AI in Workplace Planning & Fiduciary Liability

[0:02] JD: All right, let me know when it. Cue me when it's done. Oh, we're fine. Okay. [0:07] Chad: I mean, for me, it's freeze. [0:09] Justin: Really? [0:09] Chad: Yeah. Yeah. And that's the way it's. Athens is fine. It's a big city, there's a lot of history, and it's worth checking out. But done right, you could do Athens in a couple of days. [0:19] JD: You have the soup? You want to have the soup? Welcome, everybody, to another episode of Retireholics. We are here at the well Fed work conference. You're not gonna sing today in National Harbor? Is that where we are? [0:39] Mark: Yeah. [0:40] JD: What state are we in, man? Some state that you can't. Can't bring booze in over the state line or something. I don't know. [0:46] Chad: State of euphoria. [0:47] Mark: General rule for drizzly is that you can't bring alcohol across state lines. [0:53] JD: We're coming at you from, you know, another industry conference. Not just any industry conference. The wealth at Work conference put on by the guys and girls at Advisor two acts. If you haven't been to it, you should check it out. It's a pretty good one. We got a beer of the episode today to kick off the show. I haven't done that in a while. We're all drinking the same drink here. It's called Tropicannon. It's a Citrus ipa. And Chad, we just had a little. You just had a little review, Chad, under your breath. How do you feel about this beer, Baltimore? It's not good. [1:28] Mark: It's not good. It was described wonderfully fearless and independent. Yeah, it definitely is fearless. [1:35] JD: You know what? It's better than the Malort I just said. [1:37] Mark: I'm sure. I can't wait for Petros to try them. [1:39] JD: Yeah, wonderful. Don't go and buy this after delicacy, buddy. Not recommended. We're gonna go straight into headlines. Headlines. Brandon, if we could. There's a graphic happening right now. [1:57] Mark: That's a deal. [1:57] Chad: I guess I can finally try it. [1:58] Mark: You should. [1:59] Chad: It's wonderful. [2:00] Mark: You're gonna. [2:02] JD: And the first headline we have is one that I kind of wanted to avoid. But a couple things here. This one's for Planet Visor magazine. It's titled Voya, focusing on pooled employer plans and multiple employer plans with Advisor says top exec. This comes from the Leaf House conference. Apparently a Voya representative there said that they're eyeballing 90 billion in. They loosely termed it like pooled employer plan, like type plans. Which means. Which is their multiple employer plans. I will also though, piggyback on this Our good friend Mike Decenso, pooled employer plan supporter, or shall I say brainwashed by the aliens, this man is, sent me a private message and said, ooh, check out a census. A census is approaching a billion dollars in pooled employer plans. And the reason why they send me these messages is, say, look, J.D. you've been to naysayer, but you are wrong. [3:05] Mark: They're dominating. [3:07] JD: I'm curious what you all think about this. I'm going to say I'm not wrong. Okay, first of all, a census. Do you know how many billions of dollars a census has in terms of total plans? Like, not the pooled employer plans? [3:20] Mark: No, but it's a big number. [3:22] JD: 742 billion. Okay, so when. When Mike Desenso sends me an email that says they have 1 billion in PEPs, do you know what 1 is of 742? It's less. I'm not a mathematician, but it's far less than 1%. It's actually less than half of 1%. I do not consider that pooled employer plan success. Am I crazy? [3:45] Mark: Petrosis points. [3:46] JD: Okay, Voya, that's a success story, though. [3:50] Mark: If another record keeper came and said they were brand new to the marketplace and they came and said, we've got a billion dollars in assets under management right now, we'd go, that's pretty good turnaround for a quick time period. [4:01] JD: But a census is not brand new to the market. No, but they already have their sales channels. They already have to say if it's [4:09] Justin: organic too, or is it just converted [4:11] Mark: assets from other dozen? [4:13] JD: I'm not going to put it in the drink for this. I'm not going to put it in the Aeon paycheck category, because I don't know, maybe, Justin, maybe that's true. I consider those both left pocket, right pocket, kind of pooled employer plan success. I'm not so certain if that's the case. [4:31] Justin: One thing it did say I remember seeing is they're coming. A lot of them are coming down market. [4:35] JD: They're just not telling you what the assets are, which. That's good because that's what they were. [4:38] Mark: That's what it was designed for. [4:40] Chad: Exactly. [4:41] JD: But let me go to the Voya one now. So Voya at Leaf House says, oh, we're approaching 90 billion or whatever. We all know this, right? And they're not referring to just pooled employer plans. They're referring to multiple employer plans. How many millions of or billions of dollars in assets do you think Voya had in multiple employer plans? Pre pooled Employer plans coming to the market pre 2019 a lot. [5:10] Speaker E: I don't know. Just tell us. [5:12] JD: 60 million. 60 billion. [5:14] Mark: And didn't they just win the. Oh, I'm blanking on the name. Group out of Arizona, Transamerica had their mep. [5:22] Chad: Damn. [5:23] Mark: And they just won that relationship, I'm pretty sure. And so that Trinet, that's going to bring over a large portion of assets. [5:30] JD: Well, we'll see. I think this, we'll leave this category. I want to get your thoughts on it as a third party administrator. But what I see as success or what the industry tries to claim as success is all these new relationships, all these new products that are coming, these are all the press releases we get. This company is partnering with this company to offer this pooled employer plan because they see this target market that they're going after or these captured advisors of this broker dealer or whatever it is, all that stuff kind of makes sense to me. I still think those are kind of swinging for the fences, winging a prayer kind of thing. There's no proof to back up that those are going to be successful and get the assets. So that's when Chad, these people come to me with these articles going, well, look here, J.D. here are the assets and they, they reference paychecks, they reference aon, which I think I owe two drinks for now because I'm thinking that stands for something. And now they reference Voya and they reference the census. And I'm telling you, first two are left pocket, right pocket. And the other two are simply, they already had that business model like it's, it's not a new thing. Therefore I say no, Someone out there show me some actual success of new pulled and poor plans getting some type of scale in general, pooled employer plans. Spectrum Pension Consulting. Do I get that right? [6:46] Chad: Spectrum Pension Consultants. [6:47] JD: That's close enough. It's very close. You should see what people call our firm sometimes. Are you thumbs up or thumbs down on this pool employer plan? Just, I mean, where do you stand on all this? [6:58] Chad: All right, so big picture stuff, coverage matters, right? Coverage is the issue in this country when it comes to retirement plans. [7:05] JD: Love this. All right, I'm going to stay quiet for a little while, but love it. [7:08] Chad: Okay, so coverage gap is real, but it's not real in the large employer space. [7:12] Mark: Right? [7:13] Chad: You go to employers of 500 workers and above. Fully 88 are covered by workplace retirement plans. In the small employer market, that drops to 58%. There is a 30 percentage point disparity between large as well. [7:25] Justin: Real facts on the show, you don't allow. [7:27] Mark: You gotta make them up. [7:28] Justin: No stats. [7:29] JD: We get this. [7:29] Chad: Well, you're taking me at my word for these statistics, right? [7:33] JD: We totally get this. And this is why the government was convinced to put pooled and player plans in the place 100. [7:38] Chad: Right. So you're asking what are they good or bad? If it drives coverage in a favorable direction in the small employer space and only time's going to tell on that, then there's no doubt the outcome is going to be positive. In. In my opinion. The question is how successful will that be? To your point, jd, the numbers aren't there yet, so. [7:56] JD: Well, I'm gonna. I'll jump on your thing a little bit here. I think that you're in for a shock. I think most of the industry took the pool of employer plans and actually created products and solutions towards takeover plans. [8:12] Mark: Yep. Because they're asset gatherers. [8:14] Chad: That's the issue. [8:15] JD: And very, very few of them, very few of them built a product that was built for startup plans or to change this coverage gap. I've said several times, I think the congressman and woman in the. In the Washington District of Columbia, people got hoodwinked by the pooled employer plan aliens because they sold them that this is going to be for startups and to change the coverage gap. And that's really not where the industry is taking it so smart. Well, they're not even. They don't have one yet. [8:52] Chad: Part of it is also the economic model. Right. The incentives for advisors, record keepers, and to a lesser extent, even TPAs in our space is largely. Oh, gotcha. That's the dirty word. [9:09] Mark: Any acronym, buddy. Oh, any acronym. [9:12] Chad: Oh my gosh. [9:14] Mark: I had to. [9:15] Chad: No one told me the rules. [9:16] JD: This is going to be his first malort. Give it a test. Just a little tiny. [9:20] Mark: I mean, you got to get enough to taste it though. [9:22] Justin: Oh, he'll taste it. [9:24] Mark: Just give it time. Give