CITs, Target Date Funds & the IRS Audit Pilot

[0:00] JD: Okay. [0:02] Chad: Sorry. [0:03] Speaker C: Yeah. [0:04] JD: God, that was my. That's the most. [0:07] Justin: That was the most fun pre show I've ever experienced. There's a lot of angst going on right now. A lot about this is good. I'm feeling. [0:22] Speaker E: The pictures need to be good. [0:24] Mark: I don't. [0:25] JD: Brandon's pretty forward thinking and doesn't mind some abstract design, but I'm not so certain that was the way that was supposed to go down. [0:34] Chad: That was it really. He wants everything real quick. [0:39] JD: That's the quick version. Okay, welcome. Welcome, everybody. Another episode of Retired. My name is Jada Carlson. I'm here with Justin McNeil, Chad Johansen, and everybody's favorite retired robe guy. Welcome to the show. It's going to be fantastically fantastic. And I'm hoping to get just what we need in terms of content and discussion, you know, just what we needed. Okay, thanks for tuning in, everybody. [0:59] Justin: Just. [0:59] JD: Justin, do we enter the guest? No, fuck it, let's move on. We don't need to enter the guest. Done this before. Let's get right to it. Everybody knows who's here. No, you wrote something. You wrote something. Justin, go ahead. [1:16] Speaker E: No, fuck off. We go on. [1:18] JD: Okay, we go on headlines. No, no, no. Let's see. What we're gonna do first is we're gonna vote for John Sullivan's Acro Sin buddy. [1:28] Justin: John Sullivan only partakes in the Heineken. [1:31] Speaker C: I thought you were going to say we're going to vote for Chapar Champion now. [1:34] Chad: Like reverse the whole thing. [1:37] JD: Sully only partakes in the Heineken 0.0. Therefore we must put up that little fun box and throw someone in there to drink on his behalf through a LinkedIn post. [1:48] Justin: I have isolated it down to five [1:51] JD: people and I've lost my list. It's Kush, it's Hackler, it's Jennifer Tavella, it's Al Koholic, and it's Nev. So Brandon's gonna throw it up right now. And you out there in the audience, you're gonna vote for the person to be Sullivan's designated drinker in the little box. [2:17] Chad: Are they all here? [2:18] Speaker E: Please vote for this. [2:21] Justin: Isn't this fun getting started already like this? I think so. [2:25] Mark: I don't think they're all here. [2:28] Speaker E: I got alcoholic, we got. [2:30] JD: Don't worry about it. [2:30] Chad: If someone doesn't make it, we got Nevin. [2:33] Speaker E: Okay. [2:34] Chad: Yeah, I see my vote didn't make the finalists. [2:39] JD: Who did you nominate? [2:41] Chad: Joey. [2:43] JD: Well, we never heard back from him. [2:45] Mark: Yeah, we didn't. [2:47] Chad: Shame on him. [2:49] Mark: We're in mourning. Can't do it. [2:53] JD: This is a tight race and you [2:54] Justin: guys are all gonna vote for the person who I don't think is here, [2:57] JD: which I'm just gonna go to second [2:59] Justin: place, then [3:02] JD: keep voting. [3:03] Speaker E: Yeah, she's not here. [3:06] Justin: Well, that just gave it away. [3:10] Chad: Yeah, Woolney. Woolney was. [3:14] JD: Well, he's got some serious. Like something needs to go down with Wolnowitz from the retirehogs. [3:20] Justin: We might have to shift all our [3:21] JD: angst from Sullivan to Wolnowitz, please. And go after him, please. Okay, let's share the results, Brandon. [3:30] Justin: Looks like it is. Okay, Tackler. [3:33] JD: As it should be. [3:34] Mark: All right. Well, as it should be. [3:38] JD: Thought it might be fun to have old Nevin, but let's bring in the party animal instead of the intellect. [3:47] Chad: Signed off probably. [3:49] JD: All right, this is a slow start to the show. Brandon will work on elevating Hackler up [3:56] Justin: into that little box. Oh, wow. [3:59] JD: Brandon works quick. There he is. Ready to rock. Me too. [4:04] Speaker E: Wait, he's got to be the. He's got to do his laugh. Can we unmute him for his laugh? [4:08] JD: No, we can't. [4:10] Speaker C: Do not unmute him. [4:13] JD: Okay, let's dive right into subject number one. Oh, here's. Here's what I'd like to do for you guys today. [4:19] Justin: In case you're not all aware out there, John Sullivan is from 401K Specialist magazine. He's the big head honcho over there. And so what I'd like to do today is just. [4:28] Mark: Just let Justin do the intro is just pull from. [4:32] Justin: From articles over the. I'm trying to pull mostly from ones over the last week. But then guess what? Today you all are going to get a sneak peek at the new issue that's soon to come out in the next few days. And, and maybe we'll tackle one or two things that are inside of that or at least discuss it. [4:50] JD: But I would like to start with topic slash article number one. Broadridge launches a multi account collective investment trust fund open to 401ks. Are you familiar with this article, John? [5:07] Justin: You want. [5:08] Mark: You want your headline graphic, don't you? [5:10] JD: No doing headlines. [5:11] Justin: They're not really headlines today. [5:13] JD: Today is a show, Brandon, where we [5:14] Justin: skip all these things. We just. [5:20] Mark: Like seriously phoning it in. He told everybody to watch. I got my sister and brother in law watching. [5:27] JD: We are kind of phoning it in, people. [5:28] Chad: Sorry. [5:29] Speaker C: Okay, let's really make this show a disaster. [5:32] JD: We'll bring more of the. The real show drama as we go. Okay, Broadridge matrix. Understood. Stable value. [5:43] Mark: So I got rid of the I edited the actual title. If you go back to it now, open to 401ks because it's a CIT, of course it's going to be. [5:58] JD: Yeah, well, and I want to talk [6:00] Justin: a bit about collective investment trusts too, but let's first talk about stable value. It's something that doesn't get talked about a lot. I think in all the years we've done this show, we've maybe covered it three or four times at most. Why is it in the headlines again? Markets are taking a shit, everyone's worried about recessions, end of the world, that type of stuff. And now, hey, here we go, we're focusing on stable value again. [6:27] JD: Chad, you and I in the past [6:29] Justin: have talked about the fact that it's one of those investments that doesn't seem to be scrutinized when it comes to expense ratio. Many times looked at as like a zero cost kind of thing because an expense ratio doesn't really apply. [6:44] JD: But we've learned more and more over [6:46] Justin: the years that this is where firms make a ton of money. [6:52] Chad: Yeah. And often depending on whether or not you're using theirs, proprietary or others, they're willing to give you sometimes a discount on the asset based charges. But yeah, it's where they're going to make the vast majority of their money. It's a large spread that they're going to get based upon what that rate of return is versus what they're going to make in the market. [7:12] Justin: So with that said, I think this one coming from Broadridge and Matrix is a little interesting because unlike a proprietary stable value, it looks to be weighting equally between four different stable value companies. So you've got Lincoln, Great West, New [7:33] JD: York Life and Trans Am. [7:36] Justin: And currently they're just going to put a fourth in each of those stable values. And so you've got this diversification of [7:42] JD: apparently this is needed because people are concerned with credit risk. [7:49] Justin: I don't know about this, like maybe [7:51] JD: this is an upmarket thing that I [7:53] Justin: don't see in the smaller micro market. [7:55] JD: But so when you're trying to figure [7:57] Justin: out whether you're going to use a stable value, you were worried that this insurance company is going to go under and therefore that's some type of risk. [8:05] JD: And now according to Cindy Dash at Broadridge, they'll be able to diversify that [8:10] Justin: amongst four different stable value things. So anyways, that's the take I got from your article, John, do you have anything you want to add to that? [8:18] Mark: Yeah, I mean, you know, diversifying risking a insurance company. I Mean, especially the ones that they named. Is it really necessary? But you know, I guess it adds [8:26] Chad: to pretty stable with you. [8:28] Mark: Yeah, exactly. [8:29] JD: I'm with you. You would think. But I do like the fact that it's something new and it's something different. They do mention that there's four different share classes. [8:38] Justin: So there, there's a 0, a 10, a 25 and a 50. Now here we go again. And no offense, I'm sure if I asked Cindy and the people at Broadridge who, you know, I'm fans of what the fee structure is. Okay, great. You've got these four share classes, but now the question is what's the return and then what's the spread on that and how much is profit is being generated? [9:01] JD: Yeah. [9:01] Chad: And even aside from that, I'm curious for your all's opinion, will we see a lawsuit pop up that says how did Broadridge choose these four over others? And if three of them are overperforming verse one, why is that one still in the mix and do we move to three instead of four? I feel like we've seen that with Target date suites over the years. When there are more available, there needs to be proper scrutiny over the multiple