That Annuity Show
Can a mutual fund create new income potential for investors by sharing mortality risk? The answer is “yes”, starting in Canada. Fraser Stark, President of the Longevity Retirement Platform for Purpose Financial joins us to talk about his company’s novel product.
Links mentioned in the show:
https://www.retirewithlongevity.com/
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Episode Transcript
The discussion is not meant to provide any legal, tax, or investment advice with respect to the purchase of an insurance product. A comprehensive evaluation of a consumer’s needs and financial situation should always occur in order to help determine if an insurance product may be appropriate for each unique situation.
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[paul_tyler]: yeah hi this is paul tyler
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[bruno_caron]: yeah
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[paul_tyler]: and welcome to another episode of that
annuity show and today
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[bruno_caron]: oh
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[paul_tyler]: we are talking about a very novel
solution for generating retirement and income in canada
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[paul_tyler]: okay so we’re goin t have a
lot of interesting interesting questions here today but
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[paul_tyler]: before i jump
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[bruno_caron]: m
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[paul_tyler]: in i want to introduce
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[bruno_caron]: oh
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[paul_tyler]: our audience to tessa raban marshall who’s
joining us as a host
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[bruno_caron]: oh
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[paul_tyler]: you know tis a can you tell
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[bruno_caron]: yeah
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[paul_tyler]: people just a little bit about
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[bruno_caron]: oh
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[paul_tyler]: yourself
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[tisa_rabun_marshall]: sure thanks paul so
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[paul_tyler]: yeah
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[tisa_rabun_marshall]: i have about twenty years experience in
the industry and i currently am working to
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[tisa_rabun_marshall]: manage the digital platforms and tools for
our retiring and our agents here at na
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[tisa_rabun_marshall]: sah
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[bruno_caron]: oh
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[paul_tyler]: yeah so anyway welcome thanks for thanks
for getting behind the mike this is great
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[paul_tyler]: bruno
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[tisa_rabun_marshall]: yeah
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[paul_tyler]: tell us what’s up and who did
you get for us to come on the
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[paul_tyler]: show today oh
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[bruno_caron]: sure it will be my my pleasure
to to introduce you to fraser stark who
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[bruno_caron]: is the president and of longevity retirement
platform at purpose here in here in toronto
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[bruno_caron]: ontario canada m fraser has a very
very interesting background obviously extremely focused on the
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[bruno_caron]: on the financial services but not just
on the on the financial services but never
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[bruno_caron]: we’re very very excited and very pleased
and fraser welcome
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[fraser_stark]: thanks for having me on it’s great
to be here
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[bruno_caron]: so you know you know my first
question is obviously is in terms of lifetime
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[bruno_caron]: income solutions you have academic major academic
bodies that have that i’ve supported this that
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[bruno_caron]: i’ve written about it many entrepreneurs including
myself as try to bring this type of
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[bruno_caron]: solution and you guys are the
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[tisa_rabun_marshall]: oh
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[bruno_caron]: first ones to do it you know
over the entire world
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[paul_tyler]: no
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[bruno_caron]: how did you do it
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[tisa_rabun_marshall]: yeah
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[fraser_stark]: uh
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[bruno_caron]: that’s my that’s my question
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[fraser_stark]: uh
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[bruno_caron]: how how in this world
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[paul_tyler]: oh
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[bruno_caron]: you know were you able to successfully
launched this this venture
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[paul_tyler]: yeah maybe you
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[fraser_stark]: yeah
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[paul_tyler]: just tell maybe you could phrase just
tell us what it is that would be
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[paul_tyler]: great and then
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[fraser_stark]: yeah why don’t
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[paul_tyler]: how
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[fraser_stark]: i
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[paul_tyler]: do
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[fraser_stark]: start
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[paul_tyler]: you
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[fraser_stark]: with
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[paul_tyler]: do
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[fraser_stark]: what
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[paul_tyler]: it
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[fraser_stark]: it is and then and then how
we did it that that
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[paul_tyler]: yes
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[fraser_stark]: sounds that sounds excellent
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[bruno_caron]: oh
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[fraser_stark]: so the longevity pension fund is the
world’s first longevity risk pulling in a mutual
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[fraser_stark]: fund this is not a new concept
this idea of a variable lifetime income is
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[fraser_stark]: not new you know it’s existed in
europe as tantins for many years canada has
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[fraser_stark]: been experimenting this with this for decades
australia
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[paul_tyler]: oh
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[fraser_stark]: more recently there’s lots of iterations of
it but we found a way to offer
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[fraser_stark]: investors
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[bruno_caron]: oh
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[fraser_stark]: income for life in a way that
their assets are still invested in the market
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[fraser_stark]: and they’re benefiting from market returns and
yet their risk pooling with the other investors
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[fraser_stark]: so we think it’s a
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[tisa_rabun_marshall]: oh
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[fraser_stark]: great
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[bruno_caron]: oh
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[fraser_stark]: product that fits along it annuities as
part of
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[bruno_caron]: oh
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[fraser_stark]: the possible offering for someone in retirement
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[bruno_caron]: yah
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[fraser_stark]: looking to solve
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[bruno_caron]: oh
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[fraser_stark]: that nastiest hardest problem in finance which
is how do you decumulate assets when there’s
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[fraser_stark]: so much uncertainty including most notable
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[bruno_caron]: yah
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[fraser_stark]: that idea that
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[bruno_caron]: ah
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[fraser_stark]: there’s a huge range of possibilities for
how long you need the assets to last
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[fraser_stark]: for now the way we did that
as an asset manager is we we looked
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[fraser_stark]: at the mutual fund structure in canada
it’s a little bit different than the u
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[fraser_stark]: s but by and law it’s quite
similar and we said how would you have
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[fraser_stark]: to tweak a mutual fund to imbed
longevity risk pulling into this structure and that’s
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[fraser_stark]: exactly what we did in launch last
june
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[paul_tyler]: so you’re not an insurance company correct
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[fraser_stark]: correct that’s important
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[paul_tyler]: okay but you’re
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[bruno_caron]: yah
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[paul_tyler]: pulling mortality
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[tisa_rabun_marshall]: yeah
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[paul_tyler]: and what is different again we have
a lot of listeners in the us what’s
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[paul_tyler]: the difference between what you’re doing and
say oh i’ve heard it before paul is
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[paul_tyler]: tar date fund
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[fraser_stark]: yeah of course know a target they
fund is a great product for mixing
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[tisa_rabun_marshall]: yeah
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[fraser_stark]: the risk and return profile of an
