Jordan Cross: Are TPAs Dead? | Retireholics Live

[0:00] JD: Fancy local brew or something. [0:01] Chad: You know it, dude. Docent Brewery. San Juan Capistrano's finest. [0:07] JD: He's repping that Dana Point area. [0:10] Chad: Dana Point. Hardcore. Dude, if you don't live here, don't come here. [0:13] JD: How can you be. How can you be hardcore when you have a Ritz Carlton? [0:18] Chad: Yeah, that's right. [0:21] Justin: Yeah. [0:22] Chad: Hey, listen, Dana Hill's mascot, man. We were the Dolphins. [0:26] JD: Dude, I think Salt Creek's got to be the most overrated mush burger in the history of the world. That place. [0:33] Chad: Well, my wife and kids are surfing doho right now. That's how this was. [0:38] JD: So now that's. That's some. That's a historic, iconic spot. But. But still a slow little longboard wave. But I. I think Doheny's cool. [0:47] Chad: Yeah, we. So only two rules in our house. You got to be funny and you gotta surface. Everything else we could figure out. And so my wife is at doho right now with our. With our 7 year old who paddles in on his own. And she's probably got the 3 year old on the nose. [1:05] JD: No way. [1:06] Chad: Yeah. [1:07] JD: I tried to make all my kids surf when they're like 2 and 3 years old and they all hate me now and they do other things. [1:12] Chad: Yeah, that's right. Yeah. [1:15] JD: Brandon, you all right? [1:20] Chad: Yeah. [1:20] JD: We're live. You want to do it? [1:25] Mark: Mark, where's the robe? There it is. [1:26] JD: I did. [1:27] Justin: It's so hot right now. And I. Yeah, I don't have. [1:31] JD: We didn't hear anything. [1:32] Chad: We didn't know account of the three o' clock vodka that gets hot real quick. [1:39] Justin: That too, dude. [1:40] Mark: It's like 100 degrees up where he's at right now. [1:43] Justin: Not today, like 90, but living in a house that doesn't. [1:47] JD: I can't hear it, but maybe it's the silent version. [1:51] Justin: You can't. [1:52] Chad: That's weird. [1:54] Justin: If you can hear me, you should [1:56] JD: be able to hear it. [2:00] Justin: Glad we got a lot of first time people on here, you know, just. Just watching us in all our goals. [2:05] JD: Yeah, that's so true. Yeah, they're like. Wait a second. [2:08] Mark: Killing us. [2:09] Justin: All these folks that are joining for the first time, we don't actually have a show that we do. We just sit here and pretend for the next hour and then make a bunch of stuff up. So [2:22] JD: we do. I didn't think about that. We'd have new people. It. No intro video. [2:26] Chad: Well, can you. [2:28] Justin: That's weird. [2:29] Chad: If you can hear me, just go [2:30] JD: ahead and play it. I'll do it. I'll do acapella to the. You can just. Can you hear. [2:35] Chad: Can you hear the headlines thing if we do that? [2:37] Mark: Is it. [2:37] Chad: Let me see if that has audio. [2:41] JD: Nope. It's gonna be a great show today. [2:43] Mark: Nope. [2:44] Justin: Yep. Wait, J.D. say an acronym. [2:50] JD: ARISA. [2:51] Mark: That works. [2:53] JD: No sound. [2:54] Justin: Nothing on that either. [2:57] JD: Bear with us, people. No sound. I mean, I can make it without sound. Brandon, you know what it is? [3:05] Chad: I think it's Zoom is. Is filtering it. [3:08] JD: Let me try it again. Yeah, blame it on Zoom. Well, that. You know, they're. They're like. There you go. [3:15] Mark: Sweet. [3:16] JD: All right, for all the newbies, why don't you start us off with a proper intro, Brandon, and we'll get going. We're only five minutes late. Foreign. Hey, everybody, it's us again. Retireholics. We're still doing this nine years later. I'm Jay Dizzle, that's Silent J over there, and everybody's favorite retireholic robe guy. Thank you for being here. And it's a new episode of Retireholics. Let's not forget that. Oh, and Chad is not here today. He might pop in later. But I say hashtag Chad. For everyone. Let me remind you, this is the first Thursday of a month, so we will go back to the standard format of Retireholics. That means acro SIN is in play. If you say any acronym or initialism, you must drink from your penalty drink. I got some whistle pig over here. I don't know what Jordan grabbed. We'll find out shortly. The good man. Good man. Tito's out of the big handle. And what else was I gonna say? [4:50] Justin: I forgot we got more of those, Justin. [4:53] Mark: I got so many of them, man. [4:55] JD: Let's. There is no better introducer of 401k people in the entire industry than Silent J, Justin McNeil. Many say it's simply an honor to have their name spoken from his sexy, soft lips. Justin Intro our guest. Take it away. [5:18] Justin: Workplace harassment. [5:22] Mark: Although you may know this man from a different TPA firm, don't fool yourself. He's cut from the very same cloth. And even a little bit more than that. Don't believe me? Hear me out. Just like J.D. carlson. His initials are J.C. i don't know his middle name, but since I make up all the time today. Dimitri. And just like J.D. carlson, he, too was born in California, both went to college in San Diego. Both are surfers. Jury's still out on who's better. Both tried their hand at. Have you guys ever surf? Don't interrupt my. My intros, dude. Both tried their hand in one other career in the sports industry, might I add, before joining daddy's firm with open arms. Hashtag white privilege. Both have since kicked their pappies to the curb and represent their firms holding the title of president. And when our very own Chad Johansson had to bail on tonight's show. Who? JD Replace him with a fellow red bearded nerd. If I didn't know any better, I would have guessed their parents were really close back in the day. Maybe a little too close. Maybe they lived in a swingers community together, but who cares? No judgment. Let your freak flag fly. The president of Cross plans. Ladies and gentlemen, Mr. Jordan Cross. [6:34] Chad: You. [6:35] JD: Are you suggesting that redheads come from inbreeding of some kind? Is that what you're saying? No, not at all. [6:41] Mark: Chad Redbeard. [6:43] JD: I do think that Jordan, you are. You are the perfect guest for a missing Chad Johansson. [6:50] Justin: We'll. [6:50] JD: We'll see if that plays out. [6:53] Chad: And the only one of you guys that I've met in person. [6:56] JD: Very cool. [6:57] Chad: Oh, that's right. [7:00] JD: Most good shows are we kicking off at the Wheel of Ice. So let's go ahead. [7:05] Chad: Is. [7:06] Justin: Is the reason why you've met Chad because you guys run some fancy retreat for like the owners of third party administration firms that get to go to the Bahamas? [7:16] Mark: We don't get invited to those. Mark. [7:17] Justin: Is that why. [7:19] Chad: Mark, you nailed it. Yeah. [7:20] Justin: Okay. [7:20] Chad: Yeah. [7:20] JD: See this. This is. Okay. [7:23] Chad: Many of Fairmont and Ritz Carlton's are where I've spent time. [7:27] JD: Yeah, can you say conflict of interest? No, I swear, this is the best record keeper for you. Oh, and by the way, it'll get me over on into the top list so I can go to the Bahamas next year on the award trip. Holy hell, George. [7:45] Mark: You just get that update from them yesterday too, by the way. [7:48] Chad: So you on track? So? So I am all youth sports all the time. I no longer travel in June, so I am home. [7:57] JD: Are you going to Bahamas or is Chad Justin, Is that a question? Oh, me? A real question. It's not like you were in the. Let's move on. Okay, Mark, I'm a partner. Let's spin the wheel of ice. Let's spin the wheel of ice. Mark can drink for Chad. [8:16] Chad: Dude, the way this was starting out, I was worried this was crystal meth. I feel better already. [8:22] Justin: Hey, Jordy would probably be better than [8:24] Mark: this, to be honest. [8:26] JD: For all those newbies that are tuning in, Mark must pound a smearing off ice. We've been doing this bit for nine years. I don't know why. Let's get to it. Let's talk some 401k. It's time for headlines. I believe this one is from the national association of Plan Advisors. Hyphen something. I forget what the other thing stands for. I'm not going to say it. Websites. And it is titled Manage Account Default Draws Excessive Fee Suit. And it's written by the best guy you want writing about lawsuits. [9:15] Justin: I thought he was retired. I'm very confused about retirement. Does he not understand what that means? [9:21] JD: Who does his best work in retirement? But honestly, when it comes to lawsuit shit, he like digs into the nitty gritty man and really gives you some good insights on it. [9:30] Chad: I think if, if you show up at a house and Chris Hansen's there, you're in trouble. If you show up and Nevin's writing about you, you got a problem on your hands. [9:39] JD: I did. I had to search for the Chris Hansen reference. And then I remembered it. [9:44] Chad: Don't take the brownie. J.D. yeah. [9:47] JD: The first sentence of this, of this piece. I will read it to you. A new suit alleges a fiduciary breach by plan fiduciaries who defaulted participants into a Manage account option. That was. You ready for it? That was nothing more than an expensive target date fund. That was a Zinger. It's a $5 billion plan. It's called Betel. I think this is a construction kind of engineering company. The bulk of the argument centers around that the Manage account service requires participant interaction and that they know damn well that participants are not going to interact and therefore a lot of them are just put into something based on their date of birth. We got no additional data from them to really customize this managed account. However, they're claiming that the fees for the Manage account are five times in terms of participant fees, five times what it would have been had they just defaulted them into a target date fund. [10:55] Justin: Well, their returns were 10 times. Right? [10:58] JD: I don't, I don't have no idea the returns. And so then the result there is a loss of tens of millions of dollars, I think somewhere north of 20, south of $30 million is what the lawsuit says. So let me, let me kick it to you guys or I'll go to our guest first. Jordan, Is a managed account service, an appropriate qualified default investment alternative, in your opinion? I know, I know it's part of the list that they tell us is a qualified default investment alternative. So. But is it in your opinion, also known as. Does this lawsuit make sense to you? Does it have a point? [11:35] Chad: You know, I think that the point around personalized Demographic data as a default for participants failing to take action. I struggle with that. Just like I struggle with like contractual re enrollments or proprietary fee requirements. JD, I, to me, this feels like we're chasing an