John Oliver's 401(k) Critique: What Advisors Need to Know

[0:00] JD: We are at Half Moon Bay Brewery. Half Moon Bay Brewing Company. Right. Half Moon Bay, California. You can't see this, but I'm looking out at the ocean and the harbor and mavericks out there in the distance. [0:12] Chad: Life's good. Life's good. [0:14] JD: We have this beautiful backdrop setting. So we're happy to be here. We're going to have a special guest on the show that will talk to you a bit more about our location, the beer that we're drinking. [0:25] Mark: Finally a guest that didn't get. [0:27] Chad: Yeah, FINRA didn't get washed by compliance. [0:30] JD: Yeah, he doesn't have financial compliance department to deal with. So that's good. [0:35] Mark: Yeah. Do breweries have compliance? [0:37] JD: That's a question for our guest, Mark. That's good. [0:41] Chad: Always thinking ahead. [0:42] JD: I'm sure these are regulated in some format. Chad, would you like to introduce our guest for the show, please? [0:50] Chad: Lenny, please come join us. [0:54] JD: Cheers. [0:54] Chad: Guys, grab a seat. [0:56] JD: Unfortunately, you have to sit next to Mark there. [0:58] Chad: So I apologize this morning. [1:00] Mark: You're lucky. [1:03] JD: Do me a favor and kick us off with what we call and our audience knows to be the beer of the episode. What are we drinking here, sir? [1:13] Lenny: Happy to. We are drinking a honey blonde presidential ale. And this is actually President Obama's recipe or the beer that he brewed in the White House? Absolutely. [1:24] Mark: It's publicly available. [1:25] Lenny: He brewed it and then made the recipe available and so we decided to brew a batch. So this is the exact same recipe of a honey blond ale that the President brewed in the White House. [1:34] Chad: I have to imagine you've done a better job at it than he probably did. [1:37] Lenny: Oh, of course, we're pros. He's an amateur. [1:40] JD: This was his home brew kind of [1:42] Mark: flow, if you will. I really hope he was focusing on other things, not brewing beer. [1:46] JD: So I'm gonna put you on the spot, Lenny. I apologize because Chad usually intros our beer and he tries to be super sophisticated. [1:53] Mark: He does a really good job hops [1:55] JD: and tastes and reference it to oak, redwood trees or this or that. Whatever you do, can you give us a little kind of insight on it? [2:02] Lenny: Sure. So it's not that complicated. It was a pretty simple recipe if you're going to brew it in the White House. So it's not a big overly hard to get set of ingredients. It's a blonde ale, so it's like any other blond ale that you might drink and they added honey to it and so it's not much more complicated than that. It's a basic honey blond ale. [2:20] Chad: It's. [2:20] Lenny: You can taste it's very light and refreshing. It. I love it, you know, like a light ale or even like a heavier lager. The honey's not overwhelming in terms of the smell or the taste. And it's not. It's actually not very hoppy. So it's just a good summer beer. [2:36] Mark: At what point in the brewing process do you actually add the honey? And secondarily. What kind? Not the brand or anything, but what kind of honey? Because there's, you know, honey in the teddy bear. There's raw honey, there's agave. [2:48] Chad: Right. [2:49] JD: Is rare honey really a category? [2:50] Lenny: Yeah, that's a. Yeah. [2:51] Mark: It's the only honey I've ever purchased in my life. The only honey I want comes out of the head of a teddy bear. [2:56] Lenny: Yeah. No, no, no. It's. It's. It's not a teddy bear honey from bears. I disappoint you. [3:01] JD: It is actually for our audience. Right. It is cool and beer. Sophisticated, desiccated. To smell your beer, because that's what lineage did. [3:10] Lenny: So, you know, if it's very hoppy, you'll notice the difference. This one's not very hoppy. [3:15] JD: And. All right, well, tell us. Tell us about this location. It's not just a brewery. It's a restaurant. Right. Looks like a very popular one. The location's insane. The history, when it's found to tell us a little bit more about where we're at. [3:29] Lenny: Sure. So we are right. Right on the ocean in Princeton by the sea, which is Half Moon Bay. We look out, and you guys can see right there is the satellite dish is on the cliff that overlooks where Mavericks is the wave. And so the Mavericks big wave surf competitions happens right out our window. So we're about 20 miles south of San Francisco on the ocean. We opened in 2, 2000. So we've been here for 16 years. We brew all of our beer on site. Right behind you. All of it's right there. We are just about out of capacity, so we're looking to build a bigger brewery. Oh, that's interesting. But we're, for now, all brewed here. This area where we are is where all of the beer for