Your Bundled Provider
Is a TPA Too

0:01 Nevin Adams: Well, hey everybody, thanks for checking this out and tuning in. Um, we got some fun things to talk about today, and I'm here with a group of very special people to talk about it. Um, I guess I should start off by saying I'm Nevin Adams. Um, I like to think most people know who I am, but that's not true obviously in every case, particularly since I'm now technically retired. But I was once upon a time the former Chief Content Officer of, yes, the American Retirement Association, and I am living my own very special version of retirement, which is to say I continue to read a lot and think a lot and talk a lot about things about retirement. And ultimately, that's kind of what today's conversation is about. So I'm going to ask the very special people who are with me to tell you who they are in a very special way. Um, and while Norm— Norms would say suggests that I go with one of the ladies first, I'm going to break those norms and go with the only non-lady on the call.

1:00 Chad Johansen: So, Chad, pleasure to be here with you all. I am Chad Johansen. I am a quarter of the Retireholics, and my, my day job is as a partner and director of consulting with Plan Design Consultants. Uh, if you haven't heard of us, we're a 51-year-old family-owned and operated group of nerds that deliver great value to advisors and their partners. And their clients in the retirement plan space.

1:26 Nevin Adams: Did I, did I say we were going to allow commercials?

1:28 Chad Johansen: Okay.

1:29 Nevin Adams: Was that—

1:30 Chad Johansen: you said introduce ourselves. Oh, sorry. I'm a QKA as well. I forgot. We've got to come in with our credentialing too, just so that Shannon's put on the spot for hers.

1:39 Nevin Adams: Well, speaking of Shannon, take it away, lady.

1:43 Shannon Edwards: Uh, hello. I'm happy to be here with you all today. Uh, I'm Shannon Edwards. I'm the owner of TriStar Pension Consulting. We are a compliance administration and consulting firm. I started TriStar over 25 years ago. I am also a member of the American Society of Pension Professionals and Actuaries. I'm a certified pension consultant, which is a CPC, and I have other designations as well from ASPA. Do you really want me to say them all, Chad?

2:16 Chad Johansen: It's pretty fun.

2:17 Shannon Edwards: I'm an IRFA. I'm a QKA. I'm a QKC. I'm a QPA, and I think that's it. And I'm currently serving as the president of ASPA this year as well.

2:31 Chad Johansen: Thank you.

2:32 Nevin Adams: Hi, Ms. Mary.

2:33 Mary Patch: Hi, Shannon. Well, I'm Mary Patch. My designations are a lot shorter than Shannon's. I'm simply a QKA and a CPFA. I'm a retirement plan advisor with Atlatl Advisors out of Madison, Wisconsin, and I also own a consulting practice called Patch Retirement Plan Solutions. That's a non-advisory side of what I do. I grew up in the 401(k) industry, starting with processing payrolls back in 1990. So, I've been around quite a while.