investor as they move through different
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[bruno_caron]: oh
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[fraser_stark]: life stages towards retirement and so target
date fund serve that purpose very effectively what
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[fraser_stark]: they don’t do though is once someone
enters retirement they don’t provide risk pooling that
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[fraser_stark]: idea that you know we like to
say our assets are worth more to us
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[fraser_stark]: than a portion of our that’s are
worth more to us while while we’re alive
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[fraser_stark]: than after we passed away and so
what or what our product inherently does it
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[fraser_stark]: creates a trade off for people between
the estate for whatever assets are put into
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[fraser_stark]: this fund and optimizing for sustainable income
while you’re alive so a target day fund
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[fraser_stark]: is a great product and in fact
i think an investor might very well use
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[fraser_stark]: target date funds and then at retirement
put money into the longevity pension fund to
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[fraser_stark]: secure against that risk that
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[tisa_rabun_marshall]: yeah
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[fraser_stark]: they end up being someone who lives
to be a hundred and four or ninety
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[fraser_stark]: six or a hundred and ten we
just don’t know and effectively investors retires investing
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[paul_tyler]: m
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[fraser_stark]: who hold to balance portfolio almost no
matter what the construction
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[bruno_caron]: yeah
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[fraser_stark]: is in some ways they’re self insured
against their own longevity risk that idea living
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[fraser_stark]: a long life and we’ve given them
away
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[tisa_rabun_marshall]: yeah
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[fraser_stark]: to you know effectively get a type
of pension you know it’s not a registered
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[fraser_stark]: pension in canada but we use word
pension and the title because it is that
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[fraser_stark]: income for life and all of our
actuarial modeling shows that while it’s very blind
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[fraser_stark]: can go up or down with market
conditions and the experienced mortality of the investor
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[fraser_stark]: pool it will always pay and come
for life and so people can rest assured
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[fraser_stark]: that they’re spending more now more income
from this the application to this fund and
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[fraser_stark]: yet there’s no chance that it runs
out of money which is a real possibility
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[fraser_stark]: of someone you know starts with a
million dollars and spends you know seventy thousand
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[fraser_stark]: dollars
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[paul_tyler]: oh
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[fraser_stark]: a year there’s a chance that if
you live into your nineties or past a
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[fraser_stark]: hundred you could run it
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[paul_tyler]: a
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[bruno_caron]: that’s great can you talk a little
bit about that that structure how is it
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[bruno_caron]: how does it work when you know
discuss maybe a few a few scenarios a
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[bruno_caron]: few triggers
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[fraser_stark]: yeah
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[bruno_caron]: if i put in as i said
you know some you know some funds we
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[bruno_caron]: all agree that you know it’s not
there’s no one size fits all solution but
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[bruno_caron]: part of any any retires funds say
a hundred thousand dollars at age sixty five
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[bruno_caron]: what happens under various know scenarios
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[fraser_stark]: ah so
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[paul_tyler]: yea
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[fraser_stark]: essentially the key difference between this fund
most other income funds or or balanced funds
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[fraser_stark]: is that it’s redeemed not for its
nave but rather for the last year of
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[fraser_stark]: it now or unpaid capital so unpaid
capital is the amount put in at sixty
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[fraser_stark]: five lasts the distributions
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[tisa_rabun_marshall]: m
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[fraser_stark]: received today and so you know an
investor who puts in a hundred thousand dollars
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[fraser_stark]: as you said bruno and then let’s
say over three years they received twenty thousand
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[fraser_stark]: back
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[bruno_caron]: oh
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[fraser_stark]: and then if they either passed away
or voluntarily just say i’d like to redeem
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[fraser_stark]: these units and that’s a key to
that key benefit to this fund is the
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[fraser_stark]: redeemability they would get back eighty
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[tisa_rabun_marshall]: oh
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[fraser_stark]: thousand dollars right not let’s just say
the nave had gone from a hundred thousand
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[fraser_stark]: and because it’s paying out income the
nave is now at ninety three they wouldn’t
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[fraser_stark]: get ninety three they get eighty and
the thirteen thousand difference between it three and
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[fraser_stark]: eighty that’s the longevity credits that flow
in and stay in for the benefit of
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[fraser_stark]: the remaining members of their cohort and
we we construct our cohorts on three birth
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[fraser_stark]: years so our oldest cohort
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[paul_tyler]: oh
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[fraser_stark]: that we have investors from is nineteen
forty five to forty seven in cohort one
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[fraser_stark]: court two is nineteen forty eight to
fifty and so on through people that are
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[fraser_stark]: sixty five today who i believe are
born in nineteen fifty seven and every three
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[fraser_stark]: years we add a new cohort as
people in another block of three birth years
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[fraser_stark]: start turning
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[tisa_rabun_marshall]: oh
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[fraser_stark]: sixty five but that’s the that’s the
risk pulling right so unlike an annuity which
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[fraser_stark]: sits on an insurance company’s balance heat
and they basically say we’ll take we’ll take
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[fraser_stark]: this risk we’ll take your personal longevity
risk and we’ll take the market risk and
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[fraser_stark]: we’ll guarantee you and there’s obviously a
huge variety of annuity structures can’t address them
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[fraser_stark]: all today but under that structure the
insurance company is accepting both market risk and
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[fraser_stark]: longevity risk with the longevity pension fund
we as an asset manager are taking on
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[fraser_stark]: neither what’s happening is the longevity risk
of being pooled among the people the investors
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[fraser_stark]: in the pool based on that that
birth year set and the market risk stays
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[fraser_stark]: with them we’ve got portfolio construction that’s
very conservative designed suitable for someone in retirement
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[fraser_stark]: but the market risk stays with them
which means it’s variable it also means they
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[fraser_stark]: benefit from the market risk premium just
the fact market returns are expected to be
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[fraser_stark]: higher than the risk free interest rates
as i said they pull that mortality risk
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[fraser_stark]: so
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[paul_tyler]: yeah
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[fraser_stark]: it’s a great product for someone who
says i’m comfortable with some very ability in
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[fraser_stark]: my payments in return for more flexibility
a higher starting rate and the expectation and
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[fraser_stark]: design that this should rise over time
so we’ve done a ton of modeling we
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[fraser_stark]: work with life works actuarial team on
the modeling and under a wide range of
198
00:09:14,010 –> 00:09:17,336
[fraser_stark]: economic scenarios you can see that in
most cases but not all cases and that’s
199
00:09:17,396 –> 00:09:21,022
[fraser_stark]: important this fund raises its distributions over
time but
200
00:09:21,270 –> 00:09:21,990
[paul_tyler]: yeah
201
00:09:21,403 –> 00:09:25,590
[fraser_stark]: you know an investor in some of
the downside scenarios an investor who’s in a
202
00:09:25,650 –> 00:09:28,995
[fraser_stark]: traditional balance portfolio they’re going to see
that portfolio decline as well
203
00:09:29,010 –> 00:09:29,173
[paul_tyler]: ye
204
00:09:29,055 –> 00:09:33,202
[fraser_stark]: and they’re prbably gonna have to make
some spending reductions and a very similar thing
205
00:09:33,603 –> 00:09:33,983
[fraser_stark]: is likely
206
00:09:33,902 –> 00:09:34,163
