B (4:28)

And I'd love to ask, you know, recognizing that even when we refer to advisors, there are all different types, different, you know, certainly focusing in first and foremost on that RIA fee based model, advisors that are working in that space. I guess maybe I'm curious, what do you see are some of the characteristics of the advisors that seem to be the most interesting to work with or make that connection with what you're trying to achieve?

A (4:54)

Yeah, it's, it's. I would, I would put them in two general camps. So one, it's the traditional ria, who's always been fee only, for whom insurance was never accessible or usable because of commissions. Commissions drove up the costs. The compensation model didn't align, it wasn't fiduciary. So repricing the products and enabling them now to be billable assets just like anything else. So for those advisors, it now enables you, as you were talking about in your intro, the ability to more holistically serve those clients. You can now offer annuities, noting that they're low cost and commission free. You know, and offer great value to your clients. And it also helps bring in share of wallet. You know, your, your clients likely own annuities if you haven't sold them to them. You can now aggregate assets, eliminate competitive relationships, but you can be more holistic to your clients with insurance products because they now align with your ethos and your fiduciary nature and your billable model. And then for the hybrid advisor who's already migrated the asset management part of their business to fee only, it enables them to now move the insurance part of their business to fee only. It enables you, for all the same reasons that you migrated on the, on the asset management side to do so on the insurance side. There's more recurring long term revenue if you're willing to provide ongoing advice than in a transactional commission model.

B (6:23)

We've even talked on this podcast series in the past about what we often refer to as kind of that intersection between health and wealth. This idea that we're not just marking to hey, I'm going to retire at 50 or 60 or 65, that really there could be many life events and opportunities your clients are moving through. And then quite honestly, I guess the third piece is clients are just, they're living longer, hopefully right over time. And so I'm imagining that that has all had an influence on how you think about coming to the table with advisors. What's been your observation in that? The evolution, the continued evolution of that advisor offering.

A (7:01)

Yeah, that's great line of questioning. I'll date myself too. When I first started working in the RA market, it was, you know, 2004, going into 2005, launching Jefferson National. You know, going into the RA market, advisors were really asset managers, you know, in the RIA channel, you know, and the, the idea of holistic financial planning and wealth management and estate planning and all that, that was more niche within the RIA market. And now it's becoming table stakes. All of those things are becoming table stakes and insurance plays a role in those things. And you need to have, you know, to me, which is, you know, part of the reason we launched DPL is you need to have products that work within your billing model and work within your ethos of being a low cost product provider. So we've seen that. And on the other side, you see the other migration. While RIAs are really expanding their services because it's being demanded of them from their clients. You're also seeing the rest of the market start to look like an RIA. Right. So back 20 years ago, wirehouse advisor versus a broker dealer advisor versus an RIA were very different things.

B (8:12)

Yeah. And very distinct. Distinct.

A (8:14)

Yeah, very distinct. Today, not so much like today. You know, I, I, I say it all the time. You know, rias, if you're not providing holistic solutions, you're now negatively differentiated. When I, you know, 20 years ago, when you were an RIA, you can say I'm, I'm a fiduciary and I work on fees. On, you know, asset management side, I'm, I sit on the same side of the table you do. That was differentiated. Now everybody can say that and they might say best interest, but it sounds a lot like fiduciary to a client. Those advisors have a wealth of solutions they can provide. So if you're an RIA and you're simply managing money and you're not providing holistic advice and holistic product sets, that's now a negative differentiation to potential clients.

B (9:02)

How important has that technology piece been?

