Integrated Benefits & 401(k) Strategy: Plan Design That Works

[0:00] Chad: If everyone participates just at like, 3%, their name's going into a hat, and they're gonna get, like, a $500 gift card. [0:07] JD: Oh, dude. We've talked about stuff before, and we [0:10] Chad: have had a lot of our clients are like, yes, we freaking love this idea. [0:30] JD: Guest straight out of Texas, flew all the way here, got delayed on a flight. I won't mention the name of the airlines, although it's a dangerous flight, airlines to fly these days. But welcome to the show, Aaron Potichino. [0:48] Mark: Yes. [0:49] Chad: Yes. [0:49] JD: Very good. Very good. [0:50] Chad: I love it. I love it. All right, show's done. [0:53] Justin: Let's go. [0:53] Chad: Yes. This is it. There's nothing more unique. [0:55] JD: Aaron. We are going to talk some 401k shop for sure. [0:59] Chad: Love it. [0:59] JD: But, like, every episode, we have to start with the boe. The beer of the episode. And we've got one for you here that is straight out of San Diego. [1:06] Chad: I love it. [1:07] JD: We've got a chain of, I think about five. Five pizza places down here in San Diego called Pizza Port, but they also run, like, a legit brewery and distribute their beer through all the stores and everything. This is amber ale called Chronic Ale. It's an amber ale. The title of the beer is Chronic Ale. [1:24] Mark: It is an amber ale here in California. [1:26] Chad: I love it. [1:27] Mark: Why would they call? [1:28] Justin: We forgot to introduce our other guest, Bella. [1:31] Chad: We got Mary Bells. [1:32] JD: This is not Frijole. This is Bella. She's joining the show. She's a good girl. We are also going to have a word of the episode, Aaron, or I'll refer to you as Potts. [1:42] Aaron Potichino: Wow, thanks. [1:42] Chad: That's good. [1:42] JD: Cheers. [1:43] Chad: I'll take it. I'll take it. Cheers, boys. [1:45] JD: The word of the episode, boys, today will be advisor. And that can be in its singular or its plural form, right? If you say that word that I just said, you will drink from this little mystery glass in front of you. [1:58] Chad: What's word Advisor? [2:00] JD: Oh, that's a drink. [2:03] Chad: Oh, man. [2:04] JD: Way to go, Potts. [2:04] Chad: I think I said he'll bake. [2:06] Mark: You're welcome. [2:06] Justin: A a Ron. [2:07] Chad: I said that on purpose, though. [2:08] JD: Okay, Potts, take a sip of that and then tell me about your firm. Tell me about how you got into financial services. Tell me about how you got into retirement plans. Give us a little bio. [2:19] Chad: So I actually started in financial services here in San Diego. I used to live here before I moved to Austin, Texas, and decided to evacuate California like everyone else that lives in Texas and kind of I worked in politics before that and decided I wanted to kind of maintain my soul so get out of politics. Yeah, right. You know, good industry to go into. [2:40] Justin: Considered. [2:41] Chad: We're so right. Yeah. [2:42] Mark: I think that financial services is ranked below politics. [2:46] Chad: Well, financial services. But really, TPAs are at the top of the heap. Really. [2:49] JD: I mean, honestly, I think it's a good thing. We need good people coming into financial services for the. [2:53] Chad: Right, There you go. And so just decided I didn't want to spend my career in politics, even though I had a great time, had some really interesting experiences here in San Diego area, and decided that the whole goal of politics at the end of the day is say, hey, I'm going to take your life from here and move you one step forward. That's what every politician says. And I was like, well, what other type of industries like that? And that's kind of how I fell into this thing. So. Sounds idealistic, but that's how everything starts. Right. And so started working at nights and weekends with a guy and kind of figured out more. And he was a great guy, but I figured out more what I didn't want to do. [3:31] JD: Oh, okay. [3:32] Chad: And. But one of those things and then kind of that's still valuable. It's still, you know, at the end of the day, you got to know where those pitfalls are. [3:39] JD: Thank you to that guy. [3:40] Chad: Yeah, thanks. Good guy, though. Really good guy. And so eventually fell into 401ks. And this is kind of like my niche and my thing and I absolutely love it because whereas if you're an individual advisor, you only get to affect one on one. [3:55] JD: Sorry, buddy. [3:56] Chad: There you go. There you go. Mark. [3:58] Mark: That was quick. [4:00] JD: It's a rough game. It's a rough game. [4:01] Chad: It's a rough game. [4:02] JD: You're a rookie. I am. [4:04] Chad: I'll pick it up as we go. So anyways, you know, nicely, if you're an individual advisor working with one on one people, it's. You just get to work one on one. Right. I'll get it back. I'll