Fintech Disruptors vs. TPAs: Live from American Trust

[0:16] Mark: Mark, that's kind of rude. [0:18] JD: Coming to you live from the stage of the American Trust Conference in Nashville. Thank you. Look at this audience. There's a bunch of it's a who's who of 401k ballers here today out there. Well done, American Trust. You can actually see people. Yeah, sort of. And thank you to American Trust. Thank you to the sponsors, thank you to the peeps out there for having us here. It's an honor. And it's a fucking privilege. Okay. My name is J.D. carlson, and yes, I have been known to sift through Fred Reich's trash can on occasion, but I'm just trying to check out what's in there. I'm joined by Justin Silent Jessica McNeil, nerdy Chad Johansen, our producer, Brandon, aka my little brother, and the man you've all came here to see. Your favorite retireholic. [1:18] Mark: My favorite. [1:18] JD: My favorite retireholic. [1:20] Justin: It's not my favorite. [1:21] JD: Everybody's favorite tireholic. The R to the O to the B to the E. Rogue guy. Okay, that's sad. We got a super dope guest today. We got lots to cover, so I say we just get right to it. Justin, intro our guest for the audience. [1:45] Justin: Don't let the white hair fool you. This man goes heli skiing once per year. And for any of you Northern Californians out there that may have been just as confused by that as Mark was last night, it's heli skiing. As in with a helicopter, not hela skiing. [2:00] John Moody: Hela times. Hela times. [2:01] Justin: No, not that. With a helicopter. He's a corn fed farm boy from Iowa. Iowa. [2:08] JD: Ireland. [2:09] John Moody: Iowa. [2:09] Justin: Think about 4. [2:10] John Moody: Idaho. [2:10] Justin: Anyways, without further ado, ladies and gentlemen, put your hands together for the CEO of Etchco Holdings, John Moody. [2:26] Mark: Enjoy the couch. [2:28] JD: It's not what I expected. [2:30] Mark: You look a little different. [2:32] John Moody: I thought I could show up like Katie's dad. [2:35] JD: My dad's far more professional looking than that. [2:39] John Moody: Wow. [2:39] JD: Welcome to the show. We are honored to have you. You look like a hell of skier to me. But, John, what we got to do first, we got to start drinking some beer. We call this Beer of the Episode. Chad, can you describe for everyone the beer that we're about to drink? And Mark, can you grab me one or. [2:57] Mark: So we're drinking from a local brewery called Bearded Iris is ale. [3:03] JD: All right, Mark. Mark, I'd like you to take your first sip and let everyone know what you think of it. [3:10] Mark: Sniff it, feel it. [3:11] John Moody: Delightful. [3:12] JD: Okay, let me take a sip here. [3:15] John Moody: Expert. 100%. [3:17] JD: All right, John Maltese. [3:19] John Moody: Good to know. [3:19] JD: Here we go. We're going to play some games today, and I want to make sure that you all know these games and John's ready to play these games. We typically play chat bar champion. And you at home if you're watching. We'll still have a chat bar champion at the 4:30 Pacific show tonight, so don't you worry. But what we're going to play out here is audience champion. How that works is we really don't fucking know how that works. We're all gonna vote for someone at the end of the show that we think is the coolest amongst all of you. And you will get all the prizes and cash that goes along with that award. We are also gonna play acro sin because we always play acro sin. So, John, if you say any initialism or acronym, you must drink from your penalty drink. [4:02] John Moody: Which is what? [4:03] JD: Does John have a beer right now or is he. [4:10] John Moody: Oh, nice. [4:11] Mark: So good. [4:12] John Moody: What was. [4:12] JD: We were told it's gross, which is why we got it good. John, it doesn't matter how powerful you are. It doesn't matter what a big shot you are. You must keep up with your acro sin penalty. [4:23] John Moody: Thanks for pointing that out. [4:24] JD: Okay, let's make sure about that. First question to you, chime. This conference is called the American Trust Conference. Were you part of. Who's the creative genius behind that name? Never mind, we'll move on. Let's do headlines. Let's go right from the headlines. Brandon, play me some headlines. [4:42] John Moody: That's my friend Nick. [4:49] JD: Every time that plays, I feel like a journalist. All right, this puppy came out today, and I'll just say it. Napa hyphen. Net did that on purpose just to show the people how the game works. [5:03] Mark: Better than Malort. Worse than Malort. [5:05] JD: It's better than Malort. But it's bad. Okay, it's bad. This baby came out on the website that comes to you from the people at the national association of Plan Advisors. And it's talking about the Department of Labor coming out with us some guidance on crypto. See, the department is crypto guidance. What's that? [5:27] Mark: Can you classify it as guidance? It's pretty much like a big warning. [5:30] John Moody: Sounds like a big caution to me. [5:32] JD: That's right, it is. That's the best way to describe it, John. Well done. [5:36] John Moody: It does. [5:36] Mark: You read the article, didn't you? [5:38] John Moody: No. [5:40] JD: Check it out. [5:40] John Moody: That's basically, I read the headline. That's it. That's my specialty. [5:43] JD: You know what? In this particular one, the headline says it all. So that's how you do go check it out. But yeah, they're keeping their eye on crypto. Let's move on. In headlines, this is a Nashville alert. Very important for all of you here tonight. Robe Guy will be drunk on the streets of Nashville tonight and he will most likely miss his 8am flight tomorrow. 6am 6am so look for that. [6:07] Mark: He's our audience champion right there. [6:22] JD: Two hours later. [6:31] Mark: At least you had water in the second. [6:33] JD: Well done. Well done, Rob Guy. Not sure where the water came from. Finally, finally in headlines, we have a pooled employer plan article from Neil Anderson at 401k wire titled we where are all the pooled plan providers? And basically the the stats here with this is they did not they. Excuse me. Smart. The company that's now Smart USA here in the states. [7:01] Mark: That counts. That counts. [7:02] John Moody: Really good counts. [7:03] JD: United States. Oh, okay. Let me finish my thought. I'll drink for that. Was monitoring the pooled plan provider registrants right when he signed up. And in 2001, in 2021, the first year that you could do this, there were 74 total applicants. Well, 69 of those came in the first half of that year and only two of them came in Q4 of that year. So the question is, are PEPs losing their steam? I got it. I got 2. 