A (9:05)

It's critical in several different ways. So if you look at the market as you do, like when you're launching a business, so say why hasn't the annuity market moved to fees like the asset management side has? And to me it was two structural reasons. And I kind of felt this in building Jefferson national because we were trying to get annuities adopted and one of the, one of the limiting factors was the technology. So we had fantastic technology but it was never going to get integrated because we were a product manufacturer. And if you say, if you look at the problem one, the structural issues that existed were there weren't a lot of fee based products, number one. So if you wanted to use annuities on a fee basis, you were severely limited. Today that's not the case. So we've worked hard at that. We've brought 20 odd carriers to market 8,000 products. I don't know what it is anymore, but loads of products, there's a robust marketplace and commission free products. That's challenge number one. Challenge number two is it has to work in the advisor's environment, meaning their, their technical environment. At a minimum, you've got to get data feeds into their system so they can see the assets, bill on the assets. But ideally you build in tools and capabilities into that desktop to help find products. So that's what we do. Simply if you want income for your Client. You can come in and say, here's my couple data points on my client. I'm looking for $50,000 a year of income. We'll tell you the product that will most efficiently do that. Or I'm working on a financial plan and I've got a $2,500 a month income gap. Tell me what product will most efficiently fill that. Or my client owns an annuity and it's a commissioned expensive product. I want to move them into something fee based. You can literally take a photo of that statement, upload it to our tool and we'll give you an instant comparison. So we empower the advisor in so many different ways. And one of my favorite tools is the ability to compare your fixed income to the annuity.

B (11:07)

Would you say that's one of the biggest misconceptions about annuities? Any others come to mind?

A (11:13)

Some are misconceptions and some are well earned problems. One of the biggest ones I hear particularly from RIAs who aren't steeped in annuities, right, because they can never use the products. Why would they be experts is they think they mostly just think of annuities as SPIAs and something I'm going to buy income. The assets are gone and SPIAs are amazingly unpopular. Products like SPIAs make up like 4 to 5% of the market. Income is generally generated through a rider. And the important aspect of that is you don't lose access to the assets until they've been depleted by withdrawals, just like any other assets. Right. That's great for clients. Their money's not disappeared. You know, you can still see it within the portfolio, you know, it's still there. And those products generate very efficient income. You know, the other obviously is the whole thing we're talking about right now. People still think they're all commission and they're not. There's a very robust, you know, marketplace of low cost, commission free products. And the, the other misconception I hear is complexity. They're too complex. That's just not a fair criticism. We're in financial services. Financial services products are complex. Explain to me how the ETF works. That's really complex. Explain to me how a mutual fund works. That's really complex. But it's easy to understand what they do and how they're used. Right. So you would never say mutual funds are complex. I'm not going to use them. ETFs are complex. I'm not going to use them. Annuities are complex. I'm not going to use them. Well, yeah, Annuity, just like everything else in financial services, they're complex under the surface, but the use and application of them is very straightforward. We're using downside protection, we're creating guaranteed income. This is what we're doing with them, basic in terms of using them. So yes, you have to take a little time, understand how they work, just like anything else. And then the ongoing application and use of them is very straightforward.

B (13:11)

If you think about maybe some advisors that have really embarked on this journey, what have you seen as been the impact on both the advisor's business, the clients that they've been able to engage with?

A (13:22)

So I mean, one of the things I always tell advisors, you don't want to use the products, that's fine. But look at them first, like actually educate, you know, first before you make that decision. Because these are brand new products. These are not your father's Oldsmobile, they're not your father's annuities. Dating myself, again with that reference.

B (13:39)

But solid though. Solid.

A (13:42)

Yeah, but what, but what you see is the way advisors who haven't used insurance before, they will generally start with an annuity review because it's great for them, right? And that kind of serves as kind of the training of getting to know the products, right? In a very low investment way. You don't have to reallocate your investment strategies. You don't have to make these major changes. You simply talk to your clients. They own annuities, you have them, I'm happy to review them. Got this great tool and partner with dpl, review the product and that's such a win, you know, and we see advisors, you know, that that's the way it gets the ball rolling. And so we see them bring assets, you know, from existing clients and helping the firm grow and also using it with new prospective clients because what a great way to differentiate yourself, right? So it's hard to have tangible differentiation as a financial advisor. I mean, it's a great way of showing a very tangible differentiation and then what they find, which is very surprising to them, but not surprising to those who know annuities and do research on annuities, the behavioral aspects that you get from clients who own annuities is really incredible. And advisors too often forget about that. Behavior matters. Too often advisors are like, I invest and like, because I'm managing your money and I'm doing it in a prudent, diversified way, I'm managing your risk, you should feel okay, but people don't, right? So there's a lot of people who get, who still get Nervous, particularly around retirement. And so what advisors reflect back to us who've now newly started using annuities. Like one, my clients are happier and more relaxed in volatile markets. I don't hear from them as much. Two, they're willing to spend more in retirement because they've got the comfort of that guaranteed income.

