IBM Cash Balance Plans & Yield Curve Impact on 401(k)s

[0:01] JD: That's why I love. That's why I love this. I can just put this little filter that stops my redness. [0:08] Justin: That didn't do anything. [0:10] Chad: That didn't do anything at all. Let's turn the lights all the way off. Like B said, I'll sit in the dark. My family will come home from Dylan's basketball game and wonder what I'm doing. [0:19] JD: I wish I could pull up the movie I'm talking about other than the [0:22] Justin: camera shot on your chest previously, the light. [0:24] JD: What's it called when you. Maybe this is not okay anymore. I think it's fine. What's it called when you're Caucasian guy, but you don't have any skin pigment in. You're like albino. Albino, yes. Thank you. There's this movie where this guy is albino and he has no powder. Huh? Powder, yes. That's what somebody Google powder the movie if you don't know what I'm talking about. We're doing a late start. Late start, apparently, which we probably shouldn't do because I have some surprises that involve other people. So let's get this going. Brandon, if we can. I can't hear. Brandon. A monologue. A serious monologue. Ladies and gentlemen, my esteemed 401k brethren and sisters, I stand before you today not merely as a spokesperson, but as a beacon of vision and leadership, imploring your unwavering commitment to the cause. The 401k industry teeters on the precipice, a shadow haunting the very sanctums of our profession. Change is afoot. Not the change that we seek, but a malevolent transformational fueled by evil corporations. Agreed. That finds fruition in the impersonal and unfathomable evil plans of corporate behemoths born in the privileged confines of dark wood paneled conference rooms. This insidious subjugation, I hope I said that right, undermines the very essence of our calling. Worse still, it thrives on the fruits of our labor, our toil, our sweat, and, yes, our tears. The issue now escalates as corporate giants, pressured by disruptive upstarts, squandering venture capital and unsustainable ventures, seek to replenish their lost revenue. A race to the bottom ensues and the solution is glaringly apparent. Remove a piece integral to the board. Remove an integral piece of the board. Once a partner, perhaps forgotten as a producer, but now conveniently labeled an advisor, remove this key piece and with it extract 1025, nay, 50 basis points. My brethren, let not their current narrative charm you they proceed with caution, making incremental moves almost imperceivable to the naked eye. A subtle erosion of your worth until the future finds you at a precipice, value lost and a metaphorical knife protruding from your back. The record keeper triumphs, and sadly, the advisor is no more. To stand united is not merely a strategic imperative, it's a moral obligation. In our unity lies the strength to weather the tempest of financial uniformity. I implore you, place your hand upon your heart. Close your eyes. Connect with your higher power and repeat after me. Put your hand on your heart, Chad. Justin, put your hand in your heart. Hold your hand. [4:31] Chad: Close my eyes too. [4:31] JD: Okay, everybody in the chat bar, put your hand up and repeat after me. Let us not be divided. [4:40] Chad: Let us be divided. [4:42] JD: And I'm just inside your head, Chad. [4:44] Chad: Okay, got it. [4:46] JD: Let us rise above. Let us forge an indomitable front against the commodification of our industry. Power be to the advisor. Let the advisor stand victorious at the end of this battle, proud and vindicated. This is our industry, not theirs. Let it be known I employ you, employ you. I implore you. [5:08] Chad: True. [5:10] JD: Let it be so. Brandon, play headlines. Let's go. Amen, jd. [5:14] Chad: Amen. [5:29] JD: I never liked that song, but it's kind of growing on me now. You hear it like a hundred times and you start to get into it. [5:36] Mark: The article, I could say that about your monologues. [5:39] JD: The article titled Shifting the 401k balance from napa.net. yes, I'll drink for that. Written by Nevin Adams, is an interesting little, little article indeed. [5:54] Chad: Those bananas, they're popping bananas like popcorn. That was cool. [5:58] JD: It is. It's about the company, IBM and a plan design. [6:04] Chad: Gotta be right. [6:05] JD: They're getting rid of their match and replacing it with a cash balance plan. When I first saw that, I was like, wow, this sounds interesting. But you know what? Instead of just having us talk about it, what do you say we bring the. The actual writer of the article? Let's bring on the show. Move over, Chad. [6:30] Justin: Or is he going in? [6:31] JD: Oh, never mind. [6:34] Chad: Oh, Nevin's gonna be on our shoulder. Yeah, as good as it gets. Right there. [6:38] JD: Bringing him in. So, yeah, it had me thinking, wow, this is interesting. Nevin, maybe turn your camera on or approve the little notification you got. Boomer, this is interesting. [6:50] Chad: Maybe. [6:51] JD: What is? Okay, Boomer. I was having even cool thoughts of, like, whoa. Does this mean that, like, combo plans might be catching on? That might be really cool. Nevin, you called this replacement of the 401k match? With a cash balance contribution as appearing to be unique and worth noting. Do you still feel that way? [7:15] Nevin Adams: Yeah, I mean it's a big company that it's, there's a little nuances going around here. First off, IBM's had a cash balance plan. Has a cash balance plan, in fact. [7:26] JD: Who drinks for Devin, I'll drink for Nevin. [7:30] Nevin Adams: Give me a caveat. I can't possibly say international business. I'm not even sure that's really their name. [7:35] JD: Of course it is. [7:36] Nevin Adams: Probably changed it into whatever. Anyway, so they already have a cash balance plan. So presumably what they might be doing with meshing us all together is kind of unfreezing that current cash balance plan to sort of bring all this about. Now they, they avoided using the word cash balance. [7:55] Justin: Oh really? [7:55] Nevin Adams: They used, they used a different name. But honestly I think it's just because the PR folks didn't know what a cash balance plan was. [8:01] JD: Because you were, you were confident enough to use it in your article. [8:06] Nevin Adams: Sure. Because that, to me, that's what it looks like. That's what it. If you look at the machinery, if you look at the way they've talked about the math on it, I mean it looks like a cash balance plan, it smells like a cash balance plan, it quacks like a cash balance plan. It's probably a cash balance plan. [8:20] JD: When I first, when I first looked at it again, I was like, okay, wow, let me open my brain to this, like what's happening here? This sounds really interesting. Then you said this in your article. You said it, you called the replacement of the 401k match with a cash balance contribution as appearing. Oh, sorry, that's the same thing you told me. My bad. You said something to the effect of, you don't have to be a cynic to think that maybe there's some kind of math involved here. And I think what you're leaning towards is maybe this isn't an increase in benefits, but maybe a pullback from the benefits in some way. Do you have any facts? [9:00] Nevin Adams: Well, you know, okay, we'll start with this. IBM enrolling this out. And there we go again with IBM. They acknowledged that the benefit was not going to equate to what the full match would have been with their plan. So they're giving all of their employees a cash bonus at the first of the year next year to make up for that. [9:21] Chad: A one time cash bonus. Right. A one time. Even though this is a year over year pullback in benefits. [9:27] JD: Can we talk, can we talk about other pros and cons? So I think something in your article said like, okay, well, a match forces you to defer to get the match, whereas a cash balance, you just have to meet eligibility, so you don't have to actually participate in the plan. But then you kind of, you hammered that with a stat from IBM, which I'll drink on. You remember what that was? [9:53] Nevin Adams: No, I mean there's, there look, they [9:57] JD: already have 97% participation. [10:00] Nevin Adams: They don't need it for participation. That might affect their deferral rates. And that's, that's the mystery thing. You don't know if people will contribute less because they're not getting the match anymore to provide that incentive. That's a possibility. They may very well look at this and say, well, as long as they're putting money into this cash balance plan, that's all I need to worry about. It's a defined benefit plan, right? In fact, did you see Teresa Gillarducci got very excited at the return the evolution of D.C. like one more step in the path towards making your defined contribution plans is be more like a defined benefit plan by actually turning half of it into a defined benefit plan. [10:37] Justin: Now are they, did they mention if they're still keeping that open to everybody, are they using a major carve out on the defined benefit side to not have to save those dollars? [10:46] JD: And that's a great point. [10:47] Nevin Adams: Like no, it's opened the cash balance, this new cash balance is open to everybody and that, that's a potential advantage because there's only 97 participating in the [10:58] JD: great news for the 3% of, of people that was there. By the way, good kudos to international business, business, whatever for such a high participation rate. But you're right, Evan, it might go down with this design. I don't think that's a shot in the dark. I think a lot of people might look at that and say, no, I no longer need. Yes, Chad. [11:19] Chad: Well, two things, Nevin. You made a point in your article that what one of the things this may potentially accomplish is the fear that the defined contribution side can be pulled down much easier than the cash balance side in terms of benefits being pulled down. So there's some stability to the people that think of a pension plan as a more guaranteed type contribution. And the second thing, JD the conversations I'm having constantly with businesses now that, well, moving forward automatic enrollment is going to be in place, but so many of these larger firms already leverage automatic enrollment is that they're, we're almost going to see the, the death of the match. I think, I