, “Well, the statement would need to add up.” And they’re going, “Oh no, the statement’s not going to add up.” I was like, “We can’t sustain if it doesn’t add up.”

 So we had to change how the product got plugged into the system from that point, because we needed a statement to add up, which was blindingly obvious to me with that customer perspective. But these actuaries were very happy, but the statement wasn’t going to quite add up and all these things were going to be hidden in this one transaction. So it’s those little moments where you go, “Oh, of course you need product and customer experience together.” That’s why customer experience spend their whole lives having to create flyers and videos to explain your statement because it doesn’t add up and it’s not intuitive.

Fraser Jack: 12:26 Yeah, exactly right.

Caitriona Wortley: 12:27 [crosstalk 00:12:27] point of view, again, even, distribution perspective. And when I think of my team and the conversations that that customer experience and focus on the retiree allows us to have with advisors, it’s just so much more enhanced that, I think the understanding of our retirees, so, the team have all spend time with Jacqui interviewing retirees in their own homes when we were really thinking about how they’re feeling and about retirement. And it just really enhances the overall understanding. Obviously the advisors are very familiar with that, but it’s unusual for distribution teams from my experience to have that experience [inaudible 00:13:12] to relate to the advisor kind interactions and experiences.

Fraser Jack: 13:18 Yeah. I think it’s really important. Obviously, speaking to the advisors is point, but understanding what the end consumers are going through is the number one thing.

Jacqui Lennon: 13:26 Mm-hmm (affirmative). Yeah.

Caitriona Wortley: 13:27 Yeah. I like say, I like to say we’re all in the service of the clients, so we’re helping advisors help clients, but we’re all trying to help clients and retirees have better lives.

Fraser Jack: 13:38 Yeah. No, Jacqui, you mentioned you were employee number one. Firstly, how long ago was that? And tell us about how the team’s been built over that time.

Jacqui Lennon: 13:50 We started back in May, or I started in May, 2017. There are a couple of project guys who’d been sent up from Munich, so they’ve now gone back to Munich, but at the beginning, my first day we had a workshop, actually there were some people out from Minneapolis, there was a whole range of crew that were assembled and we all got into a room with the business case and went, “Okay, what do we do now? How do we turn this business into a reality?”

 And we got to know each other and do those usual team-building things, and then we quickly went, “Okay, well let’s think about how we’re going to structure out what clients need.” And I quickly said, “Okay, what we need to do is we need to develop some personas. So let’s stop talking about users and start talking about real people because there are humans at the end of this experience.”

 And we started from that very point by putting the journey stages up on the wall and mapping out what do we need to do to deliver awareness, or how will retirees and advisors think about it? And that really drove everything around what people were we going to need? What did the org structure look like? What were the key things we needed to deliver from a technology perspective? What did the system need to do, all those sorts of things. So it was really a refreshing way to think about building a business, not from what we want to do, but what do our clients need from us.

So that really drove that. And then we started recruiting one by one. Adrian, the CEO of Pimco was managing the project and he was effectively the CEO of our business as well. So we didn’t get a CEO, Matt Rady, until July.

Caitriona Wortley: 15:24 June, July last year.

Jacqui Lennon: 15:25 June, 2018. So we had a long time with no formal boss. So it was a real collaborative effort. I went to a lot of interviews to make sure that we were recruiting people that I felt had the right culture, so mainly the people that I wanted to work with, which was awesome, I was having to spend a lot of time in big corporates with, I to call it on my polite days, maybe a focus on form over substance. I was really focused on making sure we had those people that were really highly collaborative, who didn’t need to look good, they just wanted to get stuff done and they were really motivated and had a great culture. So I think we’ve got no show ponies in our business. We’ve just got those real great people you want to spend time with [inaudible 00:16:11].

And it hasn’t been easy to recruit, particularly in a startup environment, because despite being part of the Allianz Group, we were really startup-y and we were in shared office spaces, and it was six of us and we had to do everything. Like the printer broke and we had to work out what to do with that sort of stuff.

 And some people couldn’t cope in that environment, so you’d recruit them, like we got a guy in and he was there and he goes, “Okay, so I’ve written this brochure and so where’s the marketing department?” And it was like I could see the people in the room, “This is the marketing department. So we’re just going to have to work that out.” And some people love and thrive in that environment and other people are crippled by overwhelmedness.

And so it hasn’t been right for everyone. There’s been a few people that that have left, but the team’s really awesome. It’s really a great team. One of the key first hires were some IT people because there’s obviously IT build, but one of them was Melissa who’s our Head of HR and she’s really been critical in helping drive that culture and make sure that we’ve got that right team.