options that are there. And I'm curious if we're going to start seeing that in the stable value space, especially with this kind of offering. [9:34] JD: Oh yeah, but we deal with funds that are funds of funds. And to John's point, diversity is. [9:42] Justin: It's not a bad thing spreading it amongst. [9:45] JD: I don't know. I'm going to leave it in the [9:47] Justin: good category in the sense that choice is good. And so having another option, stable value, seems like a good thing to me. [9:55] Chad: I guess what I'm really trying to say, and I'll leave it here, is we keep coming up with new ways of recreating shit that we're already doing. And when we've tried to find ways to monitor investments and how do we determine if they're prudent and what process do we need to follow to follow the investment policy statement? And then we just keep coming up with new shit that nobody knows how to track and how to monitor and how to figure out what works. [10:18] JD: God, you're so. [10:19] Speaker E: Why? [10:20] JD: Because fuck them, that's why. [10:24] Justin: I think Warren Buffett was saying something to that effect this week. Chat about how Wall street just creates a bunch of products for people and that's how we make our crumbs and our in the new mag. [10:35] JD: Not to give anything away, Sullivan, there's a big article on I'm Just gonna say it. Cits. And I'm gonna drink some from the Lord here. [10:46] Mark: Yes, we have an article on cits. [10:48] Speaker E: Why would you. [10:48] Chad: You're just trying to get used to it now, aren't you? [10:51] JD: And it's titled the Rise and Rise of Collective Investment Trusts. And then there's a little. [11:01] Speaker C: Did John. Double rise. Is that what I just heard there? [11:06] JD: Didn't write it. He's such a big shot these days. He does. He barely writes a quarter of the shit that goes out on that magazine. Someone else wrote it, but. [11:13] Mark: Shut up, man. Everybody thinks I'm legit. [11:15] Speaker C: But he approved it. He's like, that was good. That was a good one. [11:19] JD: I think the rise and rise reef is responding to the fact that collective investment trusts were once kind of a cool thing, then they kind of went away and now they're coming again. Right, John, I'm going to give you one little quote and then I want your insights on this article. Collective investment trusts are the latest darlings in the investment arena with seemingly unstoppable growth in a white hot future. Tell us a little more about these things and why that. [11:47] Mark: Right, so I initially, I kind of tone that down and then I just left it in there actually, because I was like, you know what? They are white hot. I mean, if you look at Morningstar data right now and the space that they occupy, specifically, obviously within 401ks, they are coming on strong and they are going to take over mutual funds here in the not too distant future. They are just as you said, they were initially very popular and then they went away for regulatory reasons and then the regulations changed and now they're back again. We thought that they were going to come on strong about five years ago and it just seemed for whatever reason, advisors did not take to them, but now they're starting to. [12:27] JD: Let's talk about the headwinds. Well, first of all, let's talk about why they'd be white hot in 401ks retirement plans. [12:35] Justin: They don't have to go through all the regulations and the internal to do's that a mutual fund has to do. [12:43] JD: Right. [12:43] Justin: So they can run these things kind of cleaner. [12:45] JD: The reason being they do not sell them to retail investors. They'll only be selling them to retirement plans who are considered sophisticated committees of [12:56] Justin: people that know what they're doing. [12:58] Mark: Therefore, with a bank charter. [13:00] Justin: Yeah. Therefore fees can be lower. And that's, I think, always going to be a good thing. Chad, what were, what were some of the, the, the headwinds that kept them from being successful, why are we not seeing them? [13:15] Chad: Nevin just said, which is, you know, an interesting point because they hadn't figured out how to get paid from them yet and that's why they lost some of the speed that they had. The others I think is at least in my opinion the connotation of collective investment trusts are that they are cheaper because of the way that they have to report the way that they're run. But in hitting a 401 plan, usually you're an institutionalized passive investment indice type funds and the collective investment trusts haven't really been cheaper in comparison to that. [13:55] Justin: How dare you say that 401ks are all indexed? [13:58] Chad: I'm not saying all, but I'm saying if you're comparing a cit, that's usually what you're comparing it to. [14:05] JD: But I think you need to look at it, I think you need to look at it less as comparing a collective investment trust to an index mutual fund. Because collective investment trust will cover a [14:17] Justin: variety of asset classes and can be run any different kind of way, shape or form. They're not just index based. [14:24] JD: So I think what you're looking at is the bigger headwinds were people were [14:30] Justin: uncomfortable with them because there were not really tickers. They didn't fit into the record keeping Systems to show 1 year, 3 year, 5 year, 10 year history just didn't look like a mutual fund. But I think these big aggregators and these as we have more and more specialists in our industry, and this was part of John's article there where the article at 401k specialist was that the [14:52] JD: aggregators are looking at collective investment trusts [14:54] Justin: and saying because we have such large pools of assets, we have leverage now and we can go to these collective investment trusts and negotiate even lower fee, which is interesting. [15:08] Chad: Are they, are they creating their own? Because that's what you talked about in the last headline. See some of both, yeah, you'll monetize in some way. [15:16] Justin: Some of both, you'll see some of both. [15:17] JD: But, and I know I've talked with a lot of people out there that [15:20] Justin: work in that space of the mechanics of the collective investment trust and the lack of tickers, the lack of reporting, those are all things that are already going away and they will continue to go away. [15:31] JD: And so I'm going to agree with Sully, I think in the retirement plan space you're gonna see more and more collective investment trusts. [15:41] Justin: And because I don't see you can't, [15:43] JD: can't give me any real logical reason why not to I mean give me one. Somebody give me one reason why you shouldn't. Because there, I don't think there are [15:53] Justin: a lot of them. [15:55] Mark: Chetney, you know, went all in on this Bill Chetney a while ago and he was kind of banging his head against the wall because that's exactly what he said. Why wouldn't you do it? It just doesn't make any sense. [16:04] JD: The funny thing about the no rev share and I guess I didn't see Nevin's comment but earlier about how people get paid is. And here I go being naive again. In my world of working with record [16:15] Justin: keepers that doesn't matter. Like it's the same as an institutional share class as a fund, right? I don't need rev share, I don't [16:23] JD: need 12 B1s or sub TAs because record keeper can just layer that on in a wrap fee. [16:28] Justin: So that doesn't bother me. [16:31] Chad: Yeah, but they've gone the other way. Jd, you know, when you and I, when I joined you doing this originally, almost every provider was using a loaded share class to generate revenue. And then we saw them go institutional, right? We would run quotes by writing record keepers and say 100% of the assets are going to map over to the Standard and Poor's 500 fund and we would get pricing that was completely revenue neutral. Now there are a number of record keepers that won't even price that. They'll come back and say, well you have to use our stable value. And here are a couple target date options. Look at Empower for example Hancock, for example, Voya for example. They've all kind of gone back in some way to needing revenue generated from a suite of some of the investments in the offering. [17:21] Justin: Do we think that that's more in your market though Chad, and doesn't exist in the 50 million. [17:28] Chad: Yeah, I'm going to call it sub 10 space is where they're shifting back to find profits. [17:33] Justin: Fair enough. [17:33] JD: And it's. [17:34] Chad: That's not necessarily true though specific to Empower who kind of sh. I won't say sh. I will say shocked the world when they launched their most recent product which minimum limited the number of investment money managers that were available. They're doing that all the way up. I mean people are using that product on $50 million plans. [17:54] Justin: Fair enough. Fair enough. [17:56] JD: John, when you write an article on cits, does the idea come from you, [18:01] Justin: come from your staff? [18:05] JD: You know what's crazy? That makers tasted hideous. I'm going back to the malort here. [18:10] Chad: Do you just changing your taste buds, J.D. [18:14] JD: do you come up with the ideas. Do some of your staff come up with