ambulance. But, but I struggled to, you know, I, I, I struggle to see the, the, the, the impact this would have. But yeah, I, I am not a fan of managed accounts as a default. Personally. [12:11] JD: Personally, I feel like when I read through this lawsuit or Nevin's piece on held water for me, I was like, okay, I get this person's argument. Like if I met this woman a cup of coffee and she explained this to me, I would have a hard time kind of defending my industry. I'd be like, yeah, no, no, you're making logical points, Robey. You're a man of the people. You're a, you're a man of the rank and file. [12:38] Justin: Don't say that. [12:40] JD: God, do you feel like this, this whole point of like, well, if you're going to put me in a managed account, but it, for me to get the value out of it means I got to answer 15 questions and you're going to make it a qualified default investment alternative for thousands of people knowing that very few of them are going to go through that process. Is that a fiduciary breach? Like, is that not the right choice to make? Should they have just done the target date like this lawsuit says? Well, [13:13] Justin: I, I see I go a lot of different directions in this and obviously I read the article, some of it, you know, Nevin, get to the end of it. You're kind of like, all right, I get it. But when I kept hearing the word like personalization and I, and I get that right? Where in my mind again, when we're, when we're talking about it being a default, if there is going to be a much larger process involved, right. Maybe it's a one on one additional data collected, going through a lot more and actually having what feels more like, hey, I, I just built like a personal portfolio, but this is going to be strategic to me and my needs. Then I'm like, okay, sounds like there's some prudence and process behind that. But what, again, what we're, the way you were saying it all and what you're saying in terms of it almost just acting directly as a target date fund. Do I think it's a breach? Like, I'm not a legal expert, I think it's a bad decision. I think it's probably not one that I would feel comfortable making if I was in their seat and trying to defend that to my employees. [14:20] JD: Well, so think about, think about it [14:22] Mark: from the long term too. Oh, go ahead. [14:24] Chad: No, Justin, take it from the long term. [14:27] Mark: Like we're thinking about auto enrollment and long term part time employees. Like people are just gonna be automatically putting these plans and if they're not engaging in the managed account, like they're paying a lot more for their fees. It is, I could see it absolutely being a breach. [14:40] Chad: Yeah, that's exactly where I was gonna go, Justin. Which is in which trust. [14:44] Mark: Thanks for letting me talk. [14:46] Chad: You're in a trustee. [14:47] Justin: Shut up, Justin. [14:49] Chad: How is this brought up? How is this presented to the trustees? Right? Like what is the upside that is presented for exactly that long term part time scenario you were talking about? [15:00] JD: It's hard not to think that the evil corporation saw a way to make higher fees. It's also hard not to think that we live in an industry that's been so fee compressed that they're, everyone's looking for ways to generate more revenue to get back to where they were 20 years ago. And a managed account services is a way to do that that they can kind of put their head on their pillow at night and feel okay about. Like no, we're providing more value, more service, better investments, more customized. And, and, but then when it falls, when it falls to the ground like this where people, people are not using it properly and they're not getting it customized, I think that's an issue. Jordan, let me ask you, we can move away from this particular case a little bit, but you said early on that you're kind of a tech guy, you're into this tech stuff. Is not the answer for the future of managed account services. To not fall into this pitfall is for them to be able to get data on the participants that does that does not force the participants to give them that data. They can just go out and get it through tech. [16:07] Chad: Yeah. I mean, so when we look at, you know, end user functionality and maybe where our industry is going, whether that's on the advisory side or on the key performance indicator side. Now you guys got me double clutching, learning the game. I think the data is going to drive all of this stuff. J.D. i think that, you know, the future of plans will be large organizations selling you pet insurance because they got your information through their, you know, the, the aggregator advisory firm that is working with you, that has your data. You know, I, I think that there's good and bad to all of these outcomes. I think that participants will benefit from higher levels of thresholds that are applied to data, data that to yield some of these things. But I also think if you're asleep at the wheel, these are the outcomes that could happen. And so I, I, I think there's positive and negatives. It strikes me as we're talking about it, it's like that advisor who, who then says, well, we're going to put the profit sharing money in a pooled account. I'm going to do better than the market, I know, better than the participants. This is better for participant outcomes if we, if I manage the money in a pool, right. And so, you know, I think the key is the art, how it's articulated as why it's better for participants and why it's a prudent choice for the plan. [17:37] JD: I just feel like these problems go away if in two years, three years, or even tomorrow if someone's got the tech. But where it's like, if they know that participants compensation, they know how much they're deferring in the plan, they know their age, they know if they're married, they know how many kids they have, they know what car they drive and how expensive that car is or what house they live in and what zip code they live in. And, and maybe they know other things, you know, you know, through the secret society of the Internet. And then they can place them in a much more customized managed account service down the line, even though that participant's lazy. [18:16] Justin: Sorry, real quick. You know what's funny about this though is I'm putting myself in the seat of, you know, going back to that fiduciary breach and thinking to myself, like, okay, you go out, you, you research some lawsuits and you see, oh, even employers selecting the wrong target date fund have gotten sued for excessive fees maybe, right? So then you're like, okay, well that's a scary not safe place. And you're like, I'm gonna do the ultra safe conservative spot and put everybody into this managed like something that seems like it's so much more constructive and helpful and strategic and you still get shit. So I mean, like, it's just crazy. [18:53] JD: You literally are thinking about the last thing I wanted to bring up. You just did it in a different way. I wanted to say, isn't it funny that we're talking about a qualified default investment alternative? The way I used to pitch that to clients was this is something that's protecting you default your participants into this, you're protected. The government says it's cool. But what rogue guy just pointed out is that's not really true because you still get sued for it if it's imprudent and a fiduciary breach. [19:23] Chad: Yeah. [19:23] JD: Where is the value of the qdia? I'll drink when you're getting sued anyways. [19:30] Justin: Yeah, well, obviously this is specific to how that was dealt with, but anyways, yeah, it's, it's just, it's hilarious to me in some regard that do the right thing and that happens. [19:42] Chad: I, I think as we start to explore technology and not to get, you know, tingling hat level on this, there's going to be swings and misses and there's going to be good and bad. Right. And, and as we try to. [19:54] Justin: You really love those sport puns, man. [19:56] JD: You're just digging just like Chad. [19:59] Mark: Perfect replacement for Chad. [20:00] Justin: I know, right? [20:02] Mark: Yeah. [20:03] Chad: You know, but when you think about it and, and you start to imagine what, what, what we're trying to address coverage gaps in theory, what's best for participants and participant outcomes. I think we'll see more of this and then hopefully we are going to see the evolution of these things to what JD said, which is really driving good outcomes for participants based on data. I think just like self driving cars or anything else. We're going to see good, bad and ugly as we, as we, as we suss it out for sure. [20:38] JD: It'll, it'll be able to go look at your Spotify what you like on Spotify and determine your risk tolerance based on that. They'll be like, Mark listens to rap music. Like let's, let's notch him up. He's an aggressive. [20:51] Mark: Got quite interesting going on right now, fellas. [20:53] JD: What's that? [20:54] Mark: You feeling that, Jordan? [20:56] Chad: No. [20:56] JD: Earthquake. You guys have? Yeah. Oh, wow. They'll like that in the Midwest when they hear you say that. [21:04] Chad: Yeah. Don't move to California. It's the worst. [21:08] JD: If Justin goes down, we all know why the national association of Plan Advisors decided that there's. We don't have enough credentials. They decide they create another one. It's already. [21:23] Justin: Got it. [21:24] JD: You got it? [21:25] Justin: Oh, yeah. I just put everything after my last name. I don't, I don't actually take a test. [21:30] JD: You know, if you do take it, then they just want to bill me another thousand bucks for you. And so the, the, this credential is called the 401k specialist credential, I believe. And in all, all jokes aside, I think it's more pointed at sales people and I did go and research it a little bit instead of just giving them. And it does look kind of cool. Like it's going to focus More on like, conversions and transitions and mapping of assets and all these things that imagine you're a rookie getting in this business and you're going to go out and sell some things are probably more important to you than actual deferral. Percentage tests and how to determine an affiliate service group. I don't think that stuff's as valuable in the hands of some of these sales consultants as knowing some of this other stuff. I say that's cool. Good for the national association of Plan Advisors to create another credential. You know, Nerdy Chad wrote me right away and wanted to get you guys signed up for it, and I told him to suck my dick. [22:37] Justin: Wait, wait, wait. He did? [22:39] JD: Yeah. You. [22:41] Mark: I mean, look at all the modules and stuff though, right? It's