Leaf House: 3(38) Fiduciary Services & Managed Accounts

[0:00] JD: Dancers. That's who they are. [0:02] Chad: Oh, it's so painful to hear. [0:06] Mark: I know. [0:07] Justin: Greg's comment makes sense. [0:09] Chad: Yeah, the truth hurts, I must say. [0:13] Justin: Here we go. [0:14] JD: Horrible bosses. [0:16] Speaker E: Wow. [0:37] Speaker F: So much going on. [0:38] JD: Wow. [0:41] Chad: The trifecta right there. [0:43] JD: Let me, let me, let me take. Let me take all my past work for the last several weeks, smash them together and pretend I created something new. Way to go, Brianna. [0:52] Mark: Way to go. [0:53] Justin: I couldn't help but sing the old recycling song. [0:56] Chad: Recycle, reduce, reuse. [1:00] JD: What is Chad talking about? Hello, Hello, hello, hello everything. My name is J to the D. I'm joined by C to the H to the A to the D and M to the A to the R to the K and J to the to the S to the T to the I to the N. Justin. That's a long name. And we collectively like to drink beer. We like to talk. 401k. If you love 401k, then we love you. Even if you don't love us, we still love you. So welcome, you little 401k obsessed freakazoids, to another episode of Retireholics. We are so pleased that you have joined us. Can I start with something serious? Of course I will. Thank you. An important update. There's a very, very serious problem and it deserves all of your attention. Something is spreading from across the United States, from the east coast to the west coast. I had today two DCIO wholesalers come to my San Diego office. Don't worry, I kept them at a very, very safe distance from me. Those airplane flying Covid infested people. But I can with 100% accuracy confirm that the fashion fad known as the Midtown uniform has made its way from the snobby streets of New York and Boston and has now infiltrated beautiful, sunny, fashion focused California. The Midtown uniform was worn by both of these mutual fund slinging gentlemen. Holy hell. God save us all. I'm not sure what to do. [3:03] Chad: What can you. [3:04] JD: Worried? [3:05] Justin: Worried? [3:05] JD: Does everyone, everyone in that chat bar know what the. [3:08] Speaker E: I feel like you need to describe [3:09] Speaker F: it a little bit based on what we see. [3:11] Justin: I mean, you kind of. [3:13] JD: But I think, I think brands give you a good taste of it. The. The little fleece over the. The little vest fleece over the dress shirt and the suit, slacks and dress shoes. Go to Midtown Uniform on Instagram. They've got some 170,000 followers. There's lots of great pictures for you to take in there. And apparently Patagonia is hip in New York and Boston with this and Patagonia is pissed about it because they're like a surfer company like me. They're like, why the hell is Wall street wearing our shit? But anyways, watch out. It's come to California if Mark, Justin, Chad. Probably doesn't need to be said if I ever see you in that shit. Oh, it's. It's done. [3:55] Justin: It's challenge accepted. I was going to say it just [3:58] Speaker F: became the next conference we are at. [4:00] Justin: We used to make bets with JD that if he lost, we were going to put him in a suit and make him go work on his laptop on the beach. Even better. We're putting you in that outfit and making you go work on your laptop on the shore of the beach while your buddy. [4:15] Speaker F: Shall we bring back the Quiz of Death? [4:17] Justin: Oh, we should bring back Quiz of Death. [4:20] JD: If I've offended any of you audience members that have tuned in because you like to rock that look. Well, yeah, fuck you. It sucks. Don't do it. Okay, Justin. Today everyone out there gets a twofer. You get two guests for the price of one. What's the price, you ask? I don't know the damage you're going to cause to your liver by drinking along with us and watching the show. [4:44] Justin: Or. [4:44] JD: Or maybe it's the. The money had to shell out for Maya's Girl Scout cookies last week. That's the price for tuning into the show. But Justin, you're the man. When it comes to introductions. Who the hell has joined us today? Let us know. [4:59] Speaker F: I wish I knew. Because they don't have any personal shit anywhere on the Internet. [5:03] Mark: Anywhere. [5:04] Speaker F: So all. I gotta go to the dark place. I really did, man. [5:07] Mark: I was. [5:07] Speaker F: I was on some pretty [5:10] Speaker E: background. [5:12] Speaker F: You look like a serial killer. [5:14] Justin: A detective. [5:15] Chad: Exactly. [5:15] Speaker F: So all I know about you guys is you're ballers. You got nine and a half billion with a B in assets. You guys are some of the top dog investment managers out there, I think. Seven and a half billion, is that right? In your 338 alone, that right? [5:31] Mark: We just filed with a new advocate. [5:33] JD: Your shit don't undercut them. Cheese. [5:38] Speaker F: 2019 TAPA Award winner 2019 NAPA Top DC 2020. Thank God we're not doing the acronym part right now. Planet advisor top 100 teams. [5:49] Mark: Really? [5:50] Speaker F: There's nothing that you guys don't do. It's not all about the money. They do partake in some charities. Casa and Gal, they give back to the kids. So bravo to you. Even though it's a peloton race for all your rich fucker friends that can afford those bikes. Jesus. Ladies and Gentlemen, the president and VP of key accounts, Leaf House, Todd and Ben. [6:13] JD: I mean, I wake up in the [6:13] Speaker E: morning, I piss excellence. [6:16] JD: Nice, Brandon. Nice, Brandon. Todd, Ben, we will be playing Acro sin today. Okay? So just to reiterate the rules here, if you say any, if you represent any word by an abbreviation of letters, you must drink from your nasty drink, your stiff drink, and yes, Todd, your rose can count for that. Wait, JD has a peloton. I don't just have the peloton. I have the tread too, bro. I got the bike and the treadmill. [6:47] Speaker F: Look at Tristan. Of course he does. [6:50] JD: I got derailed on that one. Cbc. We will definitely be doing cbc. [6:57] Speaker G: Bing. [6:58] JD: Bing. [6:58] Mark: It's two. [7:00] JD: All right. Oh, two. Hang on. So, Todd, Ben, don't forget, you'll be voting for finalists. And then you out there in the audience, you don't forget because you will be choosing the winner via a poll at the end. So pay attention to who you think is crushing it in the chat bar. And what else do we do on this silly little show? Oh, at the end, video and Webby room ratings. When we get to the end for the post show, we'd love to have you join us via video and ask some questions of our guests. Especially if you work at Leaf House and you've tuned in, make sure you got your video going so you can tune in later and ask some questions. I'm going to take a couple swigs of this and then. And then we are going. Oh, wait, I have a new segment I want to talk about. [7:55] Justin: J.D. how many bottles of vodka do you go through in like a three week period on the show? [8:01] JD: I've had this one for a while, [8:03] Justin: so it's always your punishment drink. So either you're not drinking it or [8:09] JD: It's. You got 30 ounces of vodka there. [8:12] Mark: Are you saying he just puts it to his lips and makes a face? [8:15] Justin: I'm saying I don't see him pour it in a clear shot glass to confirm that it's going down. So you would be questioning our boss. [8:22] JD: Todd. Todd, if you'd ever watched this show, you first of all would know that there's no way to act as drunk as I get. That's real drunkness. Secondly, my wife would take offense at you saying that when she has to drive her ass all the way down here to pick me up at the end of the show. No, I wanted to add a new segment. I call it Frustrated Chad. So, Chad, we tend to get to the end of some of these episodes. We've got A little group chat going and we say like, oh, that was a great show. That was a lot of fun. And. And Chad will be the party pooper and he'll write in and be like, I wanted to ask them about this. And we never got around to asking them that. [9:02] Chad: You gotta, you gotta tee this up more. It's like awesome, man. [9:06] JD: That was great, dude. That blah, blah, blah. [9:08] Chad: And then Chad goes, yeah, but the content really wasn't what it was supposed to be. [9:14] Justin: I give you guys a thumbs up first I tap you on the ass and then I tell you. Yeah, you don't. [9:20] Chad: Yeah, that's why I sent a gif of a bubble bursting, because that's what you do. [9:24] Speaker E: Chad. [9:24] Justin: So, Chad, hey, rock star guest last week and we didn't get to really good content. [9:30] JD: Chad, Chad, today, today we're going to be talking 3:38. [9:34] Chad: Busy making drinks, not paying attention. [9:36] JD: That a Todd, are you going to read a baby 321? We're going to talk manage accounts. We're going to talk target date funds. And so, Chad, I want to make sure if you've got questions there in that little Chad brain of yours, you make sure you get them out. Go ahead and interrupt. [9:53] Speaker E: I think you have a big Chad brain. [9:54] JD: Yes, Craig. Avoiding it, by the way. [9:57] Speaker E: Todd drinks any liquid at the exact same pace. So if he was drinking water, it would be the exact same pace of him drinking. [10:04] Mark: I have a volume control issue. [10:06] JD: Yeah, I get that. That actually makes a lot of sense to me. Surprised me at all. I'm sure a lot of people are afflicted by that same disease. Let's dive right into. Should we define. You know what? Sometimes I feel like we're nerds about this stuff. We know it all and I know a lot of our audiences, but why don't I set it up for you guys? So simple, but quickly define for US338, you know, in the 401k space, how would you explain it, Todd and or Ben to a plan sponsor tomorrow when they said what is 338? What is it that you guys do go for Ben? [10:46] Speaker E: Effectively, we're taking over the investment decisions for the plan and we are partnering with the plan sponsor and the investment advisor who kind of better understands it. So that is the number one thing that you can outsource. [11:01] Justin: Right? [11:01] Speaker E: So you have 316 and other things that you can outsource. They're outsourcing the responsibility of maintaining the best in class or the core lineup to us and then we're working with them. To partner with 321 is simply we're sharing in that. We're both doing the research, we're making a culminated decision. [11:21] JD: So I kind of grew up in an industry where the plans advisor would guide the client through many different types of metrics and methodologies to, you know, decide on the core menu, as you put it, and then to decide to remove and replace funds if they fall below certain criteria in the investment policy statement. Check swing. And so that was kind of the way it was done. When did this whole 338 thing start to come into vogue where they would say, no, no, no, we can actually outsource this to a professional that's going to do this whole process for us? I mean, am I weird to guess like six, seven, eight years ago? And I know 338 has been a thing, but when did it actually start to, to be a headline? That was happening a lot. [12:12] Mark: So, yeah, I used to have people argue with me. They say that 338 is not a thing. I don't even know what you are talking about. And I always tell them, well, no, it's, it's a thing because it's. See, it's in ERISA. It's called section three, right. Subsection 38. [12:28] Justin: Oh, you gave it to Justin. [12:31] Mark: No, I, I hit Todd's face on there and messed up all the time, man. Don't worry about it, Todd. [12:38] JD: You can always finish your thought too. So you're saying, of course, yeah, it's been around, it's in the regs. But when did we start seeing it as something that was actually in play? [12:47] Mark: Well, when people started to realize that if you centralize the investment research and reporting and due diligence capabilities, that you can free up an advisor's time to focus on the things that add the value beyond just the investments. Now, the investments are important. They're very important. But the things that an advisor does beyond the investments are actually a lot more important. It's behavioral finance, it's plan design, it's consultation with the employer. These things are what the advisors, as they move forward from the past to the future, they get past the fees, the funds, the fiduciary discussion, and they focus on those things. Those are the advisors that are going to continue to grow in this business, those that focus on investments. You know, again, it's what we do. It's an important factor. But it's really hard to compete with us when we can take billions of dollars and we can take our entire investment team with the CFAs. And the Siemes and all the research. I mean this week, this couple weeks. [13:53] JD: What did I do? Go ahead and grab your nasty drink, Chad. I was trying to get a gauge on when did you start seeing it as a product offering that was actually being used by people? I mean is it that far to really. [14:09] Justin: I started seeing it through the record keeping platforms five years ago. Five, six years ago maybe six years ago. Pushed heavy by Nationwide initially and then a lot of other ones followed suit shortly after. [14:21] JD: Let me ask you Mark and Justin first and then we'll ask the boys at Leaf House. We play in this kind of. Not that all our clients are sub 10 million but a lot of our clients are sub 10 million. Most of them are. You guys are playing in this sub 5 million and startup plans. And so can I ask you guys any guess at what percentage of those plans are using a 3 outsource? 