Modernizing 401(k) Record-Keeping with Aaron Schumm

[0:00] JD: What was dinner that you had white wine with? [0:03] Aaron Schumm: Dinner was. My mother in law made a homemade chicken tikka masala and an eggplant dish. Nice. [0:14] JD: White wine go well with that? [0:16] Aaron Schumm: It's warm enough. We ate outside. You know, it's a little too warm to have the red. Perfect. [0:24] JD: I'm going to go throw in and out. [0:26] Aaron Schumm: What's that? [0:27] JD: Oh, that sounds broke in and out in my belly after this. [0:30] Mark: Are you really? [0:31] JD: Oh, yeah. [0:32] Aaron Schumm: Do you know what in and out is, Aaron? Do you guys have those out there? In and out. Yeah. Well, not out here. No. No. But I, I, you know, used to do my fair share of traveling, so I've had plenty of in and out burgers in my life. [0:46] JD: My sister in law's in town and she said it's got to be a double double. With animal style. With animal style fries. So while she's in town she wants to go all out. [0:59] Mark: You know what I had today, John? I had the, the Big Zach, which is a. We have a restaurant here in Encinitas called Plant Power. So it's like a knockoff of McDonald's. You do a drive through but everything's vegan. And so the, the Big Mac is the Big Zach. It was really good, by the way. But nobody gives a. [1:21] JD: So that's so super creative. And like at least they really tried to name it something that didn't resemble something else that they were totally ripping [1:30] Mark: off or the flip side that was so clear that they were modeling it after that. [1:35] Aaron Schumm: Yeah, [1:37] JD: you can't flip that. [1:38] Mark: Mark's gonna be. [1:40] JD: That's just called laziness, man. [1:42] Mark: Come on. [1:42] JD: I'm sorry. [1:44] Mark: All right. I figure we're about a minute from the start. I'm going to start a record keeping company. [1:50] JD: I'm going to call it Smestwell Meshtwell. I knew you'd go SMEs. [1:55] Aaron Schumm: First you want to buy the website. I open them all. All the variations. [2:01] Mark: Brandon, is this the start? [2:03] Aaron Schumm: Yeah, I guess so. [2:05] Mark: Got the volume working this time or no? [2:08] Aaron Schumm: We'll see in a second. All right, [2:33] Mark: Welcome everybody out there. Welcome, welcome, welcome to everybody's favorite 401k show. Is that true, Mark? Everyone's favorite 401k show? Not really. [2:45] Aaron Schumm: Not mine. [2:46] JD: But it's definitely not even in my top 10. [2:48] Aaron Schumm: Only one. So it has to be. [2:50] Mark: It sounds good. No, you could. There's Rick Unser. There's all kinds of stuff. But I'm gonna call it everyone's favorite 401k show. Sheltering in place, brought to you by the retireholics thanks for showing up. We've got a guest. Aaron Schum is in the house. Let me read your bio from your website because I didn't have any time or didn't care to take any time to write a personal bio for you. So I'll just read off your website. With over 15 years of FinTech, finserve and wealth management experience, Aaron founded Veswell in 2016 to modernize the way 401 plans are offered. Prior to Veswell, Aaron Co founded Foliodynamics, which was sold to Actua and in 2014. That's phenomenal. That's great. The way I think of you, Aaron is the best dressed man in financial services. I have seen you on Downtown Josh Brown wearing a beautiful black sweater, popping a crisp white collar. And I was like, that looks dope. I've seen you in a maroon jacket with very snug jeans and some cool shoes. You've always got the shaved head. You put Chad and Justin to shame with your shaved clean glossiness. Welcome to the show, the best dressed man in the financial services industry, Aaron Chum. [4:17] Aaron Schumm: Thank you. Thank you. I don't know if I could take credit for that, but I appreciate it. [4:21] JD: I was going to ask who dresses you because I can't dress that nice. [4:27] Aaron Schumm: I've dressed myself for my entire life, actually, back to kindergarten. My mother used to try to lay out my clothes for school and I'd be like, no, mom, sorry, I gotta change this up. But yeah, I mean, most of it is just because I'm always exhausted. So if you just hold it together tight enough, it comes across as okay. [4:50] Mark: Do you happen to notice Brandon's little graphic he's got going for you? He's got your jacket changing colors. So I'm loving that. [4:58] Aaron Schumm: Well done, well done. [4:59] Mark: Good job, Brandon. Okay, let's do. We're gonna kick it off with a little housekeeping. Housekeeping, right? Does that everyone get that reference Mark? [5:09] Aaron Schumm: Yep, we're there. [5:10] Mark: I don't know Brian's. Do a video for me next time. Housekeeping. Make sure you're in gallery view up in the top right or left or whatever, but make sure you can see us all on the screen at the same time. And please chat. We want to hear what you're thinking, we want to hear your thoughts, we want to hear your questions for our guests. We want to hear what you're drinking, whatever, but use that chat bar and make sure when you do, you do it to all the attendees and not to just us, the panelists. And we've got to do the prohibitive word. Erin, I think you're familiar with this. Yes. No. [5:42] Aaron Schumm: Yes, I am. True. [5:43] Mark: Okay, we're about to decide on a word. And if any of us says that word at any time during this show, you must drink from your nasty drink, whatever that is, and your wine would qualify. [5:57] JD: Aaron, he's got gin and tonic there. [5:59] Mark: So the. And we're gonna do it differently. [6:03] Aaron Schumm: I got a Hendrix here. [6:04] Mark: The attendees, you get to choose the word, so use the poll. I get to vote, too? [6:10] JD: Yes, we get a vote. [6:11] Mark: Will it be tech, client, scale, or fiduciary? I know my vote. [6:18] Aaron Schumm: God, jd, I'm really proud of you for giving us up to all the [6:22] JD: attendees after that first one with Matt. [6:24] Mark: Well, but this is different. They all get a vote. [6:26] JD: You know, it's a vote. It's easy. Aaron, if you couldn't tell, we've all scoured the world wide web to see which words you say most. Mark throughout. Pineapple. Brandon threw out pineapple. But I think the three main ones there pretty much in your vocabulary quite often. So it'll be awesome. [6:46] Mark: Brandon. [6:46] Aaron Schumm: It'll be hard. It'll be hard. [6:48] Mark: I don't see results. Are you getting the results somewhere? [6:55] JD: Yes, Blake, Technology counts for tech. Tech and technology are one and the same. [7:01] Mark: Brandon, if you don't got the results, I'm going with tech. [7:05] Aaron Schumm: Can I just go with computers? And the interweb is my. [7:09] Mark: Okay, you got a figure. Oh, no. We're not going tech. We're not going tech. [7:16] JD: That's going. [7:19] Mark: You guys are boring. 29. [7:20] JD: Hey, timeout. [7:22] Mark: How about we just say screw it [7:23] JD: and use all four? [7:26] Aaron Schumm: Whoa. [7:26] Mark: We're going to go with client, and [7:29] Aaron Schumm: we can do all of them. [7:32] Mark: Play along. If you want to play along with tech as well, fine. You're just going to drive Brandon nuts. Okay, but the official one is the C word. That starts now. So let's dive into our first subject, and I think before we get started, it's important that we lay the foundation a little bit. Okay, so Vestwell, in my own words, is this new kind of 401k disruptor, record keeper, digitally based. And we've heard Aaron talk about it many, many times, but kind of replacing this old, old legacy type. Record keepers. I love when you, Aaron, when you say that they have chassis built before the Internet was invented. So very, very cool. So this is what we're talking about is this new disruptor. And if you're going to disrupt something, something has to be broken in a sense, right? Or need. Need fixing. Need Disrupting what specifically about the record keeping companies that are out there today is broken in your mind. And we'll chime in, we're going to chat with you. It's not all on you. [8:38] Aaron Schumm: Yeah. So a lot of it, right. And this comes from kind of firsthand experience, right. Which was, which spawned my efforts to go, go after this space and a couple of things that are broken. You know, it depends on how deep you want to go with it. But at its highest. All right, well first let's start, let's start a little higher. So what I think is broken about it is your 401k, your workplace retirement plan sits in an island by itself outside of every other financial aspect of your life. You know, of course think about your bank account, your mortgage, your individual accounts, whatever they are. Everything happens, you have