John Lestock: Predatory Sales & M&A Trends | Retireholics

[0:00] Speaker A: A world where retirement plans are broken. A team of four renegade ERISA nerds dared to fix it. Justin McNeil, the wild card who plays by no one's rules. Chad Johansson, the technical wizard who can turn anything into a spreadsheet. J.D. carlson, the man with all the plans hiding under his beanie. And Mark Palamini, AKA Robe Guy, the heart and soul of the crew. Together they are Retireholics. Changing the retirement plan industry one beer at a time. [0:34] Chad: All right, fasten your seat belts you little nerdy retirement plan weirdos. We got a jam packed agenda today. Is paychecks getting creepy with some presumptive closed paperwork. We'll discuss the acquisitions. Continue to pour in with big news from Aon and Power. And Vanguard is big boy upmarket. Baller Fidelity cracking the micro market payroll and census. And the modern day technology. Let's check in on that and get into deep discussion on how things are working or not working. And then finally, Jim Sampson is trying to cancel the term selling season. We will discuss that. Yes, I am your host, Ted Benna. We are the Retireholics. Let's get into it. Quick little housekeeping. Before we start, I would like to make some prepared comments on the new Chat Bar Champion technology concept that we've been miserably trying to put in place over the last few months. So I say fuck Mobb Deep, fuck Biggie, fuck Bad Boy as a staff, a record labor and. And as a motherfucking crew. And if you want to be down with the new chat Bar tech, you too. Let's get rid of that. Let's play regular Chat Bar Champion tonight where we will just vote for finalists. We'll put them head to head and we'll let John pick the winner on a kind of final last minute Robey question. So don't get caught off guard, Roby, you'll have to give them a. A what if scenario with that. Speaking of John, this guy John on Retireholics. If you want to be the guest of the day, you gotta play with Silent J. Take it away, Justin. [2:36] Justin: What the. [2:40] JD: Good we back to normal? [2:42] Mark: What? [2:42] Justin: It's reasonable. [2:43] JD: All right, sounds good. [2:44] Mark: I'm just gonna go like this. [2:46] JD: Well, we went a little outside of the box with tonight's guest by hunting down someone outside of our industry. And he's an international assignee tax accountant. I'm going to be honest with you. I'm not sure what the that means or how it differs from Bob at H R Block, but he works for Boeing, so I'm pretty sure it's a Big deal. Well, John, I know you've seen this part of the show. It's that time where I ask you a few questions, you got a rapid fire response. Fair warning. It is okay to use the term I plead the fifth. [3:14] Mark: If you sent you here, it's a phrase you. [3:19] JD: Anyways, okay, so first off, Mark and I are having a conversation this morning. And what's your opinion on tipping culture? Are you on board with it? Do you hate it as much as I do? [3:31] Chad: What culture? [3:32] JD: I hate culture. [3:33] John Lestock: I hate it. I don't mind tipping, but having to be guilted into giving a tip, it sucks. [3:39] Chad: Yeah, no, I've been in Texas too long. I thought you were talking about cows. [3:46] Justin: You've never tipped a cow. [3:47] JD: Come on. [3:48] Justin: I. Dude, I love. [3:51] Mark: That's a record for JD that was four minutes into the show already talking about Texas. That was shocking. [3:58] Justin: I hate when they put the required tip when there's literally no service happening. None whatsoever. And it's on the receipt. [4:06] JD: Think about. [4:07] Mark: It's weird too, because every time Chad ends a Zoom meeting with us, he asks for a tip. [4:12] JD: Every time. [4:13] Mark: It's so odd. [4:14] Justin: I mean, it's automated. It just, you know. [4:16] JD: Okay. [4:18] Justin: No service with Chad. [4:19] JD: This is John and time. We're moving on. John, curious. How tough was it for the brass to call Elon to save your astronauts? [4:28] John Lestock: How tough was for the brass to call Elon to save to save your astronauts for NASA? [4:36] JD: No, it was a Boeing Starliner, dude. [4:38] Chad: Is it? [4:38] John Lestock: Yeah. Yeah. Not that I want to bring that up, but yeah. [4:42] JD: I plead the 5th is okay today, [4:46] John Lestock: but no, Yellen is not our favorite astronaut. Not even close. [4:51] JD: And speaking of starliner, did the astronauts get overtime pay for that? [4:56] John Lestock: I hope they did. [4:57] Chad: I mean, that is a payroll function. [4:59] JD: You are the accountant. You don't see this stuff [5:04] John Lestock: work for NASA. Salary? Probably not. [5:08] JD: You guys in some way shape and form. What is Boeing's biggest expense? Payroll or lawsuits? [5:15] John Lestock: Oh, that's a. Justin. [5:18] Chad: I purposely was going to steer clear of a lot of this shit. [5:21] John Lestock: Be nice. [5:21] Mark: This guy. [5:22] Chad: You're just going hard today. [5:24] John Lestock: We'll say payroll, you know, labor expense. It's going to be high. It's. That's up. [5:30] JD: Dude, I'm impressed. I thought I was going to get a few. I plead the fist on this. [5:34] Speaker A: Bravo. [5:36] JD: How many warning lights is too many warning lights in a cockpit? [5:41] John Lestock: I've never flown in a cockpit, but I'm gonna say anything more than five is probably too much. [5:47] Chad: It's a fair over under, you're down with four. [5:49] Mark: You're just riding it with the raw dog. Gonna fly with four. [5:53] John Lestock: Okay, let's try to find maybe too many lights. I don't know what the hell's going on. Or not enough lights. Oh, we didn't warn you about that thing. There's got to be something in between. Manageable, but I still know something's wrong. [6:06] Justin: All right, you're sticking with my response Houston topic. My flight back today had ice falling out of the bins all over the people in the seats. [6:16] JD: Oh, that's just A.C. you're fine there. [6:18] Justin: Yeah, I mean, I was. I was soaked. It was hilarious. [6:23] JD: All right, and we haven't done this one in a while. On a scale of 1 to 10, how hot is Nate Moody's sister? [6:31] John Lestock: I'm gonna say 10. I haven't met her, but come on. [6:33] Chad: Yeah, bravo. You've seen the show there' John, I have to say, like, have you ever [6:40] John Lestock: seen Nate [6:44] Chad: Justin put you up? Justin like, went hard at you, and you just, you know, you just came right back. That was calm, cool, collected. You didn't back away from anything. Intelligent responses, yes. [6:58] John Lestock: This is. [6:59] Chad: This is going to be a good night. It's going to be a good night. Well done. [7:02] Mark: Sorry I audit your entirety, Justin. I don't do it during your little segment there. But you had one the block. [7:09] JD: Yeah. [7:09] Chad: Okay, well, I'll make a rhyme about headlines. I've already rhymed enough. Oh, do you have a finish? [7:15] John Lestock: Fancy. [7:16] JD: The fancy accountant from Boeing, Mr. John Listock. [7:23] Chad: All right, no more rhymes for me. Let's do headlines. [7:25] John Lestock: Brandon. [7:42] Chad: We're gonna go straight to the juicy stuff, people. And this isn't something you can find on 401k specialist or at. At the national association of Plan Advisors or anywhere online, because this comes from Chad's inbox in his email. He got an email. He sent it along to me with kind of the subject line, holy cow, bro, this is crazy. Something like that. [8:08] Justin: Was that actually my subject? I don't think that was my actual subject. [8:11] Chad: I mean, it was. Holy geez. You believe this? And, Chad, I'm gonna let you set it up, but I'm obviously talking about this story of paychecks, what appears to be kind of tricking people into signing up for their pooled employer plan. [8:31] Justin: Let me start by saying this is the first time I saw this, but it was very eye opening to me. We have an advisor come to us with a client client saying, I want to start a 401k, but I already kind started the process a little bit with paychecks that's the verbiage I get. And then I go through a consultation with them. And at the end he's like, so here's the deal. I was never talked to by anyone at paychecks about a 401k. I