DOL Fiduciary Rule & IRA Rollovers: What Advisors Need to Know

[0:05] Justin: See? Bring it in, guys. Bring it in. Bring it in. Retireholics. Put it in there. Just got the sweaty hand. [0:13] Chad: I've got. That'd be me. [0:15] Justin: All right. PDC on me. [0:16] Chad: He's got a broken finger. [0:17] Justin: PDC on me. [0:18] Chad: Okay. [0:18] Justin: PDC on three. One, two, three. [0:21] Chad: Pdc. [0:24] Justin: And he continues to do that. Welcome, welcome, welcome to episode number nine. You missed a finger, number nine of Retireholics. We. This is our first one that we are live streaming on the Internet. So we'll see how that goes. What is this show? What are we doing? What are the retireholics? It is my friends here and myself, Justin McNeil, Mark Palmini, Chad Johansen, JD Carlson. Attempting to change the retirement plan industry one beer at a time. [1:07] Chad: Times four. [1:07] Justin: We start with beer 30. Mr. Johansen, what do we got going on here? [1:13] Chad: We've got a change up. [1:14] Justin: Well, you can ask him a question. [1:16] Chad: I'm pulling the string, Justin. [1:17] Justin: Well, I'll start. I was here at the office. A box came and I opened it to these beautiful little puppies right here. I don't know who is behind it or the motivation, but it comes from the company, the Standard. And I think Justin has a little more intel than we had on it. So Justin. [1:35] Justin: Yeah. [1:35] Justin: How do we get these bad boys? Our good buddies over at the Standard [1:40] Justin: have been rightfully so promoting retireaholics actually throughout their whole office. I learned which was really cool. I was up there in February and got to see it firsthand. [1:50] Justin: But one of their dark stuff. [1:55] Justin: Can I get a new one? [1:56] Chad: Wow. [1:57] Justin: One of their internal. [1:58] Justin: You grabbed the one with the skunk in the bottom. [2:00] Justin: Brew their own beers. And so they got together with their marketing team. They wanted to obviously have it on the show. They created these cool logo or labels for us as well. So we're pretty stoked on it. Looking forward to tasting it. [2:13] Justin: Did they realize that I like lighter types of beer? I think I've made that clear in past episodes. [2:19] Chad: It is an imperial stout. Let's read this out. Since it beer of the episode. I mean one year aged six months of that one year in a bourbon barrel. Maris Otter Golden Promise Crystal roasted bee, Chocolate wheat oats and molasses. 11% alcohol by volume 11. [2:38] Mark: I'm ask one question to you guys, the Standard. I love you. Thank you for this. [2:42] Chad: But what is Roasted Bee? [2:44] Mark: I'm not really excited about the making of this beer. No, it's just a letter B. [2:49] Justin: While you guys are enjoying this, I want to put out a little. A little challenge to our audience out there. And I'm gonna put it to our LinkedIn. Did you know that we have a LinkedIn company account? I mean, you can get us on all social media, but we have a LinkedIn company account. And I know for a fact that these three dudes are not even following us on our LinkedIn retire holiday. [3:14] Mark: I like your posts. [3:15] Justin: I wouldn't check this morning. [3:16] Mark: A stalker. [3:17] Justin: I'm just saying. That's not it. That's retireholics on LinkedIn. So here's my challenge to the audience. Go to the Retireholics company page on LinkedIn. If you don't have that, you can go to the Facebook one and comment on what beer you think we should have on a future episode. Okay. [3:39] Mark: And tell us why not just go have Budweiser? But why we should hash. [3:45] Justin: We are going to pick from the first 50 people that comment on either of those sites. We're going to pick a winner, and the retireholics are going to sponsor them for a beer of the month club, which I believe is@craftbeer.com and you will receive 48 beers delivered to your home on us from this deal. Okay? [4:06] Chad: And then you can drink one each time we record. [4:08] Justin: And while you're at it, if you could go to Instagram or. Or. And I mentioned the Facebook, called it the Facebook. [4:14] Mark: The Facebook gotta drop Twitter or put yourself out there on this. [4:18] Chad: And the social media aren't you. [4:20] Justin: They get out there and check it out. All right, Chad, hit us up with our first subject matter that we're going into here. [4:27] Chad: Advisors get asked the question all the time what it is that you do. And often it's not in a setting where