Spiro Preovolos: Distribution Processing & Forfeiture Rules

[0:00] Speaker A: Waves. Salt water is good for you. [0:19] JD: Hey, welcome everybody, to another episode of Retireholics. We're so happy that you're here, you little 401k freakazoids. I gotta tell you, I've started off the show proper today, so it's gonna be. It's gonna be a good one. I've. I'm three course lights down and just getting started. We're just getting started. Okay? That's how you know this shit's gonna be legit. But let's not waste any time, shall we? Let's just introduce our guest. Going to kick it over to Justin. [0:56] Chad: Oh, we're going old school. [0:57] Justin: I. I wasn't ready for this. I'm still writing. [1:00] JD: He's still writing this great. Justin, why don't you introduce the sport coat jean wearing in the center of the screen. Take it away. [1:09] Justin: This sport coat jean wearing in the center of the screen is from the ever so sunny San Diego. He loves himself some imagine dragons. Probably rocks out to some Nickelback too. [1:20] JD: Oh. [1:20] Justin: He has a stature that allowed him to be the body double for Frodo in Lord of the Rings trilogy. He loves himself a good mud bath with wife posts up on the infamous 16th green at the waste management tour. Graduated from the prestigious USC and slid right in to take over his dad's company. [1:39] Chad: No. [1:40] Speaker E: Yes. [1:40] Justin: He may be the poster boy for white privilege, but that's nothing of who he is. He is the president and CEO of your cashing participant distributions, Mr. Spiro. Provolone cheese. I don't know how to pronounce your last name. Welcome to the show. [1:59] Spiro Preovolos: That many. [2:00] JD: I like provolone cheese. Welcome, Spiro. Welcome. Sorry. [2:04] Spiro Preovolos: Thank you, guys. [2:05] JD: Pause for that. [2:07] Spiro Preovolos: Thank you guys very much to be on the show. [2:11] JD: Everybody knows what to do. You rate Justin the chopper? I'm giving him a 10. [2:14] Chad: I. I'm just gonna go on. Say it. Best intro in the past, like five years. [2:21] Justin: Thanks. [2:22] Speaker E: Five years. [2:23] JD: I've only been doing it for four, but that's. You know what? It's gonna be such a great show that it's usually not good for the host to say that, you know, because how the would you know? But we're off to a good start. Justin's killer thing. I'm gonna kick it off with the big announcement right now. I haven't really figured out how I want to introduce this to y', all, but the retireaholics are gonna drop something on you right now. Our community that I'm very excited about. We spent a lot of time working on this. [2:58] Spiro Preovolos: Oh, Boy. [2:59] JD: And one of the reasons we're going to let you guys get a sneak peek at this is, is Spiro and pen checks were helped us bring this to fruition. So what is it? Fake. Drum roll. It's Retireholics, the movie. Coming to you soon. Brandon, play them the trailer if you can. [3:31] Chad: We have a trailer? [3:34] Spiro Preovolos: You got a tent? [3:36] Speaker A: J.D. [3:37] Spiro Preovolos: j.D. [3:38] Speaker A: What's happening? Hey, J.D. [3:40] JD: where's my mug? I gotta run back in now. Where's your mug? Oh, friend, I don't know. No, don't worry, don't worry. Don't worry about it. It'll be okay. Anyway, thanks. Thank you. Bye. Don't worry, Fred. I'm gonna get the mug back. I'm gonna get it. Don't you worry, Fred. I'm on it. I'm gonna find the mug. Craig, Find the mug. Find this mug. May involve some travel. It's gonna involve some serious dedication. [4:24] Speaker A: And who's paying for it all? [4:26] JD: It's free. It's called product placement chat. Guys, meet the mug hunter. A ton of research and analysis has gone into this. And all signs, I mean, all signs point to Shannon S words. [4:56] Speaker A: Can't believe Shannon tried to shoot us. [4:58] JD: Yeah, right. But at least we know who has the mug now. [5:25] Justin: Where's Mark? [5:26] JD: I don't care. Gotta get the mug. If we find the mug, we find Mark. Chad, Justin, get this freak out of here. [5:40] Speaker A: Does pen checks have any idea what they're wasting their money on? [5:44] Chad: Ah, who cares? Let's go. [5:49] JD: Hey, [5:52] Justin: that brought back a lot of memories. [5:53] Speaker A: Oh, my God, what a great run that was. [5:56] Chad: I forgot we did that. [5:58] JD: Coming to you soon, everybody. It's in its final, final, final stage of editing. It's a wonderful story of a. A search for fredericious mug. So stay tuned. Coming very soon. [6:13] Spiro Preovolos: This is being submitted right to the Academy and the awkward. [6:16] JD: This is why we're, that's what we're waiting for, Spiro, is for the Oscars to finish so we can be in on the new, you know, what do they say, like, for your consideration season or whatever movie? No, it's, it. Well, stay tuned. It's pretty well done. [6:32] Justin: Have you seen any of it? Or was that your, like, first experience? [6:35] Spiro Preovolos: I'm not gonna lie. That was my very first exposure to any actual footage. I, I, I heard some. [6:41] Speaker A: Same here. [6:41] Spiro Preovolos: Some narrative stuff from JD before, but, but no, that's, that's the first footage I've seen. [6:47] JD: Well, let me tell you this. The trailer was thrown together for the show. The movie is far more intense and detailed. But let's let's go to headlines, shall we? Headline. With guest appearances by Fred R.E. shannon s words. Vince Morris and he does not be named Ryan Reed Napanet. I'll drink some tequila for that. Why not? Nevin Adams writes the article titled Flex Path Prevails in Suit brought by Schlichter. We have talked about this on the show previously, but now this has come to an end and Vince G. And his group over there have prevailed. To use Nevin's word, they won this sucker. [7:59] Chad: Is that like Rocky beating Apollo Creed? Is that kind of what we could equate that to? [8:05] JD: I don't know. That's an interesting analogy, but I thought they were kind of screwed, to be honest with you. I thought the conflicts of interest, the fact that they had, they were kind of pitching this to their own client base would be the real kind of downturn for it. But congrats to them. What what came from. This is. No, no, no. This is a very prudent process, by the way, the Retirement Plan Advisory Group scorecard and the underlying methodology is, is prudent and, and smart and intelligent and, and good best practices. And so, Chad, I mean, your takeaway from this, that's pretty much what the court said, right? It's like, well, wait a second, this looks pretty tight. Like it looks on point. So why are you upset with it? [8:53] Speaker A: I had the initial response. Someone had sent me the suit a little while back. My initial response was, yeah, the conflict of interest. You're going to have them shelved. This is going to be tough. And then as you read through the whole post there by Nevin, it quickly becomes true that it was all about procedural prudence. They did every single thing they needed to do to show that this was the decision that should be made in the best interest of the participants and their beneficiaries. And I don't think you can argue with the way it was laid out that that was not part of the discussion. They didn't come in and say, this is what we're selling. They came in and did a full review, analyzed different options, went through an rfp, took every reasonable step that a fiduciary should do, and landed on these funds. [9:38] Chad: Can I point something out, Chad? Did you get a new microphone? Because you sound way clearer than you ever do. [9:43] Speaker A: You always say the headphone sounds great, but I went back to the yeti mic after you Talk on my AirPods this week. [9:49] JD: You're welcome. I. I want to say, unlike many headlines, I think this one's actually pretty significant. I think this shows us as an industry. And I don't know whether y' all think this is good or bad. We're going to talk a little bit about Voya here in a second. But what it shows us is nothing wrong with selling your own stuff so long as your own stuff is well made and, and prudent and done right. And so to me, this was a big deal. I was like, okay, wow, this really kind of opens up the door for the industry as a whole to create solutions like this, which Schlichter doesn't like. We've talked about this before and clearly he's the attorney bringing this case and he doesn't think that this type of stuff should exist and he just got his ass smacked down. So that's kind of good if you're. [10:48] Justin: Is this the first loss he's had that we know of? [10:51] JD: No, he said, okay. [10:56] Speaker A: What I, what I loved about the outcome of that is that we keep using the term selling. They're selling their own products, but in all reality they did just that. They came in and sold and consulted on the other solutions that are out there and landed on flexpath being the solution that was recommended and taken. That's, I think, the difference. If you find others that are selling proprietary products, but there's no sale or consultation in that process, it's a push which we see a lot in the micro and small space. That's where I think some of the risk exists when you're just being shoved a fixed account, when you're just being shoved a Target Date fund without any option to other solutions. [11:37] JD: Part of the case that was brought against them, though, Chad, was that they felt like that these, and I would agree with this, that these Flex Path strategies were funded because of Retirement Plan Advisory Group's client base. Like, we know this, you and I were at the very conference, release this, and I walked away thinking, oh, wow, they're going to