That Annuity Show
The use of annuities by RIAs continues to grow. David Lau, one of the leading pioneers in the space, joins us today. David is the founder and CEO of DPL Financial Partners. We talk about the opportunities and challenges of “poking the bear” – and creating better retirement plans for clients in the process.
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Episode Transcript
The discussion is not meant to provide any legal, tax, or investment advice with respect to the purchase of an insurance product. A comprehensive evaluation of a consumer’s needs and financial situation should always occur in order to help determine if an insurance product may be appropriate for each unique situation.
paul_tyler:
Hi.
ramsey_d_smith:
My.
paul_tyler:
This is Paul Tyler, and welcome to another episode of that annuity show. And today I think we’ve got a really interesting topic, but I’ll let Ramsey do the intersin a secon. Say, how are you.
bruno_caron:
Yeah.
ramsey_d_smith:
M.
tisa_rabun_marshall:
Good morning.
bruno_caron:
Yeah.
paul_tyler:
To.
tisa_rabun_marshall:
Doing.
paul_tyler:
See.
tisa_rabun_marshall:
Good.
paul_tyler:
You.
tisa_rabun_marshall:
Good to.
paul_tyler:
Bruno.
tisa_rabun_marshall:
See you, too.
ramsey_d_smith:
M.
paul_tyler:
Bruno. It feels like Canada here in New.
ramsey_d_smith:
Oh.
paul_tyler:
York. Today I.
ramsey_d_smith:
Oh.
paul_tyler:
Just had to take the trash in the mail out and it was. I think Winchell is like maybe zero or something. That’s a.
bruno_caron:
Okay.
paul_tyler:
Warn.
bruno_caron:
Well.
paul_tyler:
For you. right.
bruno_caron:
Well, Canada here is minus forty.
david_lau:
Here’s.
bruno_caron:
And.
david_lau:
Minus forty.
bruno_caron:
Celsus.
paul_tyler:
Yah.
bruno_caron:
Or Faronite is the same.
david_lau:
And I.
bruno_caron:
So.
ramsey_d_smith:
Oh.
david_lau:
Am, though.
paul_tyler:
H.
bruno_caron:
Pick whichever you want.
david_lau:
Whichever you.
paul_tyler:
All right.
david_lau:
Want.
bruno_caron:
So not not shedding.
david_lau:
No.
bruno_caron:
Any tears.
david_lau:
Not shedding.
bruno_caron:
Here.
david_lau:
Any tears.
bruno_caron:
Oh.
paul_tyler:
Right.
david_lau:
Here.
paul_tyler:
So.
ramsey_d_smith:
Yeah.
paul_tyler:
Ramsey, we don’t even ask. But.
ramsey_d_smith:
M.
paul_tyler:
Do you want? We’ve got a great guest. Do you want to set this up for us.
ramsey_d_smith:
Sure. well, first off Bruno. I think it’s probably like eighty degrees, eighty to ninety degrees warmer here in Atlanta.
bruno_caron:
No comments.
ramsey_d_smith:
Very thankful for that up we are.
david_lau:
Oh.
ramsey_d_smith:
We’re very honored to have joined us today, David Low, the founder in Co of D Financial Partners, I would say this has. this has been a long time coming, Where this is Episode in.
david_lau:
M.
ramsey_d_smith:
Eighty one, And we’ve been doing this for a few years, and and really really glad to have David join us today, because he’s been.
david_lau:
M.
ramsey_d_smith:
Really one of the most.
david_lau:
Yeah.
ramsey_d_smith:
Important innovators.
david_lau:
Yeah.
ramsey_d_smith:
And disruptors in this space over the last several years, His experience in the space goes way back. so David. I’ll let you sort of fill in. You know some of the things that you’ve done. You can really go back to eat rat. All the things that have led up to your founding deep financial partners in the last several years.
david_lau:
Yeah, well.
ramsey_d_smith:
Oh.
david_lau:
First, thanks so much for having me on. I’m really happy to to talk with all of you and look forward to the conversation.
ramsey_d_smith:
Oh.
david_lau:
Like I said, I’m.
ramsey_d_smith:
Yeah.
david_lau:
Actually, I’m not.
ramsey_d_smith:
Oh.
david_lau:
An insurance guy. I’ve kind of been insurance.
ramsey_d_smith:
Yeah.
david_lau:
For a little while now, but you know I didn’t.
ramsey_d_smith:
M.
david_lau:
Grow up an insurance guy. I am. You know more on that innovator side for really, with a thesis of driving better consumer value. So my first foray into into financial services was I was the chief marketing officer of the first internet bank in the country.
ramsey_d_smith:
M.
david_lau:
And the thesis was Let’s how do we.
ramsey_d_smith:
Oh.
david_lau:
Bring better value to consumers, And the idea was pretty simple in its conception, which is, we’ll get.
ramsey_d_smith:
Ye.
david_lau:
Rid of branches.
ramsey_d_smith:
M.
david_lau:
Right. So branches are just expensive, efficient ways of distributing and servicing products. And that was a pretty radical idea in the.
ramsey_d_smith:
Oh.
david_lau:
Mid nineties when we did that, but it was usually successful because we could provide much better value products. You to the end consumer, you triple the now the savings rates, you know, quadruple the C. D rates. I mean much much better value than you could get from your big bank. And you know.
ramsey_d_smith:
M.
david_lau:
We really drove a lot of innovation throughout the banking. You know the banking world. When we did.
ramsey_d_smith:
Yeah.
david_lau:
That, everybody had to start offering online services. They could.
ramsey_d_smith:
Yeah.
david_lau:
Match our pricing, but they had to have bill payment, and Et cetera et Cetera, We then merged with trade, so.
ramsey_d_smith:
M.
david_lau:
To know Segu into a trade.
ramsey_d_smith:
Oh.
david_lau:
Where I was then the chief marketing officer there for a bit, and that was a similar thesis, so culturally we had the same backing. and but the inefficiency that each rade was attacking was.
ramsey_d_smith:
Oh.
david_lau:
Transactions and transaction transactional fees. You know, which are you know, were so high back in the day. If you know people can of rum ber, you have to remember the times we were in you. If you wanted to trade a stock through your broker, it might cost you three hundred bucks.
ramsey_d_smith:
My.
david_lau:
Right So you know each rade then comes along and swab and some others, and all of a sudden it’s twenty Lars.
ramsey_d_smith:
Oh.
david_lau:
Um, and that was super disruptive.
ramsey_d_smith:
Oh.
david_lau:
And you know, after being at a trade for a bit, I started you consulting around the globe for people looking to build internet banks from, helped build the first internet bank in Japan, you know, with Say bank, and you help Mary Lynch here domestically build an online bank.
ramsey_d_smith:
Oh.
david_lau:
But ultimately consulting, you know, isn’t very fun. Um, you’re writing a lot of term papers in the way. Looked at it, I never really a term paper guy. I’m much much more a doer, So I rejoined the founder of the original bank.
ramsey_d_smith:
Oh.
david_lau:
To form an insurance.
ramsey_d_smith:
Oh.
david_lau:
Company called Jefferson National.
ramsey_d_smith:
Yeah.
david_lau:
And when we looked to bring consumer value in insurance, specifically in the nuit space, You look. how do you do that? It’s not bricks and mortar. It’s actually its distribution costs. it’s it’s commissions, it’s wholesaling, it’s state dinners. It’s all the proverbial stuff that it goes along with annuities, which really drives.
ramsey_d_smith:
Yeah.
david_lau:
The price up. So you know, we launched a.
ramsey_d_smith:
M.
david_lau:
No load insurance product.
ramsey_d_smith:
Oh.
david_lau:
It was the first ever flat fee.
ramsey_d_smith:
M.
david_lau:
Variable annuity in the industry. It was twenty dollars a month, and basically you got tax defer for for twenty dollars a month. you know, super simple product.
ramsey_d_smith:
Oh.
david_lau:
And you know you’ve got to. When you take out the commission, you’ve got two options. You.
ramsey_d_smith:
Yeah.