prohibition came in. So during the bootlegger era, there was no breakwater there, and it was kind of rough. And so ships would bring in the rum and beer and. And they'd put it in. In trucks and go over the mountain into San Francisco. So during Prohibition, this was a big area of speakeasies, and we were. There was a speakeasy here? Right. The building right next door Had a speakeasy on the bottom floor and a brothel on the top floor. So it's got a. A kind of sordid history. So we're. We've got a restaurant, a beer garden patio out front. We have a conference center and a small bed and breakfast next door. So it's a fun, fun area and very popular on. On weekends and for. [5:01] Mark: Right. [5:01] Lenny: Especially when the sun's starting to come out. It's nice. [5:04] JD: The sun comes out in Half Moon Bay from time to time, right? [5:07] Lenny: It does. [5:08] JD: We work in the world of regulatory compliance. Strict rules, irs, Department of Labor, finra, et cetera, etc. Is there such a thing? And there's quality, like rules and stuff, right? [5:20] Lenny: No, it's a very regulated business. [5:24] JD: So [5:27] Lenny: you have to have inspections and licenses and all those things that are both for a restaurant and the beer has a separate set of regulatory agencies. And then anytime that you want to put out a new beer in, in bottles or distributed outside your area that has a label, the label has to get approved by the Alcoholic Beverage Control Division of Business, Transportation and housing in the state. So when we have the new Speer that we've got coming out is a what we call alection. How'd you get that approved? [6:01] JD: You'll get some shots of that. Right. [6:05] Lenny: Beer has a. Either you can choose a Hillary Clinton beer or a Donald Trump beer. And it's got their pictures on the label. [6:12] Mark: Are they getting royalties? [6:14] Lenny: No, they're public figures. So their. Their images are usable, but they're actually only. [6:18] Mark: So are we. So feel free to use ours. [6:21] Lenny: I'm sure that would sell very well. [6:25] JD: Love it. [6:26] Mark: Set us up for that one. Yeah, sorry. [6:28] JD: This beer is available in plenty of other places besides here on this location. So it's being distributed how far? How wide? [6:36] Lenny: So the beers we have on tap are just here. So we bottle a handful of them. And those are available mostly in Northern California in places like Safeway and Beverages and more and Whole Foods and places like that. [6:50] JD: And starting to get popular enough that you guys are looking to expand? [6:53] Lenny: Yeah, no, we're out of capacity. We're opening a tap room in Berkeley and. Wow, we're. [7:00] JD: That's good to hear. [7:00] Chad: Congratulations. [7:02] JD: I really appreciate that. One, super thankful for this venue. Two. That was great. Cool. Different information for our audience that they don't get a lot from us, so that was awesome. [7:13] Chad: I just come visit the location if [7:15] Mark: they're in the area. [7:16] JD: Thank you. Thank you. [7:17] Lenny: Thanks, guys. [7:18] Chad: Thank you very much. Appreciate it. [7:20] JD: And later, I. I apologize in advance for anything Mark does To you your. To your venue or your establishment here because it tends to get crazy. [7:29] Lenny: So anyways we already had security come in. [7:33] Chad: All right, take care guys. [7:35] Mark: Thank you so much. [7:37] JD: All right guys that you know what made me realize is that we should probably have a show about beer instead of 401k. [7:43] Chad: I was going to say because I [7:44] JD: could talk to him forever about that stuff and now we got to jump right into 401k stuff. But let's. I mean retireholics fashion list. Let's have some fun with was a little while ago but a super what I think super cool, super entertaining. But I'll get your guys opinion on this video came out from Mr. John Oliver. [8:06] Mark: He came from the Daily show with Jon Stewart and he branched out and did his own thing. Right. I'm asking. [8:12] Chad: I know he's very good. [8:14] JD: I don't want to show I was exposed to him just through this video which I thought was done really well. And so if you haven't checked it out, check it out. It's not hard to find. It's got millions and millions of views. It's caught in some heat from our industry. A lot of. And it's understandable. A lot of defensive kind of comments back at it because in a sense. Let me set the video up. Kind of attacks the 401k retirement plan space in the typical sense of high fees that are eroding away your account etc. Etc. However, I would first like to talk about the positives in it because in what we do edutainment trying to have fun with our message. His was insane. He's kicked butt. [9:00] Mark: But he also makes a topic that we consider