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,…

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…

Is there any Reason this is not Taught in School?

Most schools do a horrible job of teaching kids about money. Why do our current presidential debate topics include such gems as which candidate wet his pants on stage? I have not heard one mention of the plague of financial illiteracy that afflicts our youth. The tune of one trillion dollars in student loan debt should be…

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…

Death of a Salesman- Except for 403(b) Plans

Even the big insurers are realizing their products are inappropriate for the average investor’s retirement plans. It is astounding why we are not hearing a peep on why they are perfectly acceptable for public school teachers. I guess they are considered to be a “special” case. The Wall Street Journal put out an article today…

Why is Bernie Sanders Missing the Trend in Financial Services?

Bernie Sanders has accused the financial services industry of being engaged in “the business of fraud;” since this industry comprises about 6% of the U.S. workforce, this is one serious allegation. The good news is it is not true. I need a break from writing about insurance companies and wire houses who often mislead and…

Why Can’t 3.6 Million Teachers Get a Group Discount on their 403(b) Plans?

403(b) plans, which are entrusted with the retirement funds of our nation’s public school teachers, have serious flaws. One of the most obvious defects is the oldest trick in the book: divide and conquer. Companies like Walmart are able to receive massive discounts from their suppliers. The reason for this enormous competitive advantage is they…

Investors Need Abe Lincoln at the Republican Debates

Our current political system puts reality television to shame. The average voter is repulsed and is on the verge of grabbing a pitchfork to storm the Bastille. Individual investors are also paying a steep price for this gross political incompetence. On the birthday of arguably our greatest president, Abe Lincoln, we need to look at this sad situation in much greater detail….

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…