it a moment. Oh, it gets worse. Yeah, you guys drink this. [9:30] Speaker E: You're welcome. [9:31] Mark: Not by choice. That's why it's penalty. [9:33] JD: Back to your point. [9:34] Mark: Trust me, it's going to get worse. [9:35] Chad: Oh, geez. [9:36] JD: Okay, you were. You were saying instead of just a couple of those. [9:39] Mark: Yeah. [9:39] JD: Okay, you. What was the next benefit for this? You like? Do you remember your thoughts? [9:46] Chad: One second. [9:46] JD: Okay. Jeez. [9:48] Mark: Needs to get that down. [9:50] Chad: Oh my gosh. Seriously, I don't know how you guys do it. The incentives. The incentives are an issue because the financial rewards have to be there for service providers to step in. That. That's true of any you're just simply [10:03] JD: saying small plans aren't profitable. [10:05] Chad: That's the issue. Right. That's the, the struggle is the economic model. Now in, in secure they fix that to some extent. [10:12] JD: Secure to tax credits. [10:13] Chad: Right, Exactly. So there's, it's a, it's a major step in the right direction. But I think advisors increasingly have to be more incentivized to engage with smaller employers. [10:23] JD: And you think pooled employer plans help bridge that for them? [10:28] Chad: I don't, I think there's too little data yet to confirm whether or not pooled employer plans have been successful. [10:36] JD: Statement. I mean I think that, I mean [10:38] Chad: I think that's wired that way. [10:39] Speaker E: Right. [10:39] Chad: To be skeptic I think in this profession but we have to be a bit. Right. [10:43] Mark: I fought this one a number of times Petra. So I'm going to and you as a third party administrator know cost is almost never an issue for us in setting up a startup plan. Almost never in 15 years. Almost never. What is, is the operational worry of how this small business is actually going to run this plan. They don't understand eligibility, they don't understand definition of compensation. They don't understand when to process payroll and how to calculate the match. It's those things that I think have been the headwind to small businesses offering a plan. They feel like we're not big enough for it, we don't have the scale to run it. And I, I don't think it is cost nor do we see the pooled employer plan being less expensive. So secure 2.0, 1.0 both offered credits to pooled employer. Well, we'll say startups in general it counts because I said 1.0 but so I'm, I'm on the other side of this saying it's not a cost issue, it's an operations issue. These people are fearful of what it's going to take on their end to run these plants. [11:44] Chad: But the surveys confirmed problem. But that's a problem because administrative complexity are the two drivers to that are impediment the two most significant drivers for small employers to adopt. [11:53] JD: But the pool employer plan solution to the administrative burden is to have a 316 which has been a pooled plan provider although that's not really relieving a lot of administrative burden for them. But then more importantly a 316 that's put in there. And by the way even in the pool and employer plan space, 316s are a spectrum. You have to read the contract to find out what they're actually I like [12:17] Chad: that actually, please say that one more time. [12:20] JD: They're on a spectrum. And then put it down. Bump spectrum. [12:23] Mark: Other way, Mark. There you go. [12:24] JD: So this has got to make sense to you. Let me ask you this. [12:27] Chad: As a third party, you presume that [12:28] JD: as a third party administrator if you. We work in startup plans. I don't know if you guys do much. Yeah, you do. Okay. [12:34] Chad: So it's important that we all do do that. [12:36] JD: Do you think a lot of your 8 person, 10 person startup plans like the idea of adding on a 316. So and the cost that goes along with that? [12:51] Chad: Many years ago, when I first got into the space in 2005, my business partner, who also happens to be my brother, great man, wonderful guy, he conveyed to me that retirement plans are sold, they're not bought. [13:08] JD: I agree. [13:10] Chad: So, so part of it is what gets sold to a plan sponsor, the economic buyer of our services and selling them on a value of something that's [13:22] JD: a code section 316 that cares about their client and sees the value of a 316 can sell it to them. I get that or put it there. But I was looking for the other answer, which is I think in general most people are trying to help a small company set up a plan and we're trying to minimize costs for them. And a lot of times I think if you looked across the country, you'd find that Most plans under $500,000 in assets don't pay for a 3 Century and they don't know that's a luxury. [13:54] Chad: We were chatting about a moment at that, at that level, at a half million dollar plan asset level and below. [14:00] JD: And how many of the standalone, how many of the, how many of the standalone startup plans or very small plans have a pooled plan provider role or a plan administrator? Well, none is a trick question. These are all add ons. These are premium services. Isn't that funny that the product that we're trying to solve the coverage gap with is actually a premium, more expensive product? Seems backwards to me. And by the way, if you worked in Washington, District of Columbia in the government, what you were sold to put this, this, these regulations through on pooled employer plans. You were sold on the concept of scalability. You were sold the whole reason they voted for this shit. That's a big part because you told them that if you gathered together 100 small businesses you could get $100 million pricing at some point and you could get the little guys the same pricing the big guys get, which is by the way, a total Crock of shit. It's not a reality, that whole scalability thing. And the lower. Because PEPs are more expensive than the standalone plans. [15:00] Mark: If they get, if they get bigger plans and then bring in smaller ones. That could be a true statement. [15:05] JD: No, because inevitably it has an extra roll. PPP. An extra roll. 316. It's more expensive. You can't change physics. It's a more expensive product. You can change pH, apples to apples. [15:20] Chad: I still think it's a little bit too soon to tell. [15:24] Mark: I think what we're gonna. They're gonna, they're gonna pivot, right? They're gonna pivot in terms of what they're going after and the effects and they're gonna create some scalability. I do believe that. I don't think it's gonna have the impact that everybody thinks or many think. [15:38] JD: I don't think. [15:39] Mark: But I do believe you're right. It's. We're too short into this window, right into this path to figure out what it's going to be. It's gonna be. [15:45] JD: We'll move on to this lawsuit thing. But here's what I think right now. When you see, every time you see. [15:50] Speaker E: We know what you think. [15:51] JD: Well, no, no, no. When you see new. New thought, New thought. When you see these press releases about new pooled employer plans coming out, and whether it's from Voya or Empower or a census or a deal with American Funds or whatever it is, everyone's just trying to hedge their bets. No one really knows, like to your point, whether this is actually going to succeed or not succeed. And so don't misconstrue people starting pooled employer plans, people, big companies for them, endorsing that this is the way to go. They're just trying to make sure that if this thing does take off, it's like playing roulette and you put your chips on all the things. That's all they're fucking doing. [16:28] Chad: I think there's, there's merit in that, but I don't necessarily think that's, that's a problem. Financial product innovation is to the extent that it's helping to drive the spirit of what we're trying to accomplish. Get more people covered, get more people saving, get on a path to broad based financial dignity when people choose to stop working. So if we stick to those principles, then yeah, the financial product is a detail to help achieve that outcome. [16:52] Speaker E: To that point, it would be way better. Instead of seeing, oh, we have a billion dollars, I don't care about that, that you Change the coverage gap. [17:01] Chad: That's right. [17:02] Speaker E: Statistically, Right now I feel like if they showed it, it'd be like, well, that's kind of. Kind of. [17:10] Mark: It'd be fun to see real statistics as to how the state mandates have done versus something like this. The pooled employer plan community. It'd be fun to see. [17:20] Chad: I mean, are we not concerned on some level that if, if, if the industry doesn't get its act together in terms of improving coverage that the government will require? And, and they're going to. [17:33] Mark: We got 13, 14 states in it now. [17:35] Chad: Oh, no, I'm talking at a federal. [17:36] Mark: I know it's gonna go to a. That's my point. [17:38] Chad: That's my concern is, is, is if it's not in. [17:41] JD: Yeah. [17:42] Chad: Just to clarify, if it's not solved by the private sector in the years ahead, it will be solved at a federal level. [17:48] Mark: Is that not a bad. Is that not a good thing? [17:51] Chad: I should say it will be forced at a federal level. I don't know. It's going to solve. [17:53] JD: It's possible that we're trying to solve forced at a federal level, though, with a bit of a hybrid action to it to where the, the private industry can benefit too much. Like what happened in California. You could have a federal mandate but also allow for a foreign K plan to meet that mandate. That could be phenomenal for our industry. [18:11] Chad: And that's fair. Depending on. My concern is if, if we go down that path, eventually it may not