Pandemic Response & Fee Strategy with Voya's Bill Harmon

[0:00] JD: And we've got Bill. Mr. Bill. Oh, no. Harmon from Voya, the president of retirement corporate 401k market. Boy, that title slides right off my tongue. But welcome, Bill, to retireholics. Have you seen the show? Do you have any idea what you've gotten yourself into? [0:24] Bill Harmon: I have seen the show and a couple different versions of it, but, no, I don't know what I've gotten myself into. And I think I had someone on my team probably volunteered me for it. So I don't know if that means I won a bet or I lost a bet. I guess we'll find out at the end. [0:39] JD: I definitely was a little worried about you, and everyone seemed to be signing you up for this thing, but we're really glad to have you. We've had lots of different guests on the show, but I. Hopefully I'm not offending anyone. I can't recall having someone in a position like yours at a large record keeper. And so, for us, as 401k nerds who live, breathe, and sleep this stuff, it's going to be fun for us to pick your brain a little bit and get things from your perspective. Agree, guys? [1:06] Chad: Yes, sir. Agreed. [1:09] JD: Now, we got a good crew of people attending, so if you're tuning in, man, I'm sure there's a lot of Voya people, but I see all kinds of names I recognize. Thanks for tuning in. And yes, that is Chad Johansen. I know his head looks a little different. It's kind of like a fuzzy tennis ball. I want to reach out and touch it. But Chad can grow hair. You all know that. [1:31] Chad: Now, here, apparently, it still grows. And I will say for everybody that is tuning in live, we got some. Oh, geez. Justin, put that away. Gosh. [1:42] Bill Harmon: Yes. [1:43] Chad: You're a horrible person, Justin. [1:45] JD: Thank you. [1:46] Bill Harmon: Justin, please. [1:47] JD: Sorry, Chad. [1:48] Chad: I was gonna say dig up bad things on Bill like folks did on Nevin a few weeks ago and give us some good chirps, but, Justin, that was taking it too far. [1:59] JD: Listen, nobody likes our banter, Bill, except for us, so let's dive straight into some subject matter. [2:04] Bill Harmon: No, no, no, no, no, no, no, no, no, no. We're not. We're not skating by that. This is. This is too good. Chad is the ultimate professional. The ultimate. Justin, you're about to. [2:15] Chad: I was young once. [2:17] Bill Harmon: This is grounds for termination. This. [2:22] JD: That's impressive. [2:23] Chad: I've known you too long, Justin. [2:25] Bill Harmon: Look at all the bottles. Up top, though. [2:26] Chad: I want to point those out anyways, okay? [2:30] JD: Can we now move on? [2:31] Bill Harmon: Hey, Justin, send that to me. [2:35] JD: Go Ahead, Justin, hit us with a [2:38] Chad: Use the chat bar. Any questions you have for Bill, chat away. I'm obviously monitoring it. I look like I'm not paying attention, but I am. So send them through and we'll get them answered. [2:48] JD: Perfect. Also, we're going to play a new game. I think Brandon and I are going to call it Password. It's kind of after this old TV show game, but this is how it's going to work. There is a word of the episode that I have emailed to you. Retireholics. Bill has no idea what that word is. If he says the word. We will play kind of a zoom version of that old college game where someone puts their thumb on the table. The last person to put their thumb on the table has to drink. But we will do it with the virtual background that we've set you guys up with. So I'll give you an example. You'll have to go quickly to the. I'm not going very quick. So I'd lose the game. The virtual background. The last one to do it would have to drink. And it looks like Brandon might be playing along with us, too. We'll see. And what do you drink? You don't just take a sip from your Coors Light or your fancy beer that you're drinking. Hopefully you've got something nasty sitting around. Justin. [3:46] Chad: Nasty. I've got good scotch. [3:49] JD: Looking forward to it. Okay, so that's the deal. So, Bill, be careful with the words that you choose. And I'm going to remind myself what the word is. I remember. Let's dive right in. Talk to me about this crazy time that we're in. Again, obviously, from your perspective, what are you seeing at Voya in terms of participant behavior with this market volatility, the uncertainty of the economy? You guys have, you know, I've only got 750 plus clients. You've got tens and tens of thousands. 40,000, 50,000. I don't know where your number's at these days, but you must get some pretty interesting statistics and I'd love to know if they're recent, you know. So what are you guys seeing? [4:32] Bill Harmon: Yeah, we looked at. We were looking at participant behavior through Q1. So, you know, granted, that's got pre and during, you know, like initial announcement and then right into March. And we looked at behavior and, you know, obviously we're all saying, stay the course, stay invested. So what we did see is that participant behavior is doing a lot of that and that we're seeing that they are participant, participant, participant. Is that the word he's quick. [5:07] JD: Okay, okay. This game's not gonna work. [5:10] Bill Harmon: Yeah, you keep talking. But we did say they are staying the course. And that's the good news, is that we only saw 3% of our entire retirement population make an investment change during that first quarter. And we only saw 2.1% change. Future allocation, investments in future allocation. And that's compared, if you look at that same time period in 2019 is 1.3. So it goes from 1.3 to 2.1 during a really turbulent time. And granted, we've got more evaluation to do as time goes on, but we are seeing the participants are staying the course. We also did a survey of just consumers in general, and we found that individuals are also thinking about emergency savings. They're thinking about, you know, should I spend money on sort of excessive items, some luxury items, and they're holding back on that. And actually they're thinking about emergency savings. So those are two of the top four items that people are spending time on during this kind of, this turbulent time. So that's good. We've been talking about participants, employees. You ought to think about Americans in general. You ought to think about emergency savings. And they are. So that's good. [6:34] JD: Sorry, I'm trying to pay attention to this guy. And I'm so consumed to this game we got going on. [6:39] Bill Harmon: Actually, one, there was a participant. Was it employee? It keeps flying. There it is. Katie, we're still playing don't touch your face, right? [6:48] JD: Sure, I guess. [6:49] Bill Harmon: Don't touch your face. Ding dong. [6:52] JD: All right, Bill, so let me ask you, you get all those formal reports in