CITs vs Mutual Funds: Cost Savings for 401(k) Advisors

[0:00] JD: Do you need to raise Bill's. Can he raise audio? Can you guys hear him? [0:04] Speaker B: All right, I can't do that. [0:08] Chad: Are you close to your mic, Bill, or. [0:10] Bill: I'm on an iPhone. I can speak up. How's that? [0:14] Chad: Yeah, probably have to be a little loud. If you're too loud, I'll let you know. [0:19] Bill: Okay, boys. And I have to do a promo for our local brewery and distillery. [0:28] Justin: Okay. I was actually going to do a little funny bit where this episode's been brought to you by Viking Cove Guest Homes. [0:36] Chad: And I had a little pitch, but [0:37] Justin: I'll let you jump in on the booze after that. [0:42] JD: What is the booze? The distillery that you have there, because I recognize that logo. [0:47] Bill: Yeah. It's actually won some awards. It's icy straight vodka. And the big point of civic pride was about three years ago, we got a distillery to go along with our brewery. And that was, of course, front page news. And it said, haines gets distillery to go with brewery. And still no traffic lights. [1:10] JD: Well, they know it's important then, apparently. [1:12] Bill: Civic pride. [1:14] Chad: Kind of a cheesy, cliche question, but I'm curious. So how does it feel for you and your wife to go up there and actually set down roots for a long period of time? Are you digging it? [1:25] Bill: Oh, yeah. [1:26] JD: No, this is. [1:28] Bill: I mean, I. I dropped out of College when, like, 1981, and drove a Volkswagen bus up here and was gonna fish for salmon and live the rest of my life. And, you know, when you're 21, there's kind of holes in your plan a lot like a colander. And so instead, it's like, New York, whatever. But anyway, we came up here with my wife, and it's her idea as we headed to Empty Nesters, and she said, you know, I got nothing to do, and I know how to make beds. I know how to make scones. [2:01] Chad: Well, you must have loved. I'm sure you guys spent a lot of time researching the area and stuff, too. You probably were already in love with it before you decided to do all that. [2:09] Bill: Oh, yeah. Well, my cousin's lived here for 45 years, and that's what I came up here, was guiding with him up on the Mendenhall Glacier. And so, yeah, we definitely knew what we were getting into. Didn't know how good the fishing and the crabbing and the shrimping would be, though. [2:26] Chad: Doesn't surprise me. [2:28] JD: I agree with Bill that there should be a retireholics retreat up to Alaska. I plan to be there this time next year. [2:38] Bill: Perfect. Let's come Earlier. [2:40] JD: Little earlier. [2:42] Chad: Kush says please ask Bill to scream. [2:45] Justin: Merry Christmas. [2:46] Chad: Shitter was full. [2:48] JD: I'm Canning. [2:50] Justin: Yes. [2:52] JD: What is that actor's name now? I can't remember. [2:56] Mark: Not John C. Right? This guy from Independence Day. Right? [3:00] Bill: Yeah. [3:02] Chad: Andy Quaid. No. [3:03] Mark: Andy Quaid. [3:04] JD: Yeah, that's who it is. [3:04] Mark: Yep. Hey, Bill. Nice to meet you. [3:09] Bill: Nice to meet you. [3:10] Chad: I say you can definitely get Chat Bar Champion points pre game for sure. [3:15] Justin: Right? [3:18] Mark: I would agree. [3:20] Chad: So we're just. We're waiting on Marker. We'll just go without him. [3:26] JD: We could treat it like that. [3:27] Mark: What? Fourth episode we ever recorded. [3:29] Chad: Yeah. I don't mind starting without him. There he is. Coming in hot little housekeeping. Not real housekeeping, but everyone be prepared. I feel like Bill's audio is a little kind of sketchy. And it almost like when we talk over him, he kind of cuts out. And I don't. I think it might be his iPhone. So we might have to give him a little space while he's talking. And then, Bill, you try to be louder than normal. [4:01] Bill: Okay? And then what about that for me? [4:03] Chad: If next time you're on the show, get your technology figured out. [4:08] JD: It's Alaska, man. They don't have the tech up there. Jd [4:13] Bill: this is. This is high tech for here. [4:17] JD: Your picture's still better than Mark's. Merry Christmas. [4:25] Bill: Dinner was full. [4:31] Chad: Brandon, I think we're ready for a slightly late start. But we're ready to rock if you are. [4:37] Speaker B: Yeah. [4:37] Bill: All right. [4:57] Justin: Volume. [5:15] Chad: What's up? How's it going? [5:18] Justin: It's. It's Thursday again. [5:24] Chad: And I know what you're doing here, you little retirement plan freaks. You're trying to quench your 401k thirst. I got news for you. We got you covered. This show's got an open fire hose just gushing out Liquidy 401k knowledge for you. So, you know, just open up your [5:46] Justin: mouth and put those lips on the hose and drink it all in so you can't drink anymore. Let's get this 401k ruckus started. [5:57] Chad: Welcome to another episode of Retireholics. This episode has been brought to you by. [6:07] Justin: Ha ha. [6:08] JD: He won't do it. Mark. [6:09] Justin: Viking cove guest homes www.vikingcove.com venue for [6:16] Chad: it's a venue for happy, adventurous spirits in Haines, Alaska. Memorable and unique venue for weddings, reunions, and special events. Thank you to Viking Cove Guest Homes. This episode has also been brought to [6:31] Justin: you by a repeat sponsor, PepsSuck.org protecting advisors and their retirement plan clients from falling victim to the Pep Hoax. [6:42] Chad: You know the tagline. There's nothing a motherfucking Pep can do that a regular 401k plan cannot. And yes, I have bought the URL. So go check out PepsSuck.org I got [6:57] Justin: that URL and I've even paid a [6:58] Chad: guy 80 bucks on Fiverr to make a logo. So get ready for some merch coming down the line. [7:04] Speaker B: You said 60 yesterday. You lied. [7:07] Justin: Well, the guy came back to me and upped it. Watch out. Those Fiverr guys will stick. [7:15] Chad: Will step up. We've got a guest, everybody. And I got news for you. [7:21] Justin: I. [7:22] Chad: This is probably, you know, we've had some big, big guests and this guy's right up there with the biggest that we've had. [7:29] Justin: Let me give you a few. Let me give you a few words in my. [7:34] Chad: In my stalking of him over the last week on the Internet that different [7:38] Justin: writers have, have, have chosen to describe him as. [7:43] Chad: Speaks bluntly in his trademark style, a serial entrepreneur. He's been called eccentric. [7:51] Justin: Someone called him the one and only, [7:54] Chad: but that was John Sullivan and he calls everybody the one and only, so that doesn't really matter. [7:59] Justin: But he's also been called an innovative thinker. [8:02] Chad: Someone said that he was in a wallet comfortable state, which I think is my favorite one. Maybe we'll talk about that little bit later. A wallet comfortable state. I want to talk about that. [8:14] Bill: He [8:16] Chad: has demonstrated the ability to deliver meaningful success. Not afraid to speak his mind. [8:23] Justin: Sold his advisor practice to ing in 2000. Founded NRP in 2006, sold LPL in 2010. He's the current founder of GRP Advisor Alliance. I call him just an all around 401k Titan. Welcome to the show, Bill Chetney. [8:42] Bill: Thank you. Thank you very much. Jesus, Bill. [8:47] Justin: Intro, while we have you here, why [8:49] Chad: don't you tell us about what you [8:50] Justin: got in front of you. What are you drinking there? [8:53] Bill: Well, we're very proud of our 2000 person company or city up here. I mean, it's a metropolis. We have an ace and a true value. We actually have a Radio Shack that is a shack. But importantly, we have a brewery and a distillery, which is a great point of civic pride. A couple years ago when the distillery came to town, it was front page news that not only does Haines have a brewery, but it has a distillery. And still no traffic lights. See how it evolved here? And I appreciate all of those kind words and accolades, but they really actually make me feel uncomfortable. And the one that made me feel the least comfortable back when my buddy Charlie Ruffle put A couple of articles. In one article, he said I was a rock star. And then about a year later, he made me a legend. And we all know that the trajectory from rock