Kevin Spaeth: NDT, TPAs & Fee Structures | Retireholics

[0:00] JD: Which is. Would you say Finn. Finn Fenway Group? [0:03] Kevin Spaeth: Yeah. They're big with Pepsi. Within power. [0:05] JD: Yeah, yeah, they sold. [0:07] Justin: I. So you know, it's. [0:08] Chad: It's 6:30. [0:09] Justin: I'm bringing you up for every acronym. [0:14] JD: I feel like it should go after the start. [0:18] Justin: You're. [0:19] Chad: You are a pro at this. [0:20] Justin: We start at 6:30. I don't care if it's banter or not. [0:26] Kevin Spaeth: All right. [0:26] JD: Did you see how Roby went from Kevin from being like really nice and chill? Like, no, you totally cannot go sent. All of a sudden he pulls this little rule change time clock happened. [0:38] Kevin Spaeth: I didn't even hear the intro music. [0:40] Justin: It's called. [0:41] Mark: Well, that's. It hasn't yet. Mark's just being this version of Mark. [0:45] JD: Brandon's sick, so he probably won't do anything. [0:48] Justin: Yeah. [0:49] Speaker F: In a world where retirement plans are broken, a team of four renegades dared to fix it. Justin McNeil, the wild card who plays by no one's rules. Chad Johansson, the technical wizard who can turn anything into a spreadsheet. J.E. carlson, the man with all the plans hiding under his beanie. And Mark Palamini, AKA Robe Guy, the heart and soul of the crew. Together they are retireholics. Changing the retirement plan industry one beer at a time. [1:24] JD: Yes. Yes. That is our mission in life. That's what we've been trying to do for the last decade. I prepped for today's show waiting for my. My hotel room in Nashville to become available to me. And I had to wait in the. In the lobby bar and I'm in Nashville. And so this, I swear to God, this is what happened. Surrounded by three or four groups of bachelorette parties. Not don't all think like young women. There was all mixes of ages and people from all walks of life. One of them was a group of like 40 somethings. They're all in moo moos and apparently they've been kicked out of the pool. So they were wasted coming down to the bar. So that is where I focused on my laptop with my old fashioned preparing for today's show until I was granted access to my room up here. [2:17] Chad: What's a moomoo? I heard it twice yesterday. Maybe I'm being naive here. I don't know what it is. [2:24] JD: I mean, what were those? Remember when you put on a. A towel and you sit on the couch and watch tv? They're fan. They're sold on tv like infomercials. Snuggie. I feel like it's a fancier Snuggie. Like thin. Just you know, just put it over you all the way down kind of dress style. [2:43] Chad: All right. [2:44] JD: So. Yeah, yeah. No for dope. So dope. They look great. Let's do some quick housekeeping. Chat Bar champion is. [2:53] Justin: Yeah. [2:54] JD: A thing that we do. Thank you. But things have changed. We're no longer going to vote for you at some time in the show, you out there in the audience, you're going to vote for chat bar champion in the midst of the show, and you're going to do that by putting CBC in the chat bar and then the name of the person that you want to win. Example. Cbc. Jim Sampson. He gets a vote. I'm going to drink for those. Robby. [3:21] Kevin Spaeth: No, no, it's okay. [3:22] Justin: You're explaining rules, you know. [3:23] JD: No, no, no, no, no, no, no. [3:26] Mark: We've always said is on. Oh, no, it's in the chat bar. [3:29] Justin: Fuck. [3:29] Mark: I'm sorry. I'm an asshole. Yep. Sorry. [3:32] JD: And then Brandon will give us a little leaderboard as we go throughout. I will say, just to be official tonight, just because he's had such a run this year so far, Kevin is definitely in the chat Bar Champion game. So if you feel as though you want to vote for him for something witty he's saying on the show or joke he makes or you just like his mustache, you may do so. That is a. That is approved. [3:58] Justin: Can I give. Can I give Kevin negative points to start? Because his first few chats were to host and panelists, and that's a rookie move. [4:05] JD: So rookie is a rookie move. Maybe the next person should hold back the first vote they want to give to Kevin as a penalty. We're also going to be playing acrosan. I don't have to explain that to Kevin. But if you're new here, tuning in, if any one of us uses an initialism or an acronym, my name aside, you must drink from your penalty drink. And you know what? I'm drinking my favorite thing in the world besides my dogs and my kids. Vodka. Wait, my wife is in that list above. Drinking a lot of vodka in my free time. Yeah. [4:39] Chad: So I. [4:43] JD: With that silent J. Let's. Oh, wait. Topics today. I want to do something new. I never do this. This is what, like, formal podcast hosts do. What are we going to talk about today, people? Well, today we're going to talk about fiduciary, the new brand. The rebrand over there. We'll talk about it. We're going to talk about single point. AI. That's one word, Mark. I shouldn't have drink for that. And voya's. New partnership. Too bad Plan sponsor magazine has came out with their new record keeping survey. We're going to dive deep, deep, deep into that. And Kevin's going to. He's got a little freaking spreadsheet. We're going to take a peek at it. It's going to be a lot of fun. And that's going to blend into a little pooled employer plan discussion. And we're going to talk about the future of 401k pros, where they're coming from, what that's all going to look like. Because we know Butterbeer tells us lots of new plans are coming. So lots on the docket today. We will get to it. But first, it's everyone's favorite segment. It's the new hit topping the charts segment. Silent J's guest thing, whatever it's called, take it away. Silent Jane. [5:54] Mark: Good time chat bar champ, second time guest and one of our favorite people in the industry. But what I tend to care about more and more these days is what makes this man tick outside of the boardroom. I'd really like to dive in to deepen their psyches. Kev, you've seen the show. You know what this part is about. You ready to go? [6:09] Kevin Spaeth: Let's go. [6:11] Justin: Alrighty. [6:12] Mark: Would you rather have to explain 401k non discrimination testing at every family dinner or never watch sports again? [6:19] Kevin Spaeth: Never watch sports again. As long as I can go to the Portland Pickles game. [6:26] Mark: But I don't want a real student of the craft. Pickles, what is your most useless talent? [6:36] Kevin Spaeth: My fount of useless information. You know, you can ask me to tell you something about pretty much any subject and I'll be able to come up with something on it. [6:44] JD: 401k discrimination testing. [6:47] Kevin Spaeth: So what you got is these two groups. [6:54] Mark: All right? A beloved family member gets you a Christmas gift they they're certain you're gonna love, but it's something you could really care less about. Do you A, say no thanks and ask for a receipt, B, re gift it or C, throw it out hoping they never notice? [7:08] Kevin Spaeth: Re gift. [7:10] JD: Bravo. [7:12] Kevin Spaeth: Does ebay count? Is that an option? [7:16] Mark: I mean. Yeah, that's right. It's just like returning the gift. [7:19] Kevin Spaeth: Yeah. [7:21] Mark: The IRS gave you one Mulligan. What would you use it on? [7:26] Kevin Spaeth: Not paying taxes forever. [7:32] Mark: I'm not sure you can get forever on that one, JD Catch. Eventually you'd have to use that Mulligan [7:37] Kevin Spaeth: not paying taxes this year with my revenue generator of the year belt. [7:46] JD: I seen you guys are belts. Well, Justin, if I mean if you just don't pay your taxes long enough, you just got to pull in that one favor, right? You can do it from your jail cell, right? [7:55] Mark: Yeah, but you're in jail at that point. Like, you got to go up. You got a Wesley Snipes that go right up to the point be like, all right, we're done here. It is. All right. In a different life, you're no longer passing checks before 1K participants. Your pitcher in the big leagues. What's your walk up song? [8:11] Kevin Spaeth: I still got it caught in my head. I've been waiting for this moment all my life. The Miami Vice theme song. A little Phil Collins. Always is, always has been. [8:20] Mark: Dude, [8:24] JD: does anyone do that in Major League Baseball? That's a great one. [8:27] Chad: Oh, that specific story. [8:29] Kevin Spaeth: Am I reliever? That's a good relief picture song. [8:33] Mark: Yeah. [8:34] JD: Yeah, Wasn't that so wasn't that song about, like, he saw someone drowned or something and you knew the person responsible or something? [8:41] Kevin Spaeth: No, that was a different one. Yeah, that was a different Phil Collins song. [8:47] JD: We're totally. We're totally interrupting Justin saying, no, I [8:50] Mark: was gonna make it. I was gonn. [8:52] Justin: Whatever happened to one word answers, Justin? [8:56] Mark: It's got. The segment's gotten so much better as we've gotten away from the one word answers. I think. [9:00] Speaker F: Better. [9:01] JD: I don't know. It was pretty fire before. [9:04] Mark: Okay, all right, maybe we'll bring it