3:03 Nevin Adams: As have we all. So, bringing you back here, I mean, if you think about it, years ago, literally years ago, I sort of like reached out and pulled together this like consortium. And the reason to bring the consortium together was quite simply is I've spent a lot of time hanging around with advisors and a fair amount of time also hanging around with TPAs. And what was obvious to me in pretty short order is that these are two professions that absolutely, in a perfect world, rely on and need each other, their perspectives, their expertise, their contribution, their involvement, their engagement. And yet, believe it or not, These are two professions that are like oil and water when it comes to trying to sort of actually cooperate, and there ends up being a fair amount of a lack of understanding, and certainly in some cases a misunderstanding of what these two roles are and how they might sort of fit together. And I think over time there has been a fairly strong tendency for people to make some really bad assumptions about what these two professions bring to the table, about how much value or lack of value those professions do in fact bring to the table, and how it is all supposed to work together. And what happened was I knew folks who did have positive interactions, and I said, how can we sort of connect these dots? How can we sort of build a bridge between these two professions? Because in my experience, their integration is absolutely essential to not only the plan working the way it's supposed to, the plan operating legally, and ultimately the plan sponsor and the plan participants getting from that plan what they should get from it. So how do we do that, and how can we sort of help sort of air all that kind of stuff out? I found in a lot of ways, these days I'm fairly consumed with AI and what's going on with AI. I think one of the things that's occurred to me pretty quickly is AI can be a great tool if you ask the right questions. And in some cases, if you ask more than one correct question and be willing to be sort of iterative. But life generally, pre-AI, a lot of it means, do you know the right questions to ask? And that, I think, is one of the things that we worked on to develop to sort of flesh out and help articulate the questions that really do need to be asked so that people don't get burned by a bad assumption. After all, you all remember what— when you assume, what happens, right? So we're going to try and avoid that today. But a part of that, let's just lay the groundwork here and talk about this, and that is what are some of the really bad assumptions that advisors and, and sometimes TPAs, or third-party administrators, or as we're inclined to call them, compliance administrators, the assumptions that they end up making. And the first one is perhaps the most basic one, and that is that all TPAs are the same. You know, one is the same as another, and it's kind of— it all gets under this umbrella of saying, you know, it's a commodity. You know, it's just kind of a thing based on price, but that's not true. It's not true at all, is it? What do you say to that, Shannon?

6:31 Shannon Edwards: Thank you, Nevin. That is, in my opinion, a bad assumption. I know we've talked about this a lot in our group, and we talk about it at a lot of different conferences that I'm at and stuff. And if you know one TPA firm, you know one TPA firm. And each of us has our own processes and procedures. Each of us does things a little bit different, even though we get to the same result, right? There are certain things that every plan has to have done. You have to have your testing done. You have to have eligibility checked. You have to have allocations done for contributions. Each of us has a different service model and a different way to get to the same end. Um, you know, Chad and I have talked. We both have, you know, really good— what we consider really good firms that offer great value to our clients and great services. But even between us, we do things differently, even though we produce similar products. So I think, you know, the assumption that we're all the same is, is not true.

7:31 Chad Johansen: Let's, let's create a bit of a distinction here too. Nevin, you teed it up by saying not all TPAs are created equal or are the same. Let's bump the TPA version or TPA comment out of that and say not all compliance administrators are, because let's remember, your bundled fidelity plan is also a compliance administrator to that retirement plan. Your bundled Empower, your bundled Paychex, your bundled ADP, you can name them, anybody who's doing bundled business, they're doing the same work that, that a TPA is doing in terms of the content that needs to get done. But we are not all doing it the same, nor are we all providing the same value. And recently I ran into a situation where it made it very clear that we're not all actually doing the same work. I ran into a situation that was mind-blowing to me where a bundled solution essentially told a partnership that the partners cannot make an elective deferral after the end of the year. I shouldn't say that. The partners cannot deposit the elective deferral after the year, that that was an IRS rule. I think most of you listening in know that a partner doesn't have compensation until the taxes are being done and they determine if that partnership was profitable. Because you can't make a deferral when you don't have profits in a partnership. Well, they were holding true and fast and they were just going to tell this business owner that you cannot make a deferral. That's not true. And that's where it became very clear to me that even though we are all doing the same work, we're not all actually doing the same work. We're trying to get to the same end result, but there are very different variations of that work that's being performed. And Some have put in stopgaps like I just described that are not legal stopgaps. This is an operational stopgap for them. This provider did not want to allow a deferral to go into the plan after 12/31 and still count it for the prior tax year, even though the client is legally allowed to do so. So there are variations of this compliance administrator, and it is hard for advisors to distinguish who's doing what.

9:39 Mary Patch: Yeah, I agree. When I was— this kind of started with me struggling with having meetings with TPAs and finding out that halfway through the conversation, one said something different than the other one. And I started kind of trying to put a list of things that I really felt were important that I ask as an advisor to say, what do you do? Because I couldn't, you know, ascertain one set of service models from the other. There were so many variations. And I had clients that wanted to also bid bundled compliance with a TPA as another alternative. And I needed to be able to get that to an apples-to-apples comparison. What does that recordkeeper do versus what does the TPA do? And am I actually getting— is the client getting the services, comprehensive services that they need from the parties that are involved on the plan?