338 and then I'll kick it to the Leaf House guys. I want to get some metrics from you guys like what's your average client size, how do you see market share where you're at? But let's start with you guys in the small plan market or micro market. [15:00] Speaker F: It's definitely growing. As far as percentage wise it's still kind of small, but going up there I'm seeing RAs typically are doing it for the most part in ah shit. But not surprisingly and not surprising, a lot of the green advisors are doing it just because they're not that skilled in this side of the business yet. So they utilize that as a. As leverage makes sense. [15:25] Justin: Well again to chime in real quick, [15:27] Chad: there's a fair amount of broker dealers that require A321 to be written into the plan. So when they're proposing on startups or takeovers, what have you, the record keepers already know that they have to include that in there. So they're already including that cost. So I'll say percentage wise, If I'm lumping 321 and 338 together because of that probably 50%. [15:57] JD: Okay, shit, wow. [15:59] Chad: I would. But now if I segment that I would say 40% is 321 and only 10% of it's 338 I still run [16:09] Justin: into the issue that I did five years ago where many of the advisors that are bringing us to the table are private wealth folks that don't have a heavy focus in the 401k space and they believe picking and choosing investments is their skill set. And so allowing a338 to step in is like, oh, no, that's really what I'm here for. And sometimes I have to sit down with them after the meeting and make sure they know their role in the 401k space is different than it is helping an individual create a portfolio. There is far more to be done and we can leverage the record keepers for some of it. But they play a key role in that education campaign. [16:45] JD: Todd, don't answer that yet. Let's table that. Kind of. That classic kind of naive, I know, but what I want to hear. We'll get to that. We'll get to that. But what I want to hear from you guys is I'm guessing you guys are a little upmarket from us, but maybe I'm wrong. Tell me where you think your average client is in terms of size and then do you guys have any guesses on like market share for 338? Not for you specifically, but just for 338 services? [17:11] Mark: Yeah. So our average client is hard to say because we have startups all the way to. I think our largest plan is like one and a half billion dollars, something like that. Two billion. So it's hard to say there's an average because that's not really a fair to average those amongst the thousands of plans that we cover. In general, I would say if you take away that top section and just look at what we get on a regular basis flowing through, it's like probably 2 to 5 million in plan assets. [17:47] JD: I think it's a sweet spot for plan sponsors understanding the value of a 338. [17:54] Justin: Yeah. [17:54] Mark: And like, I think it was Chad was saying that those advisors that are in the wealth management space, they run into a lot of that. And actually those are some of the best advisors that we partner with as far as business because they realize they don't, they don't really understand the space that well and they want to surround themselves with a dream team of people, we being part of that. But they're like the conductor of the symphony, right? They're the center of the relationship. And then they bring in a great TPA like you guys, they bring in a good record keeper, they bring in a 338. They go work with the fun partners. Dang it. [18:26] JD: Oh, what? Again, Shannon, the U.S. do I have a 338 on our plan? We do not. We have an Advisor, he uses Fi360. He comes in, runs that whole deal. But if he came to me, he usually tunes in. I don't know if he's in here today. But if he came to me and offered a 330, I would consider it for sure. Because I think what ends up happening a lot of times with me and Chad sits on the committee with me, which is we rarely have these great meetings and then nothing ever comes to fruition. We don't make certain decisions. But anyways, enough of my skeletons in the closet, Ben. These naive advisors that say, well, man, I'm into the wealth management, bro, they don't really talk like surfers, but let's pretend they do. And they're like, that's you're taking over my job, dude, you can't do that. Go ahead, Ben, go ahead. Todd, how do you respond to that? [19:18] Speaker E: So first off, so as I'm answering it, Todd, I want you to think [19:21] Justin: of all the different names in which you would call a 338, right? So discretionary fiduciary, right? [19:28] Speaker E: You think of that. So I would say, I think the idea of the advisor doing everything, it works. [19:35] Justin: When you have a handful of clients, let's say they have some substantial clients they've been working with for 20, 30, 40 years. Right. [19:43] Speaker E: They understand it and they're really kind [19:45] Justin: of, they want to be the center for everything. But then you also have the advisors that are looking to grow their practice. [19:52] Speaker E: If you have over 20, 30 plans, I mean, you know, you work with all the record keepers. Do you know how hard it is to maintain the list of available funds or the share class that they have and kind of go through all of that. So truly our idea is we're not trying to compete with them and say that we're picking a better small cap value fund because of this standard deviation. And over here we're trying to help them understand that, hey, you have an hour with the key executives to go over the plan and go all through its metrics, focus on the investments for five minutes, outsource that to us. If we mess up, you can fire us. But speak for 55 minutes on everything else on the plan and go through that. Truly, this idea, I agree with you wealth advisors, they might have that idea, but I partner up with quite a few of them because they look at it and they say, I don't have time to go onto that record keeper site and understand if I can make sure that, hey, I'm running my list through you and it's still scoring and we're going back and forth and I can have contact your investment desk, for the most part, it kind of reduces that. [20:59] JD: I sat through a fiduciary review meeting today with an advisor, partner of ours, pretty large client of ours. There's about 11 people on the Zoom call and they have a 338 in place. And I think if presented the right way, it also gives the plan sponsor, like, a lot of confidence, right? Like, no, no, no offense to Joe Smith or Sally Smith, the wealth manager financial advisor, but to. To tell your plan sponsor that, hey, this isn't just me. This is like, you know, a firm that does this and only this does this nationally, this is their expertise is signing on as a 338. It gives them a lot of confidence. And by the way, if they have confidence in what you're recommending to them, then they have confidence in you, you know. So I hear you. Time management's a big one. Like, yeah, the ability to, to prep for all that and do all that kind of stuff could be. Could be a lot of wasteful time that you could spend on some other things. I asked you guys when we prep for this a little bit, I still get a little confused with this and be curious what Chad or Mark or Justin feel about this. Manage account service seems to be a trend. You know, it's been around for a while, but it seems to be catching steam for a variety of different reasons. Catching steam, Is that a thing? I make up analogies all the time like that. [22:21] Justin: I think it is. [22:25] JD: Is managed account service in direct competition with 338 or do they. Do they cross over in some way? And I'm sure the answer is it depends on. But do you see them as competitors? [22:39] Mark: No, they're complementary. And actually, you typically would want a 338 involved in the whole process. Right. So we create managed accounts as a value add. It's not a profit center for us. We believe that in the right circumstance, with the right plan, it makes sense to have a tailored portfolio to utilize the technology available to tailor a portfolio to individuals versus just target dates. Target dates have their place, Managed accounts have their place. But I don't see it as a conflict at all. Some advisors think it's a conflict because they want to talk to each participant. But you just got to be honest [23:12] Justin: with yourself and that you can't. [23:14] Mark: In a lot of these plans, you [23:15] Justin: can't meet with every single participant and [23:17] Mark: make sure they're appropriately invested. So it's a good idea, in our opinion, to utilize the proper technology to do that. [23:26] JD: There's scenarios out there right now, right, where you have a manage account service that's offered. I've heard this. This spoken. And if you Invest in the managed account Service, then that is 338. But the. Is that right? Then smiling. [23:42] Speaker E: I think you're looking at, like, participant level, right? So managed accounts will say, you know, as a participant, they're doing participant level manage accounts. [23:50] JD: But you're offended as a true 338? [23:53] Chad: No, no, no, no. [23:54] Speaker E: I just think it's all right. I mean, I just think it's interesting because what we're trying to do is kind of put the guardrails on the overall plan, right? So if you look at any plan, you're making sure that it's appropriate for everybody to get in and come through. So manage accounts are appropriate for some people, but they're not appropriate for everybody. So when we're looking at it, we're just making sure that the people who are choosing managed accounts or kind of that offering are the ones who truly want it. Right? So somebody who's probably closer. Closer to retirement. Right. Have built up some of the nest egg rather than somebody just kind of getting started that they're. They're just trying to figure out, because what's really the difference in an Alpha of 20 bucks in your. [24:32] Mark: The key to what Ben is saying is the guardrails, because the things that participants do if left to their own [24:38] Justin: devices can be kind of terrifying. [24:40] Mark: There's a case that we had with a plan this was really telling. We re enrolled everybody into appropriate investments, and then later on, when they all [24:51] Justin: had a chance to kind of go [24:52] Mark: redo things, literally a thousand people had chosen one fund, and we couldn't figure out why until we realized it started [25:00] Justin: with