and you see those numbers and you don't see like a lot of stuff changing that much, which is very comforting. And by the way, I've seen the same thing with my much smaller population. We've, we've had a lot of inquiries about COVID related distributions, but we haven't actually been transacting a whole bunch of. But if all that data is kind of ending end of March, this whole CARES act thing and stuff is coming after that, you have to have your finger on the pulse of what's happening there beyond the fancy reports. What are you guys seeing from a Covid distribution standpoint? And I know you had to get all your stuff lined up, but just give me some thoughts on that area. [7:31] Bill Harmon: Yeah, well, there's a couple things. And for one, the largest piece of legislation comes out as far as dollar amount and so on. Massive legislation that comes out and it goes live the second it's signed, you know, and so if you think about Secure act was kind of a, you know, we were hustling on Secure act and at that point we had, what was it? I think we had a little over a week to respond to it, which is crazy. And now this one goes live the second. So there's a ton of questions. You know, we, we thought, we took a couple stances. If you look at the whole funnel of decision making, one is as an employer, do you want to adopt those provisions? And there are a lot of different opinions on that. And we thought long and hard. Well, long and hard you don't have a lot of time to think about it. It went live right away. So we said, well you know what, first of all, 90% of our small market, small mid market plans work with TPAs. So the TPAs really own the plan document and plan provisions. We probably shouldn't make that decision. We should leave that up to the company, the plan sponsor and the tpa. So we then we thought about larger plans where they're more complex and you have a lot of different things to think about, particularly when you get tax exempt and multi vendor. So we said, you know what, we're going to go and take an opt in. I'm not going to force anyone to make any decisions quickly and they make that statement JD because you know, they have to first make that statement in order for us to go ahead and say, well what are we going to do as far, what are we going to see as far as these CRDs? And so we're still really early in the process. We track the calls that come in for, you know, inquiring about CRDs and they're coming in. I wouldn't say that they're coming in and accelerating, but they're coming in. So I don't, it's too early to see if we're seeing this mass exodus and everyone's taking the CRDs or any other types of distributions, loans, hardships and so on. [9:34] JD: Fair enough. Yeah, because I feel the same way. We haven't seen it yet, but we got to still keep monitoring this and see what's happening. And by the way, I want to just from the industry say hey, sorry for the quick call to action on you record keepers. I want you to know we all understood that when that sucker was signed on Friday and then you're waking up Monday morning and supposed to put things in place and it's impossible for you to do that. So I think you and a lot of your peers have done a phenomenal job, you know, hustling and trying to put stuff in place. And I think we also understand if your advisor's tuning in, you need to understand that hey, there just can be some bumps in the road too, you know, like we're gonna have to sort through this and do the best we can. But it sounds like as of today, middle of April, as an industry, we are not seeing a huge tsunami of distribution requests at this time. [10:27] Bill Harmon: I think just mostly inquiries, which is good. I want to have the conversation. You know, we made a decision early. In fact, we were even thinking about this pre cares act. But we wanted to see what it was going to do and say. And so we said, well we know there, we really figured that unemployment would go up. We knew that there would be some people hurting. We thought that there'd be some furloughs, there could be some match eliminations or reductions. So we knew that there would be some people that were hurting. And we really debated should we do something to help out and if so how, because what does that do. And so we came out pretty early and said let's waive the distribution fees as related to loans hardships. So the loan initiation fee, hardship fee, and then what ended up becoming the coronavirus related distributions. So we did that however, and sort of a very thoughtful manner I should say in that, well, I can't just waive the fees because I have a fee. But again, 90% of our small market plans, the TPAs have a fee. So I can't just do that on my own. So what we did is we said let's do when someone takes that loan or a hardship, let's take the entire fee. Like we would pay the TPA their portion of that. And then just like the normal process. So we're not going to change anything from a processing perspective and then turn back and put the money back into the participants account. As we do a sweep of that, we felt that that would be good for a few reasons. One is that TPAs are, you know, most TPAs are small companies that are also looking at their revenue sources and looking at their client base and wondering if their client base is number one gonna be able to pay the TPA's fees, but if they'll still be around. So we said, well, we really need to help. The TPAs are a huge partner of ours, we need to help them out. And then two, kind of like the idea of keeping the participant in the game. If I deposit the money back in the participant's account, then the participants still there's the word in the game and we want that. So hopefully if they took a distribution or something, but they're still making contributions, this is just something to keep them in the game. So it was that balance that we didn't want to encourage a participant distribution. There we go. But we did want to help out and at the same point, help out a big partner of ours with the TPAs. [13:05] JD: You're being super humble because as far as I saw it from my optics, you were the first one, at least the first major one that we work with to come out. And I don't know if you started the trend or if it was just coincidence that all these other record keepers had been thinking about the same thing, but, man, that felt like dominoes the next three or four days. So not only did you do a good thing for your clients, and this is. I don't know if we could back this up, if this is newsworthy, but you might have influenced many others and had a much bigger impact than you had originally thought about. So anyways, Chad was giving you the applause. [13:41] Chad: Yeah. And thoughtful, too. As you mentioned, the. The vast majority of us are