B (15:34)

Right.

A (15:35)

Most people will tell you, most advisors will tell you that the bigger problem is getting people to live the, you know, spend their money in retirement more so than reining in those people that want to overspend.

B (15:46)

Yeah.

A (15:47)

So you, you see these great behavioral benefits from clients and to hear advisors who are new users of annuities reflecting that back to us is awesome.

B (15:59)

David, something that you touched on this area of trying to differentiate in a very competitive landscape is a very real challeng for the advisors we work with. One way this is showing up in the data that we gather through our global study is specifically around services that are offered and how can organizations think about expanding their services to compete in, as we've said, a very competitive landscape. We saw in our 2025 study that nearly 40% of high performing firms, and this is a very specific criteria within our study, manage or sell insurance or annuities for their clients. So I'm not sure if I'd necessarily call that a table stakes offering just yet, but we are seeing that as an example of how businesses are expanding services and looking to compete in the marketplace. So I just wanted to call that out because I think it's worth noting in our conversation today, 1000% agree.

A (16:53)

Like I was saying earlier, like everybody is starting to look like an ria, let alone become one. Everybody's becoming an RIA looking like an RIA regardless of the channel. And you do need to be able to provide services to prevent, you know, clients from going to somebody else. And people are now more competitive channel to channel. And that's part of the promise we make, you know, to the firms we serve. We're your insurance partner, we work for you, we're not competing with you.

B (17:21)

Well, and it's one thing to hang your shingle out one day and say, okay, I'm opening an R A, I'm launching an RIA and now I'm going to go find clients. Most often we're an existing advisor somewhere, maybe even in a different business model. And you're looking to make that move into the independent RIA fee based only space. You know, you've got these existing clients, these existing assets and I know one of the things that you can help with is let's take a look at that. Let's take a look at what needs to happen or change from an existing book of clients. If you are in fact changing your business model, maybe going in a different direction to build your business over time. I know that's something DPL can help with.

A (17:57)

That's right. And I'll just add, you know, before getting into the meat of that, that, you know, the other part of the competition is the other RIA firms are starting to offer all these services. Right. Particularly at the top of the market. All of these enterprise firms who are acquiring everybody, they're starting to look more and more like a broker dealer or a wirehouse. You know, all these big aggregators. So even the true RIAs, they're becoming more and more holistic. So everybody needs to get there in whatever form you're going to deliver those services. You have to figure out how to do it. But yeah, that your question, Katherine, goes to, you know, what I was talking about earlier and who we serve that hybrid advisor. You've got a book of old annuities that you sold. Maybe you sold them a long time ago, maybe you sold them recently. We can help convert them. Like I said, we've got tremendous technology to analyze any individual annuity. We also have the ability to do that on a book. So if you can provide us the data in a spreadsheet, we'll tell you what data we need. You give us the data, we can analyze thousands of them at a time. Obviously we're only going to recommend where the client's going to get into a better product. But now you're changing that revenue. Right? So if, if you're thinking about, if you're thinking about selling your business, if you're thinking about joining, you know, one of those large aggregator firms, you're going to one probably multiply the revenue you're getting on those policies and then you're also going to get a better multiple. If you're growing, you're going to get the higher end of. Yeah, basically that's what we can help do is drive growth and drive organic growth. Bringing in held away assets, converting old assets that you may not look at into fee billable assets. And that's a great profile to have as you look to transition your business.

B (19:45)

As you look at the insurance annuity marketplace and those products, any particular headwinds or challenges that just as an advisor who's adjacent to that. Right. And or has clients of course, that are attached to that, any particular headwinds or challenges that you see, maybe over the next few years that we should be aware of.