was never. We never discussed any plan provisions. We never talked about costs. I just set up payroll within the last week for with them. And then when my. And I've got the email chains with my hr, damn person wrote and said, hey, we're considering opening up Cal Savers. How can you help us with that? They wrote back and said, oh, you already have a retirement plan in place. Here's your 401k adoption agreement. [9:25] John Lestock: Okay? [9:26] Justin: And the client was like, what? And in the middle of all the docusign that, that he did to set up payroll with them, he signed an adoption agreement with generic provisions in there. Nothing essentially customized to what he was trying to accomplish with the plan. And he was frustrated, like he was pissed. So he came to me and this is where it gets fun, in my opinion. He came to me, he's like, so what can I do? I went to our attorney, our attorney gave me some, some dialogue essentially. And I wrote him an email and I said, forward this over and follow it up on the back end with this that if you don't get an immediate reply, you're going straight to the listed executive for paychecks out of New York and you're sending this to the mailing address. [10:10] Chad: Kind of a scare tactic kind of thing. [10:12] Justin: A scare tactic. Within minutes he got a response back with a pre populated already existing on their chassis form that is rescinding his participation in the plan. [10:26] Chad: So essentially, like John, this has happened at such scale that they had to create a form they'll get you to back. [10:33] John Lestock: They were ready for it. They were ready. [10:35] Justin: They were ready for it to go. [10:36] Chad: It's been happening. [10:38] Mark: And come on guys, you've never accidentally just signed up for a 401k plan before. Come on, you gotta buy a car. The next thing you know you got a solo 401k. John, who cares, right? [10:50] Chad: This story is backfiring on me. I'm about to go to you get kind of get your comments on it. But I'm looking at Justin and Mark and I feel like they're inspired right now to sell more plans. Like they're coming up with some concepts or something. I mean, obviously it's not. [11:04] Mark: What do you, what do you. Hold on, hold time. What do you mean by that? [11:11] Chad: I've Never signed a 401k adoption agreement that you didn't know it and I just saw your eyes like lighting. [11:18] Mark: Yeah. The next time Justin, we go to happy hour, just bring a sign in sheet. But every signing sheet's just an individual document and you just have a bunch [11:25] JD: of the signing sheet. [11:27] Justin: Mark. [11:27] Chad: Can you guys do me a favor? If you're going to do that, can you slide our retainer underneath it too and get that? I'm going to modify my commission on that one then whether this is good or bad because that's kind of crazy. [11:43] John Lestock: Oh, this is awful. This is absolutely awful. So probably some document buried within the whole service agreement for payroll services. And they're. So you're basically tricking your clients into signing up for a 401k plan with a, with a pep. I know acronym with a pep that you didn't want or ask for. I mean this is, this is all. [12:07] Chad: Let me try to. [12:07] John Lestock: Obviously Mark and Chad would never do this because they're too honest. They don't have to go that route. [12:13] Mark: Sorry, Justin. [12:14] Justin: Justin. [12:16] John Lestock: Generic plan. That's what it is. It's overly, overly generic plan that they're going to say, oh well, it integrates well with our payroll system. I'd like to see it. [12:24] Chad: I doubt that. If I had to put myself in some executive shoes there or in the boardroom that's kind of making this decision, I'll. What is it? Steel man. The case. If I'm kind of going for it, but I'm against it, someone tell me in chat or if I'm using that word right. I think what they think it's like, oh yeah, we have very efficient things. We're a payroll company that does lots of services. Right. We do payroll, we do some benefits, we do 401k. We've got, we've got all these things. And so we obviously our business goal is to, is to do all things for people. We want to be this one stop shop. So someone gets the modern day business efficiency idea of, well, let's just slide it into the paperwork. Let's make it easy for everyone to like to do this. Which I'm, by the way, I'm, I'm could almost throw up on myself as I'm saying that out loud. But I have to think that that's the genesis. [13:21] Justin: That is the genesis. And I'm looking at the chat bar and it's, there's comments of like, well, at least it's easy to get out of a pet. Whether you're, you're saying that with candor or not. That's the crazy thing about this. I know it. I know it. But the crazy thing about this was they're. They're not even addressing the legal side of the fact that this business signed an adoption agreement. [13:40] Chad: It. [13:40] Justin: They're not saying, like, hey, we'll close your plan. They're simply saying, is that me? They're simply saying that. That we're going to let you back out. Like, oops, you made a mistake. You made a mistake. We'll let you back out. [13:53] JD: My question on that is, and maybe you didn't get this far, but were deferrals withheld? Like, how far down in that process do they. [14:00] Justin: So that's a really good question. That was the first one JD kind of came to me with after they had sent that form. Like, two days later, they were supposed to auto enroll and withhold money from everybody's first paycheck because there was no eligibility in the plan. The company just started. The guy. [14:17] Chad: Well, but, okay, you're talking about your scenario. You're talking about your scenario. Chad, Justin brings up an interesting point. If there's a form to back out of this, that means this has happened to lots of clients. How many clients did this happen to where they didn't realize or they just kind of went along with whatever was happening? And then to your next point. I didn't even think about automatic enrollment and, and having this happen. Like, if this thing really kind of domino down the line. God, you could have a 401k plan in place that wasn't intended. And I don't know. Can I tell me, coverage gaps. Is this a bad thing? We need to cover the gap. [15:00] Mark: Could, Could I try to play somewhat of a devil's advocate not to. Like, again, I don't agree with what happened, but you're. You're. The thing you said, Chad, that stood out to me was like the, the immediate response. Because we all know if there's, you know, a knock on paychecks, it's the response times typically pretty lengthy. And that's a. It's something that clients struggle with all the time. So my, My wonder here is they've caught this in the past, but what magnitude. And maybe it's like, hey, when we bring on a new client, we would love to sell all these different lines of business and have it all. And they kind of have it in a prepackaged. Here we go. You did all the things. Make sure you check all the boxes and send all of that. And in case someone maybe doesn't uncheck a box and it pulls those documents into whatever service they're using. Could it have just been an honest mistake? So I guess what I'm asking you [15:56] Justin: don't have a pre populated form for this if it's a once in a while honest mistake. [16:01] Mark: But if it's. But I'm saying like, you know how things work with DocuSign and other things where you can have a bunch of documents in there, you have to click a bunch of them and then you, you put it into a package again. I'm just, I'm throwing it out there. [16:15] Chad: You know, you're building Robey, you're building the smart way to do it where you just kind of, you make them acknowledge somewhere with like a defaulted check that they want to have it. And then you circle back when they're upset and you go, I'm sorry, you checked on page nine that you, you wanted to be in the pooled employer plan. And then you sign the adoption agreement. You could even, you could like mob boss them and tell them they can't get out, bro. Just having fun. [16:41] Justin: I'm curious. I put it, I put it in the chat bar. I think it was Webby said that's how they wrote a gabazillion plans in their pooled employer