people actually know what you do. It's not a point of sale. It's at your kid's little league game. It's sitting in a restaurant. It's somewhere where you're talking. You're at a golf course and you're talking to someone that has no idea what you actually do. How do you respond? And I'm guilty of this. For years I've said, oh, I'm a retirement plan consultant or I design corporate retirement plans. [4:50] Justin: Wow, that's engaging. [4:51] Chad: Yeah, that's the exact choice. [4:52] Justin: Please tell me more. [4:53] Chad: Most of these folks will say, hey, I'm a financial advisor with Morgan Stanley, or I'm an independent financial advisor. Okay, what is it that you do? And why do I care to ask you what it is that you do? And so this concept, the genesis of this came from that. And we're going to show you a nice, neat Tool that kind of helps you break down what it is that you do when you're asked that question as if you were in an elevator. The elevator pitch. [5:16] Justin: Don't stop. [5:16] Mark: Stop saying. [5:18] Justin: So I reached out to my good buddies at Invesco, and if you don't know Invesco, they have for years have a really great educational campaign that they do all across the country. [5:30] Mark: They actually came here and a presentation. [5:33] Justin: Oh, true that, true that, true that. And they did one that they call Tell Me More, which is about a log line, which is about creating a log line, which we'll talk a little about. 15 words or less that can show what it is. Answer that question that you talk about in a creative way. [5:49] Chad: Yeah. [5:50] Justin: What is a log line? Where does it come from? They went to Hollywood, of all places, to find this. And so in Hollywood, it's classic when you create a movie or a TV show in some very few words, to be able to describe what's going to happen and engage you and the hook of it. [6:08] Chad: Get them quick. [6:09] Justin: And so what we'd like to do today, instead of just blow hot air and talk about it, we want to walk them through this process. So grab your notebooks and your pencils or your pens and start working along with us to build this for you. [6:24] Mark: Grab your iPad or your phone, really, your notepad. [6:30] Chad: I'm gonna do a mark or jump onto the Invesco site. Did I do it the right direction? [6:35] Mark: I hate it when you guys do that. I never know which way to go [6:38] Chad: and jump on and go through this live. [6:40] Mark: I just do this next time. [6:42] Chad: I did it both ways. I'm covered. [6:43] Justin: It is built around three steps, and the first step is to answer four questions. And I'm just giving you Invesco's pitch on it. And then we'll walk you through how we kind of tweaked it. The first question in creating a logline is, I help blank line. Right. I help whom. [7:03] Justin: And that can be really anyone you want. [7:06] Justin: I help plan sponsors, I help local businesses, I help small businesses. [7:12] Chad: Doesn't have to be one specific group of people. You can have this for different facets of your business. [7:18] Justin: True. You can have multiples. [7:19] Chad: You can do many. [7:20] Justin: The next one is who want blank? [7:24] Chad: Right. [7:24] Justin: So what do these people want? They want easier HR support. They want fee transparency. They want. [7:33] Chad: Depending on your audience, that's going to [7:34] Justin: change better retirement outcomes, whatever. Okay, I'm using some boring words. We're going to spice it up a bit. And then the next third question of the four is to overcome. Think of a movie, right? They're always going to have a plot thickens to overcome this. So what are the obstacles that are in their path? The complexities of the retirement plan world, low returns, volatility in the marketplace. And we'll cover some of those. And then finally, the fourth question is with, so how do you uniquely help clients overcome that obstacle? What is it that you do that separates yourself from others? So pretty cool. And one thing I want to say is I felt like going through this, this, this, this act, this practice of doing this was just a great experience in itself because it's kind of difficult. [8:29] Mark: It's eye opening for sure. [8:33] Chad: And we all said, we struggled with it initially, initially. [8:36] Justin: But once you actually created that first [8:38] Chad: one or two, then it started again, things started flowing. [8:40] Justin: That's what, that's what I think everyone, you know, who's listening and wants to