yield the outcome that we want. So there's risk and fear there. I would just presume it's a much better thing for us in the private sector to engage with small businesses with startup employer plans and, and find a way to, to make it economical for them. [18:32] JD: And everything you said right there, I totally agree with and was right on point. But you never mentioned pooled employer plan in that statement, which I agree. You don't need a pool plan. [18:43] Chad: It's a financial problem to do what you just did. [18:46] JD: And I don't think pooled employer plans are the answer to that coverage gap. That's all I'm saying. [18:50] Chad: And that's fair. They may not be, but I don't think there's a problem with financial product innovation that leads to things to these outcomes. [18:58] Mark: We need to, we need to continue to try to innovate. Absolutely. [19:01] JD: We don't have time for today, but there can be problems. You said earlier you need to be skeptical always. So put on your skeptic lens. When you look at pool and employer plans and everyone out There start to ask yourself where could these things go in the wrong direction for us as an industry? And I think you might come upon some things that are worth fighting for. Okay. 61 million dollar settlement. This is at the national association of Plan Advisors. Written by the best dude to review lawsuits in my mind is Nevin Adams because he. Nobody better attention detail. He really looks into all the little nuances of these cases. We've got a $61 million settlement. This is by General Electric. Am I getting this right? [19:42] Mark: Y. Yep. [19:43] JD: And largest one ever, right? Largest one ever. I usually push against these things in favor of the plan sponsor, the employer. These people were serving up like their own investments, weren't they? [19:56] Justin: And paying off debt with it. [19:57] JD: And doing what? [19:58] Mark: Paying off debt with the investment dollars. [20:01] Justin: Like yeah, if you. I'm pretty sure. [20:02] JD: So this clearly was for the people [20:05] Speaker E: in the room that didn't read the article. Can you give a little background here? [20:11] Mark: I'm doing it for our audience. Justin, just hit it. It's General Electric Asset Management was the asset management company. I stayed away from that Ackerson and. And yeah, a large portion of the balance inside their 401k retirement plan was sitting in these proprietary investments. And the employee stepped up and said that wasn't in our best interest. You're underperforming the market and you're doing so so that you can hold on to our assets. Apparently pay down debt with it. [20:40] Justin: Hey, they were. They were underfunded on their db. Nice. [20:46] Mark: You baited him perfectly with that one. So it was a. There's a slew of issues there. Hence why it was $61 million. [20:53] Justin: Well, did you see that too? They were. It was estimated at 284 million dollar loss. [20:57] Speaker E: So wait, hold up. I'm curious. So the 61 million dollars. [21:00] Justin: So they sell. [21:01] Speaker E: Is this to make people whole? Is this to write like is it going directly? [21:05] Mark: Well, we know how much is going to attorneys. Okay. [21:10] Speaker E: $40 million is doing what? Going into the plan. Going cutting checks to participants. [21:15] JD: Like okay, yeah, restoring them. [21:17] Justin: But what doesn't. That doesn't sense to me though. If I remember reading it correctly, it said the overall loss that was estimated at2.284 million. How do. If I'm. If that's right, how do you get from 284 to 61 they settle because [21:28] Mark: they don't think they're going to get to 280. [21:30] JD: Make a deal. [21:32] Mark: Hey, technical question. That can't go into the plan. That's got to be checks cut to these participants. [21:38] Speaker E: Thinking how long that's a settlement. [21:42] JD: That's a solid. [21:43] Mark: I don't know the answer to that. But Justin said it. I was like, huh, you're not putting. Who we calling Petros? [21:52] JD: It's not going in as a qualified non elective contribution. Right? No, no, no. That is interesting. [21:59] Mark: It's not hitting the plan. [22:00] JD: I have to. Hey, someone will let us know. [22:02] Mark: Homework. I still have homework because it wasn't Trinet that I said earlier. It's somebody else and I can't come up with the name right now. [22:08] JD: I'm gonna totally talk out of my ass right now. I think it's possible that in some type of like correction or mistake or a settlement or a lawsuit that you could, you could put. Give this money back to the plan and it can be distributed amount. I think that's not. [22:25] Mark: I mean when you're making corrective distributions or lost earnings calc. Yes, but this, that's not what this is. This is a lot. This is a loss. [22:31] JD: I don't know. That'd be interesting. We'll find out. We'll get back to you next week. I guess you can sit back. [22:38] Mark: Welcome back to more. [22:40] Chad: Oh my gosh. [22:42] Justin: Hold on. [22:43] JD: Do you ever think with your clients? Do you concern yourself with them? Do you lay awake at night wondering if one of your clients is going to be involved in some lawsuit and then what? Have you ever. Has that ever happened? Do you worry about this or do you just say no? I'm a mid, small market guy, young [23:02] Speaker E: kids, he goes to bed, he's in [23:03] Chad: his sleep, man, he's asleep 100%. If I need to sleep a little melatonin, generally I don't even need that. [23:10] JD: Do you worry about litigation for your clients? [23:13] Chad: I know actually when it comes to our clients, I do not. In a broader sense, I worry about litigation headlines and the issues those create. Because again, when we talk about what might scare off small employers to plan adoption, headline risk is a real thing. And, and the perception that it creates is that the Employee Retirement Income security Act of 1974 as they are amended. You like that? [23:35] Speaker E: That was impressive. [23:38] Chad: I know. [23:38] Speaker E: I kind of want to take a malert shot. [23:40] Justin: You can take a sake shot if you like. [23:42] Chad: It's already perceived as complicated. So the last thing we want is to add fuel to the fire. And headline risk is real. So that's, that's where in the bigger picture sense I've got some concerns, but in terms of our book of business, no, I'm not worried about our clients. [23:56] JD: Let's talk About Spectrum. [23:57] Chad: Okay. [23:57] JD: Yeah. Thank you. Don't dodge it. Let's talk about Spectrum. [24:03] Speaker E: Spin the wheel. [24:05] JD: Oh, you want to do that? [24:06] Mark: What? [24:07] Justin: Wheel of ice in the way. [24:08] Mark: Break it up. [24:08] JD: I like that. [24:09] Speaker E: Give Petrus some time. [24:10] JD: We're going to spin the wheel. [24:12] Justin: You gotta spin it. I was really excited. [24:16] Chad: It gets more terrible over time. [24:18] JD: Yeah, yeah. Okay. [24:24] Mark: You're welcome. We didn't pair up. We didn't pair you up with anybody. We should have. It's a failure on my part. [24:30] Chad: I appreciate that. [24:31] JD: Failure, huh? [24:32] Justin: We have a game. Game too. [24:33] JD: A game. [24:34] Justin: Yeah. [24:34] JD: Yeah. [24:35] Mark: Oh, perfect. [24:35] JD: Sort of. All right, next word. We're forgetting we're good as I drink this smear. [24:42] Mark: Not done it though. [24:43] JD: Petros, help the audience understand Spectrum. Size of the firm, total clients, total employee. Give us a taste of kind of where you guys are at, where you're located real quick. [24:55] Justin: The audience doesn't know he's the managing director and CEO of Spectrum Pension Consultants. Also a consultant, Intelson. Since JD forgot the intro, everybody knows who he is. [25:08] Speaker E: That's true. [25:09] JD: Tell us about the firm. That was your introduction. [25:11] Mark: I appreciate that. [25:15] Justin: Wow. I can't get fired for that. [25:17] JD: How did you. How did you pronounce his last name? I didn't hear that. [25:21] Justin: Kios. I got to look at my. My notes. [25:26] JD: I mean, I've heard worse. Come on. Oh, nice. [25:32] Mark: His LinkedIn has a little button that you click and it says it. So we checked ahead of time just to make sure. [25:36] Chad: Chad, I'm impressed. [25:38] JD: Tell us. Tell everyone a bit about the firm just so we can get a feel for it. [25:42] Mark: Sure. [25:42] Chad: So, Petros Kumantros, Managing director and chief Executive Officer of Spectrum Pension Consultants Incorporated. Our firm was founded by. By my father, actually, back in the mid-70s. Income Security act of 74 was signed into. [25:59] JD: And Peace. [26:00] Chad: I incorporated in 78 and tragically my father passed on in 2005. My brother Yannis was already involved in the business at that point. I joined the firm that same year and you know, since then we've. We've grown both organically and through some strategic acquisitions. There's now collectively six third party administration and or record keeping businesses that roll up under what we colloquially refer to as the Spectrum family of companies. [26:27] Mark: Oh, really? [26:28] Chad: We also have. [26:30] JD: Yeah. [26:30] Mark: Still operating into. Well, not independently, but under their guests. [26:35] Speaker E: That's a tough one. [26:36] Chad: Yeah. [26:36] Justin: Yeah, like you're not saying Ackerson's anymore. The more you drink. [26:41] Chad: This is true. [26:42] JD: Yeah. You're getting better. [26:43] Mark: This is getting better. Never seen that before. [26:46] Chad: I'm a rule follower. What can I say about how many employees you guys have collectively within the family of companies? Right now? Just over 60. [26:53] JD: Silver. 