back here and there. All right, last one. If you could eliminate one retirement plan rule forever, what is it? [9:15] Kevin Spaeth: Vesting schedules. [9:18] Mark: That's what you went with? [9:19] Chad: That's an easy one. Jeez, Kevin. [9:22] Kevin Spaeth: Non discrimination testing so I don't have to explain it. And I can also watch reports. [9:29] Chad: You sure you don't want to say cross testing? It's a really popular answer nowadays. [9:33] Kevin Spaeth: I love cross testing, man. Cross testing is the best. [9:36] JD: It is kind of cool. [9:38] Kevin Spaeth: You know how much money I made cross testing when I was a tpa? I didn't sell, like, plain vanilla plans. I'm like, oh, you can put this person in this rate group. You can put this person in this rate group. And then the problem was it was Orange county. So I was dealing with a lot of doctors. And one time I'm like, oh, you can put your daughters in this great group, and you'll be in this rape group and say, oh, no, that's my wife. I'm like, oh. [9:59] JD: Oh, yeah. [10:00] Kevin Spaeth: Interesting. [10:01] Mark: My bad. [10:03] Justin: Interesting. Good for you. [10:06] JD: Welcome to Southern California, Kevin. [10:10] Mark: Anyways, ladies and gents, the 2014 Long Beach Chili Dog Eating Champ and RVP of the Pacific North Northwest, Mr. Kevin Spade. [10:18] JD: Bring them up. [10:19] Kevin Spaeth: It's a chili making champion. [10:21] Mark: I want just chili dog this time. Okay? It's my segment. [10:24] JD: Yeah. Kevin, there used to. [10:29] Mark: You like those chili glizzies. [10:30] JD: There used to be a time when. When Justin would just make up the bio for the person that came on the show. Those are my favorite days. You would just say things that were totally not true, and the person would sit there like, what. What the going on, Brandon? Yes, Chad? [10:45] Chad: I just. Before we. We push right past it, I need to know a little something about that belt Kevin just threw over his shoulder. [10:51] JD: Oh, I'll tell you. I'll tell you. Kevin doesn't have to tell you. Let's not let the guests talk too much on the show tonight. That's pen checks his way. That's. That's Spiro's way of buying his people that work for him, making them feel like they're supported in some way. They put him up on stage, give them an award. Here, you want to go now? Go make me some more money next year, guys. Get on it. Is that fair, Kevin? [11:16] Kevin Spaeth: That's fair. Yeah. Well, my shelf is too full with chili making chili trophies. I needed something new. So this year was a belt. [11:25] JD: No, not true. I made that up. That. Yeah, Penchex gave these belts to their top guys for the year. I thought that was very cool. I saw the picture of it. I was just kidding. Okay. Yeah, this is okay. So the intros are getting a little longer these days. That's okay, though. That's okay. You gotta let things flow. I just watched one of my first Theo Vaughn podcasts from start to finish, and I'm pretty sure Theo has no strategy. There's no agenda. He doesn't. He doesn't write notes for himself to kind of keep things on course like I do. So I'll try to be more Theo Vonish. Are you okay with that, Robey? [12:05] Justin: I'm just curious on why you just started right now. Because you're in Nashville and you figured, like, you wanted to fit in with the culture that he. He lives in Nashville. Like, I don't get it is any [12:15] JD: more a Louisiana guy. Oh, but he lives in Nashville? No, no, no. I literally listened to his podcast. [12:20] Justin: Who was he. Who was he interviewing? [12:22] JD: Riley Green. That's why I was listening. The country music star. [12:27] Chad: Because, you know, there's actually a baseball player named. [12:29] Justin: Baseball player? [12:30] JD: Yeah, I'm from Texas right now. If you don't know Riley Green is. He's a handsome dude. Cowboy hat, boots. Do Headlines. Finally, finally we're talking about some 401k stuff. You guys are familiar with k quote k quotes. You know this. We've had Steve Wilkinson on the show. Well, Cakewood also or Steve has a company called 338 Investment Fiduciaries. I call them 338 if and I play a golf with a guy who's his kind of main sales guy, Adrian a lot. And they announced to the world recently that now there's, there's none of this confusion of is it kid quote, is it 338 investment fiduciaries? Like what's going on here? There's a parent company, it's called Fiducion and they announces the world. And I might be a little biased but I think snappy brand, great concept. And if you're out there and if you, if anyone knows Steve Wilkinson, I would say Adrian as well. A plus full of integrity people. And so in a world where you've got these meseros, the Morningstars leaf house has been sold to Mezro. Why not take a peek at a boutique accountable tech forward type of firm like Fiduciary. No, they did not pay me for this. Well, he's taking me to play golf at his golf course a couple times. Yes. [14:20] Chad: Chad, I was going to ask, has it become easier for advisors to put a non platform approved 3:38 on a plan? [14:31] JD: Great question. I asked Adrian at launch after golf a few weeks ago because he, I, I saw, we were talking with the Voya guy and I don't know if he's like approved envoy but they're working with Voya. And I said is that, is that. I asked that same question, Chad. He goes no, no. With technology these days like they really don't have to be approved. Approved. Like they, they can make it work if the advisor wants it, it can happen. [14:56] Kevin Spaeth: But that's the big problem with that for record keepers is if the 338 does cascading fund changes over 100 plans. That's a lot of work on a record keeping side. So if they can solve that issue. I was doing national accounts for Empower when fiduciary rule was coming up and that was our thing. Like oh my God, what if this 3038 kicks out this fund and brings in this fund and they've got you [15:22] JD: know, a thousand a ton of plans to do them? Yeah, yeah. I, I kind of feel the same way as a third party administrator sometime when people sell like products where they want us to do an Action and then we have to do that action on, you know, a thousand plans or 500 plans. It can be difficult, but I don't know, we'll have to have them come on and discuss it. But they were telling me that it's actually pretty simple for them to get set up and have it execute with these vendors. [15:49] Chad: So from, from an operation standpoint, you can get set up or you can get, you can get access in, you can provide guidance on the investments available and get a lineup. But when it comes to Kevin's point, actual fund changes, notices, the things that an integrated 338 will have on the platform, they have to be creating their own because in that example, Voya is not going to create the fund change information or, or some of their disclosures. That's going to have to come from the 338 side of it. And that's going to be challenging, I would think. [16:21] JD: Well, I think this is why you want a tech forward type type company to do this. Right? And I also think in my earlier point of you've got the Mesros, the morning stars, what was Leaf House? You know, if you want something new to come up, something that's a little more hands on, shall I say, or kind of more attentive to the advisors and not so kind of big, big picture with everything they do, then push for a company like this and the record keepers will continue to approve them, Chad, and kind of make those, those channels happen. I just want to talk about their new brand and let every kind of give them a spotlight on it. And so if, you know, Cakewalk had [17:02] Chad: really great things to say about the [17:03] JD: brand name which most people know this [17:06] Mark: is what the, is a fiduciary. [17:08] JD: Is that what it was? [17:10] Chad: Pretty sure the exact words. [17:12] JD: That's good. Got your. [17:13] Justin: I was just trying to figure out how to, how to say it. Thanks for, thanks for clarifying. [17:19] JD: You can say it any way you want if you want. [17:21] Justin: I know that. [17:22] JD: Yeah, let's go to another company. This is our world we live in now, by the way, these little snap on type products and things. Single Point AI not going to drink for that because they put it as one word there has partnered, struck a deal with Voya. So as a third party administrator, whenever you set up a plan with a record keeper and you've got to send them plan data, provisions, data information and apparently for onboarding and apparently these people have, you know, attempted to solve this problem. Chad, you were on a call with, I'm assuming Voya and Single Point, but I Don't want to lead the witness. How did that go? What did you experience? What do you think of this so far from what you learned? [18:13] Chad: Well, let me answer the first question. How did it go? Obviously, I can be pretty jaded and I have fairly high expectations, but when it was an hour long webinar and we literally spent the first 28 minutes with no content of value, I was struggling. I took it while I was on the peloton. So, so I was pedaling and