almost. Not almost the same. A lot. Very much in line with qk. God damn it, qka. [22:49] Justin: That's two, dude. [22:51] JD: So anyways, check it out. Good for them. I. As much crap as I might give them, the American Retirement association as a whole and all of its subsidiaries, to me are. God bless them. I'm glad that we have these people kind of doing the hard job. And so, yeah, I just say that to cover my ass. [23:13] Chad: There's a corresponding one for people on our side of the industry, the qualified 401k specialist, which is design, which is relatively new from American Society of Pension Professionals and Association Associates. You guys are killing me with this thing and actuaries. [23:32] Mark: I think you're doing pretty good. [23:34] Chad: That that qualified 401k specialist deal is targeted towards salespeople on our side of the ledger. So I would sign your boys up for that one first. [23:45] JD: Yeah, yeah, maybe. Oh, they've done that. [23:48] Justin: Thanks, Jordan. [23:49] Chad: This one, this was only like a month and a half full. [23:52] JD: If we really talk about that stuff, I could get a little pessimistic and be like, I don't need some initials on the end of my name, nor does my team. Like, they. They know this more than the people that are putting this stupid little test together in the real world on the front lines. And I think a lot of times when I put people through those modules and through that training, I do feel like sometimes it's a bit of a waste of time. Like maybe 10% of it's valuable. So I'm not the biggest fan of all those credentials. And by the way, you can still get your fiduciary accredited retirement technician designation@retirex.com fart, I believe. And you can get your certificate like Marcus, and in a matter of minutes, it'll be emailed to you and you can print it and you can put it under glass and put it on your wall in your office. And I suggest that. That you do. So let's talk about Schwab personal choice retirement accounts. Jordan, do you. Do you guys use these at Cross Plans? You don't? [24:54] Chad: We do not. [24:55] JD: Lucky, lucky you. Okay. Future Plan came out a couple months ago and Chad got really excited about it. I'm sure he talked to Mark and Justin, the sales team, about it. Future Plan said, hey, we are no longer doing Charles Schwab personal choice retirement accounts. Which for everyone out there listening in that doesn't know, basically think of it as like a brokerage account. So we can just go in. But the tpa. Oh, yeah, I'll drink for that. I think a lot of third party administrators across the country were using it because Future Plan went and bought a lot of these third party administrators and kind of consolidated them all together and realized that they had a bunch of this. And I thought that they just saw it as troublesome and time consuming and. And not very profitable and they wanted to get out of it. I now think based on an email that I just got from Schwab my staff got a few days ago, maybe Future Plan had insider information that I didn't know about the email that I got because I do have, I don't know, maybe 20 personal choice retirement accounts for my. For my clients. And I got an email from a dude named Brian, a Charles Schwab from my staff did. And it says Schwab will be changing their account format to nine digits effective September 2025 at this time. Gateway, which is the system we use to send in the contributions on behalf of the plan sponsor. It's literally how you send the data to allocate the will no longer work as a funding method and the only alternatives to it are massive custodians that I'm not. I'm not a record keeper. I'm not in that game. So I'm now faced with this conundrum of trying to go to all my clients and get them out of the thing before it expires and they can't put their money into it. Pretty technical. Just wanted to bring it up. We don't have to talk a lot about it. Maybe since I got Jordan here. Let me ask you, at Cross Plans and you personally, you don't have Schwab PCRs, I'll drink. But do you do trust accounting or brokerage accounts for some of your clients? [27:08] Chad: We do. We do. Obviously with our balance forward Plans are a lot of our owner only defined contribution, defined benefit combo plans and some of our. Some of our older school plans. We do but we actually. So we stopped doing solo 401ks about three or four years ago. Unless there's a DB. [27:29] JD: Ah, there you go. [27:31] Mark: Finally. [27:34] Chad: Unless. Unless there's a defined benefit attached. We just got out of that space completely and we will turn down a plan with too many self directed brokerage accounts on the DC side. It just. It'll be interesting because. And I know there's going to be more. Oh, did I get. [27:53] JD: You can always finish your thought. But you owe him for defined contribution by the way. Tristan, are you in the audience out there? Let me know which one you are. Say yes, dad, this is me. Go on, Jordan. [28:05] Chad: So I think that there are going to be some disruptors out there. I don't know if we name names but there's some. There are some companies out there that are doing some really interesting stuff with statement and brokerage account trust accounting. We have actually been talking about stacks. [28:26] JD: Artificial intelligence. [28:27] Chad: That's the one. Yep. Super, super interesting stuff. We have been in our practice. I, I'm looking up the acronym because I don't want to do it. [28:41] JD: We. [28:41] Mark: We'll drink for you if you say it. [28:43] Chad: We will train. We've been training some of our automations just started in the last 48 hours with opt optical character recognition to, to try to on a smaller scale build a little bit of what stacks AI is doing. And we have been using some. [29:03] JD: Not that complicated. [29:06] Chad: The, the latency and the quality of the scans and how that is working is. And, and how you can do generative AI to teach it to do better. Learn those things. Those things take more. Oh, is that. [29:24] JD: Are those both me Mark, Artificial intelligence? Yeah. [29:27] Chad: Oh my Lord. [29:29] JD: I, I think if I heard you right, I agree with what you're saying. I feel like what they're doing at Stacks is kind of first level stuff for sure. Like you can go way deeper on that and, and create much better efficiencies and you just nailed it by kind of bringing in artificial intelligence. So I'm with you. I think that'll change. I don't know if that means like the future is great for brokerage accounts, but it'll definitely be better in the future than it is now. So, so maybe those are good options, you know. [30:03] Chad: And, and so then one of the things that. That always perplexes me is we spend six figures in developing that technology and invest in that heavily. Does that mean we pass a Cost reduction along to a client or does that become a surcharge opportunity for building that technology? [30:24] JD: I think you buy. I think you buy a couple lambas. [30:28] Chad: That's right. Yeah. So. So trust. I think that trust accounting and statements. I don't know that it will generate a resurgence in self directed brokerage accounts, but I think it may take some of the sting off of them and certainly some legacy. Legacy shops that have hundreds of those accounts. You know, this will be an opportunity for them to modernize without, you know, making poor Betty or Danny sit at the scanner for 40 hours a week dropping these things in. [30:59] JD: Right? No, for sure. We need to get out of the old school trust accounting. Current way it is, that's useless. And I'm with you. I think this new technology that's by the way improving so rapidly, like, I mean especially on the artificial intelligence side, that stuff's 10xing itself like every month in terms of how powerful it's getting. There's going to be some new types of solutions. Tristan, my son, are you in the audience, please? [31:28] Justin: He hasn't said a word. [31:29] JD: Yeah, he hasn't said a word, right? [31:32] Justin: If he's there, I don't know. [31:33] Mark: He probably logged in and left. [31:35] JD: He probably is drunk is what's happening. [31:38] Justin: What do you need? [31:39] JD: He was going to. She's going to show us all how to chug a beer, but not there. We'll move on. [31:44] Mark: Why would he. Chad beats him all the time. [31:46] JD: Huh? [31:47] Mark: Chad beats them all the time. [31:48] JD: Why would. They're pretty tight. They're pretty close. Let's. I'm gonna leave it up to Jordan here. Jordan, do you want to play a game or do you want to jump right into Fred's article? Okay, we'll play again. Let's play a game. I'm going to. Because I think Fred's article. Let's go. [32:11] Chad: Game. [32:12] Justin: First, the fact. The fact that you really in thought about that. Just tell me how, how, how much stuff now what's up? [32:22] Mark: The fact that Brandon's coming in worries me. [32:24] JD: You weren't. [32:24] Chad: You weren't. [32:25] JD: I have a. I have a potential [32:27] Chad: name for your game, jd. [32:29] JD: Oh, great. Wait. [32:31] Justin: We have an unnamed game that we're just gonna throw out there today. [32:34] Mark: Yeah, it's called the unnamed game. Okay. [32:37] Justin: Bar stool. [32:42] JD: I like that. I like that. The name of the game is who are you and Jordan? You like you. [32:51] Justin: The Mass singer uses that, right? Like we're just ripping them. [32:55] Chad: Yeah. [32:56] Justin: You. [32:57] JD: You are the contestant. I. We are going to show you an image. And this image is Going to be of two people mixed together, two celebrities. And you're gonna one tell us who are the two celebrities. And then you're going to tell us what you think the name should be of this new entity. We'll give you an example. Brandon, throw one up for me if you can. Okay. This is clearly vanilla ice and iced tea. And therefore I would say a good name for this. This thing would be vanilla iced tea. You know, I don't know. You could come up with whatever you want really bad. From here on out, Jordan, it's all about you. So here we go. Take a breath. [33:41] Chad: Let's do it. [33:42] JD: Get ready. Go ahead, Brandon, show them a picture. [33:48] Chad: Okay. [33:49] Justin: Oh, this one. [33:50] Chad: So we got easy. So. So we got Joe Rogan and Hulk Hogan. [33:57] JD: So. [33:57] Chad: So we go in Hulk Rogan. [33:59] JD: I like that. I like that. I like Hulk Rogan. Ding, ding, ding. Well done. You are one for one. Let's see if you can keep it up. All right, Brandon, next image. [34:13] Chad: Okay, so I. So I know the Post Malone of it. Yes, I am. [34:22] JD: You gotta look in the eyes. Can you see who's in there? [34:24] Justin: Like it's the eye of