Shlomo Benartzi: Holistic Financial Advice Beyond Investing

[0:00] JD: My lead man. I got you, Chad. The stash is coming back. [0:06] Chad: Well, it's Movember two day. Two days in. [0:09] JD: Duh, dude. [0:10] Justin: Nice shiny black shirt for Schlomo. [0:12] Chad: This is dress up for him. Not often. [0:32] Shlomo Benartzi: Foreign. [0:36] JD: Welcome to Retireholics, everybody. It's. It's. So we're going to kick this one off. You got a big guest. You got to do a. You got to do a poem, right? So we'll go back to poem time with JD if you could. Brandon. Shlomo, I wrote this for you. Shlomo. What does he do? He wears funny glasses and is smarter than you. Auto enrollments. Auto increase. The depths of his genius will never cease. Nerdy Chad says JD Richard Thaler is his bro. I say, I know Chad. Don't you know the Shlomo? Let's help Chad with a compare and contrast Shlomo vs. JD the difference is vast. Shlomo often says save more. Tomorrow JD says buy Lambo and borrow. Shlomo will give you monthly paychecks for life. JD Loves Rishi so much he would leave his wife. Shlomo leaves the industry without fear. JD has a problem drinking too much beer. Shlomo is the same distinguished, a real laureate. When Janie runs out of vodka, he gets very upset. Shlomo, is he the best guest that's ever been? Maybe. But how will he fare with Acro Sin? Will he seem so smart with too much champagne? Or will Justin's chatty mouth drive him insane? We all know Shlomo. We will all know Shlomo after this wonderful show. And then you can call Shlomo your bro. Welcome, Shlomo. It's nice to have you. Oh, he's out. [2:40] Chad: He's out. [2:42] JD: He's out of here. [2:44] Chad: J.D. that was solid. [2:46] Shlomo Benartzi: That was. [2:47] JD: Thank you. [2:48] Chad: Very, very good. [2:49] JD: I miss. [2:50] Justin: I missed the poems. [2:51] Chad: Did you have artificial intelligence write that for you? [2:54] JD: No, not at all. [2:56] Shlomo Benartzi: My neighbor decided that they shouldn't hear the second half and started to make a lot of noise. [3:02] JD: Oh, it's too bad. I'll. I'll. I'll call you on your phone tonight and do a private one on one with you. Late night. You'll. You'll know it's me when it's after midnight. Justin, I'll put you on the spot. Can you. Can we set time to show where Justin, he's not going to do a mid trail. He's not doing an outro. He's going to do an intro. [3:22] Justin: Normally I have another 10 minutes to write these things. [3:24] Shlomo Benartzi: Dude, come on. [3:25] JD: You ready? [3:27] Shlomo Benartzi: Sure. [3:28] Justin: He's a man that needs no introduction, but he's going to get one anyways. He's one of the most coveted guests of their High Hawks to date. And for a moment, we thought he was going to no show us. He's got a Wikipedia page, so you know he's legit. He's a sultan of savings, the guru of greenbacks, the maestro of mindful money management, the charismatic conductor of financial foresight. Co inventor of Save Tomorrow. [3:52] JD: Justin. Freeze. Drum roll. Shlomo, [3:59] Chad: you're good Now, Justin, you're good. [4:01] Shlomo Benartzi: Dude. [4:02] Justin: That's been happening all week with meetings. That's all right. But I'm perfectly clear. [4:06] JD: Well done. Welcome to the show, Schlomo. We're excited to have you. I know our audience is too, but let's get right to it. Headlines, Brandon, headlines. [4:26] Justin: Foreign. [4:32] JD: Everybody. You know, the friend of the show. You know the. The OG of retirement plan. Nevin Adams. Oh, God. I ring myself up there, got a. An Award. The 2023 recipient of the Harry T. Edson Founders Award. Congratulations to Nevin. The jury is still out on whether he's actually retired because I feel like he works more today than he did before he announced his retirement. But we will keep our finger on the pulse of that scary jd. [5:08] Chad: I looked at all the prior winners and I only recognized, like, two people on the list. Three people on the list. I know. Am I that disconnected? [5:19] JD: I don't know. I'm looking at them now. I kind of. I get that a little bit. And as you probably all know, because your LinkedIn scroll is filled with everyone letting you know that the IRS has come out. God damn. That wasn't on purpose. And a half with the 2024 contribution limits. Yay. So exciting. Chad, dude, were you blown away by this? A lot of numbers that really surprised you? [5:50] Chad: Yeah, super excited for it. We actually. Did you see Jake Rushton's post where he said 500 and then threw it at the camera? That's the same thing Devin pretty much said when we were chatting about it offline. It wasn't quite what I expected. I actually expected a larger increase there. [6:06] JD: Don't you think that's pretty normal, these little increments over the years? I mean, you've been in this business a long time. When you see it go from 22, 523,000, are you shocked? [6:18] Shlomo Benartzi: I don't think anyone notices it. I mean, the interesting question is, why don't we have on some of the interfaces a button that says let me always save the max? So I don't have to state a percentage. I don't have to state the dollar amount. I want to always save the max that I'm allowed to. That would make it easy for people. But as a side thing, actually about the contribution limits, I don't think many people actually remember that little thing I've done years ago, decades ago. Kind of scary. But in the old days, some of you lost your hair, like me. There was a percentage limit, not just the dollar limit, on how much you could save. [7:08] Chad: Really? [7:09] Shlomo Benartzi: Yeah, I think it was like 20% or something. I forgot the numbers. And then when they lifted it so that the percentage limit is 100%, that's just a dollar limit. [7:21] JD: Right, Right. [7:22] Shlomo Benartzi: Do you think saving weights went up or down? [7:26] JD: Oh, oh, you would naturally. I'll step into this one. You naturally think they go up, down. [7:32] Chad: Yeah, naturally up. But I'm going to say they went down because you positioned the question exactly. [7:37] Shlomo Benartzi: So they went down a bit. And the reason was that when the max was 20, 25, whatever it was, it was so easy. Yes. To use it as a mental shortcut and say, I'm gonna take 20 or 25, whatever the max is. Right. When the max is 100, you're not gonna save 100%. So what would be now a mental shortcut? 10% round number. So actually I found out at the time that a lot of new participants were saving less because the percentage limit went up. [8:19] JD: Now that you say that, that makes perfect sense to me because now you have to be on top of these numbers or you need a very proactive human resources person that's kind of sending out emails in November, Dec. Letting everyone know that this number has changed. I like what you said earlier. I would be shocked if. Well, maybe not shocked, but I would think that'd be a pretty cool little tech. Little tech button for payroll companies to say. To say, look, just max me out each year. Like, whatever it is, when the adjustment goes, do it. I'm imagining that's happening between employees and their human resources people. A lot. Like, they kind of know the people that want to be maxed out. But yeah, it is. It is confusing to stay up on the numbers, I guess. [9:03] Chad: Be interesting to see a percentage of people or a number of people that were maxing out in one year, but then didn't pay attention to the increase and thus didn't max out the second [9:12] JD: year or that happens for sure, bro. [9:15] Chad: I have to imagine. But it'd be interesting to see what percentage of people that we're maxing. [9:19] JD: If you could. If you could take. If you could get that data across the entire country, I think you'd be shocked at how many people in 2024 will defer. 