Caitriona Wortley: 17:10 Yeah. I think the standout for me, if you summarize the team is the passion. I think everyone here, or a large chunk have obviously come from financial services, and I would say the number one thing they all say quite quickly and even in the interview process is the sense of passion of the team. We really do feel we are doing something different here and we are going to change people’s lives. And that comes through even with our product Future Safe that we brought out in March, the Lantech wrote up a report, and issued a reading soon after we launched.

And it was the first time ever I’ve read your report from Lantech or any research, how it was talking about the passion of the team, and I just think of it as it was my favorite sentence in the whole report, because it really does drive everything. It’s not easy being in a startup as you would know as well. You do need to have that overarching passion to push through there not having every process in place and really coming up against barriers and how do we do this? How can we do it differently? Constantly just driving ourselves, so the passion is amazing.

Fraser Jack: 18:23 Yeah. Having been to your office a couple of times and walked in and noticed that definitely everybody is enjoying themselves, no one seems to be there under duress. Everyone seems to be really bright and happy place to be.

Jacqui Lennon: 18:36 Yeah. My job requirements are a place where I can wear jeans and have fun, and if I don’t have any meetings, that’s absolutely, wearing jeans is part of the casual culture and just getting stuff done, and we do have a lot of fun.

Fraser Jack: 18:48 Yeah, fantastic. And Caitriona, what about your team? You’ve built a distribution team?

Caitriona Wortley: 18:54 Yes. Yeah, we’re built and still building. We have nine people in the team now across a variety of roles, which seems a lot for a brand new startup, but I think the point is, again, when you think about retirement and we’re on a mission to innovate in retirement because we think it’s been lacking. The innovation is great, an innovation in retirement is great, but equally it’s difficult, so there are complex problems that you’re trying to solve for, and you need to do it in a way that people can really easily understand. So education is critical. So education and a focus on helping people understand the products in a simple way is really important. So there is a big focus on distribution and working with advisors, understanding the problems that their clients are trying to solve for and how we can help with that.

Fraser Jack: 19:54 Yeah. Now, let’s talk about these words that keep popping up, “innovation in retirement.” Interesting, isn’t it? Because some people might think, well, retirement’s retirement, but retirement’s changed a lot.

Jacqui Lennon: 20:09 Yeah. We did some research, and it becomes apparent when you sit and think about it for more than five minutes. But we did some research out and looking at what was going on with retirement and the generation of baby boomers who now have it starting to hit retirement. And if you stop and you think about that generation of baby boomers, they’ve done everything differently. They’re the bra burners, they had the big thing in the 1960s, the women in the workforce, women’s rights, going back to work, how they raised their children, it’s all really different.

So it’s inevitable that retirement is going to look different in the future. It’s not about just stopping work and going on two caravan holidays and then just staying at home, when I go out and talk to retirees, you see ... This one lovely man who owns 14 guitars and retirement is now his opportunity to express these creative self. And the way he said it to me, it was, “I’ve just got all these poetry inside of me that needs to get out and the world needs to hear it.” And I’m not sure that the world actually needs to hear it, but it definitely, he really felt he needed to get out.

So for him it was about creativity and expression and traveling and seeing all these sorts of things and doing really different adventures and not just sitting at home maybe going, playing golf and playing bowls. It’s much bigger and much broader. The globalization of the world means that people’s expectations of what they can achieve are much bigger. And also when you think about how long people live for in retirement now, it’s 30 years. So their ability to actually do a whole range of things looks very different. There’s obviously a very active stage, not obviously, but frequently there’s a very active stage at that beginning of retirement where they’re looking at traveling and those sorts of things. But building up that connections and communities, so we’re seeing lots of volunteering, giving back to ethics teachers and primary schools and volunteerings of museums, there’s huge volunteering connections, community.

And then I really think, and we haven’t even really got to that yet, but if you start thinking about that end of life experience for the baby boomers, are they going to move into aged care? What will aged care look like? What are their expectations of community in that latest stage of retirement? It’s definitely starting to change, and I think retirement is just only going to increase in its rapid change.

And I don’t think we are very good in our 20s, 30s and 40s, imagining what retirement is going to be. You just go, “It’s the shiny thing that I’m aiming for and then what? So I think we don’t spend enough time thinking about that part of our life. And when you spend time out with retirees and people in that demographic, you realize that it’s an amazing time of life. I’m one of the retirees I spoke to, he said, “It comes highly recommended, Jacqui, so get onto it.” But I think there’s a whole range of things, but people’s expectations are massively escalating.