control over it, right. To some degree this is driven by your company, right. Because of erisa. So you have to adhere to that. But as an individual, I should be able to own what I do, right. And I should have a level of portability and a level of interaction that attunes to what I'm most familiar with in my everyday life. From every other aspect, you know, it's because you want to create people, you want people to go there, you want people to interact and do this because that's what you know, when you're providing a service that's, that's, you know, you should be interacting to that level. So that's what I think is most broken. So that's core what we've re architected. [9:56] Mark: But when you say, Aaron, when you say that, that broken that island. So what I think I'm interpreting is that in that old way there won't be a lot of advantages or flexibilities to connect to those, those other things. And so you're looking to do that eventually. Or what's so bad? What's so bad about being on an island [10:19] Aaron Schumm: when you're all alone? But it's a level of interaction around that, right. When you talk to people and you typically how much wealth do you have? There are very few people that actually interact. Like look back at their 401k account or go back and reference and say this is what I should be doing. Right? But in society, in actual practice, 75% of Americans, that's where you start, right? 75% of American employees, that's where you start your first, your first level of investing as an individual. So you have to be able to carry people from there. And when it gets trapped in these 401ks. And I get people, you know, talk about leakage and whatnot, but there wouldn't be leakage if you actually structured it in a more efficient way. So what we did was obviously you had the ERISA side, you got to adhere to the sponsor side. But in the traditional record keeping world, everything happens at that sponsor level in an omnibus level, in an omnibus world. And the participants. [11:08] JD: Big word there, Aaron. [11:09] Aaron Schumm: What's that? The big word there? Omnibus, in a bubble, right? Everything happens in this pocket in one glob, right? And the record keeper is the only one who knows. The record keeper is the only one who knows who everyone is. And when it goes to the custodian where the assets are held, they don't know who any of us are. They don't know who we are as employees. It's just held at this block, right? So when I leave my 401k and I want to roll it over, an advisor wants to engage and we want to talk about other accounts. I have no clean way of doing that. Right. And it's such a pain in the ass to roll over, roll it. Right? And that's part of what we're trying to solve, right? And what we're trying to do is collapse it and say, listen, me, as my employer gives me a 401k, I have my own account within a 401. 401k. I have my own account and I also have these other accounts in my life that I want to incorporate in this, in this overall architecture and I want to engage at that level. So what we did is we built a record keeper that's fully digital, that collapses the stack. So that layer, that omnibus layer, only resides in theory. Not in theory, it resides in reality. But it doesn't reside in a technological aspect where everything has to be housed that way. So we break it down. Every participant has their own account. Now. This is why it matters. [12:22] Mark: Okay? Because I'm. That's like, great. You're reading my mind, Aaron. You're reading my mind. Why do I care? [12:27] Aaron Schumm: Yeah. So this is why it matters. Because of payroll, connectivity and everything we know about every individual, right? And because we have all the census information, we know people's, you know, their birthdays, their, their beneficiaries, you know, if they have kids, if they had, you know, if they, you know, something happened in their life, whatever. We have all this data right now. What we can start doing is guiding people to make more intelligent decisions around their investments without having to be an expert around it. So if you have your 401k today. And you're like, hey, by the way, I should probably have an hsa. That HSA happens over here. Or I should have an ira. That IRA happens somewhere else. Right. What we're doing is creating. We have an architecture where we can actually spin up individual accounts underneath for every facet that is most pertinent to that person's life. So we say, hey, you know what? Your employer has a high deductible insurance plan. Do you want an hsa? Yes. Click this button and we can spin out an account and a card around an hsa. Oh, by the way, we notice you have rollover assets for outstanding 401k balances from your previous employees. You should roll those in and stack them. So now all of a sudden you have three different accounts lined up underneath. And we have the payroll connectivity. And we know how much people should invest or can invest based on who they are, how they're getting paid, hourly, salaried, whatever it may be. And then we can start allocating the next best dollar into each of those accounts, which without that individual ever having to know what. What that. How much they should be doing. Do I have to go log into my HSA? Do I have to go to my 401k? [13:50] Mark: Brandon, can I put a pause button on Aaron in some way? Can we pause him? He just went through the entire scope of everything that we were going to talk to him about today. Did you notice that, Chad? [14:01] JD: Yeah. [14:02] Mark: He had every little buzzword and every little thing on your notes in the first. [14:07] Aaron Schumm: So that's how. That's how I think about it. That's what we're trying to solve. That's the inefficiency. Right. And then you get down the other inefficiencies of payroll. That's what's broken notice generation 5500, compliance testing, all the other gunk that goes with a 401k. Right. All of those are highly, highly inefficient. And what we try to do is build to fix those inefficient processes and allow people to interact where it's important and allow the mundane stuff that should just happen automatically get built through technology. [14:35] Mark: I'm feeling a little dizzy, Chad. Yeah, I'm feeling dizzy. [14:38] JD: Try to bring it back to really shitty word. By the way, he's got. I was writing down some of his alternative words for the C word. He's got it down right now, Wine, to get him going there. [14:50] Mark: I love my clients. [14:51] JD: So, Aaron, the way I see this is. Imagine like a Checkers board, right. Or a Connect4 board even better where you're dropping in red and black little coins each time. And I see that bottom layer being the protector participant. And you're saying this column is 401K and this column is HSA and this column is loans and this column is your banking and this column is Social Security. And what you're saying is underneath Veswell you want all of those on one level. The client is now, is now the participant. And your thought is hey, we can set up an HSA by dropping one in here and the 401k is just a source in all of these. So we can aggregate all of this information so that we can help which is essentially what financial advisors on the private wealth side are doing providing advice them determine how to spend their money. What's the next best dollar with their income. Now my question which I still can't understand after following you as much as I possibly can, is Veswell thinking they're going to build all these things or are you going out to these other companies? Like my example in pre show was with Merrill. Are you going to go to Merrill and say let me be the record keeper on your guys chassis and now you can push in your life insurance portion and you can push in your hsa. You can drop your chips in here. Now we've created such great tech that we can essentially source and record keep [16:28] Aaron Schumm: all that it is. So yes and yes. So our goal this year was to get the architecture and the framework in place so became really efficient starting with 401ks and 403bs, ERISA based stuff where we are going and what we're adding this year, some other components. You'll see stuff later this year that center around that we'll build elements of HSAs. You know we're not a bank right. So you still need a bank that's involved in an HSA. We will. IRAs are natural. Right. And some of the other, you know I don't want to go build another full wealth platform. I did that before and that there are great companies out there that you can partner. We built it with the idea though and the understanding of we not everyone is going to look to vessel to say go build this for me and they're going to say I'm tied into so