the ideas? Or does like John Hancock come to you and say, hey, we'd really like you to write something on collective investment trust. [18:22] Mark: Yeah, it's total pay for play. Actually, it's payola. No, we actually get together in an editorial meeting. We map out what we're gonna do, what we haven't talked about in a while, what might be interesting and who we can get to. The COVID Sometimes anybody. So we turn to. [18:40] Chad: Ouch. [18:41] JD: Let's go to. Let's go to headline number two, our boy Jason Roberts. And again, another article from 401k specialist. Our boy Jason Roberts is a mover and a shaker, and he has this new firm that he created towards the end of last year with Pete Swisher. I believe. Hopefully I'm getting that right. Of pooled employer plan fame. And you might have heard Jason talk about this on the show, Mark, do you remember him talking about a new way to pep? [19:13] Justin: Damn it. [19:15] JD: I don't like either penalty. [19:19] Speaker C: I think I saw it on LinkedIn, actually. When I saw that, I wasn't surprised by it because he was mentioning it. I remember you were giving him a pretty hard time about that. And he had such eloquent ways to describe what it was and how it would work. And he made it all sound really good. [19:34] JD: But yeah, you remember Chad giving him Chad. You remember what he said? [19:40] Speaker C: Everything Chad says I just removed. [19:43] Chad: I do too. [19:44] Speaker C: Let me. [19:44] JD: Let me give you the quote from Sully's article. And then, Chad, see if you can remember what you gave him shit about. It says a key differentiator in this. This solution is that employers retain the [19:58] Justin: exclusive right to hire the investment professional of their choosing. So that's the new angle here on [20:05] JD: this pooled employer plan. You remember what you said, Chad? [20:08] Chad: No. [20:09] JD: You said something to the effect of sounds like a distribution plan to me. Like you want to make. Which you were so smart, you were saying, oh, so you figured out that if I can get more and more advisors, a bigger pool of advisors to want to sell our pooled employer plan solution, then that would be smart. And I thought kudos to you for that. You know how anti pooled employer plan I am, Sullivan. [20:34] Justin: But I like that what Jason's got going. And this is not just because he's a friend of mine. I'm a fan. And I think you all should be fans of a pooled plan provider that's independent. [20:47] JD: I'm seeing too many pooled employer plans [20:50] Justin: out there where the PPP [20:54] Chad: Go ahead, [20:58] Speaker C: Chad. You're sure John did it? [21:01] Chad: He did in the chat bar. [21:02] Justin: Greg Greenfield, where the pooled plan provider is a proprietary entity of some kind. They're part of the pooled employer plan itself. [21:15] JD: So to take a firm like Jason's [21:17] Justin: and Swishers and have it be an independent, that will only be the pooled plan provider. If I'm understanding this properly, I say okay to that. Like, that's a great path that we should all kind of be heading down in this pooled employer plan space. [21:34] Mark: So you don't know Pete Swisher, though? [21:37] JD: I know of Pete Swisher, sure. [21:39] Mark: Okay. Because I think that he would be a great guest, and I think you guys would really get into it. I think there would be some sparks flying. [21:44] JD: I'm afraid I would tear him a fucking new asshole. But we'll see, right? [21:49] Mark: I like it. [21:50] JD: I don't think he wants to go head to head with me on the pooled employer plan crap. But I like that this thing's going a little bit in different roads. So we'll see how that goes. More flexibility and pooled employer plans, that can be a good thing. So we will see. I like. Also kind of cool, Mark that I'm [22:10] Justin: ask you, Sully, kind of cool that Jason is not just playing the word [22:17] JD: with an E attorney. [22:19] Mark: He's actually pronounced Erisa. [22:22] JD: That's two hacks. He's actually kind of going entrepreneur style. Right. Like you don't see a ton of that. I feel like. And maybe I'm just not understanding the Fred Reesch's and the Thomas Clarks of the world, but here's Jason as an attorney actually working on some kind of cool product. [22:42] Justin: So that's a little different. [22:43] Mark: Isn't PRI a pretty cool product? [22:45] JD: I mean, no, PRI is like a. That's a company, a shell of an attorney, you know, like, oh, yeah, we're [22:53] Justin: the pen, but this is an actual fucking thing, you know, like, okay, well. [22:58] Chad: And pro, in my point of view, whether we believe in it or not, proactively looking forward to what might be a big product in our space. You don't see many attorneys willing to take that leap. No, they're focusing on what's in what's in law and what they can handle with their hands right now. Not where we might be going. [23:18] JD: Thank you. [23:19] Justin: The. The Pension Resource Institute is more like, hey, come to us for counseling. Come to us for guidance. Come to us for templates. So, sure, yeah, it's a business, John, but. But now you. Now this guy's stepping outside of that [23:35] Mark: product like legal shield. And one of those things that you sign up and you're like, again, model and all of that stuff. [23:40] Justin: Again. Still. I'll say it in the drink for it. Still. Erisa attorney. You're still just. [23:46] JD: You're creating a facade for your Aristotle attorney skills. That's like saying that when third party administrators do a document that that's a product. Or if we do 5,500, that that's somehow a product. We came out. That's just us doing our job. [24:00] Mark: So you started out by, you know, giving props to Jason and now you're just ripping them to shreds. I love that. [24:06] JD: No, I was ripping Pension Resource Institute to shreds. Kind of. It's just seems typical. [24:12] Chad: You were just saying what is. Yeah, what is. [24:15] JD: No, and I was saying this. It to me is, is. Is new ground for an attorney. It's someone going out and actually doing a product. [24:23] Justin: Us being a positive thing. [24:24] Mark: Yeah. That's cool. [24:26] Justin: Yeah. [24:26] JD: Even. [24:27] Justin: Even attorneys have to make a living, says Nevin. [24:29] JD: I agree. [24:31] Chad: Pretty sure they're not struggling. [24:33] Justin: That's what I heard him say. I didn't say that some of them might be. [24:37] JD: All right, let's go to one more article. I thought this one was pretty. I noticed Sullivan, you have a strategy these days. [24:43] Mark: I do. [24:44] Justin: You got. [24:44] JD: You got some pretty click baity, eye [24:47] Justin: catching topics and headlines these days. [24:53] JD: Always been that way. Yeah, actually I think I wrote this one. Not you. But it says target date funds are getting their asses kicked. [25:04] Mark: But I like it. [25:06] JD: You said I can barely read Brannon's font there. Worrisome. [25:12] Justin: Target date fund performance, year to date. [25:15] JD: I think Brian wrote this one. [25:17] Mark: Now you want to know who wrote it? And I forgot to change the byline because it automatically defaults to me. It's Ron Sers. [25:25] JD: Okay. [25:26] Speaker E: Yeah. [25:27] Mark: So he, as Nevin says, has been talking about this for the past 20 years, but you know, stop clock. And so he's kind of on the money now. [25:36] JD: Yeah. [25:36] Justin: Well, if you keep talking about them [25:38] JD: for long enough in markets, eventually the hand will land on 12. Right, right. [25:45] Justin: There's some interesting stuff in this one. [25:47] JD: Some. He really dives deep into performance numbers. And so I'll share them with some of you here, I guess. First set the table for the article. It talks about target date funds just not doing well year to date. And mind you, I think it goes through the end of May. It's only been a little bit of time. It's a short period of time to look at A certain asset class. But the bigger problem with it, I believe is that because target date funds are a mixture of stocks and bonds. And both stocks and bonds have done poorly together side by side, target date funds are crapping the bed. Then Ron uses a comparison to. And I've never even been that familiar with this stuff and I'm gonna have to drink for it because I have no idea what it refers to. Wait, yes I do. These are government investment solutions. Chad, did you think of an acronym in your head? [26:46] Justin: What just happened there? [26:48] Chad: I typed one earlier. [26:50] JD: Okay, they're comparing them to the Federal Thrift Savings plan. [26:55] Speaker C: Who caught that? Because I didn't catch that. Did Hackler catch that? Oh, Hackler caught J.D. yeah. J.D. [27:05] JD: we're interrupting you. [27:06] Chad: Get over it. [27:07] Speaker C: You're professional. Keep going. Jesus. [27:11] JD: And comparing to the office and other professional employees, International Union, whatever the fuck those two things are, they're big government run retirement plans. And then instead of using target date funds, they use those types of investment solutions. So what's the guy's name? Ron Sully. [27:31] Mark: Ron Serz. [27:32] JD: Yeah, Ron Sers goes to compare those two year to date and if you look at the 2020 fund, which would