Caitriona Wortley: 22:59 Yeah. It’s funny. We did actually a workshop with just our team two or three weeks ago where we actually very deliberately spent time thinking about, we all closed our eyes, and the exercise was to imagine ourselves at 50 and then 60 and then 70 and then 80, and it really is actually a really good exercise because it just shows how when you really spend the time thinking about it, again, it sounds quite obvious, but it felt, again, 50s, 60s felt great, you’re just having really happy thoughts, lots of [inaudible 00:23:37], lots of travel. And then once you probably go, I think it was the 75 that I started, when you’re being talked through what it might look like, that is when you start getting probably, when suddenly I started getting fearful and going, “Gosh, I don’t know. I really don’t know.” I mean, yes, the previous 10, 20 years, great. I can’t wait for it, bring it on. But then that 75 and then 85, it is fearful.

So I think that emotional journey, when you talk about goals over the course of retirement, how much they can change, I think, is really worth thinking about.

Jacqui Lennon: 24:17 Yeah. Sorry, I was going to say it changed really quickly as well, because the other thing that I think is quite interesting, well, two things. One is 50% of people have retirement happen to them, so it’s because of illness or they’ve got to stop and look after parents or whatever. So you think it’s this thing that you’re planning for, but all of a sudden it hits you and then it’s like, oh my gosh, what am I going to do now? And then the other thing that I was observing when I was out talking to retirees was very much about how health drives things. So it’s like we will travel until the back gives out and then it’s going to stop. We have to stop. So very much, your goals can change quite suddenly because of things that have happened to you when you’re not always in control of those things.

Fraser Jack: 24:55 Yeah. One of the things about the goals that I always think about, and probably to do with that, the workshop you went through Caitriona, is if you look back 10 years or even look back 20 years, could you have imagined where you would be today? And it’s just really hard to think where you were only 10 years ago, and how your life’s changed in that time and how your life will continue to change over that time.

Caitriona Wortley: 25:19 Yeah. Totally. Yeah. I think you’ve got to be very deliberate about it. That’s why, I mean, yes, I often think really quickly in the moment, think about retirement, but it’s a 10-second thought. This is a very deliberate exercise to actually ... and write down different aspects of it, like what are you going to be doing? Who are you going to be spending your time with? What will your day look like from when you get up in the morning to lunch? Thinking of it in that way, so not just, again, a flippant thought, being quite prescriptive about it, and you quickly realize, yeah, you really struggle to answer those as the extra five years, 10 years gets added on.

Fraser Jack: 26:00 Now, Jacq, you’ve done a lot of interviews and conversations with retirees. I’ve done very few, me and my parents in conversation and things like that, and as you mentioned that, people have these, poetry inside them or whatever it might be. My parents, my dad particularly described retirement as the beginning of a new career, and a career of which there was no days off. It was seven days a week, there was no time off, it was as full time career and there was no other option.

Jacqui Lennon: 26:35 I really like that. What I often think we neglect to do is to respect the contributions that people who’ve stopped full time work can actually make to society and community, and often, some of the retirees I was speaking to were really afraid of retiring, they were just at that stage because they felt they were not going to be valued by society any more, and how do I define myself as a person, and what’s my purpose? And I think it’s such a waste of a resource, so even if you don’t want to put them in full-time employment, you don’t want to put them, even if they’re not in full-time employment, there’s still so much they can offer back to the community.

And I was chatting to this guy, John, who’s lovely, and he was telling me about this place called the University of the Third Age, which I think is lovely. And basically it’s for retirees. It’s coordinated by Sydney Uni, but they have local chapters. And they’ll do things like, John used to be a vet, so he ran a two-hour session on what it was to be a vet and people could come and listen about John’s experience, so they’re still learning, engaging and part the community, and John’s getting a lot of validation about, like I didn’t waste my life. I did do some really interesting things and I still have got lots to offer. So I love those sorts of things, and actually, lots of retirees hate the words “retirement,” so I love that your dad’s got a new career, and John’s got this new age sort of thing. So I think it’s really cool and it could be a really great time rather than just trying to put people out to pasture.

And I think we really have to spend a lot more time thinking about this, even from an advisor’s perspective, how when you think of achieving goals, and it’s obviously a lot more difficult now that people are living longer, and it’s harder maybe sometimes to achieve those, so you might have to have more difficult conversations about work and the need to earn more income into retirement.

And actually, again, another recent session that I sat in was a lovely lady by the name of Belinda Livingstone. And she has actually come up with a framework for helping advisors have conversations about work in the gig economy. So depending on which sector the individual has worked in in their profession and life actually continuing that into retirement on a part-time basis, whether if it’s a teacher, designing courses for an online university ... And it was mind boggling, the opportunities that are right there, really depending on the individual. I think we naturally think of driving an Uber or going on Airtasker, but it’s just so much bigger than that, and so I think there’s really something in that in terms of actually having a very ... It’s not the advisor’s role to decide on that, but it’s the guidance in terms of actually helping them make some better choices. And so it’s a really interesting topic to delve into. It’s amazing, the opportunities that are out there.