david_lau:
Can go direct to consumer, or you can go through advisors who don’t accept commissions, which is r. I. S. So we decided to launch through r. I. S built that business over the course of a decade, and you know, very successful going into the R A market, but didn’t see the kind of change that we saw with the bank. So what we saw was a few.
ramsey_d_smith:
M.
david_lau:
Other insurance carriers offering copy.
ramsey_d_smith:
Oh.
david_lau:
Cat products, rather than carriers coming out with all their own version of commission free versions of their best products, they thought Okay, The key to the R. A world is this, You know, really simple investment, only variable annuity. It’s.
ramsey_d_smith:
M.
david_lau:
Like, No, Actually, we’re just a small carrier and that’s all we really can do. Um, Rather than this is.
ramsey_d_smith:
Oh.
david_lau:
The best thing to do.
ramsey_d_smith:
M.
david_lau:
Um. so.
ramsey_d_smith:
M.
david_lau:
That kind of transition ultimately to launching d. p. l.
ramsey_d_smith:
So tell us a little bit about what you’re doing.
david_lau:
Yes.
ramsey_d_smith:
Specifically in D. P. So what is your.
david_lau:
Yah.
ramsey_d_smith:
What is your target audience? And you know and first and foremost, and then sat, And you, now, what are some of the things that you’re trying to change in the industry both with that target audience and with the insurance carriers themselves.
david_lau:
Yeah, so d, p. L is a two sided market place, so we work with carriers on one side to help bring commission free.
ramsey_d_smith:
My.
david_lau:
Products to market.
ramsey_d_smith:
Oh.
david_lau:
And work with R. S. And you know and consume is on the other side to help.
ramsey_d_smith:
Yah.
david_lau:
Them. you find and use these commission free products. And basically the.
ramsey_d_smith:
Oh.
david_lau:
Starting point was saying you know, not only does.
ramsey_d_smith:
Oh.
david_lau:
The insurance industry need to evolve, you know, the insurance industry in terms of offering No load products, is literally decades behind the rest of financial services. You know, we’ve.
ramsey_d_smith:
M.
david_lau:
Long ago moved away from shares in the mutual fund World shares. Um, you know, the insurance world just didn’t know.
ramsey_d_smith:
Oh.
david_lau:
How to handle going. No load. you know, it’s that’s hugely disruptive.
ramsey_d_smith:
M.
david_lau:
To their distribution, so they didn’t really.
ramsey_d_smith:
M.
david_lau:
Know how, Because.
ramsey_d_smith:
M.
david_lau:
I could see that from my you point of view at Jefferson National, They didn’t. They didn’t really know what they were.
ramsey_d_smith:
M.
david_lau:
Doing, So we launched by originally consulting for a number of carriers. I knew I needed products. You know there. There just weren’t products available, You.
ramsey_d_smith:
Yeah.
david_lau:
Know for you, r. I. S. so we wanted to get a.
ramsey_d_smith:
Oh.
david_lau:
A base line of products big enough to have an actual market place and launch, and we needed the carriers to.
ramsey_d_smith:
M.
david_lau:
Do certain things to be supportive of that. They have to support feed billing, then paying commissions. they have to you know, support an advisor of record on a policy where they’re used to only having an agent. You all kinds of different things like that.
ramsey_d_smith:
Oh.
david_lau:
So it’s kind of this need where r is historically have just been asset managers. Um, And you know.
ramsey_d_smith:
Yeah.
david_lau:
We all know asset management is commoditized.
ramsey_d_smith:
M.
david_lau:
At this point, there’s not a whole lot of value in aging assets. You know. That’s probably worth a ten basis point fee. Um, so.
ramsey_d_smith:
Yeah.
david_lau:
R. S, over the last decade have really started now migrating.
ramsey_d_smith:
Yeah.
david_lau:
Their business to be more holistic to start, you know.
ramsey_d_smith:
M.
david_lau:
Doing financial planning and wealth management, you know on top of asset management, and in order to do that, you need insurance and you need it in now, ideally in a fashion that responds with your business model which is feed based right, So they need no load products, So we really.
ramsey_d_smith:
Oh.
david_lau:
Set out to drive. You know, the creation of no load products in the insurance world for r. I. s were supposed to be feduciaries.
ramsey_d_smith:
M.
david_lau:
Um, you know with their clients, so they can now use these.
ramsey_d_smith:
Oh.
david_lau:
Products without conflict of interest. It was always a conflict to be clear. you know, for.
ramsey_d_smith:
Yeah.
david_lau:
R. A. if they wanted to recommend an annuity that was lost revenue for them, you have to be a really hard core feducier to do that and let me tell you there aren’t too many of them. So.
paul_tyler:
Oh.
ramsey_d_smith:
M, ah.
david_lau:
It’s uh, you know, it’s been you know that kind of mission because ultimately it’s you again for me. Driving consumer value is, let’s bring better value products. Let’s give advisors better ways to serve their customers and help deliver better outcomes.
ramsey_d_smith:
M.
paul_tyler:
So.
ramsey_d_smith:
Yeah.
paul_tyler:
Dave. this is. This is great to have you on the show. Um, the markets interesting. Uh, you.
ramsey_d_smith:
M.
paul_tyler:
Know, you know some of these markets where you know Think you know the business models structured.
ramsey_d_smith:
Oh.
paul_tyler:
One way. It tends to attract certain people with certain attitudes about products and annuities. has.
ramsey_d_smith:
M.
paul_tyler:
Been afford.
ramsey_d_smith:
M.
paul_tyler:
Word you know, for a lot of these.
ramsey_d_smith:
M.
paul_tyler:
People.
david_lau:
Yes.
paul_tyler:
How do you think Break down in your head? How do you break down the R. A space? What percent you know are never ever going to recommend an annuity Versus you know, this percentage actively is.
ramsey_d_smith:
M.
paul_tyler:
Including.
ramsey_d_smith:
M.
paul_tyler:
In the practice.
ramsey_d_smith:
Oh.
paul_tyler:
In this one in the middle are sort.
ramsey_d_smith:
M.
paul_tyler:
Of saying. Well, let me see.
david_lau:
Yeah, so I mean, there’s a lot to that. It’s a great question. So one. you have the traditional R A market, So let’s let’s talk about the market for a minute. The R a market when I lane, you know, the product that Jefferson National Two Thousand Fifteen was collectively about.
ramsey_d_smith:
M.
david_lau:
Six hundred billion dollars in assets under management. Today it’s about nine trillion, So this is the direction the advisory world is going right. and about six trillion of that is that that original R. A, who never used annuities, couldn’t take commissions, but about a third of it is. Now you know what’s known.
ramsey_d_smith:
Oh.
david_lau:
As break aways, hybrids. You know people who, who may have traditionally.
ramsey_d_smith:
M.
david_lau:
And likely have traditionally used annuities.
ramsey_d_smith:
My.
david_lau:
Now at a broker, but now they’re use an r. i a for the rest of their asset management. So there’s you. So there’s a few different types within there, But you now speaking directly to the A traditional r. I. a Um, you know, in one sense and Ram, so you can probably relate. You launch.
ramsey_d_smith:
Oh.
david_lau:
You know, a product to this world, and you’re like Okay, They’re feduciaries.
ramsey_d_smith:
Ye.
david_lau:
They’ll get edgy ated.
ramsey_d_smith:
M.
david_lau:
You know, they’ll get educated on it.
ramsey_d_smith:
Yeah.
david_lau:
They’ll understand how to use it. They realize.
ramsey_d_smith:
Oh.
david_lau:
It’s best for consumers. Um.
ramsey_d_smith:
Oh.
david_lau:
Yeah, this will be super easy, right, No, it’s not you. You’re breaking habits. And and you, you’re breaking down all kinds of things. And it’s not simply about the product. it’s about the business process. Right. How does this work into my asset management world? You know T’s not. I’m just selling an annuity. Now it’s I’ve got a portfolio. How does it fit in the portfolio? What does it replace.
ramsey_d_smith:
Oh.