and so and I need this. So it's all API driven, right. So we can plug and play things but we do want to own a lot of it. Right. And we'll build a lot of it. Right. So that's so our play Right. Who we go out to the industry and ultimately compete with are the FIs, you know, Relias and Omnis of the world, the DSTs, the Ascensuses. Right. And we're going in there and getting people out of that legacy architecture that is prohibiting them to service clients in the way. There you go. Service clients the way they. [17:57] Mark: Ah, there we go. Is that the bigger game plan, this kind of enterprise thing that you're talking about competing with the Omniplus, all that stuff, versus Vestwell itself becoming a successful option for plan sponsors? How do those two vet out? Like which one's more important to you guys in terms of growth? [18:20] Aaron Schumm: I always say so we have two. It's 100% distributed as a platform. It is not direct sold. Right. So we either work through financial services companies which are RAs, IBD. [18:33] Mark: Sure. [18:34] Aaron Schumm: Right, all of that. Or we go through payroll hrs, PEO providers and there's overlap. [18:40] JD: Right. [18:40] Aaron Schumm: Because those, those all typically incorporate advisors on top. Right. So you know, the 98% of our business is advisor driven. And that's also because, you know, advisors obviously own this industry and are attached [18:56] JD: to most of these clients. [18:57] Aaron Schumm: Right. 93% in today's world. So we, so we, you know, the main, within that segment, I would say we go to what I would say enterprise institutions. Right. So think of your typical. Who you would think of as a record keeper. Right. We're engaged with them to augment their record keeping services. Right. And then I would say preferred partnerships, often retirement specialists are really where we focus on the preferred side and then payroll HRS type players. [19:29] Mark: So I guess to clarify that question, what percentage of the business going forward do you see that Vestwell logo slapped on it for everyone to see versus it being behind the scenes? [19:42] Aaron Schumm: You almost never see Vestwell. I would say 5% of our users see Vestwell. Yeah. [19:48] Mark: And that's not the goal to grow that side. [19:50] JD: No. [19:51] Aaron Schumm: Like, no, I have no aspiration. Like I never want to see a TV commercial with Vestwell or Subway ad in New York or something with Vestwell on it. Right. I see commercials today that are kind of funny where I'm like, hey, that's actually us behind the scenes. Yeah, yeah, right. But I want to, we're the engine. I want to be the intel inside powering this industry and reshaping how this segment of the market works. [20:10] Mark: Before we jump to a quick game, Blake put a question out there which I think a lot of the audience is probably thinking about. And he said, he kind of said like, this sounds way I'm putting words in his mouth, but he goes, this sounds way too complicated. Right. Like he wants to go in and sell simplicity. And I guess in a sense he's saying, well, all of this junk that you guys are talking about is not going to be attractive to my plan sponsors, to my decision makers and hang on. So I would back you, Aaron and I think, and you tell me if I'm right, I would answer to Blake on your behalf to say that's not what Aaron's trying to do. Aaron's trying to create something that's sexy to all those companies he just talked about. Right. Those payroll providers, the ones that you're going to private their private label for those big institutions that you'll be the underlying chassis. They want to have these extra connect four buckets that Chad's talking about. And therefore they're extremely interested in this kind of stuff because it's going to make them the almighty dollar. Right? [21:09] Aaron Schumm: Sure. Yeah. [21:10] JD: They're gonna be sticky because they've got their hands in each of those different slots. [21:15] Aaron Schumm: So it becomes stickier. All right, so here's why it matters. Right out to the folks that play in this industry. So when you do this, right, the cost to serve drops dramatically. Right. We can take oftentimes people, you're making money everywhere else. [21:32] JD: It's not the cost to serve. The cost of record keep might drop dramatically because you're subsidizing with other services. [21:39] Aaron Schumm: Sure. Well, not necessarily. When you, when you build a tech. Right. We can run a plan. We can run $100,000 plan at six bucks ahead a month and $100 ahead of $100 a month to the sponsor, regardless of the size. We can run that for, you know, at an 80% gross margin. Right. Irregardless, if it's a startup plan. Right. So with a handful of employees. So now when you look at, obviously everyone's getting squeezed in this industry. Right. That gives us room to allow people to, you know, as fees come down and you want to find ways to augment services that Advisor are providing, that gives room for that while driving the cost to serve a 401K. Now in the traditional record keeping space, they've either been excluded from the small market. Right. And when I say small market, we target, you know, sub 50 million dollar plans. Average plan probably normalizes out about 2 million. But in that market it's incredibly expensive for most players to be in there and so they have to pass those fees back to a client. Right. If you look, read through a 482 of a paycheck's client. And it's crazy what they take out of the back end. Right. And what they charge and pass through that just. Yeah. [22:52] Mark: Can I ask you, Aaron, if at. Is it 106 per month or is it 125 and. Okay, whatever in that ballpark, but like just rack rate. [23:03] Aaron Schumm: Yeah, $100 a month. [23:04] Mark: Yeah, 106. 106 per head per month. When you, when you get 100. [23:11] JD: Base. 6 per head. Yeah, yeah, base monthly and $6. [23:16] Mark: Right. 1200 a year and $72 per annually. Then by the way, when you go out and get $30 million in funding, you could have just came to me. We won 4 billion off Janus Stout sometime last year. We would have gladly given you the 30 million, but let's move on. When the VC gives you the 30 million, are they. This is not the model. Right. Is for you to go grab as many clients. I'll get to that. As you can. At $100 a month and $6 per head. There's big. Right. Thank you. Okay, tell me, what does the VC want from you? Where's all this return on their investment coming from? [24:04] Aaron Schumm: By being the underlying architecture behind the scenes. Right. We're engaged with enterprise institutions now with, you know, I can't publicly name per our contracts, but we're powering thousands and thousands of plans for them and it is a lucrative business for us in a very efficient way. So by just being this engine and this infrastructure and architecture. So that's the play is if you can do this and prove out gross margins in an industry that has been constrained and will continue to be constrained because the underlying record keeping technology will not allow them to go any deeper, then that's what they're interested in. [24:46] Mark: Well, and you're also potentially going to create new revenue streams for them, right? Yeah, it's going to win. [24:56] Aaron Schumm: The advisors on the platform get a premium for who they're servicing. Right. Because rather than spreading your business across, you know, 5, 10, 20 different record keepers, now they have one place to put it, right. That's theirs. That's their brand. That increases their visibility and gives them a touch point in every participant in a very crisp, efficient way. And it's much easier for a user, an end user. Right. You know, think about most, most of our clients, you know, in the small market. This, they don't, they have no. Sorry. [25:25] JD: Yeah. [25:25] Aaron Schumm: They have no idea. They have no idea what, you know, how this works. [25:30] JD: And hey, hey. [25:32] Mark: As Jeff Andrew says, getting people out of DST is the Lord's Work. So no, we could talk to you for hours. [25:45] Aaron Schumm: Hopefully you get it. Hopefully it makes sense to the audience. [25:49] Mark: Hey, it makes a lot more sense this time, me hearing it from you than the first time Chad and I sat down with you. And we walked away going, that guy's an idiot. No, what are you talking about? [25:56] JD: That wasn't true the first time we walked away going, shit, the margin's got to be so tiny. Either that or they're not going to service anybody. It's just going to be record keeping. Which is what, this whole time, what I thought your guys's play was to say, like, literally we're just going to be behind the scenes sourcing and record