be the one that you would want to be, you know, the most protective [27:45] Justin: and conservative, I guess, I mean we [27:46] JD: can debate this, but the one currently to protect people's money, their funds are doing negative 2.7 in the conservative model, negative 5.3 in the moderate and negative 7.5 in the growth. And then the target date fund industry as an average is down 9% in that same, you know, year here to date through 531. And so I guess Ron is saying, ooh, this is horrible. Like these target date funds are not [28:16] Justin: being run properly because people are losing money in this down market. [28:20] JD: I'm going to toss this to you first, Chad. [28:23] Justin: Are target date funds supposed to keep people safe? Is that what's going on? [28:28] JD: And so when, when bonds are down [28:30] Justin: and target dates funds are down, that's a bad thing? [28:33] Chad: Well, I would say it is a bad thing. Depending on what suite of the target date funds are looking at. The closer you are to retirement, the more 2020. [28:41] Mark: Yeah, if you're looking to return, that's the problem. [28:44] Chad: That's an issue. And if you look at the underlying holdings for most of the target date suites, they are heavy in the bond space, which is, John, we talked years ago or episodes ago of why that needed to change. [28:56] JD: John, you say sequence of returns, you say, hey, if, if I'm going to retire in 2020. And my huge wealth that I built up in my 401k plan takes a massive hit at the beginning of my retirement. Retirement. Then I'm screwed going forward because of [29:12] Justin: the sequence of returns. Is that what you're referring to? [29:14] JD: Right. [29:15] Mark: Exactly. I mean, well, they're just close to retirement now. They're supposed to be along the glide path. A lot more conservative at this point and they're not. And even if they were, they were put into bonds. As you said, there's no real safe haven at this point. [29:27] Chad: Let me, I'm not saying I disagree, but let me flip to the other side and say five years ago when the market was crushing ongoing, everybody was bitching about the two strategies because people close to retirement were, were not invested aggressively enough. And we needed through strategies because people are going to keep investing in these target date funds. [29:45] JD: This is what we do as an industry, isn't it? [29:47] Chad: Yeah, we're on both sides of this thing right now. But to your original question, J.D. i think the problem with the majority of the target date fund world is that they have real, no active management. [30:00] Mark: Right. [30:00] Chad: They're merely a rebalancing of a portfolio as you change in age. [30:06] Justin: What's wrong with, what's wrong with proper asset allocation? [30:10] Chad: Nothing is wrong with it. But if we see that, that interest rates are going to be changed and that it's going to have a negative effect on bonds, I would have liked to see some of the target date fund families make some alterations to their, their fixed income or their stable value type holdings in their program. [30:24] Justin: Well, I think a lot of them did. I mean that's, that's part in this article too, I think. Well, I know that a lot of target day funds were a wary, they're not idiots. They knew interest rates are coming up and they did make some moves to cash and stuff. Stable value types of stuff. And I'm not even saying that that's the right thing to do. [30:42] JD: I like how you brought up the two verse through like, just because I'm retiring in 2020 does not mean, John, that I don't want to invest my money. I'm not going to die anytime soon. I'm going to die 25 years from now, 27 years from now. [30:58] Justin: Michael Kitces. [30:59] Speaker C: That's pretty specific. [31:00] JD: Michael Kitces talks about the fact that you should be investing more aggressively at the beginning of retirement and not the opposite, I believe. [31:09] Justin: Hopefully I'm not putting words in his mouth. [31:11] Mark: Yeah, and you know, I can see that. Look, we've talked about this for A while, just longer lifespans that you have to stay invested in equities for a longer period of time. But then you of course, got that whole sequence of return thing Right. As you enter retirement, if you completely cash out. I think it's a two versus through argument. You know, to Chad's point, I don't think that there's, you know, that old cliche. There's nothing. There's no such thing as passive management in a Target Date fund. Right. Because you're supposed to be constantly rejiggering the glide path. [31:39] JD: So Chad's hoping that a Target Date fund would not be programmed in such a way that you always knew that it was going to have 12% in large cap value and then when it hit this particular point, it would move to 8%. Chad sinking. He wants someone to actively change those pieces of the pie more often based [32:00] Justin: on, I don't know what Chad forecasting and magic balls. Like, how do they know? [32:05] Chad: No, I mean, there's metrics to look at that. What do you think managed accounts do? I mean, that's essentially. [32:10] JD: They usually lose. I feel like they usually get it wrong. [32:13] Chad: But that's essentially what you're paying for is. Is active management in that scenario. And I'm not saying every Target Date fund should be that way, but I'm saying if we look at why they are underperforming, I think it is in large part because to John's point a moment ago, they're simply rebalancing and rejiggering the exact same thing that they've done in every single phase. Wait, wait, wait. [32:36] JD: What's the word? It is a word especially nervous. [32:41] Mark: And I couldn't think of another word, so leave me alone. [32:44] JD: Especially if you live in Missouri. That's a word. [32:46] Justin: Rejiggering, I think. [32:48] JD: No, I didn't mean it like that. [32:49] Speaker C: Is that. Is that like when you're, when you're real, when you're reeling in your fish and it gets the hook you read? [32:55] Chad: Yeah. [32:56] JD: What does Ron Sers and Target Date Solutions do? Do you know Sully? [33:00] Mark: Yeah. He actually used to run a Target Date fund. He's been trying to offload it to somebody for quite some time, but now they're consultants and they provide data and information. [33:10] JD: So he'd be the guy telling these target funds they should be moving to stable value instead of. [33:14] Mark: Exactly. Yeah. Way to tie it together there. I like it. [33:18] Justin: Bonds that they're in. [33:19] JD: I wish I knew more about like investments in detail and markets and because I know that it is. Does Go against everything my daddy taught me in 401k, which was these bonds are supposed to be a place to go for safety when stock markets are falling. And to see both these things go down at the same time definitely makes me wonder, like, Justin, nice work. Work. Definitely makes me wonder. [33:50] Justin: All is wrong with the textbooks that. That we read and figured out about. About investing. [33:56] Speaker C: Dude, you never read a textbook in your life. [33:59] Chad: That's. That's not true. I had his study materials from when he was getting licensed and had different letters behind his name. He read them. There was even notes in there. [34:11] JD: Mark, actually. Mark, I actually understand it more than I just played off. I was trying to be more like, you know, welcoming to the audience and not so above them. I have lots of opinions about the markets and how these things work, but I just want to be more relatable to everybody. Yes, it's odd when stocks go down and bonds do too. [34:29] Justin: What shall we do? [34:29] JD: I don't know. Let's play a game. [34:31] Mark: Dude, you went to San Diego State. [34:35] JD: All of my learning happened after that. Okay, let's play a game. We're going to play the totally original Nope or dope game. [34:45] Speaker C: Your cue, Brandon. [34:46] JD: Yes. Now I want my graphics. [34:49] Speaker C: Maybe some music, too. [35:01] JD: Sully, this is the totally original Noper Dope game. How this works is I'm going to [35:06] Justin: ask some questions about, you know, just things. Stuff, and you're going to tell me whether it's dope or whether you're. Nope. Not into it and why you think such a way. [35:16] JD: I will always go to you first, so I'm going to start with so unoriginal. [35:21] Mark: It's lamer game, man. [35:24] JD: Using fancy words like Pollyanna, which I don't even know what that means. So using fancy words to impress people, are you Nope or dope on this. Maybe this cuts deep into your occupation. I don't know. [35:42] Mark: I always used to like to read a lot of different columnists. Christopher Hitchens, when he was alive. And he would always make references or use words that, I don't know. I got an endorphin dump if I knew what it was. So maybe it was just me feeling all highfalutin. But I say. I say dope. I gotta be honest with you. I like using fancy words and I like, if I don't know it, looking it up and expanding my vocabulary. So. Yeah. [36:08] JD: Do you use them in writing an article? Yes, I guess I kind of get that. What about when you're just having a glass of wine or Heineken 0.0 with your friends and hobnobbing, will you bust out some word that none of them understands, but