david_lau:
How do I think about this? Where does it show up in my.
ramsey_d_smith:
Oh.
david_lau:
Oft wear? How do I build on it? So it’s it’s this big evolution.
ramsey_d_smith:
M.
david_lau:
So I, you know, I cut them a lot of breaks because it’s not like just buying a mutual fund now right and you type in a ticker symbol And now you’ve gotten a new an annuity.
ramsey_d_smith:
M.
david_lau:
So it’s It’s still.
ramsey_d_smith:
Oh.
david_lau:
A little hard. but you getting you know those barriers are getting broken down every day and I think it’s much like launching a new technology. Where get the.
ramsey_d_smith:
Oh.
david_lau:
Early adoptors. You get the people who get it right away. They’ve read the academic research they know weighed foul.
ramsey_d_smith:
M.
david_lau:
Whatever.
ramsey_d_smith:
Oh.
david_lau:
They know, That annuities are better for their clients and are really strong within a financial and retirement plan, And it’s now they can do it in in a way that’s not a conflict for them. And then.
bruno_caron:
Ah.
david_lau:
You start getting to the the fast.
bruno_caron:
Ah.
david_lau:
Followers And and I think we’re.
ramsey_d_smith:
M.
david_lau:
Kind of.
bruno_caron:
Yeah.
david_lau:
Just getting into the fast follower now phase Frankly.
bruno_caron:
Ye. no. I think that’s.
ramsey_d_smith:
Yeah.
bruno_caron:
That’s really good and I really.
david_lau:
Really.
ramsey_d_smith:
M.
bruno_caron:
I really.
david_lau:
Yes.
bruno_caron:
Echo. What what you just said on? You know, it’s an annuity. How does it fit in my soft ware? How do I think about that and.
david_lau:
And.
bruno_caron:
You know I’ll ask a question.
david_lau:
I’ll.
bruno_caron:
To.
david_lau:
Ask.
bruno_caron:
You. Let’s.
david_lau:
You. Let’s.
bruno_caron:
Obviously, we have.
ramsey_d_smith:
Yeah.
bruno_caron:
You know.
ramsey_d_smith:
M.
bruno_caron:
Variable annuities have account values and we can, actually you know, somewhat relate a little more to that. Uh, but when you have, let’s say a pure lifetime income product. Let’s a pure spa That gets you a stream of income.
ramsey_d_smith:
Oh.
bruno_caron:
For the rest of your life.
david_lau:
Right.
bruno_caron:
It does not have.
david_lau:
Not.
bruno_caron:
An account. Lu.
david_lau:
But.
bruno_caron:
How do you put that in the software? How do you think about it? In turn, do you think about it as income.
ramsey_d_smith:
Oh.
bruno_caron:
Is it an asset? even if it doesn’t have an account value? Like? what are.
david_lau:
What are the.
bruno_caron:
What are.
ramsey_d_smith:
Oh.
bruno_caron:
The boundaries.
david_lau:
A.
bruno_caron:
In the.
david_lau:
Boundary.
bruno_caron:
Framework that you advise.
david_lau:
I.
bruno_caron:
Advisors to, you know, to look at.
david_lau:
Okay.
bruno_caron:
Those particular products.
david_lau:
So so.
bruno_caron:
Oh.
david_lau:
The other important part.
ramsey_d_smith:
Oh.
david_lau:
Of what we do which will blend right into this is.
ramsey_d_smith:
Oh.
david_lau:
We build technology. So from.
ramsey_d_smith:
Yes.
david_lau:
Again, my seat at Jefferson National, I knew, in order to really work real adoption within the R. A world, annuities, insurance.
ramsey_d_smith:
Oh.
david_lau:
Really had to work within their desk top. You know.
ramsey_d_smith:
Ah.
david_lau:
It had to function within the portfolio management system You had to be able to build. You had to be able to see the assets. so we built technology. which one does product discovery. So you don’t need to know anything about annuities. You just tell us what you’re looking to do will show you the best products to accomplish that. But then we partner with, you know, the leading portfolio management.
ramsey_d_smith:
Oh.
david_lau:
Systems within the R A world we’ve got already know. we’ve got partnerships with you over fifty percent.
ramsey_d_smith:
Yeah.
david_lau:
Of the now the R A market through their portfolio management systems, And there, now you can see you know those annuity products within the portfolio. Even with the variable annuity, you’re going to see the underlying account.
ramsey_d_smith:
Yeah.
david_lau:
So if you were managing.
ramsey_d_smith:
Oh.
david_lau:
To sixty forty, now you can make sure.
ramsey_d_smith:
Oh.
david_lau:
You’re doing it even with the annuity Ou know, with.
ramsey_d_smith:
Oh.
david_lau:
The annuity investments you know, and.
ramsey_d_smith:
My.
david_lau:
Of course, Bruno, you go to the trickiest one. Probably the spa. The So you know, the.
bruno_caron:
Yet.
david_lau:
Spa you know can more easily be represented in some ways in the planning software, So you can represent the income stream.
ramsey_d_smith:
Oh.
david_lau:
You know, in someone’s planning software within portfolio management system. It’s a little more tricky. You can do it through, you know, showing like a commuted value.
ramsey_d_smith:
M.
david_lau:
Just you have a sense.
ramsey_d_smith:
Oh.
david_lau:
Of.
bruno_caron:
Ah.
david_lau:
That. That’s still an asset there right. I mean, one of the now, one of the hold backs for consumers or even advisors in recommending or buying spies. Is that all this? I had two million dollars.
bruno_caron:
Oh.
david_lau:
All of a sudden. I have one million dollars.
bruno_caron:
Yeah.
david_lau:
It’s gone.
ramsey_d_smith:
M.
david_lau:
Right. So.
ramsey_d_smith:
M.
david_lau:
Can I see that now? And.
ramsey_d_smith:
M.
david_lau:
If we.
ramsey_d_smith:
Yeah.
david_lau:
Can at least show you a community value that helps with, helps with that.
ramsey_d_smith:
M.
david_lau:
But but that is, that is a trickier one. For sure.
bruno_caron:
Ah.
tisa_rabun_marshall:
David. You talked about.
ramsey_d_smith:
M.
tisa_rabun_marshall:
Being in this sort of fast follower.
ramsey_d_smith:
Um.
tisa_rabun_marshall:
Phase right? So.
bruno_caron:
Yes.
tisa_rabun_marshall:
My question to you is what.
ramsey_d_smith:
M.
tisa_rabun_marshall:
Are you seeing next in the.
ramsey_d_smith:
Yah.
tisa_rabun_marshall:
Space disruption.
ramsey_d_smith:
Yah, M.
tisa_rabun_marshall:
Innovation? What are you anticipating as being kind of the next behavior that we’re trying to shift.
david_lau:
Yeah.
tisa_rabun_marshall:
And change for the eyes. Yeah.
ramsey_d_smith:
Yes.
david_lau:
So so at Jefferson National, Now I launched the product, which was now investment only variable annuity. We had four hundred investment options right and the model was kind of.
ramsey_d_smith:
Oh.
david_lau:
Charles Swab. Once you know, so swab, the dominant custodian within R. a market.
ramsey_d_smith:
M.
david_lau:
One sources their mutual.
ramsey_d_smith:
M.
david_lau:
Fund platform. Basically we said this is one source with tax defer, Um, And you know, so leverage asset location.
ramsey_d_smith:
M.
david_lau:
Is much better. You. You’re goin t get much better results for your consumer, Much better for accumulation.
ramsey_d_smith:
Oh.
david_lau:
And nobody.
ramsey_d_smith:
Ah.
david_lau:
Did that right. and nobody did that Because.
ramsey_d_smith:
M.
david_lau:
It was too.
paul_tyler:
Ye.
david_lau:
Hard. It didn’t operate within the portfolio. All the things I was just talking Abou.
ramsey_d_smith:
Yes.
david_lau:
It was just too hard.
paul_tyler:
Oh.
david_lau:
I mean, conceptually.
ramsey_d_smith:
M.
