Record Keeper Switches & MVAs: Ellis, Moody, Itzoe | Retireholics

[0:00] JD: You are gonna have a really, really bad time, sir. Hello, my fine 401k friends and colleagues. You have arrived at a 401k utopia. A magical place for retirement plan advisors where all your dreams can come true. Welcome to a very special, [0:34] Chad: nay, super, [0:37] JD: super special episode of Retireholics. My name is JD. I am joined by Silent J, Justin McNeil, Nerdy Chad, Chad Johansen. [0:49] Chad: And the most magical and most elusive [0:54] JD: member in this 401k utopia. [0:57] Chad: A real life unicorn of retirement plans. Everybody, it's your favorite retireholic [1:06] JD: guy. Oh, wait, do we not get the new video in this format? I was looking for the robe guy thing. [1:15] Mark: See what happens when you Change things up, J.D. [1:17] JD: oh, no. Well, that's what happens. [1:19] Justin: Okay, wait, do we count Ackersons now? Do we got that graphic or no? [1:23] Speaker E: Yeah, we should if you're gonna take it. [1:27] Chad: So bear with us. [1:30] JD: Yeah, there's the Ackerson one for you. [1:32] Grant Ellis: It works. [1:33] JD: Asking special, special day. Dare I call it a hat trick? A trifecta. But you take it away and introduce our guest today, Justin. [1:45] Justin: Well, viewership has apparently been down, so JD Decided to shoot the show up with some peds. By the way of these three juggernauts of the industries, dear friends of the show and kings of the chat bar. As you can tell, one of these guys takes more selfies than only fans model, and fingers the peanut butter jar like his goddamn Ted Lasso. The other produces freakishly athletic children and can out talk the entire cast of the View combined. And the last one, well, he's known for writing novels in the chat bar, pissing off Mark, and he's got a really hot sister. Together they make up a combined 17 appearances. Please welcome back to the show Curly Mo and Larry. [2:21] Mark: Damn, Justin. [2:22] Grant Ellis: Brutal, man, Brutal. [2:27] JD: Buckle up everybody, because we got some seriously big 401k brains here tonight. [2:33] Chad: Brandon, why don't you play that new [2:35] JD: snappy headlines graphic you created? Let's do headlines. [2:49] Mark: Headlines. That's dedication there, B. [2:55] JD: Okay, let's go with Blackout gone wrong. This article comes to us from Every [3:01] Speaker E: time I blackout, something goes wrong. [3:04] Mark: In a kitchen. In a kitchen. [3:06] JD: This comes from Plan Advisor magazine. The title of the article. Automotive Group allegedly lost 9% of 400k assets during a record keeper switch. I believe this was a conversion from empower to principle. [3:23] Chad: I don't think the article really tells us where this 9% loss came from. [3:29] JD: So I'm just going to kind of more specifically go to you and I'll start with my favorite guest who's here tonight. We all know who that is. The one with the hot sister. [3:42] Chad: And I'll just ask him that. [3:45] Nate Moody: Totally blown up in my face. [3:50] Chad: Thoughts on this, this article and more specifically, thoughts, Nate, on markets going up or down in a blackout period. [4:01] JD: I mean, this is something we've always had to kind of deal with. [4:05] Chad: And, and when I read this article, [4:06] JD: I'm kind of thinking, is that just what happened here? Like we just had some markets go down and some participants are complaining. So tell me what you thought about the article and tell me what you think about blackouts and the markets. [4:17] Nate Moody: I don't think it had anything to do with that because the article had said he was in the massmutual stable value. So if he was doing a fund to fund map, it would have stayed in that until basically it traded overnight. And if they were doing a qualified default investment alternative map, it would have just moved into cash in the time that it was out of the market. If you look in there, it said the massmutual stable value, which I don't know if you guys are familiar with. And now I going to butcher this acronym. I think it's a separate account, guaranteed investment contract, interest contract that has a massive market value adjustment on it and had at one point I think was like 20% plus. And so my guess is that's ultimately what ended up happening as part of this whole transition. [5:02] Chad: You're blending two headlines on now. [5:04] Nate Moody: Read the article. He was, it says he was invested in the massmutual stable value. I guarantee that's the product that they were using. [5:10] JD: Yeah, go ahead. [5:12] Nate Moody: I thought you did that on purpose, Jada. [5:13] Mark: I thought he did that on purpose too. Blended. [5:15] Nate Moody: I give you too much credit. [5:17] Chad: I just want to talk about market value adjustments on a separate subject. You can't possibly, in a conversion from empower to principle, put money in something [5:27] JD: that's going to then have an MVA on it. [5:29] Chad: That's. [5:30] Nate Moody: You've already invested in the stable value. [5:33] Mark: Yes. Which confuses me a little bit, Nate, about how you opened that, thinking that it. It wasn't part of the market value adjustment. Are you saying it wasn't part of the market volatility that created the loss? Correct, the latter market volatile. [5:48] JD: Okay, okay, that's crazy. We'll see where that one plays out. But let me, let me go to you, Grant, just in general. You, you have a new client, you know, a month from now, $5 million plan, they're going to move from record keeper A to record keeper B. How do you address the question of like, you know, because Again Nate's talking about oh, we're going to put it in something conservative while it wa. But what if the market takes off and is 10% up in that period? Then you're going to get a bunch of grumbling people like how do you handle those types of questions? [6:22] Grant Ellis: We pray the market's going to go up. Honestly, it's one of those things. There's not a good solution to it. So we just set the stage of what's going to happen and say we're going to try to minimize the time out of the market and then you kind of hope you're on the right side of it. Assuming that you're not in the stable value or the guaranteed interest contracts with some 10 year put like you are half the time. And so yeah, there's not a. It's not a good thing to have to deal with. A lot of times plan sponsors don't even realize that's going to happen either that there's going to be time out of the market. So it's kind of navigating those waters and hoping you end up on the right side of it. I don't have a good answer for that. [6:56] JD: Fair enough. [6:57] Mark: And if done, done correctly, guys and all of you operate in bigger markets than we tend to. When you're moving a large 401k plan, what's the typical out of market time? Assuming things go status quo as it should. [7:15] Nate Moody: It depends on the mapping strategy. If it's fun to fund, it's usually a couple days at most. [7:21] JD: Couple days. [7:21] Mark: That's what I thought the answer would be. Same same in the micro space. Are you saying it takes longer if it's to a qualified default investment alternative? [7:29] Nate Moody: Yeah, because they have to reconcile all the different DOB databurst. Wow. That was a check to to map them into the age based targeting funds. So it usually takes much longer. [7:43] Mark: At what point is the marketplace going to start requiring slash forcing record keepers to stay open on weekends for these migrations so that the out of market time is essentially hours versus days. Well, it seems like a very logical thing to do. [8:01] JD: I don't know about forcing people to stay on the weekends, but you would think that technology could solve this, right? It's that it's not that complicated of a thing. [8:10] Chad: Now I was not gonna go here. Are we talking blockchain and yeah, like is that what. Because maybe that's what we need. [8:16] JD: Moody says yes. [8:19] Nate Moody: We've had plan sponsors who have not pulled the trigger on a planned conversion because they were afraid they're gonna get caught with their pants down as part of the market volatility during volatile market bunch. Exactly. Back in 2020, you ran into it a bunch. [8:34] JD: Yeah, well, I've had that happen to do when markets are volatile, headlines are hitting every day, and I've had plant sponsors call us and be like, hey, can we just put this on ice for a little while to like, things calm down? [8:45] Chad: Well, I was kind of hoping having Ellis Moody and Ito here, maybe it [8:50] JD: can chime in on his knee surgery drugs, like some best practice in terms of how you guys deal with clients that ask you. So it's. So let me take a crack at it. [9:03] Chad: You've done a lot of these. [9:04] JD: You must have had this question before. [9:06] Chad: How do you calm their nerves that [9:08] JD: this blackout may last four or five days or even one to two weeks? [9:14] Speaker H: Well, it's been a long time since I. It's going on five years since I did this. Number one, I would just say, and [9:21] JD: Nate, try to think back and remember, try to think way back. [9:24] Speaker H: Well, think. My philosophy was always to use a record keeper change. That's a great opportunity to do a QDIA conversion. So we never did. [9:38] Speaker E: Who's drinking for him? [9:40] Chad: Let's go. Between me and you. [9:41] JD: Okay, Justin, take it. Then I'll go. [9:44] Speaker H: Should I. Should I take a Percocet every time. [9:48] Grant Ellis: You got to snort it. [9:49] Chad: Sign our waiver first. Snort it. Josh it. Josh. It dies on retire. [9:58] Speaker H: That would be. [9:58] Justin: Actually, guys, you're giving Chad flashbacks right now. [10:01] Chad: That would be. How