401(k)ouple discuss AI, private equity, & plan design

[0:00] JD: Palamini, AKA robe guy, the heart and soul of the crew. [0:05] Christopher: Together they are retire holics changing the [0:09] Justin: retirement plan industry one beer at a time. That mark looks jacked in that video. If he was to take that robe off, it's just going to be washboard abs. There you go. [0:22] JD: Welcome to the show. Michael Desenso. No, I'm not at the ranch. I'm here in California. It's another episode of retireholics. My name is Brian Graph and I'm joined by Ted Bena and Fred Reish and Nevin Adams. And our guest will name later. Let's see, what are we talking about today? We got a bit of artificial intelligence to discuss with some news from Charles Schwab. Teaming up with anthropic Claude Voya, letting all their people use artificial intelligence internally. And the introduction of Duff Foreman. If you don't know who Duff Foreman is, well, you're gonna find out today. The employee benefit and research institute claims that student loan matching program, you know, the one that all plan sponsors are been drooling over for years. We love that provision. All of Christopher and Catherine's plans have it put into their documents. That's really going to boost 401k. We'll talk about that. Rob Barnett and Great Gray. That's a duo that we need to keep our eyes on, man. To build private equity, private credit, collective investment trusts. So we'll stop on that for a bit. BlackRock reinventing the targeted fund. And the question that is on everyone's mind, our TPA is going the way of dinosaurs. We will be playing chat bar champion. And I promise I'll drink for that in a second. I promise we will do it right tonight. Our apologies for ruining this wonderful tradition here at this show. So tonight it's back on the docket. Do your best in that chat bar to win chat bar champion. Tonight we will vote for for a handful of semifinalists and then Christopher and Catherine will choose the winner. And the winner tonight will receive a robe guy hoodie in the color of your choice shipped out to you tonight. And let's get to it. [2:34] Chad: But before we do, you say tonight it's going to be dependent upon how drunk you get because we know how [2:39] JD: that usually but I literally have it queued up. So because I know that that's what happens. I have it queued up on my other screen here, ready to put in the address. And so I'm going to get it done. That's my goal. Justin Silent J, do your thing, my dude. [2:59] Justin: We're super Chuffed to have these bourbon drinking, beret wearing, lord of the ring loving four. Okay, freaks, back with us today. Make sure you keep an eye out for their next podcast drop, which should be happening any day now. And with that said, let's. Let's get into it. Jennifer, Chris, do you know the part of the episode that we're on right now? How it's changed? Or do you need a refresh? Do you need a little intro to it? [3:21] JD: Did you call Catherine? Jennifer? [3:23] Chad: Oh, my God. Catherine. Jennifer, I am looking at. [3:26] Justin: Oh, Catherine, I am so sorry. [3:30] JD: Looking at what do you have? [3:31] Catherine: Is that my cab right here or does he have to, like, sing a song? [3:35] Justin: First time I've ever done that. I'm not singing the song, but I'll drink whatever you want me to. [3:38] JD: Jennifer Aniston as a screensaver on your own. [3:41] Chad: You know he does. [3:42] Justin: I've got Jennifer sitting on my notes screen here. You don't see what I'm seeing. Anyways, let's get into this. I feel terrible. I'm gonna have to issue another apology like I did for Daniela that one time. Anyways, we are at the part of the show where I ask you guys a few questions, rapid fire. You got to answer within three to five words. You ready to play? [4:01] Christopher: Yes. [4:02] Justin: Who's the better cook? [4:04] Christopher: Catherine. [4:06] JD: Oh, okay. [4:07] Speaker F: Jennifer is. [4:10] Justin: Well played. Who is more likely to be late? [4:15] JD: Me. [4:16] Christopher: Catherine. [4:17] Justin: Oh, okay. Who's the one? [4:19] JD: That husband wife version of this. [4:20] Christopher: Yeah, we're kind of going down that. [4:22] Justin: Right. Who's the one that has to remind the other one that they forgot something? [4:27] Christopher: Oh, it used to be me, but now that I'm Medicare, it's drifting. [4:33] Catherine: What? What does that mean? [4:35] JD: Now that I'm older, he's getting more forgotten. [4:38] Christopher: You need to be reminding me more. Honey, where's my brains? Yeah. [4:42] Catherine: I brought your phone in from the car. [4:44] Christopher: Yeah, you did. [4:45] Catherine: Yeah, I did. So if it's the last thing we did, I picked up. Yep. [4:51] Justin: All right, I think I might know the answer to this question then. Who is more likely to say I told you so? [4:58] Christopher: Nobody. [4:59] Chad: How is that phrase I call bullshit on that one? [5:03] Catherine: Yeah, I think you said yes, dear. [5:06] Chad: Or you know, it's turned into yes, [5:08] Christopher: and we do improv. Crap. Thank you. Improv. [5:16] Catherine: I have to remind him of everything. [5:18] Christopher: Yeah, see, she had to remind me what the hell improv was. [5:22] Justin: All right, and the last one who usually gets the last word in. [5:29] Christopher: I try to let Catherine because I'm smart. [5:32] Catherine: Oh, my God, that's very said. [5:35] Christopher: I try. [5:39] Catherine: He wants all the words In. [5:41] Chad: But yeah, that is true. [5:43] Catherine: The problem is if I get ahead of steam, going like, I can go forever. [5:48] Speaker G: Really. [5:49] Catherine: Three, four hours, if I choose to. So it's better just to not tip me over to that side where I will. [5:55] Speaker G: I will. [5:56] Catherine: Really? [5:57] Justin: Yes. [5:57] Chad: 100 world. [5:58] Justin: So I think we're at like word 342 on that one, but. [6:02] Christopher: Well, that was not a yes. [6:05] Justin: No question for a couple. [6:06] Christopher: Justin, come on. [6:07] Justin: I'm just trying to start a little fight here. It's gonna be good. [6:09] Christopher: No. Anyway, not gonna happen. [6:11] Justin: Ladies and gents, the founders of the Hunter Benefits consulting group, everybody's four favorite 401k couple, Christopher and Catherine Tipper. [6:19] Christopher: Hello, everybody. Happy to be back. Yay. [6:21] Speaker F: Thank you. [6:23] JD: Okay, let's. Let's kick this off. Yeah. We'll call this. We'll call this. Give me an H. Give me an E. Give me an A. Give me a D. Give me an L. What is it? Oh, headline. Never mind. [6:42] Speaker G: Yeah. [6:44] Christopher: Oh, headline. Oh, there we go. [6:58] JD: I've always known what the wealthies are. There's this big award show. It's people in tuxedos and ball gowns and they show up to this huge auditorium room. It looks very professionally done. It's just I've never been invited, so I. I don't even know what it looks like on the inside of that place. But a lot of important people, a lot of cool things happening and looks like it's really well done. Well, celebration is in order because you two won one of those things this year. So you've got some champagne there. I'm gonna just drink my whistle pig here. I actually owe a slug, I believe. And you won for advisor support best tpa. Is that correct? [7:45] Christopher: Yes. Since you're reading something, I don't think that's going to count. Yeah. So I'm glad that we are put in the support category of an industry as opposed to a hindrance or something like that. But this was the first year that was a little different feel at Napa. Let's just put it that way. But this was all. [8:10] JD: You can always finish your thought. [8:12] Christopher: Remember, this was all Catherine's doing 100% her effort to make sure that we got entered. [8:21] JD: Yeah, you were entered, but you guys. And you didn't win just because you have great advisor sales support. This was about the show, the podcast. Right. Okay. [8:31] Speaker G: Yeah. [8:31] Catherine: Yeah. [8:32] JD: So congratulations. [8:34] Christopher: Thank you very much. [8:35] JD: It's a huge surprise. It's cool to see creative marketing, Creative advisor support per the awards label working like that. So I love that. Obviously we're big fans of that. And thank you, Brandon. So it is wealth management that puts this on. [8:52] Speaker F: Yeah. [8:56] JD: Well, is Freddie B. There as a. Is he a big part of it? [8:58] Christopher: It's his thing. [8:59] JD: Yeah, it's his thing. [9:01] Christopher: Yeah. [9:02] JD: Hey, you think we could get an invite once in a while? [9:06] Christopher: Yeah. So the thing being coming from Chicago and there will be a Chicago related thing coming up later. Coming from Chicago, we are steeped in bread and taught about the concept of pay to play. [9:20] Catherine: Yes. [9:20] Christopher: Okay, right. [9:22] JD: Is that like a gangster reference? [9:24] Christopher: No, it's just Chicago politics as a normal way of doing business. All right. Now what we have proven accidentally is that the wealthies are not pay to play. We were a little slow to decide whether or not we were going to go to the real Manhattan. And by the time Catherine had a good conversation with them, they were sold out. I didn't know that was a thing that they could sell out for finalists, but. Yeah, that's right, Mark. But. So we ended up doing our own version of Manhattan. Okay. That's why we did the New York style pizza and the biting from the Big Apple. And for anybody who saw the picture, that was a purposeful rage bait. I know how you are supposed to eat a New York slice. It is not with a knife and fork. So we did our own Manhattan thing. So we've got our, we got our, you know, we, we did the best we could. We got our tuxedos. Tuxedos. Catherine has a ball gown T shirt. She