PEPs, Fiduciary Conflicts & Plan Advisory Groups

[0:00] JD: Like three quarters of that, he's just hanging out. [0:02] Chad: Welcome everybody to another episode of Retireaholics. [0:05] JD: All of you here in the room, [0:06] Chad: all of you out there on the Internet. [0:08] JD: Thank you for tuning in. We are coming at you live from the Broadridge FI360. Wait, let me read this. Broadridge FI360 Solutions Annual Conference 2023 here in Scottsdale, Arizona. I'm always impressed by the creativity of which these conferences name their conferences. It's phenomenal. [0:29] Justin: Yeah, it's a lot that goes into it. [0:31] JD: We are happ happy to be back. Thank you for bringing us back again. It means the world. You might know we are missing one of our cast members today. [0:40] Chad: Robe Guy, I know that's who you [0:41] JD: all came here to see, is not here. He's had a tough day. He's had some family bad news and couldn't make it out. So prayers, positive thoughts. He's fine. Family member of his, not so good with him. We'd appreciate from the retireh community, the 401k community. So for. For Rope Guy, we miss him. [1:03] Chad: You know what they say. [1:04] JD: There he is. There's my buddy. [1:07] Chad: Let's. [1:09] JD: Let's go from that very depressing note. Love you, Mark. And on a more happier note, something filled with love. A poem to start off the show. We tend to do that from time to time. So I have squirmy there, Fred. [1:27] Fred Reich: The only question is, how much of a fool are you going to make? A. [1:31] Chad: A lot. [1:31] JD: Yeah. You get this show. [1:35] Chad: That's why I love you. You might want to scoot just a little bit over. [1:41] JD: He lives at 675 Beach Sand Road and 401 is his garage code. Trash cans to the curb on a Tuesday night Wearing slippers and a robe looking so nice. But how do you know these things, J.D. that's easy. I just watch Hidden in a nearby tree because we belong together Like a deferral and a match if he had an itch I would be his scratch [2:21] Chad: A shrine by my bed to pay [2:23] JD: tribute with pictures and lanyards and a piece of his suit I only eat quiche because it rhymes with his name Loving too much, yes, I am to blame My love has no limit unlike 415 he's my just. He's my Justin Bieber and I'm his preteen. One day together we'll be One day we'll be together Together as one Hand in hand Walking towards the setting sun. [3:16] Chad: Okay, we just trimmed the trees. [3:18] Justin: It's so red for you right now. [3:20] Chad: We're going to play some games today. We always play acro sin. [3:24] JD: So for all you out there, anyone up here says an initialism or an acronym, they must drink from a penalty drink. [3:31] Chad: We're drinking Malort. [3:32] JD: Fred's been on this show maybe four or five times, I can't remember, but he's never drinking a penalty drink in his life. He just drinks. [3:41] Chad: Which is what our is our beer [3:42] JD: of the episode, which is Dos equi Sambur. [3:45] Chad: So do you think you want to partake from the Malort tonight or do [3:49] JD: you want to stay away from that? [3:50] Fred Reich: I'm going to stick with the amber. [3:52] Chad: Okay, okay. [3:53] Justin: Wise decision. [3:55] JD: So here's what I suggest. If Fred penalizes through acro sin, you all must drink from whatever you're drinking here tonight. And we'll drink from our penalty drinks. [4:05] Chad: Fair. [4:05] JD: Equal with that. [4:06] Justin: Oh wait, we have to drink as well. [4:07] Fred Reich: Wait, wait, let me get this right. If I say an acronym, everybody has to drink. Yes. Dol. [4:21] Chad: So we have to drink. That's one for you, Fred. That's one for you. [4:29] Justin: This is gonna run up quickly. [4:30] JD: We got a fun game planned, A couple fun games planned. And we will be playing champion of the audience. So much like our online show where we have chapter champion. Today, one of you will be the champion of the show. [4:42] Justin: And you get your shit together. You're already talking trash about winning and [4:46] JD: you get all the prizes and cash and all that kind of jazz at the end of the show. So how do you win? We don't know. You just gotta fucking figure it out. Say something funny. You're in. Who knows with that? I mean, you do need a formal introduction. [5:00] Chad: So like every show, Justin's gonna do [5:02] JD: the intro of our guest. [5:04] Chad: You all out there on the Internet are gonna rate him on a 0 to 10 and hopefully he'll keep his job. [5:09] JD: So, Justin, intro our guest. Take it away. [5:11] Justin: Well, this man needs no intro. But for any of you first timers here, he is the most interesting man in 401k. He's a CO founder and chief content creator for the Fred and Nevin podcast and BFF to the one and only Roby here for his fourth guest appearance, partner and chair of the firm. I still can't pronounce the one and only Fred Reich. [5:32] Chad: And you owe a drink for Best Friends Forever. [5:35] Justin: Yeah, that was hard. [5:36] Chad: Because that counts. Let's get right to it, shall we? You didn't come here to watch us [5:40] JD: banter and do dumb stuff. Let's go to headlines. Brandon, [6:00] Chad: Fred just acro sinned again. [6:01] JD: He called me his best friend. [6:05] Chad: That's another time. That's three. That's three. Okay. This is a big one. This is a big one. [6:15] JD: We've got some changes at Retirement Plan Advisory Group and National Financial Partners. I don't know, I'm kind of guessing at that one. [6:23] Justin: Financial planners. [6:24] Fred Reich: I'll drink for it. [6:25] JD: Nfp. Our boy Vince G. That counts because I don't know how to pronounce his last name. [6:35] Chad: And Nick Della Vadova have left. [6:40] JD: Nfp. I'll drink for that. What I do know is that they are now their rules are will, will be in charge of Retirement Plan Advisory Group and the Flex Pass Collective investment Trusts. [6:57] Justin: Let's not ignore. They were already in those roles. [7:02] JD: Right. [7:02] Justin: Just leaving their role. [7:05] JD: Yeah. Thank you. And hopefully I think everyone knows that. Chad, you and I were at the Retirement Plan Advisory Group conference many, many moons ago and we watched Vince drop this news that they were going to move. Not beyond. In addition to the tools that they were giving to advisors, they were now going to jump into the investment game through these collective investment trusts. The Flex Path, which I think were built as target date funds in the beginning and still are. [7:38] Fred Reich: They have others. [7:39] Chad: And what was the reaction of the room of there? [7:43] Justin: It was not good. [7:45] Chad: So imagine there was a whole room [7:47] Justin: full of defined contractors and their intros were well attended. It was everybody, including all of the sponsors, made it in for Vince's intros every year. [7:57] JD: So imagine you are an investment provider that pays for this really swanky luxe conference at Laguna Niguel, the Ritz Carlton [8:07] Chad: and finding out for the first time [8:08] JD: several years ago that no, no, no, Vince is getting into the game of investments. It came as a shock. I was in the audit thinking this will never work. [8:17] Chad: Like I, I get what he's trying to do. [8:20] Justin: We knew why, right? They were doing it because they knew they could monetize cash. [8:29] Chad: Yeah, we knew why. It, it made sense, but it didn't [8:33] Justin: seem like it was going to work. [8:33] Chad: I didn't think it was going to work. [8:35] JD: Come today, it's $40 billion in those. Those funds. So clearly he was onto something. Now this is where I want your input because we didn't bring you here for nothing. [8:48] Justin: Good looks, good luck. [8:50] Chad: There were, I don't think, one lawsuit. [8:52] JD: I felt like there was multiple lawsuits. A few lawsuits. Multiple. A few lawsuits. It's the same thing that were accusing them of conflict of interest, kind of self dealing. That's not true. Not self dealing, conflict of interest. You've got all these retirement plan Advisory Group Advisors across the country now pushing and selling to