small businesses. And so when we're looking at it, we're 25 employees. When we're looking at it from our perspective, it does make a difference. Granted, we haven't seen the big uptick, as JD mentioned, but it does make a difference and it's acknowledged by us gratefully. [14:00] Bill Harmon: Well, cheers. We love you guys. You've been a great partner throughout my career, so I appreciate that. [14:05] JD: Thank you. Justin. There's gotta be some chat going down. Anything you want to throw at us? [14:11] Chad: So, first one came from Joey. Bill, when we could actually see each other in person. Has Voya seen an appetite for participant education so far in 2020? [14:23] Bill Harmon: Have they seen an appetite of participant education as far as face to face or just enhanced participant education because of the markets? [14:30] Chad: Hey, Joey, can you elaborate? [14:33] JD: I think we can assume he's asking in this current space where most of us are stay at home, are you getting any inquiries about education and how are you dealing with us? [14:43] Bill Harmon: Yes, and we are. And you know, we're monitoring call volume, too. What you're finding is that call volume, it's actually very lumpy. We get a lot of questions as to, you know, what's your average speed of answer, average hold time. And it's so it depends on the day. The market's good, things usually quiet. If the markets are not so good, then the volumes go up. But we're also finding to this point, is that the average length of call has gone up. So there's just a lot of inquiry and discussion and so on. So that puts, by the way, a lot of strain if you didn't handle your business continuity planning appropriately. And so we were able to transition everyone to work from home, all the call center and so on, and do it very effectively. Provide WI fi where people didn't have WI fi. [15:30] Chad: So we had a. [15:31] Bill Harmon: Deliver a bunch of pucks and all of that, and provide the telephony, the multiple screens, all of that. So back to the point of participant education, we were fortunate. We had someone who came up with a really good idea that was sort of born by peloton. And so someone said, gosh, you know, everyone gets into peloton, and you sort of have these peloton celebrities that are you. [15:55] JD: I'm sorry, so are you saying you're going to get really hot chicks, do education? Is that what you're doing? [16:01] Bill Harmon: We'll get really smart people to provide education. So we created this Voya Learn. And so what it did is said, I'm going to do Voya Learn live session. So here's a calendar of live sessions, and if you want to see your Voya Liberty, and it might be something. Yeah, like that. And especially with the guy with the orange. But Voyleurn not so good, but Voylebrity very good. Yeah, like very. Okay, well, we're going there. So you could have a Spanish session and, you know, tune in live here. You could do different ones and it could be different topics on budgeting, whatever it may be. And then all of those go into a vault, and then you can go and access it whenever you want. So to answer your question, I went through a couple different areas there. We have seen an uptick in the utilization of Voya Learn, and we continue to go and produce more of them so that we can address the topics. And so right now, there's a lot of big topics that we should cover, budgeting being one of them. But also we can get more into some items like government benefits and things like that. We cover a lot of the government benefits as it relates to Voya cares for caregivers of people, special needs. But I think we need to enhance that even further. [17:15] Chad: Well, it sets up like a peloton series, too. I noticed when you log on to Voya Learn Live that it shows the different speakers who's going to be. [17:25] Bill Harmon: You could scroll through which Voya liberty you want to. Go ahead. [17:28] Chad: Yeah, it's good stuff and the content is solid. I was talking to an advisor about it a few days ago that most of the topics, even that our advisors are trying to figure out how to communicate to clients. I'm saying leverage what, you know, Big Dog Voya is already doing. Go there, see what they're doing, see how they're talking about building an emergency fund and then use that with your client. Even if you don't want to use their technology, you can at least take the content and now open that line of discussion with your client. And so I think when we first [17:57] Bill Harmon: rolled it out, yeah, we said, gosh, you know, we actually have a couple studios in our, in our different, you know, major campuses. So why don't we. Let's just, let's double down on this. Let's do a lot of them. What other topics could we do on these? And who's the subject matter expert on it? And then maybe we could even partner with some of our distributor partners and so on and say, hey, is there a topic you want me to cover? Let's go out, come out and let's do it. [18:26] JD: Chad, I don't think he means they want retirement. I met the tca. Hey, and by the way, did you see how the professional president of a Fortune 500 company kind of dodges my controversial peloton comments? He knows what he's doing. It's pretty slick. We're going to mix up. We're going to ask you a few more things, and I've seen some questions out there about getting your views on kind of what a post pandemic might look like, you know, what our industry is going to look like after all this. But let's put that on ice for a second. And every episode, we like to play a fun little game. And the game is a guessing game for you. And hopefully my producer is. My producer. My brother is listening in. He's going to get set up. We're going to show you a little clip and you just have to guess what it is and just hold your, your guest till the end of the clip and then we'll see if you can get it. All right, go ahead, Brandon. [19:27] Bill Harmon: Oh, Come through at all? [19:33] JD: No, the audio is crap. [19:35] Bill Harmon: I don't know what's going on with my audio today. There's a. [19:38] JD: Maybe you're just hungover or something. Well, I have no guess on that one. So, Bill, I wouldn't slight you, Brandon. [19:52] Bill Harmon: I don't know if it was an obscene gesture or a missile pad. I'll play it again. I'll see what happens. Nothing. Why is this not. [20:08] JD: Yeah, your audio's screwed up. [20:11] Bill Harmon: Let's just. Let's move on. [20:13] JD: Yeah. [20:13] Chad: I'm gonna say Rambo. Rambo's my guess. I was thinking Mad Max. [20:19] JD: There you go. [20:20] Bill Harmon: Justin. Justin. Got it. [20:21] JD: All right, let's. [20:22] Bill Harmon: Mad Max. [20:23] JD: You know what? It can't get any worse than that one. So let's just take a crack at the second one and see what