send out all the return Plan Advisor Group guys to go place these collective investment trusts. Is that what they are with their clients? And so I think the accusation that they were using clients to kind of fund this wasn't that far from the truth. But the legal system says, so what, it's okay that, that they were doing that because it's a great product that they built and it's, it's a good fit for people. So that's where I'm kind of, I, I say right now, publicly, not that they listen to this, but hats off to you, Vince. And Retirement Plan Advisor Group and Flex Path Strategy I know you've divided up some here these days. Like, there's different. You're not. You're not part of certain entities. But I say congrats. You won. Good for you. And great for the industry. We should all bow down and thank you. That's my. [12:48] Speaker A: I like that. You can. You can pitch your own stuff. I was thinking as I read that article, imagine if every client we went into, we had to sell Shannon's third party administrator shop. Like, we believe in plan design consultants. That's why we work here. But imagine if we couldn't sell plan design consultants. We had to walk in and. And sell another third party administrator. Be shitty if that's the way they wanted this to line up. And hopefully this sets some foundation for. No, you can sell your own product, so long as it's good product and right for the client. [13:17] JD: Spiro, was. Was Flexpath on your radar? And these lawsuits. Did you have any thoughts about this? [13:24] Spiro Preovolos: Honestly, no, it wasn't. But I. I agree with what Chad said. [13:27] Speaker E: It's. [13:27] Spiro Preovolos: You know, and the only place where it really kind of comes into play for us is when we talk a lot about prudence, dealing with missing participants, obviously. And. And the DOL has done a lot of work lately on putting out guidance around best practice around that stuff, and I think if you're following that, that best practice stuff, you know, then I think you're okay. [13:50] JD: Spiro, that's Tito's for you. It's Department of Labor when you're on this show. [13:58] Speaker A: Wait, hold on. [13:59] Chad: Does he know the rules? [14:00] JD: No. [14:01] Spiro Preovolos: No idea. But no. We'll just learn as we go. [14:04] JD: Yeah. [14:04] Chad: All right. [14:05] JD: I mean, you can take a whole shot to start, but you don't have to do that all the time. We call that. [14:10] Spiro Preovolos: Because that's not gonna last. [14:11] JD: We call that the genius. We had Janya Stout on stage, and she thought she was supposed to take an entire shot every time she had Acro send, and it got a little messy. It's at Veril Hyphen law dot com. I'll drink for that. I think the title. I don't. [14:34] Chad: I don't think you need to. I don't think we rolled that one out yet. [14:37] JD: Okay, well, you. [14:39] Chad: Well, you too, man. [14:41] JD: Bring it. Anyways, the titled use of retirement plan forfeitures, the Internal Revenue Service proposed regulations, recent litigation, and the Department of Labor's position as a third party administrator. I've been drinking. I can still pull this Acrosyn off. As a third party administrator, I've always been sensitive to these forfeiture rules. And I was taught by my daddy because my daddy gave me his company just like zero. And he, he taught me that the document would tell you what you can do with forfeiture accounts. And if the document says you can pay plan expenses, then that's, then you can go ahead and do that or reduce a company contribution, etcetera, etcetera. Well, you know, we had an issue we talked about on the show in the past, but it's not actually related to this, where the Department of Labor got. Sued a company. I think that's the correct terminology. And, and for not following their plan document as it relates to fortit. But now we've got like these five litigation cases out there. And if you listen to the new Nevin and Fred podcast, they talk about it. I highly recommend that. But where this, it's a Southern California law group that's bringing these cases forward, that's saying, no, no, no, I don't care what it says in the document. If you're taking forfeitures and using them to offset your employer contribution, you are not acting in the best interest of the participants and failing at your fiduciary responsibility. What say you, Mr. Johansen? This is crazy. [16:26] Speaker A: It's. I struggle with this one because you're supposed to follow the document, the letter of the law, and it gives you the flexibility to do this. But if you sit back and think about what actually is in the best interest of the participants, it's not to offset an expected contribution. Expected was my keyword there. Imagine it's a 4% safe harbor stated match, like that's what you're going to get. And instead of them funding the 4% and then using the forfeiture to push down the plan expenses, they use the forfeiture to fund part of the stated match that was already going to be there for the participants. Legal. But is that really in the best interest of the participants? No. [17:07] JD: No. [17:07] Speaker A: If it was a discretionary match and the plan sponsor has the ability to argue, well, I wouldn't have given the full 4%. So it wasn't really an offset. Like I, I enhanced the match, I would have given 3.8% and I gave 2% more because I was able to use forfeitures to do it. But if it's not, if it's a stated match like that, I totally get it. It not being in the best interest of the participants, but the participant is [17:27] Justin: getting it from assets that weren't theirs anyways. Why is it mad it's still going to them? [17:33] Chad: Well, Think about what their fees are [17:34] Justin: something that they have no most times hard dollar expenses that it doesn't affect them at all. [17:41] Speaker E: So why is it matter? [17:42] Speaker A: Those money doesn't need to be hard dollar though. I interpret that as it being expense that the participants would have experienced anyways. [17:49] Chad: Right. [17:49] Speaker A: And an asset based charge, something that would have been headwind to the participant. That's the way I interpret it. [17:55] JD: Can we be clear though, like, so Chad's kind of signing, siding with the law firm here. Just state the obvious. For decades our industry has not run that way like this. This is the first time this has been brought up. Like we have always felt like we've been in this secure safety blanket that you know, we can just treat forfeitures in certain ways. I mean in my career I've been asked many times, what, what can you do with forfeitures? Well, we gotta, we gotta describe it in the document, but these are the things you can do. But now this would be a whole new pathway. I mean basically what you, if you're right, Chad, there are tens of thousands of plants, maybe hundreds of thousands of plants across the country that are all doing this wrong. [18:39] Speaker A: Well there's. Hold on, let me rephrase or make sure we're saying that. What I'm saying is, is not right by the letter of the law. The law states you can use it to push down or offset employer contributions. So, so there is no basis by the law. It comes to facts and circumstances. When you say is are we doing a task that is in the best interest of the participants and their beneficiaries. [19:01] JD: But that's what, that's what's arguable. That's what this looks and the way, [19:04] Chad: the way I look at it too is what were those dollars previously they were employer contribution dollars already. So we're just moving it back into the same bucket. [19:15] JD: Well said. Well said, Mark. [19:17] Chad: So I mean I get, I, I, dude, when you, I think we could have this conversation about a ton of things that are absolutely written, written in the doc. [19:27] Justin: Right? [19:28] Chad: We've talked about this before but the forfeiture contest, funny, I actually had that conversation just today with somebody about like how that works. And it's funny when we start ripping it apart and analyzing it and start really going into the details of it. But I think you obviously you can make an argument for either side. [19:45] JD: I think that opens up Pandora's box. Like I can't imagine plan sponsors and their advisors or consultants trying to deal with forfeitures and then put this kind of PRUDENT Fiduciary act on top of it. Like, well, wait a second. We need to analyze this for a second and figure out what we're going to do. [20:05] Speaker A: Imagine the opposite side of that, though, JD A plan sponsor then doesn't provide an employer contribution and instead just uses it to offset expenses. And then there's going to be a lawsuit saying, well, you should have used those forfeitures to, to give us an employer contribution, because that's what it was originally. [20:23] JD: We're getting in the weeds now. But if I had an employer contribution in the past and then I stopped and I had money in my forfeiture account and I use it to pay plan expenses, I'm jumping on Roby's side again. I was the employer's money in the first fucking place. And we had a legal document that said that there was this vesting schedule and the money's not yours, it's the plans. And, and by the way, that's why this rule is there in the first place. It's saying, hey, this is a plan assets, and they're allowed to use it to, to do these different things. I would personally vote. I think it's five of these lawsuits and they're all from the same law firm. They're all cookie cutter kind of things. That's what these people do, right? They. They come up with one and then they just rinse and repeat with as many, as many people they can or companies they can find to go after. Thank