[bruno_caron]: oh
207
00:09:34,024 –> 00:09:36,953
[fraser_stark]: to happen with our after in in
a downside economic scenario
208
00:09:38,341 –> 00:09:42,307
[paul_tyler]: i found the cohort concept really interesting
i read the the footnotes
209
00:09:42,325 –> 00:09:44,185
[fraser_stark]: oh
210
00:09:43,409 –> 00:09:43,549
[paul_tyler]: you’re
211
00:09:43,442 –> 00:09:43,524
[bruno_caron]: ye
212
00:09:43,569 –> 00:09:44,010
[paul_tyler]: marketing for
213
00:09:43,919 –> 00:09:44,040
[tisa_rabun_marshall]: eh
214
00:09:44,070 –> 00:09:45,893
[paul_tyler]: sure you know ts laughing
215
00:09:45,911 –> 00:09:45,932
[bruno_caron]: m
216
00:09:45,973 –> 00:09:49,639
[paul_tyler]: because this is what we live for
the foot notes in these products
217
00:09:49,622 –> 00:09:49,642
[bruno_caron]: m
218
00:09:50,094 –> 00:09:50,235
[tisa_rabun_marshall]: yeah
219
00:09:50,200 –> 00:09:50,341
[paul_tyler]: um
220
00:09:50,704 –> 00:09:50,725
[fraser_stark]: m
221
00:09:50,901 –> 00:09:51,022
[paul_tyler]: so
222
00:09:51,521 –> 00:09:51,712
[bruno_caron]: h m
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00:09:51,723 –> 00:09:53,145
[paul_tyler]: you know i’m born between
224
00:09:52,991 –> 00:09:53,012
[bruno_caron]: m
225
00:09:53,546 –> 00:09:56,110
[paul_tyler]: you know this year and that year
um
226
00:09:56,111 –> 00:09:56,132
[bruno_caron]: m
227
00:09:56,491 –> 00:10:01,962
[paul_tyler]: but it’s now twenty twenty seven is
there any point at which i can and
228
00:10:02,772 –> 00:10:03,622
[paul_tyler]: join that cohort
229
00:10:05,596 –> 00:10:09,823
[fraser_stark]: any investor is eligible to invest in
the fund until their eightieth birthday the day
230
00:10:09,863 –> 00:10:10,143
[fraser_stark]: you turn
231
00:10:10,141 –> 00:10:10,366
[paul_tyler]: okay
232
00:10:10,223 –> 00:10:15,773
[fraser_stark]: at you’re no longer eligible and that’s
because of the evolving nature of the longevity
233
00:10:16,113 –> 00:10:21,923
[fraser_stark]: expectations and visibility into it we didn’t
want a situation where someone could join a
234
00:10:21,983 –> 00:10:25,950
[fraser_stark]: cohort at ninety one knowing that they’re
in good health many of the people that
235
00:10:26,390 –> 00:10:26,871
[fraser_stark]: committed to
236
00:10:26,902 –> 00:10:27,084
[paul_tyler]: yeah
237
00:10:26,931 –> 00:10:31,439
[fraser_stark]: that cohort much earlier perhaps are now
in in different states of health and life
238
00:10:31,479 –> 00:10:38,090
[fraser_stark]: expectancy so anyone up to the day
before they turn eighty is eligible you know
239
00:10:38,150 –> 00:10:43,839
[fraser_stark]: most people are investing much earlier in
there late sixties we also have an accumulation
240
00:10:43,940 –> 00:10:47,265
[fraser_stark]: class of this fund so until some
one sixty five they can invest in the
241
00:10:47,305 –> 00:10:52,013
[fraser_stark]: fund the risk pooling doesn’t yet apply
so it is redeemable at nave making it
242
00:10:52,073 –> 00:10:56,943
[fraser_stark]: behave much more a traditional balance fund
it doesn’t pay income it’s going to grow
243
00:10:57,003 –> 00:10:59,288
[fraser_stark]: the assets with market returns but
244
00:10:59,301 –> 00:10:59,361
[paul_tyler]: so
245
00:10:59,729 –> 00:11:00,110
[fraser_stark]: people are
246
00:11:00,166 –> 00:11:00,307
[paul_tyler]: yeah
247
00:11:00,732 –> 00:11:01,293
[fraser_stark]: sorry ill go ahead
248
00:11:01,601 –> 00:11:05,127
[paul_tyler]: oh no i’m just curious so so
it’s these are almost like bottles
249
00:11:05,162 –> 00:11:05,383
[bruno_caron]: oh
250
00:11:05,187 –> 00:11:06,629
[paul_tyler]: of wine you’re collecting
251
00:11:06,505 –> 00:11:06,928
[fraser_stark]: uh
252
00:11:06,850 –> 00:11:07,030
[paul_tyler]: right
253
00:11:06,932 –> 00:11:08,942
[bruno_caron]: uh
254
00:11:06,982 –> 00:11:07,598
[tisa_rabun_marshall]: okay
255
00:11:07,110 –> 00:11:07,410
[paul_tyler]: except you
256
00:11:07,554 –> 00:11:07,615
[fraser_stark]: uh
257
00:11:07,711 –> 00:11:09,474
[paul_tyler]: you’re the flask
258
00:11:09,153 –> 00:11:09,356
[bruno_caron]: okay
259
00:11:09,497 –> 00:11:09,538
[fraser_stark]: we
260
00:11:09,574 –> 00:11:09,654
[paul_tyler]: is
261
00:11:09,638 –> 00:11:09,719
[fraser_stark]: get
262
00:11:09,734 –> 00:11:09,935
[paul_tyler]: not
263
00:11:09,779 –> 00:11:10,947
[fraser_stark]: better as we age that’s right
264
00:11:11,197 –> 00:11:11,317
[paul_tyler]: yeah
265
00:11:11,273 –> 00:11:11,313
[bruno_caron]: m
266
00:11:11,357 –> 00:11:15,464
[paul_tyler]: the vetaras we age but is there
so much transparency
267
00:11:15,071 –> 00:11:15,092
[bruno_caron]: m
268
00:11:15,544 –> 00:11:19,350
[paul_tyler]: that i could if i m going
into that fun i could say go my
269
00:11:19,451 –> 00:11:23,798
[paul_tyler]: group fraser got a lot of sick
people this is a good deal i’m healthy
270
00:11:24,098 –> 00:11:25,461
[paul_tyler]: i run marathon and
271
00:11:25,495 –> 00:11:25,740
[fraser_stark]: uh
272
00:11:25,622 –> 00:11:25,824
[bruno_caron]: oh
273
00:11:25,904 –> 00:11:26,395
[fraser_stark]: huh
274
00:11:26,823 –> 00:11:31,370
[paul_tyler]: i think i’m gonna outlast the that
that group are is that something you can
275
00:11:31,971 –> 00:11:36,459
[paul_tyler]: you know policy holders are wrong terminology
of investors will investors
276
00:11:36,435 –> 00:11:36,557
[fraser_stark]: yeah
277
00:11:36,499 –> 00:11:37,183
[paul_tyler]: be able to do that
278
00:11:38,625 –> 00:11:41,730
[fraser_stark]: well they won’t know who the other
people in the pool are and that’s important
279
00:11:41,831 –> 00:11:47,821
[fraser_stark]: for privacy reasons you know if you
think of the tontine structure much much maligned
280
00:11:49,383 –> 00:11:52,769
[fraser_stark]: there’s this idea i think the simpsons
popularized this a number of years ago this
281
00:11:52,829 –> 00:11:54,692
[fraser_stark]: idea of incentive to
282
00:11:54,662 –> 00:11:54,884
[bruno_caron]: yeah
283
00:11:54,772 –> 00:11:56,275
[fraser_stark]: take out your fellow members
284
00:11:56,237 –> 00:11:56,258
[tisa_rabun_marshall]: m
285
00:11:56,335 –> 00:12:00,181
[fraser_stark]: and i mean that’s that sort of
a comical approach but but for obvious reasons
286
00:12:00,212 –> 00:12:00,232
[bruno_caron]: m
287
00:12:00,482 –> 00:12:05,370
[fraser_stark]: the investors in the fund are not
publicly that’s not public to two investors you
288
00:12:05,590 –> 00:12:10,458
[fraser_stark]: asked about transparency we are fully transparent
with how the portfolio is invested how many
289
00:12:10,719 –> 00:12:17,470
[fraser_stark]: investors are in someone’s cohort you know
we track and annually issue a report you
290
00:12:17,510 –> 00:12:17,851
[fraser_stark]: know we’re not
291
00:12:17,798 –> 00:12:18,104
[tisa_rabun_marshall]: yeah
292
00:12:17,911 –> 00:12:21,457
[fraser_stark]: required to as a mutual fund but
we want to take on as much of
293
00:12:22,158 –> 00:12:25,864
[fraser_stark]: the apparatus of a pension as possible
and so we’re about to publish an annual
294
00:12:25,924 –> 00:12:31,033
[fraser_stark]: report well give the unit holders the
investors a great deal of information but what’s
295
00:12:31,073 –> 00:12:35,620
[fraser_stark]: going on paul i think what you’re
asking about though is this idea of adverse
296
00:12:35,660 –> 00:12:41,007
[fraser_stark]: selection or selection bias which is a
really interest ing concept here any time you’ve
297
00:12:41,047 –> 00:12:45,291
[fraser_stark]: got a group of people that are
opting into something they may behave somewhat differently
298
00:12:45,791 –> 00:12:49,995
[fraser_stark]: than a group of people that were
selected at random and so there’s a couple
299
00:12:50,056 –> 00:12:54,042
[fraser_stark]: of ways that can that can play
out one is is it only the joggers
300
00:12:54,683 –> 00:12:55,164
[fraser_stark]: so to speak
301
00:12:55,058 –> 00:12:55,281
[tisa_rabun_marshall]: yeah
302
00:12:55,244 –> 00:12:55,885
[fraser_stark]: who who joined
303
00:12:55,704 –> 00:12:56,190
[paul_tyler]: right
304
00:12:55,925 –> 00:12:56,787
[fraser_stark]: this or people who know
305
00:12:56,670 –> 00:12:56,992
[paul_tyler]: oh
306
00:12:56,867 –> 00:12:57,568
[fraser_stark]: that their parents
307
00:12:57,338 –> 00:12:58,568
[tisa_rabun_marshall]: yeah
308
00:12:58,750 –> 00:12:59,251
[fraser_stark]: both lived
309
00:12:59,643 –> 00:12:59,663
[bruno_caron]: m
310
00:13:00,212 –> 00:13:01,435
[fraser_stark]: well into their nineties for exampl
311
00:13:01,650 –> 00:13:01,972
[paul_tyler]: oh
312
00:13:02,035 –> 00:13:05,099
[fraser_stark]: um that’s one type of selection bias
we are assuming we’ll see some degree of
313
00:13:05,139 –> 00:13:11,446
[fraser_stark]: that we’ve done a lot of research
into the degree to which people people’s perceptions
314
00:13:11,527 –> 00:13:15,954
[fraser_stark]: of their own longevity aligned to what
actually plays out and the answer is it’s
315
00:13:16,034 –> 00:13:21,784
[fraser_stark]: neither it’s neither perfectly true nor perfectly
false it falls in between that people have
316
00:13:21,864 –> 00:13:27,854
[fraser_stark]: some of of a sense another type
of adverse selection you know for people that
317
00:13:27,894 –> 00:13:32,381
[fraser_stark]: want to want to play money ball
here with the fund is around birth years
318
00:13:32,682 –> 00:13:33,563
[fraser_stark]: right and so someone
319
00:13:33,580 –> 00:13:33,764
[tisa_rabun_marshall]: kick
320
00:13:33,603 –> 00:13:40,071
[fraser_stark]: who was born in december nineteen forty
seven is a year and a half younger
321
00:13:40,112 –> 00:13:44,439
[fraser_stark]: than the average and three years younger
than someone that was joran born on january
322
00:13:44,519 –> 00:13:49,168
[fraser_stark]: first nineteen forty five and so that’s
something we are able to watch for early
323
00:13:49,288 –> 00:13:54,701
[fraser_stark]: and we’re not yet seeing any clustering
of investors by birth year we suspected we
324
00:13:54,842 –> 00:13:58,749
[fraser_stark]: might see people skewing to the younger
side it’s not the average
325
00:13:58,538 –> 00:13:58,798
[tisa_rabun_marshall]: oh
326
00:13:59,069 –> 00:14:03,717
[fraser_stark]: of our investors falls squarely on that
mid point of the cohorts birth range so
327
00:14:04,518 –> 00:14:09,035
[fraser_stark]: it will be a long time for
this fun before we have visibility in is
328
00:14:09,095 –> 00:14:14,332
[fraser_stark]: there adverse selection happening on that health
or longevity we’ve assumed there will be some
329
00:14:14,412 –> 00:14:19,200
[fraser_stark]: it’s modeled in and we’ve also done
a lot of pressure testing of our model
330
00:14:19,260 –> 00:14:22,946
[fraser_stark]: to say what if we’re off by
a year whatever by two years whatever were
331
00:14:22,986 –> 00:14:23,948
[fraser_stark]: off by four years
332
00:14:24,188 –> 00:14:24,430
[tisa_rabun_marshall]: yeah
333
00:14:24,429 –> 00:14:32,121
[fraser_stark]: an a four year extension of mortality
on a group of thousands of retired investors
334
00:14:32,362 –> 00:14:36,333
[fraser_stark]: is you know that is a real
test and what it shows is the fund
335
00:14:36,608 –> 00:14:37,328
[tisa_rabun_marshall]: yeah
336
00:14:36,835 –> 00:14:42,369
[fraser_stark]: still accomplishes its goal it’s still pays
income for life it still rises but of
337
00:14:42,430 –> 00:14:48,059
[fraser_stark]: course by definition it would rise less
steeply in the scenario where they live longer
338
00:14:48,099 –> 00:14:50,884
[fraser_stark]: and that’s just because there’s more payments
to make through the life of the fund
339
00:14:52,912 –> 00:14:59,203
[bruno_caron]: that’s a that’s a very interesting um
segu to you the strategy of the structure
340
00:14:59,764 –> 00:15:04,231
[bruno_caron]: i mean i think it starts at
a fairly low level as you mention the
341
00:15:04,592 –> 00:15:11,624
[bruno_caron]: mortality and the investment risk is on
the the participants shoulders but at the same
