Retirement

Episode 142: Everything You Wanted to Know About the Nasdaq-100 With Efram Slen and Mark Marex

April 7, 2022 2022, Efram Slen, Mark Marex, Podcast, Retirement No comments

Indices continue to proliferate inside fixed indexed annuities. Some of them stand by brand name and reputation alone. The Nasdaq-100 falls squarely into that category. Today we have two representatives from Nasdaq on to talk about their index. You may be surprised about what you learn. We welcome Efram Slen, Head of Index Research and Mark Marex, Head of Index Research & Product Development for Nasdaq.

Also, do you want to get regular updates on news about guests of our show? Go to https://thatannuityshow.com and subscribe to our newsletter.

We hope you enjoy the show.

Links mentioned in the show:

https://www.nasdaq.com/nasdaq-100

https://www.linkedin.com/in/efram-slen-6a377818/

https://www.linkedin.com/in/mark-g-marex-cfa-4a763560/

Thank you to our show sponsor; The Index Standard!

Fixed Index Annuities and RILAs are getting more complex and technical just when fiduciary rules are getting stricter. How do you choose the right index and allocate to them? The Index Standard is your answer. They are an independent provider ratings and forecasts on all indices and ETFs used in the US insurance space. Their process is systematic and unbiased, identifying robust and well-designed indices. We all know finance is complex and The Index Standard has a clear ratings system and uses approachable language to demystify this complexity. Visit theindexstandard.com for more information.

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Transcript

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[Paul Tyler]: hi this is paul tyler and welcome to another episode of that annuity show ramsey

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[Paul Tyler]: welcome again

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[Ramsey Smith]: always great to be here

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[Paul Tyler]: all right we’ve moved to sweaters i i didn’t bring mine today with ties to shirts

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[Paul Tyler]: i know it’s what’s

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[Ramsey Smith]: i needed to mix it up like it was nothing but sort of a typical brooks brother’s

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[Ramsey Smith]: blue shirt for the first like a hundred and forty two episodes so i’ve mixed it

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[Ramsey Smith]: up now

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[Paul Tyler]: that’s that’s great hey we have a really interesting show today

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[Paul Tyler]: and it’s it’s going to be out of in indices we’ve had a lot of conversations with

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[Paul Tyler]: people about indices where they fit in the products and we thought hey listen why

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[Paul Tyler]: don’t we actually bring some actual experts on who run one and today we have

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[Paul Tyler]: representatives from the nasdaq one hundred index

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[Paul Tyler]: and i am going to say full disclosure

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[Paul Tyler]: my company by day we are proud partners with nasdaq one hundred we just

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[Paul Tyler]: actually added the nasdaq one hundred to a number of our flagship fi products but

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[Paul Tyler]: we just want to go deeper and understand what it is and i’d like to welcome two

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[Paul Tyler]: individuals Efram Slen who is the head of index research and Mark Marex who

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[Paul Tyler]: is the senior specialist nasdaq excuse me senior specialist of the nasdaq indexed

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[Paul Tyler]: research function mark that i think i clobbered your your title

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[Mark Marex]: you were totally fine thanks paul

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[Paul Tyler]: totally fine alright hey after mark welcome

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[Efram Slen]: glad to be here thanks for having us

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[Paul Tyler]: hey thanks

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[Ramsey Smith]: like

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[Paul Tyler]: hey listen first question is

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[Paul Tyler]: nasdaq nasdaq indices nasdaq index

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[Paul Tyler]: you kind of say nasdaq and somebody says oh yeah the nasdaq index but i know the

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[Paul Tyler]: world’s a lot more complicated than that can you just kind of lay out maybe after

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[Paul Tyler]: from like

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[Paul Tyler]: what in when we say index what index are we talking about how many indices could

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[Paul Tyler]: we be talking about that the nasdaq is responsible for creates

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[Efram Slen]: think thanks ball it there are actually over forty five thousand indexes that

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[Efram Slen]: nasdaq calculates right just like some of the other big big index players out

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[Efram Slen]: there there are actually hundreds of the thousands of indexes that are calculated

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[Efram Slen]: there are only a handful that people really know globally so when you think of

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[Efram Slen]: nasa i can hear every single day people say the nasdaq went up the nasdaq went

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[Efram Slen]: down that’s actually the nasdaq composite that’s usually being referenced that’s

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[Efram Slen]: the index comprised of all securities listed on the nasdaq stock exchange so

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[Efram Slen]: that’s over a couple thousand names as opposed to the nasdaq one hundred which

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[Efram Slen]: folks still know it’s very very prominent it’s the one that’s actually the

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[Efram Slen]: barometer for the invesco qq et f and the products that you were talking about

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[Efram Slen]: right it’s an index comprised of the one hundred largest nonfinancial companies

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[Efram Slen]: from the nasdaq composite so when people tend to say the nasdaq went up and na as

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[Efram Slen]: they went down they’re actually usually referencing the composite but a lot of

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[Efram Slen]: times it gets interspersed and confused with the nasa one hundred which is where

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[Efram Slen]: all the products really

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[Paul Tyler]: how many

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[Efram Slen]: are tracking

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[Paul Tyler]: yeah and

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[Paul Tyler]: maybe just explain the mechanics so companies in the nasdaq one hundred it’s out

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[Paul Tyler]: of the one hundred

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[Paul Tyler]: how does that actually happen like is this monthly weekly

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[Paul Tyler]: what’s the process do you how do you actually manage something like this

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[Efram Slen]: so so back in nineteen seventy one maybe even give this this kind of breakdown so

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[Efram Slen]: back in nineteen seventy one when nasdaq the exchange launched that’s when the

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[Efram Slen]: composite was created fifteen years later we launched the nasdaq one hundred as

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[Efram Slen]: the tradable version right so once a

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[Ramsey Smith]: what

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[Efram Slen]: year since nineteen eighty five we have an annual reconstitution it’s a rules

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[Efram Slen]: based transfer process where the one hundred largest nonfinancial companies are

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[Efram Slen]: selected that happens every december and it’s called the quad witch day of the

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[Efram Slen]: third friday of december the other three quarters just a rebalancing that occurs

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[Efram Slen]: right so weights are reviewed and ensured that they are meeting all the

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[Efram Slen]: regulatory elements there so where necessary capping might might be applied

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[Efram Slen]: yeah so that’s it again in a nutshell the the nasdaq one hundred

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[Efram Slen]: again once a year that’s when names are are added again they need to be non

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[Efram Slen]: financial and they meet a variety of other criteria but the most important being

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[Efram Slen]: that they’re listed on the nasdaq exchange

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[Ramsey Smith]: are there who who actually makes the decision so if you look at the index indices

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[Ramsey Smith]: that are out there you’ve got s p indices which are actually in some sense

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[Ramsey Smith]: actively managed and then you have

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[Ramsey Smith]: indices which are truly rule based where do you stand in terms you know what

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[Ramsey Smith]: determines what is added orle is it does somebody make a decision is there a

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[Ramsey Smith]: committee how is that managed

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[Efram Slen]: i’m glad you asked that ramsay so we are entirely rules based it’s something that

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[Efram Slen]: we really pride ourselves on and interesting and so if you look back at the

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[Efram Slen]: nasdaq one hundred one of the things that made us unique compared to the sn p

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[Efram Slen]: five hundred in particular is that tesla right made

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[Paul Tyler]: sure

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[Efram Slen]: it into the nasdaq one hundred in july twenty thirteen when it was first eligible

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[Efram Slen]: at a market cap of around fifteen billion dollars

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[Efram Slen]: fast forward seven and seven and a half years later when the s p committee said

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[Efram Slen]: yeah it’s eligible for the s p five hundred now it was at a market cap of six

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[Efram Slen]: hundred sixty billion dollars right so yeah we’re rules based transparent we’re

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[Efram Slen]: really proud of that

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[Paul Tyler]: and it interesting so you brought up tesla when i i think of nasdaq i think okay

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[Ramsey Smith]: your

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[Paul Tyler]: tech you know tech tech tech

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[Paul Tyler]: i guess

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[Paul Tyler]: what type of misconceptions

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[Paul Tyler]: do people make when they think of nasdaq and put technology and tesla in the same

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[Paul Tyler]: same bucket

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[Efram Slen]: so we actually think of teslas yeah it can be a tech company for sure it’s also

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[Efram Slen]: an auto company right there’s a lot of great things that they’re doing look i

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[Efram Slen]: said this to it to a colleague and some friends the other day a neighbor mine

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[Efram Slen]: just put solar panels on their roof made by tesla one of the coolest things i

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[Efram Slen]: think it’s the nicest roof in the block they do a lot more than just create some

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[Efram Slen]: of the nicest looking cars on the road but yeah it depends how you want to look

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[Efram Slen]: at it right they’re an innovative organization that’s actually the core that word

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[Efram Slen]: innovation

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[Ramsey Smith]: so

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[Efram Slen]: that’s what we think of when we think of the nasdaq one hundred or even the

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[Efram Slen]: nasdaq list listing venue in general in our company that’s again it’s a very very

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[Efram Slen]: often used word but the reason why we tend to think of it it’s just not not just

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[Efram Slen]: technology and of itself so if you look and you break down companies within

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[Efram Slen]: nasdaq one hundred some of the biggest names right that come up that you could

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[Efram Slen]: probably think from you you have alphabet you have you have amazon microsoft

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[Efram Slen]: apple meta platforms and so forth right so some of the biggest names out there

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[Efram Slen]: but not all of them are actually classified as technology by your general

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[Efram Slen]: classification standards actually only a handful only about half of those were

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[Efram Slen]: some of them are consumer discretionary right where is amazon actually fit like

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[Efram Slen]: they’re the biggest cloud provider in the world but where do they fit they’re

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[Paul Tyler]: or the grocery store i don’t know right

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[Efram Slen]: actually consumer

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[Efram Slen]: they grocery store that’s right so they’re actually classified as consumer

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[Efram Slen]: discretionary so again that’s a fun thing when it comes to classifications a lot

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[Efram Slen]: of it’s just perception and a lot of it just comes down to how the rules from

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[Efram Slen]: classification systems are actually putting companies into pockets

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[Ramsey Smith]: so you mentioned that uh that the companies have to be non financial so i thought

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[Ramsey Smith]: that was i actually was not aware of that and so i i’m curious you know in a

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[Ramsey Smith]: world where financial used to be something very clear before it was sort of

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[Ramsey Smith]: balance sheet intensive banks insurance companies et cetera but now we live in a

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[Ramsey Smith]: world of fintech where

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[Ramsey Smith]: the

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[Ramsey Smith]: there may be a balance sheet it’s balance sheet light and the technology is sort

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[Ramsey Smith]: of more sort of important part

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[Ramsey Smith]: of the description of the company where does fintech sit for you from your

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[Ramsey Smith]: perspective

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[Efram Slen]: so

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[Efram Slen]: we have to utilize again this goes back to the rules based transparent we

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[Efram Slen]: actually outsource the classification we don’t utilize we don’t make those

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[Efram Slen]: decisions ourselves we utilize

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[Ramsey Smith]: got it

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[Efram Slen]: the industry classification benchmark system to determine again are they

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[Efram Slen]: financials are they not where do they fit within the rankings so we don’t include

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[Efram Slen]: any companies that are classified as financials according to that bench

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[Efram Slen]: classification system called ic

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[Ramsey Smith]: understood

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[Efram Slen]: is the benchmark so companies like nasdaq ourselves we are excluded like t ro

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[Efram Slen]: price like cme group that are listed here in nasdaq who proudly have them this

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[Efram Slen]: year they’re excluded as a result of that classification

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[Paul Tyler]: yeah interesting so if if i were you know

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[Paul Tyler]: independent financial adviser presenting nasdaq one hundred to clients what would

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[Paul Tyler]: the composition look like you know ten years ago versus today i mean clearly some

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[Paul Tyler]: of those names are still there you mentioned tesla was in there i’m sure i bet

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[Paul Tyler]: amazon i bet google was but

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[Paul Tyler]: what what have been the major major shifts like from there then to now

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[Efram Slen]: so definitely in some that we’ve seen even more over the last couple of years

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[Efram Slen]: right companies like like zoom rising to prominence right with the work from home

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[Efram Slen]: trade that was seen over the last couple of years but to be perfectly frank the

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[Efram Slen]: story just continued to evolve

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[Efram Slen]: and the important dynamic here is that we try and make sure folks understand is

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[Efram Slen]: that the nasdaq one hundred itself post ah the tech bubble and burst it’s a far

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[Efram Slen]: different story so even ten years ago the story is actually pretty aren’t similar

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[Efram Slen]: today as it was ten years ago it’s the prior ten years that we’re trying to

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[Efram Slen]: ensure that people don’t have in the back of their minds

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[Ramsey Smith]: so one of the things that we chatted about you know ahead of the show is sort of

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[Ramsey Smith]: the profile of the nasdaq and the nasdaq one hundred in the market so we’re in a

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[Ramsey Smith]: place where over i call it the last really is ten years since the first custom

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[Ramsey Smith]: index came out but probably six or seven before they started coming out like in

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[Ramsey Smith]: in real numbers there’s been explosion of customized indices

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[Ramsey Smith]: in in the fia space and tell us a little bit about you know about i don’t know

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[Ramsey Smith]: how how you feel about competing in that market and why you think why you think

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[Ramsey Smith]: your index is something that’s a familiar one

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[Ramsey Smith]: you know is for many people maybe a better way to go

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[Efram Slen]: nasdaq one hundred the way we think about very many different there are many

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[Efram Slen]: different spots that it can fit into a portfolio but it is from an index

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[Efram Slen]: perspective right

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[Efram Slen]: it can be a large capital play it can be a large growth play it can be a thematic

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[Efram Slen]: play there are many different ways or even a technology play there are many

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[Efram Slen]: different ways that that this index can fit and it’s really up to frankly how

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[Efram Slen]: folks view that type of basket in their portfolio so a big part of what we tend

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[Efram Slen]: to do in our research is compare the nasdaq one hundred to the s and p five

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[Efram Slen]: hundred because we want to make sure again like i said before the call that

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[Efram Slen]: where the nasdaq was in in the early two thousand seconds to then twenty ten to

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[Efram Slen]: the twenty tens to today just such a different story we’ve seen such a big

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[Efram Slen]: maturation of companies balance sheets completely changing and flipping on their

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[Efram Slen]: heads right where today

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[Efram Slen]: when you think of the nasdaq one hundred maybe we don’t even think that we pay

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[Efram Slen]: dividends we do i mean it’s not a massive dividend paying um in index benchmark

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[Efram Slen]: but it’s actually half of what the s and p five hundred is as at the end of

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[Efram Slen]: february at around seventy basis points but we are fully fully fledged an index

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[Efram Slen]: that index dividend that is dividend payers and so forth so again it’s a pr

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[Efram Slen]: pretty pretty great uh story depending on how you’re looking to have it fit into

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[Efram Slen]: your portfolio

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[Paul Tyler]: yeah i guess how has the risk profile changed do you think of the companies over

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[Paul Tyler]: the last ten years in the nasdaq one hundred i mean i would think that if you

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[Paul Tyler]: shifted from maybe more tact to as you’re describing more mature companies with

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[Paul Tyler]: dividend pain you’d think the volatility the risk might go out however last

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[Paul Tyler]: couple of years have been crazy in terms of market volatility what’s your

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[Paul Tyler]: perspective on

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[Paul Tyler]: you know how how i would allocate you know clients’ funds to the

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[Paul Tyler]: nasdaq one hundred versus you know funds a you know indices a b or c

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[Efram Slen]: so i actually want to make sure i give mark a chance to jump in on this but one

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[Efram Slen]: thing that i’ll comment even just at before he even gets in the answer is that

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[Efram Slen]: you know we’re an index provider we’re meant to give

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[Ramsey Smith]: yeah

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[Efram Slen]: a spot for folks to understand and track benchmarks we’re not really giving

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[Efram Slen]: investment decisions so i just want to at least caveat

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[Efram Slen]: the answer there but

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[Paul Tyler]: now thank you

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[Efram Slen]: mark i’ll let you jump in thank you

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[Mark Marex]: yeah thanks ama i mean i’ll point out a couple of data

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[Paul Tyler]: i don’t know

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[Mark Marex]: points that we have one of which is a

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[Paul Tyler]: i don’t

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[Mark Marex]: you know very long term kind of graph of you know realized volatility when you

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[Mark Marex]: look at nasdaq one hundred versus something like the s and p five hundred which

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[Mark Marex]: is much broader but plays in that same large cap space right the volatility is

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[Mark Marex]: actually very very close over the last ten to fifteen years it’s maybe a

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[Mark Marex]: difference of two or three percent a year annualized on average

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[Mark Marex]: the really interesting thing though that you know we kind of explored

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[Mark Marex]: last year writing up a white paper about you know what the performance looked

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[Mark Marex]: like during the covid bear market and how that compared to things like two

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[Mark Marex]: thousand eight to things like the tech bubble the nasdaq one hundred actually

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[Mark Marex]: outperformed in terms of not just the drawdown being lower in march of twenty

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[Mark Marex]: twenty than the s and p five hundred but also volatility being lower and i would

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[Mark Marex]: say that speaks more than anything to the difference in the composition versus

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[Mark Marex]: ten or fifteen or even twenty years ago it’s not that the sector exposures are

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[Paul Tyler]: wait minute

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[Mark Marex]: necessarily different tech has continued to be pretty consistent fifty to sixty

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[Mark Marex]: percent of the index you get another twenty to thirty percent of the index coming

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[Mark Marex]: from things like consumer and health care that stays pretty consistent long term

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[Mark Marex]: even though the company underlying will grow larger and grow smaller and go

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[Mark Marex]: private and fall out and whatnot right but in terms of you know the reputation

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[Mark Marex]: that the index has gotten especially from those top five or so names right

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[Mark Marex]: they’re almost like a defensive play nowadays right they they’re extremely

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[Mark Marex]: profitable they’re very very efficient and generating cash and turning over their

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[Mark Marex]: assets they’ve grown their buybacks which kind of

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[Mark Marex]: overshadows the dividend under performance versus something like the s and p five

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[Mark Marex]: hundred they’ve grown their buybacks by literally hundreds of billions of dollars

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[Mark Marex]: over the past couple of years

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[Mark Marex]: and that i think speaks to you know why this index isn’t you know the same as it

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[Mark Marex]: used to be twenty years ago where you had a lot of companies that were still

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[Mark Marex]: early stage still were unprofitable weren’t doing things like dividends and

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[Mark Marex]: buybacks nowadays you have this very very solid fundamental core of the index of

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[Mark Marex]: about fifty percentage of the index is the top seven companies and they are all

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[Mark Marex]: massive fundamentally strong and sound companies that have this

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[Mark Marex]: tail added on top of it of companies that buy enlarge

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[Mark Marex]: disproportionately put innovation at the center of their business models that’s

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[Mark Marex]: what the index is about to me these days more than anything else

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[Ramsey Smith]: so another thing that that sort of was was on my mind as i was thinking about

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[Ramsey Smith]: thinking about your index is just what kind of what kind of assets are ifly under

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[Ramsey Smith]: management or benchmarked to the nasdaq one hundred like can you give some idea

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[Ramsey Smith]: to the audience of the magnitude of of whether it’s an etfs or fis or if it’s in

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[Ramsey Smith]: mutual funds just even ballpark figures like how much how much money looks how

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[Ramsey Smith]: much money is out there that looks to the nasdaq one hundred as its key benchmark

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[Ramsey Smith]: in order just in orders of magnitude

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[Efram Slen]: there are hundreds of billions of dollars that that track the nasdaq one hundred

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[Efram Slen]: across pretty much every single financial product wrap that’s been created right

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[Efram Slen]: from etfs to mutual funds to insurance products utd products futures options you

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[Efram Slen]: think of a product there is an ass at one product tracking it in some capacity

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[Efram Slen]: some possibly even somewhere in the world right so there are efs in well over

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[Efram Slen]: twenty countries in the world alone let alone other product wrappers the eme

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[Efram Slen]: features that track the nad seven hundred have grown

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[Efram Slen]: explosively over the last couple years so and the micro mi launching out of the

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[Paul Tyler]: next

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[Efram Slen]: cme here as well so

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[Paul Tyler]: it’s

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[Efram Slen]: tons of derivative trading going on in very increased capacity the cues hit hit

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[Efram Slen]: over two hundred billion dollars

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[Efram Slen]: recently enough and approaching backup on the nih qs that’s the invest qq et f so

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[Efram Slen]: yeah just hundreds of billions of dollars that’s the short answer there

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[Paul Tyler]: it well go ahead

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[Ramsey Smith]: so i just kind of add quickly to that so the reason i brought that up is that you

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[Ramsey Smith]: know it’s somebody

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[Ramsey Smith]: who was in this space in my prior career like one of the challenges that

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[Ramsey Smith]: one of the tensions was always between alright you come up with something that’s

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[Ramsey Smith]: creative and customized it may work if you look at history but is it tradable on

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[Ramsey Smith]: the other side you’ve got you know you’ve got something like the nasdaq one

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[Ramsey Smith]: hundred and some other indices which are very tradable which ultimately in

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[Ramsey Smith]: addition to being recognizable also brings the ability to hedge efficiently

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[Ramsey Smith]: because behind every one of every transaction every fia purchase there’s a

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[Ramsey Smith]: hedging transaction so that’s something that i think is something that you

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[Ramsey Smith]: there’s not a question here just just a comment but i think

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[Ramsey Smith]: that is an important element

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[Ramsey Smith]: a of using a broad based indic index rather

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[Ramsey Smith]: in this in the fia space

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[Efram Slen]: i’ll even go on top of that and i i appreciate you saying that ramsay it’s great

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[Efram Slen]: this index has no they said launched nineteen eighty five is an over three seven

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[Efram Slen]: year track record right so the products have been around for quite a long time

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[Efram Slen]: like the cues launched in ‘ninety nine right and that’s again one of only saying

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[Efram Slen]: before many different products and product wrappers so yes having that track

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[Efram Slen]: record absolutely stands without question

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[Ramsey Smith]: really

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[Paul Tyler]: now well of course from a macro perspective

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[Paul Tyler]: we just get through covid only to have this awful war breakout

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[Paul Tyler]: in ukraine tell us how has this impacted the nasdaq one hundred

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[Efram Slen]: so it it hasn’t from a an actual inclusion perspective so there were no russian

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[Efram Slen]: equities in the nasdaq

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[Efram Slen]: one hundred but like many index providers out there like and p and m s c i fy

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[Efram Slen]: russell

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[Efram Slen]: all four of us actually put our announcements to remove russian equities from

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[Efram Slen]: from all over index benchmarks

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[Paul Tyler]: interesting so no no change no

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[Paul Tyler]: if i were sitting down with the client

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[Paul Tyler]: no company no russian company was in in nasdaq one one hundred that would have

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[Paul Tyler]: been pulled then

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[Efram Slen]: that’s correct

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[Paul Tyler]: okay interesting

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[Ramsey Smith]: so what are what do you see as sort of the the opportunity set in this space

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[Ramsey Smith]: broadly so just as as we mentioned before

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[Ramsey Smith]: a lot of people are getting get into the index game so you mentioned that there

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[Ramsey Smith]: are forty thousand just just you alone manage forty to forty five thousand in

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[Ramsey Smith]: indices is that right

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[Ramsey Smith]: well

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[Efram Slen]: that’s right that’s right

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[Ramsey Smith]: what what’s interesting to me is that i think they are only the last time i

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[Ramsey Smith]: checked there were like thirty five hundred stocks in the u s and the u s market

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[Ramsey Smith]: the wilshire five thousand doesn’t even cover five thousand stocks anymore back

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[Ramsey Smith]: when i started it had seven thousand in it right now now i think it has a lot

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[Ramsey Smith]: less so yeah i’m curious do you have a sense for what the future is

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[Ramsey Smith]: in indexes whether it’s broad based or more customized indices

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[Ramsey Smith]: it’s it’s been a remarkable proliferation

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[Efram Slen]: there absolutely has been um there are more and more ways to slice and dice

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[Efram Slen]: things than you can imagine so of the forty five thousand plus indexes that we

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[Efram Slen]: offer many of them actually go back to one index it’s is a global equity index

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[Efram Slen]: benchmark of around nine thousand global equities from developed in emerging

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[Efram Slen]: markets

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[Efram Slen]: that cover forty four countries i mentioned the exclusion exclusion of of russia

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[Efram Slen]: as well as a large mid small cap all cap large mid cap different currencies

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[Efram Slen]: different ways to calculate with and without dividends before you know it you’ve

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[Efram Slen]: got again we could do it on a far more the way we did it but the way we have it

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[Efram Slen]: today it’s is over forty around forty thousand or so

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[Paul Tyler]: just

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[Efram Slen]: indexes from one

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[Efram Slen]: basket of nine thousand names now think about that

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[Ramsey Smith]: mo

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[Efram Slen]: from from from how the way things have continued to evolve over the last even

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[Efram Slen]: fifteen years in the index space it started out

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[Efram Slen]: beyond fifteen years as just ways for folks to track the markets right so there

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[Efram Slen]: are only a handful of indexes that people really paid attention to indexes

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[Efram Slen]: continued to come to market just in the benchmark variety that are regular market

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[Efram Slen]: cap literally what is the world valuing these indexes as and then we start to

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[Efram Slen]: have some new indexes come to market right now were equal weighted there were

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[Efram Slen]: fundamentally weighted different ways to

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[Ramsey Smith]: maybe

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[Efram Slen]: track and and select and manage portfolios and then we started saying all right

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[Efram Slen]: well what are the active managers doing how can we try and get exposure in

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[Efram Slen]: returns that are like what active managing that’s when the rise of smart beta

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[Efram Slen]: came around and it was you know where factor indexes came about so folks were

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[Efram Slen]: focusing on far more than just value and growth there’s look at underpinning data

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[Efram Slen]: points from balance sheets and financial statements and saying well i want to

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[Efram Slen]: focus in around this data point so mark brought up before buybacks right we have

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[Efram Slen]: a buyback achiever index here we have many dividend based indexes here we have

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[Efram Slen]: many multi factor indexes that can look at a wide range of data points and then

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[Efram Slen]: over the last several years thematics has been the new rage right that’s where

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[Efram Slen]: folks have been digging into not technology or financials or health care it’s

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[Efram Slen]: fintech right it’s a smaller baske games that are focusing on like we said before

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[Efram Slen]: just just those specific names looking at names that are in cloud computing only

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[Efram Slen]: at cyber security only you’re only going to get thirty fifty maybe seventy names

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[Efram Slen]: at most in some of these thematic baskets if you’re really pushing up to seventy

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[Efram Slen]: sometimes far less

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[Efram Slen]: and again that’s what we’ve seen really things continue to evolve and it’s been

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[Efram Slen]: an awesome thing to be a part of been in nasdaq or

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[Ramsey Smith]: she

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[Efram Slen]: over eleven years it’s been a great ride watching frankly the continued growth

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[Efram Slen]: and maturation of the space

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[Paul Tyler]: interesting well yeah tell us just a little bit about both your background so a

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[Paul Tyler]: you’ve been at nasdaq for eleven years

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[Paul Tyler]: you know tell us what got you nasdaq you know what what keeps you

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[Paul Tyler]: totally engaged as we can tell in this in this space

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[Efram Slen]: i i just love frankly i i love coming to work working with

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[Ramsey Smith]: the

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[Efram Slen]: folks like mark working folks like wealthy who in the space where you have to

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[Efram Slen]: have conversations around around the markets around what we’ve got going on but

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[Efram Slen]: what my job really entails to today i’m responsible for all the research content

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[Efram Slen]: that we put out across our index business

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[Efram Slen]: so when i started here at nasdaq i was a combination of new index development as

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[Efram Slen]: well as putting our content supporting our business but today the roles evolved

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[Efram Slen]: and i’m responsible for to all content support supporting the index space here in

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[Efram Slen]: nasdaq

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[Paul Tyler]: yeah mark mark you your background and

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[Paul Tyler]: what excites you most about

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[Paul Tyler]: this particular space in the in the market

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[Mark Marex]: thanks

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[Ramsey Smith]: yeah

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[Mark Marex]: yeah i mean i’m coming up on three years with nasdaq here and specifically with

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[Mark Marex]: ephram team

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[Ramsey Smith]: but

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00:24:08,114 –> 00:24:14,034
[Mark Marex]: took a bit of more of a roundabout path to get here like ramsey i did my stint at

383
00:24:08,114 –> 00:24:14,034
[Mark Marex]: took a bit of more of a roundabout path to get here like ramsey i did my stint at

384
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[Mark Marex]: a big new york bank for about eight years in my case city coming out of college

385
00:24:14,114 –> 00:24:19,234
[Mark Marex]: a big new york bank for about eight years in my case city coming out of college

386
00:24:19,794 –> 00:24:24,354
[Mark Marex]: and my last role there was in sort of a client strategy and analytics role within

387
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[Mark Marex]: and my last role there was in sort of a client strategy and analytics role within

388
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[Mark Marex]: ib d

389
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[Mark Marex]: ib d

390
00:24:26,114 –> 00:24:31,634
[Mark Marex]: but really you know for a long part of that time at city my passion was elsewhere

391
00:24:32,034 –> 00:24:34,754
[Mark Marex]: and more in the realm of asset management

392
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[Mark Marex]: and specifically systematic strategy

393
00:24:39,414 –> 00:24:40,414
[Mark Marex]: research

394
00:24:40,994 –> 00:24:46,994
[Mark Marex]: and creation and execution that led me to launching a startup fund with a close

395
00:24:47,154 –> 00:24:52,674
[Mark Marex]: colleague of mine to trade u s equities long short on a very systematic basis

396
00:24:52,914 –> 00:24:58,194
[Mark Marex]: right and you know very risky endeavor didn’t end up working out long term but

397
00:24:58,354 –> 00:25:04,034
[Mark Marex]: really kind of cemented my desire to stay within that general space of you know

398
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[Mark Marex]: how do you design launch and then support

399
00:25:06,893 –> 00:25:07,893
[Ramsey Smith]: so

400
00:25:07,634 –> 00:25:08,914
[Mark Marex]: systematic strategies

401
00:25:10,274 –> 00:25:14,034
[Mark Marex]: that are data driven that are you know kind of fully transparent that offers

402
00:25:13,934 –> 00:25:14,934
[Mark Marex]: something unique

403
00:25:15,954 –> 00:25:17,554
[Mark Marex]: and i found that nasdaq

404
00:25:18,594 –> 00:25:23,554
[Mark Marex]: value proposition was very compelling from the perspective of you know it has

405
00:25:23,714 –> 00:25:29,314
[Mark Marex]: this industry leading index business that is very much underpinned just like s

406
00:25:29,394 –> 00:25:34,194
[Mark Marex]: and p right or m sci underpinned by this flagship product that everybody almost

407
00:25:34,434 –> 00:25:36,354
[Mark Marex]: everybody knows and has such a great

408
00:25:37,874 –> 00:25:41,394
[Mark Marex]: reputation in terms of the nasdaq one hundred but then you have all these other

409
00:25:41,554 –> 00:25:46,434
[Mark Marex]: interesting things going on under the hood that people you know outside of nasdaq

410
00:25:46,514 –> 00:25:50,754
[Mark Marex]: will really not have any idea about right things like designing indexes with

411
00:25:50,834 –> 00:25:56,594
[Mark Marex]: embedded options whether that is using options to juice your yield or to provide

412
00:25:56,914 –> 00:26:01,154
[Mark Marex]: downside protection or to minimize volatility on something like the nasdaq one

413
00:26:01,314 –> 00:26:02,594
[Mark Marex]: hundred you know we do that

414
00:26:03,794 –> 00:26:09,394
[Mark Marex]: as era mentioned the thematic space that’s been such a great source of creativity

415
00:26:10,754 –> 00:26:15,234
[Mark Marex]: and trying to figure out ways of how do you define a new industry that is driven

416
00:26:15,314 –> 00:26:20,354
[Mark Marex]: by a single technological breakthrough do you go peer play do you go uh sort of

417
00:26:20,434 –> 00:26:23,874
[Mark Marex]: broad based in coverage with that and working with clients every day to figure

418
00:26:24,114 –> 00:26:29,794
[Mark Marex]: out how do we design an index from the ground up that is rules based that is

419
00:26:30,034 –> 00:26:32,434
[Mark Marex]: transparent that is reputable and invest

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[Mark Marex]: it’s a

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00:26:33,940 –> 00:26:34,940
[Paul Tyler]: my

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00:26:34,354 –> 00:26:38,034
[Mark Marex]: great challenge because there’s no single right answer but i feel like we have

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00:26:38,194 –> 00:26:41,954
[Mark Marex]: these guidelines these principles that move us in the direction of

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00:26:42,994 –> 00:26:47,074
[Mark Marex]: putting out market leading products whether it’s thematic whether it’s smart beta

425
00:26:47,314 –> 00:26:50,434
[Mark Marex]: or something else day in and day out and that’s really exciting

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00:26:49,920 –> 00:26:54,640
[Paul Tyler]: excellent okay so for ramsay and i have an appointment with a client i guess at

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00:26:54,720 –> 00:26:58,080
[Paul Tyler]: two thirty we’ve got two hours to prep for this for ramsey and

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[Paul Tyler]: oh my

429
00:27:00,133 –> 00:27:01,133
[Ramsey Smith]: oh my go

430
00:27:00,400 –> 00:27:04,720
[Paul Tyler]: gosh i’ve gotta explain the nasdaq one hundred what what’s the best place to go

431
00:27:05,280 –> 00:27:09,760
[Paul Tyler]: to learn enough that i can actually represent your index and you know the the

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00:27:09,840 –> 00:27:14,960
[Paul Tyler]: mechanics and and what’s you know and and the the stocks inside it so that i can

433
00:27:14,820 –> 00:27:15,820
[Paul Tyler]: give somebody

434
00:27:16,720 –> 00:27:22,000
[Paul Tyler]: who’s trusting me a good understanding of where their money is

435
00:27:23,280 –> 00:27:25,680
[Paul Tyler]: what their money is going to earn interest credits against

436
00:27:26,916 –> 00:27:30,916
[Efram Slen]: so there are a few spots where we have kind of content around the nasdaq one one

437
00:27:30,916 –> 00:27:34,996
[Efram Slen]: hundred so i’ll give you kind of both both locations and and landing pages so one

438
00:27:35,156 –> 00:27:41,636
[Efram Slen]: is nasdaq com backlash nasdaq dash one hundred the other one it’s a little bit

439
00:27:41,716 –> 00:27:46,996
[Efram Slen]: harder to find but perfectly perfectly honest but if you go to indexes nasma com

440
00:27:47,396 –> 00:27:52,356
[Efram Slen]: and you go in the search bar and look for nd x n dx which is the index ticker for

441
00:27:52,356 –> 00:27:56,516
[Efram Slen]: the nasa of one hundred or just type in nasa gash one hundred you scroll down and

442
00:27:56,596 –> 00:28:00,036
[Efram Slen]: be able to find get on that page and able to see kind of all the great content

443
00:28:00,036 –> 00:28:01,876
[Efram Slen]: there that we have around around the index

444
00:28:02,640 –> 00:28:07,120
[Paul Tyler]: oh that’s great thanks ramsey any final thoughts or questions this is your this

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[Paul Tyler]: is your space

446
00:28:07,993 –> 00:28:12,553
[Ramsey Smith]: so just just one one quick question so you’ve got forty forty thousand plus

447
00:28:12,793 –> 00:28:17,273
[Ramsey Smith]: indices and it sounds like you you know you interact very proactively with your

448
00:28:17,913 –> 00:28:22,793
[Ramsey Smith]: your clients you know i’m wondering sort of what are the various ways they it can

449
00:28:22,873 –> 00:28:26,793
[Ramsey Smith]: interact with you could a could some entity it could be an insurance company

450
00:28:27,033 –> 00:28:31,513
[Ramsey Smith]: could be a bank it could could be a dis an insurance distributor right can they

451
00:28:31,593 –> 00:28:33,433
[Ramsey Smith]: come to you and and

452
00:28:34,553 –> 00:28:38,393
[Ramsey Smith]: work with you to develop their own custom index that they can launch on their

453
00:28:38,633 –> 00:28:42,953
[Ramsey Smith]: product i guess it’s do you go which way do you go is it inquiry reverse increase

454
00:28:43,193 –> 00:28:47,113
[Ramsey Smith]: can you go both ways i’m just curious how how people can engage with you to

455
00:28:48,153 –> 00:28:49,353
[Ramsey Smith]: to create unique product

456
00:28:50,196 –> 00:28:54,036
[Efram Slen]: it’s absolutely both but our our favorites actually the one that’s in between

457
00:28:54,436 –> 00:28:57,796
[Efram Slen]: where it’s together right where we come together and say we have an idea and they

458
00:28:57,796 –> 00:29:01,556
[Efram Slen]: have an idea we come together we work together create the final solution for me

459
00:29:01,636 –> 00:29:04,676
[Efram Slen]: that’s the most exciting that i’ve been a part of and i know the team kind of

460
00:29:04,676 –> 00:29:08,116
[Efram Slen]: loves here of course it’s great when someone has their own view and we help them

461
00:29:08,276 –> 00:29:11,476
[Efram Slen]: get that out in the market or we have our own view we get that in the market my

462
00:29:11,556 –> 00:29:15,236
[Efram Slen]: favorite though is when everybody comes together and we’re able to create that

463
00:29:15,396 –> 00:29:17,796
[Efram Slen]: bin kind of thought into a final index solution

464
00:29:19,600 –> 00:29:23,600
[Paul Tyler]: okay well hey well listen uh after mark thanks for your time with the links

465
00:29:25,120 –> 00:29:29,280
[Paul Tyler]: in the show notes and really appreciate your time maybe we can another time we

466
00:29:29,360 –> 00:29:31,840
[Paul Tyler]: can actually come down to the the floor when it’s

467
00:29:32,960 –> 00:29:36,960
[Paul Tyler]: know we get through this whole covid and record a show there love to love to do

468
00:29:37,040 –> 00:29:38,240
[Paul Tyler]: that in new york sometim

469
00:29:38,013 –> 00:29:39,013
[Ramsey Smith]: sh

470
00:29:38,480 –> 00:29:39,840
[Paul Tyler]: so alright

471
00:29:39,716 –> 00:29:41,476
[Efram Slen]: that’d be awesome we’ll have have to do that

472
00:29:41,040 –> 00:29:46,320
[Paul Tyler]: listen yeah all right hey thanks so much ramsey thanks and uh joins you next week

473
00:29:46,293 –> 00:29:47,293
[Ramsey Smith]: i don’t know

474
00:29:46,480 –> 00:29:48,880
[Paul Tyler]: for another episode of that annuity show

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.