02. So, Chad, what's your take on this article? Is this predicting the collapse of pooled employer plans? [7:44] Mark: I feel like I want to say yes, but in my mind, anybody who wanted to be a pooled plan provider was going to get into the game right away, get their paperwork filed and be ready as they go and launch. I think what is would be more interesting is figure out how many actually launched because I think there's very few, at least in the little bit of research that I've seen on it. I think there's very few. I can't see pooled plan providers that are actually holding onto assets right now. [8:10] JD: John, do you feel like those numbers and the fall off in those numbers are any kind of real indication? And then on top of that, what's your vibe on pooled employer plans these days? Do you think they're the bee's knees? [8:24] John Moody: Bees. Knees. You're old. [8:26] JD: I thought that's like an old term. You know what old people say. [8:32] John Moody: Oh yeah. My son likes to call me Boomer. [8:36] Mark: We call JD that too. [8:38] John Moody: The I talked about it before. The issue is we have 62 million Americans. A lot of them are gig workers. A lot of them are 1099 folks, independent contractors. I can't Say gig. You don't. [8:54] JD: Say it all you want. [8:56] Mark: Don't question it. Don't question it. [8:58] JD: Say it as much as you'd like. [8:59] John Moody: John, I gotta catch up on the game. [9:02] JD: You may no longer run this company when you're done. [9:08] John Moody: Wow. [9:10] Mark: It's good, isn't it? [9:11] John Moody: That really does suck. [9:15] JD: Remember, you can always finish your thought. So do you have any take sitting in the high powerful chair that you do on how many assets are hitting some of these pooled employer plans that were started in 21 or 22. [9:29] John Moody: I think it's a slow burn. I think that's true. I also think there's some struggles with the secure act. One point as well. [9:38] Mark: Setting every. [9:39] JD: Setting up every cat. [9:41] John Moody: I wouldn't even know how to say that right now. You just make it up. [9:43] Mark: We've been playing this game for a long time. That one's come up a time or two. [9:48] JD: It's true. We're kind of veterans. I'll finish this. John, you don't speak for the man. Well, he's drinking. [9:55] John Moody: He's smarter than you. Please speak for the man. [9:57] JD: Well, you wrote, you wrote, you wrote me an email. And he said, hey, I did send you that you're not really into pooled employer plans because I read your stuff, my propaganda. And you said, and who wouldn't want [10:14] John Moody: to listen to you just by looking at you? [10:16] JD: And you said, what are you. What are we going to do as an industry about the. I don't even know what the acronym used stands for, but the one who's been penalized on. [10:25] John Moody: I'm not saying every community. [10:28] JD: No, no, no, no. And the small. The people that work at. Like Uber's not an acronym. [10:33] John Moody: Yeah, probably. [10:34] JD: And small employers and you know all these. This coverage gap we're talking about. [10:38] John Moody: Coverage gap. [10:38] JD: I have to tell you, I was super offended because I'm a third party administrator. [10:43] John Moody: Right. [10:44] JD: My father founded our company in 1975. Chad, Mark, Justin, you guys breathe in that. Mark, that's what we do every day. [10:53] John Moody: Your company is suggesting that there's no [10:56] JD: solutions for those people because I'm here to tell you there fucking is like we do it all the time. All right. Go down this rabbit hole again. [11:04] Mark: It doesn't fall on deaf ears, though all of there still is. What was the number you threw out? [11:09] John Moody: 68 million people. Brian Graff from that organization, American Retirement Association. Brian Graff quoted it at the last conference, 62 million Americans, and believes it's in five years, $7 trillion of new money into the system. I just want Some of that. [11:29] JD: I'm a capitalist. [11:30] Mark: You need another? [11:31] John Moody: I just want some of that. [11:32] JD: His thoughts, though, on that. That very speech. Though. That very speech. You guys, his thoughts are on the federal mandate, which has been squashed since then, so it doesn't mean that that gap doesn't still exist. [11:43] Mark: Now there's 14 states with state mandates. [11:46] John Moody: You live in one of them. [11:48] JD: Well, we're not going to solve that problem while drinking beers on stage. So we. [11:52] Mark: Solving the world's problems. [11:53] JD: Jd, there's something called the Wheel of Ice. Robe guy, maybe you can explain to the audience what the wheel of ice is. The worst part of our. It's a wheel, then we spin it, and then we drink. Okay, thanks. [12:06] John Moody: Pretty simple. You'll see it. I mean, what do you want me to say? [12:10] JD: Spin the wheel. It's the worst part of the show. [12:15] Mark: At least we don't have crows. We don't have too many crows. [12:16] John Moody: Right? [12:17] JD: No crows. Okay, no crows. [12:19] John Moody: God damn it. [12:23] JD: Perfect. Justin must pound a smirnoffice. [12:26] Mark: We've done this a few times. Watch how quick he can go, too. John, it's quite impressive. [12:30] JD: It's impressive. [12:31] John Moody: Oh, yeah. [12:31] JD: Guys, look at the oohs and ahs. We do this every week. [12:35] John Moody: Yeah. [12:36] JD: Oh, don't clap for him. Hey. Hey. [12:39] John Moody: That is impressive. [12:40] JD: Hey, he's single, ladies. He's single. [12:43] Justin: I think that might be why. [12:45] JD: All right, let's move on to the topic. [12:46] Mark: I'm definitely talking to HR about that. [12:48] JD: That counts. [12:49] Mark: Dang it. [12:50] JD: Let's move on to a new topic, and I might upset you here, Mr. Moody, so I apologize with this one. [12:59] John Moody: I know you. That's a good lead in. [13:02] JD: I know you work with a couple of these companies. I know you maybe sit on one or two of their boards. But we're going to talk disruptors, and I say that with air quotes. The human interests, the guidelines, the vestwells, the betterments, the. For us alls. My question to you, and I want your honest answer. Sure. What do you think about these hundreds of millions of dollars in venture capital funding? Are these companies worth it? And is their future business model worth it? And will the venture capitalists get their money back in the. The 10x50x return they're looking for, like, three questions. [13:44] John Moody: Yeah, that. Well, that's an essay. [13:46] Mark: And we