Small-Plan Advice: Institutions vs. Advisors | Brett Shofner

[0:00] JD: Ladies and gentlemen, he's the president of work plan retire and one of the co founders of Hero7. Gretch off. [0:10] Chad: Just as the good tens out there in the Internet for a long time, it's going downhill. No. Yes. [0:15] Brett Shofner: That was. [0:16] Chad: All right, let's do a little bit of housekeeping. [0:17] Mark: I won't go housekeeping. [0:20] Speaker E: Right now. [0:20] Chad: We're going to swing and play chat bar champion. So out there, go for it. Last week's winner was Daniel Moiseseff. So there'll be a winner this week again here in the room will have the champion of the audience. So you'll play along. How does it work? What are the rules? There are none. [0:33] Brett Shofner: I don't know. [0:34] Chad: Somehow by the end of the show, we're gonna vote for four of you or some of you and some will win the cash and prizes. We'll see how that goes. We're gonna play Acro sin. So if you say an initialism or an acronym, you must drink from your penalty drink. What's the penalty drink, Mark? [0:47] Mark: It's Voldemort. I mean Malort, which I guess it's a liquor that has something to do with worms and things and stomach bacteria kills. I don't know. People either like it or hate it. And I'm assuming we're all gonna love it because we're professionals people. Okay, so that's our penalty drink. [1:11] Brett Shofner: You have an iron stomach. [1:12] JD: That's why you. [1:13] Mark: That's not true at all. [1:14] Brett Shofner: Not at all. [1:15] Mark: But who cares about that? Cause that's just if you say an acronym. But beer of the episode, since we always forget about that Chad who's lost in the streets of Chicago. I believe that's the last place we saw him. [1:27] Chad: Lost him last night. [1:29] Mark: Typically intros, the beer says something about it reads from the can. This is beer. It's in a can. We're gonna drink it. [1:37] Chad: Okay, great. [1:38] Mark: Moving along. [1:39] Chad: The show's getting better as we go. [1:41] Mark: Perfect. [1:42] Chad: We're gonna jump right into topic number one. [1:44] Brett Shofner: Cheers, buddy. [1:45] Chad: Over here. Tell me how you like it. [1:47] Mark: Tastes like beer. [1:48] Chad: Yeah, Good, I like that. Let's talk about two plan Tony andor Tanya. I've heard that reference recently. I was in Scottsdale, a lot of big shot advisors, specialists I would call them. And I heard some kind of grumblings around about these two plantones and how they had them in their sights and they were potentially going to come down market and win some business from them because they were failing. You couple that with Ryan Graf at the ara. Oh, shit. American Retirement association coming out and talking about the build back better deal and the retirement plan legislation in that and having a federal mandate. I'll get this in a second. Let me finish my thought. I just gave you a federal mandate on retirement plans. And I think the stats that he gave from a study there would be 625,000 new retirement plans, some 7 trillion in assets over 10 years. Mind you, these companies are going to average like 15 employees. So this is a big time opportunity. So my question to you, Brett, is who stands to benefit from this big time opportunity? The specialists or the two planned Tonys? And if the specialists do, do they even want to crack at this small stuff? Like why? [3:11] Brett Shofner: Yeah, I mean, first of all, that's just an awesome question. It's kind of the question of the day because we've talked about it at this conference. Right. It literally boils down to helping people. So whether that's going to be the institutional firm that's historically not been in that space. I mean, we had a session where someone joined captrust and he was talking about, you know, how his clients were asking for this and he wasn't able to provide it. That is the future. Because very simply, companies spend a ton of money on their people. There's no way around that. I mean, that is a fact. It's about 80% salary and benefits. So we can make fun of two plan Tony or two plan whatever Tonya all day long. But in some ways they're actually better. [3:53] Mark: Should we stop making fun of them though? [3:55] Brett Shofner: Yeah, well, I don't know. It's too easy. [3:57] Mark: We talk about bullying all the time. [4:00] Brett Shofner: You should stop. Wow. [4:02] Chad: I think there's some relevance there. Because if it's not all negative, I think how people look at it, it is. They say the two plantones falling asleep at the wheel, right? They sold the plan. This is the consensus. [4:14] Speaker E: That's true. [4:14] Chad: And therefore they're not doing any real great services. And so I think the specialist says whether they're a national firm or just a really great advisor in some geography, some geographical region says, hey, I could create something that would be better than two planned Tony. Mind you, it's probably a lot more watered down than what they deliver to their $25 million client or their $100 million client. And so what I want to ask everyone up here today is like, is that good? It sounds like a watered down solution might be better than what tubeplan Tony does, but is that really where we want to take this industry is watered down solutions for these smaller companies and is that in Their best interest. [4:57] Brett Shofner: Okay, so I got this. I'm going to throw it right back at you. Who is going to be better at changing the institutional consultant. Can they learn to have empathy, listen and help people make better decisions? Or can Tuplan Tony or Tanya just, you know, use technology maybe on some governance issues? [5:15] Chad: Or we could coach them up a little bit. [5:16] Brett Shofner: That's what I mean, coach them within the guardrails. Is it easier to solve that? Or maybe the specialist the institutional firm hires 2 plan Tonya. We need more women in this business, by the way. Yep. Right. So I think it's some combination there, but they have to change. And the solution, both of those narratives are not going to do it on their own. There's some combination of the two. [5:39] Chad: Both of them I think are doing it wrong. The current two plan Tony and then what I envision to be the specialists coming down market. I personally don't think either one of them is the right solution. My concern is that in our short term greed, or maybe it's not greed, maybe it's short term business opportunity, all the stuff that graph talks about, the specialists will build something to make money. But then as an industry we won't really solve problems down there. Like it'll be just a little bit better than the two plan Tony. Because let's be honest, if you service 50100 million dollar plans or whatever it is, you're not going to have the time to go down there on this plan that generates $2,500 or three grand for your company. So you don't have time to do that. So you've got to build some type of efficiency. [6:28] Brett