And not even from the income perspective, but, again from that engagement, that mental engagement perspective, continuing that into retirement.

Fraser Jack: 29:48 Yeah. I really like the word “guidance” that you just used there too. I think that’s important, that the advisor’s role, even if the new world of financial advice looks there’s more coaches around as well as advisors, and that guidance has really important.

Caitriona Wortley: 30:05 Yeah. A successful retirement isn’t just about having money, it’s about having great connections, maintaining community and sense of purpose and all those sorts of things. And I think advisors have a very deep trusted relationship with their clients, and they are really well positioned to have some of those, I guess, challenging conversations when your client’s sitting there going, “I’m going to work for another five years.” It’s like, really? You can barely lift your arms now. How could you continue to work? Let’s make other plans. Let’s think about these sorts of things. I think advisors are really well positioned to have that conversation that sometimes people are trying to avoid, but it’s really important to be upfront about those things.

And my favorite story, I love hearing advisors encouraging their clients to spend money up front. Don’t save it away because you’re at your best now. You’re never going to feel more healthy than you do now, so go out and travel and do it all now. Don’t just sit around and squirrel all your money away for nothing in the future. You’ve worked hard, really, spend it. But I think that’s quite a courageous conversation to be able to say, “Hey, guess what? Your health isn’t going to get better. So seriously go out and spend your money now.” And I think great advisors are really good at that. And that’s an important part of that relationship.

Jacqui Lennon: 31:17 Yeah, and I think, maybe taking a slightly different tact on that, but I feel like, actually as an industry, this is where we’ve let down advisors a little bit in terms of not being able to define what good looks like in retirement. So, it’s like they’re having all these great conversations, but it’s very difficult for them then to be able to put it into practice. We are seeing this a lot over the last couple of years, is how we built, investment portfolios in the industry. There’s a little bit of retirement portfolios coming into it, but really, for the majority of cases we are just applying the same principles that we used in entity accumulation.

And it’s fine in accumulation, we can define what good looks like with sufficient frontiers and average returns, but when it goes to retirement, it’s all about the goals and it’s about what risk in retirement is about, risk isn’t it running out of money. And we really just helped and equipped advisors to be able to define what good looks like for them to be able to deliver on the advice.

Fraser Jack: 32:33 Yeah. What that could look like, goals could look like is actually not having regret that you didn’t do stuff earlier.

Jacqui Lennon: 32:43 Mm-hmm (affirmative). Yeah. And I think a great goal is to have the confidence that your money’s going to last so you can actually spend it, because you do see lots of retirees living really frugally just in case. We met Jean, went and spent time in Jane’s house. Jane’s got quite a lot of money. She’s not going to run out of money in retirement, but Jane’s got solar panels and refuses to run her dishwasher and washing machine if it’s not sunny, because she doesn’t need any extra expenses and she’s quite worried about those things. Now, hey, that’s a terrible example because who cares about washing? But maybe Jean really cares and we should be able to liberate Jean and give her the confidence that she’s not going to run out of money. That’s a great goal to have confidence to enjoy your retirement, not whether you’re going to get an extra quarter percent of your return. That’s really irrelevant if you’re not spending the money that you’ve got there because you’re living this really frugal life just in case all the time.

Fraser Jack: 33:33 Yeah. Now, you did a lot of in-home research, a lot of interviews, and spent a lot of time talking to people who had retired or were about to retire, what sort of things that came out of that? What really surprised you? What was the things that you took away from it?

Jacqui Lennon: 33:49 What surprised me, and this might make me sound like a bad person, so go with it. Previously I’d spent a lot of time with advisors who told me that clients buy advisors and clients will go in any products that the advisor recommends, and it’s really by the advisor. And I felt that was advisors thinking they were bigger than themselves and that wasn’t going to be true. And then I went and spoke to all these clients, and not a single one of them could name any of the products that they’re invested in. They all felt incredibly confident that they had good advice and they’re invested in the right things, but there was just these awkward pause when it was like, “Could you name something that you’re invested in?”

So they really did trust the advisor. And what was really great about that or surprising about that is you’d say, “Tell me about what happens when you go to speak to your advisor.” And Carol, I think, sums it up the best. She goes, oh, Jacqui.” She said, “There’s no point asking me because I’m not normal. What happens when I go and see my advisor is for the first 45 minutes, we just talk about stuff, like his kids had just started going to school, so he shows me photos of them in their little uniforms, and then he’s thinking about buying a car, so we spent some time talking about which car to buy and he showing some photos of the car, and then he knows that I cycle, so he was talking to me about cycling and visiting my friend up the coast. So just for 45 minutes we just talk about us. And we only talk about money for the last 15 minutes. So mainly it’s just talking about us. So I’m not normal at all.”