plan. I would really love to see how many of them are unfunded in these pooled employer plans. Like how many adopting employers or participating employers are never making a contribution in these things. I was chatting with a third party administrator at the conference I was at this week and he's like, I've launched five now and only two of them have funded. But I have people coming to me saying, hey, I want you to start this. Be the 402A and help help or the, the pooled plan provider and help launch this thing. And he's launched five of them and only two are receiving contributions. [17:24] Chad: You can, you can continue to put that lure out in front of me, but I'm not going to bite on the pulled employer plan thing right now. We got other stuff to talk about. Let's move on to acquisitions and we'll kind of fly through these. I don't know how important this is to everyone in their day to day, but you've heard me in the past say, I just, I just think it's, it's, you know, good to know that these types of things are happening. So A on buys. Fuck United Service Institute. I don't know what they're stand for. You know, [17:59] Justin: I think it's, I think it's actually USI Insurance services. I don't think that that is an abbreviation. [18:07] Chad: Well, I'm not going to play that role. But you guys can see up there and kind of. Oh, and then it's. And then by the way, from a venture capital. Private equity. Private equity. Private equity firm. And gotten slipped up on the acronyms right now, throwing me off. And you know what I like about this one about this press release? They tell us the numbers, John. They say 17 billion in an all cash offer. And for a little context, the private equity firm bought the insurance firm that I don't know the name of back in 2017 for 4.3 billion. So that's almost a $13 billion gap in just under 10 years. Now my understanding is they've made a lot of acquisitions over those nine years. So money's been put out, you know, to grow. It's not like they just. That was all profit that happened. But the report says that Aon was paid at 14 and a half times EBITDA. I will drink. And that would be conflicting evidence on [19:20] Justin: that other one by ring them up. [19:23] Chad: Actually, Claude and I did some back math, but that would put that company at like a 39% profit margin. And then I kind of researched that which was. [19:31] John Lestock: Which. [19:31] Chad: Which matched UP. But yeah, 14 times that acronym. I just used like that. To me, I'm not a huge like mergers and acquisitions guy, but it seems like a really high multiple or one of the higher sides of it. So, yeah, it seems like a job well done for somebody there. Some people are getting paid. So, John, my question to you. Do you see these acquisitions as. Because you're a money guy, as liquidity events or as actual business strategies that's going to improve the business that's acquiring it? [20:06] John Lestock: I feel like this one's a business strategy. I feel like from what I've read a little bit about this, what I've read with Aon, it seems like they want to get into the particular market that USI is in. So they're looking at this as an opportunity to buy and get into that [20:22] Chad: classic, so classic way of doing that. [20:26] John Lestock: And bought Hewitt, you know, to get into the benefits outsourcing business. And after a while they spun that off to a light to think they're owned by private equity. So that makes sense. They're kind of doing a similar thing here. Buy the business. If you can make money at it, great. If you don't spin it off, we're [20:42] Chad: doing that at planes, on consultants. We're really trying to get into the tractor business. So we're going to be buying some John Deere's on corporate money but we just have to take down Mark and Justin's pay a little bit to make room for those purchases. But everyone's agreeing we don't make enough for that. [21:00] Mark: Again I've never gotten a paycheck. [21:01] Chad: I still believe let's stick to another acquisition closer to home. I would say empower. And our boy over there is buying Milliman for 340 million. This is defined benefit and defined contribution and some health and welfare. Yeah inside that. You ready for this Chad? Is 400 defined benefit plans and 1100 defined contribution plans with 50 billion in assets in the defined contribution plans. So that's basically like $45 million plans you know on average with just south of 700 employees. And that paycheck is going to be about three times revenue which can be pretty normal for our industry. 3 times revenue depending upon your profitability could be 8 or 10 or 11 times EBITDA. I'll drink again because I basically don't want to say that a lot too [22:02] Mark: many [22:06] Chad: these guys got a bunch of 40, 50, 60 million or more plans. I mean are you aware of this company Because I really name for sure [22:16] Justin: and I have only seen them John, [22:18] Chad: I'm going to you oh I was [22:20] Justin: going to say they're they're essentially the size that I would have expected. I've only seen them in the. The small kind of. I'll say. I'll say J.D. back in the open ARC architecture day it was the small daily VAL record keeper access that people were using Milliman for. It wasn't just the administration clearly bigger [22:38] Chad: maybe do we have anyone here that's worked there before? Oh wow. I do my research would have been [22:45] John Lestock: had I still worked with Milliman that would have been my group that was acquired by Empowerment Benefits. On the defined benefit side is work with the actuaries. [22:54] Chad: So tell us about Milliman a little bit since you were there. I mean did they focus in the the larger space And I obviously I'm kind of focused on retirement plans here. [23:04] John Lestock: You know that's a good question. I'd say medium to large. You know I was in the office in Seattle so it seemed like a lot of the clients I saw were all mostly Seattle based or in Idaho or Oregon. They were kind of in that general vicinity kind of regional but if I worked at a mailman office in Boise it'd be different. If I worked at a Millman office in Milwaukee probably a different client base they seem to be at the time I worked There kind of smaller groups that were, you know, kind of associated together under one brand name, under one Milliman name. So to me, I saw it as they worked on kind of your medium to larger sized clients compared to when I used to work at Hewitt, they worked on much bigger Fortune 500 clients. And they did have a separate division for your smaller defined benefit, defined contribution plan clients. That was almost a direct competitor. A direct competitor to Milliman's business as well, too. So smaller. But I mean, Milliman Bread and Butter was an actuarial firm. They were actuarial consulting. Those guys, they're damn good at it too. They really are. So if you want expertise and defined benefit, I mean, those were the guys. If your goal was to buy a company or a firm that had expertise in defined benefit plans, Milliman would be the one to buy. So if you want to buy plans or whatnot, that's exactly where I'd go [24:22] Chad: to in this deal. There was 400 of those defined benefit plans and $80 billion. So kudos to Empower and Ed Murphy and their continued acquisitions. So that's a lot of assets that they're adding to that program. So dare I say the. The Dark Star gets bigger or the evil empire is. Is growing right before our eyes, you [24:49] John Lestock: know, and it's not just the assets or the clients. I mean, it's the. It's the people too. I mean, there were top. The Milliman folks are top notch. I'd vouch for every one of them. They were, They're. They're. Those are the actuaries you look at and think, my God, how'd you figure that out? That, that's amazing. Just. You just stand in awe watching these guys in action. They do calculus in their heads. [25:12] Justin: That's easy. Come on. I'm at the point now, and I know this is weird coming from me, but when I hear that, I'm like, yeah, we don't need guys that do calculus in their heads to run pension plans anymore. Like, there's technology that does all of this now. [25:26] Chad: Claude can do it, sort of. Oh, come on. Maybe we'll discuss that later. Let's