their clients these Flex Path funds which they have built. And these lawsuits came to fruition. We think now that these two gentlemen on the screen are removing themselves from national financial partners to solely be in charge of Retirement Plan Advisory Group. [9:36] Chad: This is hard. And, and the Flex. [9:38] JD: And more importantly, the Flex Path Collective Investment Trust. [9:43] Chad: Is. [9:43] JD: Is that why this is happening? [9:45] Chad: Have you ever familiar with this at all? [9:46] Fred Reich: No, you know, not with some of the details you're talking about. But first off, anytime somebody starts a proprietary fund, happens a lot. It's frightening because, I mean, you know, an advisory firm does. It's frightening because first off, if it underperforms, people are going to say conflict of interest. Secondly, there could actually be a conflict of interest, that is you can't as a fiduciary, recommend an investment that you get more money off of. Or if you do now, you can recommend it, but you got to go through the hoops of prohibited transaction exemption 20, 20 02. On the other hand, if you're discretionary and you manage it and pick it, even the exemption doesn't help you, bottom line, there's just a lot of prohibited transaction and conflict of interest issues where you're both the advisor to the plan and the advisor to the fund. If you're double dipping, is there. [10:39] JD: Can you draw an analogy here though, to John Hancock foia who have proprietary target date funds on their platforms? Is it any different for an advisory firm like Retirement Plan Advisory Group and Vince to come out and say, hey, we want a piece of this fucking game, like we want to get in investments too. [10:57] Chad: Why does it all have to be [10:58] JD: you, the record keepers? [11:00] Chad: Like, why is that? [11:00] JD: Do you feel like that's any different? [11:04] Fred Reich: I think first off, the way ERISA works, the prohibited transaction roles, bring them up. Sorry, guys, that one wasn't intended the way the Employee Retirement Income security Act of 1974. [11:22] Chad: I always wanted to know what that stood for. [11:28] Fred Reich: There's two sets of prohibited transaction rules, 406 and 406. The B ones only apply if you're a fiduciary. So if you're a fiduciary advisor and you recommend a product that pays you compensation or an affiliate compensation in some other form, for example, management of the investment, then that's a prohibited transaction. And that's why it's different. The record keepers go out of their way not to be fiduciaries. They go out of their way to say, hey, we're just offering you this lineup of funds. You can Pick them or not. We don't recommend them or not recommend them. [12:05] Justin: And the record keeper is offering that lineup in most situations to the advisor. The advisor is then picking and choosing what will be placed in front of the participants. Most advisors are operating in that 321 or 338 category. Yeah, I think that's the difference there. Who's doing the. The guidance to the actual individual is the advisor and if it's the advisor firm offering, and I'm going to use your term, and you said it right off the bat, which was surprising to me whether you meant to or not, you called that solution FlexPath proprietary. And I think that that's what they're trying to separate here in this. [12:37] JD: Right. [12:38] Justin: This distinction is like they're saying no, no, flexpath is separate from national financial partners. This is an entirely different solution and we shouldn't be associated. [12:48] Chad: Chad. It's not. [12:49] Justin: We have to acknowledge OJD why I said we know why they did it. They did it because they had access to all of these advisors that they knew would sell it. It was a distribution channel. [12:59] Fred Reich: Yeah. [12:59] Justin: Whereas other, other record keepers might not have the same take rate on their. Whatever they're offering called a proprietary solution because they're not in the pockets of the advisors. When you're the BD behind the investment advisor then you're going to be able to get your solution. [13:18] Chad: You don't have to drink for his mistake. [13:22] Fred Reich: I'm sympathic. [13:24] Chad: I hear you. [13:26] Speaker F: Hold on. [13:27] Justin: Why is that such a bad thing if their funds are performing and outperforming others based on grading criteria? Why is it such a bad thing if they are partnered together still? [13:36] JD: Well, it's funny say that because when I first heard of flexpath, what was kind of sexy about it was the retirement plan advisory group believed in their fund scorecard system and it was very popular amongst them. They had some 200 plus advisors that used it. And if I understood it correctly, the flexpath methodology, if you will, was using that same scorecard approach all intertwined. So it really kind of sat alongside it really well. [14:03] Justin: The story that was a point in our career where or industry where we struggled to grade the target date funds and the different asset allocation solutions out there. It was difficult for people to say this one's better than the other without looking straight at rate of return. [14:19] JD: Here's the next thing because I'm about to say that I think these guys made this move and I've read other articles so I don't think this is just my Opinion. I think other people are picking up on this. I think these guys made this move to kind of like, kind of brush away their tracks a little bit or at the very least, like separate themselves in the future from these types of conflict of interest lawsuits. However, I want to be clear in our industry, like, just because you read a headline that someone's getting sued doesn't mean that they've done something wrong or [14:53] Chad: illegal or like no judge has slammed [14:56] JD: the anvil down yet and said that you cannot do this. And that's a bummer because I feel [15:00] Chad: like people's corporate name gets dragged through [15:02] JD: the mud before there's really been some kind of decision made on this. So anyways, this to me is deep, deep tea here. My people, like, this is a big deal. When I saw this come out. So for all you old people and I say tea, that means like gossip. [15:17] Fred Reich: And by the way, we're getting, we're getting even. [15:21] Justin: I didn't even know. [15:23] Fred Reich: So lawsuits are coming downstream and as more, more plaintiffs attorneys are entering the fray, we're getting more and more outrageous lawsuits being filed, stretched. Oh, the BlackRock target date funds, perfect example. I think a handful of those have already been thrown out of court. [15:38] Chad: Yeah, they have. [15:38] JD: So that was a good sign. I feel like. [15:41] Fred Reich: Yeah. [15:41] JD: To see those get kicked out. [15:43] Fred Reich: I think we're beginning to reach the limits. There's still probably people out there making mistakes that are. And there's going to be lawsuits. But I think, I think we've. The field has cleaned itself out. If you look at the lawsuits now, they're mainly about the share class of mutual funds selected and about the compensation of the record keeper. But that involves payments to the record keeper from the. [16:09] Justin: Which proprietary? [16:11] JD: Fred, can I tell you, I absolutely love the way you describe things and the tone of your voice. [16:24] Justin: It's fair to point out to Justin's thought, though, proprietary doesn't mean bad. Let's make sure we're on that same page. If the record keeper is going to give a discount for using their stable value or their target date funds and those target date funds. And that stable value is a positive solution and it's a good, it's a good, reasonable investment, a prudent investment. For that core menu, go for it. Take the discount you're gonna get. I have no issue with that. You know, the proprietary is not necessarily bad. [16:52] Fred Reich: Just my favorite saying about that is that every mutual fund out there is proprietary to somebody. [16:59] JD: True. [16:59] Fred Reich: And you know, if you're, if you're gonna say, I'm not Gonna