complex pretty relatable and he brings digestible points. And his accent's fantastic too. [9:09] JD: It is. And one of my favorite parts of the show is towards the end he gets another actor involved who's out in the public. They're shooting and I mean so hilarious. They're ripping on the suit and tie. Advisor. Sorry buddies. Love you guys. They're ripping on the industry as a whole. Our lingo. They got a cameo from the tiny little actress from. She's been on lots of things. I remember her from the singing show. What's the high school singing Jasmine. [9:46] Chad: Watch Glee. [9:46] JD: She gets killed by the. You've seen the ads. [9:49] Chad: She doesn't die. [9:50] JD: Prudential blocks. And they crush her if you do nothing. [9:54] Mark: Fast Forward to that 18 minutes or so and watch it. Yeah, you will. You will laugh. [9:59] JD: Freaking hilarious. And I was jealous. I was like I want to put out some content. Like that. Like that. That was awesome. [10:05] Mark: Super funny. Now, did any of you guys go get your elf spotting degree? [10:11] Chad: No, I avoid it. [10:13] Mark: I have breaking news. Oh, gosh. [10:16] JD: Mark did homework and he brought. [10:17] Mark: I'm very proud of this moment. It's been a long time coming. [10:20] Chad: Oh, gosh. [10:21] JD: Visual props. [10:22] Chad: Didn't you. [10:23] JD: Visual props from my. [10:25] Mark: I am officially an El squadron. [10:28] JD: Way to go. [10:29] Chad: Oh, Bachelor of Too. [10:30] Mark: Good job. He signed it. [10:32] JD: You know what, buddy? You can put that on the end of your email signature. [10:36] Mark: It already is. [10:37] Lenny: Yeah. [10:38] Mark: So if you gain anything from the show, it's that you get a free elf spotting degree along with many other funny comments. [10:46] JD: But from a positive standpoint, again, it does bring to the surface, bring to the general public's awareness that they should know about this stuff. They should be self educated. They should keep an eye out for if they're getting ripped off or if something's not prudent the way it should be. [11:05] Chad: Right, let's stop there for a second though and talk about getting ripped off. Because when I watched the show, and this is obviously something that we do each and every day, there are in my mind maybe none, but very few to any plans that are quote, quote, getting ripped off, especially in the early stages of the plan, which John Oliver's was, or in a sales process. Inevitably what ends up happening if a plan is getting ripped off, meaning fees are too high, is they've been in one stationary complacent position for far too long with a program that doesn't tier down their costs with growth. They went from a $1 million plan to a $20 million plan and there's been no concession in pricing. That's an issue in my mind. That would be an extreme case. [11:44] Mark: Not what's happening here, but at excellence point. [11:47] JD: That's the only time where it can really happen like that. [11:50] Chad: Yeah, I mean, we're so well regulated and the industry is so competitive that people aren't out there, quote, unquote, ripping people off. It just doesn't exist. [11:59] JD: You guys have first hand experience. [12:00] Mark: The other point of that is everybody represents their fees differently. And as you dive deeper, you begin to notice how they classify it or where they put it or how they, where their concessions are. And sometimes it's fine print. But at the end of the day, when you look at overall fees for a plan, they're pretty close side by side. [12:20] Speaker E: Not only that, but I think a huge problem for our industry is we're under a lot of scrutiny. People have this vision that we do traditionally Try to rip people off and [12:31] Mark: get paid more than we should. Why is that? That's I think almost a million dollar problem. [12:35] Chad: Because it's unknown. People can't digest why they think they're [12:39] JD: being ripped off and why John Oliver can make this successful video is because they don't know, unfortunately. [12:45] Chad: Tell me we operate in this business. Did you see the types of fees that John Oliver disclosed? Actually it wasn't his. It was a part of a poll from another show. Trustee fees and intermediary fees and legal fees. How many times are you guys seeing those when you're playing cost? You don't, you don't. It's like saying I want to know what the cost is to brew this beer. Lenny's going to tell us what it costs is. He's not going to say, well it cost me this to employ our, you know, the gentleman that overlooks or gal that overlooks the actual beer. It costs us this to buy the glass. It cost us this to buy the bottle cap. No, it's an all encompassing fee. And that's where we usually live in is we need to determine what the overall fee structure is of the