only you do forthwith? [36:23] Mark: Heretofore, I would say yes. Yes, I do. [36:27] Justin: Good for you. [36:28] JD: Your language is very beautiful. [36:30] Mark: I used to do it a lot when I was drinking, but now that I'm sober, I don't, you know, busted out as often. [36:34] JD: So, Chad, are you ever. Are you constantly trying to grow your vocabulary and use big words to impress people? [36:41] Chad: Everybody here knows that my vocabulary is terrible, and I mispronounce words all the time and I use them incorrectly all the damn time. I know what I'm trying to say, but I screwed it up. [36:53] Speaker E: Nailed rejigger. I didn't know that was a real word. [36:55] Chad: Yes, and. And you're welcome for that, Justin. [36:57] JD: So I'm going to say I know words. I have the best words. [37:03] Chad: That's it. That's it right there. I'm saying dope, but I am horrible at it. [37:08] JD: You and Donald have that in common. [37:10] Chad: Yep. [37:11] JD: Justin, maybe you. I don't know if you do or don't, but would you like to grow [37:16] Justin: your vocabulary and use it more? [37:18] Speaker E: I would love to, but it's just [37:20] Chad: not going to happen. [37:22] Speaker E: I say this is totally dope. [37:23] Chad: If it's part of your. [37:24] Speaker E: Part of who you are and whatnot, you can talk intelligently. Nothing drives me nuts more than somebody tries to sound intelligent, uses the wrong [37:30] JD: words, and just, you know. You know who we've had on this show that I have to pay very close attention to because of the way she structures sentences and the words she uses was Michelle Richter. [37:43] Chad: Yeah. [37:43] JD: I was like, bro, that chick was talking, like, Ivy League school, and I couldn't keep up. Mark. [37:50] Speaker E: Perfectly fit for her. [37:51] JD: What about you, dude? I know you were passionate about your vocabulary. [37:56] Speaker C: I think this one everybody already knows [37:58] Chad: the answer to, so we can move on. Okay. [38:01] JD: All right. [38:02] Mark: I wrote a cover story on Dave Ramsey some years ago, and my managing director just let me know that he did not like it, that it was condescending. And, you know, I used ubiquitous too often. And. Yeah, so he let me know that it just did not connect with him. [38:18] JD: That is a style in writing that you learn about, though, that you have [38:21] Justin: to watch out for. [38:21] JD: Right? [38:22] Chad: That. [38:22] Justin: Especially in, like, fictional stuff. Right. If you. [38:26] JD: If you make the story too much about you, the author and the writer, [38:29] Justin: and not enough about the listener listening and you're making a mistake. [38:32] JD: You're being cocky. [38:33] Justin: You're being. You're being too showmanship in your writing. [38:37] Mark: Overestimate the Attention span of your reader. [38:40] JD: Fair enough. Okay, John, we've gone with through Covid. You know, we wear masks, we breathe on each other, give people infectious diseases and shit. Going to the movie theater to watch a movie. You know, maybe it made some new Top Gun. Are you almost said are you lamer game on this one? No, for dope. [39:04] Speaker C: Is your question. Going to the movie. [39:06] Mark: Yeah, I didn't really understand that. Yeah. [39:11] Chad: These are your questions. [39:12] Speaker E: I think this is going to be very one sided. [39:13] Mark: Like four to one. [39:17] JD: Are you guys gonna go to a movie theater ever again? [39:20] Justin: I'm not. [39:22] Speaker C: Jurassic park comes out tomorrow. I'm gonna go by myself. Anyone want to go with you, Mark? [39:28] Mark: It's supposed to suck. [39:29] JD: I'm never doing John. [39:31] Speaker C: It's dinosaurs. It can't suck. You [39:36] Mark: God damn moron. [39:37] JD: All right, let's try another lame one and we'll see what Mark says. Wearing. I only thought of this because of Chad in his salmon colored shirt wearing a T shirt. A thin white T shirt under your dress shirt. [39:50] Justin: Are you doing that right now, Chad? [39:51] JD: Or you got the nips under there? [39:54] Chad: It's nice. [39:55] JD: Okay. John, do you wear the undershirt? [39:58] Mark: Okay, so. Yeah, this, this. Actually. [40:00] Speaker C: No, leave it, Chad. [40:01] Chad: Leave it. [40:04] Mark: All right. Yeah. So for years I never did. And people just said that it never looked crisp, it never looked sharp. And you know, I was always nipping out. And so I started wearing undershirts. Now but because the collar pops up like that and some of them are old and ratty, that it just looks like complete crap. So I can't win. [40:22] Chad: You gotta go V neck, bro. You gotta go V neck. It's gotta come down nice and low, man. I have to because too many of my shirts are thin. And then you see tattoos and it brings up conversations that I don't want. So always wearing you always are for me. [40:38] JD: Except for on Zoom meetings apparently. [40:40] Chad: Yeah, Zoom. You can't see anything. [40:41] JD: Okay. Justin, do you wear the undershirt? Nope. [40:44] Speaker E: Or do I got to. I have to pour. [40:46] JD: K. Why? [40:47] Speaker E: I got too much hamburger meat. You know, it'll fuck. [40:52] Mark: Wow. [40:53] Justin: Okay. [40:53] JD: Hamburger meat. Mark, what do you do when you're throwing on the old dress shirt? [40:58] Speaker E: It's. [40:59] Speaker C: It's a layer of sweat protection. Yeah, I gotta. I gotta do it. [41:03] JD: Sweat protection. Well, it's been a long time since I've worn a dress shirt, but when I did, I didn't mind them being able to see my nipples through there a little bit. Like, you know, it is what it is. And apparently I don't have the Sweat [41:15] Justin: problems that you guys have. [41:16] Mark: I don't know, but you went to weird. [41:18] JD: I never wore one. All right, let's go sports, shall we? John Sullivan. [41:23] Mark: Yo. [41:24] JD: Are you. Are you? Nope. Or dope on the new golf tour live. Phil Mickelson, Dustin Johnson, Sergio Garcia, and all these Rebels. [41:36] Speaker C: I have no idea stands for anything, [41:37] JD: but I'm sure it does. [41:39] Chad: It's. [41:39] JD: I've branched out, and in the. [41:42] Justin: The PGA's piss, I'll drink twice. [41:44] JD: What do you think? Are you with them or against them? [41:47] Mark: I'm against them only because I'm against live. Only because I saw. I saw Lefty just be a dick in person years ago when they used to have a golf tournament out here. [42:02] JD: Wait, who was. Who left? [42:06] Mark: Yeah. And he was just a dick to, like, this person taking a picture. And you're not supposed to have pictures, and I get that, but he just. He turned his caddy on the guy and he just ripped him a new one just in front of everybody. And then, of course, my buddy and I were drinking beers, and my buddy was about to be like, daddy, why is my hero acting like that? You know? But he didn't pull it off, so. [42:25] Justin: Oh, so this is personal for you? [42:26] Mark: It's personal for me. It just. You know, I always liked the guy, and then I saw that and the way he was acting, I was like, just another freaking spoiled athlete, man. [42:34] JD: You know, He. He lives not far from me, of course. [42:37] Chad: High rank and two Lambos. [42:40] JD: A few times he's walked his dogs by while I was washing the Lambos. And he's the nicest guy on the planet. I mean, that, like, confused Chad. The new tour. What say you, dude? [42:53] Chad: I. What's neutral in between? I have. I don't like the way this is all gone down. I do like the team approach. The scramble start or the. The shotgun start. There are some things that they are doing that I'm. I think are exciting. But I'm going to say nope. If I got a pick, I'm saying nope on it. I'm too much of a. [43:15] Justin: Really? [43:17] Chad: Yeah. I like the history of the game. The records trying to be broke, that playing the same courses, the. The structure of it. I like the Professional Golf association for those things. [43:29] JD: Justin. [43:29] Mark: That's a conservative. [43:30] Speaker E: I never gives a shit what these rich fucks are doing to get more rich, man. [43:34] JD: I'm over it. All right, Mark, I know you've been chomping at the bit. Are you a fan of the new tour? [43:42] Speaker C: Sure. [43:43] JD: Sure. Here's the thing. I don't Think you have to be. I don't think you have to be anti. [43:51] Speaker C: I will not give JD what he wants. [43:53] JD: The existing establishment right here, I feel like I understand the history of the Masters and the US Open and Tiger woods and Jack Nicklaus and Bobby Jones and all that kind of stuff that still exists. [44:07] Justin: Like, that's, that's there. [44:09] JD: But it's also okay for the world to want to evolve. And it's not okay for an institution [44:15] Justin: to feel like they have a monopoly [44:18] JD: on something and no one can challenge them for that. And if you watch the Golf Channel right now and you watch the people that are. That are close in to the PGA Tour, I'll drink for that. They're being a bunch of little babies about this, and they're bitching about it all day long on TV, all day long on YouTube. And I'd say just let people do [44:38] Justin: what they want to do. [44:38] JD: And if Greg Norman wants to run this thing and Phil and, and Dustin Johnson and Sergio