know many of them are your clients. [13:48] John Moody: Yeah. Look, I have no idea. Can that just be the answer? [13:53] JD: Sounds like. Sounds like a politician, but I don't believe you. [13:57] John Moody: I'll tell you, the. The investors that have invested in some of those Names that you named are, are not strangers to invest Investing, you know, Goldman Sachs and folks like that. I mean, great point. So they're not a bunch of idiots, right? We do have a, a retirement system that was, I'm not gonna say the acronym. When the law came around, 401k is available. I almost said it. [14:31] JD: I was like, you really don't know what the acronyms actually stand? [14:34] John Moody: No, I don't know. [14:34] JD: No, no. [14:36] John Moody: And I'm new at your game. Yeah, me too. We have a lot of big companies that run a lot of really old iron and so there is an opportunity to change that. And so will they all be successful? Probably not. That's what venture capitalists do. They invest in multiple things and take bets and then some of them are going to pay off. Somebody told Jeff Bezos it was a pretty stupid idea to sell books online once. Right, right. It is. You're worked out okay for Jeff. [15:17] Mark: Here's why I don't think you don't know the answer to this. [15:20] John Moody: Well, I don't. [15:21] Mark: I still got a trust company. You've got a third party administrator company. So you, you understand the margin. Damn right it is. [15:31] JD: Hello. Hello. [15:31] Mark: Understand the margins. And what I can't figure out is these investors, as you just stated, are smart people and they're given hundreds of millions of dollars. When I look at the pricing structure and I know the margin of the third party administrator community, I feel pretty good about the advisor side. I know nothing about the trust side. They're not going to make the money back to be able to 10x these investments. [15:53] JD: You can even currently, John, you can currently, you can estimate what is it there? [15:57] Mark: Where are they getting the money? What are they going to sell next? [15:59] JD: You can estimate their annual revenue right now. And some of these companies are five years in, in that kind of range and they're nowhere near the money that's been invested in them yet. And I know, and I believe what you said in that fact, that venture capital is just looking to hit one home run and they'll strike out nine other times. But I've played these mathematical models out for these companies and unless they pivot and sell something else, I don't see any way, shape or form, even if they get to 100,000 plans, that they're going to be able to pay back those venture capitalists. So is there something under the hood? Do they have some other, dare I say, evil plan to leverage participant data or to sell something? I don't get it. [16:45] John Moody: Look, are they the only ones leveraging Participant data today, actually, I haven't seen [16:51] JD: any disruptors doing that yet. That's been more of an empower game or someone else's game. [16:55] John Moody: That's the big box players, right, that are leveraging participant data. They figured that part out and will continue to do so. I'm not an expert as an investor. [17:09] Mark: Someone's gonna tell us. [17:09] John Moody: I'm an operator. [17:10] JD: You know what's funny? [17:11] John Moody: I don't have an answer to your question. [17:13] JD: I had this thought. It's gonna get me even more trouble. I had this thought. I said, john Moody, he's providing the custodial services and all this kind of. All the back office support and stuff. I thought, what does he care if they succeed or if they get $200 million in funding? John's going great. They got more money to pay me for my services, right? I mean, you need assets, though. Let them run as long as they can run, right? I don't know. [17:38] John Moody: No, they got. They got it. They have to succeed to continue to be a customer of mine. I want them to succeed. I want the succeed. [17:45] Mark: We have a. We've beat this topic down. For people that watch this show. Someone's gonna tell us JD at some point. I was hoping it was John, what the play is, because it is a play at assets or is it play at data? But these venture capitalists are not dumb. They're not looking at someone charging $1,500 a year to bring on a 401k plan and saying, we're gonna make hundreds of millions of dollars on that. So there is something there. [18:12] JD: Sell that it could be. Could be selling bigger. [18:16] Mark: Sell to somebody else. [18:17] JD: You've got my vote for audience champion so far, whoever the hell you are. [18:20] Mark: So it's about the only person I can see in here. [18:24] JD: I also heard from someone recently that I had never thought about this. I'm just gonna say it. This was the founder of Ubiquiti. He was on our show last week, [18:32] John Moody: my good friend Chad, Chad Parks. [18:34] JD: And he told me something I never thought about. He goes, jd, this is a Silicon Valley tech startup, boys club. Like, they know each other. They're getting this funny. And I never thought about that. I was like, oh, shit, you might be right. I'll wrap it with this. And we had human interest come on our show too. And I was so fired up to just take the dude down. And he was so nice. I couldn't. We became best friends. But he was good. He was solid. [18:59] Mark: I was impressed. [19:00] JD: So I will say this. I don't want to lump them all into one basket, I think for us all is running a very different business model. I think guidelines different from human interest is obviously different from betterment. And so they are trying it in different ways. But I digress. We'll move on. Let's have some fun. Thank goodness we've got a listener line. [19:20] John Moody: We love and embrace them all. By the way, J.D. [19:23] JD: yes. [19:23] John Moody: You had to say that, didn't you? Oh, yeah. [19:26] JD: Good for you. [19:26] Mark: I told J.D. you were gonna dance around that question and you did. [19:29] JD: The check is still in the mail. [19:31] John Moody: Don't worry. [19:32] JD: We have got a listener line. It's 833-RobeGuy. Feel free to call into it anytime. We get lots of weird stuff, but we're gonna. Our producer is gonna play three of them today for today's show. So it's the retirehax listener line. We want to hear from you out there in the world. [19:49] Speaker E: Please callin some rogue guy. Advice. Like to know your wardrobe of choice when you sleep on the park benches in Nashville. Thank you. [20:03] JD: First off, some deep thoughts. Let me clear something up. The rumors that I sleep on park [20:08] Mark: benches, I sleep on sidewalks. [20:11] JD: Okay, get that right. [20:13] Mark: First. [20:14] Justin: Secondly, well, who do you sleep on sidewalks with though? [20:17] Mark: I knew that guy. Yes, we cuddled on the streets. [20:20] JD: It's nice to feel the cold cement against skin. [20:23] Mark: So I don't wear anything. [20:25] JD: Great. Good answer. Thanks for that call, caller. Let's play the next one rule the guy. [20:32] Speaker E: This is Irish guy. St Patty's Day. Road around the corner. So give you a call. I've got a comment, a question and a comment. The first comment is if you're going to have D sit in for somebody, have them sit in for Chad. He's much too smart and itting for old guy. [20:50] JD: That's fair. I can't understand what you. [20:52] Speaker E: Neither can I. John Moody. Looking forward to listening to him. But he's from the Matrix and to see Maui on the edge. Enjoy your drinks. I'm sure they're magically delicious. [21:06] John Moody: John, did you understand what he said? Neither did I. I heard my name. I heard John Moody and Matrix and Edge. So he understands that I had did this and then I. [21:20] Mark: Yeah, that's Moody. [21:21] JD: You started that. [21:22] John Moody: Yeah, I did. I can do that back flippy thing too. I won't do it today, but I can do it. [21:29] JD: Are you in the do the blue pill or the red pill? I don't know. All right, let's go. Let's move on from that. Good try at the Irish accent. I thought that was a great Attempt, [21:38] Mark: but use a good mic next time. [21:41] JD: I will say this to everyone that calls in. Y' all could do better. You could do a lot better. We get a lot of bad 30 [21:47] Mark: in about 28 of them. [21:49] JD: Let's play one more, we'll move on. [21:53] Speaker E: I would like to ask if I could be taking out a 401k loan to pay for gas. [22:06] JD: Yes, John, you're a smart guy. [22:09] John Moody: Thanks. [22:10] JD: 401k loan to pay for gas. Good choice. I don't know. [22:15] John Moody: Right on. Sure. You need gas, right? [22:18] Mark: Hey, by the way, kudos. Kudos to Kentucky. When I drove here, Illinois Gas was like 539. I crossed the line, 3.99. [22:27] JD: Chad, Chad, I don't want anyone to. I don't want to hear that from you. Anyone from California, Cali. These guys know nothing they speak of about gas prices. Give me a break. [22:40] Justin: I paid $140 to fill up yesterday [22:42] JD: or two days ago. True, true. Okay. [22:45] John Moody: I just walk to work now. [22:47] JD: All right, John, this is the time of the show where we want to pick your brain. [22:52] John Moody: Great. [22:54] JD: I know this conference is about Edgeco American Trust right now, but I do want to revisit this whole matrix thing. I think it's very cool. I've heard it from other people where you literally started it in a small office just yourself and. And grew it. [23:11] John Moody: Really accurate, but kind of. [23:12] Mark: It's a good story though. [23:14] John Moody: I like your story better. [23:16] JD: That's what Mika told me. [23:17] John Moody: Well, you know, and by the way, he's a salesman. [23:22] JD: Is anyone like me? When Mika starts walking towards me in my brain, I'm like, how do I pronounce his name? How do I pronounce his name? I know he gets pissed if I say it wrong. [23:33] John Moody: I know he gets pissed. [23:35] JD: I called him Mika the other day. He looked at me like, whoa, he's going to take me down. No, no. So I want to know a bit. This is like a self help moment of how do we become a heli skiing entrepreneur stud like you? I mean this. How do you build a company to sell it for 200 million, then turn around and start all over and start building something like this? And I don't want to hear that it's all the people around you and you're a great hirer and they really [24:10] John Moody: just all me, jd, it was all me. [24:13] JD: I want to hear the very egocentric, like chess moves that you make in business and all those people are just pawns in your game. Give me some advice because first I [24:25] John Moody: can't get my best for Success. [24:27] JD: Okay, that's number one. [24:28] Mark: Got that down. [24:29] John Moody: That's first. [24:31] Mark: He's got Gucci shoes on the red sweats. [24:34] John Moody: I got it. [24:35] JD: So that's there. [24:36] John Moody: That's first success. First impressions are important. We used to, when we ran Matrix, we used to send memos out. We have customers in tomorrow. No shorts and sandals. Just for tomorrow. But no shorts and sandals. [24:50] JD: That's the key to success. [24:51] John Moody: So the key to success first is, you know, like the way that you present yourself to a crowd. And you can see that that is high on my list. Pun intended. So that's high on my list. I do live in Colorado. That's right, baby. [25:11] JD: I'll talk later. But John, do you understand, like most of us look to grow our business. [25:17] John Moody: Don't put yourself in the most of us category, okay? [25:20] JD: To do, you know, a certain amount of sales and create a certain amount of revenue. And then there's people like you and others that I've talked to that they're just at this next, next, next level. And I don't understand, is it just the way you're wired? Do you just not give a shit? You just go for it. Like, I don't. How do you become that type of person? What is it about you? [25:42] John Moody: Well, I don't know. How was your childhood? You look, I mean, Chris Gardner said it earlier, you know, like you, you just have to want to bad enough. You have to then make a plan and. And you fail more than you succeed. Right? Like you named. [26:02] JD: Okay, we've all done that. [26:04] John Moody: And we don't heli ski. Okay, so go further. [26:08] JD: No, no, let me, let me ask you this. [26:10] John Moody: All right. Well. Well, the heli skiing part started. I grew. You mentioned I'm from Iowa. I grew up in Des Moines, Iowa. Went to the University of Iowa because my dad said I could go anywhere I wanted as long as it was in state tuition to Iowa, so. And my sister was at Iowa State, so by God, I wasn't going there. So I went to the. I never even saw the campus. I went to the University of Iowa. I was a five year plan at Iowa. Managed a bar through college. [26:38] JD: Just like you, liking it more and more. Right? [26:40] John Moody: That, that sounds like living the dream, I should say. I started as a waiter at the bar and then I became the bartender. And then I negotiated my way into this country club as a bartender one summer and I did that. Like I was just always working. I liked working better than going to school. And I ended up the night manager