had a more formal beret for when we were doing our things for that. So now we're gonna have to see if. [10:30] JD: All right, well, congrats. We're very proud of you guys. [10:34] Christopher: By the way, she has 15 lined up next to her laptop. [10:41] JD: Okay. Yeah, let's switch colors as we go. I'm going to throw a bit of a curveball. I threw everyone a bunch of topics, but I forgot last time. Chadwick. We were going to discuss Fidelity making its way into the micro small market. You had just come back from a Fidelity conference where there was third party administrators and the such there. Full disclosure, we as a third party administrator have started doing plans with Fidelity. [11:13] Catherine: We'll. [11:13] JD: We'll find out if Hunter benefits is as well or not. They started acknowledging. Yes, but the real question for the group and for the chat bar is Fidelity has always been known as this kind of mega market player. You wouldn't see them a whole lot in the small space. They never really partnered with third party administrators until recently. Chad, can you give us a little one two on how the conference was, what was going on there and what your take is on all that. [11:40] Chad: Yeah, the one two being this was the advisor conference, not a third party administrator conference, but there was a dozen or so third party administrators there that were asked to come and co mingle with advisors and spend some time. They made a very conscious effort from the top down to continuously acknowledge our role, what we do, the value. We try to bring in a room of advisors who don't really want to work with us for the most part. So, so it was interesting. It was an interesting dynamic. It was a good, it was a good use of time. It was good use of time. Selfishly, I will say, I think if you're a third party administrator and you're not willing to dip your toe in the water and working with the 800 pound gorilla that dominates that marketplace, especially the mid to upper market, if you're trying to get to that point, you would be naive not to at least give them a shake and see what they're doing with their new TPA program. But damn, I was doing good with that too. They had, they've spent a lot of time trying to figure out how do we get into this micro space. JD the question I asked you when we met that next morning was the why, like why are they pushing so hard? Why are we seeing Empower come down? Why are we seeing Fidelity come down? Why are we seeing all of these providers that notoriously have stayed away from us as distributors come into this space? And my response back, whether right or wrong, my response back was quoting 300,000 new plans between now and 2030, those plans growing significantly. Knowing that we are going to be involved in a lot of those plants, our community, this third party ministry community, we're going to be involved in a lot of those plans and we often control where they end up as they grow. And I think that they're starting to see this is going to be their way into that 2 3, 57 billion dollar plan space. [13:29] JD: So I agree with you. And we understand why Fidelity would want to partner with 3rd party administrat. Neil in the chat bar is letting me know that it was actually in 2024. Neil in my old brain that's recently so. And I think there was kind of a slow start. It was, they got out there, they really had to get a lot of their in place. And so Neil, I feel like there it's kind of more recently that it's actually being a real thing that's kind of taking off. Christopher Katherine, we chose at least in my opinion, chose to work with Fidelity because of the brand name. Like, just like, okay, this is a big, well known brand. I mean, if you sit in front of any plan sponsor, they know who Fidelity is. And no offense to these other record keepers, but they may not know who Empower or even John Hancock or any of these companies are, but they know who Fidelity is. What was the reasons behind Hunter Benefits deciding to go ahead and partner with them? [14:25] Christopher: Katherine, Or I think, I mean, we have to have. [14:28] Catherine: We do have a couple of plans, and one of them is a very large plan. So it's. It's good for a large plan. [14:34] JD: Right. [14:34] Catherine: And so I think also part of it is Beth Robinson convinced us that. [14:39] Justin: There you go. That's fair. [14:41] Catherine: Beth Robinson convinced us that maybe being advisors to a plan, meaning compliance advisors, strategic consultants, was a good thing to do. Right. You know, once you give up that you're gonna not do the document and you give up that you're not going to do the loans and distributions, which is hard, but once you start going, well, we're going to be compliance, not Compliance, consulting people with this, maybe it's fine. And like what you said when you say, hey, I work with Fidelity, everybody knows what you're talking about, you know, so whether they settle on it or not, who's Fidelity? [15:17] Christopher: Yeah, exactly. That never gets asked. [15:20] JD: Chad, you told me that that was a. That what Catherine just spoke about was actually something that was kind of discussed at the conference, wasn't it? Is acting in this kind of consulting nature? [15:30] Speaker F: Yeah. [15:30] Chad: Is this strategy of, of consulting on bundled plants. [15:34] Christopher: Right. [15:35] Chad: And what value can we bring to that community? [15:37] JD: Although Catherine and Chad tried to back me up in this because you're more on the front lines, but we now do see Fidelity as a record keeper for small plans that we can partner with and do the compliance work on, just like we do with a Hancock or an Empower. [15:54] Christopher: Right. Well, the thing is, size is relative because unless I've missed a memo chat, it's micro. I mean, they, they have to have a takeover at over a million dollars. [16:03] JD: Yeah, yeah. Micro is like 10 million sub. 10 million is micro. [16:07] Speaker G: Oh, okay. [16:07] JD: By most. [16:10] Christopher: Yeah. But the thing is also when you tell a group of advisors that you've been working with for years that, hey, we are now friendly with Fidelity, we've added Fidelity to our lineup, they stop and they listen. Okay. They may not. They will talk to us more even if they don't do more Fidelity proposals, but it gains credibility with us. [16:30] Chad: Okay? And the community should know. People listening in that the question I often get Christopher, right after is, well, why didn't you? In the past. And there were some, there were some hindrances in the past. Obviously we've all, I should say, many third party ministers been able to work through them. We can't use our own document, which makes it difficult for certain notices, certain amendment processing. But as we continue to evolve as an industry and if we believe our value is to consult, like Catherine was saying, and understand this space better than others, then we have to be willing to step out of our comfort zone. And I think that that's what we've all been starting to do in those relationships. [17:12] JD: Fair enough. [17:14] Justin: Yeah. [17:14] Christopher: Yeah. I mean, they haven't worked forever with financial advisors. That's a relatively new occurrence. And I don't want to. I mean. [17:23] JD: Well, they stabbed a lot of them in the back, didn't they? Decades. [17:26] Speaker F: I mean. [17:27] Christopher: Yeah. I mean, yeah, they were almost. It's not that they were borderline hostile to the consulting community. It just. It was not really. The door wasn't very open. You had to kick it down. And now they've opened the door. [17:39] JD: Yeah, I think that's a good choice for them and I think they'll prosper that way, both on the advisor side and the third party administrator. Slide in another headline. The the good people at Foreign Case Specialist magazine have this title. Schwab teams with Anthropic to bring Claude to 1600 registered investment advisors. Sixteen thousand, sorry, registered investment advisors. This is called Claude for financial advisors, I believe is the tool or the package. And I love this idea. But let me go to our guests. Is it true that registered investment advisors can kind of move faster on this stuff instead of people that have broker dealers, those financial advisors? Because I've been seeing a lot of pushback from. From financial advisor firms in terms of using artificial intelligence. But here we go. Here's Schwab working with a registered investment advisor community kind of path of least resistance. And then in general, what do you think about this? [18:47] Christopher: Well, we were on a different call today where another one of our record keeper friends was seeing an increase in plans being quoted without a financial professional attached. Because the people running the company think that they can just do all the education, everything else with AI. And this sure looks like the hen house inviting the fox. This sure looks like the fox. The hens letting the fox into the hen house. Okay. This slippery slope and everything else. [19:22] JD: Oh, interesting. I like this take. [19:24] Chad: I'm not quite sure I followed. [19:26] JD: Well, here, let me unpack it for you a little Bit if so, what's Schwab going to do? They're going to connect Claude to all the, their client relationship manager software. So they're going to connect them to their investment custodial, that Schwab's platforms. They're basically going to get their hands on a whole lot of data and what the advisors are doing in their day to day, because that's what this tech's going to do. It's going to help them do their day to day job, prep for meetings, change portfolios, do education, all these things. And so Christopher Sand. Well, at a certain point I could just push these guys out of the gig, Isn't that what you're