keeping. There's no. We're dependent upon the advisor to build out the enrollment, the education, the financial wellness, the fiduciary process. Like, we are a record keeper. We are dst. And when we walked away from that meeting, JD And I laugh like, okay, you can say you got a margin on that, but you're going to need 130,401k plans before you're making any money on that. And that would be the largest provider by threefold. So now I understand what the thought was and where all this VC money comes. This is a new world that you're trying to create. [26:49] Mark: Yeah, I want to get to a game. I want to get to a game real quick. We're going to run out of time here eventually. But Jeff brought up, and I think Tom's asking if this right. I'm not sure, but he says, I assume I'm not getting 60 hard copy enrollment kits per printed in Spanish and mailed to the plan sponsor. And to back up what Chad just said and to answer Jeff, Jeff, no, I think you're right. I don't think that was ever Aaron's intention or Vest Wells. They want to be this digital platform. But Chad and I'll ask Aaron on behalf of Chad. Aaron, do you still have up your sleeve though, maybe some tech to help with education and stuff? I mean, you're not completely removing yourself from that side, are you? [27:28] Aaron Schumm: We do, we. We do a lot of, a lot of education. It depends on how far the, our relationships want us to step in. [27:35] JD: Right. [27:36] Aaron Schumm: So there's, you know, I would say it goes from fully bundled to completely unbundled and, you know, easier said than done in many ways. But so in the bundled capacity, some, some advisors, like, listen, I don't want to deal with this. You do the enrollments, you do, you do the onboarding, you know, you can do the education. So we have, you know, all online videos, tutorials, you know, walks up to the platform. All of that's already there. And we also will brand that in the name of whoever's platform it is so it becomes theirs. And then we look at a lot of. I'll use like an insurance provider. Right. What do insurance providers care about? Right. They care about being an asset manager and plugging in their stable value, whatever it is. Right. And because ultimately that's their core. That's where they're making money. [28:17] Mark: I don't know. Nationwide wants to be on my side, they tell me. [28:21] JD: So that's where they're getting their spread. Yeah, that's where they're getting their spread. [28:25] Aaron Schumm: Nationwide is an investor in us. Right. And you know, there's certain things they do well and certain things they know they don't do well, and they're looking at changing a lot of that. But even though it's on your side, on your side, they still want. That's what. That's their core. [28:39] JD: Understand? [28:40] Mark: Yeah. [28:40] Aaron Schumm: So what we'll say is, hey, we want to make sure we're accentuate your value prop and augment it through the tech side. So that's our play. Right. And then we make. We can be profitable being a pure tech provider as a business. Right. So that's what our investors are interested in and that's why they're attracted to what we do. [28:58] Mark: I get it. Let's take a. Let's take a little fun break. We play a game on the show. You're going to be on the spot, Aaron. We call this game who is that? We're going to play for you some audio clips from some pop culture type of movies and just wait till the end of the clip and then give us your best guess. But you have to promise me one thing. [29:19] Aaron Schumm: Yeah. [29:19] Mark: Do not look at the chat bar because they will cheat for you. So don't. Okay, Brandon, go ahead and run that first glorious video or audience. [29:32] Aaron Schumm: Fragile. It must be Italian. [29:35] Mark: Well, I think that says fragile, honey. [29:38] Aaron Schumm: Oh, yeah. [29:41] Mark: Oh, I didn't get this one, Brandon. [29:44] Aaron Schumm: I don't know what this one is. [29:45] JD: I. [29:47] Aaron Schumm: And you're talking to a guy who has zero minutes in his life to watch TV or movies. [29:54] JD: So come on, there's some airplane time in here. [29:57] Mark: You have a guest chat. [29:58] JD: Oh, I know that one for sure. We have a light in one of our guest bathrooms. That is the broken leg. [30:06] Aaron Schumm: Oh, is this A Christmas Story? Yeah. [30:08] Mark: You'll shoot your eye out. [30:10] Aaron Schumm: Aha. [30:11] JD: Shoot your eye out. [30:12] Mark: All Right. Let's play number two. You're kind of one for one. Your name is. [30:18] Aaron Schumm: Oh, Jack Gordon. Mr. Gordon. Good. [30:21] Mark: Well, Frederica used to work for Mrs. Lippman. Did you know her? [30:26] Aaron Schumm: No. Oh, wait, was she a great big fat person? Yeah, she was a big girl, sir. Yeah. Oh. Oh, that's the one with. Oh, God. This one? [30:43] Mark: Yes. Lauren. You are correct, Lauren. [30:46] Aaron Schumm: Oh, I. I don't know. I'm gonna blow up. [30:48] Mark: It puts the lotion on the skin. Put the lotion in the bucket or something. Yes. Silence of the lamb. Signs of lambs. [30:56] JD: Justin should know that one. He's nice and silent. [30:59] Aaron Schumm: All right, voice. I know, but I gotta. [31:01] Mark: Aaron, you're two for two. I'm claiming. All right, Brandon. [31:07] Aaron Schumm: Of that. Go ahead, [31:10] Mark: Eddie. [31:11] Aaron Schumm: Don't you worry about radiation. All I know, Clark, is that my teeth have never been whiter and my garden is spitting out 50 pound tomatoes. The theme here. Oh, that's that. Christmas vacation. Clark Grisold. All right, close enough. I don't know. I guess close enough. [31:30] JD: Right on. You got. You got half the word or half the title? Solid Lampoon. [31:35] Mark: It's in the. It's in the series. [31:38] Aaron Schumm: All right, you want to keep going? J.D. [31:40] Mark: shannon Edwards. Oh, heck, yeah. Let's do one more because I'm a. I'm afraid to ask Aaron the next questions. [31:48] Aaron Schumm: All right, this is a. This is an old one. I can eat 50 egg. Nobody can eat 50 eggs. You just said he could eat anything. You ever eat 50 eggs? Nobody ever eat 50 eggs. [32:06] JD: Hey, Baba Loo Gotch. [32:07] Aaron Schumm: We got a bet here. My boy says he can eat 50 eggs. He can eat 50 eggs. Yeah, but in how long? The hour? [32:16] Mark: Well, I believe I'll take part of that wager. [32:18] Aaron Schumm: No. $2. Right there. Cool hand. Look. No, wait. What? Luke. Nice. Wow. [32:29] JD: No clue there. [32:31] Aaron Schumm: Wow. [32:32] JD: Did Aaron just. [32:33] Aaron Schumm: Good knowledge. [32:35] JD: I just aged yourself. [32:37] Aaron Schumm: I did. Dramatically. I remember watching that one. I think it was in early elementary school. We watched it and when that One of those days when the substitute teacher shows up and has nothing to say so they throw up a movie. Never even heard of it. [32:50] JD: Have you guys heard of it? [32:50] Aaron Schumm: Chad? [32:51] JD: Nope. Nope. Nope. [32:53] Mark: All right. [32:55] JD: He shook his head like he was wrong and he's actually right. So apparently Jay doesn't. [32:59] Aaron Schumm: Doesn't know the his own game. [33:00] Mark: How's my Internet doing right now? Okay, guys, am I coming in? [33:03] JD: All right, What'd you say? [33:05] Mark: It's nuts with me. [33:06] Aaron Schumm: What? [33:07] Mark: I just want to say hi to Shannon Edwards children for staying up. And Shannon, if you let Your kids watch this show. You're not a very good mother. That's not very responsible. [33:20] JD: What about. [33:20] Mark: I'm kidding. She knows I love her. She knows I love her. She knows I love her. All I know is that. [33:26] JD: Yeah, no, no. [33:28] Aaron Schumm: Okay. [33:28] Mark: I wanted to ask you this. You said something. I thought that was pretty inspirational. I heard you on some show. I forget which one, but you made mention of the fact that in 2008, 2009, you know, when the stock market crashed and we went through all that stuff, you said that we were the problem. And when you said we, you're referring to financial services as an industry. Looked at us as this evil Wall Street. These bad guys in suits and ties stealing all their money. And the inspirational part was you said, now, through technology, we could actually be a big part of the solution. And you caught me with that one. I was like, oh, I like that. So I agree with you. And I would like for all the audience to kind of tap into that type of stuff, too. Like, this technology could be part of the solution. Right? It can help us improve our brand, which you guys hear me say at nauseam as an industry. And so we're looking for good tech. And as much as Chad and I and the boys try to tear you apart, we're also very excited. When have we