Its been two weeks since PBS Front­line Retire­ment Gam­ble was broad­casted. Dan and I were in NY this past week. We had the great plea­sure of hav­ing lunch with Rain Media  researchers, writ­ers and pro­duc­ers who made The Retire­ment Gam­ble for PBS Front­line pos­si­ble. Mar­tin Smith is stand­ing behind Dan and me. From left is Ryan (researcher), Dan, Mar­tin, myself, Marcela (pro­ducer and writer) and Nesa (asso­ciate producer).

Dan and I were thrilled we had the oppor­tu­nity to con­tribute our small part in this his­toric doc­u­men­tary. This didn’t hap­pen by chance. I have been advo­cat­ing lower cost 403b plans for over 20 years. I know many peo­ple in the pro­fes­sion who are gen­uine fidu­cia­ries and in the media. Never the less, the best evi­dence that some­thing extra­or­di­nary was accom­plished is by the crit­ics who had noth­ing good to say about The Retire­ment Gam­ble. Instead of look­ing at the facts and the data that was so well artic­u­lated through­out the broad­cast with John Bogle’s 2% fee sim­ple math equa­tion, the naysay­ers had to find very cre­ative and clever dis­trac­tions to keep peo­ple think­ing about the fees and invest­ing in low cost index funds.

Gen­uine Fidu­cia­ries liked the broadcast.

Fee Only Finan­cial Advis­ers with GENUINE fidu­ciary respon­si­bil­ity wel­comed and praised this broad­cast: DCIIA (Defined Con­tri­bu­tions Insti­tu­tional Invest­ment Asso­ci­a­tion) and 403bwise Forum run by Dan Otter were great exam­ples. We could not believe how shal­low and inept the JB Mor­gan and Pru­den­tial exec­u­tives were about retire­ment plan costs.

National Asso­ci­a­tion of Pro­fes­sional Finan­cial Advis­ers (NAPFA has mem­bers who are gen­uine fidu­cia­ries, fee-only and is cited in our book “Late Bloomer Mil­lion­aires) calls film ‘wake-up call’ for leg­is­la­tors. NAPFA is not threat­ened by this report. Here is NAPFA press release. NAPFA GETS IT!!!!!!!!!!!!!!!!!!!!

ARY ROSENBAUM, Ary’s state­ment: click here. Email: ary@therosenbaumlawfirm.com
The Rosen­baum Law Firm P.C.
734 Franklin Avenue, Suite 302
Gar­den City, NY 11530
516–594-1557, fax 516–368-3780

The New York Times Carl Richards liked the broad­cast. Carl quote Dan and I: “Please accept that you have a respon­si­bil­ity to do the hard work of learn­ing to under­stand this stuff before it’s too late. Like the two retired teach­ers in “The Retire­ment Gam­ble” say:

We never planned on learn­ing about invest­ments, until we got slammed in the gut.

Get­ting slammed in the gut seems like some­thing we all want to avoid.” Click here for full article.

Gen­uine fidu­cia­ries should be happy and grate­ful because the Retire­ment Gam­ble helped them turn thou­sands of clients from the rip-off insur­ance com­pany annu­ities, the huge banks, retire­ment plan con­sul­tants who think they are fidu­cia­ries and bro­ker­age firms to a pro­fes­sional who truly looks out for their best interests.

Other Pos­i­tive Reviews

Bogle­heads  Fol­low­ers of John Bogle’s work liked the broad­cast for giv­ing a lot of time to Mr. Bogle and his legacy of look­ing out for the indi­vid­ual investor by pay­ing close atten­tion to fees (35,000 reg­is­tered mem­bers of the best and the largest invest­ment forum on the Inter­net). Other posts reflected on what the broad­cast left out: don’t con­demn an entire indus­try, with finan­cial edu­ca­tion peo­ple can work the cur­rent sys­tem for their best inter­ests. It’s that sim­ple. If your adviser likes The Retire­ment Gam­ble, you are lucky to have him or her.

If your adviser says any­thing neg­a­tive, WATCH OUT! They don’t want you to know what you are pay­ing. Here are the negatives:

Plan Spon­sor Had noth­ing good to say about the report. I won­der why.…  Respond­ing to John Bogle’s absolute fact that 2% drains a port­fo­lio by 2/3 after 50 years: “But that 2% assump­tion is over­stated, accord­ing to Robert Hilton­smith, whose research was fea­tured in the doc­u­men­tary. Hilton­smith is a pol­icy ana­lyst at Demos, a pub­lic pol­icy orga­ni­za­tion in New York. Most funds do not charge 2%, but trad­ing costs drive up expenses. “We don’t have a good esti­mate of what trad­ing costs are because we don’t have that data,” Hilton­smith told PLANSPONSOR. “It’s either pro­pri­etary or it’s not col­lected.” (2% is NOT over­stated. In fact, its low. Plan Spon­sor did not deny Hilton­smith response that trad­ing costs are not trans­par­ent and are part of the costs. I might add that TPA costs should be added in 401k plans as well).