think you're going to see in a lot of the startup space the match start to dissolve because people are going to be auto enrolled or auto escalated at 3 to 10% or in it. [12:10] JD: When you say that, what size of company do you think you're pointing at? [12:14] Chad: Like I'm going from the bottom up. JD if you're going to see 90 plus percent participation, 4% safe harbor match when you could do 3% to everybody and leverage it in different ways or [12:25] Nevin Adams: just do a safe harbor, I mean there's a lot of ways anymore. I mean you don't, you don't have to use the match anymore to get the requisite level of participation. You might still have an issue with the deferral rates with your non discrimination test. So that's maybe still there. I mean the reality is we're going to have to see how this shakes out. I actually stumble across this because one of the employees who was not happy about this managed to go and post it up on Reddit. That's kind of like what trip me off for you. [12:54] JD: Good for you, you little sleuth. You little sleuth out there digging around. Can I like I bring up another con. I want to see what you guys think about this. In a cash balance, we all know the assets are pooled. So now I go from investing my own matching contribution from the employer. I get invested the way I want to per my risk tolerance and now the employer contribution is in a pool and, and manage as a pool and I would. You're shaking your head no Devin, enlighten me. Oh yeah, and I'd imagine a pool and a cash balance we all know has to be invested, you know, somewhat conservatively. So that's kind of a chat. [13:35] Nevin Adams: Chad, tell him how cash balance plans work with that notional value, notion rate of return. [13:40] Chad: Yeah, yeah. [13:41] Nevin Adams: So how it's actually just like a pension plan, the employer makes the investment decisions. But that does, but you don't have to worry about that anymore. If they come up short, it's on them. They have to make it up. They're giving us a J.D. [13:52] Mark: saying he's saying is that the rate of return is, is phenomenal where other people want to try to strive for higher rates of return. [14:01] JD: Yeah. [14:02] Justin: And also I was going to say [14:04] JD: what's your rate of return on your notion? Go, keep going Robbie, keep going. [14:07] Mark: No, no, I, I, well, because Nevin, I think he's going on the same topic. I thought we were ending there. I got, I, I, I have an argument back to Chad. [14:16] Nevin Adams: Well, what's if you, if you're good. No, no, no. Look, if, if you're good at investing like some people on this panel might be, and if you want to do your own investment as opposed to, I don't know, like just riding with a Target Defunder or something like that, there's absolutely a possibility that you could end up not doing as well with this kind of situation with the employer match as you did on your own. On the other hand, you can still manage your own money. You're only talking about the company match being jumped into the cash balance plan. And people have traditionally tended when they have the option to manage those pools of money differently anyway. [14:53] Chad: Yeah. [14:54] Nevin Adams: So if as we keep hearing, people are really concerned about not having enough money, not having security, all this emphasis on retirement income solutions, this is arguably a step in that direction without going whole hog to, you know, massive bring in a new investment option in your 401k. [15:12] JD: That's a great point. [15:14] Mark: I think it's awesome. By the way, in a company the size of international big men, I'd say it's really surprising in a lot of ways. [15:24] Nevin Adams: Well, it would be. Here's the really interesting thing and you got to be an old guy and have been around a long time to appreciate this. IBM has a track record with cash balance plans. They move they terminated out their defined benefit plan years ago and turned it into a cash balance plan. And when they did that, they not only got employees in an uproar, they got sued. They got sued I think three different times. One case got, got one they won at the district level. Basically age discrimination suit. Why? Because on the defined benefit plan as you get older your accumulations would be faster whereas in the cash balance plan your, your accumulations are pretty level. But they lost that on appeal. But so anyway what it caught my headline was geez, IBM, haven't you already had enough trouble converting things over to them? [16:17] JD: That's a great question. We can end on this one. Let's. Unless ask the smart guy and that's you, Nevin. Why, what was, what do we, what can we think the motivation is here? Like why did they wake up in 2023 and decide to do something like this? [16:34] Nevin Adams: I'm sure too, I'm sure there were a couple of thoughts going on here, but I'm pretty sure it's because it's felt like this is a more efficient way for international business machines to spend their benefit dollars. [16:48] JD: That sounds like a good answer. Like that sounds like it's in the best interest of the participants type of Answer. [16:56] Chad: Well, in coming up with a 5% notional rate of return is a whole lot easier when interest rates are higher and the market can warrant it quite easily. [17:05] JD: You think that's exactly motivated? [17:07] Nevin Adams: I think, I think it's just, it's a good timing. I mean the thing that I think is kind of nuts is this, this sub notion that, that a lot of people writing about this have said, which is now this is something like could everybody do this? And they're acting like what you can do with a cash balance plan is brand new, which of course it's not. It's been very popular and growing in popularity. You all know this in the smaller end of the market for a long time for a lot of the reasons that end up. It can be a better benefit for in, in the smaller employer kind of situation here. I'm sure IBM just did the math and figured out that this was a more dependable. [17:45] Mark: Do you like how you and I haven't done one? [17:48] JD: You're about to make me sad. I thought you're gonna say when they did the math you're gonna say it was cheaper, but you're not. You're saying more dependable, more. [17:54] Chad: Well, that's in part what he's saying, but also we have to go back to what the consumer wants, right? And, and I think what we have seen with this push towards guaranteed income in retirement and, and how we're accumulating assets when we get there, people are excited about the thought of a guaranteed growth rate. People are excited about the term pension again, which they weren't when I started in this. The thought that my, my, my business is going to be making contributions for me that are, that are going to be there, that are guaranteed, that are promised, there's value in that. And so if, if dem guys like, like Samson said, if dem guys are saving money by bringing the benefit into a different level but getting more bang for their buck by leveraging the terms and what people are actually looking for. One could look at it as a win win. [18:44] JD: Hey, and to Nevin's earlier points, if, if we did move in this, in this direction and we started, I always look at combo plans as like just something to benefit owners. But if, because that's the type of cash balance plans we tend to design. But if we move towards one that was for everyone, it is kind of a nice little blend to have your, your 401k for deferrals and then have a cash balance attached to it. It gives you some of that kind of guaranteed income safety that Nevin was kind of comparing it to. So maybe there is something. [19:17] Justin: J.D. [19:17] Mark: you should really start looking into that. That would be really cool if we had. [19:20] JD: Trust me, if I do a cash balance, it's going to be the first one I mentioned, the one that, on [19:28] Justin: the surface for sure, it sounds great, but when you peel back the layers as the employee, these employees are taking less money now, which is going to contribute to probably to less growth, too. [19:39] Chad: They're getting a 5% pay bump, though, in this first year. One time clear to stay. [19:46] JD: But anyways, we got to move on. Nevin, thank you very much for spending a little bit of time with us. We appreciate it and keep enjoying that retirement, but could you like, yeah, put a little extra work from time to time. I feel like you're slacking in retirement. Come on. [20:01] Nevin Adams: I gotta live, Sully. Have something to do, you know? [20:05] JD: All right. We said hi back there at the corporate offices of the American Retirement Association. See you later, Nev. Will do, man. Appreciate you, buddy. Other headlines. Have you seen the 401k lady? She's gone on a terror. So much so that I had one video of hers I wanted to share today, and I swapped it out today for another one, because I think it was today she went nuts on Dave Ramsey, which I love. There she is. She had talked about wanting to join us here today, just like Nevin did, but she has a young baby in her family and she said it might be hit or miss. So we'll have to kind of discuss this one without her, it looks like. Unless you're somewhere in there in an alias genie, and I'm not seeing it, let me know. A caller calls into Dave Ramsey's show, which, by the way, he does a pretty decent job of. Let's not forget, this guy has successful books, huge podcasts, big, super entertaining, and [21:11] Chad: for the most part, good, good content. [21:14] JD: He's got 300,000 subscribers. This video I'm talking about, it's got a hundred thousand views. Anyways, this guy calls in and it's like, look, man, I want to know about how much money I can take from my nest egg to live on. And he goes, I've done some research, and apparently it's like 4% withdrawal rate, which, if you're an advisor out there, that's a pretty common industry number that gets thrown around. And he was asking. I'm kind of concerned because I heard other people talk about 3%. Well, Dave Ramsey loses his shit and it's like 4%. 