star to legend to dead in a pool of vomit in your hotel room. [9:55] Justin: Hey, Mark, who's got the monkey with the drums button? Because we need to be playing that shit. [10:04] Speaker B: There we go. [10:06] Bill: By the way, it's not that hot up here, so I gotta. [10:08] Justin: Yeah, loosen up. Get a little more. Get a little more comfortable while I do a little bit of housekeeping. [10:14] Chad: Housekeeping. Housekeeping. [10:18] Bill: Thank you. Sleepy. [10:20] Justin: All right, everybody, make sure that you're in gallery view. [10:23] Chad: That's the best way to see this sucker. So you can see everyone's face at the same time. [10:29] Justin: And, yes, we're having another cbc. What's that stand for, Mark? [10:33] Speaker B: Chat Bar Champion. [10:35] Justin: Chat Bar Champion. All the past winners. [10:39] Chad: The swag has been out there delivered to you. Hope you're enjoying that retireholic swag. But if you want to win Chat Bar Champion today, make sure you're the smartest. Make sure you're the funniest. Make sure you. I don't know, you're best at those comments. We'll be watching those. [10:53] Justin: And, Bill, make sure you're watching those. [10:55] Chad: That chat bar, if you can, because you will have a vote for the Chat Bar Champion by the end of the show. The chat bar has taken on a life of its own. It's probably better than the actual show itself, so definitely pay attention to it. [11:09] Justin: The prohibitive word. If you say this word going forward, [11:13] Chad: you must drink from your penalty drink. [11:16] Justin: The prohibitive word will be participant. [11:19] Chad: Okay. If I need to add. If I need to add one halfway through, then I will reserve that. Right. [11:26] Justin: We're going to play a new game. I don't really have a name for it, but it's basically kind of like a swear jar. [11:33] Chad: And so for every time that somebody swears, we're gonna put like, you know, a penny in the jar or what [11:40] Justin: have you, and I'm claiming we will. [11:43] Chad: That's a swear jar. Every time someone swears, you put a quarter in it. [11:46] Speaker B: Who gets the money? [11:48] Chad: I don't know. We'll use it to buy something for the office, like a case of Bud Light or something. [11:53] Speaker B: Awesome. You, Bob, You, Jim. [12:01] Justin: So kind of like that because I'm [12:03] Chad: saying $15 for each cuss word. [12:06] JD: Fuck $15. [12:08] Chad: There's one. That's two. [12:11] Justin: And it'll go to charity. [12:13] Chad: So we'll pick a charity at the end of the show. So what I'm saying by that is when you cuss on this show, remember it's a good thing because it's going to go. It's going to send some money to people that need it. [12:22] Mark: All right, does the chat bar count? [12:24] Chad: Can I qualify as a charity? Nevin? [12:29] Justin: Sure, yeah. [12:31] Bill: If I can Repeat George Carr seven words you can't say. Okay, 60 bucks. [12:38] JD: Well, apparently every word or an F bomb. [12:42] Mark: We got to classify this or clarify this. [12:44] Chad: Every obscenity. So I don't know where at yet, but. And also, [12:50] Justin: since Bill is not. [12:51] Chad: What did that person call him? [12:53] Justin: His state of his wallet being full, maybe we'll just make Bill pay for like 75% of it or something. Okay, let's dive straight into the first subject matter. [13:04] Chad: I would like to talk about CITs. So for the longest time, 401 s have used mutual funds. Several years ago, CIT started to grab a bunch of the headlines and that, you know, we're going to have this huge tsunami of 401k plans using CITS. [13:21] Justin: I'm starting to see more and more of it. [13:24] Chad: But Bill, if you're comfortable, maybe you could let the audience know quickly, like, first of all, what's the difference between a fricking mutual Fund and a CIT? [13:31] Justin: And then are you seeing this trend [13:35] Chad: of CITs coming to fruition in the D.C. space? [13:40] Bill: So, I mean, it's cost. You're buying the same investment. You can buy, you know, whatever you want, large cap growth. And it can be in a cit, a separate account or a mutual fund. And it's just who's regulating it, who can invest in it. And the benefits of the CITs are the fact that it's just retirement money, so presumably less volatile for redemptions. And then there's cost advantages. It costs less to manage a CIT than it does a mutual fund. I mean, mutual funds are designed for, you know, the masses that have, you know, 1,000 bucks or $100,000. But it takes a lot of regulation. CITs are deemed to be invested by sophisticated investors only. And so you have a cost advantage. And you can see, you know, 25% off of the price of a particular investment vehicle by utilizing a cit. [14:41] Chad: And the price reductions coming from just the lack of regs and oversight and kind of hoops that the CITs had jumped through compared to the mutual fund. [14:51] Bill: Yeah, there's, I mean, everything from the prospectuses and all of the other, you know, requirements that are aimed at protecting individual investors are not in cits. I think from the money manager standpoint, that there's. There's like kind of a entrenched position and not wanting to have their margins eroded. So I don't think it's all pure cost. I think it's, you know, inertia. And I think it's beginning to change, but it is a lot slower than I had expected. [15:27] Chad: And then in the past, like you said, the CITs are really for sophisticated investors. However, in a 401k plan, the plan sponsor can kind of step in front of their participants and kind of take that responsibility, if you will. Is that's what's happening? [15:41] Speaker B: Right. [15:42] Bill: They are the, quote, sophisticated investor. [15:44] Justin: Right. [15:46] Chad: Is it becoming more and more of a trend? Are we seeing it across the country for these plants? [15:55] Bill: The larger the plan, the more likely you're going to see a CIT in it, right? So if you're going to save 20 basis points on a particular fund and you have a million dollars in it, it's less meaningful than if you have, you know, $50 million in a position. I mean, we've got, you know, programs where you're saving 20 or 30 basis points. But again, if it's a million bucks, it's maybe too much work to go through. But if you have 50 million, it makes more sense to go through the brain damage. But if I could just snap my fingers or all advisors could say, okay, we're just going to snap our fingers and turn it into CITs, we'd save working Americans 20, 30 basis points just like that. Because every single one of those investments could be a CIT right now. And there's products on shelves that just aren't being utilized. And again, it's inertia. [16:52] Chad: Chad, are you seeing CITs in the proposals or the products for all the large vendors that you're working with? [17:00] Bill: No, you're not. [17:01] JD: There's a number of them that are, but they're not. I don't know if they're not comfortable talking about, as Bill is right now, the benefits of them or if they're afraid to go off brand name for most of the proposals that we're seeing. But the vast majority of the large providers are shoving in Vanguard DFA and not having the CIT discussion. [17:20] Justin: Well, I want to. [17:22] JD: The question I wanted to ask Bill on that same topic, JD was [17:27] Bill: where [17:27] JD: are most of the larger plans getting access to them? Are they coming through the provider community or are they coming through the advisor community? [17:35] Bill: Well, a lot of the mutual fund providers have, like I said, tilted these up and kind of sitting there on a shelf, but they're just not being promoted. The whole sailors make less money on them and the visors don't make any more money on them. So it's a do good thing, but it's something that's, that's kind of gaining traction. And there's a number of, you know, what we call aggregator groups like us [18:02] Chad: or Resources or hot. Yeah. [18:06] Bill: And they're developing this because again, the logic. [18:11] Chad: I want to go to that in a second real quick, but Chad, like to give you some optics on it. So we have current clients that you guys sold a long time ago that are like moving their American Century target date funds and they're