of the bar at the end of the time so first thing I ever ran. Right. Well, I drank during the day and I worked at night, but we got to drink while we worked. I was the boss. You shouldn't do that. It was, it, it probably, it wasn't a long term career path. [27:21] JD: Okay, John, I'm going to be real open and honest here. So I have a business we. I push now to do 5 million in sales a year. [27:31] John Moody: Nice. [27:31] JD: Am I just. No, I'm saying do it or do we do it? [27:34] Mark: We push. We push. [27:35] JD: Excuse me? [27:36] John Moody: He pushes. [27:36] Mark: He sits on the beach and very true. [27:38] JD: When I say push, I mean you push steps. Okay, but for me to think of someone building something that would sell for 200 million is like I can't even imagine that. So are you and I just setting different goals? Is that it? That's what I'm trying to figure out is did sometime in your career or did you just stumble into it? But did you say, oh no. Did you say fuck 5 million, I'm going 50? And then you got there and you're like, oh, I'm going here. Is that the recipe or kind of. [28:09] John Moody: Yeah. [28:10] JD: Okay. [28:11] Mark: Set high goals. [28:12] JD: You know what's funny? His voice actually matches his outfit. Kinda. Yeah, I think so. [28:19] John Moody: I really am this person, jd. [28:22] Mark: That's what we love. [28:24] JD: All right. All right. We'll move on. [28:26] John Moody: Yeah, kind of. [28:27] JD: Can you expand on kind of. I think it's always going to be elusive. We'll never know. [28:33] Mark: We gotta. [28:36] John Moody: Some of it is just right place, right time. Like I, I, I got a. How many people in the room know who Orion is the software that a lot of advisors use. Right. Big company. Right, Big company. Really successful. Eric Clark is the CEO. [28:52] JD: I was gonna say, are they tied to a. I'm gonna drink for the cls. Clark Lansing and Scala. [28:58] John Moody: Clark Lanson and Scala. Chief Executive Officer. I meant to say, I know that you are going to still have the sip. [29:07] JD: Oh God. [29:07] Mark: It's great, isn't it? [29:08] John Moody: It is not good. [29:09] JD: No, it's not. I'm just gonna say an acronym so [29:13] Justin: I can take one. [29:14] Mark: Okay, what are you gonna use? [29:15] Justin: Mark? [29:17] John Moody: I meant finish that thought. Yes. [29:20] Mark: There. [29:21] JD: I'm not even saying I'm just gonna drink it. [29:23] John Moody: I work for Trust Company of America. That's first trust company I ever worked for in Colorado after I was a stockbroker for a number of years. And a financial advisor is a cooler term now. But you know, we actually in the 80s, we were still stockbrokers and I worked for Trust Company of America and one of my buddies called Me up and said hey, I bought this trust company in Texas, Sterling Trust. He owned a bank, Matrix Capital Bank. So it wasn't me in my second bedroom, it was actually inside of a bank. [29:55] JD: Cindy Dash told me that. [29:56] John Moody: Well she could have misremembered because she actually worked for the bank. That's where I met Cindy. She was working for the bank as a lawyer. Guy Gibson called me up and said I bought this trust company. Why don't you come help us grow? Was Sterling Trust in Waco, Texas. Said I'm not moving to Waco, I'm staying in Colorado. But I'll. If you let me set it up as a different company, I'll set it up and I'll come do it. I got a little salary. It was me in a cube with a bunch of mortgage brokers and me trying to sell custody. That's what was happening. I ran into Pat Clark, Eric's dad at Park Lansing's Colla. [30:40] JD: Yeah. [30:41] Mark: Check swing. [30:43] John Moody: And these were the. So don't judge us. These were the olden days. Their business model at Clark, Lance and Scala was they would go out and find brokers who had sold the old A share mutual funds. And those mutual funds, they still were collecting their 12 B1s. Is that an acronym? No, that's all numbers slide. Yeah, you're good. Because I wouldn't know how to say that. And, and, and so they, they would go out as a turnkey asset management platform. Good job. I'm catching on. I am. You eye contact me every time you do one. That's. Well, cuz, you know you seem like the most focused of the group. Not at all. Not even at all. I'm so. I, I meant that sarcastically. Right. I haven't listened to a word you said. Right. That's why I keep trying to engage you. So they would go out to these brokers in the business who had sold Putnam, American Funds, Kemper, the old traditional A share products and they would say you can keep your 12B one. We're going to put a fee on it of 2%. We're going to asset allocate it and [32:01] JD: budgeting, they come in and we'll give [32:03] John Moody: you half of it. So you'll get 100 basis points. [32:07] JD: I know. So I know the exact model you're talking about. [32:09] John Moody: And, and I'll keep a hundred. I'll give you a hundred. And, and we'll get on down the road. [32:15] JD: You can keep your, your trailer too. [32:19] John Moody: The problem was that that was all manual and you still had to leave the broker on the account at the fund company. [32:27] JD: Okay, I. I'm incredibly lost right now. [32:30] John Moody: It doesn't matter. [32:31] Mark: We're smarter than earlier, right? [32:33] John Moody: That's why I sold a company for 200 million bucks. Cash rules everything around me. Green, get the money. [32:44] JD: No, no, no. I guess what I'm hearing here is right time, right place. [32:48] John Moody: But I figured out how to automate their business through fundserve. Through the depository trust, corporations, National Security's clearing court. I got all of them. [33:03] JD: That's impressive. [33:06] John Moody: I figured out how to trade as a bank through there. Keep the broker record on the account and keep those guys collecting their 12 B1s. And I had one customer. I couldn't find anybody else doing what they were doing. Because you couldn't explain what you were doing. You should try and keep up. [33:25] JD: I think I learned something. I think I learned something, John. I think it's also something that we can't all do, which is see something that needs to be created and then create it. So that's the harder part. We all know that. A lot of the most successful people do that. But then I'm sure you were a great business person along the way. [33:47] Mark: We all see that on the risk. [33:48] John Moody: It took almost two years to get it figured out. And I wasn't making any money at the time. Time, tons of risk. Tons of people who wanted to shut it down. [33:59] Mark: Salary. [34:01] John Moody: Yeah, you're fine. [34:02] Mark: 1.6. [34:05] JD: I mean you had. I was broke. 