get it back. I didn't hear that one. [4:14] JD: Just keep it tab. We keep tab. [4:16] Chad: Just put it on my tab. If you're an FA and working one on one with people, you get to make an impact. But if you're an FA working on 401k plans, you get to have a much bigger impact on a lot more people. And there's a hell of a lot of plans out there that need savings for the most part. Very cool. That's kind of what did it. [4:35] JD: The firm name is cls. [4:37] Chad: CLS Partners. We're a little bit unique in that we do employee benefits risk. And then we've got my division that does 401k. And the other thing that makes it a little bit different, there's lots of other firms that do risk and benefits and retirement. But a lot of those things, it's kind of church and state between employee benefits and retirement. We kind of look at it as one religion. And so we work a lot with our clients where benefits team and myself will go out, meet with a client at the same time, talk about strategy at the same time. And it's amazing how foreign that is to the rest of the industry that does those things. [5:10] JD: It's ideally how it should work. I mean, that's how you would hope it would work. But you're right. Personal side. Wife, kids. [5:17] Chad: Beautiful wife. Tara. Hi, Tara. [5:19] JD: Tara. I apologize for the word of the episode. I'm safe while he's here. [5:24] Chad: Love you. Can't wait to get home because I know you want me to get home. Never gonna watch this. So. Yeah, we actually met here at the San Diego State when we met in college. We've got three kids who are hopefully sex. [5:35] JD: Very nice. [5:35] Chad: That's right. [5:36] JD: Very nice. [5:37] Chad: Harvard of the West. And so we got three kids. They used to have license plates that would say Harvard of the West. Right. Which you can only get if you're the top party school. [5:48] Mark: Right. [5:49] Chad: And so we met here and then after we got married, decided to move to Austin, Texas. Very cool. [5:54] Mark: We spent three days at the. At the Fi360 conference talking about how advisors needed to be. [6:02] Chad: Do it together. [6:04] Mark: I'm taking A's for now. Let me. [6:06] JD: Let me just save on time. Go ahead. [6:09] Mark: Talking about how folks fas. [6:12] Chad: Yes. [6:13] Mark: Need to get out more of their personal life into social. You do a great job at that. And that was the position of that question is to make sure that the world knows we are individuals, we have families and we want to take the financial services from here to here. [6:26] Chad: Right. [6:26] Mark: People need to know who we are as individuals and why we care so much. [6:29] Chad: Well, and more importantly than that, I think like if you're putting stuff on social media, like nobody's really interested in reading a market review report. Right. Like how many people. Like all of you guys. I don't know. [6:39] Justin: He might be. [6:40] JD: He's kind of a nerd. [6:41] Chad: So anywho. Right. But nobody's interested in that. But you put a picture of your family or something like that. You know, let's. That's a little bit more interesting. [6:49] Aaron Potichino: I ask you this question though, because I feel like we've discussed this a lot because we were talking about the conference a bunch. But you're on there. We see it, we like it. You're engaged, People are following you. But do you have a thought of, like, okay, I can't do it too much or how often or what is your strategy there when it comes to your posts? [7:08] Chad: There's a limit probably, but the limit's probably more on how much personal stuff you're gonna put out there. [7:14] Aaron Potichino: Right? [7:15] JD: Yeah. [7:15] Chad: You got to balance it. And then the other stuff is like, I never. You see these people on social media that are constantly putting posts out there, just complaining like, nobody likes a negative Nancy. Yeah. And so I think it's just putting out stuff that's positive, relevant, informational, and entertaining at the end of the day. [7:33] Aaron Potichino: So you don't worry about how many. [7:35] Chad: It's just about this is. [7:36] Aaron Potichino: This feels like something I should be sharing. [7:38] Chad: Yeah. 100%. [7:39] Mark: Yeah. [7:40] Justin: Right away. Like a JD or take you a while to grasp it. [7:43] Chad: And then finally, I think it. Once I got rid of my broker dealer, I mean, and so makes it a little easier. Once we got rid of our broker dealer and the kind of. The cuffs are off a little bit more, it's a lot easier to kind of open up into that environment. So, you know, broker dealers are great, but man does. [8:00] JD: All right, here's my concept. This is a little. I hope I don't freak you out. Okay. We're TPAs. You're an advisor. Successful. [8:09] Mark: He needs a gun. [8:10] JD: You're gonna have to help me out. Oh, that's okay. [8:12] Chad: Yeah, get