Fiduciary Best Practices with Nevin Adams & Fred Reish

[0:00] Justin: Hey, Brandon, put the picture of Chad and his car backed up so we [0:04] JD: can all realize that Chad's wearing the same shirt in that picture that he's wearing tonight. [0:09] Justin: I love you, Chad. [0:13] JD: It's actually going to come up later with our listener line. [0:17] Fred Reish: So sort of like college where you wash your jeans once a semester. [0:23] Justin: You watch your friend. [0:29] JD: Hey, hey, chat bar people. We're back. It's two weeks on the road, and now we're back with you in our little zoomy zoom world. And I don't know about you, Mark, but I'm kind of liking being back in the Zoomster. Yeah. [0:44] Mark: No. [0:45] Justin: No way, man. [0:47] JD: I'm sorry. I've been one of those people that's been like, oh, we're going back into person. [0:52] Justin: Whatever. No, I enjoyed it far too much. And being in my bedroom. [0:58] JD: On. With a robe. On. And. No, I hate this. I want to go back to a conference. I'm kind of enjoying it, and it's great to see all you chat bar people again. I've kind of missed you the last two weeks. I know you've been there, but I haven't been able to watch it go down. Welcome to another Retireholics, the show that attracts the biggest ballinous, badass guests in the entire 401k industry. Am I wrong or am I not wrong? Justin, it's time for your 0 to 10 introduction. Who do we have with us today? Fucking Ned, Vin and Fred. We don't need an intro. Let's roll this shit. Let's keep going. Very good rate, Justin. Zero to 10 out there for his introduction. Let's make sure we cover the rules, even though Fred Reese is allowed to skirt the rules anytime he wants. But we will be playing chat bar champion today, and I'm kind of claiming today. This is like chattel, like this. This is like the masters of the PGA Tour. Like, if you win chat bar champion on the Nevin and Fred show, that's an elite status there. So we should have had some custom mugs for this. You get a green jacket. Get something. You got to choose your mug. Maybe you could choose two renaming it [2:17] Mark: the Nevin and Fred Show. [2:19] JD: So we will be doing that. I want to reiterate that. Did I freeze? [2:23] Justin: Did I freeze? [2:25] JD: I want to reiterate that last week, our chat bar champion was Greg Greenfield. So, Greg, in the chat bar, if you could let us know. And it was a clear. You knocked it out of the park. If you could let us know what collectible mug you would like. [2:40] Justin: That's a bad Reference today. JD knocking it out of the park. [2:45] JD: Let us know. Yes. Sorry about that, Cardinal guy. Let us know which Dodger Blue. [2:52] Fred Reish: Roger Blue. [2:53] JD: Let us know which mug you want. And then. I got your address, Greg. So then I'll ship it to you before I leave the office. Tonight, we will be playing Acro Sin. So if you say an initialism or an acronym, you must drink from your penalty drink. I've got Grey Goose, Fred Reich has Starbucks. I don't know. We'll figure it out as we go. Figure out as we go. Let's go straight to Headlines. Give me my little intro. Bran, if you could, for Headlines. It makes me feel like a real newscaster or something. Give me one second. [3:27] Justin: Well, he did feel like a real new tester. [3:30] Mark: He just needed a deep drink. [3:32] Justin: Here we go. [3:35] JD: Yeah. Thank you, Brandon. I really appreciate that. Hopefully this one doesn't get our guests in any trouble. It's a little dicey, but I'm gonna. It's too good to pass up on bond. King Bill Gross sentenced to jail. Bill Gross of the famed Pimco. Let me pull up the article here on my little tablet. Apparently, Bill Gross is not very happy in his $36 million beachfront home. He's having a little spat with his neighbor, and he's been playing the Gilligan's island theme song on repeat at high decibel levels. And I'm imagining he's got some pretty expensive speakers and just playing it on repeat. The judge. Oh, there's a. There's a little video of his wife and him upset in their pool, pissed off. And the judge caught wind of this video here that Brandon showing you and news of the Gilligan's island theme song, and sentenced each of them to five days in jail for contempt. So, Bill Gross. Yes, Mark. You seem confused. It just looks like a standard Thursday night at JD's house. [4:53] Mark: I don't exactly. [4:57] Fred Reish: Confused. [4:58] JD: I got two questions. One for Fred. Fred, I believe you live in Laguna beach, which is where Mr. Gross lives this summer. Did you hear the Gilligan's Island? Could you hear it from your house at any point in time? [5:10] Fred Reish: No, I do. I do have a second home in Laguna Beach. I do spend time there, but Bill's not next door. He's further up the beach. So we're on good terms. I mean, you know, we. In a manner of speaking. We've bonded. [5:28] JD: Monkey, monkey, we're smoking the drums. [5:30] Justin: Thank you. [5:31] Mark: Oh, I did that. Took me a minute. [5:34] Justin: Yep. [5:35] JD: Got it. I actually was pretty worried that Fred was going to be Like, I actually have coffee with him on Wednesdays, so that's kind of a dick move. [5:43] Mark: Well, you'll get to for another year because his sentence was delayed in terms of when he actually has to go serve his time because of COVID Yeah. [5:51] JD: Yeah. Mark, what do you say, Spats, with your neighbors? Lamer game? Oh, we're going to. I'm all game for that. It reminds me of growing up. We had neighbors that had really barky dogs. [6:03] Justin: We had dogs, too, too. They were quiet. [6:05] JD: So there's some interesting times in our neighborhood. Nevin, are you lame or. Game on, Spats with your neighbor, man. [6:13] Justin: That's. That's lame because, like, it depends on who lives next to you and what they're willing to do. And I've lived next to some pretty dicey people, so I would hope that [6:25] JD: if you both lived in your $40 million. [6:27] Justin: I don't, by the way, I don't live in Laguna Beach. Let me just clarify. [6:31] JD: So I was just hoping that they're mature adults, they could come to terms. I think Bill's 70 years old, so I'm just kind of little childish. But we'll move on. Let's get some 401k talk. Sorry. My question there is you live in that expensive of a house, how are you so close to your neighbors? [6:47] Mark: Laguna beach, man. [6:49] JD: Yeah, familiar. [6:52] Fred Reish: Yeah, yeah, those are those beach lots. But no, actually where he lives are big homes. But yeah, you are. You know, big homes in the beach area are pretty close together. It's not like living in the Midwest or something where you have space. Yeah. [7:06] Justin: Remember what started this all was a big statue in their yard that apparently blocked views. [7:11] JD: That's right. Wow, good reporting, Navin. You're right. All right, let's. Let's move on over to Washington. We've got these two guys here, so maybe we can get some updates from them on some things that are happening. Let's talk national mandate auto enroll individual retirement account. Proposed effective date of January 2023. Part of the build back, better deal that's going through all this stuff. Would this not be the biggest thing ever