342
00:15:11,684 –> 00:15:17,333
[bruno_caron]: time you do you do structure it
in a way that payments go up over
343
00:15:17,413 –> 00:15:22,462
[bruno_caron]: time you could have structure in in
a different way can you talk a little
344
00:15:22,502 –> 00:15:25,647
[bruno_caron]: bit about that that strategy and the
mentality behind
345
00:15:25,440 –> 00:15:25,705
[paul_tyler]: oh
346
00:15:25,747 –> 00:15:29,041
[bruno_caron]: that that that structure yeah
347
00:15:28,865 –> 00:15:33,894
[fraser_stark]: yeah we really wanted to be able
to tell investors that while it’s variable and
348
00:15:33,954 –> 00:15:38,702
[fraser_stark]: it’s important that investors know that right
to education is a key element here to
349
00:15:38,862 –> 00:15:39,223
[fraser_stark]: selling
350
00:15:39,000 –> 00:15:39,262
[paul_tyler]: oh
351
00:15:39,643 –> 00:15:44,431
[fraser_stark]: and marketing this and responsibly um but
we wanted it to rise over time and
352
00:15:44,692 –> 00:15:49,901
[fraser_stark]: what we’ve created is a fun that
in our modeled scenarios i believe the average
353
00:15:49,941 –> 00:15:53,126
[fraser_stark]: is about five or five and a
half percent market return with with a lot
354
00:15:53,206 –> 00:15:59,236
[fraser_stark]: of annual deviation from that and in
the average scenario of these two thousand that
355
00:15:59,276 –> 00:16:05,026
[fraser_stark]: we’ve that we’ve modeled the fund increases
its distributions on a its two per cent
356
00:16:05,086 –> 00:16:09,533
[fraser_stark]: a year which right now doesn’t sound
a lot like inflation levels but if we
357
00:16:09,512 –> 00:16:09,754
[bruno_caron]: uh
358
00:16:09,613 –> 00:16:10,575
[fraser_stark]: rewind six months
359
00:16:10,421 –> 00:16:10,442
[bruno_caron]: h
360
00:16:10,615 –> 00:16:14,041
[fraser_stark]: and think about long term targets at
central banks at what it means is this
361
00:16:14,121 –> 00:16:14,341
[fraser_stark]: fund
362
00:16:14,160 –> 00:16:14,262
[tisa_rabun_marshall]: ah
363
00:16:14,421 –> 00:16:19,310
[fraser_stark]: is designed to keep its payment approximately
with long term targets is not index the
364
00:16:19,350 –> 00:16:23,717
[fraser_stark]: way you can you can formally and
firmly index and annuity but it is it
365
00:16:23,777 –> 00:16:26,121
[fraser_stark]: is designed to raise payments with
366
00:16:26,080 –> 00:16:26,181
[tisa_rabun_marshall]: ah
367
00:16:26,181 –> 00:16:31,830
[fraser_stark]: that with inflation um and with market
returns over time you know when we set
368
00:16:31,931 –> 00:16:36,338
[fraser_stark]: the initial distribution level for the fund
so the retirement age cohort started at six
369
00:16:36,438 –> 00:16:41,867
[fraser_stark]: point one five percent cohort for people
born nineteen fifty four to fifty six when
370
00:16:41,907 –> 00:16:43,709
[fraser_stark]: we launched was people about sixty
371
00:16:43,652 –> 00:16:43,672
[bruno_caron]: m
372
00:16:43,749 –> 00:16:44,931
[fraser_stark]: five to sixty seven years old
373
00:16:44,972 –> 00:16:45,194
[bruno_caron]: oh
374
00:16:45,171 –> 00:16:49,116
[fraser_stark]: we started that at six point one
five per cent now one of the decisions
375
00:16:49,357 –> 00:16:52,923
[fraser_stark]: we had to make at launch was
do we start with a number like that
376
00:16:52,963 –> 00:16:54,625
[fraser_stark]: that’s lower and expected to rise
377
00:16:54,968 –> 00:16:55,112
[tisa_rabun_marshall]: ye
378
00:16:55,427 –> 00:16:59,193
[fraser_stark]: and be transparent about that in the
funds perspective or do we start with a
379
00:16:59,213 –> 00:17:04,000
[fraser_stark]: number that’s higher it sort of has
an equal chance of increasing or decreasing as
380
00:17:04,040 –> 00:17:10,410
[fraser_stark]: the fun moves forward and we deliberately
chose former to start lower what that meant
381
00:17:10,550 –> 00:17:14,096
[fraser_stark]: is that when we think about this
like a like a defined benefit pension and
382
00:17:14,136 –> 00:17:19,165
[fraser_stark]: we think about the funding level the
fund started with approximately twenty percent over funding
383
00:17:19,625 –> 00:17:23,211
[fraser_stark]: so it was in a twenty percent
over funded position if you compared you know
384
00:17:23,592 –> 00:17:26,937
[fraser_stark]: the assets in the fund with the
present value of all
385
00:17:26,903 –> 00:17:27,085
[bruno_caron]: yeah
386
00:17:26,978 –> 00:17:31,144
[fraser_stark]: future liabilities and you know it’s not
been the year that any of us in
387
00:17:31,545 –> 00:17:35,231
[fraser_stark]: in financial markets wanted to see but
i think it’s been a year that’s really
388
00:17:35,271 –> 00:17:40,340
[fraser_stark]: validated that strategy because going into twenty
twenty three were in the process with our
389
00:17:40,380 –> 00:17:44,106
[fraser_stark]: annual report of defining what are the
distribution rates and i think a lot of
390
00:17:44,146 –> 00:17:48,033
[fraser_stark]: people are expecting that that we may
have to cut those rates we said it
391
00:17:48,053 –> 00:17:51,679
[fraser_stark]: was a variable fund and in years
when markets don’t do well um you know
392
00:17:51,699 –> 00:17:54,503
[fraser_stark]: there will be a decrease because we
deliberately
393
00:17:54,518 –> 00:17:55,268
[tisa_rabun_marshall]: yeah
394
00:17:54,543 –> 00:17:59,632
[fraser_stark]: went in with that buffer we’ve used
a good deal of that buffer across the
395
00:18:00,013 –> 00:18:06,083
[fraser_stark]: the five cohorts differs by cohorts but
all cohorts are going to be holding their
396
00:18:06,123 –> 00:18:10,951
[fraser_stark]: distribution level steady which i think is
really powerful to an investor who who’s put
397
00:18:11,031 –> 00:18:15,178
[fraser_stark]: money into this fund knowing the goal
is to create certainty so they can spend
398
00:18:15,218 –> 00:18:19,765
[fraser_stark]: with confidence in retirement and even though
they acknowledge it’s not an annuity with guaranteed
399
00:18:19,845 –> 00:18:25,271
[fraser_stark]: floor and balance sheet of a of
a major corporation backing it it’s really powerful
400
00:18:25,311 –> 00:18:28,694
[fraser_stark]: that it’s been able to hold so
that’s some of our thinking around distribution levels
401
00:18:29,938 –> 00:18:33,744
[tisa_rabun_marshall]: hey frinds are i going a jump
in and ask you how are you marketing
402
00:18:33,785 –> 00:18:37,891
[tisa_rabun_marshall]: this and selling this how are you
finding these cohorts are these members investors through
403
00:18:37,951 –> 00:18:41,217
[tisa_rabun_marshall]: agents direct online tell us a little
bit about the marketing
404
00:18:42,165 –> 00:18:45,410
[fraser_stark]: it’s it’s a great question this is
an investment product
405
00:18:45,212 –> 00:18:45,374
[bruno_caron]: ye
406
00:18:45,490 –> 00:18:46,332
[fraser_stark]: and so it’s sold
407
00:18:46,562 –> 00:18:46,787
[bruno_caron]: oh
408
00:18:47,033 –> 00:18:48,836
[fraser_stark]: where people buy other mutual funds
409
00:18:49,472 –> 00:18:50,132
[bruno_caron]: yeah
410
00:18:49,519 –> 00:18:49,704
[tisa_rabun_marshall]: okay
411
00:18:49,617 –> 00:18:51,761
[fraser_stark]: the accounts that they might use to
buy stocks r t
412
00:18:52,022 –> 00:18:52,622
[bruno_caron]: yeah
413
00:18:52,081 –> 00:18:55,169
[fraser_stark]: f so it’s sold through investment dealers
canada the funds available
414
00:18:54,842 –> 00:18:55,063
[bruno_caron]: oh
415
00:18:55,229 –> 00:19:00,351
[fraser_stark]: to any canadian um you know some
dealers have put this fund
416
00:19:00,242 –> 00:19:00,484
[bruno_caron]: oh
417
00:19:00,451 –> 00:19:03,916
[fraser_stark]: on their shelf and others haven’t you
know one of the surprises we’ve seen is
418
00:19:04,497 –> 00:19:10,047
[fraser_stark]: um you it’s been warmly accepted by
people who think a lot about retirement and
419
00:19:10,067 –> 00:19:12,851
[fraser_stark]: the challenges of it banks have taken
you so far
420
00:19:12,752 –> 00:19:13,016
[bruno_caron]: oh
421
00:19:12,992 –> 00:19:17,599
[fraser_stark]: one of two past banks and other
wealth dealers some have approved some have not
422
00:19:17,880 –> 00:19:22,067
[fraser_stark]: know it’s a pretty novel concept this
idea of a fund that doesn’t redeem a
423
00:19:22,107 –> 00:19:23,830
[fraser_stark]: nave which you know
424
00:19:24,311 –> 00:19:24,332
[bruno_caron]: m
425
00:19:24,451 –> 00:19:28,517
[fraser_stark]: my assets aren’t all mine you know
it’s an interesting concept so there’s some of
426
00:19:28,558 –> 00:19:34,027
[fraser_stark]: that you know the decisioning that goes
on around how much come to pay and
427
00:19:34,107 –> 00:19:39,095
[fraser_stark]: the the income policy that we’ve sat
working with life works um you know i
428
00:19:39,155 –> 00:19:41,740
[fraser_stark]: think that some some are still getting
their head around that
429
00:19:41,822 –> 00:19:42,482
[bruno_caron]: oh
430
00:19:42,240 –> 00:19:45,967
[fraser_stark]: but we’ve got we do direct marketing
to investors and so there is a direct
431
00:19:46,027 –> 00:19:47,890
[fraser_stark]: to investor marketing effort
432
00:19:47,717 –> 00:19:47,738
[tisa_rabun_marshall]: m
433
00:19:47,930 –> 00:19:48,911
[fraser_stark]: here where we’ve
434
00:19:48,891 –> 00:19:49,358
[tisa_rabun_marshall]: hm
435
00:19:48,972 –> 00:19:54,741
[fraser_stark]: got digital adds t v radio raising
awareness for the product driving education a lot
436
00:19:54,781 –> 00:19:58,247
[fraser_stark]: of our investors are do it yourself
the man they’re buying this through an online
437
00:19:58,487 –> 00:19:59,709
[fraser_stark]: account it’s sold
438
00:19:59,558 –> 00:19:59,741
[tisa_rabun_marshall]: okay
439
00:19:59,750 –> 00:20:03,396
[fraser_stark]: as a mutual fund it it’s not
available as an e t f and that’s
440
00:20:03,556 –> 00:20:08,424
[fraser_stark]: because it’s not designed to be traded
the way you can easily buy and sell
441
00:20:08,484 –> 00:20:12,290
[fraser_stark]: an it’s it’s more of a product
that though though an investment
442
00:20:12,317 –> 00:20:12,338
[tisa_rabun_marshall]: m
443
00:20:12,351 –> 00:20:15,876
[fraser_stark]: product is meant to be bought and
held for years even though you’ve got the
444
00:20:15,916 –> 00:20:21,167
[fraser_stark]: ability to redeem it days weeks months
later for our investors in the d umulation
445
00:20:21,227 –> 00:20:26,127
[fraser_stark]: class pill sixty five its it’s better
to not so it’s both through investors directly
446
00:20:26,327 –> 00:20:31,966
[fraser_stark]: it’s through their wealth advisors and we’re
seeing growing adoption by investment advisors in canada
447
00:20:32,566 –> 00:20:36,190
[fraser_stark]: and then finally it’s now available as
part of workplace programs you know so any
448
00:20:36,270 –> 00:20:42,536
[fraser_stark]: company that’s running a d c and
defined contribution pension plan where the employes at
449
00:20:42,576 –> 00:20:47,985
[fraser_stark]: retirement can can choose you know different
options life works has added this to their
450
00:20:48,046 –> 00:20:53,755
[fraser_stark]: platform on the platform side and consulting
side and so plan sponsors companies ing canada
451
00:20:53,815 –> 00:20:58,603
[fraser_stark]: that run their program through life works
are able to to turn this on and
452
00:20:58,643 –> 00:21:01,268
[fraser_stark]: so we’re now that that went live
last month and we’re now in
453
00:21:01,260 –> 00:21:01,466
[tisa_rabun_marshall]: okay
454
00:21:01,308 –> 00:21:05,655
[fraser_stark]: discussion with plan sponsors who know they
need to understand the fund of course and
455
00:21:05,715 –> 00:21:09,581
[fraser_stark]: what it can mean for their employes
but what a phenomenal way for a company
456
00:21:09,662 –> 00:21:14,169
[fraser_stark]: to show that they care about their
employes outcome even after they’re retired is not
457
00:21:14,229 –> 00:21:14,610
[fraser_stark]: just saying
458
00:21:14,591 –> 00:21:14,612
[bruno_caron]: m