3%. What the fuck are you talking about like. And he goes on this rant of like, I say 8%. And to back up his 8% withdrawal rate, he says, look, let's say you make a million dollars, you got a million dollars saved up in your nest egg. He goes, if I look back over history, we got 4% of inflation. He goes, so that's going to cut into 40,000 of your million. He goes, but if you look at the S P500, it's done like 11.8% over the last whatever year, some long time period. And he goes, so you're making 12% on your money if you're investing in S P 500. So there's a difference between that of 8%. He goes, take out 8%, $80,000 a year on your 1 million and you're never cutting into your nest egg. He goes on a call, the industry, the nerds out there, goobers and noobs and idiots and all these types of things, because we keep preaching this 4% thing. And he's super upset about it. I don't know if Brand's got the clip ready, but I want to be clear that he's not a licensed financial advisor. He's just a celebrity type. Dave Ramsey is a professional entertainer masquerading as a financial advisor. Damn genie. So any before I keep going, like, any, any thoughts from you guys on this little debate? And by the way, Jeannie's not the only advisor. Losing her, it's kind of like a, a trend right now. [23:13] Chad: Like, my, my initial response, like my knee jerk reaction to the, specifically to what she focused on the 12% side of things, was the equity exposure that those people are supposed to be continuing to carry at the point in which they're starting to pull money out. [23:28] JD: AN S&P 500. [23:30] Chad: You want to be 100% in an S&P 500, achieving apparently a close to 12% rate of return when you have the highest balance of your lifetime and you need this money and any pullback hits way harder now than it would have hit you at the age of 50. And you want to be 100% in standard course. Oh my God. My mind was blown for a second, going, okay, I got to think deeper about this, but that's just ignorant. [23:58] JD: That's a great takeaway. And by the way, I suggest everyone go watch this. If we haven't said it like Jeannie's version, it's about five minutes and it's well worth it. And she makes that point, Chad, and, but she makes it further. She goes, dave Ramsey, you make $30 million a year and your net worth is a quarter of a billion dollars. So what works for you might not work for everyone else. You can go right ahead and invest your all of your money and in s and P500, because you got tons of money to lose. Right. But someone else might not be able to. To do that. Oh, sorry for that. So that's a great point, Greg. And to your point, Chad, that's not proper investment advice to ask. I would say anybody to be invested 100% in the S and P. Oh, I did it again. 500 before that, too. What happened in diversity? I'll drink three times. What happened to them being diversified. [24:53] Chad: Yeah. And understanding someone's risk tolerance. And I get it. He's trying to make blanket statements that the vast majority of people can grab onto and maybe leverage in the production side of his show. But when you think about what he's actually telling them to do in that scenario, not only is the equity exposure an issue, but it's very clear that the biggest fear people have is running out of money. Like, that's it. How much can I pull out and guarantee I'm not going to run out of money? We're going to live longer. We're going to continue to live longer, and we need to continue some sort of equity exposure. But flipping the coin and saying go all in is going to create so much harm in those folks that are trying to reach that retirement. And they keep in mind people that are calling into the show, they're not working with the genie. They're not working with a financial advisor. They're relying on Dave Ramsey and what he says publicly. [25:51] JD: She got pissed about this because she said Dave Ramsey. So many people follow what you say, and you're totally misguiding them right now. And that's a hazard. And so one more time, like, please check it out. Jeannie's doing a great job. It's good to see her back in action. Apparently she has babies and now she just gets fired up. She likes to take it to the world. [26:12] Mark: So when you're unlimited, you know, you just. Anything can set you off, you know? But I, I think it always comes down to. It comes down to those ideas, too, of just like, consumer awareness. And I love that more than anything that Jeannie's pointing out, which most of us who work in this space kind of know the facts about Dave Ramsey. But if you're not necessarily knowledgeable and you hear that it looks polished, looks all, you know, good. There's things you're not Going to understand the reality behind which I love the fact that she's mentioned, you know, like playing a football game where the ref's only throwing flags against one team because he's in a camp where, yeah, no flags get thrown his way. He could say whatever the heck he wants with no ramification. Where others have this succinct view of, like, I have to do what's right because if I don't, I'm so. I really like that. [27:15] JD: I. When I. When I saw this, genie gave me a. A link to go listen to Ramsey. And I went to it and I was going there on behalf of genie, like this guy, right? Let me hear this stupid. He's about to say. And to your point, in the beginning, I'm like, he's kind of starting to win me over. I like, so confident. He's talking all calmly about it. He's got kind of this little southern draw. He's against the big guy. And he's like, it doesn't need to be that hard. Let me show you the math. And I was literally, like, falling, like, coming under his spell, I guess is what I could tell you. And then I had to shake myself out of it and be like, wait, his numbers are all wrong. Like, this makes no sense. [27:55] Chad: But you have to continue to understand anything you're seeing in the public light, that has a massive following. They have it usually because what they're saying has some sort of extremist type approach to it, Right? If he's always saying, follow every single financial practice that you see that's been proven on the Internet, or let me into a show, or let's cut your [28:18] JD: credit cards in half. That's his extreme thing. He'd do back. [28:22] Chad: You have to be out there a little bit. You have to be pushing the edge. It's just like the news. You know, people, including myself, I don't watch the news because it is always one end or the other. Like it is. It's. They're putting all the bad shit in front of you, or they're putting so much love in front of you. And it's because the middle ground does not sell. The quiet majority does not get sold by that space. They get sold by the extremes on each end. And he's going to continue to say things that are a little risky to get followers and tuners. [28:50] JD: And they also love to hear the streams. Go ahead, Justin. [28:53] Chad: Sorry, go ahead. [28:54] JD: No, no, you go, bro. [28:55] Justin: It seemed really strange that someone as calculated as this guy would be that out of touch with his audience. And what he's, what he's selling to say, yeah, you can get 12% return, take 8%. It almost, it felt like it was one of those, hey, maybe that I'm disturb some controversies so I can get some people, you know, more people. [29:11] JD: You want to hear some dirt? You want to hear some dirt on him? I have, I have heard from people who have been around him in the workplace scenario that he's a bit of a tyrant, that he's a little gnarly. So I know it's hearsay. I obviously haven't seen it myself. I came as a shock to me because he's very focused in kind of the church based world and everything. But I've heard he's pretty gnarly, like with the people around him. [29:37] Mark: You know, we're not, we're not here to spread hearsay. We're just commenting on a video. [29:42] Justin: We don't have 100 facts on this show. [29:44] Chad: Right. [29:44] Mark: I don't know what kind of people he's got out watching these videos. So I'm just gonna say you teach their own. [29:50] JD: You and I are here for totally different purposes. Okay, let's go to the next headline. I'm here to start rumors. [29:57] Chad: Burn the world, Mark. [29:58] JD: That's what I did hear that though. I did hear that the next headline is we getting some Updates from Empower 2023. Small 401k plan sales from Empower letting us know that in 2023 they've done like 10 billion. And this is again, is a very interesting article. I got lots to talk about here. But you know what? See that little name right there? The guy that wrote it? Let's just bring him on in to talk about it with us from four. Okay, Specialist magazine. Why don't you join us, sir? [30:33] Chad: Nevin made us drink a lot. Brian, please don't do the same. [30:40] Mark: Justin's got this one. Yeah, make him a hammer. [30:45] JD: Brian, Brian, turn on your camera. Look for your notification. The quote, the small plan market is having a very good year according to new data released by Empower. Brian, you wrote this? Empower and Brian, welcome by the way. That's very. [31:02] Mark: Oh, he brought a beer. Oh my gosh. [31:06] Speaker F: All right, we drink. Avalanche. [31:08] JD: Welcome to the show. And Brian, you do a far better job than Sully did on the podcast. And Sully was a piece of on this show like Jesus. So I'm assuming you're gonna do phenomenal here. Phenomenal. [31:23] Mark: So he speaks for himself. [31:27] Speaker F: A bad word to say about Sully. Man, I love the guy. [31:30] JD: You wrote Empowers advice. [31:32] Justin: Fantastic. [31:34] JD: Empowers Advisor sold retirement plan business, which encompasses plans with up to 50 million in assets under admin. Under administration. Sorry. Is seeing new organic growth and expansion to new areas of the market, according to Insights released today. Can I ask you. And if you don't, if you don't have an answer for this, maybe we can ask everyone, like, so does that mean that business above 50 million is not Advisor sold by Empower? Like, it caught me off guard, like reading that sentence. I didn't quite understand it. Not to put you in the hot seat. [32:07] Speaker F: Yeah, I don't know about that because. But they were just impressed with their small plan. You know, this is. It's up to 50 million in assets. They said what, there was what, three, 300 new small plants so far? [32:19] JD: 3300 new. [32:20] Speaker F: Yeah, they were under the 50. Under the 50 million assets. 