an A. Oh, shit. [25:04] Mark: It was the first one. [25:06] Speaker E: And it was a specialty, like niche fund. [25:08] Mark: It's just FYI, everybody is. That's an acronym. But for your information, I will drink in a second. For your information, if you want to start a new mutual fund, just name it, like Acme or something. [25:18] JD: Yeah, fair enough. As usual, Aaron hall had a good question. I don't know if she's propping you up here, Todd, or is actually curious, but she's a stud advisor at a SoCal area, and she says, curious, Todd, why don't you charge for the 338 managed accounts? Because you just said, hey, you do that without any revenue generated, is it a liability for you and a service others are charging for? Because you and I talked about this briefly. So go ahead, put it. I'll let you sell it a little bit. Why you guys don't have a fee for managed accounts? [25:52] Mark: Well, I don't Think it's a. It's a sell. So we look at it as we look at everything through a fiduciary lens. And that doesn't mean that other people are bad for not doing that or they don't do that, but everything's a fiduciary lens. [26:03] Chad: Right. [26:04] Mark: So we think that's a value to participants, but it doesn't take us extra effort because of the technology. So we just offer it without a margin for ourselves. So if you want to look at it from a business perspective, for us, it's just a volume play. It just gets us access to more potential customers because we give it away, essentially, whereas others have a margin built in. [26:26] JD: Fair enough. [26:27] Justin: It's a differentiator that you don't need to be profitable on because the overhead is so minimal. [26:32] Mark: Correct. I mean, and again, the little secret here is it's not a secret anymore is that we're a technology firm run by financial geeks versus a financial firm run by technology geeks. So we automate away a lot of the man or woman hours that go into this kind of stuff. [26:48] JD: But I want to spin the Wheel of Ice, and I'm praying that it doesn't land on me, because I do not want 220sugary calories. However, let me first. Did I hear that you've gone from 7 point something billion to something higher? [27:07] Mark: Yeah, we're following the adv right now. It's 12.8. [27:11] JD: Cash rules everything around me. Green. Get the money. $. Okay, so 12.8 billion. And. And you guys charge 5 basis points as a fee, typically. [27:24] Mark: Correct? [27:24] Justin: Correct. [27:24] Chad: Yeah, we're doing math now. [27:26] Speaker F: Where are you going? [27:27] JD: Here. [27:27] Justin: J.D. [27:27] JD: can someone do that math for me real quick? [27:30] Speaker F: It's around 45 billion maybe. [27:32] Justin: No, not anyone. [27:33] JD: Justin. [27:34] Speaker F: No, I can't do math right now. [27:36] Justin: Sorry. [27:37] JD: Should be a million. [27:37] Speaker F: Should be corrected myself. [27:41] JD: 45 million. Mark, you might want to get Maya in the room to hit these guys up for some girl Scout cookies. That's what I'm thinking. Okay. [27:48] Speaker F: I don't think they can afford the shipping. [27:49] Justin: J.D. [27:49] Speaker H: i'm sorry. [27:50] JD: Brandon. Let's spin the Wheel of Ice. [27:51] Justin: Spin the wheel of Ice. [27:55] JD: The wheel of Ice. The Wheel of Ice. [27:59] Mark: I am terrified right now. [28:01] Justin: Right? [28:02] Speaker F: You guys don't have to do it. It's fine. [28:05] Justin: In front of Dylan. This is going to be great. [28:07] JD: Oh, my God. The one guy who's in charge of [28:11] Justin: his child right now and a puppy that pees everywhere. I mean, my. My night's locked up already. [28:17] JD: Chad's wife left town and she didn't leave him. She just went on a little mini vacation. Just left. [28:25] Speaker E: Usually that just goes down. Good for you, Chad. [28:28] Mark: You just did that. Oh, my God. [28:30] JD: We're kind of getting to be professionals. [28:31] Justin: We're veterans at it now. [28:32] JD: Yeah, it's happening a lot. [28:36] Mark: Can you drink syrup like that, too? [28:38] Justin: No. A little too thick. Going down. [28:40] Mark: Oh, my gosh. [28:41] Justin: You gotta work. [28:41] Chad: You gotta warm it up, Chad. [28:44] JD: Tony's trying to. Jd, how many assets you get overrides on? I'm assuming you're referring to, like, TPA, rev share. Well, it's not 12. It's not. [28:55] Speaker F: Hey, Mark, did you add Todd's, by the way, for this last one? [28:58] JD: Wait, what was that one? [28:59] Speaker F: Because I'm not gonna say it [29:02] Mark: anyway. Come on, Tony. [29:04] JD: I can tell you with confidence that it's not 12 billion. Okay, let's talk about target date funds for a little bit. Target Date funds, I would say have been all the rage. They have huge market share when it comes to retirement plans. They have for the past decade plus. Are things changing? You know, based on the previous conversation we had with managed accounts, Do I want all of your perspective on this? Will target date funds continue to dominate in retirement plans, or will we see managed accounts start to take over or something else that I'm not thinking of? Let's go straight to the robe guy. What do you. How do you feel about Target dates, buddy? [29:56] Chad: Don't you know that I created those? [29:59] JD: Oh, that's right. [29:59] Chad: Yeah. [30:01] JD: That's an old, old retireholics joke. [30:04] Chad: I just announced it on the chat bar. But I just feel like we need to have a noise or a whistle that blows right at 5 o' clock at the halftime point where everyone has to open up a new beer or do something like that. [30:15] Justin: So I just announced that I was opening a beer. [30:17] Mark: I made a Tatarita. What do you want me to do? [30:20] JD: I'm on beer. [30:20] Chad: Don't worry, I'm gonna talk to him. [30:23] Speaker E: I want to say, go ahead and finish it, Todd, and make another one. There you go. [30:27] Chad: Anyways, back to. [30:28] Speaker E: You're going slow here, J.D. [30:30] Chad: what was your question again? I've already forgotten. [30:34] JD: First, do you. First, can you remind everyone why you're the inventor of Target Day funds? You remember that little bit? [30:43] Chad: Something about going on dates at the store? [30:46] Justin: Target. Right. [30:47] JD: No, [30:50] Justin: he needed funds donated to him so he could afford a date at Target or something like that. [30:55] JD: Brandon, there was the dates. [30:58] Mark: He buys at discount at Target or something. [31:02] Chad: All right, yeah, I'll look it up. [31:05] JD: It seemed funnier like five years ago, Mark, I asked you target date funds, they're huge. Will they continue to be huge or will manage accounts start to bite into their market share? [31:20] Chad: If I'm taking a stab and just a guess at this with these billion dollar geniuses looking at me, I'm going to say that I don't think that managed accounts are going to take away the lure and ease that people see with target date funds. So no, I think they're going to continue to be something that's attractive to most people within their 401k plan. [31:46] JD: Stick up for Ben and Todd, like a big part of your 338 is to, is to choose, help choose target date funds for your clients. [31:55] Speaker F: Right? [31:58] JD: Okay. But Chad, target dates still the big deal and will they continue to be. [32:04] Justin: I think they're not as big of a deal as they should be. Quite honestly. I think they should be the most highly scrutinized investment on the core men. And unfortunately advisors don't spend the time on them that they should. Whether or not they're a thing of the past, I think that will depend on what the next evolution is of the managed account service and making sure that it's a blend of some sort of target and risk tolerance portfolio that allows a participant to default into it and have a good mix of investments based upon perhaps a risk tolerance but also horizon. I think we've gotten closer with some record keepers. [32:43] Chad: I agree Chad, but at the same time too, I mean it's got to be guided somewhat by the advisors, right? I mean are they, do they want to. [32:54] Justin: Or the 338 if they're not involved? [32:57] JD: I hate to be the conspiracy theorist but Ben, before you go, let me. Maybe I'll add this to it. Maybe this will help you. You know me and these aggregator firms, right? So these large national aggregator firms are, have created their own manage accounts and I think that's great. I'm not, I'm not anti that in any way, shape or form, but I feel like they're doing that and that's a direct competition to target date funds and it's kind of taking away from those. So I was just curious and Ben, to you guys, you guys have your nose stuck pretty deep in it. I mean you need to recommend and replace and remove target date funds I'd imagine for your clients. So how do you see the landscape? [33:36] Speaker E: So I'm going to take a first stab at it and then Todd, if you want to. So I actually find it interesting because we're talking about managed accounts like A tier and target date tier, but there's a huge void in between. Right. So you have a lot of record keepers spending a lot of money on model portfolios and kind of building. Right. So kind of coming through there. So I can name probably 10 record keepers that have invested quite a bit there. And as a 338, we populate it, right, with the large cap, the small cap, etc. And then the individual is getting kind of a custom view of it. So I think you're going to see quite a bit of that as these record keepers kind of continue to evolve and kind of make these tools available to the participant, you know, So I agree with you. Target dates are very important for a lot of individuals, and managed accounts are available for a lot of individuals. I always use this as an example. My brother's a year and a half [34:28] Justin: older than I am. [34:30] Chad: All right? [34:30] Speaker E: He's an accountant. He is the most conservative individual you would ever meet. I am the most aggressive individual you would ever meet. If we just did target dates, we line up exactly in the exact same spot, but we're two fundamentally different people. I could see half my account value in my account. And I'm going to say, I believe capitalism is alive. It's going to go back up in the next week, next couple weeks. My brother does not believe that. He feels, hey, slow and steady wins the race. So, you know, I think that's where you're going to see that kind of middle ground. [35:01] JD: That was a solid point, by the way. Thank you for bringing that up. The, the, the customized stuff that's happening at the record keepers or the advisor gets to be involved in terms of the allocation and the 338, so I can get funds. So there's a third option which is kind of this hybrid. Go ahead, John. [35:18] Justin: Well, I have a question on that regarding the 338 status. When an advisor is actually picking the Funds from a338list. Table that for a second. Because, Ben, your point of creating a model portfolio, I feel like there are many that are touting a managed account service, but it really is just that they're creating a model portfolio that is the same for everybody and you're picking it. It's not a managed account. I don't think that what many record keepers are doing with model portfolios are actually considered a TDF or a managed account. [35:51] Mark: Correct. [35:51] Justin: It is something entirely different in my mind. [35:54] Mark: Yeah, I'll jump in on that 100%. If it's a managed account, it needs to be tailored to the individual. You can do that either via direct communication with an individual who has investment expertise and can sit down and do that, or you can do it via algorithms that are built that can take individual data points for the participant and turn it into something that's geared toward their specific instance or their circumstance. And to speak to what you guys were talking about, target dates versus managed accounts, we have a white paper on this. It's called the Adaptable Qualified Default Investment Account, because I couldn't