saying? I mean, this is really news. [20:08] Speaker F: Sorry, Catherine, is this really headline news? We're getting this all. What are you talking about? I'm going to push back a little bit. This isn't the first headline we've seen for a large financial institution to be like, hey everybody, we're using artificial intelligence to make ourselves do things quicker and better and be more agile. We all know what's happening, just do it. Make operations better. [20:38] Catherine: But the thing is, isn't it great for Anthropic that they're going to get to train their model on all those Schwab advisors? [20:45] JD: Hell yeah. [20:47] Catherine: In two months, you know, the basic Anthropic will be as good as a Schwab advisor because it will have all the answers and all the workflows and everything else. So, so that's what we're heading towards. Right? So, so it's. [21:03] JD: First of all, Catherine, it's going to get there anyways. But, but, but I. What Christopher was saying is now you're tapping it into the actual data of those plans. Rogue Guy, we're going to talk about Voya doing exactly what you just said, allowing artificial intelligence for their employees to use. And I think it's very much what you just said to me. This is very different. This is, this is an actual built custom product powered by Claude for these registered investment advisors that are using Schwab as the custodian. This is next level shit. Like if you build this right, this is hugely efficient, creates a lot of opportunities for success in the advisor community. And I love to see that. But all the red flags. [21:48] Speaker F: I just feel like we're getting artificial intelligence shoved down our throat from every single large institution. And at this point it's just the same story on top of the same story, at least the way it's presented. So at least if you're not saying [22:08] Chad: it though, Mark, people are going to be thinking that you're not doing it. You have to say it. You have to shout. [22:13] Speaker F: Everybody else, I disagree. [22:20] Christopher: If half of your work, okay, you were charging us 40 basis points. Okay. And now we know you've got all this Claude stuff that you're being given to help us, you're spending a lot less time. We want our fees reduced to 20 basis points. [22:35] JD: Christopher, I might be able to give you that fee reduction as a financial advisor and grow my client base by three or four times and do better for my clients, make more money at a lower price. So all those things can happen. There's a lot of fear in this artificial intelligence. I see even in the comments. Neil. Sorry to pick on you again, Neil, but talking about like, oh, look at these little edge cases things is that, is artificial intelligence going to be able to deal with that? And I can answer that one of two ways, like stop just focusing on the edge cases. Like that's a really sorry comeback to be like, well, you can still have the little crumbs that are left around the sides if you, if you want them. But I would also say to you the artificial intelligence is going to be able to do everything. It's going to be able to do everything. [23:23] Christopher: But right now, what did you find for the statistics with their errors? Wasn't it like 53 to 55%? [23:33] Catherine: There's two levels to this. So for general questions, it's 87 to 88% accurate. And I would like to ask you, how many of your 5,500, hundreds do you want to be 88 or 87% accurate? [23:47] JD: Right. You're talking about what you type into a prompt. And I get that that's very different than what's built with and has AI as powered by. So I understand. But that's not what the industry is not about putting in a prompt. It's about building products that are repeatable, that have a lot of code in them as well. Like it's very different than just going into cloud or chat GPT and asking it a question. [24:15] Catherine: Oh, got it. So if it works, then that could be beautiful. But how do you, how are you certain that it works? I think it can cut down advisor time on doing proposals or doing client meetings, all of those things. And that gets them in front of real people more, which I think is really valuable. So it's the question of how do you want to use the tool? So the tool doing, doing baseline research, it's your best, it's, it's your best junior research. [24:46] Christopher: Junior Assistant. [24:47] Catherine: That sounds amazing. Right? But at some point it doesn't give you the finesse and the answers that somebody who wants consulting. And what I liken it to is like, you can go to the school nurse and the school nurse will make sure she gives you good advice. But you want to take your kids to a specialist when there's an issue. Right. [25:06] Christopher: So when the bone's sticking out. [25:08] Catherine: So the school nurse is correct. [25:10] Speaker F: Yeah. [25:11] JD: Okay. [25:11] Catherine: But not comprehensive. [25:13] JD: I love Brandon Brand, just chatted and I agree with him. Give it a month. So, yeah, that's a fine argument right now. But again, I want to stop for one moment and understand that one. This is, to me on a bigger scale. It's about building things that have AI inside of them and then attaching to data. And then secondly. Oh, I did it again. Secondly, humans get shit wrong all the time, including the specialists that you're talking about. And so. And then I'll just go to give it a day or give it a month or give it a year. I can stay with pretty solid confidence. That's not going to be the defense anymore, Katherine. It's going to get it all right, okay. And so just accept that and then learn to build around it in terms of how we're going to provide value to clients, how we're going to build cool things that'll give them value and still provide our services. I'm not threatened by it. I'm fucking invigorated by it. But it's going to be able to do all this shit. And if you don't think it is, I'm fearful for you. Like it's going to knock this shit out of the park. [26:19] Catherine: Well, we're not. We use it for things. We definitely do. We're not, we're not naysayers. I'm just. It's understanding it as a tool versus, should it be? Your advisor. Your advisor beyond basic information and how much is it? It's based on the last 12 million articles it just looked at a second ago. And will it shift? Do you know what? It's. It's. Does it, does it ask? You know, a really good advisor will sit down with you and go, what are your goals? Where are you in life? This is where you're going and, or asking those things and building a relationship over time. Now they can use all the artificial intelligence tools behind them to get there. Right? But still, I like that. [27:05] JD: I like that idea. I like that vision. I don't think it needs to be person less or human less, but at the same time, I feel like it's going to be able to go deep and all that stuff. And by the way, I love my third party administrator brothers and sisters, all the financial advisors out there as well. So I'm only saying this again as a friend and not an enemy, that what I'm talking about is not that little box that you chat into and ask it a question like, oh, should I invest in this or do that? What I'm talking about are much deeper, more detailed, more nuanced programs, apps, modules that are built to do specific tasks like tax planning, like retirement plan design. And you're going to get very different answers and outputs than you would if you just type it into the most recent version of Chat GPT Buck. So, but we can, I'll give you the last word, Catherine, if you want it, or someone else and then we'll move on. [28:08] Catherine: So the part that I actually, so I am agreeing with you that it's coming. We got, we, we need to work with it or not have a job. Right? You're a third party administrator that works with AI. You, you can't make it. Did I do it? Okay, yeah. So, but what I actually worry about a little bit more is like all of us can sit around and be like, okay, we can all do advising, I mean, sophisticated discussions about plans, but how do I build up a staff that can do that in five or 10 years, will I have staff that can have these kinds of conversations? And what does that look like? Because the way that we've trained people traditionally is just start them and loans and distributions and work them up and it's all their experience with different clients and I don't know what a Runway for that is anymore. Do you know? [29:02] Justin: True. [29:02] JD: Fair enough. [29:04] Justin: Yeah. [29:04] Chad: Because that's going to be the world that's going to be automated. That is going to be the world where artificial intelligence makes a big quick impact, I think. But Catherine, we had this conversation recently with a big group of third party administrators. The training for folks moving into our industry is no longer going to be around technical knowledge. It's going to be about applying what they're learning from the resources they have. Like right now, a big question comes to you. You might go to the outline book, you might go to who's the employer, and that's how you learn. And then you use that experience and you preach it out. When that situation comes along again, that's what we're going to be training employees to do is now you don't need those books, you have these other resources. But when you learn that information, you need to be able to communicate it well and be able to push out those thoughts so that you can support your clientele. [29:56] JD: You ready for an odd transition? Let's. Let's. Because this was on the docket, so. But I think it kind of ties in nicely here. Who is Duff Foreman? Oh, God, Duff. [30:10] Catherine: What a name is. [30:13] JD: You can go on YouTube or whatever and look this up right now, but it's a golf tournament in. Is it New Mexico or