60. Yeah. Okay. [26:55] Mark: Do they all operate under spectrum though? That confused me a little bit. I didn't know that that's different business entities. [27:00] JD: Well, so. [27:01] Chad: And we changed our strategy, the inorganic growth strategy a few years ago. We changed a little bit. We keep, we keep the predecessor brands intentionally separate. One of the things we observed with acquisitions in our space is they create disruption. Disruption is inevitable. So one of the things you can do to mitigate disruption is to continue operations as before. We look for high quality performing businesses that are dropping a substantial amount to the bottom line based on a financial model that we've put together. And then from that, presuming the business stands on its own merits, then we would look to potentially make a deal with, with the exiting owners. And, and we try to minimize disruption. We try to keep things, make a deal as intact as possible. And I would love JD to speak with you when circumstances allow about potential opportunities. [27:47] JD: I want, if you're open to it. I once bought a, another third party administrator firm. So I acquired another shop once and fairly recently. And I never use any of those fancy words like sup. I said I would like to buy your firm. [28:04] Speaker E: Don't give him fire with the contract on. Yes. [28:07] JD: I'm like okay. [28:09] Mark: And I understand the thought there of keeping that brand in place to avoid disruption. But often the third party administrators that are looking to be acquired don't have much brand recognition. But they're not great. [28:19] JD: He doesn't mean brand recognition, he just [28:21] Mark: means in our case they were great. [28:23] Speaker E: They were good with all the scared clients. [28:26] Mark: I get it. But think of the going off, off a little bit. But the Vericite acquisition and the rebranding there. Yes, like Vericite had a pretty rough name in the marketplace. And so what did they do? They rebranded under an acquired business that they acquired. [28:41] JD: Yes. [28:42] Mark: Because that business had a great brand recognition. [28:44] JD: Yes. [28:45] Mark: And good reputation. [28:46] JD: You know that a census used to be called something else. [28:48] Chad: Byssus. [28:49] JD: Yes. And it had a horrible brand. [28:51] Justin: That's not an acronym, is it? [28:54] JD: Are you sure? [28:55] Mark: I'm almost certain. Going back to a conversation with your dad, I'm almost certain that is fact Check that one. [29:00] JD: We'll put, we'll put that on that. [29:02] Justin: Clear. [29:03] JD: Anyways, I'm not trying to kiss your ass. [29:04] Justin: Thanks for doing my intro by the way. [29:05] Chad: Please don't. [29:06] JD: But I, I look at a lot of my third party administration peers. Think about going to a classic national conference. And I see a pretty similar business model, you know, all across the country. We're doing obvious things. Documents, compliance, work, testing, prepping 5000 500s, some of them these days. Maybe kind of evolve to a 316 type of solution. Yes, makes sense. We choose to partner with an independent to do that at our firm. But whatever. But with you guys, I've always seen like this entrepreneurial spirit where you are doing your own record keeping still. Do you do this? [29:50] Chad: We do through two of our business entities. [29:52] JD: Okay. [29:52] Chad: And others are pure play third party administrators. [29:55] JD: You have a financial wellness type of solution. You partner in some way with intellisense and do things. [30:04] Chad: That's correct. [30:05] JD: You've got individual retirement account solutions. I mean if I was to say [30:11] Mark: to you, wow, they're doing way more than we do. [30:14] JD: If I was to say to you, oh yeah, tell me what all you do that a normal TPA doesn't. Are these the things you would say to me and let us, let us know more about this? Does that make sense what I'm saying? You guys are branching out. You're doing other things and we are. [30:30] Chad: But it's all focused on helping people to secure and retire with financial dignity. That's. Look, and this sounds a little bit big picture and I get it. I think we are in one of the most noble professions. We help people to accumulate and save so that when they choose to stop working, they have the ability to retire on their own terms. [30:52] JD: Okay, this is great. Let's lose all the CEO bullshit. [30:55] Mark: I was gonna say this is. We're in Washington and that's a very political answer you just provided. [31:00] JD: There's. Save that for when cnbc. I'll drink for that too. Interviews. You okay? [31:05] Justin: He's not gonna be able to get through the rest. [31:06] JD: You're doing your own wellness stuff. This is interesting. The way I see. [31:11] Mark: Whoa. [31:12] JD: The way I see wellness coming from some fintech app or that's just the short end of the OR being delivered through advisors. Now again, speaking as a third party administrator, because you guys kind of have an advisor arm. I don't know you'll speak to this. That to me is very innovative and it makes me think, well, why couldn't third party administrators be the delivery vehicle of wellness? That wouldn't be a strange planet to live on like if we did it that way. You think so? [31:47] Mark: Yeah, that would be a strange planet. You have a record keeping arm, a traditional compliance only third party administrator. To Jeff Acheson's point. Stay in your lane. Like we know what we do well and the record keeping community does a great job delivering these types of resources. IntelliSense does a great job with these types of resources. We should not be involved in that. [32:06] JD: But you don't have to create it. You could use someone else's. [32:11] Mark: But in the roles and responsibilities of our industry, I do not see the compliance administrator being a part of that delivery. [32:19] JD: Okay, well then let's talk to Petros. How did you guys see See Wellness and where did you see your role position? [32:24] Mark: I'm going to answer for you something. [32:25] JD: Okay. [32:26] Chad: It was so it was something that we began offering internally. We partnered up with another organization to with respects to Spectrum's financial wellness solution and it's worked well. There's been a few clients that have adopted it. It hasn't been though as widespread adoption as I would have hoped. Enter IntelliSense. I'm an investment advisor representative with IntelliSense Investment Solutions. That's a mouthful you won't let me use. [32:52] Mark: I know you're crushing it. [32:55] Chad: So in any event, I think financial consultants are uniquely positioned to provide workplace financial planning. I think we really need to change the moniker here around financial wellness to workplace financial planning. [33:09] Mark: Yes. [33:10] Chad: Right. It's. You know the Federal Reserve did a study saying that. That the vast majority, excuse me, 36% of Americans would struggle to come up with $400 to pay an emergency that arises. That's significant. [33:23] JD: We agree. Workplace is the great place to deliver. [33:28] Mark: It should be where it's delivered. [33:31] JD: Okay. But I want to talk more about Spectrum's role in this and saying because most third party administrator don't take that on many. [33:39] Chad: That's true. [33:40] JD: Through your investment advisor, not a standard third party administrator. Okay. [33:45] Mark: If I were to ask that question, would you say that you're delivering it because. Or as an investment advisor representative or as a recordkeeping solution or as a third party or as a third party administrator. If you had to pinpoint it. Just entertain us. You've got to shove into a bucket. [34:02] Chad: The. The solution that we have with Spectrum would generally be provided as an extension of our recordkeeping arm. Admittedly that's what I would. That said, it's also offered as a standalone service and clients have adopted it. We have clients that have adopted a wellness. [34:14] JD: They're not on your record. [34:15] Mark: So advisors that come to you as a compliance administrator. [34:19] Chad: Yes. [34:19] Mark: Will. [34:21] Chad: Would. [34:22] Mark: Could purchase that as a standalone. [34:24] Chad: They absolutely could. [34:25] Mark: Okay. [34:26] Chad: They absolutely. And that's something that we would be happy to do. [34:29] Mark: Interesting. [34:30] JD: Administrators out there would be confused by and would ask right now is how is your relationship with financial advisors? Do you still see them as your distribution, your. Your strategic partners and selling plans and do they get confused, concerned? This sounds like an old fuddy duddy ASPA concern. [34:51] Mark: Damn. [34:52] JD: Answer that. I'm sure there's people like wait, how does he, how does he compete with them but also partner with them or. [34:59] Chad: So when we went down the path of partnering up with, with intellisense and, and when I went through and and got the proper advisory licenses. 