Mini-cast 131: Blue Ridge Acquires Coastal Pensions


Bret Keisling is joined by Tom Roback, president of Blue Ridge ESOP Associates, who discusses the recent acquisition of Costal Pension Services, the importance of supporting employee ownership, and the great potential for EO on Clubhouse.


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Mini-cast 131 Transcript

Bret Keisling: 00:08 Welcome to the ESOP Mini-cast. Thank you so much for listening. My name is Bret Keisling and as it says on my business cards, I'm a passionate advocate for employee ownership. There is exciting news in ESOP world this week. There's exciting news in the world of [Third Party Administrators] TPAs this week, and I'm very excited to be joined by Tom Roback, who is the president of Blue Ridge ESOP Associates.


Bret Keisling: 00:31 Tom, thank you for coming back on the podcast.

Tom Roback: 00:34 Thanks, Bret. Always a pleasure.


Bret Keisling: 00:37 I love the fact that you're coming on this week, because you're just announcing the big news. So thank you so much and without further ado, tell us what's going on.

Tom Roback: 00:46 Thanks Bret. Well, we are really excited that we have acquired Coastal Pension Services. So, all of a sudden we have a thousand 401k plans that we administer and we have 22 more employees, most of them in Maryland close to me. So we're really thrilled about this. I've -- you know, it's very good fit, same business model philosophy we have -- very high touch, high quality service model. I've known their president, Pam Walker, since 2007, and she has an excellent reputation in the retirement plan space. And if her employees are half as good as Pam we're going to do well. I enjoyed meeting a lot of them yesterday in their office, which it's funny, it's their office, beautiful office space and in the -- very close to my old gym, that I'm not no longer a member of.


Bret Keisling: 01:47 Wow!


Tom Roback: 01:47 So, it's funny -- small world and, you know, I can get to their office in 20 minutes. So very exciting for us and they're very excited about it too.


Bret Keisling: 01:55 So will they join -- your buying the firm? Will they come in under Blue Ridge Associates? They are -- you're going to merge them in?


Tom Roback: 02:02 So we're going to keep their name. They have a good name. They'll be a Blue Ridge company.


Tom Roback: 02:06 So the Coastal Pension name has a good, has a good as a good name to it. They've been around since 1989 and have a really strong reputation, especially in the mid-Atlantic. And, you know, a couple of comments as to why that this made sense. Certainly on their end more resources, certainly the ESOP administration resources with repurchase obligation forecasting and you know, they do have a few clients that are already ESOPs and probably a lot of clients that should know about an ESOP. So I'm thrilled about that. We might be able to, you know, over time create some more employee ownership out there. So I'm optimistic about that. I think the reality is, you know, white glove service and they'll fit right in with our people there.


Tom Roback: 02:59 They also allow us to capture some of the standalone 401k administration market. To be honest with you, most people don't think of us, up to this point, of really when there's a standalone, unless there's a companion ESOP. So we'll be able to capture, capture more of those. And Pam's got a lot of great relationships out there and they've done great work for a long time.


Tom Roback: 03:22 It also gives us some new platform, 401k recordkeeper platform access. They have access to a few platforms that we don't currently. So we're excited about that and more integration there. And then we'll get more attention from, we work off of a lot of the same 401k record keeping platforms now. So we'll get a lot more attention from some of those, all of a sudden we have a lot more plans. For instance, I know one of the platforms that they have connectivity with and she's on Pam's on the advisory board, is John Hancock and so they're, they're in the top 20 out of 1,700 third-party administration firms in the country for business on John Hancock. So I think we'll get more, more attention there. And certainly the experienced professionals, you know, it's hard to find experience administrators and talent like that. So we've got good, good people there. So we're, we're thrilled


Bret Keisling: 04:21 A thousand plans and twenty-two new employees. What does that do to Blue Ridge's footprint?


Tom Roback: 04:26 I think it definitely gives us more depth on the 401k administration side there. I mean, it's -- all of a sudden we have more 401k plans than we do ESOPs and, you know -- so we have to catch that up, create more ESOPs out there so we can, we can catch up. But I just, you know, really, I think it gives us a good footprint. Most of our clients are, you know, East Coast, but certainly can, just like us, can do business anywhere in the country. And so we're very excited about it.


Bret Keisling: 05:02 Tom, one of the things that I love and, as you know and we worked together back then, but for seven years, I was one of the founders and partners at Capital Trustees, and we would come across ESOP companies that when we talked about the TPA and particularly the companies that had multiple buckets of benefits, there are great 401k administrators that might do a couple of ESOPs, but they're not ESOP administrators. And I've always stressed the importance of if you've got multiple buckets and employee ownership is one of them get someone like Blue Ridge that knows the ESOP where it is a specialized creature, and the other stuff will come along. Is that still good advice?