Arizona? [30:19] Speaker F: Pga. [30:20] Christopher: It was in New Mexico. [30:21] JD: Oh, shit. I said it twice. A Professional Golf association tournament where the commentators now have a sidekick that is an artificial intelligence commentator by the name of Duff Foreman. And to tie into what we were just talking about, my original understanding of Duff would be that if I'm a commentator, they used Nota Begay, a Tiger's buddy, as he was. He was being interviewed on this because he was alongside Duff yesterday. And what no to defended it and saying as I'm commentating, Duff will be there at my side to help me with statistics, history, things that my brain's not fast enough to tap into. And then I used to have a tech team behind me giving them. And so I'm going to have this kind of sidekick. And for a moment I thought, okay, we're not having this artificial intelligence Max Headroom type like doing the commentary. It's this kind of tool for Nota Begay to use to be a better commentator. Much like Chad just explained, a 401k service person might have AI sitting on their shoulder. Damn it. And be able to then support a client and an advisor in very complex areas, very nuanced areas, and literally have the resources they need to do it. Just throwing this out there. [31:46] Christopher: Well, are we sticking with the sports metaphors and the sports story or. No? I mean, yeah, I don't know. Formula One geek, maybe. It's a. Different metrics. They got three guys in the booth that are living human breathing. Some of the guys have been around for 25 years, and they have all those stats and statistics. Anyways. Okay, they did. You know, they're not. They're not bringing it up. So I. The stuff I saw on you on. On the video, it looked bad. It didn't sound right. And that we're having a human being having a conversation with an AI avatar in a serious manner. I mean, I'm trying to figure out. I'm trying to figure out how we can have that as. As a joke or a bit, but not. Not for something real or sincere. And these guys seem to be doing it for real. [32:37] JD: Yeah, I'm with you on that one. I'm definitely going to jump on your camp on that. It looked pretty cringy from what I saw and I didn't sit through the whole thing. But Katherine, you look like you have a thought, but yeah, definitely is not how I'd like to showcase the use of artificial intelligence. Chad, did you look at it? Did you see it at all? [32:54] Chad: I did, and it was hard to watch. [32:57] JD: Yeah, it's pretty bad. [32:59] Chad: Here would be my space for it though, Judy. Like I'm sitting in Vegas in a hotel room right now. My daughter's playing golf and I'm getting updates from my sister in law in terms of what she's doing. If there was a commentator that they could be an AI commentator in that setting that could be following her around and giving me a review of what's happening, Kind of like what game changers doing in other sports, I'd be into that. Not at the. Not at the PGA level anyhow. Yeah. [33:26] Christopher: Different situation 100%. So now the four year old version of me wants to know what the artificial intelligence Scotsman is wearing underneath his artificial intelligence kilt. [33:40] JD: Yeah, yeah. What Christopher is referencing. If you haven't all seen Duff Foreman, he's very much a old school Scottish kind of guy and very well built, by the way. He's, you know, he's, he's, he's ripped. Like, he looks like he works. [33:54] Christopher: He's very Jamie from Outlander. [33:58] JD: So we'll move on. And that's probably not the best example, but I think the summary here, because we can move on to real topics, is irl, as they say. And I'll. And I'll drink for that. You got to figure that one out. That's what all the tech guys, Brandon, [34:14] Speaker F: the leaderboards screwed up. I clicked it and it's not right. [34:17] JD: So we're not even doing it that way. [34:19] Chad: Yeah, that's done. [34:21] JD: That's done. What the was I gonna say? Oh, it's coming, people. So. Yeah, you already know that. It's on the news every day. You know it's coming. Let's spin the wheel of ice. Shall we? Spin it up. [34:36] Christopher: Remember this part? [34:40] Justin: You might not have done it. [34:41] JD: The person. [34:46] Chad: I. I bought one. I kind of feel like I have to drink it now because I'm not. [34:50] JD: I got a special treat for y' all before. If. Chad, if you want to join me, by all means, let's drink our little bottle of diabetes together. But before we do that, it's come to my attention that Catherine and Christopher each have a small bottle of Malort on them. [35:07] Justin: Oh. [35:07] JD: And they have never tasted malort before. [35:13] Justin: Let's see who can chug faster. [35:15] JD: So let's. Let's. Let's see what they think of it. Let's all let them drink it and let's look at their faces and get their months. [35:26] Chad: Tipper. Christopher. That was tiny. Take that thing down. [35:30] Christopher: It was taking a. [35:31] JD: Wait. It takes a moment. It takes a moment. [35:34] Justin: Catherine. [35:35] Chad: Give it time. [35:37] JD: Look at it. [35:38] Chad: Keeps working itself in there. [35:40] JD: Catherine, your assessment? [35:42] Catherine: I've had worse. [35:44] JD: Okay. One of the 2%. [35:46] Justin: Wow. [35:47] Christopher: They're a bronco. [35:48] Catherine: I've had worse. I'd say really cheap. A cheap whiskey is worse. [35:54] Justin: Oh, you're gonna be okay over there. [35:56] Christopher: That's. [35:56] Justin: No. [35:57] Catherine: I feel like that was better than I expected. I really was expecting. [36:00] Christopher: It was. It was better than I expected. But God, I've done it now. Except we have four more little bottles upstairs. [36:08] Catherine: I'd actually rather drink this than the old style that you're supposed to wash it down with. [36:12] JD: We'll send you. We'll send you some. Some recipes that you can mix it with others. [36:17] Justin: Yeah. [36:18] Speaker F: Yeah. [36:18] JD: I'm gonna pound this smearing off ice. [36:21] Speaker G: And she does. [36:21] JD: If. If Chad and Jess are going to drink with me, maybe Catherine and Christopher, you can set up our next topic. [36:28] Christopher: Okay. [36:29] JD: The. The EBRI is telling us that. I get that, right? I think so. Employee Benefits and Research Institute is telling us that the student loan match provision is gonna boost 401k to the next level. [36:46] Christopher: Can I have some more malarias and [36:47] JD: give us your thoughts. Okay. [36:50] Christopher: Why? Why? [36:52] Catherine: I don't know. [36:54] Christopher: So as. Yes, we are working as diligently as we can with our payroll aggregators to have as much payroll information come to us directly through the payroll systems. That's one payroll. And we're having a hard time getting that. It is the end of September and we still do not have any compensation information for a good number of our clients. Now how are we going to gather. If it's hard enough to get W2 information, how are we going to get this. This. This loan? Payment verification. That's. There's an operational problem there. And then I had a look at that article and the math seems to assume that everybody that has a student loan is going to defer 4% of compensation and they're going to be in a plan to get a match. How many plans have a match of at least 100% or 4%? [37:53] JD: You're saying there's stats in Terms of how many billions of dollars are bullshit. [37:57] Chad: Well, that and when they talked about, at least at the beginning, it made it seem like there was this astronomical gap between those who had student loan repayments participation rates and those that did not. And then when they gave the statistic, it was 9%. The participation rate difference, what was it? It was like 84 to 75%. I'm like, that's not a big change there, folks. [38:21] Christopher: Now I know this is a place who's going to correct me if I'm wrong. But if I remember correctly, years and years ago, I thought it was Abbott Labs asked for a private letter ruling on whether or not they could do this. And the response from the Internal Revenue Service was, duh, you morons. Why did you even pay to ask? Of course you can. It's called class allocation. You got to run it through Gateway and all the other testing you have to do. I'm afraid of any initials there. Just general stuff. And you can do this? Yes. The added benefit with this convoluted match concept is that the highly compensated employees, as long as you're passing the actual contribution percentage test can do it. So the. I don't know if this works for Safe harbor match or not. I've never looked at it like that. But from a discretionary point of view, this is, this is a big ass nothing burger that causes grief for us and makes operations more complex. Yes, you can talk about all your cat. I farted all day long. But I don't think that's going to help us get the data from the plan sponsor. Whoever. [39:34] Chad: I had a tough question with a group of folks at this conference last night around balancing what we can accomplish currently versus what's right for the participant. And let me ask that question of you, Christopher. Is the ability to match on student loan repayments right for the participant? [39:55] Justin: Sure. [39:56] JD: Not my question. [39:57] Christopher: No, it's not the only solution. [39:59] Chad: That wasn't the question. [40:02] Christopher: The concept of giving a person who cannot afford to make a deferral, giving that person an employer contribution to make as if that person were making a deferral. That is right for the participant. [40:18] Chad: I know I'm your employee. I'm your employee. Yeah, but, but your, while your answer was he said yes, was reasonable to [40:27] Christopher: give you money in a different bucket. [40:30] Chad: So that's what I want to