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…
403(b)
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…
A Sales Model that Makes Revenue Sharing Look Investor Friendly
Annuities in retirement accounts are an atrocious investment. They are so heinous they make funds involved in revenue sharing schemes, commonly found at many wire houses, look good in comparison. Inexplicably, regulators continue to allow teachers’ retirement accounts to be raided by insurance companies using variable annuities as their Trojan horse. Jason Zweig recently wrote an article…
Rich Plan, Poor Plan
403(b) plans are treated like the ugly stepsister compared to their more glamorous close relative, the 401(k). Both plans were designed for the same purpose. Unfortunately, their separate governance structures are a textbook case definition of discrimination. Workers who participate in a public rather than a private retirement plan are being given the short-end of…
Who is Roaming the Halls of your Child’s School?
The Bubonic Plague of high-cost variable annuity infestation has extended its predatory tentacles into the classrooms of our children. Invaluable teaching and planning time are at risk due to marketing schemes designed to entrap teachers. While the damage being done to teachers’ 403(b) plans by high-cost variable annuities is irrefutable (see here) something much more sinister has…
Straight Outta Context
It is preposterous not to include the impact of fees when deciding upon an investment. This is the main reason most teachers’ 403(b) plans are so horrifying. It is almost impossible to make a positive real return when costs exceed 3-4% on your investments. While this statement comes right out of Captain Obvious’ playbook, a…
Class Action Could Mean Trouble for Insurers
Insurance companies often make misleading claims to teachers and the elderly when pitching expensive insurance products. Often these two groups fall victims to these deceptive sales gimmicks. In a recent development, a certified Class Action against insurer ING Group could be a game changer. This is not the first time ING has had legal difficulties…
403(b) on a Card
Teachers finances are intentionally made to be unnecessarily complicated and expensive. This is the result of the toxic combination of conflict driven salespeople combined with mass financial illiteracy. Helaine Olen and Harold Pollack just came out with a great book that reinforces the fact that personal finance does not have to be complicated. In fact, so called…
Teachers’ Pensions need F.B.I. Protection
Being a former public school teacher for twenty years, I know how God-awful the average 403(b) plan can be. Now comes the not so stunning revelation…the state- run pension plans can be even more diabolical! Rhode Island teachers have called upon both the S.E.C. and F.B.I. to investigate some very serious allegations. Several hedge funds are…
Some investing lessons from Julius Caesar
Waking up this morning to see my name on Michael Johnston’s 50 Best Investing Insights of 2015 was a pleasant surprise. Seeing my name with my colleagues, Josh, Barry, Mike, Ben and Kris is quite flattering. The rest of the list Bill McBride, Cullen Roche, James Osborne, Jason Zweig, Morgan Housel, etc., speaks for itself. Especially when I thought…
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