the tiger, I must say. [34:27] Chad: Oh, there. There it is. Thank you. Got it now. Yeah. So, man, I feel like I'm taking the easy out with post alone, you know, I think that's it. Thank you for the assist, Mark. That was. I was. I was frantic. I think I just broke my. [34:44] Mark: Don't forget about the chat bar. [34:46] JD: Two correct answers are. The chat bar is doing good with this, [34:50] Chad: by the way. How do you guys manage that? It is stressing me out every time one of those things pop up. Like I am. I am full on looking down, looking up. How do we manage that? [35:02] Justin: This is the thousandth time we've done it. So. [35:05] JD: Yeah, I just ignore it. [35:10] Chad: Yeah. Okay. [35:14] JD: All right. Right, so I like how you think out loud. Go ahead, think out loud. Like. [35:22] Chad: Yeah, yeah, yeah. [35:23] JD: So. [35:24] Chad: So let's go. I'm gonna. So we're gonna go. I'm gonna make a joke here. My bet is on. Let's call my pillow Phil. [35:38] JD: Oh, that is to you. [35:41] Justin: Wrong guy. [35:41] Chad: Wrong guy. [35:42] JD: You think it's to my pillow guy? Wait, that is. That is. Wait, Foster fill. [35:49] Justin: Yeah. [35:50] JD: Phil Mickelson. Oh, there it is. I would. I would argue. [35:54] Chad: Yeah. [35:54] Mark: What is Dr. Phil's first name? [35:56] JD: I think Samson was right. It's Doctor. Did you just say Justin? [36:02] Justin: Yeah. [36:02] Mark: What's Doctor? It's like. [36:04] JD: That is. [36:04] Mark: I thought I forgot his last name. I didn't know what's his last name then? Sorry. [36:07] Chad: Yeah. What's his last name? [36:08] JD: No, it's Dr. Phil Nicholson. A little dated. I know. I don't. I think Phil lost all those sponsors when he went Bill McGraw. [36:17] Chad: Okay, so I'm going to go deep in the way back Internet machine. You guys remember probably circa 2004 when that thing bomb fights was all the rage? And do you remember it when Dr. Phil had the guy who was pushing bum fights on his show? No stuff just like Dr. Phil. And was throwing grenades like him. That's all time early. [36:45] Justin: Okay, but now to take it a step further. Have you seen the comedian now that does Dr. Phil Phil and host the show? [36:51] Chad: Yes, I have. [36:53] Justin: Yeah. [36:54] Chad: Nikki Glazer on yeah, yeah, yeah, yeah, yeah. [36:57] Mark: J.D. have you ever watched Dr. Phil? I've never seen an episode. [37:00] JD: I've definitely seen my favorite one, which Bershad just mentioned. Catch me outside. How about that? Catch me outside. I forgot about that. Catch me outside. How about that? [37:10] Justin: Yeah. So perfect how she took that and became a multi millionaire. [37:17] Mark: Living the dream. Yeah, that's easy when you're on only Fans. [37:21] Chad: Meanwhile, we're getting yelled at for charging for trust, accounting, FE fees, and that lady's out just stacking dough, huh? [37:27] JD: I mean, she has a. [37:28] Justin: She has fans too. And I don't have any money coming [37:31] JD: in, so she has a she. There it is. Well done. [37:35] Chad: Yeah, there it is. [37:36] JD: Okay, let's. Let's see if you can get one more because you're two for three. [37:44] Chad: Okay. [37:45] Mark: Oh, yes. [37:46] Chad: So we got Larry Bird and Garrett Busey. [37:49] JD: Yes. [37:50] Chad: And we're gonna go. [37:53] JD: Let's keep it simple. [37:54] Chad: Let's let, let, let's go. Let's go. Busey Bird. Let's, let's, let's do it. Let's do alliteration. [38:03] JD: I think it would be more intelligent if you went Gary Bird. Gary Bird, Gary. [38:07] Chad: I was going with the literal. [38:09] JD: We'll give it to you. We'll give it to you. [38:12] Justin: I like your style because you're like. That's what they want me to say. [38:16] Chad: You know what? [38:16] Justin: No, no, I'm not doing it anymore. Right, Mark? [38:19] Chad: I went from not knowing you guys to trying to angle to be on your show every week here. [38:23] Justin: Like, listen, in my opinion, you are on the show every week. So it's fine. [38:27] JD: Well done. Well done. Congratulations. Yeah. [38:30] Chad: Hey, whoever this Kush fellow is, if you need a way to burn some time, go to Gary Busey's Instagram. It is the saddest thing you will see on the. Oh, no, he does like cameo stuff. And for 58 cents you can get Gary Busey reading you the phone book. [38:50] JD: I prefer, I prefer to remember him from the original point break. And we'll just leave it at that. [38:56] Mark: Utah. Give me two. [38:58] JD: Give me two. [38:59] Chad: Nice. [39:00] Mark: Oh, what happened to me? [39:01] JD: Earthquake. Earthquake. Justin earthquake. I'm out. All right, let's move on. Guy from the Lord of the Rings. I honestly think the next topic is kind of the big, the big thing for today's show where we could kind of go the deepest on Fred Barnstein, past guest on the show. He was. [39:22] Justin: Is he still here? [39:23] Chad: Is he still here? [39:24] JD: Is he still here? [39:25] Mark: Yeah, he still was in here. [39:26] Chad: Phenomenal contributor to the industry. [39:29] JD: And I think Fred, I think he wouldn't be mad at me if I was to say he, he definitely likes his shock value. Like he looks for his shock value when he can. I kind of love him for that. The article is@wealthmanagement.com the title is. Is the report of the death of third party administrators greatly Exaggerated. First of all, who, who's running around talking about the death of third party administrators? I think this is where Fred like reaches into his little bag of clickbait and like tries to come up with something. I have not heard of this, this rumor circling about and I'm about to. We'll have a discussion about it. What does he point to? Why that, why the future looms so dark for the third party administrator is he points to pooled employer plans and the raging success and growth that those are having. He then points to disruptors, the human interest, the guidelines. I think that's fair. They've had quite a bit of success and brought on quite a lot of plans in a short period of time. And then he also references the fact that the payroll companies have led the rankings of new sales each year. But that's been true for a decade plus. So I feel like third party administrators have been living in this world of competition, whether it be bundled or payroll companies for the last three decades. And it seemed to have fared very well. And I'll let you guys all discuss this. But in defense of Fred, I think if you actually read the article start to finish, it's actually more pro third party administrator than it is negative. He points out a lot of things that are probably tailwinds for third party administrators. And I would agree with him. I think. [41:28] Justin: J.D. time out. So I've interrupt you. Yeah, there's a little bit of an argument between me and the chat bar about if you said third party administrator acronym, I'M just gonna say that they said you did. [41:41] JD: So I'll drink. Oh, can I do one little kind of jab at the pooled employer plan? The national association of Plan Advisors is prepping for. Thank you. Brandon is prepping for their big conference, and Nevin put out a survey to financial advisors all across the country on what topics they would like to see at the conference. I. And he shared the results of these topics in ranking. And so there was literally, like 50 of them that were potential topics. You literally have to scroll down to, I believe, like, the 27th topic to get anyone to say that they want to hear something about a pooled employer plan. And this is all the advisors going to the national association of Plan Advisors. So clearly the interest from that group is very low. They would like to learn about other things quite a bit more. We're going to get the beer now. We're chugging a beer now. [42:44] Justin: Who's that guy? [42:45] JD: All right, everyone, if you want to learn how to chug a beer. These idiots. Brandon just lets them in right in the middle. We got our flow going. [42:58] Chad: Well, they're using your. Your zoom. [43:02] JD: Told them not to do that. [43:04] Mark: Yeah. [43:05] JD: Are they coming in? I don't know. You know what? Just mute them. And when they chug a beer, throw them up there. Them. We'll just keep talking about what we're talking about now. [43:15] Mark: They're in the room. [43:17] JD: Put them in there. Okay, Go over here. Not yet. Not yet. [43:21] Chad: They're in the middle. [43:22] JD: There you are. Okay, we have a treat for everyone here today. You are going to learn a new skill in life. You're going to learn how to chug a beer very, very quickly. I have my son, Tristan Carlson, home from the University of Miami Hurricanes with his buddy Noah, also a hurricane. And I'm guessing that they've spent a lot of time training for this very moment in front of this large audience. Yes, there they are, training. Tristan, would you like to explain? [44:00] Mark: Just. [44:00] JD: Just give us two or three tips on how you're about to hold up before. [44:04] Justin: Before Tristan does anything. I'd like to be very clear to our thousands in the audience right now that who you're looking at is our future, future chief executive officer of Plan Design Consultants. [44:20] JD: Just please remember that our stock just plummeted. [44:24] Justin: Yep. [44:26] JD: Any tips? Two or three tips. A couple tips. I mean, I always take a deep [44:30] Chad: breath out right before I start drinking. I think it helps open up the throat. And then. [44:35] JD: Yeah, once you go in, the first sip is most important. You want to get a big gulp Just to really, you know, start letting things go down. Like most things in life, you want to get off to a good start. Yeah. [44:46] Justin: Yeah. [44:47] Chad: Okay. [44:47] JD: All right, well, any, do you ever do any, do you do it out of the can in a glass? Is there a reason behind that? I mean, you can do it out of a can. It's a little quicker out of a class, but. Okay. Any predictions, any predictions on what time this is going to take you? I don't know, anywhere under two and a half seconds is good, I think. Okay. Drum roll please. Drum roll. All right, cheers. When you guys are ready, [45:20] Justin: dice it all the way down in front of you. [45:21] JD: Hey, Noah, Crush stick. [45:24] Justin: Tristan drank 70 of that beer. [45:27] JD: What did tip tip number four pour half of it on your shirt, Jordan. [45:32] Mark: That's pretty impressive though. [45:34] JD: Jordan was answering his emails while that bit went down. [45:37] Chad: I was looking for something to send Brandon, but I lost it. Yeah, see you later. [45:41] Justin: Jordan was sending an email to all clients saying, I don't associate with these people. [45:47] JD: Back to the back to the real