see. Word on the street, everyone, is that our past guests on this show, our boy Jason Wenk, has been spotted shopping for new Lambos in the Beverly Hills area earlier this week. Any guess as to why he sold Altruist to Vanguard? He was on this show and I was thinking, what a baller. This guy's an independent going against Wall street, just like out of Venice Beach, California. Like, I was just so Inspired by this guy for obvious reasons, I still am. And now he inked a deal with Vanguard for over four and a half billion dollars. [26:17] JD: Got a price. JD Come on. [26:19] Chad: Is it? It is, isn't it? It's gotta be. I mean you build something. [26:24] John Lestock: Yeah. [26:25] Chad: So you're saying this is a, this is a liquidity event and that when Jason went gets on Bloomberg and does a back and forth with the Vanguard CEO and they're both saying this is about the future of the people, participants and yes. Yeah, yeah, yeah. [26:39] JD: Mark's gonna go on another title. [26:41] Mark: It's all about participant outcomes. Isn't anybody else send Jason a Venmo request for a million bucks after that? John? [26:51] Chad: I think if I was to go more positive and Jason has said this in interviews and Vanguard is kind of backing up this story. There are many out there that are saying this is an attack on advisors, that this is Vanguard's way to kind of buy in and almost follow Schwab's kind of anti advisor flow. Their Vanguard and Jason are saying no, no, no, no, no, no. You're looking at this from the wrong lens. This is actually going to benefit financial advisors and that Vanguard wants to support them and continue this altruist path, if you will. Do you think Vanguard can, can do both? Can it be what it's been for centuries? Centuries, yeah, decades. Decades. And, and now also be a super advisor friendly type of shop. [27:46] John Lestock: Cautiously optimistic. I think I'm just thinking about Vanguard's reputation. Of all the financial firms, they seem like a pretty reputable firm, 100% you know, so if they, if that's what they're saying, I'll give them benefit of the doubt. Okay, let's see if you're going to be a friend to the financial advisor, okay. You're not trying to squash them out. You're not trying to do what Intuit does to tax preparers. How about that? So if they're truly trying to be supportive to the financial advisor business industry, fine, I'm all for it. But let's again it's a big Wall street firm so I've got some doubts but let me just see what happens. They seem to be one of the better, more reputable firms out there. [28:29] Chad: So let's Chad, Justin and, or the, and the chat bar here. I always find these deals interesting in that if you remember Jason here and Altruist, what he's built, it's really like a trading platform. Right. You know, it's, it's a, with a [28:45] Justin: bunch of advisor tools, a modern day [28:48] Chad: and Obviously, you want to make it attractive to advisors. And so what happens when you build a cool trading platform for advisors? You, you create this community. You get lots of users, right, that are, they're using your tools. But I feel like when these acquisitions goes down, and this is my question to you guys in the chat bar, does Vanguard feel like they're buying just altruist, the technology, or are they also buying all these advisors and their assets under management? In a sense, which. That strikes me as odd a little bit. But then obviously that's the truth. I mean, I'm answering my own question. [29:27] JD: Yeah. Why would it be true? [29:27] Chad: Justin, you're looking at me like, I feel like, well, they built a product, they're just a thing. And it almost gets sold. Like you're like one digital buying a bunch of advisor books, you know what I mean? Which you're not really doing that. You're just buying a tool that has a bunch of advisors connected to use it. You're not buying those advisors, firms and their assets. [29:48] JD: You're still capturing them, I'd say. [29:50] John Lestock: Yeah, for sure. [29:51] Chad: Yes. [29:52] Justin: And that's what my fear, my fear in this, JD is you are. In my mind, they're looking at distribution, I think, for years. And their passive approach was different. And they didn't have to worry much about distribution. Distribution opportunity came to them. And I think that there's been such a heavy push by some other fund families to compete in that space. They were looking at this as a distribution play. I also think they wanted to have not just an offering, but they wanted more of a platform and product for advisors to help with that distribution. And then I, I do look at this in one way and say [30:32] John Lestock: this. [30:33] Justin: I, I think what we're going to see right now is some competition to Fidelity and Schwab that they haven't had in the past from a custodial standpoint. And it's another way for Vanguard to get their foot in there. My, my fear, my real fear here, there, all of these advisors that chose wank and went the altruist way went because while the, the industry was doing this with Schwab and Fidelity, he was doing this and he was coming off to the side and trying to create [30:58] Chad: something different and kind of anti establishment cool, you know? [31:03] Mark: Right. [31:03] Justin: And then he did what I imagine he meant to do when he started this and he sold to one of those large groups, made a bunch of money. But all. Are all those advisors gonna stick with him? [31:13] Chad: Well, do you know, because that's one [31:14] Justin: of the things they were Buying there. [31:16] Chad: There's news out there right now, I think. I think on investment news and some other media that Schwab is already headhunting and calling those advisors. [31:27] Justin: Oh, I bet. [31:28] Chad: And stirring those waters. [31:29] Justin: But I don't think those advisors want Schwab either. I think they wanted a modern tech platform. That was not okay to John's point like that. There's a little bit of distrust. [31:42] Chad: I was gonna say, let's let John's comment kind of bow tie this up in the sense that. Or not bow tie it. Bow it up in the sense that optimistically or cautiously optimistic. I think those altruist advisors are going to say, okay, I'm going to let. See how this plays out. You know, and to John's point, it could be a win. Win to where? Because I would argue a lot of people are. To John's points, are fans of Vanguard for a lot of reasons. The John Bogle story, the low cost. Aren't they like a nonprofit or something? They're owned by their employees or something like that. Come on, someone fact check me that in the chat bar. And so maybe this is a win. Win in that, okay, we were cool, edgy, smaller altruists. Now we're gonna partner up with Vanguard and, you know, to the moon we go. You know, so we'll see. [32:36] John Lestock: I guess the analogy is, is it like having a. Like a. Like a punk band and they get signed to a major label, so they lose their credit because now they're part of a major label, but they're still trying to keep their street cred. [32:48] Chad: That's never gonna. [32:49] Mark: That's a good. [32:49] Justin: That's a great way of looking at [32:51] Chad: it with your analogy. It's not going to end well, I don't think. Maybe more. More record sales, right? [32:58] John Lestock: Just. [32:58] Chad: Yeah, the. It's the hardcore kids that won't like you anymore. [33:02] John Lestock: But that's a legit concern. I mean, think about Nirvana. They started with a small label here in Seattle and they got bought by Giffen Records, and then they got really, really big. But I think. I know. I heard Kurt Cobain just struggled with that until the very end. He just was worried about losing their kind of their credibility as a band because they were too commercial. [33:20] Chad: That's exactly what's happened to retireaholics. Okay, let's. [33:25] Mark: Let's not go the Nirvana route, please, guys. [33:28] Justin: Yeah. Bye, J.D. it's been fun. [33:33] Chad: Let's play a game. John, I know you like to make money like the next guy, and I don't want to get John in trouble. But back In June of 2025, on a little spin off episode we do called the Shamanda Show, Rogue Guy was proposed the option of buying or selling on Boeing. And we'll talk about what he