10:32 Shannon Edwards: I know, like our first 4 meetings were all— were Mary telling us, you know, asking us if we determine eligibility and all of us saying, yes, we determine eligibility. And we kept going around and around because she was saying what she was saying, determine eligibility. And we all said yes. And we actually came to the fact after, I think, 4 meetings that we were verifying eligibility after the fact. And she was asking if we determine eligibility beforehand. So there was a lot of difference in the same words being used. But a lot of difference in what they meant to each of us.

11:08 Mary Patch: Exactly.

11:09 Nevin Adams: Yeah, I think that's, that's the other point, and Chad tapped on this a little bit. There are, there are things the law requires, there are things that the law allows, and people who are in the business of servicing retirement plans have done a pretty good job over time of defining how they want to operate, and how they want to operate sometimes is more restrictive than the law allows. Hopefully, hopefully not less restrictive than the law allows. But, but that's mathematically possible. But again, the issue is that, that sometimes the constraints that are there are there not because of what the law requires or allows, but rather what the provider has chosen to do or a way in which they have chosen to do it. Doesn't mean it's wrong per se, But it does mean sometimes that when you ask a question and you get an answer, sometimes that answer is a function of what the provider wants the answer to be, as opposed to what the answer might be. And that, again, is— it's all about, again, just going back to where I started. It's all about going back to being able to ask the right question and understand when you get an answer whether that is a full and complete answer, whether that is your answer or whether that is the answer. So again, something that you should keep in mind. So again, let's talk about another bad assumption. You know, there's this, this constant tension, if you will, between what looks to be a sort of a simpler, easier, a bundled solution where it's all in one place, as opposed to an unbundled situation where you might have multiple parties involved. And the assumption there is that unbundled is more expensive. It just has to be, right? Because it's not all in one place. It's in, you know, pieces. Those pieces require effort and time to communicate, et cetera, et cetera, et cetera. So is that a bad assumption? Chad.

13:06 Chad Johansen: I'll take it on. Let's first acknowledge that even at your bundled providers, you're talking to two different departments. If the individual that answers the phone that's been in the 401(k) space for you know, 14 months is the one doing all of your compliance work, you've got some serious worries. So even in that scenario, in a bundled solution, there are still levels of communication going to different departments and going through multiple resources, just like there would be in an unbundled. Let's go one step further and say there is a cost to the services that need to be rendered. And so most bundled providers out there where they'll bring the compliance in-house, When you tell them we don't want that compliance in-house, typically their costs are going to drop. They're going to have a reduction in their expense because they're no longer doing those rules. Now, does that mean that the bundled solution is more expensive or less expensive? I don't think we can clarify that as a whole and say that generally this is the way it works. But typically when they have a reduction in cost and you bring in a specialist that does compliance work, you're going to see a little bit of a bump in overall expense to the client. And I say a little bit of a bump because most of the time when we're benchmarking these things and we're looking against existing bundled or helping an advisor look at moving this bundled, which, which we will, we will do, and we will see both sides of that, the margin of expense differences is very, very minimal. And now you get a specialist in an area in which you, you need a specialist. The example I often give to advisors is is your client using an online CPA to do their corporate taxes? I've never had one turn around and be like, oh yeah, for their 10-person company or 50-person company or 3-person company, they're using, you know, an H&R Block to do their taxes. No, they always have a CPA because they know the value of the CPA. That is no different in our line of work. The TPA, an outside compliance expert, does a great job at designing a document that can create greater tax efficiency for the business owner, helps mitigate exposure and liability by doing essentially an audit check on the operations of the plan through the year, throughout the year. They make sure that all parties are staying compliant in the eyes of the IRS, the Department. All these little nuances create some prevention of liability, but also often save the client money in other ways. Like tax efficiency. So you can't make a blanket statement that, that bundling is less expensive. I think you should feel comfortable in a general sense saying, yeah, typically bundled will be a little less than unbundled. But that's only if you're looking at the direct line expense that the client might be paying versus looking at things like tax efficiency, participant costs, all these other areas that should be taken into consideration when you're looking at expenses.