Episode 141: Diving Deeper Into The Qualified Default Investment Alternative Market With Tamiko Toland

March 31, 2022 2022, Podcast, Retirement, Tamiko Toland No comments

Since the passage of the SECURE Act, we’ve all been talking a lot more about the institutional annuity market. However, Tamiko Toland with CANNEX has been working hard to build this business for a long time. Today we talk with her about the real opportunities and obstacles to bringing guaranteed income to a wider segment of the population.

Also, do you want to get regular updates on news about guests of our show? Enter your email under “Receive Updates” to subscribe to our newsletter.

We hope you enjoy the show.

Links mentioned today:

https://www.linkedin.com/in/tamiko-toland/

https://www.cannex.com/index.php/services/quantitative-research/income-annuity-education/

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Transcript

1
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[Paul Tyler]: hi this is paul tyler and welcome to another episode of that annuity show and

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[Paul Tyler]: ramsey good to see you

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[Ramsey Smith]: always glad to be here

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[Paul Tyler]: and we have a

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[Paul Tyler]: almost regular guest returning guest do you wanna do you wanna do the intro here

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[Ramsey Smith]: sure so time ago i think this is this is at least your third time here and um you

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[Ramsey Smith]: know we should do something like on saturday night live like when you get on when

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[Ramsey Smith]: you host for five times you get like a jacket or something like that so we’re

9
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[Ramsey Smith]: so third time i think end counting right

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[Ramsey Smith]: delighted to have you back for those of you who don’t know Tamiko Toland she is the

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[Ramsey Smith]: director of retirement markets at k x k x is a leading provider of data for the

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[Ramsey Smith]: insurance life insurance industry and the annuity industry in particular

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[Ramsey Smith]: and Tamiko’s influence

14
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[Ramsey Smith]: is really remarkable it spans retail and increasingly institutional and that’s

15
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[Ramsey Smith]: what we’re going to spend a lot of time talking about

16
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[Tamiko Toland]: so

17
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[Ramsey Smith]: today is

18
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[Ramsey Smith]: a lot a lot of the progress that’s going on in what is probably the biggest

19
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[Ramsey Smith]: opportunity in the guaranteed income space

20
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[Tamiko Toland]: space

21
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[Ramsey Smith]: and

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[Ramsey Smith]: the core work that Tamiko her team and her affiliates to doing to get us

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[Ramsey Smith]: there so with that Tamiko

24
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[Tamiko Toland]: that’s not something

25
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[Ramsey Smith]: tell us about some of the things that you’ve been you’ve been up to lately

26
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[Tamiko Toland]: sure

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[Paul Tyler]: i don’t know you

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[Tamiko Toland]: so before i i dive right into the four one key space i’ll

29
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[Paul Tyler]: i

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[Tamiko Toland]: mention a couple pieces that came out recently

31
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[Tamiko Toland]: and one was for investments and wealth monitor and it’s

32
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[Paul Tyler]: it about nine

33
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[Tamiko Toland]: really just about the validity of replacing

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[Tamiko Toland]: some or all the fixed income allocation and retirement with a guaranteed income

35
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[Tamiko Toland]: source and i say it like that because we did the research on based on spa but you

36
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[Tamiko Toland]: can replace other annuities as well so but still always

37
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[Paul Tyler]: so

38
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[Tamiko Toland]: annuities but

39
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[Paul Tyler]: but

40
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[Tamiko Toland]: that this actually

41
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[Paul Tyler]: i

42
00:02:03,144 –> 00:02:08,984
[Tamiko Toland]: improves outcomes um both in terms of income sustainability and

43
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[Paul Tyler]: get what

44
00:02:09,224 –> 00:02:11,704
[Tamiko Toland]: actually legacy which is i th

45
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[Paul Tyler]: i i feel like that’s

46
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[Tamiko Toland]: i feel like that’s a sort of the hidden story um

47
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[Paul Tyler]: else

48
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[Tamiko Toland]: when it comes to guaranteed income that we act

49
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[Paul Tyler]: y

50
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[Tamiko Toland]: like it’s it’ going to make legacy worse but anyway so another

51
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[Paul Tyler]: another

52
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[Tamiko Toland]: piece uh that i’ve done recently is uh for the journal of pension benefits and it

53
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[Tamiko Toland]: is on the topic of four hundred thousand that’s been a huge focus of mine over

54
00:02:29,064 –> 00:02:34,344
[Tamiko Toland]: the last couple of years and we’re very excited to be involved in the lifetime

55
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[Tamiko Toland]: income consortium where we’re really going to be focusing on this topic with a

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[Tamiko Toland]: group of member companies

57
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[Tamiko Toland]: this the administrative home for this is broad ridge fi three hundred sixty

58
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[Tamiko Toland]: solutions and we’re also working with another

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[Tamiko Toland]: friend of the show michelle rector at fiduciary insurance uh services and so yeah

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[Tamiko Toland]: happy to talk about any and all that

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[Paul Tyler]: excellent

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[Paul Tyler]: four one k has been a really interesting topic over a number of years actually

63
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[Paul Tyler]: years ramsey remember i think we did a podcast way back when episode number seven

64
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[Paul Tyler]: if you want to look and i think when the secure act came out

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[Paul Tyler]: and you think okay two years what’s happened

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[Paul Tyler]: a lot of companies have sort of

67
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[Paul Tyler]: looked at this opportunity

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[Paul Tyler]: we see some entrances i’ll leave you know rams you can sort of talk about the

69
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[Paul Tyler]: industry

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[Tamiko Toland]: sometimes

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[Paul Tyler]: landscape but just in the last like two days i’ve had some real

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[Tamiko Toland]: so

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[Paul Tyler]: interesting inbounds to i

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[Paul Tyler]: one was uh you know a writer for for forbes chris caruso saying looking for

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[Paul Tyler]: people’s

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[Paul Tyler]: answers to a question of what will really make this sales happen in the k space

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[Paul Tyler]: i’ll talk to some other questions again but let’s just kind of throw that out

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[Paul Tyler]: what will

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[Paul Tyler]: or what won’t make uh annuities and four hundred one ks work i don’t know which

80
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[Paul Tyler]: way you want to take it ramsay don’t know

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[Ramsey Smith]: well i’m taking notes ’cause as you mentioned this is this is an area of primary

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[Ramsey Smith]: focus for

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[Paul Tyler]: yeah

84
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[Ramsey Smith]: for me and my in my company and and uh i i have i have some theories

85
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[Ramsey Smith]: and very interested to hear tom’s input give me some idea about at least what

86
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[Ramsey Smith]: we’ve tabulated in terms of i’ll call it deals announced

87
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[Paul Tyler]: what

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[Ramsey Smith]: right and and they’re in various stages of actual execution but we recently added

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[Ramsey Smith]: up all everything we could find in the press and there’s something like sixty

90
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[Ramsey Smith]: billion dollars worth of announcements

91
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[Ramsey Smith]: you know that are in in in the space

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[Tamiko Toland]: that was so that’s

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[Ramsey Smith]: so’s not that’s not that’s not huge given the seven trillion opportunity

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[Tamiko Toland]: so

95
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[Ramsey Smith]: but it’s not insignificant and my guess is it will continue to grow but how we

96
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[Ramsey Smith]: get there that’s what tomic is going to share with us so so what do you think

97
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[Paul Tyler]: yes maybe tom yeah start with what won’t try i don’t know

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[Ramsey Smith]: yeah

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[Paul Tyler]: i’m fascinated to get your your impression

100
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[Tamiko Toland]: well i i’m gonna take a step back about a decade um in two thousand twelve i

101
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[Tamiko Toland]: actually wrote a report on in planned guarantees when i was at strategic insight

102
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[Tamiko Toland]: because

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[Tamiko Toland]: it was a very hot topic and it was about

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[Paul Tyler]: you think read

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[Paul Tyler]: so

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[Tamiko Toland]: to explode right we all felt like this is necessary it’s beneficial um to

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[Tamiko Toland]: participants right in particular like that’s where a lot of the conversation

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[Tamiko Toland]: focuses

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[Tamiko Toland]: and

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[Paul Tyler]: is

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[Tamiko Toland]: there

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[Paul Tyler]: you were a lot

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[Tamiko Toland]: were a lot of different companies that were coming out

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[Paul Tyler]: no

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[Tamiko Toland]: with initiatives

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[Paul Tyler]: i i have one

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[Tamiko Toland]: that were going to make a big difference and they were really

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[Paul Tyler]: i

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[Tamiko Toland]: designing around the challenges and

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[Paul Tyler]: yeah

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[Tamiko Toland]: you know the the big one at that time

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[Paul Tyler]: big one time

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[Tamiko Toland]: was

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[Paul Tyler]: play

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[Tamiko Toland]: eins bernstein and the lifetime income strategy which they

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[Paul Tyler]: yeah

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[Tamiko Toland]: actually did get placed as a qa and i’ll explain that a that as a qualified

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[Paul Tyler]: place

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[Tamiko Toland]: default’ investment

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[Tamiko Toland]: alternative right and so this is where

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[Paul Tyler]: wow that was great great branding qualified default wow okay sorry

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[Tamiko Toland]: well it is cause it’s a default

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[Paul Tyler]: yes

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[Tamiko Toland]: right and this has everything to do with the

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[Tamiko Toland]: all the money in motion um within four o one k plans i mean the target date fund

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[Tamiko Toland]: has become the mainstay and it is because of their use as a q dia right and all

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[Tamiko Toland]: these things are are completely related but

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[Paul Tyler]: but it might

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[Tamiko Toland]: it’s funny because you know at the time

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[Tamiko Toland]: i did this research it was more

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[Paul Tyler]: walk

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[Tamiko Toland]: qualitative research where i talked to folks who were involved and collected

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[Tamiko Toland]: information about the different solutions that were out there and so forth and i

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[Tamiko Toland]: said okay well you know this is foundational and then we’re gonna be you know

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[Tamiko Toland]: going up from here and then it just seemed to stall out and

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[Paul Tyler]: wa

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[Tamiko Toland]: despite the efforts with lines burning in their success with the uc plan which is

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[Tamiko Toland]: now part of raytheon so people refer to it as raytheon because they did implement

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[Tamiko Toland]: it

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[Paul Tyler]: yeah it

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[Tamiko Toland]: and it’s been very successful as such it’s they’ve continued and and full

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[Tamiko Toland]: disclosure they are a client of ours so

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[Tamiko Toland]: you know so what’s happened in the last decade why hasn’t it taken off and i

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[Tamiko Toland]: think there are probably a thousand different smaller reasons

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[Tamiko Toland]: and

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[Paul Tyler]: that would

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[Tamiko Toland]: that was one of the the um

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[Paul Tyler]: that

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[Tamiko Toland]: facts that led me to believe that the secure act alone wasn’t going to change the

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[Tamiko Toland]: facts that led me to believe that the secure act alone wasn’t going to change the

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[Tamiko Toland]: story

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[Tamiko Toland]: story

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[Paul Tyler]: excuse

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[Tamiko Toland]: and we really pen a lot of the changes on the secure act and i i i do think it’s

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[Tamiko Toland]: helpful and it’s certainly um beneficial

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[Tamiko Toland]: but the reality is that there are a lot of other um

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[Tamiko Toland]: like through

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[Paul Tyler]: like

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[Tamiko Toland]: lines in the industry that are coming together and

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[Paul Tyler]: i

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[Tamiko Toland]: i kind of want to get to

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[Tamiko Toland]: why is it that plan sponsors

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[Paul Tyler]: you really

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[Tamiko Toland]: really need to consider adoption of

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[Paul Tyler]: like

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[Tamiko Toland]: lifetime income it because it the ultimate reason

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[Paul Tyler]: thank you

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[Tamiko Toland]: is not altruistic you know we don’t companies don’t have this paternalistic

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[Tamiko Toland]: attitude in general like we need to take care of people obviously we know the

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[Tamiko Toland]: trend that pensions are dissipating and they’re being

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[Tamiko Toland]: replaced by dc so naturally we need to include some kind of income solution as

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[Paul Tyler]: like like yeah

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[Tamiko Toland]: part of so

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[Paul Tyler]: why not

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[Tamiko Toland]: why hasn’t it happened why

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[Paul Tyler]: he get

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[Tamiko Toland]: is it going to suddenly happen i

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[Tamiko Toland]: mean frankly in terms of the economic environment

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[Paul Tyler]: she frankly

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[Tamiko Toland]: um when people are facing uncertainty and

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[Paul Tyler]: you know

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[Tamiko Toland]: you know i i really do think that low interest rates have influences this not

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[Tamiko Toland]: something we really talk about a lot

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[Tamiko Toland]: but the methods that we use to generate income and retirement regardless of where

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[Tamiko Toland]: you’re sitting have

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[Tamiko Toland]: really deteriorated bond ladders don’t have the power that they used to so now

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[Tamiko Toland]: we’re talking about all this as

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[Tamiko Toland]: um moving

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[Paul Tyler]: i

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[Tamiko Toland]: attitudes in the retail arena well

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[Paul Tyler]: i think

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[Tamiko Toland]: the same really applies it’s the same people right it’s just

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[Paul Tyler]: thank you

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[Tamiko Toland]: regular american workers who are saving

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[Paul Tyler]: is

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[Tamiko Toland]: and when they

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[Tamiko Toland]: approach retirement when they reach retirement age and they do not have the

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[Tamiko Toland]: confidence to retire

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[Tamiko Toland]: and they’re

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[Paul Tyler]: what

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[Tamiko Toland]: much more likely to stay at their companies

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[Tamiko Toland]: and frankly this is a workforce management issue for companies that want to be

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[Tamiko Toland]: able to hire younger workers promote them through you can’t promote people when

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[Tamiko Toland]: there’s folks already sitting in those positions so that company life cycle

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[Tamiko Toland]: really gets stalled when you have people not retiring right and when you you have

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[Tamiko Toland]: folks that are hanging on not because they’re passionate about their work and

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[Tamiko Toland]: want

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[Paul Tyler]: was

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[Tamiko Toland]: to continue working retirement which is a very valid thing that we talk about so

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[Tamiko Toland]: much more now with you know

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[Paul Tyler]: i

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[Tamiko Toland]: a revision of how we view retirement but when that’s not the reason people are

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[Tamiko Toland]: are sticking to their jobs

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[Paul Tyler]: no

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[Tamiko Toland]: you know i think there are a lot

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[Paul Tyler]: about

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[Tamiko Toland]: of additional workforce issues and older workers are more expensive to companies

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[Paul Tyler]: and we don’t want talk and i

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[Tamiko Toland]: and you know we don’t want to talk about this and and i really i don’t want to

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[Tamiko Toland]: make sure that i’m be careful not to speak about this from an age’s perspective

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[Tamiko Toland]: because i you know i’m also like

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[Tamiko Toland]: leaning that direction as we all are time time moves in one direction for all of

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[Tamiko Toland]: us

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[Tamiko Toland]: but you really want people to be able to enjoy the retirements that they’ve been

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[Tamiko Toland]: saving for but when you’re not giving them that confidence and you’re not giving

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[Tamiko Toland]: them lifetime income then that

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[Paul Tyler]: that is

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[Tamiko Toland]: isn’t going to happen i

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[Tamiko Toland]: haven’t answered your question but i i see ramsey taking notes and i have a

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[Paul Tyler]: i have these i pay

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[Tamiko Toland]: feeling there might be some more questions flying my way so we we’ll get there

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[Ramsey Smith]: so yes i i was gonna say that is the that is the politest version of o k boomer

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[Ramsey Smith]: i’ve ever heard

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[Ramsey Smith]: um but it’s but let me let me ask you about this so

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[Paul Tyler]: so

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[Ramsey Smith]: um

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[Paul Tyler]: um

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[Ramsey Smith]: do you do you get the sense that that companies

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[Ramsey Smith]: hr departments

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[Ramsey Smith]: the folks that are sort of actually dealing with this particular problem you you

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[Ramsey Smith]: you’re saying this can potentially address do you think they see that yet right

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[Ramsey Smith]: do are you

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[Tamiko Toland]: yeah

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[Ramsey Smith]: yeah i mean i is that a i i i’m at the end of the day at the end of the day in

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[Ramsey Smith]: order for this to work there have to be pain points right they have to be sort of

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[Ramsey Smith]: pain

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[Tamiko Toland]: that

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[Ramsey Smith]: points that people are

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[Ramsey Smith]: are determined to sort of

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[Tamiko Toland]: just

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[Ramsey Smith]: resolve and so the question is is that a big enough pain point yet you think

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[Tamiko Toland]: i

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[Paul Tyler]: i have that

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[Ramsey Smith]: i i think that that

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[Tamiko Toland]: i think that that it’s a combination of factors and

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[Paul Tyler]: yeah

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[Tamiko Toland]: yes

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[Ramsey Smith]: yeah

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[Tamiko Toland]: i do think that

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[Ramsey Smith]: that

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[Tamiko Toland]: the employers are starting to recognize this issue

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[Tamiko Toland]: the employers are starting to recognize this issue

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[Tamiko Toland]: and i

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[Ramsey Smith]: and i

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[Paul Tyler]: and i think it it just something something like

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[Tamiko Toland]: think and i don’t forget there’s also

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[Ramsey Smith]: like that

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[Tamiko Toland]: like the there’s the

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[Paul Tyler]: parent

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[Tamiko Toland]: carrot not just the stick that

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[Ramsey Smith]: sure

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[Tamiko Toland]: you know of trying to attract you know new employees um but you know a lot of

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[Tamiko Toland]: you know of trying to attract you know new employees um but you know a lot of

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[Tamiko Toland]: times

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[Tamiko Toland]: times

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[Tamiko Toland]: that’s what

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[Ramsey Smith]: would be hard

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[Tamiko Toland]: we talk about right

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[Tamiko Toland]: oh

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[Paul Tyler]: oh

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[Ramsey Smith]: oh

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[Tamiko Toland]: participants really want this but participants

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[Ramsey Smith]: one

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[Tamiko Toland]: wanting it isn’t necessarily enough to get

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[Ramsey Smith]: you know your

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[Tamiko Toland]: over the barrier of oh there’s risk for the sponsor and that has been where

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[Ramsey Smith]: your

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[Tamiko Toland]: a lot of the conversations have really

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[Paul Tyler]: water

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[Tamiko Toland]: revolved around and so it’s it’s some you know like it it’s a set of factors and

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[Tamiko Toland]: and one of them is

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[Paul Tyler]: born

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[Tamiko Toland]: lowering the barrier

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[Tamiko Toland]: from a risk perspective which

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[Tamiko Toland]: secure

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[Paul Tyler]: you

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[Ramsey Smith]: here i actually

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[Tamiko Toland]: act does actually uh remove

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[Tamiko Toland]: that

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[Paul Tyler]: yeah

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[Ramsey Smith]: that of

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[Tamiko Toland]: in terms of including a safe harb for selection of the insurer but there’s still

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[Tamiko Toland]: a big

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[Tamiko Toland]: gap

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[Paul Tyler]: yeah

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[Tamiko Toland]: for implementation

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[Paul Tyler]: and it is

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[Tamiko Toland]: and it is a very significant gap which is

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[Paul Tyler]: how

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[Tamiko Toland]: how do you actually

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[Tamiko Toland]: how do you actually

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[Tamiko Toland]: make the choice

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[Tamiko Toland]: and we

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[Tamiko Toland]: we

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[Ramsey Smith]: you know that there are

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[Paul Tyler]: else there are right

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[Tamiko Toland]: that there are sort of tried and true methods for other other

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[Paul Tyler]: other

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[Ramsey Smith]: other friend

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[Tamiko Toland]: investments target date funds right like yes

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[Ramsey Smith]: yes

332
00:12:38,484 –> 00:12:39,484
[Tamiko Toland]: we understand

333
00:12:39,804 –> 00:12:40,804
[Tamiko Toland]: how

334
00:12:39,958 –> 00:12:40,958
[Ramsey Smith]: i

335
00:12:40,664 –> 00:12:43,944
[Tamiko Toland]: other investment options um you know make it into a plan

336
00:12:45,464 –> 00:12:49,624
[Tamiko Toland]: um but we’re talking about something that’s not just another investment

337
00:12:50,664 –> 00:12:54,904
[Tamiko Toland]: income is a completely different conversation and it works differently it

338
00:12:54,918 –> 00:12:55,918
[Ramsey Smith]: that

339
00:12:55,064 –> 00:12:56,264
[Tamiko Toland]: affects the

340
00:12:56,500 –> 00:12:57,500
[Paul Tyler]: scientific

341
00:12:56,584 –> 00:12:59,944
[Tamiko Toland]: dynamics and you know particularly because you’re talking about post retirement

342
00:12:56,598 –> 00:12:57,598
[Ramsey Smith]: dynamic

343
00:13:00,044 –> 00:13:01,044
[Tamiko Toland]: right

344
00:13:00,738 –> 00:13:02,098
[Ramsey Smith]: like the do we

345
00:13:00,824 –> 00:13:03,624
[Tamiko Toland]: that that’s really where it kicks in so how

346
00:13:03,484 –> 00:13:04,484
[Tamiko Toland]: does it behave

347
00:13:03,638 –> 00:13:04,638
[Ramsey Smith]: so how ca

348
00:13:04,100 –> 00:13:05,100
[Paul Tyler]: keep water

349
00:13:04,424 –> 00:13:06,984
[Tamiko Toland]: before retirement do we have the same expectations that we do for other

350
00:13:06,820 –> 00:13:07,820
[Paul Tyler]: that

351
00:13:07,224 –> 00:13:10,584
[Tamiko Toland]: investments and so it’s a different mindset and so when you ask

352
00:13:10,180 –> 00:13:11,180
[Paul Tyler]: yes

353
00:13:10,744 –> 00:13:13,144
[Tamiko Toland]: me like what is the biggest challenge

354
00:13:12,918 –> 00:13:13,918
[Ramsey Smith]: out

355
00:13:13,564 –> 00:13:14,564
[Tamiko Toland]: we have been

356
00:13:13,564 –> 00:13:14,564
[Tamiko Toland]: we have been

357
00:13:16,104 –> 00:13:20,024
[Tamiko Toland]: working on a lot of the solutions that are necessary for example middleware

358
00:13:20,184 –> 00:13:21,304
[Tamiko Toland]: solutions which are

359
00:13:21,380 –> 00:13:22,380
[Paul Tyler]: really

360
00:13:21,784 –> 00:13:22,984
[Tamiko Toland]: really important for kind

361
00:13:22,620 –> 00:13:23,620
[Paul Tyler]: kind of

362
00:13:23,064 –> 00:13:25,784
[Tamiko Toland]: of like the connective tissue all right

363
00:13:25,540 –> 00:13:26,540
[Paul Tyler]: any

364
00:13:26,024 –> 00:13:30,904
[Tamiko Toland]: for you know getting everybody hooked up to this right and you know

365
00:13:30,580 –> 00:13:31,580
[Paul Tyler]: that

366
00:13:30,878 –> 00:13:31,878
[Ramsey Smith]: does that work

367
00:13:31,064 –> 00:13:35,864
[Tamiko Toland]: that market has matured significantly in the last decade right where pe you know

368
00:13:36,504 –> 00:13:42,264
[Tamiko Toland]: we’re seeing some some very positive change right but the reality is that for the

369
00:13:42,344 –> 00:13:43,544
[Tamiko Toland]: folks who are actually

370
00:13:45,144 –> 00:13:49,944
[Tamiko Toland]: look at considering these solutions income is not their native language

371
00:13:51,244 –> 00:13:52,244
[Tamiko Toland]: and

372
00:13:51,940 –> 00:13:52,940
[Paul Tyler]: i think that

373
00:13:52,184 –> 00:13:54,584
[Tamiko Toland]: i think that that is a huge hurdle

374
00:13:55,884 –> 00:13:56,884
[Tamiko Toland]: in terms of

375
00:13:57,244 –> 00:13:58,244
[Tamiko Toland]: getting

376
00:13:58,824 –> 00:14:05,304
[Tamiko Toland]: the let’s say the consultants retirement plan advisors comfortable with making

377
00:14:05,544 –> 00:14:10,504
[Tamiko Toland]: those recommendations and confident that they are doing that appropriately for

378
00:14:10,664 –> 00:14:12,984
[Tamiko Toland]: the sponsor client right and

379
00:14:12,604 –> 00:14:13,604
[Tamiko Toland]: the

380
00:14:12,918 –> 00:14:13,918
[Ramsey Smith]: it’s a lot

381
00:14:12,980 –> 00:14:13,980
[Paul Tyler]: what

382
00:14:13,304 –> 00:14:14,744
[Tamiko Toland]: sponsors have to feel like

383
00:14:14,818 –> 00:14:17,058
[Ramsey Smith]: like yeah that that makes sense it fun

384
00:14:14,984 –> 00:14:18,024
[Tamiko Toland]: yeah that that makes sense and i don’t think i just stuck

385
00:14:15,040 –> 00:14:16,880
[Paul Tyler]: yeah that’s it i

386
00:14:17,638 –> 00:14:18,638
[Ramsey Smith]: like

387
00:14:18,104 –> 00:14:23,144
[Tamiko Toland]: my neck out in order to do this and it’s not simply a matter of a legislative fix

388
00:14:23,304 –> 00:14:26,024
[Tamiko Toland]: because we like we don’t need another like

389
00:14:26,180 –> 00:14:27,180
[Paul Tyler]: like

390
00:14:26,664 –> 00:14:29,144
[Tamiko Toland]: dick rule about how to do this

391
00:14:26,664 –> 00:14:29,144
[Tamiko Toland]: dick rule about how to do this

392
00:14:30,264 –> 00:14:33,944
[Tamiko Toland]: and frankly the department of labor generally stays away from that like that you

393
00:14:34,024 –> 00:14:37,864
[Tamiko Toland]: know these things kind of evolve and the general guidelines yes but not very

394
00:14:38,184 –> 00:14:44,584
[Tamiko Toland]: specific details and particularly on a really a novel subject matter and a novel

395
00:14:44,984 –> 00:14:49,144
[Tamiko Toland]: product dynamic which is what income represents

396
00:14:49,840 –> 00:14:50,880
[Paul Tyler]: so okay when i

397
00:14:52,000 –> 00:14:57,280
[Paul Tyler]: a two part question when i think toco of the group market i think like you

398
00:14:57,360 –> 00:15:00,960
[Paul Tyler]: mentioned a company with a very you know a very big company right

399
00:15:02,160 –> 00:15:07,680
[Paul Tyler]: if you’re marketing products or retirement plans into a large company the needs

400
00:15:07,760 –> 00:15:13,120
[Paul Tyler]: start to tier like executive senior the super executive management team may have

401
00:15:14,000 –> 00:15:17,600
[Paul Tyler]: they may have a fee based only advisory service that helps them do

402
00:15:17,164 –> 00:15:18,164
[Tamiko Toland]: see

403
00:15:17,760 –> 00:15:19,040
[Paul Tyler]: this you to go down

404
00:15:18,724 –> 00:15:19,724
[Tamiko Toland]: or something

405
00:15:19,280 –> 00:15:24,560
[Paul Tyler]: another tier these people aren’t so they they’ve got some big balances but

406
00:15:24,640 –> 00:15:28,880
[Paul Tyler]: they’re not going to have an advisor you get down farther than the company where

407
00:15:28,940 –> 00:15:29,940
[Paul Tyler]: i think i think i heard

408
00:15:29,558 –> 00:15:30,558
[Ramsey Smith]: favorite

409
00:15:29,660 –> 00:15:30,660
[Paul Tyler]: you talking

410
00:15:31,440 –> 00:15:34,880
[Paul Tyler]: or speaking to are people who are you know they’re just trying to pay the bills

411
00:15:34,740 –> 00:15:35,740
[Paul Tyler]: oh by the way

412
00:15:35,238 –> 00:15:36,238
[Ramsey Smith]: lot of time

413
00:15:35,600 –> 00:15:37,280
[Paul Tyler]: oh gee i did have a four one k

414
00:15:38,400 –> 00:15:41,040
[Paul Tyler]: how do you do you see the segmentation

415
00:15:42,400 –> 00:15:45,520
[Paul Tyler]: the drivers of adoption being or should they

416
00:15:45,238 –> 00:15:46,238
[Ramsey Smith]: really

417
00:15:45,680 –> 00:15:49,440
[Paul Tyler]: be different based on your income inside a company

418
00:15:51,564 –> 00:15:52,564
[Tamiko Toland]: so

419
00:15:51,798 –> 00:15:52,798
[Ramsey Smith]: no

420
00:15:52,604 –> 00:15:53,604
[Tamiko Toland]: the thing is that the

421
00:15:53,318 –> 00:15:54,318
[Ramsey Smith]: yeah

422
00:15:54,524 –> 00:15:55,524
[Tamiko Toland]: really the

423
00:15:55,038 –> 00:15:56,038
[Ramsey Smith]: like that mind

424
00:15:55,384 –> 00:15:58,184
[Tamiko Toland]: mindset of thinking around this is that the

425
00:15:58,258 –> 00:15:59,298
[Ramsey Smith]: second actually

426
00:15:58,264 –> 00:16:03,304
[Tamiko Toland]: qt is the place where the assets fall because that is the you know the default

427
00:16:03,944 –> 00:16:10,264
[Tamiko Toland]: flows into the qa and that now has become target date funds right and so

428
00:16:09,878 –> 00:16:10,878
[Ramsey Smith]: yeah

429
00:16:11,864 –> 00:16:14,504
[Tamiko Toland]: it’s the same thing of how we think about income

430
00:16:14,260 –> 00:16:15,260
[Paul Tyler]: yeah

431
00:16:14,604 –> 00:16:15,604
[Tamiko Toland]: now i’m

432
00:16:15,358 –> 00:16:16,358
[Ramsey Smith]: thank you john

433
00:16:15,544 –> 00:16:17,864
[Tamiko Toland]: gonna be honest with you like rich people

434
00:16:17,638 –> 00:16:18,638
[Ramsey Smith]: s

435
00:16:18,104 –> 00:16:19,624
[Tamiko Toland]: are fine right

436
00:16:19,778 –> 00:16:20,978
[Ramsey Smith]: right they’re knowing somebody

437
00:16:20,024 –> 00:16:22,024
[Tamiko Toland]: there’s always somebody who’s willing to give them

438
00:16:22,184 –> 00:16:26,584
[Tamiko Toland]: advice they they have lots of access to advice but the people who truly benefit

439
00:16:22,498 –> 00:16:23,938
[Ramsey Smith]: why have that

440
00:16:26,198 –> 00:16:27,198
[Ramsey Smith]: yeah

441
00:16:27,544 –> 00:16:31,464
[Tamiko Toland]: within a retirement plan are those individuals who

442
00:16:31,600 –> 00:16:33,680
[Paul Tyler]: how do i smoke but

443
00:16:31,624 –> 00:16:37,224
[Tamiko Toland]: otherwise have no access to advice or guidance or anything right and so the

444
00:16:37,304 –> 00:16:40,424
[Tamiko Toland]: default all this entire structure that we’re talking about

445
00:16:41,600 –> 00:16:42,720
[Paul Tyler]: e really

446
00:16:41,600 –> 00:16:42,720
[Paul Tyler]: e really

447
00:16:41,604 –> 00:16:42,604
[Tamiko Toland]: is really

448
00:16:41,778 –> 00:16:43,218
[Ramsey Smith]: yeah sus

449
00:16:43,884 –> 00:16:44,884
[Tamiko Toland]: it’s

450
00:16:44,500 –> 00:16:45,500
[Paul Tyler]: i

451
00:16:44,744 –> 00:16:50,824
[Tamiko Toland]: designed to help those individuals who are much more on the margins and if if you

452
00:16:51,164 –> 00:16:52,164
[Tamiko Toland]: have outside

453
00:16:51,900 –> 00:16:52,900
[Paul Tyler]: i like

454
00:16:52,264 –> 00:16:56,024
[Tamiko Toland]: advice and your advice says no no no we have this different plan you don’t need

455
00:16:56,184 –> 00:17:00,024
[Tamiko Toland]: this you know we’ll put your money into something else that’s completely

456
00:17:00,104 –> 00:17:02,024
[Tamiko Toland]: fine and that is how the

457
00:17:00,198 –> 00:17:01,198
[Ramsey Smith]: why not

458
00:17:02,024 –> 00:17:04,264
[Tamiko Toland]: q is structured it’s a default it’s not

459
00:17:02,098 –> 00:17:03,138
[Ramsey Smith]: out thirty

460
00:17:03,878 –> 00:17:04,878
[Ramsey Smith]: not

461
00:17:04,344 –> 00:17:08,584
[Tamiko Toland]: like you’re not forced to stay in it right but but it needs to be

462
00:17:10,184 –> 00:17:11,704
[Tamiko Toland]: a quality solution

463
00:17:12,824 –> 00:17:16,424
[Tamiko Toland]: for those individuals who may not be

464
00:17:16,038 –> 00:17:17,038
[Ramsey Smith]: y

465
00:17:16,424 –> 00:17:21,304
[Tamiko Toland]: accumulating as much money in you know during their working years for retirement

466
00:17:21,460 –> 00:17:22,460
[Paul Tyler]: so

467
00:17:22,024 –> 00:17:27,064
[Tamiko Toland]: and who probably aren’t going to get other guidance right and so this is exactly

468
00:17:26,764 –> 00:17:27,764
[Tamiko Toland]: why

469
00:17:27,724 –> 00:17:28,724
[Tamiko Toland]: so

470
00:17:27,780 –> 00:17:28,780
[Paul Tyler]: so

471
00:17:27,958 –> 00:17:28,958
[Ramsey Smith]: so

472
00:17:28,344 –> 00:17:29,544
[Tamiko Toland]: many people are

473
00:17:29,420 –> 00:17:30,420
[Paul Tyler]: pla

474
00:17:29,784 –> 00:17:32,264
[Tamiko Toland]: passionate about this that it’s not yes

475
00:17:32,004 –> 00:17:33,004
[Tamiko Toland]: i mean

476
00:17:32,020 –> 00:17:33,020
[Paul Tyler]: i

477
00:17:32,664 –> 00:17:33,704
[Tamiko Toland]: it’s it’s great like that

478
00:17:32,738 –> 00:17:34,178
[Ramsey Smith]: i mean like the

479
00:17:33,380 –> 00:17:34,380
[Paul Tyler]: like that

480
00:17:33,844 –> 00:17:34,844
[Tamiko Toland]: from an asset gathering

481
00:17:34,838 –> 00:17:35,838
[Ramsey Smith]: now

482
00:17:34,904 –> 00:17:38,664
[Tamiko Toland]: standpoint whatever you know servicing all these people but you know you get

483
00:17:38,364 –> 00:17:39,364
[Tamiko Toland]: folks

484
00:17:38,918 –> 00:17:39,918
[Ramsey Smith]: smoke

485
00:17:39,224 –> 00:17:43,384
[Tamiko Toland]: like me who care deeply about it because you see this is a fantastic