say the acronym. [36:30] JD: I almost just spit my beer on the screen. Okay, you got an acronym for it. Good. [36:35] Speaker E: Why? [36:36] Justin: Because you heard white paper. [36:39] Mark: But it's. And it literally lays out the concept of that. It makes perfect sense that for younger people, target dates make sense because if you look at the delta between equity and fixed income from everybody up until they're like 45, it's like the same. There's in all target dates, it's like, it's like within 5%. But then when you diverge at that age, things get more complex and all these target dates are different after that age. It makes a lot of sense to look at tailoring the portfolios for those folks. I'll tell you what's happening now and what's going to build in the future is that the technology is getting better, the competition in managed accounts is getting better. So those costs that you see can be fairly high for managed accounts, they're coming down farther and farther and farther, and you're going to see more entrance into the field. Right now you have three main technology players for managed accounts that are the backbone of everybody else's managed account system. And you're going to see a fourth, a fifth, a six, and that that margin is going to come way down. And so you're going to find that target dates, while still going to be important, the ability to use that technology to tailor a portfolio, that's going to pick up steam. Because once you can move away from a 65 basis point, get it down to 45, 40, 35, 20, pretty soon you're at a 15 basis point cost to do that. That makes a lot of sense to [38:04] JD: look at how often, and I don't know the answer to this, how often is there some type of proprietary thing going on with managed accounts these days? And. Or are record keepers willing to just say, oh, here you be a managed account service on our platform without asking for any revenue in return, like, surely there's no way that's happening? Right. So are we dealing in a whole other world of conflicts of interest? And kind of deals that are getting done to offer managed accounts. Sorry to go deep on this, but I'm just curious because it's not a world I play in, so it's a [38:43] Mark: world I play in every day. And I can tell you that I'm not aware of any record keeper having any demands on proprietary investments within managed accounts. But it's a build on their part to allow it to come in. So they do look at revenue, and the way that they typically get that revenue is that they have a markup on the underlying cost of the managed account. [39:06] JD: Okay, yeah. I would be blown away if they forced you to put some type of proprietary fund in there. That. That's disgusting. But, yeah, but they got to make money. They're not just going to give you access to their participants without taking some type of a sliver of some cash. [39:21] Justin: Right? Correct. [39:22] JD: Interesting. [39:23] Mark: It's typically a build on their end, too. So you just have to understand it's not just that they're greedy. There's a cost involved. [39:28] JD: Oh, yeah, yeah, yeah. [39:29] Mark: Doing that. [39:30] JD: Spoken like a true CEO president. But I agree with you. I totally agree with you. [39:34] Mark: No, it is. [39:35] JD: It's. [39:35] Speaker H: It's. [39:36] JD: It's actual. It's okay to create products and to charge for them, especially if they're providing value for people. And I think we lose sight of that sometimes in our industry. We're so fee compression focused. Like, it's okay to build a product and charge a fee for it, especially if it's doing a good thing. [39:52] Mark: You know, speaking of fees, I love when people try to negotiate our five BIPs. I'm like, you want me to go down to four? So you want me to cut 25% off? [39:59] JD: I know. Because it's like, how the hell are you going to go from 45 million to 40 million in revenue? That's going to. [40:06] Chad: That's going to. [40:07] Speaker I: Carl. [40:08] Chad: Who said it? [40:12] JD: Carl. Oh, J.D. [40:14] Justin: damn it, Carl. [40:16] JD: Carl, I love you. I love you, bro. [40:18] Mark: Thanks, Carl. [40:19] JD: What did I say? [40:20] Mark: So do I make another tartarita or I just keep drinking Rose? I don't know what to do. [40:24] JD: I say, hey, you. [40:25] Speaker E: Do you. [40:26] JD: Hey. [40:27] Justin: Keep going back and forth. [40:28] Chad: Make a tartarita and then just put a little bit of rose on top. [40:32] Speaker F: Ooh, a little floater. [40:34] JD: That's corruption, Brandon. Speaking of people that drink too much. On each show recently, we've been rose all day. We've been doing what I like to [40:45] Chad: call rose all day. [40:47] JD: Retire hollow history with drunk Mark. I like to go back show drunk history. [40:54] Justin: Oh, my Gosh it is so good. [40:57] JD: So I like to find an old episode where we used to have Mark finish every show with just a little kind of. He would just make it up as he went and we'd put a camera in his face and he'd be drunk and we'd film him. So I found one. It's a little lengthy, but I think if you stick with it, it's good. I think it's good. But Brandon, if you're ready, let's check in with Mark from the past. [41:21] Chad: I had a startup plan. I didn't want to give anything to my employees, so I did a salary deferral only plan and I failed my ADP test. So I called up PBC and they [41:45] JD: said you should have a safe harbor. [41:49] Chad: So I put in place a safe harbor match. [41:55] Speaker G: And now [41:58] Chad: I don't have to worry about no pests. [42:03] Speaker G: It makes my. [42:05] Chad: My life so easy that I go to sleep at night happy and. [42:16] JD: Peaceful. [42:18] Speaker G: Nice. [42:19] Chad: I love PT. [42:21] JD: Take it to the bridge. [42:24] Chad: I don't know what I would do [42:27] JD: without a smart, easy, awesome teeth. [42:33] Chad: They are my best friend. They have made my life a better place. 401ks are awesome. Wow. [42:54] Speaker H: All right. [42:55] Chad: That song's more. [42:57] Speaker E: Oh, God, that's horrible. [42:59] Justin: Mark, were you so good? [43:01] JD: Bob Marley just died again. Bob Marley just died again. Guitar. Guitar was played by our new planned conversion person, Lance Meyers. [43:14] Justin: Oh, my gosh, Mark. I've never seen that before, but that was fantastic. I do not remember that in the slightest. And you, by the way, you owe two drinks for a new acronyms. [43:24] Chad: It doesn't. [43:26] Speaker F: Yep. [43:27] Mark: That wasn't. [43:28] Justin: Damn. [43:29] JD: That was good, Mark. [43:30] Mark: That was like an angel. [43:32] JD: Yeah, I know. [43:33] Justin: I agree. [43:34] JD: I agree. I. I had in prep. [43:38] Speaker I: No, no. [43:39] JD: At first when we started this, I [43:40] Chad: thought it'd be fun. [43:41] JD: I really did. [43:42] Chad: I was like, yeah, I'll play a lot. This would be great. And now you're digging up this. And now it's just embarrassing. [43:47] JD: You know what the parents say to the kids these days, Mark? You know, you. You do it on the Internet. Stay stays on the Internet forever, buddy. [43:55] Chad: Like, sorry, that's true. But nobody would ever see it unless you dug it up. [43:59] JD: Oh, Tom. Tom's gonna get my CBC vote right there. He said that's what they say. Oh, cbc. [44:06] Mark: Yeah, they say it's nice. [44:07] Chad: You know what they said? [44:09] Speaker E: It's not embarrassing. It's awesome. So you got fans out there. [44:12] Mark: No, that was amazing. I'm not joking. That was great. [44:15] JD: Wow. [44:17] Chad: Thank you for being kind. I appreciate that. [44:20] Speaker E: I see why he has Todd's two Tataritas in. He loves it. [44:24] JD: Yeah, I'm gonna ask for the mixtape. [44:27] Chad: Like these guys are these songs and stuff, they're stupid. [44:32] Mark: And now Justin knows why you can't [44:34] Justin: find anything about us on the Internet. [44:35] Speaker F: I was thinking that exact same thing, dude. [44:39] JD: Okay, when prep for this show. Yes, sometimes we do some prep. I had talked to you guys and I said, hey, you did not prep with us. We didn't get shit. [44:49] Speaker E: We had anything nice about your questions either. [44:53] JD: So. [44:55] Chad: I still don't even know what Leaf House is. [44:58] JD: Oh, that's. Yeah, that was brought up. I know why Leafs do not have houses. What the fuck are you talking about? [45:04] Mark: I'll tell you, it's real quick. My partner Neil and I, he's our CEO. I'm the president, co founders. [45:11] Chad: That counts. [45:12] Mark: 25 years ago in the industry, both managers, whatever. [45:15] JD: But you need a story. [45:19] Mark: So we sold and retired. I was 33. And my wife, after about six, seven months, she's like, I really need you to not be here. [45:29] JD: We've heard this story before from a past guest. Not your story, but similar. [45:33] Mark: It's true. I call Neil up, I'm like, hey, Lori says I gotta like go do something from like 9 until 3 in the afternoon at least. And so he says, you know, Janice said the same thing. And I said, all right. They were talking, so they told us to leave the house. So that's the name of the company, Leaf House. [45:50] Speaker E: I just want to add on to that. What they then did was they got an office space and they didn't know what they wanted to do yet, so they played techno ball. Then they figured out what they wanted to do for lunch and then they came back to the office and then they went home. [46:04] JD: Just a pretend, pretend company. I like that. [46:07] Mark: I want to do one of those. [46:08] Justin: $12 billion. [46:12] JD: So I asked you what was next for Leaf House, and the answer surprised me, but then it didn't. And you immediately said, it's technology. Like we're working on some technology. And my, my slow surfer brain was like, wait a second, what the fuck is he talking about? Technology? And then I realized you've worked for years to build data pathways with record keepers, and you've always talked about your company as being kind of technology first, which makes sense to me because if you're going to do it right and be a good338 and be profitable and be efficient, you're going to have to build all that tech properly. And so am I putting words into your mouth. I don't know but you're like we've done all that, so now how do you like reconfigure it, tweak it, improve it so the advisor can use it? Is that the future that you're of tech that you're talking about? [47:08] Mark: Yeah. So I didn't think I was going to be the president of a fiduciary and a president of a cloud based software technology company, but I am. We started a company called Invest Grade and it's literally just us taking the technology that allowed us to build Leaf house into a 12 plus billion dollar firm and giving it to advisors to be able to use on their own if they want to. So it's a research tool. They can run research on funds and score them using our gpa, our grade point average methodology. It's also a book of business. I know I'll drink this book of business aggregation software systems because of like you said JD it's, it's that we have data feeds from like 40 of the top record keepers. Right? So if we get the proper authority from the advisors to get the data, we can build it in and they can just automatically have their information populated and then we can also, you know, do that not just on an advisor level, but we could go to a broker dealer, we can go to an [48:13] JD: aggregator, we can go to enterprise level [48:16] Mark: investment advisor and do that for them as well. So how many times am I drinking for that? [48:22] JD: I think just two. [48:25] Speaker E: Because he didn't do it from the last time. [48:27] Justin: That's right. [48:28] JD: I'm actually really excited about that. I think the FI360s of the world are cool. I think the retirement plan advisory groups are cool. That was good and, and that's neat. But there's also some stuff that's lacking there and most of the time it has to do with these data paths. Right. I mean the systems are dope, but they're not happening