david_lau:
Everybody could get that, but how do you rebalance how do you do this? It was just too hard. So what people know what R as did was they used it for ten thirty five exchange, and it really became.
ramsey_d_smith:
Oh.
david_lau:
Primarily a ten thirty five exchange vehicle, Meaning my client owns an annuity that somebody sold them. I can’t get paid on that annuity.
ramsey_d_smith:
M.
david_lau:
Because it’s commissioned. let me roll it over into a much lower cost product that saves the client a bunch of fees. And so that is the dominant way that R. s used annuities.
ramsey_d_smith:
M.
david_lau:
It was simply, you.
ramsey_d_smith:
H.
david_lau:
Know, regardless of what benefit might have been in there, I mean you’re you’re.
ramsey_d_smith:
M.
david_lau:
You’re going to make sure you’re.
ramsey_d_smith:
Oh.
david_lau:
Not doing harm to the consumer.
ramsey_d_smith:
Yeah.
david_lau:
In that ten thirty five change, But you know the consumer may have bought that annuity because they wanted the income guarantee.
ramsey_d_smith:
Oh.
david_lau:
But the R then would typically sell them against the income.
ramsey_d_smith:
Yeah.
david_lau:
Guarantee. Don’t worry about the income guarantee. You’re going.
ramsey_d_smith:
Yeah.
david_lau:
To do better if I just reduce your costs, and we know and we let the assets grow further, So that was the primary use. So when we first.
paul_tyler:
Oh.
david_lau:
Launched four and a half.
ramsey_d_smith:
Yah.
david_lau:
Years ago, that was.
ramsey_d_smith:
Yeah.
david_lau:
Again.
ramsey_d_smith:
Yeah.
david_lau:
The primary use, just like you would.
ramsey_d_smith:
Yeah.
david_lau:
Expect you. Now tell me about ten thirty five. Give me the cheapest product you have, and that’s where our education starts, so we’re like Okay. We’ll talk to you about ten thirty five, but let us show you an income solution here. let us show you what happens when we use this for income, and let us show.
ramsey_d_smith:
Oh.
david_lau:
You in your plan And and then we even have a tool which is like my favorite tool. Ever.
bruno_caron:
M.
david_lau:
Know? We built us this tool that’s in a.
ramsey_d_smith:
Oh.
david_lau:
Fixed income comparison too. So tell us what you’re getting on your fixed income. Tell us what kind of income you’re looking to generate for your client retirement. Now, let’s compare it to the annuity, and the annuity kills it almost every time. right unless.
ramsey_d_smith:
Yeah.
david_lau:
Somebody’s being dishonest about their returns and their fixed income portfolio, so it’s a. It’s a great way to start showing that.
ramsey_d_smith:
M.
david_lau:
Proof point. You know it’s the. It’s the academic research come to life right when we know annuities are.
bruno_caron:
Oh.
david_lau:
More efficient at generating income. You know that’s been proven. You know eight thousand ways for a hundred years, right, and now you.
ramsey_d_smith:
Ah.
david_lau:
Know we’ve got a tool.
ramsey_d_smith:
Oh.
david_lau:
That’s going to know. Just show you.
ramsey_d_smith:
Yeah.
david_lau:
In actual real terms.
ramsey_d_smith:
Yeah.
david_lau:
Real products. You know for real.
ramsey_d_smith:
M.
david_lau:
Clients.
bruno_caron:
Ah.
david_lau:
You how much better it’s going to be.
bruno_caron:
Ah.
david_lau:
And it’s not close.
paul_tyler:
Yeah.
tisa_rabun_marshall:
Okay.
paul_tyler:
So I have a question on fixeindexnuities and the future of no load. F. I is, but we’ve talked a lot about this, you know, in our some of our products You sessions. Um, So if I’m r, a okay and I.
ramsey_d_smith:
Oh.
paul_tyler:
Do, my my client, advisor or advisor, agree with Tis.
ramsey_d_smith:
Oh.
paul_tyler:
How do I.
david_lau:
Yeah.
paul_tyler:
Charge? How do I charge for managing this this annuity? Right now. there are three options. I’d see. one is, this is going to be technical for people who are listening. One.
ramsey_d_smith:
Yeah.
paul_tyler:
Is your cat value right.
ramsey_d_smith:
Yeah.
paul_tyler:
Okay, put in a hundred thousand dollars. What is a girl? Well, a lot of these.
ramsey_d_smith:
Yeah.
paul_tyler:
Designs.
david_lau:
Yeah.
paul_tyler:
Actually. Now, really, the account.
ramsey_d_smith:
Oh.
paul_tyler:
Value is almost more of a get your money back. The.
ramsey_d_smith:
Yeah.
paul_tyler:
Benefit base, To be a little more precise, is where quoteanquote accumulation happens, So I could link it advisor agreement to the benefit base. Now Michelle Rector, we had a real interesting discussion.
ramsey_d_smith:
Oh.
paul_tyler:
I’m not sure if this would be practical. I could somehow link it to.
ramsey_d_smith:
Oh.
paul_tyler:
The income that I’m generating, and that might link back to the the Spa discussion.
david_lau:
M.
paul_tyler:
David. How are you seeing R? S do it today? And A D you think? What do you tink? They’ll do tomorrow. Terms of wrapping this the charges up.
david_lau:
I think. I mean today. For sure, they do it on account value, So you.
ramsey_d_smith:
Oh.
david_lau:
Know it’s looked at just like any other investment.
ramsey_d_smith:
Yeah.
david_lau:
You know this is you.
ramsey_d_smith:
Yeah.
david_lau:
Invested in your example.
ramsey_d_smith:
Oh.
david_lau:
Paul, the hundred thousand dollars.
paul_tyler:
Oh.
david_lau:
And you know, as it.
ramsey_d_smith:
Oh.
david_lau:
Grows, I’m gonna bill against the account value, which I think is is a fair thing to do.
ramsey_d_smith:
Oh.
david_lau:
Right So we, You know we want to make sure.
ramsey_d_smith:
Yeah.
david_lau:
That we’re not creating dis incentive. Some R, say, should I build less for this? Should I not build for this? It’s like no build the same that you would for any other.
ramsey_d_smith:
Oh.
david_lau:
Product you’re going to use within the portfolio, Because there should not be any dis incentive to use one product over another, whether it’s a mutual fund or.
ramsey_d_smith:
M.
david_lau:
An annuity or a bond or whatever you have.
ramsey_d_smith:
Yeah.
david_lau:
Um. So there, So that’s how they use it today, and I think until their model changes and there is you know there is.
ramsey_d_smith:
Oh.
david_lau:
Actually movement in that, then it will. I think it will continue to be just built as an acid.
ramsey_d_smith:
Yeah.
david_lau:
Under management.
ramsey_d_smith:
Oh.
david_lau:
Um. But you know there are.
ramsey_d_smith:
M.
david_lau:
Conflixes.
paul_tyler:
Yeah.
david_lau:
We know with the assets under management.
bruno_caron:
Oh.
david_lau:
Fee. Um. now, some of which were touching on already, but you see some movement.
bruno_caron:
H. oh.
david_lau:
In the way, R. S. Bill, But until that happen, if they build on a Um, they’re going to build those products like a M.
paul_tyler:
Okay, related.
ramsey_d_smith:
M.
paul_tyler:
Question, which is you know? classes of F. I, A, so.
ramsey_d_smith:
M.
paul_tyler:
First ten years, fifteen years. Everybody was kind of like. You know, each write something for okerageaccounts. So.
david_lau:
M.
paul_tyler:
These products really work.
ramsey_d_smith:
M, oh.
paul_tyler:
All about guaranteed income, you know, flat out.
ramsey_d_smith:
M.
paul_tyler:
Guaranteed income Guaranteed. then along.
ramsey_d_smith:
Oh.
paul_tyler:
Comes the bill market.
ramsey_d_smith:
Yeah.
paul_tyler:
And you see a huge class of these F. I is that you know, are for our linked to different industries, You know, some proprietary, some not proprietary. What’s the head set for the R A S? Are they going to? Are they more tracted more to towards the income products and saying, Hey, listen to Isa. Let me just take this money away.
