Nickel adds to Mom’s to do list:

1..  Read your social security statement for you.

2.  Tell you when you are capable of retiring.

3.  Add your social security monthly payment to your 401k monthly income.

4.  Tell you how to find an accountant.

5.  Tell you how to find an estate attorney.

6.  Subject you to senior fraud and Ponzi schemes.

7.  Have access to all your social security earnings information, directly, creating unprecedented potential senior fraud.

Investment News, reported in this article yesterday, “Financial planning platforms target Social Security benefits data for online integration” that workplace advisor, Financial Engines, is trying to strike a deal with the Social Security Administration to get a data feed of your social security benefits directly.  Betterment, a so-called “Robo-Advisor”, who Citibank has invested in, is also working on a similar strategy, as is Morningstar’s Hello Wallet.  What do these three firms have in common?  They all are designed to create a “learned helplessness” and simply offer services that they charge a fee for, that you can determine on your own through ready available information, now all available online.  However, if you are willing to give them a piece of your social security check to have them do it for you, that is your choice, but many in retirement today are faced with watching their pennies closely.

The article stated:

“That’s because Financial Engines, Betterment and HelloWallet have recently struck a partnership with the SSA to develop software to incorporate Social Security data for individuals automatically onto their platforms. It is yet one more of the government’s attempts to assist soon-to-be retirees with their financial planning.”

We caution our Nickel readers, the government, your tax dollars, have already invested significant amounts in informing every American what is available for your social security.  It is all right there at their website and you also get an annual statement telling you exactly how much you will get on a monthly basis, how much your spouse will get and what the maximum is for your every household each year.  If you have any questions call the social security administration or email us here at Nickel.  There are a few alternatives with a two person household in determining how to maximize your benefits, but read one of the great reviews on the strategies.  Remember someone is paying for these tech firms to develop the software integration and these firms are not non-profits, which means you are paying to have them tell you all about your social security benefit, all available at the Social Security Administration.

The costs to society are too great in combatting the potential senior fraud that will ensue through have a salesforce armed with access to American’s social security benefits.

Nothing is free.  Financial Engines, Betterment, Hello Wallet (Morningstar) are all set to take part of your social security check through a fee to tell you when and how to take it.  We reiterate you are capable.  Do not fall prey to their scheme to skim more from your social security check and retirement savings, that the White House Economic Advisor recently reported is costing Americans over $17 billion annually from these conflicted intermediaries, so called “advisors.”

Learned Helplessness and the Financial Advice Industry

Since 401k’s were introduced the financial industry has spent billions of advertising to convince you, that you are incapable of selecting on your own the top US money manager for a simple balanced and growth fund.  It is not complicated if you have the simple tools and benchmarks.  It is the financial advice industry, with conflicted education, that has ensured most Americans feel they are incapable of selecting the top balanced fund in the United States.  They have crafted advertising to ensure you feel dependent on them, to ensure they may receive an intermediary fee. You are very capable, without a salesman, in choosing what is in your best interest.

The latest scheme is to convince the American public that you are incapable of reading a social security statement and determine how to add the income from your retirement plans together with the annual amount from social security.    Yes, there are a few alternatives with two earner families on the timing, but the social security administration is staffed and ready to answer your questions.  Here is where you go online and you can also make an appointment!…for free.

We have warned about this scheme before. Public Radio Shills for Financial Engines.  Don’t fall prey to financial intermediaries seeking ways to take an ever greater piece of your nest egg at retirement.  You can do it!  Here is the Social Security site and email us with any questions

 

Social Security Adminstration

Social Security Administration:  www.ssa.gov

Social Security Administration Website

 

Not On My Nickel Introduces New Case Study Series

Almost a year ago, June 11, 2014, Market Watch wrote  “Here are Five Finance Bloggers You Should be Reading”   No, Not On My Nickel did not make the list.  We do not sell “advice”, as the five Market Watch selected Bloggers do.  We do not sell investment products.