happens. [20:28] Chad: All right? Jillian said tiger king. Tiger king. [20:34] Bill Harmon: This I'll have to skip on here [20:36] Chad: because that one's not gonna work at all. [20:37] Bill Harmon: Damn it. [20:38] Chad: I gotta. [20:38] Bill Harmon: I don't know. You know what? [20:39] Chad: Let me. [20:40] Bill Harmon: Let me share my entire desktop. [20:41] Chad: There you go. Do a whole screen. [20:43] JD: You usually do a great job. You can have an off day. Don't worry about it. [20:45] Bill Harmon: Yeah. I don't know what's going on. Okay. [20:52] JD: We just lost half of our audience. It's okay. [20:57] Chad: Thank you. [20:59] Bill Harmon: I like the Kristen said. Kristen DB Said, looks like Minecraft. That's what I'm going with. [21:04] JD: Good one. [21:07] Bill Harmon: Sorry, I'm trying to figure out a way to do this. [21:09] JD: It's okay. [21:13] Chad: Brandon, while you're figuring that, there's another question that came in I wanted to get to a while. [21:16] JD: Thanks, Justin. [21:17] Chad: You're welcome. Hey, Bill, do you know if any advisors or sponsors decided to stop pre arranged fund changes that were in motion? [21:26] Bill Harmon: I don't know the answer to that. I will say that. You know, we've been looking at just. When you say prearranged, you mean rebalancing? Yeah, they were going to. [21:36] JD: They decided. Sorry, go ahead, Chad. J.D. [21:40] Chad: i was going to say scheduled fund changes are rebalanced. [21:43] Bill Harmon: Yeah, I haven't seen much. We would figure that we're going to see more fund changes, but we. So we're kind of prepared for that. But we haven't seen an uptick, particularly in our larger market where there's a lot of analysis that goes in. We haven't seen an uptick yet in that. But again there's. I think a lot of people are really digesting what's going on in this environment. I haven't seen a lot of sort of knee jerk reactions at this point, aside from. And even, you know, you'd expect to see more matches eliminated. We're monitoring that. We're seeing some, but probably not what you would expect. And that's good. Now granted, we expect it to continue, but I think it is still early on some of these. If we had this conversation a month from now, I think we'd have much clearer responses. [22:29] Chad: That's interesting. I mean, I haven't had that many of those match changes at all. What about you guys? Most of ours is written as discretionary on the document side, so we might not catch wind of it. They may be making the change on the payroll side and on the record keeper, but I'm not catching wind of too many folks adjusting an annual match right now or trying to pull back on our end. [22:49] JD: I hate to say it, but I think that's more of an up market thing too. So if you're a big, big plan and that match is very expensive and you're furloughing people, that's a quick decision you're going to make. If you're a client that's got 25 employees, it's maybe not as Paramount, but I definitely know some of our larger clients are in the midst of making those decisions and it can save them a ton of money. [23:16] Chad: The guests have had the same type of smaller responses, but Nevin fully agrees with you, JD. Yeah, it says 20% amongst big plans. [23:23] JD: Nevin always agrees with me. We're of like mind. [23:26] Chad: He knows that. I will say this too, and we've mentioned this on past shows. Three more this week. I'm seeing a great deal of change in the combo plan arena. So many folks calling up saying I want to slow down the funding. You guys wrote me a document to max our DC DB combo plan. And I want to pull off that gas pedal quite a bit till we know how things are going to settle out. So seeing a lot of that discussion [23:49] JD: still, before I ask, I want to ask you a little bit about acquisitions and smaller record keepers and how you might see that. But if the audience could listen in, I'd love for you to let Justin know through the chat bar how you feel about Chad's fuzzy hair. So just let us know. Give us a yay or a no. Why? [24:09] Bill Harmon: They're typing that out. Let me give this a shot. [24:12] JD: Okay, go for it, [24:17] Chad: dude. [24:17] Bill Harmon: Justin, [24:25] JD: I think I know. [24:26] Bill Harmon: Okay? [24:30] Chad: I know I think I do. [24:32] Bill Harmon: Phil, any guess? Do you need to see it again? True Lies? [24:38] JD: No, I don't think so. [24:40] Bill Harmon: They're actually supposed to be audio though. [24:43] JD: This is where. Who wants to guess? Chad, you wanna guess? [24:47] Chad: I think it's Karate Kid. [24:49] JD: No, I think it's where. The one where the. Where he serves him his own brains. And he's eating his brains. Remember that? [24:56] Bill Harmon: Oh, Silence of the Lambs. What is it? Those don't look like that. Let's hope not. [25:06] Chad: I don't know what that is. [25:08] JD: Shows how sick and disgusting my brain is. [25:11] Chad: What is that? [25:12] Bill Harmon: Close Encounters of the Third time. [25:15] JD: All right, well, you know what? Sometimes one more. Okay. Redeem yourself. [25:21] Bill Harmon: After this, there is no turning back. [25:24] Chad: You take the blue pill, the story ends. [25:28] Bill Harmon: You wake up to your bed and believe whatever you want. [25:31] Chad: You take the red pill, you stay in the land. [25:36] Bill Harmon: I show you the rabbit hole. [25:39] Chad: Oh, I know that. [25:40] JD: I caught a little bit of that. The visual was tough, Bill. No guess. [25:44] Bill Harmon: No guess. [25:45] JD: Audience knows. Right there we have. [25:47] Bill Harmon: The audience is all over this. [25:48] Chad: Audience is all over that one. [25:50] JD: The Matrix. That was the Matrix. [25:53] Bill Harmon: And I do like the. Oh, yeah, take the. The story ends. [25:58] Chad: Good one. [25:59] Bill Harmon: These got a lot harder than they were last time. Look how last time you guys were so good, I thought I'd just step it up, show you how deep you [26:08] Chad: did step it up. [26:09] JD: Me? Look how hot Keanu was back in the day. But it. Brandon has made them very easy, so I understand why he tried to make them a little harder. [26:17] Bill Harmon: All right, here's a good. Here's an easy one for him. We're still going, huh? [26:21] JD: Yeah. [26:27] Bill Harmon: That's Karate Kid. [26:31] Chad: No, no, no, I know that one. I believe. Well, I don't think you know it. [26:38] JD: I. Michael Jackson, Thriller. They're saying he's got a knife. [26:45] Bill Harmon: Oh, Crocodile Dundee. [26:49] Chad: That was not my guess. [26:50] Bill Harmon: That's a knife. [26:52] Chad: I thought it was Beverly Hills Cop when he dressed in the red spandex. And he goes, oh, spandex. [26:58] Bill Harmon: All right, so I went too far that time. [27:00] JD: That's all