ramsey_d_smith:
Oh.
paul_tyler:
Put a hundred percent.
david_lau:
Yeah.
paul_tyler:
Income.
ramsey_d_smith:
Yeah.
paul_tyler:
And I’m going to let your money run and grow it in this, the money.
ramsey_d_smith:
M.
paul_tyler:
Man. I’m gonna these these.
ramsey_d_smith:
Oh.
paul_tyler:
Other accounts, or am I going to try and.
ramsey_d_smith:
M.
paul_tyler:
And do blended option.
david_lau:
Yeah, I mean we see both. you know. Originally it was you know for us, and maybe it was you know. Because of the product mix we had was more about income because those are really good income products. Um, you know, particularly when you know they’re low cost and you know you’ve got pretty high pay out rates. Then you know we’ve gotten as the bond market kept going down. even though the rates.
ramsey_d_smith:
Oh.
david_lau:
Within those products, you aren’t attractive as.
ramsey_d_smith:
Oh.
david_lau:
Attractive as they are today.
ramsey_d_smith:
Oh.
david_lau:
Still relative to bonds, much more attract. So then.
ramsey_d_smith:
M.
david_lau:
We’ve seen a lot of adoption.
ramsey_d_smith:
Ye.
david_lau:
As accumulation vehicles, and also, because, as you know the downside protection aspect of it right, this is a good way of diversifying your fixed in. Uh, you know with with a different kind of.
ramsey_d_smith:
H.
david_lau:
Return characteristic.
ramsey_d_smith:
H.
david_lau:
You know.
ramsey_d_smith:
Oh.
david_lau:
We know that you know. interest rates do dictate the kinds of return so you can get in the product, But it’s not your turn isn’t driven by the interest right. So if you’re creating a fixed income portfolio, you know F. you’re buying bonds or whatever other fixed income, it’s all driven.
ramsey_d_smith:
Yeah.
david_lau:
By interest rates. So now, actually you got the performance of an index that will drive your return. You know, the capacity for that return is driven by the interest rates, but it’s a great diversification. you know from the investment side.
ramsey_d_smith:
Yeah.
bruno_caron:
Oh, thanks. and if I, if I can go back to the retirement.
ramsey_d_smith:
M.
bruno_caron:
Income part, I think it’s very encouraging to see and hear you talk the.
david_lau:
Take.
bruno_caron:
He technology.
david_lau:
Technology.
bruno_caron:
That.
ramsey_d_smith:
M.
bruno_caron:
You’ve built.
david_lau:
That you.
bruno_caron:
And.
david_lau:
So.
bruno_caron:
All of that.
david_lau:
All.
bruno_caron:
That.
david_lau:
Of.
bruno_caron:
You’ve.
david_lau:
That.
bruno_caron:
You know, you’ve put towards the you know, the return and income.
ramsey_d_smith:
M.
bruno_caron:
What is your strategy? What is your secret sauce? On bringing the message across to clients to retire to people and make them understand.
ramsey_d_smith:
Oh.
bruno_caron:
That whole value.
ramsey_d_smith:
Oh.
bruno_caron:
Proposition.
david_lau:
I’ll give.
bruno_caron:
That whole trade off that whole need, that very fundamental need that this this.
david_lau:
Ye.
bruno_caron:
Can potentially bring.
ramsey_d_smith:
M.
david_lau:
Well, if you’re if you’re going to drive change.
bruno_caron:
Oh.
david_lau:
You can’t be. You can’t be complacent about it. You’ve got to be pretty brazen.
bruno_caron:
Yeah.
david_lau:
And you.
ramsey_d_smith:
Oh.
david_lau:
Know that kind of fits my personality anyhow. but.
bruno_caron:
Oh.
david_lau:
You know I will. I will push the envelope.
bruno_caron:
Oh.
david_lau:
You know.
ramsey_d_smith:
M.
david_lau:
I’m a contrary, and I’m going to push the envelope. I’m not gonna know. Let you get away with, you know, saying things that are false run true. and we know these things.
ramsey_d_smith:
Yeah.
david_lau:
Are good for are good for consumers. they’re.
bruno_caron:
Oh.
david_lau:
Good, they’re good for retirement, they’re.
bruno_caron:
Oh.
david_lau:
Good for financial plans. they’re good to protect assets. There are so many.
bruno_caron:
A.
david_lau:
Benefits. you know.
ramsey_d_smith:
M.
david_lau:
You can’t be all in one way or another. It’s not all you know for a client. it’s.
ramsey_d_smith:
M.
david_lau:
Not all about insurance. it’s not all about.
bruno_caron:
M.
david_lau:
Investments.
bruno_caron:
M.
david_lau:
It’s a blend that gets you your best.
ramsey_d_smith:
Oh.
david_lau:
Outcome. And so you know, when you’re trying to.
ramsey_d_smith:
Oh.
david_lau:
Change a market, you’ve got to. you’ve got to be provocative. So you know.
ramsey_d_smith:
Yeah.
david_lau:
I tend to be provocative. The technology we built was intended be provocative. You know, In other ways, it’s just intended to be really helpful. right, The fixed fixed income comparison Til specifically is intended to be provocative. This is. this will show you the actual.
ramsey_d_smith:
M.
david_lau:
Value of an annuity.
ramsey_d_smith:
M.
david_lau:
And tell me you can. We even had an advisor say I can’t unsee this right. So that’s what. That’s your ideal. You know you’re you’re. You’re poking the bear. You’re getting to take a look and then, and in a good Fo, you want that good feducier to say I can unsee this. Teach me more. How do I use these for my clients? And you.
bruno_caron:
M.
david_lau:
Know that’s you know. That’s what we’re going through And you know I do it. We do it through the technology. I do it when I talk. I do you. I write a lot of articles. Haven’t written a book like you, Bruno.
bruno_caron:
Yeah.
david_lau:
Yet, but I know I like it.
bruno_caron:
Oh.
david_lau:
A lot of articles and I tend to. I try to be.
bruno_caron:
Oh.
david_lau:
Provocative to shake up the status quo because that’s the biggest thing you’re dealing with human nature of you know, they’re complacent Particularly over the last fourteen. It’s where we had a nice bull.
bruno_caron:
Yeah.
david_lau:
Market. Super easy to be complacent if you’re an R. A making a one percent fee. as the.
bruno_caron:
Yeah.
david_lau:
Markets just going up and up and up.
bruno_caron:
Yeah.
david_lau:
Um, Now you know, in order to drive change.
bruno_caron:
Yeah.
david_lau:
You’ve got to be I could ave.
bruno_caron:
Yeah, Ramsey, you’re.
ramsey_d_smith:
So I am munt now right, sorry about that. So David, listening to you talk about the thing in comparison till it reminds me of a lot of conversations I had over the years, and I would. I have to say that I was surprised to that I had to have the conversation in the first place, because it sort of it’s math and it seemed.
david_lau:
Yes.
ramsey_d_smith:
To be sort of should have been part of the basic skill set of maybe some of the folks I was aling to Um. and and even some people who saw it still couldn’t quite get their heads around it. Um, but it sort of leads me into this. This this question I have is that you know position you’ve taken and ultimately know you’re challenging people on both sides. You’re challenging R. As to do things differently, you’re talking about sort of the elements of their existing services that are commoditized. You’re challenging, also, sort of traditional distribution in an insurance as well, and identifying.
david_lau:
That’s right.
ramsey_d_smith:
The parts of what they do that are commoditized and by the way, fully supportive Here on the same pages you one gets resistance when one has those messages like where have where have you gotten? Is there any audience where you’ve gotten like the best possible feedback? Where have you gotten the most? Where you’ve been most welcomed. And where s the most resistance come from? Maybe that’s what I’m trying to get.
david_lau:
Yeah.
ramsey_d_smith:
At.
david_lau:
Well, that’s great great question. so I know sometimes.
ramsey_d_smith:
Oh.
