Plan Advisor Profitability: Why Disruptors Are Failing

[0:00] JD: White flag. [0:00] Nate Moody: I'm. [0:01] JD: I'm raising the white flag. [0:03] Chad: The props, the props that are brought today. Oh, he's taking off their. [0:07] Nate Moody: I'll take the robe. I'll take the robe up. [0:13] JD: White flag my ass, buddy. Game on. Game on. Mr. Moody, you welcome everybody. Bean wearing freak. [0:21] Chad: Welcome everybody to another episode of Retireholics. The current score, if you're on Team Roby or Team Moody is, is 1 to 1. One point for Robey on the sign and one point for Moody on the robe. Thank you for being here, everyone. It's good to see you again. Thank you for joining us on this Thursday night. I. I recently did a show or two from the East Coast. It was 7:30. You know, that's the truth. When that show starts, and I have to say, if. If you're on the east coast and you're watching this at 7:30, get a life, bro. It's too late. You should not be here. Log out now and go and do something productive with your life. Silent J, let's get right to it. This is your time to intro our guest. So Silent J, take it away. We don't have a silent J. Nate Moody. Who the are you? You're a financial advisor. You're a. You're a chat bar assassin, I believe. Like I would. I'm going to say this right now. This is going to offend a lot of people. [1:29] JD: I wouldn't give him that much credit. [1:31] Chad: I personally call him my dark horse of the chat bar. He to me is the most superior, powerful beast mode in the chat bar out of all of them. I'm talking hackler, I'm talking Samson Web, you name it. So I'm a big fan. Obviously other people feel differently. But tell us a little more about you, Moody. If I describe you as a financial advisor, is that it? Or you call yourself a 401k fucking stud or how do you describe yourself? [2:02] Nate Moody: Yeah, I would say I'm a financial advisor at a small independent financial advisory firm up in Portland, Maine. Focuses on corporate retirement plans and individual wealth management. [2:13] Chad: The whole firm does or you do specifically? [2:16] Nate Moody: I focus on just retirement plans. Yeah. So all I do is advise on retirement plans. I'm one of the partners at the firm. [2:22] Chad: I saw that like within the last two years or something. Became partner. Yep. [2:27] Nate Moody: I started out of College in 2016 as an analyst on our retirement plans team. Then I was an education specialist and then I was an advisor and then it became a partner. Bought out one of the co founders a couple years ago. [2:38] JD: You're in Texas, you're saying that word wrong. [2:42] Chad: Partner. [2:43] Justin: Partner. [2:45] Chad: Partner. [2:46] JD: Howdy, partner. [2:47] Chad: Your partner. I. I had Texas barbecue last night. Okay, great. What I know about you, though, Mr. Moody, is that you have a wit. You have an understanding of all things in our industry. Investments, obviously, record keepers, the relationships amongst all these things. And so I think we're going to have some fun tonight getting deep into it, and let's not hold back. [3:14] Nate Moody: Let. [3:14] Chad: Let's really tackle these conversations. Brandon. I call it headlines, but to clarify, for a robe guy, it's really just a code word for what we're going to talk about today. But let's. Let's do headlines. Brandon. Let's do headline. Up. Or mine. Do we. [3:47] JD: Yeah, no, do we say anything? Like, do we tell them that it was good? [3:50] Chad: Yeah, please say it, because when I see that up, I'm like, oh, my Internet's what's going on. Hey, you know what, Moody? [3:57] JD: You're here now. Say to my face, man. Don't hide behind your Twitter finger. Days are done, bro. [4:03] Nate Moody: Keyboard warrior. I'm a millennial keybo warrior. [4:08] JD: Okay, when you. [4:10] Chad: When you're taking a look at topics and you decide what you want to start with, I think the best thing to do is you just go with the biggest one first. And so I'm going straight to Great Gray, buying RPAG or rpac. I'll drink twice. [4:30] Justin: Hey, they don't like that. Better watch out. Be on a hit list. [4:34] Chad: I know. What, don't they like them? I'll say it again. No, actually, I was just gonna say, but then I tasted the vodka. [4:47] JD: Well, I'm just doing a test here. [4:49] Chad: Okay. [4:49] JD: I don't know if my buttons are working right. [4:51] Nate Moody: I can jump in on this one, jd, if you want. All right, so we are. [4:56] Chad: Let me. Let me set you up. Yes, we're gonna go straight to you. Oh, my Internet. Take it away, Moody. And can people hear me? Don't ask that, jd. Okay. I thought this was huge. I did not see this coming. We have had Rob Barnett, the chief executive officer, or the guy who runs Great Great Gray on this show. I was a huge fan. He's kind of like the Elon Musk of collective investment trust. Like, weird personality, but very smart. But I did not see this coming out of anywhere. So the question to you, Moody, is why is this happening? Is this a distribution play, or what are your thoughts? [5:38] Nate Moody: I think obviously it's a distribution play, but I think it goes back to a conversation Chad, you and I have had and we've talked about in prior Episodes is it's all becoming about the access to Retirement plan assets. And this is just a long term play to leverage the Retirement Plan Advisory Group advisors to be able to distribute their CITs. I walked right into that one. [6:02] Justin: There you go. [6:05] Chad: So, Nate, are you. Take your swig. Take your swig. And let me ask you, are you saying in a similar way that. That Vince has already sold his own target date funds to them. Rob is following suit now and saying, let me buy all your people and gain access to them to sell my own to them. [6:25] Nate Moody: So I serve on the advisory council. I serve on the advisory council for Retirement Plan Advisory Group. And we just had a meeting three weeks ago out in Scottsdale. And this could not. I feel bad, they're probably on this call. This could not have been more swept under the rug at the very onset of that conference. It was like one slide in a 35 slide. And I think the way they view it as, it was more just like an accounting function where they both were owned by the same private equity. Right. Rpg. Oh, God damn, I'll drink. [6:57] Chad: Name Advisory. [7:01] Nate Moody: Madison Dearborn Partners. They owned both Great Gray Retirement Plan Advisory Group, which was spun out of, I don't know, National Financial Partners. Is that the full name of it? [7:15] Justin: Yeah. [7:15] Nate Moody: Prior to being acquired by, I think Aon is the actual name of the company. So in their mind they were just shifting one under the other and it's all still under the umbrella of Madison Dearborn Partners. [7:28] Chad: Right. I mean, that's what you. That's what you would do when you own that type of stuff. Right. If you own all of it, you're trying to figure out where can I consolidate, what can I do? And, and so that makes sense. You want to find ways to make all the things you own work better together. [7:42] Justin: But I have to feel like there's something more than just a play at Access here, that there's another product in the pipeline. There's something else that they're going to mix in to create more margin. It can't just be Advisor access in this situation. [7:59] Chad: Okay, okay, well, let's fast forward that. So we know that Great Gray is behind collective investment trusts. Like that's their thing. And by the way, which is already having huge success, just collective investment trusts in general having massive success. But I wonder if you looked at Retirement Plan Advisory Group and as Nate so intelligently puts it, like all their assets, how much of those are actually in collective investment trust versus mutual funds? And if you were to look at that and analyze it and think, well, if I could gain in a sense not control but influence over all those assets. How could I push that number? And then. So yeah, so I do think it could be a distribution plan. But let me throw another one out of you. I was hating when people are laughing because I'm not looking at the damn chat bar and I don't know, you [8:53] JD: were starting to break up. So it was funny. [8:54] Chad: Yeah. God damn it. God damn. How about this one, Nate? Vince G. I'll drink for that because I can't pronounce his last name. He's getting longer in the tooth. He's a good looking guy, but I [9:13] Nate Moody: feel like his son works there. [9:14] Chad: I feel like he's making big business plays. Obviously he removed himself from the retirement plan advisor group but we all know, you know, that's still his baby and everything. Is this Vince retiring, you know, riding off into the sunset and he needs to get cha chinged to get out of this stuff. Like maybe that's a motivation for all this. That would be money changed hands, right? Money had to change hands for this. [9:48] Justin: There's no. [9:49] Nate Moody: That was explained to us. So as part of this flex path was spun out into its own independent entity which is sort of the 338 on a lot of these underlying co manufactured products that are partners between Great Gray and retirement plan Advisory Group that are being distributed through those advisors. So I don't. I'm not aware of him cashing out. [10:14] Justin: Is there if they split, if they tried to create a separation of church and state, there is their conflict of interest that they were worried about on the back end and that's why they wanted to roll. [10:24] Chad: That's funny right there. [10:26] Justin: I like having Moody on. He's like the inside scoop to this Chad. [10:31] Chad: I like that. Let's further remove