A (20:06)

For us as a firm, the biggest challenge is getting over the old stigma of annuities. Advisors are, I don't do annuities. It's like, just please take a look. They're really very different products now that we're bringing to market, which are very powerful for your clients. But no, I think the trends continue. One, if you're the advisor, you're running an RIA firm, there's gonna be continued pressure for more service, you know, from your clients. Everybody says there's no fee compression. Right. The way fees are getting compressed is because you're having to expand your services.

B (20:37)

Right? Margin compression.

A (20:38)

Yeah, that's right. So it's the margin compression. You're still getting your top line number, but you've gotta provide more to get it. So that's only gonna continue. People like annuities and if you can't provide and we get this directly, I mean literally we get people who call us directly, consumers who say, my advisor wouldn't talk to me about an annuity, will you help me? I mean legit, we get that all the time. And, and you know, for an advisor, your clients like annuities, you should like annuities. They provide a great benefit in a financial plan, you know, protecting longevity risk, protecting against sequence returns risk, providing that peace of mind of guaranteed income, you know, get educated on commission free products. That's only going to continue because as you're mentioning earlier, life expectancy, particularly for the wealthier, healthier set, continues to expand and planning out to, as many advisors do now, out to a hundred years old. That's challenging to do with investments alone.

B (21:39)

Yeah.

A (21:40)

And add an annuity into that and it becomes a lot more manageable to try to plan for.

B (21:47)

Yeah. I think oftentimes of late anyway, we talk about, you know, are robo advisors going to have a negative impact on the independent advisors? AI going to have a negative impact. And I think generally speaking, most organizations look at those kinds of things and say, wait a minute, no, they can actually be hugely supplemental and enhancing to what we're doing with our clients. And so I agree with you. I think there's been a bit of a stigma and especially for that independent advisor. Right. There's a, there's a reason why that word independent is in there. But it can, as you said it, at a minimum it comes up, I hope, in most really good true financial planning, true deep planning, conversations with clients and then, you know, what's the solution? Right. How do we, how do we connect with the solution. I think it's pretty powerful.

A (22:34)

Yeah. And I mean one of the, again, one of the reasons I launched DPL coming out of Jefferson national was we were a small carrier and we had a limited product set and it was really focused on investment only variable annuities. What do you come to understand is clients like the income. So I designed it to be, you know, an additional asset location vehicle. Right. Because you get unlimited tax deferral. But it was too operationally hard. So some advisors used us, you know, for that, but most wound up using us for a 1035 exchange. Let me just get my client out of an expensive annuity and into a low cost annuity. And that to me like was a problem because clients, like I said, they like the income, they like the protection features of annuities, you know, that's why they bought it. And you know, you don't want to necessarily talk them out of what, what gives them comfort. And now because we have a robust marketplace, you know, of product fee based advisors, fee only advisors can bring all of those same kind of solutions. So when they're talking to their client, they just don't have to try to convince them they don't want the income. Let's just go low cost. You can go low cost and get income, right. You know, if it brought you comfort to have guaranteed income, I can now bring you guaranteed income.

B (23:49)

You know, one thing I really find interesting as we've been talking here today and of course, you know, we're understanding the DPL Financial Partners offering. We work with advisors a lot around figuring out how do you create capacity. Most advisors are out of capacity. That's the biggest challenge for growth. We know that from our study. When we ask what's your biggest barrier for growth? Is lack of capacity. And oftentimes when we engage with advisory teams or go into businesses, you know, we see real opportunity to help get the advisor predominantly spending their time on the things that are the greatest value to their clients. And we won't get into the list on both sides of that, the pro and con list on that. But all that to say what I really appreciate is that, you know, here's an opportunity to deliver a level of service and expertise and knowledge to your clients, but doing in a way that is scalable, repeatable, efficient over time. Because again, if you decide as a business, okay, we're going to lean in on this, we're going to make sure we've got all of this covered with our existing clients or every client going forward, you've got to think about an infrastructure, a level of knowledge and expertise in the business that can require quite a lift. You know an example of that is often we will get that inquiry of we're thinking about doing some family office stuff and stuff is often the word that gets attached to that. And, and after I cringe a little bit and I say oh okay, let's talk about that. Because you know, none of these things you can do halfway and you really do need to think about what's gonna be the greatest value to your clients. So I just really appreciate when we see a potential partner that can help an advisor do this, do it quickly, do it in a very scalable way, makes them look like heroes with their clients, which we love. We always want that to be the case, but gives them just a real, you know, a really good place to work from when they're having this conversation with clients.