david_lau:
You know carriers will bring me to their distribution.
ramsey_d_smith:
M.
david_lau:
Events so I can.
ramsey_d_smith:
M.
david_lau:
Take arrows instead of that.
ramsey_d_smith:
Yeah.
david_lau:
Um, you know, talking, talking about getting.
ramsey_d_smith:
Yeah.
david_lau:
Rid of wholesalers.
ramsey_d_smith:
Yeah.
david_lau:
And a whole.
ramsey_d_smith:
Oh.
david_lau:
Saling costs.
ramsey_d_smith:
Yeah.
david_lau:
And driving to technology and stuff like that, But I mean the best I get, and I do hear it.
ramsey_d_smith:
M.
david_lau:
A lot and I’m not.
ramsey_d_smith:
Yeah.
david_lau:
Doing it Like to pat myself on the back of is not the.
ramsey_d_smith:
Yeah.
david_lau:
Way I look at it is. you know, I hear like from.
ramsey_d_smith:
M.
david_lau:
R. I. S a lot. I hear thank you like, thank you, and.
ramsey_d_smith:
M.
david_lau:
You’re doing God’s work. I’ve heard.
ramsey_d_smith:
M.
david_lau:
That quote many times and like.
ramsey_d_smith:
M.
david_lau:
I absolutely don’t look at it that way. All I take that to mean is what we’re doing is hard working with insurance carrier, working with insurance carriers Their hard. It’s.
ramsey_d_smith:
M.
david_lau:
It’s hard. not that they’re unwilling.
ramsey_d_smith:
M.
david_lau:
But you know they’re big battleships and it takes time to make change. It’s a lot of work. We spent a lot of time on it.
ramsey_d_smith:
Oh.
david_lau:
So that the you know that’s the best feedback I get. And and you, now that’s invigorating. Um, and.
ramsey_d_smith:
M.
david_lau:
Then hearing from r.
ramsey_d_smith:
Oh.
david_lau:
I. S, who are who are the converts right? That’s that’s great. We’ve got.
ramsey_d_smith:
Yeah.
david_lau:
Now of our. As we use.
ramsey_d_smith:
Oh.
david_lau:
You know for events for media. Whatever who’re like.
ramsey_d_smith:
Yeah.
david_lau:
Yeah, I used to be the four letter word annuity.
ramsey_d_smith:
Oh.
david_lau:
Person, Never an annuity, And I’ve.
ramsey_d_smith:
Oh.
david_lau:
Seen the light, and not only have I seen like when I talked to my clients about it. I love. I love the reaction I get right. So those that’s super rewarding. But you know frankly it’s and the resistance is mostly from the commission, people, you commission distribution, people, who you know.
ramsey_d_smith:
Oh.
david_lau:
I get into.
ramsey_d_smith:
Yes.
david_lau:
This flawed.
ramsey_d_smith:
M.
david_lau:
Argument all the time.
ramsey_d_smith:
Oh.
david_lau:
With them that I, what if you layer an advisory fee on top of the product than you know? the products aren’t always better than than the commission products.
ramsey_d_smith:
Oh.
david_lau:
It’s a ridiculous argument. It would be to say that the advice model shouldn’t ist at all. Like if you put a hundred basis point advisory.
ramsey_d_smith:
Oh.
david_lau:
Fee on a five basis point Vanguard, h.
ramsey_d_smith:
M.
david_lau:
T. f.
paul_tyler:
Oh.
david_lau:
It’s also worse. You know, we’re more expensive for the client, right, It’s diff and it’s about the product. The product is materially better. You know the price. you have a choice of whether you pay an advisory fee. The commission and distribution expense are built in to commission products, and it’s a material to the tune of eighty per cent cheaper.
ramsey_d_smith:
M.
paul_tyler:
Yeah, well.
ramsey_d_smith:
M.
paul_tyler:
The agencies are.
ramsey_d_smith:
Oh.
paul_tyler:
Offices.
david_lau:
Oh.
paul_tyler:
Or advisers who managed to transition their practice to some sort of a assets under management type agreement, David. their worth lot more. Well, why doesn’t everybody do it? The transition is really tough. Have you seen you know any really.
ramsey_d_smith:
M.
paul_tyler:
Good success stories where somebody has gone from, Sort of the commission model. You mentioned Breakaway, R. S. I’ve seen them too.
ramsey_d_smith:
Oh.
paul_tyler:
Where.
david_lau:
Yep.
paul_tyler:
I was his anuity agent.
ramsey_d_smith:
Oh.
paul_tyler:
You know, retirement.
ramsey_d_smith:
Ah.
paul_tyler:
Advisor. Now, I’ve got half my business here, half my business there. What’s the best bridge strategy to get there.
david_lau:
Ah, that’s and we help lots of.
ramsey_d_smith:
M.
david_lau:
People do that, So we’ve got another another tool. That is our annuity comparison tool. You can look up any annuity that’s you’ve got in force. You look it up by carrier by writer. Whatever, We’ve got a digital product catalogue that models like thirty five hundred annuities, and you know forty thousand writers and hundreds of thousands of price points. You can immediately look up those annuities. Do.
ramsey_d_smith:
Oh.
david_lau:
A comparison to a fee based, Find out if you can improve it for the client. you generally can, Um. and you know, regardless of whether it’s under wall, quote and quote underwater, and that’s a way of starting to transition. Uh, you know that that old book and then then, frankly, you know a lot of the reason, as we were talking about earlier that people have remained hybrid are not transition.
ramsey_d_smith:
M. oh.
david_lau:
Fully. Is there just weren’t products to do it.
ramsey_d_smith:
M.
david_lau:
You know, there were up until.
ramsey_d_smith:
Yes.
david_lau:
You know five years ago there were a handful.
ramsey_d_smith:
M.
david_lau:
Of products there. probably investment.
ramsey_d_smith:
Oh.
david_lau:
Only variable annuities. If you were a believer in annuities, and user of annuities, you.
ramsey_d_smith:
M.
david_lau:
Know, for your clients, you.
ramsey_d_smith:
M.
david_lau:
Didn’t have inventory right so there, as there are no products to work with, And I would say there’s been massive improvements you know, in the products. in terms of the offer, the construction, the support for being no fee building, lots of what.
ramsey_d_smith:
Yeah.
david_lau:
We call fee friendly products these days, so it’s really pretty new that you can do that. Make that transition.
ramsey_d_smith:
Oh.
david_lau:
With relative ease. You know, just.
ramsey_d_smith:
Oh.
david_lau:
A few years ago it would be super difficult.
ramsey_d_smith:
All right. Well, so one of the things that as been very interesting in this throughout this conversation, David, is that Um, you know there, there’s a lot that that can change. a lot that probably needs to change and it’s really not just about products. it’s about sort of experience. If I look at the almost everything you you’ve talked about right, it’s It’s really about working towards people’s sort of culture the way they do business, their business processes. Uh, you know, so, as you as you think about as you think about, like what it’s going to take to sort of continue this this transition in this market. I mean, how much of it? How much of it do you think it’s products versus product versus process and culture.
david_lau:
I would say there are plenty of products. Now.
ramsey_d_smith:
M.
david_lau:
It’s all about.
ramsey_d_smith:
M.
david_lau:
It’s all about attitude, culture changing behavior. you know, which is why you know we still need to continue.
ramsey_d_smith:
Yeah.
david_lau:
To poke the bear. You know this, this past year has been a great example.
ramsey_d_smith:
Yeah.
david_lau:
And you talk to.
ramsey_d_smith:
Oh.
david_lau:
An R. A. What’s your risk management strategy for the portfolio? It’s diversification. Well, how did that work out.
ramsey_d_smith:
Yeah.
david_lau:
Um, not, No, not really. Well.
ramsey_d_smith:
Very poorly.
david_lau:
It was what David blanched called a hot mess.
ramsey_d_smith:
Yeah.
david_lau:
Um, So.
ramsey_d_smith:
Oh.
david_lau:
So there’s so you know, we’ve seen.
ramsey_d_smith:
Oh.