me from the conflict of interest. I like that. [10:38] Nate Moody: But I still think a conflict or at least the appearance of conflict could appear because most advisors that operate under the retirement plan advisory group umbrella leverage their investment policy statement in their proprietary scoring methodology. And wouldn't it be strange if you're an advisor using a scoring methodology against a fund that is clears through the trust company that owns the. Do you know what I'm saying? The governance on the score. It just sort of. There's. [11:05] JD: Why aren't you wearing a tinfoil hat while you're saying all this? [11:08] Chad: No, no, that's good. [11:09] Nate Moody: But what are our options? There's two practice management platforms out there for retirement plan advisors. I think that should be where waves. Artificial intelligence goes into. [11:22] Chad: Yeah, I don't want to leave this quite yet, but I think as a good kind of more than scratch the surface but I'm going to for everyone, please soak this in a little more. Great Gray, a distributor of collective investment trust, and I would argue the biggest one in retirement plan distribution, has just purchased a very successful advisor commune, cult group, whatever you want to call it, and now has direct access to all these advisors and their assets to push an agenda. And we've, we've tried to point this or put the spotlight on rpag. I'll drink before. And very smart people have defended them that and I agree with their defense that they have great methodologies, very prudent like ways that they analyze funds and things and been able to and by the way successfully defend themselves in lawsuits and litigation. And so I, I don't want it to appear as though we're throwing them under the bus because I'm definitely not. I'm just my jaws on the ground and I'm like, wow, this is interesting. Can you guys name for me something else in our industry that is similar to this? [12:41] Nate Moody: Where what I thought was interesting, JD was the original agenda that was listed at this conference had the two major speaking topics were lifetime income and private markets, both of which are inherently a collective investment trust offering. And all of the advisors, when we started to get into it, raised their hands and said, who's asking for this? Is anybody actually at the plan sponsor level asking for this or are these just product companies looking to come up with new ways to sell additional products to qualified plans? And again, putting I guess my tin hat back on. Now, understanding the further implications of Great Gray, a collective investment trust company owning a distribution channel like this, they are somewhat incentivized to be pushing more and more products that require a more complex investment vehicle like a collective investment trust. [13:37] Chad: Chad, he just agreed with your earlier question. Concern conspiracy on your own. You said they want to sell more things. Moody said, course they do. Yeah, they possibly do. And Moody brought up guaranteed income or income in retirement, which I agree. I think it's so funny. Not the topic for today, so we'll move on. But I think it's so funny that the industry, unless Moody or Chad or, or Mark, you have a thought here, the industry is obsessed with guaranteed income in retirement. I mean, when I say the industry, I mean all the companies that want to sell it seem to be really pushing this narrative on us. [14:22] Nate Moody: Same with management. [14:23] Chad: But it seems as though the advisors are not that interested. Nate, you're our guest. You're Shaking your head in, in, in agreement with me. It's weird, right? Like they all want to sell it, but I think when you have we're on the front lines, you're like, I don't think anyone's really asking for this. [14:40] Nate Moody: Well, and then they show these stats that say, well, I'm transitioning over to managed accounts because the other thing that's on my Mount Rushmore hate list is they say it as if it boosts engagement. And yet they never actually show the statistics that it's likely the people that are more engaged are the ones that are more likely to actually opt into a managed account. Correlation does not imply causation. And yet they show these statistics because they know they can't prove through performance that they actually outperform target date funds. And so they sort of now they're backing up into, oh well, it increases participant behavior and it's a substitute for education. So I'm skeptical of anything that comes from a product based or fun company based approach as opposed to from the actual plan sponsor advisor relationship. [15:31] Chad: Here's my take. Go ahead, John. [15:33] Justin: I was just going to say, I think what we're seeing as a whole specific to the lifetime income and the different suites of services we've seen pushed into the space recently is that most businesses are looking and saying we have access to workers. Workers tend to stick around for a long time, but when they leave, we need to continue to make money. And so how can we get them from the start of investment? Through the decumulation and use of that asset that they grew over those years. And access is a component of that now. This division of Great Gray has access to these people who will probably get rollover dollars when people retire and an avenue for retaining more of those dollars inside their collective investment trust. So we're going to see it start to finish. [16:17] Chad: Let me piggyback on that. I think it's that and it's worse, it's greed. It's. They saw the success that target date funds had where they're able to get this massive market share through target date funds and they're looking for the next vehicle to do that. Like, how can we take our captured audience and find a way to make more money from them? And they sit in their conference rooms and they figure out they develop a product just for that. Instead of asking like, what do our clients need, our participants need, what can we force them into or can make a lot of money and justify it. Nate, you look like you have a final thought. Close us out on this. [16:59] Nate Moody: Well, I think, and again, this is probably somewhat related to when we get to the return of investment of an advisory practice is we do it to ourselves where we just condition our plan sponsors to think about price and price alone. And so we work all of the margin out of every single offering that's within a qualified plan. And these fund companies just move to the next higher margin item and the next higher margin item. That's why you see this huge push to try to monetize either the plan sponsor or the participant. And actually I kind of disagree with you Chad, partially because I believe this is a play towards retirement plan assets never leaving qualified plans or leaving at a significantly lower rate than what they have historically. Whether it's the DOL fiduciary rule or not, at some point it's going to become harder and harder to justify the Edward Jones advisor charging 150, you know, basis points to roll that money, you can say bips. Yeah, to roll the money out of, you know, a qualified plan that's all in at 20 basis points. And so there's a huge war over qualified plans. It's everything from digital record keepers to collective investment trust companies to John Hancock partnered with Vestwell. It's this massive war over plan sponsor assets. And how are we going to then be able to monetize those assets? Because they're not going to flow into individual retirement accounts for these asset under management gatherers that we've seen in the past. [18:31] Justin: The only fight with you there, and I'm not disagreeing with concepts that you're pushing out, what I am disagreeing with is that this is an employer sponsored plan business and the liability that exists for an employer to allow a terminated or a retired participant leave their assets in the plan is not something any of them want. And so unless something changes there, I don't think we're going to see a big change in assets remaining in plans. What I do see is Great Gray and others and this is what I was typing to Todd to a comment earlier. I never hit send on it. Sorry Todd, but comment being I think the investment companies are finally realizing the advisors are retaining these assets and we get access to these, these, these assets when it's in the plan, but then when it leaves the plan it's not staying with us as an, as an advisor or as an investment company. How can we hold onto those assets? The only way to hold onto those assets now is to get the advisors to continue to use your funds inside the individual retirement account or the distribution afterwards. And so that's why they're gonna buy these relationships. [19:35] Chad: Yeah, Chad, I think they're truly looking at that. But I. I would agree with Nate that I feel like that's maybe next level. I think right now they're just trying to game the system again. Like, how can we just make some money off this? But you're probably right. In the future they would like, they're [19:52] Justin: thinking about step two and step three as well, but. Yeah, for sure. Yeah. [19:56] Chad: They haven't gotten there yet. They haven't actually made an all in push on let's keep assets in 401k plans forever yet. That's. You might be right, Chad. You're no Nostradamus. That. That might be the next. Next next thing. But right now I think this is a play on, hey, how do we cash in the same way we did on target date funds. And they're thinking. It seems to me they're all thinking like, okay, let's create this guaranteed income type of thing. All right. Just as fun. Let's go to. To the next subject. [20:30] JD: That only took 22 minutes for our first headline. That's not bad. [20:34] Chad: Well, you know what, Rogue Guy, you know what, Rob Guy, thank God we all have you here to keep us on course with that kind of shit. You're kind of like my wife when she's sitting shotgun and I'm driving across the country and she lets me know like when I need to slow down or when I'm verging to the right or to the left. She just came in and looked at me. [20:54] Nate Moody: I like worst case scenario, we can just cut drunk stock tips. Nobody likes that segment anyways. [21:01] Justin: That'd be fighting words even with me. [21:03] Chad: Current score. Rope Guy one, Booty two. Rope Guy one. No, you can't use the same sign. Rob Guy. I'm sorry. I wish it works. I mean, maybe you could, but the timing was off. I just. [21:18] JD: I just. I can't say it. But if I hold this up, it. It says it for me. [21:24] Chad: Okay, here's almost as good. I got a LinkedIn private message from someone who I will not name because I don't. They didn't tell me I could, but they said, hey, and this is a pretty big up person in our industry. And they said that. And I will name this company they said that Future Plan, which we all know Future Plan is the a census, third party administrator kind of aggregator who, you know, as much as I might disagree or not disagree with some of the they've done like they've got a good finger on the pulse of right now as a fairly national third party administrator. They said that they have been making $2 million a year in revenue fixing the disruptors mistakes. This is guideline human interests, etc. Etc. It. It made me realize an old story that I've told on the show once before. One of those disruptors came to me many years ago when they were kind of first having success and they came to me as a third party administrator owner in the Silicon Valley and said hey, we're killing it. We're bringing in all these plans. Love you Samson. And, and. And they said hey, we're having some struggles doing some of the work. We're getting a lot more phone calls than we had anticipated, a lot more emails than we anticipated around. I'll drink ADP test, ACP task, etc. Oh, is that something? [23:12] Justin: Is it Marco's one as well for chat bar. [23:15] Chad: Okay. And, and so anyways, we're struggling. We thought we could code all this. We didn't realize we're going to get this influx of inquiries from our clients. And so we would like to hire your firm JD to do the compliance work. We want to outsource it to you. And I thought I was about to buy a third and fourth Lambo. Like I was like fucking A, let's go. You know, like I will part. I'll partner with these motherfuckers. Like I don't care. And so I talked them through it and I'm like yes, we could do that. Of course I can add the staff. I can handle any kind of inflow you have. And then it got down to brass tax, it got down to price and they wanted to pay me $500 per plan to do it. And that was at the time in my life I was like. And maybe that doesn't shock anyone out there, but for me I was like okay, conversation's over. Like I can't. There's no way I could do that for $500 per year on a plan. And I said sorry, that's a joke. Like I'm not upset at you, but we can't continue this conversation and it's too cheap and hung up. So to back up this person I just wrote me are guideline human interest according to a census slash feature plan. They are so bad at compliance work that is hitting the fan and other people are having to fix it. Buzz in like Jeopardy Moody or Chad. Who wants to answer first? Is this a. Is this a truth? [24:53] Justin: I'm hitting my buzzer. [24:54] Nate Moody: It. [24:54] Chad: I'll give it to Chad. It. [24:56] Justin: So yes, it Absolutely is the truth. But. And I think we've been saying this for years and it's a made up statistic, but about 70% of the plans we take over have operational errors. The problem with a lot of what's coming or what's happening at these disruptors is that nobody knows the plans fucked up yet. It hasn't been caught. Like it's operating over there and things are fine. And then they go to move and the hood's lifted up and people are like, oh, geez, you did what you classified employees? [25:24] JD: How. [25:24] Chad: Sorry, can I clarify? You mean moving from the disruptor somewhere else and these things are unearthed? [25:30] Justin: Okay, yes. I mean we're talking about what is already unearthed and has come over to future plan. And they're talking about $2 million in fixing plans. The crazy thing is that's only 8% of what's over there at these disruptors. [25:44] Chad: What you're saying is who knows what skeletons are in the closet right now? [25:47] Justin: Right, right, right. And I had this conversation the other day. I think what the disruptors as a whole are trying to do is meaningful to our space. They're telling us to evolve as a whole. The record keeping community, the compliance community. We have to evolve, get better, embrace technology, pay attention to what consumer wants instead of just doing what we've always done. They have. What they have failed to do is understand that there's complexities in our space that require a human, that require understanding that cannot just be coded. You can't depend on a human resources person to complete a census correctly. And they have said, we don't care. That's not our responsibility. Our responsibility is take the data you provide us, shove it into a system and spit out results in that atmosphere. Yeah, J.D. they suck. And there's a lot of mistakes and errors within that work. [26:46] Chad: Nate, have you ever gotten into that frame of mind where as an advisor where you looked at 401k plans? It's probably earlier in your career and you thought, what the, like you got a document, census comes in, you look at the census, you run the testing. There's rules to that. You pump out the results, like file A5500, like, what's the big deal? You know, and, and, and, and, and how do you feel about that now? Do you understand more of the nuance where the shit goes off the rails? [27:16] Nate Moody: Well, I think per usual, Chad hit it on the nail on the head. I think it comes down to the quality of the data that the record keepers and the administrators are receiving. If you don't have somebody there that has a pulse that knows when there's 90 employees. And for some reason the system's telling you 85 of them are excludable. And. And the testing miraculously passes. They don't have somebody that steps back and says, wait a minute, this doesn't really make sense. I don't understand why the digital record keepers get such a pass for basically just being paychecks in automated data processor in a different robe. I'll take rogue guy because it's literally the exact same example. We take over plans from paychecks all the time. And the testing will be absolutely. [28:03] Justin: What the was that? [28:04] JD: What was that? [28:05] Chad: He was trying to. He was trying to give an. He's trying to get another point, but I'm not going to give him a point for that. [28:10] JD: That was a ricochet. [28:12] Nate Moody: That wasn't an insult. It was just under another robe. [28:15] Chad: That was a clank, clank off the [28:17] Nate Moody: ring like a hat tip. And I think the other point that again, Chad has made in a prior episode before is we were working with a prospect once, a good example, and I walked them through an entire record keeper request for proposal. We looked at several different record keepers. We're going to go unbundled with a third party administrator. And they asked us about the timeline, and we said usually about 60 days start to finish. That includes designing the plan, selecting your provisions, picking the investments, building the infrastructure. And then all of a sudden they went ghost on us. And I checked back in like a month or two later, and they said they ended up going with human interest because they set up a plan. They set up a plan in a week. And then. [29:01] JD: Can you hold on, Nate, can you say interest one more time? [29:06] Nate Moody: Human interest. All right, please don't interrupt. [29:13] JD: It weird the first time your New Hampshire came out. [29:18] Chad: Continue on, Moody. [29:19] Nate Moody: Don't we get to the end of the year? They reach back out because they're hit with a massive true up at the end of the year because compensation was based on the entire plan year, not when employees were actually eligible. And they had no idea they had agreed upon that or what the implication was. This is a startup company. They hired a ton of people throughout the year. And so it just comes back to, yes, okay, you can set up the plan in 15 minutes, but what the heck are these plan sponsors agreeing to? Are they educated on the implications of what they're agreeing to? And then finally, do they know that the data they're sending to that record keeper is actually clean and accurate? Because compliance in and of itself is somewhat formulaic, but only to the extent that you're getting perfectly clean data, which never happens because people mess things up and payroll gets fucked up all the time. [30:07] Chad: I, I like your comments around data and I may challenge you a little bit, but. But I'm in a sense not challenging you. But just clean data can fix it too. But I think you made some comments there which I think are. Are important. The Silicon Valley coder types, the entrepreneurs of Silicon Valley think that they can just look at a problem, kind of see the assembly line, code it and, and make a product and crush it because they've seen that work so many times. And I think what they failed to understand is that when you have an employer slash plan