900K a year. [34:08] John Moody: I mean, I could only ski four times a month. Had to wash away Porsche. [34:14] Mark: Something I take from hearing him talk is, and we've said this about athletes, [34:18] John Moody: he's got a great cooler. [34:19] Mark: Someone is. That is super successful. Is driven in a slightly different way. And I believe that. And I think that everybody here is successful in their own right. But you're. You're driven in a different way than the rest of us in my point of view. And you're willing to take that risk knowing what the reward could be, but you have a vision to see how it's going to be done. You guys know how I work. A, B, C, D. Like my mind is. Is driven like an actuary. I can't think like you guys do. [34:48] JD: Can't take the risk. [34:48] John Moody: I can't take the risk. [34:51] JD: No, you're right. So that's good. Chad. I like that. There's another one. Is the being not risk averse, being willing to kind of put your chips on the table and try something. So that's a good one too. [35:04] John Moody: Well, what brought me to Your industry was. There wasn't anybody else really doing what Clark Lansing Scala was doing? [35:12] JD: This is kind of. [35:12] John Moody: There were a bunch of brokers selling 401k plans with the same problem. They couldn't figure out how to do it automated and get paid. Guess what? People like to get paid in our industry. And that. That we became the broke Matrix, became the broker friendly platform. That's how it started. We went to Merrill and told our story. We went to UBS and told our story. What are they? [35:39] JD: I don't know. It's gotta be something. [35:41] Mark: It's gotta be something. [35:42] JD: Yeah, I should know that one. There's three letters, okay? [35:45] Mark: That's how much I filled in your cup. [35:47] JD: You know, John started the show and he'd give like. He'd give like two or three word answers. And then as we get towards the end now, it's like, God, will he shut up? He just keeps going. Chad, we're gonna shift. We're gonna shift. You've been such a great friend to Justin. Mark, Brandon and I, we got you a little present. Yes, we did. Mark, if you could hand this on over to Chad. [36:10] John Moody: Love you. [36:11] JD: We wanted to celebrate it with you. [36:14] Mark: What kind of present is this? There's a skull of crossbones on this. [36:18] John Moody: Pirates. [36:20] Justin: Remember that time at your house and you just got a dog. [36:28] Mark: I know what this actually is now. We're doing Quiz of Death, aren't we? [36:33] JD: We're doing Quiz of Death. It's time for. [36:38] Mark: It's been a year and a half since we've done Quiz of Death. [36:42] JD: Put it on, buddy. Put it on. Time for Quiz of Death. Who gets sent for Quiz of Death? People. [36:47] Justin: Do I get to do it? [36:48] JD: No, no, no. What we're going to do here is. Justin, you're going to ask Chad three questions. If Chad gets any of these questions wrong, he must face the penalty. I'm gonna need a volunteer from the audience. Show of hands, anyone? We'll take rogue woman here. Can someone run her up the. That's a. Here, I'll take four, right? [37:14] Mark: No, it should not be on four. [37:17] JD: Okay. Not one. Take this. You can stand right here if you're okay. [37:22] Mark: It says sports Dog on this. [37:24] JD: You see the top button here? That's the one you're going to want to put your finger on when I tell you. Not yet. Be careful, Katie. Wait. [37:33] Mark: Do not press that button. [37:36] JD: Does it work? [37:37] Justin: Wait, is there vibrate and. [37:41] JD: No. Okay. She says, she says. Is it supposed to be on eight? Okay, what we've got here is a shock Collar for what I was told is large breed dogs that are stubborn. That's literally Chad's job title. We need to get this done before American Trust Legal finds out what's happening. Because I take zero responsibility. [38:06] John Moody: It was his idea. [38:08] JD: Okay, we're gonna ask three questions. [38:10] Mark: Okay, Here we go. [38:10] JD: Justin, Justin, Justin. Are you ready? Yeah, I'm ready to ask the questions, ma'. Am. When it's your time. Katie, hold it down. [38:21] Mark: No, no. One test one. I know, I. [38:26] JD: All right, here we go. [38:27] Mark: Every damn time I've puked on stage because of this. [38:31] Justin: It's gonna be fine. [38:32] Mark: It's gonna be fun. [38:33] John Moody: That's question four. [38:34] Justin: Here we go. [38:34] JD: Katie wants to know when Chad's gonna use Pension Pro. [38:37] Mark: Chad. All right, I have to P2. [38:39] John Moody: This is. [38:42] JD: What if he wets himself? Okay, let's go, guys. All right. [38:47] Justin: What percentage of CalSAvers participants have contributed to the plan for more than one business? [38:52] Mark: You know I know the answer to that one. [38:54] JD: Yeah. [38:54] Speaker E: Do you? [38:55] Mark: I do. [38:56] JD: It's part of his presentation. [38:57] Mark: Because I did that presentation last. [38:58] JD: Actually, I got it. [39:00] Mark: I locked myself in the hallway thinking about it. 35%. 35% of participants have contributed from more than one company into CalSavers. [39:07] Justin: You're welcome. [39:08] JD: Correct? [39:09] John Moody: Yeah. [39:12] JD: Shocking. It's in his PowerPoint. [39:15] Mark: No Cal Savers. [39:17] John Moody: Shocking. [39:17] Mark: We tried that one, too. [39:18] JD: All right, semantics number two, Mike. This one. [39:22] Justin: Since your wife is in attendance today. Hey, Brooke, what's your anniversary? She should be doing this. [39:31] Mark: Six, 12, 10. Six times two is 12, minus two is 10. Six, 12, 10. [39:36] JD: That's how you remember your name. [39:37] John Moody: Truly an actuary, Brandon. [39:40] JD: Nerd alert. [39:40] John Moody: Hold on, hold on. [39:41] JD: Nerd alert. [39:43] Mark: Yeah. All right. [39:44] JD: That's right. [39:45] Justin: All right, beings. You're in the nerdy one. I'm going to turn up the heat a little bit. And you have five seconds to answer this. [39:50] Mark: Oh, shit. [39:51] Justin: What's 497,613 divided by 57? [39:54] JD: There you go. [39:59] Mark: 412. Guy, I heard you say something. [40:02] Justin: You know the answer. [40:04] JD: Ouch. Oh, God. Katie. Give me a warning. Next one time. Jeez, that was legit. [40:17] Mark: I don't trust her. [40:20] JD: Katie, thank you so much. [40:27] John Moody: Oh, boy. [40:29] JD: Katie. [40:30] Mark: Never coming to Pension Pro A. [40:33] John Moody: Do you guys sign waivers? [40:36] Mark: What's a waiver? I have three workers comp claims already. [40:39] JD: Moody, Moody. You said you were risk adverse, buddy. You can. It's all good. [40:44] John Moody: This is what we do to get to the. [40:45] JD: Okay. Last. [40:48] John Moody: Perhaps you're wasting some time. [40:50] JD: Last and not least. Let's. Let's talk a little. 