you. Shannon. Six. That's. This is not gonna work. This is. There's no way this is gonna work. [21:18] Speaker A: If it did, it would be insane. It would be insanity. [21:23] JD: Spiro, Spiro, tell us, do you. About forfeitures and your personal relationship with forfeitures? Do you love them? Do you think about them all the time? I mean, they're kind of a big deal in your business. Yes. No. I don't know. Talk about forfeitures. You're our guest. I need you to speak. [21:39] Spiro Preovolos: No, no, to be honest, they're. They're not a huge part of our business. Most of the stuff that we deal with is 100 vested. So, you know, we're not dealing with our clients on that stuff. But I, I agree. It seems, it seems strange that this was, you know, employer money to begin with and somebody didn't stick around long enough to effectively earn that. So, you know, why that would need to be divvied elsewhere. I think it's kind of bananas. And, and it does fly in the face of, you know what? I don't know, 40 plus years of precedence now. So why are we. Why are we changing that? Do we think it's going to make a significant difference or really enhance, you know, the way retirement plans are run if we change that provision. [22:22] JD: Well, well done. And well, you didn't just get. [22:28] Chad: Don't patronize our guests. [22:31] JD: You just didn't get your daddy's company because you weren't smart like me. I just got it because I was the son. You actually look like you got some brains there. [22:40] Spiro Preovolos: I don't know about all that, but I'll take it. Thank you. [22:43] JD: All right, one other article I'm gonna go to. Here again from napanet and I don't know this dude. Maybe we should get to know him. Written by Ted Godbout. Help me out, audience. Is that how you say his last name? Maybe it is. Ted Godbout. [23:05] Spiro Preovolos: Good boot. [23:06] JD: Okay, this is. Watch, watch. Everybody pay attention. Watch. Mark, Chad and Justin start to get really uncomfortable as we talk about things like this. And the reason being is that let us not forget that they are sales consultants. These are. Don't let them fool you with their robes and their hoodies. These guys wear suits and ties and they run around networking in the industry. And when we start talking about record keepers that they work with, they start to get really silent and embarrassed and scared because they're gonna have to pay the piper next week or something and talk to them. So Voya has. Is unveiling a new managed account specialist team. Here's my question and I'm going to take it straight to the guest first. Sorry, Spiro. Record keepers. Not just foia. Everyone there, that'll make the boys feel a little more comfortable. Not just Voya, everyone back in the day sold proprietary products, target date funds, fixed accounts, different things and their own funds and different slots on the menu. And back in the day, that was a background. What's that? What else? [24:23] Speaker A: Back in the day? [24:24] JD: Yeah, okay. Or still a little. [24:26] Speaker A: It's still loaded with proprietary more so [24:28] JD: back in the day and then I feel like we kind of evolved a little bit and gotten this world of like open architecture or at the very least like choice and investments and this kind of a lack of a conflict of interest. When I see a record keeper coming out with manage accounts, in this particular case, they've even got managed accounts that kind of Venn diagram with a. And I say this because I love the taste of tequila with like QDIA type of stuff. I start to think, is this not just a like a grab back at proprietary and make some revenue off of these tens of thousands of clients they have and kind of get into the investment game. Am I looking too deep into this? What say you, Spiro Provolone? [25:18] Spiro Preovolos: I, I would say no, I don't think you're looking too deep into this. My, my thought is gently, they're in the business of making money as well. And, and if they can do it in a manner where they, it still looks like they're providing choice and diversity in, in the investment selection, well then, you know, that's probably you can make [25:40] JD: the flex path argument, right? [25:42] Spiro Preovolos: Yeah, exactly. [25:43] JD: There you go, Chad. You work with these, these people, not just Voya, all these record keepers as they start to do press releases like this one from Voya, talking about getting into the managed account game. Would you rather them do it or would you rather like someone like Todd Kating at Leaf House or some independent do manage accounts? Like how do you feel about record keepers doing it versus some independent company? [26:11] Speaker A: I, you know, I don't mind if it's done with the right goals behind it. I don't mind if it's the record keeper or an outside fiduciary that's sitting on the investment side or if it's the investment company themselves. What I do mind is if they're loading in proprietary suites that aren't best in class, that aren't meeting the, the metrics that our advisor partners are running to see if the, the plan or if those investments, those target date funds should have those underlying investments. If they're not meeting the metrics then there needs to be opportunity to remove them. And I think that there are too many right now, both in the managed accounts and in the target date fund suite space where you get no control over the underlying holdings and a lot of them happen to be proprietary. [26:59] JD: I think that's a potential issue is the underlying holdings. But also, and I have not done the research here, so I apologize but isn't managed accounts being endorsed and celebrated by the industry as a level up, like a more personal approach to investing in portfolios? And so doesn't that mean that it's going to come with a, a sliver of a higher fee of some kind versus the target date fund solutions? And so isn't that enough? Like I don't need to have, I don't need to have it be a fund of funds where I'm making double money. All I need to do is slap a fee on it and call it a premium service, a managed account service from Voya, from Principal, from Empower and make some extra cash. Are you okay with that, you backward hat wearing robe motherfucker? [27:52] Speaker A: You asked the right person. [27:55] Chad: Well, the way you position that, no, I'm not okay with it like that sounds counterintuitive to the actual goal in which I wouldn't, I would interpret a managed account being really four, which again, the way I've always thought of it, and again, I'm sure Chat Bar will have plenty of thoughts on this because they're all geniuses in their own right, but it's, hey, maybe somebody's just not comfortable making their own decision. Somebody doesn't have the, the ability to go out and just hire a wealth advisor to do their own stuff for them. So they view this as a value to say, look, I feel like I've got my blanket on me a little bit. Someone's helping me. Yeah, I'm going to pay a fee for that. But for that fee, I should be getting a service of feeling like they're going to take control of what I need. They're going to understand what I need. Again, saying all this in just general terms, but if that's what's occurring, if this is a specialized service and a customized service and a personalized service, then no, I don't mind it at all. But the way you positioned it as just a, a filthy money grab, def. I don't want that anywhere near the participant. [29:14] JD: I heard Spiro earlier talking. I, I interpret it as being a fan of capitalism, which I am too. So maybe for the show I kind of bring up this controversy, but I kind of agree with what Spirit was saying, which is, excuse me, if I'm at Voya and I'm sitting in a deep, dark boardroom coming up with my business strategy. And that strategy is to, excuse me again, come up with a managed account service that, again, to this whole flex path. Strat is prudent, well built, and I can layer on some basis points to make some extra revenue. I guess if I'm really looking in the mirror, I'm okay with that because that's the United States of America. That's the world we live in. So this money grab then, should actually be described as just smart business practices. Where do you weigh in on this, Spiro? [30:13] Spiro Preovolos: Well, I think Chad said something that was poignant. Right? If, if you're selling and, you know, it's. Then I think that's a problem. You know, if you're really genuinely trying to put a good product out there, which I think most of these big companies that are reputable are Trying to do, you know, then. And, and you are prudently providing analysis and choice on this stuff then, then I don't have an issue with it. But yeah, if you're, if you're selling slop. [30:41] JD: Well, yeah, here's the problem, Spiro. Chad there. It's not that hard to. You don't have to sell slop. You can. It's not that you don't need to be a rocket scientist to put together a methodology of, of proper managed account. No offense to all the managed account people out there, but it's not like super intense so anyone could do it. And so you're never going to sell, so why not build it and make some cash? Sorry, Chad, go ahead. [31:08] Speaker A: I was, I was just going to argue because I'm looking through the chat and there's a number of comments of saying, you know, the managed account service is just a glorified tdf. Dang it. Which I agree with. [31:19] Chad: Good job chat bar you Chad. That was good. [31:25] Speaker A: Which I in most case agree with because the managed account services as we see them in the retirement plan space, they tend to just be a small flavor of a target date fund that has some sort of risk tolerance