15:59 Mary Patch: You know, and I'd have to say one thing in line with that too. First off, expense should be one of the last things you're having a conversation with your client about, and you should be finding out what they need. You know, I have a client that went through voluntary compliance and they had serious concerns about, you know, going to a regular traditional 401(k) and not having somebody double-checking what was happening with the records. So, you know, that client paid more and wanted to pay more to have that extra service added to their, their whole service plan because that made sense to them. So I think a lot of times, you know, we, we look at things from a perspective of, well, we can't show that to our client because it's more expensive, but sometimes that's what the client wants and needs anyway. So we shouldn't just assume we're going to show them the cheapest solution because it happens to be bundled. And I also think too, you can have a bundled recordkeeper that does have a more, I would say, robust compliance department. And if you compared that to an unbundled with a TPA and get it kind of close to service model-wise, sometimes you can get it less expensive by unbundling with the TPA because you might have a bigger recordkeeper who has more ability to bring their fee down than the midsize record keeper who maybe doesn't have that flexibility because they do have the QKAs and CPCs on staff as well. So I think it's— I think that's the part that gets missed the most is what's most important to the client. Like, start, start there and then work your way out to what you want to, you know, show to your client. I always show bundled and unbundled to my clients because I think that they need to be a part of the conversation about what's important to them.

17:43 Shannon Edwards: I love your approach, Mary, too, because a lot of advisors don't do that. They just make assumptions or they just, they work with the same record keeper all the time and that's built into their, into their practice, right? They're, I'm just going to work with this one record keeper all the time. Sometimes if they work with a TPA, it's always the same TPA. Um, but I also think, you know, it's important. There are some unbundled TPAs who are cheaper. I mean, there's one that will charge $500. To do the work that Chad and I are not charging $500 for. That doesn't mean that it's better. And I think that the conversation again should, like Mary said, be around what is important to the client. Does the client want to call an 800 number and talk to a different person every time? Or does the client want to call, you know, a local team that can hold their hands and walk them through things? And, and how do they perceive the value that they're getting for the price that they're paying?

18:38 Chad Johansen: Well, and it's important too, we're talking about the cost to the client. It's not— forget who our audience is in this conversation, which right now is the financial advisor community, right? And there is a cost to you in terms of what your client needs that they may not be getting. So you go a low-cost solution, you go an online-based solution, the client wants to set up some, some clever cross-tested profit sharing and And now they loop you in on these discussions. They're having trouble getting a payroll link into the Recordkeeper, and you, you know, you are pulled in to fulfill that role. Where if you as an advisor practice did the research and figured out who's going to help meet you halfway in the way you want to operate with your clients, now you can cut out some of those extra services, those expenses, that bandwidth that you're spending on 401(k) operations that you You really shouldn't. That shouldn't have to be your role. I always struggle with this analogy. I've been trying for 20 years to come up with a clean way of saying it, but forgive me if this does not make sense, but your clients don't know that there is a cheaper solution out there. And I mean that. Like, if you're walking in and saying, this TPA is $500 and this TPA is $1,500, but this $1,500 TPA is going to give my client exactly what they need then your, your client doesn't know that that $1,500 is $1,000 more expensive than that one that's not going to give them what they need, right? They don't know that this TPA is $1,000 more because they shouldn't see the one that doesn't meet their needs. It shouldn't be a part of the discussion. There is always a cheaper solution out there. But to Mary's point, you got to find out what, what your plan, what your client actually needs and what your practice actually needs. Mary, I know you diversify yourself amongst TPAs because you have such a great understanding of the differences between us all. But most advisors don't have that knowledge. We'll say yet, we're going to debut a tool that might help with that. But we're going to say yet. So I think many advisors are best suited for really figuring out who 2 partners, 3 partners might be, and understanding their differences and making sure that they're rolling with a clean approach for their customers.