program. And it's important to know what each of the major components are. Your investment expense, your administration expense and your advisor costs. [13:31] JD: And we're going to talk a little about that later. But I think that's important in this case to talk about the fact that John Hancock responded to this. So John Hancock, John Hancock was the one that's interesting. John Oliver was talking about his very own plan. So, so we had firsthand knowledge. [13:48] Mark: I wish John Hancock would have put a video out. [13:50] JD: Well, they responded by the way. When I first saw their response, I was like, oh boy, let me see this corporate bs. Like let's see how they did it. It was very well done. It was very professional. It wasn't defensive at all. It was just like, hey, let us point out what happened with this exact specific plan. And that's what I think. I want our advisor, audience and anyone else that's paying attention to the show to realize is that let's get down to the basics. The real stuff that he was talking about with regards to his own plan and how it was not prudent setup of fees because that just wasn't true. [14:25] Chad: It wasn't. [14:25] JD: The real numbers don't back that up. He was a very small plan. I think we came to 30,000k or something, which is fine. But. And then what he did, and this is the problem is he took fees, represented them as a Percentage like you made mentioned earlier, it all can be represented differently. And he took that percentage and he played it out over this very long time horizon to add up and show how much money would be siphoned out of these accounts. Two points to make here. First of all, when you look at the plan as John Hancock did and you break down the specific numbers, none of those vendors, the advisor, the TPA or the record keeper were making anywhere close to an absurd amount of money. It was actually the direct operating at a negative dollar. Yeah, they were giving it away. Okay. But because he's representing as a percentage, it looks like this bigger thing. [15:16] Chad: Point number two, hold on, let's hit one thing on that. Because they point out in this article, eleven hundred dollars is what they would have had in gross revenue from the costs associated with running that plan. From a record keeping perspective, this is John Hancock $1,100 to go out and do the initial enrollment, to offer the website, to create the books, to offer the investment vehicle, so forth, all these different things. Now if it were the same cost, 1.69% when this is a 10 million 20 million dollar plan, those are big numbers. [15:46] JD: That's my second point is they didn't [15:48] Speaker E: convert it into a hard dollar cost [15:50] JD: represent those numbers over a long period of time because those numbers will go down, they'll be consistent as the assets grow. And I just want to simplify this. Go ahead. [15:57] Speaker E: To their point though I think what added to the confusion was the fact that the advisor had said hey, he sent out an Excel sheet or something, [16:04] Chad: they made a mistake and so it [16:05] Speaker E: blew it up even more than a job. [16:07] Chad: Let's be quite honest. It's a startup plan for flowing 30k and the advisor took 1 in 50. [16:12] Speaker E: 300. [16:13] Mark: Well the weird thing about that is [16:15] Chad: there's a mistake there flowing 30. [16:16] Mark: Yet he refers to when they do this math to show the difference of I don't know how average of 6,000 annually contributions for 35 people that 35 times 6,000 doesn't equal. [16:28] JD: Here's the moral to the stories. I would argue that if I analyze all the hundreds of plans that you've sold with advisors, helped clients put in place, that there are no situations where someone's making too much money. Quite the contrary, they're probably making very little. [16:44] Chad: Most are operating at a negative in the market that we're all playing. [16:48] JD: And if that's a fact, if that's a fact, which it is, then all of that news media hoopla around 401k being a ripoff And I get it. [16:59] Chad: There's still not relevant. Don't get us wrong. It's all very relevant. No, I'm not saying that the rip off side is bullshit. I'm talking about finally spending some time analyzing this and looking at the cost and understanding even in a minuscule amount, understanding where these fees come from and who they're paying is very relevant. Digesting it is a different story. I spoke to a group of advisors yesterday that were pretty much saying we'll read a 4485 and we have no clue what the costs are. So I felt like John Oliver did a fantastic job making something that is tough to understand relatable for the average American. And what the best thing about it is, which you guys have seen me do this a lot of time. What should it