486
00:17:43,238 –> 00:17:44,238
[Ramsey Smith]: not

487
00:17:43,464 –> 00:17:44,984
[Tamiko Toland]: way to reach

488
00:17:46,264 –> 00:17:48,184
[Tamiko Toland]: so many americans in a way

489
00:17:47,798 –> 00:17:48,798
[Ramsey Smith]: we

490
00:17:48,344 –> 00:17:50,424
[Tamiko Toland]: that the retail space is not going to

491
00:17:51,158 –> 00:17:52,158
[Ramsey Smith]: so

492
00:17:51,300 –> 00:17:52,300
[Paul Tyler]: oh

493
00:17:52,018 –> 00:17:56,978
[Ramsey Smith]: okay this is this is very you know interesting interesting element of it because

494
00:17:58,178 –> 00:18:04,658
[Ramsey Smith]: we live in a world where where this the same three the esg acronym comes up a lot

495
00:18:05,138 –> 00:18:09,858
[Ramsey Smith]: it comes up in investing it comes up certainly in board work i can tell you it

496
00:18:09,938 –> 00:18:11,938
[Ramsey Smith]: comes up in a lot of different places like esg

497
00:18:13,138 –> 00:18:14,498
[Ramsey Smith]: is is on the tip of

498
00:18:14,380 –> 00:18:15,380
[Paul Tyler]: i don’t know

499
00:18:14,498 –> 00:18:16,098
[Ramsey Smith]: everybody’s tongues because it’s it’s

500
00:18:15,878 –> 00:18:16,878
[Ramsey Smith]: it’s

501
00:18:16,044 –> 00:18:17,044
[Tamiko Toland]: expensive

502
00:18:16,260 –> 00:18:17,260
[Paul Tyler]: what

503
00:18:16,658 –> 00:18:18,578
[Ramsey Smith]: important in every aspect of business now

504
00:18:19,558 –> 00:18:20,558
[Ramsey Smith]: and you know one

505
00:18:20,100 –> 00:18:21,100
[Paul Tyler]: what

506
00:18:20,638 –> 00:18:21,638
[Ramsey Smith]: sort of sleeve of

507
00:18:21,278 –> 00:18:22,278
[Ramsey Smith]: esg

508
00:18:21,300 –> 00:18:22,300
[Paul Tyler]: yes

509
00:18:21,884 –> 00:18:22,884
[Tamiko Toland]: that’s pretty

510
00:18:22,338 –> 00:18:28,418
[Ramsey Smith]: that’s often talked about is banking to the un banked and you know here we’re

511
00:18:28,498 –> 00:18:34,418
[Ramsey Smith]: talking about i don’t have as neat a catch phrase as that but it’s sort of the it

512
00:18:34,498 –> 00:18:38,658
[Ramsey Smith]: is retirement income to the un income for lack of a better way

513
00:18:39,858 –> 00:18:41,858
[Ramsey Smith]: way to describe it but i’ve i very

514
00:18:41,780 –> 00:18:42,780
[Paul Tyler]: you

515
00:18:42,178 –> 00:18:45,698
[Ramsey Smith]: rarely heard it one described as an esg issue

516
00:18:46,818 –> 00:18:51,538
[Ramsey Smith]: and two i don’t really think i’ve heard any of the the current proponents of the

517
00:18:51,158 –> 00:18:52,158
[Ramsey Smith]: space

518
00:18:52,518 –> 00:18:53,518
[Ramsey Smith]: uh you

519
00:18:53,298 –> 00:18:59,218
[Ramsey Smith]: know describing it that way as as opportunistically as everybody else is using

520
00:18:53,360 –> 00:18:56,240
[Paul Tyler]: it was like that way yeah

521
00:18:59,858 –> 00:19:04,738
[Ramsey Smith]: using that acronym everywhere else in the business world so what your thoughts on

522
00:19:04,738 –> 00:19:07,298
[Ramsey Smith]: there is that a missed opportunity cause i think it’s real

523
00:19:09,164 –> 00:19:10,164
[Tamiko Toland]: um

524
00:19:12,024 –> 00:19:14,184
[Tamiko Toland]: i’m not sure i mean i i think that i

525
00:19:13,958 –> 00:19:14,958
[Ramsey Smith]: i

526
00:19:14,424 –> 00:19:15,544
[Tamiko Toland]: certainly have heard other people

527
00:19:15,238 –> 00:19:16,238
[Ramsey Smith]: it

528
00:19:15,704 –> 00:19:18,984
[Tamiko Toland]: talk about i’m not the only one who has articulated it like that

529
00:19:18,598 –> 00:19:19,598
[Ramsey Smith]: yeah

530
00:19:19,500 –> 00:19:20,500
[Paul Tyler]: yeah i

531
00:19:19,704 –> 00:19:22,584
[Tamiko Toland]: so i think there are other voices out there saying the same thing

532
00:19:23,544 –> 00:19:25,784
[Tamiko Toland]: and i definitely see that passion

533
00:19:23,600 –> 00:19:25,360
[Paul Tyler]: and i guess see that

534
00:19:26,824 –> 00:19:29,304
[Tamiko Toland]: um among other stakeholders um

535
00:19:29,380 –> 00:19:30,380
[Paul Tyler]: yeah

536
00:19:30,024 –> 00:19:31,624
[Tamiko Toland]: you know is this the marketing opportunity

537
00:19:32,684 –> 00:19:33,684
[Tamiko Toland]: i

538
00:19:32,980 –> 00:19:33,980
[Paul Tyler]: i don’t know

539
00:19:33,118 –> 00:19:34,118
[Ramsey Smith]: i don’t know

540
00:19:33,224 –> 00:19:36,904
[Tamiko Toland]: don’t know because ultimately when you look at the dynamics of how

541
00:19:33,224 –> 00:19:36,904
[Tamiko Toland]: don’t know because ultimately when you look at the dynamics of how

542
00:19:36,420 –> 00:19:37,420
[Paul Tyler]: how

543
00:19:38,264 –> 00:19:40,904
[Tamiko Toland]: the these solutions are going to be placed

544
00:19:41,300 –> 00:19:42,300
[Paul Tyler]: and

545
00:19:41,784 –> 00:19:42,824
[Tamiko Toland]: and that

546
00:19:43,724 –> 00:19:44,724
[Tamiko Toland]: the

547
00:19:43,980 –> 00:19:44,980
[Paul Tyler]: the can

548
00:19:44,084 –> 00:19:45,084
[Tamiko Toland]: mechanical

549
00:19:44,718 –> 00:19:45,718
[Ramsey Smith]: go back

550
00:19:44,984 –> 00:19:47,624
[Tamiko Toland]: factors the the choices

551
00:19:47,398 –> 00:19:48,398
[Ramsey Smith]: this

552
00:19:47,784 –> 00:19:49,064
[Tamiko Toland]: that sponsors need to make

553
00:19:49,244 –> 00:19:50,244
[Tamiko Toland]: i

554
00:19:49,760 –> 00:19:52,320
[Paul Tyler]: i don’t think that that but i i think that

555
00:19:49,864 –> 00:19:52,824
[Tamiko Toland]: don’t think that that’s the thing but i do think that that drives

556
00:19:49,938 –> 00:19:52,818
[Ramsey Smith]: i don’t think that that i think five

557
00:19:53,404 –> 00:19:54,404
[Tamiko Toland]: really

558
00:19:55,304 –> 00:19:59,704
[Tamiko Toland]: you know the the legislative components right and the fact that in the regulatory

559
00:19:59,684 –> 00:20:00,684
[Tamiko Toland]: piece say we want

560
00:20:00,358 –> 00:20:01,358
[Ramsey Smith]: want be

561
00:20:00,664 –> 00:20:02,744
[Tamiko Toland]: to make this easier we w we and we

562
00:20:02,598 –> 00:20:03,598
[Ramsey Smith]: if one is

563
00:20:02,824 –> 00:20:04,344
[Tamiko Toland]: want it to be safe so it’s

564
00:20:04,198 –> 00:20:05,198
[Ramsey Smith]: b

565
00:20:04,424 –> 00:20:05,944
[Tamiko Toland]: balancing those interests out

566
00:20:05,638 –> 00:20:06,638
[Ramsey Smith]: nine

567
00:20:06,184 –> 00:20:07,464
[Tamiko Toland]: because you want to

568
00:20:07,438 –> 00:20:08,438
[Ramsey Smith]: what do you ask

569
00:20:07,624 –> 00:20:09,224
[Tamiko Toland]: increase access to all

570
00:20:09,180 –> 00:20:10,180
[Paul Tyler]: all the american

571
00:20:09,198 –> 00:20:10,198
[Ramsey Smith]: of america

572
00:20:09,384 –> 00:20:14,024
[Tamiko Toland]: these americans which is you know that’s a very good goal for our our government

573
00:20:14,824 –> 00:20:16,744
[Tamiko Toland]: and you know folks working there to be

574
00:20:16,500 –> 00:20:17,500
[Paul Tyler]: think

575
00:20:16,904 –> 00:20:21,144
[Tamiko Toland]: thinking about and they also want to make sure that it’s done responsibly so you

576
00:20:21,100 –> 00:20:22,100
[Paul Tyler]: you know i i just

577
00:20:21,224 –> 00:20:23,144
[Tamiko Toland]: know i i think that that may be a more

578
00:20:21,298 –> 00:20:22,498
[Ramsey Smith]: you know i i think it’s that

579
00:20:23,478 –> 00:20:24,478
[Ramsey Smith]: well

580
00:20:23,704 –> 00:20:25,224
[Tamiko Toland]: relevant conversation there

581
00:20:24,820 –> 00:20:25,820
[Paul Tyler]: there

582
00:20:24,998 –> 00:20:25,998
[Ramsey Smith]: yeah

583
00:20:25,764 –> 00:20:26,764
[Tamiko Toland]: and it’s a

584
00:20:26,318 –> 00:20:27,318
[Ramsey Smith]: the one i

585
00:20:26,324 –> 00:20:27,324
[Tamiko Toland]: little bit different

586
00:20:26,324 –> 00:20:27,324
[Tamiko Toland]: little bit different

587
00:20:26,324 –> 00:20:27,324
[Tamiko Toland]: little bit different

588
00:20:28,258 –> 00:20:29,378
[Ramsey Smith]: um you know

589
00:20:28,584 –> 00:20:30,744
[Tamiko Toland]: because you know like i say when it

590
00:20:30,598 –> 00:20:31,598
[Ramsey Smith]: something

591
00:20:30,904 –> 00:20:34,184
[Tamiko Toland]: comes to building these q solutions this

592
00:20:34,184 –> 00:20:39,384
[Tamiko Toland]: is a different way of thinking about income than we’re really accustomed to in

593
00:20:34,258 –> 00:20:35,698
[Ramsey Smith]: which is a different way

594
00:20:39,464 –> 00:20:41,464
[Tamiko Toland]: retail because you know when you have an individual

595
00:20:41,540 –> 00:20:42,540
[Paul Tyler]: white

596
00:20:41,864 –> 00:20:45,384
[Tamiko Toland]: client and you know what their needs are then you make selections that are really

597
00:20:45,284 –> 00:20:46,284
[Tamiko Toland]: much more

598
00:20:47,304 –> 00:20:53,704
[Tamiko Toland]: optimized for you know what their goals are right and so you can use these you

599
00:20:53,324 –> 00:20:54,324
[Tamiko Toland]: know

600
00:20:53,780 –> 00:20:54,780
[Paul Tyler]: i

601
00:20:54,044 –> 00:20:55,044
[Tamiko Toland]: products that are as

602
00:20:55,198 –> 00:20:56,198
[Ramsey Smith]: i know

603
00:20:55,304 –> 00:20:59,224
[Tamiko Toland]: we all know like so much of the annuity industry has become highly specialized

604
00:20:59,324 –> 00:21:00,324
[Tamiko Toland]: you know you have

605
00:21:00,258 –> 00:21:01,618
[Ramsey Smith]: no that is

606
00:21:00,424 –> 00:21:03,144
[Tamiko Toland]: you know this benefit that’s torque one way

607
00:21:02,878 –> 00:21:03,878
[Ramsey Smith]: one way

608
00:21:03,304 –> 00:21:05,064
[Tamiko Toland]: and other benefit that’s toed in

609
00:21:04,838 –> 00:21:05,838
[Ramsey Smith]: another way

610
00:21:05,144 –> 00:21:08,264
[Tamiko Toland]: another way and they are different use cases right and

611
00:21:08,580 –> 00:21:09,580
[Paul Tyler]: that’s

612
00:21:08,904 –> 00:21:13,384
[Tamiko Toland]: that’s to the benefit of the end client of making it more focused right and that

613
00:21:12,518 –> 00:21:13,518
[Ramsey Smith]: i

614
00:21:13,140 –> 00:21:14,140
[Paul Tyler]: that what

615
00:21:13,164 –> 00:21:14,164
[Tamiko Toland]: doesn’t apply

616
00:21:13,198 –> 00:21:14,198
[Ramsey Smith]: think that a lot

617
00:21:15,064 –> 00:21:19,144
[Tamiko Toland]: right so much when you think about pda you’re not necessarily having a single

618
00:21:19,004 –> 00:21:20,004
[Tamiko Toland]: minded goal like

619
00:21:19,564 –> 00:21:20,564
[Tamiko Toland]: you’re

620
00:21:19,798 –> 00:21:20,798
[Ramsey Smith]: talk

621
00:21:19,860 –> 00:21:20,860
[Paul Tyler]: i my

622
00:21:20,264 –> 00:21:24,504
[Tamiko Toland]: not trying to maximize income for every single person you have to balance out

623
00:21:24,198 –> 00:21:25,198
[Ramsey Smith]: i

624
00:21:24,664 –> 00:21:26,824
[Tamiko Toland]: those interests because some people are going to end

625
00:21:26,678 –> 00:21:27,678
[Ramsey Smith]: and i

626
00:21:26,984 –> 00:21:31,464
[Tamiko Toland]: up at retirement not selecting that that benefit despite the fact that they’ve

627
00:21:31,544 –> 00:21:35,224
[Tamiko Toland]: paid into it whether it’s a decision made out of ignorance or they got diagnosed

628
00:21:35,224 –> 00:21:38,504
[Tamiko Toland]: with the terrible cancer right before they retired you know and they have

629
00:21:39,224 –> 00:21:42,664
[Tamiko Toland]: different goals um for their their post working years

630
00:21:43,458 –> 00:21:44,498
[Ramsey Smith]: about art

631
00:21:43,604 –> 00:21:44,604
[Tamiko Toland]: you know there are

632
00:21:46,904 –> 00:21:48,824
[Tamiko Toland]: it is just a different problem to solve

633
00:21:49,078 –> 00:21:50,078
[Ramsey Smith]: g

634
00:21:49,284 –> 00:21:50,284
[Tamiko Toland]: right then

635
00:21:49,980 –> 00:21:50,980
[Paul Tyler]: wow

636
00:21:50,424 –> 00:21:53,304
[Tamiko Toland]: looking at it as you know client a

637
00:21:52,398 –> 00:21:53,398
[Ramsey Smith]: it was funny

638
00:21:53,740 –> 00:21:54,740
[Paul Tyler]: yeah so i

639
00:21:53,884 –> 00:21:54,884
[Tamiko Toland]: and

640
00:21:54,438 –> 00:21:55,438
[Ramsey Smith]: what

641
00:21:54,504 –> 00:21:55,864
[Tamiko Toland]: fitting solutions to that

642
00:21:55,220 –> 00:21:56,220
[Paul Tyler]: okay

643
00:21:55,558 –> 00:21:56,558
[Ramsey Smith]: what

644
00:21:56,000 –> 00:22:03,680
[Paul Tyler]: so here here’s okay you are the in command of you’re running the hr benefits for

645
00:22:03,700 –> 00:22:04,700
[Paul Tyler]: a target i

646
00:22:04,438 –> 00:22:05,438
[Ramsey Smith]: b

647
00:22:05,280 –> 00:22:09,680
[Paul Tyler]: just took it take a job as uh you know somebody working in one of the stores i’m

648
00:22:09,760 –> 00:22:11,440
[Paul Tyler]: a assistant manager of a store

649
00:22:12,960 –> 00:22:16,640
[Paul Tyler]: how does how should the onboarding experience be when i fill at the application

650
00:22:18,000 –> 00:22:20,240
[Paul Tyler]: come to the point of okay set up your paycheck

651
00:22:21,520 –> 00:22:24,720
[Paul Tyler]: how much pal do you want to put into your four o one k o here’s the match

652
00:22:26,000 –> 00:22:30,000
[Paul Tyler]: how would you change that that setup for me to start putting money in there do i

653
00:22:30,080 –> 00:22:35,280
[Paul Tyler]: have a choice is there a default you know if you don’t say this paul you will get

654
00:22:35,920 –> 00:22:41,520
[Paul Tyler]: x percent of your savings in the four k and x percent is going to default into

655
00:22:41,540 –> 00:22:42,540
[Paul Tyler]: this income

656
00:22:43,060 –> 00:22:44,060
[Paul Tyler]: benefit

657
00:22:44,204 –> 00:22:45,204
[Tamiko Toland]: well

658
00:22:44,678 –> 00:22:45,678
[Ramsey Smith]: that

659
00:22:44,904 –> 00:22:51,064
[Tamiko Toland]: that’s the idea behind defaulting is that you don’t have to convince paul to sign

660
00:22:50,844 –> 00:22:51,844
[Tamiko Toland]: up

661
00:22:52,204 –> 00:22:53,204
[Tamiko Toland]: that you

662
00:22:54,024 –> 00:22:59,384
[Tamiko Toland]: don’t need to get educated about the benefits of of contributing to four o one k

663
00:22:59,624 –> 00:23:03,544
[Tamiko Toland]: the money goes in there you get your match and then you’re put into something

664
00:23:03,704 –> 00:23:07,864
[Tamiko Toland]: that’s suitable for you right and so conceptually yes that those are all

665
00:23:09,624 –> 00:23:10,984
[Tamiko Toland]: components of why

666
00:23:10,580 –> 00:23:11,580
[Paul Tyler]: why

667
00:23:11,064 –> 00:23:15,064
[Tamiko Toland]: we’re thinking so strongly about qa and not simply having sort of the

668
00:23:15,064 –> 00:23:17,304
[Tamiko Toland]: availability of options

669
00:23:18,664 –> 00:23:23,304
[Tamiko Toland]: before or at retirement that’s part of what the industry calls the retirement

670
00:23:23,464 –> 00:23:27,784
[Tamiko Toland]: tier right which is a range of different options to suit two different needs

671
00:23:27,724 –> 00:23:28,724
[Tamiko Toland]: right

672
00:23:28,158 –> 00:23:29,158
[Ramsey Smith]: you could

673
00:23:28,504 –> 00:23:34,104
[Tamiko Toland]: but a lot of that is elective and not defaulted um you know it was interesting i

674
00:23:33,724 –> 00:23:34,724
[Tamiko Toland]: was

675
00:23:34,380 –> 00:23:35,380
[Paul Tyler]: out uh

676
00:23:34,424 –> 00:23:37,384
[Tamiko Toland]: at the deci a innovation forum and

677
00:23:37,860 –> 00:23:38,860
[Paul Tyler]: oh

678
00:23:38,664 –> 00:23:40,504
[Tamiko Toland]: somebody was presenting information about

679
00:23:42,264 –> 00:23:47,304
[Tamiko Toland]: engagement with plans and that defaulting is great for getting people into the

680
00:23:47,464 –> 00:23:50,664
[Tamiko Toland]: plan but people don’t engage with their plans as much when

681
00:23:50,340 –> 00:23:51,340
[Paul Tyler]: maybe

682
00:23:50,824 –> 00:23:56,504
[Tamiko Toland]: they’re simply defaulted right and so there’s kind of a tension between these

683
00:23:56,744 –> 00:23:57,864
[Tamiko Toland]: facts because you want

684
00:23:58,104 –> 00:24:00,744
[Tamiko Toland]: people to understand what they’re in and to perhaps

685
00:23:58,158 –> 00:23:59,158
[Ramsey Smith]: one one three

686
00:24:00,558 –> 00:24:01,558
[Ramsey Smith]: i watch

687
00:24:00,824 –> 00:24:04,744
[Tamiko Toland]: decide to increase their allocation right and so this is actually kind of a whole

688
00:24:04,824 –> 00:24:09,464
[Tamiko Toland]: other conversation around participant engagement that would also be beneficial

689
00:24:09,544 –> 00:24:11,624
[Tamiko Toland]: and also enhances because you know

690
00:24:11,460 –> 00:24:12,460
[Paul Tyler]: we

691
00:24:11,784 –> 00:24:14,184
[Tamiko Toland]: frankly people aren’t used to they use the idea

692
00:24:13,940 –> 00:24:14,940
[Paul Tyler]: yeah

693
00:24:14,504 –> 00:24:16,584
[Tamiko Toland]: of receiving income from their employer

694
00:24:17,484 –> 00:24:18,484
[Tamiko Toland]: through a pension

695
00:24:18,980 –> 00:24:19,980
[Paul Tyler]: but they’re not

696
00:24:19,224 –> 00:24:22,744
[Tamiko Toland]: but they’re not used to this as part of the four o one k because it’s it’s not a

697
00:24:22,824 –> 00:24:27,544
[Tamiko Toland]: standard part of the landscape frankly you know relatively few plans even offer

698
00:24:27,624 –> 00:24:28,664
[Tamiko Toland]: it on on the

699
00:24:28,638 –> 00:24:29,638
[Ramsey Smith]: i don’t know

700
00:24:28,744 –> 00:24:30,584
[Tamiko Toland]: outbound you when you retire

701
00:24:31,164 –> 00:24:32,164
[Tamiko Toland]: but

702
00:24:31,680 –> 00:24:34,480
[Paul Tyler]: but you know i i wanna ask there’s

703
00:24:31,838 –> 00:24:32,838
[Ramsey Smith]: but you know i

704
00:24:32,104 –> 00:24:35,704
[Tamiko Toland]: you know i i want to add one other thing that there’s another trend right now for

705
00:24:32,104 –> 00:24:35,704
[Tamiko Toland]: you know i i want to add one other thing that there’s another trend right now for

706
00:24:36,504 –> 00:24:42,024
[Tamiko Toland]: um more sponsors to want to keep retiree assets in plan and designing these

707
00:24:36,504 –> 00:24:42,024
[Tamiko Toland]: um more sponsors to want to keep retiree assets in plan and designing these

708
00:24:42,184 –> 00:24:45,064
[Tamiko Toland]: solutions also serves that interest

709
00:24:42,184 –> 00:24:45,064
[Tamiko Toland]: solutions also serves that interest

710
00:24:46,104 –> 00:24:47,224
[Tamiko Toland]: um it you

711
00:24:46,820 –> 00:24:47,820
[Paul Tyler]: yeah

712
00:24:46,884 –> 00:24:47,884
[Tamiko Toland]: know s

713
00:24:47,798 –> 00:24:48,798
[Ramsey Smith]: some sometimes

714
00:24:47,864 –> 00:24:50,104
[Tamiko Toland]: some some designs they may roll

715
00:24:49,838 –> 00:24:50,838
[Ramsey Smith]: wow

716
00:24:50,184 –> 00:24:52,424
[Tamiko Toland]: out but a lot of them you’re keeping

717
00:24:53,844 –> 00:24:54,844
[Tamiko Toland]: if not all the

718
00:24:54,358 –> 00:24:55,358
[Ramsey Smith]: all that

719
00:24:54,744 –> 00:24:57,704
[Tamiko Toland]: acids are bulk of them inside the plan so

720
00:24:57,940 –> 00:24:58,940
[Paul Tyler]: right

721
00:24:58,278 –> 00:24:59,278
[Ramsey Smith]: so

722
00:24:58,640 –> 00:25:01,360
[Paul Tyler]: amy sorry we just one follow up on that

723
00:25:03,760 –> 00:25:07,840
[Paul Tyler]: my experience has been it is so hard to change a form from an insurance company

724
00:25:08,080 –> 00:25:09,440
[Paul Tyler]: or a fourk provider

725
00:25:11,280 –> 00:25:15,200
[Paul Tyler]: do you have models sort of best language for introducing an income conversation

726
00:25:15,760 –> 00:25:19,200
[Paul Tyler]: because you know four hundred one thousand okay everybody kinda understands four

727
00:25:19,280 –> 00:25:23,600
[Paul Tyler]: on k well how old is paul tyler you know if i’m twenty one

728
00:25:24,960 –> 00:25:29,760
[Paul Tyler]: gee maybe i’m defaulting here but i should sort of hm maybe i take it down maybe

729
00:25:29,620 –> 00:25:30,620
[Paul Tyler]: i’m

730
00:25:31,280 –> 00:25:36,320
[Paul Tyler]: actually in my fifty seconds maybe i should like allocate that initially more i

731
00:25:36,320 –> 00:25:41,040
[Paul Tyler]: mean do you have models that say this is the language it should be there for so

732
00:25:41,120 –> 00:25:44,800
[Paul Tyler]: paul makes the best optimal decision when i set it up

733
00:25:46,564 –> 00:25:47,564
[Tamiko Toland]: yeah it’s a good question

734
00:25:47,324 –> 00:25:48,324
[Tamiko Toland]: and

735
00:25:47,398 –> 00:25:48,398
[Ramsey Smith]: like you

736
00:25:47,620 –> 00:25:48,620
[Paul Tyler]: no

737
00:25:48,024 –> 00:25:52,664
[Tamiko Toland]: there aren’t models for it i mean the only model is you know i would say the

738
00:25:52,744 –> 00:25:55,624
[Tamiko Toland]: largest plan out there um if you look

739
00:25:55,300 –> 00:25:56,300
[Paul Tyler]: yeah

740
00:25:55,704 –> 00:25:59,864
[Tamiko Toland]: at rath on’s participant communications they do an excellent job

741
00:25:59,558 –> 00:26:00,558
[Ramsey Smith]: job

742
00:26:00,124 –> 00:26:01,124
[Tamiko Toland]: of

743
00:26:01,158 –> 00:26:02,158
[Ramsey Smith]: showing

744
00:26:01,224 –> 00:26:04,344
[Tamiko Toland]: showing different personas of different folks who would want to

745
00:26:03,958 –> 00:26:04,958
[Ramsey Smith]: one

746
00:26:04,424 –> 00:26:08,584
[Tamiko Toland]: stay in the plan or in in that uh guaranteed income option or

747
00:26:08,398 –> 00:26:09,398
[Ramsey Smith]: what else

748
00:26:08,684 –> 00:26:09,684
[Tamiko Toland]: not right

749
00:26:10,524 –> 00:26:11,524
[Tamiko Toland]: but you know

750
00:26:11,384 –> 00:26:14,504
[Tamiko Toland]: i think part of the understanding of this is that there are also

751
00:26:11,458 –> 00:26:13,058
[Ramsey Smith]: yeah i think more fun

752
00:26:14,100 –> 00:26:15,100
[Paul Tyler]: are

753
00:26:14,664 –> 00:26:18,024
[Tamiko Toland]: different models of how how they work and at

754
00:26:14,738 –> 00:26:16,098
[Ramsey Smith]: are watching house

755
00:26:17,798 –> 00:26:18,798
[Ramsey Smith]: that

756
00:26:17,804 –> 00:26:18,804
[Tamiko Toland]: what

757
00:26:18,300 –> 00:26:19,300
[Paul Tyler]: what point

758
00:26:18,584 –> 00:26:22,264
[Tamiko Toland]: point you are accumulating that future income and so much of that really

759
00:26:18,584 –> 00:26:22,264
[Tamiko Toland]: point you are accumulating that future income and so much of that really

760
00:26:22,424 –> 00:26:27,544
[Tamiko Toland]: ultimately comes down to how the solution works but for the most part there’s you

761
00:26:22,424 –> 00:26:27,544
[Tamiko Toland]: ultimately comes down to how the solution works but for the most part there’s you

762
00:26:27,544 –> 00:26:29,464
[Tamiko Toland]: know there’s an idea that at a certain age

763
00:26:27,544 –> 00:26:29,464
[Tamiko Toland]: know there’s an idea that at a certain age

764
00:26:28,780 –> 00:26:29,780
[Paul Tyler]: seventies

765
00:26:30,164 –> 00:26:31,164
[Tamiko Toland]: you have

766
00:26:30,620 –> 00:26:31,620
[Paul Tyler]: i like

767
00:26:30,824 –> 00:26:32,344
[Tamiko Toland]: a glide path into income

768
00:26:33,040 –> 00:26:34,880
[Paul Tyler]: it’s just like you have a good life

769
00:26:33,224 –> 00:26:37,384
[Tamiko Toland]: just like you would have a a glide path with a regular target day fund and so

770
00:26:37,084 –> 00:26:38,084
[Tamiko Toland]: that’s

771
00:26:37,300 –> 00:26:38,300
[Paul Tyler]: how

772
00:26:37,784 –> 00:26:41,064
[Tamiko Toland]: how a lot of them actually work um so it’s

773
00:26:42,084 –> 00:26:43,084
[Tamiko Toland]: you know when you think about

774
00:26:43,118 –> 00:26:44,118
[Ramsey Smith]: about the

775
00:26:43,224 –> 00:26:46,744
[Tamiko Toland]: the the range of different participants and their ages it

776
00:26:46,340 –> 00:26:47,340
[Paul Tyler]: you

777
00:26:46,824 –> 00:26:49,064
[Tamiko Toland]: may be completely irrelevant if you’re thirty

778
00:26:46,824 –> 00:26:49,064
[Tamiko Toland]: may be completely irrelevant if you’re thirty

779
00:26:46,898 –> 00:26:48,658
[Ramsey Smith]: it maybe holiday

780
00:26:50,504 –> 00:26:51,864
[Tamiko Toland]: because you’re not going to be

781
00:26:52,598 –> 00:26:53,598
[Ramsey Smith]: yeah

782
00:26:52,744 –> 00:26:55,784
[Tamiko Toland]: investing in it yet you know you’re not going to be accumulating that future

783
00:26:55,764 –> 00:26:56,764
[Tamiko Toland]: income

784
00:26:57,244 –> 00:26:58,244
[Tamiko Toland]: yet

785
00:26:57,478 –> 00:26:58,478
[Ramsey Smith]: yeah

786
00:26:58,264 –> 00:26:59,544
[Tamiko Toland]: knowing that that is something that

787
00:26:59,220 –> 00:27:00,220
[Paul Tyler]: y

788
00:26:59,704 –> 00:27:00,824
[Tamiko Toland]: will happen in the future

789
00:27:00,478 –> 00:27:01,478
[Ramsey Smith]: the future

790
00:27:01,484 –> 00:27:02,484
[Tamiko Toland]: can be quite

791
00:27:01,860 –> 00:27:02,860
[Paul Tyler]: we

792
00:27:02,424 –> 00:27:06,264
[Tamiko Toland]: reassuring to employees and it would be potentially an inducement to

793
00:27:05,860 –> 00:27:06,860
[Paul Tyler]: zero

794
00:27:06,264 –> 00:27:10,184
[Tamiko Toland]: stay at a company if you were considering you know going somewhere else so i

795
00:27:09,980 –> 00:27:10,980
[Paul Tyler]: ninety nine

796
00:27:10,238 –> 00:27:11,238
[Ramsey Smith]: ninety nine by

797
00:27:10,324 –> 00:27:11,324
[Tamiko Toland]: you know i i could see

798
00:27:11,740 –> 00:27:12,740
[Paul Tyler]: i get

799
00:27:12,184 –> 00:27:14,984
[Tamiko Toland]: again this goes more to the participants like

800
00:27:14,580 –> 00:27:15,580
[Paul Tyler]: like

801
00:27:15,144 –> 00:27:21,064
[Tamiko Toland]: the idea of income you know uh mindset as opposed to this is beneficial for the

802
00:27:20,964 –> 00:27:21,964
[Tamiko Toland]: sponsors i

803
00:27:21,460 –> 00:27:22,460
[Paul Tyler]: maybe

804
00:27:22,024 –> 00:27:23,864
[Tamiko Toland]: it’s beneficial for everybody frankly

805
00:27:24,518 –> 00:27:25,518
[Ramsey Smith]: so

806
00:27:25,120 –> 00:27:26,560
[Paul Tyler]: no i wanted to say that before

807
00:27:25,138 –> 00:27:29,298
[Ramsey Smith]: i wanted to pick up on what you were saying about staying in plan

808
00:27:30,338 –> 00:27:34,338
[Ramsey Smith]: and this is something that’s that’s been a particular interest to me and

809
00:27:35,538 –> 00:27:37,778
[Ramsey Smith]: i want to hear what you think about what the potential

810
00:27:38,898 –> 00:27:43,138
[Ramsey Smith]: implications are well first of all what are the what is the motivation start with

811
00:27:38,898 –> 00:27:43,138
[Ramsey Smith]: implications are well first of all what are the what is the motivation start with

812
00:27:39,060 –> 00:27:40,060
[Paul Tyler]: she

813
00:27:43,458 –> 00:27:49,218
[Ramsey Smith]: the motivation for for plan sponsors wanting to keep keep people in plan you know

814
00:27:43,458 –> 00:27:49,218
[Ramsey Smith]: the motivation for for plan sponsors wanting to keep keep people in plan you know

815
00:27:49,458 –> 00:27:54,658
[Ramsey Smith]: not just into retirement but through retirement then the second thing is would be

816
00:27:49,458 –> 00:27:54,658
[Ramsey Smith]: not just into retirement but through retirement then the second thing is would be

817
00:27:55,378 –> 00:28:00,178
[Ramsey Smith]: you know what are the implications and requirements for them and how that might

818
00:27:55,378 –> 00:28:00,178
[Ramsey Smith]: you know what are the implications and requirements for them and how that might

819
00:28:00,338 –> 00:28:04,338
[Ramsey Smith]: be different than what they’ve done in the past so let’s first start start with

820
00:28:00,338 –> 00:28:04,338
[Ramsey Smith]: be different than what they’ve done in the past so let’s first start start with

821
00:28:04,418 –> 00:28:09,858
[Ramsey Smith]: the motivation like why do you think a planned sponsor would not want to just

822
00:28:04,418 –> 00:28:09,858
[Ramsey Smith]: the motivation like why do you think a planned sponsor would not want to just

823
00:28:09,938 –> 00:28:13,618
[Ramsey Smith]: wash their hands of the retiree once they leave the company like

824
00:28:09,938 –> 00:28:13,618
[Ramsey Smith]: wash their hands of the retiree once they leave the company like

825
00:28:14,738 –> 00:28:18,178
[Ramsey Smith]: why where are we now in a world where maybe they want to keep people in plan for

826
00:28:17,958 –> 00:28:18,958
[Ramsey Smith]: longer

827
00:28:19,404 –> 00:28:20,404
[Tamiko Toland]: well

828
00:28:20,000 –> 00:28:21,200
[Paul Tyler]: what do you breakfast

829
00:28:20,024 –> 00:28:24,664
[Tamiko Toland]: i think they are recognizing the advantages of scale right you keep more folks in

830
00:28:24,744 –> 00:28:28,904
[Tamiko Toland]: your you plan you have larger assets and then you were able to drive down costs i

831
00:28:28,984 –> 00:28:34,424
[Tamiko Toland]: mean that that’s a that’s a pretty basic dynamic from a pricing perspective

832
00:28:36,264 –> 00:28:39,624
[Tamiko Toland]: and like i say there’s blended models and what have you in terms of like what

833
00:28:39,784 –> 00:28:42,664
[Tamiko Toland]: happens with the actual income component um

834
00:28:43,704 –> 00:28:45,944
[Tamiko Toland]: and i i think there’s there’s always

835
00:28:46,000 –> 00:28:47,840
[Paul Tyler]: we we settled from

836
00:28:46,264 –> 00:28:49,704
[Tamiko Toland]: there are much more subtle conversations and probably differences among different

837
00:28:49,864 –> 00:28:52,504
[Tamiko Toland]: types of sponsors um you

838
00:28:52,124 –> 00:28:53,124
[Tamiko Toland]: know

839
00:28:52,180 –> 00:28:53,180
[Paul Tyler]: yeah

840
00:28:52,278 –> 00:28:53,278
[Ramsey Smith]: so

841
00:28:52,904 –> 00:28:56,984
[Tamiko Toland]: i think the traditional mindset has really been like you know oh this

842
00:28:57,380 –> 00:28:58,380
[Paul Tyler]: it

843
00:28:57,398 –> 00:28:58,398
[Ramsey Smith]: yeah

844
00:28:57,624 –> 00:28:58,744
[Tamiko Toland]: participant isn’t

845
00:28:59,300 –> 00:29:00,300
[Paul Tyler]: even a work

846
00:28:59,304 –> 00:29:02,344
[Tamiko Toland]: isn’t a worker here anymore so we just we want

847
00:29:01,940 –> 00:29:02,940
[Paul Tyler]: what

848
00:29:02,424 –> 00:29:05,944
[Tamiko Toland]: to kind of sever that responsibility because it is a fiduciary relationship

