March 2016

Investor “Choice” has become a Code Word for Conflict of Interest

A study was published regarding employee retirement plan participation that could easily have  appeared in the farcical newspaper, The Onion. We are now being told  that a lack of employee choice is reducing participation in teacher’s 403(b) plans. This study is completely disregarding data that shows these plans have a miserable participation rate of around 30%. This despite the fact that states…

Full Disclosure by Brokers is no Panacea for Investors

The proposed new rule from the Department of Labor requires brokers to look out for their clients’ best interests in retirement accounts. Unfortunately, making financial salespeople disclose all of their obvious conflicts of interests may not be enough to stop their bad behavior. An excellent book written by Dan Ariely called The (Honest) Truth About Dishonesty explains why full disclosure…

When Advisors Win Vacations- Watch Out!

Variable Annuities have no place in a retirement account. Though rare in a 401(K), Annuities comprise over 70% of the assets in 403(b) plans. This version of financial malpractice deserves a special place in the insurance broker’s “Hall of Shame. ”  Teachers have every right to expel these people and the products they hawk from their…

No BICE For You!!!

    Thankfully, variable annuities may fail a new exam that would  allow them to be included in retirement accounts.  While many investors will be saved from having these noxious investments in their tax deferred accounts, others will not be so lucky. The Best Interest Contract Exemption or BICE could drive a dagger into the heart of variable annuity sales…

We Are Sorry for the Inconvenience, but This Is a Revolution

The oppressed are rising up against their oppressors. Teachers are starting to pay attention to the strangle-hold insurance companies have over their retirement funds. More importantly, they are starting to take action against the powerful vested interests that siphon billions of dollars from their retirement accounts annually. A teacher in Illinois, Mark Eichenlaub,  recently sent…

Fewer Schools are using 403(b) Plans

One of the reasons given is “to streamline costs.” It is not surprising that some schools are making this switch. The benefits of a single vendor and features such as auto enrollment cannot be disputed. Read more here

High-fee Products often Lead to Broker Misconduct

It is no coincidence that investment products that pay out high commissions are often near the top of the list regarding financial misconduct. The temptation of high monetary rewards is a tremendous incentive to cheat. This could apply to brokers pushing clients into high-fee Class A funds when a simple index fund would do the…

The Biggest Hedge Fund May Be your Kid’s University

Student loan debt recently surpassed one trillion dollars. Many private and public universities are contributing to this spiraling problem by massively overpaying hedge funds to manage their large pools of endowment funds. To make matters worse, they are often receiving returns that are inferior to almost zero-cost index funds. Hedge funds are often looked at as…

The World’s Lamest Excuse for a High-Fee Investment

Articles containing tales of the tidal wave of “annuity abuse” flood financial media. Apologists for this indefensible behavior continue to concoct excuses that defy even the most generous definition of reality. Investment News just came out with an article detailing the all too familiar tale of a broker fleecing his clients with improper annuity sales. As mentioned here,…