lead to is people knocking on doors and saying what's the cost of my program? Am I investing correctly? Am I saving enough? I love the five questions we should all ask. Number one is start saving now. Right? [17:49] Speaker E: Right. [17:50] Chad: This is relevant. [17:51] Mark: Ten years ago. [17:52] Chad: Create a time machine, go back and tap. Start saving. Then kill the avian. [17:58] Mark: That's what you do in the first one. The second. [18:00] JD: Yeah, because it's not the same time. You got to go back to when Adolf Hitler was there. You got to watch the video and know what we're talking about. [18:05] Chad: I don't know if I could do it. Like I'd have to wait till he turned bad just to make sure that he still turned bad. [18:09] Speaker E: I'd be fine with it. [18:10] Mark: I don't want to talk about this on the show at all because who knows who he's going to interview. Stop talking about this right now. [18:15] Chad: That's a good point. I might be a terrible person right now. [18:17] Mark: I need another beer. [18:18] Chad: You need a. Okay, wait. What time might it be? You need what? [18:22] JD: He needs a drink. It is. [18:24] Chad: I don't know who it's going to land on. [18:26] Mark: Hey, by the way, the wheel that be coming out. [18:29] JD: I'm also and this should be accompanied by my wonderful singing background. [18:34] Mark: That was one thing. [18:35] JD: John Oliver love the show the hand [18:37] Mark: but criticizing the term financial advisor. [18:40] JD: I got a pretty good view of it. I'm pretty certain it's going to be Mark but it might not be. Oh oh. [18:45] Mark: I'm hoping we don't have. [18:46] Chad: It's me, isn't it? [18:47] Speaker E: Any smear knoff today? [18:48] Mark: Mark has to found one of the just sitting warm. [18:52] JD: I didn't see a Smirnoff. Ice it, buddy. [18:54] Mark: I won. [18:55] Chad: Take a knee. Enjoy it. [18:57] Mark: I'm not taking a knee today. [18:59] JD: Yeah. [18:59] Chad: What? You say that every time and you end up getting on a knee. See, Every time. [19:03] Mark: Look it, I'm half sitting, half knee. [19:05] JD: All right, that's fair. [19:06] Chad: I was searching on my pen. I found it. [19:08] JD: All right, elf spotter, let's do your shmirna face spotter. We're gonna move on to our next subject. [19:18] Chad: This is a conflict of interest. It should be known that we are not a producing tpa. We are not a financial advisor. Producing. It's another certificate that John Oliver gives out. He went to John Oliver's website. [19:29] Mark: Got it. [19:30] JD: Oh, oh, you can get financial. That was part of his joke. [19:32] Mark: I forgot. [19:33] Chad: Yeah. [19:34] JD: Wow. Hey, advisors, he also can help your practice. Is this similar to a cfp? [19:40] Chad: Pretty close. [19:42] Mark: But John Oliver is the G compliance financier. [19:45] JD: Nice. [19:46] Mark: Okay, this was my. I like the elf spawning idea, but I kind of. This is kind of. When he was talking about that again. John, if you're watching, which I know [19:55] Chad: you are, if you follow the show, keep dreaming. [19:57] Mark: Yeah, like the elf spawning thing. Funny again. You're a comedian. Keep going. Like, don't know your day job. The financial advisory piece. Like, he mocked it. I mean, that's not cool. Like, I work with advisors. I appreciate what they do. They have a job, they're doing something like. [20:13] JD: Yeah. Have you seen Bothered you, didn't it? Have you seen. Have you seen the CFP ads where the dude poses as a financial advisor and then they go, man, he's really a dj. As a guy who has long hair, I take personal offense to that. Like, I'm like, wait a second. I kind of have that look. But I still work in financial services. I'm not cool with that. Let's move to our next topic, which, like a lot of these topics sometimes is developed on a blog post I wrote@401k.com f o u r o1k.com and I can track my viewers that go there. And Mark goes there like 12 times a day to look at the picture of me staring off into the ocean. [21:02] Chad: But you look good. [21:04] JD: An article I wrote on there recently, [21:07] Lenny: just skin tight shirt, had to do [21:10] JD: with this kind of race to zero. The industry is saying there's a lot of media, a lot of things saying that because of the new regulations, 404 A5, 408, our fee structures being compressed and that vendors, advisors, administrators, record keepers are being squeezed to charge less for their fees. I would like to make a couple of points for our audience. And the first general point, I would like to make is a very simple one, and I'm not trying to be defensive here, but if you lower fees or you, you ask vendors or service providers to charge less, inevitably they will have to do less for the most part. [21:59] Chad: Okay, so what you're saying