63 or just a 65. I just have a 65. We with many of our key advisory relationships we had sit downs to explain what we were doing and we put in place basically some rules of engagement because ours is a relationship intensive business. We recognize that. [35:25] JD: Okay. [35:26] Chad: You know, that said again I come back to big principles. It's what are we trying to accomplish? Help people accumulate and save. [35:34] JD: I think it's an old school complaint. [35:36] Chad: By the way, Financial dignity advisors get that advisors are actually incredibly reasonable when you have actually truth be known. Don't you think some third party administrators are reticent to engage with their advisors because they're so concerned that, that they may run the risk of biting off the hand that feeds them. Don't you see that as an issue for many, many third party administration firms? [36:01] Mark: Yeah, I think that they stay in their lane out of fear of, out of you know, rocking the boat with that relationship that is bringing them opportunity. [36:12] JD: Of course. But I like what you said. Like you have clear lines, you have contracts. By the way, we spent most of our career partnering with record keepers who also offer doing the same thing, compliance administration services. We seem to partner just fine. [36:25] Chad: Right. [36:25] JD: Okay. It sounds to me like maybe the wellness has not completely taken off yet. Which I don't think that would be a accusation of your particular product. I think that's true of the entire industry. [36:40] Chad: I'm a big fan of if ever from a public policy perspective, they allowed employers to provide this as a benefit to their workers, not subject to taxation. So the employer could get a deduction for providing this type of a benefit and the worker need not declare it as taxable income. If that public policy nut was cracked, I think you'll see more widespread workplace financial planning services money. [37:03] JD: Are you referring to. [37:04] Mark: I didn't get that. [37:05] JD: Like so emergency savings. [37:07] Chad: No, no, no, no, no. Financial consulting in the workplace. I think the better evolution of we refer to as financial wellness. Right. I think the better moniker is workplace financial planning. [37:18] Mark: Yeah but you're saying the employer be able to pay for that and get a Deduction. [37:24] Chad: That's correct. So it would be a, it would be a, A benefit that's offered just like any other type of benefit. Yes, but the benefit provided would not be taxable to the individual employee. Right. Now there's a de minimis threshold. And depending on who you ask, maybe it's $100 or so per year that satisfies, that satisfies incumbent rules. There's not much to do around. [37:46] JD: If I offered, if I paid 10 grand a year to a vendor to offer wellness to my employees, that's not a business expense for my company. [37:55] Chad: It would be. But depending on the benefit that's provided to your workers, it may be a taxable benefit. [37:59] Mark: How do you quantify the benefits of the workers getting and not make it taxable? That's exactly. [38:05] Chad: If it's just, it's very different. Right. So if it's just tech, that. And this is one of the reasons why, unfortunately, in my opinion, so many wellness solutions have fallen a little bit short, short of their promises because they're trying to thread a proverbial needle. If instead of just providing tech, you paired great technology with people smarts and you actually were engaging in the workplace, [38:26] JD: a lot of them are trying to [38:27] Chad: do that basic financial plans to people. [38:29] JD: A lot of them are putting certified financial planners in cubicles, but everything the [38:33] Mark: employer's paying is deductible. So I'm, yeah, I'm a little confused on the benefit to saying what's provided [38:40] Justin: by the employer to the participant. [38:41] Chad: So the employer absolutely can deduct this as an ordinary business expense, just like they could deduct, you know, benefit programs that are provided for health care, retirement and so forth. Right. But here, if the benefit provided is beyond this de minimis threshold, then it constitutes a taxable benefit to the worker. And that's the rub that a lot of employers face here is, okay, we're [39:04] JD: going to do this, we're going to stop here. Chad, I'm an employee at a company. I want financial planning at the workplace. You, I've got my 4K plan, fine. But now I'm going to leveraging it, someone at Intellisense or wherever, and, and you're going to say, hey, let's help you, jd, answer these questions, go through the stuff. You're going to help me with the budget, blah, blah, blah, blah, blah. Maybe you find out I got 200k over here in a individual retirement account. You want me to roll it into some managed account thing, I put it into that. I make some money, I'm making Up a lot of here, but I don't understand where the tax problem is. You're helping me with financial planning. [39:43] Chad: Philosophically, I am entirely with you. And that's, that's where I think to overcome some of the financial shortfalls that we're saying across America, it's going to require more of this good quality financial consultants engaging. And a way to engage potentially at scale is through a workplace. One of the issues here, however, is the taxability of the benefit to workers. [40:03] JD: All right, well, we'll. We'll play a quick game and then we'll come back to your presentation at today's conference, artificial intelligence. And maybe we'll even kind of weave it back to what we just talked about, because I think providing financial planning to, through the, through the employer, at scale to millions of participants and or employees is pretty close to impossible. [40:31] Mark: But that's where we gotta get right. When we look at what is needed, that's where we've gotta get. [40:38] JD: I think it's impossible to answer. I think it's impossible. Until we involve tech and artificial intelligence, I don't think we can sit certified financial planners and cubicles and service billions [40:53] Mark: of people to the point that you made earlier. It's because in that space, it's not profitable. And so the time and effort's not going to be there. But if we can use artificial intelligence scale, if we can create efficiencies, people will come down, the advisor community will come down and compete in that space and deliver resource there. [41:13] Chad: In my opinion, there's no doubt. [41:15] Mark: But we got to get there. And we're not there yet. [41:17] Chad: We're definitely not there yet. Texan is part of it, but, you know, it's pairing the right technology with the right personnel. And then of course, we need a little bit of help on the public policy side for the taxability. [41:28] JD: All right, let's play the totally original, never copied. [41:45] Chad: The intro ukulele. [41:46] Mark: Oh, you're involved. So be ready. [41:48] JD: Here's how the game works. Funny that you ask Petros. This game is kind of a pop culture kind of game. I'll come to you first. Always. I made up these rules myself years ago. And I'll ask you about something and you let us know if you're dope with it or you're. Nope. With it. And then why. Whoa. [42:06] Mark: No. [42:07] Speaker E: Huh? [42:08] Chad: Bullish. Bearish. [42:09] JD: Yes. Okay. Yes. And then why? Okay, first one, I got deviled eggs. [42:18] Speaker E: Wow, you really spent time on this one. This is when you told me you [42:23] Mark: should stop doing [42:27] Chad: I'm bullish in the right circumstances. [42:29] JD: Whoa. What would be the wrong circumstances? [42:32] Chad: You know what? [42:33] Speaker E: Hold on. I like the thought that you had to bullish or bearish. But join the game. [42:38] Mark: It's no per dope. [42:39] JD: Yeah. So you're dope in the right. [42:41] Mark: He's dope in the right circumstances. [42:42] JD: When are you. [42:43] Speaker E: Yeah, when is the. [42:45] Chad: Are you going to sit there and eat a few dozen doubled eggs? [42:48] Mark: Yes. Yes. [42:49] Chad: Prove it. Yeah. [42:51] Mark: Bring them out. [42:53] JD: That's great. What's your over under on deviled egg? How many could you have? [42:57] Mark: That's true. He said a dozen too. Oh, a few. Yeah. [43:00] Justin: Top weeding contest champion. [43:02] JD: But deviled eggs, That's a rich kind of. [43:05] Mark: I have to scrape off the top. [43:06] Justin: It depends. [43:07] Mark: The yolk mixture. I need less than what's always. [43:10] Chad: Has Joey Chester ever attempted this? [43:11] JD: I can't imagine that he has you. How many would you eat? [43:17] Justin: Yeah. [43:18] Speaker E: Wow. [43:18] Mark: I'm looking for this. [43:19] JD: I'm done with Petros. Prove it. And Chad, I don't want to hear any more out of you. You said scrape. You scrape it off the top. [43:27] Mark: You're dis. Hold on, let me. Let me make one. When I moved to Missouri and at Christmas and Thanksgiving time and the garage stays cold, what happens is the deviled eggs go from in the house. When everybody's grabbing them in the garage. That's 25 degrees. I feel like in Missouri, every time I walk out to get a new beer, every time I go out to get a new beer, I grab a deviled egg, toss it in, grab a beer, go back to scrap the top. I do. [43:52] JD: Oh, that's not. You're disqualified. [43:54] Mark: I just know how you feel at that point. No, it's still in there. Sorry. [43:59] Speaker E: Deviled eggs are disgusting. [44:00] JD: Them. [44:01] Mark: They're trash. [44:02] Speaker E: They should not be hard boiled eggs. [44:04] Justin: Negative Nancy again, it's not. [44:07] Chad: You cook an egg. Don't hard. [44:11] Speaker E: No, they're gross. They're disgusting. [44:13] JD: I think they're low cholesterol or something. [44:17] Speaker E: The egg whites probably are. [44:19] Chad: Eggs are the magical. [44:21] JD: This one's gonna go. [44:22] Speaker E: You can do like. By the way, eggs are fantastic. But there's a certain way you can make them and then there's other ways that you shouldn't and that. [44:28] JD: I'm just glad you all eat them. [44:31] Speaker E: No, I will not eat that. [44:33] Mark: No. [44:33] JD: I've met a lot of people are like, oh my God, that's disgusting. [44:36] Speaker E: I love it. [44:36] JD: Okay, this one's just for you and only you. I don't want anyone else to chime in on this at all. [44:42] Justin: That sucks. [44:42] JD: We can't you show up at a conference much like this one, and because you're a sponsor