ever tried to tear them apart? Well, you should. There's not been one show so far, you know. Aaron, hold on. Timeout. This is time for us. JD has probably thought, like, I'm gonna come in, guns blaze and ask some hard questions. He has not. He hasn't even. He's like, oh, being all nice and stuff. [34:53] JD: So come on, jd, let's see this. [34:55] Aaron Schumm: You can throw it at me. I don't mind. I'm all. I'm all for. For taking it, because I really. [35:00] Mark: You really let me down today. I've been quiet the whole time just waiting for you to do something that I actually be like, there it is. Nothing. Nothing at all. Do you know how when a politician starts talking and you just get lost in their words and the way they go on? Like, Aaron, kind of. I got spellbound. [35:16] Aaron Schumm: See it in your eyes. [35:18] Mark: Yeah, I was. He really did tackle a lot of my questions right out of the gates. You know, I will say. I will say, now, this isn't to be taken offensively, Aaron, but have you [35:28] Aaron Schumm: ever been compared to Voldemort? I have not. [35:32] Mark: Okay, so I feel like you've got JD under this spell, and I'm wondering. It's because maybe that's your Doppelganger. [35:37] Aaron Schumm: I'm not sure. Maybe. I know that's a good. I like it. [35:41] Mark: Well, I'm gonna stick to the positive right now and then we'll see if we can find something really negative to attack him. You said something like, you know when today when an advisor goes to a record keeper and says, for example, like you know, I'd really like to send it, I'm gonna use the very simplest of solutions. I want to send an email blast to all of my participants and all my plans that have, you know, north of $100,000 and are over age 50. Quite honestly, I think there's a lot of record keepers that would say to you we can't even do that for you. And the ones that could, it might take a lot of time to get that type of report back. So you're telling me that that is something that Vestwell can and will do. And again, I've given the most simplest of an example. I can only imagine what the universe looks like in terms of what you could create for me as an advisor if I wanted it. Is this part of your mission? [36:47] Aaron Schumm: Yes, but this is how it goes, right? And this is just how this stuff gets built. And I had a conversation too with one of the largest record keepers out there, a CEO of this company that we're working with and engaging with. And we were talking through some of the things we're building and he's like could you do this? And I said we could, but it's not that easy. And I said where we start, we try to control it. We in emails for example. So we can do white labeled emails, videos, you know, whatnot says, you know, whoever pick pick a company and it goes out to all the participants and we could track all the emails, who opened it, who didn't, what inbox it, it goes all that stuff, right? [37:27] Mark: I can do that in mailchimp bro. [37:29] Aaron Schumm: It's not that you can do it similar, right? So we built a lot of this stuff so we can customize that content but then we pull that in and then what we start to do is segment the data and then bubble that up to the advisor. Now we haven't done a lot of this yet and I'll fully transparent. One of our known deficiencies is I think we can provide better reporting and better interaction out. So our head of design and product where you know, we've been told this we're working on is to build out the ability for an advisor to do this themselves from our platform where they can just go in themselves and say, here's who I want to touch. And then it goes back out. Right. And then they, they create the content. They use our kind of reskinning of the emails and whatnot, and then it goes back out. It's easier said than done. Right. And it takes a while to do this stuff, but that's, that's the direction. Now can we get the data and say, here's who you should reach out to? Yeah, it. It would take us, you know, less than a day, right? It would. We could turn it around quickly. But we have to surface those internal filters we use back out to our users in a more efficient way. On our short list of roadmap initiatives, we're building out a whole tpa portal where TPAs could just come in and run their books on our platform and have everything they need at their fingertips. Just a lot of times, like we do in a fully bundled way today. So that'll be out the next couple months here. And [38:51] JD: everything you're stating there is still dependent upon having that data, which is. It's been a common theme in all of our conversations. [38:59] Aaron Schumm: And this is part of what I would say people get frustrated with, but we're pretty stringent about it. So we have this, you know, kind of thing, you know, bad data. Faster doesn't help anyone. Right. So when we get data in, we spend a lot of time, you know, refactoring rosters and looking through and call outs. And when we process payroll, we track where the errors are. [39:23] Mark: Right. [39:23] Aaron Schumm: We track. We have certain users that allow us to track their eyeballs and we see where they're looking on the screen and what they're doing. And then we try to build to where they're getting hung up. Right. And the number. The two biggest problems are birth dates and Social Security numbers. [39:38] Mark: So silly. [39:39] Aaron Schumm: And. [39:41] Mark: Hold on, we're not going to glance over that. You're tracking eyeballs for people that let us. [39:49] Aaron Schumm: They're folks that we don't. We don't just do it. That's not like Google, right. Where we'll do this behind [40:02] Mark: tracking JD's eyeballs. [40:04] Aaron Schumm: Right now it's in a container, right. And it's a software package we use where it's like user. User testing. Yeah. [40:10] Mark: Like the FBI. Jesus. [40:12] Aaron Schumm: Like, they log into it. It does. It's not in the platform. They go into a specific site. It's very clear that there's something happening that's gnarly. See this stuff, we say go in and look. And then we can see the cursing. [40:23] Mark: Let's get away. Let's get away from eyeballs. Let's get back to the data. Census data. So look, Chad's trying to go towards is like we've seen this. And Aaron, long before you were in the foreign K biz, people are trying to do this shit. [40:37] Aaron Schumm: Yeah. [40:37] Mark: And we've continued to fail and fail and fail as an industry. So I will give you that. But it's not a failure because we don't possess the, the tech. We have the tech to line up census information and feed it in on every per payroll period basis. The problem that we've been having as an industry is we can't get our fucking clients to cooperate and do it properly. [41:01] JD: And we, well. [41:04] Mark: And we can't go back and forth with them trying to sort it all out all the time. So what Harry, what is your guys experience with that so far? [41:10] Aaron Schumm: So are you talking like payroll in general? [41:13] Mark: Sure. [41:14] Aaron Schumm: And get. All right, so, so pay. So we have I would say four major ways we collect payroll, right? And this is why we work with payroll providers. Because the ideal way is to get an API that goes back and forth, right? [41:24] JD: Yes. [41:24] Aaron Schumm: Through. [41:25] Mark: And a proper API. [41:26] Aaron Schumm: Yeah, a proper API. Super hard to do. And most payroll providers have no idea, right? You, I don't know if you ever, you guys probably, I don't know if you care enough. But like look at, look at ADP's Payroll Interface API. It's a joke, right? It's an absolute mess. And it tells. And obviously they control a lot of the world, right? Adp, paychecks, so on. But then you get guys who are much more tech advanced, like a QuickBooks, right? And they have, you know, they're doing some pretty interesting things with their APIs. So you build that up. Now you can't do that. You can do a 360 flat file that goes back and forth, right? Just here's data, here's this. It goes back the other way to do it. The next best is a 180 so from payroll to our platform, but doesn't go back. So if I change my contribution amount from 5% to 6%, not going back. What we built for the folks that have nothing because they have a closed ecosystem homegrown payroll system, which a lot of these folks do. We built this payroll engine that allows you to drag and drop a payroll file. And we know where it's coming from, who the provider is, the sponsor, what their eligibility rules are and whatnot. And, and we grab the data and then we normalize it and we bounce it off the historical data that they've had. Right. So we look for anomalies in the process. We look for, say, hey, you