things were fine and I'm okay, but I'm like, tell me what you guys are actually going to do. Let's get to it. So Brandon Scott, you chose Phil Ricky [18:43] Kevin Spaeth: Hill over Jess over Jess King. [18:48] JD: All right, Brandon goes. Sounds like this show. [18:51] Chad: Yeah, that's fair. That's fair. We're a show though. That's definitely. [18:55] JD: So what were they talking about for 28 minutes before getting to the point? [19:00] Chad: They were essentially talking about the relationship with Voya and there was a lot of horn tooting of like, this is going to be so great now that we have Voya on board. And Voya is amazing and our backgrounds and why we're so amazing. They were trying to build some rapport, but I still at this point had no idea. [19:19] JD: Okay, Chad, Chad, does this ring a bell? Let me, let me read to you. Thomas Locke is the CEO and, and founder. I'll drink. He was at investment for six years. Some companies before that. It looks like he's definitely always been kind of a tech guy in the 401k space, but here's his description of what they do. Our proprietary technology employs advanced machine learning algorithms to extract, interpret and normalize data from diverse document formats with unparalleled accuracy. The platform's adaptive smart template system minimizes manual input, accelerates workflows, and seamlessly integrates with existing record keepers and administrative systems. There, that's. [20:05] Chad: We eventually, we eventually got to some of that. [20:09] JD: So when you, when you hear that, that makes sense to you? When I hear that, I hear a bunch of yell gobbledygook, but I do [20:15] Chad: because I sat through the content. But they, they went to the extent of explaining the cost structure to TPAs, to onboard, and the discount they're going to get with Voya with. Without me actually knowing structure, they're gonna do, oh yeah, as a structure, you're getting 50 off if you're a TPA and dang it, in a relationship, that's two. [20:36] JD: But we have to. Third party administrators have to pay for this. [20:40] Chad: You have to pay to get set up with it, first a setup cost, then you have an annual cost, and then you have to buy tokens depending on how many clients you use on their chest. [20:50] JD: Oh, what is this, an arcade? [20:52] Mark: Here comes the truth. [20:54] JD: Kevin, you're the guest. Okay, go on. [20:56] Chad: Sorry, just, just let me give a little bit of background still here. Because I went into it the way the email communication came out for the webinar. I went into it thinking this is going to be a new way of tracking information during a conversion from the prior record keeper over to Voya. It's going to pull in all this data, it's going to map in provisions. It's going to. [21:20] JD: It would relieve your installation conversion team of a lot of like, responsibilities is what you're seeing as a third party administrator. Okay, yeah, right. [21:27] Chad: So that's what I went in thinking. And then again, 35 minutes into it and understanding the cost structure, still not knowing a single thing that they're actually going to do. And then they started to explain and the next 10 minutes was really, to me, it was data. Data mapping is really what it was. We know data. We know as Actuarial Systems Corporation. [21:53] Mark: That was not a check swing. [21:54] Chad: You got to see. Okay, I don't even know if FT Williams stands for something, but I'll just keep. We know all these documents, we know their structures. We're going to get your document, we will know your structure. And then when a document comes in from one of those providers, we'll be able to take the existing port plan provisions, map them directly into your system [22:14] JD: and eliminate just data. Which, by the way, with AI. Yeah, but no offense, like with AI and Kevin, I'll let you speak right now, but yeah, with AI, it's. Oh, that's three. Yeah, sorry. These are fairly simple solutions. These days it takes a weekend with a couple of smart people to figure out how to do this. So it doesn't surprise me. I feel like this is a quick stab at trying some money because you figure out you could do something with today's technology, which, by the way, I'm not against that, but Kevin, go ahead. Do you have some thoughts? [22:51] Kevin Spaeth: So like when, eventually when Secure 3.0 comes out and you got. [22:57] JD: We don't know that could be an acronym. [22:59] Justin: We don't know if that. We can't. It is right now speculation. That's speculative. [23:06] JD: We're not going to do it. [23:06] Kevin Spaeth: So when, when they change the laws again and you got a big book of favorites that had that where a lot of different plans want to change, they have like 10 different options of what to do. This gives you. I think. I think gives you an easy way to get all that information one place and ship it over to the Record Keeper so that they can cascade the changes across their system to see, like, who wants this kind of new distribution, who wants this kind of new eligibility thing. Something like that. [23:34] JD: Yeah, I like. [23:35] Justin: I like. I like. When you said cascade, that made it sound really. [23:39] JD: But, Kevin, we do that. I mean, I would argue. We've always had provisions. We've always had nuances with design, and we've always had to send that data over to the Record Keeper to make sure that they are aligned with what administrators are doing. [23:56] Kevin Spaeth: Between PPA and secure, there is nothing. And then. [24:01] JD: Yeah, yeah, there's more. Agreed. There's a lot more. Recently. [24:06] Kevin Spaeth: Which one was that? [24:09] Chad: Protection act. [24:10] Justin: Yeah, but also, you didn't say 2.0. So then you get rung up for [24:13] Chad: the first setting every community something. [24:16] JD: You're totally right, Chad. [24:18] Kevin Spaeth: So. So, Adam, Power. I was out in power when those came out. And we're looking at, you know, maybe a hundred different possible changes per times 70,000 plans. How do we do that? You know, how do we figure out which plan wants this, which plan wants that? The act that came out before that, the one with COVID which I can't name cares. Cares, but that's an acronym. Who is going to have the. What kind of distribution rules. And so we just. Unless we heard from you, we just defaulted your entire book of business to one side of things. [24:58] Chad: Yeah. [24:59] JD: Welcome to our industry, bro. What the. This is. Yeah, that's what we do. I get it. That's what we do. [25:07] Chad: And so. So Moody had mentioned in the chat bar the real issue that I thought that they were trying to solve. And this data. This data drop, I'll say, between third party administrator and record keeper was something to do with census gathering because that's one of the hardest components, right? Mapping over provisions from what they're currently deferring current ages, current. Current data hires, current hours worth of the year, current vesting, like all of that information that comes over. [25:32] JD: Did they discuss this in the call? [25:34] Chad: They didn't. [25:35] JD: I didn't get any of that. Okay, well, let's go positive here. Kevin, what you just said, I believe is totally true. The industry is getting more. [25:47] Kevin Spaeth: I didn't talk it. I got an acro. Sin. [25:50] Justin: Sorry. [25:50] Chad: It was. [25:50] Justin: It was so hold. That's right. I got a new rule for that. If I. If I miss it by too long, I take it. [25:56] Chad: So, Kevin, that's On me. [25:57] JD: Oh, nice. [25:58] Justin: New rule. [25:59] JD: I like this five minute rule. Yeah, the 30 second rule. Kevin, you're totally right. [26:07] Chad: There's my new glass. [26:08] Justin: Justin. [26:09] JD: A lot more moving pieces these days. And at the same time I would argue from experience that technology is absolutely. I don't even, I feel bad saying is going to, I feel like can right now help an old industry. Whether you're an old record keeper, you're an old third party administrator, you're someone in between this, this data that we've been in for the last 20 years can be solved right now. And it was a lot more difficult for it to be solved two years ago. Three years. Three years ago. And your everyday humans these days can solve it in a variety of ways and in a variety of waves. And so it can be done. And so yeah, let's stay tuned to this. This. I do think this is going to happen. [27:01] Kevin Spaeth: Selling more advertising space on his robe penchecks would be interested in sponsorship. [27:07] Justin: Dude, the cost has gone way up. [27:11] JD: Kevin. Yeah, yeah. [27:12] Kevin Spaeth: If Aaron Hotel can afford it. [27:16] Chad: Yeah. He got you [27:23] Justin: well [27:25] Chad: for the sequel. [27:26] Kevin Spaeth: He's actually in Nashville and it's you know, a little Brokeback Mountain. [27:30] Justin: I, I'm for, for the sake of transparency here. Full disclosure, I'm still in Missouri, so. [27:36] JD: Chad. Chaz, this is, this is Chad's robe. Chad, did you have a thought? [27:42] Chad: I was just gonna say they did hint at some of the things they're