800 of them they said were startups. And they said they, they kind of attributed that growth to secure 2.0 and, and your favorite MEPs and PEPS. [32:38] Chad: That's two for you. [32:40] JD: And again, I. I am not. I'm not in a bad mood tonight. I got a little confused. [32:48] Mark: Oh, my God. [32:50] JD: What's going on? I got a little confused because I went to plan. I went to plansponsor.com and I looked at the rankings of the record keepers and I saw that last year Empower sold like 10,000 plans. I should find my numbers here. Yeah, like 10,000 plans. And I was confused. I was like, why are they celebrating a year and kind of pounding their chest on selling 3, 300 plans so far? Granted, the year's not done yet. When last year they sold like three times that many plans. And then it dawned on me, and maybe the chat bar can help me out this acquisition. Right? [33:29] Chad: Yeah. [33:30] JD: So I said, shimani, I found the. Found the fault in my own. In my own pathway. But then I went and looked at 2021 and 2022. In 2021, they did 3779 plans, and in 2022 they did a very similar number. I'm not to be the asshole here, but it seems to me like they're having a pretty normal year for them. I don't quite get the chest pounding on everything. And by the way, is it chest pounding if guidelines doing 15,000 plans a year and you're doing three to four. Anybody answer for me? [34:06] Speaker F: I think those guys are just. [34:07] Mark: Sampson says it. [34:08] JD: Go ahead, Brian. [34:09] Speaker F: They're just happy about this. This whole release that they sent out was just about the small plan. [34:14] Chad: Market I was gonna say. [34:15] Speaker F: Oh, I think they were just trying to talk about that. They weren't talking about greater sales at large. [34:20] Chad: So there they did the same thing in 2022. Right. Like if I go back and look at 2022 sales, you all wrote an article in June of 2022 about what they had brought in year to date at that point. And it was different because they were in the mass acquisition and the merger of all of that in during that stage. J.D. if I try to put on my tinfoil hat and think about the timing of the release from Empowers perspective. They've been making a very conscious effort to get into the micro space they really have. 800 startups was highlighted. [34:53] JD: This would match up with what Brian's saying. So continue on. [34:56] Chad: Yeah and so I think that part of this was an effort to flex the muscles and say look, we're in this startup space. We're in this small market market space too. We're not just writing the large enterprise level plans. And then to your point if you at least in the research that I did on their release, their term of 50 million and under being advisor sold I think is all they're distinguishing between is, is like enterprise level deals and, and deals that are driven by the advisor like north of 50 million. I think they're leading towards that. It's usually an HR professional or a group of people within the business that are driving the, the request for proposal process for the advisor driving. [35:39] JD: I don't, I totally do not agree with that. [35:41] Chad: I think I just, I'm telling you that's what I think I read in the way in which they're wording it. [35:46] JD: Everything he says been on point besides that one. That's crazy. Like there's, that's the, the 60,0752-505000-01000,000,000 market is, is not. Is still advisor driven plans like these are the ones that have them. I just find that really interesting. But I, I'm with you. I think it, it obviously was a micro small plan kind of announcement. They also very strategically and Brian you were behind kind of writing this and creating it. They quoted a notable TPA and the TPA gave praise to power. I would drink for that. They also brought in Rick Wedge as an advisor. He gave promising you know, positive feedback about what was Empower was doing. So I definitely saw this and I here I go tinfoil hat guy again. But shame on me. I saw this strategy of trying to announce like look at us of course TPA partners and we're advisor partners. We're doing well in this small market. So I guess my takeaway is we should all join in because Empower is doing such a great job. [36:51] Speaker F: Well, I'll tell you what, one of the things that they mentioned to me was that with the pool plans they say that they, they ought to be driven by advisors and the third party administrators with record keepers providing the back end and the tech and the participant experience. And that the most effective model they say has the advisor at the center of it. So that was kind of like part of the message they were trying to get through. [37:14] Chad: I, I feel like I'm pretty good at, at looking through the weeds and figuring out what the objective is. And JD I told you this leaving the third party administrator symposium in, in San Diego that I went to for [37:27] JD: Empower and you were met with, you have met with Ken Monroe there who's commented in this name. [37:33] Nevin Adams: Right? Right. [37:33] JD: Yeah, he's, he's quoted in this article. [37:37] Chad: I felt very strongly that they are committed to the advisor space. I felt very strongly that the thought of them writing direct business, the thought of them chasing rollovers, like yeah, they're not naive guys. They're gonna, we're on a race to zero in the record keeping space. Like they're gonna find ways to be profitable and attract new business. But they, I do not believe they're trying to cut the advisor out. In fact, I think they are, to Brian's point, trying to put them front and center. I came back from that in full transparency and I told our team, including JD if we're not building business with Empower, we're gonna fall behind. And I said that very confidently because I think that they are going to continue to shine in this space. [38:22] JD: I think they have been a top three name for the last four or five years. Like they're definitely on the up and a very popular product. They've got a lot of flexibility. I totally get all of that and I'm not, I know we've kind of maybe thrown them under the bus with their personal capital acquisition and some of the kind of things we've heard coming out of there. And maybe they're kind of redirecting the ship a little bit and maybe that's part of this article is let people know, like, look man, like we're very friendly in this, this environment. But the article also talked about Brian, that with three quarters of the new plans are on this Empower select thing. They called it a packaged off the shelf platform. They keep these things on shelves back there in Colorado and then they take them up. They said they've seen significant growth within the managed account offering reaching almost 4 billion. And then they got this thing at Empower that I think we've talked about on the show before. This dynamic retirement manager which takes you from a target date fund in the beginning and then kind of automatically swaps you into a managed account as you kind of build your wealth more and get closer towards retirement. And they got 21 billion in this sucker which is like almost 100,000 participants. So I'm with you, Chad. I think they're probably smart enough to know that the advisor is still crucial in kind of the production role and the distribution role. But my kind of rub with them has been they're looking to make revenue in lots of other ways. But I hear you. We've talked about this before. [40:01] Chad: They're all going to have to. J.D. we've seen the race to zero. So if the margins are so thin they can't continue to deliver service. And I said this with an advisor in sac I was with who's a stellar advisor. I said look, we're now throwing in automatic enrollment on new plans. We're throwing in long term part time and tracking of that and we're asking the record keepers to do notice fulfillment on this and, and to help the tracking and to create payroll integration relationships. We're asking them to do all this new all while saying get paid less. Well, if they're going to keep going that way, they've got to find alternative ways of driving revenue. [40:38] JD: Then just be careful. Let's, let's go ways where they can make more revenue doing the things that they should do and not take total control over everything and let the advisors kind of stay in the hundred. Brian, quick plug. I just found out today, I don't know when it came out, but you guys got a new issue out, am I right? [41:00] Speaker F: We do, yeah. It's [41:03] JD: bam. All right everybody, I just pulled it right in front of your chest. So brand new issue of 4 1K Specialist Magazine is out there everybody. And I definitely went peruse through it. It's great stuff, lots of stuff. I mean my gosh, it's a very robust in terms of all the different topics that are in there. So check it out everybody. You can digitally go to their website, just go up in the top right to a little magazine icon and you can FL right through it in your very own home. And Chad gets some Hard Cop hard copy delivered to his house and he on his bedside and he has him on his bedside table at night. [41:42] Chad: Oh, that I do. I read them, but I go to the. Every time I go to the conference, I grab them when I'm there, and that way I have something to read on the airplane flight home. [41:50] Speaker F: No doubt. We wish everybody would take them. Would take them from the conference. [41:54] JD: I have like 300 of the one where we are on the COVID just sitting at our office. Brian, thank you. I. I mean what I said. You're doing a great job of the podcast. You really are. Like, I think we need him on [42:10] Chad: as a regular guest jd. I think he should come back at some point. [42:14] Mark: Yeah, like a regular every couple of months kind of thing. [42:17] JD: It just seemed like more fun to make fun of Sully. Brian's so professional. But yes, we'll definitely have him back in 2024. And keep. Keep writing it, man. Just remember, every time you're putting a pen to paper, I know that's not how you do it, but we are all out here as an industry looking for that content, waiting for it, hoping for it, and devouring it when we wake up in the morning. So just remember, your work is not wasted on us. So keep cranking away. [42:45] Speaker F: All right, Appreciate it, guys. [42:47] Chad: Thank you. [42:47] JD: Have a great night. [42:48] Justin: Thank you. Fantastic. [42:50] JD: Why don't we spin the wheel of ice? Let's spin the wheel of Ice and see who the lucky winner is. [42:55] Chad: I didn't grab mine today, so if it's me, I'm in