459
00:21:14,650 –> 00:21:17,716
[fraser_stark]: hey you worked with us for twenty
five years you’ve saved up a lot money
460
00:21:17,856 –> 00:21:20,183
[fraser_stark]: you know here it is let us
know where you want to transfer it and
461
00:21:20,585 –> 00:21:23,093
[fraser_stark]: good block figuring out how much to
draw each year its
462
00:21:23,098 –> 00:21:23,240
[tisa_rabun_marshall]: yeah
463
00:21:24,175 –> 00:21:28,242
[fraser_stark]: you know you can stay in our
plan and you can have income for life
464
00:21:28,503 –> 00:21:28,843
[fraser_stark]: in a non
465
00:21:28,742 –> 00:21:28,843
[paul_tyler]: ah
466
00:21:28,883 –> 00:21:29,885
[fraser_stark]: guaranteed way way that’s
467
00:21:29,850 –> 00:21:30,660
[paul_tyler]: yeah
468
00:21:29,925 –> 00:21:33,050
[fraser_stark]: variable but what what that does that’s
so nice is
469
00:21:33,000 –> 00:21:33,304
[paul_tyler]: oh
470
00:21:33,110 –> 00:21:38,260
[fraser_stark]: it allows that income for life without
the financial infant share responsibility on the corporate
471
00:21:38,280 –> 00:21:43,069
[fraser_stark]: balance set which of course dvpensions have
put put on over the years and is
472
00:21:43,289 –> 00:21:45,313
[fraser_stark]: the main reason why most companies are
moving away
473
00:21:45,209 –> 00:21:45,411
[tisa_rabun_marshall]: is it
474
00:21:46,781 –> 00:21:47,302
[paul_tyler]: in phrase
475
00:21:47,038 –> 00:21:47,321
[tisa_rabun_marshall]: thank you
476
00:21:47,402 –> 00:21:52,470
[paul_tyler]: you got a real interesting background and
because you just came from facebook you worked
477
00:21:52,791 –> 00:22:00,747
[paul_tyler]: with an influence of what lessons did
you learn there that you’re plying into this
478
00:22:00,767 –> 00:22:01,108
[paul_tyler]: space
479
00:22:02,435 –> 00:22:02,595
[fraser_stark]: yeah
480
00:22:02,469 –> 00:22:02,490
[paul_tyler]: m
481
00:22:03,276 –> 00:22:05,440
[fraser_stark]: you know the other part of my
career i started a bann
482
00:22:05,252 –> 00:22:05,374
[bruno_caron]: ye
483
00:22:05,520 –> 00:22:10,007
[fraser_stark]: company as a consultant and my clients
were retail banks in both canada and the
484
00:22:10,067 –> 00:22:12,511
[fraser_stark]: us wealth management
485
00:22:12,480 –> 00:22:13,920
[paul_tyler]: oh
486
00:22:12,551 –> 00:22:18,061
[fraser_stark]: firms as well as one of the
largest canadian pensions and so i’ve worked in
487
00:22:18,101 –> 00:22:21,607
[fraser_stark]: the d b pension side i’ve worked
so i do have a more financial background
488
00:22:22,588 –> 00:22:23,049
[fraser_stark]: after being
489
00:22:22,952 –> 00:22:23,173
[bruno_caron]: oh
490
00:22:23,089 –> 00:22:29,578
[fraser_stark]: though you know influitive and facebook both
tech companies and both really innovative and i
491
00:22:29,610 –> 00:22:30,270
[paul_tyler]: yeah
492
00:22:29,658 –> 00:22:34,402
[fraser_stark]: think that’s what’s what’s happening here is
i was drawn to this role to join
493
00:22:34,522 –> 00:22:37,576
[fraser_stark]: early twenty twenty one because
494
00:22:37,262 –> 00:22:37,544
[bruno_caron]: oh
495
00:22:37,676 –> 00:22:43,205
[fraser_stark]: it’s it’s important innovation and it’s not
going to be easy you know this is
496
00:22:43,326 –> 00:22:44,928
[fraser_stark]: this takes real change in mind
497
00:22:44,762 –> 00:22:45,106
[bruno_caron]: yeah
498
00:22:45,028 –> 00:22:51,018
[fraser_stark]: shift and we’ve got a product here
that solves a the important problem for retires
499
00:22:51,619 –> 00:22:56,628
[fraser_stark]: and yet it looks so different that
getting that getting the product design right and
500
00:22:56,668 –> 00:23:01,295
[fraser_stark]: thinking about it both in financial terms
as well as consumer terms and the you
501
00:23:01,336 –> 00:23:05,783
[fraser_stark]: know the real way that people make
decisions at the kitchen table you know talking
502
00:23:05,823 –> 00:23:10,190
[fraser_stark]: to their advisor talking to their spouse
talking to their kids you know all of
503
00:23:10,250 –> 00:23:15,499
[fraser_stark]: those things it makes it fascinating problem
to solve and it’s it’s been a ton
504
00:23:15,579 –> 00:23:19,045
[fraser_stark]: of fun so far and you know
we can’t wait to see where it goes
505
00:23:19,105 –> 00:23:21,509
[fraser_stark]: but this is what i do in
my career is i think on my linked
506
00:23:21,549 –> 00:23:23,372
[fraser_stark]: in i say i like solving
507
00:23:23,702 –> 00:23:23,926
[bruno_caron]: oh
508
00:23:24,174 –> 00:23:30,284
[fraser_stark]: really challenge problems with technology and you
know this is more financial engineering than you
509
00:23:30,304 –> 00:23:34,911
[fraser_stark]: know data base engineering but none the
less it’s it’s a really cool it’s a
510
00:23:34,932 –> 00:23:36,961
[fraser_stark]: really cool space and i’m loving here
511
00:23:39,312 –> 00:23:44,741
[bruno_caron]: no that there and then i mean
that’s going back to the point you mentioned
512
00:23:44,821 –> 00:23:50,831
[bruno_caron]: earlier on education and that that that
kitchen table sale can you dis some of
513
00:23:50,871 –> 00:23:55,078
[bruno_caron]: the some of the some of the
initiatives that you’ve you’ve had and what some
514
00:23:55,098 –> 00:24:01,128
[bruno_caron]: of the challenges that you’ve had in
terms of bringing the idea of the concept
515
00:24:01,268 –> 00:24:08,079
[bruno_caron]: forward people to individuals or to to
employes as you as you mentioned
516
00:24:08,876 –> 00:24:12,403
[fraser_stark]: yeah you know there are there are
a couple of challenges here you know one
517
00:24:12,523 –> 00:24:15,910
[fraser_stark]: thing is that i have found interesting
an i’s been a bit of a surprise
518
00:24:16,110 –> 00:24:20,212
[fraser_stark]: when you start talking about this fund
a lot of people you see their mental
519
00:24:20,293 –> 00:24:25,347
[fraser_stark]: wheels start turning and they say if
i put all my money into this you
520
00:24:25,387 –> 00:24:29,915
[fraser_stark]: know i’d have i’d be rather a
liquid and and they’re not wrong but we
521
00:24:29,995 –> 00:24:32,820
[fraser_stark]: sort of say well who said anything
about putting all your money into this i
522
00:24:32,880 –> 00:24:37,347
[fraser_stark]: mean that that sort of true of
of any product is it’s not right for
523
00:24:37,488 –> 00:24:42,997
[fraser_stark]: for everything you know so so that
education what i’m getting at there is sometimes
524
00:24:43,057 –> 00:24:49,089
[fraser_stark]: we bring in our preconceived notions on
on products and when you talk about a
525
00:24:49,129 –> 00:24:52,579
[fraser_stark]: product like this people jump to all
of it and we say absolutely not you
526
00:24:52,619 –> 00:24:56,007
[fraser_stark]: know this isn’t right for everyone and
even the people it’s right for it’s not
527
00:24:56,067 –> 00:24:59,032
[fraser_stark]: right for all of their assents one
thing we’re seeing is a lot of our
528
00:24:59,072 –> 00:25:04,161
[fraser_stark]: investors actually already have a d b
pension or they already have annuities in their
529
00:25:04,201 –> 00:25:09,730
[fraser_stark]: portfolio and what they’re doing is there
they’re compartmentalizing the income in retirement and saying
530
00:25:09,750 –> 00:25:12,935
[fraser_stark]: there’s a there’s a portion that’s absolute
base line you know in canada we have
531
00:25:13,216 –> 00:25:18,324
[fraser_stark]: we have pretty good government supports which
is which is great and some people buy
532
00:25:18,425 –> 00:25:24,955
[fraser_stark]: nuits to create more guaranteed income at
a fixed level this allows them to have
533
00:25:25,436 –> 00:25:29,382
[fraser_stark]: income for life at a variable level
and we show them that it will vary
534
00:25:29,463 –> 00:25:33,910
[fraser_stark]: but it shouldn’t dramatically because of the
way we manage it so that’s one thing
535
00:25:33,990 –> 00:25:39,762
[fraser_stark]: on the on the education side it’s
been really interesting the other is just because
536
00:25:39,822 –> 00:25:44,033
[fraser_stark]: this product looks and sounds like an
annuity in some ways a lot of people
537
00:25:45,350 –> 00:25:49,691
[fraser_stark]: you know we have people ask us
well well how can you say it’s guaranteed
538
00:25:50,132 –> 00:25:53,639
[fraser_stark]: and we say we didn’t say it
was guaranteed right we said it’s income for
539
00:25:53,719 –> 00:25:57,105
[fraser_stark]: life at a variable level and that’s
an that’s clear but they’re bringing in that
540
00:25:57,165 –> 00:26:00,530
[fraser_stark]: notion that because it’s ncome for life
and the only income for life people have
541
00:26:00,570 –> 00:26:04,797
[fraser_stark]: ever seen is a d b pensioner
an ane they’re they’re bringing that in as
542
00:26:04,837 –> 00:26:09,585
[fraser_stark]: well and the final example in that
sphere is that this is it ties to
543
00:26:09,645 –> 00:26:14,013
[fraser_stark]: a single person there’s no spousal component
to it that’s an innovation we could we
544
00:26:14,073 –> 00:26:18,718
[fraser_stark]: could do further there’s trade off to
it of course because a couple lives longer
545
00:26:18,778 –> 00:26:22,402
[fraser_stark]: than a person the distribution levels would
be lower and that could be the right
546
00:26:22,462 –> 00:26:28,319
[fraser_stark]: trade off but a lot of times
people say you know well my my spouse
547
00:26:28,379 –> 00:26:32,005
[fraser_stark]: and i you know both need income
and i want like they feel as though
548
00:26:32,045 –> 00:26:37,494
[fraser_stark]: the product is designed against their interests
by not being spousal and and we have
549
00:26:37,514 –> 00:26:41,281
[fraser_stark]: a nversation and point out and generally
we we get them there that well you
550
00:26:41,321 –> 00:26:45,628
[fraser_stark]: can buy some in each person’s name
and in fact that actually lets you create
551
00:26:46,810 –> 00:26:51,998
[fraser_stark]: a very effective income flow before and
after first member of a couple has passed
552
00:26:52,059 –> 00:26:57,648
[fraser_stark]: away you can actually engineer it really
brilliantly because again this this allocation let’s say
553
00:26:57,708 –> 00:27:02,095
[fraser_stark]: a couple with a million dollars who
put four hundred thousand into longevity two hundred
554
00:27:02,135 –> 00:27:08,165
[fraser_stark]: in each person’s name they’ve created a
very nicely aline stream of income to their
555
00:27:08,205 –> 00:27:13,756
[fraser_stark]: needs before and after the first member
passes away but these are what i’m in
556
00:27:13,877 –> 00:27:21,070
[fraser_stark]: out is that we carry a lot
of preconceived notions in i think financial education
557
00:27:21,151 –> 00:27:28,349
[fraser_stark]: among the general population varies from high
to quite low and it’s important for everyone
558
00:27:28,589 –> 00:27:33,154
[fraser_stark]: you know to think through these issues
so i think the same issues that that
559
00:27:33,715 –> 00:27:38,683
[fraser_stark]: an agent would would struggle with or
might struggle with explaining a more complex annuity
560
00:27:38,763 –> 00:27:42,710
[fraser_stark]: to a family i think some of
that exists here but people are really resonating
561
00:27:42,730 –> 00:27:47,690
[fraser_stark]: with this message of you still benefit
from market return have the confidence to spend
562
00:27:48,375 –> 00:27:52,241
[fraser_stark]: it’s still assets that you can think
of in your portfolio because they are there
563
00:27:52,381 –> 00:27:56,027
[fraser_stark]: for you and when you pass away
a portion is left in or after a
564
00:27:56,047 –> 00:27:59,733
[fraser_stark]: number of years it’s all left in
but those are some of the challenges bruno
565
00:27:59,814 –> 00:28:00,799
[fraser_stark]: that we’re facing
566
00:28:07,552 –> 00:28:12,780
[bruno_caron]: wonderful and i mean i know we
kind of touched on it a little bit
567
00:28:14,243 –> 00:28:18,470
[bruno_caron]: but you know you mentioned you know