right. All right, Bill, so this will probably be the last time you'll ever see us again and be on our show. So let's move straight on to. You're a big shop. Voya is a big shop. A committed record keeper. Someone's been in the space a long time. And I think from my perspective, personally, sometimes we forget how valuable that really is until the shit hits the fan. And we have a global pandemic, and there's new legislation that comes out, and people want it implemented in, you know, negative two days. And. And you've got people tsunami in your call centers. And so I want to tell you right now that if you're an advisor out there listening in, this is why when we get through this stuff, you want to make sure that you're partnering with big shops that can support you and. And support your clients when all hell is breaking loose and do a good job of it. And I feel that as a tpa, in working with bigger shops like yours right now, bigger record keepers, and it's a blessing, and it's such an. I don't Know how I do it working with some of these other shops. Cause I'm experiencing it in that light. Give me some of your insights on that. And then do you think that these smaller record keepers can survive this? Will we see more acquisition? Do you, do you think of though they are struggling, some of your smaller competitors, some of these small VC backed new shops. I mean give me some honest thoughts on that. [28:30] Bill Harmon: I think you hit a couple points that are right on. You know we just came out of the longest bull market in history and margins are thin, I don't have to tell you that. So even you know we look at a lot of different reports. There's some interesting analysis that kind of companies itself report that even during this long bull there was a fair number of record keepers that weren't making money or that had very, very thin like dangerously thin margins. If you had any level of correction that they'd be underwater. So then this happens and it's not even just this as far as equity markets coming down, but it's this as far as you have to pivot. This is why this is so different than 08 and 09. You have to pivot and implement BCP immediately however working from home and do so effectively. So those that were under investing during all that time and it could be under investing because you have an owner that's less interested in the business as a whole, doesn't have that passion that you just described for the business, they're feeling the strain and I'm not so sure that that's small record keepers only. There could be some large record keepers that are really struggling because they under invested and we're not capable, they weren't able to go ahead and transition to work from home, handle call volumes. We just saw of a security breach. So some, you know, I think that you'll and that people have written Nevin's written about this. I mean there's, there's going to be some fraud and cyber attacks during this period of time and if you weren't prepared for that and aren't prepared for that, that will really be a problem and probably be the end of some record keepers. And yeah, that might apply to smaller ones more so than large, but I think it's just those that are under invested. To answer your question, I absolutely think there will be some acquisition M and A activity and it could come from a lot of different sizes or types of ownership. [30:36] JD: Go ahead Chad. [30:37] Chad: I'm curious because you're starting to take us down kind of that post pandemic which has Been a theme for our show is to kind of get everybody's impression as what our business will look like post pandemic. I see merger and acquisition being a component of that, just out of necessity probably for some groups. But I'm curious what your perspective would be. Do you think that participant needs or what they are really seeking in terms of guidance and advice and services? Hey, I don't count Brandon, me saying participant. [31:10] JD: Good call, Good catch. [31:11] Chad: Chad, do you think that what employees and participants actually want will change post pandemic? Because I feel like the last 10 years I've been doing this, I've seen waves. It was at the beginning, it was all costs associated. Then next from that came fiduciary. Then from that came we'll say financial wellness or participant. And now we're seeing what I imagine will be an entirely different phase of our industry. I'm curious what you think that will be post pandemic. [31:39] Bill Harmon: Well, I've always been wondering. It just feels like the whole distribution model, oftentimes the service model somewhat antiquated and really doesn't. Doesn't seem to follow how you do commerce when you get home. I'm not suggesting that we do everything, you know, e commerce there still needs to be. This is a very complex business. I mean, you can't, you know, you see, a lot of times people try to put. Make this a commodity. You can't do that. You can't. There is complexity. However, having said that, we can deal with the human element of that and you are such a big part of this complexity and optimizing plan design and all of that, that's necessary. But does it then require that I show up with a giant document that has to be signed in 20 different places and then go through a long process of multiple people entering it into a system? Does it require that I have to go out and see somebody multiple times to go and either communicate, educate, whatever it may be. And the answer had been yes, because that's how the audience wanted to consume information. I think the audience with this now is more open to consuming information differently. And so I'm not by any means suggesting that we dehumanize this process. I don't want that at all. But I do want us to mix in. So if the pendulum swung completely, completely the other way and I was not allowed to make any type of human contact, I can't shake a hand. I can't. I can't be in front of you to now. It might be a little bit more in the middle to where we can provide education more virtually like this. We can have conversations and meetings like this and have multiple people doing this. And I don't need to fly 10 people who then are out of production or answering calls or doing whatever for two days. I don't need to do that as much as I did before this. So I think it'll swing a little bit in the middle. And those that can adjust to that best, I think will connect because I think the audience is open to it now. [33:46] Chad: And I love hearing that in my mind from the top down, meaning the large companies to the small companies, because it's fairly easy for the small companies to make that change, but most of them won't. They're fearful. So to hear that someone like Boya might be making that change of allowing more folks to