good would that be for our brand viewers? [10:05] Mark: Yeah. [10:05] JD: Oh, my God. [10:06] Chad: It's so good for the brand. [10:08] Speaker H: Josh Ito's life and career goes off the rails because he's snorting Percocet. [10:12] Chad: So you're saying. [10:13] JD: So it's. [10:14] Chad: So what you're saying is the reboot. [10:15] JD: The reboot's part of the answer. [10:17] Grant Ellis: The. [10:17] Mark: The. [10:18] Speaker H: The. The reboot. From my perspective, we never did fund to fund transfers. We always used it as a reboot opportunity. And you know, I. I think the key here is just, you have to. You have to communicate and over communicate ahead of time and having a philosophy. We would do notifications out to participants. This is what we're doing. Here's the trade off. Because it's really a. It's. It's. It's a flip a coin, right? I mean, if the market goes down during the conversion, you're a hero, people. You're a hero. And if it goes up, you're a goat. And not like the greatest of all time goat, but at the end of the day. And I know you see, I mean if you're talking a handful of days out of the market and I know we see all the industry, you know, stuff of like if you miss the 30 best days, but generally speaking, a handful of days is not going to, is not going to, it's not going to harm people long term. And so my philosophy was always communicate and quite frankly getting them at conversion and getting people diversified and we thought think invested appropriately is probably more than going to make up over time. [11:34] JD: I think you just nailed it. So listen kids at home, it's. I just told you, I think a good answer is hey, you're in retirement plan. This is a long term investment strategy. It's not something that we worry about days and weeks. We're talking about years and decades. And so just accept what happens and move on. We're going to reboot them into quality investments and the future's bright. Okay. [11:58] Speaker H: And I would just say, I would say the other thing is when you're doing this, you're doing it for a reason. And so we would accentuate all the other. Hey, here are the reasons we're moving, here's why it makes sense. We're greatly reducing your fees. We're going to have better resources for you, whatever that looks like. And so you know, I think communicating with, with clients is important. I mean that, that article said the guy was 100% invested in stable value. Like the guy that the guy referenced. Right, the guy referenced in there. So that, that was our philosophy. I've been out of the game, so I don't know what the, the best way to do it anymore. [12:36] Chad: I have no idea. Rogue guy are a side of Percocets [12:39] JD: to talk on and on and on like that a thing. [12:44] Speaker E: How would, why, why are you asking me that question? [12:46] JD: I don't know. [12:47] Nate Moody: I thought you had Percocets every episode. Judy, let's go. [12:51] Chad: Yeah, I've been. [12:52] JD: Well, that's a fact. Everybody knows that. [12:55] Chad: Let's go to the next one. This is not an article but I [12:57] JD: honestly did want to talk about market value adjustments or anything similar to that [13:02] Chad: because in 10 years I don't think [13:05] JD: we've ever really talked about this on this show. So I'm going to kick it over to you, Grant, because this is a [13:10] Chad: weird one and maybe you can help kind of some of the rookies out, [13:14] JD: out there understand like where this comes from. Like how do you even get a market value adjustment on a 401k plan? [13:22] Chad: And then we'll Dive in a little [13:23] JD: deeper on how we'd like to deal with it when we see these things. Because let me ask you, is this [13:27] Chad: good thing or is this a horrible thing? [13:30] JD: Like how do you view it, this market value adjustment? [13:33] Grant Ellis: I don't view it as a good or a bad thing, it just is. And it's understanding the way the contract's written and what a lot of people, especially plan sponsors don't, is that a lot of those contracts are written based on the pricing of the stable value or the guaranteed interest contract. [13:46] Chad: So the whole thing, where it's coming from, right? [13:48] Grant Ellis: Yeah. So the whole thing. So when the money markets flipped and the stable value was better and then vice versa, everybody's like, we'll just change it out. You're like, no, no, no, you can't do that. The whole contract and the pricing often is built off of that. And so number one, it's just kind of knowing what those options are. You get burned on that once as an advisor and realize that people are stuck and have a 10 year put or something or a market value adjustment that's really heavy. And so it's, it's understanding that ahead of time and having the contract structured correctly and then doing a lot of participant education to get them out of it. If we're getting ready to do a transfer, which is a really scary, not good thing to do. I would never do that, Nate. Don't worry. [14:21] Speaker H: Not me. [14:22] Nate Moody: Well, no, a lot of these record keepers will have look back periods like. [14:25] Grant Ellis: Yeah, now they will. They've gotten look back. [14:27] Nate Moody: If they see more than 20% outflow, they'll still hit you with a market value adjustment. [14:31] Grant Ellis: Yeah. [14:31] Chad: So Nate, do you agree with, with [14:33] JD: Grant and that this is something you're going to look to avoid putting in place with your current clients? So that would to me say it's not a good thing. [14:42] Chad: You do not see the child. [14:44] JD: What's that? [14:45] Grant Ellis: We want to make sure we understand it and have the conversation. So it's just one of the factors that goes into it. [14:52] JD: You could advise a client to put that stable value in place or that guaranteed investment contract because it fits. [14:59] Chad: Right. For fully understanding that if you ever [15:02] JD: need to move this plan, you might have to pay the piper. [15:05] Grant Ellis: I mean, personally I'm not. We're going to try to avoid it at all costs. Yeah. [15:09] Chad: How about you, Nate? [15:12] Nate Moody: I mean, if you look at historical performance, stable value has outperformed money market over literally every single time period over the last 50 years with the exception of the last 24 months. Because we've seen the greatest increase in interest rates that we've ever seen in the shortest amount of time. So is stable value still an appropriate cash equivalent option? 100%. Is the market value adjustment a necessary evil to Grant's point, for the way in which those products are structured? I mean, that's the whole game that they're playing. Is the yield from the underlying intermediate bond fund less the cost to wrap the fund in the insurance contracts is always going to be a higher net amount than what the yield on a money market is over long time periods. And you smooth some of the interest rate volatility. I think the challenge is with some of these stable value products that are totally antiquated that now record keepers are depending upon the spread that they're keeping between what they're paying out and what they're keeping. There's one record keeper in particular that's particularly egregious. I think it's like 1.45% for their flagship fixed account. Those are the ones that are really challenging. But there are stable value products out there that'll buy out the market value adjustment. And even after amortizing that buyout, it's still net, net better for those participants. And then certainly once that amortization goes off, it becomes way better long term. [16:36] JD: And let's be clear, not all guaranteed returns are the same in these products and not all market value adjustments are the same. So to Nate's point, you got to kind of look at the different ones. Chad, Nate just kind of comment on something which was the next thing I want to cover before we wrap this topic is how do you deal with it when you go find a plan that's willing to move to you and then, oh, surprise, there's a market value adjustment that's going to ring them up for, you know, six figures plus, I'm seeing now a lot of the new record keepers can propose to kind of [17:13] Chad: buy on that, that, that, that debt [17:17] JD: or that cost, if you will. Now it, it's going to increase their fee structure. Right. So help people out there understand what [17:23] Chad: your options are when you're trying to deal with it. [17:26] Mark: Yeah, there's, there's a variety of different ways. One, and it's going on in the chat bar right now. One, as you just mentioned, there is the new record keeper will often try to buy out the market value adjustment. Now in order to buy that out, they're going to amortize it over the course of maybe five years. They're going to increase their asset charge in order to do it, they're going to charge all the employees more to make a few that have a market value adjustment hole. Every once in a while you run into a situation where that exists where the new record keeper does not increase the pricing proposed because they had enough juice in there already and they really want the plan. But that usually is a very small market value adjustment. The other option is you can leave the asset where it is trust, account for it as a, as a third party administrator, let that money fulfill its contractual needs and then move it over 12 months later if that's what it takes. We saw a couple people mention in the chat bar, you can actually with some record keepers now take the fixed account from the platform that you're on and use the same fixed or stable value at the new platform you're going to. So we've seen standard do this a lot. I've seen principal do it a couple of times