22,500. I would. It's got to be a ton of unlike you. There's your next white paper, Schlomo. Go. Go figure that one out for us. Okay, next deal. Let's talk sadly but interestingly about layoffs. There's an article from Financial Advisor magazine that says Charles Schwab Chuck is laying off 2,000 employees. This is going to save them about $500 million. This doesn't come as a surprise. They let us know this earlier in the year that they were looking to do this. And it doesn't look like it's any specific employees, although they do say that, that it's no client facing employees. I love how a company has to make that very clear. Like we're firing a bunch of people, but they let everyone know. But. But don't worry, all the service people are still there. Like that's their protective mode. Shlomo, when you see a big company like Schwab laying off this many people, and I know you pay attention to markets and the economy and everything that's going on. Like, we still seem to be pretty strong in terms of economy. In spite of the high interest rates and everything that's going on, the market's going up. Is this a telltale sign when you see companies like this laying off people that they think tough times are ahead or. I mean, how does a smart guy like you interpret this? [10:53] Shlomo Benartzi: You know, when we talk about 401k participants, we talk about how they panic when markets go up and down. [11:02] JD: Sure. [11:02] Shlomo Benartzi: And when market sneeze, they suddenly save a bit less, actually get demotivated. And sometimes even those who do take action. Not many, but those who do tend to virtually buy high and sell low. And I'm wondering what would have happened if a big financial institution came out and made a very strong statement that says every time everyone else will fire people and markets will go down. We're gonna hire people because they're going to be more talent to grab. And we're gonna grab it every time that our competitors are gonna cut their marketing budgets because the Dow went down a bit. We're gonna spend a lot more because there's gonna be money in motion. And yes, investors be aware our earnings are gonna go down, but it's gonna be so much better for us in the value of the company in the long run. So I keep thinking about it because very much like you. And this is not about Schwab. They might have very good reasons. I, I don't know what they're doing and why, but in general, our industry did incredibly well when the S p was at 1500, the industry did even better when it was a 3000. The industry did unbelievably well when it was at 4500. So if it goes down to 4000, I, I don't understand. I really don't understand that thing. Other than the obsession we created in our culture that earnings shouldn't go up and down. We always have to hit the target. Why we're telling plan participants think long term, think creating value. And we created actually a culture that is really only about if we make short term. [13:18] JD: Yeah, the short term. I love how you're very. Making the connection between a 401k participant and then just the stock market or business as a whole. But that's very true. Yeah, we're. We're telling everyone, take the long, long the long road, mind. But then everything we do and in finance is very short term. Like we're looking at quarter profits in the next quarter and hitting certain numbers and all that kind of stuff. Devin brought up cool stuff in the chat bar and that we do have a lot of debt. And I also would argue that the COVID money definitely is a boost. And I don't know how long we feel that boost, but I think a lot of Americans do still feel it from 2020, the extra money that they had in their pocket. So maybe that's kind of keeping us going. And then a lot of people in the chat bar also mentioned, oh shit, I don't know what it stands for. TD Ameritrade, which they talked about in the article. Of course, that was part of this. That someone also called it a restructuring. Daniela says that, oh, there's a lot of. A lot of Ameritrade people. I'm not sure about that, but obviously when you acquire a company like that, you're probably going to cut a lot of those people loose. So I'm sure that takes up a somewhat of a chunk of. [14:36] Chad: Well, at the same time that they've had this acquisition and they've had all these new employees come over, they also stopped earning on trades. [14:47] JD: Right. [14:47] Chad: They've also continued. And it was something I hadn't really thought about. Shlomo. I'm sure you did. But they make most of their spread on money sitting in cash. Well, not as much money sitting in cash there. Now it's being pushed into. We'll call them stable investments that have a short term horizon that's higher than the small cash return interest rate that they're getting. All of that's going to cut into margins. All of that's going to cut into profitability. And if they're looking and saying we're going to embrace technology moving forward, now is the time, bro. In there and trim. [15:18] JD: I wouldn't necessarily say that Schwab isn't going through a tough time, though. I was playing pebble beach the other day and, and Charles Schwab was out in front of his house there mowing his own lawn. So I was like, holy. [15:31] Chad: Sure of that. Sure of that. [15:32] JD: Judy, let's go, let's go to topic before we go to some of Shlomo's topics here. Let's don't worry, Slow mother's got nothing to do with you. We're going to spin the wheel of ice and someone's going to have to drink a smear right into it. [15:46] Chad: I hope it's Mark. [15:48] Shlomo Benartzi: Yeah. [15:48] Justin: Who's drinking if it's Mark? Does he get it next week? [15:50] JD: You are, you are, I'd say, Justin [15:55] Chad: person who's been in the industry the least. [15:57] JD: Oh, well, there you go. Okay, I'm gonna set you up, Shlomo. I'm gonna set you up. Topic number one. I'm gonna read the abstract from the Value of Holistic Financial Advice and then we'll ask you a few questions. You can kind of, kind of set this up for us. This is from Shlomo and his little white paper that you have here, which any of you can get your hands on. If you want, we'll direct you in the right direction. Financial advice has historically been narrowly focused on investing decisions, thus catering to a small fraction of the population with enough. With enough wealth to care about alpha people like me. This paper explores the potential value of a broader or holistic financial advice that also covers savings, debt and insurance decisions which are relevant to a much broader population. The results show through your research here that, that there's tremendous value in such advice which is potentially worth. This is a first for me. 2472 basis points I've ever. I've never thought of basis points in the thousands. You're going to have to teach me on that one. Or an income boost of 7.5% for the typical household. 7.5% of their income. More importantly, this type of advice can be especially valuable for those with lower income who historically have been underserved. Shlomo, just set this up for everyone. These These three areas of savings, debt, and insurance. And these are the actionable areas that you think you can really make a dent in for other people. Like let everyone kind of understand the purpose of this study and some of the, some of the findings that you had. [17:41] Shlomo Benartzi: So I've been thinking for a long time about kind of, you know, what can we do to help the average for 1k participant. And we've made great progress on kind of investing. When I started to look at 401ks three decades ago, it was very common that people would be 50 in company stock and 50 in what we used to be called gigs, guaranteed insurance contracts. So we make great. [18:18] JD: You owe us a drink, Shlomo. You got your champagne there? [18:22] Shlomo Benartzi: Yeah, I'm working on it. It's, it's in its ice bag. And I'm gonna work with that, love. [18:32] JD: Okay. And you know, so you have to drink when you use acronyms, right? [18:39] Shlomo Benartzi: Did I use. I forgot even what I said. [18:42] Chad: Guaranteed income, contract, interest contract. [18:47] Shlomo Benartzi: Yeah, but that was, that was. Yeah, fair point. Chills. [18:54] JD: Anyway, we focus heavily on all the investing side of things. Yeah. [19:01] Shlomo Benartzi: And you know, you guys like to care, so I would say, who the cares about Alpha? Only people who have. Only people who have a lot of money. [19:14] JD: That's me, Shlama. [19:17] Shlomo Benartzi: Fair enough. But in order to care about Alpha, you need to have enough wealth in America. Now, as we actually sitting in this show, for every dollar in retirement savings, there's $2 of household debt. Oh, yeah. So we have to start looking at the big picture. And if you think about it, it's so difficult to assess the value of advice because let me give you an example. Do you have kids, jd? [19:52] JD: I got three. [19:54] Shlomo Benartzi: Wait. Excellent. What about you, Chad? [19:56] Chad: Yep. Two. [19:58] Shlomo Benartzi: Two. Justin. [19:59] Justin: Keeping the dream alive. [20:01] Chad: I got none. [20:02] Shlomo Benartzi: Okay, I got a great plan for you, JD And Chad. Do you ever buy ice cream for your kids? [20:09] JD: Yeah, sure, sure. [20:10] Chad: Ice Cream fairy brings us money for it. [20:13] Shlomo Benartzi: Stop it immediately. It's a great plan. Never buy them ice cream. Put the money aside with compounding. By the time you become grandparents, you're gonna be able to buy ice cream for 10 grandkids. It's the power of compounding. Well, you see the problem with that stupid idea, and it's an inherent problem with providing advice that there are trade offs. Do I buy actually ice cream for my kids or do I buy ice cream for many more grandkids? So you can put value on that advice of don't buy ice cream now, buy more ice cream later. So I was thinking, how do I solve it. And I was like, are there any cases where I can find a solution? I can give you advice that would make you buy ice cream for your kids and the grandkids. It's a win win. You don't have to give up on anything. There's no trade off. There's virtually hundred dollar bills waiting on the sidewalk and you're going to collect them. And as I was starting to look at the research, I was like, whoa, there are so many hundred dollar bills waiting. Where are they waiting? [21:31] JD: People are wasting. You're saying there's opportunities that people aren't taking advantage of in those areas and losing money. [21:37] Shlomo Benartzi: Therefore, basic, basic opportunities. For example, it wasn't that long ago when interest rates were low that one third of Americans, one third of Americans paid 1/3 too much on their mortgage, 1/3 too much on the mortgage. Every third person did it. And that study was focused on people who had good enough credit that they could refinance. Think about how much money went away. Now talk about insurance. When you look at lower income individuals, they generally waste one paycheck, one bi weekly paycheck every year because they buy an insurance policy that always, always make them pay more whether they stay healthy or whether they get sick. It's just an insurance policy nobody should ever buy. And we could keep going around saving decisions too. In a nutshell, I found cases where there's a better choice and there's no trade offs. You get ice cream for your kids and your grandkids. [22:55] JD: These are little, these are little simple financial decisions that many people, although we're kind of fixated on the lower income people, but it could be true of midwealth too, and higher wealth, but where they're making an improper decision. I saw in the, the white paper you gave an example too of people choosing their group health solution and always choosing the lowest deductible that they could get, right? So they're paying an enormous premium to get this low deductible. And if you do the math, it that doesn't work out most of the time. So you've made an improper choice. [23:33] Shlomo Benartzi: Not most of the time. [23:35] JD: Never, never works out. [23:37] Shlomo Benartzi: Because if I reduce your deductible by 500 bucks, but that cost you 600 bucks, you're always going to be worse off. So in other words, they're buying an insurance policy that even if they got really sick is still going to make them more, pay them more money. [23:57] Chad: So this, in that article, this is highlighting that what our industry is so focused on as being financial Advice is really investment advice. And what you're discussing is more holistic financial advice. And I said, I've said this to every person that asked me why I have an advisor that manages our money, that, that helps my wife and I make these decisions. And I said, it has nothing to do with investing the dollars. It has to do with helping us make the right decisions on do we buy this car outright, do we, do we take interest? Do we take a loan on it? How do we pay down our mortgage over a period of time? Do we take a 30 year or 15 year fixed? All these little things that I'm not smart enough to understand that they have a pulse on that person helps me with this. That to me is the value of a good financial advisor. [24:47] JD: I think Shlomo knows that. What you're referring to there, Chad, is what I would call like a financial planner. And I think more and more, especially out in California, you see a lot of advisors that kind of brand their business model as someone who's really going to help you with all these types of holistic things and these decisions like Chad was talking about. But I still think that there's still an overwhelmingly amount, a large amount of like just wealth managers and a lot of financial advisors just talking about the investments. And so hopefully this trend will continue. But there's, there's some roadblocks in front of it, there's some speed bumps. And I want to get your thoughts on this slow mo. Like I've always, and we've talked about this on the show, I've always felt like one of the reason that the low income people are underserved is because they don't have income, they don't have investable assets. And so for someone to go give them holistic advice, how are they going to get paid? In your paper you talk about that 7.5%, which I think is like the average household income based on your math to try to back into it, is somewhere around $60,000. So you're saving them like four and a half thousand dollars a year. I'm assuming that Shlomo doesn't think that the Advisor should take 2K of that 4,500 to pad their wallet for the services they're providing. But I don't know is how can someone get paid when someone's only going to save 4, 500 bucks? Therefore, how do we deliver services to these people if we can't get paid for it? You know? [26:18] Shlomo Benartzi: No, I, I get it. I think we're gonna have to automate it. It's gonna have to be a hybrid, a hybrid model of kind of technology, AI and human advisors. So that's artificial. [26:38] JD: Take some champagne, buddy. Artificial intelligence. Okay, so the, the good old artificial intelligence can solve everything answer. Which by the way, I kind of believe in that, so I'm not against you on that. But don't we also know that these low income people are not really good at doing at, at being proactive? I mean, you're, you're one of the godfathers of automatic enrollment, automatic increase. You don't, you don't believe that all these people are going to run off to an app or use technology to get this kind of advice because they're not typically motivated like that. [27:18] Shlomo Benartzi: So let's, let's talk about that because I think it's really important. First of all, I don't think we need another app. I mean, your phone is probably already blowing up from all the apps that it has on it. So I don't think another app is the solution. I think one of the great things about kind of the large language models that we're seeing, like ChatGPT, nice work. [27:46] JD: Oh, that's definitely generative, son. We got to figure out what that one means. [27:52] Justin: We figured it out a couple weeks ago. [27:55] Shlomo Benartzi: See it keep. [27:56] JD: And you can always finish your thoughts. We have to drink right away. [28:00] Shlomo Benartzi: I enjoy it though. But the, the ability of those tools to communicate is unreal. So in other words, we don't need anything more than text messaging really to actually have a chat with those tools. So I don't think we need another app. But, but the absolute solution and obviously the analogy of automatic enrollment, make it easy. Just do it for them. So there's no reason that we have people having to keep checking their mortgage and look for better deals. All of that should be automated. I mean, should be automated. [28:55] JD: There's no very. Bro. You remember when we thought automatic enrollment or automatic increases was like very Big Brother? I remember that was. Everyone's like, whoa, you can't, you can't do that on behalf of people. Like, that's really sketchy. A lot of plan sponsors push back against it. Like, and now we've overcome that. But so, but so when I hear Shloma talk about, like, defaulting these people into some of these decisions, I start to go, holy shit, that sounds pretty intense. But we felt the same way about your other inventions, so maybe that's all right. Chad. [29:34] Shlomo Benartzi: Today for someone to actually keep monitoring my life insurance policies, my mortgage, everything, and just let me know when