trouble. Mark's got you. No, I'll walk to the John Deere and get it. [43:06] JD: That's what you get. Yes, yes. [43:09] Chad: Sure, dude. [43:10] Justin: Six o'. Clock. [43:12] JD: I'm gonna bring someone on to chat with us. We're gonna continue this three. [43:17] Mark: So good. [43:18] JD: It's not a headline. [43:19] Chad: I like this. [43:20] JD: It's just something I'd like to talk about. I'm thinking you guys might like this. It's been a long time maybe since you've. No, let's wait and see. Brandon, if you can. [43:33] Justin: Oh, I see it. [43:34] JD: I see it. An old friend. An old friend. [43:42] Chad: Oh, the sultry voice of 401k. [43:48] JD: Where is he? There he is. There he is, everybody. Mr. Rick Unser is in the house sporting the quarter zip. Looking good. [43:58] Justin: It's the new uniform. [44:01] Chad: Younger each time you come on this show, right? [44:03] JD: It does look good, doesn't he? [44:05] Justin: Yeah, thanks. [44:06] JD: The lighting must be life. It's. It's the fact that he. He's relieved himself of having to record that damn podcast every Friday night. He's. Now he's got a new, new look on life, we should do the same thing. We should do the same thing. I brought him in because I wanted to kind of pivot a little bit for us and talk financial advisor jargon a bit. And I want to, I, I listen to a lot of financial podcasts that are outside of 401k and in the current environment when the fed funds raid and recession looming, they talk about this yield curve and the inversion of the yield curve. And I got to be honest with you, the surfer in me originally was like, I don't know what the they're talking about, you know, like now I understand that has a lot to do with like these, these fixed securities type stuff. Mostly they're talking about Treasuries and, and for everyone out there listening in, I'm sure most of the advisors here know about it. But you know, you've got these short term treasuries, these like 3 month T bills and you get a certain yield on those. And then you got these five year and these 10 year and these, you know, 30 year, I believe they go out to treasuries, US treasuries and they have a certain yield and typically it's the shorter term ones that would have a smaller return. And the more you're willing to wait and put it out there in the future, you get a, you get a bigger return for a variety of reasons. But to put in kind of kindergarten sense, like if I was the lone rogue guy, you know, 100 bucks today and he's gonna give it back to me tomorrow, I wouldn't expect him to like pay me any extra. Like I'm just giving 100 bucks. He needs it right now, needs it real quick and tomorrow he's gonna get back to me. But if Rove guy asked me for a hundred bucks and he wants to give it back to me in a year, I might be like, hey man, I'll give you 100 bucks. But when you, I want a little something in return for giving that to you, you know, AKA God damn it, interest. And so that's kind of how this works. But when that, that, when that yield curve starts to flatten and or go inverted, all of a sudden that whole story, I told you, flips upside on its head for a variety of reasons in our industry. Now here's the fun part and I might can get this up. So chat bar, please chime in and or Mr. Answer here. I think in five of the last recessions this has always happened. I think it's literally like five for five. Like it has always predicted or at least for every recession we've had, this happened right before it. And so, and we're right in that spot right now. And a lot of people argue that we are not in a recession yet but based on this inverted yield curve. So Rick Onser, is this asked of you this, this concept, I mean in your day to day work life and how familiar are you with it? [47:00] Justin: Pretty familiar. But I would say where this is coming to roost in my world is we don't get a lot of questions about investments from plan participants, but we are getting questions of hey, I just saw on TV the other day I can get a 5 1/2% CD. Where can I get that in my 401k plan? [47:20] JD: Who's drinking for all drinks. He's got him, he's got a glass. [47:25] Chad: Oh, there we go. [47:28] Justin: So what, where can I get that in my 401k plan? Now if you were brave enough and hang on to money market in your, in your menu, you're doing fine. That can I ask you come back to life. [47:39] JD: Can I ask you guys who are on the front lines, are there money markets and things now? Like back when I was selling, when's the last time you sold a plan? JD Money markets were like zero Sometimes, sometimes if the rap fee was too high, a money market would be like negative on some of those. [47:59] Chad: And you know, most record keepers are pushing their own solution in that space which potentially creates a drop in, in the asset charge and so they don't want a competing fund in there. And so often leaving the money market in when there's a fixed solution or a guaranteed solution. It's. It's not allowed. [48:15] Justin: Yeah, it's not allowed. [48:16] Chad: No. [48:19] JD: But both those product types are paying more these days. Are you seeing it live in color in a menu in, in these record keeping platforms? You should, right? [48:28] Chad: Yep. [48:28] Justin: Well, so, so here's I think the challenging conversation and I think for folks out there you just need probably something you should be thinking about or be ready for in a conversation if it hasn't come up yet is again, money markets have responded nicely because those are tied to the, the fed funds rate. As you know JD as you eloquently pointed out, the short end of the curve, right. That's, that's raising very quickly. So money market rates have been, have been going up over the last two years from next to zero to well depending upon who you talk to. 4 or 5% whatever it might be. However, you're also right, what most plans have in them now are Some form of stable value, some form of guaranteed, whether that's a separate account fund, whether that's something that's based off the general account of the insurance provider that you're aligned with. Those rates are not going up nearly as quickly or a gift or at all or a gic. Well, a lot of them are tied to the bond market. So what you'll see in whereas rates go up, prices of bonds go down. So I mean the way that we try to explain like a stable value fund for example, is it's essentially a three to four year maturity bond that's wrapped with an insurance product. So what happens when rates go up dramatically, Bond prices go down. So as, as all of this happens in the background, you've got, yeah, you've got this kind of disconnect in the market where yeah, bond prices are going up, but the value of those bonds are dropping. Now you're creating this big gap in market to book. [49:52] JD: So Rick is out. Hey, I want to stop. [49:54] Mark: For years now, Rick, I've been trying to tell. [49:57] JD: No, Rick is actually outlining like a perfect kind of Chad's nuggets here, although it's, it's Rick's nuggets is that this happens a lot in 401k when in the retail space they can get certain things and so they come to their Advisor in the 401k space and say, hey, I know I can get this, so why don't we have this in our 401k. And Rick, you're doing a great job of explaining. I don't know if the participant cares about your explanation, but. [50:25] Justin: No, but, but, but the participant, the participant cares when the employer comes back and says you can't have this. And I think that's where as an advisor community, I'm not saying stable value funds are bad, but when you come back and say, well, we've got the stable value fund, it's yielding 1.8% right now. Okay, let's get rid of this thing. We want the money market, right? Hey, that's yielding 5%. Let's give that. Well now all of a sudden you've got market value adjustments, you've got put provisions, you've got all these other things that if you didn't do a good job explaining that on the front end, this is now a major reality that you're stuck with. [51:01] JD: Is this, Ricky, tell me your business has been going pretty well. Is this a conversion problem too? Are you. Oh yeah, for sure. Are you looking at. And you're kind of in that you're in a, the bigger space than we are. So, I don't know, 25 million north and bigger than that, obviously, but. So you really got to put your kind of your Sherlock Holmes on when you're trying to take over a plan and take a look at what they have in the fixed area and what that might mean in terms of market value adjustment. Do you have any big plans that you were looking at where this is an issue that you go, yeah, what am I gonna do here? [51:42] Justin: So I'll give you, I'll give you two horror stories and I won't, I won't name names. So we've got, we have one, one group that we've been working with this year. We're bringing 15 plans together and it's, it's a big project. [51:55] JD: Mark, Mark, why don't you bring in business like this, 15 plans he's bringing. [52:00] Chad: I was just gonna say thanks for the call, Rick. Yeah, sorry. [52:02] JD: Go on, rick. [52:03] Nevin Adams: I do J.D. [52:04] Mark: i just, I don't tell you about it. [52:08] Justin: So we're bringing these plans together. All sorts of record keepers where the, where these plans are. Lo and behold, we're starting to get under the, under the hood on some of these stable value funds pretty early on because we know this is going to be an issue. We go to one of the stable value funds. We knew that we were going to have some challenges, but we finally get the discontinuance quote. They're like, all right, this is about $15 million in the cash account. It's like, okay, we know this is not going to be awesome, but let's just, let's see what comes back. So they come back with two options for us. You can have a, you can have an equal payout over 10 years that's not benefit responsive, or you can take $0.82 on the dollar as a market value adjustment. [52:49] JD: On the 15 million. On the 15 million. [52:52] Chad: Can you not move in kind? Can you not leave that as a solution in the new chassis? [52:57] JD: Wait, explain the, explain the first solution to the dumb surfer again. What did you say? [53:03] Justin: So it was essentially, you can exercise a put, and that put will say, we'll give you. That was actually, it's 11 payments over 10 years, but it's not benefit responsive. So you can't like call in