flavor to it. That's what they are. [31:40] Chad: And a lot of flavors going on there, buddy. [31:43] Speaker A: When I see. No, that's. See that's where I have an issue. When I see something like this release that says we're going to have them as a qualified default investment alternative inside a target date fund, but automatically push them into a managed account when they reach a certain age that has a higher cost structure without it's. It's a qualified default investment alternative. In order to be in a proper managed account, you need to have some interaction with the people that are managing your money. [32:06] Chad: Who's doing. [32:07] Speaker A: Understand your risk. [32:08] Chad: Who does that? [32:09] Speaker A: They're not. [32:10] JD: Who does that? [32:11] Speaker A: Well, there are tactical money managers. [32:12] JD: When you describe, when you describe Voyager's approach of, of kind of evolving you into a managed account from a qualified default investment alternative, all I can hear in the back of my head is Cha Ching, cha Ching. [32:28] Speaker A: So yeah, so there was a comment in the chat bar that I want to address is from Tony Davis, who we all know I love Tony. The, the direct thought of a managed account not having any greater benefit than a target. [32:44] Chad: Be careful, he pays me. [32:45] Speaker A: No, I'm, I'm not entirely disagreeing with him. It just needs to evolve inside the retirement plan space. The point, the advisor community believes in the term managed account in my opinion because the advisor community with A high net worth person, what do they do? They create a managed account, they go in, they figure out what the risk tolerance is, when are their deaccumulation phase, what kind of money do they need and they start to build out a portfolio based upon that individual. That's what they do for the high net worth person on a personal level. Now the problem is we're trying to say that's what's happening inside the retirement plan space, but it's not, that's not so. Who believes in the managed account? The advisor community believes in the managed account because that's what they do on an individual level. But we have not found a way to make that. They found a way to make it profitable. They have not found a way to make it that personable in the 401k space. And that's where I think we need to get. If we're going to tell people we're going to build a portfolio to you for you, we've got to get there. That's Brandon, you got me this 4K camera. So you keep having me highlighted like ghost. It's your fault. [33:50] JD: I want to move on to another. We're going to do an old segment. I'm going to bring back an old segment. It's going to be a lot of fun. [33:54] Chad: That looks like Voldemort before his face became deformed. [33:58] Speaker E: Good point. [33:59] JD: But I think it's important when we sit here and hash this out as industry people to sometimes put yourself in the shoes of the plan sponsor and think about how they would think about this. And I was recently on a large fiduciary review meeting and the vendor was coming back to the client with some offerings in the fixed account space and being very transparent about what this was going to mean to give them a better fixed account or what their options were and the prices that came with it. And so basically what happened, long story short was they kind of like pulled up their skirt of and were very transparent of like where they needed to charge them more or charge them less in terms of selling proprietary things. And There was about 15 people on this call, like the CF, the CFO, a drink, a bunch of people. And it felt really dirty to me. Like I felt like the plan sponsor. All those people on the committee were finally seeing my industry of like, oh wow, there's all these conflicts of interest and if, if we use this, this fixed account we can actually get a lower fee but if we use this other one we'll get a higher fee. And if, but then they're Also offering this. We're gonna get a lower fee. Wasn't proud. In that moment, I was kind of like, oh, my God. I don't think the client is liking this right now, the way it's being presented. And so that's the last quick question I want to propose to all of you here. And just chime in is when you think about the way the client thinks about it, would the client prefer to have Voya do recordkeeping, leave palace do manage account, the advisor. Do the advisor work, a TPA do the compliance work, or do you think the client would prefer this kind of all in messy conflict of interest game? I'll drink. [35:53] Justin: I think when you like that, it's. Yeah, you position it like that. Of course they don't want a conflict of interest, but they definitely want what's easiest. They don't want to be, you know, knowing that, you know, I got to deal with this vendor and this vendor and this vendor by any means. [36:07] JD: Good answer. Good answer. But that's. That's definitely goes in the face of, like, fiduciary responsibility and acting the best interest, which you're totally right. Which is. Yeah, they just want to do what's easier for their business, and we may fall victim to that as a society. We'll see. Okay, let's move on. We've only done this a few times, but I think every time it's been a big hit. I tend to call this spotlight, where we look at a product and we spot, like, this product and really kind of dig into the details for 15 minutes. That's not what it's called. It's called flashlight. Brandon. And Brandon, we're bringing up Doug Cebella. Bring Doug into the. Into the. Whatever the. We're in. And Chad, I'm gonna kind of kick this over to you because the company is called Payroll Integrations. Oh, and I know you're. I know you're a big fan. Not only have you been a big fan of integrating census data and stuff for a long, long time, but Doug's looking creepy in the little. [37:30] Speaker E: I'm just loading over everybody right now. What's going on? [37:33] Chad: Like, you're in. You're. You're in the Predator or something. [37:36] Speaker E: I think I might be in Dune [37:37] Justin: from what you look like. [37:39] Speaker A: Yeah, you look like slim shady too. [37:44] Speaker E: 10 year old me would have loved to hear that. [37:45] JD: Slim Shady set up payroll integrations, Chad. And we got. We got 10, 15 minutes to talk to Doug about the product and the goal here. The goal is very simple. [37:54] Speaker A: What is happening? [37:55] Spiro Preovolos: I don't know. [37:56] Speaker E: I gotta figure this out. [37:58] Spiro Preovolos: Not you dude much green Baker. [38:01] JD: We'll figure it out. We want advisors out there, the industry out there to know more about this solution. So set us up, Chad. [38:09] Speaker A: Yeah, it's been a constant issue in my world since I started in this space. I. I've spent as much time as I can get people to listen, talking about the importance of payroll directly linking into the 401k plans. So that when you're trying to determine who's eligible and how much they can save and how much have they already saved this year when you're trying to run match calculations, all of that is a payroll function that happens to deal with the 401k itself. And so I've been searching for years to create as many links synergies as I can between the payroll vendors and the 401k space. And along came payroll integrations to us, which essentially sits in between and offers technology. I'm not going to say the, the three letter word technology between an employer's payroll and a vast majority of record keepers. That's what's so attractive to us sales guys is we're not stepping into relationships saying, well, if you work with them then you might get integration. No, you all are working with so many different record keepers. It makes it easy on us. And they create a link between payroll and record keeping. And the new announcement makes it sexy for us as third party administrators. We can pull all the census data directly from them as well. That's attractive. [39:25] JD: Chad. I'm uncomfortable when you use the word Sexy. And the 401k industry just makes me [39:30] Speaker A: personally, you know what gets me going? [39:32] Chad: Jd, Strap on Cash balance, I guess. [39:35] JD: Brandon, our producer just let you know Doug still does look like he's in the band the Cure right now. But anyways, Doug, respond to Chad. [39:46] Chad: That's his zoom settings. [39:47] JD: I can't do anything about it. [39:49] Speaker A: No. [39:51] Spiro Preovolos: Got the matrix filter [39:56] JD: the same way you guys are. I don't have any. [39:57] Justin: Turn off your snap ability to alter that. [40:00] Speaker E: Let me see. No, it's all good. [40:05] Justin: I hope your company technology is better than your camera. [40:09] JD: We are. We are. [40:11] Speaker A: Hey. [40:12] Chad: I was like, hey, no, no, turn the filter back on. [40:17] JD: It was way better. Yeah. As the Cure lead singer, then a guy in a Callaway quarter. [40:27] Speaker E: Yeah. Robert Smith, loves Callaway. Big golfer. Okay. Anyways, where were we? [40:34] JD: Tell us. [40:34] Speaker A: No idea. [40:35] JD: Chad's a big fan. We want our audience to know all about what you're doing. I'm going to ask you straight up. You guys have had a Lot of success recently. Yeah. Like I'm not just propping you up. Like, you guys are kind of crushing it. [40:47] Speaker E: We have. Things have been going really well. Just closed a big funding round back in September, the $20 million series day. [40:55] JD: I was talking about new clients and partnerships, not about all the fucking hundreds of millions of dollars you're getting in VC funding. [41:02] Speaker E: If there was hundreds of millions of