working on that I believe will be attractive right now. There's not enough documents that they have relationships with in my point of view to feel like this would make a meaningful impact for a third party administrator. But as they get more docs in, they get more integrations that will work. The other component is. But integrating with Pension Pro, integrating with. [28:08] Justin: Geez. [28:09] Chad: Customer relationship. Client relationship management systems, that's a big step for them. Like if you can pull in a doc and you can upload our Pension pal with client name and ein number and address and contacts. Like that's valuable stuff there, that data center. [28:26] Kevin Spaeth: But I think that with Actuarial Systems Corporation and FT Williams, they have the integration with those two and I thought they also had it with stacks. Yeah, Dynamis. [28:38] Chad: Yeah, yeah, they've got a couple. [28:39] JD: Yeah. Mark, bring them up. As you guys say this, which I'm literally clinching my left arm with my right hand and I'm squeezing it because. [28:50] Justin: Prove it. Show us. [28:52] JD: Oh, it's just like guys, the technology to do this is so easy right now. Like nobody's denying that we're acting like cavemen. Like, we need fucking third party companies to figure this out. Oh, like this can be done right now. If Voya empower. Whatever. Get off their ass and lift a pinky. Like, it's not that hard. I could vibe this on a weekend. And these companies are still bumping around like blind cavemen trying to figure out how they're going to sort data out, for Christ's sakes. And if I hear. [29:29] Mark: Enjoy those calls tomorrow, Chad. [29:32] JD: I'm a drink for APIs. I said it again. [29:34] Chad: No, there's nothing bad there. I'm gonna say to jd, if that's the case, then why haven't you coded that for. For our onboarding and getting our data into those systems? And I know you can, but you're a third party add on to technology as well. So why does Voya spend time to build it and create it when somebody else is already doing it and they can snap it on? Like, I disagree with that. [29:56] JD: Apparently from your perspective, they. They didn't do it in a. [30:00] Chad: They didn't do it the way I think would create value. [30:03] JD: Yeah. So that's my point is if way would just like silo off three people, put them in a corner and give them Claude and ask them to build something. They could. They could build this. But instead we're sitting here waiting like, you know, for the stuff to happen. And me personally, why would I do it? I'm not gonna do it for 13 different vendors to do all their. Right now I got bigger fish to fry and my Monday through Sundays are booked building. But I'm not gonna use Friday morning booked getting over a hangover. Yeah, but I'm talking about. But I'm. Yeah, what? We'll just stick to the topics. Let's move on. I can't. Don't take me into artificial intelligence. Let's spin the wheel of ice. [30:52] Chad: Eddie, what do you have in that [30:54] JD: glass of vodka with pineapple juice? [30:58] Chad: Oh, that's different for you. [31:03] JD: Oh, pineapple juice sounds delicious. You know, you guys would imagine this as a guy who has a. How much is my toilet cost? 12 grand? 15 grand? I forget the room. I'm in the presidential suite here at the Hyatt Centric in Nashville. I mean, I am looking out across all of Nashville. I have a. I have a ping pong table made out of fancy wood, and I've got a Pac man machine in my room with a full kitchen. Okay, let's doesn't have an heirs Ro [31:34] Kevin Spaeth: robe, that's for sure. [31:35] JD: What I'm sure I got a Robe somewhere. You want me to go find it? Kevin. [31:40] Mark: Mark, it's over. [31:43] Justin: Back to, back to reality as you're [31:47] Mark: staring at a golf simulator. [31:49] JD: Well, I'm not. [31:50] Justin: I'm in a room, I'm in a dungeon. [31:55] JD: Plan sponsor magazine, I think we've been doing this show for about 10 years I think and the first year, maybe the second year we did a full episode on this plan sponsor record keeping survey we had. We brought visual props where we're tearing off what record keepers were in the top 10 and here we are 10 years later and it has come out again, which I'm so excited about. But I've lost my notes because I've been shrinking. Here we go. Kevin has a fucking spreadsheet about it. We're going to talk about that and we can use Kevin's spreadsheet and his thoughts for the basis of this conversation. But Kevin, you said in an email to us that you think the real metric here is head count, not plan count. And I have to admit to you, I'm obsessed with plan counts. And you went on to talk about. No, no, no, it's about headcount because record will explain it because I talk too much on the show. Tell us why. [33:02] Kevin Spaeth: So plan count is a misleading number because a solo 401ks plan count and a lot of these fintech record keepers have sign up solo 401k plans for like the gig economy and that gives them. That's the plans is 30,000 people, you know. But in reality record keeping costs boil down to the participant. What is the mailing cost, what do they have to staff the call centers for? It doesn't even matter about plant account from a testing standpoint if you're working with a third party administrator. So all it is is a per unit cost that boils down to the participant. It does. No other stat really matters. [33:44] JD: Sorry, I had to respond to Amanda because. [33:47] Kevin Spaeth: Yeah, so like that's what it is. One plan is your three person startup [33:52] JD: or I, I like, I like your anti disruptor thing. I think that's cool because I definitely don't want to misinterpret guideline or human interest or someone else for having these kind of really low plans. But let me counter you in that when I look at the top 10, I don't look at head counts. I want to see plan counts because when I go in there what I'm looking at is I want to be able to say to advisors and I'd love to get Justin's, Mark's, Chad's, input Here, like advisors, these are the top record keepers in the 401k space. And they prove that by servicing this many clients. And so I understand that like when you run a record keeper, that headcount's important. But from my perspective, I want to know how many employers do you service? Because regardless of how many the headcount is, you're kind of one person. Things aside, I'm thinking more like six people, 10 people, 15 people, whatever. But how many employers does your team have to service to answer their questions and get them through a year of being a 401k plan sponsor? And so if your plan count reaches 30k, 50k, 60k, I can then say with confidence to a financial advisor, hey, this is a proven record keeping entity. Like these people crush it. They do this on the day to day, they're experts. And so that's why I really want to focus on who the top 10 are. Is that okay, Mr. Spade, does that make sense to you or. [35:36] Kevin Spaeth: It does to an extent. But the last thing a record keeper really wants to do is to talk to a plan sponsor. They want to talk to advisors to get more business and they want to talk to participants to have them up their contributions. [35:46] JD: But Chad, don't they have to, they got to talk to human resources. They have to talk to the people. That's where the problems happen. [35:53] Kevin Spaeth: They could talk to their third party administrator and the third party administrator blocking tackles and knows how to deal with all the stupid questions like the majority [36:03] JD: of, not all of them do. [36:04] Chad: Yeah, true, Kevin. You know though, the majority of the, the questions that get asked are not about compliance or even about eligibility. It's about transaction timing. It's about when's the loan gonna hit. It's about payroll. [36:21] Kevin Spaeth: Where's the storm, how they vesting? [36:24] JD: I lost my password. I lost my password. How do I submit payroll? I fucked up. You know, it's, it's. There is definitely for sure a lot of that. And by the way, Veswell guideline, human interest, painfully figured that out early on in their kind of executions. [36:40] Kevin Spaeth: But so I'm not saying they never talk to the plan sponsor, but the TPA does the block and tackling on the stupid questions and the smart questions get into the record keeper. And I just said third party administrator, [36:52] Chad: which, let's be honest, most third party administrators aren't staffed to handle the stupid questions. Like we don't have call centers that are going to answer the phone and have 75 people waiting to have a comment back. So I'm not sure I agree with that flow there. JD for people who have not seen what plan sponsor put out or don't have the inside track like Kevin does to look at all these prior years, can we acknowledge just some of the basic details? The, the. [37:24] JD: Oh, it's so fun. [37:26] Chad: Players in the room, right? Fidelity, Vanguard, all of them basically empower principle like nationwide. [37:35] JD: Yeah. [37:35] Chad: Although a census, this is to Kevin's point, a Census showed something like 219, 000 plans. Yes, all