mapping all the money over to an American Century cit. So I want you to know that the branding thing you talked about earlier, like all the big mutual funds have CITs. And so it's just this momentum that's happening. And so we do have clients that are doing it to get the cost savings. So that's for sure. But the next thing I wanted to ask, which I think is where you're going to, is when these aggregators start to create their own. Like, am I allowed to talk about RPAG on this show or is that not okay for me to do? Bill? [18:57] Bill: No, 100% they've got. [18:59] Chad: So they got their Flex path, right. [19:01] Justin: There's a CIT and I don't want [19:02] Chad: to pick on them. So let's not say we're talking about them. But are these aggregators in general, is there some. Not conflict of interest? Is there an incentive for their advisors to put these CITs in place, meaning that they're going to make some more money because it's their own stuff. [19:19] Bill: Okay, so here's the. This would be the storyline and I wish I had this cartoon available because I was trying to get momentum behind this. And it's this medieval king wading into war and there's a guy behind the tent with a machine gun and he says, I don't have any time for your stupid ideas. We have a battle to fight. Okay? I mean this thing is so simple and so, you know, such an improvement again, 10, 20, 30% off. So I think when people start to lose business, that's when they'll think about it. I would envision a suite of CITs. I mean, we've got BlackRock, total return and we've got Western Core and MFS and Franklin Templeton. So as that suite builds out and you've got again, resources. [20:08] Chad: There it is. [20:10] JD: You're very solid. [20:11] Bill: How did you pull that? [20:13] Justin: Brandon's on Top of it. [20:14] Chad: Brandon's on top of it. [20:15] Bill: But didn't that just kind of like tell a story? [20:20] Chad: Yeah, no, I hear you, I hear you. [20:22] Justin: It's a greater good. [20:24] Bill: So here's the deal. I would like to send a prospecting letter out to my competitors clients and say you have $300 million in your plan. 100 million of it is concentrated in these four funds. I can map you into those same forms or same funds and save you 26 basis point, $226,000 a year. Would Tuesday afternoon or Thursday morning be better for you? I mean, it's not. [20:53] Chad: This is not a sale. [20:54] Bill: It's not even a story. [20:55] Chad: Matt, let me take some of the chat bars questions. Chad, real quick. There a lot of people out there are saying, but they want to have tickers, they want to look these things up. Hey guys, technology's come along. You can have tickers to see and you can click on those suckers in your, in your account access the same way you would a mutual fund and see performance and see all that type of stuff. [21:14] Justin: Correct me if I'm wrong, Bill. [21:15] Chad: Like that stuff's come along now. So that's not the issue. That's not the issue at all. [21:21] Justin: And then Bill, you answered my question. When I said can they make more money? You said, you didn't really say this, [21:27] Chad: but you meant, yeah, they can. But you know what, I don't freaking [21:30] Justin: care because it's the greater good and it's okay. [21:34] Chad: And I've said this before, we do live in a capitalist society. It's all right to create a product that generates revenue for you so long as it's actually doing a good thing for the people that are purchasing it. So sorry, Chad, you had a thought? [21:46] JD: No, just continuing to go down that path. And the offerings from the record keepers I look at Hancock, for example, does the lowest net share class cost. And that was pretty much their pitch, Bill, what eight years ago when they came out and they said, look, you can have an A share in your lineup even though you're a $50 million plan if we're offsetting everything we're getting because it's the lowest net share class. Hancock was one of the first I saw in the major players to push CITs in the lineup. But I don't see any take rate on them in the space that we're operating in, in the smaller space that is. And like you said, maybe it's because record keeping side in that smaller space, they don't want to spend the money to set up the CITs in the system when they're not going to get much out of it? [22:33] Chad: That's a good question for Bill. [22:35] Justin: Bill, we work as a tpa, we [22:37] Chad: work in what you would call the micro space, right? In these like startups to 10 million kind of thing. And so we're working with all these names. You're familiar with the nature wise, the principles, the Voyas, the empowers. And in their kind of micro market plans, Chad's not seeing these things. Is there a reason for that that you think and is Chad right they just don't have the time or the energy and the money to throw to change the system up or is there something else that's stopping it from going small market? [23:04] Bill: But I don't think, I mean they're not getting pressure from advisors because on that a hundred million dollar note, and I said you can save $226,000, everybody gets excited. If I say you can save 26 bucks on your a hundred thousand dollars, you get less excited, right? [23:22] Chad: But like most things that are up market, it'll come down, Chad. [23:26] JD: Yeah, well, and I've seen it. The reason why I've seen CIT is more in the advisor space is a few of those folks that are doing a lot of K business have come to us and said we want to create a micro market solution. And their request has been we want our built out CITs as investment options even if it's a startup plan. And so I had to go to battle for them with a couple of these providers saying, look, these are what this advisor wants on all plans that they put with your, your product. And it was a fight, it was principal that ended up doing it. And jd, you know, the advisor, but it was a request by that advisor and a push to get it in there. And it's worked out real well for him. [24:05] Chad: Well, Chad, Mark, Justin, don't tell me that the advisors you guys work with don't want an extra 20 basis points in savings because they do. They're always spreadsheeting that shit. There's one for the bucket and they love 20 basis points even though it's only on a million dollar plan. [24:24] Speaker B: You are really. You picked a really shitty word tonight. [24:28] JD: He did it on purpose because we all got so drunk the last few weeks. [24:32] Justin: No, I did it. [24:33] Speaker B: Yeah, you did. Yeah, you did. You definitely would. [24:36] Bill: No, you guys are going into training for, for the super bowl. [24:40] Speaker B: Okay? [24:40] Bill: We're gonna get liquored here. All right. You don't go to the super bowl without stretching it, Ben. [24:46] Chad: It always Happens. It always happens. Another question from the chat bar I want to ask Bill is, can I before you leave? Yeah, sure. [24:54] Bill: Go for the boss. But I'm very commercial, and I believe in capitalism and all of that, but I also get stretched out on positions that take longer to come to fruition, and that just doesn't matter because it's what I want to do. The question I would have for you on all those things we talked about, CIT is, should it happen? Fuck, yes. [25:19] Chad: Yeah, it should. [25:22] Bill: Fuck yes. $30. [25:24] Chad: Yeah, it should. [25:26] Justin: That was a $30 point you made, but well made. [25:28] Chad: Very good. [25:29] JD: Well made. [25:31] Justin: Should happen. [25:33] Chad: Someone asked. [25:33] Justin: And then I want to move on to a fun little deal we got going on, but someone asked, Are CITs [25:39] Chad: as transparent as mutual funds? And I think what they mean is, can. Can. Can I, as a. I'll say it as a participant, can I go and [25:50] Justin: see what my CIT is made up of and the underlying investments and the [25:55] Chad: associated expenses and the management, et cetera, et cetera? Is that available to me? [26:01] Bill: Yeah, there's. There's fact sheets just like. So there you go. [26:06] Mark: Absolutely. [26:07] Justin: That's the answer, Brandon. Well, let me set it up first. To everyone listening in, we are about to spin the Wheel of Ice, But I swear to you, we have changed the concept for the Wheel of Ice. And I don't