stuff. I was saying. I think Fred's article also can be very pro third party administrator and it talks about the tailwinds of secure 2.0. I don't think he talked about this, but I also feel like state run plans, the tax credits of Secure 2.0 I believe are, are laid out perfectly for third party administrators across the country. No offense to Fred, I, but I think sometimes these higher ups in the industry that kind of look at things from a 30,000 foot view and I'm pointing this right to you, Jordan, and get your thoughts on this. I don't think they understand that small third party administrators have been on the front lines of establishing new plans, you know, small plans, for decades and have been succeeding at it and setting them up and doing in a cost efficient way. So I think it's funny when they talk about like this world that's going to expand with all these new plans and somehow third party administrators are at a disadvantage when we've been crushing this shit forever. Like this is nothing new for us. [46:58] Chad: Yeah, for me, I agree. I didn't think the article was as bad as the headline led it to believe, but I think that for all of us, I don't know how you guys feel and maybe it's the Glenn Levitt kicking in here, but I think we're coming to the precipice of some existential challenges for our industry for third party administrators and local actuarial consulting firms. I think there are some real hard decisions and some real challenges that many of us are going to have to make because of rising costs, technology commitments. There's some real existential threats to our industry, but I don't think the ones that were outlined in that article keep me up at night at all. And, and as I was reading that article, I was waiting for the gut punch to go, there it is, there it is. And it just didn't come. And you know, for me, I think that I found a quote because I am a super nerd for Mark Twain that I wanted to throw back in there, which are, there are two times in a man's life when he should not speculate. When he can't afford it and when he can afford it. And obviously the humor of Mark Twain. But I think that we in the actuarial consulting community, we can't afford to speculate. We have to be able to solve client problems. We have to be able to respond to center of influence, center of influence needs. And we have to do so in a way that still allows us to make money and not race to the bottom in fees. And so, you know, I thought one of the highlights for me, literally I laughed out loud, was we quoted paychecks as statistics that 70% of their pool deployment plans don't have a TPA. And I wondered if Fred paid the $1500 for those records or if that was just off paychecks is, you know, the good nature of them sharing that data. I think that Casey Price is quoted in the article. Casey is brilliant and a mentor and a friend and runs the nation's largest aggregator of third party administration firms. J.D. to your point, those of us who are living in the trenches know that the battles that we are battling are different from do we need to learn how to use chat GPT are pooled employer plans chasing us out of business. Those aren't things that keep me up at night as an owner of an actuarial consulting firm that has 850 plans. So I think that, I think the premise is flawed and I think that you know, all of us who are out there doing it, creating wealth accumulation, tax deduction strategies, solving problems, fixing those broken plans from those payroll providers. We know the things that are real and I don't know that that article really touched on them. And if Fred wants to give me a holler, I'd be happy to go through those things, which I think are worrisome for our entire industry. [50:22] JD: I'm actually going to go to, at the end of his article, he actually bullet points several questions and I think that those are pretty well written and they kind of get my brain going. And so I think we could maybe focus on, on those a little bit. However, I will say that if you look at third party administrators across the country, clearly they're all very different. Right? Like, it's funny how we, we put things in one, one little, you know, basket all the time. Like, oh, this is the value of a third party administrator. It's A, B, C and D. And the reality is, is that there are shitty third party administrators. There are, there are medium sized regional third party administrators, there are large national, as you called them, kind of super third party administrators. And there are some that, that do really well and evolve with technology and are constantly kind of improving their efficiencies in their business model. And then yes, there are others that are very old school and they're still doing things the way they did them 30 years ago. A lot of my father's peers fit that description, where I learn more about their business and they're still doing things the same way they did it a long time ago. Is there a threat to those types of companies that aren't going to evolve? Sure, absolutely. But that'd be true of any industry. And by the way, any vocation is going to have to kind of step up as it relates to technology. I would further though say that to me, it seems like a lot of the conversations I'm having with people are the opposite of the demise of third party administrators. And almost like, oh my God, if we're going to like solve the coverage gap and we're going to get all these new small startup plans that, by the way, all the big advisor shops don't want record keepers, don't find them all that attractive because they're small, they have zero assets. But guess what, we've been selling those things forever. The two guys flanking us on this podcast sell all kinds of startups all the time and they have been for years. So I would think the years moving forward are like fishing in a barrel for many third party administrators to grow their firm twice the size, three times the size based on what sits in front of us. These are good times for third party. Our death is not looming. [52:42] Chad: But you have to have the infrastructure, you have to have the strategy, you have to be prepared. Because winning on the fringes, gaining and growing plans. As we all know, it's really easy for a third party administration firm to grow this way and not that way. To scale. You have to grow this way, not that way. And I think that if you look at those Cerule studies that they're talking about. By 2028, there will be 900,000 qualified retirement plans in the universe. We're talking about a growth of 300,000 qualified retirement plans in the next four to five years. The only proof that I need to know that my firm is viable is Fidelity wants to work with me. Fidelity has rolled out TPA Edge. [53:25] JD: This was in the article. [53:27] Chad: And Empower has launched their Ready select product and has launched a co branded product with Invest. [53:36] JD: Can I back you up? Automatic Data Processing is now partnering with third party administrators in a pretty aggressive way. You mentioned Fidelity. That's a great sign that a lot of these large record keepers are realizing the value of a third party administrator as a strategic partner. That's right now in 2024. So this is new news. [53:58] Chad: My good friend Allison Cohen from Frenzy Law Benefit center said something in January that I thought was really profound and has been directionally guiding me all year. It has never been a better time to be a third party administrator. It's never been harder to be a third party administrator. And I think both of those things are true. And I think that those of us in the regional bucket that you outlined before JD we're going to have to solve how to build efficiently, how to utilize technology, how to scale and size or what we're going to do is, is run out of business because we're paying people too much and not charging enough for our clients. [54:39] JD: Well, I think technology can lend a huge hand with that going forward. You know, even specifically artificial intelligence and the things that can happen with that. I think Fred even mentions that in terms of we. Well, here's a. When one of those bullet points at the bottom he says, I know he does. Come on J.D. oh, bullet point two. Can they. Meaning third party administrators leverage artificial intelligence, which seems well suited for a rules based data driven service. That's a really intelligent comment slash question there. And I, and I think he's right. I think third party administrators are really well positioned for that because the bigger firms, the big record keepers, they move very slow, they have got a lot of compliance and they're really going to struggle with evolving technology in that space. And so the little guy could really be the kind of gap coverage there. Sorry to use that analogy to fit it in. He also mentions, and I thought this one's really interesting. I am currently dealing with a couple of record keepers that have. I used to think this was just kind of rumors when Fred would say, oh, service is lacking at the record keepers because of the fee Compression. I'm really starting to feel it now. So there are some and I'm not going to name them now. Maybe on some future episodes we can talk about this. But I have some clients that are upset with some record keepers and these record keepers are really struggling to respond, really struggling to kind of deal with the problems at hand. And I fear that it's, it's what Fred talks about in this article. Well, if that is true and that is happening, I also feel like a third party administrator as a liaison or some type of interim service person will become extremely valuable to financial advisors that want to have happy clients in the future. Again, another tailwind. [56:41] Justin: Hey Justin, are you getting the feeling like JD's really trying to focus and show how smart he is? Because Jordan's on the show right now. [56:50] Mark: You know he's going toe to toe. You realize it's like it's like chat having Chad here still. We're not saying they're just going back [56:58] Justin: and for I, I'm listening but I'm just chatting with people and I'm like JD's really on his game today. I feel like he's threatened. [57:05] JD: Oh wow. I didn't feel that way. [57:07] Justin: Hey Fred, new clickbait article title JD Scared as by Jordan Cross there run with that. [57:14] JD: So I'm actually, I'm actually so stoked he's here. I didn't feel threatened at all. And I'm, I love any smart thing he says. I'm psyched about [57:23] Chad: that JD and, and guy you you hit a lot of the things that I, that I was going to hit on. But on the why third party third party administrators are viable. How many firms do we all know are in