david_lau:
Really over the last twenty years, not just last year. Um. diversification is not a sufficient risk management strategy.
ramsey_d_smith:
M.
david_lau:
Anymore. You know, you really need to bring some insurance in and poke the bear. I mean, another way. we’ve been poking the bear pretty hard. Recent.
ramsey_d_smith:
Oh.
david_lau:
Is about the four percent rule. So.
ramsey_d_smith:
Yeah.
david_lau:
Many advisors.
ramsey_d_smith:
Yeah.
david_lau:
The four percent rule is the retirement.
ramsey_d_smith:
Yeah.
david_lau:
Plan. S. like, Guess what? That’s a really bad retirement plan.
ramsey_d_smith:
Oh.
david_lau:
So you, you know, for any number, we could do a whole show on that right, But it’s not a retirement plan. It’s a. It’s a guide line.
ramsey_d_smith:
M.
david_lau:
To A to a portfolio withdrawal. that should be a portion of a retirement plan. But now for a lot of r. s. that’s the holy. It’s it’s you know. that’s the guiding. The golden rule. this is.
ramsey_d_smith:
Yes.
david_lau:
You know, four percent rule safe withdrawal.
ramsey_d_smith:
Oh.
david_lau:
Rate. That’s my retirement plan.
ramsey_d_smith:
Oh.
david_lau:
And you know I love to point out that you know the originator.
bruno_caron:
Oh.
ramsey_d_smith:
Oh.
david_lau:
Of the Four Central Bill Bangin, You know who’s in this is about total return. Right’s.
bruno_caron:
Is.
david_lau:
Just use investments.
ramsey_d_smith:
Ye.
bruno_caron:
Yeah.
david_lau:
To fund retirement for anyone who, not following.
bruno_caron:
Yeah.
david_lau:
What we’re talking about, he couldn’t do it. he published. I saw, I saw an article in the Wall Street Journal.
ramsey_d_smith:
M.
david_lau:
About.
bruno_caron:
M.
david_lau:
A year ago, right.
ramsey_d_smith:
Ah.
bruno_caron:
M.
david_lau:
He’s nine years into retirement and it was one of.
ramsey_d_smith:
M.
david_lau:
These typical articles, The four.
ramsey_d_smith:
Oh.
david_lau:
Person, the founder of the Four percent rules, As you know.
ramsey_d_smith:
Yeah.
david_lau:
I should be using a lower rate now, But the.
ramsey_d_smith:
Yeah.
david_lau:
Gem in the story was, he said that he was so worried about the markets that he’s moved to.
bruno_caron:
M.
david_lau:
Twenty percent equities and ten percent bonds and seventy per cent cash. It’s like Hey.
ramsey_d_smith:
Yes.
david_lau:
Guess what. That’s not Following the four percent rule. You got to stay at least fifty.
bruno_caron:
Oh.
david_lau:
Percent equities, preferably seventy five. Um, and so.
bruno_caron:
Ah.
david_lau:
To expect clients.
bruno_caron:
Ah.
david_lau:
To be able to do that, which is what.
bruno_caron:
Yeah.
david_lau:
All advisors say. Hey, just stomach the market Ey Just just you know. Hey.
bruno_caron:
Oh.
david_lau:
This is just a down turn.
ramsey_d_smith:
Oh.
david_lau:
You stick with it. you know it’s going to be.
ramsey_d_smith:
Oh.
david_lau:
Fine. You’re going to come out the other end and and even the guy who’s the biggest advocate, the creator.
bruno_caron:
Yes.
david_lau:
The four percent rule couldn’t do it in retirement. So how about we start thinking.
ramsey_d_smith:
Oh.
david_lau:
About a different.
bruno_caron:
Oh.
david_lau:
Idea.
ramsey_d_smith:
Oh.
david_lau:
You know, Let’s let’s.
ramsey_d_smith:
Oh.
david_lau:
Talk about all the not only financial but psychological benefits of an.
ramsey_d_smith:
Yeah. The.
bruno_caron:
Oh.
ramsey_d_smith:
The hegemony of the four percent rule in that space is staggering and we spent a lot.
bruno_caron:
Oh.
ramsey_d_smith:
Of time talking about it on the show. We had weighed on and a bunch of others, David and we had Bill bangin himself on the show a while back, and he shared some of the same things that you said. I think.
bruno_caron:
M.
ramsey_d_smith:
With To be fair, though, I think it’s a great sort of. I think it’s a great.
bruno_caron:
Oh.
ramsey_d_smith:
Sort of starting for a conversation like we all need, sort of like an anchor to start with. I think for that it has been.
paul_tyler:
Oh.
ramsey_d_smith:
Enormously valuable to the entire personal finance space, but to blindly rely on it as is intellectually lazy and and not.
bruno_caron:
M.
ramsey_d_smith:
Not responsible. so we definitely share your share thoughts.
david_lau:
M.
ramsey_d_smith:
On that.
paul_tyler:
Oh.
bruno_caron:
And.
david_lau:
Ah, and.
bruno_caron:
I.
david_lau:
I’ve been.
ramsey_d_smith:
M.
david_lau:
Go ahead.
bruno_caron:
No, I think you said it really well. It’s like well, just stomach the market. You.
david_lau:
A.
bruno_caron:
Can do that during the.
david_lau:
A.
bruno_caron:
Accumulation.
david_lau:
Ring.
ramsey_d_smith:
Yeah.
bruno_caron:
Phase and you have like many.
david_lau:
That’s.
bruno_caron:
Years.
david_lau:
Right.
bruno_caron:
To.
paul_tyler:
Oh.
bruno_caron:
Come.
ramsey_d_smith:
Yeah.
bruno_caron:
For the the accumulation.
ramsey_d_smith:
Yeah.
bruno_caron:
It’s.
david_lau:
Leave.
bruno_caron:
Completely.
ramsey_d_smith:
Oh.
bruno_caron:
A different story.
david_lau:
I.
paul_tyler:
Yah.
david_lau:
Yeah, it’s I mean.
ramsey_d_smith:
Yeah.
david_lau:
And and basically what it’s It really speaks to psychology right and not.
bruno_caron:
Yeah.
david_lau:
Only you know just.
paul_tyler:
Oh.
david_lau:
You know.
ramsey_d_smith:
Oh.
david_lau:
From the academics of it. Yeah, you have time and duration for the market recovery when you’re when you’re in accumulation, but you know the mentality when you become the retirement is totally different, which is you know why we’re such huge fans of know the work that now weighs done with Alex G on the retirement income.
ramsey_d_smith:
M.
david_lau:
Style awareness.
ramsey_d_smith:
M.
david_lau:
So.
ramsey_d_smith:
M.
david_lau:
You know it’s not.
ramsey_d_smith:
M.
david_lau:
The advisor of forcing upon the client. This is the way I’m going to manage your retirement.
ramsey_d_smith:
Oh.
david_lau:
Which is basically I’m going O use.
ramsey_d_smith:
Oh.
david_lau:
All investments in a four percent rule And don’t worry. That’s the way it goes, and I’m going to manage you through it. It’s not going to be. We’ll just cut back you’re spending. Maybe you’re gonna have to sell your vacation home. We’ll have to cut back on things if it doesn’t go well, but don’t worry. I’ve got you well. that’s not the only option. And like how about having a way of letting the client tell you how they.
ramsey_d_smith:
M.
david_lau:
Like this. You know again, let’s be focused on the client, not me as adviser.
ramsey_d_smith:
Oh.
david_lau:
And so huge fans of of the Rica.
ramsey_d_smith:
M.
david_lau:
We bring it out to our.
ramsey_d_smith:
M.
david_lau:
Members in promoting that heavily, and you know love it.
paul_tyler:
Well.
ramsey_d_smith:
Oh.
paul_tyler:
I love it too is. so does Ramsey, Ramsey. I think you were one of the first people to grab on to that whole.
ramsey_d_smith:
M.
paul_tyler:
Framework which is great. We are.
david_lau:
S.