know if you know this, but the Wheel of Ice started [26:24] Chad: as, like, a literal wood wheel that we used to spin around back in the day six years ago, but now it is a game of chance. [26:33] Justin: It could land on any one of us. [26:36] Chad: I have gone out and got mine. I believe Chad and Justin, everyone's gotten theirs. [26:40] Justin: And I want to say for the record that mine is one pint and eight fluid ounce, so I'm not drinking the whole. [26:45] Mark: Damn. [26:45] Bill: It's a big one. [26:46] Justin: Yeah, you are. What? [26:50] JD: Justin's got it, too. [26:51] Justin: There's no way I'd be done by the end of the show. So now, Chad, jd, Justin, Brandon's in the game. I'm nervous we could lose. So go ahead and spin the Wheel of Ice. [27:05] Speaker B: Bye, Shannon. [27:20] Justin: Yes, Brad. [27:24] Mark: He's like, hey, you got ice, right? [27:25] JD: It's like, I should have said no when I told Brooke that it was going to be random. Now she goes, you mean we have to keep that shit in our refrigerator all the time? I'm like, apparently we do. [27:34] Justin: There's another one for the bucket. Brad was rooting for you, Justin. [27:38] Chad: Brad wanted you to win, so good for you. [27:41] JD: Holy. [27:41] Justin: You're gonna drink the whole thing? Oh, My God. Okay, well. [27:44] Speaker B: Brad. Brad, no, I'm not gonna drink one for the hell of it. Okay? There's no way. [27:50] JD: I'm so happy. [27:52] Justin: Justin. [27:53] Chad: Justin, that's a monster Smirnoff you just took down. [27:59] Bill: Wow. [28:00] Chad: All right. [28:01] Justin: Yes. Clap, clap, clap. [28:03] Chad: Very well done. [28:04] JD: And Ice March. [28:05] Bill: Pay attention. Fuck. [28:08] Justin: There's one for the bucket. [28:09] JD: I think now we have two legends. If Bill's a legend on the show, I think Justin just became a legend with that. [28:16] Chad: Craig says the bar. [28:18] Bill: Solid effort. Solid effort. [28:20] Justin: Hey, Brian says JD would have drank [28:23] Chad: it the same way. [28:24] Justin: He would have no problem with that. Let's move on to the next subject. I heard something as I was. [28:30] Chad: Or I read something as I was stalking you, Mr. Chetney. And it was something I'd never heard [28:35] Justin: before, and it really resonated with me. [28:39] Chad: You made an analogy to a 401k employee who gets to retirement. They're at retirement. And I think the analogy you made, I'm just going to use these numbers, but let's say that person has made a $50,000 salary for their whole career. Now they get to retirement age and they've saved up, let's say, a million bucks just to keep things simple. So they've got a million dollars in this pot that they've saved. As an industry, we have successfully got them to that point. [29:08] Justin: And Bill made the analogy to, like, [29:11] Chad: an NFL star that is not capable of managing their money. And Bill, instead of me putting words in your mouth, tell us a little [29:19] Justin: bit about that analogy you created. Because it resonated with me. [29:22] Chad: I was like, that's frickin Interesting. [29:24] Bill: Well, 80% of NFL players are bankrupt four years out of the league. And if you take anybody, I always pick on my brothers just because, you know, they have to have Thanksgiving with me. And I say, look, if you're making $50,000 a year, $100,000 a year, 200,000 matter, and then all of a sudden, you're given 20 times that. I know what I'm doing. Drunken sailor time. All right? I mean, it's motorhome, it's boat, it's a trip, and it's bust. I mean, that's human nature. So somehow locking up money and securing the future for people is important. [30:04] Chad: I've never thought about it that way. Mark, how do you feel about that? Are we setting all these people up for disaster time when we get their 401k nice and big and fat, and then they hit retirement and they don't know how to manage that money? Are they just going to blow it. [30:21] Speaker B: Well, I want to say no because they've worked their ass off for so long. I hope that part of that was planning for what exactly they wanted to do when they hit that point versus the alternative of somebody stumbling upon. I shouldn't say stumble, but working their ass off, getting 20x the next day, signing a contract and basically being dumped money. Your bank account goes from 20,000 to 20 million. To me that's very different that your perception of the value of that money. What your family lifestyle is where you are health wise. I don't think so. I don't think we're setting people up. I think if they it up, it's their own fault. How about that? Fifteen. [31:14] Bill: That's 15. [31:16] Justin: I don't think. Who do we going on there? Oh, that's dead. [31:21] Chad: Will Ferrell. Will Ferrell. [31:23] Justin: I don't necessarily think they're going to [31:24] Chad: be like the NFL star that, you know, tries to live in the $6 million house and drive the Lamborghini. [31:32] Justin: But, but they might have a million [31:34] Chad: bucks in their savings for, for retirement [31:36] Justin: and then they want to like buy [31:38] Chad: that car, you know, and it's a $75,000 car and they should be driving a $25,000 car and they're gonna go, [31:46] JD: well, buy that car. You worked your ass off all night. Don't spend all the money, buy the car. [31:54] Speaker B: As long as you've accounted for what it means in the future, like do some mathematics and figure out. [32:02] Mark: And the major difference here is the amount of money you're getting handed. I hope at least kind of like [32:06] JD: you, Mark, like I hope people would [32:08] Mark: be smarter than that. It's NFL players, any sports athletes can hand in millions at a time and we're busting our ass just to save $26,000 a year. So I hope they're a lot smarter than that. [32:19] Justin: Has anyone done any testing like Bill? I'm going to ask. Bill, I'm going to set you up here, Bill. [32:24] Chad: I want to know what your guys potential solutions are for these people. But I think proportionally it's the same guys. I think you're missing the point. I think proportionately when someone hasn't seen a million dollars or they could just spend it where they want to, there's some danger there. There's some danger that exists. So Bill, let me ask you, what are advisors doing to remedy that? You know, and this is kind of a frontier we don't talk about a lot. We've spent the last 20 years within this industry getting people to save money. What Happens when it's time for them to spend it. [32:57] Bill: Well, there's all sorts of these drawdown solutions and income solutions and typically they're just sophisticated algorithms that nobody can explain and let alone understand. Right. So if you're an advisor trying to explain it, and I'm not an imbecile, but I'm just not that great at the tech on quant stuff and I try to explain how this drawdown thing is going to work in year 17, such and such is going to happen that does not translate to the consumer. And so some type of income solution, I don't think anything will happen until it is a guarantee, which probably requires some type of an insurance solution. Annuities are impossible to buy. Right. [33:42] Justin: I'm going to say if you say annuity, you don't have to put a coin in the jar, but yeah, I should. [33:49] Bill: It only takes you 19 years to get your money back, so. [33:52] Chad: But something new and improved, but like that, a steady stream of income. [33:57] Bill: Yeah. If I put my money in this thing, I want to know that I'm getting $1384 a month forever and that's it. I don't. The rest of it I'm not going to be able to understand. And I don't want to be too like, negative, but since we're in this election season and we're calling out that everybody should be smarter than just blowing a million bucks. Are you guys looking at what people are consuming? Doesn't matter which side you're on. [34:26] Mark: Surprisingly, it's increased. I read. [34:31] Chad: I think what Bill's trying to say, Mark, is that some people are fucking stupid and so they need help again. [34:37] Bill: But I didn't have the extra 15 bucks. [34:41] Speaker B: I think stupid is a relative term. [34:45] JD: I am a bit surprised to hear you say that though, Bill, because you mentioned earlier you're a