discussion with talking to under NDA having conversations with private equity firms? Private equity ain't in the business solution if if third party administration. What where did I get dinged on [57:52] JD: that non disclosure agreement? [57:54] Mark: Ah. [57:56] JD: Hey, what is your point? [57:58] Justin: Don't you dare question my ring ups dude. [58:00] Chad: All right, what's your point? [58:04] JD: Is attracted by third party administrator. What does that mean? [58:07] Chad: Private equity is not in the business of losing money. Period. End of story. They're in the business of making money on money and finding ways to optimize it. And so to me part of the driver for those roll ups that we are seeing right now, part of what's so appealing to business owners in our industry who don't have succession plans is the fact that we have an opportunity to change the game of our industry. But the cost of that, what it will take to scale that is going to be incredibly challenging for most local owners to execute on. When we start to talk about the costs that my firm is spending in development applications, cybersecurity and being NIST and do cyber compliant, what we're doing with penetration testing, that's got to be a drink. [58:58] Justin: Whoa. [58:59] JD: We don't talk about penetration. [59:01] Mark: Penetration. [59:03] JD: So family friendly show penetration. [59:06] Chad: I mean, listen, I'm getting dinged after I got to imagine a minor was drinking on this show. But listen, like, you know, I think that it's a really exciting time to be independently owned and it's a really exciting time if you are looking at the horizon. But jd, to your point about George, [59:27] Justin: I'm drinking for you for that one. [59:29] JD: Hey, can we, can we, can we. Fred commented in the chat bar he says, is Jordan predicting the consolidation of third party administrators? Is that what you're saying? [59:38] Mark: I think that's. [59:39] Chad: I, I believe over inevitable several years third party administrators are going to be like banks. I think there are going to be seven or eight really big ones and I think they're going to be regional [59:53] JD: players that go, you're falling right into Fred's trap. He loves that story. He feels that's the story of a lot of things in our industry. [1:00:00] Chad: And, and I believe that those who are regional players, like regional banks, going to be harder, but it's going to be relationship driven. And there's got to be a why behind your story. There's got to be a why behind. Somebody chooses cross plans over national aggregator abc. And so why's it got to be [1:00:20] Mark: cross and not pdc? [1:00:23] Chad: Listen, Justin, it can be whomever. Yeah. Because at the end of, at the end of the day, what I need, what you need are good locally owned competitors. Because if the financial advisor community treats us like H R Block and said, yeah, I had a bad experience with the team. Oh man, I gotcha. Don't ring me up. I got you. We're going. Don't ring me up then, then all of us lose. But I would rather lose three plans to you, Justin, and take two from you than lose five to a payroll provider. [1:01:01] JD: I think I liked what you said, but let me, let me kind of massage it a little bit or kind of redirect it. [1:01:07] Mark: Don't penetrate though. [1:01:08] JD: Yeah, no, no penetration here. I don't think we're gonna end up with 7, 8. I don't think we're gonna end up with 12 or 24. But I like what you're saying, which is we'll probably end up with a lot of very Strong, well run technology driven third party administration firms and maybe the old ones will die and there'll be new ones that come in that are run by younger people or what? Like I even see that right now. Justin, you squint. I get contacted by a lot of [1:01:38] Mark: younger people that are just third party administrator firms. [1:01:42] JD: New, they're starting new third party administration firms. [1:01:45] Mark: Wow. [1:01:45] JD: And this kind of backs up Jordan's point too. [1:01:47] Chad: Spoiler alert, go work at Chick Fil. [1:01:49] JD: A private equity. My point is I like your story about how like the old non good ones will die and the ones that are strong and have a message and a value and, and real kind of like solutions behind them will thrive. And then I love to get super optimistic and think. I think those TPAs, which could end up being 50 to 100 of them. Oh yeah. They could potentially be the best solution in 5, 10, 15 years. And what I mean by this is as technology gets more impactful, I think consumers, and by consumers I mean plan sponsors and financial advisors might find it really sexy to have an interim entity that has their hands on the steering wheel of all the technology. I'm just thinking about payroll integration. I'm thinking about leveraging the data instead of falling into the abyss that is this large Fortune 500 company that's going to quote, offer great services and value. The, the smaller regional firm might be way stronger because they have independence. They can kind of outsource these different technologies and snap them onto their own company and they could be far more effective, far more higher value. Like maybe, maybe in five years. People are like, dude, and I'm gonna drink for this. TPAs are the, like they're way more advanced when it comes to technology and solutions. [1:03:25] Chad: All right, I'm, I'm throwing a bomb. In 17 years of being in this industry, I have never been happier to be a TPA than a fight than a financial advice. [1:03:37] JD: Right. [1:03:38] Chad: Because what we do will be a lot more challenging to automate the solutions we provide. The expertise that we deliver will be harder to. To to 0 and 1 than fee and fund lineups and bringing this thing full circle, building those preferred kind of fun lineups for participants. It is a great time to be in the qualified retirement plan business if you do compliance and administration. Never been harder, but it's a great time to do it. [1:04:11] JD: Yeah, I agree. [1:04:12] Mark: I agree. If you, if you are forward thinking and it'd be tech savvy for sure. If you're not, I don't. You're gonna fall, by the way. [1:04:18] JD: Yeah. You'll you'll try to retire, you'll get purchased, or you'll just die. [1:04:23] Justin: It's still not bad if you're gonna get a big check from it. [1:04:27] Mark: True. [1:04:27] Chad: Yeah. [1:04:28] JD: Let's. Can we pivot before we kind of end? We haven't even talked about your favorite. [1:04:36] Chad: You guys. You guys haven't even. You guys haven't even taken any shots at Serato Group. [1:04:40] JD: No. That's where I'm going right now. You're reading my mind. And I'm not taking shots at. [1:04:44] Mark: Is membership open? [1:04:46] JD: Dude. [1:04:47] Chad: I'm sure you guys heard this week we just admitted a really new member. Amanda Iverson, Pinnacle Plan Design. [1:04:54] JD: No, I did not know this. Breaking news for me. [1:04:56] Chad: Spoiler alert. Pinnacle plan design, the 17th member of the Serato Group. [1:05:02] Mark: It feels like two years ago you were at nine. That's some growth. [1:05:06] Chad: Yeah, we. And that we have a queue of 10 or 15 firms that are eagerly trying to join what we're doing. [1:05:15] JD: So I don't want to put words in your mouth. [1:05:16] Chad: Do it. [1:05:17] JD: But explain for everyone the Serato Group what it is. Some may not know. And then can I ask as a backup to that is. Is everything we've just been talking about is this kind of the mission of the members of Serato Group is that if y' all can kind of bond together, then you'll be able to leverage this technology level, these kind of strategies. And like I was kind of befuddled at why you all were getting together in the beginning, but is that it? You guys are going to work together? Yes. [1:05:51] Chad: And for your chap bar in Espanol, Serrado is closed. It's not portuguesa. It's so. Yeah, but, but, but. So what is the Serato Group? The Serato Group is a collective of independently owned, separate third party administrative firms that started as a study group, evolved into a think tank, and now is a 501c6 consortium of what we believe are some of the most forward thinking, progressive shops that are focused on the things that we're talking about right now, which is delivering the best solutions to our clients by aggregating our collective investments in our companies by going to record keepers and broker dealers and pitching them on presenting us as an alternative to nationally owned for national firms. [1:06:50] JD: So there's part of that I'm not picking on you as. [1:06:53] Chad: No, no, no, please. [1:06:54] JD: Maybe. Maybe the smaller regional, dare I say local third party administrator feels competition or not good enough when compared to a national third party administrator. I personally have never looked in the mirror and felt that way. But yeah, but I get how someone could. [1:07:12] Chad: Super fair question. I think that. And actually my main man Chad was on this trip and I think there are a few people in attendance who were in Banff, Canada at a record keeper who won't be names rewards trip Johnny Hancock. And some of us turned the corner and walked into a room where there were the highest of the higher up with John Hancock meeting with four or five firms. So even in the most prestigious event there was another group. And I think that what that clued us into was distribution size and the way we deliver services matter. So I don't think it's about ego as collective JD and so. [1:07:59] JD: And it's not necessarily just about price breaks either. Yeah, it's about being heard and, and having a voice and helping kind of move their products in certain directions or something. Or is it about price breaks? I don't know. Maybe I shouldn't have said. [1:08:14] Chad: And and mark to your point about cool kids club, like that's a fair. That's a. [1:08:19] Justin: Well, you are paying attention to the chat bar. [1:08:21] JD: Kudos to you. [1:08:22] Chad: I told you I'm seeing them all. You know. And my dear friend Russ Hooker calls us a book club. Right. Like those are fair. [1:08:29] JD: Russ Hooker is your dear friend? [1:08:31] Chad: Oh my God, I love that. [1:08:33] JD: I feel so one of my favorite [1:08:35] Chad: people I've ever known. And often we are brought on stage places to present diametrically opposite views of the universe. [1:08:44] JD: But does he shave that discussing beard yet or does he. [1:08:47] Chad: Yeah, he's trimmed it up. He's looking sharp, man. So. So what I would say JD is it's less about let's get discounts at Colonial Surety. Let's. It's not about let's get discounts at X, Y or Z. It's about going to a broker dealer. It's about going to