Shofner: Well, or adapt, change what you're doing. Go to that same company, literally 26 person company and say, hey, you know, there's data out there telling us that you've got some issues around wellness. Let me set up a program for you. Let's do an hsa. Let's do a college savings. Sorry. Oh, and Iowa College savings program. [6:48] Mark: Maybe you had not had. [6:48] Brett Shofner: You know, let's work with your key executives. Right. Let's engage with your employees. Now you're making money different ways. Yeah, that's tough. [6:55] Mark: Have you had this before? [6:57] Chad: That's my first. [6:58] Brett Shofner: I thought I could get away with that, but that didn't work. [7:00] Chad: And it stays in your mouth like mouthwash or something. [7:03] Mark: I mean, you know, I guess I say you don't have to as the guest, but if you don't, I'd be very disappointed. [7:10] Chad: We can move on a little bit from this, but I really do want everyone to think about this. We live and breathe in the micro space, right? As a third party administrator, I mean my father started the company in 1975. That's all we do. Startups, $200,000 takeovers, million dollar takeovers. And believe it or not, and I'm sure this won't come as a shock to a lot of you, but there are some great advisors in the micro space that charge 50 basis points on a $500,000 takeover and still run fiduciary review meetings and still get in there. And I'm with you. The wellness, the plan, ways to make more revenue. I think that's a great idea, great concept. But I would like to see the two planned Tonys get coached up and be more like these good advisors in that space. And then let's take the good Advisor from making $2,500 to making five grand or six grand so they can provide even better services. I think that's a better solution. And then maybe even the bigger firms can come down market and instead of making 2,500 bucks and trying to sell other shit, they could. I'm not supposed to cuss at this one. [8:17] Mark: Shame on you. [8:18] Chad: That's hard for me. It can make a little more money and maybe make something more efficient. My concern is these people need help in 401k and we're not going to be able to help them. We're going to abandon them if we try to solve it with tech. And we're surely going to abandon them if our only way of making revenue off them is other stuff. Let's focus on the 401k. Let's show them that it's important, let's show them that it's valuable and let's get our fees up. And that's true. [8:42] Mark: That's why too some of the accountability has to be on their shoulders as well. [8:47] Chad: Right. [8:47] Mark: We talk about all the time that typically they come in and then they never see them again. Right? So it's, it's also on them to step up. [8:56] JD: But I think that'll if we do what JD's talking about, right? Take that from 2,500 to five grand, that now becomes a more attractive thing for them for them to want to do, right? They're getting paid for it. It's not just, hey, $250 over the next, you know, till the plan's a million dollars. [9:09] Chad: A lot. These people laugh at 5 gr. These people are trying to make 20 grand, 30 grand, 50 grand per client. [9:15] JD: But that client's Also not super attractive to them either. Right. And we have to help fix that gap, bridge that gap. And we need more I think advisors coming up through the ranks. The two planned Tonys Tanya's to get better at what they do well jd [9:30] Brett Shofner: so here's a question. If Graff is right and he pretty much has. He's always right what he's [9:39] Speaker E: for. [9:39] Brett Shofner: But I'll get you side if he's right though that all these plans are gonna, you know, 60 million people. Okay. Think about that. 60. Think of organizations like Edward Jones. What are they good at? They're good at helping people in this world. [9:53] Chad: Raymond James. [9:54] Brett Shofner: Yeah, Raymond James. I mean these organizations could instantly actually provide a lot of value and crush it. So I think those kinds of things are right there for the taking. You know if that goes through, we'll wrap up this. [10:06] Chad: So call me a dreamer. I just don't even want. I don't want the Edward Jones. I think I don't want the Edward Jones guy or girl coming in and selling planning to their 401k plan but not doing a proper semiannual review, not walking them through new regs, not understanding the importance or communicating the importance of the education to the participants. And I'm worried about that right now. What worries me about that is we have a bad reputation now. Even though 401k advisors I think are far different than typical Wall Street, a lot of people still look at us that way. And if we start to come at these people with like you don't have to do anything cheap, low cost solutions, we're kind of going to set us up for a disaster our own reputation in five years, 10 years. These guys suck. They don't do anything when it comes to 401k. It's all a bunch of smoke and mirrors. And then they're selling us other stuff. Maybe not a good look. And we need to be careful about. I'm not saying we can find a way, but be careful. Everyone seems to be just jumping into this with these solutions instead of stopping and measuring and thinking about the midterm and the long term. Crazy. [11:14] Brett Shofner: No, no, you're 100% right. Devil's in the details. But here's the bottom line. The employees, when you survey them, they want help. And this is notable. They want help through the workplace. [11:25] Speaker E: Right. [11:26] Brett Shofner: And all the COVID stuff, as awful as it has been for everyone, it's created opportunity where the employers protective almost like creating a stable environment for people for their employees. So there's that opportunity to connect. They need awesome advisors, whatever their name is, to step in and bridge that gap. So that opportunity is. Is there. And I mean, look, there's people here. Josh, wherever he is, I mean, this guy's so fired up, he's ready to run through that wall. There are people like that out. I know wouldn't end well, but, you know, there are people that will step up if they just have the right technology. And again, the company just has to understand why they're in there. Because I'm with you. If you have a small company, the last thing you want is some dude slinging products, annuities, or whatever at your people. But if they're in there driving engagement and you're not having turnover and your employees stay and they love working there, like that's a win. That's an ROI to the business, boom. [12:22] Chad: I really don't like that. Is not cool. [12:25] Mark: Take a drink. [12:26] Chad: When he says these studies, I close my eyes and imagine all these studies happening in, like, I've never studied the mega market. Do you think the 10 employees at Joe's Auto Shop want to be given these financial services through their plan? I'm not saying I have to say no, because I think it could be