Garcia and the rest of them want to go be a [44:46] Justin: part of it, then shut the fuck up. [44:48] Chad: JD I don't think people are debating that we should evolve and people should have options. But yes, they are. You should the rest of those options. Why should I be able to go spend. Can I. J.D. i don't want to hear your examples, dude. [45:05] Speaker C: I don't want to hear your lame example. [45:09] JD: It's not the same thing. [45:11] Chad: I'm going to go work for Fidelity. [45:12] JD: They're going to take this to court. You are not a 1099 employee of mine. If you were, then you would have the right to go do that. You work for me, okay? Those people, Phil Mickelson, they are independent contractors and so receiving benefits. [45:30] Chad: 1099 don't get pension. Are these PGA? [45:32] JD: They do if they have a union. They do if they have a union. [45:35] Chad: Getting pension. Are they getting benefits? [45:37] Justin: Well, Donut. [45:38] Chad: Hey. Are they under contract? [45:39] Speaker C: Don't. [45:40] JD: Don't act. Don't act like, you know, with your three fingers, because Greg Norman has a legal team that dis. That disagrees with you. [45:47] Justin: You. [45:48] JD: And they're taking it to court and they're going to fight for those people, [45:52] Chad: and they should have the right to do that. And the Professional Golf association should have a right to put some repercussions behind those decisions. [46:02] JD: Well, we'll see. [46:02] Speaker C: I can say is this football Tried this, and they're still trying this with a cool, new, interesting league, right? The Extreme Football league that Vince McMahon started. They're in their third iteration now, right? What does it do it just challenges the status quo. And that is okay. I'm not getting into politics. I'm not getting that, man. These. These dudes are getting paid life changing money and you know what? Go for it. If you have the opportunity. Fine, go for it. I could care less about that. [46:33] JD: All right? I gotta get. I gotta get to the COVID If [46:35] Speaker C: they would just let these guys like drink beers while they're playing, it'd be way better. [46:40] JD: Just saying I gotta get to the new cover. But the team. [46:43] Justin: The team. Go team, go sports. [46:45] JD: No, I'm, I'm, I'm. [46:46] Justin: I'm bringing this one up. [46:47] JD: I've been spending a lot of time on it. I've been interested in it, so. But I'm gonna let Hackler talk because he's a big golfer. Brandon, can you or does Hack can unmute himself? Am I on? Yeah, are you. Are you pro? New tour or against it? Totally pro. Yeah, buddy. Fight the establishment, bro. Fight it. Love it. All right, mute him. Let's move on. Okay, Brandon, let's give it a drum roll here. It's okay, Sullivan, for us to release the new mag cover, right? [47:22] Mark: We're good, man. [47:23] JD: Okay, drum roll here. When. When's this baby coming out? [47:28] Mark: I don't know. I have to look at my calendar. This weekend. [47:33] JD: This weekend. Okay. All right, let's show everyone here first. Who's on the COVID Mark thinks it's going to be a joke. [47:40] Justin: I can tell. [47:40] Chad: That looks right. It's robe guy. Just rogue guy. [47:43] JD: That would have been funny if we would have mocked one up. This is the new cover. It's coming out in the. Over the weekend, says Sullivan. Who do we have there on the COVID buddy? [47:53] Mark: We got Tyrone Ross Jr. Who has been making a lot of waves lately. Not so much for 401k related issues, but more for wealth management. But he's got some stuff coming up with 401ks as well. And you know, I don't know if this says something. Well, it does. It says something about us and the industry. But this is the first person of color that we've had on the COVID since we started in 2015. And it's not anything to be proud of, but, you know, we are finally able to do that. Talk some important and sometimes uncomfortable issues about financial services and representation and a number of other stuff. So. [48:27] JD: Well, and Tyrone's not afraid to. [48:30] Mark: He is not. [48:31] Chad: He. [48:31] JD: Tell it how it is and speak directly to those subjects. I think it's great that it's. It's funny that you say he's a guy of color. Because I think even the article itself, he says, don't call me a person of color. Call me a black man. [48:45] Chad: I know, you know, I'm a. I'm [48:46] JD: a frickin black man. He's gnarly. But I'll tell you what I like about it, John. Yeah, cool. He's a black man. His own words. But he's also not. Even though he's in a suit and tie here. A lot of the stuff I see from him is this cool, hip dude in a T shirt with a cool sport jacket, jeans, and some sneakers on. And so to me, he's in that kind of, dare I say this, Aaron Potichin, Alex Astley. I shouldn't put Aaron in that category. Alex Astley, kind of new, modern, young, cool, less Wall street kind of guy. Not afraid to talk in normal terms and normal. [49:25] Justin: And so that's what I like about that. [49:26] JD: He's seeing more people like that. [49:28] Mark: He's going to surprise you a lot with his opinions too. He surprised me anyway, which made for. [49:33] Speaker C: It doesn't. Doesn't take much to do that dude. [49:37] JD: And you got him in this suit, but you did some photos with him in a T shirt and, and sneakers [49:42] Mark: and, and actually Aaron. Aaron are like buds. They're really, really tight. He was the one that actually first got me in touch with them. [49:50] JD: Here's the bummer for me in this article was I knew that he had done this big crypto thing. The on ramp. Yeah, ask it, Chad. So he was in the on ramp, didn't you. Did you see that he was let go? [50:05] Chad: Oh, no, I didn't. [50:07] Justin: Oh yeah. Okay. So this is what I. [50:09] JD: When I opened this article, digitally speaking, I was like, oh, maybe I'm gonna [50:13] Justin: actually find out what happened at on [50:15] JD: ramp because they brought him on as their CEO. [50:18] Justin: He might. I doubt he was there a year. I don't know how long it was. Oh, yeah, I'll drink from that. [50:25] JD: And then they let him go. But does your article tell us what happened there? [50:28] Mark: No, he said that he. He deferred diplomatically and said he has a lot to say about it. He's not ready to talk about it now, but he will when the time is right. And so I pressed him a little bit harder. [50:40] Chad: That meant legally I can't for a period of time. [50:42] Mark: That's. Yeah, exactly. [50:44] JD: So, yeah, maybe not disclosure, but yes. Chad, you had been a huge bitcoin crypto advocate. [50:52] Chad: Can I ask now that we have an inside track, potentially, we've been wanting A huge crypto person that actually knows crypto. Could this be the guy on our show? On our show we've got someone with crypto. [51:04] JD: We've got a couple in the wings. I'll tell you this to give away some of John's article here. John, you wouldn't call him Pro crypto and 401k, based on what I read. [51:14] Mark: That was one of the surprises. Yeah, exactly. I thought he was going to be all over it, but he absolutely was not. It was really more a personal experience growing up, as he says, underbanked or unbanked community and what it can do and the empowerment that it can give to that community. So that was pretty interesting. [51:31] JD: Chad. He likes bitcoin for the decentralization. You know, he likes bitcoin for all those things that. That would kind of get stripped away [51:41] Justin: if you put it inside an organized 401k plan. Right. [51:45] JD: And so he doesn't say, at least to this article, he doesn't say bitcoin or crypto is necessarily a great asset class to have in what he calls. And maybe he's wrong on this because I know he's not a massive 401k person, but conservatively set up 401k plans. [52:04] Justin: He thinks that maybe that's not the right place for it. [52:09] JD: But he also goes on to say that he thinks the investment in. I think you'll like this, Chad. He says something to the effect of it's not about investing in the small B, it's about long term investment in the big B. And you can steal this from him, Chad, which means I'm not so much talking about bitcoin as I am talking about blockchain. [52:28] Justin: And blockchain is going to change the world. [52:31] JD: I think the last time John was on our show, I only know this John because I went and watched it to kind of revisit how you act on this show and prepare myself News or. And you said something to the effect of that it was going to be the new way that we work with money in the future. And I think that Tyrone believes in that too. [52:52] Mark: It was Scarabucci that said that, actually. [52:54] JD: Yeah, you were quoting him. [52:55] Justin: That's right. [52:56] Mark: Yeah. I just wanted to name Draw. [52:57] JD: And yeah, you were about as boring last time as you are this time, [53:01] Chad: but shut up, man. [53:04] JD: And the audience might be saying, why isn't JD Going to him for more questions? [53:07] Justin: Why isn't he? [53:08] JD: Because I've tried that in the past and it just doesn't work very well. So I'm just kind of like dancing around him is what I. [53:13] Mark: Because you think I'm the SME here. You know I'm a late journalist, right, who drank too much and I mean, you know, I