those, all those owner only plans done through a handful of broker dealers and that's their go to. So Kevin, I think that's what you're getting at. [37:51] JD: Well, don't forget Chad, when you, when you see empowers numbers, they're including their white labeled stuff that they do as when you see vessels numbers, they include the things that they're kind of the intel chip for. So I think that's okay. But Chad, to answer your question for everyone, I think if you don't check it out, you really should. If I didn't make that point clear enough earlier, like I get excited when this thing comes out. I spent a lot of time today trying to dice through it. Kevin's got his own spreadsheet and I [38:22] Chad: try to put important data. [38:24] JD: Yeah. I try to come up with assumptions and so I'd like to ask you guys something that we could chat about quickly. In terms of top 10. Chad, you mentioned a census was at 218. Automatic data processing is at just south of 200k. Penchecks is mysteriously no longer playing ball with plan sponsor magazine, it appears to me. I don't, I don't know. [38:49] Kevin Spaeth: Is that, does that count as a drink? [38:52] JD: What did I do? [38:53] Kevin Spaeth: Call you? Called the paychecks Penchecks. [38:57] Chad: Oh, you deserve a drink. I thought he was trying to make fun of you guys. Kevin, like they're not a record keeper. Why would they report here? [39:04] JD: No, no, no, no. But clearly I'm thinking of you, Kevin. That's good. And Powers at 87k. American funds. 68. I was kind of surprised by that. American funds. But when I look back historically, nothing's really changed. Boy is at 64. Manulife John Hancock retirement. Boy, that rolls right off the tongue. They're at 55k principal 45. The only change we've seen in the last five years. Human interest sneaking in. So human interest now is at 44. And to Kevin's earlier points, I think that's probably really valid. They're probably boosting that number with a lot of really tiny plans and then fidelity is in that final spot at 36. And if you flipped the requirements or the filter, if you will, and went to Assets, I think Fidelity would go from the bottom of the list to the top of the list for obvious reasons. [40:01] Kevin Spaeth: And that's why playing count doesn't matter. [40:05] JD: Well, it does to some extent. Yes and no. Yes and no. I don't totally agree with that. But all this is data obviously, Kevin, and you're all looking at to get a glimpse of some value from it. And I definitely think that to your point, I totally understand that a big vendor with, with a lot of assets potentially and a big headcount maybe has a proper scalability or does or doesn't. But also someone servicing a lot of plan count also has to kind of acquire certain skills and have the right service departments and the right people to do that. So it's all of the above. Some interesting takeaways for me though is no more guideline on the list. They're gone, I'm assuming because of the gusto purchase and then the flip of half of those to vest well paychecks apparently no longer submitting. And so here's my question to Kevin. Can I ask you like this list, you said you've been keeping the spreadsheet since I think you said 2018. [41:10] Kevin Spaeth: Yep. [41:11] JD: I tried to look back a little bit. Are things changing or these just the same people in the same rankings for the last 10 years? Like is there, what can we glimpse from a, like a big summary, a big 30,000 foot view. [41:25] Kevin Spaeth: Anything there's the rich get richer, there are fewer providers out there. Mass Mutual, Prudential, you know, one America gone. And then you also can see things creeping up. But I mean look at, I, I think what you see from this is at both your level and my level, a census is number eight. Oh no, sorry. A census is one in plan count. But they're eight. [41:53] JD: Yeah. [41:54] Kevin Spaeth: Participants. So I don't think we give them enough respect for how large they actually are. [42:02] JD: I think that's fair. [42:05] Chad: As I look at that number and I see the gap between a census and others in terms of plan count, I'm going, that's not, that is not a traditional 401k that, that's not filing a short form or a full form. You can say it's, it's an, it's an easy. I also look at some of those numbers and I immediately go to. They've got state, they've got some state plans. Are they looking at those plan sponsors and calling those a retirement plan? Because 219,000 is insanity, guys. [42:34] Kevin Spaeth: Yeah, what about college savings accounts? Don't they do those? [42:39] Chad: So you don't know what data is being recorded there? [42:41] JD: Well, you do. These are, These are definitely D.C. plans. That counts. [42:46] Chad: That doesn't mean that they are. They are under the governance of the Employee Retirement Income Security act. Jd. Like, they, they could literally be state mandated plans. [42:57] JD: No, no, I agree. They could be state. I jumped on that. On the college. On the college. But yeah, there could be state mandated plans. I'm sure if you looked at, I mean, go look at Vestwell, you could, you could sort through that to figure out like what they're doing there. So, hey, like anything, when you see these, this, this type of like data accumulation and rankings, you need to like, be a smart human when you look at it. But I like what Kevin just said. He said the rich were getting richer. And so when I was sitting amongst all those bachelorettes this afternoon, I took Nationwide just because we used to be a big Nationwide shop. Voya, John Manulife, John Hancock. Retirement just flows right off the tongue and, and principal. And I did a, I did a couple things looking at them. I looked at from 2020 to 2026. How did they grow in terms of plan counts and how did they grow in terms of assets, which I'm going to equate to like, revenue. So to Kevin's comment of the rich getting richer, okay, nationwide went from 34,000 plans, almost 34 and a half thousand plans, to 30, just shy of 32,000. So they lost a little, but their revenue, or, sorry, their assets went from 148 to 219. That's, that's a soft example. Okay, ready for this? Voya? Went from almost 65,000 plans to, to just over 50,000 plans or halfway on their way to 51,000 plans. And their revenue went from 377 billion to 766 billion. Now, it's not complicated to figure this out. That's assets growing. That's the stock market going up from that point. But isn't that interesting if I applied that to my own business model? They lost plans but gained substantially in revenue. To Kevin's point, the rich getting richer. John Hancock. Excuse me, Manulife, John Hancock. Retirement went from 49,000 plans to a number that I was drinking when I wrote this. It went down by a little bit. 45,000 and something. So just down slightly and they went from 168 billion to 258 billion. So not as aggressive as a way, but a similar story and principles The. The same, actually. A little different. Principals kind of stayed flat over those last five years and their revenue went from 419 billion to 645 billion. When I say revenue, I'm. That's not. Shame on me. That's their assets and their management. I would imagine that their revenue proportionately went up. Up for those assets going up. So, Kevin, you're the gas. Chad doesn't want you to talk because he's got it. No, go ahead, Chad. I. I don't let the gas talk all the time. Go do it. [46:16] Chad: The only thing I would say is I struggle with these stats and they're. They're. As we know, it's only as good as the people who are putting this data together. But there's no way in my mind the numbers that you shared right there. JD. [46:29] JD: Yes. [46:29] Chad: Boya lost 15,000, 000 plans. It went from 66, 000 to just over 50, 000 plans when I went [46:36] JD: to the 2020 Plan Sponsor magazine record keeper survey. Go look at it now. [46:43] Kevin Spaeth: Or you could just take my spreadsheet and unhide all the columns. [46:47] JD: See, I did. I didn't do that. You only had the past year. You. I didn't see that. [46:52] Chad: Yeah, second tab. [46:53] JD: So go check it. Go check it for me, Kevin. [46:57] Kevin Spaeth: So what is it? Voya. [46:59] JD: Voya. What was Voya in 2020 for the Record Keeping Survey? [47:03] Kevin Spaeth: I'm 51 3. 89 then 2021. 51. 908-905. [47:09] JD: Oh, 51. I had six. I'm not gonna go there right now. I had 64. [47:16] Mark: Someone drink a little too much? [47:17] Justin: Yeah, we've got a little bit. I can't go there. [47:22] JD: I can't go there. [47:23] Mark: Everyone's been drinking a little bit too much. [47:26] Kevin Spaeth: I was in. But that's one America. [47:28] JD: Yeah. Wait, wait. [47:30] Chad: So that, that was Brashaw's comment about acquisition. Like we would have seen playing [47:36] JD: that rant out. [47:36] Justin: Right? [47:37] JD: Oh, I gotta go look at it. But I can't rewind, rewind, rewind, rewind. Same point is true. Same point is true. Unless I'm off on the. On the asset under management, which obviously I'm not because the markets have gone up. I mean the concept is still is totally accurate. Right? [47:55] Justin: This is why we should let the guests talk a little bit more. [48:01] JD: Oh, I gotta go look at that. That can't be wrong. I do. I remember. Va. You guys, I'm never wrong on this. I'm gonna go look. [48:10] Justin: We've proven you wrong. [48:12] JD: Not. Not very often. I feel like you do this. And then I wake up on Friday, hung over and I go look and I figure this out. [48:21] Chad: I think you just had the numbers backwards. You said 66 down to 51 and I think it's actually 51 up to 6. 