401K. Shall we? As a TPA. I got it, I got it. As a third party administrator. For years record keepers have told me, you know, I asked them, why do you work with third party administrators? And they say, oh, because you guys do such great work. You know, you're experts and you work night and day. You work hard, you know what you're doing. I claim bullshit. Not true. Not true. [41:26] John Moody: Really? You don't. [41:27] JD: The only reason record keepers work with third party administrators, they would happily do the compliance work. They see us as a distribution channel. They see us as increasing their sales. I want to ask you, do record keepers, do the industry see advisors as a true value add or do they tend to focus on them as being distribution channel? And I'm asking because I want to know. [41:56] John Moody: Well, you move from third party administrator to advisor. [41:59] JD: Yeah, yeah. [41:59] John Moody: Asking both questions or what? [42:01] JD: No, don't worry about the third party administrator. I was trying to set the mood. [42:04] John Moody: Notice how I didn't use the acronym. Catching up. [42:07] JD: Trying to set the mood. [42:08] John Moody: The mood. I've never heard that before. Is that some play on my name? [42:13] JD: What is that? I'll just ask you point blank. Do you think that the industry, record keepers specifically think that they could exist and, or thrive in the future without financial advisors being their distribution channel? [42:31] John Moody: Yeah, I will. I think there's, there's plenty of direct to consumer efforts out there that are not engaging advisors. Clearly. Yes. [42:43] JD: A lot of those disruptors, a lot of those, that was, that was at [42:46] Mark: least their first or long. [42:47] John Moody: They've changed their, they have changed their tune. Yeah, they, they clearly have. [42:51] JD: I guess I'm also speaking to like empower, purchasing personal capital, buying, that kind of stuff. [42:56] John Moody: That one's obvious. Right. [42:58] JD: So you think there are some out there that think, well, maybe we could pull this thing off without advising part of the future? [43:05] John Moody: He says, yes, I think that, you know, like any, any other business, there are different bets being made. Some are betting on advisors and some are betting on. We can do this ourselves and we'll go direct to the, the consumer. Here's the, here's the gap again, JD As I go out and I start as an advisor, so you know, like that's my, those are my peeps as I go out and talk to them and I talk about things like pooling investors in a pool plan. I get that blank stare look. [43:39] JD: Like who? There's not a lot going on up here. [43:42] John Moody: Who gives a shit, John? I don't want a bunch of people with three employees. I don't want that. I'M chasing that hundred million dollar plan over there and I don't talk to you about that for lack of a better word. [43:55] JD: Is good. [43:56] John Moody: Greed is good. So, so the, the, the opportunity for B2C to go direct to that consumer. [44:04] JD: That's got to be. That's one. Yeah, yeah. [44:06] Mark: Business business gotta be. [44:09] John Moody: Here's some more coughs syrup. [44:11] Mark: It does taste like coffee. [44:13] JD: It's a fair description. Remember you can always finish your thoughts. [44:17] John Moody: You should all have some. The, the, the, the. The reason those businesses will succeed at the business to consumer model is that nobody else wants to call on them. The you. You're the industry of advisors that thank you for all the small businesses. I'm not trying to pick on you all but nobody wants those tiny little micro startups. Nobody wants them. That's why there are 62 million Americans without a workplace retirement plan. [44:50] JD: That's why. [44:51] John Moody: So either, either just say fine that can go to Guideline or human Interest or whatever they can have all those and as soon as the plan grows up right. Then they'll call you or they'll call you and then you'll want to. [45:09] Mark: But here. [45:10] John Moody: But if, if we as an industry, if you advisers that are sitting out there, if you're not willing to work with those startup micros, you can't be grumpy that somebody else is here. [45:25] JD: Go ahead. [45:26] Mark: Two thoughts. One being these disruptors have made. Made a practice on working with those small micro startups. So there's, there's a thought that those can be profitable. [45:35] John Moody: Right. The second I think Guideline won't even take a conversion in. I think maybe they, maybe they will. I don't know. [45:43] JD: First I heard that but I think [45:44] John Moody: that their main focus is you don't have a plan sign up. [45:48] JD: And now they all for sure are looking at that small. [45:51] John Moody: You don't have a plan. So sign up, I'll give you a plan. [45:54] Mark: I and, and the folks out here would know better than I would what percentage of the business is still sold by a relationship versus someone cold calling and coming in that doesn't know someone in the room. [46:06] JD: Chad, let me back you up on this. [46:07] Mark: Especially in the micro space. [46:08] JD: I think 98% guideline, human interest. Sorry to bring your clients into this discussion John. Guideline human interest started off going direct to the consumer because they're Silicon Valley people. [46:22] John Moody: Just to be clear, we don't do business with guidelines. [46:26] JD: They thought that that's how things work. You build something, you think it's great and you send it out to the market and People line up to come buy it. I think we all know that's not how this industry works. Retirement plans are complicated. They need people in there to sell them and convince people that they need them. [46:44] John Moody: No one will buy books online. Yeah, and you know Jeff Bezos is an idiot. [46:50] JD: Well, it's least in the 401k space until Amazon has a 401k plan. We'll see. [46:54] John Moody: Right. [46:55] JD: But so far those companies did pivot. They realized early on relationship, relationship based business. They realized early on that they had [47:06] Mark: your golf buddy, the person you go to church with, someone you graduated college with, that ends up helping you set up that micro market plan. That's not gonna change. [47:15] JD: Can I also go one more point on that and then we