dollars, I probably wouldn't even be here right now. So. No. Yeah. As far as like partnerships on the payroll and the record keeping, TPA side, everything's going gangbusters, which has been awesome at the highest level, just for everyone. [41:20] Chad: You, Justin, you do Justin, you drink for him. [41:23] Speaker A: Keep going, Doug. [41:24] JD: Keep going, Doug. [41:25] Speaker E: Sorry, no acronyms. Am I getting that right? [41:28] Chad: Yeah, there you go. [41:31] Speaker E: I see everyone drinking, I figure I might as well go downstairs and grab one myself, right? [41:35] JD: So, Doug, can I ask you. I. I have. The whole reason you're here. [41:41] Speaker E: Yeah. [41:42] JD: Is because Chad brought you up on a show and our chat bar was blowing you up too. Like in a good way. They were like, oh my God, we're in love with this company. And I was like, wow. Okay, we need to take a second look at this. Who are your competitors? Do. Are there other people trying to do this? And why have you caught up on Gangbusters and they haven't? [42:04] Speaker E: So that's a great question. We do have competitors in the space who are, who have seen success. I think there are differentiators within our platform which make us a little bit easier to use, more scalable things like that. So look at like a pay connect, who's great. Other venture backed companies like Finch and Merge who are trying to do the unified application programming interface thing, you know, want to say the dirty acronym there? [42:31] JD: Yeah, yeah. [42:31] Speaker E: But yeah, like there's a lot of competition in the space. There are a lot of people trying to move into the space. And fundamentally I think there, it's a bit of like a twofold thing that we've developed here is one is just how we interface with payroll companies. So the way we built our product out is so employers can come into our platform and very easily authenticate and onboard their plan onto our platform. So outside of record keeper testing and TPA testing or whoever we're sending the data to from our end. [43:07] Speaker A: Oh, Doug's got his own drink. [43:10] JD: You can always finish your thought though. You just owe us one. [43:13] Chad: Did you add that? [43:15] Speaker E: So it's easy for us to onboard those plans. It takes 10 to 15 minutes from like a technology perspective, whereas in what we Call the old world of EDI feeds. Right. [43:25] Spiro Preovolos: You're. [43:26] Speaker E: If you're a plant sponsor, that means. [43:28] Chad: But that sounds like an acronym. [43:30] Speaker E: It is. Employee Data Interface. [43:33] JD: Oh, got it. [43:35] Chad: Oh, you're so smart. [43:36] Speaker E: You know they're spending anywhere from 10,000 to $50,000 to get one live. They are spending six to eight months and they're going back and forth with the payroll company and the record keeper and somebody else. And it's just a huge math. Right. I'm sure you're all very familiar. So we wanted to automate that process and streamline it as much as possible. So the way we built our platform is through application programming interfaces with our payroll partners. [44:04] JD: We have built APIs for all you generalists out there. [44:08] Speaker E: For our, our acronym driven folks. We are, we're using those APIs and we are allowing. That's on purpose or allowing that authentication flow to be fast. Right. And so we can onboard a plan 15 minutes, 30 minutes, start sending data immediately. And then from there obviously there's testing that needs to be done by the record keeper or the TPA or whomever. But from our perspective from onboarding to, from onboarding to go live or go live with our platform, it's meant to be very fast. [44:42] JD: So you, yeah. You created a user experience that's simple. It's technology backed. Whatever. [44:48] Speaker E: Exactly. [44:49] JD: Great. Obviously, selfishly, I look at this from a third party administrator perspective and I mean Chad and I have talked about this for, geez, the last decade. Really like we would have record keepers 10 years ago come out with kind of cool little tools or technology to kind of line up whatever the client was using as a payroll provider to, to sync up into the record keeper. But it was, it was just nationwide or just principals or just Voyas or just Hancocks. I love the idea of an independent third party doing this for a lot of reasons. Are you looking at the success of guideline and human Interest and these, these, these are these like disruptors that have come into our industry venture capital back to the tune of hundreds of millions of dollars. And I think their biggest selling point I, yeah, it has been is this payroll integration, this kind of ease of having the data of your payroll. And it has in my opinion, boosted their business in a big, big, big, big way. [46:00] Speaker E: Yeah. [46:00] JD: You know what I just did there? I was slurring because I'm drunk and I turned it into saying the word a few times and it worked. So I'm going to be your salesman right now. Not that you asked me to. What you might be providing Us as an industry is our own version of guideline and human interest that we can run out there and sell paychecks. [46:25] Speaker A: Adp. Yeah. [46:27] JD: Right, yeah. Is that, is that fair to say, Doug? Like do you so yourself that way or. No, [46:37] Speaker E: I think we're a little bit of a sidecar to those guys. I will say a few of the names that you mentioned and some of the venture backed 401k record keepers that you've been talking about, we do actually supplement their product. So they are not like the panacea be all end all. [46:54] JD: You're saying you're, you're helping them out, [46:56] Speaker E: you're part of the back in some cases, yeah. [46:59] Chad: Some of them. [46:59] Speaker E: I'm not going to name names anywhere but some of them, yeah. I'm not going to do our customers like that. [47:08] JD: You, you non industry types, I mean that in the best way possible. You're still learning about your secretiveness of your business relationships. I come from an industry where because we're under I'll drink erisa. There's fiduciary responsibility like when, when plan sponsors and or advisors, the people that represent them need to make decisions about what vendor to use, what vendor not to use, what's we like very transparent, open because we need to know about the company, who they work with, revenues, like are they profitable, all these things. Otherwise how could we possibly recommend them to our client? But you all like, and I'm from the Bay Area, I'll call you Silicon Valley types from outside the industry. You like to keep all that like back in the closet. Like it's, it's interesting. [47:57] Speaker A: They have to. [47:57] Speaker E: So we have definitely gotten as I like to call it the latex glove treatment from a lot of these larger record keepers. [48:03] Chad: Whoa. [48:06] JD: Roby loves that. [48:07] Chad: That's why he said can you please expand? [48:12] Speaker E: We do, we do disclose that information in some cases. So I mean I can tell you we work with like nine of the ten largest record keepers that are out there. You know, the principals, the empowers, the boys of the world. We're seeing a lot of, a lot of success there. [48:26] JD: There's some names. [48:27] Speaker E: It's our, it's our guys who are, you know, positioning themselves as the technology providers who we do help that or a little bit less inclined to give up the names for. But with that said, like you said jd there is, there's just so many payroll companies out there that it is logistically impossible for every record keeper to go out and build as many integrations as as they need to. Right. There's Potentially thousands. It's kind of one of those things where it is, it's a bit nebulous how many there are, but from our perspective it's like how can we go out and how can we build payroll relationships? How can we bring them to record keepers TPAs and democratize the space, right? Because like you said, these guys have hundreds of millions of dollars to play with and they are running, you know, they're doing the VC playbook. They are looking at. [49:14] Chad: Brandon has this guy's picture already. [49:17] Speaker E: There we go. They are running major deficits to be able to win business and do it at a loss because they have extra, you know, cash to burn, right? So they can go out and they can spend money on technology that other organizations may not be able to. So for us it's about democratizing the industry for everybody. [49:34] JD: And I, I love to hear that because I think that's exactly what our industry needs. Not only to one, make a better client experience for our clients. Right. Like as a TPA that was on accident. I'll drink for that. It's a pain in the ass. You know, we've got north of a thousand clients and so to ask them for census every year data hire, date of birth, first name, last name. I know that if you put a lie detector on them they'd be like this is a pain in the ass. Why do I have to do this every year? And Chad and I have debated about this again for the last decade and so to create some type of technology that would get us the data. And here's the specific part, the nerdy part here, the way we actually want it instead of just giving us access to the payroll companies like data, like no, no, feed it to me the way I need it and make sure that it's accurate. Could do a lot of very phenomenal things is, is doing, huh. [50:41] Speaker A: There's a lot of third party administrators on here. Like I positioned it from a, from an advisor perspective. There's a lot of our peers on right now and that will be watching this. I think you're sitting in the dark if you're