do this should do, you know, because there's going to be different, different scenarios at a different type of pitch. You know, not pitch, but, you know, [8:52] Justin: play with it and have fun with it. [8:53] Chad: It's funny too, that, that what, what is the outcome? J.D. at the beginning of this conversation before starting a show, said, you guys might be too young, but do you remember TV Guides? Because the outcome is the synopsis. It's the bottom lever of a TV or layer of a TV guide that's talking about what the show is about to go through in a sentence or two, which still exists, by the way, when you click guide on your television. [9:16] Justin: I have an example of one of those. If you want a real logline, which is for a show called How I Paid for College, here's a log line. A talented but irresponsible teenager schemes to steal his college tuition money when his wealthy father refuses to pay him to. To study acting at Juilliard. That's a log line from. [9:34] Chad: That works. I'm hooked. I wanna watch it. [9:38] Mark: Anyways, here's what I liked. [9:42] Justin: So I was thinking when I was researching this. Well, Invesco created this. What's Invesco's logline? And sure enough, there it was, smack dab, right on their website. And Invesco's was helping financial professionals get, keep and grow business with never seen before ideas. I was like, that's pretty good, man. [10:04] Chad: The concept here is to be able to start this exercise right, is to start the exercise, to consider this and come out with a product at the end, something that you can use and the. Excuse me, the evolution that this will lead to. We're drinking stout Beer here. [10:19] Justin: What did you have for breakfast? [10:21] Chad: Nothing. The evolution that this can lead to, and it's gonna be part of what notyourtypicaladvisor is in the future is to take what you're going to say and now make it tangible. [10:33] Justin: Yeah. [10:34] Chad: So if you can come up with this creative. And even Invesco has a portion that they call adding sauce to it, spicy sauce to it, where they give you these words, secret sauce. Secret sauce. I think where it's talking about spicing it up and taking, as JD mentioned, first example, second. But now you create this, and now that person asks you and you have something to say, and they say, tell me more. Because that's what Hollywood said they were trying to do with this. Right? Is tell me more. We hook you. [11:01] Justin: We hook you. [11:01] Chad: We hook you. Now, tell me more. It all connects now. Right. [11:05] Justin: But you know, you're right. [11:06] Chad: But now what tangible do you do to follow it up? And that'll be future. [11:10] Justin: Not your typical advisor to wrap this up. I honestly feel like that if you start this process, what you end up doing for the second level and the third level is you start to put more meat on that bone, and you get more and more comfortable walking into a prospect and being able to deliver what sets you apart from everyone else. And that's all. That's all. This segment, hashtag not your typical advisor is about, is we want to help our advisors and people that watch the show build something that's impactful when they walk in, and that they're confident and comfortable to discuss it. [11:42] Chad: And what better group? I mean, we see this from every single avenue. Those that have deliverables, those that don't, those that really, really leverage partners, those that don't. So we really have a pretty good foundation of what's needed to differentiate. [11:55] Justin: It is time for the infamous Wheel of Ice. Sing it. [12:00] Justin: Oh, dear. [12:01] Justin: He plays it. I'm not gonna sing it. [12:04] Chad: I can't even get my. [12:07] Justin: It's been put through a filter. It is a wheel of ice. Did you auto tuned? Yeah, I was. I was. [12:14] Mark: Yeah, [12:17] Chad: I like it. [12:18] Justin: That's Lance from Installations and Conversions over there. [12:21] Mark: That's Periscope hooking him up with a little. [12:23] Justin: We have nobody left on Periscope at this point. [12:25] Chad: I don't know. I don't blame him. [12:29] Mark: There's no way. We tried. All right, Daddy. [12:31] Justin: Anyone still on Periscope? We got six. Hey, is Jerry from Bloom there? [12:39] Chad: Yeah, Jerry Hollis. [12:40] Justin: Is Jerry from Bloom. [12:45] Mark: Brandon and Tracy also. [12:46] Justin: How about Timmy? [12:54] Chad: Shame on you. I see my Name on there. I can physically see it right now. [13:01] Justin: You