sponsor that has a 401k plan or anything similar under the rules of ERISA. I'll drink, but let me finish my thought. These things come up in the day to day, like nuanced situations like we hired this person and we fired them, then we rehired them and they were eligible, but they weren't. And trust me, as someone who runs a company that's got, you know, a thousand plus lands, it bothers the out of me. Like, I wish it worked like a simple assembly line, but it's not just technology. It's also, dare I say, I'm so sorry to any of my clients that watch this on YouTube, the stupidity of your clients at times. Not stupidity, JD. [31:37] JD: The. [31:37] Chad: The lack of experience or knowledge around how a 4.1k plan works. They're making widgets. They don't get it. And I love that meme. And, and so the Silicon Valley coders that developed these disruptors clearly did not understand that and that that was what preface the call they made to me back in the day to kind of do the work. And what has prefaced the private message I got from a big person in this industry saying fuck, I think they're really fucking up at this. And, and I liked Moody that you brought up the payroll companies because Shannon S words also brought. Or someone did in the chat bar brought up. This is kind of similar to the payroll companies. That's fine, but. Oh, that's right. But the person in the chat bar said. But at least they kind of fucking get it. Like, which is true. Like the payroll companies suck, but at least they, they kind of have qualified people there that fucking understand what they're doing. Some of these disruptors have literally hired outside of our industry with a bunch of people that have no idea what the fuck they're doing. Yes, Chad, go ahead. [32:42] Justin: That's part of the problem right there. And Hackler said it to people that know what they're doing. I think in my interactions with a few of the, the disruptors, I know we're not trying to sling names, but in my interactions with them, you have two things that happen constantly. One is they design a plan up front that on the back end they don't know how to administer. I mean, I'll make it very simple, right? They create a cross tested profit sharing allocation to try to get more money to owners. And that's fine in the consultation, but when it comes time to running the plan, the person that is supposed to be back there or the technology that's doing that calculation has no idea what levers do what. And the results never come out in a favorable fashion. They never come out, I'll say, in a, in a truly efficient fashion. So that's one issue. I continue to see the design plans that they actually don't know how to administer. And on the second end, let's be quite honest, if they have a good consultant, if they have someone good at the helm that can, that can do the work, they don't stay in that role for more than three fricking months. They're promoted and gone somewhere, they've taken a job somewhere else. And so there's this constant door of churning of people trying to cut their teeth or just get a paycheck that have no idea what, what ERISA even means. [33:59] Chad: Go ahead, Nate. [34:01] Nate Moody: So can I kind of call out the third party administrator industry as a whole? So in my mind you partly brought this onto yourself and you did it for two reasons. One is technology and I think that's the easy answer. But the second is, and this is a trend we've seen, so we have, we work with over 250 retirement plans and I would say more than half of them are unbundled with a third party administrator. And it used to be the case that any small plan, or any plan that we felt like needed hand holding, needed white glove service, we would go unbundled, no question. And for some reason I feel like the entire third party administrator industry, in response to record keepers building out more bundled capabilities, is to focus more and more on compliance. We want to be your cash balance, we want to be your new comparability, your hyper experts. And they've stepped away from service, which is by far what is in the highest amount of demand amongst our plan sponsored clients. Because the record keeper service is so bad, and this might be anecdotal just based on our geographical region we've experienced [35:15] Chad: it could be your area, but Johnny, go right to you. It could be your area. But I started to hate you in the beginning of that. But then you saved yourself. You totally redeemed yourself. Yeah, yeah, I totally get what you're saying. So go ahead Jack, because you love what he said at the end. [35:29] Justin: I thought you were going a different direction and I was going to agree with you. I'm going to say I disagree with you as a whole. From the third party administrative community, what actually happened is that we had to find a way to be more efficient, to compete on a margin and cost perspective with the new third party administrators that were coming in and doing shit work and saying they were going to do the same stuff we do. And for the bundled providers coming in and doing shit work and saying. But they're saying it and people will buy it. So what happens is the administrator community, they, they, they had to condense the service side to be more efficient. It's not that we want to be specialists, we don't want it. We're not profitable on these super difficult five business multi control group five payroll feed type businesses. We're profitable on a safe harbor match plan. And so what. What we all did is we didn't increase our costs at the rate in which we should have to win business. And if you don't increase your costs and your overhead continues to climb, usually what ends up happening is service starts to fall, you don't employ enough people. [36:37] Chad: I also want to be very clear, [36:38] Nate Moody: that's exactly the argument I'm trying to make Chad, is that instead of increasing fees at a time when people would be willing to pay for additional service, we're seeing it all the time. On the advisor side, these bolt on 338, 321 that say this is all you need to run a successful plan. And we get pushed the same exact way and now we're starting to get it from benefits brokers who will come in, give away the retirement plan and then they'll just unload all of their other high margin product lines on our employer clients where they can undercut and subsidize the retirement plan fees. But our clients, I should say our clients, I think there are clients out there that are willing to pay higher fees. Touch service. And it's true for the third party administrator in particular. [37:20] Justin: And let me make one more point JD and then let me kick it to you Nate. The, the truth, and I think everybody here has heard me say this so many times, perception Is reality for a client and the perception they have of us is not are we doing great work? Not are we positioning cash balance not as is our profit sharing allocation, the best it can be. It's about, did you answer the phone? Did you respond in a clear and precise way? Did you respond quickly to emails? That's what we can control as a community. That's what we have to get better at. Because the commodity is the work, the output of work. [37:57] Chad: So then Moody agrees with that. That was Moody's point, was to. To focus on service. But I need to be very clear too Moody, because I think TPA is for the lot. Well, I know for the last 50 years. Oh, damn. Okay, I'll drink for that. Let me finish this because obviously everyone knows out there, I took over my father's company and there's a lot of third party administrators in the chat bar. That was their brochure for the last 40 years. 50 years was we are better at service. And we got beat up by that because financial advisors honestly didn't give a. They wanted lower cost, more efficient, whatever. And so I think that was very much a 70s, 80s, 90s type of play. And it kind of worked back then of like, well, we're just better service. And I know Shannon Esser is here. White Glove is, is her big thing. I've seen her do a lot of. And God bless the third party administrators that are doing that. I think at our firm, just to be candid and transparent, we see ourselves more competing with bundled and saying like, okay, how can we compete with the bundled and disruptors and how can create a more efficient model that works? Well, because in my mind, everyone's, everyone, all those vendors I just mentioned still have to do compliance. So if you're a bundle record keeper or you're a disruptor, you still got to do all the compliance work. So you're really no different than we are. And so the question is, is, can we do it better than they do it now? I agree with you. If you can up the service model, that's great. But at the same time, you're dealing with this like this, this race to the bottom, this push for lower fees. So I think if you're intelligent, it's got to be a balance and you might be the exception to the rule. Moody, who's saying like, my clients will pay more for this, this or that. But when you're Chad, Mark, Justin, Devin, our team running out there, you're running into a lot of advisors who are like, yeah, but I could just fucking Put over here for nothing. And so we're kind of forced to [40:07] Justin: find a more efficient over here is saying all the same things because it's a salesperson that doesn't care if the plan sticks. They're going to be with another company in tears anyway. So they're saying we've got great service, we're white glove. This is our response time. We know what we're doing. We all know that that's not true. But, but the advisor, the client really doesn't. And so they continue to push it. [40:31] Chad: Nate, I think if a third