did and how that's panned out. But let's play. Let's play the game. Brandon drunk stock tips again. [34:19] Mark: Well, I don't have to wonder if before I do this episode, do this segment, I should shotgun a beer every time. [34:25] Chad: I like that. That'd be a good ad. It's your segment. [34:28] Mark: I just, I don't have one unopened. [34:30] John Lestock: So. [34:30] Chad: Yeah, it's your segment. Make the addition. [34:32] JD: Do you have a smear now sitting next to you? [34:34] Chad: That's a quality [34:37] Speaker A: on that, right? [34:38] JD: Here we go. [34:40] Justin: Oh, that was so good. Oh, get backfired. [34:49] JD: Do it with it, buddy. [34:50] Justin: I'll do it with you. [34:51] Chad: Oh, Chad Callaway would have been nice. I didn't do Callaway. That would have been nice. So Robey was on The Shimana show June 6, 2025, and Boeing was at 200 and Roby said bye. I'm sure John could tell you, we all know that Robey's always going to be right. And so it is up since then. I think it's about 210 based on my. My iPhone told me before this show. So good pick there. Rogue Guy, I think he made. [35:21] JD: You got to pay for the lawsuits. [35:23] Chad: Yeah. About a plane crashing or something in that one. But you're going to say bye anyways. I remember bits of it, but it was. [35:30] Mark: Yeah. You know, sometimes we say things we don't mean. [35:34] John Lestock: Okay, 2025, let's see. That would have been. Oh, not too much after we had the incident with Alaska Airlines with the. With the door plug. [35:42] Mark: So I feel like what actually happened was, as I said by. And then the next day something happened. [35:50] John Lestock: Yeah, our liner, maybe. I don't remember. [35:52] Chad: I don't know if it was a. Was it a Boeing? It was a Boeing plane. Like something. [35:56] Mark: I'm sure that it was. [35:57] JD: No. We're not gonna get you in trouble for all of this, are we? [36:00] Chad: Someone Googled out like June 7th what happened with Boeing. [36:03] JD: Okay. [36:04] Mark: I'm more worried about what's going to happen to us. Like we're gonna have someone coming to our doors, knocking on them soon to be like, I'm not. [36:11] JD: I'm not worried about the rocket technology. Clearly it's not gonna hit us. [36:14] John Lestock: I'll be fine. I'll be fine. [36:15] Chad: It's all entertainment. It's all entertainment. [36:17] John Lestock: Has been Relatively like what? Between 200 and 220 or the last couple? [36:23] Chad: I don't know. Because we're not going to talk about Boeing today. We are going to talk about this mystery stock, everybody. This one had its initial public offering through a blank check merger back in 2019, not that long ago headquartered in San Francisco. Last quarter it did 753 million in revenue, up 38% year over year. And management just raised full year guidance road guide to somewhere between 3.1 and 3.3 billion. It has almost 3 million paying subscribers. Okay. [37:01] Mark: Oh, is it OnlyFans? [37:04] Chad: No. Up 19%. [37:06] JD: I think that would have been a B. [37:09] Chad: Every one of them hands over about $92 a month, which creates a gross margin of 64% for this company. I'll get to hasn't been profitable because stocks around $28.52 week range has been from 1374 to $65.30, meaning inside of the 12 months it's quadrupled, then lost more than half. It's got a beta of 2.4. Get to was just bought by an Australian company and it's the fastest growing product line outside of weight loss. It's Hims. [37:54] JD: Oh, see that right there? [37:56] John Lestock: Yeah, I've heard of those guys. [37:58] Chad: You know, Hims and hers. It says. So there are 3 million people are paying a monthly subscription. So a doctor they will never meet in person can mail them something in a plain brown box. Guy buy or not buy him. I mean we're talking like erectile dysfunction. We're talking like all kinds of stuff like that, right? [38:20] Mark: Well, you don't have to tell them why I use it. All right? Jesus, man. Okay, well, so I feel like this is one of those fad things that comes out every once in a while and like I see too many, I'm gonna say advertisements, commercials with like high paid celebrities that say to use this. Right? And they've got good brand recognition because the name ZZ and they do. But this kind of stuff can be done by pretty much anyone now I think, right. As long as you get the proper people behind you. But here's what I'm gonna say is I think that this is not a buy. I, I don't, I don't buy this one at all. I'm selling this one because I feel like this type of company is going to have competition that's going to do what like other companies do to, let's say a celebrity endorsed pots and pans company where they're just like, we can make the same thing and not pay Gordon Ramsay $8 billion a year to market it. And we're gonna charge less than half of what those other guys do it. And we're gonna call it days and thems. Right? So it's gonna be the competition right off the bat. Undercut them, cost. And people like this stuff, though, because it's like, you don't have to go to a doctor. People like doctors. Anyways, I'm out on it because I think that there's too much in terms of headwind for a company like this to continuously grow where others can step in and do it as well. Amazon could probably have it tomorrow and basically rear them. Gone quickly. So don't fall for the Jennifer Lopez advertisements and J.D. carlson endorsements. His beard is probably through that prescription. [40:14] Chad: Hair loss. They do hair loss. [40:15] Speaker A: Yeah. [40:15] Mark: So don't fall. [40:16] JD: That's where they started, I thought. [40:18] Chad: Yeah, you're thinking, right, Justin. Justin. Okay. [40:21] JD: Roby says, no, I haven't used it. [40:23] Mark: Clearly. [40:23] Chad: No, no. Robi says to sell. That's why we're here. So we got our answer. Thank God. I will short the stock as soon as I get off this. Justin, do you. Do you see these celebrities that he's talking about? Because the ads I've always seen have just been like, the founder guy, kind of like, hey, my name's Tom, and I. Yeah, and this. And I feel like the celebrities are doing, like, all the other zempic stuff and the glp, whatever, weight loss stuff. Although these guys do weight loss now too, do they not? Yeah, yeah, yeah. [40:55] Justin: That's what makes their business viable at this point. They keep jumping to new things, whatever the consumer wants. [41:01] Chad: Let's move on. John, let me ask you. [41:03] Mark: 2019, Jennifer Lopez, Alex Rodriguez were endorsing that. [41:07] Chad: So there you go. [41:08] John Lestock: Okay. [41:10] Mark: Kristen Bell, Rob Gronkowski, Common. [41:13] Chad: So Jayla was. Was promoting the erectile dysfunction drug or. No, I'm kidding. [41:18] Justin: Sorry, Ben. [41:20] Chad: John, let me ask you this before we go off this subject. The. The popularity of these weight loss drugs. I got Serena Williams on tv, like, just showing me her sticking it in her stomach, and I'm gonna be fit and great. I mean, are all these people gonna die of some weird disease in seven years, or am I just being a weirdo? It seems scary to me that I just. [41:45] Justin: J.D. [41:46] John Lestock: okay, you got a good point, because you're right. [41:48] Chad: It's. [41:48] John Lestock: It's the. The GLP1s are the popular weight loss drug right now. My concern is how quick did this thing get approved by the fda and how long before we start seeing the class action lawsuits. Yes, I'll drink. As a result of some negative side effect from this drug, all of a sudden everyone stops using. I seem like this recurring pattern. [42:09] Chad: I feel like it's entering super quick. And this is very divergent for our show here, but I feel like it's entry through the Food and Drug Administration or whatever was that. This stuff has already been used for a very long time for like people with diabetes. I'm not a doctor, but with other diseases. So it's already like gone through rigorous testing and training, whatever. So I get that side. But just seems weird to me now that I'm watching someone on tv go, do you want to be fit and skinny? Just stick this needle in your body and you can do it. I'm like, this just. It seems like God in the universe is not okay with this