where essentially they're saying you can use our stable value over there and then we won't charge the market value adjustment. In that scenario I've seen clients pay for it. A business step in and say, all right, it's $44,000. Let me write a check for it. So there are ways to handle this. [18:52] Chad: Maybe your, maybe your new record keeper [18:54] JD: platform is a, is a decent savings and you just say, hey look, you're going to make up for this in two years and then off into the bright future. [19:02] Nate Moody: Chad, why wouldn't you have a new stable value buy out the market value adjustments. So that way only those folks that are inside the stable value are pay paying for the cost to buy it out, especially if net ends up being higher, which it almost always is. [19:16] Mark: Yeah. So what Nate is saying, and this is the first time I did this was maybe six months ago. Nate. I'd never done it before where essentially we had this, we went to the new product, we said get one of your stable value offerings to buy out the market value adjustment and lower your net credit rating from 2.6 to 2.4. The only the people that are sitting in the fix are the ones that are buying it out. To Nate's point, that worked fairly well in that scenario. But it's not a lot of times, Nate, they don't want to do that. And the reason they don't want to do that is because that's where they're getting their spread. That's where they're getting the majority of their money. And I was going to make two quick comments, JD1, being in our space in this Micro small space. Often just by offering the stable value or the record keeper's fix, they're giving the entire plan a reduction in the asset charge. Whether a single dollar goes there or not, there can be not a single dollar that hits a stable value. They're giving a full plan reduction in the asset charge, which is something that, to Grant's point, you got to be open to. We may not like it, but if it's going to be beneficial for everybody, we kind of have to be open to those solutions that are for the greater good, for lack of a better term. [20:29] Chad: Seems odd to me. [20:30] JD: I, I, if you, it's been a long time, when's the last time JD sold a plan? But when we used to have these things back in the day, them as negative and I always felt like someone guided them down the wrong path to have it clearly based on this discussion today, that's not always true. You got to look at the math and the value of that type of investment. But that's the education today for anyone listening in, you know, that's new to this or you know, somewhat fresh is you got to look for these things, you got to understand what you're getting your clients into and then if you do find them out there in the wild, understand that there are some solutions. But when you look at those solutions, understand the details there and how that's going to impact everything. [21:10] Chad: Because I've seen a lot of these [21:11] JD: where the record keeper just goes ahead and buys it out to Nate's point and they just bump up the fee to everyone and, and everyone just accepts it like, okay, great, we got rid of it. [21:21] Chad: And they're just kind of dumbly following like, oh, I'm not realizing that their whole product just went up in cost. [21:28] Mark: But JD, you can end it on this. And I think this was part of Grant's point earlier. When you're burned by this once, you never get burned by it again. And when you're in the situation that we are in right now, if you're marketing to new for 1k plans, you absolutely have to be looking at what assets are sitting in the stable value or the fixed. When you're considering a record keeper change, you may not have made that bed for them, but they're laying in it. And you have to analyze that the moment you start looking at that record keeper change. [21:57] Grant Ellis: Well, that's part of the point, right? Because eight out of ten plans go to advisors who have one to three or five plans or whatever. So if you don't know what you're looking for. They're going to make the money on the record keeping side. And Chad, you've probably seen it on the small plan market now when you're doing contracts on the front end, especially with insurance providers, there's like three to five different stable value, money market, guaranteed interests. So now you have to know what you're looking at on the front end and do due diligence on all of those. It's really fun. [22:22] Mark: That doesn't happen. Grant. [22:23] Nate Moody: Right. [22:24] Grant Ellis: Yeah. [22:24] Mark: Advisors are doing one to three plans. [22:26] Grant Ellis: It's like pre check for you, right? It's pre checked like yeah, we're good. [22:30] Speaker H: So I think. So do you think the next generation of this is going to be guaranteed income provided by a record keeper and then thinking about how you get locked in. [22:44] Mark: Oh, it's portability, Josh. They all have portability now. [22:47] Speaker H: Right, right. [22:48] Chad: Well and just for, for that to [22:50] JD: actually happen, that would have to succeed and it's falling flat on its face right now. So I don't know if that future exists at this point. Sorry about. [23:01] Nate Moody: Just ask Teachers Insurance and Annuities association how portable those products are. [23:08] Speaker H: Little 10 year, little tender on the traditional. [23:11] JD: Yeah, I am making myself a new little vodka drink while I do that. Brandon, let's spin the wheel of ice because maybe I'll just chase this thing down with a, with a Smirnoff. [23:31] Mark: I think I'm three for three in the last three times I've been on. [23:34] Chad: I feel like this is supposed to [23:36] JD: be landing on Mark. [23:40] Mark: Hey, it didn't land on Mark. [23:44] Chad: Any one of you guys, you can kick off the next subject while because [23:47] JD: it takes me a while to do this. [23:49] Chad: The subject is what the fuck is a boon. [23:55] Mark: Oh God. [23:58] Nate Moody: Grant or Josh, have you guys looked into these guys? [24:00] Grant Ellis: Yeah, yeah, go ahead Nate. [24:03] Nate Moody: No, I don't. I, I stared at their website for like 30 minutes prepping for this and I literally have no idea. They're like, they feel a little bit like a, like a bid money meets fiduciary works meets, I don't know, one of these made up organizations. It's just hard for me to keep them all straight. [24:19] Grant Ellis: Yeah, listen to me. It's like a lot of the FinTech 401k providers right now, right. They're really good with user interface and it looks good and it's going to sell and make some money and then there's nothing on the back end. And so I don't know if that's part of the play because it seems to be a lot of these companies realize if they can just get you in the door that they're going to keep you for a while and make money and probably get sold in between because it's nice and shiny and sounds great. [24:44] Justin: All the articles ahead of time, bravo. [24:45] Chad: They're looking at it and they go, looks like, looks like, [24:51] Grant Ellis: look how nice it is. [24:52] JD: Bit money which is like this technology. They can do these quick kind of design option things. Grant talks about them looking like some of the disruptors, which I totally agree [25:03] Chad: with all those things. [25:05] JD: The funny thing is that at their [25:07] Chad: core they're a third party administrator. They're literally a compliance only third party administrator working with record keepers to record [25:19] JD: keep and just do their job. [25:21] Chad: But here's the weird thing, and not [25:23] JD: to get all like hyped up conspiracy [25:25] Chad: tinfoil hat today, but 17.5 million in investment. [25:32] Mark: Yeah, I would give them, I'd give them as much as I had too right now. [25:36] Chad: You would. Oh, so you're gonna, you're gonna make the case because. And I'll set you up for it, right Chad? I'll set you up. [25:42] JD: What is really behind this, Everybody listening [25:44] Chad: in is Edward Jones. [25:48] JD: Am I setting you up right Chad? [25:49] Speaker E: Sure did. [25:51] JD: Okay. [25:51] Mark: I mean even when you click on their website it says trusted by 20,000 plus advisors. So who's the, who's one of the biggest investors in Aboon? [26:01] Speaker E: Chad? [26:02] Chad: I did my research today. [26:03] JD: I asked Google, Gemini how many advisors Edward Jones has. [26:08] Chad: Oh my God, 20,000. [26:11] Mark: Yeah. So here's the thing that I struggle with and I'm fairly pissed off about this at this point because it came out initially with a boon with Jones and Jones came to us because we do a fair amount of business with them. They came to the third party administrative community and said it's just another offering for our folks, we're not pushing it. And then I started getting forward email after email after email coming from a boon directly to every single Edward Jones advisor. I don't get that kind of access. And then a month later you see primary investor in Aboon is now Edward Jones. And the next thing you find out is every single now compliance education meeting for Edward Jones is hosted by a boon. The third party administrator community has been cut out for the most part. Nova and a few others have tried to make their way in. Now here's my bigger issue JD and I'll give you two of them. One being they are trying to position themselves as the sole administrator for 20,000 plus advisors. When I, when I dove into who they are and what they're doing, you wonder how many employees they have there? Okay, six. [27:17] Grant Ellis: I was about to say like three. [27:19] Mark: They have six people left Veswell and started it. And then Jake Linney, who we all love, who is. Yeah, he's from the industry. They have