know, JD, you know, you look like you were, you know, 40 years old last week. Now you look like you're 16. You know, I don't know what happened to the beard, but hey, this isn't right what happened. And then we allow them to change it and then we can teach the system to look for those anomalies continually. Right. So we added layers and layers of, you know, of validations. [43:10] Mark: Understood. [43:12] JD: Validation is tech based and relatively simple. I think many of your peers are doing that as well. What I liked what you said is something we've been screaming about for years. As you said, we know these payroll providers and we know what to expect. So if you know what kind of file feed and you know their letter headings and you know how they're as you in your terms, antiquated systems are going to push that data over, then you can set up your API to read that data and it doesn't necessarily have to be in a singular format and line up exactly how you need it. Hence the 360. Works cleaner. [43:48] Aaron Schumm: Yep. [43:48] JD: The question, the two questions I would have off of that is, are those payroll providers playing friendly? Are they letting you actually know it? And then here's even more important to me, Aaron, somebody on your side needs to sit in that driver's seat when you're onboarding that client and when you're onboarding that business and say, oh, you're with. Or oh, you're with QuickBooks. Here's the full. The file that you need to pull. Here's what you need to do with your payroll provider in order to make this happen. Nobody's doing that. We all preach it, but nobody does it. [44:24] Mark: Hang on, hang on, hang on. It's not just that. The problem that also happens is you can have a beautiful API set up with payroll vendor X that you know the way payroll vendor X works. But the problem that happens is definition of comp, you know, different dual eligibilities, rehires, there's a lot of things. No, no, no. But the. If the data is coming over and the data is not the right data, you have to. Even though it fits the API the way the template was supposed to be, the plan still screwed up. And I don't see anyways, yeah, yeah, yeah. This is me being an old guy. This may be an old guy saying, your tech's not going to solve everything, Aaron. It won't work. [45:09] Aaron Schumm: It doesn't solve Anything. Everything. Right. And we have clients that don't have email addresses. Right. So now you got a whole nother problem. Right. So I think what someone. Someone here mentioned that, you know, the payroll company screwed up or the HR person screws it up. And that happens all the time. Right. And a lot of times we try to catch as much of it as we can. So we. Right now, we're at a clip. We run. We run 93% of our payroll straight through automatically the first time. Clean. Right. [45:37] Mark: Oh, wow. [45:38] Aaron Schumm: And we're trying to get. [45:39] Mark: Or at least you think. You think you did a clean. [45:41] Aaron Schumm: Yeah, we're trying to get that over 95 this year. And it's hard. It's super hard. Right. And there are. There are guys. So there's another payroll company we work with, and then their clients come in and they're like, hey, we have a K1. And we're like, oh, [45:57] Mark: sorry. [45:58] Aaron Schumm: And so they can't do a K1. And then we have to deal with it. Right? Yeah. [46:03] Mark: Trust me, bro, we're in 45 years of doing business right now. Like, we. Yeah, there's all kinds of little messy situations. I'm sure you're feeling the brunt of there, is there? [46:12] Aaron Schumm: This is a. This is a business of edge cases. Right. And knowing more and more of what people do well and that they don't like Paylocity. We have a great interaction, a great connection with, you know, QuickBooks. We have a great one is a really great one that goes live later this year, and we keep trying to work with them to help, and they're much more open to it. To your first question. Right. Versus four years ago, when we started talking. No one wanted to talk to us. Now people are like, okay, we had a payroll company call us the other day that was adamant. They would never do business with us. They're like, okay, we're ready. And so they're getting more and more friendly. Now, I don't know what that data is going to look like. It may be a dumpster fire that they send over, but we'll do what we can with it. [46:54] Mark: And no matter how much Chad and I tear that apart, Chad, we still. I know you and I agree on this. To have those scrubs to scrub the data, to have that tech in place, which is not unique to Veswell, but I know it's part of what you guys are doing is the right step forward, regardless of if it has some holes in it here or there. I mean, we've got to all get there as an industry. So we have to applaud that and that's great. I just, if we're being a dick to Aaron, we want to say it's like, well, that's, we could do that 10 years ago, bro. Like, we can scrub payroll and census data to look for errors and let the submitter know that hey, this looks wrong or this doesn't look wrong. And I'm sure yours is slicker and newer and cooler, but I just, that's not something that we haven't had, you know. [47:39] Aaron Schumm: But think about when you take it to the point of how long it takes payroll to process today, right? When someone submits a payroll file, it's three, four, five days later before it actually gets processed. Because although someone else is doing scrubbing behind the scenes, it's an arduous process that's not efficient. Now if you can take that, we've gotten this down to milliseconds, right? And ACH protocol has its own flaws, but that's changing in the industry as well. But if we can do this where it effectively becomes real time, ach, boom. Here's your $500 you just contributed. That's, that's where the puck's going, right? And that's what we're starting to get to. And the faster you can do it, the more efficient it becomes, the less, the less time intensive it is for someone and less error prone it is. And then when you know, you know better than anyone, once you submit that payroll, you and it gets processed, it is so hard to back out. Right? [48:30] JD: And so, but all of your statements there, Aaron, were about payroll integration. Like in order to real time, in order to have that, you need the feed coming through and you need to be dependent upon that that data is accurate. So when you run your 45 point validation, you've got the fields aligned and you know what you're looking at. If you have a seven person client submitting, yes, submitting data through an Excel spreadsheet or re uploading every pay period, it's the same process. And I will tell you, most of the providers out there, other than your paychecks, that want the float income of holding on those dollars that payroll comes into their system and by end of day, as long as it comes in before 4pm, it's in the market the next morning. [49:14] Mark: Yeah, it'll be in the next day. [49:15] JD: It's immediate, it's not, they're not missing that work. [49:18] Aaron Schumm: Well, right. But there are only, there's only so much improvement you can make out it'll never Be perfect. This, this is not going to. We can't find the sil square bullet, right. And say this is what it is because you just have to deal with too many scenarios around it. But it is getting better. And then there's, there's, there's the ability that's starting to come out now where you can do predictive analytics of when you're going to be paid and how. And then actually do it before you get paid. Right. And. And if you have that. Right. And if you can get ahead of that. Right. So that's. We want an architecture and infrastructure that can get us there. Right. And if we're sitting on a RELIAS backbone, it will never get there. Right. Or pick. [49:56] JD: Well, I. While I. I admire what you all are doing and if you've watched these shows or any of our conversations for the last five years, you will see what you guys are trying to better is exactly what we've said needs to be bettered in this business. It is exactly it. I've said for years for a participant to have. [50:20] Mark: Chad. I thought we were trying to be a dick to him now. [50:22] JD: We were trying to. Let me go [50:25] Mark: ahead. Go ahead. [50:27] JD: Can't believe you have a mohawk. I just, I'm just saying. And it's staying strong. I believe, and I go back to my early days before I was in this business, that the average American participant that's in our retirement system doesn't have access to the property guidance advice advisors that are going to step in and say, hey, you're saving in your 401k plan, but really you need an emergency savings