I should switch. I mean, there's so much effort otherwise. And the problem at the end of the day, the wealthy would actually have someone check it for them and the rest of the people would not. So when you look actually in the case of mortgages, virtually people who are not as digitally savvy or lower income, they end up literally subsidizing people who are digitally savvy and wealthier because they refinance. Right. So I think we got to try and automate all of this and it's gonna have some tough discussions. Automation means data. [30:24] Chad: Yes. [30:24] Shlomo Benartzi: Data means we have to talk about privacy. But let me ask you this. We're automatically enrolling people. We're in the 21st century and we're automatically enrolling everyone at the same deferral rate. Do you think that the single parent with three kids, five maxed out credit cards behind, making the minimum payments, do you think that we should automatically all that single parent to save 7%. [31:02] JD: Now this kind of venn diagrams with your save more tomorrow 2.0. Right. And I, when I, I heard you on a podcast talking about this and it got really, really exciting. I think Chad's gonna like this. I think you've mentioned this before, Chad, where instead of say defaulting everyone at 5% or whatever, you'd actually use their personal data to decide or maybe decisions from them too, but to put everyone on their own kind of personalized path. [31:32] Chad: We talked about it in the Ron Sers article last week about accessing that data. How are we getting it? Can blockchain help in that at some point? Can artificial intelligence help? Pull in all that is available to us on someone so that we can make informed decisions. [31:50] JD: Do we worry? [31:50] Chad: The truth is we're never going to get it from the participant, JD ever. You're never going to get what you need from them to refinance their loan, Shlomo. So we have to find a way to gather it without their effort. [32:01] Shlomo Benartzi: Are you sure about that? [32:03] Chad: I'm very confident in that. [32:04] JD: You mean you won't get it from them? But Shlomo's saying but you can get it from the Internet. [32:11] Chad: Yes. I'm saying they will not take the time to input that information, the average American. [32:18] Shlomo Benartzi: I agree, I agree. But you got to look at what Athena Advisory with Brian Cusmano, used to be the Chief Innovation officer at Empower, is doing. And imagine, imagine that I could literally have a one click refinance your mortgage. Yeah. Wouldn't that be nice? So nice. [32:44] JD: But there's, but there's. It sounds nice in dreamland, but There's. There's closing costs that you need to consider, I guess. So you would make those decisions for you, huh? If it's a reasonable closing cost. [32:54] Chad: But again, you need information in order to do that. And I'm not saying that the future will not allow you to get that data. What I'm saying is we cannot rely on the participant to get that data. That's why automatic enrollment auto escalation was so effective. [33:08] JD: Okay, wait, I want to stop with Hackler saying, I want to stop with Hackler in the chat bar. Hang on, Shamo, because I'll ask you this, because Slacker Schlackler. Schlackler brings up a good point. What about laws like. And not just ERISA laws. God damn it, I'll drink for that. [33:25] Shlomo Benartzi: Well, if they're. [33:25] Justin: If they're providing the data. [33:27] JD: But, but no, no, no, not, not privacy laws. Laws of like equal rights and benefits, you know, or aren't you. Aren't you liable because you. You automatically enrolled someone at 7% and then you automatically enrolled someone else at 3? Isn't that like a lawsuit waiting to happen down the line? Because you. You analyze those people incorrectly or something, Shlomo. [33:50] Shlomo Benartzi: That's what you do now. You analyze them all incorrectly and say, come back. Yeah, thanks. You're completely ignoring the fact that all it would take to give better advice is just having a participant say, you could use my credit report. Soft credit report. One little click, one little click. And you could actually at the same time say, oh, we could do all the refinance application for you because we could pull data from the credit report. We'll. [34:23] JD: We'll move on from this one. But I want to love, I want to imagine one last thing here, Chad, is we talked about this on a live show before, and I forgot, but workplace solutions. So now we allow the employer to be the Trojan horse of this type of futuristic thinking. And I could swallow the concept of. Remember a very loving, paternalistic, maternalistic employer that says to their 50 employees, 75 employees, look, when you come to work here, we care about you and we care about your financial life as well. And so we're going to put everyone that we employ into this program, and it's going to do all these things for you. Your savings, your 401k, your insurance, your. Your debts, your credit cards, your. And. And so I could see how that would be accepted by people like, it's just your employer taking care of you. [35:22] Chad: Shame on you. You can go back to every episode of this show that I've Been saying that for years that all financial services resources are eventually going to be coming through your employer because we're all going to get smart enough and realize that's the easiest way to reach the average American. And so I do think, I do think refinancing, I do think if you're going to take a mortgage, I do think if you're changing credit card services, I do think if you're looking to [35:49] JD: buy financial wellness on steroids to be [35:54] Chad: accessible through the employer you're working with, [35:57] JD: do you feel that way from day one, you feel like the, the employer is the right vehicle to deliver all this? [36:03] Shlomo Benartzi: I think we should debate that it might be valuable when you have large employers, but I don't want to miss out on people in the gig economy and people who don't have employers. But you touch on financial wellness and I want to actually spend a couple of minutes there because I think the 2000 basis point statistic is not as shocking as another statistic I want to share on finance. [36:30] JD: That's what Chad charges on startup plans is 2000 basis point second. [36:37] Shlomo Benartzi: So, so I was one. When you think about money, it's just the means, it's not the ends and the. At the end of the day, what we're looking for is kind of financial peace of mind in some way or form or financial wellness as some might call it. And I started to measure it using kind of a metric that my good friend John lynch at the University of Colorado has devised. And I was looking what drives it. Is it gender? Is it age? Is it income? Is it. And it seems like the only demographic variable that makes a difference is exactly what you, you would predict income, you have more money, financial anxiety goes down, financial well being goes up. But then I included one more variable, financial advice. And I found out that the, the most important factor in financial well being is getting financial advice. [37:49] JD: Brandon, Brandon, you want to throw up that slide? Thanks, buddy. Ah, he's reading my mind. This is what this is. This is kind of touch on what you're talking about a little bit. [37:56] Shlomo Benartzi: It's kind of touching on it. So it's virtually showing from left to right, like the gap in financial wellness. And a higher number is better, it's less financial anxiety, greater financial peace of mind. You could see there's some difference between men and women, younger and older, high income, low income. But getting actually financial advice, working with an advisor has bigger impact than anything else. [38:27] JD: You feel this way, right, Chad? [38:30] Chad: Absolutely. [38:30] JD: You talk so highly of your guy like, so you're, you're happier financially because you have someone guiding you through. [38:37] Chad: I, I can confidently say outside of investments, he saved us tens of thousands of dollars with proper advice on what we should be doing in situations. [38:46] JD: But again, you're one of those, you're one of those richer people. So we expect you to have that. [38:50] Chad: So these are, these are decisions in buying our home and, and buying a car that, to have things that every, every household is, is hopefully doing the. Buying a home. Maybe not