in the history of 401k to have a national mandate? I'm going to go straight to you, Fred. Is this thing going through and would it not be the coolest? [8:00] Fred Reish: I think there's a good chance it will go through. I think it's going to get mixed play. Some people are going to say it's a mandate on employers, therefore, it's horrible. Even though it's just a mandate to facilitate through your payroll system and do some paperwork. But viewed from the perspective of folks in the 401 community, I think there's a. Particularly advisors, but also other service providers. I think there's some real opportunities there because we've seen it in California because we do have a mandate here, a state mandate, and there are people out there selling against us saying, hey, you're going to be forced to have an IRA based plan. But there's some deficiencies with IRA based plans. You really ought to set up a 401k plan. It's a lot better for you. So we're seeing growth in 401k plans as a result. [8:54] JD: Yeah, for sure. In California. Nevin, you've got your ear close to the ground there. I think Brian had mentioned that he thought as I had like a 75% chance of this thing going through. Are you still optimistic? [9:08] Justin: Yeah, with, with Fred on that, I think there's, there's a lot of energy behind it. It's, it's somewhat problematic because, I mean, let's face it, everybody's, you know, we still haven't figured out this debt limit yet. And then there's a couple of other bills that are kind of vying up for attention as well. But to your point, I remember Brian was Brian Graff, my boss, CEO, American Retirement association, was testifying on Capitol Hill for the Senate Finance Committee. Oh, geezer. [9:38] JD: Chief executive Officer. Oh, well, always finish your thought. [9:42] Justin: No, no, no, you guys don't understand. Is that literally his title? It doesn't stand for anything. His title is. That's a word anyway. [9:49] Fred Reish: I don't even know what those words mean so far. I'm in trouble today. [9:54] Justin: Well, just don't spell anything out. No, I mean, we did work with the Employee Benefit Research Institute to project out the impact of this thing. We're talking over just a 10 year period, like nearly $7 trillion worth of brand new savings. [10:13] JD: 615,000 retirement plans. [10:17] Justin: Yes, and 60 million retirement savers. And to Fred's point, what we've already seen happening and what you all have talked about on these sessions before is, is what that mandate does in terms of bringing it to the forefront of a plan. Sponsors attention and the opportunity to sell them a real plan, if you will, as opposed to the simple payroll deduction kind of thing we have. Yeah, it could be a game changer. In fact, those statistics, Senator Wyden, who's chair of that Senate Finance Committee, described them as jaw dropping. [10:55] JD: Yeah. [10:56] Justin: So. [10:56] JD: Hey, and it's true. I think when CalSavers first came out here, we were a bit concerned, right? Like, oh geez, like where are they getting into our game? But it is true, we have learned it's been a fuel, a catalyst for new 401k business and we've talked about that a lot on the show. So I won't go over it again, but if it happens on a national level, it's going to be great for our industry. Let me give you some of the basics on what I'm understanding it to be. It's got an eligibility of 20. This is the individual retirement account, the mandated one. It's got an eligibility of 21 years, a one year of service or 500 hours in two consecutive 12 month periods. For eligibility, they auto enroll, enroll yet 6% and then increase you annually by 1% to a cap of 10. You're under the same individual retirement account limits of 6K. And it's intended to be a Roth contribution that you're putting in. So after tax, let's see, there's incentives for the savers credit where the government would chip in a 50% matching contribution up to like 1000 bucks, I think, which is really kind of cool. So Fred, beyond the opportunity for new 401k plans, how do you feel about the structure of the government program itself? Like, do you like those things I said? Does it sound pretty cool to you or. [12:22] Fred Reish: Yeah, they do. I would point out though, they're also in Secure Act 2.0. There's some significant savers credits if you set up a plan. So if we get both those bills, which I think in due course we will, I still think that setting up, compared to these state plans or compared to a federally mandated plan, a 401k plan is superior. Just superior services, superior investments, you know, [12:48] JD: fiduciary responsibility, a lot of flexibility, customization. Totally. Yeah. [12:53] Fred Reish: Yeah, exactly. And bigger benefits for the top guys. So 100%. [12:59] JD: Yes. [13:00] Justin: Nevin, when Fred says. And I need to pause in this when Fred says secure 2.0, since secure. Oh, what is an acrosant? [13:08] Fred Reish: Wait a second. Not, not really, is it? [13:11] Justin: Yeah, not in its current usage, but I, I need. That's why I need a judge's call here. [13:16] Mark: Yeah, no, we have always made it. [13:18] Fred Reish: I don't know how you get. I don't know how you're gonna take acronym out of the name of Secure 2.0. [13:23] Justin: I don't. [13:24] Fred Reish: Secure, [13:27] JD: secure. [13:28] Mark: Secure. [13:29] Fred Reish: Secure. [13:31] Mark: Give me one is gonna be hurting. [13:34] JD: That's three more. Let me ask you guys this, okay? And maybe I'm stretching here, but I Want to get your thoughts? We create these 600,000 plus retirement plans and let's say a lot of them go the federally mandated counterfeit's points because I agree 401ks are cool but let's say they go to the individual Retirement Account program. Will this not create like an energy and evolution of new investors like people that are actually in the markets investing, getting a feel for retirement and how might that positively impact our industry long term? Where I would think these participants would grow up and be like hey now I'm really interested in this and I want more investment options. I'd like a bigger, better 401k like Fred said. And then maybe we're the benefactors of an industry of like this new desire, this new demand for better retirement plans. Am I being too optimistic or could that also be an outcome? [14:37] Fred Reish: Nevin, do you want to go $7 trillion [14:43] Justin: new? [14:44] JD: Yeah. [14:45] Justin: Right now the 401k industry writ large I think has like 12 trillion in it. 7 trillion more huge. Where do you think that's going to go? I mean trust me, it's maybe it's hiding out in the Amazon thing around me. [15:02] JD: Cream get the money $$Bill your [15:06] Fred Reish: yeah, yeah, me too. I think that directly to answer your question JD I do think that some of the businesses that stay real small, just a simple payroll withholding arrangement, fine. But some of those businesses are going to grow and they're going to be used to putting money into savings for their employees with investments. But they're going to grow into retirement plans and they're going to get bigger, they're going to have more employees, they're going on something a