66. [48:29] Mark: That would make more sense. [48:30] Kevin Spaeth: I already use my sex Panther reference in the, in the chat bar. [48:36] Chad: Still holds. Very true. [48:37] JD: That point is still very true. It is. Okay. [48:40] Chad: But I get my, my rich are still getting richer with a little grain of salt. [48:45] JD: It works. They are, they are. [48:47] Justin: They are. [48:48] JD: And by the way, I'm not against that. Roby, I, I feel like if that's your business model and you can make that happen and you, you make. We talked about this. I feel like not on last show, but maybe the show before. Where is it okay for someone to make more money as the assets grow? And that's a very debatable concept. But let's be clear. Let's wrap this. [49:10] Kevin Spaeth: Not if you're a tpa. You gotta credit back that revenue sharing. [49:14] JD: True, true. But clearly if you are a, no offense, community listening in, an advisor or a record keeper, that is how the business model works right now. Assets grow and your revenue grows. Now if you're pointing your finger at me as a third party administrator, yeah, mine does grow too, a little bit. But the five basis points I get ongoing is minimal compared to the rest of my business model. It's a, it's a buffer. It helps. But I have to bill my clients directly for the bulk of what I make. And so again, I'm not saying that that's wrong. I'm actually kind of okay with it. If it changed, I would kind of be okay with that too. But it is what it is. And if you're in this industry, you should be aware of that. You should be cognizant of that. That's how it's working. And if you're against that as an advisor. Time for Chad's nuggets. With JD stealing Chad's points he's made before, you can find vendors and you can find third party administrators that will support you in a flat fee. Cause Census can do that. Yeah, there's plenty of record keepers out there that can do that. [50:29] Chad: I'm getting ready to write an article on build versus asset based fee for plan consultant. It's due on Tuesday, so wait for it. It'll come out and be on that exact topic. J.D. [50:39] JD: perfect. And we never pitch ourselves on this show, but at Plain Design Consultants we have a non rev share fee schedule that we do for advisors that like to work with those types of products. So it's very doable. Kevin, let's play a game. A long time ago, Will Hackler, legend. Sorry, what did he say? I think they do. You know. You know me, cab. I'm a creative type and long time ago, I came up with the most. The coolest, best game ever in the history of retire. Alex. It's called the no per do game. [51:22] Mark: Really sad we're not doing fin talk. [51:32] JD: Justin. Please tell me you're saying that on purpose because you know how sensitive I am. [51:38] Mark: I was done with that one, pal. I'm so stoked. [51:40] JD: This is back the last several episodes you're like, are we doing Fintox again? No, for dope, Kevin. And this one cuts deep for me today. It cuts real deep. No per dope. Southwest Airlines, have you flown these people? [52:00] Mark: Nope. [52:01] Kevin Spaeth: Yeah, I'm an Alaska guy. [52:04] JD: God bless you, Chad. How do you feel about Southwest Airlines? Are you nope or dope on this? [52:10] Chad: I'm. I'm dope. I have to be because it's the primary hub coming in and out of the two airports I travel through all the time. [52:18] JD: I'm starting to experience that. Apparently San Diego to Austin is a big Southwest thing. Justin Silent J. Southwest. What do you. How do you feel about it? [52:27] Mark: It's not my cup of tea, I'll tell you that much. But I'm also curious, why'd you fly it again and get put in the penthouse and just one up. [52:34] JD: Finding an airline. We'll leave that for the end. Yeah, I had to here. [52:38] Chad: But the private jet was being used. [52:41] JD: Southwest. [52:43] Chad: Yeah. [52:43] Justin: Well, first and foremost, it's like I'm in the middle. I'm a nope. No, because like it is the free. The, the free bags initially, like when they used to do that was awesome. That was a great. But the anxiety of check in and getting. Fighting for your spot in line when you felt like you were in a gang war. Like, I was nope on that. So dope on the free bags. [53:07] Chad: Nope on the seats. [53:07] Justin: Now they've changed in a paper bags. So them for that. And then secondarily they put assigned seating. [53:15] Chad: So I'm not. [53:15] Justin: So I'm still in the middle. [53:16] Mark: Dude. [53:16] Justin: It's. It's. [53:17] JD: You know what it is? [53:18] Justin: It's like an old reliable. You could just count on them to be on time, get you ready to go. Yeah. [53:23] JD: J.D. [53:23] Justin: it's not the fanciest, but it's fine. [53:25] JD: It's fine. [53:26] Justin: And the cost is reasonable. It's fine. Fine. [53:29] JD: Yeah. [53:29] Justin: We're having Fun. [53:30] Mark: Under two hours. [53:31] JD: Well, what I can tell you is. And this is what irks me, Kevin. Is Amanda still here? This is what this irks me, Kevin and Amanda. There is no first class, and there's no lie down seats. There's no champagne. There's no cold mint towel to kind of put on your face. And you know what I like about flying, Kevin? When I fly, wherever I go, part of what I like about it is the privilege of, like, my wealth and my success and watching other people walk on the plane and walk past me in first class, knowing they're not sitting where I'm sitting. [54:14] Kevin Spaeth: Oh, man. [54:15] Chad: Today. [54:16] JD: Today we also found myself on Southwest flying from First Time Watchers. This is a bit. [54:25] Justin: No, no, this is not a bit. Disclaimer. The. The comments made by JD Carson do not represent the thoughts and feelings of the other folks on this show. We fly Southwest and we are fine. [54:40] JD: Justin's half right. It's half a bit. It's half not. Okay, let's move on Southwest. [54:44] Kevin Spaeth: The thing I always like was once you get your seat, you try to sell the seat next to you the. To the thinnest person walking down the aisle, like, hey, this is a great middle seat right here. [54:54] Justin: Yeah. [54:55] JD: I have told my travel agent, who is my wife, that I will only fly first class, but that doesn't happen when we have to fly southwest to Nashville or Austin. So, yeah, Justin, you're right. It's a bit, but it's also not a bit. I'm a spoiled little bitch and I want to fly in first class, motherfuckers. Okay? [55:15] Kevin Spaeth: I like money. [55:17] JD: Next one. I'm not gonna lie. We need to be authentic here. And yes, yes, Amanda, my toilet. My bidet is expensive. Okay? Outsourcing, Kevin. Outsourcing. I say this because I want that sweet juice out of my kettle. One outsourcing. TPA work. Your email signature says do what you do best. Outsource the rest. Should third party administrators be outsourcing their work? Are you. Nope. Or dope on this? [55:51] Kevin Spaeth: Dope. You know, you got to do it to stay competitive. And as long as the information is secure, which it is, because it's the Internet and you've got people with master's degrees. Doing what People. You know, you'd have to pay $50,000 for somebody with no experience to do it here. [56:09] JD: Master's degrees in India or something. Yeah, fair enough. Fair enough, Chad. I mean, come on, bro, dig deep. Are you. Nope. Or dope on outsourcing. And I'm specifically third party administrator. [56:25] Chad: Yeah, I'm nope, I'm nope on the sense that if it's your core competency, it shouldn't be outsourced. It should be what you're doing. If you're outsourcing some component of your process, so be it. But if it's the work that you are hired to, to do, I don't feel like that should be outsourced. [56:42] JD: Justin, I'll let you piggyback and, and give you some further context. Like outsourcing doesn't have to be to India. You can outsource right here in the good old United States of America. There's and are we ready for this? And, and Kevin will back me up on this. There's plenty of outsourcing types of things that TPAs do. I'm trying to soften this blow a little bit. I outsource all kinds of things in my company. [57:11] Justin: Other things we use pen checks for, something like that. [57:15] JD: Yes, we outsource. Write your own document. No, I'll source your own 5,500. [57:22] Chad: That's absolutely different. Yes, we do write our own. There's a boilerplate. No, that's entirely different. [57:29] JD: Kevin's point is true. We, we use software. Yeah, I guess maybe you're right, Chad. Maybe you're right. [57:36] Chad: Yeah, that's not the same. [57:37] JD: Justin, your thoughts? [57:39] Mark: What do we outsource? I