or you're part of it, you gain access to the sponsors room, the exhibit hall, pre conference, the night before the keynote. You know, no one's come in yet. None of the paying people have come in. And you peruse the sponsors tables and grab swag for yourself. Is this dope or. Nope. Are you crossing some lines before attendees have had opportunities? [45:14] Chad: No one's even been in there yet. That's a no. That's a hard no. [45:18] Mark: For sure. [45:18] JD: Illegal, in a sense. [45:19] Chad: Hard no. [45:20] Speaker E: Just like stealing chloroform. [45:23] Justin: First chair man. [45:25] Speaker E: I thought he said chloroform. [45:28] Mark: You do know that's like our host jam. That's what he. [45:33] JD: Well, he put on the event. That's a little different. Okay. This a random one? [45:39] Mark: Yeah, random. [45:40] JD: How do you feel, Petros, about seahorses? [45:47] Speaker E: They're like deviled eggs. How do you feel about that? [45:50] JD: Not eating them? Just, you know, seahorses in general. [45:54] Speaker E: Can you eat a seahorse? [45:56] JD: Let's discuss. But how do you feel about seahorses? I mean, just general. There's no trick question here. It's just. [46:03] Chad: No, I suppose they're fascinating. [46:07] JD: Extremely fascinating. I mean, it's one of the most fascinating creatures beings on the planet. [46:13] Speaker E: Real. [46:14] Justin: That's. [46:14] JD: I would. I would say. How do you feel about them, Chad? [46:17] Mark: They are so incredible. When we go to the aquarium and I see them just fluttering and moving around, it's prehistoric to me. It's insane. [46:25] JD: You started this. [46:26] Justin: I've never seen they exist. [46:30] JD: How many dozen can you eat? [46:33] Chad: At least 45. You know, the real man of the hour. [46:37] Speaker E: I know you have passion. [46:40] JD: This question was really directed at. [46:42] Speaker E: I don't even know how we came about this. [46:45] Mark: No, I don't have. [46:46] Speaker E: They shouldn't exist. They're not like they're insane. Think about what they look like and what they're like. [46:53] JD: They're. [46:54] Mark: Their wings are like this big and they help themselves. [46:58] Speaker E: Why do they never grow bigger than that? [47:00] Chad: They have to be, right? I think. [47:02] Speaker E: What? [47:03] JD: What? [47:04] Justin: Like that. The fish have fins on the side. [47:07] Mark: They don't move that fast. [47:08] JD: Is a seahorse a fish? [47:10] Chad: I do not have domain expertise. [47:11] Speaker E: Any questions about this? Are they considered a fish? [47:15] Justin: I think we should all get high and really have a deep conversation about this. [47:18] Mark: What is it that they're not? [47:20] Speaker E: I don't think they should be real. [47:23] Justin: They shouldn't exist in real life. So I don't even know if they. [47:28] Speaker E: There's no way you can survive in the wildlife as a seahorse. [47:33] Mark: Springfield Aquarium. Solid. Okay. [47:35] Justin: Maybe have SeaWorld. I didn't see any Sea World. [47:37] JD: Well, seahorses. [47:38] Mark: Seahorse cl. [47:40] Speaker E: By the way, horses are also sketchy. [47:43] Chad: Yeah. [47:44] Justin: Do they neigh under the water? [47:45] Speaker E: Seahorses are sketchy. But horses. [47:48] Chad: How are horses sketchy? [47:49] JD: Yeah. Why are horses sketchy? [47:51] Chad: I don't know. [47:51] Speaker E: Have you ever like hung out with a horse? [47:53] Justin: Yeah. [47:53] Speaker E: You ever been like, that's not sketchy. [47:55] Chad: Horses are kind of magical animals. [47:57] Speaker E: If you walk behind, I think that's a. [47:59] Chad: They might kick the out of you. [48:00] Speaker E: Like, that's sketchy. [48:01] JD: Hey, that's true of lots of animals. They're so strong. [48:04] Speaker E: No, horses are weird, man. They're just built weird. [48:07] JD: I stand. We're gonna get a lot of hate. We're gonna get a lot of hate mail. [48:11] Speaker E: My sister owns a horse and I walk by and I'm like, that's sketchy as. [48:16] Mark: Because they're terrifying to you. [48:18] Speaker E: I won't. [48:18] Mark: They're out of horse. [48:19] Speaker E: Like I better looking. [48:21] JD: By the end of the day I will have. [48:23] Speaker E: Why do you think cowboys don't exist anymore? Because the horses. [48:27] JD: I will Google whether you can eat a seahorse and I'm afraid to find out the results, but we will Cops on. [48:34] Mark: All right. [48:34] Speaker E: Cops on horses. [48:37] JD: Petros you. [48:37] Speaker E: Not a lot of them. [48:38] JD: You were. You were brought. Speak. You spoke this morning. Not to put you on the spot. I haven't been to the breakouts. How's the turnout? [48:47] Chad: Knowledge is my reward. [48:49] JD: How was the turnout? [48:51] Chad: It seemed well received. I was pleased with the turnout. It was engaging and a lot of questions were asked. [48:57] Mark: What was the topic? The title was because we didn't get to make it. Sorry. [49:00] JD: Artificial intelligence. Chat Gunner Decker. Police Techno. What are the impacts to our industry? Where is all this going? Give us a summary. [49:15] Mark: Bring it. [49:15] JD: What you discussed and how was the interaction with the audience, et cetera, et cetera. Give us a feeling. [49:21] Chad: So the interaction I felt was. Was positive. [49:24] Mark: The. [49:24] Chad: The naturally generative AI is disrupting everything. [49:29] Mark: Keep going. [49:30] JD: Finish your thought and then you can drink. Or don't just drink. Don't listen to me. It's just my show. [49:39] Speaker E: Our show. [49:42] Mark: Jesus, jj. Yeah. [49:45] Chad: It really gets worse. It really does. How is that possible? [49:49] JD: It's aftertaste, kind of. [49:50] Speaker E: It's what it's made out of. [49:51] JD: Chase it down. [49:52] Speaker E: I bet you the Lord's made from seahorses. [49:55] JD: Okay. Do you think most of the people in your audience see artificial intelligence as Chat Gunner Techno. [50:04] Speaker E: Wow. [50:05] JD: And. And it's just like this. Beep that one out, this little prompt thing. They can go into this chat bar and ask it questions and write me an article or tell me what you think about the world. Or do they see it as something bigger than that? [50:18] Chad: Well, it's definitely bigger than that. We've all. We've used chatbots forever. [50:21] JD: Oh, I think it's way bigger than that. [50:23] Chad: Yeah. Do you remember Clippy? [50:24] Mark: Yes. [50:25] JD: Yes. [50:25] Chad: Okay. [50:26] Mark: Remember what [50:30] Chad: Microsoft Assistant way back when, he has the opposite assistant from many. [50:35] Speaker E: Chad was the one who ran Clay. He was Clippy. [50:38] Chad: So we've had these metaphors wars with, with computers for forever just to help us use and interact with, with computers. Right. The difference, though, with generative artificial intelligence is the content that's being created is itself unique. It's. It's derived from the large language model together with prompts from user interaction. So it is completely different than the types of bots we've used for, for the last couple of decades. [51:07] Mark: Can I, let me ask what JD asked, though. Do you think the general audience understands the scope of it or do we still, just as a general, see it as something we can create a question to and get an answer from? [51:19] Chad: I think most people right now view it as novel and are using it to the extent that they are very much. [51:24] Mark: I don't think, I don't think the average person is seeing it as a way to advance the business that they're working in. Maybe a way to create efficiency within the business on that. [51:36] JD: Did you start to show them like this can go beyond that little chat bar? [51:41] Chad: Oh, absolutely. There's there. And it already is. [51:44] JD: Oh, I know. [51:45] Chad: It's. We are, we are only scratching the surface here of what's possible. I use, I use this system every single day. It is a personal assistant. It is an executive assistant. It's become a data analyst. I'm incorporating it actively into our business businesses. And, and look, it opens up a whole range of, of, of fair questions around ethics and property ownership and copyright. But look, the technology is here. It is staring us in the eyes. And if we don't adapt, do you [52:13] JD: think we'll see it used in our industry first as like a service thing, like a communication thing where a client might ask it questions and it would answer or it might provide. I think it has financial planning at some level. [52:29] Chad: Yes. [52:29] JD: Or do you see it as an internal operational thing that replaces workers and lowers overhead? I mean, what, what do you think comes first? [52:38] Chad: Or all of that will come. But as it relates to worker displacement, I remain an optimist here. I think though there will be jobs lost. [52:47] JD: It's also just a tool that could. [52:50] Chad: I think there's going to open up new opportunities. Opportunities things that we haven't remember this social media was not even an industry pre 2007. Now it's enormous in the tech sector. The Internet's only been broadly speaking around since the 90s in its more modern form. So when we think about business disruptions that have occurred that have dislocated workers over the last few decades, there's always new and emergent opportunities that get created. I'm an optimist, optimist on this. But make no mistake, there will be disruption I think in our industry specifically when it comes to customer service, client facing experiences and yes financial planning. Chad mentioned how do you do things at scale? This provides an opportunity you're excited about. [53:31] JD: That area seems like a pretty logical straight