party administrator right now spends the next 10 years of their life trying to say that customer service is their X factor, they'll go out of business, they won't compete and they'll get Nate's. [40:49] Justin: Let's be honest though, let's be honest with that. They'll get the Nates. They'll get some advisors that care, that pay attention, that this is a focal point of their business. What they won't get is the volume. And the fact of the matter is 70% of plans are still sold by advisors that will do three to five plans in their career. [41:06] Chad: Nate, when I say that like, how does that make you feel? How do you respond to that? [41:10] Nate Moody: I think the point you made that I wholeheartedly agree with is that a lot of this stems from the advisor community. And one of the easiest, lowest hanging fruits for advisor to be able to show value is, is to hammer the other service providers on fees. And it's just, hey, look how much I saved you on your third party administrator. Hey, look how much I saved you on record keepers. And now we turn around and bitch and moan that you guys don't service and we have to pick up the slack on the service. But this entire time we've been both conditioning the client to think about fees and fees alone and we've been selecting the lowest cost provider. So I wholeheartedly acknowledge the advisor's role in leading to this outcome. How do we solve it? I think is a combination probably of the two and meeting somewhere in the middle. [41:53] Chad: Yeah, go. What I know you are talking about everything that Chad and Shannon is here tonight and some others have been working very hard at with the American Retirement association to kind of connect the national association of Plan Advisors and aspa because I'm not going to. I'm too drunk to think of that one. So I'll drink and get them together so they can each understand each other's value. But I'll simplify it all that all the good Vibes between all those things. If you run a business, whether you're an advisor or whether you're an administrator, you got to make decisions that will make your company the right decision for the people you're looking to buy your product. And we want advisors to buy our product. So our cons. Not plan sponsors. I mean, kind of, sort of, but mostly advisors. And so we want to build our product in a way that most advisors say, yeah, that fucking works for me. And I think a lot of advisors say, I want you to do a good job bordering towards slightly great, but I also want it to fucking be affordable. And so it's. It's a paradox. It's a tough thing, but, you know, it's fine. I'm not losing sleep over it. And I'm mostly wondering, do I change the lime green Lambo to, like, a purple, or does that make me, like, feminine in some way? Because when lime green, I feel manly in a weird way. But if purple could be weird. Let's spin the wheel of Ice, Brandon, shall we? [43:36] Justin: I hope it lands on Justin. [43:40] JD: Did Brandon take him out? [43:43] Justin: You can't even see it. Brandon's Internet so bad. [43:46] Nate Moody: Drink for Justin. [43:48] Chad: It's on Chad. It's on, Chad. [43:52] JD: JD focus. [43:54] Chad: I'm drinking. Okay, I'm drinking. [43:59] Justin: I'll join you, jd, I'll join you. [44:01] JD: Let's all do it. We'll all do it. We'll all do it for Justin. [44:04] Nate Moody: A string for Silent J. He's my biggest supporter. I love you, Jay. [44:09] Chad: Damn. All right, Nate, As I drink my smear off, you are doing a presentation at the national association of Plan Advisers 401k summit with some other people, two others. I can't zoom in on it. My ad is too bad. The title, profits abilities, improving your practice profitability. We're talking about return on investment for financial advisors. What is this presentation about? Our retirement plan advisors making enough money. Do they have good profit margins? Do they not have enough? Like. Like, let's kick this off, and I'm going to pound this. You. You kick us off. [44:55] Nate Moody: I think the conversation is, how do you create profit margin in a retirement plan advisory specialist firm? And I think, candidly, the short answer is, you kind of don't. You have to have some other form of revenue that's tied to your relationship on the plan. And I think there's different ways to go about it. Some that are more predatory, some that are more organic. But I think it's increasingly difficult to do. And I think the ones that are successful do it at the expense of their clients. And what I mean by that is whether it's a pooled employer plan, an advisor manager account, or any of this other bullshit that they lie and say is improving participant outcomes but is actually trying to create efficiencies for the advisors themselves to create profitability as opposed to just charging what they should or finding ways that they can continue to add value to that employer or to the participants. So that's my spiel and I'm going up against. Going up against. That's the way I view it. It's a panel. My other panelists are somebody who's tied to a benefits broker and sage view, which again very, very interesting in different models from a. Rodney. [46:03] Chad: Rodney Kaufman. Rodney Kaufman. [46:06] Nate Moody: Correct. [46:08] Chad: So, okay. So can I ask you. You just said something caught me off guard. You said that you don't think a retirement plan advisor only firm can crush it. Not enough revenue. [46:23] Nate Moody: I think I. I guess it depends on your definition of crush it. And I guess nobody's in the retirement plan business to drive Lambos. Most of the people that are in it is because they're actually care about helping the employees at the companies they're working with leveraging the retirement plan. That is true. That is the truth. Because. [46:44] Chad: Hey name. I just want you to know I'm on your but. You just really made me feel like an but. [46:50] JD: Hey buddy, not everyone lives in Maine. [46:54] Chad: All right. [46:54] JD: Just gonna say that that's. [46:57] Nate Moody: I don't know. That's why we do it. I think that's advisors because most retirement plan advisors are smart enough and I [47:04] JD: recycle because I care about more money. [47:08] Nate Moody: Yeah. When I'm talking about the opportunity cost of an advisor's time Mark. And if you're going to spend it on retirement plans, you're probably talented enough to be able to do it on the individual side or where the margins are significantly better. So you have to be a special type of crazy to work on retirement plans. And there has to be some sort of higher meaning that or you're just a status and you just would prefer to make money work. [47:27] Chad: Dude, can I stop there? Sorry. Go. Chad, I've been talking. Go. [47:32] Justin: No, no, no. Go, go, go, go. [47:34] Chad: I'm caught off guard by that because I have my visuals on my perspective on retirement plan advisors obviously. But I all. A lot of those guys do both. Guys and girls do both. And I feel like this high stress comes from the wealth management where people are coming to you with millions of dollars. They want you investment invest with them. They have like weird goals that they think you're going to accomplish. And so when stock markets go up, go down, you're the fall guy. They want to know, like, why do we make these poor, poor decisions? Where I feel like in 401k plans, the committees on the, at these plan sponsors, these players, understand that they're not worried about the market's ups and downs. They just want you to do prudent things, smart things, in the best interest of the participants, and you're not trying to pick the stock or the investment or tell them exactly what to do. So I would say 401k is far less stress than investment management and private wealth. And you're shaking your head no. And you would be right if you're. Because I don't know what the fuck I'm talking about. [48:44] Nate Moody: I guess stress is a relative term. I reference work. I think it's more work on the retirement plan side stress, maybe on the individual, because you're dealing with things that sometimes are more personal for a particular person. And so there's more emotions involved than you might with a plan sponsor dealing with their retirement plan. But I think I would say objectively, but I guess because I'm saying it's inherently subjective, that 401k plans are significantly more work than individual relationship. [49:13] Chad: Nate, Nate, Nate Moody. How much work is it for me as a registered rep, to sell a 401k plan with Chad and my local Voya rep? It's 2 million bucks. I put it in place. I take a 50 basis point, your wrap fee, you know, and I don't do shit. That's a piece of cake. Like, why is that hard? Like, I never even have to check in or do anything. And five years goes by, seven years goes by, and I make money. Like, what are you talking about? I'm confused. [49:48] Nate Moody: I guess we were operating under the assumption of advisors that are good and care about their work and want their participants to be successful. But you're right. If you're a shitbag, then yes, it probably could be a pretty easy job. So that's how you get Lambos. Apparently. [50:05] Chad: He's not talking about me. [50:07] Nate Moody: That's why our service is down, okay? [50:12] Chad: Clients, we actually have job that we. Go ahead. [50:23] Justin: I, I, I was just gonna say that we are talking about advisors. Nate, your point was about advisors that, that specialize in the space, trying to make a business, a successful business out of just doing the advisory work. And I get it. What you're saying is you need to be more than just a retirement plan advisor in order to create profitability in your practice because you