all, but no, these are normal steps in life. [39:04] JD: JD and so Schlomo through, through technology are you're hoping that a lot of the lower income people can, can be on the far right of this little chart here. They can have an advisor in a sense, right? [39:20] Shlomo Benartzi: Well, yes, but let me just quantify that far right. So if you kind of think about having an advisor makes more of a difference in income, can we quantify it? And I found out that getting financial advice has the same impact as boosting your income by 82% on your financial well being. Think about that number. If you had a choice between getting financial advice and doubling your income, that would have the same impact on lowering your financial anxiety and boosting your financial well being. [40:05] Justin: That, that's clear like across the board to low income people as well as high income people too. [40:11] Shlomo Benartzi: It's not, it makes a bigger difference on lower income. [40:16] JD: Of course it does. Yeah, it does. There's less, there's less. You're playing with less chips on the table. So it's going to have. [40:22] Shlomo Benartzi: I realize that. [40:22] Justin: But there's so much more, so much less to, to utilize typically. So I didn't. [40:28] Shlomo Benartzi: Relative to their income, it's such a bigger number. [40:31] JD: Totally. [40:31] Shlomo Benartzi: Yeah. [40:32] JD: Remember Chad when we were in DC Check swing when we were in Washington and, and he was on stage talking about how you get like a $500 check per month or whatever through your guaranteed income. And I was like, who the fuck cares about that? But then I just realized, wait a second, if you make 45k a year and you retire and you get Social Security and that takes up a big chunk of it, that 500amonth is a nice little add on to that percentage. Yeah. So. So when you're dealing with lower income people, there's a lot of opportunity to fill that gap, you know, because you don't have to get that many dollars. [41:15] Chad: Shloma. He said earlier, he had said earlier too that folks in the higher income brackets are leveraging these things already. They are refinancing. They're not the 1/3 that is paying more. So those are the people that have more room probably to have this create an impact for them because they're not, they're not doing it. Think of it. And this is a horrible example, but I can't not say it. There's a lot of conversation about businesses paying their fair share of taxes. There's a lot of very large businesses making a whole lot of money that probably pay less taxes than JD and plan design consultants. Right. So that same concept exists. There's a lot of smaller business and our individuals. [41:57] JD: You didn't add that one, Shlomo. That should be. You probably thought of it. You could add that as a fourth area. Well, I'm sure there's a fifth, a six and a seventh area. But how about, how about getting good tax then like accountant, CPA help. That could save you some money too. You make as much money as me, you don't get any write off. But when you're a, when you're a normal person, you can get write offs and stuff, right? [42:19] Shlomo Benartzi: You don't get a write off. Lambos, you know, but I don't get a write off. It raises an interesting question. With all of the tax credits to set the 401k, [42:35] JD: do you think, do [42:37] Shlomo Benartzi: you think that the people at the coffee shop I go to every morning at Good People, it is literally called Good People. Awesome Coffee Shop. Do you think that they're aware of the tax credit? To actually know about the tax credit, they need to have an expensive accountant who would actually be aware of it. Community. So we've got a lot of challenges here. And kind of the issue in making smart decisions in the retirement space is not just at the employee level. There are challenges at the employer level as well. [43:13] JD: Well, come on, Shlomo, you gave us automatic enrollment. We, we pumped that baby into the Pension Protection act and now it's been many years. Where's your next big thing, bro? Like, help us out. You're supposed to be leading us to the promised land. No, no, no. We're going to get to something you're working on. But what I'd like to do first is play a little game. So we're going to play the totally original, never copied. Nope. Or Dope game. All right, the way this works, Shlomo, is I'm gonna ask you a question, bring up kind of a pop culture thing or a statement, and you're just gonna let me know if you're dope with it thumbs up or nope with it thumbs down, and then tell us why you feel that way. Okay, this is something that happens. No, I'm gonna go this one first. Simple, no explanation needed. Eating in your car, are you? Nope. Or dope on eating in your car? Nope, he says. And why those? [44:26] Shlomo Benartzi: You know me, I'm reasonably organized and neat color and so on. So? So my car. Nobody can eat in the car. [44:42] JD: Shlomo, do you have kids? [44:45] Shlomo Benartzi: I do have kids. [44:45] JD: And we don't let them eat in your car. [44:48] Shlomo Benartzi: Of course not. [44:49] JD: Wow, we're learning so much. What a mean dad. Chad, you eat your car. Come on, everybody in Missouri eats in her car, don't they? [45:00] Chad: I'm dope for sure. I gotta run the kids from event to event to event. They've got to eat at some point. We can't stop between school and baseball and track and so yeah, they're eating while we're rolling. [45:13] JD: Justin, I know you've eaten your car. Come on, bro. [45:17] Chad: Look at me. Of course I do, man. [45:18] Justin: No, I don't have nice enough car to worry about that. [45:21] JD: So you're dope with it. [45:23] Shlomo Benartzi: Oh, hell yeah. [45:24] Justin: But you're in sales. You have to be. [45:27] JD: Can I propose a question? Like, it seems very rushed and kind of like, I don't know, haste, wasteful. Like why not just pull over, you know, Pull over, sit on the hood of your car, of your truck and huh. [45:43] Shlomo Benartzi: Time. [45:44] JD: So efficient time. Wow. [45:48] Chad: You got to be present kids to practice late. The kids get out of school at 3:30. They've got this, this and this. They've got to eat dinner before 9 o'. Clock. My kids are 11 and 8. I'm not going to feed them at 9 o'. [46:00] JD: Clock. [46:00] Chad: But they've, they've chosen to do different events. So I've got to get them some food at some point. It's usually from one place to the next. [46:06] JD: Well, Jason says Tesla, definitely. You know, I think we talked about this on the show. I bought my son a Tesla out in college in Miami. And it's got those, the white seats, the bright white seats. Those things freaked me the out when I saw those. They are the cleanest white interior. I, I can't wait to see what thing that thing looks like at the end of the semester. [46:31] Shlomo Benartzi: Shloma. [46:31] JD: Okay, another one? Yeah, I bought him a Tesla, bro. It's the cheap one. It's the low, low end one. I got them. [46:40] Chad: Okay. This is. [46:41] JD: Something happens to me. I'm curious if it happens to you. Shlomo. I don't know what it's called. I think there's a name for it. But ordering Food envy. Like, and specifically, like, with your spouse. Like, so you're at a restaurant. This has me all the time. And I'll order something that I want to eat, then my wife will order something, the plates will come out, and I will. This is good for a behavioral economist. Here. I will always feel like I made the wrong decision. Is. Is this a thing in your life? No, it's not. But do you feel me? Does it. This make sense to the. To the behavioral person? No. Okay, Chad. [47:19] Shlomo Benartzi: Oh, you know what? I do. I don't. I don't all though. I have my girlfriend model for both of us. And that way, if I don't like it, I can blame her. I chose the wrong one. [47:31] JD: You know what we call that? We call that automatic enrollment. Okay. Chad. Yeah. What's your. [47:35] Chad: No, Brooke. Brooke and I will chat about. Usually it's what I want and then what she wants, and then if what I want is not something that she wants, then I'll pick something different. So I'm splitting. Oh, we're. We're hammering two different meals together. That one of each that we want. [47:53] JD: Justin, I know you don't have kids. [47:55] Justin: I've never had that problem, pal. [47:59] JD: I think what I'm gonna do every time is when I go to the restaurants now, I'm gonna