six total people running illustrations, running compliance work, manning the phones, manning emails. Like it's not possible. You can't service it. No, it's not. Just. And so here comes the second point, the shift that I've seen so far. There was one illustration that advisor sent. Well, he didn't send it to me. Sent it to another tpa. Yes, I'll drink for that, Mark. That was clearly communicated that it was a control group, yet they had the owner getting 2,402referral limits, but maxing out 23,5 on both plans, even though it's clearly communicated. And a boon is saying it's a control group. [28:07] Chad: Yeah, they're just getting started, man. They can drop a few balls. [28:10] Speaker H: It looks like what they're. It looks like they're trying to be vest. It looks like they're trying to be vest. Well, for the TPA community. [28:16] Mark: Yep. I think you're right, Josh. Yeah. [28:18] Chad: Digital. [28:19] Mark: And the two founders are vestwell. The two founders are vest. Well, people that left. [28:25] Speaker H: The main guy is he was at Bamboo hr. [28:28] Chad: Thank you. Yeah, he came from payroll. [28:30] Nate Moody: Okay. [28:31] Chad: He's a payroll entrepreneur. Yeah. [28:34] Mark: Where did he go after Bamboo? [28:36] Speaker H: So he had a. [28:38] Mark: He had spent two and a half years at Veswell. Right. [28:40] Speaker H: That's not on his LinkedIn. [28:41] JD: No, I don't think so. [28:43] Speaker H: He was acquired. He was acquired by Bamboo in August of 2022. Yeah. [28:49] Chad: If for the facts is he's a big payroll entrepreneur guy. [28:54] Speaker H: You know, he's a, he's a product guy. I mean he was at Bamboo. He was the, the head of data products. [29:00] JD: Your point is still valid, Chad. First of all, just because they're servicing 20,000 advisors, which basically is just a spin on the fact that they're servicing Edward Jones. Yeah. [29:11] Chad: We have no idea how many plans [29:13] JD: they actually have in place right now. So I'm not the guy to defend them. But maybe six employees is appropriate at this point. We have no idea how many plans they have. [29:21] Chad: But I think the interesting part to me is the 17.5 million. And so I'm going to make a [29:26] JD: case for them right now in that you're getting all huffy about this and everyone knows I love to pick a fight with Chad. [29:34] Chad: Why not? If I'm Edward Jones, why not basically own my own third party administrator? [29:42] JD: In a way, I'll put the 17.5 million into it so I can make [29:46] Chad: it a, a great growing firm with [29:48] JD: a great digital experience and, and it's got artificial intelligence in it and yada yada yada. [29:54] Chad: And I will force all these advisors [29:57] JD: across the country to put plans in here. [30:00] Chad: And this next boom that we all [30:02] JD: hear about from Brian Graff and the [30:04] Chad: American Retirement Association, I'm sure Edward Jones [30:07] JD: and their 20,000 advisors, if they each, if they each had a gun to their head to sell one plan a [30:12] Chad: year, they could sell 20,000 plans next [30:15] JD: year, over the next five years. [30:17] Chad: And at a certain point, I haven't done the math yet, but maybe even a little bit, TPA compliance only could [30:24] JD: reach some type of revenue where 17.5 million could, could be paid back in some way. [30:30] Chad: Like I, I don't understand why more advisors don't try to create their own [30:35] JD: in house third party administration firm. [30:38] Mark: JD that's why I said at the very beginning I would give them the money that I have right now. Jones from the top down is absolutely pushing 401k plans. They're incentivizing their folks more. They're pushing it from the top down. They have requirements and then you get a captive audience of advisors as a third party administrator, they're going to crush it. It's just inevitable. As you get all these new plans into Grant's point from earlier advisors who have never done the business before or a lot of Edward Jones folks, they're going to sell these plans, they have the relationships and it's going to go to a boom. I'm jealous. That's what I am. [31:12] Nate Moody: J.D. do you say that because you think by controlling the plan design more under our umbrella there would be benefit or is it more access to the participant data? [31:23] JD: No, I, well that too I think multiple facets to control the plan design, that's fine. To control the service model that you want. Like you'd be in charge of it in terms of do you want a high level service, medium or low. You can control the fee structure and then yeah, why not? [31:40] Chad: You have now you've got access to [31:41] JD: data in a more kind of easy accessible way through the census and everything. [31:46] Chad: There just seems to be a lot of reasons why I actually drunk late [31:50] JD: night pitched this to Vince Morris once at his house and he, and he kicked me out of the house. But, but I was uncomfortable. [32:00] Speaker H: Most of the firms I know who've done that, who've had in house TPAs because I work with several of them, they've all outsourced to like a July. They, they want to be on the. Well, they want to be on the advisory side. I think the other thing is, the nice thing about not having that is like, I hate to say it, but like if a mistake gets made, let's say on the admin side or there's an operational failure, like your throat's getting choked. And so if there's another baby with the bath water, the hundred percent. And so I think the better thing for an advisory firm is hiring employees that used to work for a TPA firm that can bring that knowledge and expertise as kind of like a second set of eyes and being able and a buffer and being able to kind of have that internally as part of your advisory service, basically. [32:56] JD: Well, to Grant's point earlier, let me get to Grant real quick, Nate, in that he made the point that this kind of looked like some of the disruptors. And one of the things they're pitching right now is this digital experience. And the fact that you could, from [33:10] Chad: what I've seen, it looks like you [33:11] JD: could go through a series of questions and you could have your plan document ready to be signed within, you know, minutes. And so. [33:17] Chad: And I don't want you to be the friendly, friendly to the TPA world. [33:21] JD: I'll drink. [33:23] Chad: But how do you feel about, as [33:25] JD: an advisor about your client going through a design in 15 minutes or less? And how do you think most advisors might feel about that? [33:33] Chad: Is that a good thing? Because we stand here against it. [33:35] JD: Like, are you fucking kidding me? [33:37] Grant Ellis: I think it's the difference in whether you're an advisor who does plans and has been through this before versus somebody who has no idea and is like, I don't know. This is the same as everything else because it's going, it's kind of going back to the MVA stuff is if you go through this and you deal with operational failures and realize the complexity of keeping up with all this nonsense, that's the legislation and all the stuff, and then it goes bad. You know, you're like the third party administrator. We have to have them. And so again, I'm like, Chad, I'm jealous. It looks awesome. They're going to make a ton of money and it's going to suck. And kudos to them, right? What's their goal? Gobble them up, make a bunch of money, cross sell it, get other avenues of revenue into the stream. [34:16] Mark: So the, the ton of money one scares me though, Grant, because they're number one, they're partnered with three or four record keepers that all have rev share intelligent there. I saw, I saw a quote from them though on a, I think it was a six person startup and they quoted 316 services at $4 a participant. [34:37] Grant Ellis: Not a lot of money yet. A lot of money. [34:39] Mark: Are you doing that by the way? Yeah. What is your 316 is the question. But wow, $4 participant, that's really going to do something. [34:46] Chad: By the way, that was impressive. That was impressive that they were able to strike a deal with John Hancock American Fund. I'm kidding. I'm being facetious because most record keepers had to say like oh you're Edward Jones, of course we'll be a part of your fucking thing, whatever it is. [35:06] Mark: But, but here's what I don't get. Like Jones jd, you remember five, six years ago, more than that probably when Jones came to us and like we want you to be an approved tpa which means we've done your due diligence, open up your back door, show us all your compliance, give us your, your different notices and your procedures and we had to be approved. A boon comes to market in what, 2024 and by the beginning or first quarter of 2025 they are in the doors and the, and the provider of choice with Edward Jones. And then Edward Jones has an investment in them three, four or five months later. But how enough did they do that? [35:42] Speaker E: How do they get in the doors [35:44] Mark: and climb in there? [35:45] Speaker H: Because Edward Jones is so far behind the Market From a 401k perspective, they're a mess, they're a disaster. And if you look at their advisors who they're working with, these are all going to be sub million dollar plans. Probably sub $500,000 plans. [36:03] Mark: They just aren't the most love. [36:05] Speaker H: They're not a player market a lot [36:07] Chad: of people are after. That's a, that's the market a lot [36:10] JD: of people are after right now. [36:11] Chad: That, that what do you think guideline [36:13] JD: was built for human interest was built for. It's this very micro market you're talking about, you know. [36:18] Chad: So Justin, I interrupted you earlier and I know I've