20:55 Nevin Adams: Absolutely. Well, so I'm going to go to the next assumption, and I will, and I will just confess, this one confuses me. Um, and, and I say it confuses me because traditionally, when I think about the skill set that a TPA brings to the equation, I'm inclined to think that big plans need that help more than smaller plans. But apparently the embedded assumption— and there are some sophisticated planning devices that small plans certainly need and can take advantage of that a larger plan can— but the assumption seems to be that a TPA is really a better fit for small plans than it might be for large plans. So clearly I don't understand how people's assumptions work because I'd make the opposite thing. What do you all think about that?

21:48 Shannon Edwards: Well, I'll go. So, this assumption is— it does frustrate me a lot. We have our largest plan in our practice is 3,500 lives and over $100 million in assets. And they've been a client since I started my business. And so, when I hear from a former client, I ran into a former client, he moved from one job to another. And he said, I miss you guys so much. I loved working with you. I have this new advisor on this plan that we're working with, and we just moved it. And he said we should just go bundled because we have $20 million in the plan and big plans should just go bundled. And I said, that is not true. If you loved working with us, then we can still work with you. Let's go to lunch and talk about it because we also have plans that have 2 employees. We can range from one to the other. So the assumption that all large plans should just go bundled, I get that a lot of large companies have great HR departments. They do. They're far better than probably some of the smaller employers that we work with. But that doesn't mean that the HR department doesn't need help too.

23:07 Chad Johansen: So, well, and I think the general assumption exists, Neven, because listen to the conversation we've had so far. We've talked about customization and, and doing more work, and you tend to be able to do those things in a smaller, closely held business. You tend to be able to dial up profit sharing to heavily favor owners. You tend to be able to set up different eligibility periods, maybe to, to help with their retention issues when they hire new employees and, um, and their waiting periods to get in. Like those things exist more in the small plan space than they do the large plan. So, I think that's why the assumption is there. But to Shannon's point, and what I have found more often than not, is these larger businesses actually, I'm going to say, need us more because operationally they have things buttoned up on the HR side and maybe the payroll side. But they have such a broad landscape when it comes to changing legislation, when it comes to new rules like tracking long-term part-time. And they need a little extra handholding because the impact of these little things are massive within their operation and not small. And like most, most small businesses might have one long-term part-time or two, or they might have one highly compensated person that has to deal with Roth catch-ups now. But a larger firm might have 75 or 100. And how do you adjust that? How do you communicate that? They— I think they actually need as much help as the small group does. But the premise, the assumption is there. It's not a, it's not a bad assumption. What I would say more so is that small groups bring greater value. That's a bad way to say it. Small groups need a TPA more than large groups do, but that doesn't mean that TPAs are not good for large groups. I mean, that's my spin on it there.

25:00 Shannon Edwards: Very well said. You know, another thing that I have heard though is the opposite. We have a— what I would— I consider him a specialist advisor, um, who has told me, oh, I just put all my small little Safe Harbor plans bundled because they don't need a TPA. And I, I— that takes me aback a little bit because this— the small little Safe Harbor plan might be the doctor's practice where the wife is running the doctor's practice and has no idea what the definition of compensation is for her small little Safe Harbor plan. And to have, you know, and that's how errors occur. You know, they say garbage in, garbage out, right? And so whoever's feeding the information to the bundled provider, if they don't know what they don't know, they may be unknowingly feeding bad information. So I think the assumption doesn't work either in either direction. To always be right.

25:58 Nevin Adams: Well, I think that gets back again, you know, when you assume, you have a problem.

26:04 Mary Patch: And I would tell you that my largest client has a TPA. So, you know, and we have a lot of— we're doing 360 payroll, which doesn't work very often as well as it should. And we're doing a lot of cleanup of data. And I'm grateful I have a TPA on the back side at year end to help us clean it up. So you can't make the assumption that every client, you know, fits into a shoebox. They're all different.