fund. Oh, but really you should be putting some money in an hsa. And I have thought that that is a fault in our system because they don't have enough money, they don't get access to that guidance. If you can solve that, great. I don't think we're there. I don't think we got it yet. But the fact that you're trying to tear down that wall. Kudos. The same thing with the payroll integration. The only thing that I've heard different from what you're doing, from what all the other record keepers are telling us, this is what we're trying to build, is you very clearly have a vision of making that participant linear and the sources being all these different areas that they need help with. I have not heard anybody else line it up like that. Right. In our world, it starts with a 401K. And you're a participant here. And if we can get you anything else, it's these other levels of service down here. It's not linear. Your source is the participant. Just like in our world, a source is a traditional, a Roth, a match, profit sharing. Your source right now is 401k, HSA, insurance, annuities. And that is not something I had ever heard until I heard you say it with, with John Sullivan. And that, I think is the only differentiator that I've really heard you guys are creating at this point because cloud API has been there. Other people are spending millions and millions and millions on that too. [52:15] Aaron Schumm: Yeah. And people are spending tons of. And people have tried this. Right. And it's a big ship to build and you know, it's. It's expensive and it's hard. Right. And I don't discount it. All right? And I have a ton of respect for, you know, everyone who's been in this industry for so long and been, you know, very successful at it. But I do think it's inherently flawed in a lot of things we talked about. And we have to give a better solution out to folks now whether they understand how the architecture works, I don't care. Right. This is on us to provide the ability to service people better. [52:48] Mark: That's where my attack on Aaron and vessel goes south. Mark is much like some of the people in our chat bar. I was thinking really myopically about the plan sponsor and the participant. And I was looking at what Aaron's doing and trying to do and kind of agreeing with what Blake said earlier where I was like, they're not going to care. You know, we're even seeing some of the chat bars right now where they're just not going to care about all those different levels of detail. I don't think having their money hit their account, you know, one day before versus the next day even really matters to them or would be part of a point of sale. So I was going to come back to you in this negative way of like, look, bro, we're doing all the things that matter and our clients aren't asking for the things that you're asking for. But my mistake there, my folly was, is that that's not who you're building this for. You're building it for the big players that want to do better, for those people that don't know any better. And you will impact them. I'm not saying you're not going to impact those participants. You will, but that's why I was getting that all wrong. But let's go to one other thing. Based on what you just said, are you familiar with Schlichter? The 401k boogeyman? Do you know who that is? [54:01] Aaron Schumm: I do now. [54:02] Mark: Okay. Yeah, well, trust me, he's gonna be, he's gonna be crawling out from under your bed sometime very soon. Okay? So he is not a big fan of 401k providers offering other types of solutions to generate revenue. And I'm sure you know this. He calls it whack a mole. He feels like ever since he's gotten fee transparency under wraps through all his lawsuits, vendors are just finding new ways to generate revenue. Are you concerned for yourself, that is Veswell and, or the clients that you're providing this chassis for that we. Yes, Mark. That this maybe is not okay in our industry to use participant data to sell and cultivate products for them. Because I'm pretty sure Schlichter doesn't think it's cool. [55:04] Aaron Schumm: So I think when you look at your, I mean he could argue that it's not cool. But I do think ultimately you want better services. Right. And people are not 401k experts, nor should they be. Right. I use my wife as a reference all the time. Right. She's. My wife's a genius, but she's a biotech life science scientist. Right. And she does not care about how a 401k is working and what she should be interacting with. She knows she needs to do things. Right. But she's not going to take the time to do. [55:34] Mark: And she's not alone. [55:36] Aaron Schumm: Yeah. How do you put things in front of people's, in front of their eyeballs and guide them through without helping them. Right. And everything you do, when you, when you go to log onto your computer and you go to any website, right. Or you get a pop up ad, right. Based on all that. And there are ways, you know, we scrub the data. We don't sell data. We're not, we're not, you know, we're not using it and passing it on anyone. All the privacy. [55:58] Mark: You know, Aaron, Jerry doesn't look happy with you. [56:03] Aaron Schumm: If we're going to do justice to the folks that we're servicing in the financial service industry, we have to give. And if you don't have the information, you can't give advice. What do you think about it? You know, traditional financial advisory, if you're sitting down with a client, you're going through a laundry list of questions, right? And if you're going through a laundry list of questions, most of those questions could be answered before you even sit down with that person. Right. And if you can do that and create efficiency around it. Why wouldn't you? Right. [56:31] Mark: Aaron, we all understand. We all understand why, and I'm with you. I think that sounds like a glorious future for us to make it, you know, point and click and really easy and intuitive and AI and all the other things we see in the world. I love when my phone can tell me there's a surfboard for sale down the street that fits my criteria and gives me a notification. I'm a huge fan. Take all my personal information and give me that value. But when you step into ERISA and you step into these captive people, that's where these ERISA attorneys, or I should say Schlichter, is. Feels as though we're crossing a line. So again, don't give me the value of it. Give me the okay, no, it's just not going to be that way. And Schlichter is going to lose and the people on your school of thought are going to win. [57:21] JD: No. [57:21] Aaron Schumm: So, I mean, I think all these. Everything we do is opt in, right? We don't force anything down anyone's throat. We're like, we're not. If you click this button, you're not, you're not, you're not glued to us forever. And we know your. Everything in your life, right? We have data that we have to have for payroll and things like that, but we're not saying, hey, we're going to use this data in this way. Now if we can ask people, hey, do you want us to help you along in this process? And they allow us to, or they allow the advisor to do that and have the interaction, then we should be able to do this. I had this conversation with. I was having lunch, this is a while back, with one of the commissioners of the sec and we were chatting through some of this and we got into this discussion of who owns your bank account now? Number, right? Do you own your Wells account or Chase or wherever your bank is? Or does Wells or Chase own it? Right. And why do they own it? Why shouldn't I own it? And why shouldn't I be able to take that with me and create portability and then allow that, that bank to come with me and that data, that metadata, come with me to help, wherever it goes, make better decisions along the way? [58:24] JD: For me, that's way over my head and perfect analogy. [58:29] Aaron Schumm: I get it, but that's how we think about it, right? It should be the participant. If I want someone to help me through this, I should be allowed to have that happen versus being reliant on Someone that maybe doesn't give a shit about me, maybe the advisor doesn't care. Right. And they just want the business owner because they're one of their high profile clients. [58:46] Mark: You also answered the right way. What Mr. Schlichter wants to hear from us I think is transparency and letting the participant know before it all happens. Disclosure. They want massive disclosure and massive transparency. And I think if you can show that your plan sponsors that, hey, this is happening and this is what it means and we need you to sign off on it. I think you're more protected. Is this a conversation that's happening in your