little more sophisticated maybe to be able to attract employees through matching contributions and on and on and on. So I think a certain percentage will grow into 401k plans and I think there's opportunities for everybody there. More people investing, more people with savings. I remember when we first put in my little law firm before I joined the big one, many, many years ago, we first put in a 401k plan. The office manager really embraced it. She got everybody to sign up for it. But then like three months later, some of these young 20, 21, 22 year old employees saw their first quarterly statement. That was the first time in their lives they had ever saved any money. One or two of them actually called their parents and said, mom, dad, I've saved money, I've got money invested. I mean they were that excited about it. And I think we'll see some of that here too. I don't see any reason why, why it wouldn't produce that same kind of pride and sense of planning for the future and investing that we want to see. [16:42] Mark: And we've said on this show a number of times recently, just needing the awareness for the younger generations. And J.D. to your point, this is going to create that awareness much earlier in their working career than they're getting access to it now. And that will be huge when they hit 25 and now they get their first real job post college. But they've been into a state or federally mandated plan in the early years of their working hours or their working years. They're likely going to join at that point. I think that that's crucial since we're not teaching it in the schools. At least we'll get their appetite wet there. [17:14] Justin: Yeah. [17:15] Fred Reish: You know, to pick up on that ASPA ARA has done some research about automatically enrolled plans for you, Fred. [17:24] JD: I'm going to drink for you, Fred. [17:25] Fred Reish: But you know, that's right. That's two the American Retirement association has done some research about diversity and inclusion and has found that automatically enrolled plans produce greater results for diversity and inclusion, which I think the new state mandated plans or federally mandated plans would as well. So that's an extra added benefit because of the focus we're putting on that in this country right now. [17:57] JD: And unlike pooled employer plans who don't really care about the coverage gap, this federal mandate will actually do something about the coverage gap. So I think it's going to be a huge, huge positive. [18:11] Justin: I didn't think there would be come into this. Just. Yes. [18:16] Fred Reish: Can we talk? Can we please talk about the Dodgers? [18:20] JD: Geez, Fred, we cannot save it for the after show. I don't believe I just told Fred Reich. No. I feel ashamed right now. [18:29] Fred Reish: Be that way. [18:30] JD: Fred, I want you to expand on the in setting every cat catch me outside. How about that? [18:38] Fred Reish: Hey, get that black and orange off [18:40] Justin: of there [18:43] JD: in the. I'm just going to say it and I'll drink for it. And the secure 2.0. I've heard you on the podcast on the Nevin and Fred podcast talk about how you felt like the this it's not the savers credit the credit to the employer, the 5K annually and then what is it even like maybe I don't know if you could break it down for us but you said it was kind of overlooked and you felt like wow, this is a really big deal. And I think in the hands of people like Chad, Mark and Justin running around trying to set up new plans, this should be something we should be talking about to employers. [19:18] Fred Reish: Noam, I think the savers credit and the credit for the employer. But Nevin, you've thought about that a lot. [19:26] Justin: No, I mean, jd, you're spot on. I mean we've offered, long offered really modest, minuscule credits to employers to start up or to do a plan or things like that. But arguably, aside from the fact that startup plans don't tend to be very lucrative in terms of offering the programs and things like that, from the employer standpoint, you know, you're taking on potentially a lot of burden and you're not getting really anything to offset it. The credits that Fred is talking about, they're not only more than enough to like cover the plan operation and get it. I mean they're structured in such a way so you get it whether you, you need it or not. I mean it's just a flat out check from the government. [20:09] JD: I would just think your, your third party administrators all across the country would see this as a massive opportunity to offset their billable costs. I mean you can walk into all these plans and be like, look, it's basically going to be free for you to set up a new plan. I mean it's a, it's an opportunity. [20:27] Fred Reish: I think in the bill whose name will not be named. At the credits for the employer are extraordinary. I want to back up what Nevin says. They cover the contributions to a degree as well as the administrative costs. I mean there's like a, I can't overstate how big these credits are going to be for new startup plans. So yeah, and I think the savers credits as well. But I would get out there, I'd be beating the drums on it. I, it's a little bit hard until the bill is actually passed because you're saying, hey, you really ought to be attentive to what's going to happen. But, but once it's here, and I think there's a high degree of confidence that the bill, who and I became a bill and I remain until they [21:23] Justin: decide to make me a law. [21:25] JD: If you're, if you're an advisor or you're a third party administrator, you should be building your pitch now. You should be working on your materials now. You should be preparing for when this stuff goes into law of the opportunity. Let's play a little game. Let's mix it up. We'll have some fun. I've got a little game planned for the two of you, Nevin and Fred, but before we do that, we're going to spin the Wheel of Ice. So, Brandon, spin the wheel of ice. Pounding us. It's winning. [22:05] Justin: That was close. [22:06] Fred Reish: So did I win anything? [22:10] JD: Yes, Fred, you won the opportunity to not pound a Smirnoff ice. Brandon is. That means the show is going to go downhill from here from a production value, but that's okay. Brandon, could you. Can you do two things at once? I can try. I need you to play my favorite game with my favorite song. [22:37] Fred Reish: All right, hold on. [22:40] JD: Our Jack Daniels bottles are branded, so I wanted to show that off. Look at that. [22:46] Justin: Aren't those, like, 4 years old? [22:49] Mark: How many new ones? Those were going to Nashville with Fred originally. [22:53] JD: Right? We're going to Nashville again. [22:55] Mark: I'm making more. [22:57] JD: I don't think whiskey spoils. [22:59] Justin: Okay, so you need your song. [23:00] Fred Reish: All right. [23:01] JD: Yeah. We're gonna play a little game. Nevin and Fred. One of these things is not like the others. One of these. [23:14] Fred Reish: Thank you. [23:15] JD: Okay, this one is for you, Nevin, and you only. You just need to let me know which one of these things is not like the other and why. Oh, that one's easy. [23:31] Justin: They're all