can't have enough margin on the plan itself and run that a successful business. Now those that I have seen that are just retirement plan advisors that are very good at what they do and make a fair amount of money, the only reason they're not doing private wealth is because that is a referral source for them. They're getting fed opportunities by these private wealth advisors that are stumbling into the 401k by these group health advisors that want the group health on the back end so they don't do the ancillary services. They just do the retirement plan space because they're getting fed enough business to, to make the retirement plan space profitable for them. Those that don't have that, that are trying to hunt on their own because margins have been squeezed. You guys are in the same boat. The third party administrators are in that we talked about. And JD just made the perfect point for it. Nate Moody is going to come in and say, I will do this, this, this and this. Here's my track record. I do it for a ton of plans and I'm going to charge 50 basis points. And the guy or gal down the road is going to come in and say, I do this, this, this and this. They're not going to tell them that they only have one plan and they're going to say I charge 50 basis points. And the consumer is going to look and say, well Nate, this guy said the same thing and I'm only going to charge, it's going to be the same 50 basis points. So Nate's either got to charge more or he's got to create efficiency. [52:07] Chad: I had a small epiphany that I think backs up Nate. We hear about all these big retirement plan only firms that make a ton of cash, like they sell, they, they people acquire them, right? Oh no, my Internet went down. [52:24] JD: So you're good now. You're good now. You're good now. [52:27] Chad: We hear about these big retirement plan firms that only do retirement plan and people buy them for large sums of money. I think what Nate was saying is that every guy or girl, the average guy or girl that does business, it makes a lot more sense for them because they're not this massive firm selling all across the west coast doing retirement plans. They got to make money and it makes more sense for them to maximize their profits from their clients and do multiple things. And also we've talked about that on the show before. And so. [53:00] Speaker E: Oh, oh, oh, oh. [53:03] Justin: O'Reilly Auto Parts. [53:06] Nate Moody: I thought that was on purpose. [53:10] Chad: I apologize. [53:12] JD: Let me show you my old face. [53:18] Chad: I apologize. [53:21] Nate Moody: You set those my room. [53:23] Chad: God damn. [53:25] Justin: Jd, you're back. [53:27] Chad: Oh my God. [53:27] Nate Moody: Well, can I jump in then? J.D. [53:29] Chad: real quick? Yes, go, go. [53:31] Nate Moody: These aggregators are not buying these retirement plan advisory shops for their retirement plan business. They're buying it for the access to the employer and to the participants. They're not buying it because retirement plan advisories all of a sudden this like very profitable, stable business. They're doing it because there's other more profitable lines of business they can un load onto their unsuspecting clients that they built this level of trust to this fiduciary message we, we tell. So it's, it's. They're not buying it because it's a profitable business. [54:05] Justin: You've heard us talk about it. Moody. I'm a firm believer that if the right effort, healthy effort is put in to support that participant that might need a 529, that might need long term care for a parent that might need something that they're not going to get elsewhere. I love an advisor practice or a team that can bring those services to them. What I don't like to think about is a participant being sold something that they don't need because an advisor has access or a record keeper has access to that relationship. But the average American is going to do the vast majority of their investing their savings inside this company sponsored plan. And we don't know what is right for them. We don't know if they have massive credit card debt. We don't know if they need a 529 because their kids are going to go to college. The truth is, if we did know, I would hope as a community we would guide them down the right path. That's where I think we, we should be going. I think advisors can create profitability with other lines of service. To your point, the return on investment side can't just be on the 401k. The 401k needs to be more of a holistic relationship for these participants because they're not getting it elsewhere. [55:19] Chad: All right, all right, here comes the old guy to just kind of button this up. That's me. 20 years ago, if you sold 401k plans and you said that, and most people know this, but if you said you're an advisor and you said you want to sell those participants other things or your plan sponsor other things, you're ostracized like it was, it was not a good look. They didn't like it. Those times have changed. Nate Moody's Right. Chad's right. And. And Mark is leading in the score over Moody right now. Three to one. Yes. We are in the. The day of convergence, whether it's big convergence or little convergence or somewhere in between. So I totally, totally agree. I've made that point on this. On this show before, so. Yeah. But also I do think that. Yes, go on. [56:19] Nate Moody: Are we going to get to the Employee Retirement Income Security Act Advisory Council? Because that. [56:25] Chad: That's next. Okay, I like that we're going. We're going there next, but I just. I just want everyone to know that convergence is dope, but I think Nate brought this up on a local scheme. You gotta look at what you're doing and how that might be different, and it's different for everyone. So we'll touch on it again. But, Nate, we're not going to go straight to that because I know that you like making money because everybody does. Really. And if you're smart, when you want to make money, you look to the people who actually, like, know what's going on. You know what I mean? Like, there's certain people in this world, you've got. Elon Musk is a freak. Whatever your political beliefs are out there, he's a freak. He's a genius. You got Warren Buffett, that guy. I think most people say a genius, but when it comes to stock markets, there's really only one. That's the goat. All drink for that. And that's rogue guy. This drug. This one's really easy. Ro guy. This one's really easy. I'm do something different. [58:01] JD: Keep. Let's keep it easy. Yeah. [58:02] Chad: We've never done this. We've never done this. Oh, I say it's easy. It's easier for us. It's not easy for you. We've never done this. The Dow Jones Industrial Average has been in a. Here, we say, you know, a fall plummet over the last few days in March, in early March, March 3, it was at a high of $44,000 or just under. Don't get. Don't get nerdy, guys. Don't get on the details with me. And today it closed at 42. 579. That's a loss of like 3%. You see it in the news. Stock market is falling. Some people talk about Trump's terrorists, and those are the reason. That's. It's. You know, that could be very accurate, maybe. Or the perspective. Robbie's shaking. I don't know. But, Roby, we usually ask you about a ticker. We ask you about a Stock today. We're a country in need. We're a world in need. We're asking you about the Dow Jones Industrial Average. Is this something we should be investing in or not? Is it gonna continue to plummet because of the evil orange president, or is it going to sky through the roof because of this great new president we have that's doing things like. Like, what is the stock market going to do? Rogue guy, Tell us. [59:39] JD: Well, I. I think if you listen to any tick tock financial professional or any. Any article you read out there, the stock market's about to crash, y'. All. It's. It's going to crash. It. Doomsday is here. Everybody get your toilet paper and canned goods, head down to your bunker and hide. That's all we can do, right? Unless you're like Chad, and I'm assuming because they seem like they're lost, long lost brothers with Nate bought all your crypto and Bitcoin, you're going to go down to your mind and figure all that out and somehow make money off of it. Then you're okay. But if you're like the rest of us and you're just. [1:00:21] Chad: By the way, how do you cash. How do you cash in. In your. How do you cash in on your crypto when you're done in your, like, doomsday bunker? [1:00:28] JD: Yeah, no, it's. It's very simple, J.D. [1:00:31] Justin: just. [1:00:31] JD: You just. You just mine for it or something, and then money just, like, pops out. I think you go to the Mario World and, like, you get coins. And I think that's how it works. I'm not really. I'm not up to date on all that, so. [1:00:44] Chad: Robbie, Robbie, Robbie. [1:00:46] Speaker E: In. [1:00:46] Chad: In all. In all seriousness. In all seriousness. [1:00:49] Nate Moody: Yeah. [1:00:49] Chad: And I know this is. [1:00:50] JD: Yeah. [1:00:51] Chad: A very serious. [1:00:52] JD: I don't know how to answer your question other than One way, J.D. [1:00:56] Chad: you say you're saying stock markets going down. [1:01:00] JD: No, because that's what all the naysayers would say. But I'm not a naysayer, all right? When I start something, I finish it. All right? I can give you some more cliche, cool quotes, but I don't have any because I'm not that good at pulling stuff out of my brain that fast. [1:01:20] Chad: That's pretty good. [1:01:22] JD: But I'm gonna say just. [1:01:23] Chad: Greg Greenfield says you're bullish. Oh, yeah. [1:01:27] JD: If that's. If that means to. To buy, then, yeah, I'm in. [1:01:30] Chad: Bye, all. Can