and say, hey, I want to roll my money over, or hey, I've had a disability or hey, I've been separated from service. I want to take my money out. Yeah, your money is stuck for 10 years. So that was option number one. Option number two was a market value adjustment at 82 cents on the dollar. In other words, a 2 million dollar hit for this company. If they wanted to make it. [53:36] JD: That's 2 million that gets lost. [53:38] Justin: That's a 2 million dollar hit for the, for the, either for the participants or for the company. [53:42] JD: Yep. [53:43] Justin: So that's, I mean, right. Live, live in reality happening right now. So hey, Instead of merging 15 plans together, we merge 14 together, the other one separate. Can my answer is a separate plan. [53:55] JD: Can my answer be to those options? None of the above. [53:59] Chad: Yeah, stay put. Yeah. [54:02] Justin: And that's what we did. We basically, we basically just said, yeah, we basically just said, hey, we're gonna, we're gonna keep this plan aside. We'll merge the other 14 together. We'll keep. You take that one aside. [54:11] JD: Oh, or do you just take the rest of the assets and leave those assets behind and then you just get someone to kind of record keep it for you? [54:18] Justin: No, I mean that's, that's a challenge with a lot of these stable value funds is that once you stop the flows they, you know, most of the time that triggers the discontinuance element of it. [54:28] JD: That's so interesting. [54:29] Justin: It's, you're, you know, you're stuck. So, so what we did is again, like I said, we merged the other 14 plans or we're in the process of merging the other 14 plans together and we're just going to keep this as a separate plan outside the control group or excuse me, as part of the control group, but outside Umbrella. [54:43] JD: You'll umbrella test it. [54:45] Justin: And yeah, we're gonna, we're aligning all the provisions, but we're keeping everything active. So it's, it's crazy. So the other one, real, hey, Stable value fund company slowly was kind of running out of steam, went out of business final. So they, they finally said, all right, hey, we got to shut the plan down. We're terminating it. So. All right, tell us what's going to happen with the stable value fund. Hey, it's getting paid out, so there's no put right. So it's only just a payout at, at market value. Anybody want to guess what the market value on that was? [55:19] Mark: No. [55:20] Chad: No. [55:21] Justin: $1 million.40 on the dollar. [55:27] JD: Oh, whoa, you can't do that. You can't do that. That's, you're, I mean, I guess you signed contracts, right? You agreed to like these terms. I, that's horrible. I, I, you know, you go, Rick, [55:41] Chad: in that scenario, can you go to the individual and start encouraging transitions you can't create a competing fund in there, so it's not like you can have another. [55:50] JD: Even though even those transition. You know, Chad, even those transitions tend to have handcuffs on them. Like you can only do so much at a certain time. [55:58] Chad: I didn't think at a particip. An individual participant level, it was. [56:02] JD: They can. They can. Yeah, I've seen them for sure where participants can only move a certain amount of money at a. At a certain time from them. They. They're no dummies to me. It's just. You don't see that in the micro market. I mean. [56:16] Chad: Yes, you do. We do. We're seeing a bunch of it right now. And that was the difference, though, I think, JD between what Rick's explaining what we are is that often the record keeper will step up and buy out that balance. They'll increase the asset charge by the new record. [56:30] JD: Right? Yeah, the new record. [56:32] Justin: So. [56:32] JD: So isn't that a game, though? That's. So. That's a fun. [56:35] Chad: But it's a small number, right? It's 20 grand. They can handle that. You're talking $2 million. [56:42] JD: Can I. Can I interject here is. But what ends up happening is like the wrap fee goes up or the pricing goes up. [56:49] Chad: Like I said, it's like two basis points is what they're throwing on there. [56:52] JD: You're paying for it. [56:53] Justin: The other thing. The other thing to know too is some of those buyouts are limited. We've learned this the hard way. [56:59] Chad: Some. [56:59] Justin: Some of these buyouts are limited by state regulations. So I, I think there's one that we were working on where somebody was willing to step up, or they're like, hey, we can only eat 7% of that market to book. So if you've got something 85, 82, 88 on that, on that market to book, you're still. I mean, it might close the gap a little, but you're still left holding. Holding a pretty big. Here's my big deficit. [57:23] JD: Here's my takeaway to kind of wrap this, because I'm going to go with Ed's advice here. We're going to. This is depressing. And we need to move on to. [57:32] Chad: There's so much strategy in this, though. We ought to. Yeah. Because this is the market we're living in right now from conversion standpoint. [57:39] JD: That's kind of what I was just going to say. [57:40] Justin: But it's. But yeah, it's the participant that wants a higher yield. And if you've got a stable value fund, you know, hey, you got to Think through how you explain that to. To your plan sponsor, right? [57:49] JD: And it's. [57:50] Justin: Again, I'm not. I'm not. Stable value funds are fine, except for when you try to break them in bad. You know, in a bad market environment. And I'm not like, I'm not poop. I'm not pooping all over stable value funds here. I think, hey, you know, they're taking risk, they're investing. That's. That's why they were able to pass on a higher I than you'd get. So they have to be able to protect themselves. But at the same point in time, you. You've got to understand a lot of this as you go into. As you go into this on the front end or else. I think that's where times like this is where the surprises come in. [58:17] JD: I think that's where GG says serious fucking question. And. And I agree is like, we lived 10 years, a decade, more than a decade with like, these very low interest rates, and they kind of stayed that way. And so this is new for some people that are kind of rookies to this industry. And I think the big takeaway is a couple of things, is one is like having a good knowledgeable experience advisor in your corner to kind of navigate these treacherous waters with the plan sponsor. And even maybe the participants, if they have access to some of these things, is. Is immensely valuable. I mean, holy. Like, you could get into a lot of trouble with this thing down the line. And maybe if you got the right person guiding you, they can kind of say, yeah, that looks cool for now, but that could be a headache for us down the line. So maybe we go a different route. And then the next scenario is, we've never lived in this. Excuse me. We've never. In the last decade, we haven't had this kind of rapid change in interest rates. And so it is putting a lot of things upside down and not just the yield curve. Give me a drum roll for that. You know, it's. It's making a lot of things different that used to be the same for a long time. That was like a joke, Justin. Like, yield curve gets upside down. But this is getting. Anyway. [59:42] Chad: Comment. [59:42] JD: Oh, sorry. I always do that. I. Forget about the damn chat bar. I look at you guys and you, like, you laugh or. Or you squint. I'm like, what am I saying that they're upset about? [59:50] Mark: Not all your jokes are funny, J.D. [59:52] JD: just. Yeah, I know that. Okay. Thank you. It's good to see you. We love you. I personally, I'd love For you to come down and I'll put on a quarter zip, and we can play golf at my local club down the street. Yes, Chad, you want to talk work, go ahead. [1:00:15] Chad: No, no, I have a. Well, maybe somewhat. I have a request. You guys did like terms of the retirement plan industry that were. That people use all the time, that were confusing. If I think back from when you originally did that, the two of you, to now, there are a hundred new terms that I hear constantly that weren't around back then. I think you need to do it again. I think for two of you need to jump down. Yeah. And drink through that and do it all over again and come up the new terms that are there and. And lay them out for us. [1:00:49] Justin: We could do that after a round of golf. I love it. [1:00:51] JD: Yes. [1:00:51] Chad: There you go. [1:00:51] Justin: I'm in. [1:00:52] JD: All right, buddy, let's set it up. And speaking of golf, let's go to drunk stock tips. See you later, Rick. Love you, buddy. Good. [1:01:01] Justin: Good to see you guys. Happy Thanksgiving. [1:01:17] JD: Speaking of better. No particular. [1:01:20] Chad: That one. [1:01:21] JD: Speaking of golf, drunk stock tips. What does that mean? That's a weird. [1:01:25] Mark: Like, is it. [1:01:26] Justin: Is that. [1:01:26] Mark: Is that like. [1:01:27] Justin: Are you Mark the golfer? [1:01:29] JD: No. [1:01:30] Mark: Is it gonna be a golf stalker? [1:01:32] Speaker F: It is. [1:01:32] JD: Well, I mean, it's got the title. It's. Oh, I see how smart you are. 800 yards, Chad. You can hit bomb. [1:01:41] Chad: Show me your short. [1:01:44] JD: I know. Oh, God, I love that. [1:01:47] Justin: What happened with Tiger's kid today? [1:01:49] Chad: They won the state championship in Florida. [1:01:51] JD: Oh. Why are you guys paying attention to it? I just want everyone to know out there, too, we do not stop at 30 minutes these days. We don't have those shackles on us. [1:02:00] Mark: 30 minutes, that would be. [1:02:02] JD: Oh, sorry. Six, 60 minutes. [1:02:04] Mark: That's your fucking mud. [1:02:06] Justin: 30 minutes ever. [1:02:07] JD: We. We do what we do. And. And I think there's a moment here, too. I'll keep it short, Mark. Sorry. [1:02:13] Mark: But yeah. [1:02:14] Chad: Okay. [1:02:15] JD: I learned this week that hard work means something in life. Like when you. When you get your hands dirty and you do some, you do hard work for yourself. A little project means a lot. You can't always, you know, have other people do it for you. I re. Gripped my own golf clubs last night. Cut off the old grips, put on the new ones, and there's a certain set of satisfaction that is a lot better than me walking down to my club pro shop and saying, hey, little Johnny, here's my