don't. [53:21] JD: You just write what people, [53:24] Chad: John. [53:25] JD: You just write what people tell you. [53:27] Mark: That's it. [53:29] JD: Not your own thoughts and opinions. Let's go to a nerdy headline that's we've had on your website here. I think Chad can get into this. And then we'll wrap and get into some juice. Juicy stuff. Yes, go ahead. [53:42] Chad: Before you go there. Yeah. Samson just mentioned that no, we had not hit wheels. [53:50] Speaker C: Like, it's like the kid in class where it's like you didn't assign homework. [53:57] JD: Give me everyone. [53:58] Justin: God damn it. [53:59] JD: What do you mean everyone? I'll get a pint. Glass. [54:11] Chad: I'm not pinting it. I'm putting it in my mouth and I'm swirling it around while I drink my shirt off. [54:17] Speaker C: That's okay. [54:19] JD: You can't do that. [54:20] Speaker C: No, [54:22] JD: that water. [54:26] Speaker E: What was in the other hand? Chad. [54:30] JD: John, tell some people about Alex. [54:32] Chad: Airplane. Bourbon. [54:33] JD: John, store. [54:34] Mark: I had to get Fireball. [54:35] JD: Tell some people about the imagery of the new magazine. Tell some people about some of your stories in there. How excited are you that's coming out? [54:43] Justin: When will it come out? Digital versus hard copy. [54:45] Mark: Yeah. So digital is this weekend. Hard copy is another two weeks and it'll start showing up in mailboxes. But yeah, no, we've got Tyrone, we've got, as we talked about, CITs, and then we've got. Michelle Richter actually penned a piece and it's really funny because it reads exact. Reads exactly how she speaks. So [55:14] JD: actually I've read that one and I understood it a lot more than when she talks to me. [55:19] Mark: Really? [55:19] JD: Yeah, totally. I feel like she simplified it for people like me. [55:23] Chad: It was very. [55:24] Mark: She's very passionate and I kind of just let it go like this. In your own words, very little editing. I say because I wanted her personality to come through, but I'm really just lazy. But it. It's good piece. It worked out well. [55:39] Chad: John, can I ask why? I mean, you were kind enough to place us on the COVID of your magazine, but clearly the content wasn't good enough. To have jd, like co author an article or anything at any point serious [55:55] Speaker C: or any of us do that. [55:58] Mark: I take Chad in a heartbeat. [56:00] Chad: But I was aiming for. [56:02] Speaker C: There wasn't a question there. [56:05] Mark: Well, I gotta be honest with you. [56:07] Chad: Statement. [56:07] Mark: Chad's podcast was better than JD's. I'm just being honest. [56:12] JD: Catch me outside how about that? [56:13] Mark: Sorry, man. [56:14] JD: I guarantee you if we pulled your [56:16] Justin: readers, that would not be true. [56:18] JD: Okay, less I want to cover this IRS thing. One last article you guys brought up and then we'll go to the voting here with this real quick. Third party administrators are nerding out the Internal Revenue Service announces pre audit pilot program. [56:37] Justin: What did I fucking say? [56:40] Mark: Internal Revenue Service. [56:42] Justin: Oh, I said Internal Revenue Service. [56:47] JD: I just wanted to say wrote that article, Chad. Have you seen this, Mark? Justin Sully obviously knows. Apparently now in the past you would get, you know, letter from the Internal Revenue Service saying, hey, we're gonna audit your freaking plan, dudes. We're coming in. Watch out, here we come. Get this shit ready. You're about to go down. And now they're gonna allow you 90 days to proactively go back to them and say, okay, no, no, no, we [57:17] Justin: see what it is. It was this, this and that and we fixed it. And this is how we fix it. [57:21] JD: And you guys don't have to come down here anymore. [57:23] Justin: We're all good. [57:24] JD: And they'll go bada bing, bada boom. Did I get that right? Solely. Is that basically how you wrote it? [57:30] Mark: Yeah, it's, it's a little different from the voluntary correction program only because you were allowed to correct up until you were selected for an audit. Now you can do it even after you get the audit letter. [57:43] JD: Right? That was the big thing we talk about, remember, Chad, in our world is, yeah, don't let the IRS catch you because when they catch you, you're done. You've lost all your rights at that loss your options. [57:56] Chad: My, my question kind of on this, jd If I think of it operationally, I feel like the Internal Revenue Service is saying, let me instead of fish with a fishing pole in line, let me throw a big ass net out, right? And let me see who responds. And did they respond thoroughly? Because then I know who I'm going to be able to catch off guard. [58:18] JD: I like that. [58:19] Mark: Yeah, you're incriminating yourself. And there was a lot of chatter about that when it first came out on LinkedIn, I read. But it just reminds me of pre crime, pre audit. It's weird. [58:28] Justin: No, but I like that. [58:29] JD: Chad, I think what you're. Maybe what you're saying is normally they can, they only have so much bandwidth, so they can only audit so many companies, but now they can do this net as you said it, and send it out to a lot more and see which ones respond. And it's funny, I saw the third party administrator community respond and Comment to [58:52] Justin: this on the Internet. [58:53] JD: And it was kind of a mixed bag. Like a lot of them were like, [58:57] Justin: oh, this is great. [58:58] JD: This is an opportunity for us to provide another service to our clients. Yes, Chad. [59:05] Chad: No, keep going. Because I want to tell you my interpretation of that. [59:08] JD: And there were, there were others that felt like, oh my God, my clients are now going to come to me with this and I'm gonna have to do all kinds of crap for them and deal with the IRS and put this stuff together where it was a [59:21] Chad: little bit different to pay for. [59:23] Justin: Yeah, right. [59:23] Chad: Which was my comment. [59:25] JD: Right. But. Oh my God, oh my God, oh my God. I do not want to drink another one of these. [59:31] Speaker C: Well, it is 5:30, buddy. You know, we need to do. [59:35] Chad: Let me, let me, let me make a quick statement with that. Jd. I felt like what I read and the way I interpreted it is when we have an opportunity as a third party administrator community, as a compliance community to set them up, almost like an audit of financials, like a traditional certified public accountant audit. Every year that happens on plans. Over a hundred people, over 120 people. [1:00:03] Justin: Okay. [1:00:03] Chad: We have an opportunity to say we've got all of our shit together as a package. Here you go. Like that. We can prepare this holistically for all clients. I feel like that's the way this is going to be led. Think of it, Think of it from perspective where if, as long as you have your ducks in a row from a reporting standpoint, you can escape a part of the audit. Short form audit, I guess not a short form anymore. 103 G6, whatever that shit is. But I feel like that's what's going to happen to the third party administrative community. You need to have all these things ready. So when we get that letter, it's done. [1:00:44] Justin: I didn't see it that way, but I see how maybe it could go that way. I guess we'd both have to understand more what the Internal Revenue Service plan of attack will be like. [1:00:54] JD: How big is the net going to be? Because we know right now there are certain things that trigger an audit. Right. That have to do with your 5500 and what you do. And, and we already live in that world. [1:01:05] Justin: We know that that happens. [1:01:07] JD: So if, if that's going to stay at the same number and their net's not going to increase the way you said it would, Chad, then I would say this is just a good thing. This is just a good. [1:01:18] Chad: You misinterpreted what I was saying. I'm not saying that the Number of audits will increase. I'm ability to fish in a barrel is going to increase because they're going to cast a larger net. And instead of having to audit to figure out if there was mistakes, they're going to say based upon the way people respond to us, we're going to be able to really target people who have fucked up. [1:01:40] Justin: That's interesting. Fair enough. [1:01:44] JD: You're digging what looks like to be a cooperative movement between the Internal Revenue Service clients and turning into more of a deception and like a way to do more. I don't know. But I will tell you this. [1:01:58] Chad: I don't think I am. [1:01:59] JD: Third party administrators, really experienced advisors can already before this. And by the way, this is just a pilot program. It may not come to fruition, it may not continue on, but can already help their clients avoid an audit by understanding what triggers certain audits. Now that the Internal Revenue Service never tells us exactly what it is, but we have ideas. All right. I've never been so scared of the penalty drink. Right now I'm surrounded by makers and malort and I don't like either one of them. And I've decided to go back and forth, which has been a bad idea. Vote for chat bar champion and then I've got some dirty, dirty, dirty topics to talk about in the after show. There's been some