not spending a little time seeing what you guys are doing. And I had your team send me over a list of record keeping partners currently, I mean it's long. It's long. And that's the issue I've always ran into with the other groups. A group out of Arizona that you guys that you know, we've used is that it's always limited to a couple payroll providers or a couple record keepers. You've Grown that list, which makes it so much easier for us to say, yeah, we can find a way to create the link that I've always wanted because there's some tech in between now. [51:22] Speaker E: Yeah, we've got a pretty big web of connectivity that's only continuing to grow. Right. Like we've knocked out all the big boys, most of the big boys on the payroll side, most of the big boys on the record keeping side. And now like you guys have alluded to, we're doing third party administrator connect where you'll be able to get your 5,500 filing data without having to go ask for it. Right. Sending 50 emails to sponsors to get that information. So we're just going to keep iterating on our product. There's going to be a lot of really cool stuff coming out for. For TPAs, for record keepers, for everybody. Hit me with acro sim. [51:59] Spiro Preovolos: Yep. [52:00] Speaker E: No, it's coming, it's coming. [52:01] Chad: My phone's having trouble right now. [52:03] Speaker E: And yeah, I think that we're really uniquely positioned just with the staff that we've hired who have industry expertise, the connections and, and just everything that we've built and you know, it's, that's. [52:16] Chad: Why is Chad Johansson on your board of directors? [52:21] Speaker A: Yeah. [52:21] Chad: That might be a conflict of interest. I'm just saying. [52:25] Speaker E: Shameless self self promotion. Right? [52:27] Chad: Yeah. [52:28] JD: Well, I mean I, I usually like to kind of shame on me. Find the negative here, like try to kind of hit you with a hardball. But. No, no, no, this is, this is what we need as an industry. We're not going to do it on our own. Whoa. We very much need a third party to do it. [52:49] Speaker A: We're not doing it on. Yeah. [52:51] JD: I guess my toughest question. So I want to represent the audience listening in my toughest question. It's not a hardball to you. It's more about the process. So this is not unique to your company. But many times, like especially as a third party administrator, we work in the, what many called the micro market. Right. So I think my average client's probably 30 employees, maybe a million dollars in assets. And Chad will always represent them proudly by saying they may not have a human resources team or a payroll team. Maybe it's the owners that are doing those types of skills, you know, or those tasks. And so if that owner is working with payroll company. I was going to say abc. I said it. I'll drink, right. Oh, no, no, no. [53:38] Speaker A: That's not an Ackerson. [53:41] JD: And. And they get set up at that payroll company, that payroll company. Is not always thinking about the retirement plan when they're setting them up to do payroll. And so that's my concern is, is the data exchange, the data exchange not flawed? It works seamlessly. But is the data that I'm getting flawed? Because the users that are using it are not cognizant of the, of the importance of that data as it relates to the retirement plan. And that's always been my push against this, which sounds like a boomer push, because I want tech. I, I, I absolutely want it. Like, yeah, I'm gonna get there, but I'm afraid that the auditing and the careful kind of measure twice before we cut in these situations, getting lost on the guidelines, the human interest, and then maybe you and your peers. So are you looking at that shit? Do you understand what I'm talking about? [54:38] Speaker E: Yeah, I do. I think a lot of it is fundamentally housekeeping on the data side from the plan sponsor. There's a lot of that, right. You know, you can't be having people, can't be having employees get sent through with like nine zeros as their SSNs or no date of births or you [54:52] Chad: know, fundamental things, say Social Security number, [54:55] Speaker E: I forgot things like that. Like a lot of it boils down to the plan sponsor just not tending their garden, as I like to say. But there is, there is kind of that, that form of, of like deferral updates, making sure that those are updated in a timely manner. There's just a lot of administration that goes into like the management of your 401k. And ultimately our goal is to have this be like a single setup, right? Like you set it up. Once we make sure that if there's a match that it's calculated properly on the payroll software. And you know, if there is any deferral changes, we're picking those up. Our platform is designed to take like the payroll configuration and make sure that that data is coming through accurately every time. [55:49] JD: Not that you want to hear advice from a drunk shaved head surfer in Southern California, but here would be my advice to you. And you obviously don't. You're getting your funding and your, your business plans going gangbusters, but I would look closer at that and he's gonna go, it's gonna go the cure on me. I would look closer at that and see if there's a better way to, for an ongoing type of audit. Because I'm fearful, here I go finding the negative, right? I'm fearful that this could be the, the pitfall that you're not anticipating is that if this data is inaccurate as it relates to 401k. Sure, you could get a lot of people that if mistakes happen, things aren't working right, could become naysayers or not like this. And what we need is. And it's not. It's not. It sucks because I know your investors don't want to hear this, but maybe tech can do it, but it doesn't seem to me to be very scalable. You need experts that can look at it and audit it. Or maybe artificial intelligence can do this going forward, but I worry a bit about the gaps, that's all. And. But we do need to move on, Chad. But. Go, go, go, go. [57:03] Justin: You're on mute, Chad. [57:06] Speaker A: I said we need to move on. But let me add one point, because what was attractive to me, jd, in the most recent, being on mute at [57:12] Chad: this point in time, you. You have to act. [57:14] Speaker A: Dude, Justin was. Justin was telling me how bad my lighting was. Jd. They give you the ability when you're loading implant specs to the system to actually define what the definition of compensation is. [57:24] JD: I know, but Chad, what I meant was that shit changes. [57:28] Speaker A: Oh yeah. And someone's got to update the system for sure. I'm just saying, think of all the tech that's out there that just says no. We're going to give you straight W2. [57:35] JD: That's great. [57:36] Speaker A: Actually allows you to say no. We want to carve out. We want to carve out missions and bonuses. And I get. You get a clean feed. [57:42] JD: I get that. But Doug, Doug was saying, hey, we set him up in 15 minutes or less. And I was more worried about what happens in year three or five, year seven. You know what I mean? [57:53] Speaker E: Like, yeah, I mean, look like it's meant to be where plan sponsors and the way we have designed our platform is that TPAs or record keepers can go in and make changes and view as a plan sponsor views the plan, right? So what they can do is, is they can manage all that stuff proactively. And the plan really meant to view this once a year because plan documents changing at what most once per year or anytime. So if it changes, you just let us know. Or you as a TPA can log in, you can view all your plans, you can make the changes on what we have for like compensation changes. So it is. [58:27] JD: Maybe that's the future. As a business owner, I don't like you telling me that my staff has to make changes to things to make your product work. But that's just me being a drunk asshole. Because if I really jump on Your bandwagon here. Shut up, J.D. like, that could be a really efficient way in the future that I still benefit from, because it's easier than me gathering senses from a thousand plus clients. So I would love to work with your product and do that, so I get it. Okay, Cool. Very cool. And in shame on me. The industry has been overwhelmingly in support of what you're doing. So payroll integrations, we got Doug here. Everybody out there, look it up, check it out, and. And we'll watch. And God bless you. [59:15] Speaker E: Thanks, guys. Feel free to reach out to us anytime. Love coming on. [59:18] Speaker A: Appreciate it, Doug. Thank you. [59:19] Speaker E: Take care. [59:20] Spiro Preovolos: Bye. [59:20] Speaker E: Bye. [59:21] JD: Bye, bye. Spiro, can you take it easy on the guy? I mean, what the. You're just. You know, we get these guests like Spiro just jabber, jabber, jabber all the time trying to take up the spotlight. Spiro, you like making money? Who doesn't? And everyone out there that thinks this show is 60 minutes long, think again. [59:45] Chad: I. I think that it is, but I'm on it, so it's not. [59:49] JD: It's not. It just flows. [59:51] Chad: This isn't the Joe Rogan podcast, all right? [59:54] JD: It is. It's organic. It's called Drunk Stock Tips, people. It's called Drunk Stock Tips. First, let's. So we don't forget this. [1:00:08] Chad: Oh, yeah. Hey, Brandon, you can go just. You can just go yourself. Did you. [1:00:12] Speaker A: Did you remove JD from the wheel? [1:00:19] JD: No. Chad, I don't know when you're gonna learn. Don't ever question the integrity of the will of ice. The gods strike you down. Want to make money? That's how you do it. He. He told you to buy Nvidia at $355. Sparrow. He said, Buy it. And everyone else was saying, like, are