on that. [8:13] JD: All right. Let's imagine if you will, because we're. We're very interested what's in your brain. [8:18] Mark: Right. [8:19] Chad: This is going to be scary. [8:20] JD: Focus on our diamonds. [8:20] Chad: We really need to edit this. [8:22] JD: Let's imagine that we. We kidnapped you, right? We threw you in the trunk of the car, drove you away. [8:29] Chad: That's how we got on here. [8:30] Mark: Yeah, that's. [8:30] Chad: Yeah. [8:34] JD: Took you down to the basement, Right. [8:36] Aaron Potichino: Stuck. [8:36] JD: Taped you to a chair, inserted truth serum into your arm. [8:40] Mark: Right. [8:40] JD: And now we're going to ask you some questions that we want to know, and you're going to give us the [8:45] Mark: real deal and we're going to keep it around retirement business. [8:48] JD: Okay. [8:51] Chad: Sounds like an episode of Billions for a second. [8:53] JD: So each of us is going to kind of take our turn and ask you some questions, right? [8:57] Chad: All right. [8:58] JD: First one I want to ask you is suit and tie all the time. [9:03] Chad: So funny question. We just hired a new guy, Jonathan, who's Super smart. Love having him part of the team. And he's from New York City, and he's used to dressing up New York City style, suit and tie every day. And literally the guy doesn't even own a pair of jeans. So Jonathan started to call you out on that on tape. But I wear jeans literally, probably 80 to 90% of the time, dude, go [9:24] JD: buy a pair of jeans. [9:26] Chad: The other thing is, we're in Austin, Texas, Right. So we have tech companies. I've literally had clients say, can you not wear slacks to the meeting? Because. Not that it's intimidating, but people are not as likely to want to talk to you. So I wear jeans 80% of the time, probably. This is good. [9:41] JD: This is good. [9:42] Chad: And I don't think I've worn a tie once in the past two years. [9:45] JD: Probably you might rub off on my guys here. [9:48] Chad: Right. [9:48] JD: Because we have this debate a lot, and these guys. [9:50] Mark: I'm trying to get you to rub off on me. These guys wear nerdy chai's a little different. [9:54] JD: I know we don't look like it, but these guys wear suits and ties every day. And I think they could get a little more hip, a little more off. [10:01] Chad: You're in California. [10:02] Mark: So here's the issue, if I'm being honest. The issue is we go into meetings with FAs and there's an expectation that we're gonna be dressed a certain way. [10:11] Chad: Right. [10:11] Mark: It's their client, not ours. [10:13] Chad: Right. [10:13] Mark: So we have to be a little more reserved in how out there we're with it. I would love to be in jeans every day, but there are some advisors in certain BDs. You drive your BD's. [10:25] JD: Dang. [10:26] Mark: I did slice. [10:29] Justin: I think it's relative to location. [10:31] Chad: 100%. [10:32] Justin: I don't run into that ever. [10:34] Chad: Yeah. [10:34] Mark: Not ever. [10:34] JD: About 95% of the time. [10:36] Chad: Well, you don't ever go to meetings. [10:37] Justin: You just. Right. [10:39] Chad: Yeah. [10:39] Justin: Efficiency. [10:40] Mark: And he's completely silent. [10:43] Chad: All right. [10:43] JD: But I like that. It's not what I expected to hear from you. [10:46] Chad: Yeah. [10:46] JD: And so I appreciate that. [10:47] Chad: I'm trying to have my sock game here too. [10:49] Mark: Yeah, yeah. [10:51] Aaron Potichino: These I usually have. [10:53] Chad: That would be awesome. If you were wearing socks with those, though, that would be pretty good. [10:58] Mark: You mentioned that you have benefits. 401k side. I obviously fall to you. I love reading some of your stuff. You talk about wealth and health. My question for you would be twofold. Number one, I've been waiting years to see an advisor who quantifies for their client kind of a total compensation package. [11:18] Chad: Yeah, we do That I always feel like, okay, we do that. [11:20] Mark: So expand on that. All right. [11:22] Chad: So we did this for a client that was, it was a private equity backed client. So companies that are owned by private equity are pretty much interested in getting as much EBITDA as possible. Right. And so we had gone in, done a lot of stuff on their plate benefits program, kind of strip some cost out without really increasing the cost for the employees, move them to a new record keeper, reduce the cost of the 401k so giving kind of reduce the tax rate on the employee, let's call it that. And we had shown and then this company was pretty benevolent. They had a safe harbor match. So if you put in five, you're getting four. They were fully funding the health savings account in January. So getting either $1,000 or $2,000, which is really rich that in January, which is very unusual. And, and so what we did is we showed these employees and we