interrupted you for 10 years and not really give a but today I'm turning over a new leaf. Did you want to say something? [36:28] Justin: I don't remember so long ago. No, no, no. I was going to say to the boys, I don't know, Chad and Mark, if you've run into this yet, I'm, I've talked to a few of the, the Jones guys and they're already having service issues. They don't like it. They don't want to use these guys at all. So I am curious. Like I didn't realize there's six employees. [36:47] Mark: If they. [36:48] Justin: This has got to blow up, right? If they can't handle that servicing, well, [36:52] Mark: they'll grow with it. I would think. [36:54] Chad: They got $17.5 million to throw at some admin. [36:58] Grant Ellis: Know there's some pretty poor record keepers that are doing the same thing and are doing just fine in terms of growth point. [37:04] JD: That's a great point. That's a phenomenal point. So let's, let's move on because I've got more conspiracies to talk about. [37:13] Chad: It wasn't my intent to do a [37:16] JD: lot of conspiracy stuff. It just seemed to kind of. [37:18] Speaker H: Yes, it was. [37:18] Grant Ellis: You literally emailed us about a bunch of conspiracies. [37:23] Chad: I know but it just kind of fell that way on the table. I wasn't. It wasn't by construct. I've said this many times. Rob Barnett, the president of Great Gay, Great Gay Great Ray. [37:40] Justin: Well this show just got canceled. [37:44] Chad: I've been one of my favorite guests on the show. [37:47] JD: Like so smart, a little weird but. But really cool guy. Really enjoyed having him. [37:54] Chad: The. The title of the article today is Great Gray. [37:56] JD: This isn't the title. [37:57] Speaker E: I'm really. [37:58] JD: There it is. Okay. J.D. [38:00] Speaker E: say the. Say the letters man. [38:02] Chad: Great Gray purchases Flex Path Collective Investment [38:07] JD: Trust Fund Sub Advisory Assets. [38:11] Chad: Great. Now in my mind purchased everything that [38:15] JD: Vince Gian Gianna Navazo has created. [38:21] Chad: It's all. And we can talk more about that. [38:23] JD: But so Great Gray now is the owner of Retirement Plan Advisory Group and is the owner of Flex Path, the [38:33] Chad: target date funds which have grown pretty significantly. I believe it's it's parent company. And this is where Nate can really help us out. Madison Dearborn Partners. This is where it gets really juicy. Is the owner of Great Gray or at least the majority private equity backer in it and they also own this thing we're going to talk about tonight. Right? Wellspire and nfp. Like Nate, this is. [39:03] JD: I'm serving this up to you. [39:06] Chad: This is world domination. What is. What is happening here? There's some big fancy people making moves. [39:15] Speaker H: Yeah. [39:15] Nate Moody: So I was talking to somebody because they nothing says up and up like releasing a press release at 5pm on a Friday. This is when this dropped. It was last Friday night and I was texting another advisor friend of mine and he just sent me back the spider man. The spider man meme of all the different spider man just pointing at each other. [39:37] Grant Ellis: Oh yeah. [39:39] Nate Moody: I don't Honestly, I don't even really know what to think at this point. [39:44] Chad: Control of advice. [39:46] Nate Moody: It feels like they're vertically integrating the 401k market from investment product to investment manager to advisor and distribution channel. Which makes me nervous because that removes some of the ability for those advisors to objectively evaluate their own investment products. Obviously even just a perception of a conflict I think is going to be a challenging thing to overcome. But I don't know, it's. That's. I guess my initial read, wasn't that [40:18] JD: already kind of happening in some way, shape or form at Retirement Plan Advisory Group with the flex plan strategies which [40:25] Chad: by the way were sued and came [40:27] JD: out victorious as, as not being a non prudent choice. But. [40:32] Chad: So this has already happened but you just nailed it. Someone's doing it on a bigger level now on a, on a higher vertical scale. [40:41] JD: And I think for. I think a lot of people don't see this happening. They just kind of see another headline where I'm starting to be like who [40:50] Chad: are these Madison Dearborn people, bro? They're fucking gnarly. [40:54] JD: Like they're coming at this retirement plan industry and taking some big chunks of it chatty here. [41:00] Speaker E: Madison Dearborn. I think of Ashley Madison and it really confuses my lot, dude. I'm always like what are we talking talking about that one for? Anyways, go on, carry on with real business guys. [41:14] Nate Moody: I think what's challenging just sorry to quickly jump in. Jenny is RPA Retirement Plan Advisory Group is also a practice management software provider of which many independent advisors rely upon it. And part of their revenue model is dependent upon distributing these white labeled collective investment trusts that I think ultimately likely subsidizes the expense of the software itself. And so if we're kind of put in this awkward position as advisors of okay, they're lowering their explicit fees to subscribe to this software, but they're doing it because they know by gaining access to you as an advisor they're going to be able to shill those collective investment products that they have massive margins on. Is that create this like uncomfortable position where if I'm another advisor and I use Fi 360, I'm looking at every single advisor on Retirement Plan Advisory Group's platform and saying hey, you know, did you know that your advisor's software and scoring methodology is owned by the same company that offers the collective investment trust that they're recommending to you? Like that's not exactly objective, just so [42:24] JD: happens to be the actual funds that you're in in your program. [42:27] Speaker H: But Again, that's our rpag. That. I mean, they made that move years ago that they wanted to get into Asset Management. Ten years CITs through their, like, outsourced [42:38] Chad: 338, [42:41] Speaker E: by the way, six unclaimed drinks. [42:43] Mark: So. You know what? I'll take another one. I. I took one for him earlier. [42:46] Chad: That's. That's. [42:47] Justin: That's how we determine it. [42:48] Chad: Josh, continue. Continue your point. [42:50] Speaker H: Well, and. And I don't know what the val. I mean, I know the value prop. That Retirement Plan Advisory Group boys. [42:58] Speaker E: Don't jazz hands us, buddy. [43:01] Grant Ellis: Yeah, you did jazz hands Nate just now, by the way. That was right in Nate's face. [43:05] Speaker H: I am hopped up on a narcotic right now. And, like, I don't know what the. I mean, at the end of the day, Gray. Gray is all about. They care about distribution, the cits. So I know that that was an argument that Retirement Plan Advisory Group made before was like, hey, you can get Citizen through us lower than you can get them anywhere else. [43:33] Speaker E: I'll take it. [43:34] Speaker H: But from a software perspective now, why? Like, I can just. If I'm an advisor, I can just go to Great Gray and I can get Citizens. [43:44] Mark: So I don't know what that is. An acronym. [43:48] JD: Okay. [43:49] Mark: Collective Investment Traps. [43:50] Chad: Let's. Let's take one. [43:52] Speaker H: I'm not drinking. I don't really care. [43:57] Chad: Let's take what Josh said, and let's [43:59] JD: do a fun little history of Vince [44:03] Chad: Ginazo and Retirement Plan Advisory Group, because I think Josh nailed something. Let's be clear. 20 years ago, and Chad and I were there in the early years of [44:16] JD: Retirement Plan Advisory Group. [44:18] Chad: I was there in year. [44:20] Speaker E: Chad, how long you been with pdc? Oh, God damn it. [44:23] Chad: I was. I was there year two or three. [44:25] Speaker H: Don't they go. Don't they go by rpag? [44:27] Chad: JD Retirement Plan Advisory Group. [44:31] Mark: They. They did not want to go by that. Josh. [44:34] Chad: No, they didn't want to be rpac. [44:36] JD: Okay, but. [44:37] Chad: So let me get back to the point. Back then, it was software. [44:42] JD: That's what it was. [44:43] Chad: It was just software. They had built this software where you could do analytics on funds. They were one of the first ones to do it back in the day. [44:51] JD: You could go to Morningstar. You could go to them. I'm not even sure Fi360 was even around yet when that first happened. Maybe a few. Few years after. [44:59] Chad: Then they got into the gig of kind of saying, hey, we can also support our rpag. [45:05] JD: Damn it. [45:06] Chad: I thought. I was avoiding it. [45:07] JD: I was saying it. [45:10] Chad: Members by helping you when you, when you land a whale, we'll help you [45:14] JD: sell the big plans because we're good at it, you can use the brand, etc. Etc. [45:19] Chad: And then it was 10 years ago when Vince came out and said we're [45:25] JD: getting into the investment game. [45:27] Chad: And we've talked about this on this show before. It was a shocking moment and a shocking room when all of the defined contribution investment only partners were sitting in there that have paid for this conference for 10 years at the Ritz Carlton and Dana Point, Laguna Niguel and found out that Vince was creating his own target date collective investment trust run by [45:51] JD: BlackRock or you know, but what have you. [45:54] Chad: Apparently Great Gray was involved in the, the trust or the custody of it [45:59] JD: at that time as well in the beginning. [46:01] Chad: And, and that was a moment where [46:03] JD: I feel like Vince really placed his, his freaking mark on like I'm going to do some