some of those those preconceived ideas some of
568
00:28:18,510 –> 00:28:18,590
[bruno_caron]: the
569
00:28:19,675 –> 00:28:21,055
[fraser_stark]: yeah
570
00:28:19,892 –> 00:28:26,043
[bruno_caron]: the guarantees um any other parallel within
you know with
571
00:28:25,890 –> 00:28:26,610
[paul_tyler]: yeah
572
00:28:26,083 –> 00:28:33,094
[bruno_caron]: your comparable peers and i e annuities
in any any other differences you’d like to
573
00:28:33,615 –> 00:28:38,383
[bruno_caron]: highlight and maybe perhaps on the on
the investment side we didn’t discuss too much
574
00:28:38,543 –> 00:28:41,989
[bruno_caron]: but any anything in that in that
particular area
575
00:28:42,685 –> 00:28:47,773
[fraser_stark]: yeah yeah you know the investment side
is it’s our our c i o purpose
576
00:28:48,354 –> 00:28:54,685
[fraser_stark]: greg taylor who manages the portfolio with
no one but they’ve created a truly diversive
577
00:28:54,805 –> 00:28:57,389
[fraser_stark]: i m portfolio across geography
578
00:28:57,450 –> 00:28:59,580
[paul_tyler]: yeah
579
00:28:57,529 –> 00:29:01,596
[fraser_stark]: sect or strategy you know it’s a
mix a fixed income and equities we use
580
00:29:01,756 –> 00:29:08,247
[fraser_stark]: hedging overlaid to further reduce risk there’s
about nineteen percent out casion to alternatives which
581
00:29:08,307 –> 00:29:13,235
[fraser_stark]: we invest in through through liquid alternative
funds which gives access
582
00:29:13,800 –> 00:29:14,063
[paul_tyler]: yeah
583
00:29:14,317 –> 00:29:19,907
[fraser_stark]: to real estate to energy to precious
metals base metals et cetera that portion of
584
00:29:19,927 –> 00:29:22,431
[fraser_stark]: the portfolio has been really great this
year when we’ve
585
00:29:22,380 –> 00:29:23,280
[paul_tyler]: oh
586
00:29:22,471 –> 00:29:26,738
[fraser_stark]: been so challenged in markets with with
this inflationary environment the
587
00:29:26,820 –> 00:29:27,870
[paul_tyler]: oh
588
00:29:27,058 –> 00:29:32,949
[fraser_stark]: portfolio is targeting a return of only
around five percent you know it’s deliberately seeking
589
00:29:33,029 –> 00:29:37,197
[fraser_stark]: return with minimum volatility this isn’t about
ou know a lot of d b pensions
590
00:29:37,067 –> 00:29:37,150
[bruno_caron]: ah
591
00:29:37,277 –> 00:29:43,368
[fraser_stark]: actually strive for eight to nine percent
annually they almost need hit that in over
592
00:29:43,408 –> 00:29:48,136
[fraser_stark]: the long term in order to in
order to make their make all their payments
593
00:29:48,216 –> 00:29:52,964
[fraser_stark]: but we’ve we’ve set this up to
work on a on a low return basis
594
00:29:53,100 –> 00:29:53,443
[paul_tyler]: oh
595
00:29:53,765 –> 00:29:57,732
[fraser_stark]: that said it’s very different than an
annuity because there it’s an investment fund there’s
596
00:29:57,792 –> 00:30:01,739
[fraser_stark]: no capital reserve requirements where we’re able
to benefit from
597
00:30:01,770 –> 00:30:02,017
[paul_tyler]: oh
598
00:30:01,779 –> 00:30:07,207
[fraser_stark]: that market risk premium and i think
that i think that’s that’s really powerful and
599
00:30:07,267 –> 00:30:11,112
[fraser_stark]: as much as in these early days
there’s a lot of education with investors going
600
00:30:11,252 –> 00:30:11,673
[fraser_stark]: on that
601
00:30:11,708 –> 00:30:11,928
[tisa_rabun_marshall]: yeah
602
00:30:12,090 –> 00:30:12,930
[paul_tyler]: oh
603
00:30:13,855 –> 00:30:17,481
[fraser_stark]: you know sometimes it goes very well
sometimes the product
604
00:30:17,427 –> 00:30:17,588
[tisa_rabun_marshall]: yeah
605
00:30:17,562 –> 00:30:22,129
[fraser_stark]: is still too foreign to people and
that’s okay but i see this over the
606
00:30:22,169 –> 00:30:25,475
[fraser_stark]: long term getting to a place where
it’s much easier to explain than a the
607
00:30:25,555 –> 00:30:26,459
[fraser_stark]: annuity constructions
608
00:30:26,310 –> 00:30:27,000
[paul_tyler]: my
609
00:30:26,920 –> 00:30:30,132
[fraser_stark]: and the transparency is powerful when someone
passes away
610
00:30:31,220 –> 00:30:31,321
[tisa_rabun_marshall]: ah
611
00:30:31,755 –> 00:30:33,238
[fraser_stark]: purpose investments does not
612
00:30:33,210 –> 00:30:33,840
[paul_tyler]: oh
613
00:30:33,318 –> 00:30:36,864
[fraser_stark]: benefit from that in any way if
you think about where those mortality credits go
614
00:30:36,924 –> 00:30:41,030
[fraser_stark]: it always flows to the pool you
know we receive a management fee as investment
615
00:30:41,051 –> 00:30:46,019
[fraser_stark]: managers do on every fund that’s taken
nelly is a percentage of the assets but
616
00:30:46,059 –> 00:30:52,770
[fraser_stark]: the residual left in the pool always
benefits the surviving investors and i think that’s
617
00:30:52,910 –> 00:30:55,314
[fraser_stark]: that’s really powerful people are funny about
618
00:30:55,157 –> 00:30:55,178
[tisa_rabun_marshall]: m
619
00:30:55,334 –> 00:30:59,802
[fraser_stark]: that concept of fairness right things that
don’t really seem to affect us we still
620
00:30:59,882 –> 00:31:03,909
[fraser_stark]: care about a lot and there’s a
there’s reams of psychological research into how important
621
00:31:03,989 –> 00:31:07,795
[fraser_stark]: fairness is and that’s one of the
elements that really resonates with invest when we
622
00:31:07,835 –> 00:31:10,720
[fraser_stark]: speak to them is that idea that
the
623
00:31:09,810 –> 00:31:10,620
[paul_tyler]: oh
624
00:31:10,820 –> 00:31:16,109
[fraser_stark]: corporation is not benefiting you know if
they if they passed away early you know
625
00:31:16,149 –> 00:31:20,478
[fraser_stark]: the other big tether huge difference from
an annuity is really around that idea i
626
00:31:20,538 –> 00:31:24,349
[fraser_stark]: touched on at the beginning that an
investor can choose to redeem this and i
627
00:31:24,389 –> 00:31:25,833
[fraser_stark]: think that’s that’s really powerful
628
00:31:26,610 –> 00:31:26,953
[paul_tyler]: oh
629
00:31:26,745 –> 00:31:30,431
[fraser_stark]: of course many annuities will either keep
paying or lump some out to the estate
630
00:31:30,511 –> 00:31:35,760
[fraser_stark]: of some one who passes away but
your your voluntary redeemability is typically quite low
631
00:31:36,040 –> 00:31:41,449
[fraser_stark]: depending on the structure with this fund
we never treated any differently whether you’ve passed
632
00:31:41,509 –> 00:31:45,256
[fraser_stark]: away or are simply asking you to
have your money back and i think that’s
633
00:31:45,276 –> 00:31:50,545
[fraser_stark]: really powerful it means no one ever
has an incentive to live or to die
634
00:31:50,685 –> 00:31:51,026
[fraser_stark]: if you think
635
00:31:51,041 –> 00:31:51,206
[tisa_rabun_marshall]: yeah
636
00:31:51,067 –> 00:31:54,943
[fraser_stark]: about it financially it’s it’s i think
that’s a powerful benefit
637
00:31:55,890 –> 00:31:58,474
[paul_tyler]: for sure i think we just lost
a brutal unfortunately
638
00:31:58,369 –> 00:31:58,670
[tisa_rabun_marshall]: but yeah
639
00:31:58,875 –> 00:31:58,995
[paul_tyler]: but
640
00:31:59,067 –> 00:31:59,293
[fraser_stark]: okay
641
00:31:59,236 –> 00:32:00,237
[paul_tyler]: tsa tis now
642
00:32:00,229 –> 00:32:00,249
[tisa_rabun_marshall]: i
643
00:32:00,257 –> 00:32:00,999
[paul_tyler]: you had a question
644
00:32:01,678 –> 00:32:04,423
[tisa_rabun_marshall]: yeah i wanted to jump in so
i agree with you sort of that power
645
00:32:04,543 –> 00:32:12,135
[tisa_rabun_marshall]: of fairness and choice but i wanted
to go back you in your background mentioned
646
00:32:12,656 –> 00:32:18,145
[tisa_rabun_marshall]: you innovation and tech that thread throughout
the positions that you’ve held so i heard
647
00:32:18,185 –> 00:32:22,212
[tisa_rabun_marshall]: you talk a little bit about technology
infused into the financial modeling but i was
648
00:32:22,312 –> 00:32:26,800
[tisa_rabun_marshall]: curious if there’s any tech or innovation
you could share and whether it’s you know
649
00:32:26,880 –> 00:32:31,428
[tisa_rabun_marshall]: user experience sort of what investors might
be empowered to do through managing their assets
650
00:32:31,508 –> 00:32:36,095
[tisa_rabun_marshall]: on your platform or any other type
of infusions of tech for the actual benefit
651
00:32:36,155 –> 00:32:37,698
[tisa_rabun_marshall]: of the investor um
652
00:32:37,908 –> 00:32:38,333
[fraser_stark]: great question
653
00:32:38,100 –> 00:32:38,220
[tisa_rabun_marshall]: that
654
00:32:38,373 –> 00:32:38,555
[fraser_stark]: tis
655
00:32:38,461 –> 00:32:39,565
[tisa_rabun_marshall]: you guys might make considering
656
00:32:40,445 –> 00:32:45,293
[fraser_stark]: yeah you know right now because it
sold as a mutual fund the client experience
657
00:32:45,353 –> 00:32:49,480
[fraser_stark]: is typically between the deal or whether
that’s an online
658
00:32:49,324 –> 00:32:49,838
[tisa_rabun_marshall]: hm
659
00:32:49,520 –> 00:32:53,346
[fraser_stark]: brokerage or an advisor someone works with
or the life works platform for someone who
660
00:32:53,386 –> 00:32:57,633
[fraser_stark]: manage this manages this as part of
their workplace savings program so
661
00:32:57,758 –> 00:32:58,898
[tisa_rabun_marshall]: mhm
662
00:32:57,994 –> 00:32:58,174
[fraser_stark]: that
663
00:32:58,140 –> 00:32:58,366
[paul_tyler]: oh
664
00:32:58,254 –> 00:32:59,216
[fraser_stark]: experience is
665
00:32:59,220 –> 00:33:00,420
[paul_tyler]: yeah
666
00:32:59,296 –> 00:33:04,685
[fraser_stark]: today controlled there you know we have
bold ambitions to play in different parts this
667
00:33:05,106 –> 00:33:05,707
[fraser_stark]: but what i can
668
00:33:05,910 –> 00:33:06,750
[paul_tyler]: oh
669
00:33:05,947 –> 00:33:11,416
[fraser_stark]: what i can tell you is our
website retire with longevity dot com has two
670
00:33:11,476 –> 00:33:17,967
[fraser_stark]: calculators there visualize ones as a simple
visualizer of income someone can expect the others
671
00:33:18,027 –> 00:33:22,234
[fraser_stark]: a bit more of a of a
picture a canadian retired investors
672
00:33:21,701 –> 00:33:22,208
[tisa_rabun_marshall]: hm
673
00:33:23,236 –> 00:33:28,284
[fraser_stark]: income profile you know when i look
and i see calculators you know that exist
674
00:33:28,425 –> 00:33:32,097
[fraser_stark]: online in different places often they’re very
complex
675
00:33:32,340 –> 00:33:32,582
[paul_tyler]: oh
676
00:33:32,835 –> 00:33:38,183
[fraser_stark]: i think they may be in some
cases designed to make the person showing it
677
00:33:38,224 –> 00:33:42,791
[fraser_stark]: to the client look smart or you
know it’s more about showing complexity than the
678
00:33:42,891 –> 00:33:47,878
[fraser_stark]: simplicity and we want to with that
i mean our investors are very intelligent but
679
00:33:48,179 –> 00:33:54,186
[fraser_stark]: but this is not the they’re not
actuaries they’re not financial know ph d s
680
00:33:54,547 –> 00:33:59,453
[fraser_stark]: and so the more you can show
someone simplicity i think and and so we’ve
681
00:33:59,473 –> 00:34:04,840
[fraser_stark]: got some calculators today where where i
can see us going with this is you
682
00:34:04,880 –> 00:34:05,281
[fraser_stark]: know too
683
00:34:05,379 –> 00:34:05,400
[paul_tyler]: m
684
00:34:05,481 –> 00:34:10,930
[fraser_stark]: often we we go to averages planners
often say well you know the average person
685
00:34:11,030 –> 00:34:13,855
[fraser_stark]: is sixty five can expect to live
to be eighty seven eighty eight you know
686
00:34:13,955 –> 00:34:18,162
[fraser_stark]: depending on country and gender and so
forth so let’s build you a plan of
687
00:34:18,202 –> 00:34:23,932
[fraser_stark]: ninety right but averages are always dangerous
i go back to that that that fable
688
00:34:23,972 –> 00:34:27,798
[fraser_stark]: you know would you you walk across
the fast flowing river if i told you
689
00:34:28,019 –> 00:34:31,184