A (25:44)

Yeah, so our technology is amazing. I mean it's super efficient, super easy to use. Again as you were describing, if you're just providing insurance services review and somebody brings you an annuity to review, that's a pain. You have to look at that statement. You probably have to go to the website, maybe call the carrier, try to look at the prospectus, figure out what the heck they own. With our tech. You can either just look it up in our system, we'll give you an instant comparison or take a photo of the statement. Amazing time savings and you're also going to service your client better.

B (26:18)

Well, I think that's an excellent point to end our time here today. I, I could, we could probably talk for quite some, quite a bit longer on some of the different opportunities and impacting advisor businesses. But David, I really appreciate you both of course sharing what DPL in particular is doing but also I think raising just the general understanding, dispelling some of the myths, helping advisors think about, you know, if I'm looking at and expanding my services, how can I continue really show up for my clients, meet their needs as they evolve over time. I really appreciate you taking the time to help us better understand how insurance annuities can be one of those levers. And so thank you for that, very much appreciated.

A (26:59)

That's great. And I appreciate being on because I always tell people our three prong value proposition, how we deliver value to clients is one, we drive low cost products, two, we leverage technology to help find the most efficient products. But three, we work with fiduciary advisors so you know, people focused on delivering that value. Really appreciate you having me on.

B (27:21)

You're welcome. I couldn't have said it any better. I will tell you this. I reached out to your team. I said, hey, you know, tell me a little bit of something. Something about David that might not everybody might not know. I mean, must have been wildly fun to get to throw out the first pitch at an LA Dodgers game, even though I am a solid Seattle Mariners fan. So we'll reevaluate whether we can be friends or not. But that was so cool. What a wonderful opportunity. How fun was that?

A (27:45)

Super fun. And I do have to say I did throw a good strike. It was love it. Threw enough batting practice to my kids and their teams while they were growing up. I felt pretty confident in it and I went from the rubber. It didn't go in front of in front of the mound. Had to go from the rubber. Did my little Fernando Valenzuela look to the sky and how fun. It was awesome.

B (28:09)

Well, like you were saying earlier, like, if you're gonna do something, do it really well. And clearly you did. I think that that's really cool. I love that. Thank you David. And for those of us listening here today, absolutely encourage you to check out DPL Financial Partners. As David mentioned, he's got an entire team of people that are happy to answer any questions you have, help you think about both your current offering or perhaps a new offering for your clients. And of course, for those listening today, if you want to know more about how Dimensional supports Advisors alongside advisory businesses, check us out@dimensionaldimensional.com and with that, we'll see you all next time. Thank you.

C (28:47)

Thank you for joining us for Dimensional Fund Advisors managing your practice podcast. For more information, please visit www.dimensional.com. dimensional Fund Advisors LP is an investment advisor registered with the securities and Exchange Commission. Insurance and annuity products are not offered through Dimensional Fund Advisors LP or its affiliates. Dimensional makes no representation as to the suitability of any insurance platform, evaluation tool or insurance product and we do not endorse, recommend or guarantee the services of any such platform, tool, or product. Dimensional is unaffiliated with DPL Financial. The views, information or opinions expressed during this podcast are solely those of the individuals involved and do not necessarily represent those of Dimensional or its affiliates. All expressions, information and opinions are subject to change. This podcast is distributed for informational purposes and it is not to be construed as an offer, solicitation, recommendation, or endorsement of any particular security, products or services. Please consult with qualified legal or tax professionals regarding your individual circumstances. Circumstances Investing involves risks. Risks include loss of principal and fluctuating value. This podcast is available for private, non commercial use only. You may not edit, modify or redistribute this podcast without the express written consent of Dimensional Dimensional assumes no liability for any activities in connection with this podcast or for use in connection with any other website, computer or playing device.