paul_tyler:
Sort of nearing the top of the hour, David. I love, Love, To quote a couple of things, poked bear love that diversification is not.
ramsey_d_smith:
Yeah.
paul_tyler:
A risk management strategy any more. I don’t know. I think we may have had some. Has some good titles.
ramsey_d_smith:
Yeah.
paul_tyler:
Here, Hetisa.
ramsey_d_smith:
M, m.
paul_tyler:
What any last thoughts.
ramsey_d_smith:
M.
tisa_rabun_marshall:
Ah.
paul_tyler:
Questions.
tisa_rabun_marshall:
I think I would go back to.
ramsey_d_smith:
Oh.
tisa_rabun_marshall:
The psypsychology of it all that.
bruno_caron:
Oh.
tisa_rabun_marshall:
You were just talking about David. I think.
ramsey_d_smith:
M.
tisa_rabun_marshall:
You know.
bruno_caron:
Yeah.
tisa_rabun_marshall:
Whomever the financial professional is that you’re partnering with. How are you going to add more value if I’m goin to have the conversation Versus just show up with the plan and say here, here’s how we’re going to do it.
paul_tyler:
Yeah.
tisa_rabun_marshall:
I think the other.
ramsey_d_smith:
M.
tisa_rabun_marshall:
Thing that shifted is that.
ramsey_d_smith:
M.
tisa_rabun_marshall:
Idea.
bruno_caron:
Oh.
tisa_rabun_marshall:
Of sort of set it and forget it, model like, just set it up and it will be there when I get there.
david_lau:
Yep.
tisa_rabun_marshall:
It’s revisiting it. It’s adjusting it.
ramsey_d_smith:
M.
tisa_rabun_marshall:
It’s you know, goals shift, new products.
paul_tyler:
M.
tisa_rabun_marshall:
Come out.
ramsey_d_smith:
Oh.
tisa_rabun_marshall:
Mark.
bruno_caron:
Yah.
tisa_rabun_marshall:
Change that on going.
bruno_caron:
H.
tisa_rabun_marshall:
Conversation, and the more you can add the value right and have the relationship, you can show up every year.
bruno_caron:
Oh.
tisa_rabun_marshall:
Every few years, and kind of check in. I think.
bruno_caron:
Yeah.
tisa_rabun_marshall:
Really building that trust. that relationship.
bruno_caron:
Oh.
tisa_rabun_marshall:
Is probably that value that we’re all speaking about.
bruno_caron:
Oh.
tisa_rabun_marshall:
As far as behavior changed.
bruno_caron:
Yeah.
paul_tyler:
Yeah.
tisa_rabun_marshall:
So.
ramsey_d_smith:
M.
paul_tyler:
And Bruno. you’re.
ramsey_d_smith:
Oh.
paul_tyler:
You were kind of like. You got just a kindred spirit here who also.
tisa_rabun_marshall:
Yeah.
paul_tyler:
Read your book.
david_lau:
Yeah.
paul_tyler:
What do you think? What are the take aways here.
ramsey_d_smith:
M.
bruno_caron:
Oh. well, I think.
ramsey_d_smith:
M.
bruno_caron:
We can.
david_lau:
In.
bruno_caron:
Definitely say that we found.
paul_tyler:
Oh.
bruno_caron:
We have multiple ideas.
ramsey_d_smith:
The.
bruno_caron:
For.
david_lau:
Des.
bruno_caron:
The title of the episode.
david_lau:
Don’t.
bruno_caron:
So you get poked, the.
paul_tyler:
Yeah.
bruno_caron:
Barry.
ramsey_d_smith:
Oh.
bruno_caron:
Provocative technology.
david_lau:
I.
paul_tyler:
Uh.
bruno_caron:
Now, Seriously, thank you David for coming in. I think.
david_lau:
Oh.
ramsey_d_smith:
Yeah.
paul_tyler:
Oh.
bruno_caron:
The work you do is phenomenal for the the entire industry. We.
paul_tyler:
Oh.
bruno_caron:
Certainly appreciate it, and we certainly appreciate having you on the how.
paul_tyler:
Yeah.
david_lau:
Yeah. I appreciate being here and again. Like for me, this isn’t about annuity, Like is.
ramsey_d_smith:
M.
david_lau:
Isn’t about.
bruno_caron:
Yeah.
david_lau:
Annuities about delivering best outcomes for consumers doing what’s.
bruno_caron:
Yah.
david_lau:
Best for consumers. annuities have, unfortunately, A, Had you know this stigma.
paul_tyler:
Yeah.
david_lau:
Driven by the rift created by commission, You like commissions. You love the products. you didn’t like commissions. you didn’t like.
ramsey_d_smith:
Oh.
david_lau:
The products.
bruno_caron:
M.
david_lau:
But academics.
bruno_caron:
M.
ramsey_d_smith:
Oh.
david_lau:
People who study ret, I mean research, love annuity.
ramsey_d_smith:
M.
david_lau:
Retirement, income.
ramsey_d_smith:
M.
david_lau:
And retirement, love annuities. That’s pretty much universal, so let’s get rid of that conflict so the consumer can benefit. you know. Let’s let’s bring you more annuities.
bruno_caron:
Oh.
david_lau:
Out through more channels and more avenues because people need them and we didn’t.
ramsey_d_smith:
Oh.
david_lau:
Even touch on how they know. the fact that retirement is.
ramsey_d_smith:
Oh.
david_lau:
A way more difficult problem today than was twenty years ago. M.
ramsey_d_smith:
M.
david_lau:
Longevity, lack of pensions, lower interest rates. You know all kinds of issues with retirement, So again.
ramsey_d_smith:
M.
david_lau:
I could keep going on and I know we’re at time, so I really appreciate you guys having me on.
bruno_caron:
Oh.
paul_tyler:
Ramsey.
ramsey_d_smith:
So David. that means well.
david_lau:
Okay.
ramsey_d_smith:
We’ll just have to have you back on some.
bruno_caron:
Oh.
ramsey_d_smith:
Time sometimes soon so we can do. Chapter two.
bruno_caron:
Yeah.
ramsey_d_smith:
Um, look.
david_lau:
Happy to do it.
ramsey_d_smith:
Yeah, thanks very much for coming on. and as I said it was, it was long overdue I’m glad we made it happen. I personally think you’re.
paul_tyler:
Oh.
ramsey_d_smith:
Focus on process and on substance.
paul_tyler:
M.
ramsey_d_smith:
And not on product are super important. I think they’re bare. the poke everywhere, right on the insurance side and insurance distribution, certainly among in the in the advisor space. And so thank you for everything you’re doing.
paul_tyler:
Yah.
david_lau:
Thank you guys again.
ramsey_d_smith:
Yep.
david_lau:
You know for having me on.
ramsey_d_smith:
My.
david_lau:
And and uhyoukwe’ll.
ramsey_d_smith:
Yeah.
david_lau:
Keep fighting a good fight.
paul_tyler:
Yeah, David.
david_lau:
Oh.
paul_tyler:
Thank you as well. And what’s the best.
ramsey_d_smith:
Oh.
paul_tyler:
Way for people to connect with you or find out more about your firm.
ramsey_d_smith:
M.
david_lau:
Go to the website D, p l, f, p dot com, d, p l. financial partners dot com.
ramsey_d_smith:
My.
david_lau:
Um, and you can get access to our tools, You know we’ve got. We’ve got six or seven.
ramsey_d_smith:
Yeah.
david_lau:
Different.
paul_tyler:
Yeah.
david_lau:
You know tools that can help you find best products to comparisons. All kinds of stuff like that, and you know, and connect with one of our consultants if you like, talk to somebody.
paul_tyler:
All right, Listen, thank you. thanks. Tis a Ramsey Bruno great.
bruno_caron:
Oh.
paul_tyler:
Show And think we want to thank our listeners. Uh, give us feedback. Send us ideas.
bruno_caron:
Oh.
paul_tyler:
For guests. Share the episodes with your friends.
ramsey_d_smith:
Oh.
paul_tyler:
And we’ll be back again next week with another episode of that annuity show.
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