pick anything that's proprietary to anybody. [17:03] Justin: Good luck. [17:04] Fred Reich: Then you're not gonna pick any investments. So it's really. But going back to what you said earlier about the conflict of interest in the advisor being independent, if the advisor is independent, is really using their best objective judgment to pick good investments for the plan, then that's the system right there. That's what makes it work. And it's not whether a fund is proprietary or not. [17:27] JD: I love when you guys, you ERISA attorneys. I'm gonna drink for that. [17:34] Chad: I don't know why. Give us, like, the black and white [17:41] JD: of, like, the law. But the reality is, in the real world, that's happening all the time. And you say that, but proprietary is, like, a big deal, and it's going to continue to happen. But what I think we should watch out for is we had the founder of Guideline [17:59] Chad: on our show, like, four weeks ago. [18:02] JD: I used to. I used to talk so much shit about that company, like, nonstop for the last few years. [18:07] Chad: And I thought they were also going [18:08] JD: to fall flat on their face in [18:12] Chad: slightly less than eight years. [18:14] JD: They now have 40,000 retirement plans, small plans, I think 8 billion in assets under management. But it's hard to not see the success they've had with 40,000 in seven years. And they don't play the proprietary game. They play the old Vanguard Cult game, you know, and, and slap those in. And so we need to be careful as an industry. If, if we continue to push harder on other sources of revenue within our own hen house, so to speak, there's going to be others pointing the finger at us. [18:47] Chad: I want to pivot a little bit [18:49] JD: because I read something literally today from you, and you scared the. Out of me because you said, look, yeah, the lawsuits are kind of settling down, but someone asked you about, like, how low they might go, and you threw out like, a $50 million plan size number, and you said something to the effect of that, oh, well, maybe there'll be these kind of like, more ambulance chaser. You didn't say that, but attorneys out there that would copy and paste some kind of lawsuits and actually go after a $50 million plan, which I had never thought of in my life, which [19:24] Chad: starts to scare the shit out of [19:25] JD: me, because those are my clients. [19:26] Fred Reich: No, I think that's. I think it's. I think that's generally what you're saying is true. I think most of the lawsuits are 300 million and up, for obvious reasons, dropping down to like a hundred million level. I just had a, a conversation with a client about, you know, where they should draw the line for certain of their practices, taking into account the specter of a WrestleMania gift. And we sort of agreed that a good practical line was 100 million. [19:53] JD: Drink, everybody bring them up. [19:57] Chad: Employee retirement income, security, blah, blah, blah. [20:00] Fred Reich: And so. But I think below 100 million, the odds of also happening are very, very small. There was one around 40 or $50 million with the traditional claims of, you know, they just copy and pasted overpaying for record keeping. The, the. But when you get down to that size, say it's 100 million dollar plan. What would be an outrageous amount to overpay on a $100 million plan? Let's say it's $10 million, right? I mean that, that I don't know how you would possibly. [20:29] JD: And the attorney gets what, 10 million on 100, 300k or something or so [20:33] Fred Reich: maybe 5 million is more realistic. What's the extreme of how much you can overpay? Because the statual limitation is six years. So over six years, how much can you. [20:41] JD: The money's not there. [20:42] Fred Reich: Okay, so let's say it's 5 million then. Well, the settlement's going to be for less than half of that. In all likelihood, that's 2.5 million. The attorney's fees are going to be about a third of that. Say that's 800,000. You can't take a case, most of these cases to go to trial. I know the defense costs are not even to go to trial, but to get there, it's going to be 2 to 3 million on legal fees and court costs. So you figure that defense, the plaintiff's attorneys are spending some proportion of that. My point being the economics doesn't add up. When you get below 100 million, there are no, we've heard that business people, [21:21] JD: we've heard that forever. And that makes perfect sense. But where you shocked me was you were kind of saying like, I don't know, there might be some kind of, [21:28] Chad: there might be some kind of low dwelling skeezy, you know, attorneys that might [21:32] JD: go after these lower things because they don't mind. [21:34] Justin: This time we'll, we had one on the show, right, that essentially said, I'll take a smaller case, but I know I can spend less time, still win. [21:40] JD: Yeah, we'll see after it. [21:42] Fred Reich: That's the copy and paste thing that, that, you know, the first, like Schlichter, Schlichter law firm have, have established where the claims are. [21:51] JD: If you say Schlichter on the show, it's also a penalty Drink should happen. [21:57] Chad: Just kidding. [21:57] JD: That's not true. That's not true. [21:59] Fred Reich: That, that's. It's there now. You can. There are copy and paste lawsuits out there. [22:02] Chad: Now let's. [22:03] JD: Let's move on to another headline from the national association of Plan Advisors website. The article is titled John Hancock launches dynamic Default Investment feature. This caught me off guard. Here's what's happening. And Fred, you may not know this, but this is brand new. Typically, you take over a plan, 5 million, 10 million, 1 million, whatever, the assets are going to roll over into Hancock in this example. And what we've been taught as an industry is we used to kind of map different funds like large cap value to in small cap value to small cap value. But these days, we pretty much just throw it into a target. A fund based on your date of birth. Right. It's become pretty much the best practice. [22:43] Chad: Hancock's saying, okay, that's cool, we're going [22:45] JD: to continue to do that. But now what we're going to do is the plan sponsor is going to choose an age, 50, 55, 65. And for everyone at that age and older, we're going to automatically enroll them into the. Their managed account service that they do with Morningstar. [23:05] Justin: At 50 or 55. [23:07] Fred Reich: Yeah, whatever they choose. [23:10] Justin: That's the trend, right? [23:11] Justin: That's what the article is saying. [23:12] Justin: Yeah. [23:14] Chad: I don't know what you think about that. [23:16] JD: That was a fact. [23:18] Fred Reich: You talked about monetizing services and other things you can make money on. [23:22] Chad: Wait, has John Hancock ever been your client? [23:25] Justin: Oh, I thought he was doing this right there. [23:27] Fred Reich: He put his hands up like [23:31] Chad: dollar bill. [23:33] Fred Reich: But managed accounts are one of the ways folks are trying to get away from the low margins for record keeping and advising retirement plans. And what you're talking about is the more popular version of the more common is called the dynamic qdia, where participants are defaulted. Uh oh, I'll be with you. [23:57] Chad: You can always finish your thought and catch up. [23:59] Fred Reich: Participants are defaulted into a target date fund when they join the plan. Let's say 21 years old, very common. Then later, at an age selected by the Plan sponsor, typically 45, sometimes 50, they are redefaulted into a managed account. So what Hancock is doing is very similar to what's happening. [24:22] JD: Okay, I wasn't even aware that this was. This is a common practice that's been happening. [24:27] Fred Reich: There's a default process. [24:28] Chad: He got you again. Qualified default. Come on, play the game, people. [24:31] JD: When he's. [24:32] Chad: This guy's a legend, a God in the 401k. [24:35] JD: When he said you drink. [24:38] Chad: I didn't know this was already happening, [24:43] Fred Reich: but