Tom Roback: 05:47 I agree wholeheartedly, Bret. And I do think, you know, we're very flexible, we can work with any financial advisor. That's another thing about Coastal Pension. They're not a producing TPA like we are. You know, we never act as financial advisors so we can work with with any financial advisor there. So they are more willing -- financial advisors are more willing to work with us and almost in any 401k recordkeeper platform. So I do think that's good advice. Coordination's key on ESOP and 401k administration. You know, it does help with one census. It's just less work for our clients that they're -- it can get irritating for them, let's say, if we're just doing the ESOP administration and they're getting the same census question from two different parties that can get a little old. And, you know, there's some, some cases where it's absolutely necessary to have the same third-party administrator on both plans because the coordination of the plan documents, it just makes a lot, a lot easier there, so.


Bret Keisling: 06:52 Blue Ridge is just prominent in ESOP world, and you guys have worked hard for the reputation that you have.


Bret Keisling: 06:59 You -- kind of frivolous, but I love it -- you guys throw one of the most famous parties at the Las Vegas conference every year, and I don't know where that will be, but truly, I've made great network connections. I mean, it's a great party overlooking a pool, but great network connections. And I have friends that I'm close with now that met at your space. You are heavily involved in The ESOP Association. You're the former chair of the board, I believe, of NCEO. You are very active in the Mid Atlantic Chapter of The ESOP Association. And now you're president of a firm with more 401k plans than ESOP plans. Does this change your focus at all? Or, you know, are we reassured that you are employee ownership all the way?


Tom Roback: 07:45 I think we're employee ownership all the way. It gives us more depth. It's just such a natural with 401k administration and ESOP administration. So we were a little bit late getting into 401k administration. I give Dolores Lawrence, one of our managing directors, a ton of credit. She really built our practice there from scratch, but it was really smart. It's been a growing practice, but you know, catching up one by one, doing acquisitions does help with, to get the critical mass there for some of the points that I talked about earlier.


Bret Keisling: 08:18 Well, they'd be the first Blue Ridge company. Is this the first time you've acquired something and are handling it that way?


Tom Roback: 08:24 It's the first one where we are -- where Coastal is keeping their name. I know we did acquire Benefit Concepts Systems last year. That was very successful. Just a quick point; I think their clients are happy. We gained one of their top professionals there and that was very seamless and went very well, that acquisition last year.


Bret Keisling: 08:49 And one of the things that I love about you being in the ESOP space is culture and integration of cultures is so important to our work. All of us, you know, that if you're an ESOP company, but you don't have the culture, you're not engaged, your not, whatever, that's not what we're talking about. So I imagine you have great insights with the acquisition last year that was a full integration. And now you're going through it again a little bit different. They're absolutely part of your team, but will stay branded. Does that give you a better insight into the cultural stuff we talk about in employee ownership and merging cultures?


Tom Roback: 09:23 I think so, you know, we're learning. It's not easy, but you know, so far so good. We've got some little details to perfect, but I feel really good about it.


Bret Keisling: 09:34 And Tom, just one other subject while I've got you here, you and I have been hanging out on the audio drop-in app Clubhouse, and I did a Mini-cast a couple of weeks ago about the potential I see for growing employee ownership conversations on Clubhouse. And am I on the right track? What do you think of Clubhouse and the potential?


Tom Roback: 09:56 Yeah, I'm still learning. And you've taught me a couple of things in a short period of time. So I've got to give credit to one of my fellow board members, Greg Washburn, he's the one that told me, hey, hey, we got to get on there and spread the word on employee ownership! So I didn't get my invite from him. I got it from you. And I appreciate that, Bret. [Laughter].. And then I shared it with Marie Sherlock who is on there some too. So, hopefully, you know, love you being on at the ground level and we can help spread the word and clarify what employee ownership is and pros and cons and things like that.


Bret Keisling: 10:36 Well, it's a lot of fun for me, Tom, because I really flashed back to when I went to my partner in 2017 and I said, hey, I want us to start a podcast. And he'll tell this story, he looked at me and said, that's great, what's a podcast?


Tom Roback: 10:50 Right.


Bret Keisling: 10:50 And Tom, I think you were like one of my first four or five guests and it's also why you're in my heart a little bit. You've always supported me, not just as a trustee, but through the podcast, and in the last couple of weeks...


Tom Roback: 11:02 Right back at you!