849
00:29:02,424 –> 00:29:05,944
[Tamiko Toland]: to kind of sever that responsibility because it is a fiduciary relationship

850
00:29:06,844 –> 00:29:07,844
[Tamiko Toland]: um but

851
00:29:07,220 –> 00:29:08,220
[Paul Tyler]: like

852
00:29:07,718 –> 00:29:08,718
[Ramsey Smith]: but you

853
00:29:07,784 –> 00:29:11,784
[Tamiko Toland]: you know there there are advantages too frankly for the worker

854
00:29:12,664 –> 00:29:15,944
[Tamiko Toland]: right that you know this i because it is a fiduciary relationship

855
00:29:12,720 –> 00:29:14,720
[Paul Tyler]: right but you could be

856
00:29:17,304 –> 00:29:20,424
[Tamiko Toland]: and you know you may be able to take advantage of things you’re not gonna get

857
00:29:17,304 –> 00:29:20,424
[Tamiko Toland]: and you know you may be able to take advantage of things you’re not gonna get

858
00:29:17,378 –> 00:29:18,738
[Ramsey Smith]: yeah maybe you

859
00:29:20,664 –> 00:29:21,944
[Tamiko Toland]: elsewhere so

860
00:29:20,664 –> 00:29:21,944
[Tamiko Toland]: elsewhere so

861
00:29:22,898 –> 00:29:26,178
[Ramsey Smith]: so sorry i wanna just just follow up on this paul so

862
00:29:26,838 –> 00:29:27,838
[Ramsey Smith]: so

863
00:29:27,420 –> 00:29:28,420
[Paul Tyler]: what weekend

864
00:29:27,458 –> 00:29:32,818
[Ramsey Smith]: i’m with you i’m with you and i and i i agree a it’s it’s it’s part and parcel

865
00:29:32,580 –> 00:29:33,580
[Paul Tyler]: what

866
00:29:32,978 –> 00:29:37,218
[Ramsey Smith]: why this is an attractive opportunity for plan sponsors and frankly for asset

867
00:29:37,298 –> 00:29:38,578
[Ramsey Smith]: managers and carriers

868
00:29:39,778 –> 00:29:43,858
[Ramsey Smith]: the one question though was so at that at that point of transition so you are a

869
00:29:43,938 –> 00:29:49,698
[Ramsey Smith]: fiduciary and you now want somebody to stay in plan you know after age sixty five

870
00:29:50,418 –> 00:29:54,418
[Ramsey Smith]: but now this person in theory can go a lot of other places right they can roll

871
00:29:54,498 –> 00:29:56,178
[Ramsey Smith]: over and go to you know any number

872
00:29:57,298 –> 00:30:03,938
[Ramsey Smith]: of sort of established you know asset manager sort of providers or broker broker

873
00:30:04,018 –> 00:30:09,138
[Ramsey Smith]: dealer providers who have these entire suites of services and so in some sense

874
00:30:09,378 –> 00:30:12,898
[Ramsey Smith]: you’re telling the person well you should stay here with what we offer the

875
00:30:13,058 –> 00:30:16,898
[Ramsey Smith]: service offering we have which may or may not be as expansive as all the other

876
00:30:17,058 –> 00:30:22,018
[Ramsey Smith]: things that they might do like is that is there a fiduciary responsibility there

877
00:30:22,258 –> 00:30:27,538
[Ramsey Smith]: that that is that is also quite different literally at the point of at the point

878
00:30:27,698 –> 00:30:31,698
[Ramsey Smith]: of transition and not just not just managing but but basically saying please stay

879
00:30:31,638 –> 00:30:32,638
[Ramsey Smith]: as opposed to going

880
00:30:33,644 –> 00:30:34,644
[Tamiko Toland]: yeah and i

881
00:30:34,100 –> 00:30:35,100
[Paul Tyler]: i don’t know

882
00:30:34,344 –> 00:30:36,344
[Tamiko Toland]: don’t know that the rhetoric is you should stay

883
00:30:37,118 –> 00:30:38,118
[Ramsey Smith]: yeah right

884
00:30:37,260 –> 00:30:38,260
[Paul Tyler]: i think they’re

885
00:30:37,384 –> 00:30:41,784
[Tamiko Toland]: i think they the rhetoric is much more hey this is the benefit that you’ve

886
00:30:37,384 –> 00:30:41,784
[Tamiko Toland]: i think they the rhetoric is much more hey this is the benefit that you’ve

887
00:30:41,784 –> 00:30:45,224
[Tamiko Toland]: accumulated and then you know you can make your own decision whether that’s with

888
00:30:41,784 –> 00:30:45,224
[Tamiko Toland]: accumulated and then you know you can make your own decision whether that’s with

889
00:30:44,844 –> 00:30:45,844
[Tamiko Toland]: the

890
00:30:44,844 –> 00:30:45,844
[Tamiko Toland]: the

891
00:30:46,504 –> 00:30:51,784
[Tamiko Toland]: with some some degree of guidance um or if that’s independent of that um and

892
00:30:51,684 –> 00:30:52,684
[Tamiko Toland]: there’s just information

893
00:30:53,544 –> 00:30:55,784
[Tamiko Toland]: that’s conveyed i mean there are a lot of

894
00:30:55,398 –> 00:30:56,398
[Ramsey Smith]: what

895
00:30:55,864 –> 00:30:57,544
[Tamiko Toland]: different models of how to do that but i

896
00:30:57,420 –> 00:30:58,420
[Paul Tyler]: i think that

897
00:30:57,704 –> 00:31:02,024
[Tamiko Toland]: i think the premise that it’s you should say because we want to keep your assets

898
00:31:02,104 –> 00:31:03,304
[Tamiko Toland]: in plan it is

899
00:31:03,544 –> 00:31:08,824
[Tamiko Toland]: probably not the way that i would think about it and also you know the rollover

900
00:31:03,600 –> 00:31:06,720
[Paul Tyler]: probably no week i about it i it also

901
00:31:09,064 –> 00:31:10,744
[Tamiko Toland]: situation right now is in flux

902
00:31:10,838 –> 00:31:11,838
[Ramsey Smith]: yeah

903
00:31:11,224 –> 00:31:15,304
[Tamiko Toland]: and so the relative ease with which that can happen is like that

904
00:31:15,378 –> 00:31:17,618
[Ramsey Smith]: that’s i think that’s very important

905
00:31:16,000 –> 00:31:17,760
[Paul Tyler]: i think that that works

906
00:31:16,024 –> 00:31:17,944
[Tamiko Toland]: i think that’s a at question so

907
00:31:18,980 –> 00:31:19,980
[Paul Tyler]: very

908
00:31:19,464 –> 00:31:24,424
[Tamiko Toland]: there is more reason for the sponsors to be offering like good

909
00:31:25,704 –> 00:31:27,384
[Tamiko Toland]: options within their plans

910
00:31:28,164 –> 00:31:29,164
[Tamiko Toland]: right um

911
00:31:29,944 –> 00:31:32,584
[Tamiko Toland]: and we’ll we’ll just see we’ll see how things evolve it’s just going to say you

912
00:31:32,664 –> 00:31:34,744
[Tamiko Toland]: know adoptions not quick that and that’s reality

913
00:31:35,440 –> 00:31:36,560
[Paul Tyler]: yeah i’m trying to think if i

914
00:31:35,698 –> 00:31:40,338
[Ramsey Smith]: it’s just hard to figure out whether whether the new rollover rules create more

915
00:31:40,498 –> 00:31:45,458
[Ramsey Smith]: problems for the people that are trying to be rolled over into right or if they

916
00:31:45,060 –> 00:31:46,060
[Paul Tyler]: so

917
00:31:45,618 –> 00:31:51,298
[Ramsey Smith]: also create similar challenges for for for somebody that says don’t roll out

918
00:31:51,718 –> 00:31:52,718
[Ramsey Smith]: right that’s

919
00:31:53,858 –> 00:31:58,498
[Ramsey Smith]: these are open issues but uh it’s the complexity the complexity is striking to me

920
00:31:58,800 –> 00:32:03,760
[Paul Tyler]: yeah i think for our listeners who are independent agents or advisors

921
00:32:05,200 –> 00:32:10,240
[Paul Tyler]: you know the plus is the employers have started that income conversation

922
00:32:11,078 –> 00:32:12,078
[Ramsey Smith]: so

923
00:32:11,120 –> 00:32:15,440
[Paul Tyler]: temco in a way that they at least start to understand they all understood asset

924
00:32:15,520 –> 00:32:19,840
[Paul Tyler]: allocation now they’re starting to understand income rams you brought up a really

925
00:32:20,000 –> 00:32:24,080
[Paul Tyler]: good question which is wow this would be really difficult to roll over you know

926
00:32:24,160 –> 00:32:25,600
[Paul Tyler]: we already have some some

927
00:32:26,640 –> 00:32:31,520
[Paul Tyler]: you know rules from the dol you know coming in to making it very difficult to do

928
00:32:31,580 –> 00:32:32,580
[Paul Tyler]: this properly but

929
00:32:34,560 –> 00:32:38,080
[Paul Tyler]: now you i’ve got a little bit of tension you know with some of the plan providers

930
00:32:38,800 –> 00:32:39,840
[Paul Tyler]: and where that money’s going

931
00:32:43,804 –> 00:32:44,804
[Tamiko Toland]: i mean i think that would

932
00:32:44,420 –> 00:32:45,420
[Paul Tyler]: we

933
00:32:44,824 –> 00:32:45,944
[Tamiko Toland]: be more true if we

934
00:32:45,700 –> 00:32:46,700
[Paul Tyler]: had

935
00:32:46,104 –> 00:32:49,784
[Tamiko Toland]: had current wider adoption of lifetime income within

936
00:32:49,540 –> 00:32:50,540
[Paul Tyler]: like

937
00:32:49,864 –> 00:32:52,184
[Tamiko Toland]: plants and it’s just that it’s it’s not significant

938
00:32:53,224 –> 00:32:55,784
[Tamiko Toland]: right we we need to see more of it and

939
00:32:56,364 –> 00:32:57,364
[Tamiko Toland]: it

940
00:32:58,284 –> 00:32:59,284
[Tamiko Toland]: the

941
00:32:58,660 –> 00:32:59,660
[Paul Tyler]: like

942
00:32:58,904 –> 00:33:01,624
[Tamiko Toland]: cycle of getting things adopted is very

943
00:33:01,380 –> 00:33:02,380
[Paul Tyler]: very different

944
00:33:01,784 –> 00:33:06,824
[Tamiko Toland]: different from simply selling somebody an annuity in the retail space right so i

945
00:33:07,544 –> 00:33:09,144
[Tamiko Toland]: i mean i don’t see that as being a

946
00:33:10,424 –> 00:33:15,864
[Tamiko Toland]: a present issue and we don’t know actually what will ultimately happen as far as

947
00:33:16,184 –> 00:33:21,784
[Tamiko Toland]: rollovers out of plans so i you know we can we can speculate we want about that

948
00:33:21,220 –> 00:33:22,220
[Paul Tyler]: about that

949
00:33:23,040 –> 00:33:24,480
[Paul Tyler]: i never said what

950
00:33:23,064 –> 00:33:26,904
[Tamiko Toland]: i mean i think that a lot of this conversation frankly and i’ve i’ve said this

951
00:33:27,064 –> 00:33:32,664
[Tamiko Toland]: whole time and with uh the lifetime income illustrations that are going to be

952
00:33:32,744 –> 00:33:35,064
[Tamiko Toland]: peering on people’s four o one k statements

953
00:33:35,484 –> 00:33:36,484
[Tamiko Toland]: that’s

954
00:33:35,580 –> 00:33:36,580
[Paul Tyler]: i know

955
00:33:35,878 –> 00:33:36,878
[Ramsey Smith]: that’s all

956
00:33:36,184 –> 00:33:39,304
[Tamiko Toland]: all of an opportunity for retail right

957
00:33:38,998 –> 00:33:39,998
[Ramsey Smith]: dr

958
00:33:39,624 –> 00:33:41,224
[Tamiko Toland]: because you know when you see

959
00:33:40,900 –> 00:33:41,900
[Paul Tyler]: see oh

960
00:33:40,924 –> 00:33:41,924
[Tamiko Toland]: oh

961
00:33:41,544 –> 00:33:44,504
[Tamiko Toland]: i my four o one k could turn into this

962
00:33:41,618 –> 00:33:43,298
[Ramsey Smith]: oh i like he’s good

963
00:33:44,598 –> 00:33:45,598
[Ramsey Smith]: your

964
00:33:44,724 –> 00:33:45,724
[Tamiko Toland]: guaranteed income

965
00:33:46,844 –> 00:33:47,844
[Tamiko Toland]: yet

966
00:33:47,060 –> 00:33:48,060
[Paul Tyler]: they

967
00:33:47,464 –> 00:33:50,824
[Tamiko Toland]: there’s literally no way to possibly do that within my existing plan

968
00:33:50,980 –> 00:33:51,980
[Paul Tyler]: break

969
00:33:51,324 –> 00:33:52,324
[Tamiko Toland]: right so when

970
00:33:53,544 –> 00:33:56,024
[Tamiko Toland]: when you you you run into this logistical challenge

971
00:33:56,664 –> 00:34:00,584
[Tamiko Toland]: but you start thinking about what to do with your retirement savings in a

972
00:33:56,720 –> 00:33:58,080
[Paul Tyler]: like think about

973
00:34:00,664 –> 00:34:03,064
[Tamiko Toland]: different way you know like i say i think that that is a

974
00:34:02,660 –> 00:34:03,660
[Paul Tyler]: g

975
00:34:03,144 –> 00:34:05,384
[Tamiko Toland]: great opportunity in the face of some potential

976
00:34:06,500 –> 00:34:07,500
[Paul Tyler]: right

977
00:34:06,984 –> 00:34:12,584
[Tamiko Toland]: compliance challenges right so there’s a lot of forces at play right now for sure

978
00:34:13,440 –> 00:34:14,560
[Paul Tyler]: now there are a

979
00:34:14,118 –> 00:34:15,118
[Ramsey Smith]: are

980
00:34:14,640 –> 00:34:18,720
[Paul Tyler]: large number of big plans like you described like raytheon with

981
00:34:20,140 –> 00:34:21,140
[Paul Tyler]: good hr

982
00:34:20,598 –> 00:34:21,598
[Ramsey Smith]: t

983
00:34:20,900 –> 00:34:21,900
[Paul Tyler]: benefits

984
00:34:22,880 –> 00:34:28,320
[Paul Tyler]: professionals tremendous support from from advisors for the plan but they are

985
00:34:28,480 –> 00:34:32,720
[Paul Tyler]: like a lot more small plants with fewer participants

986
00:34:32,684 –> 00:34:33,684
[Tamiko Toland]: just

987
00:34:34,000 –> 00:34:39,120
[Paul Tyler]: tim k do you think the equation or how sponsors are going to think about it will

988
00:34:39,280 –> 00:34:42,560
[Paul Tyler]: change when you start to go down and maybe you only have ten employees maybe have

989
00:34:42,720 –> 00:34:47,680
[Paul Tyler]: fifteen employees um do you think the adoption challenge will be any different or

990
00:34:47,920 –> 00:34:51,760
[Paul Tyler]: will it’ll be just effectively same set of considerations

991
00:34:53,484 –> 00:34:54,484
[Tamiko Toland]: well i think you know

992
00:34:56,344 –> 00:35:00,664
[Tamiko Toland]: really what’s going to happen is we’re going to see an increase in adoption right

993
00:35:00,844 –> 00:35:01,844
[Tamiko Toland]: it it

994
00:35:01,260 –> 00:35:02,260
[Paul Tyler]: eating

995
00:35:01,544 –> 00:35:05,384
[Tamiko Toland]: is going to happen for sure is it is happening right now but

996
00:35:04,980 –> 00:35:05,980
[Paul Tyler]: what

997
00:35:05,078 –> 00:35:06,078
[Ramsey Smith]: what

998
00:35:05,204 –> 00:35:06,204
[Tamiko Toland]: it’s um

999
00:35:06,100 –> 00:35:07,100
[Paul Tyler]: that

1000
00:35:06,504 –> 00:35:12,344
[Tamiko Toland]: as that picks up i think it will make um make it more of a competitive issue for

1001
00:35:12,044 –> 00:35:13,044
[Tamiko Toland]: than

1002
00:35:12,260 –> 00:35:13,260
[Paul Tyler]: that

1003
00:35:12,744 –> 00:35:17,624
[Tamiko Toland]: it shifts to making a competitive issue for employers right in addition to all

1004
00:35:12,744 –> 00:35:17,624
[Tamiko Toland]: it shifts to making a competitive issue for employers right in addition to all

1005
00:35:17,704 –> 00:35:21,544
[Tamiko Toland]: the other reasons that people should be or you know plant sponsor should be

1006
00:35:17,704 –> 00:35:21,544
[Tamiko Toland]: the other reasons that people should be or you know plant sponsor should be

1007
00:35:21,624 –> 00:35:25,704
[Tamiko Toland]: considering it and i think we’ll see more solutions that are particularly

1008
00:35:21,624 –> 00:35:25,704
[Tamiko Toland]: considering it and i think we’ll see more solutions that are particularly

1009
00:35:25,784 –> 00:35:31,144
[Tamiko Toland]: tailored for that market right so you know some of them are really designed more

1010
00:35:25,784 –> 00:35:31,144
[Tamiko Toland]: tailored for that market right so you know some of them are really designed more

1011
00:35:31,304 –> 00:35:33,864
[Tamiko Toland]: for the larger plants for i think obvious reasons

1012
00:35:31,304 –> 00:35:33,864
[Tamiko Toland]: for the larger plants for i think obvious reasons

1013
00:35:35,064 –> 00:35:38,264
[Tamiko Toland]: and we’ve seen availability for smaller plans but then adoptions low because

1014
00:35:38,364 –> 00:35:39,364
[Tamiko Toland]: they’re not necessarily they

1015
00:35:39,398 –> 00:35:40,398
[Ramsey Smith]: what

1016
00:35:39,864 –> 00:35:44,664
[Tamiko Toland]: may include it in the plan but it’s not the qa and so like that’s

1017
00:35:44,824 –> 00:35:47,864
[Tamiko Toland]: that’s like the big shift i think for everyone and and we

1018
00:35:44,898 –> 00:35:46,418
[Ramsey Smith]: like that that’s like the

1019
00:35:44,940 –> 00:35:45,940
[Paul Tyler]: not se

1020
00:35:47,944 –> 00:35:50,744
[Tamiko Toland]: whether that’s an appropriate choice for a small sponsor that’s

1021
00:35:48,000 –> 00:35:49,280
[Paul Tyler]: it was a hurry

1022
00:35:50,980 –> 00:35:51,980
[Paul Tyler]: that’s

1023
00:35:51,144 –> 00:35:52,264
[Tamiko Toland]: a different question i i’m

1024
00:35:52,620 –> 00:35:53,620
[Paul Tyler]: yeah i’m not think it is

1025
00:35:52,664 –> 00:35:54,184
[Tamiko Toland]: not saying it is or isn’t um

1026
00:35:54,904 –> 00:35:58,504
[Tamiko Toland]: but i think that that’s a thing to think about when you have very few employees

1027
00:35:54,904 –> 00:35:58,504
[Tamiko Toland]: but i think that that’s a thing to think about when you have very few employees

1028
00:35:54,960 –> 00:35:57,360
[Paul Tyler]: oh but i think i think about

1029
00:36:00,024 –> 00:36:01,064
[Tamiko Toland]: you’re gonna be thinking about their

1030
00:36:00,900 –> 00:36:01,900
[Paul Tyler]: saturday

1031
00:36:01,224 –> 00:36:03,384
[Tamiko Toland]: needs really differently and much more

1032
00:36:05,144 –> 00:36:10,344
[Tamiko Toland]: for those individuals and you know then let’s think about peps and and what have

1033
00:36:10,044 –> 00:36:11,044
[Tamiko Toland]: you

1034
00:36:10,740 –> 00:36:11,740
[Paul Tyler]: like

1035
00:36:10,804 –> 00:36:11,804
[Tamiko Toland]: but um

1036
00:36:12,404 –> 00:36:13,404
[Tamiko Toland]: you know it

1037
00:36:12,844 –> 00:36:13,844
[Tamiko Toland]: like

1038
00:36:13,060 –> 00:36:14,060
[Paul Tyler]: like

1039
00:36:13,138 –> 00:36:15,058
[Ramsey Smith]: you know it’s like a different type of story

1040
00:36:13,464 –> 00:36:15,864
[Tamiko Toland]: i say it’s a different set of considerations in the space

1041
00:36:15,460 –> 00:36:16,460
[Paul Tyler]: see

1042
00:36:16,404 –> 00:36:17,404
[Tamiko Toland]: and that

1043
00:36:16,980 –> 00:36:17,980
[Paul Tyler]: that one

1044
00:36:17,138 –> 00:36:18,578
[Ramsey Smith]: and c sp

1045
00:36:17,224 –> 00:36:22,184
[Tamiko Toland]: learning curve which is one of the reasons that you know we really uh wanted to

1046
00:36:21,844 –> 00:36:22,844
[Tamiko Toland]: see the

1047
00:36:22,220 –> 00:36:23,220
[Paul Tyler]: you like

1048
00:36:22,504 –> 00:36:24,024
[Tamiko Toland]: lifetime income consortium come

1049
00:36:23,700 –> 00:36:24,700
[Paul Tyler]: yeah

1050
00:36:24,184 –> 00:36:28,344
[Tamiko Toland]: together because we can get the education out there you know it’s a large group

1051
00:36:28,584 –> 00:36:30,344
[Tamiko Toland]: of very very different solution

1052
00:36:30,744 –> 00:36:32,024
[Tamiko Toland]: providers that are

1053
00:36:31,040 –> 00:36:32,240
[Paul Tyler]: was saturd

1054
00:36:31,638 –> 00:36:32,638
[Ramsey Smith]: yeah

1055
00:36:32,264 –> 00:36:38,744
[Tamiko Toland]: you know really deciding that it’s more important for them to work in concert

1056
00:36:38,678 –> 00:36:39,678
[Ramsey Smith]: yeah

1057
00:36:39,544 –> 00:36:41,544
[Tamiko Toland]: to get the message out to improve education

1058
00:36:39,544 –> 00:36:41,544
[Tamiko Toland]: to get the message out to improve education

1059
00:36:42,744 –> 00:36:45,704
[Tamiko Toland]: and to reduce some of the the compliance hurdles

1060
00:36:47,118 –> 00:36:48,118
[Ramsey Smith]: so how

1061
00:36:47,780 –> 00:36:48,780
[Paul Tyler]: how do you think about it

1062
00:36:47,858 –> 00:36:52,658
[Ramsey Smith]: do you think about you know the mandate of of this new organization versus there

1063
00:36:52,738 –> 00:36:56,018
[Ramsey Smith]: are some other educational organizations in the space right

1064
00:36:55,964 –> 00:36:56,964
[Tamiko Toland]: yeah

1065
00:36:56,738 –> 00:37:00,338
[Ramsey Smith]: there’s the alliance for lifelong income there’s limma the all friends of the

1066
00:37:00,198 –> 00:37:01,198
[Ramsey Smith]: show by the way

1067
00:37:01,644 –> 00:37:02,644
[Tamiko Toland]: yeah

1068
00:37:03,298 –> 00:37:05,698
[Ramsey Smith]: uh curious how like you view

1069
00:37:06,738 –> 00:37:10,498
[Ramsey Smith]: the mandate of this consortium as being

1070
00:37:10,204 –> 00:37:11,204
[Tamiko Toland]: so

1071
00:37:10,658 –> 00:37:14,898
[Ramsey Smith]: different or what’s the sort of unique element that you guys are focusing on

1072
00:37:16,338 –> 00:37:19,938
[Ramsey Smith]: is it the complete focus on this one particular space is there anything else

1073
00:37:20,098 –> 00:37:21,138
[Ramsey Smith]: about it stylistically

1074
00:37:22,738 –> 00:37:25,378
[Ramsey Smith]: that’s part of your mo that you can share with us

1075
00:37:26,204 –> 00:37:27,204
[Tamiko Toland]: sure

1076
00:37:26,780 –> 00:37:27,780
[Paul Tyler]: sure i mean i think

1077
00:37:26,904 –> 00:37:28,504
[Tamiko Toland]: i you know i think you

1078
00:37:28,984 –> 00:37:31,544
[Tamiko Toland]: we’re also very friendly with the other

1079
00:37:29,040 –> 00:37:31,920
[Paul Tyler]: we’re also great friends the other one

1080
00:37:31,878 –> 00:37:32,878
[Ramsey Smith]: yeah

1081
00:37:31,884 –> 00:37:32,884
[Tamiko Toland]: organizations out there

1082
00:37:33,964 –> 00:37:34,964
[Tamiko Toland]: and

1083
00:37:34,598 –> 00:37:35,598
[Ramsey Smith]: and yeah

1084
00:37:34,604 –> 00:37:35,604
[Tamiko Toland]: yes

1085
00:37:35,140 –> 00:37:36,140
[Paul Tyler]: get married

1086
00:37:35,384 –> 00:37:37,944
[Tamiko Toland]: education is a component of what we’re doing

1087
00:37:39,064 –> 00:37:42,664
[Tamiko Toland]: but we’re not an educational organization we’re we’re actually our

1088
00:37:42,460 –> 00:37:43,460
[Paul Tyler]: mm hm

1089
00:37:42,804 –> 00:37:43,804
[Tamiko Toland]: goal is commercial

1090
00:37:44,078 –> 00:37:45,078
[Ramsey Smith]: there we go

1091
00:37:44,504 –> 00:37:47,064
[Tamiko Toland]: and commercially we want to see

1092
00:37:48,104 –> 00:37:50,504
[Tamiko Toland]: broader adoption of these solutions and

1093
00:37:50,420 –> 00:37:51,420
[Paul Tyler]: so it

1094
00:37:50,664 –> 00:37:51,784
[Tamiko Toland]: so it’s a commercial

1095
00:37:52,824 –> 00:37:54,904
[Tamiko Toland]: look at the problem not simply throwing out

1096
00:37:54,678 –> 00:37:55,678
[Ramsey Smith]: got

1097
00:37:55,064 –> 00:37:58,184
[Tamiko Toland]: education but education saying okay well what are the challenges how

1098
00:37:58,140 –> 00:37:59,140
[Paul Tyler]: how c

1099
00:37:58,264 –> 00:37:59,704
[Tamiko Toland]: can we help close those gaps

1100
00:37:59,844 –> 00:38:00,844
[Tamiko Toland]: and then

1101
00:38:00,320 –> 00:38:02,000
[Paul Tyler]: and then where are their an

1102
00:38:00,398 –> 00:38:01,398
[Ramsey Smith]: and we

1103
00:38:00,584 –> 00:38:05,224
[Tamiko Toland]: you know where are their actual like logistical adoption issues like say with the

1104
00:38:05,304 –> 00:38:08,744
[Tamiko Toland]: record keepers right ’cause the record keepers are the ones that

1105
00:38:08,340 –> 00:38:09,340
[Paul Tyler]: that

1106
00:38:08,978 –> 00:38:10,098
[Ramsey Smith]: yeah like you

1107
00:38:09,224 –> 00:38:11,064
[Tamiko Toland]: frankly are holding the keys on this

1108
00:38:11,380 –> 00:38:12,380
[Paul Tyler]: oh

1109
00:38:11,784 –> 00:38:13,304
[Tamiko Toland]: ultimately right

1110
00:38:13,220 –> 00:38:14,220
[Paul Tyler]: and

1111
00:38:13,624 –> 00:38:14,744
[Tamiko Toland]: and you know they

1112
00:38:14,804 –> 00:38:15,804
[Tamiko Toland]: are they are

1113
00:38:14,880 –> 00:38:16,080
[Paul Tyler]: they they are not

1114
00:38:15,478 –> 00:38:16,478
[Ramsey Smith]: they are

1115
00:38:15,864 –> 00:38:17,704
[Tamiko Toland]: not jumping into the pool

1116
00:38:18,924 –> 00:38:19,924
[Tamiko Toland]: right

1117
00:38:19,318 –> 00:38:20,318
[Ramsey Smith]: spray

1118
00:38:19,784 –> 00:38:20,904
[Tamiko Toland]: and so you know

1119
00:38:20,660 –> 00:38:21,660
[Paul Tyler]: got

1120
00:38:20,724 –> 00:38:21,724
[Tamiko Toland]: that is

1121
00:38:23,224 –> 00:38:27,304
[Tamiko Toland]: it’s a concern that we’re all listening to and we just want to make sure that all

1122
00:38:27,384 –> 00:38:28,504
[Tamiko Toland]: the dots are lining up

1123
00:38:29,544 –> 00:38:32,104
[Tamiko Toland]: to make this a reality and we want to hear from

1124
00:38:33,304 –> 00:38:35,464
[Tamiko Toland]: from the folks that are are really in the front

1125
00:38:35,140 –> 00:38:36,140
[Paul Tyler]: why

1126
00:38:35,544 –> 00:38:36,824
[Tamiko Toland]: lines and

1127
00:38:36,740 –> 00:38:37,740
[Paul Tyler]: you

1128
00:38:36,984 –> 00:38:40,664
[Tamiko Toland]: hearing the objections dealing with those challenges to help

1129
00:38:40,260 –> 00:38:41,260
[Paul Tyler]: help

1130
00:38:40,904 –> 00:38:42,344
[Tamiko Toland]: solve those challenges so

1131
00:38:42,980 –> 00:38:43,980
[Paul Tyler]: where you

1132
00:38:43,064 –> 00:38:46,504
[Tamiko Toland]: we’re just in year one right of the consortium so we’re just

1133
00:38:46,744 –> 00:38:50,744
[Tamiko Toland]: establishing really the basics and then that work will continue and one of the

1134
00:38:46,838 –> 00:38:47,838
[Ramsey Smith]: yeah

1135
00:38:50,564 –> 00:38:51,564
[Tamiko Toland]: issues too is

1136
00:38:51,078 –> 00:38:52,078
[Ramsey Smith]: two

1137
00:38:51,544 –> 00:38:56,504
[Tamiko Toland]: like how do you compare these different solutions and how do you make a selection

1138
00:38:56,584 –> 00:39:00,424
[Tamiko Toland]: and that’s something that that we’re working on from an analytical perspective

1139
00:39:01,064 –> 00:39:05,944
[Tamiko Toland]: right that saying well what kind of quantitative support is there the conclusion

1140
00:39:05,564 –> 00:39:06,564
[Tamiko Toland]: is

1141
00:39:05,804 –> 00:39:06,804
[Tamiko Toland]: never

1142
00:39:05,860 –> 00:39:06,860
[Paul Tyler]: never

1143
00:39:06,278 –> 00:39:07,278
[Ramsey Smith]: never did

1144
00:39:06,664 –> 00:39:07,784
[Tamiko Toland]: there’s one best

1145
00:39:08,684 –> 00:39:09,684
[Tamiko Toland]: solution

1146
00:39:09,964 –> 00:39:10,964
[Tamiko Toland]: right there

1147
00:39:10,738 –> 00:39:12,498
[Ramsey Smith]: like they need to work different

1148
00:39:10,984 –> 00:39:12,824
[Tamiko Toland]: solutions are to work differently in different

1149
00:39:12,660 –> 00:39:13,660
[Paul Tyler]: we

1150
00:39:12,804 –> 00:39:13,804
[Tamiko Toland]: ways and

1151
00:39:13,598 –> 00:39:14,598
[Ramsey Smith]: and was very

1152
00:39:13,784 –> 00:39:17,704
[Tamiko Toland]: what’s very important is for people to have some quantitative basis to say well

1153
00:39:17,398 –> 00:39:18,398
[Ramsey Smith]: people

1154
00:39:17,884 –> 00:39:18,884
[Tamiko Toland]: this is better in this

1155
00:39:18,838 –> 00:39:19,838
[Ramsey Smith]: the car

1156
00:39:18,904 –> 00:39:20,664
[Tamiko Toland]: regard and then but this

1157
00:39:20,744 –> 00:39:24,504
[Tamiko Toland]: one’s better in this regard what works best for for our

1158
00:39:20,798 –> 00:39:21,798
[Ramsey Smith]: is instead of

1159
00:39:24,100 –> 00:39:25,100
[Paul Tyler]: r

1160
00:39:24,924 –> 00:39:25,924
[Tamiko Toland]: you know

1161
00:39:25,380 –> 00:39:26,380
[Paul Tyler]: what

1162
00:39:25,704 –> 00:39:27,224
[Tamiko Toland]: worker population and

1163
00:39:27,300 –> 00:39:28,300
[Paul Tyler]: that

1164
00:39:27,544 –> 00:39:30,504
[Tamiko Toland]: that’s the kind of decision making that we really want to support a can

1165
00:39:31,280 –> 00:39:35,760
[Paul Tyler]: okay so here here’s literally a million dollar question just set it up i was at

1166
00:39:35,840 –> 00:39:40,400
[Paul Tyler]: an insure tech conference here monday ramsay we actually had former guests there

1167
00:39:40,480 –> 00:39:43,440
[Paul Tyler]: at this event new york so jerry golden was there spent some time with

1168
00:39:43,318 –> 00:39:44,318
[Ramsey Smith]: yeah

1169
00:39:43,520 –> 00:39:49,440
[Paul Tyler]: jerry our friends remaining best a m s t v was broadcasting there you missed but

1170
00:39:50,240 –> 00:39:54,240
[Paul Tyler]: actually people came up and talked to us better me about our show so we’re uh you

1171
00:39:54,400 –> 00:39:55,920
[Paul Tyler]: crossing a lot of wires here

1172
00:39:55,478 –> 00:39:56,478
[Ramsey Smith]: what

1173
00:39:56,080 –> 00:40:02,320
[Paul Tyler]: but temco we took out some very prominent vcs for dinner night before and the

1174
00:40:02,400 –> 00:40:06,080
[Paul Tyler]: question i got was yeah i’m reading about this and hearing about this paul but

1175
00:40:06,240 –> 00:40:08,400
[Paul Tyler]: like when you know is this a

1176
00:40:09,260 –> 00:40:10,260
[Paul Tyler]: when is this

1177
00:40:09,638 –> 00:40:10,638
[Ramsey Smith]: what

1178
00:40:10,060 –> 00:40:11,060
[Paul Tyler]: going to be a meaningful market

1179
00:40:10,838 –> 00:40:11,838
[Ramsey Smith]: work

1180
00:40:11,280 –> 00:40:16,000
[Paul Tyler]: is it three years five years ten years from now to invest i mean what’s

1181
00:40:15,558 –> 00:40:16,558
[Ramsey Smith]: what

1182
00:40:16,000 –> 00:40:17,360
[Paul Tyler]: your what’s your

1183
00:40:17,278 –> 00:40:18,278
[Ramsey Smith]: your respect

1184
00:40:17,440 –> 00:40:19,200
[Paul Tyler]: perspective like when will

1185
00:40:20,400 –> 00:40:24,640
[Paul Tyler]: this be a material a business that you know people are going to fund a lot of the

1186
00:40:24,720 –> 00:40:27,280
[Paul Tyler]: businesses that are making big bets in the space

1187
00:40:30,044 –> 00:40:31,044
[Tamiko Toland]: so

1188
00:40:31,944 –> 00:40:33,784
[Tamiko Toland]: it it’s a it’s a slow play

1189
00:40:33,478 –> 00:40:34,478
[Ramsey Smith]: one

1190
00:40:33,644 –> 00:40:34,644
[Tamiko Toland]: still

1191
00:40:34,904 –> 00:40:38,744
[Tamiko Toland]: honestly like it’s not like all of a sudden everybody’s gonna start throwing this

1192
00:40:35,218 –> 00:40:36,978
[Ramsey Smith]: ho not like all the

1193
00:40:38,824 –> 00:40:42,584
[Tamiko Toland]: on their plans and my feeling is a and i

1194
00:40:42,404 –> 00:40:43,404
[Tamiko Toland]: think this gets

1195
00:40:42,540 –> 00:40:43,540
[Paul Tyler]: i think it’s

1196
00:40:42,918 –> 00:40:43,918
[Ramsey Smith]: get

1197
00:40:43,224 –> 00:40:45,224
[Tamiko Toland]: missed a little bit with like the

1198
00:40:44,918 –> 00:40:45,918
[Ramsey Smith]: like that

1199
00:40:45,464 –> 00:40:48,184
[Tamiko Toland]: ramsay’s press release survey right a lot

1200
00:40:47,780 –> 00:40:48,780
[Paul Tyler]: what

1201
00:40:48,264 –> 00:40:51,784
[Tamiko Toland]: of the companies that are really engaged now have been engaged for a very long