efficiently in terms of data being sucked over. Not for the most part at least. I know they've made some inroads, but how far along are you and is that something that's going to be available soon? It already is to some people. It's further out in the future, like. [49:12] Mark: Yeah, so we, that's a great question. So we have, we have it available and we're, we're rolling out the launch March 1 for the broker dealer, excuse me, for the mutual fund and record keeping community and TPA community where they can start to see that, that information and in the next release, which is probably a quarter away, we're going to start bringing advisors in and broker dealers into the environment. [49:44] JD: Okay. Yeah. You said third party administrator is so. Yeah. Yep, yep, yep. [49:50] Speaker E: He's trying to throw you a bone and bit him. [49:53] JD: Good thing that Todd's not watching Chad's child tonight because that would be rough. Wouldn't be good. All right. I am to the end of my notes. No, I got other shit. I got other shit. [50:06] Justin: Hey, Chad. Chad. [50:07] JD: We don't want you to be the downer in the text message Ton. Okay. [50:12] Justin: I feel like we're doing well, guys. [50:13] JD: What do you need to get off your chest? Chad, what was not talked about? What content? [50:18] Justin: I posed a brief question earlier but skipped over it and I'm curious for you guys opinion. I believe you offer a 338 service that allows the advisor still to pick the underlying funds but then you take over the process of adding, removing, replacing. That to me is like a 321, not a 338. So there are others that do it if you don't. But. But educate me a bit. The record keepers that say we're providing a 338 service, but here's a list of 300 funds to choose from. Choose them and put them in the core menu. [50:50] Mark: Great thing to let me talk about. I really appreciate you asking that. No, we are the originator of the Flex Fiduciary. Meaning we created the technology that allows us to have a different lineup on literally every single plan if we want to. So we take input from the advisor and the plan sponsor and we look at the demographics of the plan and we design the lineup from that. But that does not mean that we give them a list of funds to choose from. We just say, hey, who are you used to? Who do you understand? Who are partners for you? And we run those through our screening system. And if they pass, then why wouldn't we use them? But if they don't pass, we're not going to use them. And the reason we can do that is because we spent millions of dollars in 10 years of build on a technology that no one else has. So anybody else that tries to do flexibility, to steal a phrase from our coo, Chad Brown, that's papers on the floor. They're doing it on spreadsheets. [51:46] Justin: That's a Q and A later. Go ahead, Ben. [51:50] Speaker E: The way I would equate it is most of the time you're looking at it, right? So your work coming onto a plan the same way that you're kind of cleaning up on that standpoint, right. When you would get hired as a third party administrator. So you're kind of reviewing what they currently have. So they're saying, hey, do we have anything that's good here or do we truly have to take everything out and move it? Right, so we have that component of it. But I would say I've been here what, two and a half years, I have never had an advisor call me and say, I want you to use this very specific fund. They might say, hey, I like target dates that are passive. Or I like active managed target dates. [52:31] JD: Or they're like, hey bro, can we get in on some GameStop man, let's get in on some games. [52:36] Speaker E: Or hey, I'm gonna schedule a meeting with you and then no, no, show [52:40] Mark: you for 45 minutes. I have an idea on the GameStop thing. Did you guys see Constellation Brands Liquors today? Went up three and a third percent because we did that. They knew we were doing this tonight and they knew the booze. I'm telling you, that's what it was. [52:56] JD: Get out now. If I was going to invest in the retireholics, it'd be a big short, big time. Go ahead, Ben. [53:04] Speaker E: No, I was just going to say I think it's a misnomer that we get individuals that are literally saying, I want you to use this again. It's more of, here's the overall lineup, what scores, what goes through? You know, we have one of our investment analysts, his name is Michael. You know, I would say it was probably one of the most fascinating experiences watching him have a conversation with an advisor. And the advisor was dead set. I want passive lineup. I want a passive lineup, all passive. And so the conversation started kind of very similar to this. Okay, do you truly want passive because you believe in passive, that people can't beat it, or you just focus on low cost? So we took a mid cap value stock and we showed the passive version and then we showed an active version that it was more expensive, truly. But they showed a million dollars would have been $3 million versus one and a half million. And he was able to show that graph through and say, which one do you want? Do you want the 3 million or do you want the 1 1/2? So we're able to have those conversations to kind of get through that component of it. [54:06] Justin: And I'd imagine you two are far smarter than I am. But in the court of law, I believe a338 is taking discretionary authority over those decisions. And right now you're giving somebody else the opportunity to weigh in. [54:17] Speaker E: We're taking Input. [54:19] Justin: You're taking input. [54:20] Speaker E: Just like you take input if a plan sponsor wishes to have loans or safe harbor or allow. [54:28] Justin: Completely understand. I think the difference here is the discretionary authority side of things. And I believe input can lead as long as they're meeting metrics. I feel very comfortable with that answer. [54:38] JD: It gets really dicey with the, the passive versus active. And I'm sure you guys feel it more than we do. Todd and Ben. I mean, this industry is because of fee compression, because of the media, because of certain things has really kind of. And because of lawsuits. I feel like Schlichter and some of his peers feel like if you're not using index funds, you're somehow not a good fiduciary, which is total bullshit. Right. But, but you guys must be feeling that. And we don't have a ton of time, but give me, give me your quick 1, 2 defense on how do you navigate the waters of passive versus active and everything that's going on. [55:19] Mark: We never make it an, an argument. It's active and passive, and there's a place for both in almost every lineup, depending on the needs of the plan to counter a little bit of chat. Chat. I get what you're saying, but let me, let me change what you're saying. Let me reverse it. What fiduciary doesn't take into account the understanding of the advisor, the demographics of the plan and the understanding of the plan sponsor. [55:44] Justin: Demographics of the plan. Absolutely. The needs of the participants. Yes. Because that's what the fiduciary should be doing. The business and procedures and comfort of the advisor. I'm not so sure I agree with that. [55:58] JD: Brett. Brett, these guys would totally agree with your comment on making the advisors feel part of the process, whole business model. I totally agree with you there and I think Lee Faust does too. We're running out of time. We can take this to the after show, the post show a little bit, but I want to make sure we get CBC in and, and for all those wussies. For all those wussies that need to leave after 60 minutes and can't stay for the after show, I want to make sure we finish within 60. So give me some votes for chat bar champion. Start with you, robe guy. Again, you're just, you're just nominating someone to be a finalist. [56:44] Chad: I know. I'm just going to say, like, I rarely get distracted by the chat bar, but today, tonight, I for sure did solid. [56:53] Justin: Right? [56:54] Speaker E: It was good. [56:55] Chad: I mean, I'll tell you this much. If someone sends you something, you probably should put them as your vote. So I'm going with Amanda. [57:06] JD: Okay, good. And she just dropped to 69. [57:10] Chad: I don't know what that's in reference to because I've lost control of this chat bar entirely. But I'll just go with that and. [57:15] JD: Okay, Brandon, we got one for Amanda. Justin. [57:21] Speaker F: Well, Tommy Condren got me with the I married you for dinners, not for lunches. Get the fuck out. [57:26] JD: Three Piece. [57:26] Justin: Three Piece was solid tonight. [57:28] JD: Three Pieces in. [57:29] Justin: Chad, since I can't vote for Shamanda, meaning two. I'm gonna go. I'm gonna go with Julie Casey. Julie had a solid night. [57:41] JD: Why is Amanda texting me right now? She's upset about something. Who'd you say? Sorry, Chad. [57:51] Justin: I'm going with Julie. Casey. [57:53] JD: Nice. That's a good one. Yes. Big part of the flow tonight. So Brandon, we got Julie. All right, Ben, who's your vote for to make the finalists? [58:06] Speaker E: Could it be Will Hacker? [58:07] JD: Oh, geez. Hackler. [58:09] Justin: He's always in the running man. He's legit. [58:15] JD: I'm getting texts from Amanda Hackler. [58:19] Justin: Todd. Todd. [58:20] Speaker E: Who's hacking? [58:23] Mark: I'm biased. Me and Brett buddies. So I got to vote for Brett. [58:27] Justin: That's fun. Brett had some long winded ones, but they were good. [58:32] JD: I'm going to back you up on Three Piece. And so that's Tom Condren Brannon. So I think we probably got five or so. So throw him up on the pole. I still feel bad making Brandon do all this, but he seems pretty quick to the trigger to do this usually. And you the audience will now vote for who will win Chat Bar Champion and win all the prizes in cash. And I won't. We had it last week. He already voted for finalists. Dumbasses. [59:02] Justin: Yeah, but last week we got a vote. He blocked us out this week. [59:05] JD: It's tight. It's tight. Would you have a tie, Brandon? [59:10] Mark: I feel like there's fraud here. [59:13] JD: Oh no. Tom's Three Piece has gotten the lead here. [59:17] Justin: Three Piece was active tonight. [59:21] Chad: JD don't give a play by play. Come on. [59:23] JD: I'm not sorry. No, I'm not doing my horse thing I did last week. [59:27] Justin: Julie, if I could have voted, you would have got it. [59:31] JD: As we let these final votes come in. No, we're done. Three Piece is the winner. Tom Condren. Congratulations. You are Chat Bar champion for this [59:41] Justin: week on the votes there weeks show. [59:44] JD: And I wanted to let you guys know if you haven't picked up what I'm putting down, we have now. Brandon and I used to Always just pick the song to end the show. But now what we've done is ask the boys to kind of go in rotation. Shannon picked Pink on behalf of Mark. Justin picked some God awful country song. And tonight is Chad's opportunity to let us in. [1:00:09] Speaker F: Take the cake is the worst one. [1:00:10] Justin: Here we go. [1:00:11] JD: Chad is going to pick the song to close out the show and then we'll go to the after show. And I'm hoping it's something that really ties us into Chad's soul, gets us to really know who Chad is as a human being. So, Chad, I hope you picked a good one. And everyone, thanks for tuning in. And if you want to get really wasted, stick around for the after show. Peace. Thanks for tuning in. [1:00:42] Justin: Semisonic, huh? [1:00:44] JD: Is this like a dad joke within a song? [1:00:47] Justin: This was my song when I came out to close games in college. [1:00:51] Speaker G: Closing time. Closing time. Turn all of the light lights on over Every boy and every girl Closing time. One last call for alcohol so finish your whiskey or beer. Closing time. You don't have to go home but you can't stay here. I know who I want to take me home. I know who I want to take me home. I know who I want to take me home. Take me home. Closing time time. Time for you to go out to the places you will be from closing time. This room