26:30 Nevin Adams: Got it. Well, let's pivot to another assumption, and this is what we're talking a lot about, bundled providers, bundled recordkeepers. So that assumption is that bundled recordkeepers typically do all the required stuff that people are supposed to do. How does that play out in the real world?

26:51 Mary Patch: That hit me between the eyes. I assumed that the bundled on one of my clients got to the year end and I said, okay, well, where's the match calculation? Because you're doing the cross-tested profit sharing at the end. And they said, we don't do match calculations. And I'm like, you what? How are you going to do the profit sharing if you don't have the match in there too? That doesn't quite make any sense. And they wanted to charge the client like another $1,700 or $1,800 to add match calculation onto it. I'm like, well, you're You knew this when you bid the plan out. Why am I just now finding out about this at year end? So I found myself in a situation saying, who's going to do this match? And luckily it's an easy match, so I just do it for the client. It takes about 10 seconds and send it over. But they wanted $1,800 to do something that literally took me 10 minutes. That's crazy. So you can't make those assumptions. You got to lay everything out. I mean, it's in their document. They can see the source when they were taking over the plan. But it never came up for conversation. So, you know, and if you've got an other rights or features situation going on, you're going to have to make sure you got that covered because if there is something unusual in your plan— I had a former client of mine from my prior life, they went into voluntary compliance. They had a two-tiered match system based on employees. So this group of employees, when you're up to so many years of service, and this many people over here, so many years of service. And I said, you got to test that. You can't just look at that match holistically because there's two different matches going on. And there was a lot of other things. They merged two plans together. They never even bothered to look at the plan once the bundled provider brought everything together. And they had one plan was a profit sharing only, the other one was a 401(k) match. So all the profit sharing people did was add 401(k) and kept doing profit sharing. And the 401(k) match, kept doing 401(k) and match, got to the end of the year. Nobody even realized that not everybody got profit sharing and not everybody got match. And, you know, that should have been conversed with the client upfront and it wasn't. And so what ended up happening, the client ended up in voluntary compliance. So, I mean, I think you can't make the assumptions that everything is being done or, you know, it's all taken care of just because it's bundled. I mean, that's kind of a bad approach.

29:14 Shannon Edwards: Yeah, I, I think that's, you know, first I want to say there are bundled providers that do really great jobs, right? And there are some plans that are great fits for bundled versus unbundled. But I think like Mary said, it's not making the assumption. You have to, if you're referring your client to a certain provider, whether it's bundled or unbundled, you need to have a really good understanding of what services they're providing and what the client is getting. I mean, and sometimes it can be as small as who determines who the highly compensated employees are. We had a plan— I mean, we had a plan that we pulled out of unbundled or pulled out of bundled with a payroll company, and we had to do a VCP going back 12 years because they asked the client who the highly compensated employees were. And the client didn't know that the son of the owner was highly compensated. Um, you know, or, you know, they ask, do you own any other companies? And the client said no because they don't know the family attribution rules when it comes to, you know, related employers. And so we ended up having to go back 12 years to correct things because the client didn't know what they didn't know, and they were being asked versus having a provider who determines those things for you and double checks those questions and answers every year. So it just, it's really important to not make the assumption and really understand what you're getting.

30:44 Mary Patch: Yeah, I mean, I just had one where the, the owner and 3 of the kids were there and they never even asked the question if they were related to each other. I'm like, they all have the same last name. I would have thought you would have looked at that. And then when we went back and figured out they didn't do first year top heavy correctly, Pulled that one out and I said, hey, you know, we need to fix this. And they said, we don't go backwards and fix situations like that. And I'm like, well, if the client's got to go into VCP, who's going to fix it, right? I mean, I was shocked that they wouldn't fix something that they did, you know. And their theory was, well, the client didn't tell us that they were all related. I'm like, and you didn't look at their last names and see the whole family worked there? So.