can come to a close and everyone can get ready to head out for tonight. But we work again in that startup space. I mean, you guys will sell a ton of startup plans this year and so I'm gonna challenge you a little bit. [47:32] John Moody: I'm glad you do. [47:33] JD: I don't think that small companies, the eight person auto shop on the corner corner is not setting up a 401k plan because advisors don't want to set up a 401k plan for them. Because we, you know, lists and lists and lists of hundreds of advisors that would love to have a startup 401k plan. Shocker. We live in that space. The reason why that auto body shop does not have a 401k plan is because it's too fucking expensive for them. They don't want to stroke the check for 2,500 bucks or whatever it is. And mind you, they should know about asset based fees and fund costs. They don't. They should know about. They're more worried about what they have to write a check for. And this is why I'm shocked when you look at these disruptors. They all have a fee that that plan has to pay. So how the hell are they solving that problem? [48:23] John Moody: Still got to get paid. [48:24] JD: Doesn't make sense. You still got to get paid. [48:25] John Moody: Still got to get paid. [48:26] Mark: It does make sense with what John said earlier, which is about this technology. Like when I run in to those disruptors, it is all about payroll integration, ease of operations. It's never about tax efficiency or this [48:39] John Moody: is what's right for my employees, some sophisticated plan. They want to check a box, one size fits all. Here it is. You want it, great. You don't want it, move on. [48:48] Mark: There's a space for that. [48:49] John Moody: There's a space. We don't want to admit it 62 million of them. [48:52] JD: Chad, the venture capital funded disruptors did not invent payroll integration. [48:59] John Moody: No, they knew that. [49:01] JD: Access. What's that? [49:03] Mark: It's access, right. If they're going to try to go around the advisor. If they're going to try to go direct to client, they're looking for access. [49:09] John Moody: They got a new intermediary. It's a payroll company. It's a payroll company. They got a new intermediary. It's a payroll. [49:16] JD: The payroll company is now their distribution channel. And they. You're right. That's how Guideline got to their level. Human interest did a lot and they keep continue to do that. And that is one thing we could all learn as an industry. [49:29] Mark: We need to. [49:30] JD: 15 years ago in my career we were talking about, oh, we should partner with payroll companies. Like what a great partnership. And we just never can make it stick. We can never really make it work. Not at any scale. And then here comes guideline. [49:43] John Moody: We can and these human. [49:46] JD: And they're pulling it off. My understanding is guidelines north of 10,000 and plans and a lot of that has been through their relationship with Gusto, the payroll provider and what they've done. So anyways, lesson could be learned. Lesson could be learned. If any of your clients are mad at you on Monday, I apologize. [50:02] John Moody: There may be some jd so thanks. [50:04] Mark: You're welcome. [50:05] John Moody: It's what we do best. [50:06] JD: You can take it out of our appearance fee. No, you can't. Okay, let's vote for a champion in the audience. Even though we can't see see any of you. [50:16] Mark: But there I. I think there's been one person that was. [50:20] John Moody: I'm not voting for any of you. [50:22] JD: My vote is for the guy that yelled in the beginning and his name's. That's the guy. You talker. [50:31] Mark: Yep. Your vote, Mark. [50:33] JD: Because I can see her and she's [50:35] John Moody: my robe best friend. [50:36] Mark: Holly. [50:37] JD: Just Holly Knight. [50:38] Justin: I like Holly. [50:38] JD: Just because you know someone. Okay, John, your vote for audience champion. The coolest member of the audience. [50:46] John Moody: Coolest member of the audience. [50:48] Mark: Can't pick yourself whatever you want. [50:49] John Moody: Yeah. No, I am the coolest member of the. [50:52] Mark: We know. [50:53] JD: Finally the ego comes out. [50:56] John Moody: It is always Katie Boyer. Yeah, it's actually a fact. It is Katie Boyer. [51:02] Mark: Katie's on my ship. [51:03] JD: Katie Boyer. Chad, your vote. [51:06] Mark: Hawker. [51:07] Justin: For sure. [51:08] JD: Okay, Justin, I really need you to pick the same person. [51:12] Justin: That buzzer was just on point. I gotta go. [51:14] JD: Katie Champion of the episode of the Katie Boyer from Pension Pro. Well done. Katie. Katie, did we not. [51:23] Mark: There's no voting. [51:24] JD: We can't vote, Katie. We've got some prizes for you. These are. This is a poster from a signed poster from the retireaholics from pre Covid, like old, old conference no one wanted. We've got some swag that's all leftover dusty schwag from past conferences that nobody wanted. And a hat and a mug, so it's yours. You can grab. Get it after the show. And she probably doesn't want it, so [51:50] John Moody: we'll just keep it. Then you can give it to the next one. [51:54] JD: Let's see. I'm gonna do a little housekeeping for y'. [51:57] Mark: All. [51:57] JD: Even though American Trust didn't ask me to. I thought they were going to. Reminder, tonight is an evening at the Country Music hall of Fame. Okay? Live music, the Nashville skyline, food, drinks, good people. Enough said. I didn't write that. They did. That's tonight at seven. [52:18] John Moody: Yep. Don't look at me. [52:19] JD: Don't look at me. [52:21] Justin: I can see you right now [52:24] Speaker E: making [52:25] Justin: announcements and don't know the. The details of them. [52:26] JD: No, I just kind of winging it. Just kind of winging it. So that should be fun. Okay. Thank you. First of all, thank you, Mr. Mooney, for being with us. We really appreciate it. [52:41] Mark: You fit in well up here. [52:43] JD: Thank you to American Trust for, you know, taking a chance on us. [52:50] Mark: We won't be back next year, but it's fun. [52:53] John Moody: And more important, thanks for your last visit to our conference. [52:58] JD: Solid. And thank you, most importantly, to all of you that stuck around in attendance. We really, really appreciate it. Are the doors locked? Do they keep them in 401k? People rock. We love you guys and hope to see you later tonight. We are the retireholics. We are changing the retirement plan industry one beer at a time. Thank you for hanging out with us. [53:20] Mark: Cheers, John. Kudos, buddy. Thank you. [53:22] Justin: Cheers, boys. [53:24] JD: Cheers.