is they want to keep their margins at where they're at. So if there's a squeezing, that service will go down. [22:07] JD: They're gonna find ways to do less service. And I think that you cannot argue that fact. Unless you live in the fantasy world that you think they're just rolling at some premium and they've been making too much money, which we've already seen people think is not true. [22:20] Speaker E: But why don't people think about that? In the process of trying to squeeze fees, it's like, hey, you're soon gonna get to the point to where there's nothing left. [22:27] JD: I think it's an evolution of a consumer. I think that's a more advanced way of thinking. But it's is very true. And that's what we're talking about it today for our advisors, for our industry professionals. I think they need to understand that to not be part, in my opinion, to not be part of that kind of movement, to continue to squeeze your partners and everyone. Because in the end, I think it's your consumer, your plan sponsor, your plan participant that's going to lose by not getting certain things. And one other thing, we live in a world right now where we stand at a point where so many cool things could be added to this industry to make it better. That will take a little bit of investment, a little bit of money, a little bit of inspiration. And if we start to squeeze everything down, I think you risk not being the benefactor of some of those, you [23:21] Chad: lose that ability to reinvest in the business and grow the marketplace. But to argue a little bit with what you just stated, I think some of the providers, some of the advisors out there, even the TPAs, rather than starting to trim into margins, you're just going to see lower cost providers start to take over more business. And so you're going to. We talk about this all the time with advisors. Some will say, you know what, I'm going to create a second model that's less service but charges less. Others will say, you know what, if I'm operating based upon my business at a 50 basis point clip and someone fresh out of college wants to come in and sell that plan for 25, that's always going to exist, you have that same conversation with us all the time. There will always be a lower cost provider out there. So the race to zero is going to happen everywhere. I don't think too many providers are going to trim service. I think they're going to find a way to. And the gentleman from One America talked about this, segmenting the business. [24:14] JD: This was on the 401k Friday's podcast. And the president I believe is president of One America. Discuss. Go on. [24:23] Chad: Sorry. And he talks about segmenting business. Your record keepers should identify themselves as either being a low cost provider, a technology based, low touch high tech provider or a high touch high service provider. And now you can sit with a client, which is essentially what we often do with advisors, and say what are your clients needs? Let's align you with a provider that kind of matches those needs. What is it that a client really needs from a service provider? Do they need technology or are they a shop that has eight people? [24:51] JD: Very well put. And he does a great job on that. So if you haven't seen it, check it out. The next kind of big subject matter, if you will, is in this compression of fees. There seems to be a trend towards passive investing, index based funds versus actively managed funds. No surprise there's. Because here comes the sun that's warm. [25:15] Mark: I like it. [25:15] JD: No surprise there. Because that's probably the easiest way to reduce costs. [25:21] Mark: Right? [25:21] JD: Going from an equity managed fund to an index based passive fund. Is this a trend that we see? [25:30] Chad: Oh yes. [25:31] JD: So are they a benefactor? When I say they, I mean these index based funds. A benefactor of this compression of fees. [25:39] Chad: Absolutely. [25:39] JD: Okay. But in this situation what's happening is the consumer, if they're knowing, is saying no, I'm choosing to not pay for that Wall street money manager. I instead would like a computer that just ties to an index and therefore I get a lower price because I'm cutting out a service. And I think that that's. Whether you agree with that or disagree with that. And that's the oldest debate in financial services. Active versus passive. That's an okay decision to make. [26:15] Chad: Yes, it's a real legitimate cutting of cost. If that's what you're doing right. It truly will lower the cost of the program. Nobody's losing services except for perhaps the investors who no longer have access to an active money manager. Where I see it being most utilized is an advisor or an advisory firm or record keeper who is trying to look as competitive as possible. And this is one