work from home and not have to, they can be still as effective without physically going someplace, yeah, that's positive. From the top down, I think it'll cause a ripple effect even in the smaller space. [34:14] Bill Harmon: You know, you have to be careful of it in the sense that, you know, I don't want anyone to look at this and say, oh, well, you know, Big Boy is saying it has to be done this way. I'm more saying I think the audience will want it to be done this way is okay for done this way, and therefore we ought to lead them along that way. If you're comfortable with that, here's three great ideas on how we can deliver this. You know, Voya Learn was an idea. Prior to all of this, we had probably, maybe a third of our field team was using Zoom before Zoom was Zoom. And so they became comfortable with it. And now I think it's just a matter of, all right, let's take it to the next level. We're constantly getting best practices within the team to say, how do you function in this new world? I almost want to have this leader of virtual to say, what are the best ideas? Let's consolidate them, put them into a bottle and send it out so that everyone is comfortable with this whole thing. It wasn't until recently that I learned how to put cool backgrounds behind me. [35:17] JD: I've always felt like the financial services, especially 401k, what seems so far, far behind the technology curve. And it shocked me because you think of companies like yours and you think, well, they've got the resources, like they could create some really cool stuff. So I like to hear you say that, and I like to think that maybe this pandemic kind of pushes us towards that a little bit. You made the Comparison to Peloton earlier, which makes a lot of sense. I've got the Peloton bike and the tread in our garage and it's been, my whole family's been on it through this whole thing. And you're probably well aware that it can give you little awards and little virtual trophies and it can give you notifications to remind you that you've ridden seven days in a row and that this instructor is putting a live class on at 6:30. Like we could take a lot of those ideas and create a community within 401k where the employees are engaging that way maybe. And so anyways, there's a lot of things that we could do. But I'm going to give you some business advice. Bill Harmon, if you really want to crush it, mute him. Mute him in the record keeping space. You need to come up with the cure for this disease. Can you guys just work on the cure for coronavirus? Can we do that for. [36:39] Bill Harmon: We've got our crack staff on it right now. [36:41] JD: Okay, let's talk about your quick transition to what work from home. And as we go post pandemic, would you consider leaving that in place or do you, as this large financial institution still want people to make the trek to the big buildings and get in their little gray cubicles and pound away at the keyboards? [37:05] Bill Harmon: Yeah, I probably don't have this fresh idea on this in the sense I think all of us are wondering what that day, you know, all of a sudden someone. And by the way the weird part is going to be states are going to be different on this. I can tell you that Connecticut's already stated that their date is May 20th. Colorado's May 1st, I think. Isn't California May 1st as well right now? [37:29] JD: I thought Trump said we all get to go out tomorrow. [37:31] Bill Harmon: I thought that was right. And then, and then you've got that. So I think it's hard to sit there and say, oh, on such and such date everyone's going to go out. I really do believe it's going. We're almost going to come out of it the way we went into it. So we went into it sort of in these stages and you know, now all of a sudden the stages, if you're going to go outside, you're going to wear a mask. And none of us really had worn masks before and now there's designer masks. Oh, okay, maybe that's fine. But we all of a sudden got comfortable with this idea that we're going to wear a mask. And then I thought what happens? Like the Next time I see my mom, you know, she's in California. Of course I can give mom a hug. But that's going to be just this weird. In the back of each of our minds, it's going to be, well, that's going to take some time. So all of this to go and start moving into a business environment, go to a big building in New York. I think it's going to be a period of time it will ease into it and we use into it geographically. We're going to continue to perfect this virtual distribution, virtual service environment, virtual communication and connection. My team, we have once a week happy hours, virtual happy hours like this. And I do the same with friends, just so we continue to stay connected. And this becomes a bit of a new normal that I'd like to graduate out of. But I don't think it's going to [38:54] Chad: be a snap of the fingers. [38:55] Bill Harmon: And I'm sure I'm not saying anything that's new. [39:00] JD: I hear you. [39:03] Bill Harmon: That's awesome to hear. I think that's, I think we can all make assumptions of what's to come, but we don't. [39:10] Chad: Like I work for a company with 20 some odd people. I talk to JD well, he leaves [39:17] Bill Harmon: me out of everything, but somewhat regularly. And so I kind of get an [39:20] Chad: idea of what's going on. [39:20] Bill Harmon: But you guys are massive. And to hear that from someone like yourself and to kind of. It gives you some comfort and clarity [39:27] Chad: knowing that the folks at the top [39:29] Bill Harmon: are taking a good hard look at this and making sure that it's about the people. It's about the people who have gotten [39:36] Chad: you to this point, that you're going [39:37] Bill Harmon: to take care of them and you're not just going to go, all right, we got to get the money making machine back running, so let's get out there and do this. [39:44] Chad: And that's that, you know, that's really cool to hear. And I hope everyone else, oh, this [39:47] Bill Harmon: comes from the top too. At Voya. This comes from our chairman, this comes from our CEO. That number one priority is taking care of our employees. And we're not going to put them in dangerous or even, you know, maybe Bill Hayward. Just throw him out there. Just let him deal with it. [40:02] Chad: Yeah, let him do it. [40:03] Bill Harmon: Who's Bill Hayward? [40:05] JD: I was just gonna say Mark. I've been threatening Mark that we love Bill Hayward. [40:09] Bill Harmon: I've been actually, isn't it Bill Hayward that got me into this right here because I lost a bet. [40:17] JD: I've been threatening Mark with firing him because of this downturn. Potentially. And I feel like with your orange shirt and all of your really positive, heartfelt comments about