concept, but I'm just being narrow minded. [42:50] John Lestock: Well, no, no, you get a good point because yes, it got FDA approved. However, it was probably for a different use. The drug was intended for something else. Now they found a. Now they found a different use. Weight loss. [43:02] Chad: Yeah. [43:03] JD: Kind of like the Viagra pill. [43:04] Justin: Huh? [43:06] Chad: Is there downsides to my. What was Viagra? [43:09] JD: It was a blood pressure medicine originally. [43:11] John Lestock: Thinking about Viagra. [43:14] JD: It helped with that blood pressure. [43:15] Mark: Let me tell you guys, back in [43:17] John Lestock: the day where it went exactly. [43:20] Chad: Back in the day, you're just man, I got high blood pressure and you're taking your medicine like, God damn, what's happening with my penis? This is this. Okay, let's move on. This won't be a smooth transition, but we'll try it. [43:34] John Lestock: We'll do it. [43:35] Mark: Okay. [43:36] Chad: Dad, Chad was at my house last night. [43:45] John Lestock: There we go. [43:46] Chad: And we were sitting out on, on my deck and. And we. [43:49] Justin: Yeah, you were. [43:50] Chad: Yeah, we were. We got in this deep conversation keep coming and about. About census and because we have John here and he's got a really professional history of payroll chat. And I got in that same vicious loop again. Not, not. We weren't arguing. We're having a very civil conversation, but of like, okay, you're in this foreign case. And census is so crucial to doing compliance and administration. It's the beating heart, it's the holy grail of the work that needs to be done. And all across the country, third party administrators continue for the most part, myself included, right now to gather census on like a spreadsheet, if you will, rows and columns. And that comes with its own pros and cons. And I just want to give a state of the industry right now. The solutions to that could be what we all hear and we've talked about on this show 360 payroll integration or my particular example could just be 180 payroll integration, I guess. But so tapping into a payroll company to get that very important data that you need to do the work that comes with its own, that's not perfect and comes with its own problems, by the way. And then in addition to that, we are now seeing I just want to lay the land. And then we just kind of have an open conversation. We're seeing other solutions that can be tech based. We're seeing companies like Finch try to come in and be intermediary. We're seeing companies like payroll integrations come in as a third party to try to sit in between and solve those problems. And then Chad, you mentioned we also saw some kind of creative people trying to get their hands on PDFs or full blown data reports and then using technology or artificial intelligence to kind of parse through that data to quote unquote, clean it to get it to where you can use it. And my problem with this conversation was, and John, I'm first going to go to you is in theory, all these concepts seem to make sense. We've been discussing a lot of them for over 10 years, but they still run into these roadblocks and these reasons where they don't work at scale unless you're automatic data processing or paychecks or this that's already doing it. And it's a couple of things. It's just free flow on your thoughts on what I just said. And then also give us some context in terms of your job and if you've ever witnessed this like, okay, it's interesting to get my payroll data over to my 401k provider. [46:35] John Lestock: My thought is it's. What is it? What's specific details you're asking for within the census data. [46:44] Chad: Pretty simple really for the most part. [46:46] John Lestock: And they explain why I'm saying that you've got your HRMS system, the HR system that has, you know, all the data. You've got a subset of that which is the payroll system. So there's what I mean by that is payroll has some of the data you might need for your census. The HR system may have other pieces of it. So it may have incomplete information for you. [47:09] Chad: And also John, do me a favor and, and step off your large company high horse and understand that some of these are five person, you know, husband and spouse owned companies. They don't have all these fancy tools you're talking about. [47:24] Mark: Also Say human resources. [47:26] Justin: But that's a super valid point that I, we don't talk about J.D. that John's making there is that sometimes payroll is not the human resources system. Sometimes those are to. Like when you're looking at data higher, for example, it might be in one and not the other or Social Security or. So that can be difficult. [47:45] Chad: So he's adding to the, to the problem. He's saying, yeah, this is legit. Like this data spread out. It's not in the same systems. [47:53] John Lestock: It can be done, integrations can be done, it can definitely be done. But it's just being just, it's just being cognizant of what exactly are you asking for which we know what you need for your census to, for the, for the record keeper, for the plan administration. But understanding on the payroll side, what information do they have and more importantly, what information do they not have? And if you ask for something like a report out of their system, the caution is if it's a canned report that automatically processing or paychecks created as a kind of a standard report, it may not give you exactly what you're looking for. So you really want to dig into the details. And one example would be part of your census compensation. What's included in there? Is it matching the definition provisions? [48:36] Chad: Yeah, the provision on the document. [48:37] John Lestock: It's not. They're just barfing out a report and giving it to you. It's not going to help keeping. [48:43] Chad: Are you keeping family attribution in your payroll system? Are you keep. You know, there's all kinds of things where it can go wrong. But I liked what you said and we can kind of go to what Chad and I were talking about last night because you kind of led to it. Let's assume that data is all there somewhere, which by the way, still isn't always fucking true, everyone. But let's just for the sake of the argument assume that it is all there somewhere. You, John, very intelligently said, okay, well you got to know what report to pull. And then that report might not have some of the columns or the rows that you're looking for. Chad brought up something really interesting last night. Being very forward thinking, thinking, okay, J.D. you're doing this artificial intelligence stuff all the time and you're telling me how great it is these days. Surely I could take. Let's imagine I had nine files from human resources and payroll and they're all messy, scattered all over the place, but somewhere in there was everything you needed. And Chad was saying, can I just give that to an AI and say, go find the shit I need and parse it up and package it. [49:48] John Lestock: Absolutely. You can absolutely dump it into a data warehouse and do some data transformation, pull out the pieces of information, data elements you need, put it into a final file of your census that you need based on what you define, of course. Absolutely. That's data analytics right there in a nutshell. [50:08] Chad: I agree, by the way. Give it to you massaging a meeting, [50:12] John Lestock: pull out what you need and exclude what you don't need. But it's still legitimate, it's still valid, it's still reliable. So you can have that for your census to do your non discrimination testing, to double check the employer matching contributions or whatnot, all the other aspects of plan administration that you need that particular data for. And I think the key is to have a good conversation with the payroll folks and say this is what I need and clearly define what it is you want. Because otherwise they'll just throw a report at you and say hold on, before you get excited, this is what I need. And I'm going to define exactly those parameters I'm looking for. Here are the data elements I need. Can you get that for me? And break it down like that. You know, if the plan document says we define compensation as box one of W2, okay, that's exactly