you kidding me? This stock's been on a tear. You know where it's at now? [1:00:57] Spiro Preovolos: I know. [1:00:57] JD: 926. [1:00:59] Chad: What? [1:01:00] Spiro Preovolos: Jesus. [1:01:01] JD: He told you to buy it when a lot of people are telling you not to. And you should have listened to him. He said, buy door dash at 75. It's at 133. Okay. He said, buy Home Depot at 269. It's at 376. He said Disney. This was controversial, but he said Disney. That's a stock. He said Disney was crack for kids at 90. Crack for kids. It didn't. It didn't go off right off the. Off the start line there, but now it did. It's at 110. He said, buy Costco at 500. It's at 7 85. He told you to sell, not buy. He told you to sell GameStop, Laird bird. Even though he loves writing those little. He loves riding those things off the curbs and crashing and getting scars on his face. But he told you to sell those. He was right. Okay, everybody. When this man speaks you EF hunting his, you start listen toing it. I'll drink for that. Here we go. Roby the ticker and I'll drink again. Is V s. No, wait. Tickers. I'm safe. [1:02:11] Chad: No, you're good. [1:02:12] JD: V S. C O. Roby's like. No, you're good. [1:02:17] Chad: I'm, I'm very focused on what you're saying versus do you know, I feel [1:02:23] JD: angrier and drunker with a skin head and in a white T shirt, but I don't know. [1:02:28] Speaker E: Wow. [1:02:29] JD: Okay, [1:02:31] Chad: sorry. Can you just tell me the name of the company? [1:02:34] Speaker A: I don't know. [1:02:35] Chad: Similar. [1:02:35] JD: I cannot. The ticker is bso. [1:02:38] Chad: So you want me to look at it? [1:02:40] JD: It was a high. No, this is the buildup for the audience. It was a high of 74. It's currently at a low of 18. They do 6.3 billion in annual sales and the revenue growth has been up from 2020, 2022 of 17.2%. They have just under 100,000 employees. And here's a controversy. Robyn, I apologize for putting in the spot. You might get canceled for this. The company is Victoria's Secret. [1:03:09] Chad: Okay. I was trying to, I was trying to guess in my head what it was and that didn't pop into my head at all. Which is probably a sign of what I'm gonna answer with then, I guess. Okay, so. Huh. [1:03:25] JD: I, I, I'm gonna, I'm gonna like retail. It doesn't like retail. [1:03:29] Chad: I'm gonna pick my words very carefully as I go through this very long analysis. [1:03:38] JD: Okay, let's make it a three hour show. Let's go. [1:03:41] Chad: Yeah. So let me take you back in time, Teenage Roby. I'm just joking. [1:03:49] JD: I'm not gonna do that. [1:03:55] Chad: Okay. So what I can say is this. They sell things that other companies now sell. They're not the big 800 pound gorilla on the block anymore. I think there are other companies that I've caught on to, like, hey, we need to sell things that people feel comfortable in. Body positivity. Which by the way, I will say this like Victoria's Secret tried to go the route of like having the non standard, like what everyone expects to be like a, I'll just say it like a lingerie model. How do I know this? Yeah. I. I read. [1:04:43] JD: I read you're saying they did some different body shapes. [1:04:46] Speaker A: So. [1:04:47] Chad: And apparently that didn't go over so well. So it sounds to me like they're probably on the downfall right now would be my guess. [1:04:56] JD: They definitely are, stock wise, but. [1:04:59] Chad: Oh, really? Okay, good. Let's be honest. It's past Valentine's Day, so not a lot of people are buying it right now. Right. I mean, you need clientele. You need to make sales. [1:05:09] JD: But it's such an iconic brand. Can it happen? [1:05:13] Chad: It really is. So that's why. That's why I'm torn. I'm honestly torn. There's. But I'm gonna stick with my gut. No pun intended. [1:05:22] JD: You always do. [1:05:24] Chad: I'm going to say I'm out. Okay. I think. I think stores will likely start closing shop. You can buy this stuff on Amazon. You can go to. You know, I know Kim Kardashian has her own branded stuff. I mean, you kind of need that audience. That's probably more. I don't know. I. It's Victoria's Secret, like, for boomers. And like now the younger generation wants like, what is okay. [1:05:56] Speaker A: Boomer. [1:05:57] Chad: Yeah. I don't know. So maybe Victoria's Secret needs to stop being so secretive and just move on. So I'm out. I'm gonna sell the. [1:06:09] JD: Out of that. [1:06:10] Chad: I'm done. I'm done with it. [1:06:11] JD: Okay. [1:06:12] Spiro Preovolos: I don't know that boomers in. In Victoria's Secret, like, that was a [1:06:18] JD: weird combo he made there. I think he was trying to say, like, it's old news. Yeah, yeah, yeah. The. The hip kids aren't into Victoria's Secret anymore. [1:06:30] Chad: I don't know. I don't know what they're into, but it's something else. [1:06:36] JD: Spiro, let's shift. And by the way, Spiro, when Roby says sell, please jump on your E Trade account tonight and short that because you'll make yourself a ton of money. I mean, and I just want to let everyone know that's listening out there. This is actually investment advice and you should do what Ro guy says. And it is fully backed by the [1:07:00] Chad: retireholics and we are a registered investment advisor through retireholics. [1:07:06] JD: That's a straight lie. But okay, here's the deal, Spiro. I'm not sure everyone knows pen checks. No offense. I think it for historically, it's been a very third party administrator focused company. I think you guys are doing some new things now. But what I do know is that my father started a third party administration firm in 1975 and I think your dad was doing the same damn thing at the same damn time. But your dad being an entrepreneur and I think getting together with a bunch of other third party administrators thought he, we could create this new business. And it was centered around distributions because News alert everybody. There was a time when Voya and Empower and Principal and whatever didn't do distributions. The third party administrator had to do it all and do the 1099s and deal with all the taxes implications and the whole thing. [1:08:04] Chad: The. [1:08:05] JD: Yeah. And so your dad and a bunch of people got together and said, hey, we could create a company around this. Now that company that you are in, you are the president of is 100 plus employees, or in that ballpark, around 100 employees. You're building a cool new office not, not far from where I live. And we use you guys religiously for all of our clients. And here's the next thing that was [1:08:30] Chad: a tough word for you, JD [1:08:35] JD: for all our clients that are not at a package record keeper. Because that's another thing. A lot of third party administrators still have clients with E Trade or, or Charles Schwab or whatever. And we still need to process these distributions and we use pen checks. That's not an endorsement here. Although they did sponsor Retireholics, the movie, but. Okay. So Spiro, let's start first on the father son relationship. Yeah, it was difficult for me to convince my old man that he needed to retire, but I did it. I manipulated him. I drugged him at times. I eventually pushed him out of the company kicking and screaming and took all the wealth for myself. Have you had a similar experience? Old people or how did your old people. [1:09:24] Spiro Preovolos: I, I, for a second I thought you were telling my story right there. So. Yeah, that same exact experience. No, it's, it was interesting for sure. I will say one thing that's, that was really helpful. We had a really awesome board of directors and they were really great about helping us with that transition from my father to me. And so it was, it was useful. But yeah, I, I would say I had my hands firmly placed on the door jambs and my foot in my dad's back. And I was, you know, pushing as hard as I could and good visual. [1:10:02] JD: And now give us a taste for pen checks. And you can start from a third party administrator perspective. Like you got clients all across the country. How many. What are you doing? How is the company evolved? [1:10:16] Chad: Yeah. [1:10:17] Spiro Preovolos: Excuse me. Well, how's the company involved? You're right. Right. We started off 30 years ago and it was a group of TPA. Firms that got together and we're kind of just talking about what was going on in the industry, what they liked, what they didn't like. [1:10:31] Chad: And Chad, you owe one too for the chat, buddy. [1:10:36] JD: All right. [1:10:41] Spiro Preovolos: And so they, they were doing some informal surveys amongst this group of, of third party administrators that got together. I'm picking up on this, thank you. And, and they did a survey of what they disliked about the business. And what they realized is the number one thing for all of them at the time was processing distributions because to your point, it was, it was super archaic and paperwork. They had to send you the money directly to the plan sponsor. Plan sponsor had to open up a separate trust checking account because they couldn't commingle the money. Blah, blah. [1:11:12] JD: There can be deadline issues that suck. Yeah, yeah. [1:11:15] Spiro Preovolos: And, yeah. And the TP, the, the, the TPAs had to. [1:11:22] Speaker A: There we go. [1:11:27] Spiro Preovolos: Excuse me. Had to. Lost the train of thought. But it doesn't matter anyways, [1:11:36] Speaker E: they had [1:11:36] Spiro Preovolos: to, they had to actually pay the taxes on this stuff. And it was, obviously, it's based on the amount of tax which could change from, depending on the number of distributions you're doing, etc. So there's all this just very technical compliance stuff that was