friends. [23:34] JD: They are all friends. It's not that hard. I mean, it's not that intense. Oh, and I just totally got that one wrong. They're all celebrities. I forgot the name of somebody. I mean, you could come up with several answers here, I would think. [23:52] Justin: Well, I mean, yeah, Mercury Mark. They're only. Let's see. There's only one of them. That's a. That's a crazy serial killer. And that's the guy on the far. That guy over there. [24:04] JD: Freddie Mercury is the crazy killer. [24:06] Justin: Oh, at the other end. [24:07] JD: The other end. I was with Kate. I was with Kate. I was. That's a great answer. [24:12] Fred Reish: True. [24:12] JD: There's one killer there. I was going. One of them is a cartoon. There's just one that's a cartoon, but that's it. So Fred Flintstone is the answer there. We're going to go to you now, Mr. Reese. It's your turn. Brandon, show up Fred's slide. Oh, this one takes a little more thought and nobody can help him. And Fred, don't cheat in the chat bar. I doubt the chat bar would even be able to help you with this one. [24:40] Justin: Your. [24:40] JD: Your partner there might. [24:42] Fred Reish: One of these things. [24:43] Justin: Well, one's an ackerson. [24:44] Fred Reish: Nevin was at Ebury. Nevin was a plan sponsor. [24:48] JD: You smart. [24:49] Fred Reish: Now I have to decide between Wachovia and EF Button. I will say Nevin was at Wachovia. [24:54] JD: Correct. [24:55] Mark: Wow. Wow. He knows his podcast Partner is that [25:00] JD: first one he said in Acrosyn? Yeah, yeah, sure. [25:03] Justin: Yeah. [25:04] Mark: Did he say it is? Yeah. [25:05] JD: Good job. Good job, Fred. I'm impressed. I'm impressed. Okay, the last one is for both of you, and you can work together. You know, you can phone a friend with each other and try to get this final one [25:19] Justin: once. [25:20] JD: Brandon, there are two things at once. Good job, Brandon. You can talk amongst yourselves or [25:29] Fred Reish: this [25:29] JD: one's a little more like, use your brain. Like I tried to, tried to stump, tried to play with you. [25:34] Justin: Well, none of them have orange as a school's color. True. [25:39] Mark: Good thing we're looking for one difference. [25:42] Justin: Well, you know, you got to start somewhere. It's process elimination. I don't know. We got cats, we got Wildcats. [25:51] JD: I was thinking more. Try to think more. 401k, I would say. [25:55] Justin: Oh, I know, I know, I know. [25:58] JD: No, no, no. [26:00] Justin: Oh, Nevin's got it. [26:01] Fred Reish: Go ahead, Nevin, go for it. [26:04] Justin: 403B University lawsuits. Stanford. Stanford. [26:08] JD: Yeah, you got it. [26:08] Fred Reish: I was gonna say, what about this? Columbia is the only one without a football team. [26:15] JD: You can always come up with a new one. But yes, those are all targets of the 401k boogeyman. Mr. Gerald Schlichter. Besides Stanford. Yeah, yeah, yeah. Good job, Good job. [26:26] Mark: You guys were impressive. [26:28] JD: Yeah. You won the game. [26:29] Fred Reish: Yeah. What a great game. [26:30] JD: For sure. Well, I brought you guys here one because you're living legends and 4K icons, but I also wanted to put a little spotlight on the new podcast you guys are doing, so the Nevin and Fred podcast. First question for you guys on this guy is, how does Nevin get his name before Fred? And was there any back and forth on this? [26:53] Justin: Nevin set it up, [26:57] Fred Reish: did all the work. [26:59] JD: You got to think about, about that, though. Like, it sounds better, right, Nevin? [27:05] Fred Reish: Oh, that's, I agree, it does sound better. And I, I, I, I called Nevin and said, nevin, I, I hear there's this thing called a podcast. What do you say we do one of them? [27:17] Justin: It was friends idea. It was Fred's idea. [27:19] Fred Reish: No, Nevin knew all about it and, and, and he really did all. He took the laboring or he pulled it together. He made it work. [27:26] Justin: Actually, my, my daughter, who I think may even be on the chat room, Aaron, if you're on the chat room, hop in there and say hi. My daughter Aaron is our producer. Actually, she's, she's not in Brandon's league, but she's, but she's better looking. [27:41] JD: Does she do all your social stuff? [27:42] Justin: Too, because I know you guys aren't doing that. No, she does. She does that as well. Okay. And she's got us on all the platforms and all that kind of stuff. Aaron's done a great job. It was. Because up until then, it was just me and Fred futzing around with our computers and trying to figure out sound files. [27:57] JD: So, Mark, Mark, are you. Are you suggesting that Fred Reich does not know how to do an Instagram story or that he has no idea what an Instagram story even is? Yes. [28:10] Fred Reish: Okay, let me clear. [28:12] Justin: Okay, But. But don't forget, we also. It's a family affair because Fred's son Freddie contributed our theme song. We actually have our own unique theme song to kick it off. [28:23] JD: Good one. Very vibey and very groovy. Shoot. Did I freeze or did they. [28:39] Justin: That's fred on sex. [28:44] Fred Reish: That is Freddy. I mean, that music was written by Freddie and created. It's all computer music. [28:53] Mark: Nice. [28:54] Fred Reish: Yeah. [28:56] JD: I think we lost jd. [28:58] Mark: Oh, he is frozen, isn't he? [29:00] JD: That's so good. [29:01] Mark: I've got my chat bar over him, so I couldn't even see it. [29:04] JD: All right, Fred, here's your chance. [29:05] Justin: Dodger talk. [29:06] JD: Here we go. [29:09] Fred Reish: Hurry, hurry, hurry, hurry. Hurry up. [29:11] JD: He's coming down. [29:12] Justin: Hurry. [29:12] Fred Reish: Oh, no, no, no. [29:16] Mark: Go sports. [29:18] Justin: Sports. [29:20] Fred Reish: The team, the team. [29:21] Mark: Go, team. [29:22] JD: Go sports. You guys are having too much fun while I'm gone. I come back. Makes me feel bad. Makes me feel bad. Let me ask you, what's the frequency on these things? It looks like you're kicking them out about every month. Is that the plan? Will that change at all? I think the audience. Everyone, would love to get this stuff a little more. Can we get it twice a month? You guys can pull that off? [29:48] Justin: Well, we got it off the ground at all because Covid slowed down Mr. Reish's travel schedule and made it a lot easier for us to sort of do that. Not to mention mine, but Fred's. Anybody who's kept up with him on Facebook knows Fred's on the road a lot, capturing pictures of hallways everywhere. So that's helped a lot. We wanted to do something that we. Yeah, there we go. That we could count on doing with regularity. And, yes, right now, it's. It's been once a month. [30:21] JD: Can I ask who's. Who do you think of as the intended audience for the Nevin and Fred podcast? [30:28] Justin: What do you think, Fred? I'll let you answer that. Yeah. [30:32] Fred Reish: I mean, it would be really, really valuable to plan committees, to plan fiduciaries, because we talk about how to run a plan better, but it's actually directed more at people who advise plans. It could be third party administrators, record keepers, investment advisors, broker dealers. But the idea is that