Voya, you're like positioning yourself for another job or something. [40:29] Bill Harmon: Well, he's got some Runway. He's got a lot of Runway. Yeah. J.D. i should remind you that Plan Design Consultants also utilizes the orange that we [40:37] Chad: stole from Voya in order to roll out our thing. [40:41] Bill Harmon: We'll share orange. [40:42] Chad: Yeah. [40:42] Bill Harmon: And yesterday was payday. [40:44] JD: Right. [40:44] Bill Harmon: I didn't get a check, so I'm pretty sure I was fired. [40:47] JD: Chad and Justin got theirs, but we left you out. We're just trying to cut back a little. Mark. Hey, I'm gonna go to the, to the. [40:54] Bill Harmon: Okay, just make sure you've got your stapler. Bill, a couple questions for you. [41:02] Chad: Do you think that employers or plans are going to want to definalize meetings via Zoom? And will this put a hold on provider changes over the next six to nine months? [41:13] Bill Harmon: Yeah, that's a good question. And really, what's, you know, I mentioned that some record keepers in their transition to work from home or any of the under investment that they did prior, I think that's going to create levels of discomfort for some plan sponsors. And then the question is going to be, is there enough discomfort for us to then want to go ahead and move? And there's been some apprehension and moving during this time. I will tell you though, we've had some really big sales weeks in the last couple. During this period of time, we are seeing, I think like anybody, a slowdown in RFPs, but we're still seeing plans that are submitting paperwork to our implementation team and at a good clip, we do expect there to be that conversation and just saying, what's the right time to transition. The comment though, that I would make is that statement that if they're concerned of a blackout, you know, okay, it's volatile markets. But I'm concerned that I put my participants into a blackout. I just had mentioned that only 3% of our entire participant base had, had changed allocation during the first quarter. So let's even say that that number goes up a little bit during the second quarter. That still means that even if it goes up to 4 or 5% means 95% of participants didn't make a change. So if that, if that lack of service you're receiving, it's that bad and you really do need to move, and I do think there's plenty of that out there, then this concern of putting participants into a blackout really just we need to go ahead and replace that perception with some fact and the fear [42:54] Chad: that we've all dealt with for years isn't that participants aren't going to be able to make moves. When the market's moving 2,000 points in a given day. It's at that 48 hour period that they're out of the market is going to be a 2000 points point up jump and they're going to miss that jump. And that's what I'm hearing from some of our key advisors talking about slowing down or as you mentioned, the beginning of our tech together, delaying that transition. [43:20] Bill Harmon: Yeah, and that's legitimate. And we're exploring, as I'm sure every record keeper is, different ways of doing this to where you minimize time out of the market. And I think we all know that there's different ways to do that. So we can structure conversions as such to where there's minimal time out of the market, because that's legitimate. And it's funny, it's almost the same question as the prior question. And when exactly do we feel that the market is no longer volatile? Like Thursday, because I had two straight days where it was normal. You know, it's just one of those. Exactly. I'll be at this beach right here. But you're right. So it's one of those points to win. Just there's this level of comfort. But in the meanwhile, we do think there are ways to really minimize time out of the market like that during conversion. [44:10] JD: Chad, I want to let you know that the overwhelming consensus of the audience is that they absolutely love your hair. They love you, they love everything about you. [44:19] Chad: I paid them. [44:20] JD: Okay. I want you to know that Nevin Adams brought up a interesting question, kind of a tough one that I think I'm going to throw at you. So don't blame me, blame Nevin. How do you feel about the litigation on asset based fees? You know, where a record keeper's revenue grows with assets versus what some of these litigators are saying. It should just be a flat fee or a per participant fee or something to that regard. So give me the presidential answer to that one, buddy. [44:53] Bill Harmon: Well, I think the presidential answer is, you know, obviously a lot of. Well, there's a couple different. It depends on your business model. One thing is that really in many ways from a Voya perspective. Let me give you that first. Then I'll give more of a global perspective, but void perspective. Our business is pretty diverse. We really serve a market of markets. And by that I mean. Yeah, you know, you mentioned that you're talking about revenues being dependent upon assets. So if assets are down because equity markets are down, revenue's down. But then there's also some other markets called larger markets where there's really more of a flat per participant revenue. So if you sort of have this one market that's writing the ups and downs of the equity markets and then you have another market that's pretty steady, it does balance itself out. And so there's a few record keepers that have this market of markets that can balance out those ups and downs. For those that are really committed to one market, call it just small market only, that makes it very tough. And that makes it to where, you know, do you respond by cutting back, cutting expenses, which then puts you in a precarious position to get out of it, or do you just ride the wave? And I think that's a lot of it. A lot of people are saying that, you know, they're trying to put a date on when we're all going back and this is all going to be fine. They're trying to put a date on when equity markets are going to come back and be somewhat stabilized and recover. And that's a bit of the hard part. [46:31] JD: I guess my further question to that is how do you feel about a record keeper generating their revenue more in a flat base environment versus, I mean, screw the markets up or down? I just think there's a lot of people out there that are pitchforking and chanting that you should charge one fee and one fee only and it shouldn't matter about up or down markets. [46:52] Chad: I'll toot your horn a little bit, Bill. As soon as JD asked that question, I wrote him privately and said you teed Bill up because you all were on the front lines of going flat fee based, letting the advisor comp the asset base. And here's what Voya needs to record keep. And, and