capitalist and you're comfortable making more money and charging for it. Like I would think you as an individual getting to that point in your life would say, I want, I want to continue to thrive in this market that goes up every single year with some cap to make sure I don't run out of money. That's my fear of the. And that's I think why the income solutions haven't taken off in the case base is because most folks want to keep achieving what we have seen stretch out over 70, 80 years, which is a market that continues to do that somewhat of an up. [35:23] Bill: Yep. So go Back to like 2002, 2003, and we were trying to build an insured product around this in 2002, there was all these annuities that had guaranteed 5, 6% kickers, right. So you put your money in and you left it for five years or 10 years, whatever the threshold was, and you got a minimum of 5 or 6%. We were able to underwrite that offshore for 12 basis points. Right. But it got consumed so much that you were initially able to offshore 100%, then 75, then you had to own 50% of the risk. And that's what took MetLife out, is that all of a sudden they couldn't offload even 25% of the risk and they owned this stuff at, you know, 600 basis point guarantees. So when it'll come around. But something, it's going to have the G word and it's going to be guaranteed before people can well hear that. [36:25] Chad: I'll let you. [36:26] JD: We've had, we've had, we've had John Ruth on. We've had others that are trying to find the next solution for stable money. I won't use the term guaranteed like you are, but for seriously stable money with upside capture inside the case space, there are people trying to solve that equation. [36:49] Chad: Did you hear Bill dropping that knowledge? That's the kind of stuff that Bill knows is like he knows all these like deep in the back board room type of deals and how things works. And I wanted to ask him all kinds of questions about mergers and acquisitions today. I've heard them on podcast, talk about 10x EBITDA and all this kind of fancy stuff, but I didn't think it was really that interesting for our audience. So maybe we'll save some of it towards the end of the show because [37:16] Justin: I'm dying to ask him some questions [37:17] Chad: around some of that stuff. [37:19] Justin: But this guy knows the inner workings [37:21] Chad: of how shit works in our industry and we need to tap into that a little bit today if we can. [37:29] Bill: And then if I don't know, I'll make it up. [37:32] Chad: There you go. [37:34] Justin: That's the goal of our show, Monkey. We built on every episode. We like to play a game and [37:42] Chad: Mark's in charge of the game. But while Mark's doing this game, I would like Justin. To work, work with the chat bar to find another word of the episode because participant is not working. [38:02] Mark: It sucks ass. [38:06] JD: I just said it too. I whispered it. [38:09] Justin: Chat bar, let Justin know. Chat bar, what should we do, Mark? [38:12] Chad: What's the game? [38:13] Justin: Explain it to Bill. [38:14] Speaker B: Time for the game, Bill. It's pretty simple. It's called the lame game. I'm gonna give you A. Either a sentence or a topic or something. And your job at that point is to tell me, are you game or is it lame? Make sense? All right, question number one. I know it's a little different now with what's all going on in the world, but when you go to a restaurant that could be with your significant other on a date with your best friend, I don't care who, if you sit on the same side of the booth as that person, is that lame or are you game? And Bill, I will start with you. [38:59] Bill: If you're with your wife of 35 years, it's game. [39:03] Justin: I thought he was gonna say game. I can see him doing up that up in some cozy little bar in Alaska. [39:09] Speaker B: Yeah, dad, [39:13] JD: only with your spouse. Game. I'm adding caveats in there. [39:22] Speaker B: I need to. I need to make my questions more specific. [39:25] Mark: Lame is. [39:28] JD: I hate that side story. [39:30] Mark: Here, we have time for one. [39:31] Speaker B: Yeah, well, you know what? Justin, floor is yours. [39:35] JD: Thank you, sir. Appreciate you. [39:36] Justin: Take it away. [39:39] Mark: 36, 20. So my 24 year old sister and her boyfriend, we were going to family event and my mom was driving with them, my dad, we all had to take different cars. My sister and her boyfriend sat in the backseat and I gave them a ton of shit for it, and they couldn't understand why. What do you. I mean, is it not proper courtesy to have one of you guys sitting in the front seat? Like the passenger seat? [40:01] JD: The driver sat down 44 years old. Yeah, it's proper courtesy if they were. That's what I thought. [40:06] Mark: And I got a rash of shit from my. Not my family, but my mom and my sister are like, what the hell is your problem? You're an asshole. [40:12] Justin: That's three into the. [40:13] Chad: Into the jar, by the way. Three into the jar. [40:17] Speaker B: I'm a little confused by that. You didn't want them sitting next to each other in the same vehicle in [40:22] Mark: the backseat while my mom was her chauffeur. [40:25] Justin: Oh, my dad had to drive his car. [40:27] Mark: He had to drive separate. [40:28] Speaker B: You weren't in the car. [40:30] Mark: No, I said we were all driving separate. I wasn't in the car and I gave him a rat. [40:33] Speaker B: Now I get it. [40:34] Chad: All right. [40:36] Mark: Might be a little intoxicated from the Smirnoff. I might have nodded. [40:41] Chad: Sorry, I'm gonna say lame. I'm gonna say lame, Mark, Only because in all honesty, I've never done anything like that. [40:47] Justin: Unlike the romantic Bill Chetney, I don't hold my wife's hand when we walk down the beach or do any shit like that. So I'm just gonna be honest with everybody. [40:58] Speaker B: All right, next question. Pumpkin spice, anything. Is that lame or are you game, Bill? [41:06] Bill: That's so fucking lame. [41:09] Justin: I kind of thought that was. [41:13] Chad: I don't know what this charity is, but it's gonna get loaded tonight. [41:16] Speaker B: I will say. I went to the store the other day, and there was some of the weirdest shit flavored with pumpkin spice. I mean, I. I don't. I don't get it. [41:27] Bill: I don't get it. Chad. [41:30] JD: Lame for sure. [41:32] Justin: Justin, [41:35] Mark: I don't want any payroll deductions [41:40] Justin: not coming out of your payroll. We're going to take it out of Mr. Deep Pockets over here, all right? If it's a candle, I'm fucking game. [41:52] Speaker B: Okay? [41:52] Bill: I will get. [41:53] Speaker B: So pumpkin pie doesn't count in my handle. All right, next question. And this question. [42:03] Bill: You know what? [42:03] Speaker B: I'm not even gonna speak. I'm not gonna say anything. It's just gonna be all visual. Bill, and I need you to be honest, because this might hit a personal level for you. Is this lame or are you game? [42:23] Bill: My family favorite. [42:25] JD: Hey, I'm. My favorite. [42:29] Chad: Is Bill Jr. In the attendees, I'm assuming. [42:33] Justin: Did he show up to this? [42:35] Bill: He may have just shot him. [42:38] Justin: Brandon, do we have a picture of Bill Jr or. [42:40] Speaker B: No, he's kind of waiting for that man spot. That's kind of the punchline to this whole. Whole thing. Picture. [42:47] Justin: Brandon had a busy afternoon. He might not have pulled that one off. [42:50] Speaker B: You guys have to email me this stuff. You can't text it to me. Okay? [42:55] Justin: No, if you text it to me, game over. I'm not. [42:58] Speaker B: I don't pay attention to it. [43:00] JD: Oh, yeah. [43:01] Bill: Oh, there he is. [43:02] Justin: Look at that, man. [43:03] Bill: He's got the stash going right there. He does. [43:07] Mark: Incredible. [43:09] Justin: So who's next, Mark? Because I think. I'm thinking we're all game. [43:12] JD: Yeah. [43:13] Speaker B: Game, say. But for the audience. So they get. Now they know the odd. The point there was. It was Bill's son, Bill Jr. [43:20] JD: So, Chad, I'm lame. [43:23] Justin: Lame on handlebars. [43:24] JD: I'm lame. [43:25] Speaker B: No. So you can't call handlebars. That's something very good. That's the. That's this. You got to call it Raleigh