true. [12:44] Mark: Do I think they want it? [12:46] Chad: Are they the same that I want [12:47] Mark: to be optimistic and say, yeah, they do want it, but I don't think that the 10 people at Joe's Auto [12:53] Chad: Body Shop Care Graphs, 625,000 plans averaging 15 people. Do they want this help in these plans through their employer? [13:03] Brett Shofner: Absolutely. [13:04] Chad: I think they do. Yeah. [13:05] Brett Shofner: Absolutely. [13:05] Chad: I don't know. [13:05] Mark: I hope so. [13:06] Chad: I'm a little concerned about it. We'll see. We'll see. Okay, let's. Let's break it up a little fun. And we'll come back to a subject that kind of ties in. Brandon, let's spin the wheel of ice inside the wheel of ice. The wheel of ice. The smear Knoff. There's no second. [13:35] JD: Oh, there's no. [13:35] Chad: There's no makers up here. No boilermaker. We thought it's too complicated. Okay. We started something new a few weeks ago. We created a phone number, 1-833-Rogue-Guy. You can call in, leave a message. [13:47] Mark: Not my cell phone number. [13:48] Brett Shofner: Don't worry. [13:49] Chad: Leave a message after the beep. And we like to check in with a few of those, hear from our audience. Oh, good job. [13:56] Mark: Well done. [13:56] Chad: It's like, what are they counting for? Oh, you finished the smearing off. So, Brandon, you place a few that have come in. [14:01] JD: It's not all about you, J.D. [14:03] Speaker E: i prefer to remain anonymous caller, but I have questions for retireholics. Do you like Evoshire? You should like Evosher. If you do not like Ivoshare, then I don't know if the title means as good for you. Okay, that is all. [14:19] Brett Shofner: Okay. [14:21] Mark: That's a free ad for evosher. [14:22] JD: Yeah, like, I recognize the Russian guy came back. [14:26] Mark: Yeah. [14:26] Speaker E: Hi, messages for Mr. Carlson. Your test results for your rash have come in. [14:34] Chad: We really think you should give us [14:35] Brett Shofner: a call back to discuss this. [14:37] Speaker E: You can call us at 555-555-5555. [14:43] Chad: Great that you give us a call. Thank you and have a great day. [14:50] Speaker E: Hey, ragdoll. On JD's post, you put something that says totr. What do you mean? Please enlighten me. [15:01] Mark: You don't know. Now you know. Oh, if you don't know what totor stands for. Sorry. T O T R, [15:09] Speaker F: you'll. [15:10] Chad: Wow, you set me up, dude. [15:17] Mark: Anyways, it stands for the other two retireholics. Because on this show, Justin and I represent that. Because we've always seen ourselves as, you know, the JD and Chad. They're doing their thing. They're the retireholics. And then we're just the other two guys. And so we sort of branded ourselves. [15:38] JD: Well, it really started when we noticed all of our photos were going up when we started this whole thing. And Mark and I were always cropped out of the photos, always Chad and jd. Like, there'd be half of our bodies on our post last week. But yeah, that's kind of. We're like, oh, we're just the other two retireholics. [15:58] Chad: All right, we got one more. And I know what this one is, but it'll lead to a discussion. [16:02] Speaker E: This is Suzanne Mithick from NPPG. I am answering the call to discuss PEPs. I posted a video on LinkedIn explaining why PEPs are good. The individual clients don't need to file a 5500 form anymore, and they are allowed to focus on employee engagement versus administration. [16:26] Chad: Okay, Suzanne, sorry about the blah, blah, blah. We were having a little fun. Suzanne's actually a friend of. First off. [16:33] Mark: No, she's not a friend. She's a sponsor of the robe. So I'm sitting this conversation out. [16:39] Chad: And we appreciate you putting this together. And her comments are. She made two, right? She said the 5500 and then outsourcing your administration, your compliance work. I think those are two bullet points that most pooled employer would. That would be high up on their list. And so let's tackle a few together. And I'd like to do this two ways. First, let's tackle some of these areas. And then second, let's look at it from the advisor's perspective, because it could be a good thing for them to implement into their practice. 5,500. You don't have to do your 5,500. That's not a thing unique to pooled employer plans. You could have done that long before pooled employer plans existed. You also outsourcing your compliance work and your fiduciary responsibility. We call that a316. You also could have done that long before pooled employer plans are in place. Gets under my skin a little bit. When someone goes around waving the flag for pooled employer plans, I still want to say the acronym and claiming that somehow these are unique to them. Like, oh, there's this new thing out and it does these things for you. I'm thinking that's not unique to me. [17:51] Mark: Maybe it's because it's like an automatic thing versus an optional thing. [17:58] Chad: Fair enough. [17:59] Mark: Maybe that's where they should start taking that. The way it's built, this is like you get a cheeseburger, it's got the cheese on it. You don't have to add it, like at a fancy restaurant, you know. [18:09] Speaker E: Sure. [18:10] Chad: Great defense of that. [18:11] Mark: I'm not defending it. [18:13] Brett Shofner: No. [18:14] Mark: But I am sponsored by it, so there's that. [18:16] Chad: The next big bullet point you hear is low cost. And when I first heard about pooled employer plans, I thought this sounded really, really attractive. This concept of we could take 100 small plans south of a million dollars. We could pool them all together, 52 [18:32] Mark: plan Tonys and Tonyas, and we could [18:35] Chad: get, you know, $200 million pricing. $500 million pricing. A billion dollar pricing. I was like, wow, that sounds really, really interesting. As I've seen the market play out and looked at some of these proposals, I'm not so certain that that's the truth. Now you're even seeing the industry back up. In the very beginning, if you remember, they were all waving the flag about low cost. And now they're like, oh, it's not about low cost. It's not about low cost. The reason why that is, if you think about it as a record keeper, having 100 small plans in one pooled employer plan. And how does your job change from having 100 individual plans? This is where I cuss in. A normal one doesn't change, doesn't change. Your job's the same. It's 100hr people. [19:23] Mark: There you go. [19:24] Chad: It's 100 clients and it's really not any different. And so when you see cost savings, drill in a little deeper to find out where they are. Because I don't think they're in the record keeping and I surely don't think they're in the fiduciary services of the 338 and the 316. Because those are premium services. Those are add ons to the micro market. They're usually in the advisor side. And so we'll talk why that maybe is a good thing or a bad thing, depending upon your model. But please don't