won't be open till your brothers or your sisters come. So gather up your jackets, move it to the exits. I hope you have found the friend. Closing time. [1:02:29] Justin: Ah. [1:02:29] Mark: A man drink like that and he don't eat, he is going to die. [1:02:35] Justin: Ain't that true? [1:02:36] JD: When. [1:02:37] Chad: Hey, it's really Wonka. [1:02:41] Justin: I had. We Transitioned perfectly while JD's using the restroom. Worked out real well. Todd, JD cut you off on that last conversation and I imagine you had. You had something else you wanted to add in. [1:02:55] Mark: Is it bad that I don't even remember what I was saying? [1:02:57] Justin: No, that's. I wrote that in a text message to the guys today when they were asking who had the last song. And I'm like, I don't remember the end of the shows. So [1:03:07] JD: Mark's song to be. [1:03:08] Speaker E: How many different names of fiduciary did you come up with? [1:03:10] JD: Todd, are Shannon and Amanda still in the chat bar? Can someone explain to them that I can't also read their text messages while shit's going on? Use the chat bar. [1:03:22] Justin: Clearly it needed to be quiet. Do we need it, jd? [1:03:25] Speaker F: Do we need to bring them on? [1:03:26] Speaker H: Yeah. [1:03:26] JD: No. Well, you. [1:03:28] Chad: During the show, you're allowed to call it out loud. [1:03:30] JD: I saw you had an order of people you were gonna bring on, but you're in charge of this, Justin. So if you'd like to bring on whomever. I'm down, but yeah, they'll be on next or last. Let's bring on Brads. [1:03:44] Chad: I'm a little nervous that Amanda has my address now. [1:03:47] Speaker F: Yeah, I would be too. [1:03:49] JD: I can't. I don't know. [1:03:50] Speaker F: Brad. You're coming on. [1:03:52] Chad: Brandon. [1:03:52] Justin: Bring him in and zoom that chat, Bradley. [1:03:56] Speaker F: There he is. [1:03:57] JD: Hey, hey. Oh, I gotta hang on, Brad. Hang on, Brad. My chat bar is over your face. I must move it. [1:04:06] Mark: Hey, Brad, don't be giving me a hard time about the Bobcats dog. [1:04:11] Speaker J: Hey, that's. That's why I came on. I wanted to talk about a real topic here, Todd. But Todd and Ben, that was great stuff. But I wanted to find out, like, Texas State went 2 and 10 this year. So my first question is, Todd, what do they need to do next year to get into the playoff discussion? And my next question related to Texas State is, if I go to a Texas State home game, can I get a Tataria there? [1:04:33] Mark: Absolutely, you can get a Tatarita. However, what they need to do is they have to move farther away than 30 miles from UT because you can't recruit if you're 30 miles away from UT. That's the problem. [1:04:48] Speaker J: Nice, Brad. [1:04:51] Chad: I have a question about your background. What are the posters? Are those inspirational sayings? [1:04:55] Speaker J: The posters are all the national parks that I visited. [1:04:58] Chad: Okay, negative points for that. All right. [1:05:01] Justin: That was close. [1:05:03] Speaker J: That was close. Eight of them, and I'd like to get more. [1:05:05] Speaker F: So what's our Webby rating, boys? [1:05:07] JD: I gave him a 7. 5. I was a little put off by the pictures, but because they're so perfectly lined up, I then gave him some extra points. Looks like Tony gave him a six. [1:05:18] Justin: Go that way, Brad. Let's see the outside. What's the Webby rating? Where's the. Oh, there he is. [1:05:23] Speaker J: That's just outside the office window. [1:05:24] Mark: Do I get extra points for having a crazy picture of my daughter in the background? [1:05:27] JD: That's cool. [1:05:30] Justin: The. [1:05:30] Speaker J: The real good one that I've got that you can't see is. Is that one right there. [1:05:36] Justin: Oh, U.S. open. [1:05:38] Speaker J: That's the U.S. i went to with my dad, so I got that up here. [1:05:41] Justin: And then I also got his CPA license right next to mine. [1:05:44] JD: Now you're making me feel bad about my low rating, so maybe that'll add [1:05:49] Speaker E: on to the rating. [1:05:50] Justin: 7:2. 7:2 is a solid rating. [1:05:52] Speaker H: Not Bad. [1:05:52] JD: It's not bad. [1:05:53] Mark: Not bad. [1:05:55] JD: Did we have a retirement plan question for leaf house? Mr. Brad? [1:06:02] Speaker J: That was it. I was more. I was more concerned about, you know, the football thing. [1:06:07] JD: So. [1:06:07] Justin: I love it. [1:06:09] Speaker J: But I appreciate being on the show. You guys are awesome. I enjoy being here every week. [1:06:13] JD: So you, you are too, man. [1:06:15] Justin: Cheers, Brad. [1:06:17] JD: Certified public accountants unite. Right on. [1:06:19] Chad: I'm sure you're super not busy right now, so enjoy the not busy season. [1:06:24] Speaker J: Yeah, the day's only halfway over. [1:06:25] Chad: Yeah, I bet. [1:06:27] JD: I just reminded myself you can say acronyms now in that post show. You don't have to dream, you have to drink. Amanda. I love the after show too. Hopefully we're gonna get some serious stuff here. No, no fault to you Brad. We love seeing you, buddy. We love those little line pictures. [1:06:43] Chad: Todd. There's nothing left in there, Todd. It's gone. It's gone. I'm sorry. [1:06:46] JD: Justin. We have Brandon. [1:06:48] Speaker F: Bring on Tony next. [1:06:50] JD: Tony. [1:06:50] Justin: Oh boy. [1:06:51] JD: Here we go. [1:06:53] Speaker G: Yes. [1:06:54] Justin: There he is. [1:06:56] JD: Hello td. I mean you gotta go with it. You gotta go with it. Oh no. It's supposed to be a 9. I'm only giving you a 10 if there's a cat in the house. Yeah, where's the cat? [1:07:06] Justin: The cat makes himself both of them scarce during retire. Hog sour. [1:07:13] Speaker F: They know I'm after one, right? [1:07:14] JD: Dude, you're afraid. [1:07:15] Justin: I'm just saying. Hey, it is what it is, right? [1:07:18] JD: So Tony, you lovely. You lovely man, you. Do you have a question for these two guys from Leaf House? Yeah, Todd, first of all, you inspired [1:07:28] Justin: me to be drinking margaritas on so nice. [1:07:32] JD: And I think you guys just do a fantastic job. [1:07:35] Justin: I'm not surprised at your growth. [1:07:39] JD: It's inspiring, you know. So here's my question. I read an article the other day that talked about retirement plan specialists or plan fiduciaries wanting real retirement annuities, not annuities. Oh yeah, yeah, yeah. Income years renders and 5% up charges and all the garbage that annuities are known for. Income solutions annuities. And I think that's a big growth area because it's needed. Great point. Thoughts on that and what's your position? Great topic. [1:08:20] Mark: We are a fan of the fact that that's a great topic. We are a fan of the fact that we've been given a clear path to fiduciary lack of a better term protection by allowing us to with certain restrictions pick in plan annuities or in plan income protection and not be on the hook 30 years later for the fact that you picked a specific insurance company right now, the industry is still grappling with how do you make it portable? [1:08:55] JD: Right. [1:08:56] Mark: And that's what we're really looking at. And there are things that we're working on with different companies. You know, we have something that we're going to announce that might be down that road with I join, but it's still a work in progress. It's still partially baked. It's kind of like, I can use acronyms or not. It's kind of like pets. They're partially baked, right? They're not. [1:09:21] JD: So is portability the biggest roadblock to retirement income solutions now? [1:09:29] Mark: Now that we have a path to again, how can I as a fiduciary if I didn't have a path? How could I pick an annuity company to do this and then be on the hook for it 30 years later? That's crazy. I can't. That's not feasible. That was always the most ridiculous thing about it. Now we have a path where we can get some protection that, yes, it made sense at the time, thus we're not liable 30 years later. But the real question is, yeah, but how do you, how does that participant deal with it? If the plan sponsor changes plans or they want to roll money out, how do you, how do you take that with it? And how does somebody account for the record keeping of it? And there's some solutions that are being developed that are really interesting, but it's going to take a while. [1:10:10] Justin: Well, and I've heard from others that one thought is to allow those dollars to be rolled out regardless of record keeper at the time the plan sponsor chooses to make a move. But my thought is the participant shows that at that point in time, thinking at least that they're going to continue to be able to make contributions into that ongoing growing annuity. And so allowing the assets to roll out doesn't solve the issue. I think that we. It needs to be portable, but it needs to be available independently of the platform chosen. [1:10:41] Mark: That's a good point. [1:10:42] Justin: If we're going to be able to do it. [1:10:43] JD: Well, fees is still an issue too. Right. Because the way I was taught was like, and again, all sensitivity to an insurance provider that's providing a stream of income to someone till they die. Like, that's, that's a risky business to get into. But, you know, that's what their actuaries get paid for and that's what they do. But I always felt, and I was taught by my old man that like, just these annuities were so expensive and so that, that Was it was counterintuitive to him as a way to plan for retirement. Now he was a smart guy. Do we think that solutions we have going forward will tackle that? You know where that just won't be quite as expensive as your classic annuity? [1:11:27] Mark: You know what's funny about that JD is that. And I'm, I'm old, right? I'm 46, got in the business in 97. [1:11:38] JD: I'm older than you Todd, but I [1:11:40] Mark: look damn good, my friend. [1:11:42] JD: But I don't have as many billions as you have. Continue on sir. [1:11:45] Mark: You look damn good. So you know, a few years into the career they had a lot of these benefits that were in. Think of it from a wealth management perspective in these annuities, the guaranteed minimum withdrawal benefits, step ups. And I was doing the math on it back then and I wasn't the only one. There were some like really smart economic folk and we were like this is not sustainable. Like you can't keep doing this. If the certain market conditions exist this is going to be like these companies are going to be in trouble. And guess what? It ended up being true. Like it was a really good deal for people to be in those to have government enforced protection of the benefit because that's what ended up happening and that's why some of them didn't exist later on because they couldn't sell them in the new environment. So I don't know, I mean even [1:12:35] JD: Webby, even Webby says annuities have such a bad rep, you know that try to call them anymore. [1:12:43] Mark: Call him Fred, don't call him annuities. [1:12:45] JD: I know, I mean we've had products, right? Like Prudential had something or let's focus on the small market. Like Hancock had their thing. Right. And is it safe to say that Hancock's guaranteed income for life, I think what's called basically fell flat on its face in terms of adoption. Right. It poofed. [1:13:07] Mark: Right. [1:13:07] JD: It didn't do shit. [1:13:10] Mark: I can never say such a thing. [1:13:11] JD: Gola, huh? [1:13:13] Justin: I'd say J.D. it depends on what its goal was. Did it drive business? Absolutely it did. It was a differentiator that people talked about. Just like the mutual fund window at Nationwide. But the opt in rate was very minimal. That's what I got them a shit ton of business. [1:13:27] JD: No, I meant the typical sales guy answer. Yeah, no, I meant the. Did the participants actually use it successfully too? [1:13:34] Justin: Yeah, but did it win them business? Absolutely. [1:13:36] Shannon: Sure, sure. [1:13:37] JD: Fair enough. But I think what the problem we're trying to solve right now is how sexy would 401ks be if we