Every single person told me that story, so it was like, oh, these clients have this really deep personal relationship with the advisors, and they have a lot of trust in the advisor, and as a product manufacturer, it’s a little disappointing, but don’t always know what products that they’re invested in. And I realized at that point how important advisors could be in helping clients have great retirement beyond just helping them manage their money, but really thinking about health and career and those sorts of things.

And that same woman, Carol, with her advisor, her advisor actually recommended and helped her find a part-time job because he thought she was getting quite lonely and she needed to have some more social engagement. So she’s now back working three days a week in a much less stressful job, but she loves it. And that was on the advice of her advisor who sounds like this really insightful and warm guy. So I really loved that.

The other thing that was really important and makes sense is that need for connection and community. So you could see people who were enjoying retirement, they would tell stories about going out with their friends, and Christine, who’s still my favorite retiree, she has a little network of people that she’s collected from her morning walks, and once a month they do their [inaudible 00:36:22] 50 jump on the train and see how far they can go and have morning tea somewhere far away and then come back again. So she’s created the sense of community and she’s a real community builder.

And then you would meet men in particular who were struggling to find connection because, for whatever reason they’d moved, and this one guy was a [inaudible 00:36:42] and he had bad shoulders so he couldn’t play tennis and he couldn’t play golf and he didn’t drink. So he honestly didn’t know how to make friends outside of his wife. And you could see that he was a lot sadder.

And so that need to create connection and community is super important, whether that’s through friends or family or just belonging to these things the University of the New Age. I think the more we can do to build that sort of connection for those people at that age group is really important. And they’re all probably, I don’t know if people find this surprising, but they’re all quite digitally savvy, and they’re very diligent. So they will all go on ... because even though they trust their advisor, they don’t always trust the institution. So we saw lots and lots of clients spending a lot of time every day checking bank balances and bank statements. And even someone was checking the rate on the term deposit because they had a bonus rate and they needed to check every single day that the bank hadn’t taken away that bonus rate.

But they would do that because they’ve got time and they are quite digitally savvy, but they would just go back on and check and check and check and check and check. So they’ve got a lot of trust in the advisor, but not as much trust in the institution. And they do spend a lot of time thinking about day-to-day finances and really managing that, often quite frugally despite not needing to.

Fraser Jack: 38:05 Yeah, there’s two parts of what you said there that I really want to try and draw out. The first is the concept around, obviously a long term relationship and how important relationship is to retirees, and people seeking advice in this space, because there’s a lot of conversation at the moment around one-off ad hoc advice, people going for one-off advice versus having a long term relationship and whether that’s a Bible in the retiree market or not, if people were seeking advice.

Secondly, the opportunity I see different than advisors can put together if they do specialize in the retiree space, of actually creating community around their clients and helping their clients, and there’s a big shift in modern business now towards membership type businesses, and to be able to create community or events even with their clients.

Caitriona Wortley: 39:02 Yeah. I might just start off, and I know Jacqui has actually spent some time talking about the latter part in terms of with advisors in terms of how to enhance that community in the advice practices. But to your point on the one-off fee, I think there is a place for a one-off advisor, I don’t think that’s redundant. I think the reality of the costs to serve increasing, particularly post work commission, it’s a pain. So we need to deal with it and one-off advice does play a role in that regard, and it actually even helps more Australians get advice and that’s a good thing.

But to your point on [inaudible 00:39:43] just been spending time on this recently for an upcoming conference around this concept of specialization in retirement advice. And actually if you’d asked me a while back, I would have said, yes, that would be a thing. And we are hearing more of it that it is more of a trend to specialization. I think it’s interesting when you unpack it a bit more.

One thing I’ve learned through speaking to advisors who, I suppose, conceptually specialize in retirement advice, their point is that, if you want to specialize in retirement advice, you actually need to be engaging with the kind, 10 to 15 years in advance, and that in itself is specialization in retirement advice, because you really need to understand, and going back to the trust aspect, and the goals and the values, you really need to understand what the underlying drivers of the client are, not what the risk questionnaire says or, I know it’s still heavily used, I know you guys are changing that, which is great, but I think really understanding how the clients actually feel and react, what the impact of big market events, negative markets have on the clients and how they feel, what their loss of loss aversion is like and how that is changing as they approach to retirement, to really actually unpack a lot more of how the clients will we feel will want to live their retirement as well.