look locked in. Oh, wait a second. Make sure it's on Chad. But let me make sure it's right. [13:08] Mark: No, come on. [13:12] Justin: What is this? Let me guess. Is it Mark? [13:14] Chad: Is it Mark? [13:15] Justin: Yeah. [13:15] Chad: Does it happen to be Mark? [13:16] Justin: Yep. [13:17] Chad: No. No, no, no, no, no, no. [13:19] Justin: Are they all like. Oh, come on. [13:23] Mark: You guys suck. [13:24] Chad: You thought you had a way out? Yes. [13:26] Justin: Fear not, buddy. It's all you. [13:28] Chad: Cheers. Mark. Enjoy. [13:29] Mark: Yeah, look at the difference. [13:32] Justin: Jesus. [13:32] Justin: Get the butt out of my face. [13:33] Chad: Yin and yang. [13:34] Mark: Holy cow. All right, all right. [13:36] Justin: Mark goes down to a knee. That's how he does it. [13:39] Chad: Mark, Mark. [13:40] Mark: Mark. [13:41] Chad: Mark. [13:41] Mark: Mark. [13:41] Chad: Mark. Periscope. Sorry. This is for you. [13:44] Justin: Last time it was like 12 seconds. [13:46] Mark: I'd like to see this. Yeah, it's. This is a. A shimmer original. [13:52] Chad: He is. [13:52] Justin: Cheers. We're thinking for the next golf tournament that we sponsor, the contest we have at our hole will be to pound a shmern off ice. And the time you get will be put on a sticker on your. And the winner will get a. Will get a prize. [14:08] Chad: We like to promote drinking. [14:10] Justin: Very good. [14:11] Justin: Really? [14:11] Justin: There's still a little left in there, buddy. Nice job. [14:15] Justin: Look at my eyes. [14:16] Justin: They're a little chill. Good job, Marcus Allen. Good job. All right, so I'm so happy. Our next topic or segment we call the 411 and the 401K. We're gonna talk about what everybody and their mother's talking about. I know my mother's talking about it. Is your mother talking about it? [14:39] Justin: The new baby? [14:39] Mark: Don't you talk about my mom. [14:40] Chad: I don't think my mom is. [14:42] Justin: The new fiduciary rules. What? [14:47] Chad: Did you guys know that this was happening? [14:51] Justin: What's a fiduciary? The new fiduciary rules. So first. [14:55] Justin: No, I'm serious. [14:56] Justin: Let's talk about the fact that you should. When next time advisor asks you. [15:04] Mark: I gotta go make. [15:09] Justin: I'm surely not one. [15:10] Mark: Hey, by the way, we're live on Periscope. My phone just told me. [15:13] Justin: Okay, good. And so what we try to do here on this show is inform and give our audience some valuable nuggets because [15:24] Mark: we're sure that they've been hit with. I don't know, I'm gonna guess 600 emails by now about it. [15:30] Justin: Yeah. [15:30] Chad: And everything is about content and not. Not loose interpretation. That's what we're gonna do. Loose interpretation. [15:37] Justin: Every industry email that comes through on a day to day basis is included. [15:40] Chad: Every meeting I sit in is about what is gonna be the impact of the fiduciary definition? [15:44] Justin: Well, and it's, it's in general media too. Right. So it's in USA Today and Wall Street Journal. So surely plan sponsors and people out there are cognizant of it. And so we just want to make sure that our advisors have some information, some insight, some things that we can kind of provide them. What would we like to start with? [16:06] Chad: I think biggest, obviously, is the potential impact to rollovers and the IRA implications. [16:13] Justin: The ira. [16:13] Mark: Right. [16:14] Justin: Everyone's getting in a hussy over that. [16:15] Chad: They are, and I think rightfully so. There's some significant fear there in terms of guidance and what information is shared to create and what does it all generate around suitability? Right. Isn't that what everything is generating around is this decision to move money or not move money, for that matter, in terms of the IRA side of things, is it the right decision for that participant? [16:40] Justin: And I probably skipped past this, but it's also called the fiduciary rule for a reason. It's basically saying that if you come within any close proximity of a, of a retirement plan, you're a fiduciary or [16:54] Chad: a retirement investor, for that matter. [16:55] Justin: Well, and then we'll get to the ira. But so that's what's happening is if you, if you deal with this stuff, if you help plan sponsors, if you doubt you're a fiduciary, if you breathe on it. [17:03] Chad: I mean, we were chatting this morning about on our drive in, they're even going to the extent of saying, if you're delivering