by having a better understanding of what we see and the experiences we've had because we try to make it very practical, that that puts them in a position to help plan fiduciaries do a better job. But the way the conversations have turned out, it's also good for plan for plan sponsors to listen to it as well. And just to add a little overlay on that. JD the genesis of this was to have fun. Nevin has seen all those different places you had up there. Nevin's been in the retirement plan world for a long time and even though I'm much younger and haven't been in as long, I'm older. The idea was we would have some fun together, but we would have fun being serious and are fun about serious things and really how to, how to do a better job and how not to make mistakes and what best practices are and, and, but all very much in a back and forth conversation. So our goal is to have fun with it. You know, as long as people are interested and they listen, as long as we have fun, we'll keep doing it. And if it's turns out that we should do it a different way, for example, we're just doing audio now, but if at some point it turns out that we should do visual as well, we'll record it on video. So we want to deliver something good, we want people to have fun with us. So we have a lot of really good back and forth. So anyway, that's the idea and we do want to contribute though we don't want to just. It's not just chitty chat, it's about real things for real plans and how to make them better. [32:33] JD: Honestly, not to pat you guys in the back. It has that kind of light fun feel, especially off the start and the music is very groovy and then you guys get right to the point. But it's got a calm kind of demeanor to it. And I think just through the chat bar you're going to see a lot of people really do like it and obviously everyone's really interested in what's in the brains of you too. And you both speak very well and share your thoughts very well. So yeah, you got to keep doing it. But that's cool Fred, that you're thinking about that you're willing to learn and see if it could evolve in some way. But so far I'd say you guys are knocking it out of the park for sure. So people can find it everywhere. Aaron's putting it out on every single podcast app or Apple Spotify. [33:20] Justin: You can go. If you don't have access to one of those platforms, you can go to nevinandfred.com but we're also putting them up in. In Napanet so you can find it there. [33:30] JD: There it is. [33:31] Mark: There it is. Got him. [33:34] JD: And don't forget to follow them on Instagram. The Nevin and Fred podcast on Instagram. [33:40] Justin: We're over. By the way, I think we're over 2,000 listeners listens now. And I think you're until. [33:47] JD: Yeah, don't show off, dude. We get it. You're cool. [33:50] Mark: Whatever spreads on every. Every month. Nevin, we get it. [33:55] JD: Yeah. On your last, on your last podcast, you had to go out and throw out like, oh, yeah, we got questions on Twitter and Fred was responding to this person. I don't think we've ever gotten a question on Twitter for this show. So. Yeah, okay, we get it. You're. You're like up here. [34:10] Fred Reish: Okay. As Nevin said, we've had over 2 million unique listens. [34:16] JD: So nice [34:19] Justin: related to us. But. [34:20] JD: Yeah, well, 1.5 million of them is J.D. by the way, you do if you look at your itunes or what is it called these days, the Apple podcasts, you've got two people wrote a review. It's my daughter and it's Brandon, and they're giving you five stars. And [34:42] Mark: speaking of Instagram gold, J.D. you got to acknowledge Justin and Mark's Instagram post from today. That was true. That should break the Internet. It made me laugh so hard. [34:52] JD: That's. [34:52] Justin: That you. That's got to go to the credit has. [34:55] JD: His credit is due to Justin for that. Justin, you had the caption, buddy. Very good. It's the toter. The other two retireholics Instagram. Check it out. I think we'll talk. [35:06] Fred Reish: Thanks. [35:07] JD: Give me two seconds. [35:07] Mark: I can get it for you. [35:09] JD: Oh, one. [35:10] Fred Reish: Okay, two. [35:12] JD: Well, now I'm distracted because I'm like. [35:15] Fred Reish: The other thing I want to say about the podcast, JD is that we're going to keep up with current events as well. [35:21] Justin: It's. [35:21] Fred Reish: It's, you know that, that sometimes we'll talk about our experiences, for example, working with plan committees. Other times we'll say, hey, here's this new rule. What should plan committees be thinking about or doing or what should advisors be talking to their committees about? So it's there, there, there. It's not there will be a continuing education on new development sort of aspect to it, but not the minutiae of the rules. More what. What should we be doing about? What should we be thinking about it? [35:47] JD: You've kind of struck that theme already, I'd say. You guys have been obsessive about the plan committee. You've got two episodes that you've covered a lot of those, and I've liked that. And someone did mention today on LinkedIn that they're going to share it with their plan sponsor clients. And so you mentioned that earlier. I think that's smart. I've listened to it with that kind of ear. And I think this is something that advisors, third party administrators could share with their clients. And to have their clients get a feel for what a committee should look like, why it's so important. That's actually the next subject that I want to talk about. Brandon, do you want to show the video before I talk real. For one case. Brandon does that, though. I think more importantly is there's got to be a little level of, like, marketing and advertising. And I mean, I've only got one podcast on my robe. I should probably add another. [36:36] Justin: So if you guys want to send [36:37] JD: me a patch, I could market you guys, you know, just. [36:40] Mark: Okay, you go to 4 million views in a week with that. [36:45] Fred Reish: Okay. [36:45] JD: Yeah, let's try to get back to. [36:47] Fred Reish: There we go. [36:48] JD: Here you go, Fred. That is Mark and JD Fighting over Fred to be his best friend. It's on Instagram at the Twitter. Instagram account. Okay. [37:13] Fred Reish: Okay. [37:13] JD: Plan committees. In episode three, y' all talked about titled Committed Relationship, you covered these plan committees. Fred, you were asked by Nevin in that episode how many people should be on a committee. And instead your response was less about how many and about who should be on the committee. So for our audience here today, who should be on your 401k committee and who should not? [37:38] Fred Reish: Not Katie, I think, you know, good to have somebody from the CFO or the finance side, somebody from hr, somebody from benefits. [37:49] Mark: Oh, no, Fred. [37:50] Fred Reish: No, I messed up. [37:52] JD: David. Chief Financial officer. [37:55] Justin: Okay. [37:56] JD: Oh, DK's David K. Oh, keep saying them, dude. Keep them going. I just connected the dots. Fred, please continue your thoughts. No. Son of a. [38:08] Fred Reish: But I mean, to me, I would never. If once a company's big enough, I would never have the CEO on the plan committee. I wouldn't have anybody who dominates the plan committee. Yikes. I did it again. [38:22] Justin: Oops. I did it again. [38:23] Fred Reish: But I think if you go into the size issue, an operational size 3 might be too few. 5 might be just about right. 