real monetary damage in a good way here and make some money. [46:13] Chad: And I think what we're looking at today with the sell of retirement plan Advisory Group to Great Gray as well as the Flex Pass strategies, I think Vince is off into the sunset. And I have no idea how much money he made, but I think he made a lot of money. [46:31] Mark: Oh yeah. [46:32] Chad: And that. And now he's gone and it's all done. [46:34] JD: He's. [46:35] Chad: And he's moved on. [46:36] JD: So yeah, I guess I didn't have a point to that but there's your history lesson for the day. So. [46:42] Mark: And it. And it aligns and makes sense. We can't avoid Kate's comments in the chat bar from 800 minutes ago when JD before JD's rant she asked what happens when these private equity aka Madison Dearborn companies investing in this space start push private equity into the 401k space Moody's talked about. [47:05] Speaker E: Also known as Buddy. [47:06] Mark: Just saying. Also known as I think Brandon needs [47:10] Justin: to make the Madison Dearborn logo and the Ashley Madison in font like he [47:14] Mark: does for all of our. Doesn't it? [47:17] Speaker E: Every time you hear it, every time [47:20] Speaker H: one of Yalls emails, one of Yalls emails got leaked off Ashley Madison, there's a 90% chance that's possible. [47:27] Chad: Moody, do you have a tinfoil hat squared moment of where this goes to [47:35] JD: what Kate's saying beyond the collective investment target date funds and into actual private [47:41] Chad: equity like Madison Dearborn pushing their own shit to the Wellspire and the retirement [47:50] JD: plan advisory group, etc. [47:52] Chad: And maybe even into the very collective investment trust target day funds themselves. [47:55] JD: Right. [47:58] Chad: Are we going too far? [48:01] Nate Moody: I Don't know. I'm torn because, you know, based on what we've seen already within Retirement Plan Advisory Group, I do feel confident that I, As a result of this partnership with Great Gray, we're going to see a level of investment within that platform and software that has been needed for a decade plus. [48:18] JD: It's been pretty stale for a while. [48:20] Nate Moody: If that ultimately comes as a result of sort of shilling some of these additional products. But as long as an advisor has the option to decide whether to utilize them or not, I mean, it's kind of like, you know, we get to enjoy all the bells and whistles of Facebook because ultimately we're the product. But there are things that we can choose not to engage in and still benefit from being able to utilize the platform. So I, I think probably at some point that that will definitely be a distribution channel, because greed is just too, too of us. You know, it's just chasing the money. That's how these organizations. [48:55] Speaker H: Can we just talk about private. Do we know private equity, like, their business model is not to go in and invest in a bunch of money. It's to make it as profitable as [49:05] Mark: possible because it's not a short window. [49:08] Speaker H: It's not. It's not permanent capital. Let's make it as profitable as possible so we can flip it to, you know, the next. You know, that's. [49:20] Mark: That's absolutely right, Josh. [49:21] Speaker H: And I think, honestly, this is a spicy take. I know it's made people a ton of money, but I think private equity, frankly, is one of the worst things that's happened to the industry, because I think it's gone from 10, 15, 20 years ago. You talk to founders of firms and everybody, especially those that were really bought into this concept of being a fiduciary to clients. And it was always, how do we add more value to clients? And I'll say now, most of the people I talk to is like, what's my value? What's my valuation? And I think it's taken the advisory industry's eye off the ball, quite frankly. So I, I, you know, it's made founders a ton of money, but I think private equity has actually done a lot of damage to our industry in a lot of cases, [50:10] JD: historically. [50:11] Chad: Or this. [50:11] JD: Are you talking about this new push or just in the past? [50:16] Speaker H: No, I think I. Private. Private equity is eating every business, every industry in America. And I just think when that happens, press releases sound great. I gotta be honest with you. Okay, I, I think it. I think it winds up really cannibalizing and and doing, doing more damage, to be honest. [50:38] JD: You're not, you're not talking about private equity as an alternative. [50:48] Speaker H: If I was an advisor and now let's say my firm is owned by private equity and is there going to be a push of like private equity? I really believe it's $12 trillion. They've been licking their chops to get into this market. There is so much capital. And so now do you have a conflict if am I recommending an option? Whether it's a standalone private equity investment. I think private credit is a total, going to be a night, a nightmare in our country as well. And you know, are there conflicts as an advisor like hey, I'm recommending something and oh, by the way, the PE firm that owns us is part of this. I mean I, I will see that come, I do think that's going to [51:29] JD: come up without, without, without exaggeration. Let's see if I can be totally honest and transparent here. I probably get an email at least [51:40] Chad: once a week and I get big [51:43] JD: fat packages in the mail on a fairly steady clip of private equity firms that are trying to buy my business. And my business is, is a smaller business, you know, but they're, they're aggressive and I get the follow up phone calls. I get all this stuff. So it's, it's pretty intense. Grant, I know that you spend most of your days. [52:07] Grant Ellis: Don't start. I don't want to hear, I know where you're going here. [52:09] JD: No, no, no. [52:10] Chad: I know you're, you remind me of, you know, a good old boy doing right. [52:17] JD: You make your way to church on Sunday and then Monday through Friday, you, [52:21] Chad: you walk to most of your clients. [52:23] JD: I feel like in the snow, uphill. You meet them face to face. [52:27] Grant Ellis: Why did I sign up for this? [52:28] Chad: You know, they're, you know, their families, you know, their, their wants and desire. [52:33] JD: These are all good friends of yours, your clients. What are you telling them about private equity? [52:38] Chad: You don't have time for it. And I mean the old investment that [52:41] JD: could come to play in target date funds and manage accounts. [52:45] Chad: Are you fearful of that? [52:46] JD: Is that a bad thing for your clients? Will you try to screen it out [52:49] Chad: of, of the target day funds that you recommend or. This is too deep for you. [52:54] JD: You got, you got more important things to do. [52:56] Grant Ellis: No, we had a conversation as soon as the executive order came out, right, because it hit headlines and everybody's wanting to know what are we going to do? And thankfully on that we've got some time. But I love the conversation because it's a couple of different things. One is, like, when we were meeting with wholesalers during that time period, they were like, listen, all we're gonna be able to talk about for the next 18 to 24 months is private credit and alts. [53:14] Nate Moody: That's it. [53:15] Grant Ellis: And I was like, what are you talking about? And then that happens. And so you can see all kind of the nefarious things happening and the intertwining of the revenue streams. And kind of going back to what Nate said is my hope is that there's an element of, yeah, old, rich white guys can make more money. That's what that headline to me said with all of the CIT purchases and all that. And then maybe they can make the software programs better. And hopefully people can still have a way to be objective and do their job for their clients. And that last one's the part that's hard, kind of going with the who owns who and conflict of interest, because even peeling that back for a client is a really challenging thing to do. And so, yeah, we're talking about it, but just saying, like, to be determined. We're not. I was about to say something. An acronym to be determined. [53:58] Chad: Where. [53:58] Speaker E: Hey, you already said one, say another. Why not? [54:00] Speaker H: It's all right. [54:01] Grant Ellis: Hey, you know, nice, young. Yeah. So it's. We're just saying, listen, we're. [54:06] JD: We're. [54:06] Grant Ellis: This is on the radar, and it's going to be on the radar for a while, but we're kind of waiting to see. I think it's going to be the distribution channels of inside of the funds and the collective investment trusts. And then it's going to be. Are there safe harbors for, you know, the plan sponsors? If they add these. It's just all kinds of stuff that we have to deal with. And it's a very busy, loud season. Anyway, I think we're. [54:26] JD: I. I want to move on to a little bit of fun, but I think we're very close to seeing it happen inside these targeted funds and these managed accounts. Because you hear it from Voya, you hear it from Empower. I got a thing today from T Row Price. They're all very clear that this is something they're putting their marketing efforts into. And so they're not going to put marketing efforts into it if it's not going to be a sliver in a. In a fund. And so it'll be interesting if advisors are. I've seen a lot of negative opinion about it from advisors, and it'll be interesting if they, like, try to screen out Target date funds that are doing it. Because we'll talk more about it into 2026. Because I'm starting to learn a lot more from some old people about why this really is a money grab and why that this industry is struggling to find new places to make