1202
00:40:51,484 –> 00:40:52,484
[Tamiko Toland]: time

1203
00:40:53,304 –> 00:40:54,344
[Tamiko Toland]: right and

1204
00:40:54,498 –> 00:40:56,258
[Ramsey Smith]: and they feel that

1205
00:40:55,224 –> 00:40:57,064
[Tamiko Toland]: they feel like this is an important opportunity

1206
00:40:58,284 –> 00:40:59,284
[Tamiko Toland]: right

1207
00:40:58,998 –> 00:40:59,998
[Ramsey Smith]: um

1208
00:40:59,644 –> 00:41:00,644
[Tamiko Toland]: but

1209
00:40:59,700 –> 00:41:00,700
[Paul Tyler]: like

1210
00:40:59,878 –> 00:41:00,878
[Ramsey Smith]: what

1211
00:41:01,224 –> 00:41:02,584
[Tamiko Toland]: uh you know when

1212
00:41:02,278 –> 00:41:03,278
[Ramsey Smith]: it would

1213
00:41:02,664 –> 00:41:03,944
[Tamiko Toland]: you’ve been doing it for a

1214
00:41:03,860 –> 00:41:04,860
[Paul Tyler]: decade

1215
00:41:04,024 –> 00:41:05,944
[Tamiko Toland]: decade or perhaps longer

1216
00:41:06,740 –> 00:41:07,740
[Paul Tyler]: and not quite she

1217
00:41:06,744 –> 00:41:11,704
[Tamiko Toland]: and not quite nailed it i mean there’s a lot of conviction around the space and

1218
00:41:12,024 –> 00:41:14,184
[Tamiko Toland]: being present and planting the flag

1219
00:41:15,224 –> 00:41:16,344
[Tamiko Toland]: where you know i don’t

1220
00:41:16,038 –> 00:41:17,038
[Ramsey Smith]: don’t

1221
00:41:16,424 –> 00:41:20,024
[Tamiko Toland]: think the expectation is oh yeah we’re gonna be getting our money back in the

1222
00:41:20,104 –> 00:41:21,544
[Tamiko Toland]: next year or two right

1223
00:41:21,140 –> 00:41:22,140
[Paul Tyler]: great

1224
00:41:22,504 –> 00:41:23,544
[Tamiko Toland]: um so

1225
00:41:24,444 –> 00:41:25,444
[Tamiko Toland]: it it’s

1226
00:41:26,244 –> 00:41:27,244
[Tamiko Toland]: i think

1227
00:41:26,420 –> 00:41:27,420
[Paul Tyler]: i think it

1228
00:41:26,558 –> 00:41:27,558
[Ramsey Smith]: i think

1229
00:41:26,984 –> 00:41:29,304
[Tamiko Toland]: at at a high level firms

1230
00:41:29,620 –> 00:41:30,620
[Paul Tyler]: like

1231
00:41:29,784 –> 00:41:31,784
[Tamiko Toland]: decide this is where we want to be

1232
00:41:29,784 –> 00:41:31,784
[Tamiko Toland]: decide this is where we want to be

1233
00:41:32,524 –> 00:41:33,524
[Tamiko Toland]: right

1234
00:41:32,758 –> 00:41:33,758
[Ramsey Smith]: right

1235
00:41:32,820 –> 00:41:33,820
[Paul Tyler]: right yeah

1236
00:41:33,544 –> 00:41:34,744
[Tamiko Toland]: and if you

1237
00:41:33,544 –> 00:41:34,744
[Tamiko Toland]: and if you

1238
00:41:35,884 –> 00:41:36,884
[Tamiko Toland]: if you need to

1239
00:41:37,864 –> 00:41:39,944
[Tamiko Toland]: like replenish the coffers quickly i

1240
00:41:40,020 –> 00:41:41,020
[Paul Tyler]: i think it still

1241
00:41:40,024 –> 00:41:43,944
[Tamiko Toland]: think it’s it’s still going to be tough because it’s still very very difficult to

1242
00:41:44,204 –> 00:41:45,204
[Tamiko Toland]: predict

1243
00:41:44,978 –> 00:41:48,658
[Ramsey Smith]: predict health it is not a really fast

1244
00:41:44,984 –> 00:41:49,624
[Tamiko Toland]: and history tells us that this is not a really fast moving space right

1245
00:41:49,478 –> 00:41:50,478
[Ramsey Smith]: right

1246
00:41:49,760 –> 00:41:51,440
[Paul Tyler]: crazy i think

1247
00:41:50,204 –> 00:41:51,204
[Tamiko Toland]: um but i i mean i

1248
00:41:50,998 –> 00:41:51,998
[Ramsey Smith]: i mean i think that

1249
00:41:51,144 –> 00:41:53,064
[Tamiko Toland]: think the opportunity is obviously still there

1250
00:41:52,838 –> 00:41:53,838
[Ramsey Smith]: there

1251
00:41:53,464 –> 00:41:55,464
[Tamiko Toland]: and we’re getting so close like it really

1252
00:41:55,538 –> 00:41:58,738
[Ramsey Smith]: you do like really a once but i’m talking

1253
00:41:55,624 –> 00:41:59,304
[Tamiko Toland]: it feels like we’re really on the cusp but on the cusp of something that’s still

1254
00:41:59,318 –> 00:42:00,318
[Ramsey Smith]: really

1255
00:41:59,464 –> 00:42:02,104
[Tamiko Toland]: relatively slow moving right and

1256
00:42:01,540 –> 00:42:02,540
[Paul Tyler]: right and

1257
00:42:03,144 –> 00:42:06,504
[Tamiko Toland]: you know especially large punches want to see what the other ones are doing like

1258
00:42:06,204 –> 00:42:07,204
[Tamiko Toland]: what

1259
00:42:06,420 –> 00:42:07,420
[Paul Tyler]: what

1260
00:42:06,904 –> 00:42:08,664
[Tamiko Toland]: oh what choices are you making you know how

1261
00:42:08,364 –> 00:42:09,364
[Tamiko Toland]: are you

1262
00:42:08,500 –> 00:42:09,500
[Paul Tyler]: i mean

1263
00:42:08,798 –> 00:42:09,798
[Ramsey Smith]: how are you

1264
00:42:09,064 –> 00:42:13,864
[Tamiko Toland]: implementing this how did that go right and i think that that experience feeds

1265
00:42:14,024 –> 00:42:15,944
[Tamiko Toland]: into the willingness of others to jump

1266
00:42:15,638 –> 00:42:16,638
[Ramsey Smith]: ju

1267
00:42:15,924 –> 00:42:16,924
[Tamiko Toland]: into it because it’s not

1268
00:42:16,420 –> 00:42:17,420
[Paul Tyler]: not

1269
00:42:16,824 –> 00:42:17,864
[Tamiko Toland]: simply about saying oh great

1270
00:42:17,678 –> 00:42:18,678
[Ramsey Smith]: hungry

1271
00:42:18,024 –> 00:42:19,064
[Tamiko Toland]: you know we’re gonna pick this thing

1272
00:42:21,860 –> 00:42:22,860
[Paul Tyler]: ramsey

1273
00:42:22,438 –> 00:42:23,438
[Ramsey Smith]: all right

1274
00:42:22,800 –> 00:42:27,360
[Paul Tyler]: we’re we’re we’re kind of the top of top of the the hour here i don’t know final

1275
00:42:27,760 –> 00:42:28,800
[Paul Tyler]: thoughts questions here

1276
00:42:28,978 –> 00:42:35,618
[Ramsey Smith]: yeah so much so much to chew on there um i was you know i was really struck by

1277
00:42:35,858 –> 00:42:41,778
[Ramsey Smith]: your comment about sort of the culture here the culture of the target audience

1278
00:42:41,858 –> 00:42:45,058
[Ramsey Smith]: and if you think about the there’s two target audiences right the first one is

1279
00:42:45,618 –> 00:42:47,858
[Ramsey Smith]: the plan sponsors the folks that are holding the

1280
00:42:49,218 –> 00:42:53,938
[Ramsey Smith]: that have the assets then the ultimate target obviously is the end conser but

1281
00:42:55,938 –> 00:43:00,178
[Ramsey Smith]: you pointed out quite rightly so that you have all the people that are in

1282
00:43:00,338 –> 00:43:01,378
[Ramsey Smith]: decision making position

1283
00:43:02,978 –> 00:43:08,178
[Ramsey Smith]: don’t necessarily have a culture of of talking about income at maybe the the

1284
00:43:08,258 –> 00:43:12,098
[Ramsey Smith]: depth that it needs to be for them to be comfortable to move forward with things

1285
00:43:12,178 –> 00:43:17,378
[Ramsey Smith]: like this so it’ll be it’s just an interesting uh conundrum to figure out how to

1286
00:43:17,538 –> 00:43:21,618
[Ramsey Smith]: how to how to get past that point is it the same people be getting educated is it

1287
00:43:21,698 –> 00:43:23,778
[Ramsey Smith]: new people in those roles i don’t know

1288
00:43:24,818 –> 00:43:28,418
[Ramsey Smith]: but that that is of the many of the many interesting things you said that’s the

1289
00:43:28,418 –> 00:43:31,778
[Ramsey Smith]: one that sticks with me because i feel like that’s that’s often the hardest thing

1290
00:43:31,598 –> 00:43:32,598
[Ramsey Smith]: to overcome

1291
00:43:34,844 –> 00:43:35,844
[Tamiko Toland]: but it’s

1292
00:43:35,420 –> 00:43:36,420
[Paul Tyler]: i need know

1293
00:43:35,704 –> 00:43:39,304
[Tamiko Toland]: it’s an opportunity as well for the intermediaries

1294
00:43:39,398 –> 00:43:40,398
[Ramsey Smith]: sure

1295
00:43:40,344 –> 00:43:45,704
[Tamiko Toland]: and let’s not let that point get lost right um ’cause when you talk to folks

1296
00:43:45,784 –> 00:43:47,464
[Tamiko Toland]: about like target date funds

1297
00:43:48,504 –> 00:43:50,264
[Tamiko Toland]: and you know people who missed the

1298
00:43:49,940 –> 00:43:50,940
[Paul Tyler]: w

1299
00:43:50,264 –> 00:43:52,104
[Tamiko Toland]: bus really missed the bus on that

1300
00:43:52,764 –> 00:43:53,764
[Tamiko Toland]: so

1301
00:43:53,220 –> 00:43:54,220
[Paul Tyler]: do i think that

1302
00:43:53,384 –> 00:43:57,144
[Tamiko Toland]: i think that the same the same goes for in common and

1303
00:43:58,904 –> 00:44:00,504
[Tamiko Toland]: even if you have not been

1304
00:44:00,100 –> 00:44:01,100
[Paul Tyler]: sh

1305
00:44:00,484 –> 00:44:01,484
[Tamiko Toland]: a passionate

1306
00:44:01,300 –> 00:44:02,300
[Paul Tyler]: about

1307
00:44:01,384 –> 00:44:05,064
[Tamiko Toland]: advocate of of income solutions right

1308
00:44:05,280 –> 00:44:08,640
[Paul Tyler]: right i think the i know i have heard about

1309
00:44:05,784 –> 00:44:08,104
[Tamiko Toland]: i think now is a really good time to learn

1310
00:44:08,118 –> 00:44:09,118
[Ramsey Smith]: learn about

1311
00:44:08,344 –> 00:44:09,944
[Tamiko Toland]: about them and w how does

1312
00:44:09,678 –> 00:44:10,678
[Ramsey Smith]: not good

1313
00:44:09,964 –> 00:44:10,964
[Tamiko Toland]: this really apply

1314
00:44:11,564 –> 00:44:12,564
[Tamiko Toland]: to

1315
00:44:12,924 –> 00:44:13,924
[Tamiko Toland]: to the

1316
00:44:13,864 –> 00:44:17,624
[Tamiko Toland]: workplace savings right and it is different and there are different ways of

1317
00:44:14,080 –> 00:44:16,000
[Paul Tyler]: what we i didn’t eat

1318
00:44:17,704 –> 00:44:20,904
[Tamiko Toland]: thinking about it there are different ways of breaking down the client cause the

1319
00:44:21,144 –> 00:44:22,904
[Tamiko Toland]: the client is this like

1320
00:44:22,580 –> 00:44:23,580
[Paul Tyler]: like

1321
00:44:23,224 –> 00:44:26,104
[Tamiko Toland]: or the end user is the sponsor right but it’s

1322
00:44:25,860 –> 00:44:26,860
[Paul Tyler]: what

1323
00:44:26,104 –> 00:44:29,464
[Tamiko Toland]: funny because there’s a parallel between retail and how we think about you who’s

1324
00:44:29,464 –> 00:44:31,064
[Tamiko Toland]: the client is is the client

1325
00:44:30,678 –> 00:44:31,678
[Ramsey Smith]: like

1326
00:44:31,144 –> 00:44:32,184
[Tamiko Toland]: the persons ends

1327
00:44:31,798 –> 00:44:32,798
[Ramsey Smith]: eight

1328
00:44:32,184 –> 00:44:33,624
[Tamiko Toland]: up with the annuity or is the

1329
00:44:33,478 –> 00:44:34,478
[Ramsey Smith]: the plane

1330
00:44:33,624 –> 00:44:36,984
[Tamiko Toland]: client actually the financial intermediary who

1331
00:44:36,980 –> 00:44:37,980
[Paul Tyler]: that’s

1332
00:44:37,144 –> 00:44:38,824
[Tamiko Toland]: ends up making that recommendation and

1333
00:44:38,420 –> 00:44:39,420
[Paul Tyler]: and

1334
00:44:38,984 –> 00:44:40,424
[Tamiko Toland]: we know that the industry has always

1335
00:44:40,380 –> 00:44:41,380
[Paul Tyler]: he out

1336
00:44:40,504 –> 00:44:42,904
[Tamiko Toland]: seen it as that financial intermediary right

1337
00:44:43,140 –> 00:44:44,140
[Paul Tyler]: and

1338
00:44:43,544 –> 00:44:45,464
[Tamiko Toland]: and the same kind of goes here but

1339
00:44:45,340 –> 00:44:46,340
[Paul Tyler]: you all

1340
00:44:45,544 –> 00:44:47,064
[Tamiko Toland]: they’re also they’re providing advice

1341
00:44:46,780 –> 00:44:47,780
[Paul Tyler]: you like

1342
00:44:47,144 –> 00:44:49,064
[Tamiko Toland]: and they you know they may be providing other other

1343
00:44:48,820 –> 00:44:49,820
[Paul Tyler]: other

1344
00:44:49,624 –> 00:44:51,144
[Tamiko Toland]: fiduciary services as well

1345
00:44:51,100 –> 00:44:52,100
[Paul Tyler]: well we

1346
00:44:51,784 –> 00:44:53,864
[Tamiko Toland]: where it’s very relevant for them to need to be

1347
00:44:53,940 –> 00:44:54,940
[Paul Tyler]: i

1348
00:44:54,264 –> 00:44:56,264
[Tamiko Toland]: educated to a higher degree you’re

1349
00:44:56,318 –> 00:44:57,318
[Ramsey Smith]: you’re certainly not

1350
00:44:56,344 –> 00:44:57,624
[Tamiko Toland]: certainly not gonna be like

1351
00:44:58,684 –> 00:44:59,684
[Tamiko Toland]: seeing people

1352
00:44:59,444 –> 00:45:00,444
[Tamiko Toland]: change seats in

1353
00:44:59,458 –> 00:45:00,738
[Ramsey Smith]: c g c c

1354
00:45:00,020 –> 00:45:01,020
[Paul Tyler]: oh

1355
00:45:00,424 –> 00:45:01,864
[Tamiko Toland]: h r departments or

1356
00:45:01,958 –> 00:45:02,958
[Ramsey Smith]: k

1357
00:45:02,024 –> 00:45:04,264
[Tamiko Toland]: cfos change because of income okay

1358
00:45:04,924 –> 00:45:05,924
[Tamiko Toland]: so we

1359
00:45:05,638 –> 00:45:06,638
[Ramsey Smith]: yep

1360
00:45:06,024 –> 00:45:07,464
[Tamiko Toland]: got to work with what we got here

1361
00:45:07,380 –> 00:45:08,380
[Paul Tyler]: huh

1362
00:45:07,478 –> 00:45:08,478
[Ramsey Smith]: right

1363
00:45:07,484 –> 00:45:08,484
[Tamiko Toland]: ramsey

1364
00:45:11,140 –> 00:45:12,140
[Paul Tyler]: no this

1365
00:45:13,200 –> 00:45:14,320
[Paul Tyler]: this is this is terrific

1366
00:45:16,000 –> 00:45:21,120
[Paul Tyler]: uh i guess for the listeners who are hungry to learn more

1367
00:45:21,238 –> 00:45:22,238
[Ramsey Smith]: yeah

1368
00:45:22,000 –> 00:45:26,320
[Paul Tyler]: or i want to follow you what’s what’s the best way is it is it linkedin is it

1369
00:45:27,760 –> 00:45:28,800
[Paul Tyler]: your corporate website

1370
00:45:30,900 –> 00:45:31,900
[Paul Tyler]: think he

1371
00:45:30,904 –> 00:45:33,224
[Tamiko Toland]: linkedin is great i mean you know can x is

1372
00:45:32,980 –> 00:45:33,980
[Paul Tyler]: exact

1373
00:45:33,164 –> 00:45:34,164
[Tamiko Toland]: active on linkedin

1374
00:45:33,998 –> 00:45:34,998
[Ramsey Smith]: and i

1375
00:45:34,184 –> 00:45:35,384
[Tamiko Toland]: i’m active on linkedin

1376
00:45:35,644 –> 00:45:36,644
[Tamiko Toland]: we

1377
00:45:35,700 –> 00:45:36,700
[Paul Tyler]: oh

1378
00:45:36,258 –> 00:45:37,858
[Ramsey Smith]: i there all on twitter

1379
00:45:36,264 –> 00:45:40,504
[Tamiko Toland]: are also on twitter um there’s if you’re interested in any of the research

1380
00:45:36,264 –> 00:45:40,504
[Tamiko Toland]: are also on twitter um there’s if you’re interested in any of the research

1381
00:45:39,280 –> 00:45:42,000
[Paul Tyler]: hear any of the uh oh

1382
00:45:41,564 –> 00:45:42,564
[Tamiko Toland]: and

1383
00:45:42,264 –> 00:45:44,504
[Tamiko Toland]: articles commentary and what have you also

1384
00:45:42,398 –> 00:45:43,398
[Ramsey Smith]: article

1385
00:45:44,284 –> 00:45:45,284
[Tamiko Toland]: our

1386
00:45:44,658 –> 00:45:46,338
[Ramsey Smith]: also our web film

1387
00:45:44,660 –> 00:45:45,660
[Paul Tyler]: really

1388
00:45:44,904 –> 00:45:49,464
[Tamiko Toland]: website has a wealth of information under thought leadership as well as if videos

1389
00:45:49,544 –> 00:45:50,744
[Tamiko Toland]: and all all kinds of stuff

1390
00:45:50,598 –> 00:45:51,598
[Ramsey Smith]: stuff

1391
00:45:50,960 –> 00:45:52,240
[Paul Tyler]: stuff and they

1392
00:45:51,464 –> 00:45:53,784
[Tamiko Toland]: um and there’s there you know there is

1393
00:45:53,540 –> 00:45:54,540
[Paul Tyler]: there’s

1394
00:45:53,558 –> 00:45:54,558
[Ramsey Smith]: here

1395
00:45:53,944 –> 00:45:56,824
[Tamiko Toland]: some stuff on lifetime income there as well so just

1396
00:45:53,944 –> 00:45:56,824
[Tamiko Toland]: some stuff on lifetime income there as well so just

1397
00:45:56,320 –> 00:46:00,560
[Paul Tyler]: excellent alright let listen thanks so much there there’s a there’s a lot

1398
00:45:57,458 –> 00:46:00,658
[Ramsey Smith]: i’m sure there’s a lot of stuff on lifetime income there not some

1399
00:46:01,284 –> 00:46:02,284
[Tamiko Toland]: what guess

1400
00:46:02,780 –> 00:46:03,780
[Paul Tyler]: there’s a lot and

1401
00:46:03,484 –> 00:46:04,484
[Tamiko Toland]: a wea bit

1402
00:46:03,680 –> 00:46:05,200
[Paul Tyler]: we will put those links we will put

1403
00:46:04,838 –> 00:46:05,838
[Ramsey Smith]: yeah

1404
00:46:05,280 –> 00:46:07,360
[Paul Tyler]: those links in the show notes if you want to click in and

1405
00:46:08,020 –> 00:46:09,020
[Paul Tyler]: connect

1406
00:46:09,920 –> 00:46:15,440
[Paul Tyler]: or visit the website so taco thanks so much ramsey as usual appreciate all the

1407
00:46:15,060 –> 00:46:16,060
[Paul Tyler]: great

1408
00:46:16,640 –> 00:46:21,200
[Paul Tyler]: questions and thought behind this uh this show um please join us again next week

1409
00:46:21,680 –> 00:46:25,520
[Paul Tyler]: and uh for another very interesting episode of that annuity show

Episode 140: A Chat With The Father of 4% Percent Rule With William Bengen

March 24, 2022 2022, Podcast, Retirement, William Bengen No comments

How many times have we discussed, debated, and loved the retirement rule of thumb known as the “4% Rule”? Today, we had the opportunity to speak with William Bengen, the creator of that exact rule. And as we learned, there are very good reasons why a seemingly simple concept like this continues to guide retirement planning today.

Also, do you want to get regular updates on news about guests of our show? Go to https://thatannuityshow.com and subscribe to our newsletter.

We hope you enjoy the show.

Links mentioned today:

https://www.linkedin.com/in/william-bengen-21b159196/

Thank you to our show sponsor; The Index Standard!

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Episode 139: What’s Different This Time When Saving For Retirement With Byron Boston

March 17, 2022 2022, Byron Boston, Podcast, Retirement No comments

Yes, markets do run in repeating cycles. However, the best traders ask themselves, “What’s different this time?” Byron Boston, CEO of Dynex Capital explains that this is the very first rule his firm uses when plotting how to navigate their portfolio through changing times. However, two large exogenous events – the pandemic & now a war – are creating some uncertainty for baby boomers hoping to turn assets into income.

Also, do you want to get regular updates on news about guests of our show? Go to https://thatannuityshow.com and subscribe to our newsletter.

We hope you enjoy the show.

Links mentioned today:

https://www.dynexcapital.com/about-us/leadership-team/default.aspx

Thank you to our show sponsor; The Index Standard!

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Transcript

1
00:00:01,378 –> 00:00:07,698
[Paul Tyler]: hi this is paul tyler and welcome to another episode of that annuity show ramsey

2
00:00:07,558 –> 00:00:08,558
[Paul Tyler]: how are you

3
00:00:08,707 –> 00:00:09,707
[Ramsey Smith]: fantastic

4
00:00:09,938 –> 00:00:14,898
[Paul Tyler]: hey a good um we have a great guest in fact it was a really good show it was one i

5
00:00:15,058 –> 00:00:19,538
[Paul Tyler]: missed when i was on vacation now mark is out so we’re tag team in this show

6
00:00:19,698 –> 00:00:21,538
[Paul Tyler]: ramsey do you wanna do the intro

7
00:00:22,407 –> 00:00:29,847
[Ramsey Smith]: absolutely so we’re very lucky today to be rejoined by byron boston who is the ceo

8
00:00:30,007 –> 00:00:36,167
[Ramsey Smith]: of Dynex a mortgage real estate investment trust and the reason that we wanted to

9
00:00:36,167 –> 00:00:39,927
[Ramsey Smith]: have him back on the show and the reason it’s so timely is byron

10
00:00:41,127 –> 00:00:42,967
[Ramsey Smith]: is a student of economic history

11
00:00:44,167 –> 00:00:49,767
[Ramsey Smith]: and he has really an extraordinary view on sort of macroeconomics

12
00:00:51,527 –> 00:00:55,527
[Ramsey Smith]: and and geopolitical issues which of course we you know really at the center of

13
00:00:55,607 –> 00:00:56,967
[Ramsey Smith]: everything that we need to worry about

14
00:00:58,247 –> 00:01:02,487
[Ramsey Smith]: as an economy and it’s not just it’s not just big investors need to focus on it we

15
00:01:02,567 –> 00:01:06,967
[Ramsey Smith]: as individual americans financial advisors all need to have context and so we’re

16
00:01:06,967 –> 00:01:11,607
[Ramsey Smith]: we’re delighted to have delighted to have byron back and one of the things that i

17
00:01:11,767 –> 00:01:15,207
[Ramsey Smith]: always say about baring that i think is many things that are interesting is that

18
00:01:15,927 –> 00:01:20,407
[Ramsey Smith]: fundamentally when he when he talks about how he viewed the world he starts with

19
00:01:20,727 –> 00:01:24,807
[Ramsey Smith]: you know four four words i am a lender and i think that’s something that people

20
00:01:25,207 –> 00:01:28,887
[Ramsey Smith]: not necessarily understand about what it means to be a mortgage reit but he’s

21
00:01:28,967 –> 00:01:33,367
[Ramsey Smith]: fundamentally a lender and and that that lens i think brings a very interesting

22
00:01:33,447 –> 00:01:36,407
[Ramsey Smith]: perspective on the way it looks at the world so with that

23
00:01:37,078 –> 00:01:38,078
[Paul Tyler]: oh

24
00:01:37,207 –> 00:01:42,407
[Ramsey Smith]: welcome back byron we’re delighted to have you tell us a little bit about tell a

25
00:01:42,487 –> 00:01:46,807
[Ramsey Smith]: little bit about yourself and your journey and what brought you to

26
00:01:48,167 –> 00:01:50,167
[Ramsey Smith]: and what dyne does very quickly no

27
00:01:48,640 –> 00:01:54,800
[Byron Boston]: thank you sure sure ramsey paul thank you so much for having me and um that’s a

28
00:01:54,960 –> 00:01:56,480
[Byron Boston]: fantastic introduction

29
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[Byron Boston]: to i am very much so a student of history

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[Byron Boston]: i am a an economics ner a very student of economics and i found my way to that

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[Byron Boston]: topic in college and i’m very happy that i did i am an economics major from

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[Byron Boston]: dartmouth college

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[Byron Boston]: and i found my way there senior year it was not my original major i had to switch

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[Byron Boston]: my major my last year in school and the reason that’s important and so many

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[Byron Boston]: students are confused in terms of their majors i switched that major because

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[Byron Boston]: that’s what i was interested in i had taken a path down the the wrong direction

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[Byron Boston]: mainly because of influence of of others and and i’m so happy that at some point i

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[Byron Boston]: said you know what i love economics i want to switch my major the head of the

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[Byron Boston]: department helped me switch my major and here i am sixty three years old that had

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[Byron Boston]: to be and at this point it was forty two years ago and um forty yeah forty two

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[Byron Boston]: years ago when i made that decision and i am so happy i did because i i really am

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[Byron Boston]: an economics ner and so in this job at dynex capital

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[Byron Boston]: this is a core

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[Byron Boston]: knowledge skill set that i lean upon and how we make our decision so i am a lender

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[Byron Boston]: i came out of dartmouth college after studying economics i came right to the wall

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[Byron Boston]: street world and i was trained in one of the better corporate lending programs at

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[Byron Boston]: chemical bank spent three years as a lender i went back to business school and

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[Byron Boston]: studied finna county came back to wall street as a mortgage backed securities

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[Byron Boston]: trader i was fortunate it was before larry fing started black black rock that one

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[Byron Boston]: of the best he ran one of the best mortgage back securities trading desks on wall

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[Byron Boston]: street and i was allowed to join that group and so i believe i trained

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[Byron Boston]: in both both the chemical bank and at first boston by some of the best in lending

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[Byron Boston]: and in uh investing and in trading and the asset class and trading that i focused

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[Byron Boston]: on was mortgage backed securities

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[Byron Boston]: and so i started that journey as a trader in eighty six eleven years on the what i

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[Byron Boston]: would call the south side of wall street and i flipped over to the b side where i

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[Byron Boston]: was at freddie mac for seven years where i further hone my skill and knowledge of

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[Byron Boston]: lending money against real estate um and in two thousand four i started my first

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[Byron Boston]: company it was called sunset financial was a mortgage reit took it public i got a

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[Byron Boston]: takeover bid in two thousand six we sold the company happily sold the company the

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[Byron Boston]: company was successful and one of the the most important things i can tell you

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[Byron Boston]: about my career

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[Paul Tyler]: no

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[Byron Boston]: is that a chunk of the investors of my first company i started asked me to come to

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[Byron Boston]: dine capital and help them rebuild this

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[Ramsey Smith]: w

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[Byron Boston]: organization dye had hit some hard times and it was somewhat of a rebuilding mode

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[Byron Boston]: so this has been a turnaround i’m very proud that my i started a company sold it

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[Byron Boston]: and i had enough happy investors to ask me to come and do it again with her and so

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[Byron Boston]: i’m still here that was about fifteen years ago my fifteenth year at dint

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[Byron Boston]: investment trust a financial services company and we generate dividend income long

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[Byron Boston]: term total returns by financing real estate assets but most importantly our

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[Byron Boston]: purpose we’re here to make lives better and the way we make lives better is by

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[Byron Boston]: taking care of the individual savers who buy our stock or our preferred stock we

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[Byron Boston]: also make the lives better of our employees by creating a great working

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[Byron Boston]: environment and giving them also an opportunity to own dn capital stock and enjoy

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[Byron Boston]: the dividend and cash income that we throw off from that stock and then here’s

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[Byron Boston]: another category that most of won’t understand we use leverage or we borrow money

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[Byron Boston]: to to make money in other words we

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[Byron Boston]: we sell stock to our investors we then borrow additional money to then take and

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[Byron Boston]: lend that money to either directly to homeowners

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[Paul Tyler]: it’s

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[Byron Boston]: uh through securities or directly to homeowners and we also lend against other

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[Byron Boston]: asset classes such as apartment buildings malls

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[Byron Boston]: we’ve pretty much a l again in every asset class

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[Byron Boston]: in fin capital the last thirty years or so so our goal again make lives better

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[Byron Boston]: take care of the savers take care of our employees and the last category i forgot

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[Byron Boston]: to tell you was we take care of our creditors when we borrow money we don’t want

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[Byron Boston]: to be a problem to our creditors we want to be one of the best credits that they

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[Byron Boston]: have on their books

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[Ramsey Smith]: so i just want to jump in real quick there so you you’ve got a business that you

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[Ramsey Smith]: are a lender it’s you’re a leverage lender and so tell us a little bit about why

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[Ramsey Smith]: that makes you so sort of hyper focused on what’s going on

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[Ramsey Smith]: in the macroeconomic environment

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[Byron Boston]: so first off

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[Byron Boston]: just trying to think every lender most people in this economy deal with deal with

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[Byron Boston]: they’re leveraged so banks are leveraged banks leverage themselves through demand

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[Byron Boston]: deposits right and so uh they could use other type of leverage but their core uh

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[Byron Boston]: uh liability happens to be demand deposits we

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[Byron Boston]: use shorter term borrowings which are not as um

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[Byron Boston]: what word simple word i can use not as easy as demand deposits it’s a little bit

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[Byron Boston]: tougher when you’re leveraging yourself through what we call the repurchase

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[Byron Boston]: agreement market or short term markets as such

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[Byron Boston]: risk management is essential for running a real estate investment trust such as Dynex

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[Byron Boston]: capital so if you ask me for just one line about dyne i’m going to say we bring to

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[Byron Boston]: the table expert risk management

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[Byron Boston]: discipline capital allocation and those are the two skill sets that we bring to

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[Byron Boston]: the table and we’ll present you with a very skilled and experienced management

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[Byron Boston]: team so we are leveraged we must think about the

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[Ramsey Smith]: thats

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[Byron Boston]: global environment we have a very disciplined approach start first with assessing

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[Byron Boston]: the global macro environment and then work your way down to ultimately the either

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[Byron Boston]: the bond or the loan that we put in our portfolio and let me just add this one

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[Byron Boston]: thing ramsay and paul i don’t want to confuse anyone if you lent money in nineteen

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[Byron Boston]: seventy five more than likely you’re making a direct loan to a borrower in twenty

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[Byron Boston]: twenty two i have more options i can either make a direct loan or i can buy a

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[Ramsey Smith]: b

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[Byron Boston]: security

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[Byron Boston]: that is backed

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[Ramsey Smith]: back

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[Byron Boston]: by a pool of loans and those are we call securit eyed assets so today dyne

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[Ramsey Smith]: like

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[Byron Boston]: balance sheet it is majority you know ninety nine percent securit eyed assets

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[Ramsey Smith]: so to talk about and we were paul and you and i were talking about this before the

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[Ramsey Smith]: before the call like there’s a lot going on in the world right now

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[Ramsey Smith]: so

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[Ramsey Smith]: you know tell us tell us about you know what what what’s on your mind and and

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[Ramsey Smith]: importantly like why things might be different this time around

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[Byron Boston]: that

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[Ramsey Smith]: in terms of market distress something that you have a great deal of patience for

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[Ramsey Smith]: because you expect it to happen every four five six seventy years but it might be

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[Ramsey Smith]: different this time tell us a little bit about that

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[Byron Boston]: what would you look at what

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[Byron Boston]: the main question we ask at din’s capital is what is different this time so there

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[Byron Boston]: was a book written called this time is different and you hear quoted on t v and

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[Byron Boston]: other shows and i think that book is misleading there is something different every

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[Byron Boston]: single time and the real question you ask is what is different this time but be a

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[Byron Boston]: avid student of history to understand global economic cycles global uh market

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[Byron Boston]: cycles and at

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[Byron Boston]: economic data social data political data

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[Byron Boston]: and to assess inform an opinion first and foremost on the macroeconomic

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[Byron Boston]: environment we don’t want to get so focused on that loan or that bond that we want

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[Byron Boston]: to make and ignore the global environment and we make a decision and then we get

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[Byron Boston]: completely annihilated because there’s a major macro change or such as

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[Byron Boston]: at this point we’ve experienced two exogenous shocks in the economy so in general

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[Byron Boston]: we believe a dy that the world changed as of january one twenty twenty that we

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[Byron Boston]: have entered into just a completely new environment what are the characteristics

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[Byron Boston]: of the environment first and foremost right off the back we were hit with an

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[Byron Boston]: exogenous shock as this decade started what happened next the global governments

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[Byron Boston]: both central banks and fiscal policymakers responded enormously like none of us in

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[Byron Boston]: our generation has ever seen um to try to

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[Byron Boston]: save the global economy

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[Byron Boston]: uh given this situation that they intentionally shut down the global economy none

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[Byron Boston]: of us could have ever imagined we shut down a global economy we were all sitting

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[Byron Boston]: at home two years ago not leaving our homes right so this enormous effort was made

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[Byron Boston]: um central banks took an unprecedented step except maybe during world war two of

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[Byron Boston]: stepping into the the global capital markets buying etfs bonds i don’t know it

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[Byron Boston]: seems if they bought a little bit of everything

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[Byron Boston]: and now two years into that we came into twenty twenty two

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[Byron Boston]: with the central banks intending to try to reverse that

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[Byron Boston]: and in addition

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[Byron Boston]: fiscal policy makers potentially trying to pull back on some of the fiscal policy

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[Byron Boston]: that have been added to the economy so when we started this year off at dns we

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[Byron Boston]: believe we were in a big moment in history we’ve never been through this where

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[Byron Boston]: central banks at first built up their balance sheets that large and now they’re

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[Byron Boston]: going to try to pull back the stimulus or the liquidity that have been pumped into

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[Byron Boston]: the global system and right in the middle at the beginning of this process we now

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[Byron Boston]: experience another major exogenous shock and what do we mean exogenous shock it’s

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[Byron Boston]: outside of the economic system something that happens on the outside now we have

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[Byron Boston]: to assess that and say through what mechanisms will this impact the economy and so

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[Byron Boston]: we first had this huge drop in demand from the the pandemic as we shut down the

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[Byron Boston]: economy this time we have another exogenous shock and now we’re coming through the

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[Byron Boston]: uh the mechanism uh o energy right we’re going to drive inflation

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[Byron Boston]: with that issue you could ultimately have a psychological impact because at some

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[Byron Boston]: point the war could bring very negative psychology

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[Byron Boston]: to the consumer

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[Byron Boston]: the consumer environment the largest one we’ll all talk about is inflation we had

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[Byron Boston]: an inflation issue before the exogenous shock now it’s been more exacerbated and

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[Byron Boston]: then when you think about it we’ve got the supply issue supply chains the if you

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[Byron Boston]: think about cutting off russian oil in effect we’re saying okay we’re going to cut

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[Byron Boston]: off certain supply of our energy but the demand is still there

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[Byron Boston]: so now we probably have a problem in terms of prices increasing as we try to

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[Byron Boston]: allocate

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[Byron Boston]: scarce resources so we’ve enjoyed for thirty forty years this wonderful world of

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[Byron Boston]: globalization