7 is probably okay. You get over that. And you may have too many people to really be good a good functioning committee. But I like a group of people who are engaged, who are willing to speak up. And the thing I most dislike is where one person dominates the committee. That's a prescription for disaster because they're going to impose their will. And sometimes those tend to be very opinionated people who make decisions shooting from the up, even. So. [39:02] JD: Although you did, although you did give us an example where you, you had mentioned that two of the committee members for the New York University lawsuit kind of saved the day for the plan as a whole. So having some power trippers sometimes ain't too bad, I guess, huh? [39:18] Fred Reish: Well, yeah, no, I, I, Smart, thoughtful people that'll ask questions are the best people. What happened with nyu? One of the people on the committee said, I didn't even know I was a fiduciary. Well, like, give me a break. [39:32] Justin: Another said, another chairman of the committee said that. [39:35] Fred Reish: Another said, I'm too person. I'm too busy with all my other job responsibilities. I didn't really have time to do a good job. Oh, come on. I mean, that, that's like the worst possible things. Two of the committee members, though, were really good. They reviewed all the materials they got. They asked questions of the advisor, they understood the issues, they made thoughtful decisions and comments, and they saved the day. Nyu, not withstanding. [40:02] JD: Oh, my God. Hey, Fred, I just want you to know, I don't know if you've noticed, but I'm trying to take a swig of vodka every time you break the fucking rules of the game. If you could please use your brain and like, melt on the game a little bit, I would. [40:21] Fred Reish: Okay, new york university. But the two saved the day. I mean, the, the two, they were really diligent committee members. So. Yeah, yeah, that was, that's actually a great case for a case study for a plan committee. I mean, if you could take the facts out of that case and walk through a committee with them, that's one of the best educations you could give them. [40:48] JD: Go ahead, John. [40:49] Mark: I was just going to say, I feel like most advisors are fearful to have another advisor on the committee, but that outside counsel and the groups that I've been involved with has been the most effective person to have on a fiduciary committee. Someone that is not trying to steal the business from the advisor, but truly is in there and understands this space and can be a resource for that investment committee for that fiduciary committee, it's been phenomenal. In the two groups that I've seen do that. [41:17] JD: I want to Nevin go to you. When Fred was talking on the podcast, I think one of the points he was trying to make was he liked a committee that was willing to almost argue with each other or everyone could voice their opinion. And I've been part of those types of committees and they're phenomenal when everyone's playing a role and no one's afraid to ask the dumb question or, or push something a little further in that direction. And I think when you guys are talking about this, that's the ERISA attorney utopia that you envision. However, I sit in on a lot of, okay, I'll drink for that. I sit on a lot of these committees these days and I want to get your opinion about this. I feel like we're on a 60 minute timeline. Like there's clearly, there's 60 minutes allocated this meeting these days. It's, you know, 14 rectangular boxes on zoom. The advisor is going to go through the investments, we're going to do some reg updates. I feel like by someone asking a question or derailing in some way, it's almost frowned upon. So what kind of advice might you give to advisors that are dealing in the real world where everyone wants to get through this meeting as quick as possible? I mean, you all are talking about this utopia of fiduciary review meetings. [42:35] Justin: Well, just because you have people who are active and engaged and asking questions doesn't mean they're doing that throughout the meeting. I think, I think there are ways. I think what's important is to have an agenda, what you're going to talk about, which I assume everybody does, and also have some rough idea of how long you're going to spend on each of those things. And I would say actually budget time for discussion. And it's not a bad thing to budget it even after each topic, but certainly after the significant ones, you know, the reality is you don't. I mean, sometimes you're not going to have time to wrestle each issue all the way to the ground. So maybe it's something that you defer some of it to the next meeting, some of it. Sometimes you may set up a separate meeting or something like that. I think, I think what you don't want to do is miss out on that interaction and give people that opportunity to ask questions and to know what's going on. And honestly, people that I know, the advisors that I know that know how to run these meetings, and stuff. They know how to do that and they know how to, how to engage people and get that feedback from them. [43:39] JD: I would take a chapter from Josh Idso's book, pun intended, which is don't let the client push you around. If the plan sponsor thinks these meetings are supposed to go quick and fast in 45 minutes, you need to have the confidence to sit them down and say, look, this is a serious matter. We're going to need back and forth from everyone on the committee. We're going to go down different topics and we need the time allotted, necessary. And so I just think too many people are giving the clients what they want instead of telling the clients what they need. And we need to see more of that. [44:13] Fred Reish: Yeah, I agree with that. Just to quantify some of that, I think in my experience it takes four meetings a year, quarterly meetings, two hours devoted to each meeting to cover both the best practices and the fiduciary responsibility. So I would allocate at least eight hours a year. And I would also hope that people would read the materials before they come to the meeting. But, you know, yeah, I'm gonna, I'm [44:40] JD: gonna clip, I'm gonna clip what you just said. Brandon's gonna clip it out for me and we're gonna send that to every advisor and plan sponsor in the world. Frederic says two fucking hours for the meeting and read the shit before the meeting. I love it. That's great advice, solid advice. Thanks for your little tidbits on the committee meetings. If you haven't listened to. I think it's episode three and episode five where you guys go into the committee meetings in detail. So I highly recommend people tune into those. Brandon, let's break it up with a little fun again. We started a listener line where people out there could call in with their thoughts, questions, opinions. It's 1-833-RobeGuy is the call in. And