fingers. Right? [43:32] JD: Raleigh fingers. [43:33] Mark: Greg says it right there. [43:34] Bill: Just. [43:36] Mark: I'm game for sure. You can pull it off. Do it. [43:39] Speaker B: What do. Okay, how about. No, don't stop. You have to do it now. [43:44] Mark: I mean, this is just. [43:46] Justin: Oh, sure. [43:48] Bill: Grow it. [43:48] Justin: There's one for the. For the jar. I'm. I'm with Amy. Glenn, I'm a full beard kind of guy. [43:56] Chad: Mustaches are creepy. [43:57] Justin: Sorry, Junior. [44:01] Speaker B: Well, you know what they say. [44:04] Bill: Honesty's bad. [44:05] Justin: You know what they say, chat bar. Let me know what they say, because [44:10] Chad: I'm still trying to figure that one out. [44:13] Mark: Let's just read that Q and A by Bindi. [44:18] Justin: Justin, do we have a new prohibitive [44:20] Chad: word that I tasked you with? [44:22] Mark: We have a few options here. I don't know what to do. [44:24] Justin: Well, you gotta make a choice. It's up to you, Smirnoff boy. Let's go. [44:28] Mark: Then we're gonna go with any profanity word said. [44:32] Justin: You're gonna [44:35] JD: like that. [44:36] Justin: That's an odd juxtaposition. [44:39] Speaker B: That's not fair. [44:43] Mark: We came out with basis points, CITs, which were past that, and advisor, which we've done way too much. [44:50] Justin: So what's the answer? [44:53] Bill: I gave you the answer. [44:54] Justin: You didn't like it. I guess it's swearing. There we go. [44:58] Bill: This is. [44:59] Justin: This is gonna be a real bad thing. I'm gonna. My wife's not around. I'm have to call Uber. [45:06] Mark: Bill said we gotta start prepping for the Super Bowl. [45:08] JD: Here we go. Jd. [45:10] Speaker B: I like that you got a new bottle there. [45:13] Justin: Yeah, gotta reload. [45:15] Chad: I don't like this. [45:17] Justin: I don't like this at all. This is a horrible idea [45:21] Bill: with a word. Some words that are just underutilized, like outcomes. [45:27] JD: That's what he did with Participant, though. [45:30] Bill: I know. It's just like. I get so tired of all the same words. It's just, you know, quarterly investment, due diligence. Why are we even doing the Chinese menu anymore? Right? It's crazy. So we go to participant outcomes for 200. Alex. [45:48] JD: Hey. P word is still a word. [45:50] Bill: Mark. [45:51] Speaker B: Oh, sorry. [45:52] Justin: We can't go. [45:53] Bill: We need to move. [45:55] Justin: We need to move on. It can't be a cuss word that doesn't work because then we're battling for the charity. I won't. [46:01] Chad: You know, that's [46:04] Justin: advisor. And we will leave the P word in just in case it happens. So [46:10] Bill: it's both. Twofer. [46:12] Chad: It's a twofer. [46:13] Justin: For the third subject matter, I'd like [46:16] Chad: to do a bit of a potpourri, if you will. It's kind of like your idea, Chad, but I'm hoping we can ask some serious questions along with some funny ones. And for potpourri, what we mean, Bill, [46:27] Justin: is we're each going to just ask you random questions that we'd like to. And if your answers are short and sweet, that's fine. If you Want to go deep and in detail, all the better. So I will start with. I'll save my funny one. I'll start with a good one. What do you think of. [46:48] Chad: Give me your honest opinion of companies like One Digital and Hub looking to buy their way into the retirement plan space. [46:59] Bill: Hmm. Since I have an awful lot of friends over there at both of those places. [47:05] Chad: Well, I don't want a filtered answer. [47:07] Justin: I want the truth. [47:08] Bill: Yeah, we heard. [47:09] JD: You were blunt. [47:11] Bill: I paid five times when I bought 12 of those firms and now they're paying 10 times. [47:17] Justin: They're paying too much. That's a good answer. I like that. [47:22] Bill: Let me backpedal. No, no. And not in a serious way. When I was copying what NFP was doing in the late 2000s, the public markets were rewarding public companies like NFP at 13, 14 times. Well, now the public markets are rewarding like a Gallagher at 17 or 18 times. So why shouldn't there be more X in it for the selling party? Because it's still accretive. Right. But I would say that the success of all of those initiatives are driven on cross selling. And if you sat with any of the M and A guys there or anybody involved, they're saying yes, cross selling and synergy. [48:05] Justin: Right. [48:06] Bill: And it can work if it gets pushed down and crossed over between the advisors. But if it's not done successfully cross selling and synergy, [48:20] Justin: we've got action. You got a prohibitive word violation, Mr. Chetney. You said the A word, so you got to drink from your nasty drink. But that was good. What he was saying is when he [48:31] Chad: was doing that kind of aggregator game or acquisition game, he was paying 5x and these days they're paying twice as much. So he kind of did one up on them. But then he's saying it's worth it, that they're paying them 10x because when [48:44] Justin: they go on the enterprise level and they sell to some bigger entity, they're getting 17x. [48:49] Chad: So it's only fair that they pay them more. [48:51] Justin: We haven't talked about this in the past, but so you guys know one of the reasons why a lot of these. [48:56] Chad: There's probably a lot of people on this show that they move over to those big aggregators. I don't know if you know this, but now you do. [49:03] Justin: They get paid to move over to those things. [49:05] Chad: They get a one time big kind of upfront payment. [49:08] JD: Really? [49:09] Mark: Yeah. Where does that kind of land? I mean, is it a set amount or they kind of. I would imagine they're probably looking at [49:16] Bill: their book 8 to 10 times ebok, which is earnings before owners comp. So if an advisor's making a million bucks a year, they'll say look, [49:27] Chad: damn [49:27] Justin: it, you can save it. You can save it. [49:29] Chad: Finish your thought. [49:32] Bill: So if they, if they're going to make 250,000 a year, they sell their other earnings, the earnings before owners comp for $750,000 times some number of X which can get as high as, you know, 10 times. So it's seven and a half million dollars. You put those coins in the bank and you can put up a lot of aggravation about doing your expense reports for your new employer. [49:58] Justin: I like that. [50:00] Mark: I would imagine they'd have to keep the plans around for a certain amount of time or else they can, they'll, you know, not penalty to pay back. Right. [50:07] Bill: Structures are typically a three year earn out and so just use a round number of 10 which is kind of highest yen. You might get three or four times more if you hit a certain growth CAGR. [50:23] Chad: Also understand that if you're a FA and say you've got 100 plans and you're moving to one of these aggregators, it's not like disruptive to your clients. [50:34] Justin: It's not as though it's not like a normal acquisition where you might lose [50:38] Chad: 25% of your client base. You're not going to lose your clients when you move over to those things. [50:43] Justin: So I don't think that's a big [50:45] Chad: concern of the acquirer. [50:47] Justin: But, but I just want you guys to know here. Cause I don't know if you knew that. [50:50] Chad: And anyone tuning in, these people could be getting checks that are pretty hefty to move over to those things. So it's something to keep in mind. Yeah. [51:00] Bill: The centerpiece of whether or not it works in three years when everybody reviews it, it will be the cross selling and synergy. And again if you're a seller, you want to look not at Hub as a national company, you want to look regionally. What are the people in my area that I'm going to be told I can go partner with and sell my retirement clients health and welfare? It's, it's local, it's not, it's never top down and otherwise cross selling and synergy turns into checks in the mail and I won't. Well, you figured out that's. [51:36] Justin: Well, can't avoid that. [51:37] Bill: Hold on. [51:38] JD: I can't, I can't leave off that though. So most of the time we talk about aggregators, we talk about creating efficiency for A practice. But you're saying it's more about creating referral sources