money. And we're just a victim of that. [55:22] Grant Ellis: I mean, have you seen a record keeping. Have you seen a record keeping fee lately? It's like, hey, our record keeping fee is three basis points. [55:27] Mark: Right. [55:28] Grant Ellis: You're like, what, you're making like 12 bucks. And so you have to look at all the other revenue streams and how they're making money and they're having to. [55:34] Speaker H: Because it's that's. It's that spread on that. [55:36] Grant Ellis: Yeah, it's all of the above. [55:37] Mark: Right. [55:38] Grant Ellis: It's all of that. You have to figure out how you can get a piece of that in whatever way possible. [55:42] Speaker H: And there's a. I would say as [55:45] Grant Ellis: I can't [55:48] Speaker H: as an advisor, family show [55:50] Chad: Nate, [55:52] Speaker H: worth your salt. I think it's your job to really demystify all of this. And Nate and I talked about it on the podcast. You know, a lot of us grew up in the, you know, B shares and all the conflicts before transparency. And I feel like our section of the industry really promoted transparency. Transparency creates trust. And it feels like we're going backwards in a lot of ways with these like three basis points for record keeping. Look it that money's. These companies are making money somewhere. It's just the bodies are getting buried. And I think there's a real opportunity. If I was still advising clients, I think you can really use this as a weapon. [56:41] Chad: Yeah. [56:41] Speaker H: To really go in to demystify and to create transparency and to really help plan sponsors understand what is happening because they don't have the ability to distill and discern this themselves because they're not in it. And I feel like we. We need to be. Fiduciary can't be a marketing term that we use. It has to be part of our DNA that. [57:06] Chad: I love that. [57:07] Mark: But we saw. We saw that try to happen. [57:10] Speaker E: Josh still has such a good vocabulary. It's pretty intense. [57:13] Chad: Sorry, say that again. Chad. [57:16] Mark: We saw this try to happen years ago with fiduciary definition and this push by larger broker dealers to have 401k folks, advisors and corner offices be the only ones that are writing plans. But what did we quickly see to grants point again earlier? People are going to sell plans that will do one to three in their entire career. You're not going to have that kind of focused advisor that cares in that space, that understands. [57:41] Chad: But I loved, I loved it. [57:43] JD: So's take right there. I thought it was a real Chad's Nuggets moment of he's very right. We went from an industry, there's Chaz Nuggets. [57:53] Chad: We went from an industry where we [57:57] JD: had all kinds of crazy revenue share share classes, pay to play, real lack of transparency, big upfront commissions for advisors. Like it was a real crazy time. [58:09] Chad: And then we slowly migrated or evolved. [58:12] JD: I should say to the post, kind of 408B2, 404A5 and I agree with Josh. [58:17] Chad: I don't think it was those regs that did it. It was the advisor community saying we [58:22] JD: want institutional shared class of funds, we want transparency to know what's the record keeper making, what's the third party administrator making, what's the advisor making. [58:30] Chad: And that, that to me was a great moment. You've all heard me bitch about pooled [58:35] JD: employer plans where I feel like it's dragging us back, but this stuff's dragging us back too. [58:39] Chad: But Josh's point, which I want everyone to take note of, is what a fucking great opportunity to Nate agrees to be the transparent guy or girl that says fuck all that shit, come with me. I'm going to help you understand that they're playing a bunch of games to generate revenue. And I'm going to bring you institutional shared class of funds, no conflict of interest, yada yada, yada. So I think that was really well put. And I only say it over so I look like I'm smart and people [59:10] JD: stop and say, hey, I should follow it says advice. [59:14] Grant Ellis: So hey, listen, I got to say, I agree in theory, 100% with you, Josh. My question is whether eventually it's going to be possible to list out all of the conflicts of interest that exist with all of the companies that you bring a client. [59:27] Nate Moody: Right? [59:27] Grant Ellis: How many layers do you bring back? Let me explain. This old guy owns this thing and he owns this other thing. And it, the list is so long, it's becoming more integrated with money flow everywhere that there's going to be a challenge in just being able or being willing to list out all of the conflicts of interest that [59:45] Chad: this is what you're so good at. You don't go into all the minutiae [59:48] JD: and all the details. [59:49] Chad: You just have to establish trust so that buyer knows I trust Grant and [59:56] JD: he's going to lead me towards transparent clean products. [59:59] Mark: But Grant's saying he can't do that. J.D. [1:00:02] Grant Ellis: that's what I'm saying is, will it be possible to even know? [1:00:05] Mark: And can you cover margin in doing that? Grant, you didn't. The advisors aren't being paid enough for the most part to go go down that path. [1:00:12] Grant Ellis: And I'm not sure the sponsors will care eventually either. [1:00:17] Chad: We got to move on. We got a few more things to cover. [1:00:20] Speaker H: It's over. [1:00:20] Speaker E: We're not moving over. [1:00:22] Chad: And we're gonna end the. [1:00:23] JD: We're gonna end this subject. And I never say this with Tony Davis's quote, because it's right, blah, blah, blah. I've got a free plan. Sign here. So, yeah, you're right. We'll probably lose those things. [1:00:36] Chad: Let's. Let's play a game because we've got [1:00:39] JD: all these fun people here, and it's the totally original. You know. You know what it is? There is too many people here to go through all of you. So we're just gonna go kind of one at a time. Grant, you look healthy. I feel like. [1:01:09] Chad: Good, good skin tone. [1:01:11] JD: Your hair looks healthy. [1:01:12] Grant Ellis: I don't know what to say to that. [1:01:14] Speaker H: Grant's microphone. Dope. [1:01:17] Speaker E: So good. So good, man. [1:01:19] Nate Moody: Very good. [1:01:20] Chad: Grant, are you sure? [1:01:22] Grant Ellis: Be quiet. What are you. [1:01:24] Chad: Nope. Or dope on microwave food. [1:01:28] JD: Do you do this? [1:01:29] Grant Ellis: I got kids dope. Heat it up. Let's go. [1:01:32] Chad: Because it's easy. Yeah, what was the question? [1:01:36] Grant Ellis: Microwave food. Yeah, listen. Yeah, I'm. I'm in hardwood box. [1:01:40] Chad: Poke some holes in the slits. [1:01:42] Speaker H: Don't care, man. [1:01:42] Grant Ellis: Yeah, I. Kids busy. All the things. 12 and 14 year old running a business like. Let's. Let's heat it up. Let's go. [1:01:49] JD: I expected more from you on that. [1:01:51] Speaker E: Okay. [1:01:51] Grant Ellis: I know. [1:01:51] JD: That's fine. [1:01:52] Mark: JD's a hippie. [1:01:53] Grant Ellis: Don't worry, Grant, I. I know I knew where we're going here, but I, [1:01:56] Chad: I. Nate Mooney, if you have an [1:01:58] Nate Moody: air fryer and you're still microwaving food in 20, 25, it's disgusting. [1:02:03] Grant Ellis: We have one of each. [1:02:04] Mark: Yes, we want. Yeah, one of each. You got oatmeal. And in the morning. [1:02:07] Grant Ellis: Yeah, come on. [1:02:07] Mark: Air fry oatmeal. [1:02:09] Chad: God bless you. [1:02:11] JD: God bless you, Nate Moody. [1:02:12] Mark: Hold on. [1:02:13] Chad: Moody. [1:02:13] Speaker E: Are you one of those, like, microwave has like, sick from it get cancer? [1:02:18] Nate Moody: No, I'll microwave leftover coffee to reheat it. So I'm. Couldn't be more opposite money. [1:02:25] Grant Ellis: What's going on? [1:02:27] Speaker E: Drink your coffee regularly and it's warm, dude. Don't let it sit 30. [1:02:32] Chad: 30 seconds. 40 seconds it. Where are you at on coffee? [1:02:38] Nate Moody: Well, actually, if you really want to unpack it. I'll get the stoke iced coffee that comes in, like, the plastic bottle. I'll pour that out. Microwave. I'll microwave that because I like my coffee hot. But then it's like instant coffee. [1:02:52] Mark: You. There is something wrong with you, son. [1:02:55] Chad: Holy millennial. [1:02:57] Speaker H: Millennial. [1:02:58] Speaker E: That is the weirdest thing I've ever. [1:03:00] Grant Ellis: I know you buy serial killer type of stuff. Man. [1:03:04] Speaker E: That is cold. [1:03:05] JD: Okay? [1:03:06] Speaker E: Cold brew for a reason, buddy. [1:03:08] Chad: I know. [1:03:08] Nate Moody: I just love my coffee hot. [1:03:12] Mark: You can make it hot. [1:03:13] Grant Ellis: You know you can make it hot. [1:03:13] Mark: Dating. [1:03:14] Speaker H: We can't move on. [1:03:14] Justin: We have to discuss this. [1:03:15] Grant Ellis: Right. [1:03:16] Chad: Just tell you guys to know in. In two weeks. [1:03:19] Speaker H: Nate, did you vote for Mom? Dummy. [1:03:22] Nate Moody: He was a classmate of mine two [1:03:24] Speaker H: years ahead at Bowdoin. That's something I'll be proud of. [1:03:28] Chad: Okay, let's move to it. [1:03:29] JD: So, Josh, it's a. Nope. [1:03:31] Chad: Or dope on kombucha. [1:03:37] JD: This is a liquid that people drink that has micro. [1:03:40] Grant Ellis: Everybody froze. [1:03:42] Speaker H: I don't even know what that. I don't even know what that is. I'm gonna go. No. [1:03:47] Chad: Okay. So you're. Nope on that. [1:03:49] Mark: Josh looks like he's got a dip in right now. [1:03:51] Speaker E: Scares the out of me. [1:03:53] Chad: Robbie, are you. [1:03:54] JD: No. [1:03:54] Chad: For dope on kombucha. [1:03:56] Speaker E: Never had