argue with a little bit. Now you're, now you're making a discriminatory, discriminatory action in choosing who you're going to give that money to. You think that I couldn't Defer because I have student loans. So you're going to give me extra dollars in the plan, but you're not going to give it to Mark who doesn't have student loans that can't afford to defer. Like how are you going to judge, how are you going to judge who you're giving it to in that scenario? And it's got to be non highly compensated folks in that scenario. [40:58] Speaker F: Yeah. [40:59] Christopher: Okay. Either way is subject to testing. Okay, I've lost the point. [41:06] Chad: You have to have. The point is you have to have [41:08] JD: a debate anyways because it's a, it's [41:10] Speaker F: the impact of malort. It just sits there [41:15] Christopher: turning into RFK junior. This is how he got the worm. [41:19] Catherine: So you can't do a deferral because you have to pay for your. So you have to pay for your. The vet bills, for your dog. I don't know. [41:28] Chad: I mean, yeah. So therefore we give you money. [41:30] JD: There's the Catherine Tipper I've been looking [41:32] Christopher: for where we can implement the student loan match, make you whole process through a different way. I don't have a problem with the concept. [41:45] JD: Chad and Chris. Chad and Christopher. Let's move on from that debate because it's irrelevant now. [41:51] Speaker F: Wait, yes, Rob Guy again, I always go down different paths. I came into this thought when Chad has that question of like, yeah, of course it's a good thing, dude. Like, what are you naive? But then as I heard everyone else's argument, I was like, oh, that makes a lot of sense. I've kind of come into the other side. So my whole thing is like, why are we trying to force things through the 401k plan? Why? Why? There is such thing as a student loan reimbursement program that employers can just basically pay a portion of the student loan to give them the flexibility. Say, hey, I gave you $200 to pay off your loan. That's going directly to your loan payment. Now you can defer that on this side. [42:35] JD: So like I could raise your. [42:36] Speaker F: Do we have to? Do we have to what? [42:39] JD: I could raise your salary or something. [42:41] Christopher: I don't know. [42:41] Chad: There's. There's significant negatives to both of those. [42:43] Speaker F: Yeah, yeah, yeah. But I'm just saying, like we're forcing things. But at the same time, I do think it's good public relations in terms of our industry saying we're do gooders, we're trying to have good things happen and help people out. But there are a lot of caveats to what we do. [43:02] JD: I think it's people that want to see this provision work. And this is propaganda to push it further, to show, hey, man, look how much money this would. This would happen. And to Christopher's earlier points and Chad's, it sounds like the stats are off on that. Anyways, I want to move on because we have a lot to talk about. But you did bring up something, Christopher. If we could get technical, you were saying that you were going to need to confirm that they had these student loans. Isn't that a plan in these new regs, Is that on a plan sponsor responsibility to confirm or like. You don't have to do that as a third party administrator. [43:39] Christopher: We have to get the information because if Mr. Johnson is not deferring. [43:46] Catherine: If. [43:46] Christopher: What is it based on? You've got $5,000 a in student loans. I think the way it works is. And you're not doing it because you've got $5,000 in student loans. That's all you have. We are supposed to give an employer matching contribution based on a $5,000 deferral that he's not doing. That's my understanding. [44:05] JD: You personally want to see it though, as opposed to the plan sponsor telling you what it is, right? [44:11] Christopher: I mean, but a plan sponsor saying, give chad an extra 1500 bucks. An employer non elective, like, okay, yeah, well, that's different. I don't have a problem with that. I mean, like, yeah, Chad's a good guy. I've heard. I haven't seen it, but I've heard. [44:24] JD: Oh, no way, dude. Let's. [44:28] Christopher: Sorry, Sorry. [44:29] JD: Let's play a game. Let's play a game. It's called Fin talks. It's been a while. All right, the way this game works, Catherine and Christopher, is we're gonna play you some reels from Instagram or some from Tick Tock. And it might be financially related, it might not be. And we're just gonna get your thoughts on it and discuss it. [44:56] Speaker F: This is the definition of not a game. [44:58] Speaker G: Yeah, we need something more interesting to get people to want to work here. We could offer competitive pay. No, Anybody can match salaries, unlimited paid time off. Excuse me. What if instead of limiting their time off, we remove the limits entirely? Yeah, that's a great idea. Let's let the employees take even more days off because that's definitely gonna help productivity. No, no, the idea of more. Go on. If I gave you my debit card and told you you could spend up to $20, I bet my life savings you'd spend 19, 50 without hesitation. But if I were to tell you in that same scenario, you had no limit. How much would you spend? I'd probably ask what you think would be reasonable. Exactly. If we give them 25 days a year, they'll take 25 because it's theirs. But if we give them infinity, they'll hesitate. [45:50] Speaker F: They'll send them. [45:51] Speaker G: Yes. They take even less pto, they'll work harder, burn out faster, and best of all, we don't have to pay them out for unused vacation days. A punishment disguised as mercy. [46:04] Christopher: I've. Are we supposed to guess where it came from or just. [46:09] JD: No, no, you just. What are your thoughts on unlimited part time off? [46:12] Christopher: And this was an entire day when I used to do Vistage and they brought in a consultant to teach us how to have total, open, complete and honest communication with absolutely everybody inside the company without any emotions or feelings being hurt. And that when you can achieve that level of nirvana, everybody inside the team can decide how much everybody gets to take off. And supposedly the result is that people take less because they don't want to. They don't want to upset the team. [46:50] JD: Yeah, my bad. [46:51] Justin: That's fucking wild. [46:52] JD: I said part time off paid time off. This was a huge Silicon Valley trend back in the day. [47:00] Speaker F: Oh, it still is. It still is. [47:02] JD: Still. Yeah, yeah. [47:03] Justin: I want to know what employees are like. Oh, I'm. I'm maximizing that. Like there's got to be one or [47:08] JD: two right in the chat bar, said, she's going to Bora Bora, she's out. [47:13] Catherine: I mean, that's. It is some employees will take advantage of it. [47:16] Speaker F: Right. [47:16] Catherine: And be gone all the time. And other people will be not and feel guilty. And then the. [47:23] Speaker F: Well, here's the caveat. There is still like a lot of these companies that do it around here now. You still have to get approval. So like, sure, you could ask for a million days. I'm going to give you three. [47:33] Justin: Yeah. [47:34] JD: Sorry, you can't. Tom. [47:35] Speaker F: Right. [47:35] JD: We need you at your desk during the week of October that you're doing. [47:39] Chad: Right? [47:39] Christopher: Yeah. How. How it was presented to me and my end, where we had the Vistas thing was that the team decides you are responsible for your teammates and to make sure that projects are delivered on time and you don't want to be person who's letting people down. [47:56] Justin: Right. [47:57] JD: I didn't want to spend too much time here, but here. [48:00] Christopher: How she muted you, doctor, you're muted. Oh, there we go. [48:03] Catherine: But the thing is that it is great because then you don't have to keep the PTO on your balance sheet because technically if you give [48:12] Christopher: Pay time off. [48:15] Catherine: Because if you give somebody six weeks of vacation a year and they quit, you have to pay them that out. [48:21] Justin: True. [48:21] Catherine: If you don't. If you don't have that, then you don't have to pay them. [48:24] JD: That's great. [48:26] Catherine: So your balance sheet, especially for these big tech companies where everybody gets six weeks, maybe eight, maybe 10, you know that those are big numbers. So. Yes, it is. It looks like it's something amazing, but it's kind of cloaked in a. Yeah, we do something for accounting that was amazing for us. [48:45] JD: You know, Covid kind of created an interesting experiment here because, you know, pre Covid, most people would drive into an office, you know, check in at 9am if you weren't there when you're supposed to be, people would notice. You'd sit at your desk, you'd work, and you'd leave, and you'd commute home, and you'd put in your normal eight hours a day with lunch or whatever it is. And then at Covet, Now, I don't track my employees. I mean, I asked them to. These guys don't have to. But I asked my regular employees to kind of fill out a what time sheet. I always kind of want to get rid of it because I pay everyone on annual salary. Like, I'm not paying people by the hour. And I feel like I have an unwritten agreement between me and them that they should be putting in 40 hours a week, but I'm not really, like, monitoring it. And Will Hackler had a great comment. I look at it more like this way. Is. Is their job measurable? Like, if you. I was used. This is a horrible example. But if you've got a heroin addiction while you're working for me and you stopped doing your compliance work for my [49:49] Speaker F: clients, that was between you and me, dude. That was between you. [49:52] Christopher: You're