broke it out. We said, look, if you make $57,000 and you live in Mississippi, which is where half the company was based, and if you put 5% in your 401k and you defer $1,000 into your HSA, your taxable comp, it went from 57 to like let's say it was like 52. Right. So this is what you need to live off of. And then if you add back in your deferral plus the deferral or the deferral on the 401 and the HSA, plus the match on the HSA and the 4, your actual total comp is like 59,000. It's like that's pretty badass. [12:41] JD: I feel like you and Eric could be like long last brother. [12:43] Mark: I know you're speaking my language, right. [12:45] Chad: But anyways, so. But it's great. And the employee population was really kind of. They were braced, the HR team was really kind of braced for a little bit of backlash because there was some changes to the plans, what have you. [12:56] JD: Any time there is. [12:57] Chad: And a lot of the employees afterwards like holy cow. Like this is pretty awesome, you know. And so we've continue to do that as much as we can. A lot of cross pollination with that. [13:06] Mark: Yeah, we're waiting to hear and see [13:08] Chad: some like that, but it doesn't. I think a lot of advisors don't work close enough with their benefits team or the benefits team that's outside of them. And then number. Yep. And then number one, you know, the benefits just don't care and want to communicate with the FAs. [13:23] Mark: Yeah, well. And that's why I think it's awesome that you guys are on both the benefits and the wealth side. The second part of that question would be gamification. Have you adopted any of that when working with these participants? [13:37] Chad: Glad you brought that up. So we just kind of rolled out, like, a new financial wellness platform. I won't say who it is unless they start to comp me for that. [13:43] Mark: And so no free ads here. [13:45] Chad: You know who you are unless you're at 5,360. [13:48] JD: They give us a little. [13:49] Chad: And so. But that financial wellness platform has got some gamification built into it, so we're gonna do that. The other thing that we've kind of socialized with a lot of our clients was, hey, let's run a contest where between in, like, let's say it's the third quarter, if everyone participates just at like, 3%, their name's going into a hat, and they're gonna get, like, a $500 gift card. [14:13] Mark: Oh, dude. [14:13] JD: We've talked about. We've talked about stuff before, and we [14:16] Chad: have had a lot of our clients are like, yes, we freaking love this idea. And we're just waiting as a good time to kind of implement it. Right? And so it's either that or it's like, hey, we'll give you five. Everyone's name's gonna go into a hat. If you go complete your beneficiary forms, which nobody does. [14:30] JD: There's another. [14:31] Chad: I've never heard, but that's like, it's super easy stuff. It's like, we'll even pay for the $500 gift card. Right? It's like, it's not a big deal, but it's like, hey, people will crazy enough, they'll go after the craziest things. Right. You know, five has shown that, like, 100%. Yeah. And there was this whole thing that was done by Walmart that we kind of stole this idea from, and it was awesome. So we're just. [14:56] JD: We're have to have this guy back. [14:58] Chad: Yeah. [14:58] Mark: Well, you know, I'm chewing this. [15:00] JD: This is great because we've talked about that a lot on the show and trying to find ways to be creative and get involved. And there you are. You're doing it. [15:06] Chad: It's real. [15:07] JD: You're not just talking about it. [15:08] Chad: Right. [15:08] JD: And you're telling us and you're telling our audience that it's working. [15:11] Chad: Yeah. [15:11] JD: And so that's. That's really, really good. [15:13] Chad: Yeah. [15:14] Justin: Based on your response, assuming you're in the basement right now, tied up, you'd be A horrible pow, man. [15:19] Chad: Yeah, I know. [15:20] Mark: Just be it out. Right. [15:22] JD: By the way, it could all be made up. I mean. [15:25] Chad: Yeah, that's the thing. I could be giving you the wrong quarter. [15:28] Mark: It's failing drastically. [15:30] Chad: It's great. We know the cops are on right now. [15:34] Justin: We're all going to jail. [15:35] Chad: Yeah. [15:35] JD: All right, so your guys' turn over there. He's got true serum in him. What do you wanna. What do you want to shoot at him here? Just real quick. [15:45] Aaron Potichino: Only because I. Again, I was looking at some of your LinkedIn stuff and I'm a old HR nerd in my previous life. And I'll. Real quick. So the audience knows I'm not just a guy who sits on the couch and makes jokes. I actually was a part of a team that went and traveled and did what we called HR games. It was HR related Jeopardy. [16:02] Mark: Questions. [16:03] Aaron Potichino: I was a part of