it. Literally. It sounds weird. I don't want it. I don't want it anywhere near me. [1:04:01] Chad: No, I. I've tried it. [1:04:03] JD: And my stomach gets very upset. [1:04:05] Chad: Justin. [1:04:05] Justin: Of course. Brandon would be drinking it daily. [1:04:08] JD: Yeah. [1:04:09] Justin: Next to the island. [1:04:10] JD: Almost killed him. [1:04:11] Chad: Yeah. [1:04:11] JD: Okay. With your stomach. Aren't you. [1:04:13] Chad: You have a sensitive stomach, Chad. [1:04:15] Mark: I do have a sensitive stomach, but it was Donna that put me on it. Right. And all of a sudden all these, like, toxins started being pushed out of my body. It was the weirdest thing. Like, my arms had, like, not pimples, but, like, toxins pushing out of them. [1:04:36] Chad: Oh, my God. We just lost half of our viewers in two seconds. Brandon, you have a kombucha message you'd like to share. I. I just. I drink this health aid Cayenne kombucha. [1:04:51] Nate Moody: It's like soda, man. It's like. [1:04:53] Chad: Like. [1:04:53] Speaker H: It's like a healthy soda pop. It's great. [1:04:56] JD: Okay. [1:04:57] Nate Moody: All right. [1:04:58] Chad: My microbiomes were not ready for what I had sent down there with them. And. [1:05:02] JD: And I did not feel good. [1:05:04] Chad: Let's see. [1:05:05] JD: I've. [1:05:07] Chad: I got one that I want to show for everybody, and it's. It's a Nova dope on Fred Reese and his new Instagram style. So I don't know if you've seen this, but this is Fred's Instagram, and he's been popping off on a lot of flower shots. And then all of a sudden, he started mixing in with the flowers. Airport airplane shots. And Brandon, I don't know if you can scroll down a little, or is that impossible? [1:05:42] JD: I'm asking too much. [1:05:43] Mark: As. As everybody gets older, they still image [1:05:47] Chad: lots of flowers, lots of airplanes. And what I would like to do is I'm dope on whatever he does, [1:05:55] JD: except for some of his recent comments on pulled employer plans, which show me [1:05:58] Chad: that he is losing it a little bit. But that's okay. But the flowers. I was like, oh, he's getting artsy. The sporadic airplanes. I want to know what's the message? What is Fred trying to tell us? There's got to be a message there, Grant. [1:06:16] Grant Ellis: No, I have no comment. [1:06:17] Chad: No. [1:06:18] Speaker E: Roby, I think JD. [1:06:21] Mark: I think you're lame, buddy. JD's too deep in a conspiracy theory. [1:06:28] Speaker E: It's not the conspiracy. Like, people take pictures and post them. Like, who the cares? It's just their life. They're doing stuff. They're just. There's no context. They think they're cool. They think they're different. They think they're artistic. [1:06:42] JD: Look at this. [1:06:42] Chad: Look at this. [1:06:43] Mark: Give a. [1:06:44] Chad: Let's. Well, let's stop. [1:06:45] Grant Ellis: You see the skull went in there. Yeah. [1:06:51] Chad: Roby, you're robi. You're missing an opportunity. This is one of the greatest 401k ers to ever live on this plane for you like this. [1:07:06] Speaker E: This is not a shot at me or Fred. Re. This is a shot at you for thinking there's some hidden message here, buddy. It's Instagram. It's a picture. [1:07:15] Chad: Enjoy it. [1:07:16] Speaker E: Hey, like, hit your little, like button and move the on. [1:07:20] Chad: Everyone stop for a moment. [1:07:21] Speaker H: He's been drinking too much kombucha. [1:07:23] Chad: Everyone stop for a moment and look at it. [1:07:25] JD: So he's literally worried that his Percocets are setting in too hard. [1:07:29] Chad: He doesn't know what's going on. I don't like what is happening. [1:07:33] JD: Why are they talking about flowers on Instagram? I'm sure. [1:07:36] Speaker H: Well, I'm on. I'm on the one with. [1:07:37] Chad: With. [1:07:37] Mark: He. [1:07:38] Speaker H: He's got the skull, and it's tripping me out right now. [1:07:42] Chad: Are you following him on Insta. Are you following him? [1:07:45] Nate Moody: Oh, yeah. [1:07:45] Speaker H: He just liked my daughter's college commitment post. [1:07:48] Chad: Are you kidding me? Okay, all right. Last. Last. Nope. Or dope. Nate Moody's sister. No, no. We'll move on. We'll move on from that. [1:07:58] JD: We'll move on from that. [1:08:00] Chad: I don't have time for the well spire thing. [1:08:02] JD: We've done enough conspiracies tonight. [1:08:05] Chad: I just want to end it with the Ito x Moody X Ellis moment that y' all were able to experience tonight. You've got three advisors that a lot of people reached out to me and said, I like that you're bringing on, [1:08:22] JD: like, the young guns. [1:08:24] Chad: Like, these are the. The new kids. [1:08:27] JD: And I was kind of thinking myself, like, him. [1:08:29] Chad: Listen, you old. The new kids. These are the. Like, these are the prime time that are taking over this industry. What do the three of you have in common? Is it a love for the game? [1:08:43] Speaker E: White dudes [1:08:46] Chad: specifically making a difference? [1:08:48] Speaker H: Sherry, you podcast is what we have in. [1:08:50] Chad: Is it. [1:08:51] Mark: Here we go. [1:08:52] Chad: Is it not afraid to speak your mind? Is it the industry zagging and you guys tend to zig at moments. Real quick, Grant, [1:09:04] JD: I can't ask you guys to talk about that on your own. That. I'll just do it for you. [1:09:08] Chad: Everyone, kids out. [1:09:11] JD: They got some going on. [1:09:13] Chad: The new. [1:09:14] JD: The up and comers, the taking over the industry. Don't give me that Percocet look. It's so. [1:09:20] Mark: I want to answer that question. JD51. [1:09:24] Speaker H: I'm gonna be 51 in a month. [1:09:25] Grant Ellis: I was gonna say this is an age disparity here. [1:09:27] JD: That's young for a retirement plan advisor. You're just a young whippersnapper. [1:09:32] Chad: Yes. [1:09:34] Mark: I think it would be fun to hear the four of us quickly try to answer that. I would start by saying they're incredibly intelligent and can speak in a way people can understand, which is hard to pair those two things. But that's. I think the three of them. Every time I listen to them talk, I'm learning. And I'm learning in a way in which I can digest and say it again. [1:09:53] Chad: Agreed. Justin, how much do you love these guys and why? [1:09:57] Mark: I love them. [1:09:58] JD: They're great. [1:10:00] Chad: Robbie. [1:10:02] Speaker E: All right, Grant. I missed the episode he was on. But listening to him today, I'm infatuated by his voice. And I think that he's probably got a. [1:10:11] Grant Ellis: There's an incredible. [1:10:12] Chad: Just. Just. [1:10:13] Speaker E: Just the. The world is his oyster. It so is. [1:10:16] Justin: Is. [1:10:17] Speaker E: He's like God to me. And then moody. [1:10:22] Chad: Well, can I finish? And obviously say the opposite. [1:10:26] JD: I'm. I've had so much of it. So I'm like, I'm done. I've overdosed. You know, I need to move on. [1:10:32] Nate Moody: What? [1:10:33] Speaker E: And he never can. [1:10:35] JD: He leaves. [1:10:36] Speaker E: He pulls me Back in. You know what I mean? [1:10:39] Chad: I have to say, I was listening [1:10:41] JD: to his podcast this afternoon with Nate, and I was like, God, he asked such good questions. It so does. [1:10:50] Chad: Anyways, yeah, I'm over. It's so old news. Grant to me. Grant to me on LinkedIn is like [1:10:57] JD: me listening to country music right now. [1:10:59] Chad: Like, when I listen to country music, I feel good about my family. [1:11:03] Justin: You're not in Texas. Stop. [1:11:04] Chad: About the people around me, about, you [1:11:06] JD: know, the real things in life, like [1:11:08] Chad: grandpa's and kids in life. And that's what I love about Grant Ellis and Nate Moody. Nate Moody. Psych. [1:11:17] JD: When I was 21, I saw some [1:11:19] Chad: hot, sexy chick that I was into. [1:11:22] JD: That's Nate Moody for me in the 401k space. [1:11:24] Chad: Everyone, we're not doing chatboard Champion, y'. [1:11:28] JD: All. [1:11:28] Chad: We're done. It's been another episode. [1:11:31] Mark: Oh, gosh. [1:11:32] Chad: We are changing the retirement plan industry one beer at a time. [1:11:34] JD: I gotta go watch the Buffalo Bills play and we'll. [1:11:38] Chad: We're out of here. We have a guest in two weeks. I forget who it is, but. [1:11:43] JD: But we got one, so. [1:11:46] Speaker E: First off, let me go look. [1:11:47] JD: It's so. [1:11:48] Speaker E: It's so Moody and Ellis. We need to have a. A name for them like we do with Shamanda. [1:11:54] Chad: Make this. Can we. [1:11:56] Justin: What, the Three Amigos? Or three. [1:11:58] Speaker E: No, like, you got to combine their names or something like. [1:12:01] JD: Okay. [1:12:04] Speaker H: Into an acro. Sin. [1:12:05] Mark: Yeah, I don't know. [1:12:05] Speaker E: Yeah. [1:12:06] Speaker H: But also, can we just make this [1:12:08] Speaker E: in every, like, four month rotation every quarter? [1:12:12] Mark: That'd be fun, fellas. [1:12:14] JD: Yeah, I like that. I like that idea. [1:12:16] Chad: In two weeks, we've got Benjamin Brandt. You're familiar with this guy? Yeah. [1:12:21] Grant Ellis: Retirement starts today. [1:12:23] Chad: Yeah. Okay. He'll be on the show. And yeah, we love you guys. Thanks for tuning in. We'll see you next time. Thank you. It so. Thank you, Grant. Thank you, Mooney. You guys, you know I love you and out there. [1:12:36] JD: We'll see you next time. Peace out. [1:12:37] Chad: Yeah. [1:12:38] Mark: Yeah. You guys are awesome. Thank you, fellas. [1:12:40] Grant Ellis: A lot of fun. [1:12:42] Nate Moody: Take care. [1:12:42] Chad: Play us some music. Brandon. [1:12:49] Speaker E: Said something smart. [1:12:51] Chad: This is not accurate. Percocet. Miley. Percocet.