I back you. Can I back you up to give everyone a little perspective? And then we'll get Nate Moody's input as a financial advisor, a little perspective. The Dow was just over 32k in October of 2023. There's been some time since 2023 and obviously I'm picking a low at that, at that little period. And so that was quite a while ago. Today it closed at 42, 579. So, so literally in October of 2023, it was at 32k and now it's at 42k plus. So like when people, when I look at the news and they're like, oh, the stock market's down, I'm like, really? Is it down? Like, it seems to be up to me. Let me take it a little further. And this is unfair. And Nate, Nate, you go next because I'm being like one of those people on like CNN or Fox now. So I'm going to tell you that in March of 2020, that's a bad date for me to choose because, yeah, that's when like a global pandemic was going to hit. But the Dow Jones industrial average was at 21K. Here we are now a few years later and it's at almost 43. Like, are people losing their shit about the last few days? Nate, what the is going on? [1:03:02] Nate Moody: I don't know. Market goes up, goes down. We get paid regardless. Doesn't matter. Those contributions are hate. [1:03:10] JD: I thought you didn't care about getting paid. I thought you didn't care about that, buddy. [1:03:17] Chad: He's so right though, for a new advisor that. Go, go Nate Gogum, if you want [1:03:24] Nate Moody: my honest reaction, it's yes, the market probably has nowhere to go but down. I mean, look at valuations, you look at volatility and I don't really view that as a bad thing. I guess if you're retiring tomorrow, yeah, you should be, you know, somewhat insulated if you're investing appropriately. Somewhere along the line, since 0809, we felt like any single market correction is like the worst thing in the world. What's the old quote? When the tide goes out, you see who's wearing a bathing suit and who's not, who's wearing a robe and who's not. [1:03:54] Justin: I think it's healthy. [1:03:56] Nate Moody: I think it's healthy for businesses that get overextended to be punished when they're irresponsible in a market drains. So I, I view it as a healthy part of the economy. Market will likely go down. But that's my viewpoint. [1:04:10] Chad: That's fair. [1:04:12] JD: I disagree. I disagree with the expert because yeah, [1:04:15] Chad: yeah, you just go moody. So the, the true talk to me about the market. [1:04:19] Nate Moody: 401k stylist. [1:04:23] Chad: I just, I just. Oh, okay. All right. We'll go three. Three. We'll go three. Three. He's claiming that you, you're not a [1:04:32] JD: stylish dresser coming from dude. [1:04:34] Chad: Because you wear a robe. And he was giving commentary in the markets which you don't. You just kind of pull out of your ass. So I'm gonna give that to him. I, I just. So three. Three. The Moody versus No, no. But I want people to be clear on is that the stock market is, is not a day to day thing. I think it's hilarious that we're in the news now talking about like, oh, look at this, look at this. It's like this has happened so many times in so many years and so many decades and like you can't look [1:05:12] JD: at a day a week, but that's Wi fi. [1:05:15] Justin: So. JD that's in part because we're in a business that is about long term investing and the rest of the world is not in a business that's about long term investing. And they're looking at their accounts daily, weekly, and they're freaking out when there is a pullback. And so we're sheltered to Nate's point. Like dollars are going to keep going into the plan. We're relatively recession proof business because people need it. Yeah, insulated is a perfect word for it. But the rest of the world is not in the same position we are in. And sequence of returns hurt them. And they're in a position, many of them, where they need this money. The baby boomers are in a retirement phase. This is super relevant even when it is a small pullback. Yes, it should not be freaked out over, but it needs to be addressed, talked about, discussed, so people don't make poor decisions. I'm going to just be clear here. [1:06:14] JD: No, no, no. J.D. Drunk stock tips. And this has become a panel of where's, what should I do? Like fair point. [1:06:26] Chad: Mark this. [1:06:27] Justin: Fair point. [1:06:27] JD: This does not count. This does not. This does not go on my record. [1:06:31] Nate Moody: Okay? [1:06:31] JD: This is, this is absolutely asinine. No, no. All right, can I resist segment. [1:06:39] Chad: Can I respond to Nate? Am I coming in clear right now? [1:06:43] Justin: Yes. [1:06:44] JD: Yeah. [1:06:45] Chad: Nate, the only reason my Wi fi sucks is because I'm in Texas thinking about buying a ranch. I want to buy a ranch. [1:06:56] Nate Moody: Keep telling me about that in your industry. [1:06:59] Chad: I literally toured ranches today to buy a ranch and I had to figure out where the might go. All right. This is why I was so sensitive to Chad's Midwest vibe. Because I'm thinking I might buy some cowboy boots at some point here. Like, might buy a ranch. No, no, I. I love Gucci. [1:07:21] JD: Probably sells them. Don't worry. [1:07:23] Chad: They do. I love all that. I love all that. There's a lot to unpack here. We. We probably have to have Nate come back at some point. No, no, no. [1:07:34] JD: Yeah, he's good. He's good. [1:07:36] Chad: He doesn't want to. Okay, last topic. Plan Advisor magazine. [1:07:44] Nate Moody: Hold on. [1:07:44] JD: Hey, if the show's not over. Sorry. [1:07:48] Chad: No, it's not. It's not over. [1:07:49] JD: I, I. I have to go, so. This is awkward. [1:07:53] Chad: Oh. Oh, go. Go then. Yeah. Rob guy, go ahead. Pimp your robe. Guy. Pimp your. [1:08:00] JD: I'm not gonna pimp anything. [1:08:02] Chad: I would just. [1:08:02] JD: I would like to say a couple of things before I go. If I get a vote for chat bar champion, it belongs to William Hackler. [1:08:11] Chad: Okay? [1:08:12] JD: That's number one. Number two is Nate. I don't. I don't want to like you, but you're a good dude. And I think that our little back and forth is. Is fun, but it's all in fun. [1:08:29] Chad: No cheese in them. Yeah. [1:08:31] JD: And so please, if I can just say anything. My sister needs a call back for her child support, so please give her a call back. All right. Dude, Jesus Christ. My niece is hurting. She. She needs clothes, bro. Like, come on. Bye, everybody. [1:08:46] Nate Moody: I love you. [1:08:47] Chad: Ro, I think you just left Robe Guy. I think won the Team Moody Team rob guy, he's up 4, 3 with that child support comment. And we'll talk about this last one. I want to talk about this last one, and then we'll head out. Little chat bar championship Plan Advisor magazine. The title of the article is secure 2.0 provision should boost advisor revenue in 2025. I never really stopped to think about this, and so Chad will have to go to Nate first. But, like, when you saw Secure 2.0 come out, you're like, oh, well, automatic enrollment mandatory for, like, startups and all these other things. Were you like, oh, this is great. This is gonna boost my revenue. And, and before you. Before you comment, let me give you this small paragraph from the article. And I love this. These articles and their stats. The survey found that approximately 2.2third of retirement plan advisors polled said they expected new provisions to boost their revenue by at least 1%. Dates. How excited would you be to boost your revenue by 1% next year? [1:10:15] Nate Moody: The. [1:10:15] Chad: The better 1%, the better. [1:10:19] Nate Moody: The better part of the paragraph was only 9%. Thought it would boost more than 10% yes. What the are we talking about? [1:10:28] Chad: Who's reviewing those stats when they put them in the article? [1:10:31] Nate Moody: It's so bad. It's so bad. So just disconnected from, like, what actually matters. [1:10:39] Chad: We could probably just leave it at that, but. [1:10:41] Justin: No, no, no, no. At least make a comment of what they're trying to. To say. Say here as a whole, which is forced automatic enrollment will. Will lead to higher contribution values, which will lead to more money in retirement plans, which will lead to more revenue. That. That as a general blanket statement is true. The same plan that we set up. And. And just from a. From a compliance side of things, Nate, and I'm sure you know this. I wrote for. For 15 years. I wrote a ton of Safe harbor match plans. I write almost no Safe harbor match plans now. [1:11:18] Nate Moody: It's Quacka, baby. [1:11:20] Justin: Yeah, go. You can drink twice for that one. [1:11:22] Chad: You don't want. You don't rate. You don't write quokkas, do you? [1:11:25] JD: Oh, yeah. [1:11:26] Justin: Oh, yeah. They're forced automatic enrollment, so we're writing a ton of them. [1:11:30] Nate Moody: You don't even have to deal with. Oh, it's great. [1:11:33] Justin: You go straight to 10. You go straight to 10 to avoid secure 2.0. [1:11:39] Chad: You guys are teaching the old man something right now. And I want to do this. Holy fuck. You're saying secure mandated automatic enrollments. I'm putting in startup plans. I'm going quokka because three and a half percent. [1:11:56] Nate Moody: You got your. [1:11:57] Chad: This is the shit we need to talk about on this show. [1:12:00] Nate Moody: Two years. [1:12:01] Justin: No, but both of you guys, in my opinion, are incorrect. With the automatic enrollment, you're going to see a 90% participation rate. So why go a 3.5% match. Go a 3% non elective. Get the 3% in auto, enroll at 10% so you don't have auto escalation issues. And now you set the owners up to do some additional profit sharing at no additional cost to the