say that pooled employer plans are low cost. Please don't say that you can outsource your administrative responsibilities, unlike something, because it's not true. You can do that somewhere else. And then the last one, and this one really pisses me off. Audit. You get a reduced audit cost, right? You pull everyone together and Instead of paying one $15,000 audit, you could spread it across a bunch of people. Why did we put these in place in the first place? Why did the government put this legislation through? What was the number one reason to solve the gap? Right, the coverage gap. This was supposed to be for companies that couldn't afford a 401k plan. This startups the small auto body shop. They don't have a fricking audit. They never had an audit. So wait a second, here's my bigger problem. All these pooled employer plans are not focusing on the problem that they were instilled to do. They're trying to win takeover business. You're trying to turn it into a shiny little mousetrap to win new business and put all these bullet points about why it's so different and why it's so cool even with those things exist in the first place. It's pissing me off. This guy is super upset. [21:06] Mark: Can you get your soapbox and step [21:09] Chad: off and let me be. So Brad, given all that, there's got to be some upside potential for firms. I mean, I don't know if you feel this way, but where does a pooled employer plan fit? Where could it be effective? [21:25] Brett Shofner: Look, I want to argue with him, but he's made some good points. But here's the bottom line. Whether, okay, the intention might have been bad or who knows why they want to do it and take over. Like that's relevant and probably accurate. But as an advisor, we're back to anything I can do to remove complexity so that I can add value. I mean, we talk about this red ocean, blue ocean thing. Todd KTING. Retireholics. Friend of the family here. You know what he's doing is awesome. Like you know, the mundane. [21:58] Mark: He's not playing tic tac. [21:59] Brett Shofner: We don't want advisors doing that. Right. Advisors should be spending their time on the most meaningful activities which we were talking about earlier, the stuff that matters. So if a pep can't get. [22:09] Chad: Damn. Finish your thought. [22:11] Brett Shofner: Yeah. [22:11] Chad: All right. [22:13] Brett Shofner: If a pooled employer plan can do that and make it easier so that we can get to the things that matter, that you know the true substance of what we can deliver to these, then I'm okay with it. That's how you have to look at it. Is it perfect? Is it some special magic pill? Absolutely not. Is it overblown? Yes. Are people making more of a deal out of it than they should? Yes, they are. But it does reduce some friction and complexity, even if it's on the margin. And that'll help us get to the stuff that matters. [22:44] Chad: Good point. That's a valid point. That's true too. Yeah. Let's be clear. They're not all the same. And this is relevant to this certain subject because believe it or not, as, as anti pooled employer plan as I can be, I do think there's a space for it. Whether it's short term business opportunity and whether it's in the best interest of the industry, I struggle with. However, if I'm a national advisor shop and I've always focused on the 25 million plus, 50 million plus, and I've never done the $1 million plan, the $2 million plan, the startup, whatever, because I can't make enough money. Okay, maybe this is your opportunity to build something to get into that smaller market and create some revenue. We talked about this earlier. [23:30] Mark: Take it away from Tony. [23:33] Chad: Maybe it's going to be more simply built. Maybe it's going to be efficient. Maybe you'll never even set foot at that employer's actual office. [23:41] Brett Shofner: One other thought. So the big G in the room, right? The government, we don't want them coming in this space. Okay. Now how would they try to solve this problem? I'm pretty sure it would be around low fees, right? Absolutely. So here's the thing. The pulled employer plans, maybe this is a little bit of a one step, like we're one step ahead. [24:01] Chad: They're a transition to better plans. [24:03] Brett Shofner: Well, it just keeps like give, you know, take that move away from them so that they can't come in and you know, with the low cost maneuver, because this will drive fees down because the plans will be simple there's less admin. Blah, blah, blah. They will be cheaper. [24:17] Chad: This was a government run. [24:19] Brett Shofner: Yeah, I mean, we don't want the government. Pretty much whenever they're involved, bad things happen. [24:23] Chad: It's kind of interesting you say that because we're from California and that's not obvious. Can I say the plan's name? The state run plan? [24:34] Mark: I think I can say Cal Savers [24:36] Chad: plan is for some of you that are out of that state. It's been mandated on kind of this calendar and into next year it'll be mandated for employers with five or more employees. So if you have five more employees, the state, California is saying you must have a retirement in place. If it's a 401k plan, great. You check the box. It could be. Dude, I can't say those. It could be other individual retirement account options as well. Any type of retirement plan that takes [25:04] Brett Shofner: effect in Illinois in 2023 as well. [25:06] Chad: Yeah, there's several states, although maybe Illinois is one that's going to have a mandate. I know a lot of them didn't go as far as the mandate that California has. We love it as third party administrators. It's been a phenomenal marketing opportunity to run around everywhere in that micro space and say, hey, the government's got a gun to your head. They're going to force you to do a plan. Why don't we create something that's better for you, that's kind of more customized. And so it's really been a boom for, for retirement plan in California. So when Graf talks about the federally mandated, I think, wow, this is going to be, it's going to be huge. But to your. I understand your points about simplicity and the low cost, but yeah, I think it's still oversell. [25:48] Brett Shofner: Just don't oversell it. Just use it for what it is and get to the things that are more important. [25:52] Speaker F: You also think it's from the standpoint of these small employers, they got to run their business, they got to grow the revenues and the profitability to stay in business. That's where America grows is from the small business. And so they don't know how to run one of these plans. And what the government did was put this in the hands of the firms that know how to run, that have experience. So that's another piece of this. It's not just coverage. But now the gold plan providers, they now are the ones that know this business, know how to run this business and they're experts at it. [26:21] Chad: To your original point, there are going to be some good