[fraser_stark]: on average it was only two feet
deep well if it’s eight feet deep in
690
00:34:31,204 –> 00:34:34,790
[fraser_stark]: the middle you’ll you’ll get washed away
and i think the same thing is exactly
691
00:34:34,850 –> 00:34:39,723
[fraser_stark]: what exists for investors so i could
s in the next year building tools that
692
00:34:40,767 –> 00:34:47,941
[fraser_stark]: that make monte carlo simulations readily accessible
in a real way to investors and i
693
00:34:47,981 –> 00:34:53,110
[fraser_stark]: think monte carlo is the thing and
stocastic fancy greek word or latin word for
694
00:34:53,150 –> 00:34:57,617
[fraser_stark]: it these are terms that just sound
like a lot of sophistication went in on
695
00:34:57,637 –> 00:35:01,844
[fraser_stark]: the back end but i’d love to
show investors that there’s a wide range of
696
00:35:01,904 –> 00:35:07,814
[fraser_stark]: possibilities and what you need to do
is optimize you need to optimize your situation
697
00:35:07,854 –> 00:35:11,080
[fraser_stark]: work gardless of what happens right it’s
what we do when we insure things it’s
698
00:35:11,100 –> 00:35:16,629
[fraser_stark]: what an annuity does right an nuities
great annuities are great products but but that
699
00:35:16,729 –> 00:35:20,996
[fraser_stark]: idea you know it’s not easy and
these things are complex in the back end
700
00:35:21,076 –> 00:35:24,322
[fraser_stark]: how do you turn it into something
that’s visually quite simple you know i think
701
00:35:24,722 –> 00:35:28,248
[fraser_stark]: know my experience at facebook for a
couple of years you know is a great
702
00:35:28,308 –> 00:35:32,696
[fraser_stark]: example of a platform that takes you
know the amount of information lowing through that
703
00:35:32,856 –> 00:35:37,083
[fraser_stark]: the you know whether you think about
our user experience and being able to you
704
00:35:37,143 –> 00:35:40,449
[fraser_stark]: know to attend events and see that
our friends are going that is that is
705
00:35:40,489 –> 00:35:45,417
[fraser_stark]: a tremendous amount of information that’s simplified
and really consumable ay by people of all
706
00:35:45,477 –> 00:35:50,245
[fraser_stark]: ages it’s become a controversial platform social
media itself is a controversial topic these days
707
00:35:50,640 –> 00:35:51,690
[paul_tyler]: oh
708
00:35:51,387 –> 00:35:54,492
[fraser_stark]: but likewise if you think about what
what happens i was on the on the
709
00:35:54,572 –> 00:35:59,480
[fraser_stark]: ads team at facebook if you think
what happens there the amount of data that
710
00:35:59,540 –> 00:36:03,587
[fraser_stark]: is going in to determining that that
i see and add you know advertising a
711
00:36:03,627 –> 00:36:07,834
[fraser_stark]: certain car brand or you know sneakers
that they want me to buy it’s immense
712
00:36:07,934 –> 00:36:14,787
[fraser_stark]: amounts information going in so that’s where
i see a lot of education that’s really
713
00:36:14,907 –> 00:36:17,031
[fraser_stark]: helpful to investors you know i think
714
00:36:16,950 –> 00:36:17,438
[tisa_rabun_marshall]: hm
715
00:36:17,191 –> 00:36:22,352
[fraser_stark]: our legacy should be we’d love to
to really help investors in canada and around
716
00:36:22,392 –> 00:36:31,189
[fraser_stark]: the world understand the challenge of the
accumulation and and you know if that’s what
717
00:36:31,229 –> 00:36:35,897
[fraser_stark]: we create however they choose to solve
that great and i think our fund will
718
00:36:36,357 –> 00:36:38,341
[fraser_stark]: we’ll ride that wave of course
719
00:36:39,050 –> 00:36:39,518
[tisa_rabun_marshall]: hm
720
00:36:39,222 –> 00:36:44,231
[fraser_stark]: but i think it’s just so important
people you people are suffering and and lots
721
00:36:44,251 –> 00:36:47,376
[fraser_stark]: of investors are doing really well but
we hear from canadians every day who are
722
00:36:47,476 –> 00:36:50,160
[fraser_stark]: really hit by what’s going on in
markets and you know
723
00:36:50,151 –> 00:36:50,678
[tisa_rabun_marshall]: hm
724
00:36:50,201 –> 00:36:54,911
[fraser_stark]: they’ve not got enough money to last
them forever at their current rate of spend
725
00:36:55,252 –> 00:36:57,780
[fraser_stark]: and so being able to articulate that
is
726
00:36:57,780 –> 00:36:58,084
[paul_tyler]: oh
727
00:36:57,820 –> 00:36:58,863
[fraser_stark]: where i’d love to contribute
728
00:36:59,540 –> 00:37:00,886
[paul_tyler]: okay so your fund
729
00:37:01,238 –> 00:37:01,382
[tisa_rabun_marshall]: ye
730
00:37:01,308 –> 00:37:09,623
[paul_tyler]: versus annuities is it does your product
replace annuities if i’m an investor reward is
731
00:37:09,663 –> 00:37:14,253
[paul_tyler]: a compliment would i ever own your
fund and have an annuity at the same
732
00:37:14,334 –> 00:37:14,575
[paul_tyler]: time
733
00:37:15,705 –> 00:37:18,450
[fraser_stark]: many of our investors do and when
we speak with the com know we do
734
00:37:18,530 –> 00:37:22,697
[fraser_stark]: market research and talk to investors we
welcome them to the community we’re building um
735
00:37:23,097 –> 00:37:23,177
[fraser_stark]: you
736
00:37:23,139 –> 00:37:23,160
[paul_tyler]: m
737
00:37:23,198 –> 00:37:26,483
[fraser_stark]: know and and a surprising number of
them do say you know i have annuities
738
00:37:26,543 –> 00:37:28,967
[fraser_stark]: and i heard about this fun and
and i understood
739
00:37:28,530 –> 00:37:28,813
[paul_tyler]: oh
740
00:37:29,007 –> 00:37:33,114
[fraser_stark]: the differences you know i like the
shelf analogy and you think about you know
741
00:37:33,174 –> 00:37:36,880
[fraser_stark]: a shelf at a store and the
two products side by side on the shelf
742
00:37:36,900 –> 00:37:41,170
[fraser_stark]: they each have different different trade offs
and benefits um and i think that’s that’s
743
00:37:41,210 –> 00:37:44,862
[fraser_stark]: very true here you know there are
investors who will look at our fund and
744
00:37:44,942 –> 00:37:50,021
[fraser_stark]: say what i’m actually after is an
annuity i need that guarantee i’m willing to
745
00:37:50,102 –> 00:37:55,070
[fraser_stark]: accept less you know what i say
about guarantees we we’ve got to blog post
746
00:37:55,130 –> 00:37:57,674
[fraser_stark]: on our website about guarantees they’re wonderful
747
00:37:57,510 –> 00:37:58,380
[paul_tyler]: oh
748
00:37:58,096 –> 00:38:01,518
[fraser_stark]: but they come at a cost and
you may or may not choose to take
749
00:38:01,538 –> 00:38:04,843
[fraser_stark]: that cost i mean do you do
you buy the insurance when you get a
750
00:38:04,903 –> 00:38:08,957
[fraser_stark]: new smart phone you know that means
if you if you drop it and smash
751
00:38:09,037 –> 00:38:11,960
[fraser_stark]: it the company some people do some
people don’t they’re making the right decision for
752
00:38:12,000 –> 00:38:17,710
[fraser_stark]: themselves in the guarantee against market risk
that comes with an annuity is right for
753
00:38:17,770 –> 00:38:21,718
[fraser_stark]: some people and not right for others
and the research shows we’ve got an amazing
754
00:38:21,798 –> 00:38:24,182
[fraser_stark]: advisory committee on this fund one of
whom
755
00:38:24,210 –> 00:38:24,539
[paul_tyler]: oh
756
00:38:24,582 –> 00:38:31,133
[fraser_stark]: jim leech ran ontario teachers pension plan
and and others bonny macdonald’s leading academic what
757
00:38:31,254 –> 00:38:35,340
[fraser_stark]: each of our our advisory members has
told us in different ways is that investors
758
00:38:35,441 –> 00:38:42,292
[fraser_stark]: are actually able to manage variability and
income it think about our lives if i
759
00:38:42,392 –> 00:38:46,669
[fraser_stark]: get a raise at work i’m gonna
i’m going to change my spending in slight
760
00:38:46,709 –> 00:38:50,676
[fraser_stark]: ways it may mean more saving but
it may also mean slightly different spending patterns
761
00:38:50,756 –> 00:38:54,383
[fraser_stark]: likewise if i take a different job
at a lower pay level i’m not i’m
762
00:38:54,423 –> 00:39:00,506
[fraser_stark]: not absolutely you know devastate it in
a irrecoverable way we can adjust to those
763
00:39:00,546 –> 00:39:05,428
[fraser_stark]: things and so when you say to
someone you know i’ll guarantee you i don’t
764
00:39:05,468 –> 00:39:10,556
[fraser_stark]: know x per cent or or i
can offer you one and a half times
765
00:39:10,636 –> 00:39:14,041
[fraser_stark]: that as a return but knowing that
there are scenarios where it could go down
766
00:39:14,102 –> 00:39:15,564
[fraser_stark]: to less than whatever that x was
767
00:39:16,170 –> 00:39:16,560
[paul_tyler]: oh
768
00:39:16,926 –> 00:39:20,792
[fraser_stark]: and you know people rightly ask a
lot of questions about that well how likely
769
00:39:20,852 –> 00:39:24,779
[fraser_stark]: is it to do these different things
and that’s what we’ve been so transparent with
770
00:39:24,899 –> 00:39:28,004
[fraser_stark]: our with our reporting and the annual
report we’re putting out in a couple of
771
00:39:28,024 –> 00:39:32,049
[fraser_stark]: weeks to show you know the update
on all that but that’s that’s really how
772
00:39:32,089 –> 00:39:36,553
[fraser_stark]: to think of it against an annuity
and that idea of compartmentalizing our income sources
773
00:39:36,598 –> 00:39:36,638
[tisa_rabun_marshall]: m
774
00:39:36,613 –> 00:39:39,118
[fraser_stark]: in retirement most most
775
00:39:39,162 –> 00:39:39,263
[paul_tyler]: ah
776
00:39:39,218 –> 00:39:43,488
[fraser_stark]: investors in canada do not own annuities
and i think if someone says they’ve looked
777
00:39:43,397 –> 00:39:43,418
[tisa_rabun_marshall]: m
778
00:39:43,528 –> 00:39:45,192
[fraser_stark]: at longevity and are going to
779
00:39:45,197 –> 00:39:45,218
[tisa_rabun_marshall]: m
780
00:39:46,675 –> 00:39:51,523
[fraser_stark]: are going to buy an annuity i
think that’s fantastic you’re you’re protecting yourself against
781
00:39:51,563 –> 00:39:55,349
[fraser_stark]: longevity risk someone says i’ve looked at
longevity and i think i’m just going to
782
00:39:55,369 –> 00:39:58,254
[fraser_stark]: keep my assets in a balanced fund
783
00:39:58,560 –> 00:39:58,822
[paul_tyler]: oh
784
00:39:59,014 –> 00:40:04,483
[fraser_stark]: m i think okay but you’ve left
yourself you’ve left yourself self insured effectively and
785
00:40:04,924 –> 00:40:08,710
[fraser_stark]: what you have to do then as
an investor s decide how do i balance
786
00:40:08,810 –> 00:40:13,196
[fraser_stark]: the risk of running out of money
at some state which is which is a
787
00:40:13,256 –> 00:40:18,685
[fraser_stark]: possibility unless you unless you stretch your
portfolio to last until your dean fifteen you
788
00:40:18,725 –> 00:40:22,291
[fraser_stark]: know the oldest canadian ever live to
be ned seventeen and a half but i
789
00:40:22,331 –> 00:40:26,798
[fraser_stark]: think a hunderd and fifteen will cover
you know basically everyone if you do that
790
00:40:26,978 –> 00:40:27,298
[fraser_stark]: you have
791
00:40:27,180 –> 00:40:27,900
[paul_tyler]: yeah
792
00:40:27,759 –> 00:40:33,194
[fraser_stark]: you have a very high degree of
certainty of understanding and leaving a lot of
793
00:40:33,275 –> 00:40:37,051
[fraser_stark]: money your estate and that’s it’s great
for your state but
794
00:40:37,269 –> 00:40:37,290
[paul_tyler]: m
795
00:40:37,775 –> 00:40:40,803
[fraser_stark]: that’s that that’s the trade off and
so that’s how we think about it
796
00:40:42,189 –> 00:40:42,210
[paul_tyler]: m
797
00:40:43,049 –> 00:40:45,152
[tisa_rabun_marshall]: so fraser few times
798
00:40:45,188 –> 00:40:45,289
[fraser_stark]: to
799
00:40:45,433 –> 00:40:50,201
[tisa_rabun_marshall]: i’ve i’ve heard you sort of hint
at i think a bigger why i’ve heard
800
00:40:50,241 –> 00:40:53,787
[tisa_rabun_marshall]: you talk about sort of the power
of the product and a little bit about
801
00:40:53,827 –> 00:40:54,287
[tisa_rabun_marshall]: the legs