not supposed to talk about that. [49:54] JD: I think I would find out relatively quickly that you are not doing your job, and then the proper steps would take place. So it's a weird world we live in and that, you know, are you going to monitor someone? Not monitor them. The real goal should be, are they getting the job done that you're paying them to do? And I won't even talk about. What'd you say, Cat? And how that might. [50:16] Christopher: Cat, I farted last. [50:20] JD: Last thought. Catherine. [50:21] Catherine: I'm just amazed that you kind of aren't too worried about whether an employee is exempt or not in California. And you're keeping track the hours. [50:29] JD: Oh, overtime. We have to. Yeah, yeah. So they. We and by the way, I pay way too much overtime, so. But yeah, we. They have to turn in their timesheets. I said that, didn't I? [50:39] Catherine: And. [50:40] JD: And so. But I'm not. What I mean is I'm not there seeing their keyboard strikes or are they sitting at their desk checking in. Like, I. You could lie to me. I have no idea whether you're there or you're not there. Some people are monitoring whether your teams is green or. Or red, but I don't. That's not really a company policy for us. But my point is it's very loose these days in terms of. Of hours. Boom, boom, boom. Let's see. Oh, next Fintok. That's where we are. [51:22] Justin: One. [51:22] JD: One comment from Catherine and we'll move on to the next. I have to be refreshed on who [51:29] Catherine: John Connor is, but. [51:31] Justin: Oh my gosh. [51:32] JD: Okay, well, then you're not the right person to ask. One response from Christopher and we'll move on. [51:38] Catherine: Look at him. He's. He's running away. [51:43] Chad: He'll be back. [51:45] Christopher: Yeah. [51:45] Justin: Well done, Chad. I'm proud of you for that one. [51:48] Chad: Okay. [51:49] JD: Okay. Oh, no. Did he freeze? [51:52] Christopher: I believe John Connor, who is Sarah Connor's progeny for $200. J.D. [52:00] JD: connor's what? [52:01] Catherine: Okay. [52:02] Justin: Child. [52:03] Catherine: Okay. [52:04] JD: Oh, yeah, It's John, I think, right? Yeah. [52:06] Christopher: Yes, yes. Skynet is real. [52:08] JD: Even though they were about to hook up, I feel like in that. That first. [52:12] Chad: Yeah, it was a little creepy. [52:13] Christopher: Oh, they did. [52:14] JD: Did they hook up in the first one? [52:17] Speaker F: Yeah. [52:17] Christopher: Oh, yeah. Michael Beam or Bean or whatever. And Sarah Connor. Oh, yeah. [52:21] JD: I will say this as we move on. I do say please and thank you to Claude when I'm working with him. So. Okay, next one. [52:29] Catherine: Brandon. [52:42] JD: Roby. Roby. You could do that. You could do that in today's day and age with like an email to the staff, like a mistake email for sure. [52:53] Justin: God, I want to go back to the office so bad right now. [53:01] Speaker F: That's. [53:01] Justin: That is. [53:02] Speaker F: That is like somebody who wants to see the world burn, but also the biggest troll of all time. And I'm so sad of, like, I never did that when I was in office. [53:14] Justin: You could. [53:14] JD: And just putting that. I would take hours putting that together, like, because there's so many. [53:18] Speaker F: Oh, man. [53:19] JD: Micro strategies within that. [53:21] Chad: Oh, yeah. [53:22] Christopher: You know, no, that would be a 45 second conversation with your favorite chat bot and you'd have it printed out in a couple of seconds. Why are you spending time on that? [53:34] Chad: Because J.D. wants to sit back and be conniving and be like, okay. How could I get that person to freak out the most? Oh, they don't like that one. Let's go. That person makes ten grand more than them. That would be fun. [53:47] JD: My name on that list would be the one that would get a lot of abuse. [53:52] Justin: Everyone knows how much you make. [53:53] Speaker G: Jesus. [53:55] Justin: Internet does. But I'm running through the list of employees who would blow the up right now. [54:02] JD: Let's move on, shall we, to Rob Barnett, who's a past guest on this show and he is the president of Great Gray. I think I'm getting his title right. He's the man in charge at Great Gray now the owner of Retirement Planet Advisory Group, among other things. And great grade to for to tune everyone back in is huge in the collective investment trust space, which if you don't know is taking over massive market share in the 401k and retirement plan space. Collective investment trusts outdo mutual funds at this point and continue to grab more and more of that. That market share. But the kicker here is he is partnering with that firm. I'm not sure if I can say that. [54:53] Chad: I think you can. [54:54] Christopher: It's a word. It's a word. [54:55] JD: It's partnering with I Capital and they're creating collective investment trusts which knowing Great Gray, will be used in the retirement plan space to define contribution space that will be focused on private equity and private credit and real estate. Something. But take it away, Christopher is. [55:15] Christopher: Okay. My understanding is the collective investment thingy is not allowed in plans that not for profits use. I can't remember if that counts as [55:24] JD: an maybe, but who cares about 403 plans? [55:27] Christopher: No, but no. [55:29] Justin: Because [55:32] JD: there's some rules, there's some bills that are trying to get passed on that. [55:34] Justin: But yes. [55:35] JD: What's your point? [55:36] Christopher: No, they're having a hard enough time getting collective investment trusts approved for the not for profits and this is not going to help it. That was my first reaction. I'm not saying that's. That's good or bad, but I'm just. That's the not for profits are not going to like this. I don't think. I think that it's. It's good. It's going to make the argument better. Trustworthy. [55:59] JD: Let me put it this way. I don't think Rob's gonna lose sleep over that. He's trying. [56:04] Chad: I also don't think the not for profits have any say in whether or not collective industrial trusts get approved for their plans. [56:11] Speaker G: That's. [56:11] Chad: That's going to come from the top now. It's going to come from people with money. [56:15] Christopher: If you wanted a comment, did it have to be a good one? [56:18] JD: Brian Graff wants that to happen. What I'm looking for here is the conversation I want to have is the whole one where I've talked to a lot of industry thought leaders, just older, really smart people in our industry that are not buying this whole private equity private credit. And what the debate has been is that they're going to be part of sleeves inside of target date funds and manage accounts. And that's been the story that I've been pushing, and some people are still very upset by that. I don't know if, if Moody's here tonight, but he's had lots of thoughts on that stuff, and I agree with most of his thoughts on that. What I'm seeing here now is, oh, no, no, no. Here's a dedicated investment option that's going to be specifically in this market. So this, to me is a whole new domino that's falling over in this kind of this, this topic that's been, that's been consuming our industry for the last year and a half. [57:19] Christopher: So what may be a better comment is we had Brian from Morningstar recorded for. Well, no, he was on our webinar yesterday, not a podcast. And he was talking about the fact that they will have a portion of private equity. He keeps calling it privates. And I keep thinking of fig leaves. They will have a small portion of what they call privates inside target date files that are covered by a 338. Okay. And I think. And that. And old me was kind of shocked at that. But what that means is that the private or the alternative investments that they're putting under that 338 are only the ones where they've had a look at the liquidity. They've had a look. They're trusting the valuations. There's been some due diligence on that. And I'm presuming, one would hope, you [58:21] JD: would think if there's a 338 layer, one would hope. [58:25] Christopher: That is the assumption that you are getting. And I did not read far enough on this article to see what they were putting into this investment option. [58:37] JD: I mean, the whole liquidity thing is great. We can, we've done this in the past on this show in terms of liquidity, in terms of the lack of transparency, these are all concerns. And, but I used to wave those away, Christopher and Catherine, by saying, hey, this is going to be a sliver inside the target date fund. So the liquidities are issues being answered for the most part. And then I was also saying, oh well, these are smart people. They're going to understand that the lack of like they will know. They will, it'll be transparent for them. They'll know what's the under holdings are and, and what's going on. And so I was just kind of a sucker, like, oh, this is going to be fine as long as in a small sliver in the target day. And just so we know, Christopher, the train has left the station. Like Empower is all in on this. Voya is all in on this. Like this is happening in manage accounts and target A funds. There's really nothing we can do to stop it. We can try to, to shout from the mountaintops and express our concern with it. But this to me, I thought was unique, this article in itself, because now this first time I'm seeing a specific investment option to this type of alternative investment that could land itself in a core menu or, or who knows what. Or maybe I'm reading too deep on this. This is just part of a targeting. [59:51] Catherine: Probably this good on them is that the return is really good on this private investing. [59:57] JD: That's up for debate too, Catherine. [1:00:02] Catherine: Is it really a good investment