ones. So I, I'm with you. There's going to be some ones that see the problem, build it properly, it's the right pool plan provider. I'm going to say P3 just because I think it's cool, but I'll have to drink for that. [26:35] Mark: It doesn't really count. [26:37] Chad: And then they've got the right advisor firm, they've vetted out the record keeper and they've really got the best interest of those employers in that pooled employer plan. Of course those are going to exist, but there's a lot, Michael, that are out there that are literally seeing this as a return to proprietary investments behind closed door deals, ways to make more money through other tricks and smokes and mirrors. And to me, and I've said this before, so I apologize, but we were on such a great path as an industry. We had left behind the revenue share loaded up share classes and we had moved to institutional share class of funds. We had moved to real transparency. [27:23] Mark: The pooled employer plans get access to. Right. Which is not true. [27:27] Chad: My point is we were really heading towards this feel good transparent where the consumer and the general public could look at us and go, oh, this is a squeaky clean industry. Unlike it was 15 years ago where I feel like pooled employer plans is circling us back to now where it's like, oh, we're going to got to pop open the hood and find out who's making money where and how and what relationships are there. I know I've been a broken record on this. I'm just concerned about what this means for the long haul for our industry. We can't get too caught up on making some money here over the next two years without thinking about our reputation forever. [28:03] JD: What also concerns me about it is the amount of participants that are going to be in these plans and the I would say inability of once you have hundreds of plans in these things, the inability of the advisor to actually focus on those participants as well. They're not going to be spending a ton of time with them. Like you know, if you have just a single advisor going after a single plan and focusing on that company specifically, [28:23] Chad: it would be watered down. [28:25] JD: Disagree. [28:28] Speaker F: That's going across all the plans, they have less time. Totally focusing on those sort of investment monitoring reports is a different report for every employer. And so it's actually going to free up that advisor to work more with those individuals. [28:39] Chad: And so someone who agree with you, but I also worry about that because I live in that space. I'm very, very concerned with us creating plug and play solutions for the micro market. And I'm very worried about. We were talking about pooled employer plans to start this. I think it's super wrong to run around and say 401k bad, 401k hard for you. Pooled employer, easy. Pooled employer plan. Nothing for you to do. As someone who has hundreds of clients that are small businesses, if you start to teach them that there's nothing for them to do and that this is a piece of cake, you're heading in the wrong direction. And I think even CalSavers is going to fall apart. We're going to see a real mess with CalSavers at some point where they're not putting in people that are eligible. These are individual retirement accounts, so if you breach the comp levels, you're not allowed to put into them. But no one's tracking that shit. [29:41] Mark: We should probably move on. Yes. [29:43] Chad: Just saying. Let's move on. Thank you, you know, for that pep talk. The reason you want to move on is we're just gonna go straight to the lamer game. [29:55] Mark: Oh, that's right. [29:56] Brett Shofner: Yeah. [29:57] Mark: Do I get an intro for that game or. [29:59] Speaker E: No, [30:03] Brett Shofner: refer to my notes. [30:04] Mark: I don't remember what my question. Okay, so for those of you who don't know this game, it's very simple. I'm going to ask a series of questions to the crew up here. And please participate out there in the audience as well. If you think that what I. Tracy's yawning. Hi, Tracy. If you think it's lame or if you're game. Okay, pretty simple first question. Bars of soap. [30:32] Brett Shofner: Lame. [30:33] Mark: And I'm just gonna add a little context to that. Why are we still. Why do they exist still? There's so many variations of squeezable foam able soaps. [30:42] Chad: Always first to show. [30:43] Mark: Right? [30:43] Chad: No, I know. [30:44] Mark: I'm just looking at you to prove a point. Cause I don't think you use soap. Flame shock. Yeah, lame. [30:50] Chad: Okay, [30:53] Brett Shofner: J.D. [30:58] Chad: trying to pull a tree. [30:59] JD: What's the question? I was talking to the. [31:02] Brett Shofner: You can't get the film off your feet. They slide around. There's always going to go on. [31:05] Mark: I mean, like, it's even terrible. Even in prison. They shouldn't have that. [31:08] Chad: So the problem with soap, the only soap in a dish that I'm down with is the one in the hotel that I rip open and I use the first time. [31:17] Mark: Okay, so this is kind of where this comes from. Now, I know we're in the times of the pandemic or whatever still. So, like you're in Someone else's room, like JD's got this massive penthouse suite. So we go there to hang out and drink beer, and I go to the restroom and I see a bar of soap that's been used. I'm like, where's the squishy, foamy one? So I do the rinse and flick. Anyways. [31:42] Chad: Yes. [31:43] Mark: Thank you. Next question. Greeting cards. You look like a greeting card kind of guy. I don't know why. [31:51] Brett Shofner: Yeah, I'm good with that. I'm game. Yeah, greeting cards are cool. [31:55] Mark: All right. Giving them or accepting them from others. [31:58] Brett Shofner: Oh, I mean, in my family, it's a big deal. My wife loves getting them. Okay, cool. You know, like Christmas time, when people do all the pictures, do you do the. [32:07] Mark: Do you do the pick out the perfect card and just sign your name [32:09] Brett Shofner: or do you actually write something that's lame? There's a lot of layers to cards. They're just too complex. [32:16] JD: Dustin, in game, great way to communicate your feelings, expressions, someone for you. [32:22] Mark: Congrats, you're the vessel. Do you buy the blank ones and then write in them? No, at the Dollar store. [32:29] Chad: You know what I do? I get them and I open them up, see if there's any cash in there, and I'm done. [32:35] Mark: Well, I think this came of a conversation. But I get a card and I do the. You kind of scan it. But I don't actually read it. [32:42] Brett Shofner: Ever. [32:43] Mark: I don't ever. If you said, give me a card, I don't actually read it. [32:46] Brett Shofner: There's only one problem with that. Cause like, in our family, we do try to go big with the greeting cards. And so you establish the standard, and then you surpass it, and you surpass it, and then you're like, oh, shit. [32:56] Mark: Why don't you just make the greeting [32:57] Brett