clubs. Here's my new grips. I want them tomorrow morning. Put them on there, buddy. Here's a ten dollar. Here's a ten dollar bill? No, it felt good. [1:02:55] Mark: Way more expensive than $10, but yeah, it felt great. [1:02:58] JD: And I did them great. And I will tell anyone out there that's that's putting on their own golf grips. I know Mark has a history of this. There's one key thing you need to know. That little. The little slick juice you use to like, slide it on there. [1:03:12] Chad: Oh, yeah. [1:03:13] JD: Do not be stingent with that stuff. Pour it all over that tape, put it in your grip, shake it around, put it on there. Make it. Make it simple for yourself. Yes. Justin, have you ever cripped your own? [1:03:25] Chad: Isn't it stingy? [1:03:28] JD: I don't know. [1:03:30] Chad: Have I ever gripped my golf clubs? [1:03:32] Justin: Have you seen this play golf? [1:03:33] JD: These days, when there's no chance in hell, when you have chat, GPT, write your monologues, it's hard. You try to use big words, you get in a flow. Drunk stock tips. [1:03:45] Justin: Chat. The three letters after that comes chat. [1:03:48] JD: Oh, got it, got it, got it. I'll drink. I. We're not gonna go through your old results. No one wants to hear that anymore. You've been killing it. [1:03:58] Chad: One comment on the old results is I bought Pfizer after the last show when you recommended it. I'm down 30.75 right now, Mark. [1:04:06] Mark: Yeah, what's so bad about that? [1:04:07] JD: Hang in there. [1:04:10] Chad: I'll hold on. [1:04:10] Mark: Ride it out, buddies. [1:04:12] JD: Thankfully, that's what I was referencing earlier. That's powder. That's Chad. Okay, the ticker on this, you ready for this? The ticker on this. Fun that. We're looking for advice from you, Mark. [1:04:27] Mark: Yeah. [1:04:28] JD: By the way, I watched Netflix golf car racing guys last night. It was all right. The ticker is G O L F. Passionate Holdings Corp. Acoustic Acushnet. Yeah, we like that. You know this already. [1:04:50] Justin: Interesting. [1:04:50] JD: The stock is you worked for them. [1:04:54] Mark: Okay, when? This isn't story time, but I used to do could be days for Cobra Golf. Cobra Golf used to be owned by a Kushnik company. They sold off Cobra to Puma, as [1:05:08] JD: they should have because their brands right now are bowler. These are the brands. [1:05:13] Mark: Well, they recognize where their bread butter was, bro. [1:05:16] JD: This is. This is sick ass golf brands. Titleist. [1:05:20] Mark: Yeah. [1:05:21] JD: Footjoy. Vokey. Bro, those are the wedges you need the Vokey. [1:05:27] Chad: They own these brands? [1:05:28] JD: Yes. [1:05:29] Chad: Oh, geez. [1:05:30] JD: Let's talk putters, shall we? A member of my golf club. Yes. Yes. Scotty Cameron. By the way, there's a Scotty Cameron store down in Encinitas where I live, and they will not let you inside. Of it. You have to stand out front in a line and there are nerds lined up there all day long with their little putter saying, walk by there when [1:05:53] Mark: we were down there. [1:05:53] JD: Yeah, it's solid. And then, oh, I was on a roll. And then a pinnacle. [1:05:59] Mark: Anyways, you gotta have one, you know. [1:06:01] JD: Yeah, right. You gotta have one of those diversity. [1:06:04] Mark: It's like kickstart for us. [1:06:05] JD: Yeah. Called diversity. So I'll give it to you. Roby, lead us, buddy. The stock closed today at 56.24. It's been on a tear since May of 2022. Like, it's, it's really done well, but, you know, I don't know. I know you don't care about that, so I won't give you the price to earnings ratio and I, I won't let you know what the revenue was last year. You just tell me. Like, you know, this company you work for. [1:06:31] Mark: You know, it's funny because again, as, as a golf nerd, I feel like that brand is kind of stuffy, you know, like there's some more modern cool hit brands I think that, that do well with the general population and for people who like to go against the grain and are more into like the YouTube golf and stuff like that. But Titleists will dominate golf balls for forever and golf clubs for professionals. Footjoy will always be a go to brand for shoes Scotty Cameron will hold true. They hold value better than just about anything. Look at that. [1:07:11] JD: How about, how about the. How about the ROI on Titleist pro ones? I mean. Oh, sh. That's. Oh, is that a thing? [1:07:20] Chad: Return on investment? Yeah, [1:07:27] JD: I think the V's one too. Oh, I just said it again. [1:07:29] Mark: Oh, here's what I'll say is this. This stock doesn't excite me, but I feel like it's. I'll compare it to like a Toyota Camry. It's just something you can rely on. Like it's gonna go. It's not. Nothing flashy, but it's gonna, it's always gonna be good, Tom. So it's, it's a buy and hold as a stable investment choice. There's not going to be a lot of volatility. I think, I think you're good to be there. But don't expect like some crazy massive payoff or return unless they do something shocking to their clubs or purchase another company and get more involved in the youthful generation of golf. [1:08:14] JD: Well, can I ask you. So I mentioned Netflix special, which I watched part of last night, which had all these mix of athletes and Obviously, race car drivers. What do we call them? [1:08:27] Mark: F1. [1:08:28] JD: F1. So for anyone listening that doesn't know, like, in Las Vegas. Chad knows this very well. He was at the airport last night. F1 drivers and PGA Tour. Oh, I'll drink for that. Got together and. And they're playing a little kind of impromptu. Not impromptu, sorry. Creative golf event where literally, like, the first hole was like a speed run. They had to, like, they all hit at the same time and then drove their carts as fast as they could to the green to putt in the ball. And so my point is obviously trying to kind of get into the younger crowd or make the sport seem a little cooler. They're cross referencing. Aren't these positive things for the stock. Can't. Doesn't golf want to. [1:09:10] Mark: Yes, Golf. Golf does. But look at will it Marketplace. It's Titleist going into where some of these other hip, cool brands are going. Okay, but. But Titleist is like. It's the brand everybody sees and just goes, yeah, it's good. It's good. It doesn't fit for everybody. Right. That's again, when Titleists own Cobra. They were like, Cobra's for the beginners and people who want to get better. Titleist is for the. [1:09:41] JD: And the people who. Like Ricky Fowler. [1:09:44] Mark: Yeah, that too. So it's. It's tried. Chad, this is not your segment. [1:09:49] JD: Put your hand. [1:09:50] Chad: No, no, I was raising that. [1:09:52] JD: We like Ricky Fowler. The. [1:09:55] Mark: So. So I. I think that titles could change their mantra, but they don't need to, like, the people know what they're getting. They're getting the best number one ball in golf. They're getting clubs that are expensive for a reason because they use good materials. The best of the best. They're. They're for players like they're always going to be. [1:10:16] JD: They're just cool. [1:10:18] Mark: Yeah, they just know that they know their lane. And I'm going to say an acronym like, they're not going to be like pxg. No offense, Chad, and try to, like, win the market over with crazy marketing [1:10:28] Chad: and spending thousands to ring him up. Here would be my fight back, Mark. I bought Pfizer when you told me to buy Pfizer. I've bought others. I'm looking at my Schwab account right now when you told me to buy. I will not follow suit with this one. And here's my sole reason. Oh, what. What has happened to the game of golf and all of these companies since Pandemic started? They have skyrocketed. And so if I go back to 2020. April of 2020. Stock price was at 24 a share, it's at 58. It's seen its climb, it's seen its climb through the boost of golf, through the excitement of golf. [1:11:07] JD: Right. [1:11:07] Chad: I think that that will, I think all of them will slow down a bit. It will make money in the long run. There's no, I think there's no better now now researching it. I had no idea who they were [1:11:19] Justin: too. [1:11:19] Mark: What you have to think too is, is golf used to be pretty cyclical, right. Because I'd be like when the Masters hit, everything went up and then the golf season was over, it would decline. Golf has turned into a all year round thing as you we as seen by what's on TV. They're on Netflix now. It's reality YouTube. Golf might take over golf. I'm telling like I'm just telling you if you follow any of this stuff. [1:11:41] JD: Yes, I do. [1:11:42] Mark: These guys, Bob does sports foreplay. Good golf, whatever. [1:11:47] JD: Good, good, good, good, good, good. [1:11:50] Mark: Golf is now not a function of just the tour, it's a function of our fingertips. And it's about content. Content takes over everything. Now I'm, that's why I'm saying titles isn't going to skyrocket, right. Some of these other brands might, but they're gonna stay relatively flat. [1:12:08] JD: And bro, they are like the Gucci. [1:12:14] Mark: Oh, good point. [1:12:15] JD: And, and, and Gucci. [1:12:17] Mark: No like Chad's clubs are. The Gucci Tylus is like a little [1:12:21] Chad: bit under but Gucci doesn't make every different level of, of, of product. Right. Like just commenting to Tony in there, you've got nxt, you've got different level of Titleist golf balls that even amateurs will play with. Like so new coming in are gonna buy them. [1:12:41] JD: The stock is the stock of Gucci lvmh. Someone help me in the chat bar. It's Louis Vuitton, whatever. That's. It's the same kind of thing where it's like a holding of a lot of these luxury brands. And I was trying to back up Mark to say like those brands withstand decades because they've been around for centuries and so they're not going anywhere. And so usually those are good bets, you know that long term that sticks around. And I feel like like before the [1:13:09] Mark: housing market crash that was a, that was a relatively safe investment choice, right? [1:13:14] JD: Yeah. All right, so it was a buy, right? It's a buy from Roby and I [1:13:18] Chad: buy a long term buy though. He's making his point. Heard it's a long and Buy. [1:13:22] Mark: Yeah. [1:13:23] JD: Oh, wow. Look at how. Look at how smart he's getting. Remember in the beginning of Drunk stock tips, he