a very competitive, good winning team, by the way. [16:06] Mark: You're not? [16:08] Aaron Potichino: No, I'm going sinking my ship as we go. [16:10] JD: Dirty chat. [16:11] Chad: So I'm seeing these disruptions. [16:12] Aaron Potichino: Hr. Let's see the selfies going on. [16:14] Chad: Yeah. [16:15] Aaron Potichino: I guess my question is pretty general, so I don't have time for it, but give the audience a little bit of an idea of what that is and how you're involved and how that's impacting your business. [16:23] Chad: Disrupt hr. [16:24] Aaron Potichino: Yeah. [16:25] Chad: Disrupt HR is kind of this movement that was started by a woman, I think, three years ago or so. And the whole point of Disrupt HR is to take a normal HR conference that would be a full day, and a lot of people would probably be falling asleep on the second half of it. [16:41] Mark: Yeah. [16:42] Chad: They could be better. Right. And so. And we're going to condense all of that content into little appetizers of information. And then we're going to. Yeah. And they're super tasty. And then we're going to provide those to people in a fun environment. Right. So we've done. [16:58] Mark: You're a speaker at the. [16:59] Chad: I was the emcee. Yeah, I did. I did speak at one time and [17:02] Aaron Potichino: it was super hard to also get involved in that. [17:04] Chad: Yeah. So the format of this thing is you have five minutes and your slides move every 15 seconds. [17:09] Mark: Oh. [17:09] JD: So there's rules. [17:10] Chad: It was super. When I did it, it was the hardest speaking engagement I've ever done. [17:14] JD: Right. [17:15] Chad: Yeah. [17:15] Aaron Potichino: He couldn't do it. [17:16] Chad: Yeah. It's really. [17:20] Aaron Potichino: Slides ago. [17:21] Justin: Let's go. [17:22] Chad: It's really. Yeah. And so because there's. You have to be just brevity all the way. Right. And so most People, when you get up to talk, like you've got, like, 30 minutes or something like that, you can kind of go on these tangents and then get back to your point. There's no room for tangents. So it's interesting to see this. You know, we just got done with one this past Tuesday in Dallas at the Improv. So we did it at a comedy place. It was really cool. Well, it's even cool because you're on the stage. I'm like, this is where Adam Carolla was. Right? It was awesome. Right. So it's pretty cool. So there's a fun event. [17:55] Aaron Potichino: Did any of your jokes just fail like mine do? [17:58] Chad: No. [18:00] Mark: Speaking of, like, derailing, I think it's time that we move on to the new game. Okay, we'll get back to questions. [18:12] JD: Do we have the pieces for me? [18:13] Chad: I have. [18:14] Mark: I have our piece. [18:15] JD: Okay. Okay. Do you mind putting this down? [18:20] Mark: Yeah. We're swapping. [18:21] Chad: Yeah. [18:22] Justin: All right. [18:23] Mark: All right, so here's the game. There is a word on each of [18:26] Chad: these pieces, and I have to guess what the word is. [18:28] Mark: You have to guess what the word [18:29] Chad: is, and you're going to describe what the word. [18:30] Mark: Excuse me. We're going to give you single word hints, okay. And you have to come up with as quickly as you can the word that is on a piece of paper. [18:38] JD: And we provided them theirs. [18:40] Chad: You would do rocket scissor. [18:41] Mark: Because, you know I lose every time. One, two, three, shoot. One, two, three. [18:47] Justin: Two. One, two, three, shoot. [18:49] JD: Yeah. [18:49] Chad: Nice. [18:50] Mark: Okay, so you're going to go first. We're not going to look. You're going to go first. So they're hitting me. [18:54] Chad: All right, So I have to guess the words. And These are all 401k related. [18:59] Mark: Retirement related. [19:00] Justin: So we got a timer. [19:01] Mark: Hey, block. Block. [19:03] Chad: How many words? We're not cheating. [19:05] JD: One word at a time. How many words? [19:06] Chad: It'll work. [19:06] Justin: Yeah. [19:07] Chad: So I don't need to cheat. [19:08] JD: You don't need a timer. [19:08] Mark: You get six words to try to get him to say it. [19:10] JD: No. [19:11] Mark: For each six words, try to say it. Okay. You just get three hints. [19:15] Chad: Son of a. Son of a bitch. Do I have to guess that? Is that. Is that your words? [19:21] JD: Three words? Yeah, that's three words. [19:23] Mark: Okay. [19:26] Aaron Potichino: Number. [19:27] Chad: Number. [19:28] Justin: Yes. [19:29] Chad: 401K. No, no, Justin. 321. [19:34] JD: Justin gives you. [19:35] Mark: Yeah, they'll keep. [19:36] JD: You can keep guessing. [19:37] Chad: 338. 