Brandon play us. What have we heard? What has come in? I had a two part question. Seem to have some pretty important guests this week. The first question is, does Chad lease [45:40] Mark: or purchase or finance his Jaguar? And the second question is, who writes Justin's questions on the show? I don't know that voice. [45:50] JD: Shots fired. That's David K. That has to be. [45:53] Justin: That's what I thought too. [45:54] JD: But Chad, do you lease the car or did you buy? What's the deal? What's the finance? [46:01] Mark: That vehicle was purchased outright after I was sideswiped on 280. [46:10] JD: Of course it was. And Justin, we all know your Rolls Royce got sidewiped you just. [46:17] Mark: It was an old Rolls Royce mark. Ten years. Ten years plus. [46:22] Justin: David, to answer your question, it's a waterfall. [46:24] JD: Every week, someone else, you know, decides [46:27] Justin: what I'm going to say on the show. [46:28] JD: Right. [46:28] Fred Reish: Okay. [46:29] JD: Yes, I know you write your own stuff. It's great stuff, Justin. All right, Brandon, next caller. Hello there. I have a question regarding Fredrich and jd. Having watched retire Harley several times, I got the impression that Frederich was JD's best friend. But having listened to the most recent episode of the Nevin and Fred podcast, Nevin talks about giving Fredrich a big hug. [46:58] Fred Reish: So I was wondering, is Fred Reich [47:01] Mark: also Nevin Adams best friend? [47:03] JD: And part B of my question is, is JD jelly? First of all, you're falling down that webby. We know that's you and you're way too concerned with all that stuff. Fred, I'm apologizing. I look you in the eyes right now. I do tell a lot of people on the show how close we are, you know, how we hang out and stuff. And I know that Nevin is really your best friend. Obviously did a podcast with Am I jealous? Yes, I am. Okay. Next caller. Brandon. Hi, Brendan. I saw the recent announcement that Blackrock is offering annuities to 401k plans. I would love to get your insight on these things. I just keep trying to wrap my brain around things like what happens to employees that use the investment option but they leave their company or what if they accumulate a super small investment in the annuity and how does it look for cash out? I love the idea of this in theory, but when I try to think about how it plays out in practice, I get overwhelmed. Fred. Nevin Blackrock's life path, paycheck, annuities and a target date fund. You heard most of our questions there. How do you feel about all this stuff? [48:22] Justin: Go for it, Frank. [48:23] Fred Reish: Okay. You know, the. In a manner of speaking, the really big issue now with 10,000 people retiring a day, that's a common statistic because 10,000 baby boomers are getting to age 65 every day. 10,000 people are claiming Social Security, all that stuff. The issue is how are you going to make money last for folks lifetimes with the money in the ira withdrawing, the Iraq. Oh, God. Oh, geez. [48:51] JD: Fred, come on, buddy. [48:53] Justin: Oh, well, I mean it. [48:55] Fred Reish: There, there is a rumor was named after Ira Cohen, which is a name and not an acronym. The but but. So there's a lot of people are really struggling with how do we make this work? How. How do we make money last for a Lifetime, properly done, I think there's a role for annuities. Bottom line, properly done, I do think there's a role for annuities for guaranteed [49:21] JD: lifetime income is the, is the biggest problem, Nevin. The, the. The ability to move it from one plan to another. And people change employment so often. Often. [49:34] Justin: Go ahead. Somebody want to. [49:36] JD: I mean, I do. Go ahead, Chad. [49:38] Mark: I have a question that goes along with that, though. In the 401k space, we're building annuities to be leveraged during the accumulation phase. Right. Like most of what has been created out there is about driving assets into these investments before you reach retirement age. Shouldn't annuities be utilized at retirement age when we're getting into the decumulation phase? Is this just a money grab by the investment companies to try to get dollars earlier? [50:06] JD: I think specifically to the BlackRock one. And I think a lot of these, they don't kick into that kind of annuity start till like five years before retirement or at like 59 or something like. Yeah, they wait till they kind of. [50:22] Mark: So that's the first one I've heard that way then. Because that's not how they were when they rolled out originally and have been recently. [50:28] Justin: Well, okay, so here's the thing into what Fred was saying. We've got a serious problem with people not knowing how to. I mean, they're not very good at accumulating, but with automatic enrollments and target date funds and things like that. [50:48] JD: Check swing. Check swing. [50:50] Justin: Yes, we've managed to sort of help people get along that path. We haven't done is been able to get them on that decumulation path and having something that automates that opportunity. There have been a couple of different product rollouts over the years that have tried to do that. And yes, they've mostly done along the lines of what the BlackRock product is doing is kind of sidle that in along with that Target Date fund. So that kind of helps put them on that path to that, you know, to that type of investment at a. At a point in time which makes sense for them to do that on their own if they had the cognizance and all that kind of stuff to do that. So the good news there is there it is, that kind of approach, and that's probably going to be the only way we're really going to help get people onto that is to find out something that's just as easy as a target date fund was to sort of flip the switch and help them do the right thing. There are problems Portability is a big one. Portability, meaning, you know, when you're sitting there with this provider and you bought their annuity and then you change employers, as people often do, then what do you do with that? Now, there have been some product designs out there more recently because multiple providers are involved with it. The idea is that it can be ported over or that you can take that accumulated annuity and somehow move that investment over as well. There are issues there. And honestly, I think a lot of plans, I mean, although the BlackRock rolled out and said they've got five large plan sponsors already signed up to sort of move along with this. So. But I think, I think it's going to take a little time before employers get completely comfortable with that, because logistically, I think it's still complicated. And even if it works seamlessly on the back end, I think the explaining of it is complicated. And until it can be uncomplicated and annuities are inherently complicated, I don't, you know, I think we're going to struggle with that, but we need a solution. We need something that's going to help people find their way into this kind of investment. [52:53] JD: The decumulation part of retirement is an important and a complicated one, and we haven't had solutions forever. [52:59] Mark: So I don't know the answer to this, but I would