Roth: Instead of just providing information, RetireUp also allows the client to be fully involved in their retirement income narrative. Instead of an advisor simply saying yes or no to the client’s different goals, needs and desires (i.e. can I afford this goal, can I retire at an earlier age, etc), RetireUp provides the advisor with tools to interactively communicate and explore the risks or the sacrifices around the client’s specific goals, needs and desires. The client can then play a part in what they are willing to do on their end. We designed this narrative process to be heavily visual, to enable clients to better see the impact of their decisions. Science has shown that images flow 60,000 times faster than words or text. You are giving information to the brain more effectively and creating better understanding. This sets up the potential for what we call “light bulb” moments to happen – where the client is fully engaged, can clearly understand the choices and consequences they have to decide on.
Hortz: You have mentioned how RetireUp can also help advisors redraft the conversation around investment vehicles in their retirement income strategy? Can you further explain this?
Roth: RetireUp facilitates a deeper conversation between the advisor and client. The tool identifies the risks, needs and goals of the client, communicates how specific investment vehicles respond to different variables, and how that response will affect the client’s retirement income. Thus, the retirement income strategy that is implemented will be built on knowledge around the client’s goals and what investment vehicles will help facilitate in reaching those goals.
For an example, while we do not promote annuity sales, we do list annuities as a retirement income option, describe what an annuity does, and accurately communicate that to a client. We build in the specs and fees of the annuity with the main goal of putting everything on the table in the retirement conversation. The problem traditionally is the client and/or the advisor may come to the table with assumptions based on what they were told by the media or common practice (this product is too expensive, etc). Thus, the advisor or the client may have inadvertently eliminated the best investment solution before the retirement discussion even started. Including a diversity of investment vehicles allows the investment advisor to then ask the questions: what is the value-add of the specific vehicle based on you and your goals Mr. Client? What are your priorities? And every client’s priorities are different; not just quantitatively, but also qualitatively. RetireUp categorizes these options. What’s most important to the client: ending estate value? or income stability? If income stability, what can I do to increase it?
Now, the advisor is having a conversation around a client priority and they may be willing to accept an added cost to gain the greater security of income in retirement. Another client may say asset value is most important to me so I will never pay for an annuity. With this discussion the advisor allows the client to have the authority to make the decision of what is more important to them versus commandeering the conversation beforehand. RetireUp is product agnostic but also wants to be thorough in providing the client with an array of investment options , full disclosure and costs associated to make an informed decision with their advisor.
Hortz: Tell us about your patented income stability ratio in your software. What does it allow you to determine that other income planning tools cannot?
Roth: It is not a Monte Carlo. The Income Stability Ratio communicates how much of the client’s income is protected from market volatility. In other words, any income that is autonomous from the market sequence risk. The trademark tool allows the client to understand the concept that it matters when you retire within the market sequence. As a result, the client now has the knowledge to play a part in determining how much of their retirement income they are comfortable having at risk to the market.
Hortz: Can you give us examples of different kinds of cases or unique applications you see advisors have been successful with using your software and process?
Roth: Successful and unique applications of RetireUp range substantially. The advisor may use it to demonstrate the value add of a specific life insurance annuity, or to demonstrate the impact of taking care of an elderly parent while supporting their kids at the same time, or to communicate the impact a pension annuity compared to a lump sum payment may have on their retirement.
Whether at the advisor level or the institutional level, RetireUp’s visual narrative is used as the most powerful and impactful aspect of our offering - even for a highly numerical, quantitative personality. The advisors and their clients respond positively to our ability to demonstrate the interplay of scenarios and choices and what happens as the most likely consequence. Our software can answer very complex questions in complex plans through an easily understandable lens.