316. [19:40] Justin: Built in. [19:41] Mark: Oh, I said one word. [19:42] Justin: One word. [19:44] Chad: Built, number and built. [19:47] Justin: One word. I'm gonna say core, core. [19:50] Mark: Wrap. [19:52] Chad: Fee. Wrap. Fee. Wrap. [19:55] JD: Fee. [19:56] Chad: Investment managed account. [19:57] Justin: Okay, we say fee, so. [19:59] Mark: Okay. [20:00] Justin: It's a shit. [20:01] Mark: One word. Go. [20:02] Chad: One word. [20:05] Justin: Oh, additional fee. There you go. [20:07] Chad: Revenue share. [20:08] Justin: You're on the right. [20:09] Chad: Okay. 12v1. [20:10] Justin: Thank you. [20:11] Mark: Oh, man. That was two words, you cheaters, by the way. Yeah, but you can't use two words. [20:19] JD: How many did it take them? [20:20] Chad: I don't know. [20:21] Mark: Five. [20:21] Chad: Five. [20:21] Mark: We'll give you five. [20:22] Aaron Potichino: Second, third, fourth. [20:23] JD: Give you five. We'll give you five. [20:24] Mark: Okay. [20:25] Chad: Ready? [20:25] JD: Yeah. Oh, we're gonna nail this. [20:28] Mark: Okay, I'll go first. [20:35] Chad: I thought this was retirement deferral rates. [20:42] JD: Post. Hold on, hold on. [20:43] Chad: Roth. [20:44] Aaron Potichino: Yeah, [20:47] Mark: on there. [20:49] JD: Oh, I thought they did after. [20:54] Mark: And post. [20:55] JD: All I saw was after Congratulations. [20:57] Chad: Dang. [20:58] Mark: All I saw was after congratulations. [21:00] JD: We did it, buddy. [21:01] Justin: Hey, P.S. [21:01] JD: you guys suck. [21:03] Mark: Hey. I would argue that we both cheated right there. [21:06] JD: By the way, I did put on their card. I gave them their five words. I can't say. And next to it, I said, you guys suck. [21:12] Mark: Yeah. [21:13] JD: You're drinking this whole thing. [21:15] Mark: Yeah. [21:15] Aaron Potichino: That's the. [21:15] Chad: That's the rule. Oh, man, I love that. I love that. You know, you've made it when you've got your name on booze that you've relabeled. [21:25] Justin: Yeah. [21:27] Chad: That's a mark of success when you've decided to bogart somebody else's icon. [21:32] JD: I just want to say, for the record that I didn't really lose that game. [21:36] Justin: Fair enough. [21:37] Chad: Well, you could say it was a learning opportunity, not a loss. Right. [21:40] JD: Well done, by the way. Well done. Aaron. Yes, Justin? A question from over on that side for our guests. He's strapped to the chair with duct tape. The true sermon is in. Ask him a question. [21:53] Justin: So I guess my question was centered around. You do a ton. [21:57] Chad: Yeah. [21:57] Justin: For your clients, partners, whatnot. You have to create some back end efficiencies. [22:02] Chad: Right. [22:02] Justin: So a lot of the things that we like to do is talking to FAs is. Right. A lot of them work with 15, 20 different. [22:10] Chad: Right. [22:11] Justin: Arcade's out there, right. Where we've been trying to help them. Bella. [22:16] JD: Bella. [22:17] Chad: Shoot. [22:17] Mark: Sorry. [22:18] Justin: And debt, who they're working with. 3 to 5 main rks. Do you do that? [22:23] Chad: So at one point, we had like 11 different record keepers we were working with. And I think we're closer now to like, five. [22:29] JD: Okay. [22:30] Chad: And we're tending to kind of focus on just a handful of record keepers that we're working with right now. And for us, we're, you know, our big thing is finding the friction for a client and then just reducing it and so for us, we're only interested in working with record keepers that can reduce that friction. And there's common points of friction for clients. So it's like the payroll remittance part, the service from the record keeper side, like, and dealing with competent service people and then people that will actually respond in a timely manner. Right. So we're interested in working with record keepers that can meet, that can solution for those friction points as much as possible. And then honestly also have like some kind of integration with like a health savings account or something like that's becoming really big for us, obviously. And it's surprising to me how many of them don't view that as like important or look at it at all. They will, but it's crazy how many record keepers are out there today that deal in employee benefits, whether they're selling disability insurance or life insurance, what have you, that don't have any automatic integration today with the health savings account. [23:35] JD: Yeah. [23:35] Mark: So the truth of CRM is in deep because I think there's many out there that would like to know the true answer for someone as successful as you in this. When you step into a meeting, is your true effort broker of record or are you looking and saying, I know what's right for the client and I'm going to move this plan to a provider that creates less. [23:55] JD: One of those partners. Yeah. [23:56] Chad: So we have our whole sales process when we're working with a prospective client is we tell them, look, here's where you're at today and here's where you could be tomorrow. And part of getting there tomorrow is leaving where you're at