could tackle that in retirement? Chapter of life. Right. And give people some confidence that this is how much you're going to have and you can count on this. And it just simplifies so many things, but it sounds like it's a far stretch. [1:13:57] Mark: Well, I will tell you that very large companies, very powerful companies are efforting that as we speak, and we'll see what they can pull off. And there's a lot of innovative ideas behind it, but we'll see what they can pull off. We just. As a fiduciary, we just want to be there to be able to measure it and judge it and decide whether or not it can be used. Right. We're not trying. We're not out there creating it. We're trying to figure out how to. How to use it, because I think it's a great solution if you can solve those issues. [1:14:31] JD: I love a lot of the advisors, like, Greg's thoughts, too, are same as my old man's, which is, hey, all you got to do is properly invest your money and do it wisely. But the reality is that the average Joe can't do that, and they just don't get it. So as advisors, we kind of have a skewed perspective on what's available to the average Joe or Shali. They don't have a lot of options, and they don't know what to do. And so obviously, these types of guaranteed things seem attractive to them, but it's a struggle. Justin last. Bring on Greg Greenfield. [1:15:08] Speaker F: Mr. Greenfield. [1:15:10] Justin: Yes. [1:15:10] Speaker F: He's coming up next. [1:15:11] Justin: Hopefully. He's got pants on. He said he wasn't wearing them. [1:15:13] Mark: Hey, in future episodes, is there any way I could do part of Justin's job, which is just to listen for acronyms? [1:15:18] Speaker F: No. This is the only thing I do on the damn show. Todd. [1:15:22] Mark: It's amazing. [1:15:23] Chad: No, no, no, I. Listen. [1:15:24] Speaker H: What's up, gents? [1:15:26] JD: Hey, what's up, Greg? Hey. [1:15:28] Justin: So [1:15:31] Speaker H: my question had to do with Dylan Panther football for. For Todd. I mean, all this. All this retirement talk is, you know, I just. There's only so much I could take. I just. It's kind of curious. Like, actually, Todd, who's your favorite Texas high school football quarterback? Who would you like all time? Who would you say is the greatest? [1:15:54] JD: There's my question, Brandon, can you throw up that yay, sports thing that you do? Go ahead. [1:16:00] Mark: You. You asked a question that's gonna have an answer that's completely biased because, yeah, [1:16:06] Speaker H: of course, even in retirement questions, I knew you Were gonna be biased, but that's okay. It's cool. [1:16:12] Mark: Hey, so Cliffy Kingsbury was the guy that brought the ball out to me when I was center in New Braunfels. Go Unicorns, baby. [1:16:19] Chad: Okay. [1:16:19] Speaker H: All right. [1:16:20] Justin: Nice. I love it. [1:16:21] Mark: The Bronfels High, we seem to be of love and loyalty. [1:16:23] Speaker E: Yeah, yeah, you heard that correct. His mascot is unicorn. Show it again. There you go. [1:16:29] Chad: First off, that's. That's legit. The coolest thing I've ever seen for [1:16:32] Mark: a high school hell yeah, boy named Sue. If your name is unicorn, you better be badass. [1:16:39] Chad: No, I was gonna say that's. That's. You guys were well ahead of the curve. Like, good for you first off. [1:16:44] JD: But secondarily, unicorns, Hell yeah. [1:16:48] Mark: That is my spirit animal, baby. [1:16:50] JD: To all the people that are still tuned in, I see there's still a lot of you. I know you stuck around because the after show is usually when we really get deep into the retirement plan subject matter in such a way that we don't on the regular show. I apologize on behalf of retireholics and the fact that we now talk about football in the after show, but maybe you'll stick with us. [1:17:12] Speaker I: We'll see what happens. [1:17:15] JD: Talking about Craig, Greg Greenfield, Ask Ask Leaf House a question about 338 or fiduciary or 401k or forever. Forever be exiled from the retire hall? No. [1:17:31] Speaker H: Okay. So. Seriously? Yeah, no, we're just talking about annuities and guaranteed income. There's all sorts of stuff to talk about that. So I was on a webinar today with Nationwide, and they were talking about this interesting new product that's not variable. So let me just make it more succinct. What do you think of not fixed but index annuities in terms of guaranteed income type solution? Because it sounded like the way this guy was presenting it, there was a cash value. It wasn't like an immediate annuity. It was a deferred indexed annuity. It sounded kind of interesting. The product, I don't know. I mean, we're all trying to get good outcomes. [1:18:19] Mark: You know, anybody, So I don't know anything about it. I would first ask my boy Ben if he knows anything about that because he's from Nationwide. [1:18:29] JD: I would tell you that I can speak on behalf of Nationwide. Greg, they are on your side. [1:18:39] Speaker H: JD Got that because he watches football all the time because he's such a sports. [1:18:42] Justin: There you go. [1:18:45] Speaker H: And we can't talk about real serious [1:18:47] JD: retirement issues because we don't know what the you're talking about. [1:18:51] Mark: We have no idea about things about it. Can we get Brad Page? [1:18:55] JD: I had no real question. [1:18:56] Speaker H: I wasn't even wearing pants when Justin's like, do you want to come on the show? [1:19:01] Mark: Peyton Manning? [1:19:02] Justin: Your room ready? [1:19:03] Speaker J: Just went up. [1:19:06] JD: All right, let's bring on Shamanda if we can, huh, Justin? We love you, Greg. [1:19:11] Chad: Later, Greg. [1:19:13] JD: We love you a little less after your football questions, but we still go unicorns. [1:19:17] Justin: I'm gonna research the final question, though, because Nationwide has been on the front of some pro accounts and some other things they've been doing, so it'd be interesting to learn, but I haven't heard anything about it, Greg. [1:19:26] Chad: Sorry. [1:19:28] Speaker H: Okay. [1:19:29] JD: I'm really afraid for Shamanda. [1:19:31] Speaker F: Amanda left, so we only got Shannon. [1:19:34] JD: What? [1:19:34] Justin: No, Amanda's still here. [1:19:37] Speaker F: I'm looking at the. [1:19:39] Mark: No. [1:19:40] JD: Do you want me to text her? [1:19:41] Justin: Do you see something I don't? Yeah, you probably should. [1:19:43] Chad: She's here. [1:19:43] JD: She just said, I'm here. [1:19:45] Mark: What the hell? [1:19:46] Justin: She was moved over to a panelist already? That's why you don't see her. Oh, there we go. Oh, look at her Drop in Pinnacle in there, too. [1:19:54] Shannon: I don't see it. Where am I? [1:19:56] Chad: Yeah, we don't know. [1:19:57] Shannon: No, no, I'm not gonna stop. Hold on. [1:20:00] Justin: Oh, my God. Amanda. Don't. [1:20:01] Shannon: Don't. [1:20:02] Speaker J: Don't worry. [1:20:02] Justin: I'll throw up. Plan design, and we'll compete. [1:20:04] Shannon: Stop it. Stop it. I did this last time, and everybody at my firm gave me crap. [1:20:08] JD: So why the bun was on fleek last week. [1:20:13] Shannon: I apparently talked very loud comparative to y'. [1:20:16] JD: All. Oh, well, now I can't hear you now. [1:20:18] Speaker E: You're very. [1:20:20] JD: Where's. Where's the second half of Shannon? [1:20:23] Shannon: She said she's not. What did she say? See, how do I get on? This is why I get mad when she's, like, giving me shit in the chat. Sorry for the. [1:20:33] JD: She's still there. Where is Shannon? Get on here. Shannon can't be Shamanda without the shot. [1:20:41] Shannon: She's the best part of us. Let's all just say the truth. Hold on. I want to change my background. [1:20:46] Mark: Honestly, I want to take this moment to curse on air because I. I don't think I've done it. I just want to say horseshit, [1:20:53] Chad: that's all. [1:20:53] Justin: Geez, Todd. [1:20:55] Chad: Feels good. [1:20:55] JD: Feels good, doesn't it? [1:20:56] Chad: Hey, it does die out of here. [1:20:58] Mark: He's. [1:20:59] Chad: He's too much, man. [1:21:00] Mark: It's amazing. [1:21:01] JD: He just went from 12 billion to [1:21:03] Mark: 10 [1:21:06] Justin: because he's saying bad things about all of us in the background. [1:21:10] JD: Shamanda. Shamanda. Shamanda. I am so happy you guys love [1:21:16] Shannon: Shannon and she puts up with me. [1:21:20] JD: We love both of you guys so much. The only thing I don't love about you is when my phone is buzzing in the middle of a show. [1:21:27] Shannon: And once you get off the show. So oftentimes JD and Shamanda will converse after the show and when you read that text, you're going to feel real bad about not voting for me. [1:21:46] Speaker I: Great. [1:21:47] JD: I will read. I'll read. [1:21:49] Shannon: I just sent you and something because he's the only other. So I do have. I have. [1:21:54] Justin: Okay, Mark now. [1:21:55] Shannon: And I have JD's email and then I do have Mark's. He. [1:22:00] JD: He did give me home address only [1:22:03] Shannon: because JD was like this. I said, hey, I got this thing for Mark. Can I get his address? And he was like, oh, I have to go in the payroll system to get it. I'm like, cool, you know what? You don't want to get sued. Just give me a cell phone number. He was like, don't give her your address. And I also have Brandon's address, which Brandon, I tried to send him a gift twice and he apparently lives in a very fancy place with Gates because it has been rejected twice. [1:22:35] JD: Oh, yeah, Brandon's place is a little dodgy to get back to. It's. I love to see you guys so happy that you jumped on. And do you have a question? And I jumped into. [1:22:51] Shannon: I asked Mandy, what is our question? [1:22:53] JD: Like, tell me, tell me it's not about football. And go ahead. [1:23:00] Speaker I: First of all, I would like to know, is it Todd that's from Texas? Who's from Texas? [1:23:06] JD: Todd? [1:23:07] Speaker I: Okay, Todd, are you a tea sipper or an Aggie? [1:23:12] Mark: Went to Texas State. When I went, it was called Southwest. [1:23:15] Shannon: I want to live in Austin. I actually do have a question because Ben. So the 338, like conversation. No one asked my question in the chat bar because no one ever looks at. At my chat. [1:23:29] Speaker F: There's just so many to keep track of. [1:23:31] Justin: Let's be honest. Questions go to the Q A. Amanda, [1:23:34] Speaker E: I'm like 100 listening to you. Let's not talk about the chat bar. [1:23:38] Shannon: Okay, so don't really look at me. Look at Chad. He looks at Chad. You look lovely. Okay, let's look at Chad while I ask this question. So when you explain what a338 does and an advisor, why they would want you there and like, they don't have time to look at the record keeping platforms and all that, Honestly, a light bulb went off for me. Like, okay, but how often or how hard is it for you to get in front of an advisor who will actually listen to that kind of explanation? Because when they hear that, I think they would go, whoa, but how hard is it to get there? [1:24:19] JD: Apparently not too hard since they've got 12 billion under management. Go ahead, Ben. [1:24:24] Speaker E: No, I mean, we got great partners. I mean, we partner with third party administrators, record keepers, mutual fund wholesalers. So they culminate coming to us and we do a lot of outreach, right? So, I mean, Todd and Neil are sales oriented individuals. We didn't get to 12 and a half billion because we were waiting for people to bring us plans and come through. [1:24:47] Justin: Right? [1:24:47] Speaker E: So we are all go getters constantly having conversations and moving that conversation forward. So I mean, it's work, right? We're all in the business of getting in front of individuals and getting them to understand our components. [1:25:01] Mark: But I would say that. So we partner with about a thousand advisors around the country. So it's worked a thousand times. [1:25:09] JD: You guys also told me, you told me earlier that you were grateful to the record keeping wholesalers were a big voice for you