was in the middle of typing a response. I missed the question. What are we outsourcing? [57:45] Justin: Is anything your intros? [57:48] Chad: Yeah, game. [57:57] Mark: What was the question? Or let's just move on next one. [58:01] JD: Yeah, I mean this is a deep number doubt. This is a deep number doubt. But I didn't on purpose because I saw Kevin's email signature. So Robbie, I mean, how do you feel? Honestly, all, everything we said when you, when someone put a microphone in your face and said a third party administrator, outsourcing or not, what's your take? [58:20] Justin: Well, again, I, I, they Oh, is that for me or is that for Justin? [58:25] JD: Use you, Robbie. [58:26] Justin: Okay. Yeah, I, I, the word outsourced, right, has in my opinion, isn't just all encompassing of one thing like you just mentioned. Doesn't mean you have to be outsourcing overseas or, or you know, the typical thinking of like call centers and such where you're talking to someone who maybe English isn't their first language and whatnot. I think the idea of outsourcing, when done right, when utilized to do things that are going to enhance your services and make things better internally, I'm okay with that. As long as the, the end user, your clients or Your, the partners that you're, you know, working with to build your business are impacted negatively by that. Right? Meaning like they're not talking to the right people. They're not getting the people who are day in day out here to build this business and are accountable and wanting to do the right thing and stand behind the products and services. [59:20] JD: Go ahead, Kevin. Defend the industry before I do. Go ahead. [59:23] Kevin Spaeth: No, I think, Greg, a good point in the chat bar is using AI outsourcing. [59:29] JD: That's a great concept. [59:32] Chad: That was going to be my exact example, Kevin, in terms of outsourcing, if I hire a lawyer to defend me in court and a lawyer stands up there and reads from artificial intelligence the questions they asked and what Chachi PT told them, I'm going to feel like that was a disservice to the word, to the work that I hired for. But if that lawyer used that artificial intelligence service to gather information from and to do research and then they came in and they defended me with the work that they gathered from that resource, that to me seems okay. I hired them to defend me. That's the quality of work. That's the core competency of their work. [1:00:12] JD: I didn't want to spend time on this, but let's, let's pivot. Let's do it here. When people pitch to me as an owner of a third party administration firm with I don't know where we're at north of 1200 plans right now, what they say is, hey, it's tough for you to do all this work. It can be very seasonal. And if you know anything about this business, you know that, like, it, like, it kind of ebbs and flows in terms of the periods of the year. And so they're like, look, you should focus JD on being like service focused. Like, make sure the people that work for you at your company are focused on your clients, your advisor partners, picking up phone calls, answering emails, doing those types of things. Why are you hiring people to pull levers and push buttons and software to do things that are all pretty standardized in terms of testing and push edge cases to the side? That's a oxymoron. No, in a weird way, for a moment and say, like, in general, that's true of like 95% of my business that I don't think you hire me to make sure that the ADP test is done right or that processing is done right. [1:01:27] Chad: Yeah, that is exactly why they're using you. And not a bundled low cost. [1:01:31] Justin: No, because. [1:01:32] JD: No, no, no. Because software, software does that. Not, not like Experience. [1:01:37] Mark: You're still doing it. [1:01:38] JD: Software does that. Yeah, but so hey, first of all, Plan Design Consultants does not outsource one bit of our business overseas or here in the US we do it all in house. That's because I want to employ more people and have them be my employees. Because Amanda, I'm a fucking narcissist. So that's what I want. The more employees I have, the better value, I feel like as a human being. But I'm just trying to make the argument, what they say is like jd, you could run a better business if maybe you just employed more people to do like the, the grittier for your employees and less of the world. That's all. [1:02:16] Chad: That's true. That is absolutely true, jd, when it comes to the button pushing that you described. But to Kevin's point earlier when he said I sold a bunch of cross tested plans in la, someone's got to sit back and say which employees? Dang it, you're right, Kevin. Which employees do we, which allocation groups? How do we dial up the design of this cross testing? Like that's not something that artificial intelligence is necessarily going to do when it [1:02:46] Justin: comes to the work itself. [1:02:47] JD: Be careful. [1:02:48] Chad: When it comes to the work itself. It can now. So that's why I wrote in the chat bar. What are we being hired to do? [1:02:55] Justin: That. [1:02:56] Chad: That's a, that's a real question. [1:02:57] JD: That's a great question. [1:02:59] Chad: And it is. But it's two part to me. I think it's ever changing to be consultants that are responsive, that are attentive, that understand the space, that, that are, are there to be a deeper relationship with the people we're working with, that is advisors and that's potentially their clients. We're, we're expected to do quality of work. It is an expectation that the, the actual deferral percentage test can be done [1:03:26] JD: well, that if you don't, you're a, you're a failure. [1:03:30] Chad: So, so your, your point though is very valid. And, and maybe I'm wrong in this. What are we actually hired to do? I still think at this point our community as a whole is hired to be specialists, not to be operational people. And that may change, but if you tell me it's going to, I'm going to say, well, then why doesn't. [1:03:50] JD: Okay, are you ready? Are you ready? Ready for this? Chad, let's, let's show everyone what's under the skirt with me and you. [1:03:59] Mark: Yeah. [1:03:59] JD: If you take our, our business and we've never done this on. [1:04:04] Justin: We're not going. No no, no, no, no, no, no, no. [1:04:08] JD: We've never done the sun retire. [1:04:10] Chad: No, no, no, no, no. It's okay. We'll change the trails. [1:04:15] JD: Yeah. [1:04:15] Justin: Thank you. [1:04:15] Mark: Okay. [1:04:17] JD: Out of our how the hot dog is made 12 right now. Thank God for you, your sales team and everything you've done. And Kevin listening and everyone tuning in. I would say half of our plans are Safe Harbor Match plans on a per payroll period basis. [1:04:41] Justin: Half. [1:04:41] JD: So take the other half and say to yourself, okay, those are ADP tests, pass or failures. Those are cross testings. Those are all those things you just talked about. I'll drink but half of them, which is a big chunk. Your point of like being a consultant and doing all this stuff is less relevant. I'm going to say not relevant, but less relevant. Like there's some basic steps that need to happen along the way to get that client from A to Z and being done. And Kevin, you're the guest when I say that. Does that offend you? And the people you represent at pen [1:05:19] Kevin Spaeth: checks, like the 100 US based sales force of pen checks is not necessarily offended by those. [1:05:25] JD: You. [1:05:26] Justin: Us. [1:05:26] JD: Oh fuck. God damn it. [1:05:29] Kevin Spaeth: It's not necessarily offended by that. What it, what, where are they? Your value add comes in is when these new acts are passed and helping you craft the plan design that's right for you. Or maybe saying hey, you've grown out of Safe Harbor Match or hey, you, you're Safe harbor non elective, but you should be Safe Harbor Match and saying things like that. Just doing the average deferral percentage test on an annual basis. [1:05:54] JD: That's still consulting. [1:05:56] Kevin Spaeth: Yeah. You're still consulting. [1:05:57] JD: Is that what you're going to say, Chad? Like they're still consulting? [1:06:02] Chad: Yes, I'm going to say that proactive consulting is something that our industry as a whole continues to miss the ball on. [1:06:11] JD: Yeah. So we could be more proactive. Okay. That's fair. That's. That's the future. And hey, by the way, in this new world where I'm. Where I'm potentially right and a lot of the old school world is wrong and that a. Actually things can be pretty easy, it also does unlock a new world where we can start to do more proactive things. But I think to do that we need to look in the mirror, Chad, and understand that most third party administrators across this country aren't as proactive as they think they are, aren't as white glove service as they think they are because it's a hard job. To Kevin's point, a lot of new provisions, a Lot of new rules, a lot of nuances, a lot of things to do, a lot of deadlines to [1:06:57] Kevin Spaeth: hit and how are we hiring the new, the younger