it is not bad. [24:45] Chad: So you don't have. [24:46] JD: I always thought like manage account service versus target date fund. It's a classic debate, but I always felt like, okay, I get it. In a managed account service, I can gather more information on you than just your date of birth and be able to give you a more customized approach. I never thought it made more sense as you were older versus if you were younger. And so that kind of struck me as weird like. [25:10] Chad: And what they said in the, in [25:12] JD: the article, John Hancock defended themselves by saying, okay, well, it's more serious decision making when these people older, bigger account balances, closer to retirement. I get all that, but that's the first time I've heard it positioned that way. [25:25] Justin: We know it, Sherry. We know it. Yeah, bigger account balances for folks who are close to retirement, certainly. [25:32] Fred Reich: I'll tell you the rationale that's written up is bigger account balances, but Also when you're 25 years old, you have no idea what your future holds. You don't know if you're going to be really successful financially, if you're going to stagnate at a certain level. By the time you're 45 or 50, you know, you've bought a house, you've had kids, you've got married or not, or you haven't done any of those things, but your life has become more formed your objectives. Maybe you're going to work to 70, maybe you only want to work to 60. You're no longer a one data point. They age, participate. You're now multiple data points to the extent that you can get. I'm aware of one service where the record keeper gives the advisors eight data points about a participant. They will then they have a call center where they will call out the participants to get another three or four data points. That then enables the advisor to really customize the portfolio. [26:23] Justin: That's not what's happening here. [26:25] Chad: But that's the Nick. [26:28] Fred Reich: Then the other Thinging is good one, Chad. Can the advisor provide additional services? Because there are at least three theories plaintiffs are suing on right now on Advisor managed accounts. But for value as 1, is it justified by the fee and the Are you helping participants know if they're on course to retire or not? If they aren't, are you helping them know how much more they need to defer to be on course? If they're already on course, are you helping them invest conservatively so they're taking less risk on and on and On I mean there's a version of that can be a real high value version and justify a certain amount of fees. There are other versions of it that might just be a bunch of asset allocation models and don't justify. [27:13] Justin: Well and here would be my defense of it when I've helped advisors try to pitch this over the years which I have for a long time. What I'm usually looking for is tactical management. And I think whether you have data points or not, if you're saying that someone's within five years of retirement or eight years of retirement, whatever threshold the plan sponsor state and you as a, as a managed account service are going to go in and change their equity exposure based upon where the market is and their age that could be worth the cost because we believe, believe heavily in the target date fund world and the asset. [27:49] Chad: I'm different than you Chad. [27:50] JD: I don't even need that. [27:51] Justin: Everybody's in the same mix. [27:53] JD: I don't even need the tactics identical. [27:54] Fred Reich: I agree that is a lower value proposition in terms of the fees. [28:00] JD: I don't even need the tactical. I'm totally okay with just the more data points which by the way leverage [28:06] Justin: the more data points and they're doing this at scale. They're not leveraging. [28:10] JD: Justin and I kind of dug it up to like look at where Hancock is and it's a scale based on how much money you're putting into it. We, we averaged it about what, 30 bips or something. So you have to put that into context and hey, I do massive. [28:26] Justin: Hancock does give a discount if you're using their managed account. So you're getting three, four, five basis points. Yeah. [28:33] Chad: And I want to be clear, I, I probably have. [28:35] JD: How many plays do I have with Hancock? 206, 260 plans. And I'm still talking shit. A little bit of shit. We'll see. [28:42] Chad: I don't know. It's okay. [28:44] JD: Like I get it. [28:45] Justin: Why set it up to where I know it's a higher account balances down the road but why not do better for the participant if you truly believe in that and start doing it from a young age. [28:53] JD: I liked what Fred said. [28:54] Chad: Fred. [28:55] JD: Fred answered that? Yeah. He said you know more about your life. You. [28:59] Chad: Basically I felt like what you said [29:01] JD: was you can answer more questions about your own risk tolerance or retirement plan goals a lot better at 55 than you can at 25. Which that made sense to me and I have to. [29:15] Justin: Brandon, he whispered it, but you can ring him up. [29:17] Chad: Okay, let's hear what we're Gonna do? We're going to play a game. [29:21] JD: It's a simple game. We're going to spin a little digital wheel. And whoever loses has to drink from the mal. [29:41] Chad: Chad, take the whole thing down this time. Yeah, take it all down. We're gonna have some fun. We're gonna have some fun. [29:49] Justin: I know it's rigged, Fred. See, that's how I know he watches the show. [29:52] Chad: Because this is rigged. [29:55] Justin: Thank you. [29:57] JD: Not rigged. [29:59] Chad: We are. [29:59] JD: You know when you're at the FI360 Broadridge Conference and you get fancy people like Fred Reich, you gotta double dip. You gotta get some more people up here. So we are gonna bring to the stage another retirement plan stud. Cindy Dash, get your ass on up here. [30:22] Chad: Cindy Dash from Broadridge. We got a chair just for you. Where's she going? Right by Fred, right? [30:27] Justin: She's gonna sit next to Fred. [30:28] Chad: Up on up. [30:31] Justin: No, there's stairs. [30:32] JD: Stairs right here. Whoa. [30:37] Chad: You've already penalized Drink your gin for too much information. Very good. All right, Cindy. We call this. [30:51] JD: We don't call it an intro. We call it a Midtron. [30:55] Chad: Take it away, Justin. [30:56] Justin: Hold on. I need my notes. [30:57] Justin: Don't touch anything. [30:58] Justin: Thank you. [30:59] Justin: Just want to know. All right, you guys are gonna learn [31:00] Justin: some fun facts about her that you probably never knew before. But they're all true, I promise. She's a former tennis elite who starred on the Mickey Mouse Club alongside the likes of Drew Barrymore and Neil Patrick Harris. Not only has she scaled the corporate ladder with grace, but she's also summoned of the world's tallest seven peaks on all seven continents. She's a general manager of a 711 Kwik E. Mark chain and everybody's favorite ventriloquist. Ladies and gentlemen, put your hands together for Mrs. Cindy Dash. [31:27] Chad: Wow. Quite the bio. My gosh, I'm impressed. I learn more stuff about you every day. Cindy, Cindy, I'd like you to join in on a little conversation I'm gonna [31:41] JD: have with Mr. Reese here. Now, [31:45] Chad: it's publicly known knowledge that I [31:47] JD: am not a fan of the pooled employer plan. And. And sometimes I listen to you and little Nevin on your podcast, and I hear you say things such as, this will be great for the coverage gap. [32:02] Chad: This will allow small businesses to have affordable retirement plans. [32:07] JD: And I sit in my car, and [32:09] Chad: as much as I love you, I [32:10] JD: cuss you the fuck out. I'm like, what are you talking about, Fred? Why don't you know? [32:17] Chad: You're such a smart man. Okay, let's take this one step at [32:21] JD: a Time pooled employer plans and the concept that if you bring a hundred million dollar plans together they will get economies of scale and get hundred million or five hundred million dollar pricing. Okay, I want to put this arrest for you. They've been lying to