being sort of foisted upon the plan sponsor. Plan sponsors turn around and giving it to the TPA going, that's gonna, that, that was gonna hurt for a while. You know, you guys do this because it's what you do. So that was really how, how Penchecks was born. Right. [1:12:03] JD: We were, you look, you looked at [1:12:07] Speaker A: a need that nobody wanted to do. Yeah, but like it was, it's tough. It's not easy work. It's difficult. But you stepped in and said, we're going to do it. [1:12:18] JD: And we all said, like, let's evolve this a little bit, Spiro. Like, so nowadays third party administrators, the record keepers, do a lot of that stuff. But as I mentioned earlier, we seem to all still have a lot of what third party administrators are called trust accounting clients where we need your services. And I think that's where you've provided a lot of value for the third party administrator community. But then this is a bit of a pitch for you because you've been such a great, such a great participant tonight. You guys are now kind of evolving a little bit and looking at rollovers and possibly even managed accounts. Am I right? So can you, can you let everyone know a little bit about like the future, what you're looking at, how you guys are going to evolve? [1:13:09] Spiro Preovolos: Yeah, you're absolutely Right. So yes, I think there, there will likely always be some segment of the market that that will be a great fit for. Right. And, and we will, will provide services and infrastructure that will allow third party administrators to, to sell certain types of plans where we're a great fit for and they don't have to worry about taking on that additional administrative burden in terms of the future of this, of where we're going. Yep. We've been heavily involved in the automatic rollover space for a long time and what we recognize is a couple of things is that there's a lot of, of the market that's underserved out there. And so we had the, the opportunity to create a partnered solution to, to launch a managed IRA solution and really going to be advisor focused. Yeah. Right. There you go. It's going to be advisor focus. [1:14:05] Speaker A: Not easy. [1:14:07] Spiro Preovolos: I feel like if I was on the show like frequently like you guys, I might get this better. But JD's up to like 9 acro sins. [1:14:14] JD: I kind of do it on purpose, but I'm an alcoholic. [1:14:16] Speaker A: That's what he says. So, so tell me, tell me a little bit more on the. [1:14:21] JD: I've been drinking a lot of vodka in my free time and. [1:14:29] Speaker E: Mark's laugh every time. It just makes it me think he's [1:14:32] Justin: actually laughing in the show. [1:14:33] Speaker A: It does the, the individual retirement account side of things because, because we had jd. I don't know if you, you sent this on, on a different topic for, for tonight's show prep. There is a need for this type of service. There is an absolute need for people that are rolling their money out of the plan. They're in retirement. It's small balance, it's sub 100k. Nobody wants to touch it. The record keepers might create, we've seen this with empower and personal capital might create their own strategy to try to grab those assets. There's a need and I don't feel like it's being fulfilled yet. So is that what I'm hearing? You guys are. Because I did not know this. You guys are getting into that space a hundred percent. [1:15:17] Spiro Preovolos: Chad. That's, that's exactly what it is. I can't say better so I won't even bother to elaborate. [1:15:23] Speaker A: Interesting. So spirit, you're on the distribution side. So you're. Yeah. You're in the midst of it. [1:15:31] Chad: Okay. [1:15:32] JD: Yeah. Everybody check out pen checks. Keep your eye on them. You'll see them as a product placement. Full sponsor of the retireholics movie coming out. [1:15:46] Chad: Time out. [1:15:46] JD: Time out. [1:15:47] Chad: When's that actually coming Out. [1:15:49] JD: Well, they were. They were going to put on the trailer. They were gonna. This. I'll answer you, Mark. They were gonna put on the trailer coming in March 2024. And then their idea was creatively to then like slash through and go. Or maybe April 2024. And then they're gonna go. Or maybe. [1:16:11] Speaker A: Maybe [1:16:14] JD: I would say the over under would be on 20 to 20 days. Yeah, 20 days. We're done. We're just finishing off some little pieces. And trust me, a lot of time, energy and effort has on it. Yeah, it's. We're. We'll have that out real soon and should be fun. Should be fun. Yeah. We could do a premiere. Not a premiere. We can watch it around that swimming pool. The Motel 6 at the retirement. [1:16:42] Chad: Let's. Let's rent out the shittiest theater in the United States. [1:16:47] JD: Just screen has like, rips in it. [1:16:50] Chad: And yeah, it's got rips. There's cockroaches eating popcorn and still on the ground, random describing. [1:16:56] Spiro Preovolos: That's, you know. [1:17:01] JD: Okay, Chapter Champion, let's do this. We got a leaderboard. By the way, I'm very disappointed in the retired community. Remember when I told you two weeks ago that I'd throw some little Easter eggs out there for you? To get an additional points on the chapter champion leaderboard, I made a post on LinkedIn. I said, go check out one of our other social medias. It was Instagram. And answer the trivia question, which was what's the nickname or the phrase we use for a really drunk retireholic on the show? Which is what? [1:17:39] Speaker A: Thank you, Tony Davis. [1:17:41] JD: Tahoe. Tahoe, whatever. And I gotta go check my LinkedIn, but I didn't. I haven't gotten any responses yet. So there's 300 points available for five of you to go do that and follow those instructions. However, Will Hackler was the first person to tune into the pre show and comment. And he gets 500 extra points. Will knows how to work this game. Okay, Chopper Champion, the annual edition for big prizes. Justin, your vote. [1:18:12] Justin: Oh, Kate's tonight. [1:18:14] JD: Who? Katie Boyer. Just because she's a new mom and. Yeah. And you are dream being nice. Okay, Chad. [1:18:21] Justin: No, not. [1:18:22] JD: Yeah, maybe a little bit. [1:18:23] Speaker A: I. I had Katie pinned up too, but I'm gonna go with Grants. Grants had some really good pointed comments tonight, so I'm going Grants shrubby [1:18:36] JD: and probie. [1:18:37] Chad: Ed. [1:18:38] Speaker A: Ed said something nice. [1:18:39] JD: Oh, yeah. [1:18:40] Speaker A: About his segment. So Mark's like, [1:18:45] Chad: hey, pandering is fine, dude. It works, okay? [1:18:49] JD: It's empowered. Katie Boyer is as a New mom. She's fired up. Kiss my ass, jd. Kiss my ass. Spiro, your vote for chapter champion tonight. [1:19:02] Spiro Preovolos: Yeah, I'm gonna have to go with Katie, too, for the. She had a latex probe comment, and, [1:19:07] JD: yeah, those are always good. Everybody loves a good latex pep probe. I'll drink for that. All right, I'm gonna go like last time. I'm picking the goddamn winner here. [1:19:22] Chad: Yeah, I like that. Thank you. [1:19:26] JD: And as much as I don't want to, I don't know why I say that. Just got most. Most of the votes. Katie Boyer. Katie Boyer, you. You are chap. Our champion today. [1:19:40] Chad: Okay, so this is the funny part. Let you tell the. Tell the story. I mean, yeah, this is like. [1:19:46] JD: Yeah, I tried to send a group text to the retelling hireholics text this evening saying, hey, go like and comment on this post I just made to boost this deal, and I accidentally included Katie Boyer in it. I went to the wrong group text, and she looked at the leaderboard of Hackler Barthels, everyone, and she goes, sorry, Katie. She goes, sausage fest. And we were like, oh, but she did open my ass. Well, finally we have a non sausage on the leaderboard. [1:20:25] Chad: Yeah. [1:20:31] JD: Yeah. So congrats, Katie. You're in there with a thousand points. Should get you up there in, like, T2 or something. I'll drink for the tea twice, and. Oh, yeah, I will. I will drink in my. My Roby. Look at me in my white shirt. I will drink this tequila when I penalize, bro. Spiro, thank you so much. Appreciate you for being here. Appreciate you for your nepotism and [1:21:08] Chad: appreciate [1:21:09] Speaker A: you for the work that you're doing. [1:21:11] JD: The keys to the car that your daddy handed you job. I can only say that because my daddy handed the keys to me as well. Love you, daddy. Thank you. I appreciate it. Couldn't have bought the Lambos without you, Justin. Chad, it feels so good to be in your club. In the club. [1:21:35] Speaker E: I'm. [1:21:35] Justin: I'm gonna say, like, you. [1:21:37] Speaker A: You pull it off. [1:21:38] Justin: Well, if you went full, like, you would be. [1:21:40] Speaker E: You got that? [1:21:40] Speaker A: No, because he still has hair up there. That's why he doesn't need to go full. [1:21:45] JD: But I went pretty close. I went pretty close when I did it just grown out a little bit. But so. [1:21:52] Spiro Preovolos: But you had long hair for so long, and, like, that was you that everybody knew. Like, you look great with that, man. [1:21:57] Speaker A: And the beard, too. Gone, too. [1:22:00] Speaker E: It's off. [1:22:01] JD: Spiro, I love you too. Hit me up in my dms. [1:22:05] Chad: Oh, that counts. [1:22:07] JD: We will see you in two weeks. And everybody get ready for retire. Alex, movie. Brandon, play us out with some music and. Yeah, we'll see you again. We love you guys. Thank you. [1:22:19] Speaker A: Thank you, Spiro. [1:22:20] Spiro Preovolos: Thank you guys. Super appreciate being here tonight. [1:22:24] JD: Brothers and sisters unite. You're awesome. A little weird, but.