and synergy and ways to continue to build the book. But the folks that I see migrating over, at least in my conversations with them, it's never been about finding more opportunity. It's been about leveraging the tools that the aggregator is bringing. So what you're throwing at me is completely different than what I thought was the actual. [52:09] Justin: Okay, Chad, sorry. You got to look at it from [52:12] Chad: big boy Bill's perspective. So when big companies like, say, One [52:18] Justin: Digital wants to, you know, make this [52:20] Chad: big acquisition, it's gotta be about those synergies because that's. That's what they want. [52:26] Justin: It's gotta flow both ways to create business for more. I understand that a local guy. Yeah, yeah, I understand that a local guy might. But don't forget, those big entities need many of those little guys or girls [52:38] Chad: to be interested in that synergy. [52:39] Justin: And that's why I thought Bill was so smart when he talked about it being local versus national. [52:43] Chad: So that was a pretty good point. [52:45] Bill: And, you know, you guys may be looking at kind of through the TPA or record keeping lens, so there's, you know, like Jerry Bramlett rolling up all that stuff for a census. The margins, I don't know. You know, be a little glib here. The margins in retirement are shitbox. And if you take our shitbox margins and increase them by 20%, Hub couldn't give a. So that was 30. [53:16] Justin: No, we're getting there. [53:19] Chad: I thought this was gonna be like 300 bucks. I think it's gonna be like a grand. This is gonna be a good show. It's gonna be a good show. It's gonna be a good show. [53:26] Justin: Oh, there goes. He's done. [53:27] Bill: Let's see. [53:28] Chad: Apparently. [53:29] Justin: Apparently his pockets aren't that deep. Once I said a grand, he's shot out of here. He's gonna pay for it. [53:38] Chad: Brandon. Brandon. [53:39] Justin: Wu Tang. Wu Tang. Mark, do you have a question for our guest? [53:52] Bill: Yeah. [53:54] Speaker B: Why do you have wads of money [53:55] JD: slaying around your house right now? [53:59] Bill: Well, Alaska is a cash country. They don't believe in government. [54:04] Speaker B: It's not a country, by the way. It's a state. [54:06] Bill: But, oh, no, no, you're mistaken. It's its own country for a country. [54:13] Speaker B: Okay, well, that's news to me. [54:16] Justin: I feel like he's. I feel like he's in a very wallet comfortable state. Chad, do you have a question for him? [54:21] Speaker B: Hold on. I have a real question. [54:23] Chad: Okay, go. Sorry. [54:24] Bill: I'm ready. [54:25] Speaker B: Have you ever Gone to a meeting. Could be any type of meeting. [54:31] Bill: Drunk. Yeah, baby. [54:39] Speaker B: What? [54:40] Justin: Sorry. [54:42] Bill: I said I can't imagine if that wouldn't have happened at one point. I can't think. [54:46] Speaker B: Sorry. Your country must have bad wi fi. [54:53] Justin: Chad, it's your turn. Anything you want to know of our guest? [54:57] JD: I'll start stay on the retirement side of things. I feel like Empower went back a few steps by having mutual fund families pay for shelf space, but it's leading to benefit for participants. Yes, I'm drinking for that. Is that a good thing or a bad thing? Shelf space, [55:23] Bill: That is simply the way of the world. And it's the big get bigger. And Fidelity has been pulling out Bitcoin for years and years. Right. So I don't know if it's a. I don't know if it's necessarily a good thing or a bad thing. I think it just is. Right. And I. Depends on which side of the equation you're on. So if I'm on the side of my clients, you know, I'm going to try to leverage, you know, what I can to get them the best price. And again, I'd go back to cits. I didn't see them getting a half a million dollars out of, you know, or a million bucks out of various firms and saying, good, give me your lowest cross cit. I think it's can in a way perpetuate the, you know, entrenched margins. [56:15] Speaker B: Okay. [56:16] Bill: I mean, that's. There you go. There's your soundbite for the day. Fucking entrenched margins. There's no other reason, okay? You guys aren't making any money as TPAs or record keepers. It's gonna grind, advisors. It's been fee compression forever. And I'm so happy right now. Trench margins are in the mutual fund. [56:44] Justin: It's another one, Bill. Another prohibitive word. But I'm so happy. [56:47] JD: That's why I asked that question, Bill, is because I hadn't. I hadn't thought too much about it. I think what Empower is doing is good. It's the person who is benefiting is the average retirement, you know, investor, for that matter. So back to your CIT conversation. I know people are giving them some crap for it, but I'm all in. [57:07] Bill: Well, they're achieving scale. And, you know, Ed Murphy and Bob Reynolds and all those folks, I mean, they, they did it at Fidelity. They're doing it as a competitor to Fidelity. So I'm a fan of that aspect of it. And, you know, it. [57:24] Chad: It's. [57:25] Bill: It's scale. Right. They're achieving scale. They scooped up, you know, Mass Mutual and you know, that's just kind of the nature. I mean, what did you. I'll throw a question to you guys. What do you think about, you know, the buying spree of Jerry Bramlett in the census, scooping up Future Plan. [57:43] Chad: Future Plan. [57:45] Justin: Believe it or not, it actually kind of. [57:47] Chad: Maybe I'm just an optimist, Bill, but [57:50] Justin: it gave me comfort in that the more of my competitors, and the boys have heard me say this, but the more of my competitors they buy up and put under their umbrella, the less of my competitors look more like me. So I kind of stand out as a family owned tpa, not bought out by this bigger firm. And I like that because that's my [58:11] Chad: brand, that's my go to. So it made me feel like, okay. [58:15] Justin: It just makes me accentuate myself in the market better. I also didn't understand it because when I asked the people, I didn't talk to Jerry directly, but I talked to [58:24] Chad: some of the people underneath him. [58:25] Justin: And when I asked why they were doing it and if they were going [58:29] Chad: to bring those assets that were with Empower or Voya or Principal or Nationwide into the Ascensus record keeping platform, they stared me dead in the eye and [58:39] Justin: said that that was not the plan. [58:41] Chad: And I was like, well, that doesn't make any sense to me. Then why are you buying all these little tpas and aggregating them if you're not going to bring the assets into your record keeper? So I didn't understand it, but I [58:54] Justin: was happy to see it happen. [58:55] Chad: Is my flow. [58:58] Justin: And somebody Will Hackler says my brand is wacko. Will. [59:03] JD: Fuck you, Will Hackler, jd. He said this was better than any CE session he's ever attended. Like, that's my quote right there. That needs to go everywhere on the air. And you get a better session drinking beer than any C session he's ever attended. [59:22] Justin: Will's a past cbc. [59:24] Mark: I wonder if we can start off from CE credits for this show. [59:28] Chad: I don't think so. [59:29] Speaker B: We do. [59:29] Justin: Justin, do you have a question for our guests? [59:32] Bill: Nope. [59:35] Justin: Yeah, that's Probe 3. That's what we do. [59:37] JD: I didn't know. I will make it up. [59:39] Justin: I got one. [59:40] Mark: What happens when we don't get a freaking agenda before the show? [59:43] Justin: Jerry Schlichter. I call him the 401k boogeyman. Or I didn't. Someone else called him that and I [59:52] Chad: just used that term. [59:53] Justin: Do you think that Jerry's upset because I heard that you called him on a recent podcast that our industry's chief ambulance chaser. You asshole. Is he mad at you? He might be coming after you, Chetney. [1:00:10] Bill: So what I said was that one of the industry chief ambulance chasers just got in trouble. I didn't name a name. [1:00:19] Justin: Oh, come on. We can put two and two together here. [1:00:22] Bill: Oh, that's because you guys are smart. [1:00:27] Justin: Do you never wake up in a cold sweat Worrying about the 401k boogeyman? [1:00:31] JD: Dude, I. [1:00:32] Bill: No, not at all. And I actually, way