So that’s a really important thing, I think, that we need to think about. The other aspect is in, I think, for region, it’s all very well to be a very specialist in Sydney or Melbourne CBD, but when you actually go into regional areas, this concept of, well, hang on, specialized advice, it’s like this, if you put it in medical [inaudible 00:41:45], it’s the process of a GP versus a specialist. If you’re living in regional New South Wales, you’re going to be a GP, and you have to be that way, particularly, if we think of specialist advice, and again, thinking of it from a medical perspective, obviously it does lead to higher fees. So the more complex, more technical than more specialist area, it’s typically more expensive.

So the likely impact of that is, again, higher fees or if we want mass Australia to be getting advice, I think, this broader advice practices still serve a big role. I think they both serve a role.

Jacqui Lennon: 42:24 Yeah. I agree and disagree with some of that, and I think technology can really help here. I do think we need to recognize, even if we don’t have specialist practices, we need to recognize that the mathematical problem in retirement is a bit different to the mathematical problem in accumulation. And we need to get better technology and ideas of what good looks in retirement and how to measure risk appropriately once you’re in that drawdown stage versus the accumulation stage. And I think the industry needs to do that. And then people can either have that as part of their toolkit or choose to specialize in that space. But I think we need to recognize that it is different once you hit that drawdown phase, and aside from the emotional changes, which we’ve talked a lot about in retirement and the fear and the level of confidence and all those sorts of things, aside from that, thinking about those risks and what risk looks like is quite different in retirement.

Caitriona Wortley: 43:20 Absolutely. Yeah. You need a very differentiated approach for sure. My point was more just that you can do both. You could do accumulation advice and decumulation, and that’s really about understanding the client [inaudible 00:43:34], but you need a very different set of tools to your point, Jacqui, 100% agree.

Jacqui Lennon: 43:40 And back to, sorry, your other point, Fraser, about the one-off is the ongoing advice. I think using your doctor analogy is really great. So one-off advice is really useful. It’s like going to a medical center and you go in and you get something treated and that fixes that particular problem and you’re good for a little while, but the benefit of that ongoing advice, where you deliver that really deep relationship is so important because they connect all the dots and they understand your behavioral aspects. So I think it can be richer, but I think there’s a place for both of them, and to Caitriona’s point, the affordability means that sometimes people are just going to have to go to a medical center and get some transactional advice, and other people who can afford it and need that additional support can get that ongoing advice.

Caitriona Wortley: 44:25 Yeah. And it’s all about [inaudible 00:44:27] value, I suppose, even if it is just one-off advice, hopefully they feel some sense of value from that, which encourages them to go the further step of getting ongoing advice. But I think, yeah, the technology piece is really important, and we definitely need to solve for that if we’re going to increase the amount of advice being provided in Australia.

Fraser Jack: 44:50 Yeah, the technology piece is definitely something to my own heart, and after all this research and innovation in the renewed form of retirement and technology and an amazing team, do you want to give us a quick overview of what you’ve created out of all that?

Jacqui Lennon: 45:11 We’ve built a retirement specialist business, so we are focused only on delivering retirement products to the Australian market. And our first product, Caitriona mentioned before is called Future Safe. And this product is a promise issued by life company, which really is helping dealing with that sequencing risk, so around that transition to retirement, that specific risk of experiencing the series of market downturns. So we’ve got the ability to create some protection for retirees, but also give them access to market growth as well in our product.

Fraser Jack: 45:40 And tell us about how that launched and when it launched, and how’s it been going?

Caitriona Wortley: 45:46 We’d launched in March this year, so we’re just three months in. It’s going really well. I mean, we’ve had two recommended ratings from Lantech and Zenith, which is terrific for such a new product in its infancy. But I think the big key point to that is that it’s solving for something that advisors feel like it can be solved for at the moment. So it’s that sequencing risk issue that Jacqui talked about, in a way that’s cost effective, which is a big thing we heard in the market testing with advisors, clearly people can get protection, but it’s very expensive to do, so doing in a way that that’s quite simple and an efficient and cost effective was a really big thing for advisors.

So, I think the willingness, it’s really interesting when the team are going out, I think people really want to focus on retirement portfolios and how to create better outcomes for the retiree clients. And I think so it’s great in that it’s not difficult to get in to have those conversations. And I think people really identify with the need that this product solves for. So we’re working through getting on the majority of the market’s APS, and that’s going really, really well and making good traction.

And again, I think the researchers see the need that it plays in a portfolio. So yes, it’s all going really well. It’s not a silver bullet for retirement, this solves for one risk in retirement; it helps obviously solve longevity risk as well, if we can avoid those big drops. But really our vision is to build a business that solves for every risk in retirement. So Jacqui is already focusing on product two and what that looks like, and doing the market testing with retirees again. And we aim to have a full suite of solutions. That’s our, like I said, not just the financial needs, but again, those emotional needs and help advisors, I think, have better conversations with their clients and help their clients feel more comfortable in retirement.