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[Paul Tyler]: so

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[Byron Boston]: it has helped keep inflation lower it took a long time for many of us to recognize

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[Byron Boston]: the

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[Ramsey Smith]: alright

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[Byron Boston]: full impact of moving production from

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[Byron Boston]: an employee asked that

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[Ramsey Smith]: yeah

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[Byron Boston]: asked for fifteen dollars an hour to an employee that ask for one dollar an hour

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[Byron Boston]: that that’s in effect what took place

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[Ramsey Smith]: i

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[Byron Boston]: right we moved to the low low cost producing areas of china mexico other places in

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[Byron Boston]: asia and now these supply chains are being ripped apart and we don’t know what the

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[Byron Boston]: impact will be we do know that one of the mechanisms that it will transfer into

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[Byron Boston]: the economy will be through inflation through energy prices because that’s one of

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[Byron Boston]: the major areas that we’re going to fill this supply chain disruption taking place

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[Byron Boston]: in the short medium and long term

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[Paul Tyler]: environment

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[Paul Tyler]: step back to something you said earlier what’s different this time well that

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[Paul Tyler]: implies we know the time that we’re comparing this against

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[Paul Tyler]: and you know i’m a history i was a history major in college and i think back you

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[Paul Tyler]: know they also i think when we could have a whole show on this is i know you spent

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[Paul Tyler]: a lot of time in psychology just the social change going on you know i could say

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[Paul Tyler]: well it what’s different now than what we went through in nineteen sixty eight i

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[Paul Tyler]: could say that here in the us in certain points

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[Paul Tyler]: looking at what’s taking place

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[Paul Tyler]: psychologically and politically i don’t know it’s just back to the vit know in

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[Paul Tyler]: germany you know post world war one you know you’ve got national psyches t

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[Paul Tyler]: people trying to create myths that didn’t ever you know recreate history that

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[Paul Tyler]: never existed before how do you factor the social change going

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[Paul Tyler]: taking place at the same time

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[Byron Boston]: boy the first point is you gotta acknowledge the social issues it’s it’s it’s

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[Byron Boston]: unbelievable how many economists i talk to and they don’t recognize the social

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[Byron Boston]: issues so let’s go back to the inflation of one thousand nine hundred seventy

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[Byron Boston]: seconds that everyone wants to talk about what took place in nineteen set by the

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[Byron Boston]: side issue if someone says that the inflation ninety seven was jimmy carter issue

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[Byron Boston]: just ignore them they don’t have a clue what they’re talking about the inflation

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[Byron Boston]: that developed ultimately in the one thousand nine hundred seventy was a result of

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[Byron Boston]: multiple factors i would say over the twenty years before nineteen eighty between

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[Byron Boston]: nineteen sixty and nineteen eighty think about everything that took place because

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[Byron Boston]: it ultimately came through social issues right so you have a president shot and

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[Byron Boston]: killed in our country you we have this view of our country in great history we had

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[Paul Tyler]: sh

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[Byron Boston]: a president killed then we had his brother killed we had martin luther king killed

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[Byron Boston]: we had enormous social issues that develop enormous programs that were put in

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[Byron Boston]: place to try to to deal with this this social unrest that was happening you had

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[Byron Boston]: generational tensions between the the young baby boom generation and the older gen

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[Byron Boston]: generation before them and so this led to public policy issues that that would

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[Byron Boston]: ultimately play a role it led to especially some of the programs were trying to

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[Byron Boston]: deal with poverty and other issues such as that so these are social factors

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[Byron Boston]: rippling

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[Ramsey Smith]: correct

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[Byron Boston]: through the economy in ways that you can’t always predict so let’s think about

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[Byron Boston]: today what was amazing about twenty twenty we have this pandemic and then what

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[Byron Boston]: happens someone had a phone with a camera on it and so they video tape the police

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[Byron Boston]: in minnesota with his with his knee on the neck of george floyd so now we have

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[Byron Boston]: this huge movement developed right in the middle of this unbelievable moment in

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[Byron Boston]: history where we shut down the global economy so when we think about what is

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[Byron Boston]: taking place at dyne when we think about risk we think definitively broader than

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[Byron Boston]: just c plus i plus g plus net exports equals gdp there are a lot of factors that

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[Byron Boston]: ultimately come into play let me just point out a couple of them human conflict is

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[Byron Boston]: at the top of our list at dyne capital we’re concerned about human conflict where

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[Byron Boston]: does it come from

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[Byron Boston]: it comes from history we’re seeing this now not only in the united states we’re

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[Byron Boston]: seen in other places right you go to turkey and and you know ewan doesn’t want to

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[Byron Boston]: admit that there was a armenian genocide that took place you come to the united

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[Byron Boston]: states and you got this debate over you know how are we going to look at our own

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[Byron Boston]: history here in the united states you’ll probably go to germany you’ll have find

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[Byron Boston]: some germans and want to deny that there was a holocaust so so right off the bat

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[Byron Boston]: the social issues around just what has happened in the past and how we’re going to

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[Byron Boston]: reconcile and deal with what has happened in the past um today

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[Byron Boston]: income and wealth inequality in my opinion is like high blood pressure in your

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[Byron Boston]: body they call it a silent killer and so it’s it’s or or is the the professor from

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[Byron Boston]: university of chicago wrote the book fault line it’s a crack beneath the surface

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[Byron Boston]: of a global economy and it will manifest itself in ways that of us can really

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[Byron Boston]: imagine that it’s happening whether it’s electing an extreme person into office

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[Byron Boston]: because a certain sector of the population feels less left behind

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[Byron Boston]: or whether it’s just an explosive situation that took place if you remember the

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[Byron Boston]: arab spring or how about the french revolution we could go on and on in terms of

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[Byron Boston]: how might wealth and income inequality manifests itself you layer on top of that

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[Byron Boston]: technology and so now back to the human beings right because that’s what sociology

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[Byron Boston]: and psychology happens to be technology has allowed us to really experience

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[Byron Boston]: everyone else more than when i was a child so i didn’t grow up on the the

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[Byron Boston]: wealthiest side of the railroad tracks but if you had to ask me if we were not

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[Byron Boston]: wealth i would have been not i don’t know what you’re talking about we’re fine but

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[Byron Boston]: when i went

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[Paul Tyler]: it

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[Byron Boston]: to dartmouth and all of a sudden i started to realize how other people lived then

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[Byron Boston]: it was like whoa man maybe you know maybe life is a little different for us right

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[Byron Boston]: but today technology take talk newspapers facebook they keep everyone

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[Byron Boston]: almost whatever

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[Byron Boston]: coveting everyone else and it’s that’s a psychological issue that comes into play

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[Byron Boston]: the wealthy don’t live a life that no one else sees the wealthy live a life where

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[Byron Boston]: all the poor people can see exactly how they live and they can see what they’re

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[Byron Boston]: missing so there are a lot of social factors that are coming into play the one

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[Byron Boston]: that concerns me the most is human conflict we’re seeing that in terms of the

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[Byron Boston]: russian situation today i had some more colorful language i’ve used in my office

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[Byron Boston]: on this i won’t use that that color uh language

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[Ramsey Smith]: no

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[Byron Boston]: here but

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[Ramsey Smith]: i don’t care

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[Byron Boston]: we have had a larger amount of authoritarian type leaders rise to the global stage

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[Byron Boston]: over the last call it ten to twenty years and it’s concerning to us at

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[Byron Boston]: i hope that wasn’t too long winded there’s a lot

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[Ramsey Smith]: no

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[Byron Boston]: of social

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[Paul Tyler]: no no

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[Byron Boston]: factors that are happening there’s a ton

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[Paul Tyler]: no well you know and i think it’s it’s interesting how how do all these pieces add

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[Paul Tyler]: up to something different right pandemic we’re stuck in we’re on zoom all of a

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[Paul Tyler]: sudden we realized oh the technologies has been sitting here for ten years

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[Paul Tyler]: actually is kind of useful connects all of us you know ukraine is interesting

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[Paul Tyler]: because

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[Paul Tyler]: y

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[Paul Tyler]: as i’ve started to kind of start talking to people i know somebody you know i know

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[Paul Tyler]: a startup in ukraine i talked to her when she had her two two months ago she had

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[Paul Tyler]: her bag ca work on zoom she says oh yeah i have a bag of cash i have a gun my tank

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[Paul Tyler]: of is filled with gas

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[Paul Tyler]: wait a second i’m looking at you i feel like i know you and i see you here i think

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[Paul Tyler]: you know ukraine has such technology talent we’ve had so many you know especially

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[Paul Tyler]: in our business you know i have worked with so many different technology vendors

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[Paul Tyler]: now there these people just to screen away you feel like you know them you know i

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[Paul Tyler]: talked to somebody who was was on slack

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[Byron Boston]: yeah i do feel like you know

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[Paul Tyler]: slacking somebody and on video with a programmer in ukraine doing their day job in

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[Paul Tyler]: a bomb shelter with wi fi

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[Paul Tyler]: right now you know to buy your point if you didn’t have a camera and a screen in a

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[Paul Tyler]: on every

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[Paul Tyler]: camera i don’t know would ukraine just be kind of a strange thing off to the side

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[Paul Tyler]: and we don’t know how to spell it we barely you know now we know to say cave right

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[Paul Tyler]: a lot more than that a lot more

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[Byron Boston]: yeah yeah

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[Ramsey Smith]: hm

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[Byron Boston]: yeah it would be off to the side i i’ll tell you i have

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[Byron Boston]: a wonderful woman who reports to me

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[Byron Boston]: employee dix she is from the ukraine she came to the u s in the nineteen nineties

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[Byron Boston]: and she challenged me she said oh byron

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[Ramsey Smith]: she

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[Byron Boston]: what’s different between bosnia in the nineteen nineties her husband is from

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[Byron Boston]: bosnia so he

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[Paul Tyler]: wow

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[Byron Boston]: is he he unfortunately felt the brunt

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[Byron Boston]: uh um uh he’s a muslim descent from bosnia and uh she said what’s the difference

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[Byron Boston]: the world didn’t care about bosnia and the world didn’t care about syria why is

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[Byron Boston]: everyone responding to this so she’s from ukraine and i said you know that’s a

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[Byron Boston]: good question i thought about it pretty hard and i said the ukrainians are doing

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[Byron Boston]: something really really powerful they’re using the media and technology to make

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[Byron Boston]: sure that we all live this horrible journey with them

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[Byron Boston]: we’re living this journey i mean we’re seeing the president there he’s on the air

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[Byron Boston]: we can see it we can see the story we’re living this with them in the one thousand

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[Byron Boston]: nine hundred ninety seconds when they’s events were taking place in the balkans we

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[Byron Boston]: really didn’t know we didn’t have life to infect some of the worst genocide events

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[Byron Boston]: we’ve only been told about it because no one who was there is really trying to

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[Byron Boston]: admit if you talk to the serbian people today apparently my understanding is

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[Byron Boston]: they’ll deny that there was ever any type of genocide events that took place but

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[Byron Boston]: this is different what’s different this time right what’s different is that

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[Byron Boston]: they’re taking social media and they’re ensuring that byron paul and ramsey live

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[Byron Boston]: with them

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[Byron Boston]: the the or or get as close get close to it we can’t live with them because of

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[Byron Boston]: they’re feeling the pain of this what is taking place we’re seeing this president

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[Byron Boston]: speak on video we’re seeing other people

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[Byron Boston]: broadcasting up to the web we’re all living this experience day to day with them

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[Byron Boston]: very different than the balkan situation in the one thousand nine hundred ninety

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[Byron Boston]: seconds when we didn’t really have internet at that time didn’t have cell phones

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[Byron Boston]: didn’t have tick talk didn’t have facebook ett cetera et cetera so we’re living

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[Byron Boston]: this event together so it’s hard

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[Ramsey Smith]: mm

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[Byron Boston]: not to feel something

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[Ramsey Smith]: alright

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[Byron Boston]: with it i know there’s a lot of debate about you know why

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[Byron Boston]: is this getting a lot more attention than even some of the syrian it’s that point

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[Byron Boston]: the technology use here is to me seems very different and it’s allowing me to live

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[Byron Boston]: this

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[Byron Boston]: with the people of ukraine in some way

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[Ramsey Smith]: so do you have do you have any thoughts on how this might all play out i know

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[Ramsey Smith]: that’s a tough question none of us really know right

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[Byron Boston]: nine

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[Ramsey Smith]: but like do you

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[Ramsey Smith]: there’s so many directions it could go so

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[Ramsey Smith]: uh

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[Ramsey Smith]: putin could putin could

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[Ramsey Smith]: stop right he could keep going past ukraine even if he stops in ukraine like the

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[Ramsey Smith]: outcome can be a lot of different things like there could be some sort of some

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[Ramsey Smith]: sort of peace where he takes part of ukraine

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[Ramsey Smith]: he give some of the back to the existing government there’s all these various

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[Ramsey Smith]: outcomes like do you have a do you have any thoughts on what might be likely

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[Ramsey Smith]: outcomes or or even if not that like what maybe the implications are

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[Byron Boston]: right

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[Ramsey Smith]: for some of the various outcomes

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[Byron Boston]: yeah sorry so so so as ceo of dyne capital i am a coach right so the

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[Ramsey Smith]: yeah

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[Byron Boston]: way i tell smart papo who’s the president of our company companies and the chief

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[Byron Boston]: investment officer i tell her all the time i say you’re the quarter back on the

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[Byron Boston]: fuel i’m on the sidelines i’m the coach so i can’t come on the film through the

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[Byron Boston]: past so i’m coaching

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[Ramsey Smith]: yeah

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[Byron Boston]: my team through this

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[Byron Boston]: event so first and foremost this is evolving no one knows what’s going to happen

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[Byron Boston]: here no different than the summer july of nineteen fourteen no one really knew

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[Byron Boston]: what was ultimately going to take place but there are some things that i can

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[Ramsey Smith]: yeah

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[Byron Boston]: lean on and say okay this is what’s

387
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[Byron Boston]: the world is has changed period

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[Byron Boston]: get used to it what we knew ten years ago when the travel and the globalization

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[Byron Boston]: like it had gotten and it was and the great low prices we all enjoyed as the

390
00:25:46,320 –> 00:25:50,640
[Byron Boston]: iphones were made in china and brought back one piece made in mexico one in china

391
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[Byron Boston]: one and someplace else the world has changed we are going to go through a

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[Byron Boston]: decoupling process of some sort

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[Byron Boston]: what will it be how dramatic will it be how long would it last we’re not sure oil

394
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[Byron Boston]: clearly has been a political commodity

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[Paul Tyler]: yes

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[Byron Boston]: for

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[Byron Boston]: ages it continues to be a political commodity today so we’ve got to come to grips

398
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[Byron Boston]: with the fact at dye capital the world has changed we don’t need to sit around and

399
00:26:21,520 –> 00:26:27,600
[Byron Boston]: be and and cry over spilled milk the world has changed so things could escalate or

400
00:26:27,760 –> 00:26:32,000
[Byron Boston]: or they could could de escalate but we don’t know which way that will take place

401
00:26:32,160 –> 00:26:37,760
[Byron Boston]: and what we do at dns think through these scenarios what will we do in this a

402
00:26:37,760 –> 00:26:41,040
[Byron Boston]: generic situation what would we do in this situation what we do in this situation

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00:26:41,600 –> 00:26:47,440
[Byron Boston]: one of the complications here is that before russia invaded ukraine at dns we

404
00:26:47,520 –> 00:26:53,200
[Byron Boston]: believe this was a big moment in history just based off of but governments trying

405
00:26:53,360 –> 00:26:57,840
[Byron Boston]: to pull back the liquidity that they had pumped to all the liquidity pumped into

406
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[Byron Boston]: the global system

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00:26:59,680 –> 00:27:05,120
[Byron Boston]: to spare the world the pain of the pandemic so that was huge in itself so now you

408
00:27:05,280 –> 00:27:10,480
[Byron Boston]: layer this exogenous shock on top of it it really complicates the picture things

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00:27:10,640 –> 00:27:15,760
[Byron Boston]: have changed supply chains are going to to change um if you recall in the one

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[Byron Boston]: thousand nine hundred seventy seconds you may not have been born yet ramsey but we

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[Byron Boston]: all had to to start we the speed limit on the highways were dropped from seventy

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[Byron Boston]: seventy five miles an hour to fifty five it was a federal law the speed could

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[Byron Boston]: drive over fifty five miles an hour on an interstate highway and so that was just

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[Byron Boston]: a big deal everyone

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[Ramsey Smith]: thank you

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00:27:35,040 –> 00:27:39,520
[Byron Boston]: was like oh my gosh the speed limit is fifty five and then i think gas stations

417
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[Byron Boston]: were closing at night and there was a lot of adjustments that had to be made

418
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[Byron Boston]: during those oil embargoes so it’s been wonderful we’ve had a great life you know

419
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[Byron Boston]: everybody’s been traveling visiting other countries and everything’s been great

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[Byron Boston]: but things changed at this point likewise we all got used to this wonderful low

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[Byron Boston]: inflationary world and prices continuing to come down and if you look at history

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[Byron Boston]: in reality inflation has always been tended to be higher than what we’ve

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[Byron Boston]: experienced maybe over the last decade or so so we’re probably going to have to

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[Byron Boston]: get used to because if nothing else these supply chains changing and breaking down

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[Byron Boston]: and volving to something new we’ll probably end up with more inflation than we had

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[Byron Boston]: before one concern again i have i have a concern on the human conflict because i’m

427
00:28:25,600 –> 00:28:29,920
[Byron Boston]: concerned that this wealth and income inequality is being exacerbated by all of

428
00:28:30,000 –> 00:28:34,560
[Byron Boston]: these developments from the pandemic to this current development clearly the

429
00:28:34,640 –> 00:28:39,120
[Byron Boston]: higher oil and gas prices are hammering the lower income parts of the world more

430
00:28:39,520 –> 00:28:42,480
[Byron Boston]: than the higher income participants so the

431
00:28:43,520 –> 00:28:47,520
[Byron Boston]: the future is very very uncertain it’s not a new

432
00:28:47,158 –> 00:28:48,158
[Paul Tyler]: w

433
00:28:47,680 –> 00:28:51,920
[Byron Boston]: place for the world the world has been again study nineteen fourteen to nineteen

434
00:28:52,160 –> 00:28:53,760
[Byron Boston]: forty five but you could also study other

435
00:28:53,478 –> 00:28:54,478
[Paul Tyler]: see

436
00:28:54,080 –> 00:28:56,960
[Byron Boston]: other periods you could study the one thousand nine hundred sixty seconds

437
00:28:58,240 –> 00:29:02,000
[Byron Boston]: the world has i i know you want it to say it’s all nice and peaceful everybody’s

438
00:29:02,080 –> 00:29:07,200
[Byron Boston]: happy but that hasn’t been the case throughout history so things have changed we

439
00:29:07,440 –> 00:29:10,480
[Byron Boston]: are acting at dynamics if things have changed we’re trying to draw up scenarios

440
00:29:10,560 –> 00:29:11,760
[Byron Boston]: that include

441
00:29:12,940 –> 00:29:13,940
[Byron Boston]: some very

442
00:29:14,800 –> 00:29:15,920
[Byron Boston]: extreme scenarios

443
00:29:16,247 –> 00:29:21,207
[Ramsey Smith]: so then how do you how do you manage money differently so you have the old regime

444
00:29:21,367 –> 00:29:26,487
[Ramsey Smith]: right and you approach risk management one way and now this is new regime it’s

445
00:29:26,487 –> 00:29:31,127
[Ramsey Smith]: hyper inflation and but not hyper it it is inflationary it is inflationary there’s

446
00:29:30,740 –> 00:29:31,740
[Byron Boston]: yeah

447
00:29:31,207 –> 00:29:35,927
[Ramsey Smith]: there’s a lot of new risks um you know do you do you invest in different

448
00:29:36,087 –> 00:29:38,807
[Ramsey Smith]: instruments do you like how do you think about

449
00:29:40,167 –> 00:29:44,087
[Ramsey Smith]: you know managing your interest rate exposure just just big picture like what are

450
00:29:44,247 –> 00:29:47,767
[Ramsey Smith]: some what are some meaningful changes you think you’ll make in the way you run

451
00:29:47,467 –> 00:29:48,467
[Ramsey Smith]: your business

452
00:29:48,720 –> 00:29:53,280
[Byron Boston]: okay so i’m glad you asked this question i did bring this quote with me today so

453
00:29:53,067 –> 00:29:54,067
[Ramsey Smith]: okay

454
00:29:53,600 –> 00:29:58,400
[Byron Boston]: eight years ago in twenty fourteen here’s a quote from my

455
00:29:59,860 –> 00:30:00,860
[Byron Boston]: my fourth quarter

456
00:30:02,320 –> 00:30:06,960
[Byron Boston]: earnings call at the beginning of twenty fourteen i said we believe that economic

457
00:30:07,360 –> 00:30:11,360
[Byron Boston]: uncertainty regulatory uncertainty global market uncertainty have created a very

458
00:30:11,760 –> 00:30:17,360
[Byron Boston]: complex environment for global growth to be able to accelerate the levels seen in

459
00:30:17,440 –> 00:30:19,440
[Byron Boston]: prior post war uh

460
00:30:19,147 –> 00:30:20,147
[Ramsey Smith]: yeah

461
00:30:19,840 –> 00:30:24,320
[Byron Boston]: post war periods the recoveries so we use the word complex

462
00:30:25,600 –> 00:30:29,200
[Byron Boston]: i got a ton of people who like really challenged me for saying that the global

463
00:30:29,840 –> 00:30:32,000
[Byron Boston]: risk environment was complex that was twenty

464
00:30:32,187 –> 00:30:33,187
[Ramsey Smith]: i’m

465
00:30:32,400 –> 00:30:34,160
[Byron Boston]: fourteen so why is that relevant

466
00:30:35,220 –> 00:30:36,220
[Byron Boston]: look at i

467
00:30:35,907 –> 00:30:36,907
[Ramsey Smith]: oh i live there

468
00:30:36,000 –> 00:30:38,640
[Byron Boston]: joined Dynex in two thousand and eight when

469
00:30:38,800 –> 00:30:43,600
[Byron Boston]: we first started to invest we invested safely then we took on more risk starting

470
00:30:38,807 –> 00:30:40,647
[Ramsey Smith]: is more so creating to remember

471
00:30:43,380 –> 00:30:44,380
[Byron Boston]: about two

472
00:30:43,667 –> 00:30:44,667
[Ramsey Smith]: all those

473
00:30:44,080 –> 00:30:48,080
[Byron Boston]: thousand nine we went what we call down in credit we bought triple b assets single

474
00:30:48,160 –> 00:30:52,560
[Byron Boston]: a rated assets some non rated assets we took a ton of risk in terms of credit

475
00:30:53,280 –> 00:30:57,760
[Byron Boston]: about this period in twenty fourteen because we were concerned about the uh uh the

476
00:30:57,920 –> 00:31:00,880
[Byron Boston]: rising level of global risk complexity

477
00:31:00,507 –> 00:31:01,507
[Ramsey Smith]: movie

478
00:31:01,220 –> 00:31:02,220
[Byron Boston]: we started to

479
00:31:01,707 –> 00:31:02,707
[Ramsey Smith]: c

480
00:31:02,640 –> 00:31:07,200
[Byron Boston]: go what we call up and credit and up in liquidity we sold our lower credit rated

481
00:31:07,100 –> 00:31:08,100
[Byron Boston]: assets

482
00:31:08,880 –> 00:31:12,480
[Byron Boston]: we then started to sell our less liquid assets

483
00:31:12,107 –> 00:31:13,107
[Ramsey Smith]: yeah

484
00:31:13,040 –> 00:31:17,360
[Byron Boston]: and we moved what we call up and credit and up in liquidity by twenty eight

485
00:31:17,840 –> 00:31:18,880
[Byron Boston]: eighteen we were

486
00:31:18,667 –> 00:31:19,667
[Ramsey Smith]: education

487
00:31:19,120 –> 00:31:20,960
[Byron Boston]: pretty much so ninety five per cent

488
00:31:21,127 –> 00:31:23,847
[Ramsey Smith]: oh if you’re gonna go down there’s in the face

489
00:31:21,600 –> 00:31:24,880
[Byron Boston]: uh ownership the assets on our balance sheet that we

490
00:31:24,587 –> 00:31:25,587
[Ramsey Smith]: and

491
00:31:24,960 –> 00:31:27,280
[Byron Boston]: owned were all all the most liquid

492
00:31:28,480 –> 00:31:32,560
[Byron Boston]: real estate bonds that we could find which are thirty year residential

493
00:31:32,880 –> 00:31:39,040
[Byron Boston]: freddie mac fanny may securities furthermore we increase the amount of cash in

494
00:31:33,127 –> 00:31:35,767
[Ramsey Smith]: for in e as in rush text

495
00:31:38,780 –> 00:31:39,780
[Byron Boston]: what we call

496
00:31:39,547 –> 00:31:40,547
[Ramsey Smith]: yeah

497
00:31:39,600 –> 00:31:43,680
[Byron Boston]: unencumbered securities on our balance sheet that we call out liquidity versus

498
00:31:44,000 –> 00:31:49,920
[Byron Boston]: twenty thirteen when bernanke said taper we’re probably carrying you know six

499
00:31:49,700 –> 00:31:50,700
[Byron Boston]: seven

500
00:31:51,280 –> 00:31:56,080
[Byron Boston]: eight times as much cash and unencumbered assets on our balance sheet so we’re

501
00:31:56,240 –> 00:32:02,640
[Byron Boston]: very very liquid and we have a very very flexible mindset because we believe the

502
00:32:02,620 –> 00:32:03,620
[Byron Boston]: world is complex

503
00:32:04,880 –> 00:32:05,920
[Byron Boston]: and we believe we’re

504
00:32:05,867 –> 00:32:06,867
[Ramsey Smith]: just kind printing

505
00:32:06,000 –> 00:32:10,400
[Byron Boston]: going to be surprised the phrase we use is surprises are highly probable clearly

506
00:32:10,480 –> 00:32:14,960
[Byron Boston]: over the last eight years the surprises have continued to come and we’ve stuck

507
00:32:15,120 –> 00:32:19,680
[Byron Boston]: with our posture of being up in credit and up in liquidity this give us the

508
00:32:19,840 –> 00:32:24,160
[Byron Boston]: ability in my opinion we make the right decisions we have the ability to make

509
00:32:24,320 –> 00:32:28,640
[Byron Boston]: money in any environment um now you got to be able to assess the environment right

510
00:32:28,460 –> 00:32:29,460
[Byron Boston]: now you can’t

511
00:32:28,827 –> 00:32:29,827
[Ramsey Smith]: sh

512
00:32:29,200 –> 00:32:31,600
[Byron Boston]: assess the environment it’s uncertain what’s not gonna happen

513
00:32:30,887 –> 00:32:35,687
[Ramsey Smith]: so so so higher quality higher quality credits higher liquidity and

514
00:32:36,727 –> 00:32:38,567
[Ramsey Smith]: that served you well through the pandemic

515
00:32:38,880 –> 00:32:42,000
[Byron Boston]: yes very well through the pandemic we were ready for that we look very well

516
00:32:38,967 –> 00:32:44,727
[Ramsey Smith]: right at right not right like if you look at like some some mortgage rates did

517
00:32:44,707 –> 00:32:45,707
[Ramsey Smith]: better than others

518
00:32:45,927 –> 00:32:51,127
[Ramsey Smith]: in through the pandemic put that put it that way and then and then here you are in

519
00:32:46,000 –> 00:32:47,760
[Byron Boston]: yes substantially better

520
00:32:51,207 –> 00:32:56,087
[Ramsey Smith]: this next crisis and it sounds like a strategy it works it’s continue to work well

521
00:32:57,367 –> 00:33:02,487
[Ramsey Smith]: you know the takeaway for this audience you know is is just sort of think about

522
00:33:02,567 –> 00:33:04,647
[Ramsey Smith]: things is like all right well how how do i think about

523
00:33:05,767 –> 00:33:11,047
[Ramsey Smith]: my own portfolio or my client’s portfolios if one is to sort of follow your lead

524
00:33:12,087 –> 00:33:15,607
[Ramsey Smith]: it is it is you know a flight to flight to higher quality

525
00:33:16,647 –> 00:33:21,047
[Ramsey Smith]: a flight to higher quality and having more liquidity as opposed to sort of dialing

526
00:33:21,127 –> 00:33:23,127
[Ramsey Smith]: up on risk but the interesting thing is everybody

527
00:33:24,167 –> 00:33:26,087
[Ramsey Smith]: everybody’s dialing up on risk these days

528
00:33:26,240 –> 00:33:28,480
[Byron Boston]: they are everyone wants to buy the dip

529
00:33:26,727 –> 00:33:29,847
[Ramsey Smith]: right we are in a low interest rate environment so a lot of people are going the

530
00:33:29,847 –> 00:33:33,127
[Ramsey Smith]: other way right so that’s kind of an interesting dichotomy there yeah

531
00:33:30,480 –> 00:33:34,560
[Byron Boston]: yeah they are they are can i give your thought on that um

532
00:33:34,187 –> 00:33:35,187
[Ramsey Smith]: sure

533
00:33:34,960 –> 00:33:39,200
[Byron Boston]: because i’m always thinking about the the individual investor i’d say fifty

534
00:33:39,440 –> 00:33:45,280
[Byron Boston]: percent of our investors are what we call retail investors and i have a great

535
00:33:45,520 –> 00:33:48,320
[Byron Boston]: concern for my generation the baby boom generation

536
00:33:49,360 –> 00:33:54,160
[Byron Boston]: they have just talked to too many friends who all believe in buying the dip they

537
00:33:54,320 –> 00:33:58,320
[Byron Boston]: all use phrases like well it always comes back don’t sell buy into it it always

538
00:33:58,260 –> 00:33:59,260
[Byron Boston]: comes back

539
00:34:00,560 –> 00:34:02,240
[Byron Boston]: you know by the dip mentality

540
00:34:03,280 –> 00:34:07,360
[Byron Boston]: i would urge whether it’s a if you’re an investment advisor listening to this or

541
00:34:07,440 –> 00:34:13,200
[Byron Boston]: if you an individual listening to this i would not simply fall back on the by the

542
00:34:13,280 –> 00:34:18,480
[Byron Boston]: dip mentality i would really do some analysis and understand why you are

543
00:34:18,800 –> 00:34:23,040
[Byron Boston]: continuing to if you’ve got your your your you just fully invested

544
00:34:24,560 –> 00:34:29,440
[Byron Boston]: you know for example all your risk is in stocks i would try to diversify in some

545
00:34:29,520 –> 00:34:31,840
[Byron Boston]: way shape form a fashion your holdings

546
00:34:33,600 –> 00:34:40,240
[Byron Boston]: i would ask myself what would happen if the stock market corrected and it didn’t

547
00:34:40,320 –> 00:34:44,880
[Byron Boston]: come back for seven years so i’m using the seven year benchmark because i think if

548
00:34:44,880 –> 00:34:49,680
[Byron Boston]: you bought the s and p five hundred in two thousand jan two thousand i don’t think

549
00:34:49,760 –> 00:34:55,280
[Byron Boston]: you got back to even t two thousand seven and then you got cober again with the

550
00:34:55,440 –> 00:34:59,920
[Byron Boston]: with the great uh financial crash and then you had to wait another probably seven

551
00:35:00,160 –> 00:35:04,560
[Byron Boston]: or eight years after that to get back to that level if you would have bought the s

552
00:35:04,720 –> 00:35:09,120
[Byron Boston]: and p five hundred i think in nineteen twenty nine you didn’t get back even until

553
00:35:09,300 –> 00:35:10,300
[Byron Boston]: nineteen fifty five

554
00:35:10,358 –> 00:35:11,358
[Paul Tyler]: yeah

555
00:35:11,280 –> 00:35:15,600
[Byron Boston]: and so finally we ran a chart at Dynex that

556
00:35:16,800 –> 00:35:21,120
[Byron Boston]: that layered on the growth of the fed’s balance sheet and the s and

557
00:35:20,747 –> 00:35:21,747
[Ramsey Smith]: where

558
00:35:21,200 –> 00:35:25,040
[Byron Boston]: p five hundred and and if you just a visual looks like a one to one relationship

559
00:35:25,680 –> 00:35:28,800
[Byron Boston]: right so there’s been a ton of liquidity pumped into the global system

560
00:35:28,427 –> 00:35:29,427
[Ramsey Smith]: oh

561
00:35:29,040 –> 00:35:30,160
[Byron Boston]: by the central banks

562
00:35:30,027 –> 00:35:31,027
[Ramsey Smith]: oh

563
00:35:30,640 –> 00:35:32,320
[Byron Boston]: that has inflated all

564
00:35:32,187 –> 00:35:33,187
[Ramsey Smith]: okay

565
00:35:34,080 –> 00:35:35,360
[Byron Boston]: all like let be two

566
00:35:36,460 –> 00:35:37,460
[Byron Boston]: an enormous

567
00:35:36,947 –> 00:35:37,947
[Ramsey Smith]: you cannot

568
00:35:37,440 –> 00:35:41,600
[Byron Boston]: amount of elevation in global asset prices stocks um

569
00:35:43,040 –> 00:35:44,480
[Byron Boston]: anti cars art

570
00:35:45,520 –> 00:35:49,120
[Byron Boston]: houses at least in the housing i think it’s a little bit unique i have an opinion

571
00:35:49,120 –> 00:35:54,000
[Byron Boston]: on that i’ll give you but they’re crypto there’s an enormous amount of liquidity

572
00:35:54,320 –> 00:35:59,600
[Byron Boston]: that has supported global asset prices i personally this is a byron opinion i am

573
00:35:59,840 –> 00:36:04,640
[Byron Boston]: concerned about a global asset price correction i don’t believe if let’s say you

574
00:36:04,640 –> 00:36:07,760
[Byron Boston]: didn’t have the russia situation if the central banks would have tried to reduce

575
00:36:08,000 –> 00:36:12,400
[Byron Boston]: their balance sheets and they try to do it now i eventually i do not believe they

576
00:36:12,480 –> 00:36:16,000
[Byron Boston]: can do it without with a soft landing i i don’t believe that they can do it with a

577
00:36:16,000 –> 00:36:20,560
[Byron Boston]: soft landing that i i just don’t believe they can do it so i am concerned about

578
00:36:20,640 –> 00:36:25,440
[Byron Boston]: the baby boom generation why because i’m sixty three so let’s say i take a hit in

579
00:36:25,520 –> 00:36:28,960
[Byron Boston]: two thousand it doesn’t come back to seven years okay i’m seventy now and then

580
00:36:29,040 –> 00:36:32,080
[Byron Boston]: let’s say i take another hit like the great financial crash when i’m seventy and i

581
00:36:32,320 –> 00:36:35,840
[Byron Boston]: maybe i’m dead by the time or before it comes back you see what i’m saying i mean

582
00:36:35,920 –> 00:36:39,360
[Byron Boston]: i’m just being real here about it if you’re if you you’ve got to think if you

583
00:36:39,440 –> 00:36:43,920
[Byron Boston]: don’t earn money anymore you’ve retired a lot of baby boomers have retired early

584
00:36:44,240 –> 00:36:48,960
[Byron Boston]: right the great resignation you must make sure you think about do you have enough

585
00:36:49,280 –> 00:36:53,280
[Byron Boston]: assets to go as long as you want to live everyone says i want to let them ninety

586
00:36:53,360 –> 00:36:57,040
[Byron Boston]: ninety five really well then maybe you should should work to seventy you know so

587
00:36:56,678 –> 00:36:57,678
[Paul Tyler]: yeah

588
00:36:57,200 –> 00:37:01,680
[Byron Boston]: check your income make sure you’ve got enough coming in and understand that this

589
00:37:01,760 –> 00:37:08,880
[Byron Boston]: is a unique moment in history don’t just buy the dip because you bought the dip in

590
00:37:08,960 –> 00:37:10,960
[Byron Boston]: nineteen nineties and everything worked out okay

591
00:37:12,478 –> 00:37:13,478
[Paul Tyler]: wow

592
00:37:14,098 –> 00:37:15,138
[Paul Tyler]: ramsey this was

593
00:37:14,827 –> 00:37:15,827
[Ramsey Smith]: but

594
00:37:15,298 –> 00:37:16,658
[Paul Tyler]: great where the end of the hour

595
00:37:17,598 –> 00:37:18,598
[Paul Tyler]: it went fast

596
00:37:19,067 –> 00:37:20,067
[Ramsey Smith]: sure did

597
00:37:19,620 –> 00:37:20,620
[Byron Boston]: yeah

598
00:37:21,207 –> 00:37:28,247
[Ramsey Smith]: so at byron thanks thanks for thanks for coming back a lot of takeaways from that

599
00:37:28,407 –> 00:37:33,447
[Ramsey Smith]: but perhaps the biggest one for me this time around was you know that there’s not