go up to the waitress first and like, whisper to her and be like, look, whatever I order, just ignore it. Get me the same thing my wife gets, you know, and then I'll be happy forever. Okay, so I'm a last one. And this one is. Is important here on Retireholics. This is really. We want to know how all our guests feel about this subject. Nope. Or dope on seahorses. Gotta think about that one. Take your time. That's a. It's a deep crappy. [48:35] Chad: But they're. [48:36] JD: They're creepy. Dope. And why do you love those little guys? Or. [48:45] Shlomo Benartzi: I mean, I love everything. Everything in it. I mean, it's like. I love this stuff. I love it all. [48:53] JD: Seahorses. [48:55] Chad: Seahorses are incredible creatures. [48:57] Shlomo Benartzi: They are in your car. [48:59] JD: They are incredible creatures. Okay, we are gonna do an old segment that we haven't done in a while, and we're gonna mix it in with. With Shlomo's thing. So I think we called it, like, what we do here, Shlomo, is we take a quick little look at a new product that's out there in the market, and we call it Spotlight. Play the music. This is a quote from Shlomo. In 10 minutes, participants are able to Create a highly customized and sustainable retirement paycheck that reflects their needs, goals, and preferences. I'm talking about Pension plus people. Okay? Pension plus. I saw an announcement. You made a deal with American Funds. They've agreed to pilot this. I believe you made a deal with one America that they're going to pilot this. Tell everyone what the is going on here. How the hell can you do this in 10 minutes? And how can you create paychecks for people for life? [50:07] Shlomo Benartzi: So let me actually just tell you a personal story. One of my closest friends just literally lost his dad roughly a week ago. [50:20] JD: One of your good friends lost his dad? [50:23] Shlomo Benartzi: Yeah, yeah, yeah. And he literally lost it while we were having a webinar to talk about some insurance financial products. Beginning of the webinar, he was alive. At the end, he was dead. Anyway, fast forward, his mom is still alive. He meets with the financial advisor to kind of figure out what's next. And of course, his mom is devastated and she's scared to death about how the. She's gonna create a paycheck, how she's gonna get the next paycheck now that lifetime partner is gone. They've been together for literally 50 years. [51:06] JD: And was he. Was he still the, like, an income provider at that time? Like, he wasn't retired? [51:11] Shlomo Benartzi: They were both retired. [51:12] JD: Okay. [51:13] Shlomo Benartzi: They were both retired. But still the Social Security was more on his side and, you know, all the complications. [51:19] JD: She didn't manage the stuff. Yeah, yeah. [51:21] Shlomo Benartzi: There's an advisor, and the advisor shows up and he says, don't worry. Look at the portfolio. It's so well diversified. And my friend is like, what the. How do we create a paycheck? Yeah, [51:39] JD: you don't care. Logging on, seeing how much money you got. How are you going to live off of it? Right? [51:43] Shlomo Benartzi: Exactly, exactly. So I think it's a huge problem for people to figure out how to convert assets to income. [51:54] JD: Of course, we've talked about this on the show forever. I think the accumulation phase has its own problems, but is fairly straightforward. But we all in the industry seem to look at decumulation and feel like, oh, my God. That's a complicated problem to figure out. So I agree with you. Like, it's intimidating. [52:13] Shlomo Benartzi: So let me give you an example. You have kids and Chad has kids. Are you planning to leave something to your kids one day, J.P. yeah, I [52:23] JD: mean, I. I want to make a joke there, but no, I am. We'll be serious. [52:27] Shlomo Benartzi: Chad, what about you? [52:28] Chad: Yes, that's my intent. [52:31] Shlomo Benartzi: 75 of Americans with kids would like to do it. 25 do not want to do it. So retirement is all about personalization and it's all about trade offs. The more you're going to live to your kids, the less you should spend every month. Where do you go today as parents? Maybe you, Justin, have a favorite charity, whatever you might want to live or not want to live. Where do you go today to have someone tell you, given your health, given where you invested, given investing, if you were to leave to your kids one day $100,000, this is how much less you would spend every month in retirement? [53:20] Chad: Nowhere. [53:21] Shlomo Benartzi: There's nowhere. So if we look at this screen, what we've built at Pension plus is really a trade off engine where. A UPS driver who might not be great at number and month and finances can see in plain English, if I leave no gift from all of the sources of income, I can have a sustainable monthly paycheck of $5,700. Well, maybe I want to leave a gift. Not today, I want to leave it when later on if you want to leave 100k, we'll figure out inflation and everything you have to reduce your monthly paycheck by 250 bucks. All in plain English. And this is one of many decisions that we don't help people make really all those trade offs. When to retire, when to claim Social Security. The typical American household is giving up hundreds and $82,000, $182,000 by claiming Social [54:38] JD: Security, not pushing it out. [54:42] Shlomo Benartzi: And this is advice by the way. [54:45] JD: Yeah, and this gift part is, is one part of it. And that's really cool to see it here. But I'm actually more interested in kind of the how you're building this. I go to the website and there's kind of like these four stages. It says, it says tell us about your retirement savings like your 401k or your, your individual retirement account. Answer 10 simple questions about goals, needs, preferred retirement lifestyle. And that preferred retirement lifestyle might have to do with this, what do you call it? A bequest. I learned a new word today. Bequest or I never use that one. And then Pension plus creates a personalized monthly paycheck that lasts the rest of your life. I get that. But here's the one that, that makes me wonder. There's no need to transfer any funds. You stay in complete control of your savings and continue to grow in the same accounts. So the way Pension plus wants to work and you've already got this relationship kind of built with American funds and one America is money stays in there and then you have a Relationship with them with like APIs or what, I'll drink for that or whatever technology to like kind of do this. And then the record keeper will tell the record keeper what amount and they'll go ahead and cut this check. You're nodding? Yes, yes, yes. That's a trip, right, Chad? He doesn't want the money. [56:06] Chad: I didn't understand that. Hold on. Don't. Don't move past that. Because when I read through the website, I didn't get that. I thought it was different. You're saying you're telling the record keeper to cut the check. We don't tell you, Shlomo, they're not taking the money. I was not aware of what was happening. The way I read that, just so you know, the way as an outsider I read, in reading through the website and article, is that you all were going to take ownership of the assets. I know nothing has to move. You were going to take ownership of the assets and essentially annuitize it from your side to continue to issue them a paycheck ongoing. And if they had a help us, [56:44] JD: there's no annuitization, is there? I can just go ahead and go. [56:50] Shlomo Benartzi: No, that's very valuable feedback and I'm glad you mentioned it. But the idea is that we're going to calculate what you could take out. So you're not running out of money, but we're not going to have you move the money to us. We're not going to take control of your assets. We're just advising you so that you could keep it within your 401k plan if you would like. If you want to move it to an ira, it doesn't have to be ours. We're not pitching product. We're going to help you there as well. [57:22] JD: You gotta drink, bro. Individual retirement account takes some of this [57:26] Chad: different than what I envisioned. [57:27] JD: Okay, okay, Here's a quick, easy question. Then I think that everyone would want to ask. So I'm in charge of my own investments. What if I blow it? Pick horrible investments, do whatever, and my account balance starts to drop, drop, drop. Will my