you. This is not a truth. Voya, Hancock, Empower for decades have been gathering assets. That's what they do. And the more assets they gather, the more they can get economies of scale and lower their fee. I want you to close your eyes and think about those hundred one million dollar plans in the pep. And I want you to think about the record keeper that's record keeping them. Oh yeah, I got a drink for that. [33:08] Chad: I'll get it. [33:09] JD: It's still a hundred human resources people. It's still 100 contacts at those clients. It's still the same participants. Tell me where the record keeping job has somehow changed. [33:23] Chad: Like where is this economy scales and let me one more time to get hard on you and I apologize because I love you. I've looked at a lot of pooled [33:30] JD: employer plan proposals that was good. And they're not cheaper than their standalone offerings. They're just not. The only reason they may appear to be cheaper is they somehow carved out the advisor role or somehow lowered the advisors comp, somehow used an all index fund type of menu. They're not really when you look at apples to apples, cheaper than standalone plans. And the more people I hear say it in this industry, you included, even though I worship and love you, it's pissing me off. [34:07] Chad: It's getting dark. [34:09] JD: Am I? Does that make sense at all? [34:12] Fred Reich: I have heard from a number of people since you're insisting that we be practical that there is little if any savings on the United States. [34:21] Chad: Thank you. [34:21] Fred Reich: Okay. Even your good buddy Pete Swisher. You're right. [34:25] JD: You're right. And Jason Roberts agree to that. Yeah. [34:29] Fred Reich: I hope is if there are savings that if some of these plants can accumulate hundreds of millions of dollars that they'll be able to get low cost share classes. That's where I think there might be some savings. Also I think that every Tom, Dick and Harry is starting a pool employer plan. [34:50] Justin: True. [34:50] Fred Reich: I did that for you. All right now And I bet you that within 10 years we're going to see a roll up of the industry. I just can see that coming down the line. There are far too many of them [35:02] Chad: or they'll just die on the vine. [35:03] JD: And you know plans will terminate within them. [35:06] Chad: Cindy. I know. [35:09] Fred Reich: I think it's a tool though. It is a tool that will be Appropriate for some people and not appropriate for other people. And having said that, I think there will be good ones and bad ones. So I don't see it as a panacea. I don't. It's not just like, go sign up with it. [35:22] Justin: There's a space for them is what you're trying to say. There's a fit in some walks of life. The problem, I think that JD has referenced numerous times too, is that they were set out to solve the coverage gap, that they were going to bring down costs, which is what we read in the article. [35:38] JD: Who put this in place? It was Washington. [35:42] Justin: Yes. District of Columbia. [35:44] Chad: Thank you. Yes. And. [35:45] Justin: And what we've seen, though, is that those that are offering these pooled employer plans are not saying, let's go after the brand new, not most of plans that have no assets and employees need access. They're saying, no, no, we need assets to make this run. [35:59] Chad: Washington gave them marching orders to save us from the coverage gap, and now they want your 50 million dollar takeover. [36:07] Justin: So I agree, Fred, that in five years, in 10 years, these will still exist and there will still be a place for them. [36:13] JD: Cindy. [36:14] Justin: But I think we need to be honest with one another, what they're trying to do and what they're here to accomplish. [36:19] JD: Cindy Dash, Fred says that they're a tool. And part of what he means by them being a tool is that, and I've heard him speak on this, is that you can get, for lack of a better term, fiduciary relief, right? So you get this pooled plan provider role, and you get to outsource your fiduciary responsibility to this, this new type of retirement plan. This pooled. Pooled employer plan. 316 and 338 services, as well as I was signing 5,500 for my clients five years ago, existed long before pooled employer plans. [36:55] Chad: So I want to know where you, [36:56] JD: where you sit in on all this. Like, are you a big fan of this? Personally for business, for not. Like, where do you plant your flag on the pooled employer plan? [37:05] Speaker F: Well, first, I want to say I'm very sorry for you that this has brought you to a place with Fred. [37:11] Chad: Is she mic'd up? [37:13] JD: Did we get her mic'd up? [37:14] Justin: She is miked, but it's silent. [37:17] JD: You guys hearing all right? You got a handheld? [37:21] Chad: We got you. We plan for backups. [37:26] Speaker F: All good? [37:26] JD: We're good. Got you. Here you go. [37:29] Speaker F: I was just saying I'm sorry that this has brought you to this place with Fred, because I know he I know he is your spirit animal, and he's mine too. I've worked with Fred for a long time. He is magnificent at solutioning. So, yes, agreed. I know that's not what you asked, but on our side, re. Even a few weeks ago, we had a webinar that we were, you know, talking about pooled employer plans, and the feedback that we got from a number of our clients was, why, like. And there is a tool. There's a reason. But the same discussion point that you're making around cost and what they've been doing in the workplace and with these solutions has been in effect for years. And now potentially with the tax credits under this. Under the Secure Act 2.0. And yeah, you get. [38:21] Chad: By the way, that's okay. She can say 2.0. [38:23] Speaker F: You can't say because you said 316 and 338 on your numbers that there's actually ways to utilize those tax credits and that that's being overlooked. And so they're not so much where I stand, but a lot of our clients stand in the position of, we've been doing this for a long time. We can do this at a different cost factor. The fiduciary side, I'm gonna leave to this guy. He's still your best friend. [38:51] JD: Yes. [38:51] Speaker F: And he's, you know, I agree with the dol. With the Department of Labor. Sorry. [38:56] JD: Drink. [38:56] Chad: You all have to drink. No, you have to drink your gin. You're good. You don't have to drink for. [39:00] Speaker F: Did you guys see I have this, like, party glass here. [39:03] Justin: Tell me you're gonna go after them. [39:05] Speaker F: So great. I love them. Alert. [39:07] Chad: Cindy. [39:08] JD: Thank you. [39:08] Chad: I. I mean, obviously. See, I. I love that you. [39:13] Speaker F: By the way, if you went to college and you had Everclear, this is worse. [39:17] Chad: Yeah. [39:17] Justin: Right. [39:18] Chad: Just letting you know. [39:20] Speaker F: So much worse. [39:21] Chad: By the way. [39:21] Fred Reich: Yeah. Secure 2.0 is not an acronym. [39:26] Chad: I know. Yep, Yep. [39:27] Fred Reich: That's the literal name of the world. [39:29] Justin: So bad. [39:29] Chad: You know where I learned that? You know where I learned that? We've been so bad. We've been implementing that on our Thursday [39:36] Speaker F: night shows for LinkedIn. I just Mr. Old [39:40] Chad: Forever Fred and I learned that on the Nevin and Fred podcast. [39:45] Fred Reich: Give it two or three minutes. Let me. You know, one thing on. On this. The whole issue of. [39:57] Chad: You don't think the role of the [39:58] JD: advisor has been fully explored. [40:00] Fred Reich: No. If you've got a platform that's taking care of everything in theory, you know, 316, 338. What's the role of the Advisor that refers the employer to the pooled employee. [40:12] JD: You've lessened their job a little bit. [40:14] Fred Reich: In other words, is what used to be worth a plan where the services of the advisor used to be worth 100 basis points a year, now worth 50 basis points. I mean again, you can have a robust role worth more. But what's the role of the object advisor? What's their contract with the employer? [40:32] Justin: And that's