Too many advisors are trained to sell, not plan. Inexperienced college graduates and other unqualified individuals are often used by insurance companies as a form of asset-gathering cannon fodder. Multitudes of salespeople are sent out on this mission; few strike it rich. Some insurers believe if you throw enough sales pitches against the wall, a portion of retirement…
Those Who Have the Gold Should Not Make the Rules
Treat clients the way you would like to be treated; this is pretty simple to understand. No need for legions of lawyers, thousand page documents, or best interest contract exemption clauses. Unfortunately, in the world of investment advice whoever has the gold makes the rules. This could not be more opposite from The Golden Rule. It…
How Do You Break A Bad Investing Habit?
Bad habits are very difficult to break. Smoking, overeating, and watching too much Vanderpump Rules are routines we need to rupture. Lord knows I spend way too much time following Jax, Lala, and the rest of the breathtakingly imbecilic, but strangely fascinating, SUR crew. Bad investing habits are the norm, not the exception. They include panicking…
An Army Of Darkness Dominates The Annuity Market
Annuities are often sold by inexperienced salespeople, supervised by conflicted branch managers. This deadly combination is poisoning the investment well for far too many investors. Last week’s announcement of the Department of Labor’s fiduciary rule was a win for investors. Unfortunately, there is a gaping hole in this legislation that a zombie herd from the Walking…
The “Rosemary’s Baby” of Investment Products
Talk about an investment where the glass is always half empty! Indexed annuity products are the eternal pessimists. The fact that they do not include dividends in their return calculations pretty much guarantees they will miss about half of the markets historic gains over time. In a not so shocking turn of events, these products are…
Act As If What You Do Makes A Difference. It Does.
On the eve of the implementation of the Department of Labor’s fiduciary rule, there is a smell of danger combined with real change in the air. You are not really paying attention if you do not get the sense that this time it just might be different. More finance types are looking at themselves and not liking what…
The Fees in Bernie Sander’s Wife 403(b) are Burning Down the House
I bet if Paul Ryan’s wife had Jean Sander’s 403(b) account, he would not be leading the charge to block the Fiduciary Rule coming out on April 6. According to Scott Dauenhauer, Her VALIC account’s average fund expense fee is 1.56%, says Dauenhauer — who also says that because the account holds 20 different investments,…
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…
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