a record keeper and saying our collective is stronger than Cross plans on. On its own. Think about the European Union or maybe [1:09:16] JD: even, maybe even that you'd eventually have a brand that people would recognize and be like, oh, if they, if they're part of Serato Group, that means like they're the shit. Like they're high quality shop. That, that. [1:09:29] Chad: So one of the, one of the commitments that every Serato Group member makes is a commitment to what's called the Serato standard, which is a commitment to have. Here we go again. Penetration testing and the level of. And I'm gonna have to drink because I don't know NIST and Department of labor cyber requirements. That's table stakes for entry that alone costs. [1:09:56] JD: Did you just say table stakes? [1:09:58] Chad: Yeah. [1:09:58] Justin: You are Chad. You're literally Chad. [1:10:02] Chad: That alone costs my firm. That gets you a year just to do that. And so I think that. And I'll finish my thought and then, then I'll drink. But I think that when we go to a record keeper and say there's 17 firms with over 25,000 plans, 50 billion in assets, we get a different treatment. When I say, hey, I'm Jordan Cross [1:10:31] JD: of Prospect Plans, what kind of treatment do you want as well? I'm being honest now because I, I could give a. I would actually prefer that most of these record keepers just leave me the alone. So what, what do you want from them? [1:10:44] Chad: Yeah. So now we're going to get a little nihilistic in my view of the future. So I believe as we are seeing regional vice presidents and wholesalers territories expanding as we are seeing fewer and fewer seasoned regional vice presidents and wholesalers hired for jobs. [1:11:05] JD: Interesting. [1:11:06] Chad: Distribution channels are getting directed more and more towards TPAs. That coverage gap that you alluded to earlier, JD why do we think there are more and more opportunities for online installment of qualified retirement plans? I think that whether it's Empower Fidelity or John Hancock or anybody else, I think more and more from implementation and onboarding, we become a de facto extension of that record keeper or their broker dealer. [1:11:40] JD: I think what's sexier I heard from you is, and I would agree with this, I hadn't thought about this. This is a great comeback to what I said is I do believe that in the old days, if you are a high producing third party administrator in a region, your local wholesaler had to kind of dish you more leads, more opportunities because they had to. You were an important part of the ecosystem, more so than some smaller third party administrator that say only did a handful of plans each year. And so you're notching that up a level where I think in the old days where it sucked was because I have a somewhat regional third party administration firm in that we do business in different zip codes that have different wholesalers. And usually the wholesaler in one zip code could give a rat's ass. [1:12:30] Chad: Right. [1:12:31] JD: How many plans you did in another zip code that he or she does not represent. But. And I was, that always frustrated me. I'd like to see the boss of those people say, hey look, this third party minister is doing a lot of plans in these different states and therefore you need to treat them with a certain amount of respect and give them leads in your area. I haven't seen that come to fruition. I think little area just lives on its own. But you're seeing a future where with less regional vice presidents, less wholesalers, it may be the upper ups that say, no, no, no, Serrano group is massive to us and so you're going to need to give them a lot of your attention. [1:13:11] Chad: That's right. [1:13:11] JD: Okay, touche. [1:13:12] Chad: And if, and if we imagine that cerule study comes into play and we're going to be adding 300,000 new plants, I mean, you guys have probably heard it. Ken Monroe of Empower has been running around talking about the fact that they anticipate selling 8,000 plans by 2028. Right. Like they are in this. How are they going to meet that distribution channel? Is it with a thousand different TPA partners or is it by going to the same partner that they can trust because they have those cybersecurity guidances, they have the commitment to excellence that the Serato Group members have. [1:13:50] JD: I would love, I would love someone to convince me that Empower wants to leverage strategic partners in a, in a good, wholesome way going forward over the next five to 10 years. I sometimes see them as the death star that wants to like, dominate and do it also. I love hearing you say that. And by the way, I love Monroe. I think he's a solid human being [1:14:13] Chad: who for, for a decade, all of us on the west coast had to, had to endure Ken Monroe on startup plans, small plans, and tell us why he was never going to do them, not interested in them, take them someplace else. And now he wants them. All right. And that is reflective of the growth of, of the small plant market and the importance of the local third party administrator. [1:14:38] JD: Well, I like what you're saying. And I was not here in any way, shape or form. And by the way, I love to get aggressive with guests. [1:14:47] Chad: Yeah, it's. [1:14:47] JD: It's been a while. But I didn't come to the show with that vibe. I don't know why. [1:14:51] Chad: No. [1:14:52] JD: And so I guess what I would say is I'm very. [1:14:55] Mark: You're swooning right now, pal. [1:14:57] JD: I'm very pro third party administrator, like, so I kind of want to see my brethren rise and do well. And if, if that means that they're all getting together in the Serato Group and that becomes this cool thing that's a brand that people recognize and provides value. Like, I'm totally okay with that. [1:15:14] Justin: I think you should just leave the Serato Group, join forces with us. We can call it Crisscross. [1:15:22] JD: Well, I mean, anyways, I'M totally. All right. [1:15:25] Chad: So Mark, that presents an interesting, interesting question. In the early Audis we saw in the NBA superstars band together saw the big three. Right. When I start to think about the future of this not just inside the Serat group but, but I start to imagine those things starting to be more and more common where you guys who have and I know you got sales guys all over but you guys have a strong presence in Northern California. What. Why wouldn't you and a handful of other firms look at. Why don't we just own this space together? There are a lot of opportunities I think to form those types of big three. [1:16:11] JD: My, my answer to that. [1:16:13] Justin: You know, you know what? As jd, as the, as the senior level person here. Let me, let me take this one. If I was in charge in strategic alliances and making these decisions, Jordan we would have had many meetings about this. So we would have probably been on the cutting edge of doing something this But I've got these old hags, JD and Chad running the shop here and trust me, they are, they need some help man. So if whatever you can do, you know where to find me. [1:16:41] JD: I, I in all seriousness, there's no, [1:16:44] Chad: no longer non competes in California. Right Mark. So listen, you know, didn't know that but yeah right. [1:16:50] Justin: Huh. [1:16:53] JD: I personally feel like and shame on me. I, I don't want to be the party pooper here. I just feel like that that stuff is great for us to talk about. I just feel like it moves the needle less for decision makers. I agree with what you said before. I think you need to have a real value add. I think you really need to understand your company and how it can be a good solution for your clients. You need to be able to verbalize that and show that and obviously I'm someone who believes in brand and, and people like knowing who you are and what you're doing. But, but I just sometimes feel like we get so caught up in what we think is this bigger entity. I don't think the client gives a fuck that your future plan and you're this consortium of all these TPAs from across the country. Sometimes that can be bad. Sometimes they're much more interested in the fact that your, your local Mary Smith third party administrator who has three employees is going to do your job. Like that seems like an manage so I think we get so caught up in this like bigger is better. [1:17:54] Chad: Yeah. [1:17:55] JD: And I'm someone who's really trying to grow my firm and be bigger but I just don't think it's all that Impactful. [1:18:01] Chad: So I, I don't, I actually don't think these are competing ideas, JD And I don't think they're mutually exclusive. I think that our clients don't care what we do. They care how we make them feel. Do we solve their problems? Right. They don't give a about. And I'm a drink for it because I can't get the acronym for EBAR right now in 4184 testing, they don't care about those rate group testing, they don't care about adp. They want to know what's the cost, is the allocation, efficiency, how much did the business owner get? Did we pass our testing? Now, that's different from what broker dealers and record keepers care about. They care about quantity. They care about the distribution. So I think that both things can be true. I don't think my 850 clients care that I'm a member of TCG. I owe you two. [1:18:57] JD: But you, you're. To me, you're putting. [1:19:01] Justin: You gotcha. [1:19:02] JD: Gotcha. You're putting a lot of value in the power of your record Keeper partners. And specifically like wholesalers. And I would just. Anyone listening in, that's in this business too, I would, I would highly encourage you to be your own brand and your own value and knock on your own doors and develop your own relationships with advisors. And then wholesalers want to work with you because people know who you are and people are asking about you as opposed to sitting around with your hand out saying like, please, please, may I have some plans. That's right, Keeper. Send me some plans. Like them, you got to go get your own, but create your own brand. [1:19:45] Chad: But if one guy's printing out a package and sending it in the mail or is sending Excel spreadsheets around with Social Security numbers and, and a financial advisor or a regional vice president or wholesaler knows, hey, this group does everything secure. This group is going to protect data and personally identifiable information. [1:20:05] JD: Agree on that. We agree on that. [1:20:06] Chad: That. Then I think that there's going to be a leg up. Again, we, we agree on that. [1:20:10] JD: But that goes back to my original point that I agree with you. I think the one, the bad ones will die on the vine and the good ones