been part of our issue at this space is that we obviously have built, JD and his dad have built a business for 50 years now off servicing the advisor. And that concept of cutting out, that's where the pooled employer plans are creating cost savings is most of them are minimizing the role of the advisor, minimizing the role of participant education and engagement, minimizing the role of investment selection, minimizing the role of understanding your client and putting everybody into a pool. That to me is an issue. [41:04] Chad: It's the main reason why I put [41:07] JD: up such a stink. [41:08] Chad: Happy birthday Jason, you little Taylor Swift fan you. It's the main reason why I kind [41:17] JD: of wave the anti flag and I get so upset about it, get in fights with Swisher online is because I am genuinely concerned. As someone who grew up in this industry and loves our industry and respects the people that are in it, I'm afraid that if we try to sell low cost, you don't have to do anything, you don't have any responsibility. And this is a message that's coming from the disruptors as well as the pooled employer plan promoters. And I feel like be careful the message that you're putting out to our consumers because you might turn around in seven years, 10 years and find out they don't value what we do anymore. And I'd prefer us had a different direction. Many of you have heard me say this before and I apologize. We, we used to have conflicts of interest. We had proprietary funds, we had pay to play, we had revenue share, we had all this stuff. And then we had 400 B2 and 404 A5 and we started to move away from that. [42:20] Chad: And by the way, you can get [42:22] JD: institutional share class of fund on a startup, Mr. Re, that's available today. [42:28] Chad: You don't need a billion dollars to [42:29] JD: get an institutional shared class of fund these days. It's a glorious time to live in. [42:34] Chad: And so what I don't want us [42:36] JD: to do is now I get so loud. [42:38] Chad: Sorry. [42:41] JD: Breathe. Catch me outside. [42:42] Speaker F: How about that? [42:44] Chad: What I don't want us to do. [42:45] JD: We were on such a great path. [42:47] Chad: And I don't want us to head [42:48] JD: backwards towards other ways that aren't good for our industry. So we'll move on from that. But any. If anyone ever wants to reach out to me about pep, fucking don't. [42:59] Fred Reich: Okay? [43:00] Chad: Yeah. All right. [43:02] Justin: That's all you, jd. [43:03] Chad: Okay, let's play a game. Let's have some fun. Let's lighten it up, shall we? [43:07] JD: This is the totally original and just incredibly well put together game called the Totally no Burdube game. [43:27] Chad: Alright, the way this game works is [43:29] JD: I'm going to give you something very pop culture y not 401k. And you've played this game before? [43:35] Chad: Well, it's Cindy go first. [43:37] JD: Oh, you both played it? [43:38] Fred Reich: Yeah. Yeah. [43:38] JD: And you'll give me the. [43:39] Speaker F: You can phone a friend. [43:40] Chad: Is it dope or is it. Nope. [43:42] JD: And then what we would all love is a reason why you feel this way. I flew from. I was in Denver yesterday and I flew here. I live in San Diego, but I was at a wedding. I flew here this morning. First class. Of course. [43:58] Chad: I don't fly. [43:59] JD: Fucking coach. [44:00] Chad: No. How dare you. [44:03] JD: And I was in 1B. Dude sat next to me. [44:08] Chad: Wasn't flip flops he was wearing, but [44:10] JD: it was like sandals. Open toed sandals. He could use a little grooming, I [44:16] Chad: would say, but coming from you, nope. Or dope on sandals on the airplane. Cindy, you first. [44:27] Speaker F: Nope. I'm with you. I do not need to see your toes and the dirt that you're bringing on along with COVID and let's place it in first class. He probably stretched out. Did he put it up on the side and. [44:40] Chad: No, he just. [44:41] Speaker F: In the dirt. [44:42] Chad: He just fell asleep with a little. [44:43] Speaker F: Yeah, right, exactly. [44:45] Chad: Fred, you travel a lot. [44:47] Fred Reich: I'm with Cindy. [44:48] Chad: Okay, you're listening. You're nope. [44:50] JD: You're nope on the open toed shoes. I don't care what you two people think. [44:54] Speaker F: What? [44:57] Chad: Oh hey, I'll ask you guys on this one. Fred, he's ripping off his shoes. All right, like I mentioned, I was at a wedding. You guys. You guys. I was at a wedding last night [45:12] JD: and my sister in law shared with me something that shocked me. I mean absolutely shocked me. [45:20] Chad: So the question is nope or dope. [45:23] JD: And unfortunately we're going you first. Fred, even though this is not your area of expertise, [45:30] Chad: breastfeeding someone who's not your child. [45:32] Justin: What? [45:33] Fred Reich: What? [45:35] Chad: I learned at the wedding that my [45:38] JD: wife's sister breastfed my nephew. That is not her child. [45:45] Justin: Why are you bringing family drama into this? [45:47] Fred Reich: I'm not really up to speed. [45:50] Chad: All right, we'll pass. We're gonna go to Cindy. [45:53] JD: Cindy overwhelmingly don't. [45:55] Justin: Nope. [45:55] JD: What? [45:55] Justin: It's an overwhelmingly nope. [45:57] Fred Reich: Are you sure? [45:59] Chad: Brandon told me that this happens in many cultures. [46:02] Speaker F: She wants to answer. [46:04] Justin: Really? [46:05] JD: Sherry, thank you. This is not a crazy thing. [46:10] Justin: Breastfeed as a wet nurse or do you pump and deliver? Because my wife donated, but I don't feel like you actually. [46:19] Chad: Nurse Sydney, do you have a feminist vote on this? [46:22] Fred Reich: I'm hearing that I'm wrong. [46:23] Chad: They caught me off guard, but [46:28] JD: thank you, sir. [46:29] Justin: Oh, fair. [46:30] Chad: I get that this happens. We get. We get edgy here on this show. Hey, man, we're not going to skirt around the. [46:35] JD: You know. [46:36] Speaker F: Yeah, I think it sounds like the audience has a lot of opinions as somebody who did not succeed in that department and had to use formula. You know, my OBGYN said that my daughter would not go. Oh, sorry. Would not go to Harvard or Yale. But she thought she would be fine. I struggled. It worked out okay. She's at Northwestern, so I think it's whatever. Whatever works for people to get them where they have to be. [47:02] Chad: Fred's not sure what to think. [47:04] Speaker F: I cannot do that again. I'm still salivating. [47:09] Chad: Fred's not sure what to think about that. Still. He still hasn't added all together. Good with, you know, Erisa Law. A drink for that. Not so good with breastfeeding. [47:17] JD: And this might be the last time Fred's on the show. So soak it in right now while you can. [47:23] Chad: Last one. Last one. I'm gonna go to you guys down here, take you guys off the hot seat. [47:29] JD: I don't know why I was feeling spunky today with it. [47:32] Chad: No, Per Dubs, kissing your own kids on the lips. Chad, Is this a thing? Is this a. Is this a show of love? I feel like this was positioned. Is this a show of love to your six year old son? Is this okay? I mean, on the list, I'm gonna say age dependent. Fair enough. [47:54] Justin: And then say no, but my son [47:57] Chad: loves to kiss me. [47:58] Justin: Me on the list. [47:59] JD: He does. [47:59] Chad: He does. [48:00] Justin: He, like, runs at me and he grabs my cheeks and push them together. [48:03] Chad: Hey, Tom Brady is famous for this. [48:05] Justin: I enjoy. [48:06] Justin: I thought you were going with this. [48:07] Chad: Tom Brady famous for this. [48:08] Justin: I really do. But I'm gonna say nope. Because my daughter, who's much older, if that happened, I would feel really awkward in front of her and her friends. Like, that's not cool. [48:16] JD: Well, of course. But you're saying there's a place for it. [48:19] Justin: I'M saying there's an age for it. [48:21] JD: I. I've got three kids. They're all out of the house now. [48:24] Chad: But I've never kissed any of them. [48:26] Justin: That's a lying. That is a lie. You cannot tell me that when your kids