what they're going to give you. But that might not be what you're really looking for if you want to exclude things like imputed income or something goofy like that. Because if they don't know, if the feral folks don't know any better, that's exactly what they're going to give you. You know, you didn't want. [51:11] Chad: This is perfect guy for my because he's, he's adding to me on the negative side, which I know you're not intending to, but, but I kind of agree with you. By the way, you're up on that high. Boeing Horse again. When you're a startup plan with seven people, do you think there's someone at the advisor or the record keeper or even the third party administrator that wants to sit down and do this helpful consulting audit that you're talking about to, to make sure that all the pipelines line up the way that they should? Because you're right, it's not happening and it makes no financial sense. [51:51] Justin: Go ahead, Mac. [51:54] JD: I've always thought this and I've never really spoken up about it. And to quote the guy with the hot sister who wants to replace me, this shit should be standardized. It's not that fucking hard. And we make it so much more complex than it is. Aside from, like John just said, talking about the definition of complex. [52:11] Mark: That. [52:11] JD: Yeah, you got to make. You got to figure that out. But how have we not done that yet? [52:16] Chad: I still think you can standardize that, Justin. Well, you're. [52:19] JD: Well, if you. If you're plugging and playing a certain [52:21] Justin: things and you just want the report, [52:24] Chad: you and Moody are saying is, as an entire industry get together and say, hey, when it comes to a 401k report, it's gotta have these things, and they should be in this way. Now, I'm still going to throw a curveball at you, though. So then I guess I'd have to get on board with the. With the consolidation. [52:46] Justin: It'd have to be a mandate or something. [52:48] Chad: I'm going to be some. Some TPAs. Damn it. Some administrators are going to take ownership percentages in like a plan in a questionnaire or are going to get family attribution. [53:02] Justin: That's not really a payroll file. [53:04] JD: Yeah, I'm not looking at that. I mean, it's simple data. Hire data, termination date, compensation hours. Like, what are we doing here? We're making it so damn complex. And it doesn't need to be. [53:16] Chad: I would love to. To jump on that bandwagon. And I definitely think that, that Moody's right. That's the best possible solution to get us as close to perfect as we can get. But, Chad, are you shaking your head? We're never going to get to perfect? It seems like. [53:32] Justin: No. And I don't even mind if you guys want to say that's the best possible solution. Possible solution. But that's short term. In. In my mind, if you had a pool of data, and in that data, to John's point, it said, what was payroll income? What. What was bonus income? What was commission income? Like, all of that is in the payroll file. So if that is in something that you then load into an artificial intelligence system that also has the. [53:57] Mark: A, The. [53:58] Justin: The adoption agreement as a check swing. And it says, oh, our definition of compensation is to exclude bonuses. Well, now the AI system also, damn it, knows what the bonuses are and can pull it out of the comp definition. [54:10] Chad: Okay, well, just remember then, that's the longer term. You're going to have to teach all plan sponsors that are also payroll clients to use their payroll system in its complete capacity. Like, again, I hate to be the nerdy. [54:27] Justin: No, I know, I understand. [54:29] Chad: You're going to have to say, you better put in family attribution, and you better. [54:33] Justin: That's put in no, family, family attribution is not. That's going to have to stay in some sort of questionnaire. So will ownership. Because that's not a, that's not really a payroll fund. [54:43] Chad: It's not uncommon for people to take ownership on. [54:46] Justin: But jd that, that, that to me is where the standardization comes in. It's not that we need the same headers or we need it to be in this specific order or the report should have this individual information. It's that it should encompass all information that is in your system. [55:02] Mark: Who. [55:02] Justin: Who owns the data? Give me all the fucking data. [55:05] Chad: I, I hate being this guy. But do you also know that these companies don't stay with the same payroll providers forever? And it is not uncommon. [55:15] JD: Right, but that's the standardized part. [55:17] Chad: It's not uncommon for us to have a client that has like a rehire date from someone who is. And I fucking hate it when third party administrators do this shit. But someone who is hired 12 years ago and is already eligible and then they're rehired and it's nowhere in the fucking payroll data. Chad, [55:37] Justin: by the way, you're not gonna [55:38] John Lestock: know something from 12 years ago. Hell no. [55:40] Justin: No. But guys, that's gonna have to change with some of the new rules and definitions that are coming out with long term, part time and do they click over to someone who's gonna. Out of the long term part time. So evolving. Right? [55:53] John Lestock: I really hate to say this, at some point it becomes the client's responsibility. [55:58] Chad: Yes. [55:59] Justin: Yeah. [56:00] John Lestock: As a client, if I'm the client, I'm managing different service providers. I'm managing the payroll provider, I'm managing the 401k administrator. You know, whether it's record keeper or you know, the full blown administrator, you name it, I'm still responsible. I'm the guy on the hub, 100% so. [56:17] Chad: And John, that is, that is not you on I need. [56:22] John Lestock: And go to the payroll folks and payroll provider and say I need this. Don't give me the can report, I need this. And if we need a customer report, then get me one. We need a custom data file. [56:32] Justin: Get me one in the micro space though. John, they don't have a person to call. They're with gusto. They're with some online payroll Solution. They're with QuickBooks Online. Like you don't get that stuff, dude, [56:45] Chad: do you know that even my company right now, I mean this is going down a rabbit hole. But we use QuickBooks online. It doesn't source our Safe harbor match. We keep that shit on a fucking Spreadsheet on the side. [56:59] Justin: It doesn't match on Roth dollars. It doesn't calculate that either. Jd, I have one more thing to share and I know you want to make the final point, but on kind of the same topic, there's a third party administrator who I know well, who I trust believe in value, whatever you want to say there, they have launched a new product where they're literally telling plan sponsors, you never have to log into your 401k program at all. We will log into your payroll, we will pull payroll, we will update, we will do all transactions. We will take care of. Absolutely. We are your 402A. You will never ever open up a John Hancock website. [57:41] Chad: Not. That is not a reasonable scalable solution. [57:47] Justin: I'm not disagreeing, but that's not, that's [57:50] Chad: not going to fucking work. That you can't, that's, that's one company's attempt to create value that is not scalable across the country. That's not, that's no way fucking answer. [58:01] Justin: I'm a hundred percent with you. I agree. But it exists. [58:04] John Lestock: You can't over standardize across numerous clients who had different earnings codes, different plan provisions in their 401ks. They're on standardizable, if that's even a word. At some point you need like a consultant or somebody as a spirit guide to guide these, guide these providers together. [58:22] Justin: That John, to, to that point right there, that's what this group is saying they're doing. And guys, remember the group out of Arizona that kind of said the same thing years ago that we never hear about anymore. But they're essentially saying we're going to put a human being in a desk that will log into your paycheck system or log into your QuickBooks and they are your 401k specialist that would be sitting at a desk in your office. We're going to pay someone to do