people and training them up? [1:07:01] JD: Kevin, we're never going to get to that topic tonight. [1:07:03] Chad: So Kevin's trying to create you a good bridge. [1:07:06] JD: No, we could go, we could go after show. If you're down, I'm down. But my point is all these things are venn diagramming a little bit and there's a new future and there's an old current kind of status and, and we just, I think we should be eyes wide open. [1:07:22] Chad: You dangled the carrot, you didn't give any, you didn't give any actual value in there. JD for those that want to know that the under the curtain mark side of things is that when you talk about half of the plans being safe harbor matches per pay period, that can be very automated with proper technology. Easy, very automated. That is not the value of a third party administrator in my point of view. That, that is literally crunching numbers, Kevin. [1:07:50] JD: Amanda, that's a 400. That's a 402G and a 5500, basically. [1:07:56] Kevin Spaeth: Why don't you charge a lower fee for that? Why don't you say like an adp? Because the baggage fee, you know, people do. [1:08:04] Chad: And we have, we have people do kickstart for years. That was a heaven. Yeah, that's much lower cost structure, Devin. [1:08:11] JD: So has Nova, so has. Like, that's not uncommon. Kevin, that's already been done. [1:08:16] Kevin Spaeth: Oh, but, but it's not, it's not super common. [1:08:19] JD: It's not common. No, no, it's definitely not. But it's been done because everybody wants [1:08:24] Chad: to make more money. [1:08:25] JD: No, Amanda wasn't yelling at you. I was actually reaching out to you. It's like someone else who's a thought leader on this, who's running a shop like that. And I'm just saying, look how simple a safe harbor on a per payroll period basis is. If you look at it through a certain lens, it's really a 402G and a 5500 and then maybe like paying out people south of 7K. But I'll drink for the, the thousand reference on the alpha. [1:08:54] Kevin Spaeth: And that's something you'd outsource because you'd have penchecks do it for you. [1:08:57] JD: Yes, There you go. Okay. I, I love this show and I, and I'm annoyed by the show at the same time, but it's good, it's good, it's good, it feels good. [1:09:13] Justin: Yeah, yeah. [1:09:13] JD: Yeah, yeah, it feels awkwardly good. It's, it's great. It didn't like play out the way I wanted to, but I, I like where it went. And Kevin, if you're down for last [1:09:23] Justin: time we had a show that didn't play like you wanted to. That was rough, man. [1:09:30] JD: Actually enjoy that show. And speaking of people, I hate J.D. no, no, just the guy. You know, the guy. The guy, yeah, man. I can't remember his name. [1:09:41] Justin: No, no, we're not talking about, we're not talking about it. [1:09:43] JD: No, no. [1:09:45] Kevin Spaeth: Is it a middle aged bald white guy? [1:09:47] JD: I think so. I mean, I'm just guessing. [1:09:51] Justin: Got a few of them here. [1:09:52] JD: Yeah. The guy who ripped us on his blog posts and put it on pension whatever thing. Never, man. I'm over it. [1:10:00] Mark: That wasn't a headline. [1:10:02] JD: No, we, we, we hit back and we've, we've heard nothing back. We've heard nothing back. So if anyone knows that guy that we're talking about, like poke him, motivate him. I'm down. Let's talk, bro. Let's keep the conversation going. I'm in. I'm not, I'm actually not even butthurt about it. I love that the old guy tried to write something. I think it's very cool. Okay, thank you for tuning in to retire Hollux. We'll see if Kevin sticks around. Maybe not. [1:10:33] Justin: Oh, hold on. So if you have like a proper end of show that you're about to do, that's fine. But I want to end the show for the, for the audience a little bit here. If first and foremost, Kevin, do you have anything to pitch? You want to, you want to give us anything? You have a. Tell us your socials, tell us what you're always doing. Ball games, all kinds of things. [1:10:56] JD: Let me pause you, Let me pause you for a second, Mark. You've done this a few times on the show. Let's make this a bit. I like this. [1:11:02] Mark: Go. All right. [1:11:07] Kevin Spaeth: Trust. We help you with the force out small balances. It's a plan document Issue your TPH be telling you that. And also don't do that balance of the plan which will help better get better pricing. I'm also on the board of Western Pension Benefit Council. We've got the Del Mar races next month on a Thursday if you guys want to come. And then the annual conference will be in Salt Lake after that. And if I get any more. [1:11:34] JD: Kevin, how many, how many days out of the year do you spend at a baseball game, a ping pong event, a luncheon At a third party administrator firm where you bring in pizzas and somewhere else where you put on silly hats. [1:11:50] Mark: Do you have. [1:11:51] Justin: Yeah. [1:11:51] JD: Where you put on silly hats and take pictures or to Mark's point, like put on costumes. Like your job looks like you're a bit of a circus animal really. Like, what do you do? You run around. [1:12:01] Mark: Whoa. [1:12:03] Kevin Spaeth: Well, I found a long time ago that I can either be my inauthentic self and do business that way, which is like every other middle aged white guy in this industry, or I could just act like my authentic self and have fun with it with people. And I found that people like it the other way. [1:12:26] Justin: Not. [1:12:26] Kevin Spaeth: Not these middle aged, bald white guys. They're different. [1:12:29] JD: Chad, are you middle aged? How old are you, Chad? [1:12:32] Chad: 42. [1:12:34] Kevin Spaeth: Camera. Because I could see like how. How receding my hand. Are you. [1:12:39] JD: Are you gonna break? [1:12:40] Mark: Is that like an early come over? [1:12:42] Kevin Spaeth: No, no, not yet. Not yet. I'm a couple days out for that. [1:12:46] Justin: Are you going back to the beard? Are you going. No beard for a while, so. [1:12:49] Kevin Spaeth: My parents are in their 80s and they haven't seen my chin in 10 years. I'm going back to Jersey in two weeks. Weeks. And then after that. [1:12:57] JD: Are you saving this shaving the staff? [1:13:00] Kevin Spaeth: I'm gonna put some lights on my car and start pulling people over. [1:13:07] JD: All right, awesome. Thank you everyone for tuning in to a another episode of Retireholics. Kevin, thank you for being our guest. Thank you for everything you've been popping off in the chat bar this year. And thank you for like, I think more importantly than either of those things, I. This whole show was built upon kind of like people like you. Like, thank you for being invested in 401k and giving a shit about the details. And I think the entire industry needs people like you doing that. And so you're a blessing to all of us and I was happy to showcase that. I didn't know that about you originally until we kind of met personally and talked and I was like, oh, this guy's a goddamn nerd. Like, he's into this. So that is what Retireholics is all about. [1:14:01] Kevin Spaeth: Like, you are retire Alex and I am a guest. But I also tied for second on the chat bar champion. I think that's work. [1:14:09] JD: Nice work. [1:14:10] Chad: Well, [1:14:14] Kevin Spaeth: I got a six handicap. [1:14:16] Justin: You get some pops? Yeah, sure. I'll give you the championship. Sure. [1:14:21] Chad: Now you're one above him. [1:14:23] JD: And 11 drinks, by the way, that is actually a good. [1:14:27] Justin: That's impressive. [1:14:28] JD: Earlier you're trying to lead me into the final topic, but you just led me into. No, he's chopper champion Greg Greenfield, gg. Yeah, there's our chapar champion for tonight. [1:14:42] Justin: JD what do you got going on later today? You're in Nashville, a place that notoriously, the retireaholics have stayed out until 3, 4 in the morning. We've been taken around by celebrities, we've done things. What do you got going on on the docket tonight? [1:14:56] JD: I'm gonna take this bottle of vodka and I'm gonna walk down the street of Broadway and see what happens. Like, I have no idea. [1:15:05] Chad: That's a terrible idea, J.D. [1:15:07] Mark: i really hope you come across Dusty. [1:15:09] JD: Yeah, maybe I'll go find Dusty. And so my. My heartwarming moment with moment with Kevin. And thank you to you out there for tuning in again and our next guest. Next month on the next episode, Retire Hawks will be none other than Drumroll. Brandon, you still there? Sick on that goal. [1:15:36] Chad: I know who it is. [1:15:37] JD: It's hard to find trouble. You do, Chad? [1:15:39] Chad: Yeah. [1:15:41] JD: Sherry Fitz. Oh, yeah. Sherry Fitz. So with that, Brandon, play us out on a song. And then if I'm still alive and Kevin's still here and whoever else is here, maybe we'll talk about where the next generation of 401k. [1:15:59] Kevin Spaeth: Because Nashville. One thing I always teach my kids is, is that in a world of Justin Bieber's be a Johnny Cash. [1:16:06] JD: Oh, fuck, Kevin. I love that. The core of that is great, but you need to know. And Brandon, you can play the music after this. But I'm a Justin Bieber.