was like, buy it, bro. Put all your money in. I'm in. And now that he's had all this success, I literally envision him now in a suit and tie, and he's like, oh, I'm long term on this for 10 years, so don't quote me today. Like, I. You know, we'll see. [1:13:42] Chad: Also, we got to start putting a [1:13:44] Justin: time frame on it, JD 6 months, 12 months. [1:13:47] Chad: You also gave him a stocky nose. Like most of the other ones are companies that he's not personally tied to. When you said a cushion it, I was like, who the is that? [1:13:58] JD: Well, Chad, you're the only idiot in the room who's betting against him on this one. I just dumped a ton of cash into my E Trade account. [1:14:07] Chad: E Trade. [1:14:08] JD: Long term. Okay, Chap. Our champion. Last week's winner was Hackler, if you guys remember, not last week when we had a Shlomo on. How'd you guys like Shlomo? I like Shlomo. [1:14:25] Chad: I've been asked, like, a lot. Shloma was as advertised, but more fun than expected. [1:14:31] JD: You know, he motivated me for 2024. He told us we need to get gnarlier, step it up, be more rebellious. I was like, all right, we got. Yeah. By the way, everyone, we have, like, two more shows left this year before the new unveil of next year's version of this show. And what it's going to look like, it's going to be very different. So stay tuned. [1:14:53] Mark: Justin, did you say season nine? [1:14:56] JD: Yeah, I think it is. [1:14:58] Justin: It is. [1:14:59] JD: And, yeah, we got some. You're gonna see a total revamp of what we're doing. It's gonna be totally different. Hackler one, I got lazy. Guys. We had a lot of subjects today, a lot of guests coming on. I. I noticed There was a McDonald's right by where he was staying. So he got like. He got like six. Four Big Macs, maybe six Big Macs, four cheeseburgers. I got him like, three of those fish fillet sandwiches. I got him a little. They didn't have it. [1:15:33] Chad: I was. [1:15:33] JD: I was looking for that. They didn't have it. I was looking for that. Just a bunch of random. Just him. Excuse me. [1:15:41] Chad: His wife's there. Kids are gone, but his wife's there. [1:15:45] JD: It was about 100 bucks, man. [1:15:46] Justin: You can throw down, Mark. [1:15:48] JD: It was about a hundred dollars. About a hundred dollars of diabetes. That's what we sent Him. So congratulations, Hackler. You're an icon. You're a legend and a chat bar champion for sure. I mean, I. I honestly think, like, [1:16:03] Justin: he might be the king when you [1:16:05] JD: die someday, I will talk to your loved ones and ask them if we can put chat bar champion on your [1:16:11] Mark: Gravestone after this McDonald's order. [1:16:13] Justin: That might be JD. [1:16:16] Chad: He's for sure outliving you. That was funny. [1:16:19] JD: No, he's not. Have you seen those shorts he wears all the time? He's gonna get leg cancer. Some kind of melanoma on his leg. [1:16:25] Justin: Don't even put that in the universe, man. [1:16:27] JD: I'm sorry. I love Hackler. Okay, so who's the. Who's your chapter champion tonight? Roby, I'm going straight to you because Justin never has someone picked out. [1:16:38] Justin: I don't. Are you drunk? [1:16:40] JD: I. I never. [1:16:42] Mark: When they're gone. But, you know, my big thing has been, like, newer people, and maybe he's not new. I'm so bad with this stuff. But. And I'm getting his last name wrong. It Kyle. Is it Cliff or Cliff Kyle Clift. Yeah. [1:16:59] JD: Oh, they're gone. But that's okay. It doesn't matter. [1:17:04] Chad: We're. We're 20 minutes late at most labs. [1:17:07] JD: Chad, we're not late. [1:17:10] Chad: Sorry. [1:17:10] JD: I don't have a 60 minute thing, JD. [1:17:12] Chad: I've slept, like, four hours in the last three days. [1:17:16] JD: My vote. My vote is for Ed Di Marino, who, by the way, Ed is like. Ed does hang out in his basement with a tinfoil hat and think to himself about the conspiracies of the 401k industry. And I love that. I love that. [1:17:34] Chad: Ed might be. Yeah, Ed might be one of my favorite people that. That tunes in, but quietly, like, inserts comments. [1:17:45] JD: That's why I'm voting for him tonight. Who's your vote, Chadwick? [1:17:48] Chad: G. G, we're an after show. I can say it. I already tried to throw. [1:17:52] JD: We are not an after show. [1:17:53] Justin: Not an after show, man. [1:17:55] Chad: Okay, you have to drink. Greg is my choice for sure. There was no question tonight. [1:18:00] JD: God damn it, Chad. You just said, like, we're in overtime. Then you said you were an after show. No, we're not. Get with the new rules, Justin. [1:18:09] Justin: But it was a bit of a ping pong match between Greg and Samsonite, [1:18:13] JD: so I can't pick. [1:18:14] Justin: I'm gonna choose heads. [1:18:16] Chad: Tails. [1:18:16] Justin: We're gonna flip the Smirnoff cap. [1:18:18] JD: Nice. I like that. [1:18:20] Justin: It was tails. [1:18:22] JD: Who is that? [1:18:23] Justin: I didn't say who. [1:18:24] JD: That. [1:18:24] Justin: No, I don't remember what I said, [1:18:26] Chad: I'm assuming that's something because you said Greg first and then Samson second. [1:18:29] JD: I think. I think tails. Tails should be Samson because he's got a nice tail. Yep. [1:18:35] Chad: Whoa. [1:18:37] Justin: America's ass. [1:18:39] JD: Is it Samson? Okay, Samson. Ed. New guy that we ever heard of. That's not here. [1:18:47] Chad: Right, Clift? [1:18:49] JD: And Is that it? [1:18:51] Chad: Greg. Greg. [1:18:53] JD: Oh, and G.G. i'll drink. [1:18:55] Justin: Great. [1:18:55] Mark: Kyle. [1:18:55] Chad: Ed, I just got a picker picture from Hackler. Picker. [1:19:00] JD: Okay. Okay. Mark, send us off those people. Apparently, your guy's gonna lose. Need to finish your sentence. Can. Can you text me that picture? [1:19:14] Chad: Yeah. [1:19:17] Mark: Okay, let's go. [1:19:18] Chad: Real simple. [1:19:18] Mark: I'm gonna say if. [1:19:22] JD: If. [1:19:22] Mark: Ne. If you win tonight and next week, JD sends you a puppy. [1:19:31] JD: Oh. [1:19:31] Mark: What will you name it? [1:19:33] JD: Okay, well, I'm not gonna do that, but. [1:19:35] Chad: That's great, Mark. [1:19:37] JD: But that is a good question. Yes, that is a good question. [1:19:41] Justin: There's only one acceptable answer here. [1:19:43] Mark: There only is one, Justin. You're right. [1:19:45] JD: Let me see this. [1:19:47] Chad: Maybe there's two. [1:19:48] JD: Oh, my God. Yeah. Look at his McDonald's order. My Lord. [1:19:53] Chad: I sent it to Brandon, too, in case you wanted to throw it out. [1:19:56] JD: Can you zoom in on his kid's face? [1:19:59] Chad: Like, what the hell's happening, dad? [1:20:04] JD: What the. He's like, son, I need you to eat three Big Macs right now. Ooh. Brian, that's a good answer. Even though you're not in the running. Nevin. I like that, but you should say Nev. That's what we refer to him as. Come on, Brian. Get your shit. [1:20:23] Chad: Says Max. Max. [1:20:26] JD: Max. Why max? Oh, like 401k max. Like maxing out. [1:20:31] Chad: There's something more clever than that for Greg. Come on, Greg. [1:20:37] JD: Yeah, that's Greg's answer. [1:20:39] Chad: Oh, Max. Max is his answer. But he said yeah as in 401k max. [1:20:44] Mark: I'm. [1:20:45] JD: He's drunk. He's drink. [1:20:47] Chad: You should have named it Drink. [1:20:48] JD: Hey, he's kind of drink right now, so give him a break. [1:20:52] Chad: We're Baxter. [1:20:54] JD: Because any dog of mine needs to speak Spanish and eat an entire wheel of cheese. [1:21:00] Chad: Yeah. [1:21:01] Justin: Come on. [1:21:02] JD: Is that a movie? [1:21:03] Chad: Yeah, it's a movie reference. It's Anchorman. You know I don't speak Spanish. [1:21:08] JD: Anchorman's like, the number one movie reference quote. And I don't know if I really. [1:21:13] Chad: Front to back, it's all good. [1:21:15] JD: So that's actually really good, then. [1:21:18] Chad: So you don't decide. Mark does. [1:21:20] JD: Is Sampo in the Running? [1:21:21] Justin: I never. Yeah. [1:21:23] JD: Is everyone in yet? [1:21:25] Mark: I have no idea. [1:21:26] JD: Yeah. [1:21:26] Chad: Yeah. It's just Samsung. It's just because Cliff left. Yeah, but there's just Sam. [1:21:31] JD: What about Ed? Did Ed vote? [1:21:33] Justin: Ed responded. [1:21:34] JD: Oh, drunk stock pop. Or did he have another one? [1:21:37] Chad: I didn't see. I thought Ed had left. [1:21:39] JD: Robe pup. Oh, he's. He's trying to, like, kiss up to you and drunk stock pop Ed. That's very smart. Kissing up to the guy who's actually in charge of declaring the winner. [1:21:51] Mark: I've never declared the winner. And you always do, jd. [1:21:54] JD: Oh, okay. [1:21:56] Chad: I swear it was marked. [1:21:57] JD: Well, I choose. No, I want to choose Ed, but he's not actually the winner. The winner is Sampo. The winner is Samson. All right. Congratulations, Jim Sampson. We'll be sending you 28 Big Macs next or in two weeks. Yeah, so. All right, everyone, it's been another episode of Retire Alex, and based on the number, the hundreds of people that dropped off in the last 30 minutes, we will not be going this long. [1:22:25] Chad: Next week, I say 30 minute shows. [1:22:30] JD: But for you, you dedicated people that stuck around. Good for you. Love you. [1:22:35] Justin: Thank you. [1:22:36] JD: Appreciate you. Okay, yeah, we'll see you in two weeks. We are the retirement Thanksgiving. We are changing. [1:22:43] Chad: Happy Thanksgiving. [1:22:44] JD: Happy Thanksgiving. Happy Thanksgiving. We're changing the retirement plan industry. One off at a time, Kitty. Zooming our at a time. Love you guys. See you next time. [1:22:58] Justin: See ya. [1:23:00] Chad: See you guys. Good luck. Night, Mac. Mark, sorry I missed you in NorCal. [1:23:05] JD: Brandon, play some music. [1:23:08] Chad: JD have you looked at my credit card statement from this past week yet? [1:23:11] JD: No. [1:23:11] Chad: Oh, it's good. [1:23:13] JD: Oh, God. That weekend I'll be taking it out of your paycheck. Hey, mister. [1:23:20] Chad: Don't call that dog Life saver. Call him. [1:23:25] JD: What are we watching? Please play it. [1:23:31] Chad: It's only us here. We can chat. That's not true. [1:23:34] JD: No, he's supposed to play a song. [1:23:35] Chad: I didn't know Hack was still here. I didn't even look at him in the chat. [1:23:56] JD: When I'm far away in another place Harded out to move justice your pillow.