avenue for trimming down those that representation of fees. [26:45] Mark: Right? [26:45] Chad: It is. And what I love. [26:47] Mark: Sorry to interrupt, but tying right back into John Oliver's deal was they said the majority of people should be invested for sure, index funds. [26:56] JD: Anytime you see one of those media outbursts, they're gonna attack that first because it's the best way to the number. [27:02] Chad: And this is what I was getting ready to say. And I'll raise my hand and say I'm perfectly okay with that. As long as you're passionate and you have that belief. If you want to go in and show a DFA index Vanguard lineup and you can sit down and look the client in the eyes and say you have a belief and conviction to why you're doing this, in that methodology. In that methodology, exactly. I'm perfectly comfortable with that. I love that thought and I think it fits well. But you need to have belief in why you're pitching that. [27:29] JD: And I think too many these days, and this is good education for our audience, I think too many are doing it. As Mark said, just alter that number on a spreadsheet. Don't give them an index based menu. If that's not what you believe in, [27:42] Chad: that's not what you're gonna do. [27:43] JD: In the case of solar, just because you want your number to look lower now you're part of the problem instead of being part of the solution. If you believe in passive, I back you up, then by all means go [27:53] Chad: for it, tell that story. [27:54] JD: But if you believe in active, then hang on to that and fight the good fight against this kind of, of low cost fee charge that's happening. [28:01] Mark: Yeah, you could have the best of both worlds with a plan though. [28:05] JD: Of course you can. Of course you can. [28:07] Mark: So, and then it comes down to education. [28:09] JD: That's all I want. Two things that I wanted to get out of this, this race to zero conversation was one, I want the advisors to watch this episode, to grow a pair. And when you walk in, you put [28:21] Mark: that in your blog too. [28:22] Chad: By the way, should it be a hashtag, you might need to hashtag that spoke about. [28:27] JD: I want you to man up, grow a pair. And when you go sell your own services, don't feel like you have to be the cheapest option. Be more proud of what you offer, what makes you different from the other guys, and charge a premium or something that's a fair rate for what you're doing. And then secondly, do the same things for the vendors that you're trying to align yourselves with. Find the ones that find that balance between the appropriate fee for the appropriate services and we'll wrap this. But one thing that hasn't been discussed and it should be a Subject for a future show is who's paying for the costs and what's right. What's just in terms of who pays for it. Should it really be coming out of the participants pockets or should a portion or all be paid by the employer in a business expense? And that's an entirely different conversation but a super relevant one and a super important one. [29:20] Mark: I love your comment about I love you. Good work ain't cheap. Cheap work ain't good. [29:25] JD: I stole that. Oh, you didn't. [29:28] Mark: Oh great. [29:28] JD: Someone wrote me that on social media. They said, love your quote, cheap work. I'm all, thanks. I loved it too. For whoever wrote it. That's why I stole it. [29:36] Mark: You better start using like sources, disclosures. [29:40] JD: Screw that. [29:41] Chad: Oh, goodness. [29:42] Mark: Whoever wrote that I love you should [29:44] JD: have just rolled with that. All right, well that's gonna wrap our show. Before we head on out, I do want to let our audience know, be prepared. There are more coming. The way we keep pumping these babies out. [29:58] Chad: Two, we do have a good quiz of death coming soon. [30:03] JD: Coming soon for sure. But I just want to thank the engagement. I was in Southern California, came to the office this morning and showed up and there were two boxes on my desk. I opened up those boxes. People out there in the world have sent us beer out of the kindness of their own hearts, saying, love the show. I'm not supposed to be cocky about this. Love the show. Here's a beer. [30:32] Mark: I like not be cocky about it. [30:34] JD: Here's a whole bunch of beer. I thought that's super cool. [30:36] Mark: Thank you. [30:37] JD: So please, I guess my message is, and this is the real purpose of this show, continue to send us free beer. That's really why we started this show. [30:46] Chad: Yeah, that's pretty much it. [30:47] JD: That's our goal, guys. We are the retireholics. And you may not believe it. I think you believe it. I don't know, but believe it. We are changing the retirement plan industry one year at a time. Crap, sam.