line to you can create a large language model that is customized and unique to say a client's A plan sponsors specific provisions in their plan or investment options available and you could train an artificial intelligence solution to answer questions like not generally, just very specific to like Joe Smith could call in and be like does my plan have a safe harbor match and what are our target date fund options? [54:06] Mark: And those are black and white answers more of what should I doing? I'm 35 years old and I'm married and I have this and I think that that's where we need and we'll [54:17] JD: be getting to or the marriage of both those things. Cuz much better to get a consultative answer that's not just generic, it's actually specific to that to those responsibilities. So that's to you excites. [54:30] Chad: It is absolutely fascinating to me now there like I said the other doors that it opens it is equally fascinating and terrifying because regulators are so much on their back heels here. Public policymakers have no clue where things are right now in this space because. [54:46] Mark: Because regulators can't hold anybody's feet to the fire. What's the issue? [54:50] Chad: The tech is. I'll give you a specific example. I shredded my presentation a couple weeks ago because at that point what I was prepared to discuss was already obsolete. [54:59] JD: Right. [55:00] Chad: So I actually asked Chief Chet the system. [55:04] Justin: Yes. Does that stand for generated of personal technician? [55:07] Chad: The acronym actually is reflected in the, in the PowerPoint slides that I put together and you just can't remember, you dummy. It's escaping me. Okay. [55:15] Speaker E: It's the Malort document. [55:17] Chad: It might be as a seahorse. [55:19] JD: Yeah it's constantly evolving yes. Changing at such a fast pace. What we say today could. It could be totally different three months from now. [55:27] Chad: Very much. [55:28] JD: And then. We've never seen. Sounds cliche, but it's really, really true, especially once you get involved with it. We've never seen something change so quickly, like evolve so quickly as this stuff. [55:39] Mark: I'm not sure we've seen anything with this much surface opportunity. Yeah. [55:44] Chad: 2. It is as big as the. It's bigger, in fact, than the Internet. In fact, if people are not making use of it today, start. It costs $20 per month for the premium version. And I'm not some OpenAI spokesperson here. [55:59] JD: Yeah. [55:59] Justin: Hey, some of this. You might like it better. [56:02] Speaker E: Yo, you. You drank out of it. [56:03] Chad: You can't share. [56:05] Mark: That's sake and it's delicious. [56:07] Chad: I rather like some. Yeah. [56:08] Speaker E: Do you think that most put up the acronym leaderboard? Because I have zero. Just in case anyone's wondering. [56:14] JD: When you talk about Go for it, Mark. Authorities and regulations and maybe you're thinking like securities and Exchange Commission and. Because I think a lot of the companies that want to use artificial intelligence seem to be at least the front runner. Seem to be people in the wealth management, planning, investment side of things. And I'm talking big companies, you know, sure. Fortune 500 company. This is where they're putting their resources because this is where money's at. But ensure that's going to get regulated and there's going to be some. Some roadblocks or some speed bumps and some things. I think this industry will adapt and fine, give them rules, they'll figure out how to deal with those rules. But there's all kinds of other areas where you could use artificial intelligence that don't have those same type of regulations. [57:01] Chad: So more from the. I'll give you a specific example. How do you enforce copyright and property ownership in this new space? Who owns it? No idea. [57:13] JD: Yeah. [57:13] Chad: Because original content, again, you're using a generative artificial intelligence system, which. [57:19] JD: I'll give you the analogy. Could you. Maybe you guys know this. You have friends and stuff in Silicon Valley. Could you copyright code back in the day. [57:27] Justin: Oh, you still do, don't they? [57:29] JD: You could. Brandon says you could. Okay. I thought you were going to say no, no, say same thing. It's like it's a tool. You can't copyright how you're using it or whatever. You know, it's like saying, I'm going to copyright how I type, though. [57:44] Mark: Much like, how would you get the code at that point? Someone would have to give you access if you're creating your own system off the artificial intelligence and. [57:53] JD: Oh, bro. [57:54] Speaker E: Well, the code is one thing, but it's the person doing the coding that's really the thing that you need. [57:59] JD: If I can explain something to you [58:01] Mark: because I don't know. [58:02] JD: And maybe people out there, you can buy open artificial intelligence for sure and use it beyond chat. [58:11] Chad: Yes. [58:12] JD: And you can bring that intelligence to create your own large language and use it in conjunction. You can. [58:19] Mark: But how would somebody else get access to that. Well, you have personally created and that database of large language. [58:25] JD: Anyway, you want to deliver it to them, you deliver it to them through a software. [58:29] Mark: No, but I'm saying I couldn't then get access to what you have created. Right. [58:33] JD: Oh, right. So it's, it's walled off. Why do I need a trademark? [58:36] Mark: So that's what I mean is I [58:37] Chad: wouldn't be able to get that instance is very different. Right. So you open up the application program interface. You build your own custom tech that interfaces with a large language model there. It's a little bit. [58:47] JD: You teach it your. [58:49] Chad: Exactly. It's clear. It's, it's, it's, it's unambiguous. In that case, who owns it? You built the system that's interfacing with the large. [58:58] JD: I don't know. [58:59] Chad: But more along the lines, if I navigate to the artificial intelligence platform and I set up a series of prompts and it helps me to write a book as an example. Is it my book if I'm relying on the content that was generated from the large language model? Is it the software developers who built the large language model? [59:17] Mark: No, it's yours. [59:18] Justin: There's so many. [59:19] Chad: Or do we know this or are we presuming. [59:22] Mark: We're presuming. [59:23] Chad: These are the open questions that I think we'll. What about deep fakes as an example, when it comes to content generation, fun one. [59:30] JD: Did you ever see on social media the, the Kanye song that artificial intelligence wrote? He wrote a new artificial intelligence wrote a new Kanye rap. Not supporting Kanye. And are you. It's like if you heard it, you'd be like, holy, Kanye's on fire, bro. It's not Kanye. Who's. Whose is that? Like you can ask artificial intelligence right now. Have Jimi Hendrix play me a Miley Cyrus. That's right. And have Elton John sing on it. [1:00:04] Mark: Yeah. [1:00:04] JD: And write the lyrics by Taylor Swift and it'll, it'll create something for you. [1:00:09] Chad: So who owns that? [1:00:11] JD: I. I just made that up. Right. [1:00:13] Mark: No, yeah, but that's great. [1:00:15] Chad: If you're using Someone else's image and likeness. Yeah. Again, so many unanswered questions. [1:00:22] Speaker E: There's a very big difference between using someone's image and likeness. Obviously even sports has gone through that versus just using something to produce a result. Right where it's creating it. But it's still an original thought. That'd be like saying if I create a new guitar solo that I'm supposed to give that money to the maker of the guitar because they created it so it makes the noise that I make. It's not true. I made that. I prompted it correctly to make that noise. [1:00:50] JD: If you copy my corps in the same sequential thing that I made five years before you and you go make money from it, I can sue you. [1:01:00] Mark: Yeah, that's always. [1:01:01] Speaker E: That makes. Yeah, that's. [1:01:03] Mark: That already exists. [1:01:04] Speaker E: Exactly what exists right now. [1:01:06] JD: So we'll figure out the laws around. [1:01:08] Chad: There's no doubt. I guess the tech is moving so quickly. [1:01:11] Speaker E: It's incredibly conf. [1:01:13] Chad: Can't keep up even in our space. [1:01:15] Mark: Can you speak to. I look at the tech that's being created and think we're going to use it for efficiency first and that's going to be around, I think servicing and then secondarily it will go to operations. [1:01:28] Chad: I think that's probably true. I'd like to think that most people in the service sector try to view things through the lens of their clients experiences. At least I would hope so. So I think you're right. That's probably how we would see it evolve sequentially. [1:01:40] Mark: That to me is interesting because we are a service focused business and operations are a byproduct of what we're all trying to do. I think that we're missing the mark right now that there are a lot of organizations spending money on using this to provide advice. For example, like you said earlier in the asset management side, I think that less are looking at it as what was a chatbot three years ago and saying how can we integrate the provisions of a plan? How can we integrate the needs of a specific client in a geographical location? And what likely is the outcome of this participant's question and use artificial intelligence to really create a high level service model for that individual. I think we've gone operations first. [1:02:25] JD: Here's the crazy thing. We have that ability right now. And when I say we, I don't mean like big corporations. I mean small