Bret Keisling: 11:02 I appreciate that. But I had 20 listens the first couple of weeks of my podcast and I joked that, you know, probably 15 were my mom and now, and I'm not bragging, but four years later-- I'm proud of this -- and I don't know what it means, but as of today, we're at 73,000 total listens. And I have a strong sense that, you know, there are two to three million employee owners and I'm not even touching, you know, I'm not scratching the surface.


Tom Roback: 11:29 Wow.

Bret Keisling: 11:29 So Clubhouse, and I'll just give an example Tom, we've popped up, we've just started a number of rooms. There is a room on Tuesdays. I'll do a little plug: noon Pacific time that Brian Khorsand of Khorsand ESOP Advisory has set up and we've run that three weeks and I've set up a couple of rooms, just I'm there hanging out and I'll set up an EO room.


Bret Keisling: 11:49 You've always popped in. And what I like about Clubhouse, I'll go, I'll hang for a couple of hours. You'll pop in. You might have 10 minutes. You might have 30 minutes. You might simply decide, you've heard me talk enough or whoever and you know, whatever, but you come in.


Bret Keisling: 12:02 But let me just give an example. There's a business analyst from -- who works for Deloitte -- and she's showed up in a couple of rooms and Tom, as you know, I'm not a journalist and I've never tweeted about your presence on Clubhouse without your permission and I'm sharing it now. So, I won't mention her name, but she's a year or two into her career at Deloitte and is fascinated by employee ownership, because it turns out she studied under Dr. [Joseph] Blasi and Dr. [Douglas] Kruse and Professor [Christopher] Mackin, and she's got that wide-eyed wonder of somebody new to employee ownership. And I thought it was fun. She asked questions and talked about the difference between accountability and ownership. And it was her, you, me, Brian, and one or two others, and we're just kicking stuff back and forth. And it was just, that's what she wanted us to talk about and we were all in. I thought it was really cool.


Tom Roback: 12:54 I enjoyed that. It was awesome, Bret.


Bret Keisling: 12:58 So where I see Clubhouse, and then I will let you go, where I see Clubhouse going is, is for me, Tom, I want to see as many rooms on employee ownership as possible. I set up an employee ownership club, the way Clubhouse works, anybody can set up their own clubs. So I'm not saying, you know, it all has to be through me. I want to see as many rooms as possible. And a lot of my stuff now is just having conversations, trying to grow the sandbox, but I could see once we get -- and by the way, Clubhouse is still in beta it's iPhone only until May -- but once we really have traction there, Blue Ridge Associates easily could be setting up rooms of ask the TPA, ask these questions, and providing all of us more interactions with employee owners. So that's where my excitement lies.


Tom Roback: 13:41 I agree, Bret.


Bret Keisling: 13:42 Excellent, Tom, congratulations on your acquisition and give our congratulations to your team and thank you for your acquisition. Thank you for just being so strong in the employee ownership space.


Tom Roback: 13:53 Hey, thanks for having me, Bret. Really enjoyed it.


Bret Keisling: 13:57 All right.

Bret Keisling: 13:57 And with that folks, we are going to wrap up today's episode. As I like to say during the pandemic. I don't like to say it, but I do say it, our country continues to go through an awful lot together right now, and that is how we'll get through it, together. And that's in the best spirit of employee ownership.


Bret Keisling: 14:12 With my thanks to Tom Roback and the great folks at Blue Ridge, this is Bret. Keisling; be well.


Bitsy McCann: 14:19 We'd love to hear from you! To contact us, find us on Facebook at KEISOP, LLC and on Twitter @ESOPPodcast. To reach Bret, with one "T", email Bret@KEISOP.com, on LinkedIn at Bret Keisling, and most actively on Twitter at @EO_Bret. Again, that's one "T". This podcast has been produced by The KEISOP Group, technical assistance provided by Third Circle, Inc. and BitsyPlus Design. Original music composed by Max Keisling, archival podcast material edited and produced by Brian Keisling, and I'm Bitsy McCann.


Standard Disclaimer: The views expressed herein are my own and don't represent those of my own firms or the organizations to which I belong. Nothing in the podcast should be construed as guidance or advice of any kind in any field and the fact that I mentioned an organizational website or an advocate or a company on a podcast does not reflect an endorsement, but if you've heard your name or your group's name mentioned on this podcast, I'd love to have you come on and talk about it yourself.


A note on the transcript: This transcript was produced by Temi, an automated transcription service. While it has been reviewed by The ESOP Podcast, we can not guarantee the accuracy of the transcription. Please refer to the original audio when citing sources.