check start dropping too? Obviously, right? [57:44] Shlomo Benartzi: No, because we're gonna alert you. So let's say you're 100 in a single stock. We're not going to produce a paycheck for you. We're going to tell you, look, this is not sustainable. So we. There are cases where we're not going to be willing to virtually guide you because we feel that the situation if you were 100 in Bitcoin, would be like, we don't know what to make out of this. So we're sorry, we can't really help you. [58:15] JD: So there are some requirements that my investments be kind of allocated prudently for your math. But I did also see somewhere that if the investments do well, I might get, like, a bonus check at the end of the year in addition to my monthly check. Yeah. [58:33] Shlomo Benartzi: So we have a patent. We built virtually a formula that if things do well, how much of a bonus can we give you without increasing the risks that you're going to run out of money? These are not huge checks, but they have psychological reason to be there. People want a little bit of upside, something positive to look for. If you think about it, how do we do decumulation planning? Right now we're like, chad, when are you going to die? That's kind of the first question on a lot of calculators. And then the next thing, you're gonna run out of money. Very, very positive experience. And then we're surprised that people don't want to engage with it. So we think it's really important to add something positive to the process that people can look forward to, even if it's not a huge chunk, but not make it such a end of life. Yeah. [59:41] JD: Like a true behavioral guy. Because I. I guess I would argue that, well, if you did extra returns in a year, it might be nice to put it back into the account to kind of get that compounding, keep going on a bigger balance. But I get it. It's kind of fun to get an extra check. Yes. [59:58] Justin: Justin, what about when the returns are down, though? I mean, my thought was why would. Why would you not want to save that for those years, too? [1:00:05] JD: Yeah, I guess. Did you answer that question, or am I too drunk already? What happens when. When they. When the accounts don't do well? Let's say it's prudently invested. It's not in Bitcoin or anything like that, but it just, you know, we had a bad couple years that my monthly check number doesn't go down. [1:00:20] Shlomo Benartzi: So we build it in a way that it's going to be very unlikely that it's going to go down now. If the world is collapsing, we'll adjust it. But if you think about the typical household at that phase, easily half two thirds of their income comes from Social Security. Then their portfolio is often, you know, 40% in stock, 60% in fixed income. So they're not as sensitive to the market as you would actually think. It's not the big issue. The big issue is actually longevity. So people normally run out of money because they win the longevity lottery and they live long. [1:01:05] JD: I saw something. I saw some dude recently, I give a speech, and he was talking about how even because of like, artificial intelligence and all kinds of stuff, like, we could see lifespans get super gnarly in the next decade or two, where people, a lot of people are living well beyond a hundred and. And all of the impacts that that's going to have on our society. We're pretty intense. So, anyways, side note, side note, I want to ask you kind of, you made me think of this with the target date funds and everything, as the. Can I call you the inventor of automatic enrollment? And I mean, you. You put. You played a role, though, like a big role. No, no. [1:01:49] Shlomo Benartzi: So that's a misconception out there. My good friend Mitch Haber always said that Shlomi is the godfather of auto everything. [1:01:57] JD: That's the one America guy. Yeah, Mitch, yeah, yeah. [1:02:01] Shlomo Benartzi: It's now at Voya, but. But more importantly, he's a good friend of mine. We just had coffee yesterday. But anyway, automatic enrollment was set in the UK in retirement plans about 200 years ago. [1:02:22] JD: Okay. [1:02:24] Shlomo Benartzi: Yeah. Moshe Milevsky, the economist in Canada, has actually got a PhD in financial engineering. And then during the pandemic, got bored and decided to do a master in History. And he was studying that and. And that as far back as he was able to trace automatically. [1:02:47] JD: Great, nice, humble answer. But when it comes to the Pension Protection act, it was you and Richard. No, wait. [1:02:56] Shlomo Benartzi: But automatic escalation, that's me. And we child. Absolutely. So automatic enrollment, we did not invent it. We would have loved to. We did not. Automatic escalation, Absolutely. [1:03:10] JD: Okay. And. And you, whatever you did through your hard work, you guys get that implemented in the Pension Protection Act. And we look back now and wow, like. And if anyone wants to go to Shlomo's website and there's like a fun little calculator there, kind of ticking away at all the millions of people that it's helped and all the assets that it's. It's helped you. And obviously, automatic enrollment, automatic increase has been, I mean, a tidal wave for our industry. [1:03:38] Chad: Every new plan created from here on out. [1:03:42] JD: You must love secure 2.0. Taking that and like mandating it for new plans. But I had a more controversial question for you. You've also said that you're a fan of qualified default investment alternatives and kind of the target dates as. As that solution were you. Did you feel bad or weird at all in 2020 when the target date funds in the, in the higher genres, you know, people close to retirement because equities and fixed income went down together. They had such a shitty year. Like, were you thinking, like, oh my God, what did we do with these qualified default investment alternatives? Or, or. No, like, how did you feel about that? Look, long run, I guess. [1:04:24] Shlomo Benartzi: Well, we built retirement saving vehicles. They're even called this way. Look at ups. Look at most companies. It's not called the ups. [1:04:36] JD: Oh, two. Give them two. Six, seven. [1:04:38] Chad: I got you for one. [1:04:39] JD: But hey, he just went. That was the over under, though. Six and a half, I think was the over under. [1:04:43] Justin: No, because one was counted for you. [1:04:45] JD: Okay, sorry. Go on, Shlomo. [1:04:47] Shlomo Benartzi: So, so think about it. It's really the savings plan. That's how they're called. Look at the 45,500 forms. And we never thought about actually the fact that there needs to be kind of an income at the end. It's like an airplane that was built to take off, climb, and, you know, be on autopilot through the ocean, and then there's no landing gear. So the problem is not that there's a great autopilot across the ocean and that's the QDIAS and the target date funds. The problem is that there's no [1:05:30] JD: qualified default investment alternative. [1:05:32] Shlomo Benartzi: And virtually, I don't think that what failed for people who were to retire in 2020 is that the target date funds are a bad idea. What failed is they were not built for decumulation. And we have to start addressing the decumulation. It means products, but before the products, it means classes, which would mean which products are right for you. And the one shoe fits all would not work. It's all going to be about personalization. And that's where all the technology would, would come in. [1:06:15] Chad: It's every, every and all, every academic, although Shlomo is the only academic we've had on. Every person who knows this space and is so intelligent is saying the exact same thing. Personalization is the next step in, in, in every financial services space, let alone just the 401k. And what's going to be needed for that is access to the data. And that's coming. It's. It's here, but it's really coming. [1:06:41] Shlomo Benartzi: So here's an interesting fact about credit. Credit reports. The Fair Credit Report act was set more than 50 years ago. It says that we need an explicit consent. But that thing was set before there were soft credit reports affect your credit, before there was Internet, before we knew anything about opt in versus optimization. [1:07:12] JD: It's antiquated. It's antiquated. [1:07:14] Shlomo Benartzi: So to me, what Washington should be focused on is data and question they should ask, and I'm not saying I have the answer