600
00:37:33,767 –> 00:37:37,847
[Ramsey Smith]: probably a scope for soft landing and right and most importantly you didn’t see a

601
00:37:37,927 –> 00:37:38,967
[Ramsey Smith]: soft landing before

602
00:37:39,220 –> 00:37:40,220
[Byron Boston]: no

603
00:37:39,447 –> 00:37:40,887
[Ramsey Smith]: russia invaded ukraine

604
00:37:41,020 –> 00:37:42,020
[Byron Boston]: no i really don’t know

605
00:37:41,847 –> 00:37:46,567
[Ramsey Smith]: so whatever the delta was on you know they’re not being a soft landing it’s even

606
00:37:46,427 –> 00:37:47,427
[Ramsey Smith]: higher so

607
00:37:46,820 –> 00:37:47,820
[Byron Boston]: yeah

608
00:37:47,207 –> 00:37:50,007
[Ramsey Smith]: i yeah hard landing the delta hard landing is even higher

609
00:37:49,700 –> 00:37:50,700
[Byron Boston]: yeah

610
00:37:50,407 –> 00:37:55,687
[Ramsey Smith]: so a that’s a very very sort of interesting view and it’s consistent with your

611
00:37:55,767 –> 00:37:59,367
[Ramsey Smith]: focus on liquidity and higher quality so thank think of shame

612
00:37:57,840 –> 00:38:01,200
[Byron Boston]: and we’re still able to generate a solid above average dividend yield it’s not

613
00:38:00,747 –> 00:38:01,747
[Ramsey Smith]: yeah

614
00:38:01,200 –> 00:38:04,080
[Byron Boston]: like we’ve said shareholders are well at a great above average

615
00:38:03,787 –> 00:38:04,787
[Ramsey Smith]: yeah

616
00:38:03,980 –> 00:38:04,980
[Byron Boston]: dividend yield

617
00:38:06,320 –> 00:38:09,840
[Byron Boston]: guys are still making solid cash income from both our preferred stock

618
00:38:09,387 –> 00:38:10,387
[Ramsey Smith]: yeah

619
00:38:09,860 –> 00:38:10,860
[Byron Boston]: and our common stock

620
00:38:11,378 –> 00:38:17,138
[Paul Tyler]: yeah well byron thank you again this was i got a lot of more questions we’ll save

621
00:38:17,078 –> 00:38:18,078
[Paul Tyler]: it for that for next step

622
00:38:18,507 –> 00:38:19,507
[Ramsey Smith]: hi

623
00:38:20,258 –> 00:38:22,578
[Paul Tyler]: if people want to get more of what you’re

624
00:38:23,598 –> 00:38:24,598
[Paul Tyler]: telling us

625
00:38:25,378 –> 00:38:28,898
[Paul Tyler]: how do they do this what is the best way to follow you know what you’re writing

626
00:38:28,798 –> 00:38:29,798
[Paul Tyler]: saying doing

627
00:38:31,300 –> 00:38:32,300
[Byron Boston]: you know we we do have

628
00:38:31,947 –> 00:38:32,947
[Ramsey Smith]: let’s see

629
00:38:32,480 –> 00:38:38,880
[Byron Boston]: our quarterly uh calls are very detailed and we do have a macro view we start with

630
00:38:38,960 –> 00:38:45,200
[Byron Boston]: the macro view to ultimately get to the investments so every quarter we do have a

631
00:38:45,360 –> 00:38:50,800
[Byron Boston]: call sometimes i post on a linkedin but i try try to be very careful

632
00:38:51,920 –> 00:38:58,240
[Byron Boston]: about some of the social media we do at Dynex we do post we do post certain points we

633
00:38:58,480 –> 00:39:00,160
[Byron Boston]: thought about you know some of the economic

634
00:39:01,140 –> 00:39:02,140
[Byron Boston]: thoughts that we have

635
00:39:03,200 –> 00:39:07,280
[Byron Boston]: but you know it’s like when i said complex in two thousand fourteen i had so many

636
00:39:07,360 –> 00:39:10,720
[Byron Boston]: people who didn’t understand what i was really saying why were we going up in

637
00:39:10,720 –> 00:39:15,520
[Byron Boston]: credit or up in liquidity and so sometimes i like yeah you know fine i’ve got

638
00:39:15,540 –> 00:39:16,540
[Byron Boston]: shareholders who

639
00:39:16,358 –> 00:39:17,358
[Paul Tyler]: excuse me

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[Byron Boston]: listen to us and we’re all in the same boat together and we’re happy and i want to

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[Byron Boston]: take care of my shareholders it’s very very important so please you know there is

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[Byron Boston]: a quarterly call that’s there i i urge people with annuities to look to diversify

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[Byron Boston]: with something like a nine x capital stock or a preferred stock and and we’re in

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[Byron Boston]: the same boat as all of our shareholders were

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[Paul Tyler]: so

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[Byron Boston]: dedicated to making their lives better

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[Paul Tyler]: okay hey listen great ramsey thanks byron thank you and

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[Ramsey Smith]: pleasure

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[Paul Tyler]: thanks to thanks all our listeners join us again next week for another episode of

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[Paul Tyler]: that annuity show

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[Byron Boston]: thank you for having me

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[Ramsey Smith]: alright appreciate it byron

Episode 138: Sizing the Prize of Institutional Annuities with Martin Powell and Bruno Caron

March 10, 2022 2022, Bruno Caron, Martin Powell, Podcast, Retirement No comments

We opened our digital papers a few weeks ago to read an article in AM Best News entitled, “Annuity Providers See Growth Opportunity in US Retirement Plan Changes.” Who was quoted but none other than two regular guests – Martin Powell, Head of Annuity Distribution for CUNA Mutual and Bruno Caron Associate Director at AM Best. It’s a big prize. Even converting a small share of the $7.3 trillion in assets in 401(k) plans to annuities would prove transformational for the industry. We decided to “double click” on the article and bring in both experts to continue the discussion.

Also, do you want to get regular updates on news about guests of our show? Go to https://thatannuityshow.com and subscribe to our newsletter.

We hope you enjoy the show.

Links mentioned today:

https://news.ambest.com/newscontent.aspx?refnum=239183&altsrc=114

Martin Powell:

https://www.linkedin.com/in/martin-powell-4790b01a/

Bruno Caron:

https://www.linkedin.com/in/bruno-caron-68a303/

Thank you to our show sponsor, CUNA Mutual!

Built on the principle of “people helping people,” CUNA Mutual Group is a financially strong insurance, investment and financial services company that believes a brighter financial future should be accessible to everyone. Through our company culture, community engagement, and products and solutions, we are working to create a more equitable financial system that helps to improve the lives of those we serve and our society. For more information, visit cun amutual.com/annuities.

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Transcript

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[Paul Tyler]: Hi, this is Paul Tyler, and welcome to a. another episode of that annuity show

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[Paul Tyler]: and uh, uh, Mark Ramsey, good to see you.

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[Mark Fitzgerald]: as always great being here

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[Ramsey Smith]: Great to be here. Always

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[Paul Tyler]: Yeah, and uh, you know. every once in a while you know we. we see breaking news

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[Paul Tyler]: and we say Wow, look at this. Our, Our, The Our universes are colliding and Um.

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[Paul Tyler]: in um,

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[Paul Tyler]: uh, A Ms. news actually came across. Uh, recently released an article entitled

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[Paul Tyler]: The annuity providers see growth opportunity in U. S retirement Plan changes. We’ve

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[Paul Tyler]: been talking about the secure act. We’ve been talking about the opportunity in

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[Paul Tyler]: in, uh in in some of the the institutional retirement plans, And who’s ▁quoted.

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[Paul Tyler]: But we have a picture of Bruno Car and Bruno. welcome to a show.

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[Bruno Caron]: thank you great to be back here

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[Paul Tyler]: Yeah, D, no, lovely and uh, Martin Powell, uh, from CUNA Mutual, who is head of

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[Paul Tyler]: the Unity distribution. Martin, We got you on as well, Martin. Welcome.

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[Martin Powell]: to be back could seeing everybody

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[Paul Tyler]: Yeah, yeah, glad to have you. So two two regular, uh, guests now, Martin. you’re

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[Paul Tyler]: now regular on the show, Um, we, we’ll put that in our show notes. Um, but uh,

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[Paul Tyler]: uh, real interesting opportunity. thought it was timely to talk about. Only you

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[Paul Tyler]: know W. how big is this market going? How quick is it going to change? And and

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[Paul Tyler]: just generally you know where’s the annuity industry going Toead In the next you

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[Paul Tyler]: know, couple of quarters. Given all the turmoil. Um, so um, Ramsey. How kind ofl

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[Paul Tyler]: have you lead off? This is uh, an important area for you in a lot of focus.

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[Ramsey Smith]: sure,

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[Paul Tyler]: Um, where shall we start

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[Ramsey Smith]: so I think maybe the the biggest potential opportunity in the retirement

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[Ramsey Smith]: income space is with four one plans, so implant annuities and it’s an area

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[Ramsey Smith]: that’s been under developed for a variety of reasons. Part of it that uh

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[Ramsey Smith]: hopefully has been cured by the advent of the secure act, But there’s still

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[Ramsey Smith]: a whole lot more work to do in the space and uh, so I was fascinated when I

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[Ramsey Smith]: saw this article that featured Uh. Bruno and Martin, You know, talking about

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[Ramsey Smith]: where what the potential is there. I think that’s I think it is. Uh. I think

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[Ramsey Smith]: is is the one place that might help to save the retirement income problem

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[Ramsey Smith]: that we have you know across the broadest possible audience. So uh, from my

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[Ramsey Smith]: perspective, this is this is. This may be the most most important mission of

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[Ramsey Smith]: the insurance industry. So Martin and Bruno, you guys are on the front

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[Ramsey Smith]: lines. Uh, and you know you know, Martin, You know you are. You run an annuity

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[Ramsey Smith]: distribution, So you, you know very much. What’s what’s Uh, You know what’s

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[Ramsey Smith]: on the horizon for Cuna Bruno. You have a fantastic perspective across the

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[Ramsey Smith]: industry In your role at a M. best, so we’re just we’re really looking

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[Ramsey Smith]: forward to hearing from both of you One. your perspectives on what you’re

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[Ramsey Smith]: seeing, and too, your perspective on where you think you’d like to see.

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[Ramsey Smith]: You’d like to see things go. So so Martin, why do we start with you and and

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[Ramsey Smith]: Martin? even though you were just on our last show? Please re, introduce

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[Ramsey Smith]: yourself a little bit. because we, we have the the benefit of doing back to

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[Ramsey Smith]: back recordings today, which has been great.

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[Martin Powell]: well thanks thanks for having me back and it’s martin powell i’m responsible for

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[Martin Powell]: annuity distribution for community cut a mutual group historically been focused

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[Martin Powell]: just on credit unions now’ outside with independent and bank broker dealers

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[Martin Powell]: selling our annuity products and uh we’re growing

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[Martin Powell]: to be a top twenty an new distributor in the country and we’re really bullish on

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[Martin Powell]: the annuity market because it really drives at our mission to help people get

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[Martin Powell]: access to a brighter financial future and

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[Martin Powell]: we really see that this

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[Martin Powell]: opportunity

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[Martin Powell]: to continue to grow not only through financial advisers because its annuities

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[Martin Powell]: today are sold through a financial advisor sitting face to face with somebody

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[Martin Powell]: who is near retirement or in retirement talking about income protection

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[Martin Powell]: and as all of us on this call know that annuity is the only product in the world

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[Martin Powell]: that provides a personal pension and the best longevity insurance you can

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[Martin Powell]: get

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[Martin Powell]: but now introducing it to a four hundred one thousand plan it’s just powerful

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[Martin Powell]: especially if you can

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[Martin Powell]: you know similar to what they do now in four hundred one thousand plans they you

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[Martin Powell]: have to opt out

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[Martin Powell]: versus opt in and we’ve seen the numbers change dramatically with four four o one

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[Martin Powell]: k um

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[Martin Powell]: same thing here where you they can opt they need to opt out potentially of

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[Martin Powell]: getting annuity because once again people need this product and their portfolio

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[Martin Powell]: and it’s going to raise the awareness it’s gonna get more people educated

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[Martin Powell]: on protecting

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[Martin Powell]: their income stream and protecting against longevity so i think it’s really

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[Martin Powell]: exciting to see the development and for us as a company to work on our strategy

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[Martin Powell]: to ultimately at some point in time induce space as well to get not just with the

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[Martin Powell]: financial advisers but to ultimately get with the plan sponsors and the ultimate

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[Martin Powell]: employees

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[Martin Powell]: getting opportunities to protect their um retirement

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[Paul Tyler]: and Bruno Ramsey said, I love his declaration. The biggest opportunity that

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[Paul Tyler]: the annuity industry faces

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[Paul Tyler]: the next five to ten years, true or false,

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[Bruno Caron]: true absolutely true

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[Bruno Caron]: and uh you know definitely echoing ah Ramsey and and martin comments uh j just

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[Bruno Caron]: earlier and

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[Martin Powell]: no

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[Bruno Caron]: it it’s is nice for for us as as as rating analysts i mean obviously the the biggest

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[Bruno Caron]: product we offer at the

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[Bruno Caron]: but at the same time it is important for us

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[Bruno Caron]: you know to to always get back to fundamentals

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[Bruno Caron]: and

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[Mark Fitzgerald]: yeah

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[Bruno Caron]: you know we always we always in constant conversations with our colleagues on the

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[Bruno Caron]: on the pnc side and you know this whole concept of risk cooling is so fundamental

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[Bruno Caron]: and the you know most people i know uh will earn more in a year than the value of

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[Bruno Caron]: their car

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[Bruno Caron]: and that that’s just you know you know people who make fifty thousand dollars

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[Bruno Caron]: will most likely have a card that’s worth a little less than that uh a hundred

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[Bruno Caron]: thousand dollars two hundred thousand dollars whatever your number is

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[Bruno Caron]: and yet people risk pool the risk of

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[Bruno Caron]: uh damaging their car if their car you know they have an accident and they have

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[Bruno Caron]: you know the risk pool that that risk through car insurance

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[Bruno Caron]: and

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[Mark Fitzgerald]: yes

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[Bruno Caron]: you know think about earnings when it make sense to risk pool that the value of

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[Bruno Caron]: earnings you know if you outlive

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[Bruno Caron]: your your your life expectancy by one year

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[Bruno Caron]: two years a decade two decades uh

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[Bruno Caron]: doesn’t it make sense to have that type of risk pooling you know w within your

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[Bruno Caron]: retirement planning and i think the answer is yes i think you know to go back to

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[Bruno Caron]: your question

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[Bruno Caron]: true absolutely true i think it’s a huge opportunity the

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[Bruno Caron]: the insurance industry has you know at at the forefront and there’s been a lot of

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[Bruno Caron]: improvement there’s been a lot of development you mentioned so i think it’s it’s

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[Bruno Caron]: a very very exciting time for for lifetime income

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[Ramsey Smith]: So should we revisit this? this idea of opting versus opt out, because I

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[Ramsey Smith]: think it’s a very importantlynch in in whether or not this works. So so

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[Ramsey Smith]: Martin, you mentioned, Uh, opt out as being part of the future. Um,

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[Ramsey Smith]: how important do you think that is to the success of of impuities?

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[Ramsey Smith]: If if consumers can simply elect or or have to elect in order to get

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[Ramsey Smith]: guaranteed income?

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[Ramsey Smith]: what kind of what kind of take rates would youpo More orders of magnitude,

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[Ramsey Smith]: not’ not looking for specific statistics, But how much of a difference do

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[Ramsey Smith]: you think it makes you know based on your your years of experience,

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[Martin Powell]: it makes a tremendous difference that if people

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[Martin Powell]: have tot out and go their way they’re going to be so much more successful of of

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[Martin Powell]: saving in their four one k plan and take advantage of the benefits of a form one

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[Martin Powell]: k and the same thing here um

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[Martin Powell]: they need to ensure

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[Martin Powell]: their income for your life and

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[Mark Fitzgerald]: alright good morning everybody

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[Martin Powell]: great analogy about car insurance right

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[Mark Fitzgerald]: uh

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[Martin Powell]: there’s no opt out or apt in based on your f i mean many people

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[Mark Fitzgerald]: on

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[Martin Powell]: financially

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[Mark Fitzgerald]: uh one

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[Martin Powell]: they they they have to get car insurance right it’s not you can’t

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[Martin Powell]: go down

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[Mark Fitzgerald]: i

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[Martin Powell]: to a state

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[Martin Powell]: so it’s just it’s it’s so important that

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[Mark Fitzgerald]: s

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[Martin Powell]: you know the

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[Mark Fitzgerald]: trees

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[Martin Powell]: the power of insurance

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[Martin Powell]: is is pooling pulling your wrist

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[Martin Powell]: and y you

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[Mark Fitzgerald]: yeah

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[Martin Powell]: got to educate people on it so i i opted out to me is

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[Martin Powell]: is the game changer here and it really

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[Ramsey Smith]: So

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[Martin Powell]: sobs it solves the

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[Martin Powell]: the uh the pension crisis in this country

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[Paul Tyler]: Yp.

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[Ramsey Smith]: so I, I always like the ask of the question of people. So is social

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[Ramsey Smith]: so I, I always like the ask of the question of people. So is social

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[Ramsey Smith]: security? Is it optrupt out?

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[Ramsey Smith]: security? Is it optrupt out?

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[Ramsey Smith]: Actuallyly, just opt

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[Martin Powell]: that’s right

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[Ramsey Smith]: you’re in. right,

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[Martin Powell]: exactly where in

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[Ramsey Smith]: not optional, right, uh,

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[Ramsey Smith]: the, the the find define pension benefit plans when they existed like you

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[Mark Fitzgerald]: so

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[Ramsey Smith]: know, optional, y or nay,

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[Ramsey Smith]: nay,

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[Mark Fitzgerald]: right

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[Martin Powell]: yes

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[Ramsey Smith]: right.

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[Paul Tyler]: Yeah,

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[Ramsey Smith]: So arguably those are the two most successful, at least two of the most

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[Ramsey Smith]: successful retirement income. Uh, sort of Uh platforms

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[Mark Fitzgerald]: you

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[Ramsey Smith]: right. So D v plans obviously are being phased out, but they have been

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[Ramsey Smith]: successful in their

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[Mark Fitzgerald]: your

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[Ramsey Smith]: lifetime. They have successfully achieved what they’re supposed to do as a

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[Ramsey Smith]: social security. So they, they all have in common is common

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[Mark Fitzgerald]: okay

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[Ramsey Smith]: is that they’re they’re mandatory. And so

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[Mark Fitzgerald]: oh

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[Ramsey Smith]: you know, to your point, Martin, it’s hard to see how how imple annuities

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[Ramsey Smith]: are going to

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[Ramsey Smith]: be successful. I think it’s either going to be binary area, they fail

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[Ramsey Smith]: completely. arere going to be very successful.

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[Ramsey Smith]: And And and it’s probably because they will. They will. precisely this

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[Ramsey Smith]: reason that you’ve highlighted that they will be uh, not optional.

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[Paul Tyler]: well, let’s play it forward, Ramsey.

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[Ramsey Smith]: Mhm,

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[Paul Tyler]: let’s assume a world where

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[Paul Tyler]: it is there’. It’s opt

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[Mark Fitzgerald]: there’s a

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[Paul Tyler]: out or it’s you have no choice. Um, let’s say, let’s let’s say it mirrors the

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[Paul Tyler]: four K. It’s an opt out type situation. I know Marin, Bru, Mark I, what is this

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[Paul Tyler]: do for the individual advisor? Help hurt

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[Paul Tyler]: the the sale of individual anuities,

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[Mark Fitzgerald]: i i personally think long term yeah

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[Bruno Caron]: i think it helps all at all else being equal regardless of the shape or form of

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[Bruno Caron]: you know you know the that relationship the conversation whatever it is

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[Bruno Caron]: people will need some sort of advice people will

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[Bruno Caron]: we’ll need

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[Bruno Caron]: advice in one

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[Mark Fitzgerald]: let’s see

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[Bruno Caron]: way or another now this may you know this may challenge you know

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[Mark Fitzgerald]: but yeah

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[Bruno Caron]: the current environment that it may or may it may not it remains to be seen

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[Bruno Caron]: but that that advice that thinking that’s shopping i mean you know

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[Mark Fitzgerald]: what

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[Bruno Caron]: there’s a lot of value added there to to have that that knowledge and the average

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[Mark Fitzgerald]: yeah

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[Bruno Caron]: person doesn’t necessarily have that

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[Bruno Caron]: you know that

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[Bruno Caron]: that knowledge and that goes back to your original you know discussion on opt in

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[Bruno Caron]: opt out you know i always think of myself

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[Bruno Caron]: buying things where i’m not i’m you know i’m not an expert it’s not something i

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[Ramsey Smith]: Think might no buying

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[Bruno Caron]: think about every day

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[Mark Fitzgerald]: see

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[Bruno Caron]: and that default option is is very

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[Bruno Caron]: and that default option is is very

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[Ramsey Smith]: every day and

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[Bruno Caron]: is very important

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[Mark Fitzgerald]: yes

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[Bruno Caron]: and it really

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[Bruno Caron]: you know it really guides without even knowing um but at the end of the day that

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[Ramsey Smith]: guled

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[Bruno Caron]: that that knowledge

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[Mark Fitzgerald]: yeah

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[Bruno Caron]: is

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[Mark Fitzgerald]: he

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[Bruno Caron]: is is is key

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[Mark Fitzgerald]: yeah i agree i mean i think

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[Paul Tyler]: Yeah, more.

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[Mark Fitzgerald]: the key i think the key is really the educational process going into it because

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[Mark Fitzgerald]: even if you think about outside of the qualified plan marketplace and look at

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[Mark Fitzgerald]: look at the hurdle with advisors in terms of changing the mindset from an

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[Mark Fitzgerald]: accumulation focus strategy to a distribution focus strategy and that challenge

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[Mark Fitzgerald]: still ongoing in terms of you know how to how to put that right structure in

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[Mark Fitzgerald]: place and then you bring it now to the consumer level that it has always looked

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[Mark Fitzgerald]: at four hundred one k plans as purely an accumulation strategy i think the key is

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[Mark Fitzgerald]: really going to be number one educating up front making sure

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[Mark Fitzgerald]: that that they understand the value behind that and to Ramsey’s point that the

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[Bruno Caron]: oh

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[Mark Fitzgerald]: successful programs that are you know not opted in and guaranteed you know have

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[Mark Fitzgerald]: been really the the foot sholes of of successful retirement over the years

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[Mark Fitzgerald]: i think the other interesting challenge is and it’s always been interesting to to

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[Mark Fitzgerald]: see the disconnect that people have as it relates to what the equitable income

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[Mark Fitzgerald]: lifetime income is from an accumulated asset and i think it’s really important to

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[Mark Fitzgerald]: make sure that people understand going into it the value of that in terms of what

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[Mark Fitzgerald]: this projection can generate going down the road and the key is going to be that

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[Mark Fitzgerald]: point of of education up front i think

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[Paul Tyler]: Yeah, Mar, Martin, I got a friend, Uh, a call from a friend of mine who actually

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[Mark Fitzgerald]: um

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[Paul Tyler]: retired from at life and said, Oh, Paul, uh, you actually made it. He was on the

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[Paul Tyler]: Def Benefit and he got his pension. he said, Oh, I just got this forum telling

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[Paul Tyler]: me how much money I’m going to. This converts into what are? Are you see? Any

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[Mark Fitzgerald]: so

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[Paul Tyler]: advisers? Taking advantage of this is an opportunity to go and talk to people

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[Paul Tyler]: about an noities,

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[Martin Powell]: i i had not had any opportunity or or been told by any

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[Mark Fitzgerald]: see

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[Martin Powell]: advisor about them

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[Mark Fitzgerald]: never

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[Martin Powell]: take the opportunity to go out but

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[Mark Fitzgerald]: that

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[Martin Powell]: when you you think about

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[Martin Powell]: you know ten million households control probably ninety plus percent of the

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[Martin Powell]: wealth in this country right and that’s primarily where financial advisors are

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[Martin Powell]: all right there’s a hundred and thirty million households in this country so this

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[Martin Powell]: think now if they have an annuity

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[Martin Powell]: for more people have four hundred one ks because we’re making them opt out just

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[Martin Powell]: think the need for the

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[Ramsey Smith]: be

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[Martin Powell]: advice one

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[Martin Powell]: now you’re not working anymore and you gotta climb down the mountain with your

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[Martin Powell]: accumulation

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[Martin Powell]: it’s just gonna right raise the tide and need for advice

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[Martin Powell]: so i i just

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[Martin Powell]: it’s it’s just exciting that it’s gonna it’s gonna raise the need for advice

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[Paul Tyler]: Okay, w. one of my first jobs was a management consultant. So Bruno, I’m very

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[Paul Tyler]: good at slides and Marin. I’m really good at spreadsheets. Him. Say anything

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[Bruno Caron]: what specific

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[Paul Tyler]: right, so the article says,

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[Paul Tyler]: Seven point three trillion dollars, or sitting there in the four o one k market

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[Paul Tyler]: Marin. I’ve got a plan to get you to. I’m going to get two percent of that

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[Paul Tyler]: market

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[Bruno Caron]: what

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[Paul Tyler]: for your company. Uh, is this an opportunity when you, when you size this thing

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[Paul Tyler]: out, Is this a a

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[Paul Tyler]: crawl, walk, or or a run imperative for most Uh, nodity companies today you’re

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[Paul Tyler]: not not speaking for Ka, but speaking for you know, your the colleagues, your

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[Paul Tyler]: colls cross the across the country.

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[Martin Powell]: i i i think it’s a initial crawl

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[Martin Powell]: f for us and and its probably part of our

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[Martin Powell]: our dna

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[Martin Powell]: to get to get it right you know just because we’re in the in the business of of

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[Martin Powell]: risk so i think it’ll be a crawl and an acceleration in in

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[Martin Powell]: if you just think about products like somebody’s got to go take the risk and they

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[Martin Powell]: see the success we all come in

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[Martin Powell]: and develop and innovate and bring products and we and then finally it becomes a

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[Martin Powell]: market and we start innovating back and forth between the companies a competitive

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[Martin Powell]: perspective so that’s what i see happening here

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[Paul Tyler]: Ramsey should be a really fast crawl.

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[Martin Powell]: eight

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[Ramsey Smith]: Um. I, I think it should be, but I’m I’m biased. Uh, I think I think there

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[Ramsey Smith]: will be people that are

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[Ramsey Smith]: the

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[Martin Powell]: picture

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[Ramsey Smith]: leaders and the people that are that are fast followers and people that that

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[Ramsey Smith]: are that are happy coming sort of further back and everybody has their own.

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[Ramsey Smith]: You know reasons for that. Uh, I. I. I do think that we

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[Ramsey Smith]: just need to make sure that we have some leaders. Some folks that are that

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[Ramsey Smith]: are getting the Uh. getting the ball rolling be cause. it’s a. It’s actually

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[Ramsey Smith]: a complicated business. It’s way more than just a product. Be cause once as

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[Ramsey Smith]: soon as you bring it into a four o one K. You say All right. Well if I bring

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[Ramsey Smith]: it into a four o one K.

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[Ramsey Smith]: Probably it’s not stand alone. Probably it’s it’s embedded in a in a target

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[Ramsey Smith]: date fund, So all the you know, all the products have been offered so far,

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[Ramsey Smith]: Including the one Martin that you mentioned usually are it’s a. It’s a

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[Ramsey Smith]: guaranteed income product or annuity embedded in a target

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[Mark Fitzgerald]: yeah

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[Ramsey Smith]: date fund. Says structure around that. there’s an entire protocol with the

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[Ramsey Smith]: way that the various members of the four one K

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[Ramsey Smith]: ecosystem have to communicate with each other. So record keepers, in this

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[Mark Fitzgerald]: and we cg but somebody else

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[Ramsey Smith]: case a carer, An asset manager is probably a fiduciary, or too involved. So

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[Ramsey Smith]: its actually,

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[Mark Fitzgerald]: if you know is there suggested

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[Ramsey Smith]: it’s actually much more than a product sale. It is a

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[Mark Fitzgerald]: like me

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[Ramsey Smith]: platform sale, And that, so, from my perspective is that everybody should be

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[Ramsey Smith]: figuring out the platform part now, because the product parts the easy part.

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[Paul Tyler]: Yeah,

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[Paul Tyler]: Y platform is really interesting, Ramsy, Bruno. You know how many hundreds of of

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[Paul Tyler]: successful the nody companies are there today, Because you know, we, we sell

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[Paul Tyler]: through thousands of advisers, Right, hundreds of different distribution

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[Paul Tyler]: channels.

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[Paul Tyler]: How many how many players you think can occupy and actually be successful in

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[Paul Tyler]: space? Is that five or ten is twenty? Is it you know? is there a limit?

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[Bruno Caron]: all right

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[Bruno Caron]: the the the markets will dictate those those limits i i think there’s room for a

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[Bruno Caron]: lot you you you

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[Bruno Caron]: mentioned it that seven point three trillion dollars there’s room out there for

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[Mark Fitzgerald]: yeah that’s what i speak

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[Bruno Caron]: you know for for many players

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[Bruno Caron]: for some competition in for for an actual market

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[Bruno Caron]: to Ramsey’s point

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[Bruno Caron]: everything in in retirement planning has to be part of a comprehensive plan and

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[Bruno Caron]: it’s not just about you know market risk longevity risk inflation risk it’s its

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[Bruno Caron]: about all of the above and um you know i i think that you know some of those

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[Bruno Caron]: risks and and some of those uh considerations have been that it have been studied

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[Bruno Caron]: have you know and are available you know to to the consumers

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[Bruno Caron]: it’s that part on on on lifetime income that i believe is lacking currently is it

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[Bruno Caron]: gonna be a fast crawl

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[Bruno Caron]: we we we certainly can hope for it and uh

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[Mark Fitzgerald]: yeah

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[Bruno Caron]: but but but i think it’s it’s it’s on it’s on all of us to to make sure that you

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[Bruno Caron]: know a crisis doesn’t happen in

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[Bruno Caron]: twenty years where you know all all of a sudden you know people just keep on

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[Bruno Caron]: waking up in the morning

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[Bruno Caron]: very old and you just ran out of money

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[Bruno Caron]: we don’t need to wait for that to happen and we can act

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[Bruno Caron]: and i think we can do that as a as an industry

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[Bruno Caron]: but

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[Bruno Caron]: exciting times to say the least

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[Paul Tyler]: Yeah, well, we’re near the end of our time mark. final last question. thoughts

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[Paul Tyler]: on the topic

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[Mark Fitzgerald]: yeah i guess two thoughts number one bruno have you seen any kind of modeling

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[Mark Fitzgerald]: like allocation modeling programs out there that that individuals can work with

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[Mark Fitzgerald]: and second do you think that we’ll see an evolution similar to what we have on

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[Mark Fitzgerald]: the individual annuity side with income writers kind of being the first

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[Mark Fitzgerald]: leg of this but then all all of a sudden you see care benefits coming out of it

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[Mark Fitzgerald]: and death benefits coming on to it you think you’ll see the similar evolution

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[Mark Fitzgerald]: from that standpoint

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[Bruno Caron]: on your first question

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[Bruno Caron]: yes there are like th those those tools out there uh you know and i think

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[Bruno Caron]: i i think of of those tools as not necessarily a silver bullett but it it is

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[Bruno Caron]: something that really helps you

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[Bruno Caron]: develop a comprehensive plan

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[Bruno Caron]: ask the right questions

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[Ramsey Smith]: The

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[Bruno Caron]: make sure that as a

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[Bruno Caron]: consumer you don’t get blank

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[Ramsey Smith]: make sure that at

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[Bruno Caron]: sided by something you haven’t thought about so i i definitely

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[Ramsey Smith]: you get like, by and by something.

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[Ramsey Smith]: So I

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[Bruno Caron]: encourage you everyone to use those tools and some of the guests that you’ve had

401
00:21:35,737 –> 00:21:40,937
[Bruno Caron]: on the on the show have have developed their their own and you know with uh with

402
00:21:41,337 –> 00:21:42,697
[Bruno Caron]: with with with multiple um

403
00:21:43,817 –> 00:21:47,817
[Bruno Caron]: other other peers so yes they’re out there and yes i believe

404
00:21:47,516 –> 00:21:48,516
[Ramsey Smith]: there?

405
00:21:48,057 –> 00:21:52,857
[Bruno Caron]: there’s going to be uh more uh more more coming and yes they are

406
00:21:54,377 –> 00:21:55,417
[Bruno Caron]: they are very helpful

407
00:21:56,457 –> 00:21:57,577
[Bruno Caron]: uh on your

408
00:21:58,697 –> 00:22:01,417
[Bruno Caron]: you know on on your on your second questions

409
00:22:03,897 –> 00:22:09,177
[Bruno Caron]: yes i i you know i believe there there is capacity there

410
00:22:11,737 –> 00:22:14,617
[Bruno Caron]: i do believe that market is going to to to grow and

411
00:22:15,517 –> 00:22:16,517
[Bruno Caron]: and evolve

412
00:22:17,657 –> 00:22:19,177
[Bruno Caron]: you know there’s appetite

413
00:22:21,177 –> 00:22:24,617
[Bruno Caron]: on both sides you know there is appetite for for capital intensive business

414
00:22:26,297 –> 00:22:31,897
[Bruno Caron]: there is all those fixed income assets that are that are ready to be to be

415
00:22:31,717 –> 00:22:32,717
[Bruno Caron]: deployed

416
00:22:33,897 –> 00:22:36,857
[Bruno Caron]: so i think everything is is out there for

417
00:22:38,377 –> 00:22:39,897
[Bruno Caron]: for for for success

418
00:22:41,308 –> 00:22:42,308
[Mark Fitzgerald]: great thank you

419
00:22:42,159 –> 00:22:43,159
[Paul Tyler]: Ramsy.

420
00:22:42,468 –> 00:22:43,468
[Mark Fitzgerald]: you

421
00:22:44,316 –> 00:22:45,316
[Ramsey Smith]: uh, so yeah,

422
00:22:46,696 –> 00:22:49,256
[Ramsey Smith]: I, uh. I’ll say it again. I think this is the. I think

423
00:22:48,980 –> 00:22:49,980
[Martin Powell]: one

424
00:22:49,416 –> 00:22:54,536
[Ramsey Smith]: this is the biggest opportunity that we have right now. Uh, I think it is an

425
00:22:54,696 –> 00:22:58,376
[Ramsey Smith]: opportunity for the industry, I think is an opportunity for America. Most

426
00:22:58,396 –> 00:22:59,396
[Ramsey Smith]: importantly,

427
00:23:00,076 –> 00:23:01,076
[Ramsey Smith]: and

428
00:23:01,976 –> 00:23:06,056
[Ramsey Smith]: I, we just need people to of put themselves out there and try and make it

429
00:23:06,136 –> 00:23:10,536
[Ramsey Smith]: work. They’ already, by our count, by our teams, count eight or nine

430
00:23:10,776 –> 00:23:13,576
[Ramsey Smith]: offerings right up up and running. Um,

431
00:23:13,976 –> 00:23:18,056
[Ramsey Smith]: some have made announcements, but uh, not clear that products have been

432
00:23:14,046 –> 00:23:15,166

433
00:23:18,136 –> 00:23:23,256
[Ramsey Smith]: filed yet. It’s still early days. It’s still very early days and I think

434
00:23:23,196 –> 00:23:24,196
[Ramsey Smith]: that uh

435
00:23:25,576 –> 00:23:28,776
[Ramsey Smith]: people that jump out in front and learn how to navigate what is a very very

436
00:23:28,936 –> 00:23:32,536
[Ramsey Smith]: different distribution channel. Early, Um, will put themselves in a position

437
00:23:32,856 –> 00:23:36,456
[Ramsey Smith]: to succeed in a market to Bruno’s point, That is big enough for a lot of

438
00:23:36,116 –> 00:23:37,116
[Ramsey Smith]: players.

439
00:23:36,357 –> 00:23:37,357
[Bruno Caron]: it is

440
00:23:36,979 –> 00:23:42,499
[Paul Tyler]: Yeah is great, Uh, Martin. thanks for joining us and thanks for sharing your

441
00:23:42,579 –> 00:23:45,779
[Paul Tyler]: perspective. If people want to get in touch with what, what’s the best way for

442
00:23:45,939 –> 00:23:47,699
[Paul Tyler]: for people to uh, reach out to you?

