PensionBee CEO on Reshaping Investing for Retirement

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00:00So PensionBee is an interesting one and I would love if you could just explain

00:04how the company operates and what you're trying to achieve. I know you were born out of sort of

00:08the friction that one encounters when trying to switch their retirement account when they

00:13move jobs, but how do you try to solve that problem? Well, absolutely. That is one of the

00:18main problems in personal finance. The average person will have around 11 or 12 different jobs

00:23these days. And almost every time you get a new job, you might get a new retirement account,

00:30a 401k. And life gets busy. You move along. You go through your career. And when you're in your

00:3740s or 50s, you might find yourself with lots of small little accounts just sort of littered all

00:44over the place. And so PensionBee helps consumers to take control of that money, to bring it together

00:50into one new online account, to have it invested in a way that is appropriate for retirement,

00:56really well diversified and focused on growth when you're younger, and then perhaps de-risking

01:01when you're older. So it works for your retirement. Well, let's talk about what you actually invest in

01:06when it comes to rolling everything into an IRA. I know that you invest in ETFs in particular,

01:12which I find interesting. I cover exchange traded funds. They don't fit into 401ks, even though

01:18in a lot of cases, they're priced more cheaply than some of their peer mutual funds.

01:24Absolutely. ETFs are very much the future of financial services. They're incredibly liquid.

01:30And we invest in ETFs like SPY and MDY, which are really well known for that level of liquidity.

01:36They're incredibly transparent. They can be traded pretty much instantly. And so your money doesn't

01:42sit out of the market, especially these days when markets are incredibly volatile.

01:46And so ETFs are really the future for retirement. And we think that they will eventually take over.

01:52I am curious with some of the potential changes that could be coming here in the U.S. with regards to

01:57the types of assets that pension plans, that the individual folks in pension plans and in 401ks can

02:03invest in. Does that change what you have to do and more importantly, what you have to do to educate

02:08people?

02:08Well, the asset types that could sit within your retirement account are definitely broadening.

02:14And we've heard a lot about private assets in particular. These days, you can also access some

02:19of these private assets through ETFs. And so it might not change the operations entirely. I think

02:25that a good question, though, is, is this the right time to be putting private assets into retirement

02:30portfolios?

02:31Is it?

02:32And there are definitely some who would argue that it is. It's a time when private assets are

02:37really growing relative to public markets. But it's also a time where private assets are seen as

02:43being at historical highs from a valuation perspective.

02:46What about from a diversification perspective? Because, I mean, I mean, I'm old enough to know when

02:50you first get your 401k plan, it was pretty limited. I mean, you're basically just, you know,

02:54you're buying a broad market equity fund of some type and maybe a broad market bond fund. And,

02:58you know, you might have an EM or something thrown in there as well. And that was it.

03:02And those options have expanded a lot and probably for good reason.

03:05Yeah. And diversification is absolutely still the free lunch that it's known to be within

03:10economic financial circles. I think we do have to ask ourselves, of course, what is the cost of

03:15these investments? And do they truly diversify the returns that you might receive in public markets?

03:21So I think the jury's still out on that.

03:23The jury's still out. I do want to talk a little bit about your business specifically. I mean,

03:27when it comes to socializing this idea, when it comes to onboarding new clients, I mean,

03:33what does that look like?

03:35Well, customers can sign up really easily for PensionBee. You can do it on our website or you

03:40can download the app. And then you tell us a little bit about your old retirement accounts,

03:45sometimes as little as where you worked. And we can guide you towards the right record keeper,

03:51where your money might be. We can then help you move that money over. And we can either do that

03:56through automations or we can do that over the phone if that's how you prefer to work or through

04:01live chat. It really depends on the individual's preference because retirement can be a really

04:07complicated and scary subject. And sometimes you just need the human touch.

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