were tiny, they didn't grab your cheeks. [48:32] JD: Oh, is it like a baby or something? [48:34] Justin: Yeah, well, young kids, toddlers. [48:36] JD: I don't know. [48:37] Chad: Fred, we're going to, you know. No, we're not going here. [48:40] Justin: What are we going to be for? [48:41] Fred Reich: No, you're okay. [48:43] Chad: Oh, boy. Come here. Come here, Fred. Don't leave me hanging. All right, city. Last one. [48:48] Speaker F: I'm a no. [48:49] Chad: Yeah, it's a little weird. No, that's a little weird. You guys don't love people. Look. [48:56] Justin: Yeah. [48:58] Chad: Did anyone see when Tom Brady did [49:00] JD: to his kid on like national tv? [49:03] Chad: I don't know if I'm a bad [49:04] JD: human or what, but I definitely was like, whoa. Like, that's a little gnarly. [49:08] Chad: I didn't see that. Now that I've soaked it in, if [49:11] JD: any of you do that, I'm not that you care what I think. It's okay. I get it. You love your little kid. Just, you know, listen to Chad and draw some lines somewhere. That's all. Find an age. [49:22] Chad: All right, we'll move on from that. [49:24] Justin: Your shoes are still off. [49:26] Chad: Cindy, one of the main reasons you're up here is because your role at [49:32] JD: Broadridge and with Fi360 is key to this topic in this week's show. [49:40] Chad: On Thursday night, Chad and I got [49:42] JD: into the after show and we started talking about technology in 401k, which can seem kind of like a cliche, boring topic. But what we were talking about was smart. The company from the United Kingdom had come over into the US to what I thought was sell pooled and. Ah, damn it. [50:02] Chad: What I thought was sell pooled employer plans. [50:05] JD: They've since they still will be a record keeper for pooled employer plans but they since pivoted a little bit. And what they are now saying is that they're offering technology to other record keepers. They did a deal with Transamerica where they're offering the technology. I'm probably this wrong a little bit, but just think for fun, like technology. What does that mean? A quicker, more digital onboarding process that [50:29] Justin: apparently trans more integrated wellness solution. [50:32] Chad: Whatever. [50:34] JD: But my point is I come from Fred's world. The old school world of nationwide financial builds their own widgets. Principal financial builds their widgets. Same as Voya Empower. [50:47] Chad: Are we in it Are we starting [50:49] JD: to, are we already in and starting to get into a different space where. No, no, no. We're gonna snap on other things and make partnerships with other technology companies that maybe are from within our industry or maybe outside of our industry. [51:03] Speaker F: I appreciate the question because I think Fred was starting to feel bad that I came up here and you've been asking him about breastfeeding and other things. So thank you for taking it back to a topic that is good because I do appreciate that. But we. Yes. So to answer your question, I think this has been, and I know because we work with a lot of different providers that this has been going on for quite a while and it really is an opportunity for firms to, to get to market faster and basically private label the system for when you help the dumb surfer. [51:35] JD: When you say firms get to market faster, you mean building it yourself can take time, money, energy, and why not just buy it somewhere else or partner somewhere else? [51:45] Speaker F: Partner somewhere else like firms like Broadridge. And we all know that you're far from dumb and I do appreciate that. But I would say it's more of looking at it to the point of, on the wealth platform side where we've seen. And that's what you're talking about, the drive wealth firms of, you know, there's all kinds of really the, the way in which individuals are looking to get advice is changing and to get access to investments on the digitization side that you heard about and democratization. So access to those systems. It's easier to rely on systems like, like Broadridge and partner. A lot of these institutions that you just named have 35 or 40 different recordkeeping systems that they acquired along the way. And so that technology is far from integrated. [52:34] JD: It's not, it's not well suited. [52:36] Justin: Interesting point. [52:37] JD: It's not well suited for snap on technology type stuff. [52:40] Speaker F: No, that's why it's easier to say, okay, but when they make that decision and they're going down that path, I think it's super interesting to think about data and how data gets, you know, parlayed into those systems. Whose data is it? Who, how you think about going forward and the partners you work with. And so as, as I look out to the landscape, I see a lot more of that happening, especially as there's that convergence and we talked about this in retirement and wealth and more of these larger institutions are really going after that individually. I'm going to say it, I'm going to say it. [53:22] Justin: You're saying I didn't expect to hear it, but I Heard two rams butting heads there, which is who gets access to the data. And in the world we've all lived in, it's the record keeper that usually accesses the data and leverages the data. But in this scenario, if we're talking about wellness solutions or some of these snap on technologies, they want access to the data as deeply as the record keeper does because there's so many different solutions that can be offered. So maybe, and this was the debate we had on Thursday and I thought JD going I don't think companies are being created to sell like they once were when we started in this space. They're being created to be bought by Broadridge, they're being created to be bought by Nationwide. And I fought him saying I don't think that's the case anymore. They want to sit siloed as a [54:11] Chad: solution, as a technology partner with all of those companies. [54:13] Justin: But, but maybe if they're wanting access to the data, that reinforces my point even deeper that yeah, they want to be siloed because they want to start leveraging other tools to sell to these participants. Access is the key. If anybody disagrees with that, I think we're not in the same industry. Access to the participant is the key that everybody is searching for right now. [54:33] Speaker F: Who's going to get it and trying to get the individual retirement account at the end of the day. And so that connection, that's where I think more of these systems and the reason why the pure record keeper and being interested in record keeping and the longevity of that is changing and moving more towards a technology based solution that we talked about. [55:00] Chad: This is good, this is interesting. If I'm understanding this, of all people, she's. [55:05] Speaker F: Well, of course our point is we, we're. But we're, we really are serving everyone and that we don't have a stake in it. And we love the record keeper, we love the asset manager. And so I could be your best friend if Fred wants to give that up. [55:18] Chad: I want to be clear. I want to be clear out there [55:20] JD: on the Internet too. This was not planned. I didn't even feed you anything. We're going to talk about. And you're now putting me down a different path here. I love this Broadridge because it's almost like, for lack of a better term, almost like open source in a way. Like you're just this kind of independent record keeper that is much different from Avoya, Nationwide and Empower. And I wasn't trying to do an ad for you. You are better suited to add on all These different varieties of snap on technologies than they are. And mind you, you already know this about them. They don't want to play ball with a lot of these startup companies. When these little startup companies come to them and say we've got the best wellness tool or we've got the best like 360 payroll integration thing that we could bring in, usually the principal and everyone is like, okay, we don't know who you are. Who do you know to get a meeting here? We're not going to talk to you. And so they get pushed off and they die in the