443
00:23:48,240 –> 00:23:51,520
[Martin Powell]: you can reach me martin dpu at kuntu dot com

444
00:23:52,879 –> 00:23:53,879
[Paul Tyler]: Excellent. All right,

445
00:23:54,296 –> 00:23:55,976
[Ramsey Smith]: Martin. Great to have you back again

446
00:23:55,719 –> 00:23:56,719
[Paul Tyler]: Yeah,

447
00:23:56,036 –> 00:23:57,036
[Ramsey Smith]: and twice

448
00:23:56,080 –> 00:23:57,760
[Martin Powell]: it could be back yes

449
00:23:56,797 –> 00:23:57,797
[Bruno Caron]: let’s listen

450
00:23:57,016 –> 00:23:58,296
[Ramsey Smith]: double trouble awesome.

451
00:23:58,339 –> 00:24:02,579
[Paul Tyler]: thanks and and burn up for you. best way to reach. Uh, reach you.

452
00:24:03,257 –> 00:24:06,377
[Bruno Caron]: same emails good linkedin’s good um

453
00:24:07,957 –> 00:24:08,957
[Bruno Caron]: so they’re

454
00:24:10,137 –> 00:24:16,777
[Bruno Caron]: bruno backing at aves plus the the linkedin’s always there um anytime

455
00:24:17,939 –> 00:24:21,939
[Paul Tyler]: Okay. great, and we’ll also put a a link to your book again. Everybody should

456
00:24:22,019 –> 00:24:26,739
[Paul Tyler]: buy the book and and read it if they uh want to understand how this market works

457
00:24:26,899 –> 00:24:30,499
[Paul Tyler]: with the opportunity, Thanks so much, Martin Bruno thinks everybody thans our

458
00:24:30,579 –> 00:24:34,819
[Paul Tyler]: listeners, and Uh join Skin next week for another episode of that annuity show.

459
00:24:35,426 –> 00:24:36,426

460
00:24:35,717 –> 00:24:36,717
[Bruno Caron]: thank you

Episode 135: Helping People Find Purpose in Retirement with Joe Jordan

February 17, 2022 2022, Joe Jordan, Podcast, Retirement No comments

Why do we help people build retirement plans? To optimize cash flow? To minimize asset risk? Yes. However, these should simply be the tools that allow people to pursue their purpose in later life. Joe Jordan, speaker and best-selling author joins us again today to talk about his message that crosses countries, languages, and cultures.

We want to thank our primary sponsor and my employer by day, Nassau Financial Group. We’re “working harder to be your carrier of choice.” We support you with best-in-class service. We seek to keep things simple and will have your back in the years to come. We’re headquartered in Hartford, Connecticut with $19 billion in assets under management and serve over 400,000 policyholders. We have been doing this a long time – 170 years – but we remain humble enough to always try to improve.

Also, do you want to get regular updates on news about guests of our show, like Joe? Subscribe to our newsletter, below!

We hope you enjoy the show.

Links mentioned today:

https://www.linkedin.com/in/josephjordan2/

https://www.josephjordan.com/

https://www.josephjordan.com/super-saver

Thank you to our show sponsor; The Index Standard!

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Episode 134: Picking Nouns or Verbs In Retirement Planning With Michelle Richter

February 10, 2022 2022, Michelle Richter, Podcast, Retirement No comments

Language is powerful. It’s exceptionally powerful in the highly regulated world of retirement planning. Michelle Richter, Principal at Fiduciary Insurance Services joins us today to give us a lesson in regulatory grammar and how recent new rules from the Department of Labor may change them.

Also, do you want to get regular updates on news about guests of our show? Subscribe to our newsletter, below!

We hope you enjoy the show.

Links mentioned today:

Anatomy of Products

Connect with Michelle on LinkedIn: https://www.linkedin.com/in/michelle-richter/

https://www.linkedin.com/posts/michelle-richter_smaller-firms-may-not-be-ready-for-dol-fiduciary-activity-6894979699173666816-Ymo5

https://fiduciaryinsuranceservices.com/fis-glossary/

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EPISODE TRANSCRIPTS:

Paul Tyler:

Language is powerful. It’s exceptionally powerful in the highly-regulated world of retirement planning. Michelle Richer, principal at Fiduciary Insurance Services joins us today to give us a lesson in regulatory grammar, and how recent new rules from the Department of Labor may change them. We want to thank our primary sponsor and my employer by day, Nassau Financial Group. We are working harder to be your carrier of choice. We support you with best-in-class service. We seek to keep things simple, and we’ll have your back in years to come. We’re headquartered in Hartford, Connecticut with 19 billion in assets under management, and serve over 400,000 policyholders. We’ve been doing this a long time, 170 years, but remain humble enough to always try to improve. Also, do you want to get regular updates on news about guests of our show? Go to thatannuityshow.com and subscribe to our newsletter today. We hope you enjoy the show.

Intro:

Welcome to That Annuity Show, the podcast that will make you an expert in explaining annuities to your clients. Give us 30 minutes each week, and we’ll shave hours from your client presentations. Now here’s your host, Paul Tyler.

Paul Tyler:

Hi, this is Paul Tyler, and welcome to another episode of That Annuity Show. Ramsey, how are you?

Ramsey Smith:

Very good. Always glad to be here.

Paul Tyler:

Yeah, lot of talk about today. We’ve had an interesting theme running through some of these conversations around language. Jason, we talked about, how do you frame decisions around when to take social security? We had some great discussion with Cyrus on how to describe protective income, and we’re, I think, in that same vein, we’ve got another great guest, returning guest, to talk about a lot of important topics to our business, but also language and what exactly do labels mean and what labels should we adopt. Ramsey, do you want to do the intro?

Ramsey Smith:

So in terms of policing language, I’ll just say that our next guest, this one goes to 11. Right. So, we’re very pleased to be joined today by my good friend, Michelle Richter. Michelle previously, for many years, had worked for a global actuarial firm, and has broken out on her own in the last year or so, and is doing amazingly well with a whole bunch of new clients. We’re very excited to have her on the show, hear about how her business is developing, but also very importantly, hear more about these various topics, these various linguistic issues that we’re dealing with from a regulatory perspective, and frankly, just from an existential perspective in this industry. So, with that, Michelle. Introduce-

Michelle Richter:

It’s going to go deep, Ramsey, if we’re-

Ramsey Smith:

… Tell us about the name of your new business and how you got it started.

Michelle Richter:

… Sure.

Ramsey Smith:

I mean, it’s a great entrepreneurial journey. You’ve recently taken over a new leadership position in the industry as well, and you are publishing-

Michelle Richter:

Yes.

Ramsey Smith:

… more prolifically than I can ever remember. And it’s been great because you put out a lot of good stuff. So rock and roll.

Michelle Richter:

Thank you. Thank you so much, and it’s oh my goodness, it couldn’t be more of a pleasure to be back here. So thank you so much for having me. And the last time that I was here, I earned one of my favorite clients. Did you [crosstalk 00:03:54] tell you this?

Ramsey Smith:

No. No.

Paul Tyler:

We need these stories. So where-

Ramsey Smith:

Please, tell us.

Michelle Richter:

Yes.

Ramsey Smith:

Go ahead.

Michelle Richter:

Yes. So, I’m now working with RISA profile, who is a previous guest of yours and the relationship started not with the time that I flew to Texas, basically just to meet Wade Pfau, in the middle of the night, that made no impression whatsoever. It was my appearance on That Annuity Show that Alex Maria saw that caused him to reach out and say, “Yeah, we maybe could benefit from working together.”

Paul Tyler:

… Excellent.

Michelle Richter:

But he was right.

Ramsey Smith:

That is fantastic. Look, I think one of the most satisfying things about this show is that… And we always say the guests make the show, Paul and I just are lucky enough to be here. The guests make the-

Paul Tyler:

By the way, I’m just hanging on to Ramsey, that’s all.

Ramsey Smith:

… Not hardly. The guests make the show, but part of it is the guests get to be there… You get to be your best self. And we keep on hearing stories like this, where there’s been a great sort of point of inflection career-wise or otherwise after appearing on the show. So we love these stories and as you develop more from your appearances, share them with us, because we’d love to hear them.

Michelle Richter:

I, on one hand, I hope I get more, but on the other hand, because I’m at capacity not taking new clients until 2024, I kind of hope that doesn’t happen.

Ramsey Smith:

Can I tell you that is such a boss move, right? It’s a boss move. I love this. So Michelle sends a note out. I don’t know whether this is in LinkedIn or elsewhere, and said, “I just want everybody to know I’m booked til 2024. So if you had any designs on working with me, you missed out. See you in 2025.”

Michelle Richter:

It-

Ramsey Smith:

That was such a great move. That was so baller.

Michelle Richter:

… Thank you. Thank you very much. And that’s actually the third time this week I’ve been called that.

Paul Tyler:

All right.

Michelle Richter:

I’m not even kidding.

Ramsey Smith:

Fantastic.

Michelle Richter:

I’m living my best life.

Ramsey Smith:

There you go.

Michelle Richter:

I can’t deny it.

Ramsey Smith:

All right. So for-

Michelle Richter:

Yes, to business.

Ramsey Smith:

… Tell the audience what you’ve been up to.

Michelle Richter:

Yes. So my business is incredibly creatively named Fiduciary Insurance Services, just like any good insurance person would do just name exactly what you’re doing. But to be a little less, not funny, but a little more serious, the way that I saw what I wanted to do and what I wanted to be was fiduciary, which is somebody who takes very seriously their responsibility to their clients and is prepared to represent that they’re the superlative. That they’re the best. So a fiduciary is somebody who’s prepared to represent. I’m giving you my best advice. I’m doing the absolute best and I’m the best in my… Or I’m within the best class of my community. And so insurance because insurance is what I’m obsessed with and services is I do verbs. I sell verbs and I don’t sell nouns.

Ramsey Smith:

So this really at the heart of frankly sort of the way this point of inflection in your career and your life. So we should dig it a little bit deeper. And I told Michelle before the show, I’ve borrowed her nouns versus verbs paradigm for a presentation I’m giving later this week. So thank you for that. And again, full credit to Michelle Richter for that wisdom.

Michelle Richter:

No. I’m so glad it resonated.

Ramsey Smith:

But let’s talk about that. Tell us about the nouns versus verbs paradigm and why you think it’s a way to describe the difference between the traditional fiduciary and what we do on the insurance side.

Michelle Richter:

Yeah. And it’s, the amount of information that I’m going to be able to tie back to this premise is going to be pretty incredible. I think when we see at the end of the show. But at this moment, I would expect the audience to be pretty skeptical that it’s going anywhere good. In all seriousness though, insurance is… So I’ve had the great pleasure of having had the opportunity to run a corporate RIA, a multi-billion dollar IA for a fortune 100 insurance company. And I also had the good fortune of being a product developer, or I should say an intellectual property developer, which ultimately was service marked at that time by virtue of the distinction in my mind between nouns and verbs.

Michelle Richter:

And so in running an RIA and in also running an insurance business, I think a person winds up… And a person who sits in the seat of regulatory principle for those entities winds up with a lot of background information on the regulatory frameworks under which either verbs or nouns are compensated. And one incredibly important tenant that I feel doesn’t get communicated to financial professionals well enough is that one does not receive compensation for both at the same time. So one-

Ramsey Smith:

Can you hold on just one second, because I want to make sure the audience understands who sells what? So let’s just start with the basics. And if you said that, I’m sorry I missed it, but-

Michelle Richter:

… No, I didn’t. I didn’t.

Ramsey Smith:

… Okay. Let’s talk about who sells nouns and then who sells verbs.

Michelle Richter:

Agents and brokers.

Ramsey Smith:

Got it. Okay.

Michelle Richter:

RIAs.

Ramsey Smith:

RIAs, sell verbs.

Michelle Richter:

RIAs sell verbs. Correct. And agents and brokers sell nouns. And to the extent that any verbs get provided in the sale of those nouns, they are solely incidental to the noun sale. That’s what the loss is.

Paul Tyler:

Okay. So, sorry. Sorry. Let me go really slow. So I am an insurance agent-

Michelle Richter:

Yeah, let’s go super slow.

Paul Tyler:

… I sell Ramsey and annuity. I’m selling him a noun.

Michelle Richter:

Yes. Yes.

Paul Tyler:

I help Ramsey plan for retirement that possibly could benefit from an annuity. Am I breaking law, because I’m not a licensed planner?

Michelle Richter:

Only if you’re charging for the service.

Paul Tyler:

Okay. So if I’m charging for the verb, it’s a problem. If I’m charging for the noun, I’m okay. Okay.

Michelle Richter:

Yeah. That’s right.

Paul Tyler:

I like this.

Michelle Richter:

Right. Because you sell nouns. Sell means receive remuneration and exchange for.

Paul Tyler:

Is that a bad thing?

Michelle Richter:

No, it’s a wonderful thing. I buy nouns all the time. And for me, it’s just really important to know what’s happening right now. Am I buying a noun or am I buying a verb? So when I go to look at a house and I did. The last time I bought a condo, I used a real estate agent and she received a commission for helping me and there was no chance I was going to do all that work on my own, and thank God she was there. Right. But she wouldn’t call herself my real estate advisor. She was my real estate agent. She helped me buy and sell the property, which is a noun.

Ramsey Smith:

Okay. So I think that before long, you’re going to have to turn all this into a schoolhouse rock song.

Paul Tyler:

Yes.

Ramsey Smith:

It’s just-

Michelle Richter:

It’s true. But there’s so much obvious… Excuse me, so much confusion. Intentional confusion created around the differentiation between those regulatory frameworks. And that’s why I’m constantly on LinkedIn correcting people for saying things like that.

Paul Tyler:

Sure. Well, and I’m looking at the clock it’s February. February 2021. This was a big month for nouns and verbs in the insurance space. And I don’t know if we get here now or, we Ramsey, we wait a little bit. Because I’m confused. I’m noun and verb confused as are many people in this business.

Michelle Richter:

Yeah. Well, yeah. I mean, so I think, Paul we’re talking about DOL or the Department of Labor’s rollover guidance and how it impacts our community as distinct from how it impacts other pieces of the financial professional ecosystem. And it’s going to be a really challenging time in our space, I think, as we all figure out how it is that we’re supposed to operate under these new expectations. In the past, it was either the DOL took the perspective that a one time transaction, which is what insurance is, because it historically has been.

Michelle Richter:

Now in sales, it’s usually not. Doesn’t meet what DOL calls that five-part test for under ERISA. But since they reinterpreted it and since they’re going to be applying prohibited transaction exemption, 2020-02 and revising an old prohibited transaction exemption, that would have been relied upon by the insurance industry, if they were not revising it, it creates this unbelievably confusing landscape for our industry to be operating in. And we kind of don’t know exactly how so some of these things will shake out as they’re coming before July 1st, as they’re looking into how to enforce this. But it’s going to be impactful to agent business models and in part, because for the fixed noun sellers in our space, there is no regulatory overseer that can serve as financial institution for them.

Ramsey Smith:

… So. All right. Let’s just walk it back here. Right?

Michelle Richter:

Stop. Yeah. Okay.

Ramsey Smith:

So let’s go the life of an agent. Let’s take an agent. Let’s talk about what that means. So I’m an agent, I go out and I have clients, I’m selling my nouns. I come across a client, that’s got money and I want to do a rollover. Let’s go specifically what the day to day experiences for a noun seller, aka an agent.

Paul Tyler:

Right. And it’s one noun versus another noun. If the noun is a qualified noun.

Michelle Richter:

Yeah. So if you’re selling qualified nouns now, if you want to qualify for prohibited transaction exemption, 2020-02, you need to have a financial institution that oversees your conduct and that can sign with you, that you are acting in a fiduciary capacity. That’s really new for our world. And it does not fit with demutualization. So meaning it does not fit with not career agents, because the insurance companies will not serve as co-fiduciary. So, because that is how it is panning out, and the fact that the industry had intended instead of allowing agents to use 2020-02 with the insurer as co-fiduciary, they instead indicated that they would use PT8424, which is an old exemption. But labor’s now modifying that. The material difference between those laws or those abilities to roll that money over is 2020-02 requires you to be a fiduciary. Whereas, 8424 just requires disclosure of compensation that it not be unreasonable. And you’re not claiming to be a fiduciary.

Paul Tyler:

Okay. One piece of trivia PTE84, why was it named 84 Ramsey? Do you know?

Ramsey:

I don’t know. The numbers are so different.

Paul Tyler:

It was-

Ramsey:

I don’t know why they’d be so different.

Paul Tyler:

… so creative.

Ramsey:

Do tell.

Paul Tyler:

It was written in 1984. That’s it.

Ramsey:

Right. Was the other one written in 1922?

Paul Tyler:

No.

Ramsey Smith:

So you lost me, man.

Paul Tyler:

No, PTE20, 2020. It was written in 2020.

Ramsey Smith:

Oh 2020. Oh, fair enough. Got it. Yeah. We’re in a new century.

Paul Tyler:

Right. Just to help it-

Ramsey Smith:

Go figure.

Paul Tyler:

… It kind of helps you think. Well, it actually, a little bit of trivia actually helps because all the insurance companies are relying on this definition 81984 to protect us right now.

Michelle Richter:

Right. And think about it, it hasn’t been revised since then, because nobody needed to rely upon it, because nobody was tripping up the five-part test in how it was being interpreted before. But now that it’s being interpreted differently, now the industry is needing to rely on one of those PTs. And in the case of an independent agent there isn’t an overseeing. They would oftentimes work with an IMO or FMO to help with marketing, but those organizations aren’t responsible for regulatory oversight. So that places them in an awkward position because they’re going to need to attest for themselves that they have satisfied 81984.

Ramsey Smith:

Well, so let’s talk about that. What should they do? Should they go out and find a financial institution? So the insurance companies won’t help them. The IMOs at this point, aren’t set up to do it. Although, I know that in the previous iteration with the DOL there were some IMOs that were thinking about adding that capacity. But that’s still developing it best, right?

Michelle Richter:

Yes. Developing at best. I hope. I hope it develops.

Ramsey Smith:

Okay. But, what can they do now? Do they have to sit on the sidelines or what can they do?

Michelle Richter:

I think we’re going to find out. I think that’s what’s under negotiation at the moment.

Ramsey Smith:

[crosstalk 00:18:37].

Michelle Richter:

Right. So-

Paul Tyler:

Yeah. I’ll give you late-breaking, real-time picture. We had a number of our distributors for meeting and talked exactly about this topic. And question from one of our distributors, well, wait a second, if our agent doesn’t… If the agent says they did this and got the client and they have the records, but they don’t, who’s liable here? Michelle, is there a difference between a fiduciary with capital F or a small F in this world?

Michelle Richter:

… So if they’re relying on 8424, then they’re not a fiduciary. I do not know how they’re going to modify the language in 8424, yet. But my hope is that it’s tight. But I think there will be material negotiation that’ll occur around this. I think what is likely at the moment is that there will be an expectation of best interests being met. I don’t think that 8424 is going to go as far as fiduciary or that somebody going to have to rep for that. 2020-02 does do that, but the industry isn’t looking to use it. And the industry is looking to modify 8424, and I think it will come shy of that representation. But it’s still being negotiated.

Paul Tyler:

Well, as an aside, there actually, a lawsuit was filed in Texas to challenge this. And Ramsey, I actually got an inbound, unsolicited inbound of the people wanting to come on our show and talk about their lawsuit. So I don’t know, Michelle, what do you think? Would that-

Michelle Richter:

Tell me more. What lawsuit? What happened?

Paul Tyler:

… There’s a lawsuit challenging this, the DOL rule filed in Texas.

Michelle Richter:

Oh. Oh. Oh, I know what you’re talking about.

Paul Tyler:

Filed in Texas by an industry group. I would suspect there’ll be more. We’ll see more in an effort to better define what does this mean. Verb versus noun. Crazy. Crazy world.

Michelle Richter:

Yeah. Well, yes, I think there’s going to be another round of clarifications before anything goes into effect for… As relates to the July 1st deadline. Not as relates obviously to the February 1st deadline. I expect we’re going to see more clarification.

Ramsey Smith:

So first of all, Paul, sure. Why not? We should have them on if they have something to say.

Paul Tyler:

Right. Right.

Ramsey Smith:

But now, so now Michelle, the next piece of this, you developed some very sort of strong opinions and you, right? But no-

Michelle Richter:

Yes.

Ramsey Smith:

…. and you share them and you address some pretty important organizations pretty directly, like FINRA, the SEC. So now, most people do that with some trepidation. You are-

Michelle Richter:

That’s true.

Ramsey Smith:

… You are fearless. And I’m curious have they-

Michelle Richter:

That’s because I’m cracked.

Ramsey Smith:

… Good on you. I mean, so have you ever gotten any response from them yet? Do you expect at some point you might hear-

Michelle Richter:

Not yet.

Paul Tyler:

Interesting.

Michelle Richter:

I hope so, because I’m not tagging them to be silly or to annoy them. I’m tagging them on points that I think are really important for them to consider. And in particular as it relates to the identities of people who distribute insurance, I think there’s insufficient guidance given as it relates to those intersections between how one interacts in an insurance community relative to a wealth managing community.

Ramsey Smith:

… Okay. You gave a good segue there, because we talked about this. We talked about in a world where we all spend a lot of time thinking about identity, sometimes it cuts both ways. Sometimes it’s good. Sometimes, it’s great to some issues obviously in the broader society. But in here, in this space, you came to a really interesting realization about the business you wanted to build and this distinction between services and things. And-

Michelle Richter:

That’s right.

Ramsey Smith:

… And the place, the very unique place you wanted to carve out. So, so tell us about that discovery process and then how you’ve implemented it into a business.

Michelle Richter:

Okay. This is going deep guys. And it’s going to be real fun.

Ramsey Smith:

That’s how we roll.

Michelle Richter:

Okay. All right. So, I fashion myself an intellectual property developer. Okay. That’s how I’ve spent a material portion of my career doing that. Okay. So with intellectual property, you obviously need to have protections for it so that other people don’t copy your work and that you have enough time to build it into a business. So one thing that’s become very apparent to me over the… slowly, but then suddenly… over the last 20 years of developing intellectual property is this realization that the way in which one does business, when one sells verbs is really different from the way that one does business, when one sells nouns. And since the insurance world where I have grown up and spent my whole career and where I am obsessed is where it’s at as an industry is that we do not have a verb based lens to look at insurance through.

Michelle Richter:

Insurance, there’s no 40 Act corollary in the insurance space. Some adaptations around the premise that there are advised assets inside of annuities, for example, on which fees can be charged, creates a little bit of an intersection between those communities. But it’s very ill defined how one could experience insurance through a verb based lens. So the realization that I had, as I said, over a 20 year period of developing IPs, is that the really unique IP developers that have made a low cost investing environment possible we’re able to do so because of the verb based compensation system. So if an advisor, and by advisor I mean person acting in an advice capacity, and by which that means verb provider, so a person providing verbs can weave together, weaves a verb, the products, products are nouns.

Michelle Richter:

So think Vanguard or think Dimensional for people who manage assets on the podcast. These are entities that are really well regarded for being able to provide lower cost, intelligent product noun solutions. They’re popular in the RIA community because the RIA earns money for delivering verbs. There can never come to be a Vanguard or Dimensional in my community because my community only has available to it a noun based compensation system. And because that’s true… Okay. So because my community can only profit from noun sales, the only way in which we develop intellectual property is as nouns. But because products sell in insurance only if there has previously been an investment in both manufacturing and in distribution, it can never be the case that intellectual property on its own can be valuable in insurance.

Michelle Richter:

And because it is so expensive to invest in that issuing authority and distribution infrastructure, there will never be an incentive for a noun based infrastructure to use low cost intellectual property. So because all of these things are true and because my community doesn’t have a verb based understanding, there can be no value to intellectual property in my community, which means there’s no value to me in my community. That’s where I reached the end of the rainbow, if you will.

Ramsey Smith:

This is like the Pythagorean theorem of like… When you first showed it to me I thought this, it reads like a geometric proof.

Michelle Richter:

Yeah. Well, it also is a geometric proof. Yeah.

Ramsey Smith:

Okay. There it is.

Michelle Richter:

I did literally QED three dots and a triangle, kind of pull it out. But yeah, back into that logically, like when you have that awareness of your own experience and believe me, it motivates you to the point where you want to just blow up the world or make another world. Another world in which there exists a verb based architecture for my industry.

Ramsey Smith:

Okay.

Paul Tyler:

You know-

Ramsey Smith:

Go ahead, Paul.

Paul Tyler:

… Okay. Well, a lot of layers here, Ramsey. I’m going to tick the first one off, which there’s just kind of a reflection, Michelle. At a prior company, we sold a lot of our nouns through a big association. You know this association because, one of your prior companies sold the very same powerful one. And they actually, their compensation was literally intellectual property charge. Which made no sense because there wasn’t any intellectual… It was truly, they were the verb. They were creating this collection and this community and continually keeping a cohesive community, but their compensation structure was based on something that wasn’t quite descriptive. I’m not saying inaccurate, but it was not descriptive what they were doing.

Michelle Richter:

That’s obviously a different regulatory thing. So it would, to be able to be compensated that way and not to be overseen as a noun seller, I imagine was beneficial for them.

Paul Tyler:

Now, are you arguing that there’s… What if I’m a distributor and I’ve come to a carrier and I’ve brought them a wonderful product idea, and I want to get compensated based on an idea brought to them, is that not intellectual property?

Michelle Richter:

Yeah. So they can charge asset based fees on that concept. That concept will be valuable to a manufacturer if and only if it illustrates better than does the incumbent product portfolio that the carrier already has.

Paul Tyler:

It’s Ramsey.

Ramsey Smith:

Paul, you’re letting that sink in. I can tell.

Paul Tyler:

Look labels important. I think back to, again, back to some other companies. I mean, we had whole committees, Ramsey, deciding what noun was appropriate, would we allow our agents to be called. This noun was a suspect noun. This noun is a legitimate noun, or adjective, I guess.

Ramsey Smith:

OR versus ER?

Paul Tyler:

Yes. Certified retirement.

Michelle Richter:

Who has not sat through a two hour long compliance versus distribution dispute on the spelling of that word? Raise your hand if you haven’t.

Paul Tyler:

But this is an important topic. And you’re right, we’re right, framing language over the next six months will be critical for a lot of industries. And Ramsey, great question, who’s liable. You say the IMOs are not really… A lot of the distributors are not set up for… Have giant compliance arm. But they also don’t have, Michelle, one of the other advantages of a noun based company is it has deep pockets so that you have one agent who goes awry or a client who’s just ridiculous in demands or feels upset later. You got money to pull from. From the future. Whereas your distributor, your bank account probably isn’t that big.

Michelle Richter:

100%. So that’s why somebody has to be out there defending the individual distributors because they don’t have… They’re not able to rely a financial institution that oversees them and that helps them to comply with the regulations as they keep getting amended. And frankly, the whole regulatory structure that exists in the insurance space evolved from the fact that insurance companies were mutual at the time when the regulations were established. And because that was true, distribution coexisted with manufacturing. And because that was true, it was important for the insurance companies to train their agents really effectively to understand their products, to explain them well. And all of this is all occurring because of demutualization. Because distribution no longer is controlled by the same entity that issues products. And that creates this disjointed regulatory experience where the individual financial professional, instead of the, as to your point, the giant issuing company, the financial professional is the person who needs people like you guys to be out there communicating with them about what responsibilities really are.

Ramsey Smith:

This is like a philosophy class, like alienation. I feel like I’m back on campus, Paul.

Paul Tyler:

Yes.

Ramsey Smith:

So-

Paul Tyler:

Yeah. I’ll share you my notes after the show, if you trade me yours.

Michelle Richter:

There’s no scale in this class. Everybody’s getting-

Ramsey Smith:

So let’s-

Michelle Richter:

Mark the [crosstalk 00:33:51].

Ramsey Smith:

… There’s two things. One is like, okay demutualization process happened at some point in the history and what are all the sort of knock on effects that were unexpected that happened? That’s a whole discussion. And then there’s-

Michelle Richter:

It is.

Ramsey Smith:

… Then there’s a discussion that you having come to this conclusion said, “I’m going to build my own business and I’m going to build one that is relevant in this sort of bizarre construct.” So tell-

Michelle Richter:

Right. Exactly right.

Ramsey Smith:

… So tell-

Michelle Richter:

In my bizarro world where-

Ramsey Smith:

… I didn’t say you were bizarre. I said that-

Michelle Richter:

… No. No, you didn’t. I did.

Ramsey Smith:

… I said it was the situation, and you sort of identified with sort of the unique, and so-

Michelle Richter:

So from my perspective, what I want to do is create meaning behind the term insurance advisor. I view myself as a person who advises institutions and academics and life insurance companies about insurance. But because there’s no meaning to this term yet, I’m kind of going out there trying to claim it. I certainly would prefer somebody else took care of it. But to the extent that it-

Ramsey Smith:

… It’s yours. Keep it.

Michelle Richter:

… But to the extent that that’s not occurring, then that’s important to me to make sure that it occurs, because I do not want to leave the next generation that follows me in the circumstance that my generation was in where there cannot be such a thing as valuable intellectual property in their field. That’s lame.

Ramsey Smith:

All right.

Michelle Richter:

So insurance advisor-

Ramsey Smith:

That’s the sound bite right there.

Paul Tyler:

Yeah.

Ramsey Smith:

We’ve gone through, just this tremendous sort of vocabulary journey and we boiled it down to this is lame.

Michelle Richter:

… Right. Well, it is. But it is, because I mean, I’ve seen so many good product ideas over the years and people not be able to launch them and not know why. Well, here’s the why. Read NCHA, it’s a noun based world and-

Ramsey Smith:

Told you, Paul.

Michelle Richter:

… So there should be a verb based world for my people, because I have a tribe that’s valuable over here and we provide services that are really important to our communities, so you know.

Paul Tyler:

Maybe we could get a gerund that would sort of fit in between. What do you think, Ramsey? Gerund.

Ramsey Smith:

Yeah. I get it. Yeah.

Paul Tyler:

Insurance gerund.

Michelle Richter:

Yeah, exactly. I mean-

Ramsey Smith:

What would it be?

Michelle Richter:

… But a gerund is a verb. But it’s really, I know that I sound like maniac, but I’m telling you guys the truth. The end result of there being no over-based infrastructure, no over-based regulatory environment is that there are no dimensionals in the insurance base and there can’t ever-

Ramsey Smith:

So here’s another controversial question. So, we talked about how in insurance, there’re state regulators and obviously in securities you’ve got FINRA, SEC, so who is the boss of you right now? In this new-

Michelle Richter:

Nobody.

Ramsey Smith:

… Okay. So, but say that one more time.

Michelle Richter:

Me. Me, I’m the boss of me. My boss is a maniac. She’s a complete lunatic. No, that’s just the thing it’s-

Ramsey Smith:

From a regulatory perspective, I mean.

Michelle Richter:

… I have no regulatory overseer and that’s troublesome. Because we’ve all seen the effects of my conduct. But think about that on LinkedIn, having the complete freedom to just say that which is true. It’s been pretty amazing. But at the same time, I’m a rules follower I’m a rules explainer. I’m maybe a little bit at the edges of rules. Let’s not say breaker, but bender. I jaywalk routinely. And in any case-

Ramsey Smith:

You live in New York, yeah.

Michelle Richter:

Yeah. Yeah, yeah, yeah. So any case. But the point is, as I was beginning on my journey to figure out what do I want to do with my life and career, and I was trying to figure out under what regulatory framework does one monetize intellectual property, or can one, and there totally is not one. I have a 65, I formed an RIA. I have not yet used that RIA. I haven’t done any business out of it. I provide strategic consulting on an hourly basis and nobody oversees that. And that’s troublesome. There should be a regulator.

Ramsey Smith:

Is there some regulator that thinks they oversee that? The part of it, isn’t just-

Michelle Richter:

No.

Ramsey Smith:

… Sometimes, if it’s enough, if they… Somebody, if an entity or somebody in the government feels that they oversee it, then they can obviously… They have the power to make that happen. Do you think that that’s a… Anybody like that exist thus far?

Michelle Richter:

I would like for that to happen, but no.

Ramsey Smith:

That’s interesting. So You want that, that would be-

Michelle Richter:

Yeah, I do.

Ramsey Smith:

You think it’s a problem that there isn’t somebody that’s thinking about this from a regular bucket.

Michelle Richter:

Yes.

Ramsey Smith:

That’s a very… Because in one sense you’re breaking glass and on the other sense, you’re like, “Okay, but there needs to be somebody. There needs to be a referee here.”

Michelle Richter:

Yeah. Can’t be codified. It can’t be repeated until there’re eyes on it and process to make it verb. You know what I mean?

Paul Tyler:

Okay.

Ramsey Smith:

All right. Well then-

Michelle Richter:

Then it’s not repeatable without that.

Paul Tyler:

Working-

Ramsey Smith:

… Go ahead.

Paul Tyler:

… No. Go.

Michelle Richter:

Then it’s not repeatable without that.

Paul Tyler:

Go ahead. No go, Ramsey.

Ramsey Smith:

We’re at the top of the hour. So I warned, Michelle before we started this, because Michelle who’s always sort of hyper prepared, sent us a whole I’ll call it a treatise because this has been a philosophical conversation. So we had plenty of things to talk about and we said that there’s way more than we can ever cover today. I think, we’ve done… actually, we’ve done a great job covering a lot of things. This has been a great conversation. And, Michelle, this is your third tour here, and you’ll certainly-

Michelle Richter:

That’s right.

Ramsey Smith:

… We’ll certainly have you back again. Have back again this year.

Michelle Richter:

Well, thank you guys.

Paul Tyler:

Absolutely.

Ramsey Smith:

This has been great.

Paul Tyler:

Yeah. Michelle, hey, thanks so much.

Michelle Richter:

Thank you.

Paul Tyler:

I know your solidly booked. So if you’re clients listening to show, don’t call her. Okay. Don’t. But if somebody wanted to find out… Okay, first of all, you’re on LinkedIn. Great. I recommend connecting or following you. Where else? What? Your website. How else should we find you?

Michelle Richter:

Yes. I have a website, fiduciaryinsuranceservices.com. And I also serve as executive director for the Institutional Retirement Income Council, which is a nonprofit think tank in the defined contribution space. And that website is an absolute treasure trove of information for those people who do serve an in-plant community. That’s IRIcouncil.org.

Paul Tyler:

Excellent. Michelle, thanks so much. Ramsey, it was a pleasure and-

Michelle Richter:

A lot of fun.

Paul Tyler:

… as always, listen, we appreciate all our listeners, and of course our guests. But keep ideas coming. People we should pull on and-

Ramsey:

But give us victory stories.

Paul Tyler:

… Yes.

Ramsey Smith:

You came on the show and it, somehow it led to a victory in your life or career. Share that with us. It’s super important.

Paul Tyler:

Yeah. Please. Please. Okay, terrific. Hey, thanks so much and tune in again next week-

Michelle Richter:

Thank you guys.

Paul Tyler:

… for another episode of That Annuity Show.

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WealthManagement’s Fifteen Must-Listen Financial Podcasts Featuring That Annuity Show

January 27, 2022 2022, Media, Podcast, Retirement No comments

The cast of That Annuity show is proud to report that our retirement podcast, was recognized as one of the “Fifteen Must-Listen Podcasts” by WealthManagement.com. We really want to thank all the great guests in 2021 who made this possible. In particular, we want to give a big shout-out and thanks to Terry Heys, Annuity Gator for nominating us for this honor!

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Links mentioned in this show:

https://www.wealthmanagement.com/careers/fifteen-must-listen-financial-podcasts

Episode 103: Confidently Sorting Through a Sea of Indices With Laurence Black

Episode 98: Aligning All Interests – The Client, The Advisor and the Company With Yale Bock

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Episode 132: Framing Retirement Planning Questions the Right Way With Jason Fichtner

January 20, 2022 2022, Jason Fichtner, Podcast, Retirement No comments

Someone once told me that finding an answer is easy. Coming up with the right question is not. In a complex process like retirement planning, the questions our clients ask and those we ask of them can prove more powerful for the outcome than the answers we actually receive.

Today, Jason Fichtner joins us to talk about the importance of framing retirement time questions properly to optimize decisions about taking Social Security. Jason is Vice President and Chief Economist at the Bipartisan Policy Center and Senior Fellow for the Alliance for Lifetime Income.

Also, do you want to get regular update s on news about guests of our show? Subscribe to our newsletter, below.

We hope you enjoy the show.

Links mentioned today:
https://bipartisanpolicy.org/person/jason-j-fichtner/
https://www.linkedin.com/in/jasonfichtner/
https://www.protectedincome.org/about-us/

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Episode 131: Don’t Forget About Hidden Home Values When Planning For Retirement With Don Graves

January 13, 2022 2022, Don Graves, Podcast, Retirement No comments

Retirement planning conversations can easily focus only on traditional savings vehicles – 401(k)s, IRAs, money market accounts and stocks. However, home equity is an important asset that shouldn’t be overlooked.

Today, Don Graves, a best-selling author and President of the Housing Wealth Institute explains why every agent should be knowledgeable about reverse mortgages when building plans for clients. Rapidly rising home values in the last 18 months only makes this information more valuable.

Links mentioned in the show:

askdongraves@gmail.com

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