love to. I'd love to find out if there, if it's tracked what portion of annuities actually pay out more than the amount that was put in. Like, who is benefiting from the annuity? Is it the investment space or is it the actual people purchasing the annuities? And I truthfully have no idea what the answer would be there. [53:25] Justin: Well, that's one of the big holders. That's what people are afraid of because they know how it works. You know, the house always has the odds and everybody's always got this fear that the money that they're going to get, that they're not going to get all the money back that they put in. Well, let me just tell it to you folks, that's called Social Security. Also, I'm never going to get back all the money I put in Social [53:44] Mark: Security, but I'm forced to do that. I'm forced to. This. I am not yet. We're pitching it as an industry. So that's what I'm trying to make. [53:53] Justin: It's about. It's about having. Okay. The conversation I had with my dad as he was coming into retirement was ultimately, when you get close to that, what you really want is not to Maximize the value. Want to know how much you're going to actually use? Get. [54:05] JD: Yeah. [54:06] Justin: And that's really important. As you're looking at, this is going to be my pay. If we talk about the paycheck for the rest of your life, how much that's going to be really matters. And it may mean you trade off some upside potential and it may mean that you, because of longevity, you don't get out of it every cent you put in. [54:23] Mark: Yeah. [54:23] Justin: What's important is that you can count on what you're going to get out. [54:27] JD: Yeah. Very well said. Very well said, Nevin. And if you're a financial guru out there and it doesn't make sense to you because you understand that you could take that money yourself and go invest it and do whatever, I get that too. But what Nevin's saying is, hey, there's some people that just knowing the fact they can put their head on the pillow and know that they're going to get that 25 grand every year, it helps them live a happy and content life. And there's some value in that. So it's a dicey subject. But that was good. That was good. I appreciate it. [54:58] Justin: And a great question. And a great question. [55:00] JD: And thanks to their. [55:03] Fred Reish: I think part of this is to think about it more for the middle class because the folks with huge account balances, they are going to be able to manage or hire people to help them manage the money and make it last for a lifetime while they're withdrawing money. But when you get down below the level of where folks can hire sophisticated advisors, who's going to help them? How's the system going to support them? There are also hybrid solutions like guaranteed minimum withdrawal benefits, GMWBs and apply. [55:32] JD: Don't say it. [55:33] Fred Reish: Oh, guaranteed Minimum Withdrawal benefits. [55:37] Justin: What is the record? Is he close? He was 22. [55:44] Fred Reish: Anyway, Fred, there are all these words that will not be mentioned again and I will momentarily blank out here and there, but you pay between 90 and 100 basis points a year for the guarantee that you will never run out of money if you withdraw according to the rules. Those are a hybrid arrangement where you have the target date fund. See, I was good there. And the insured benefit, but you just pay for the insurance as a discrete charge. You don't, you know, and then the investment stays separate. It doesn't all get into a fixed product. Those are really transparent. [56:27] JD: And again, I think the sophisticated investor has lots of options. But like you were saying earlier, we're talking about the general public and how can we make Things easy for them. And so this is a hot topic. We probably have to keep revisiting this one on future episodes. I feel like the chat bar is getting a little fired up on it. And, Kate Clark, we will take your personal work questions for Fred in the after show. Okay, we'll get to those here shortly. I saw that. We'll get to you. Kate has a question. We gotta wrap this. And I've also got for the after show, tune in because I have a listener that didn't call in, but they wrote me, and their name was anonymous, and they called themselves pissed and betrayed financial advisor. And they're very upset with some things that I've said. And I will read for you. This. This person's haters emailed to me in the after show. Okay. [57:21] Justin: Again. [57:23] JD: No. [57:25] Fred Reish: Yeah. [57:25] JD: If I'm still awake. Okay. We. We got to do chat bar champion, everybody. So who is your vote for chat bar champion today? And remember, this is like a. This is a masters win. This is a. This is a big deal. What do they call the four big turn grand slams? Is that what they call them? Majors? [57:47] Justin: Majors. [57:49] JD: This is a major. Justin, who's your vote? I'm going Webby today. Michael Webb. Brandon is the first one into the semifinals. Chad, [58:00] Mark: there's a lot of good. There's a lot of good ish in that chat bar, but I'm going with it. So it's so crushed it tonight. Both funny and content driven. [58:10] JD: Are IRAs not called individual retirement accounts? Nevin, who's your vote for Chatbot champion? [58:20] Justin: Tom Codren. [58:22] JD: Three piece. Okay. Very nice, Fred. Take a stab at it. [58:26] Fred Reish: I'll take somebody else. Let me keep reading. I saw Mike Webb a couple times, so there's a. [58:31] JD: There's a shot you can back up Webby again. Mark. [58:38] Justin: Hackler. [58:40] JD: Hackler. And I'll. I'm gonna go with it. So my. My second, third, fourth favorite podcaster. That's a lot, Brandon. Sorry. But throw them up there and let's see who wins. Chap our champion. You. I'm gonna say it's a major. So you get to choose two of your favorite collectible mugs. And remember, if you collect all four, you win a mystery fifth mug. Not that anyone gives a shit. [59:17] Mark: I mean, I love mine. Dang it. We can't vote, guys. Always a check every week. [59:25] JD: See if Brandon's tight race as Webby won before. [59:31] Justin: Yes. [59:32] JD: He's had to have. Right? [59:34] Mark: Yeah. [59:35] Justin: I'm the one who never wins. So. Just saying. [59:38] JD: Looks like you're gonna lock it up. Webby Michael Webb is the winner of Chat Bar Champion. Webby in the Chat Bar. Let me know what two mugs you want. Do you want a rogue guy? A silent J? You know, what do you want? And then I probably have your address too. Yeah, in the system, so you don't need to send me that. Gentlemen, thank you so much for having this fun with us. We are going to go on the other. Katie, you're welcome. I know it lasts a lot. [1:00:05] Mark: Definitely. [1:00:07] JD: We are going to go on the after show and if you stick around with us, that'd be great. If you don't, then we'll just talk shit about you and that's just as fun. So we could do that too. But we got some things to talk about in the after show to the audience. Thanks, it's great to see you back here in the little zoom format. Fun, fun, fun. Thanks for all of your engagement and yeah, Brandon, play us off some music. It's. It's 5:30. Let's wrap this up.