we put a lot of that business in place because in the Bay Area here, there's a lot of plans that grow at a huge clip. So if you come on a startup plan and say, hey, we're three grand, that's what we need to do our record keeping. The advisor needs 50 and but we'll be able to charge three grand. Most of your peers were doing a dollar amount based on a percentage. So in years 2, 3, 4, 5, 6, 7, that dollar amount goes up because it's calculated off of percentage. You're one of the few, I'll say, one of the few in the micro market, but especially that is a big provider that is doing that. So kudos. And I felt like JD Teed it up well there because you're one of the few that are doing that. [47:47] Bill Harmon: Yeah. And you know, I think there's this balance that the marketplace wants a record keeper to make enough money to go and reinvest in the business. And so then it's up to the record keeper, obviously to have scale to where they can operate plans on a unit cost at the right rate, to be very efficient with technology and do all of that. And then they can return that to saying, okay, now my pricing can be competitive. Part of it is the cost to invest in cyber and fraud, the cost to invest in regulatory changes. All of these things are going up and kind of feel like they're accelerating. So not like that. Therefore, that has to be tied to an asset based charge or whatever. It's just that there has to be some recognition that costs are going up. It's my job and I spend the majority of my time looking at what's the right investment on our business so that we can continue to be competitive, continue to be efficient and effective and continue to grow. And then that turns around to go and provide the right price to the plan. To answer your question as well, there's a lot of plan sponsors that make a decision as to do I want to pay a flat fee because that comes out of my pocket, or do I want to go ahead and kind of split that between me and the participant, whether that be through mutual fund expenses that then get shared with the record keeper or just an asset charge. And so just to be able to be a record keeper that has the flexibility and there's many of us out there to accommodate what the client's needs are. I think that that's how you can accommodate that question and their needs. But I think we all know too, if the asset based fee is the only way you're collecting revenue, that fee will go down as the plan grows. [49:41] Chad: Dollar amount doesn't necessarily, but the fee does. [49:44] Bill Harmon: You absolutely right. So in other words, it goes up with assets, but usually that ratio will come down so that the asset charge. [49:52] Chad: In our world, we love finding additional deductions for businesses because that's often what we're trying to balance. Right. The plan design is going to create the greatest deduction for that business, the greatest benefit for the owner and the employees. And then when we get to the plan costs, if we can encourage them to take on the billable, billable fees drives down participant costs and creates another deduction for them. So pushing that as often as we can. [50:18] JD: I think you nailed it with saying hey, you can offer both and then if the clients can choose and or their advisors can guide them to which decision they want to make, I think that's the best answer there. I also want to back you up and that no one's asking you to be cheaper. I shouldn't say that. I'm not asking you to be cheaper. I know you get a lot of pressure from the industry. So all you advisors out there that are tuning in, stop with the asking these guys to be cheaper. Let them work on these improvements. Let them work to better service your clients and your participants create new tools for you guys. It costs money to do this stuff and they need your support to be willing to show products that maybe aren't the cheapest thing on the table. And I just think you guys, you all out there need to keep considering that because that's not what we're asking of you. [51:04] Bill Harmon: Bill. [51:04] JD: We want you guys to make better stuff, not worse stuff. And so if it costs price, I think we're okay with that. Or at least we should be okay with that. I was just asking whether it should be asset based or flat. And you offer both, so that's fine. Justin, what else you got out there? [51:22] Chad: Nothing's been pretty quiet, pretty unique comments I may have written Justin and told him no longer to broadcast questions because we're over our timeline. So that might be why it's quite. [51:35] Bill Harmon: No, we're solid and I think Nevin's saying so many comments, he just wants us to bring him back in. And Evan, you got to work harder, buddy. You got to work harder. Bring you sitting under your creepy staircase in every time. [51:47] JD: Yes. Last time we brought him in he was in his very dark home. It scared me. Once he proves to me he's lightened it up in there, we can bring him back. We'll let you go. We really appreciate you taking the time. Maybe you could take a nice walk on that beach behind you. But can I ask you, I need to know this is the journalist in me. You were at Empower before you were at Voya. Are you the genius? Is this your gig? Were you at Great west and you were the guy who told them to change their name to Empower and then you come over to Ing and that's your value add again is let's change our name to Voya. Is that your trick? [52:27] Chad: Timeline doesn't line up? [52:28] Bill Harmon: No. [52:31] JD: Alright. [52:31] Bill Harmon: There's some very smart people that come up with branding and that is not my skill set. And both are some powerful brands and some great companies and so no. My, my. If I could find any level of expertise, it was certainly not there. Well, whoever came up with Voilebrity, or I'm probably butchering the Voylebrities. Yeah, that's. That's a very smart person. [52:57] JD: Thank you, Mr. Harvey. [52:58] Bill Harmon: You surround yourself with really smart people. You look good. [53:01] JD: We appreciate you jumping on the virtual couch with us, Mark. Sign us off with our ending. That means nothing. That we don't even know. [53:09] Chad: You know. [53:09] Bill Harmon: I don't sign it off. It's all on my daughter's. [53:12] Chad: She needs to do it in this box over here. [53:14] Bill Harmon: Touch your face, ding dong. [53:16] JD: Don't touch your face, ding dong. Thanks for tuning in, everyone, out there. We appreciate it. [53:21] Chad: Thank you, Bill. [53:22] Bill Harmon: Thanks for having me, guys. Thanks for what you do. [53:25] JD: Yeah, no worries. [53:25] Bill Harmon: You as well. [53:27] JD: All right, no need for the banter. I'm gonna go walk the dogs. That was a good long 45. [53:32] Chad: I am, too. Good night, everybody.