Fraser Jack: 48:05 Yeah. And when we spoke previously, this is the Goals Based Advice podcast and we like talking about goals. So, what are the goals that even the first product is solving?

Caitriona Wortley: 48:21 If you think about retirement goals, the main financial goal is a spending, or main goals in retirement are really just spending goals. So making sure that you can meet your travel desires, but also maintain your lifestyle throughout retirement. So what this product really does is protect your assets with that first stage of retirement to ensure that your money will last and you can meet your income goals.

The way we hear advisors talk about, or as soon as you mention it to an advisor, they go, “Oh, I’ve got a client, blah, blah, blah, who never wants to go backwards, and they have that fear of going backwards.” So currently they’ve got lots of money sitting in cash, which is earning terrible returns. And this product allows them to not go backwards but also get some further upside to that. So really it’s about protecting their assets to achieve their spending goals, but also those emotional goals of loss aversion and that fear of going backwards that we hear the clients talk about a lot. So really just bringing in that dispersion of returns, and I think having a much smoother journey.

Jacqui Lennon: 49:17 And just creating the confidence that even in a market downturn, you can still meet your goals. It’s not like, well, if the market’s good, you can have this, and if the market tanks, sorry, that’s not going to work.

Fraser Jack: 49:27 Yeah. Removing stress and fear and replacing it with a bit of certainty.

Caitriona Wortley: 49:32 Yeah, increasing that sleep at night factor, which I think is really underestimated, but it’s so important when you go and talk to retirees.

Fraser Jack: 49:39 Yeah. Now, Jacqui, you mentioned product two, are you able to talk or give us a sneak peek in, or is that still watch the space?

Jacqui Lennon: 49:48 It’s a bit watch this space. We’re going out next week to meet with a whole series of retirees. So as Caitriona said, we’re really trying to break down retirement into some components rather than come up with a massive product that no one can explain. We’re trying to create simpler, more transparent products.

The first one was definitely about sequencing risk, our second product’s more of an income stream focused product, but what the exact fixtures look and how we communicate it is a watch this space sort of a thing.

Fraser Jack: 50:15 Ooh, there we go. A bit of a sneak peek, but still keeping [crosstalk 00:50:17]-

Caitriona Wortley: 50:17 ... exclusive when we haven’t-

Fraser Jack: 50:19 You mean the suspense? Nice. I like it.

Jacqui Lennon: 50:22 Well, yeah, we’ve got some ideas, but I’m worried that the retirees won’t understand it or we’ve used all the wrong words and the wrong language. So I don’t want to get ahead of myself. I’m going to wait for them to play back what they think is good and tell you then.

Fraser Jack: 50:33 Oh. Now, if you were out speaking to a retirees and they don’t have an advisor, what tips would you give them around finding an advisor?

Caitriona Wortley: 50:44 My one, I think for setting off for an advisor, I think the values piece, really aligning your values, and it’s all very well saying, okay, you can spend 10 years building up trust, but if you don’t have that 10 years, how do you do that quickly? And I think that really is that connection piece. I think value alignment is a really quick way of doing that. There’s a survey that was done in the US, it was looking into this concept of the fear of judgment and really interesting study, because it basically had clients do a face-to-face interview, first interview with an advisor, a face-to-face, a physical one, and then the other one was with a computer.

And the results of that were quite alarming in that the accuracy of the details provided to the computer was 100% and the accuracy provided to the advisor face-to-face was a lot lower. And it’s purely explained by the fear of judgment. It’s like me coming home from the shops and I buy an iPad that cost maybe $300, and I tell my husband it’s 150. It’s just that whatever. I don’t do that, but we [crosstalk 00:52:00]-

Fraser Jack: 52:01 Just an example, not real. Okay.

Caitriona Wortley: 52:06 We can all think of examples of that where we just maybe just tell a smidgen less truth in what we’re saying. And I think the same is true with an advisor. You just inherently, you just feel, judgment feels like a very harsh thing, but it can be quite subtle, and you just shave a little bit off the truth. So I think the ability to build the trust to make sure that that is minimized as much as possible is really important. And that for me comes down to that connection, somebody that’s really spending time understanding me, telling me about themselves in the first interview, I think it’s just really important.

Jacqui Lennon: 52:43 Yeah, I totally agree with that. And if I was to give someone advice, it would be to shop around. Don’t feel that you go to one and you’re stuck with that person. This is a person you really want to bare your soul with and tell them everything, so you need to find that person that you create that connection with, and just keep looking until you find them.

Fraser Jack: 53:02 Yeah. And what tips would you give to an advisor who was looking to do a bit more work in the retirement space?