that and do all of this stuff for you now. So JD's point, it's just not scalable. [58:49] Chad: No, but you're kind of saying the same thing John said, which. So I'm, I'm agreeing with John and I'm arguing with you, so I should get my thing straight here. What John was saying is, hey, I don't care if you're a six person. What do I use all the time, Mark? Flower shop on the corner or auto body shop? You still, you put on your big boy pants, your big girl pants. You have a responsibility to run your retirement plan appropriately. Okay? And understand what that works. Now to Chad's Dream, which is kind of John's dream too. If you had a really smart financial advisor that really played in this space and understood everything that we were talking about tonight and they wanted to roll up their sleeves and get in there and help, I'm all for that. But why I was telling Chad it's not scalable is that's expensive. That's a lot of hours and a lot of responsibility to take on to do that. Especially to act in like some type of 402, a 316 capacity that's going to run you almost as much as what we're charging you to do the entire fucking admin work. That's not going to play in the micro market. [59:58] Justin: Nope, that's true. [1:00:00] John Lestock: That's true. Yeah. [1:00:01] Mark: Stop yelling at us, dude. [1:00:03] JD: Geez. [1:00:04] Chad: Well, my problem is everyone talks about this payroll integration. Everyone talks about these new tech, these new tools. And I'm just saying, I'm not sure we've cracked this nut yet. Everyone. Like, I don't see a real solution. And I'm only very sensitive to it now because I'm working on my own proprietary stuff in house that I can find ways to make it work well for me and my clients, but I can't scale it to everyone else because it's just all over the map, you know? [1:00:33] John Lestock: Well, and you can only standardize so much, right? Yeah. That's the key to making it scalable. Is it. Can you over stand, can you standardize it to the point where it's the same for everybody? And if you can't, if there's, you got to do some weird goofy thing with this client and that client, this other client, then your standardization falls apart. You can maybe knock out 80% of your transactions, 80% of your processes, but the other 20% you still have to have hands on. And like to your point, jd, that's where the cost comes in, that's where it becomes expensive because it becomes manual by default. If I can't standardize it, standardizing means automate. If I can't standardize, I can't automate it. That's I agree. [1:01:09] Chad: And what I like, I think the motivational thing from what you said there is I'm so obsessed with like getting to 100%. [1:01:17] John Lestock: Right. [1:01:17] Chad: And I need to just accept like, okay, well maybe we just get to 75 and then we just got to deal with the rest of it, you know? [1:01:22] John Lestock: Exactly. Do what you can. And, and maybe if you minimize the amount of the process that's manual, that reduces the cost, maybe that makes it A little bit more manageable, I guess. Client by client. I'm not sure, but yeah, it's sort of on. On a scale of 100 to 0%. Right. [1:01:39] Chad: Well, if we could go full circle to what Chad said. I. I hate having this be the answer to everything, but maybe artificial intelligence in its current form or in its future form can accomplish something like that at a reasonable price because it's not people doing it so that there's potential. I think artificial intelligence could be the solution. John. Let's finish up tonight by watching the boys squirm. We're going to play a final game, and it's a game. [1:02:11] Justin: I got to go. I had a 7:30 hard stop. [1:02:14] Chad: It's a game that we've never played. [1:02:16] Mark: Oh my God. [1:02:18] Chad: Okay, I don't have a name for this game and I don't have a graphic, but Brandon and Claude will whip up a name and an intro video in the coming weeks. For now, we'll just call it 401k math. Three men enter, one man leaves. Thunderdome style. [1:02:37] Mark: Underdome. [1:02:38] Chad: I'm ask three questions and you guys are just gonna spit out who's got. Or actually should I make you like. And you just spit out the answer when you think you have it. We can make sense of it. And whoever can get the correct answer first wins. But you only get one answer. Don't. Don't be shooting different answers at me. We'll work on the rules, okay? Okay. All right. First one, Think math. Small plan. Market advisor. Here's the question. What is 50 basis points of $1,000,000? Go. [1:03:12] Justin: 5,000 win. [1:03:14] JD: What are you talking about? Roll back. [1:03:16] Justin: I won. I was way closer. [1:03:19] JD: I was done saying 5,000 before he even started speaking. [1:03:23] Justin: Oh, you're way wrong. [1:03:24] JD: AirPods. Man, this audio sucks. [1:03:26] Chad: We'll watch the tape, but I'm giving Chad that one. Okay, you're a medium sized plan Advisor. What is five basis points of 10 million? [1:03:39] JD: 50,000. [1:03:41] Chad: Why does. [1:03:42] JD: Oh, five basis points, you say 50 basis points. [1:03:46] Chad: I changed my basis points on my thing, but I know this shit. I know this shit. Five basis points of 10 million. [1:03:55] Mark: 5,000. [1:03:56] JD: 5,000. [1:03:57] Justin: Yeah, I answered it right away. [1:03:59] JD: I heard 50 bits. [1:04:00] Chad: Finally I was like, all right, you're a. You're a 338 national fiduciary firm. You do 338 fiduciary services. What is five basis points of one billion? [1:04:13] Justin: 50,000. [1:04:14] Mark: 50,000. [1:04:16] Justin: No, 5,500,000. God damn it. [1:04:21] Chad: Chad wins. Chad wins. Two out of three. [1:04:24] Mark: No. [1:04:25] Chad: We'll check the tape. [1:04:28] Justin: Justin I was so ahead of you, buddy. [1:04:29] JD: You were not. [1:04:32] Chad: I was going to talk about Fidelity. So we'll let Chad, just real quick, I would say, hey, Fidelity's breaking into the small market this big. [1:04:40] JD: Oh, no. [1:04:41] Justin: That's a big conversation. [1:04:43] JD: Okay, we'll say he had a hard stop. Jd. [1:04:46] Chad: Yeah, we'll save it for next time. [1:04:47] Justin: Well, that's a good combo. I don't want to be quick on that. [1:04:50] Chad: We'll pump it over for next time. John, thank you so much for being part of our community first. Yeah, John, it's kind of cool because, you know, our. Our audience is financial advisors, industry record keepers to find contribution, investment only. It's really cool to know that there's like, you know, some guy at a company sitting there paying attention, which to me is genius of you. [1:05:12] JD: Some guy at a company, he's an international assignee, tax accountant. [1:05:17] Chad: You know, we should have, we should have talked about that because that can get really complicated when you talk about how you deal with people in other countries in 401k plans for a US based company. But I was like, I don't want to do that while I'm drunk. That's going to be weird. [1:05:31] Mark: No. [1:05:32] Chad: John, thank you so much for being our guest today too. I really appreciate it and you did an awesome job also, John. [1:05:39] John Lestock: This was a blast. I love you guys. I learned so much watching and participating in the podcast you guys hold. It is amazing. You know, it's just. Yeah, how could I not? You guys are cool. Come on. [1:05:52] Chad: That's awesome. [1:05:53] Mark: Well, it's awesome to have seen your name for so long in the chat bar and have you here. That's really cool. But also, just so you know, after our shows, we usually have a little sidebar, maybe a group text going on, and sometimes it's been pretty negative on the lack of interest of drinking and fun of the guest. And by the way, you've blown it out of the water and you're actually drinking, so we appreciate it. So thank you for that, for actually being a true retireholics guest because we've had some duds, I'll tell you. [1:06:24] Chad: And thank you to you out there in the audience for tuning in again on another Thursday night. And yeah, the. The old, the old what's now old chapter champion contest we did with the technology was pretty bad, but tonight's chat bar chain was even worse because it never happened. Brandon, play some music. We'll see you next time.