guys and that you didn't necessarily man your own team of suits and ties and or midtown uniforms to throw across the country to sell your stuff, that it was the record keepers that were selling on your behalf. Is that, is that accurate? [1:25:32] Mark: Yeah, we, we, we spent the time and energy to figure out what it is that helps them with their sales and became a value add that they would bring to the table. And so we have great relationships with a lot of different record keeping wholesalers that, that bring us in. And [1:25:52] JD: Shannon, Amanda, can I ask you guys. Well, fuck, Chad, Shannon, Amanda, as TPAs, I asked these guys, are you guys seeing a lot of 338 done on your. The plans that you guys are selling or. No. Amanda says no. [1:26:10] Speaker I: Okay, so here's my thing. No, here's my thing is that as [1:26:15] Shannon: a tpa doesn't look fabulous. [1:26:20] Speaker I: No. I look like shit tonight. Thank you. I look like shit. Thank you, Amanda. [1:26:25] Shannon: You both look amazing. [1:26:26] Mark: What are you talking about? [1:26:27] Speaker I: So here's my question. Chat. Here's my question to JD is like, as a tpa, we have, I mean, our business is built on referrals from advisors, right? So we had advisors constantly asking us for my plan, which is not like a $50 million plan by any means. I've got a team of eight. Right? [1:26:50] Shannon: Yeah. [1:26:52] JD: Webby, Ratings. [1:26:53] Mark: Yes. [1:26:53] JD: Yes. [1:26:54] Speaker I: So what I'm asking is like, as a TPA firm, jd, we were getting so Many questions from advisors. I had to finally say, I can't have an advisor anymore because I, I have too many advisors asking for my business. [1:27:11] Shannon: So how do you answer that? [1:27:15] Speaker I: When we hired. We don't have enough questions. [1:27:20] Shannon: Yeah, when you have 18 advisors, who do you. [1:27:22] JD: And they all, hey, I'm gonna, I'm going to do you guys one better. To your question, Shannon. I have my own securities license, okay? So I have a Series 6, 63 and 65, or whatever the fuck it is I have to update every year. And so I could be the, I could be the advisor to my own plant, right? And save myself the 25 bips that we pay our current advisor. However, I see real value in having this person come in, quarterback this stuff, manage it, get it done for me, because if I was to do it myself, it would never get done because I'm not really an advisor. But anyways, so my answer to you is, I would never have a plan without an advisor. Me personally, and I lean on that person to do certain things. But I say this to the crowd as well, because I'm just fucking advocate for the role that that advisor plays in so many different ways. But I get your vibe of like, shit, I can't keep control of everyone asking me to know. [1:28:33] Speaker I: And I, here's, here's, here's my backstory. The advisor that we had for years was basically, how do I say this politically, correctly, getting some tea. He was basically no, like, no, like, the advisor that we had was not an okay advisor. And so we actually ended up firing him and hiring a 338, which is, I mean, I, I like having a 338 on my plan, and I would love to have an advisor on my plan that would actually take care of me and not. But we're a very small. We're small. So we're a lot smaller than you, jd. So, I mean, that's something to be considered. But I definitely took the value in having a 338 fiduciary on my plan, because I'm not an advisor. I'm not licensed. I don't, I just don't do that. So, I mean, we, we have a 338 now, so that's kind of the thing that I struggle with is like TPA firms. What do you do as far as the advisors are giving you business? And how do you pick which one you're going to go with? Because, [1:29:49] JD: hey, this is kind of a weird question, but I'm going to tell you the flip side of it is what Hand soap. First of all, Amanda, Amanda, I want you to know. [1:29:58] Shannon: Are you listening to the chat bar? [1:30:00] JD: Yeah, yeah, I saw that. I want you to know, Amanda, I also have lotion behind me so don't sweat it. [1:30:06] Shannon: And oils. Thank you. [1:30:09] Justin: Stay focused. [1:30:10] Shannon: Thank you, friend. Sorry. [1:30:12] JD: I was going to tell you, Shannon, the harder I. The harder part I have is actually letting go of an advisor and getting another one. So that's a tough call for me. But anyways I. Not because Todd and Ben are here. I would say this regardless of them being here. To Me Having a 338 honestly seems like a no brainer. Like I think if you were able to explain it properly to a plan sponsor and. Or an advisor who didn't quite get it, I think if you could properly explain it to them, it would be a no brainer to put that role in. And especially if it's sitting at five basis points or I think the going rate is somewhere between 5 and 10 and some in that area, I would say do it 100% of the time. [1:31:00] Speaker I: I totally agree. [1:31:01] Shannon: To introduce the 330. Are you introducing that to the advisor Private? [1:31:07] Justin: I am, yes. [1:31:09] Shannon: Yeah, for sure. [1:31:11] Justin: Yeah. Depending on the advisor skill set and their role, if they're going to act as the 338 then I don't push on it. But if they're not, which is the vast majority of them, then I let them know the importance of that role and encourage them to use it. And that's what my. When I was raising my hand earlier, that's what my question was to Todd who was talking about where you're accessing most of your business. I tend to only hit 338s in two ways. One, the advisors offering it or the record keepers offering it. And you guys are on a number of record keeping platforms. That's my kind of intro to the two of you. But is that where you're getting most of them either through the advisor or directly through the RK platform? [1:31:51] Mark: It's. That's a. Yeah, we have, we have good advisor relationships obviously. But a lot of it is through great relationships with record keepers and with third party administrators. But I can say TPAs now that see the value. [1:32:08] Shannon: That's shenanigans. Just so you know, after show I. I was sick for two days because [1:32:17] Speaker I: that's your fault. That's your call to Manda. [1:32:19] JD: Do yourself a favor and go back and watch past Shamanda episodes. It'll drive your brain nuts. [1:32:25] Mark: I love it. This is the. This is the most entertaining moment. I love it, but no, it's, it's, it's. Yeah, it's, it's, it's. It's those folks that introduce us to the advisors, Chad. And it's those types of relationships that we try to build. [1:32:45] JD: Amanda, let me ask you this. There's a financial advisor and for the last. [1:32:50] Shannon: Can we just acknowledge Chad's super duper cute kiddo there and yeah, wave and love on it. Hi little guy. [1:32:57] JD: Close the show out. Amanda. Imagine a financial advisor with a client and for the past five years they've been going in like twice a year and walking them through like an Fi360 type of ranking and then counseling them to remove and replace a fund. Right? And then imagine that advisor today walking in and saying, hey, I got something I want to talk to you guys about. You know that thing that I've been doing for the last five years? Me, Tom Smith, that lives here in any town, California and been guiding you? There's this thing called 338. We can offshoot this to a large national firm that does nothing but this. It costs 5 basis points. They take full responsibility for those decisions in terms of what funds should remain on the core menu. They do all the research, all the analytics, provide all the proof and the documentation. To me, that's a great conversation to have with a plan sponsor. And you're not hurting your role. You're actually, you're actually showing your client that you pay attention to shit and you bring new, modern, efficient ways to manage the plan. I think your clients would love you for that. [1:34:08] Shannon: So, Shannon, are you in there? [1:34:10] Speaker I: I agree, JD. [1:34:12] Shannon: There's three words that go with that 100% agree. The biggest challenge there is not that conversation, JD. It's getting these folks to agree. Or I think TPAs, number one, don't understand 338. [1:34:28] Speaker I: They just get it. I do. Because I have one. I do. I do. [1:34:33] Shannon: And other advisors just don't get the value. So I think, I don't think the conversation is with the plan sponsor advisor. I think it's with other. [1:34:43] JD: Ben would agree with you. [1:34:45] Mark: With the advisor, it's three things. Access, scalability, and price. We just spent the last three weeks doing due diligence with the 30 largest investment management firms talking to the top PMs. An advisor can't do that. You just can't do that. That's my investment desk with cfa. Seem as they did that. Scalability. We do all the work. We do all the work. And price. I get almost everything cheaper than you can. [1:35:17] JD: Todd, you said it earlier. If I'm a small time advisor and I've got 15 plans with five different record keepers, I'm going to waste so much time prepping for those meetings and what funds are going to come in. [1:35:33] Mark: That was Ben. [1:35:34] Speaker E: But imagine that you actually put through a fun change. Yeah, right. So that's right. So then the advisor has to go in. You know, they pick a lineup. Right. They have had to plan five years. They might not have ever done a fun change. So now all of a sudden, they're going through and they're doing a fun change with a record keeper. They're not familiar. [1:35:53] JD: Amanda is now my CBC nomination. I. I know how to do it, but it's not working. All right. [1:36:07] Shannon: Hey, I didn't die. No one gave me shamanda. [1:36:11] JD: You're gonna. You're gonna close out the show with us. It's so sorry. [1:36:15] Shannon: I'm so loud. My staff is going to be so mad at me. I tried to whisper. [1:36:20] JD: Mark, Mark, I've run out of energy. Can you do the show closing and set up a song? [1:36:26] Chad: I would try. [1:36:29] Speaker E: Amanda's gonna do it for you. [1:36:30] Chad: Yeah, yeah. [1:36:31] Justin: Ben's got it. [1:36:32] JD: Ben knows. [1:36:33] Shannon: Amanda, thank you for letting me fill [1:36:35] Speaker I: in for you last week. [1:36:37] Chad: I don't. Don't think. [1:36:38] Justin: Don't think. [1:36:38] Speaker F: That's two weeks ago. [1:36:39] Justin: Yeah. [1:36:40] Speaker I: Yeah, two weeks ago. Oh, my God. [1:36:42] Chad: I'm just. I'm just surprised that I got to come back. I figured if they had, they were just gonna be like, nah, you're out. [1:36:48] Justin: You're out. [1:36:49] Chad: So. [1:36:49] Speaker I: No. [1:36:50] JD: All right. [1:36:50] Speaker I: You do a much better job than me. [1:36:52] Shannon: Mark, how many. How many girl scout cookies did your daughter get? Can you. [1:36:56] Chad: That's a good question. [1:36:57] JD: Good question. [1:36:58] Speaker J: I'll give you. I'll give you. [1:36:59] Shannon: Anybody else want to know? [1:37:01] Justin: Yeah. [1:37:01] Chad: Here's what I'll say is she set her initial goal at, I think 150. [1:37:07] JD: Todd hasn't gone to the bathroom. I'll show. [1:37:10] Chad: Because last year she sold like 120 or something and she crushed that within the first week. We've now set her target at 325, and I think she's getting close to about 2 80, 290, something like that. [1:37:23] Shannon: Okay. [1:37:23] Speaker I: Can I buy some still? [1:37:25] Shannon: Because I need the link. [1:37:26] Chad: Sure. For sure. [1:37:27] Speaker I: Send me the link. [1:37:29] Chad: Yeah. [1:37:30] JD: Chad, can Dylan close out the show? And Brandon play us a song? [1:37:34] Shannon: My husband, who gets mad every time I show up on here. [1:37:42] Justin: Oh, my God. [1:37:43] JD: Oh, my God. [1:37:43] Justin: What's. [1:37:44] Chad: What's in the bowl? [1:37:45] Shannon: He makes me dinner. He's so great. [1:37:49] Speaker E: A bear down. [1:37:50] JD: Amanda, we. I think we all agree your husband is great. [1:37:55] Speaker I: Your husband rock. [1:37:57] Shannon: Talk to him pre pretty.