The State of Retirement Research | #419 (Jean-Pierre Aubry)
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What is the main topic discussed in this episode?
This is the Rational Reminder Podcast, a weekly reality check on sensible investing and financial decision-making from two Canadians. We're hosted by me, Benjamin Felix, Chief Investment Officer, and Cameron Passmore, Chief Executive Officer at PWL Capital.
Great to be with you again, Ben. Episode 419. And this one, as we were just saying to the guests as we signed off, It really is a super interesting and fun conversation about kind of our almost the greatest hits of things we've talked about that really get people energized and learning about. You know, this week's guest that you found, Jean-Pierre Aubray, he's the Associate Director of Retirement Plans and Finance at the Center for Retirement Research at Boston College. which is a fascinating organization and the research they've done is so varied. So it was blocked in four different conversation topics and each one is so practical, so pragmatic, so interesting, a little bit shocking, a little bit not shocking, but to have it all wrapped up in nice, tight,
completely understandable bundles from JP was a real fun, interesting interview.
The reason that it comes across as greatest hits of stuff that we've talked about is that their JP and his team are doing research specifically for improving financial outcomes for households, which is kind of what we're trying to do. So it makes sense that the greatest hits would align there. And I think what JP brings is his own research on those topics. It's not just a summary of other stuff that we've talked about. It's a reiteration of it backed by independent research that him and his team have done. So I think that brings a really fresh angle to these topics, even if they're topics that we have covered before.
So let's edge the perspective to, I think in each of the topics in terms of awareness and not just the public, but also awareness of the advisory community. some really interesting insights there that you learn about. For example, asset allocation.
How do financial advisors impact asset allocation? One of the surprising stats, there is some sample bias here as JP talks about when he brings the stat up, but a huge portion of households do work with advisors. Their impact on asset allocation, definitely that was an interesting point. The discussion on alternative investments and public pension plans, I personally love.
That's a topic that's- That's like candy for us, right? Let's face it. It was very balanced. And as you quite clearly said to JP, it can change.
Yeah. I think that's always an important point to bring up that we can look at the last 20 years and say, all these pension funds are not very smart, but that can change in a couple of years. If, and I'm not saying it's going to happen. Everyone knows I support index funds and wish that pensions would use more of them instead of all the alternative investments that they use. However, it only takes a couple of years of a big performance swing for all the stuff that they're doing with alts to look really smart. Anyway, so we did talk about that. We also covered how inflation affects retirees and how the distribution of the inflation effect on retirees changes across different characteristics, retiree characteristics.
Talked a little bit about market risk for retirees. We talked about the financial advisor piece and how financial advisors impact asset allocation, but we also talked about how individual preferences for asset allocation differ from the actual asset allocations that people have, which is also a bit surprising.
Also, he talked about the asset allocation per advisor.
Yes, that's another big one. If you take, I can't remember how many they had, but five different whatever number, five different profiles call it. of households with different characteristics that you would expect an advisor to give different recommendations to. The recommendations given an advisor are very flat across those five different profiles, but the recommendations from advisor to advisor are very different, which is something we've talked about in the past, called an advisor fixed effect.
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Chapters
4 chapters
1
What is the main topic discussed in this episode?
0:04–30:15
2
What is the Center for Retirement Research and its mission?
30:15–33:57
3
Why do households' actual stock allocations exceed their stated ideal allocations?
33:57–53:24
4
How do financial advisors influence clients' equity allocations and what incentives matter?
53:24–1:01:45
Speakers
3 identifiedMore from The Rational Reminder Podcast
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