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: email@example.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.