31:25 Nevin Adams: I'm telling you, the providers have done, I think, a very good job over the years of doing a good job of defining what they choose to do and what they will do, as opposed to what you might need them to do. Right.

31:40 Chad Johansen: But yeah, Nevin, that's, that's where this conversation all came about, right? Is that you're right, the providers— and I'm in the provider conversation, it's the TPAs included. This is all service providers in our space. We internally define these things, but we can make it very difficult for advisors to actually figure out what it is that internally we've defined as, as we're doing. To Mary and Shannon's point, Mary, you mentioned earlier not tracking eligibility. You mentioned earlier not calculating match. Shannon, you mentioned not determining who highly compensated people are. They made those internal decisions, but never when you're reviewing their product in a point of sale are they going to come out and be like, well, actually, If you work with us, we're going to force you to tell us who highly compensated— don't worry, we'll give you the definition, the legal definition of what a highly compensated person is, and then you have to tell us. And you also have to know about attribution laws. No, right? So it's very difficult for an advisor to make an educated decision as to are they going to meet my client's needs if everybody's kind of hiding these roles and responsibilities to who's doing what.

32:50 Mary Patch: Well, even you and Shannon do things differently. I mean, I, I I heard both of you talk about some of your service models and it's, it's different. So if you're not asking the questions, how do you know that the people you're sitting in front of are gonna service your client the way you need 'em to? You know, I don't wanna run into my client at the grocery store and have her angry at me because she thought that that service model covered a service and it doesn't. You know, so as an advisor, those are a lot of times personal relationships, personal friendships we're bringing to the table. So we just need everybody to be honest about what they can and can't do.

33:20 Shannon Edwards: Well, and I think that goes to a good point, Mary. You know, when we have a client, we have two clients. We have the financial advisor who brought them to us, and we have the client. And our job, one of our jobs is to protect the relationship between the financial advisor and the client because the financial advisor doesn't want to look bad for referring a bad service provider.

33:41 Chad Johansen: Correct.

33:41 Shannon Edwards: And so, I mean, I think that that's, you know, something that advisors need to be aware of too is You know, does your compliance administrator, whether it's bundled or unbundled, have your back? Like, are they protecting your relationship? I have advisors that will literally bring me a client and say, this is the most important client I have in my book. Their plan's not very big, but on the wealth side, it's the most important client I have in my book. I need you to protect that relationship. And, and we take that seriously.

34:13 Nevin Adams: Well, let's go to our last assumption, and it's about size. And it basically is the assumption that you get better backup, better coverage working with a larger firm. And Chad, you touched on some of this kind of earlier in terms of people being maybe in different places and things like that. But what do you think about this notion?

34:36 Chad Johansen: Well, you know, when you first just said it, my original thought was, he's not wrong. And what I mean by that, you use the term backup. In a closely held third-party administrator shop, usually you've got, let's say, 20 people. And if you're doing a work retreat, if you're doing a team building effort, if you have— and in full transparency, this happened to us this past year, we had a family member pass away. Well, when you employ 3 or 4 members of a family, and they have a close family member pass away, well, those 3 or 4 members of your team are now going to go and be away for a period of time. And so you have to have backup in place. And when you have 20 employees, the backup is thinner than when you have 500 employees. To your, to your point, Neven, larger can equal greater scale. But I think when we talk about coverage, I think we also have to look at things like response time and knowledge and accuracy of answers. So yeah, someone might be there to respond to you, but are they giving you accurate guidance and advice and support? Does it, does it get handled with one reach out versus five reach outs? That to me, that statement right there is a big one and it's one I struggle with. You have to remember that advisors don't— most of them don't just focus in on 401(k)s. And the client, I can confidently tell you with 100% certainty that their client doesn't operate 401(k)s as the primary competency of their business. They have a business to run. So when that client picks up the phone and calls because they need to handle something that's 401(k)-related, they need that thing kind of handled then, not 5 calls later, not 4 days later, not someone finally called me back 3 days later. So being present and the ability to handle an interaction, then provide the coverage that is needed and the guidance that is needed when the client is ready to talk about the 401(k) before they go back to the other 5 hats they're wearing is super important. I think there is something to be said that coverage exists with larger firms, but I'm not willing to say that the coverage is equivalent to that of a specialist compliance administrator.

