Graham Hand: I'm with Brnic van Wyk from the Australian Retirement Trust. Brnic, you were talking in that session about retirees should learn to spend more, not just accumulate more. Why don't people spend as much as they should?

Brnic van Wyk: Oh, it's interesting, Graham. We come to an investment conference, and you ask me, what's the biggest problem facing retirees. And it is a spending problem. They've spent three decades of their lives saving for retirement and now is the time to start spending it. Our system is geared around capital accumulation, not converting capital to income, and that's a hard challenge. And I think what we will see in the investment industry is products and structures that assist people in their retirement, actually, spending their money, converting all that savings into hard earned income.

Hand: Yeah, the Retirement Income Review quoted surveys saying that people in retirement, or when they die, they leave 90% of the assets they entered retirement in with. When you look at that, you think did they scrimp and have an inferior standard of living in retirement? So, let's fix that.

van Wyk: I believe so. I mean, a lot of it revolves around uncertainty. And we have the ability to create an environment where we can increase confidence, and I think that's what it is. It's giving people confidence that they know they've got enough to spend.

Hand: Yeah. And you also talked about people focusing, first of all, on the goals and objectives of what they're doing and not so much initially at least on what investments should I hold. So, do you think there's enough focus on that?

van Wyk: Well, institutions have a range of investment options for retirees and those investment options are all geared around at a time horizon and investment objective, and it pretty quickly shows you what the objective of the portfolio is, whether it's long-term higher expected growth, and that doesn't necessarily mean it's only for youngsters. So, a retiree may well allocate a reasonable proportion of these savings to a high-growth, aggressive long-term portfolio for the portion of their money that they do not anticipate spending for the next 20 years. So, you may well find a 30-year-old and a 60-year-old in the same portfolio. What I do think you'll see though in retirement, call it mental accounting, there are portfolios with objectives that are much more short-term, aimed at protecting capital, it's got a lower expected return but much lower chance of drawdown. And those are the types of portfolios people will probably be using for near-term liabilities, call it, I don't know, settling debts, big holidays, the daughter's wedding.

Hand: Yeah. Or money to live on.

van Wyk: Yeah. So, there are different options presented to trustees. And in my view, the key consideration is the objective rather than the asset allocation. The asset allocation underneath will show up differently because they're serving different objectives.

Hand: Yeah. Thanks for your time today, Brnic. Appreciate it.

van Wyk: And thanks for the opportunity. Really, I loved it.

Hand: Great. Thanks a lot.