boardrooms with your board of directors, with the people at Goldman Sachs, all these like is this a concern at all? Is it brought up or no? [59:23] Aaron Schumm: I mean Goldman Sachs, you know how concerned they are always with what the next lawsuit is going to be thrown at them. But no, I mean the level of diligence and protocol and security and lockdown we have in this system is. I'm incredibly proud of our team for how they've approached it. Now we talk about it, right? But we don't, we're not there yet either. Like there's a lot that we want to do aspirationally and there's a lot of things that we're looking at and we're building a framework around it right now. We're like just make this shit work and go really smooth and make sure people are getting everything they need. [59:56] Mark: I don't know. But Aaron, not to fake a tough question, I honestly want to know the answer to this. When, when people are chucking 30 million at you, they want it to work. And if that's built on these extra channels working, then I would think that that would be a very serious conversation in that boardroom is okay, Schlichter's wrong. Of course we're going to be able to sell other things and that's our direction and that's where we're moving forward. As long as we see why A as long as we disclose, as long as we're transparent. So that's got to be where you guys brains are at then. [1:00:26] Aaron Schumm: No, it happened. Yeah, we have conversations like that all the time. And so too when our platform we this is not a one size fits all world. Right. And we don't treat, we don't treat this industry like that. So everything's configurable. So if someone says listen, we go to an enterprise institution or an RA or TPA and said you know what, we're not cool with this. We don't we don't want this, we don't value this. Or we don't. We just, we turn it off, right? So and so if they're worried about themselves in that regard and they're not comfortable with what we've laid out, we flip it off. [1:00:58] Mark: Fair enough. [1:00:59] Aaron Schumm: So, and you have to do that, right? But then there's other people are like, no, we need it. Right? And we're not going to charge people for not going to be like, you know, some of these other players out there are like, well we're not giving you the data that you own. Like, no, it's yours here. [1:01:11] Mark: Yeah, no, I know, but the lawsuit in five years from the boogeyman is, oh my gosh, there's this, you know, billion dollar plan and they were making all this money on the HSA and they're making all this money on the emergency savings accounts and the IRAs and they did this or that and they all were selling this stuff to this captive audience. Shame on them. We've seen it from Schlichter and all of his stuff. So anyways, yes. Go, go, go. [1:01:42] JD: You have built or taken upon what your dad has built under a premise that you and I have chatted about for years, which is you don't design a solution for in fear of what the bad people might do with it. Like think of retireholics. When you started retireaholics, it wasn't like what kind of shit are we going to get from people who will think this is a joke? So in this, if we take a step back from the people who think sharing the data is bad and we say, what does the average working person actually need? Let's just say it's a 32 year old, they're in their first step of their career, they're making reasonable money. What does that individual actually need? They need guidance. They need to know how to spend that next best doll. Agreed. So if we stop there and we worry about the outside fears, how do we accomplish that? And that's what I think. Aaron and others as smart as he is that don't drink alcohol at 4:30 on every Thursday afternoon. I think that's what the next step is. [1:02:47] Mark: 100%. [1:02:48] JD: That's what needs to be accomplished. [1:02:49] Mark: And can I say it for in my very naive opinion, it's not Aaron [1:02:53] JD: that I worry about, honestly, it's the people who are giving you that money. No offense to them, I don't know who they are. [1:03:00] Mark: But what's their, what's their play here ultimately? [1:03:04] JD: Because in a lot of Ways, don't [1:03:07] Mark: they just sooner or later just want you, Aaron, to go on to your next entrepreneurial ventures? Good question. [1:03:15] Aaron Schumm: It's a good. [1:03:16] JD: Take that. [1:03:17] Mark: No, we don't have a ton of time. That's a great question. [1:03:21] Aaron Schumm: If I do that. But no, the, the. So there's a very specific, calibrated way that we've structured our cap table, and there's a couple broad themes around it. One is they have to be fintech focused. They. And they have to know this industry. If you look at. Because I'm too old and tired and jaded to try to educate someone on how this works or how a financial advisor works. Right. And I've dealt with folks who are like, well, tell me what an advisor does in a 401k. And I'm like, fuck you. Conversation's over. And this is. [1:03:58] Mark: We don't swear on the show, buddy. Geez, you mean like downtown Josh Brown, who doesn't know a 401k from a chicken on his interview with you? But. Go on, go on. [1:04:09] Aaron Schumm: So the other side of it is, hey, we want to, you know, the folks on our cap table, we are not tied to. You know, usually there's a. There's a lifespan of a fund, right? Where it's like, hey, you're on the clock. You have five years go, right? And then we're flipping this thing. There's no lifespans on the funds we're in. And it is built to be a profitable scalable model that stands on its own. So this business is built to, you know, we could go public. We could be the next old Sun Guard or wherever, wherever we want to go. And. And that's the play right now. Will we go public? I don't know. Right. Like, I'm just focused on executing and what we want to execute on Mark [1:04:48] Mark: when he sells out to Fidelity in three years, we have this on tape. Yeah, I'll be knocking on your door, buddy, [1:04:56] Aaron Schumm: that, you know, Fidelity won't be in a choir, I don't think. I don't know. But they are in the cap table. But they, but, you know, there are folks who are interested in this and they look at that as, you know, is this the next thing for them? I don't know. Right. And we're looking at. We're going to build a business that does what we need to do to service this industry the right way and build a viable business. This is not. But one thing I want to be very explicit is we. This is not a business where we're going out and just trying to capture as many users and clients as we can not give a shit about revenue or whatever. [1:05:28] JD: Right, right. [1:05:29] Mark: And fair enough. Yeah. Client shoot. [1:05:33] JD: Okay, Mark. [1:05:34] Mark: Mark, you gotta. You gotta close this out here. What's your timing's done, buddy. We're done. Can we do one of. What's your game? You still want Aaron? You wanna play game? You got time? [1:05:46] Aaron Schumm: Yeah, I got. Yeah, I got. I got a newborn here. I got my. [1:05:51] Mark: He's got time. I have a question that's just before we go on. [1:05:54] Aaron Schumm: I'm gonna get keyboard behind you. [1:05:56] JD: Are you in a band or something? [1:05:59] Aaron Schumm: Oh, no. So this is. This was my. My. My lockdown initiative that never. I was gonna teach myself and my three year old piano. [1:06:15] JD: All right, well, we'll play a game. [1:06:17] Aaron Schumm: Hopefully that was the goal. Is it. [1:06:22] JD: Is it my Internet? [1:06:23] Aaron Schumm: No, it's into [1:06:26] JD: starting to lose Aaron. [1:06:27] Mark: I think he just hit a button because he wants to bail [1:06:31] JD: you guys. [1:06:33] Mark: I'm gonna make that button. [1:06:37] Aaron Schumm: I like that. Yeah. All right, well, you know what they say. [1:06:45] JD: You know what they say. [1:06:47] Mark: All right, Brandon, there's the show. Brandon, can you spin. Brandon, can you spin the Wheel of Ice, please? Okay. [1:07:09] JD: Take a picture of Aaron in that stalled face. [1:07:12] Mark: It's Mark. [1:07:19] Aaron Schumm: There he is. [1:07:20] JD: Okay. Aaron, that was perfect. [1:07:24] Mark: We ended the show. Aaron, we're all done. You're out. Appreciate it. [1:07:28] Aaron Schumm: Thank you. All right. [1:07:29] Mark: See you, buddy. Hey, everyone. Thank you for tuning in. Abby, Amanda. Amy. [1:07:35] Aaron Schumm: Bird. [1:07:35] Mark: I like that name. [1:07:36] JD: Bird. [1:07:37] Mark: Brad. Chris McDavid. What's up, dude? Corey, Deanna. That's a Vestwell person. [1:07:43] JD: You were gonna be here for a while. [1:07:45] Mark: Oh, okay. And the rest of you. Chad doesn't give a shit about you, but thanks for tuning in. It's.