will. [1:20:17] Chad: Will. [1:20:17] JD: Will thrive. [1:20:18] Chad: And, and I think that we are all such a collegial group, right? [1:20:21] JD: Like 100%. [1:20:23] Chad: You guys do things so diametrically different with the retireaholics than the way I have cultivated our branding and marketing. But philosophically, we're totally in line with how we service our clients. How we treat our employees, how we look at the universe. I think authenticity matters and that was what we were talking about before we went live. Right. Like clients know when somebody's putting on errors. [1:20:47] Mark: Yeah. [1:20:48] Chad: We want to solve their problems and, and, and move forward. [1:20:51] JD: I got news for you. Fred said it earlier. [1:20:53] Mark: I have many leather bound books. [1:20:57] JD: Fred said that rich mahogany third party administrators will, will take over the world. And I'm not trying to be goody goody nice guy here. I believe this from the bottom of my heart. My chihuahua's life I put on it. I would much rather see you succeed. Amanda succeed, Shannon S word succeed. All the people that I've, that we've literally put on this platform and like had great conversations with then bundled providers and we've had guideline on here too and human interest has been on here too. But I don't want to see them succeed. I want to see my peers succeed. And that's where I'll leave it. Tonight is I think what we talked about is the future looks bright for them and the good ones are going to get really better and there's a lot of exciting things down the line for, for third party administrators. And so I can't wait. I sit and wait with excitement to see what the new 3.0 version of a third party administrator looks like in the coming years. And God bless you Mr. Cross. I hope Cross Plans is one of those and I wish Toronto Group all the success in the world. And if you guys want Rogue Guy to come over and work for you, you can have him. Like there's literally. [1:22:19] Mark: Real quick, real quick. Well I've gotta make mention this. [1:22:24] Justin: My, is this my initial termination? [1:22:26] JD: Go to chapter champion. What do you got to mention? [1:22:28] Justin: Guys wait for. [1:22:28] Mark: Well hold on, hold on. We've had Jen twice an anonymous attendee, five times in the question and answer section. Want to know about the census news. Are we going to address that or is that long since it was headlines? [1:22:42] JD: I, I looked at the ascensus stuff and I was just like that's what you call clickbait. It's too boring. I was going to talk about a census but we had enough topics. Basically what I was going to say is hey, they've restructured their sales team. They've got these four core divisions. They're massive. We know they're the parent company of Future Plan. That was brought up tonight in the conversation. I think a census is very relevant. I think they're a huge record keeper at this point. I think they're doing some positive things to improve their service model which used to suck back in the day and I think it's getting a lot better. So I was basically seeing like, hey, let's pay attention to them. Let's make sure we're, we're keeping our eye on their finger on the pulse, what they're doing. Jordan, are, do you do any work with them in terms of record keeping? [1:23:29] Chad: We do. And, and we do a little bit more with Vanguard on that. [1:23:35] JD: Yeah. Right. [1:23:37] Chad: The only thing that I would say, [1:23:38] JD: did I hear, did I hear something changing there? Vanguard. A census, I thought. [1:23:42] Chad: Well, so I think didn't a census buy all of Vanguard's individual solo for. [1:23:48] JD: There you go. That's it. Okay, that's not that exciting. Never mind. [1:23:50] Chad: But, but I think that, I think that the news from the restructured sales team and I don't want to speak on behalf of a census for a variety of reasons, but I think that what it tells us is the same thing we see with empower and fidelity. Moving down market and embracing third party administrators. Segmentation, delivery of services, focus on core specialties, be authentic in who you are and you know, attack and win in every vertical. [1:24:22] JD: Yeah, yeah, we've, we've said a lot. I mean I could, we could go for hours, but yeah, dude, maybe we'll come back, maybe we'll do this again because I think there's a lot left to chew on and talk about. But for anyone listening in either live tonight or in the future in the recording, like dig deeper into what it means to be a third party administrator or partner with one. I, I think the old bullet points are evolving and changing and what you know, to be a third party administrator will look, I think looks different today than it looked 15 years ago, especially depending upon what firms you're looking at. And I think that it's going to change rapidly with technology and what's going on and, and could be one of the best places to be even for small plans, even for complicated plans, even for simple plans which we didn't get into tonight. But not simple as in the plan type, as simple as and easy. Because a third party administrator can be the glue to bring all that technology together and create really simple, easy, flowing small plans to help with this coverage gap. But I'm going on and on. Chop. Our champion, Brandon, can you throw up our leaderboard? We now have a live breathing leaderboard that Brandon I both have access to. It will show our, our updated points at all times. I don't. This one doesn't scroll down but the very Bottom of it is Brian Brashaw with a negative 369 points. I am now penalizing Brian Bashaw on LinkedIn when I see him make little quirky comments that I don't like. And I got points from him for that. Justin, I didn't know that was in the. Your vote for tonight's chat bar champion is. [1:26:05] Mark: There was a lot of good activity tonight. I'm sorry, Tony's going for it. I mean there was a lot of. A lot of close, close guys there but. And gals. But Tony, you got my vote. [1:26:14] JD: You're going for Tony Davis. I love that. Robey, your vote for chopper champion. [1:26:20] Mark: Bo. [1:26:22] JD: Bo. [1:26:23] Mark: He was up there. [1:26:24] JD: Bo. Bo. Sorry, Bo. Oh, you're right. Yeah, yeah, I remember that. A couple comments here and there. Jordan, go ahead. But it cannot. It cannot be someone from the Serato group. I'm kidding. [1:26:37] Chad: I'm a redheaded guy who does math for a living and Tony kept saying nice things about me. That's a easy one. [1:26:44] JD: That's good. You know what I think? [1:26:46] Mark: Heartstrings. [1:26:47] JD: If Tony. Actually, I will vote for Tony too. Although I must. I must say that as a conflict of interest on my part, I do business with Tony. He's a friend of mine. We're working on some things together. Much to your artificial intelligence that you're talking about there, Jordan. So we have a company that we're partners with in. But here's the lesson for Tony. Tony can come to the chat bar a lot of nights with some vigor and some, some spunk and some, dare I say negativity. Not in a bad way, but you know, he doesn't mind calling out when he sees it and throwing a few stabs here and there. I felt like tonight he was more positive and kind of value adding and looky, looky. He ends up winning chat bar champion. I don't know. Maybe Tony can learn something from this. Maybe we can. Maybe all you need in life is just a little love. [1:27:46] Justin: This, this bleeds into this earlier. I mean the whole. Rocky, Rocky 4. [1:27:52] JD: Man, what happened to Rocky 4? [1:27:55] Justin: Remember, you don't know the speech he [1:27:57] JD: gives at the end. No, no, you can change. Yes, yes. You'll get a thousand points. I should put you on that leaderboard somewhere. Brandon will make that update right now. Jordan, thank you so much for attending a Thursday night and retireaholics. It's long overdue. We very much appreciate it and thank you to everyone that tuned in new. Holy. [1:28:29] Justin: That wasn't Chad. [1:28:31] JD: What? [1:28:32] Mark: What? Joking. [1:28:33] JD: Oh, oh, oh. Monkey with the drum. Monkey with a drum. There's Chad. I love that chat [1:28:41] Chad: since I've seen a powder drop. Thank you. [1:28:45] JD: And to you. Let me finish my thought. To you guys who are tuning in every Thursday. Not everything. Every time we have a show to hang out with us means the world and your family and we love it. We're gonna, we're gonna mix it up. Next show which is two, two Thursdays from now, the third Thursday of the month, we're gonna have Sherry Fitz on our experimental format and tune in for that. Sherry Fitz on the experimental format. Usually we don't bring a guest on for the experimental format, but I've got something fun planned that will leverage a guest well and Sherry's game because she's part of the retirex family. So tune in for our experimental formats on which I think Jordan would have loved to have a non acro sin format today because goodness gracious, he definitely is. [1:29:43] Mark: Is enjoy that hangover tomorrow. [1:29:45] JD: A lot of ackerson. [1:29:46] Chad: I'll be driving down JD's way, throwing the bird out the window past Carl's back. [1:29:51] JD: Jordan, do you know, do you know who holds the all time record for most acro sins in a retireholic show? [1:29:57] Chad: No, give it to me. [1:29:59] JD: The newest member of the Serato group, Amanda Iverson. [1:30:04] Mark: It is, it's, it is not far off from his number tonight either. [1:30:09] Justin: Throw up that leaderboard. [1:30:10] Mark: Yeah, for sure. [1:30:11] Chad: Yeah. [1:30:12] JD: You should have done a background check on her. You should have done a background. [1:30:15] Justin: Oh, the other. The, the drink leaderboard from tonight, Brandon. [1:30:18] JD: Oh, do we have it? Do we even do that? [1:30:21] Justin: We keep track. [1:30:22] JD: Yeah, I don't know. We have that. Thank you everyone. We will see you in, in two weeks. And thanks again to Jordan and the Shroudo group and cross plans and yeah, peace out everyone. Oh, we're gonna play a song. Oh, look at, look at that. Look at that. Look at that leaderboard. [1:30:41] Mark: Jordan, I think Shannon was or Amanda was 22. [1:30:44] Chad: Dude, I'm in bad shape. [1:30:50] JD: Greg Greenfield made a comment on LinkedIn. He said that this show was going to be wiggity wiggity whack. Let's play some music and we'll get out of here. [1:30:59] Chad: I get the joke. [1:31:13] JD: My shorts are on backwards right now. [1:31:17] Mark: How do you manage that. Little fat? [1:31:25] JD: I'm the Mac and I'm bad you something that you never had. I make your wiggle and shake your rope Cuz I be kicking the FL that makes you want to jump how high? Real high.