802
00:40:54,115 –> 00:40:55,285
[fraser_stark]: yeah
803
00:40:54,528 –> 00:40:59,136
[tisa_rabun_marshall]: of the company so my question for
you is it feels like there’s maybe an
804
00:40:59,236 –> 00:41:06,147
[tisa_rabun_marshall]: intention to shift the investors mindset about
retirement could you comment a little bit on
805
00:41:06,688 –> 00:41:10,297
[tisa_rabun_marshall]: kind of that bigger why or what
you hope to do and shifting people’s attitudes
806
00:41:10,358 –> 00:41:13,866
[tisa_rabun_marshall]: about retirement their attitudes around outliving their
assets
807
00:41:15,465 –> 00:41:20,574
[fraser_stark]: yeah it’s a great question to send
and you know our mantra at purpose and
808
00:41:20,955 –> 00:41:25,001
[fraser_stark]: on the longevity team his ambition never
retires i think we’re driven by a sense
809
00:41:25,322 –> 00:41:26,564
[fraser_stark]: of this
810
00:41:26,580 –> 00:41:26,786
[paul_tyler]: yeah
811
00:41:26,644 –> 00:41:30,951
[fraser_stark]: can be an amazing third act in
people’s lives people are spending more time in
812
00:41:31,011 –> 00:41:34,477
[fraser_stark]: retirement as retirement age you now it
varies we call
813
00:41:34,350 –> 00:41:34,551
[paul_tyler]: oh
814
00:41:34,537 –> 00:41:35,559
[fraser_stark]: it sixty five of course
815
00:41:35,468 –> 00:41:36,278
[tisa_rabun_marshall]: oh
816
00:41:35,699 –> 00:41:37,642
[fraser_stark]: not every one retires at sixty five
we sort of
817
00:41:37,651 –> 00:41:38,138
[tisa_rabun_marshall]: hm
818
00:41:37,702 –> 00:41:39,571
[fraser_stark]: use that as a cliche
819
00:41:40,350 –> 00:41:41,559
[paul_tyler]: yeah yeah
820
00:41:41,855 –> 00:41:44,339
[fraser_stark]: it can be such a powerful time
in life
821
00:41:44,184 –> 00:41:44,266
[tisa_rabun_marshall]: ye
822
00:41:44,700 –> 00:41:48,626
[fraser_stark]: but if you’re stressed about running out
of money it may not be or it
823
00:41:48,646 –> 00:41:50,770
[fraser_stark]: may not live up to its full
potential because
824
00:41:50,678 –> 00:41:51,818
[tisa_rabun_marshall]: mhm
825
00:41:51,270 –> 00:41:52,372
[fraser_stark]: you know doing these things
826
00:41:52,478 –> 00:41:53,678
[tisa_rabun_marshall]: yeah
827
00:41:52,593 –> 00:41:58,082
[fraser_stark]: going to see family who live in
a different province or state pursuing hobbies whether
828
00:41:58,142 –> 00:42:03,010
[fraser_stark]: it’s the sort of cliche of golf
or some artistic endeavor or you know even
829
00:42:03,090 –> 00:42:07,978
[fraser_stark]: giving back to your community you know
like a board member volunteer these things they
830
00:42:08,038 –> 00:42:08,179
[fraser_stark]: take
831
00:42:08,212 –> 00:42:08,233
[paul_tyler]: a
832
00:42:08,239 –> 00:42:08,760
[fraser_stark]: resources
833
00:42:08,390 –> 00:42:08,798
[tisa_rabun_marshall]: hm
834
00:42:09,441 –> 00:42:09,701
[fraser_stark]: they don’t
835
00:42:09,591 –> 00:42:09,998
[tisa_rabun_marshall]: hm
836
00:42:09,741 –> 00:42:15,050
[fraser_stark]: take they don’t take huge amounts of
assets but they take income to be able
837
00:42:15,110 –> 00:42:18,215
[fraser_stark]: to know that you can do these
things that you can know gas in the
838
00:42:18,255 –> 00:42:22,282
[fraser_stark]: car pay the rent et cetera and
so you know that
839
00:42:22,200 –> 00:42:22,860
[paul_tyler]: yeah
840
00:42:22,382 –> 00:42:28,693
[fraser_stark]: that’s what drives us is this idea
that you know it’s there’s so much research
841
00:42:28,753 –> 00:42:33,661
[fraser_stark]: into into how society doesn’t value the
elderly the way that it
842
00:42:33,601 –> 00:42:34,088
[tisa_rabun_marshall]: hm
843
00:42:33,701 –> 00:42:34,783
[fraser_stark]: should and there’s organization s
844
00:42:34,764 –> 00:42:35,198
[tisa_rabun_marshall]: hm
845
00:42:34,823 –> 00:42:39,771
[fraser_stark]: great advocacy organizations like carp here in
canada really pushing for that but but we
846
00:42:39,912 –> 00:42:43,859
[fraser_stark]: see that as important as well and
want to as a we’re a financial company
847
00:42:44,120 –> 00:42:49,118
[fraser_stark]: we’re an asset manager we want to
help people make the most out of their
848
00:42:49,198 –> 00:42:52,843
[fraser_stark]: assets and so that’s really what drives
us but but we love that saying ambition
849
00:42:52,943 –> 00:42:53,564
[fraser_stark]: never retires
850
00:42:54,158 –> 00:42:54,338
[tisa_rabun_marshall]: that’s
851
00:42:54,230 –> 00:42:54,654
[paul_tyler]: ambition
852
00:42:54,398 –> 00:42:54,559
[tisa_rabun_marshall]: great
853
00:42:54,856 –> 00:42:55,118
[paul_tyler]: never
854
00:42:55,360 –> 00:42:55,380
[tisa_rabun_marshall]: i
855
00:42:55,360 –> 00:42:55,824
[paul_tyler]: retires
856
00:42:55,460 –> 00:42:58,245
[tisa_rabun_marshall]: was kind of repeating that as you
were speaking ambition never
857
00:42:58,242 –> 00:42:58,422
[paul_tyler]: that’s
858
00:42:58,305 –> 00:42:58,685
[tisa_rabun_marshall]: retires
859
00:42:58,502 –> 00:43:03,530
[paul_tyler]: great that’s great listen you have a
great tag line helping canadians retire from work
860
00:43:03,971 –> 00:43:05,955
[paul_tyler]: not life this is this
861
00:43:05,945 –> 00:43:06,087
[fraser_stark]: right
862
00:43:06,015 –> 00:43:09,941
[paul_tyler]: is good this is more than a
mutual fund stock ticker right think fraser you’ve
863
00:43:09,981 –> 00:43:16,011
[paul_tyler]: got going to your company which is
terrific and um i don’t want to ask
864
00:43:16,292 –> 00:43:17,313
[paul_tyler]: too hard you know we’re
865
00:43:17,288 –> 00:43:17,592
[tisa_rabun_marshall]: oh
866
00:43:17,354 –> 00:43:22,522
[paul_tyler]: right up to the hour here you
talk about your focuses on can tiens how
867
00:43:22,582 –> 00:43:25,147
[paul_tyler]: big of a lift is this to
take your product and put it into the
868
00:43:25,287 –> 00:43:28,732
[paul_tyler]: u s is it really a matter
of just putting resources or do you have
869
00:43:28,773 –> 00:43:32,298
[paul_tyler]: to get some laws changed to do
something like this in the
870
00:43:32,336 –> 00:43:32,537
[fraser_stark]: yeah
871
00:43:32,359 –> 00:43:33,242
[paul_tyler]: states oh
872
00:43:33,097 –> 00:43:37,104
[fraser_stark]: you know it’s a great question and
we see this is applicable around the world
873
00:43:37,946 –> 00:43:43,034
[fraser_stark]: one of the things that that i’ve
been really pleasantly surprised by is just how
874
00:43:43,114 –> 00:43:47,842
[fraser_stark]: many people around the world are all
working towards the same goal here of giving
875
00:43:47,922 –> 00:43:52,810
[fraser_stark]: people security and retirement and i think
there’s applicability of this in the u s
876
00:43:53,051 –> 00:43:54,573
[fraser_stark]: as well as other countries
877
00:43:54,210 –> 00:43:54,534
[paul_tyler]: yeah
878
00:43:55,395 –> 00:44:01,164
[fraser_stark]: you know places in europe are going
through transitions with their pension structure australia has
879
00:44:01,224 –> 00:44:04,790
[fraser_stark]: built an incredible pension system but its
been rally focused on accumulation and not as
880
00:44:04,850 –> 00:44:11,061
[fraser_stark]: much yet on decumulation you know law
is changed i would say is too strong
881
00:44:11,141 –> 00:44:15,208
[fraser_stark]: a wording is what we needed here
in canada was to work with our regulators
882
00:44:15,889 –> 00:44:20,256
[fraser_stark]: to have some exemptions to the way
you know the rules and guidelines that cover
883
00:44:20,597 –> 00:44:26,106
[fraser_stark]: mutual funds you know this idea of
a fund that redeems at less than its
884
00:44:26,166 –> 00:44:29,592
[fraser_stark]: current value it raises eyebrows and we
needed
885
00:44:29,577 –> 00:44:30,090
[paul_tyler]: hm
886
00:44:29,632 –> 00:44:33,338
[fraser_stark]: to show the regulators first of i
was an important problem we’re solving that we
887
00:44:33,378 –> 00:44:37,825
[fraser_stark]: were doing this for reasons that that
to to give us exemptive relief on that
888
00:44:37,926 –> 00:44:41,391
[fraser_stark]: issue allowed us to create a really
powerful product and in that process took a
889
00:44:41,431 –> 00:44:45,678
[fraser_stark]: couple of years but as soon as
they stood the problem and understood that our
890
00:44:45,759 –> 00:44:49,725
[fraser_stark]: structure and the transparency and how we
would use it was powerful they became not
891
00:44:49,805 –> 00:44:55,595
[fraser_stark]: only open to it but actually champions
and ambassadors for us around the country was
892
00:44:55,856 –> 00:44:58,726
[fraser_stark]: which was great you know in the
u s i think similar things would need
893
00:44:58,766 –> 00:45:03,688
[fraser_stark]: to be true and you know you
have regulators who who take really
894
00:45:03,540 –> 00:45:03,844
[paul_tyler]: may
895
00:45:03,768 –> 00:45:10,299
[fraser_stark]: strong investor protection focus as they should
as ours do here and you know we’re
896
00:45:10,480 –> 00:45:15,614
[fraser_stark]: looking to opportunities bring this to the
u s and markets but it really has
897
00:45:15,654 –> 00:45:21,901
[fraser_stark]: to fit within every country’s you know
the structure around how they manage investment funds
898
00:45:22,221 –> 00:45:26,448
[fraser_stark]: and you now we’re so proud of
what we’ve built in canada to see the
899
00:45:26,689 –> 00:45:31,837
[fraser_stark]: attraction it’s getting to be on a
on an institution a record keeping platform this
900
00:45:31,918 –> 00:45:35,003
[fraser_stark]: early in its existence i think is
really really
901
00:45:34,950 –> 00:45:35,135
[paul_tyler]: ye
902
00:45:35,083 –> 00:45:39,951
[fraser_stark]: powerful and the press we’ve gotten around
the world has been has been you know
903
00:45:40,532 –> 00:45:45,079
[fraser_stark]: incredibly encouraging and and wonderful so
904
00:45:45,320 –> 00:45:45,461
[paul_tyler]: yeah
905
00:45:45,560 –> 00:45:48,185
[fraser_stark]: yes they tune stay tuned on on
the us we’d love
906
00:45:48,090 –> 00:45:48,333
[paul_tyler]: oh
907
00:45:48,325 –> 00:45:53,353
[fraser_stark]: to know we’d love to bring a
similar product to the u s and it’s
908
00:45:53,433 –> 00:45:58,783
[fraser_stark]: choice for invest or right and as
i say annuities are great but the guarantees
909
00:45:59,044 –> 00:46:02,069
[fraser_stark]: come on to costs that’s right for
some investors and and not right for others
910
00:46:02,169 –> 00:46:04,514
[fraser_stark]: and i think this belongs on the
shelf beside products like that
911
00:46:05,620 –> 00:46:10,470
[paul_tyler]: excellent all right listen fraser thanks so
much for your time tessa thank you
912
00:46:11,063 –> 00:46:12,706
[tisa_rabun_marshall]: thank you thanks paul thanks fraser
913
00:46:12,594 –> 00:46:18,444
[paul_tyler]: and listen fraser we’ll put your website
in the show notes any other
914
00:46:18,698 –> 00:46:19,298
[tisa_rabun_marshall]: yeah
915
00:46:19,105 –> 00:46:24,123
[paul_tyler]: places people should go to learn more
about your company product or reach you
916
00:46:25,228 –> 00:46:29,475
[fraser_stark]: i think the website’s great the contact
information is there for anyone interested reach out
917
00:46:29,555 –> 00:46:34,584
[fraser_stark]: and our team will get notes to
me as appropriate purpose invest dot com is
918
00:46:34,664 –> 00:46:39,068
[fraser_stark]: the parent company’s website if people are
interested in purpose but retire with longevity dot
919
00:46:39,108 –> 00:46:40,089
[fraser_stark]: com is really
920
00:46:39,990 –> 00:46:40,590
[paul_tyler]: oh
921
00:46:40,730 –> 00:46:45,694
[fraser_stark]: a great a great resource with with
lots of articles and helpful tools
922
00:46:46,390 –> 00:46:50,135
[paul_tyler]: all right good all right hey thanks
so much thanks our listeners and join us
923
00:46:50,155 –> 00:46:53,259
[paul_tyler]: again next week for another episode of
that annuity show
924
00:46:54,326 –> 00:46:55,345
[fraser_stark]: all right thanks for having me
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