back when that thing started, I looked at it again as a capitalist, and I said, holy crap, you can make a fortune of money here because virtually 75% of the plans are out of compliance. And all you got to do is go for a big pot of money, and then you go over and you sue it. And are you doing that? Good. But it's just not a path I would want to spend my time doing. But it was a legitimate effort. And then as these things have longer timelines, I think they get overextended and the good is gone and the economics take over. [1:01:16] Justin: I kind of love that he got [1:01:18] Chad: his hand slapped a little bit because it shows that now you don't just make a case and get a kind of payout agreement that you could actually get in trouble yourself. Not that he can't handle the 1.5 million or whatever it was, but still, it's good that he got a little slap on the hand there. [1:01:36] Justin: And if. [1:01:37] Chad: Jerry, if you're listening, I love you, buddy. You're fine. Don't worry about me. [1:01:41] Justin: Chad, do you have a question for our guest? [1:01:43] Bill: Don't sue me. [1:01:46] JD: I already asked. But if you want me a second. [1:01:48] Speaker B: Want me to ask me rapid fire, according to you? [1:01:51] JD: Yeah, yeah, it was supposed to be. So do you fold or do you crinkle? [1:01:56] Justin: Jesus, that's creepy. [1:01:59] Mark: You've been asking that for 10 years, man. [1:02:01] JD: These are good questions. I can judge a lot about a person based on whether they fold or crinkle the leaf from outside. [1:02:10] Speaker B: When Alaska. [1:02:11] JD: He doesn't use paper. [1:02:12] Bill: Oh, toilet paper. [1:02:14] Mark: Yeah. [1:02:15] JD: Bunch it up into a ball or do you fold it nicely? Told you. [1:02:21] Mark: Good questions. To the bar right now. [1:02:23] Chad: All right, Chad, Justin, find one here in a second. You can ask them. Chad, that's an appropriate question to ask Nevin Adams on stage at a conference. He's a writer. He's a polite, mature man. [1:02:36] Justin: Bill is a wilderness man. He lives in Alaska. He catches, like, fish with his hands. You don't ask him about toilet paper. That's just Weird. [1:02:46] JD: I really wanted to know. J.D. [1:02:48] Justin: it's just weird. [1:02:49] Bill: All right, fine. I use hundies. [1:03:02] Justin: This question, Justin, do you have a good one? [1:03:05] Mark: I thought it was good. What do you think of self, Bill, what do you think of self regulating organizations? [1:03:16] Justin: Where's the monkey? [1:03:21] Bill: Yes, I regulate myself. [1:03:24] Justin: It's good. [1:03:27] JD: Really well too. [1:03:28] Justin: That's another one for the bar. I got the last one. And then we'll wrap this show with the chat bar champion vote. This doesn't come from me. This came from someone else. I wrote it down. So I don't even really know the whole concept behind it. Someone wrote in. Someone wrote in, said, is Bill mad that Vince stole his aggregation idea? [1:03:56] Bill: Actually, you know, it's the sincerest form of flattery. Right. And I'm not gonna even. It's not just Vince, if you look at this, right, Troy Hammond, Vince, Jim o', Shaughnessy, Randy Long, they were all part of nrp and I'm not taking credit for all their successes. They, some of them fucking fantastic jobs and in huge businesses. But the notion of an aggregator, I [1:04:30] Chad: mean, didn't exist back then. [1:04:33] Bill: It proliferated. And you know, I'm still really good friends with Vince Morris and Jim o' Shaughnessy and Randy and these guys. You know, I have my one little adversary which, you know, that is what it is. But otherwise I'm, I'm proud of what we started because we're trying to gather resources and grab their strength so that we could advocate for our clients against multi billion dollar institutions. Whether it's money managers, whether it's Empower Fidelity recruiters. What we tried to do is say, hey, we're all great. Let's aggregate our power and let's go for more shit for our clients. Yeah. [1:05:16] Justin: And now look at it now. It's the. [1:05:19] Chad: I mean, our audience is probably sick of it because we've had a lot of aggregator related guests on the show recently. Just happenstance that it happened that way. [1:05:27] Justin: But if that ain't proof, I don't know what is. It's a massive trend across the country right now and I think there's a lot of good things happening with it. We're running out of time. Maybe we'll go after a little bit and ask them some more questions like that. [1:05:40] Chad: But let's finish the show properly and [1:05:42] Justin: then if people stick around for the [1:05:43] Chad: after show, fine, let's vote for the [1:05:45] Justin: chat bar champion and we'll play some music and head out. I'm going to start with you, Justin. Who's your vote for chat bar champion, [1:05:54] Mark: we'll go with Will Heckler. [1:05:57] Justin: Who won last week? [1:05:59] Mark: I don't know. [1:06:01] Justin: Wasn't it Will? [1:06:03] JD: Did he. [1:06:05] Justin: Will, did you win last week? [1:06:06] Chad: Three weeks ago. [1:06:07] Justin: Will says, I don't know, Will. I get wasted every Thursday. Okay, Will's a good, good vote. [1:06:12] Chad: Who won last week? [1:06:18] Justin: Chad, your vote. [1:06:20] JD: I'm going Will as well. There were some solid comments tonight, Will. Well, especially the one that I'm gonna put in quotations and throw all over the retireholics website. [1:06:31] Justin: I'm gonna go to you, Mr. Chetney. And you can't be like Joe Biden. You can't vote for your son. I don't know. [1:06:39] Bill: I'm gonna go with Will Hacker because I thought his name was Will Wacker. And I thought Will Wacker was such a cool name. [1:06:47] Justin: Oh, wonderful. Mark. [1:06:58] Speaker B: I'm not gonna vote for the same person everybody else is voting for. He's already once. And my vote doesn't matter at all. I'm just gonna give it to. Why are you pointing yourself? [1:07:09] JD: Vote for me. I've been in the chat bar like crazy tonight. [1:07:12] Speaker B: That's a good point. [1:07:13] Justin: Yeah. [1:07:14] Speaker B: No, I'd never vote for you. I'm gonna vote for Bryant Lester. [1:07:19] Bill: Wow. [1:07:19] Justin: Little right? [1:07:21] Chad: Yes. Little kiss ass voting for Bryant Lester. [1:07:28] Speaker B: How is that a kiss ass? [1:07:29] Justin: I actually thought that. And I never wanted to vote for him. I don't know why, but his little games he plays by coming in under a different name. But tonight I thought Tony had a good game. So my vote's going for Tony. And then when Tony actually has a chance to win, I don't vote for him. He won't feel so bad. So fuck you, Tony. [1:07:48] Speaker B: I'm pretty sure that that's not Tony. [1:07:50] Bill: $15. What? [1:07:52] Speaker B: Somebody else probably just came in as Tony thinking it was funny, right? [1:07:55] Justin: Well, then they. If that's true, Mark, they deserve my vote even more. [1:08:01] JD: Hell yeah. If that's true for sure. [1:08:03] Justin: Okay, not true at all. [1:08:04] Speaker B: It's for sure. [1:08:06] Justin: Will. [1:08:06] Chad: Will Hackler, you are the first two time chat bar champion. [1:08:12] Justin: So what that means when you're a repeat winner. [1:08:15] Chad: John, you have to pack. [1:08:17] Speaker B: Thanks, John. [1:08:18] Justin: You have to pack up the shit we sent you and send it back to us now. So it goes backwards, right? [1:08:24] Chad: No. [1:08:26] Bill: What? [1:08:26] Chad: Nobody gets it. [1:08:27] Bill: I do. [1:08:28] JD: I was too busy chatting with John though. [1:08:31] Justin: We'll send you more swag. [1:08:32] Chad: We'll send you more swag. [1:08:34] Justin: Congratulations, Will, for being chat bar champion. Mr. Chetney, thank you so much for joining us. Maybe you want to give the audience [1:08:41] Chad: a little view of what's behind you [1:08:43] Justin: so they can see that that's not a virtual background. And then once everyone's seen that, Brandon, you can play us out with a little music and we'll stick around for [1:08:51] Chad: some after show after the song. [1:08:54] Bill: 360. Look at that. [1:09:04] Justin: Thanks, everybody. [1:09:24] JD: Going to get another beer. [1:09:27] Bill: So messed up I want you here's my room I want you here. Now we're gonna be face to face.