36:50 Mary Patch: And I would say that a lot of times with bundled solutions, you also have basically a hunt group that the calls all go into. So, Sometimes I can call in there on behalf of a client question and I can get lucky and get somebody who actually does work on the plan more frequently. The next time I can call in and they don't have a clue. So I'm repeating the problem again and trying to reeducate them on the features of the client because there isn't any company out there that handles recordkeeping or administration that doesn't have like an assigned— you have your block of plans that you're working on. Now, whether it's the primary person or the backup person, the backup still has their own block of business they're working on. So do they know this client over here in this block and they're just backing it up? Um, I don't know that I feel that I get any better coverage on a larger firm that has that type of service model because I feel like I'm explaining the history of the client to help them understand why I need this specific answer answered in a certain way. So, you know, I kind of like that you have the TPA that you can call and then they know that client because they typically have a relationship manager who's been on that case. I mean, I can tell you with my TPAs, I've got the same person for the last 6 years. So, you know, they are more familiar with the client and I don't have to go through that, you know, overkill of talking about what's going on with the client.

38:20 Shannon Edwards: Yeah, and I'll, I'll just chime in a little bit too. I think in a smaller firm, you probably have some requirements for response times. I know I have expectations of my team for how long it is before a client or a financial advisor gets a response. I have noticed sometimes when we have to go to the recordkeepers with questions, even if we have a client account rep assigned to that plan, They're not the ones doing the work. So if I have a question about a report or this or that, they have to go ask the team that did the work. And that can be 3 or 4 or 5 days before I get an answer. There was one recordkeeper that we emailed, and the email response, an automatic response we got back, was, thank you for your email. We've received it. It will be 5 to 7 business days before you get a response. And I was like, that doesn't fly in my office. That's right. And it wouldn't fly with my financial advisors either. So, I mean, I just, I think it's a different service model and you need to know what to expect. And that's a good question to ask. It's like, when can I expect a response to a question? Are the people, who are the people answering the question? You know, are they educated? Do they take continuing education? Things like that, and know the level of person that you are asking the question to.

39:47 Chad Johansen: Amen.

39:49 Nevin Adams: Well, that's our 5 basic bad assumptions. Hopefully our discussion has illuminated them for what they are. Um, I should also mention that again, to something we've said at the outset, this group has put together a tool. We call it a checklist. I I kind of hate that name. It's kind of clunky, but, but it is a device, if you will, that will help you know the right questions to ask on behalf of your client or on behalf of yourself as a fellow service provider to make sure that the things that need to get done, who is actually going to do them? And as the partners that you're signing up with, whether it's a bundle provider or a TPA, Are they in fact prepared to step in and do that service? And/or if they're going to do it, do they charge extra for it? Because you need to know that as well, to the points that Mary was making earlier about, oh sure, I'll do it, but it's going to cost, you know, X amount more for you to do that. So it's a way to, to sort of front end those discussions, to eliminate some of the assumptions that are out there and to give you a better sense of exactly who you are stepping off to do business with, making sure that that's somebody you want to do business with. So I'm not sure at this point in time exactly how we're going to make that device available to you, but somehow with this video, a link, something, we will let you have access to that and you can check it out and let us know what you think. We're going to do another episode of this, and in that one we're going to talk about some questions, some good questions to ask potential Advisor Partners, and I think that's something you'll definitely want to tune in for as well. Anything else anybody wants to say?

41:42 Chad Johansen: No, I'm happy we're bringing this discussion to the front. I think it's been needed.

41:47 Nevin Adams: Awesome. I hope you all do in fact check this out. Um, hope you find it informative, and I do of course hope you'll check in on our next episode. Y'all take care.