vine or whatever. A company like yours seems like that you're looking for this kind of stuff to find the right ones where I'm not so certain they are. [56:26] Speaker F: I agree with all you said. Except for the record keeping. [56:29] Justin: Record keeping? [56:30] Chad: Except for what? [56:31] Justin: You called her a record keeper. [56:32] JD: Oh, yeah. [56:33] Chad: Custodian. [56:33] JD: Sorry. [56:34] Speaker F: Yeah. But we really are the pipes. Like we're truly looking to be pipes. Insights. I made a rhyme for you. [56:40] JD: You're right. The pipes custodian. [56:42] Speaker F: At the end of the day, really, that's where we serve the industry in the best way. Reducing costs, which you talked about. Access and the really speed to market. [56:53] Chad: Well, Cindy, let me tell you something. [56:55] JD: You can't judge the words that someone says when they're drunk. [57:00] Chad: Like, I'm going to think custodian and [57:02] JD: I'm going to say record keeper. Like that's just going to happen. You know what I mean? [57:06] Speaker F: All right. But we're, we are proud of that. [57:08] Justin: Can we ask Fred, who's seen every iteration of this business over the last 25 years? Do you agree that the modern tech company, which I think is different than what was started 10 years ago, does not want to be acquired anymore? They're not setting themselves up to sell. They're setting themselves up to provide to Broadridge and Captrust and National Financial Plan. Everybody else. [57:34] Fred Reich: Yeah, I mean, they're setting themselves up to make them want one way or another. And I'm working with. I get A lot of the tech companies hire me because they. I can imagine they do what they can do and then they realize they need an ERISA attorney and they're not tied to the old law firms. Whoops, sorry, guys. They're not tied to the old law firms because they're not a major financial company. So they'll seek out somebody and with some of them, a subscription service. Matter of fact, with a number of them, a subscription service is what they're trying to do. They want to get that monthly Payment, recurring revenue. I think they're like any startup company. They've got seed money from private equity or somewhere else. They're trying to get off the ground. They're trying to develop a product that, that is going to make a lot of money. I don't think they're even thinking 20 years from now or 15 years from now. And interestingly the guys, because it's technology, I guess the guys there tend to be gone. I'm dealing with a lot of 30 and 35 year old people who are coming up with incredible technology ideas, ideas for distribution, ideas for investment management. [58:52] JD: Many of them from outside our industry. Right. Hard. [58:55] Fred Reich: Oh yeah. They're not, they're not ERISA people. Not the ones I'm that are hiring me at least. [58:59] JD: Oops. [59:00] Fred Reich: I'll help you. [59:00] Justin: Sher's gotcha. [59:02] Speaker F: It helps them to be to partner with Broadridge because of our reach. Right. And because of the client. Helps us to give that technology that Fred's talking about without, you know, building it and being a disruptor because we have so many different clients. So it doesn't put us in a position to compete. [59:21] JD: I think this is a big deal, we're gonna end it. But I really feel like, and I'm not trying to make a big moment here because I really feel this genuinely, I feel like there's a shift and we might look back in five years, seven years and be like what you and I kind of dealt with the last 30 years is changing and there might be some other companies ready to deal with that. So I'd love to talk to you more later over a beer or something about all that. That's really interesting to me. [59:51] Fred Reich: Just real quickly on that. In the last week, two major financial institutions have approached me about putting together a team of lawyers for digital engagement. Yeah, it's like that's corporate speak. [1:00:04] Chad: I love, I love that they know enough at least these disruptors to find Fred Reese. I would think they'd be like, who [1:00:14] Fred Reich: that's. That is. I mean we're getting more of that. But I'm agreeing with you. I do think that it started maybe four or five years ago and a lot of it's just percolating up to the surface now. But there's a lot of work going on with technology that's, that's going to really change our world. [1:00:33] JD: We're due for it. [1:00:35] Fred Reich: Yeah. [1:00:35] Chad: Because we've been for such a wealthy industry, like we're so far behind the [1:00:41] JD: curve in that state stuff. [1:00:42] Fred Reich: I think Cindy's probably seeing more of It. I am. Because she's got an. [1:00:48] Speaker F: Yeah. I mean what we're seeing is the opportunity and the opportunity to work with different providers for ease of access to those platforms. And so yeah, I. I do think where the recordkeeping systems are. Are really old and legacy, very different. It's very, very difficult. And when you hear us talk about lifetime income and some of these separately managed accounts and what you talked about, that Turbo, you know, QDIA or dynamic. Sorry, I'll leave you with that. Someone has to deliver that. [1:01:22] JD: Yeah, right. [1:01:22] Speaker F: Someone has to get that to market. And so that's where firms like ours can do that. But it doesn't. It. We also have to be able to communicate with a whole host of different systems. And that is not easy. [1:01:33] JD: It's exciting times. It's exciting times. [1:01:36] Justin: We talked about it too. [1:01:37] Chad: The. [1:01:37] Justin: The record keeping space is a cruise ship and you all and others are a small little. [1:01:46] Fred Reich: You're just. [1:01:46] Chad: You're just stealing Aaron Shum's now from Veswell. Maybe you literally just stole that shit from me. Look, we want to. [1:01:56] JD: We were going to do audience champion but to be honest with you, you guys really like. I can't pick gal. [1:02:02] Justin: That was awesome. [1:02:03] JD: Okay. Oh well, she's gone. [1:02:05] Chad: So if you want to get some Fred Reese, he was good. Fred Reese is my spirit animal merch. You can come on up and talk [1:02:12] JD: to Chad and he's got a few trivia questions for you on Fred. If you get it right, you have some free merch. [1:02:18] Chad: We will also be here tomorrow kind [1:02:20] JD: of hanging out by the Broadridge Lounge. Come play some games with us. Hang out, talk 401k if you want to. [1:02:26] Justin: Gonna say let's talk 401k. [1:02:28] JD: Yes. [1:02:29] Chad: But first and foremost, I want to [1:02:30] JD: thank you all for hanging out and staying here in our little creepy room. We appreciate it. [1:02:37] Chad: I want to thank the. Yeah. This guy. [1:02:43] JD: The absolute coolest, gnarliest dude in 401k. Mr. Fred Reese. [1:02:54] Chad: You seen this? [1:02:57] Justin: That looks like Silence of the Lamb. [1:02:59] JD: Yes. And Cindy, thank you for having us back. Thank you to you, Faustino. This might be our last year. [1:03:05] Chad: I'm okay with that. [1:03:06] JD: You know, I know we talked about breastfeeding, so I will take my medicine. [1:03:10] Chad: But. [1:03:11] JD: But thank you for having us. [1:03:12] Speaker F: No, it's always great to have you guys. I echo your sentiment on Fred. He is magnificent when it comes to solutioning and partnering with us. So, you know, he's not my best friend, but you know, I think he's up there. I thought you'd have a song. [1:03:25] Justin: He can only have one best friend. [1:03:26] Speaker F: I thought you might have a sequel to the. [1:03:29] JD: You know, if you tune into Thursday nights, the songs have been getting pretty bad lately, so we've kind of moved on from that for the time being. [1:03:37] Chad: And then you guys out there in the Internet that are tuning in via Twitter, LinkedIn, YouTube, you little fucking freaks. It's a Sunday night. Go home, spend time with your families. Jesus Christ. Love you guys. And yeah, we are the Retirehogs. We're changing the retirement plant industry one beer at a time. [1:03:59] JD: And thanks for tuning in.