Plan Spon­sor goes on: “Reg­u­la­tions like 408(b)(2) and 404(a)(5) have made fees more trans­par­ent and eas­ier for plan spon­sors to under­stand. Fee reg­u­la­tions have helped every­body ful­fill that fidu­ciary role,” Ready said. “Given that first line of defense, the [fee] infor­ma­tion is impor­tant to know and under­stand, but it shouldn’t be a key dri­ver in the decision-making process.”

My com­ment: So it’s a bunch of num­bers and codes that “ful­filled the fidu­ciary role?” That’s hilar­i­ous! Why does it take a reg­u­la­tion to force the indus­try to ful­fill a fidu­ciary role? All the indus­try has to do is explain ALL FEES! You know, sit down and actu­ally talk to clients FTF and at least try to pre­tend that clients are real peo­ple who can under­stand more than they think instead of check­ing off a com­pli­ance rule in the reg­u­la­tion book.

Our over­sight com­mit­tee at LAUSD demanded demanded trans­parency of fees, espe­cially the dreaded rev­enue shar­ing costs of our 457b TPA way, way back in 2006 and our TPA fought it tooth and nail. If fees are not so impor­tant why does the indus­try raise a HUGE fuss when­ever it’s brought up. PBS Front­line should be com­mended for tak­ing on an entire indus­try and sup­port John Bogle. Why? Fees are the key dri­ver in the deci­sion mak­ing process and the key dri­ver for dimin­ished nest egg leav­ing many retiree’s impov­er­ished). Gen­uine Fidu­cia­ries UNDERSTAND THIS!!!!!

LinkedIn 401k Group More bal­anced cri­tique, at least the author said that some good points were made – the finan­cial indus­try has to be more trans­par­ent about fees. Neg­a­tive com­ments are the usual com­ments about leav­ing out peo­ple who were inter­viewed that pointed out that fees should not be the sole con­sid­er­a­tion of plan­ning for retire­ment. They also say that peo­ple will be afraid to plan for their retire­ment after view­ing the scare tac­tics. (My com­ment: peo­ple are scared because of the 2008 stock mar­ket crash, not because of this broad­cast. GIVE ME A BREAK!).

Real peo­ple expressed their views on the 403bwise forum and Bogle­heads forum. Gen­uine fidu­cia­ries have noth­ing to fear about this broad­cast and noth­ing to fear from us reg­u­lar folks who liked this broad­cast. If you are look­ing for a finance adviser, ask him or her this ques­tion: What is your opin­ion of PBS Frontline’s The Retire­ment Gam­ble and John Bogle? If their face turns pale, leave. Find a gen­uine fidu­ciary finan­cial adviser or bet­ter yet, read up on invest­ing and do it your­self: You can start with our easy to read book: Late Bloom­ing Mil­lion­aires.

The Retire­ment Gam­ble took a sig­nif­i­cant risk by expos­ing fees for what they are, EXCESSIVE, and what Mr. Bogle has been report­ing for many years. Con­trary to indus­try reps who took issue with the broad­cast focused only on the neg­a­tive, PBS Front­line did offer a pos­i­tive solu­tion to the Retire­ment Gam­ble and that is to watch fees closely, used low cost index funds and stay the course.

Obvi­ously, I am a bit biased since Dan and I were fea­tured in the broad­cast. Crys­tal Mendez, the other teacher, was great. One viewer com­mented that it was the three teach­ers who knew what they were doing com­pared to the oth­ers in the broad­cast. Sure, but do peo­ple have to write a book and go through what we had to go through to learn to find the right plan? Remem­ber, we couldn’t trust any pro­fes­sional for years. Crys­tal, Dan and I had to do this ourselves.

What PBS Front­line left out from our two-hour inter­view was that after the tech bub­ble crash in which we found our­selves in finan­cial sham­bles, we changed course ten years ago. We started invest­ing in TIAA CREF and Van­guard, exactly what the pro­gram sug­gested as a solu­tion. WE DID IT. And we made our mil­lion back by using low cost index funds, had a fixed income allo­ca­tion accord­ing to our age, rebal­anced and saved about $150,000 in fees in the last ten years (See fig­ure 40 below: hypo­thet­i­cal 1.95% annual fee to what we actu­ally paid, .35%. The dark black bar is what we actu­ally paid from 2004–2011 in our port­fo­lio). Had we paid 1.95% in fees we would have had our port­fo­lio dimin­ished by $150,000. Facts on fees don’t lie and don’t let any­body tell you differently.

Best of for­tunes, Steve and Dan

(Note: Click on the graph for a clearer image)

Near the end of the Retire­ment Gam­ble broad­cast, Dan and I were filmed strolling around our neigh­bor­hood. Some peo­ple com­mented on the mes­sage on my shirt. Below is the mes­sage of this famous shirt, in case you missed it. I wear this shirt to annu­ity con­fer­ences and was nearly kicked out of a hotel by security.