Jacqui Lennon: 53:08 Definitely to press point, to build trust and that openness, I think show some vulnerability. So talk about yourself, but in a vulnerable way. I’ve seen lots of advisors who feel their job is to be authoritarian and lecture-y and that’s a style, but I don’t think that’s the right style. And when you’re thinking about retirees, they’ve probably seen it all and they’re a bit sick of that sort of crap and they’ll see straight through it anyway. So you really want to be that connected human who really listens and asks questions and shares that personal side of you to build that trust and that relationship, and how you choose to show vulnerability is up to you. But yeah, we had a guy out from the US who basically said, “If you haven’t cried in front of your clients, then you’re not doing it right.” Now, that’s extreme vulnerability. And that is a hugely courageous and probably not a good thing on the first meeting, you do need some level of professionalism. But I think that, if you can actually get to that stage where you can cry in front of your clients and they can cry in front of you and you got that really deep connection, that will be an amazing advice relationship get where both people will be really benefiting from that conversation.

Caitriona Wortley: 54:13 Yeah. And again, going back to the goals piece, really thinking very deliberately about retirement goals, so whether it’s risk profile and really questioning whether that’s the right approach for retirement. So I think tools and technology that can allow you to have better conversation with clients is really important to really get to the goals piece.

Jacqui Lennon: 54:38 And I think taking a really broad view on goals, so rather than just, okay, so you need $40,000 a year in retirement and you want to go on these many holidays, [inaudible 00:54:46] but how are you going to spend your time and what are you going to do? You’re spending time with the kids and you’ve got connections with your family doing health things. So really have those broader goals, because that also gives a much richer conversation because if you’ve only spending the same amount every year and going on one holiday, there’s not that much to talk about. But if you’re tracking all these other sorts of goals and making sure that they’re really engaged with the community and they’re managing their health, then that’s going to be a much happier retirement, and I think a much richer advice relationship as well.

Fraser Jack: 55:13 Yeah. Thank you. Now, I’ll finish on the final question, the tough one. If you go back in time and have a do over, what tips and advice would you give to yourself on the way through?

Jacqui Lennon: 55:25 I’d have told myself to go to Parramatta and work in FMCG. No, I definitely think one of the things that is good about me but I found really challenging and didn’t lean into enough when I was young, is my authenticity and willingness to be different and just stand out and fight for what’s right rather than just conform to what I think is acceptable. So I think if I went back, I would tell myself to not be afraid to be different and that there’s a lot of value in that and just hold onto who you are and stand up for yourself.

Caitriona Wortley: 55:58 I can identify with that and I can see, yeah, you’ve definitely got there. It’s good. And we love you for it.

What would I say? I mean, gosh, I’m not one for looking back so much, I have to say I look back and I go, I actually love how things have played out. My main thing is probably the passion piece. I think finding that passion, it’s maybe easier in other sectors, but I feel human services is not somewhere that it’s really easy to find true passion. You can love what you do, but really be passionate about what you’re doing and that you really feel you’re making an impact, I have to say it’s pretty much a first for me since coming here, and it’s like a whole new lease of life. It sounds a bit cheesy, but it’s really true and I’ve seen it with not just me, with other people in the team as well, which is really cool. So I think chasing that passion is really important.

Fraser Jack: 56:52 Fantastic. Thank you both for coming on the show today and sharing your insights and your journey, your story, everything you’ve learnt and along the way, and sharing that with the lessons. I really appreciate it.

Caitriona Wortley: 57:05 Thanks, Fraser. It’s been great.

Jacqui Lennon: 57:06 Yeah. Thanks for having us.

Fraser Jack: 57:07 All right. We’ll see you soon. Thank you.

Just before you go, actually, how can people get hold if they want to find out a bit more?

Jacqui Lennon: 57:16 Yeah, sure. You can visit our website’s, probably the easiest place, which is allianzretireplus.com.au. Or please, yeah, look us up on LinkedIn, and send us a note, and love to come and have a chat.

Fraser Jack: 57:30 Wonderful. Thank you. And I look forward to hearing about the iteration and the next products as they come out, as they’re created.

Jacqui Lennon: 57:36 Watch this space.

Fraser Jack: 57:37 All right. Thank you. [crosstalk 00:57:39].

Jacqui Lennon: 57:38 See you. Bye bye.

Fraser Jack: 57:39 If you haven’t already, I’d love you to subscribe to the podcast on your podcast platform of choice. And to continue the conversation head over to our social media channels. We’ll catch you next time.



Disclaimer: This document is a transcription obtained through a third party. There is no claim to accuracy on the content provided in this document, and divergence from the audio file are to be expected. As a transcription, this is not a legal document in itself, and should not be considered binding to advice intelligence, but merely a convenience for reference.