is should we actually allow a responsible employer financial institution to automatically pull credit reports so that we can make sure that we don't automatically enroll? [1:07:40] JD: That's not a, that's not a foregone conclusion. Because I like the idea. We've talked about this on the show before. I like the idea of you using my data to enhance my life. Like, we've used the example before. Like, I'd love to be driving down the highway and have my phone tell me that there's a surfboard that fits, you know, my preferences, that is on sale on the next exit and I go get it. But then there's. And I don't know if it's truly half, but then there's a whole nother group of people in the United States that are like, that sounds super creepy. And I want to block my data from these people. I mean, we've seen the government try to quiz Facebook or Meta and Google and the chief executive officers of those companies, even though our congressmen and women don't know shit about this stuff. But. And ask them how we're going to deal with this. My point is. Spit it out, JD Is I think half the country wants that. I think half the country is scared to death of it. [1:08:41] Chad: To the, to the point. We've discussed this on the show, J.D. a number of times. What, what I think works in that scenario is that you're in the marketplace for a surfboard. A surfboard would be a good purchase for you. You could use a new surfboard. Maybe you need a new surfboard. The problem is what we've seen with the social media sites and what tends to happen if, if access to this data comes true is that they're going to sell you whatever is right for them, not what's right for you. And that's the issue we continue to run into with how these ads are placed inside our feeds. Is it. It's not necessarily what people should be looking at. You can look at surfboards. The average working American should not be looking at surfboards. They should be looking at. [1:09:23] JD: I like what you're saying, though. I like what you're saying, though, a little bit. Could we not draw a line when it comes to data and say, look, okay, we can have the debate about Google using your data or Facebook or Amazon or whatever. That's one debate. But another Kind of cleaner, healthier debate is. But what about if an employer is going to use it for good to help you with like these holistic financial services we're talking about that would probably have a lot less scrutiny of like. No, no, we're not trying to use your data to sell you things. We're trying to use your data to, to set you up on the proper financial plan. Although Shlomo Schlichter's not going to like this Schlichter. He doesn't like the data thing. And yeah, anyways, we, it's got roadblocks. It's definitely got some challenges in front of it. [1:10:14] Shlomo Benartzi: I'm not saying I have the answers, but I don't see enough focus and discussion on this. And without data, there's no big data. Without big data, there's no machine learning. Without that, there's no artificial intelligence. Does not make it easy advice. It's all linked and we're kind of, I don't know, I mean all of these focus that 401k plans are too expensive and this and that. I'm just like thinking, okay, so we're going to get an index fund to be one basis point cheaper. Did anyone ever do the math what that's do for Americans? The median account is $16,000. One percent is 160 bucks. One basis point is $1.6. [1:11:08] JD: Changing the world, man. [1:11:10] Shlomo Benartzi: We need to talk about important things like data, because data could be a game changer. And I'm not saying we should give it to everyone. I'm just saying let's focus on what's important and what would move the needle. [1:11:24] JD: Yeah, you're you talking about data in that way is the same way that people like you would talk about savings rates 10 years ago. And it's true. It makes perfect sense. We're so focused on fees when we all know that the savings rate was the much bigger variable in the equation. And now you're saying, hey, get me the data. And we can do phenomenal customization that will save people a ton of money, but instead we're going to focus on all the archaic fee kind of shit. Yeah, I like that. That's probably the, that's probably my favorite thing from tonight, actually. So, yeah, the future could be bright. It could be some cool stuff. I, I won't ask you about this, but I noticed I'll just make the comment that you seem to be kind of working with or lending your wisdom to a lot of different companies. What Acorns and Voya and, and different firms I see on your website or whatever. So hopefully some of those big companies are gonna come out with cool tech and solutions in this space. So I will wait to see it. Let's. Yeah, we'll cross our fingers, Chad. Let's. Let's see Chop. Our champion. So, Shlomo, I don't know if you've been able to pay too much attention to that chat bar. You seem to be a multitasker. But this is where we're going to vote for someone to be the. The best person in the chat bar and they win prizes. Last week's or last show's winner was Brian Brashaw. And what Chad who was solid today? Is Brian here? Is Brian here? Yes. And, you know, I. I totally forgot about him, so I didn't do for him. But I know what we want to do is kind of package up all of our K beanies and stuff and send it back to him. But. And I know that I also was promised to do a song, so I will do a song next show based on the requirements because Roby wasn't here, so it's not right. But we'll get Prashad something. And maybe he needs a new RPAG backpack. I'll drink for that. But your. Your vote for chapter champion. Justin is. Is who. Is who so hard. [1:13:38] Justin: There were so many good ones tonight. [1:13:42] Shlomo Benartzi: I gotta go hack Hackler. [1:13:45] JD: I like them. We're going back to the. [1:13:46] Justin: It's kind of the Danielle Samson grants. They were freaking solid tonight. [1:13:53] JD: Chad, your vote. [1:13:54] Chad: Heidi was awesome. Great. They were all great. I just looked were. Were north of 800 comments, and I think hack probably had about 600 of them. And they. And they were good. I'm going hack for sure. [1:14:08] JD: Those two hacks. Is that what we just said? Two hacks? Okay, I'm gonna go old school too, like one of the original gangsters. And I'm gonna go with Samson. I like that he cusses a lot. Even if he uses, like, numerics and stuff, it's still good. There's Hackler using a bunch of. What do we call those? What are those? That's a. Symbols. Symbols. Shlomo. Go ahead. Just pick anyone. Unless you know someone in there. Whatever you want to do. Who do you vote for? [1:14:38] Shlomo Benartzi: Oh, I need to pick. [1:14:41] Chad: Yeah, yeah. Pick somebody. [1:14:44] Shlomo Benartzi: The first one. [1:14:46] JD: You're gonna. All right. 3X. Okay, so Roby's not here, so we're not doing the old, you know, finish this sentence. Eckler, you won chapter champion again, buddy. Congratulations. [1:15:01] Chad: He's won act deserves the praise. But my gosh, that was a good bar tonight. I saw Justin laughing hard a number of times. I had to mute. [1:15:09] Shlomo Benartzi: Well, I have. [1:15:10] Justin: I have rants on the side texting me and those two idiots are together and just saying some whacked out. [1:15:15] JD: That's not good. Shlomo, we appreciate you immensely. Thank you for spending time with us. Thank you for drinking your champagne appropriately when you when you penalized. And more Importantly, as a second generation 401k person who just loves this industry and everyone in it, I personally thank you for all the time you spend pontificating on these things and coming up with solutions and all the hard work that goes into it. We are blessed as an industry to have someone like you do what you do. And that's not me kissing your ass. That's real there, like you're solid, dude. And. And thank you so much for what you do. And thank you for being a guest on our little a ruckus of a show here. Chad, Justin, thanks for your efforts. Rogue guy off and chat bar and everyone tuning in later, watching this on YouTube and LinkedIn and Twitter and wherever. Get a life. It's been another episode of Retireaholics. We will see you next time. So toodaloo, everybody. Have a great night. Peace out. [1:16:36] Chad: Thank you, Slow Mo. Appreciate the insight, man. That was awesome. [1:16:40] JD: Yes. [1:16:40] Shlomo Benartzi: Thank you. Slowmo, see what Brandon's got.