staff. So we're JD. You know this. We're writing a bunch of three and nines right now. 3% Quokka non elective. An extra 6% profit sharing for the business owners. Cost them nothing additional to the staff. We're doing a bunch of those right now. [1:12:42] Chad: We. If you. When you come across these nuggets, this should be like showpiece topics early on. [1:12:49] Justin: Nobody likes this nerdy stuff, though. [1:12:53] Chad: Mean nuggets like that. But thank you, Brandon. That was definitely a nugget. Okay, good. [1:13:02] Nate Moody: And can I just. Can I put a finer point on this conversation as well? I think for what little revenue would be increased as a result of more plans adding automatic enrollment is null and void as a result of the additional work we've had to take on to help our plan sponsors navigate adding the mandatory secure to I'll drink in a second. [1:13:24] Justin: Not drinking for that. [1:13:25] Nate Moody: The new provisions and understanding which record keeper is able to implement which optional and third party administrators doing what around self certification of hardships and all this I think is totally oh, an extra 2% of revenue because of the automatic enrollment. It's. It's. [1:13:42] Chad: That's. That's actually really intelligently put. Like it's a net net where you're losing on that. We. We should probably about Secure 2.0 More on this show. But when you talk about Secure 2.0 and you actually implement it with your clients, it's a show and they're probably gonna this up a lot and yeah, we should come back and talk about it more. But yeah, I totally agree with you. I totally agree with you. Moody. Moody. I. I was going to do a great game with you tonight. I was gonna do this brand new game where I was going to put up on the screen a few images. And so I want to try to play it right now as we end it out and then we'll do chapter Champion really quick. But I was going to put up a image of Wednesday from the Addams family, you know, her little dark, cold face. And I was going to put up an image of a. A ring with purple and aqua colors on it. Just someone's ring. And I was going to put him an image of a band that no one would know from the 80s or whatever. And I was going to say, Nate, what do these things have in common? What. What. What is the. The connecting line? And I can't ask you to do that now because you can't even see the images. But would you have a guess at that or no? No way. [1:15:15] Nate Moody: Ash Wednesday band. [1:15:17] Chad: Oh, got. What? [1:15:19] Nate Moody: Ash Wednesday. [1:15:20] Chad: No. Oh, good. Oh, I get the. The. The woman. Obviously we all know her Wednesday from whatever. And the. The ring would be a mood ring. And the band was going to be the Moody blues from the 80s. I was going to say that the [1:15:35] Nate Moody: vibe is classic joke. Classic joke. [1:15:37] Chad: It's moody. It's moody. But I just, you know, I was driving across a country and I won't comment on that and so that didn't work. So. Okay. All right, Chop. Our champion. Chad, your vote for chap. Our champion is. I don't give a. Stop. What? [1:15:54] Justin: It's Harlow. [1:15:56] Chad: Oh, Harlow. [1:15:58] Justin: Don't get Me, it was all positive comments all night, which. Which is a little rare, and I enjoyed the interaction. So it's Harlo for me. [1:16:05] Chad: H. Has Harlo won? Has he won? [1:16:11] Justin: I don't think so. [1:16:13] Chad: I would cuddle up next to him on a night he'd stab you for sure. [1:16:18] Nate Moody: Any relation to Jack? [1:16:20] Chad: All right, Moody. Moody, your votes. Chapter Champion. [1:16:24] Nate Moody: I felt like I actually gave a pretty good run for my own money in there, but I'm going to. [1:16:31] Chad: I like that. That'd be a movie. [1:16:32] Justin: It's a point for that against Mark, even though Mark's not here. [1:16:35] Nate Moody: That would complete my villain arc if I nominated myself first. I'm gonna go Greg Greenfield, actually. Nope. I take that back. Nope. I'm out on gg. I'm back in on Shannon Edwards. [1:16:51] Chad: We'll drink. And when you're in this atmosphere, we call her S Words. All right, Harlow. Jesus Christ, Harlow. I'm gonna go with Samson just because his guideline that he sticks to and he doesn't let go and he stays on that. So, Brandon, can you throw that in front of the audience? Those three, can you do that, Brandon? I don't know. I'm sure you can. Right, who do we have? Chad? He's got it. He's got it. He's got it. [1:17:28] Justin: J.D. what we ought to do is leave it in suspension so that people outside of the actual live feed on Zoom can vote, like, in the next two days. And we put it on LinkedIn. We let them vote over two days. And then. And then we. We announced chat bar, like on Friday or Saturday, something. [1:17:46] Chad: Chad, to your point, the live show gets a certain audience, but I need Nate to know. The Nate moody promotion on LinkedIn, like, blew up pretty big compared to a lot of people we have on the show, like, that had a lot of views, likes, etc. The winner of Chapter Champion tonight is Shannon S. Words, which I think is a phenomenal full circle early viewer. She showed up. Did she earn it tonight? Did she? Well, I can't. [1:18:24] Justin: She did. She was active. She even. She even stabbed at me a couple times when she's like, I respect you, but all right. [1:18:30] Chad: Yeah, all right, Nate Moody. I don't give a What anyone else on the show says. In my opinion, I might be tapping you as, like, on a serious, regular basis. I think you need to be on here. I think you need to. Yeah. People, you didn't. [1:18:54] Justin: You didn't even tap into the little bit that Nate and I have talked offline. The stuff that he's doing from a Marketing, like, the way his brain works is phenomenal. It's so much fun. [1:19:06] Chad: Oh, my God, I forgot something that I need to announce, and there's only a few people left here. Our next guest. Sorry, Nate. I was. I was telling you how much I love you. Our next guest in two weeks. Come on, jd, Find his name. Jesus Christ. [1:19:24] Justin: Oh, he's still coming, isn't he? [1:19:27] Chad: He is. [1:19:30] Justin: I'm giddy about it. [1:19:33] Chad: Chad, I can't find. I'm scrolling through my LinkedIn. Our next guest is Donald Trump's nomination for the Secretary of the ebsa. I will drink. [1:19:50] Justin: This is the oldest person, Arnowitz. Daniel Arnowitz. [1:19:55] Chad: This is. Could be if he's approved by, you know, the Senate or what if that. Am I getting that terminology right? This guy's at the top of the retirement plan food chain. We had the old one, Preston Rutledge. Not old in age, Preston, but old and whatever. Nate, are you hearing this? The person that Trump has nominated to run the ebsa. I'll drink. Is our next guest on the Retireholics in two weeks. [1:20:24] Justin: I thought for sure he'd back out, so I'm pumped that he wrote back. I was like, no, I'm sticking with it because when. When JD lined him up, he was not the next elect for the EDSA people. [1:20:35] Chad: What the. Okay, so. But beyond that, I'm sure Nate Moody will do a far superior job than that guy will. We'll see. Because Nate's a baller, A shot. [1:20:46] Justin: You're awesome, Nate. That was fun, man. [1:20:47] Chad: Yes, I say that all the time, but I honestly mean that, Nate, when I go to sleep tonight in this little Airbnb, I'll drink. I put my head on my pillow. I'm gonna think about you fondly. I'm gonna think about go tonight and everything I did. I mean, sometimes I get in a little fetal position and, like, I put my. My legs between my. My arms between my legs, you know, like. And I get all cozy like a little baby. And I'm gonna be thinking about Nate Mooney and. All right, can I. [1:21:27] Nate Moody: Can I say one last thing quickly? [1:21:29] Justin: No. [1:21:30] Chad: No, you can't. And the audience, we love you. Thank you for tuning in. We'll see you next time when the most powerful person retirement plan will be on this show. Yeah, Nate, go ahead. Say what you want to say. [1:21:45] Nate Moody: I'm not gonna both smoke up your ass, but you are by far the only industry and industry adjacent podcast that I've ever listened to and actually related to and agreed with and Even if I disagreed, I agreed with the logic for why you had your point. So much more than all these other cheeseball podcasts about scaling a 401k business and whatever it is about retirement plan compliance. So just for what it's worth, I. I appreciate you guys having us on and I appreciate you having this forum for nerds like us in the chat bar to be able to talk about things that I think actually relate to the day to day realities of people that are involved in the retirement plan industry and aren't just quote unquote, stewards of the industry. [1:22:30] Chad: God damn. [1:22:30] Justin: Appreciate that, Nate. You like even more now, J.D. [1:22:34] Chad: yeah, and now when I'm in a little fetal position, I'm going to get a little chubby. All right, let's play some music. Let's get the out of here. [1:22:43] Justin: Good night, guys. Good night, Nate. Thank you. [1:22:46] Chad: See you next time when we're Talking like Washington D.C. types. I'll drink. It's gonna be big time. [1:22:52] Nate Moody: Later. [1:22:53] Justin: See you guys. [1:22:56] Chad: Love you, everybody. Peace out. [1:23:04] Nate Moody: Ready? [1:23:05] Speaker E: Music. I was in your wet dream? Driving in the car, Saw you with the side of the the road? There's no one else around you? Touching yourself, touching yourself, touching your? Touching yourself, touching yourself? You said, baby, do you want to come home with me? I got Buffalo 66 Baby, do you want to come home with me? I've got Buffalo.