distribution education, what are your options? Leave the money in the plan, roll it to an ira, take a distribution, pay taxes and penalties because you're under 59 and a half. That's going to position yourself as a fiduciary. That's a fiduciary act. Now, that's a big change to where we're at now. [17:24] Justin: But over to the ira, I'm ashamed to say that we've never been. That we've never, we haven't had a lot of advisors, I don't think, that have really built their business around these IRA rollovers. They've kind of focused on the 401K. But out in the world there are some big business models built as they should be, on dealing with the money that tries to leak out of these 401ks. And how's that dealt with IRA rollovers? And so the kind of breaking point here is you're in a 401k plan and you're paying a certain fee for that as a participant. Right? And maybe that Advisor is making a 25 trail or a 50 trail or a 10 basis point trail, depending upon the size of the plan and the services provided. But now you're talking to them about rolling out and you're going to make 1% or 75 basis points or you know, something more than you were making before. Is that a prudent decision for that participant? Is it suitable as you put it? And are you disclosing, are you transparent with those fees? That's where this rub is happening with IRAs. Right? And that's a, that's a scary thing for people that have built their business model on that. And you're going to tell me now too, it's not even just the guy that's the advisor to the plan. [18:42] Chad: You know me too well. It's not just the guy that's the advisor to plan. It's that private wealth individual that's working with employees of Google and any other large corporation that's helping with IRA rollovers. But I was going to take it a step further and say There are many BDs out there, even that have created a rollover distribution type you put process. I wasn't going to call them out, geez. But when folks leave a plan, they get automatically notified and most advisors will set the threshold, but they get notified and say, hey, you're getting ready to leave your plan. Here's your three options. If you want it to move the dollars to an ira, then you can move it to this ira. And in doing so, we're going to have a management fee, we're going to put you in a portfolio. We're going to manage those dollars. The Advisor on the 401k is going to be compensated on those rollover assets. And by doing so often, it's not level in terms of what they're being compensated. I'm curious from a large scale of how that's going to be handled. I mean, only time will tell, but I think that that's an interesting question [19:47] Justin: to ask for advisors. I think when you've got things like this in the news, this is a good thing because these are things to talk about with prospects and whatnot. [19:57] Mark: So check, don't check your phone. [19:59] Chad: It could be someone that's calling, got [20:01] Justin: an email on his phone or. All right, thank you for tuning in to episode number nine of Retireholics. [20:10] Chad: Thank you. [20:11] Justin: I, I'm a social media obsessed dude. So don't forget, go check out the Instagram, the Facebook [20:19] Chad: 401k. [20:20] Justin: I'm writing a book. [20:21] Chad: Some significant content. [20:22] Justin: 401k.com f o u r o 101 no, that's not part. [20:32] Chad: There's some really good content, so check that out. [20:34] Mark: We'll talk about some of the blog [20:36] Justin: posts on future episodes. And it's a wrap. We are the retireholics. [20:42] Chad: Thank you. [20:43] Justin: Changing the retirement plan industry one beer at a time. [20:50] Justin: Don't forget that one. [20:51] Justin: Peace. That one's going. [20:54] Justin: Yeah, that one's going too. Gets the bald spot nicely. Good. [20:57] Justin: Oh, that's your bald spot camera. [20:58] Chad: Brandon, I felt like you were getting rather frustrated back there. [21:01] Justin: What? Thank you. [21:10] Mark: You're welcome. Thank Guatemala. Do you think bagels and donuts are cousins? No, they're absolutely different people. They couldn't be related in any way. A bagel is like a canvas for art. A bagel you can make your own. A donut is like corporate America. They're gonna tell you what you're gonna get. Oh, I want a goulet donut. Oh, yeah, you do. Well, here you go. Oh, you want a bagel? Do you want toasted? Maybe not toasted. Do you prefer snapback or flex fit hat? I'm not sure what you're asking me right now. I'm focused on bagels.