or is it just that somebody loves selling into it? [1:00:06] JD: And you hear both sides, you hear people saying that, and that was the pitch, by the way, that even the government gave, which is, oh, all the wealthy people are making so much money off of this, these private equity and private credit, and we need to give it to the little guy, you know, and by the way, Christopher, to your earlier point, that's why Brian Graff was fighting for 403B plans to get collective investment trusts and their stuff. Oh, the little guy doesn't get these cool investments at a lower cost. And so. But then I hear other people, Catherine, say, oh, that's a bunch of bullshit. Most of these investments actually struggle and don't do well. And so, yeah, the jury's out on all that. [1:00:47] Chad: We've. Go ahead, Christopher. [1:00:49] Christopher: I was going to say, isn't there a record number of exits that aren't happening this year that were planned with private equity? And maybe I'm focused too much on the private equity side of the alternative investments, but my understanding is that this year there's a record number of deals that can't close. People thought they were going to have exits in 2026 and they can't sell it. [1:01:16] JD: Okay, yeah, well, you're tipping your cap here too is Christopher, is that the whole industry was struggling for more money, right? They needed more investments to Keep afloat. And that's why they looked at our [1:01:29] Chad: industry, 10 trillion dollar space, like, let's [1:01:32] JD: get into that space and they can keep us afloat. [1:01:35] Chad: So. So here's the one piece. [1:01:37] JD: Can I apologize to. I think it was Neil again in that he was correcting me. And I think he's totally right. This is not going to be a core menu slot. It's going to go inside of those very things I talked about. The managed counselors and targeted. Sorry, I had a little brain fart there. Go ahead. [1:01:51] Speaker F: What. [1:01:52] Chad: What I was going to say is I think if we follow the money and you put on your tinfoil hat and jd, you were leading us there right at the end, and Christopher, you picked it right up. If we look at who has the power right now, and you look at this article not from the side of having privates in here, but the side of getting access to assets. [1:02:11] Justin: Yeah. [1:02:12] Speaker F: Just call it privates. We just did it. [1:02:14] Chad: Christopher did it like seven times. So I'm doing it. [1:02:16] Speaker G: I know. [1:02:16] Speaker F: We just can. [1:02:17] Chad: Access to assets. The people sitting at the top of Great Gray are the folks, in all likelihood, that need privates to succeed, needed access to this space. And what we're. What we're overlooking in all of this is the distribution channel that they have. This is going to be everywhere, because the distribution channel into the retirement plan space is heavy. Through RPG and other entities that Great Gray have a grab a grip on. It is a distribution play for these resources, and it's happening so fast. [1:02:51] Christopher: Todd, I'm not being a jerk here. What did those initials stand for? I've been hearing that. The ones that you just said I [1:02:59] Chad: don't want you to. [1:02:59] Christopher: The ones that you just had to do the drink. [1:03:01] Chad: Oh. Retirement Plan Advisory Group. [1:03:03] Christopher: Oh, sorry. Thank you. [1:03:05] JD: Hey, by the way, Chad, you went one layer deeper that I should have done, which is what Moody does all the time. Great Gray is owned by a private equity firm called Madison Dearborn Partners, which [1:03:20] Chad: is, like, heavy in the retirement plan space. Look at who Madison Dearborn own, but clearly fucking everybody. [1:03:27] JD: Yeah. [1:03:27] Christopher: So, Chad, was your point that the fact that we've had so many exits not happen is why this group wants to do this? So that they can get the funds to close those exits. Is that the part I was missing? [1:03:42] Speaker F: Yeah. [1:03:42] JD: Or keep. [1:03:43] Christopher: Thank you. [1:03:43] JD: Yeah. [1:03:44] Chad: Or keep them and continue to make money. Yeah. [1:03:46] JD: Keep afloat. [1:03:46] Christopher: Okay. [1:03:47] JD: But. Yeah, so there. So there definitely is conflict of interest here. And that Great Gray is owned by Madison Dearborn, who is. [1:03:54] Chad: And Great Gray has a distribution channel through the advisory space. And we're a massive one. [1:03:59] JD: You know how we. I always call empower the. The evil empire. I. And I'm gonna get. I love Rob Barnett, by the way. He was a great guest on here. One of my favorites. I've said that many times. I feel like Great Gray is kind of the evil empire of the retirement plan space right now. You know, they're getting all this control, dipping their hands in all these different cookie jars and kind of influencing things like just throwing that out there. Don't get mad at me, Rob. I'm just playing. Just playing. Okay, less. That was good one. Let's move on real quick. New kind of Target day fund from BlackRock. I've said this for good. Christopher's excited. I've said this for years. I think all Target Day funds look a lot alike. They have a lot of the same glide paths. And when you look at them, they're almost identical. I've always said, oh, wouldn't it be cool if like something new happened, but no one wants to stick out their neck. Christopher, this looks different. [1:04:56] Christopher: Yes, this. Unless I misread this, I was really pleased with reading this article. I thought this is absolutely fantastic. Yet as I sit here in my Malort adult brain, I'm starting to wonder does this make annual notices and things like that even more difficult? But I know we have our cat eye farted to help us with this. But I just like the concept of having. Of having a specific target date fund for a company or industry or something like this. This was something. I thought this was a very. I liked this one. [1:05:34] JD: And if anyone gives target date funds shit, Chad, they tend to give them shit on them not really being like they don't know the people that are investing in them. [1:05:45] Chad: There's no customization. It's just everybody's in the same walk of life based upon age. Yeah, no, but. So I wrote in the chat bar retire view and I could be wrong on that name, but wasn't that principals product that was very, very similar to this like 15 years ago that looked at the workforce, looked at age, look at risk tolerance, look at where the company was and helped create a different glide path. And it used the underlying core menu funds to build the Target suite. I'm pretty sure that's what it was. [1:06:16] JD: I think you're right. [1:06:17] Christopher: Okay. Okay. Yes. Oh, apparently it still exists. Okay. [1:06:21] JD: Sour Daniel is right now. [1:06:23] Chad: Yeah. [1:06:23] Christopher: Yes. And then I guess the one thing I didn't read in this, I'm. But I'm making an assumption is that What's. There's the glide path and there's the. What's the other. There's glide path and what's the other way you're supposed to look at a target date fund? [1:06:40] JD: Two or three. [1:06:42] Christopher: Yeah. Right. Is that. Is that right? Yeah. [1:06:45] Chad: And I'm kind of go together but yeah. Okay. [1:06:48] Christopher: I was presuming you get to pick the type of. Not only what the risk tolerance is, but I'm presuming you get to pick the other elements of what the target date fund is going to be. [1:06:58] Chad: Usually your risk tolerance is dedicated or dictated by the two or through. [1:07:02] Speaker F: Right. [1:07:03] Chad: You're going to be a greater equity exposure. If you're going through retirement versus to it then you get conservative early. But yet those. [1:07:11] JD: You could argue those are two different ways of looking at how to build a target date fund. But. But I understand how they kind of venn diagram with each other and we're [1:07:20] Chad: seeing right now too the conversations are coming up in terms of the. The customization of these target date funds of these advisor managed accounts that are starting to make their way into our space more and more and these advisors managed accounts being used as a QDIA like the target date funds have notoriously been used, man. So I'm anxious to see how this kind of new solution will fight against those advisor managed accounts. [1:07:49] JD: More. More money goes in to target date funds than any other type of investment option. [1:07:57] Chad: It's like 71. [1:07:58] Christopher: I was gonna guess. I thought it was 70 of the new money that's going to target dates. Right? Yeah. [1:08:03] JD: Therefore I would love to see some evolution, some enhancements, some creativity, some new ways of thinking instead of just the same old shit we've had for the last 25 years. [1:08:15] Speaker G: So. [1:08:17] Christopher: Well, is. Okay, I. Truth be told, I did not read every word. Okay, good. Good scanning. And was there a. Was there a hint as to when this is going to be live and which of our record keeper friends are going to be having it on. On their menu? Was there any hint of that? [1:08:38] Chad: I didn't see. I have not seen it again. No. [1:08:40] Speaker F: No. [1:08:41] Christopher: Okay. [1:08:41] JD: I mean you'd hope if it's a press release, it's. It's happening. Someone in the chat bar check us out on figure that out for us. All right. Final subject before chat bar champion and the winner. [1:08:54] Chad: Jeez, J.D. we have lives after this show, you know. [1:08:58] JD: Yeah, well, you gotta. Okay, I'll. [1:09:00] Chad: I'm kidding. [1:09:01] JD: No, you're ready, Chad. Check swing our third party administrators going the way of dinosaurs. And the answer is clearly yes. Okay, let's go to chop our champion. [1:09:17] Speaker F: No, [1:09:19] Chad: come on. I was gonna say the tippers