drama between Mark and Sully. I'd like to get to the bottom of it. I've got video. It's going to get really exciting in the after show. Justin, your vote for chat bar champion. And don't look surprised because I always fucking come to you first. [1:03:06] Speaker E: I just said Kate. [1:03:07] JD: Okay, good. [1:03:08] Mark: Kate. [1:03:10] JD: Kate who? [1:03:13] Justin: Kate Clark. Who? Who is this Kate Clark you speak of? I don't know. [1:03:17] JD: She's someone here that. I'm kidding. [1:03:22] Justin: I love Kate. Is she gone? [1:03:25] Speaker E: Yeah, she left. [1:03:26] Justin: Oh, that's okay. [1:03:28] JD: Chad, your vote for chopper champion. [1:03:30] Chad: Oh my gosh. Nevin ran the whole night and then Kate with the Pisces conversation, Pasty's comment and then a few others. Kate walked away with it. [1:03:40] JD: To me I, I feel like if I voted, I feel like if I voted for Hackler, he get sympathy votes from everyone just because he's been up there drinking. [1:03:50] Mark: I was going with a will just because he's been doing all my ups. [1:03:53] Chad: Well, you haven't had a point though, jd. Haven't we all said you need to be present to win? I feel like we have. [1:04:00] JD: So they won't, they won't vote. They won't vote for them. I'm actually gonna vote for my old buddy. The second half of Shamanda. She had a nice blend of accusational chats against me. Some positive things out there. She was involved with some lengthy stuff. So I'm going with. With Amanda Iverson. Robe guy. [1:04:27] Speaker C: I. I wanted. [1:04:29] JD: I don't. You know. Based on your attitude. Based on your attitude tonight and a lot of things you said, I think I'll strip you of your right to vote for anyone tonight. Sullivan, you go ahead. Vote for someone for chat bar. [1:04:40] Justin: That's the way the cookie crumbles. [1:04:42] Chad: Mark's pissed off that the warriors lost last night. He's still recovering. [1:04:47] Mark: Nobody else. [1:04:47] JD: Yeah, well, hey, Mark, why don't you tell them to rebound sometimes? Like, on either end of the court, try to rebound. All right. Sullivan, I'm surprised you. [1:04:56] Speaker C: Even Devin is nobody. [1:04:58] Mark: Nobody voted for him, and he was kissing up. [1:05:02] JD: Kissing up to your competition. [1:05:04] Justin: Kissing up to your competition. [1:05:05] JD: Trying to be friendly with your competition. All right, I like that. [1:05:08] Mark: I don't care. [1:05:08] JD: I can respect that. All right, let's put the votes in. And let's see. By the way, pizza did not go out to Sylvia, last week's winner, because she's got a broken foot and she's on a train right now. And so she asked me to Please not send 10 pizzas to her front door. So I'll save that for next week. [1:05:28] Chad: John, I. I wrote Brandon and asked him to put Nevin in there because I felt like the cape vote was. Was not appropriate. [1:05:35] Speaker C: Chad, Chad, when you do things like that, you don't need to tell us, okay? Just let it go. Nobody actually gives a. Just let it go. [1:05:44] JD: I don't. [1:05:45] Justin: I don't even understand what you're saying. [1:05:46] Mark: Yeah, that was very interesting. I'm glad you told me. [1:05:49] Chad: You. John, Brandon, a little disheveled right now. [1:05:52] Mark: Zoom crashed here. What's. We got? Kate and apparently Nevin. [1:05:59] JD: Nevin, Amanda. And. [1:06:04] Speaker E: No. Vote for. Yeah, that's it. [1:06:06] JD: Kate, Amanda. Never. [1:06:08] Speaker E: Mark didn't vote. [1:06:09] Justin: All right. [1:06:12] JD: Yeah. [1:06:12] Chad: Chad originally voted for [1:06:16] JD: Justin. Nevin. [1:06:20] Justin: Nevin. Yes. [1:06:21] JD: Yes. [1:06:21] Justin: That's it. [1:06:22] JD: Those three. [1:06:23] Mark: Yeah. Did it again. Just a second. [1:06:26] JD: Okay, well, we can just have Mark name the winner, then. [1:06:29] Speaker E: No. [1:06:30] JD: Doesn't work. [1:06:30] Chad: No, not doing it. You do. [1:06:34] JD: You will do this if I ask [1:06:35] Justin: you to do it. [1:06:36] Chad: No. Hey, I'm an independent contractor [1:06:41] Speaker C: on this show. Still. Still pay me for the work I [1:06:46] Speaker E: do on the side. [1:06:47] Justin: Holly, I didn't. I can never watch the chat bar. Did someone give a pasty comment? [1:06:52] JD: Is that a thing? Could you put pasties over your. Your dark nipples as a man to wear your. Your dress shirt and no one would see. [1:07:00] Chad: That was Kate. She told you that you need to put pasties on. [1:07:03] JD: Oh, work now. I'm glad I voted for her. [1:07:06] Justin: That's phenomenal. [1:07:08] Chad: You didn't. You didn't. [1:07:10] JD: I didn't vote for Amanda. I'm drinks today, people. [1:07:17] Speaker C: Yeah. [1:07:17] Speaker E: What's italia right now? [1:07:19] JD: 16, is it? [1:07:21] Chad: Yeah, bring it up. How many shots is JD taking? A. [1:07:24] Mark: 15. [1:07:24] JD: Oh, I actually think I put way too much in my. In my Smearnoff, too. [1:07:29] Justin: I think I put, like, two shots in my Smearnoff. [1:07:31] Mark: Wait, it's Will. Done. 14. Holy crap. [1:07:35] Justin: Yeah, thanks to you. [1:07:36] Chad: Give him a. Give him a couple more, John. Give him a couple more. [1:07:39] Mark: That's right. [1:07:40] JD: Okay. Kate Clark is the winner. [1:07:43] Speaker E: Not weird, right? [1:07:47] JD: Share the results. [1:07:48] Justin: Yes. [1:07:48] JD: Kate Clark is winner. [1:07:49] Justin: Congratulations, Kate. I'm pretty sure I have your address, so watch out. [1:07:56] JD: You'll be getting some pizza next week. [1:07:58] Justin: I hope you like anchovies and, I don't know, severed cow heads, because I know she likes that. [1:08:05] Mark: I owe you, man. [1:08:07] JD: Yeah, well, thanks for being his Acrosyn buddy. We appreciate you for that. You're a real trooper. [1:08:12] Chad: Keep Will on for the after show. [1:08:14] JD: Of course we can keep Will on for the after show. And we can unmute him. [1:08:17] Speaker C: He's no longer here. [1:08:19] Chad: Just saying. [1:08:20] Justin: Oh, she's not. Well, I'll text her that she won. She's on a group text with Chad and I. [1:08:27] Speaker C: Yes. Point that out, huh? You know what? [1:08:32] JD: You got a lot of sidebar. You got a lot of sidebar comments tonight and a lot of, like, silent angst and a lot of, like, oh, I'm this. I'm this guy. You're. You're not Pollyanna, you know, you're not being very Pollyanna at all. It's actually means that you're blindly and foolishly optimistic, and it comes from a 1913 novel about an orphan. And guess what? When you use it in a sentence, you capitalize it like the book that it's referenced from. So learn some robe, guy. Okay, thank you, everyone, for tuning into another episode of Retire. Alex Sully, thank you for being our guest. [1:09:11] Justin: Yes, Justin. What? [1:09:13] Speaker E: Oh, I was just gonna say there's someone in the chat bar that would like solely to talk about the tapo winner. [1:09:21] Justin: Great. [1:09:21] JD: Well, tell that person that this is not their show, okay? It's our show. And we'll talk about it in the after show. [1:09:29] Mark: All right? [1:09:30] JD: I'm kidding. [1:09:31] Justin: I'm just trying. [1:09:32] JD: We're already 10 minutes late, so who cares, right? [1:09:34] Justin: We're 10 minutes late. [1:09:34] Speaker E: I was actually just staying by. I wasn't at. [1:09:37] Chad: Never mind. Bye. [1:09:40] Mark: This is well orchestrated, man. [1:09:43] JD: I'm just. You sometimes when you do this show. I'm just talking to everyone out there in the audience here. When you do this show, like, you try to, like, you do your best to work a flow of energy, and it's kind of like riding a bike. You want to keep the momentum moving [1:10:00] Justin: along for your entertainment, you know? So you guys are like, you know, [1:10:04] JD: it doesn't get weird and then you're [1:10:05] Justin: trying to, like, go to this crescendo and then these guys come up with like, random. They put their finger up and like. I need to talk to you about this. Someone wanted you to talk about Tapo. What the. I don't care about that. I'm trying to end the show. [1:10:20] JD: So. Sullivan. Yeah. So thank you for being our guest. Thank you for all the hard work you do at Foreign K Specialist magazine. Even though these days I see your name less and less as a writer of an article. I know, I know, Brian. [1:10:36] Mark: Managerial role. I'm more administrative now. [1:10:38] JD: Yeah, Vision guy sounds. Sounds lazy to me, but we appreciate what you're doing. Everybody. Look for the new mag. It's hitting your inbox this weekend. [1:10:50] Justin: Go to 401kspecialistmag.com and 401kspecialist.com or you [1:10:55] JD: have both of those. Yeah, I'm gonna. [1:10:58] Mark: Yeah, just go with 401k.comserist.com. [1:11:03] JD: okay. Sounds good. [1:11:05] Chad: Very different. Just saying. [1:11:07] JD: And yeah, again, thank you to all of you. Thank you, Chad. I appreciate your. Your partnership and all this. You've been a phenomenal people here. [1:11:16] Mark: Soon. [1:11:16] JD: You've been a phenomenal partner. Brandon, thanks for all your production efforts. And it's been another show. Let's play some music. [1:11:25] Mark: Okay. [1:11:26] JD: Fuck you, Mark. Feelings. But I hate you. Not joking. Bye. Don't, don't, don't, don't, don't, don't.