Shofner: cards if you're that good at. [32:59] Mark: You know, not at the time of the day. [33:01] Brett Shofner: Yeah, but they're cool. I'm gay. [33:03] Mark: And they're expensive, by the way. [33:04] JD: Hold on. So Chad would like to respond here, too. No, he says, waste of money. [33:10] Mark: All right, Chad. [33:11] Brett Shofner: You're right. [33:11] Chad: Heartless. [33:12] Brett Shofner: Where are you, Ben? [33:13] Mark: Are you in Chicago? All right, brushing your teeth. [33:17] Chad: Game. [33:23] Brett Shofner: With dog. [33:25] Mark: Brushing your teeth right after you wake up, first thing you do, you get up, brush your teeth. [33:31] Brett Shofner: Yeah, we gotta go. Game there. Even if you're thinking lame, you lie. [33:36] Mark: I don't. I don't partake in the lame part of this. I'm just. I've heard rumblings of things lately. [33:41] Brett Shofner: Justin. [33:42] JD: I prefer to wait after breakfast. [33:44] Mark: See, that's what I'm Talking about why am I hearing more and more people say that? [33:48] Chad: That's disgusting. [33:50] Mark: You wake up and literally the only thing you should do is brush your teeth. [33:54] JD: I brushed my teeth when I went to bed. I didn't eat anything. I'm gonna eat breakfast, then I'm gonna brush your teeth. [33:58] Mark: So if you've got a. You're laying next to somebody, let's just say. And you just breathe in their face. You don't think that that person's gonna [34:06] Chad: be like, oh, that's great. [34:07] JD: Yes, go eat breakfast. You're married. [34:09] Brett Shofner: I'm not. Right. Yeah. [34:10] JD: Doesn't happen to me. [34:11] Mark: Doesn't matter. [34:12] Brett Shofner: Married or not. [34:14] Mark: J.D. right? [34:16] Brett Shofner: I think we should explore more. Who's waking up? [34:18] JD: No, we need to move on. [34:20] Chad: Yeah, true. [34:21] Brett Shofner: That's the more interesting part. [34:22] Mark: Well, when you game on that? [34:23] Brett Shofner: When you wake up at noon. [34:26] Mark: Yeah. [34:26] Speaker E: I wouldn't rest. [34:26] JD: My tv, my bed, every morning. [34:28] Speaker E: Mark. [34:28] Brett Shofner: All right. [34:29] Chad: Waffle. It goes back and forth. [34:31] Brett Shofner: Pandora's box there. [34:32] Chad: Sometimes I'll have surfed, had lunch. I'm at the shit. I don't think I brushed my teeth. [34:37] Mark: I don't know. Anyways, you know what they say. [34:39] Brett Shofner: You know what they say. [34:42] Chad: One more fun before we drop into our last topic. And this all comes from Brett. He said, I got a Michael Jordan story. And it obviously he's got a lot of stories. [34:53] Mark: I'd rather hear the Marcus Allen stuff. [34:55] Chad: I want to tell it. So this is your spot for the Jordan story. All right. [34:59] Brett Shofner: So the Michael Jordan story is a good one because Michael Jordan, this is just my opinion, but I think he's the greatest athlete of our lifetime. And this is his town. Okay. And this is Retireholics, which centers around a lot of alcohol, some of which is great, some of which is frickin awful. [35:16] Mark: Do you think Michael Jordan likes Voldemort? [35:20] Brett Shofner: No, I think he's going a little higher end. But my Michael Jordan story is I did grow up in California, small town. I was lucky enough to be picked to go to this camp, right? And so the best player out of my area was a guy named Rod Higgins. And Rod Higgins happened to be on the Chicago Bulls. And his roommate was Michael Jordan. So I go to this camp with all these players and it's up in the mountains above Fresno. No one's around, no press. [35:42] Chad: How tall are you? [35:43] Brett Shofner: A little shade under six' three, not [35:45] Mark: tall enough in Fresno, like Fresno, California? [35:48] Brett Shofner: Yeah. So I'm at this camp and in the middle of the week, Michael Jordan just walks in our gym. And it was that alone was unbelievable. And I think I was like a 14. So, you know, that was, that was memorable in and of itself. That is great. And I got to know Michael and I played with him, learned all these things, blah, blah, blah. But what was interesting was when I came back the next year, the camp was a little bigger and Higgins loved playing tennis with me. And so I would basically whip his ass every day. And he just, he loved it. He's just like, you're a little fireball. Killing me in tennis. And so he kind of took me under his wing. So he comes up a basketball camp. Yeah, I know, but he comes up and he goes, we're gonna go on an errand. [36:27] JD: You wanna come? [36:29] Brett Shofner: 15 years old. So I jump in an RV. [36:33] Chad: You said the story was like, boom. [36:34] Brett Shofner: I know. Mega square recreational vehicle. I jump in an rv. [36:41] Chad: Save him up. Save him up. [36:42] Mark: Don't worry, Brett, I'll do it for you. [36:44] Brett Shofner: Inside the vehicle, Inside the vehicle were Mitch Richmond, Michael Jordan, some other NBA players. And they were. [36:52] Mark: You don't know their names? [36:54] Brett Shofner: They were going on a beer run. [36:55] Mark: Okay, I got you, buddy. [36:57] Brett Shofner: So I'm this 15 year old kid, I've never seen alcohol. They're going on a beer run. [37:02] Mark: You're a liar. [37:02] Brett Shofner: No, that's her. You've seen it before. Michael Jordan handed me a Bartles and James. I'm dating myself. [37:10] Chad: Good job. [37:10] Brett Shofner: And said, son, here you go, buddy. And I drank half of it and was bombed out of my mind because [37:15] Mark: I weighed like literally 15. [37:18] JD: I'm not buying it. [37:19] Brett Shofner: So the first time I had alcohol was with Michael Jordan. That's 100% true story. [37:23] Mark: You just literally told the world that Michael Jordan and for gives underage children alcohol. [37:29] Chad: Do you know how many viewers we have out there? [37:31] Brett Shofner: I know, I should have thought of that. So touche. That is 100% true story. [37:36] Chad: Brandon's always our producer is always trying to teach me. J.D. like you have a point to say and then you take three minutes to say the point. You just say, Michael Jordan gave you a wine cooler when you were a kid. All right, that's the [37:52] JD: JD A comment like that is going to lead to follow up questions and it's going to take just as long. So I'd rather your story. [37:57] Mark: Good little shout out, rest in peace to Norm MacDonald. Like that's how he told his country. [38:02] Brett Shofner: Thank you. [38:04] Mark: I like stories. I'm sure you do, except the ones you tell. [38:07] Chad: Well, let's give him another chance. Brad, you sent an email to me and I love this statement. He Said the best companies in the world are obsessed with solving their customers problems. And I'm thinking outside 401k, you know, I'm thinking all kinds of tech service, hotels, hospitality, whatever. And that's a very true statement. [38:27] Mark: Like Apple solving your broken phone problem and by making a new one because