business mom and pop on a very affordable budget could do exactly what you just talked about. And I knew you're gonna say that because years ago you came to me and said he wanted to have on our website like the little chat thing where our clients could go and like ask it questions like, sure, hey. And we would program at the time. Decision tree, the massive decision tree. I was like, chad, who the is gonna go on our website and ask the stupid thing questions? And by the way, who the is gonna build this massive decision tree of all these things? And yada, yada, yada. And I kind of poo pooed his idea and was like, this is crazy talk. And now with artificial intelligence, you really don't need to create the tree. [1:03:32] Chad: That's right. [1:03:32] JD: You just have to teach the system and then give it the data that you're talking about, which we already have and say, hey, here's the data, here's what we want you to do. It's like a child. You just bring it along. It is. [1:03:43] Mark: You have to teach the person too, to ask. But by the way, children fight back. [1:03:48] Speaker E: Okay. [1:03:49] Mark: The right. [1:03:49] Speaker E: This other option does not fight back. [1:03:51] Mark: When I talk with family members try to do this stomp its feet, they talk to it like it's a computer instead of talking to artificial intelligence like it's another human being. And when you do it, when you ask it, like I would ask you a question, comes back with the right answer. But when you try to get an answer out of it, you screw it up. [1:04:09] JD: I want to end the show and I want to ask the two of you and if you guys want to chime in, you can. [1:04:13] Speaker E: I was gonna say just getting shunned out of that question. [1:04:15] JD: Right back to where. Right back to what we were just talking about. Do you think right now if, if TPA is across the country or your own could have that today on the [1:04:26] Speaker E: side or your own, hey, we're elders now. [1:04:29] JD: Would your clients like it and use it or would they prefer to call into that classic client service person and don't give me the classic CNBC out drink answer. Like, give me that from your heart. Like, do you think people would use this thing? [1:04:45] Chad: Or I think within the next couple of years we won't even know that we're using it. And it will be part of our everyday. [1:04:52] Mark: So. [1:04:52] Chad: And I don't think we're too far away from that. [1:04:53] Mark: Could be. [1:04:54] JD: It could be a verbal answer on a phone. [1:04:57] Chad: That's right. [1:04:57] JD: From artificial. [1:04:58] Mark: Even the people who prefer the call myself a number. So far. [1:05:02] Justin: What about you? One of my biggest things, he trumped [1:05:04] JD: me with the voice because I agree with you. Sorry. And your thought on it was, are [1:05:09] Justin: people going, you know my. I think I answered my own question later on was it's going to be a generational thing and how advanced tech is. Because we all right now hate talking to prompts. And the only way we get away with the classic prompts, only way we get away is if we can tell we're not talking to prompts and we think we're talking to people. Otherwise I don't think people go that route. [1:05:32] JD: You're talking to artificial intelligence, but the experience is so flawless. [1:05:38] Justin: I think it's a generational thing. I think you might like that better be fine. [1:05:42] JD: You might be like, son of a, I got an actual person this time. God damn it. I want the system that's like flawless. [1:05:49] Chad: Your. [1:05:50] JD: Your thoughts, Chad, Put the voice aside. No, just that simple little box on the screen. [1:05:55] Mark: Yes. And, and so I think in the way you positioned it earlier, my chatbot thought was not about a client calling in and saying, hey, what are my provisions? What's my eligibility? It was more sales focused, which to me was service focus of. Think of the questions we get all the time, all the frickin time about ownership relations and attribution law and how much can I save in this scenario. And I've got 15 employees. If we can use artificial intelligence to service the advisor that wants to ask that question and wants an answer immediately, that's where I see massive value. And to answer your direct question, yes, I think that as a community, as long as we're getting them the result, that is the right result and in a timely fashion. Every single client being an advisor or the clients they bring into us want that option. [1:06:45] Justin: I agree, but. So right now if we need some type of determination made, we say go to an attorney. Is it going to be to a point to where we can ask artificial intelligence? And we know they're going to give. It's going to give us the right answer. But can we use that as. [1:07:02] Mark: No, you're not going to be able to use that as an illegal opinion. But that's where Employee Retirement Income Security act attorney steps in and issues a legal opinion. We give them guidance. [1:07:12] Chad: Basically. [1:07:17] JD: Right now already says that at the bottom every time if you ask it says you should seek out like legal and or accounts. [1:07:26] Justin: But I mean, so if the attorney is doing that, not saying they are, but if they go to do that and that's what they use for their [1:07:34] Mark: legal advice, they're issuing a legal opinion. So that's on them now. That's their license thing. [1:07:41] JD: This plan, it will happen. This is, this will be a part of our Life Fred Reich or the new Fred Reich will come along and he will use this large language model to help him answer the question. The same way I'm doing it already. The same way way he or she used to use Tripot's ERISA outline book to go, oh, what did I do? [1:08:01] Mark: Employee Retirement Income Security. [1:08:03] JD: You know what I mean? It'll be a tool. The same way you remember the good old ERISA outline book and whatever. [1:08:08] Mark: Cheese? Jd. [1:08:09] Speaker E: I don't know what you're saying. [1:08:10] Mark: You just said it again. [1:08:11] Chad: Beer? [1:08:12] JD: I'm saying the words. [1:08:13] Speaker E: The tripod. [1:08:14] Mark: What outline book. Employee Retirement Income Security Act. [1:08:17] JD: Ah. I usually say the three letters I thought I was being. [1:08:23] Chad: There's little doubt in my mind that someone is going to train extensively. Chat. Yes. Generative [1:08:33] JD: training. [1:08:34] Chad: I believe so. Generative pre transformer on the entirety of the Employee Retirement Income Security Act. [1:08:40] JD: Oh, people are working on it right now. We can give a shout out to our. To our chat bar buddy, Tony Davis. His K bot is no secret. [1:08:50] Mark: No, he's got it out there. [1:08:51] JD: He's been working on a large language model. You can ask it questions and just like anything, it's got to learn. And he loves when it gets something wrong or doesn't know something. He's like, tell me. And then he just dumps more info on it. [1:09:03] Mark: I asked him, I asked it a question maybe four or five weeks ago that was inaccurate and answer and I knew it. And I sent that back within four minutes. It had the right answer. Now. Yeah, because he's like, what about it? It's impressive. That stuff is so cool. [1:09:18] Justin: From Friday or Thursday. [1:09:20] Mark: No, I'll tell that often. [1:09:21] Justin: That's so good. [1:09:22] Chad: You can basically from the system. [1:09:24] Mark: No, no. I had to do something for me. [1:09:26] Speaker E: That was incredible. Oh, okay. [1:09:29] Mark: In terms of workflow, it was awesome. [1:09:30] JD: Remember, we don't always go 60 minutes anymore. We flow sometimes. [1:09:34] Mark: I'm just curious. [1:09:35] JD: We're doing a three hour version today. Okay, cool. We're going to do something we've never done though. I'm going to let Mark announce it after. I thank you, Petros, for being our guest. Oh, thank you. [1:09:46] Chad: This is really appreciate. Cheers. [1:09:49] JD: I don't even think we had your brother on the show before. [1:09:52] Mark: Yeah, we haven't. [1:09:53] JD: We just kind of hung out with him and Oahu. By the way, can you put in a good word for us? We don't want to do a lot of conferences going forward. We'd like to cherry pick them. [1:10:02] Chad: Yes. [1:10:03] JD: But we definitely like ones in the Hawaiian Islands. [1:10:06] Chad: Hawaii is beautiful. [1:10:08] JD: I understand that if he's gonna do that anymore. Did they. Are they doing it this year? [1:10:12] Chad: To be honest, I'm not. I'm not certain. [1:10:14] JD: Wow. Nice brotherly connection you guys have. Do you talk ever with each other? [1:10:17] Chad: Depends on the day. [1:10:20] Mark: Did you. Was that who you text earlier? [1:10:22] JD: Just let him know the bubbles going. [1:10:27] Mark: That's Saki is rough. [1:10:28] Speaker E: Hey, Justin. Hey. Spin the wheel. [1:10:30] JD: Just. Okay. [1:10:31] Speaker E: That's the announcement. [1:10:32] JD: Thank you for tuning in. [1:10:33] Chad: Is it really? [1:10:33] Speaker E: Yeah, Double. [1:10:34] Chad: We're going double. [1:10:35] JD: We got the 401k go guy tomorrow. And hold it up. Oh, Mark says we're gonna do first time ever. Wheel of ice twice. [1:10:46] Speaker E: Oh, Wheel of ice twice. Which I did. [1:10:48] Mark: And then he just moved it. [1:10:51] Chad: Oh, God. [1:10:52] JD: Jesus Christ. [1:10:53] Mark: Your face came off. [1:10:54] Speaker E: Justin, you got a drink. [1:10:56] JD: Quit moving it. [1:10:59] Speaker E: That's an everybody, thank you. [1:11:01] JD: We are the retire Alex. We are changing the retirement plant industry one. Don't worry, that's not you at a time. See you later, everybody. [1:11:14] Chad: Oh, my gosh. [1:11:18] Mark: We do have to buy that.