today. [24:10] JD: So, hey, you're committed to that strategy. [24:12] Chad: Yeah. And there's some record keepers where we know that this is, you know, you've told us this is where you want to go. That's record keeper is not going to get you there. It's just not right. And so it's like, look, you're going to have to leave that guy at the train station and you're going to have to move to this new guy. [24:26] Mark: The difference for me in hearing you say that, and I love that answer, is that so many folks out there are worried about winning the plan that they don't bother to take that firm step. I know what's right for you. Yeah, I know what's right for you. I know what rk you need. [24:39] JD: That's what I heard from him. [24:40] Mark: That's what I heard. And I love that. And I think that for those listening, that's what takes you from 10 plans to 20 to 30 is when you're willing to believe in what you're doing. [24:50] JD: That's what it is. It's credibility. Because he's not just after the sale, winning the business, getting paid. He wants to do the right thing and make a difference. [24:57] Justin: Right. [24:57] JD: And I think in the end you actually end up being more successful in sales that way anyway. [25:01] Chad: Well, and it's also, it's about like, what's the solution? Like the client is hiring you, the FAA for. See, I got that. Yeah. To help them figure out a solution. Right. And most FAAs are only focused on what they really know. So I'm going to fix your investment menu. I'm going to do the ips. But that's the stuff that's like way down here that we're conditioned because that's what 90% of these conferences are about. But it's not the stuff that the clients actually deal with. Right. On a day to day basis. They're dealing with like the payroll remittance. They're dealing with the fact that their payroll and HRS system isn't connected to the record keeper. And that's a pain in the butt. Right. So it's like, all right, well that's a main like really pain in the ass thing for you, the client. We should try and remedy that. Maybe you should have a 360 integration. Right. Maybe you should work with a payroll provider that actually does that. We have a brand new client that we just got where they're like, look, this is a huge pain in the butt. We've got to download this report, go on to the website, you know, input it here and then dah dah, dah, dah. We're like, well how about if it was just like you push payroll and it was done like, oh yeah, that would probably be better. [26:07] Mark: Sounds like. [26:07] JD: Yeah, we got to get to the close to the end here. But I basically have two questions for you. [26:12] Aaron Potichino: I have one thing to say. Shoot advisor. [26:14] Justin: Yep. [26:15] Mark: You need to try it. [26:16] Chad: It's good. Yeah, it is. [26:18] Mark: Oh, I get, you know what do [26:19] Aaron Potichino: we tell them what that was? [26:21] Chad: No, I don't want to know. I don't want to know. I would have asked, but I don't want to know. [26:26] JD: Are you are using some type of system to deal with all these clients in omnibus, like to review the funds? [26:34] Chad: Yeah. So we're using a system today that kind of aggregates all the planes together. Our new guy is kind of doing all the investment management review, everything like that. [26:45] JD: You have a guy internally that does all that for you. [26:47] Justin: Yeah. [26:47] Chad: So internally, he's doing all that for [26:48] JD: us and preps you on some system for your fiduciary review meetings and all that stuff. [26:53] Chad: Does all that stuff. Yeah. [26:55] JD: Second question for you or. I actually have three A. I lied to you. I apologize. [26:58] Chad: Yeah. [26:59] JD: Second question is there's a artificial wave in Texas, I think, close to Austin. [27:04] Chad: It is. It's the only place in America that has an artificial wave. Well, it's awesome. [27:11] JD: Got one in California. Yeah. [27:13] Chad: But it's like, it's in the middle of nowhere. [27:15] JD: Yours is the only one open to the public. [27:17] Chad: It's in Austin, Texas. It's awesome. [27:19] JD: How far from your house? [27:21] Chad: From my house, it's probably 35 minutes with traffic. [27:24] Mark: Careful, because he's gonna be. [27:25] Chad: But it's right by the airport. [27:27] JD: I would like to continue this conversation at your house on a wave. I'll be coming. [27:31] Chad: Do it. [27:31] JD: I'll do it at night. Maybe two nights, three days. I'll get my tickets to surf there. [27:35] Chad: Very good. Yeah. It's a legit waves. [27:38] JD: Okay. True Serums in. [27:39] Chad: Yeah. [27:42] JD: I'm asking you a question. [27:43] Chad: Yeah. [27:43] JD: A, B or C? TPA. [27:45] Chad: Obvious thing we're doing. [27:47] JD: Mark. [27:47] Chad: Yeah. DPAs, right. [27:49] JD: Are good for complicated plans. [27:52] Chad: Right. [27:53] JD: Easy plans. [27:54] Chad: Right. [27:55] JD: Or all of the above? [27:57] Chad: I think all of the above. But I'm not saying that because. [28:01] Mark: Yeah, True Serum is in. [28:03] Chad: No, I'll give you an example. Okay. So we have got. Honestly, like. So we've had plans where they had a TPA and they were on a platform that required them to use a tpa. But I don't want to say. Yeah, yeah. But I knew that that platform wasn't right for them, so we had to move them away from a TPA record keeper relationship. Right. We have other plans where I know that they need the TPA badly because they would not be able to run this plan correctly if they did not have a tpa. Because the amount of effort that this client needs to make sure that they stay on the right course for the 316 services and the TPA services that they're providing, they're gonna go off the tracks. [28:42] JD: So you're an advocate of that. [28:44] Chad: I'm an advocate of the best solution possible for their clients. [28:47] Mark: Not every solution needs a tpa. I think we can all say that they don't. [28:51] Chad: Right. Yeah. But if they. Because if your answer was yes, then that would mean that you're not actually adding any value anywhere. [28:57] Mark: Well, that's the benefit of being a consultant. Right. Your job is to do what's right for them. Client. And there are times where we as consultants talk with advisors. We're like, truthfully, you're. I think you're better off writing this in a bundled strategy. [29:08] JD: Aaron seems to have a good perspective on it through his experience. But I think the common thought is, well, okay, a TPA is great when things get really complicated from a design perspective, so they can minimize problems, errors, et cetera. What they don't understand. And we have inside knowledge to see this is the very simple plans. [29:27] Chad: Right. [29:27] JD: Also run into problems. [29:29] Chad: Oh, my God. Yeah. [29:29] JD: And you're talking about dealing with data. And is the data accurate and is the counseling accurate? Is the design Right? And so we see this with a safe harbor. Match can be screwed up if the client's not doing it properly. So I appreciate your intervention. [29:45] Chad: Yeah. And I think also we've got a lot of, you know, Austin's, a plethora of startup companies, what have you that are there. And a lot of these companies that we'll deal with that are, like, doing startup plans. We know that they're gonna benefit from having a TPA because, you know, God bless the people that are there, but they're doing 9 million jobs. Right. And they don't have time to actually know, like, sit down and know everything that they're supposed to do on running this plan. Right. But if they get a tpa, that's probably gonna be somebody that's gonna be like, knock them on the door. Be like, hey, look, by the way, you're supposed to do it this way. [30:13] JD: I'd love to hear that. Okay, this is what I want to say to you, Mr. Potichin. We just came back from this conference. [30:21] Chad: Yeah. [30:21] JD: And they told us that financial advisors. Financial services ranks very, very low. [30:28] Mark: It was. Yeah. It was all financial services. Let's be clear with that. [30:31] JD: In terms of the general public's trust and acceptance and, you know, liking of that, we ranked below used car salesman. Okay. And insurance salesman. [30:41] Chad: Yeah. [30:42] JD: But. [30:42] Chad: Yeah. [30:42] JD: And at this comp. [30:43] Chad: Yeah. [30:44] JD: At this conference, I talked with people about that we need to raise a brand. Because I don't see that in the real world. [30:50] Mark: That is not at all what I see. [30:52] JD: People that actually care about what they do, that are passionate about what they do, and I just want to say thank you to you because you are proving my point. [30:59] Chad: Right. [31:00] JD: You are a perfect example of someone who loves what they do, is passionate about it, is Knows everything about it, brings your education up. [31:09] Chad: Right. [31:10] JD: You can help. Cares about their clients. This to me. [31:13] Chad: Yeah. [31:13] JD: Is the retirement plan advisor. This is what everyone needs to see out there because Mark, he's one hell of an advisor. Advisor. [31:23] Chad: Advisor. [31:23] Aaron Potichino: Advisor. [31:24] JD: Advisor. [31:26] Chad: I'm just going to drink that because I like that. [31:27] Mark: Yeah. [31:28] Chad: Cheers. [31:28] JD: Take notes. [31:29] Chad: Thank you, guys. [31:29] JD: We need more of this. [31:30] Mark: And thanks for the awesome to bring that up so that people can see and realize we are the [31:37] Chad: thanks, guys. [31:37] JD: Texas changing the retirement plan industry [31:43] Chad: and [31:43] JD: whatever these suckers are. [31:44] Mark: Thank you. [31:45] Chad: Thank you, guys. Appreciate you, [31:49] Mark: man. Well done, dude.