we're making your old one obsolete. [38:35] Chad: Sort of. Sort of. And you said, are we doing that as a foreign key industry or are we just trying to solve our own issues? Can you expand on that a little bit and then we'll chat it up? [38:46] Brett Shofner: Well, I'm going to follow your philosophy. No. [38:50] Chad: Are you done? [38:50] Brett Shofner: No. [38:50] Chad: That's good. [38:51] Mark: Just drop the magnolog off. [38:53] Brett Shofner: Touche. [38:53] Chad: Right? [38:54] Brett Shofner: No, but it's true. Like our industry, I mean I think we are, we suffer from that. We worry about our own issues and that gets into the pooled employer plans and other things that we get to go back. I am sorry but like if we just stay focused, like I said in that email, on solving your customers needs, that's all we need to worry about. Because if we solve, you know, for these employers and employees, which, let's face it, this is like a super huge important issue for like where I grew up, people didn't go to college. Like people weren't educated. That's a lot of America. And that was in California, which you wouldn't even think that would exist in California. And so this is an awesome opportunity and it's actually not that complicated. Solve their problems, figure out how to do it and the rest falls in place. That's what I think. [39:40] Chad: We started to talk about this over a beer and trying to figure out like shocking, well, what have we not innovated? What have we not done? Or how would we solve this problem? And it was funny because it got really simple. I feel like the conversation like, okay, we need to do more for the participant, almost take them out of the equation is where our brain was going. And my brother was driving this conversation and he's less of a day to day 401k guy. And I was kind of like, you're talking about default investment, you're talking about target dates or manage account service, you're talking about simplifying a core menu to like just a suite. These are all things that we've done as an industry for the last 10 years. So I feel like we've tried to do a lot of this stuff to make it simpler. But I also feel like we get in our own way because we think like, okay, how do I innovate? And I Think of, like, empower and personal capital. And when I watch the TV and I see an ad for personal capital, and they show me, like, as an individual investor, that could I get all these cool graphs in this app that shows me, like, my rate of return and how I'm going to succeed in my retirement and how my investments are doing. [40:43] Speaker E: And. [40:43] Chad: And I think the regular Joe and Mary is like, I don't give a shit about that stuff. [40:47] Brett Shofner: Oh, dude, I know. Newsflash. People that make under $150,000 a year, they don't give a rat's ass about any of that. They don't care. They want stability. They want a job. To go have a beer at night, to watch their kid play soccer. That's what they care about. So our job, I think, is to, you know, make. Enable the employer to connect with those people so they stay their business is profitable and those people have better lives. [41:13] Mark: So what you guys are saying is [41:14] Brett Shofner: that you make over 150,000. Did not say that. So I like what you're saying, but most people don't. [41:23] Mark: That adds up. [41:25] Chad: I'm focusing more on what's this cool, new, innovative thing. And instead what you're saying is. No, no, no, no, no. How can we help our employers by maybe not giving them, like, this cool 401k tech? How can we just make their workplace a better place for their employees so they keep retained, everyone's happy? Okay, I didn't think about it that holistically, but how do you even do that? I mean, you can create default investments, create automatic enrollment, go back, create a wellness program, pensions. [41:55] Brett Shofner: I got it. How do relationships work? How are all these people getting into his bed at night? You were talking about earlier, right? [42:03] Mark: Tinder. [42:03] Brett Shofner: It works for both sides. [42:06] JD: 401k only, that's a site. [42:09] Brett Shofner: No, but a relationship works two ways. Employers have to offer people what they want and what they need. I mean, literally. This is not complicated. There's a ton of smart people. Am I wrong on this? You offer people what they want. Why do marriages work? Why do partnerships work? [42:25] Mark: They don't. [42:25] Brett Shofner: The benefits. The benefits. [42:28] Chad: Statistically shaking. [42:32] Mark: Not wrong. [42:33] Brett Shofner: But, Julie, we're overthinking it. I mean, really, as an industry, we're overthinking it. Look at the benefit stack. What did it look like 30 years ago? It looked the same. That makes no sense at all. It needs to be different. Like, okay, connect with these younger people. Give them what they want, whatever the hell it is. If it's pet insurance, if it's childcare, Whatever they want. [42:53] Chad: Because it's not that. Okay, here's my one big takeaway on this. And this ties to everything we've talked about today. Great. And I know you want to bring in wellness and planning and pet care and all these things and I want to bring in this really well run 401k plan beer. But there's one part that's broken in it I feel like. And this I feel like was to my points earlier about pooled employer plans and micro plan, like efficiency. Things not working is. The one missing part is the company themselves, human resources, the chief financial officer, the people that are there on the ground. We're trying to sell them things like, don't worry about it. Not a big deal, low cost, doesn't take any effort. And for us to succeed to your little utopian you're talking about, we need them to be 100% in. I feel like that's my opinion. And so our narrative needs to change away from all this other crap. And it needs to be like, okay, people at the company, human resources, payroll, chief executive officer, chief financial, let's get together. This is going to take some work. We have to roll up our sleeves. You're going to have to promote this, you're going to have to push this. We're going to be here to get it done. But we need your buy in. And I don't think that's a big initiative for our industry right now. I know we talk about it, I know it's in some articles and things, but we're not doing it as a bigger push. [44:24] Brett Shofner: Well, you just made my point though. We have to give them what they want and what they need to make your point. [44:29] Chad: I wasn't trying to argue. [44:31] Mark: I know you made a point. [44:32] Brett Shofner: I'm trying, but. No, you're right. I mean, look, they will buy in though, because they're strapped more than ever. Everyone knows that in our industry. HR in particular is really interesting. Damn. Because they don't have a seat at the table. Thank you. You're a Raider fan so much. They don't have a seat at the table. [44:49] Chad: Live on instagram tonight at 10. So. [44:52] Brett Shofner: But like listen, no one listens to HR. I mean, better they get a diminished role and they shouldn't. They're not in those important meetings. It's always the cfo, CEO. [45:01] Mark: Oh, God, no. Not doing it. [45:05] Brett Shofner: Just hand me the bottle, Mark. [45:06] JD: You may as well just drink out of the bottle. [45:08] Brett Shofner: Yeah, but I mean, but I mean the real point is they're closest to what you're Talking about the people, their issues. Why? Why are people leaving? We gotta bring them in, bring them into the conversation to your point, and give them what they need to be more successful. [45:22] Chad: I'll go self reflect. Where are we at these days? 27 employees. 