have to have something on that one. [1:09:22] JD: I was actually gonna do this whole bit. [1:09:23] Catherine: Christopher, the way it's been set up in the past, I think the old model is hard to do. Right. It's going to be a new model. It's not that what we know and how we know how to talk to people isn't going to be valuable. But like I've said before, I think we have to make our own weather. Everybody's using all of these tools to say we don't need anybody who knows this stuff or has this lived experience. So we actually have to fight back if we want to keep it and show our value. [1:09:52] JD: But I would piggyback on you. I'll piggyback on you and say I think all this new tech cat shit aside cat I farted not aside as part of it as well, but just all this new tech in general. Access to third party applications, all kinds of ways to transfer data around and do things. I think third party administrators probably sit in the best seat to take advantage of these new things and do new enhancements, new value, new ways of servicing clients that haven't been done before. And I think it's the bundled providers that will actually struggle to change, to pivot to do new things. And so I say if you think and Freddie B's wrote some articles that have kind of hinted towards this. If you think that third party administrators are going to go the way of the dinosaur because of technology and what have you. I would argue you should look in the mirror if you're a record keeper or a financial advisor or even an investment for like a mutual fund or a collective investment trust because you all might be put out of a job a lot sooner than a third party administrator would for a variety of factors. So smoke on that shit. [1:11:14] Justin: That technology for that not to to be the case. I feel like as for I think yeah in order to not go by the wayside they have to adopt the technology and, and build that out for [1:11:27] JD: their, their firms and I think they're in the best spot to do that. [1:11:30] Justin: But yeah, those who are not going [1:11:32] JD: to do that I would think what you're going to a lot of them [1:11:35] Chad: out there, what you're going to get [1:11:37] Christopher: here at some point size is going to become a disadvantage. [1:11:40] JD: That love that. [1:11:42] Chad: Okay, that's not what I thought you were going to say. [1:11:44] JD: I love that though. Yeah, it's a good point. [1:11:46] Chad: Expand for me. [1:11:47] JD: You can't move. It's the classic Aaron Shum statement. Chad, you're a big tanker out in the ocean. You can't move and change your longitude and latitude to get where you need to go. That small little speedboat can do circles around you and pivot off and head north. [1:12:04] Christopher: Yes, there's a disparity in access to resources in theory, okay. But there are some rather large broker dealers that we have become familiar with over the past that at some point thought the fax machine was the height of technology. Okay. And are exceedingly slow to move. There are record keeper friends of ours who have yet to allow plans to have an in plan Roth conversion, despite the fact the law was passed in 2013. No, I'm not bitter about it at all. Okay? The I started doing this in 1990 and what we are doing today has almost no reference, no relationship to what I was doing for work in January of 1990. [1:12:59] Chad: That was the point I think we're overlooking right now. And, and let me, for those that don't know, let me, let me try to give a little classification of the third party administrative space. You have 15 people, 15 businesses that are large. You have 15, 50 or so TPAs that are pretty strong and good in size. Column give you that you can ring me up column, column. 1500 plus plans and then the rest of the third party administrator community are small. It's 200 plans, it's 400 plans, it's 500 plans, it's 150 plans. I think what we're going to see is that that community either gets bought out or fizzled out. And so when you look at whether or not the TPA space is dying, I'm going to say we're not dying. To Catherine's point, we're changing. You either are going to be small, nimble, dynamic and consult or you're going to be larger and say we're going to be super easy to work with. But with the intellect that a third party administrator should bring to the table, I think that we're going to see that variance. That's where I thought you were going, Christopher. [1:14:06] Speaker F: Size. [1:14:07] JD: I love that Chad. And I think your stats are somewhat right, often a little bit, but it's good enough. It's a good. [1:14:13] Speaker F: The key there is that they're made up. [1:14:15] Chad: That's the key. [1:14:16] Speaker F: That's the key. [1:14:17] Chad: They're not entirely, because I did sit with John Hancock that gave me some of those stats in terms of size of plans and they've got a pretty [1:14:24] JD: good basis like those know what they're talking About. [1:14:26] Speaker F: Okay, so now menu life. [1:14:30] Christopher: Any life. John Hancock. [1:14:32] JD: We live in a state of time, A moment in time that a small company. I'm a company of 35 employees. I think Hunter benefits is very similar. We can do things now with software and new things that we want to create that we could have 10 years ago. Chad, you've heard this from me a million times on our Domino's pizza delivery chart that we wanted to do for 401k plans where you kind of saw your status as it came in. And to do that, we were going to have to go hire some coder overseas. It was going to cost us six figures to do is going to take 18 months to ship that product and get it to finalization. We live in a world where you're going to be able to build things economically, custom, very quickly with this whole cat eye farted. And I've done it personally myself in a big way that I built to monitor your guys's sales. I built in a weekend. I use it every day. You guys use it. It's phenomenal. [1:15:39] Christopher: Never used it once. [1:15:40] Speaker F: Not once. [1:15:41] JD: I built a design tool. So anyway, my point is that tech, the ability to make tech to make your business better is something that small businesses never had before, and they have it now, and they're going to have more of it in the future, which is going to empower them to do some gnarly and be able to compete with the bigger companies. [1:16:01] Chad: So [1:16:04] JD: less vote for chat bar champion and then let our Catherine pick the winner. I'm gonna vote. [1:16:13] Christopher: We didn't do this last time. [1:16:15] JD: No, we didn't. [1:16:15] Chad: No, we did not make a choice. [1:16:17] Catherine: Christopher. [1:16:18] Christopher: Sorry. [1:16:19] Catherine: I'll make a choice, but I'm gonna [1:16:22] JD: vote for Neil Anderson, people. Justin, your vote. [1:16:26] Justin: Oh, this is gonna be tough there. It's between two. I'm gonna go with one because I know everyone else is gonna vote the other. I'm gonna go Webby. [1:16:32] Christopher: Webby. [1:16:33] Chad: Have you had a good night? I said Michelle already. I thought she had an incredible night. [1:16:39] JD: Catherine, your vote. [1:16:41] Catherine: Daniela. [1:16:42] JD: Daniela. She's won many times. Christopher, I'm gonna have to go with Daniela and Roby. [1:16:52] Speaker F: Yeah, I agree with you, Katie. Neil. [1:16:55] JD: Neil. Okay. Daniela and Neil are gonna go head to head. And Catherine and Christopher, you're gonna pick the winner. Rod, have Catherine and Neil finish this sentence. Spit it out. [1:17:13] Speaker F: Tomorrow a dive bar opens up sponsored by the Retire holics. What is the name of that dive bar? [1:17:25] Christopher: We're supposed to type this or the Tide? Yeah, because somebody said Catherine. [1:17:30] JD: Sorry, Christopher. Daniela and Webby and Neil will type answer and the. You will decide the winner. Daniela's entrance is Malort till you die. That's the name of the. [1:17:43] Chad: There's got to be something for speed there too. [1:17:46] JD: Yeah, true. Fair enough. [1:17:47] Justin: Yep. [1:17:50] JD: Yeah, that's clear. With a Katherine. Christopher, who is your winner? [1:18:00] Catherine: I'd still say Danielle. [1:18:04] Christopher: I say Neil. [1:18:05] JD: I get the deciding vote. Neil, you are the champion tonight. Of Chap. Our champion. Not you, Daniela. Steph, you. Neil. Neil, Private message me on LinkedIn and let me know what size and what color you're gonna get a hoodie shipped out. Well, they'll probably ship it tomorrow. I'm gonna do it tonight because I'm not that drunk. And it's got robe guy on the front. Front. He's in a robe, of course, and he's on a scooter. And I think he's drunk. But definitely. [1:18:34] Christopher: How did he have zero penalty points or whatever you call it? Is he still at zero? [1:18:40] JD: He just doesn't. [1:18:40] Speaker F: I'm just that. Christopher. [1:18:42] Chad: I'm just. [1:18:43] Speaker F: I'm. I'm just not. Good, man. I know what these acronyms are. [1:18:46] JD: Christopher, Catherine, the 401k couple, Hunter benefits. Thank you so much for your pleasure. Appearance, I believe. [1:18:55] Christopher: Thank you. Yes. [1:18:57] JD: Everyone out there. You guys can catch their podcast, their YouTube show. Tune into them on LinkedIn to catch all that stuff. I stand behind it. It's good stuff. I watch it all the time. [1:19:06] Christopher: Thank you, everybody. [1:19:07] JD: They're straightforwardness, and I'll back up Christopher. Thank you, everyone for tuning into another episode of Retireaholics. We appreciate you, and we'll see you next time. Where are their hogs? Changing industry. One beer at a time. See you next time, everybody. [1:19:25] Christopher: Brandon, Justin, Chad, jd, Mark, thank you so much, guys. [1:19:29] JD: It was a pleasure. [1:19:30] Chad: Thank you, guys. Pleasure. See you all soon.