20? [45:29] Mark: How do you not even know? That's not even a high number. [45:32] Chad: Well, here's my point, okay? As an employee, you're disconnected. I don't think I'm making a massive initiative to. And I work in this industry. Your guys are employees of mine. You don't see like major things coming from me about 401k or wellness or these types of things. I pretty much leave. [45:49] Mark: Yeah. Where's our wellness program? [45:54] Brett Shofner: You need a wellness program based on what? There's a guy in a robe next to me, right? My point is to say it. There's a guy in a jean jacket, yeah. [46:02] Mark: Do they have sponsors that don't pay them? [46:05] Chad: My point is that I believe in this stuff, but I get busy running my own company. I don't do it. I need someone. [46:11] Mark: You get busy surfing. [46:12] Chad: I need someone to sit me down and say, hey, look, it's time. [46:15] Brett Shofner: You're sitting right now. [46:18] Mark: It's time. [46:20] Brett Shofner: Profit sharing. [46:21] JD: We need health, wellness, the whole nine yards. [46:23] Chad: People in there talk to you about your budgets and what you're doing. Guys are okay with that and you'd love me for that and work for me forever because I provided you this. [46:33] Brett Shofner: I bet they would. [46:33] JD: I'm just looking out for 27 other. [46:37] Chad: I think they would too. But I think it's going to take either someone convincing me, which I think would be the role of our industry, or me really, you know, doing the [46:46] Mark: heavy things, getting to convince yourself at this point. [46:49] Chad: So I clearly haven't. So anyways, I think to close that, I do agree with you. I do think it's an opportunity. I don't think we're going to solve it with products and tech. I think we're going to solve it with a. With a shift in what we're offering and what we're doing. And it's going to take a bit of courage to do that and stop you out there. Stop running around trying to sell easy and low cost and instead sell solutions and evolution and a better world. Whatever. Okay. [47:22] Brett Shofner: Touche, man. [47:26] Chad: Yes. Wait, hold on. Can I get on the soapbox? [47:30] Mark: So I think, and I believe this to be true across a number of different industries and what have you, that you get people like yourselves who are dedicated to your craft and your industry behind closed doors. You listen to valuable Speakers who are here to give value, educate, teach you new tools and things. But then we all go back to our desk and we all go back to our office, and what really happens. So I think it's a reflection. It's a mirror effect. Right. We have to be accountable for if we're going to go have these nice. Thank you to Cynthia and everyone else who've done this and have this be done. And you guys go back and you're the thought leaders, and you do put this into action. Everyone else has to do the same thing. So I think it's a collaborative effort amongst everybody in the industry that if we can push one another, that it will have a bigger effect. [48:23] Chad: Right. [48:24] Mark: It's not just me, me, me, me, me. I learned something, but I can pass that along. And also, if you learn something and you take it back and you put an action, great. But if you just come here, you get your steak dinner and go home, then shame, shame, with all your jokes [48:39] Chad: and all your interruptions on purpose. I know whenever you dig deep in your heart, I just swell up with love for you. I mean, that was legit. [48:47] Brett Shofner: That was pretty legit. [48:48] Mark: We'll add an extra zero on my check notes. [48:50] Chad: All right, we need to. I hope the chat bars are rocking. We will choose a chat bar based on looking at the script. I don't know. When I get up, I can already [48:58] Mark: tell you who's going to win. I'll tell you who. [49:00] JD: I've been watching it. [49:02] Mark: Greg Greenfield. [49:03] JD: He's at the top. Who do you think at the top? [49:05] Mark: Three. Greg, we got plenty of time. Three piece. [49:08] JD: Three piece. He's been. Okay, but what we got. Daniela, Greg, and Crystal have been rocking [49:14] Chad: it for you guys. Okay, Dark horse. Okay, but we need to vote for a champion of the audience, [49:23] Brett Shofner: hands down. [49:24] Mark: No, no, no. Winning. This is not a good thing. [49:26] Brett Shofner: This is basically. [49:27] Mark: Who's the one we don't like in this audience? [49:29] Brett Shofner: That guy. [49:31] Mark: No, I'm joking. [49:32] Chad: I'm joking. He's not afraid of controversial, I would say. Usually it's some type of humor. [49:39] Mark: You win. [49:41] Brett Shofner: Yeah, give him a shot of that. Yeah. [49:46] Chad: Hey, yeah. Meet us afterwards. We'll hook you up with some. [49:51] Mark: Meet me outside. [49:52] Chad: And by the way, can you guys all do me a favor? Play it, play it. Catch me outside. How about that? Thanks. Do me a favor before I say goodbye. We had signed posters at the Scottsdale event, and when it was all over, we just saw them in trash cans and had, like, a bunch of them. We were at the airport and they were in a trash can. So if you could grab the posters and any merch you can get your hands on out there and then just if you're gonna throw it away, like, wait till you get home. Yeah, Wait till you get home, then toss it away. [50:31] Mark: It actually, you could, like, use it as wrapping paper, maybe wrapping paper, bottom [50:36] Chad: of your cat's litter box, something like that. [50:38] JD: Or get some tape and put it on some of the buildings here. [50:42] Chad: Thank you to Institutional Investor. Thank you to Cynthia. Thank you to Steve. Thank you to Giann. But more importantly than that, thank you to Maria. Maria's been awesome. She's been such a great help for us. We really appreciate that. Thanks to Eric and the boys in av. You guys are awesome. And hopefully, Eric, we're not getting wasted tonight like we did in Scottsdale, and [51:06] Mark: I went to bed early that night. [51:07] Chad: We really appreciate you guys sticking around to the end of this thing and all the laughter and the interaction. You know, they can interact even when you don't have your own mic, so thanks. We appreciate it. Thanks, [51:19] Speaker E: Brett.