Not On My Nickel empowers retirement investors to take charge to go direct to the best core retirement money manager who files audited performance at the SEC.  We streamline the distribution channel, through our soon to come digital platform and inter-active tools.

Nickel provides independent, unbiased information/reporting– a critical component for capitalism and price transparency.  In an attempt to distinguish between financial news that is simply “Sponsored Ads”, we encourage readers to take a look at Not On My Nickel’s review of what is presented as financial journalism and Blogs, through our new Case Study series.

Should these Blogs and news outlets all be labeled “Sponsored Advertising” so as to provide full disclosure? Is the average reader making retirement investment decisions based on financial journalists representing these sponsored ads as real news?

“About MarketWatch

MarketWatch, published by Dow Jones & Co., tracks the pulse of markets for engaged investors with more than 16 million visitors per month.”

Here is the Market Watch summary, from their article above, of the two Advisors/Bloggers for which NOMN presents Case Study Number One.

Market Watch Top Five Bloggers

In addition to their “finance blogs” Mr. Ritholtz is a regular contributor to Bloomberg, frequently endorsing his firm’s strategy and at his Blog.  Mr. Brown is a regular contributor to CNBC’s daily TV shows.

NOMN Case Study Number I of “Financial Bloggers to Read”

Nickel presents the first in our Series:  NOMN Case Study Digital Advice Platforms and Financial Bloggers- Lift Off.  Take a peak.

Market Watch’s Blogger list includes Mr. Ritholtz and Mr. Brown, who are in business together at Ritholtz Wealth Management and Lift Off.  Lift Off is Ritholtz and Brown’s digital solution as described here at Business Insider by Linnette Lopez on October 1, 2014

“A NYC Wealth Management Firm Created A Super Cheap Way For Young People To Get Professional Investment Help”

Lift Off and Ritholtz Wealth Management

 

Business Insider represents to the young this is a “superior cheap way for the young to get  professional investment help.” Really?

We attach our Flow Chart for you to determine if the young just starting out, are better off with the “first robo advisor for young people” according to Ritholtz and Brown, owners of Lift Off, and Business Insider?

Based on Not On My Nickel’s criteria for selecting who is worthy to manage retirement assets for the young, we find these two top Dow Jones Market Watch recommended Bloggers’ “digital platform”  lacking transparency and misleading:

  • They provide no publicly available historical performance or defined, published long-term investment strategy that has withstood the test of time given up and down markets.
  • They have not provided five year audited performance to the SEC.
  • Their selected custodian and brokerage firm have been cited by the SEC for trading in dark pools with retail retirement investors money and cross-examined by the Senate Banking Committee for conflicts of interest.
  • Fees are not transparent, in fact they take many hours to dissect.  Their website is misleading, as to fees.
  • Given the level of intermediaries, we cannot say the firm has truly shown they are operating in the best interest of their client.
  • Their “digital platform” increases the number of intermediaries, increasing all-in costs.

Is Lift Off’s Website Misleading?  See below.  Clients pay .4% fee to Lift Off and another .10% to Upside and .50% – 1.81% to Envestnet Asset Management’s sub advisors for all in fees of potentially 2.3%.  Portfolio turnover is not disclosed and brokerage fees are unknown, if TD Ameritrade trades in dark pools.  Four intermediaries cannot be deemed the “Next generation digital solution.”  Here is a shot from Lift Off’s home page:

Lift Off WebsiteConclusion

  • Lift Off is not using technology to streamline the “supply chain” for retirement investors.  They are adding an unnecessary complexity, that not only limits transparency to the retirement investor.  Lift Off increases fees through an increase in intermediaries. It appears that financial journalists, at both Business Insider and Dow Jones’ Market Watch are simply promoting the firms that provide them advertising revenue, to the detriment of the retirement investor, as the White House Economic Report warned last February.

“Conflicted investment advisors are costing retirement investors over $17 billion annually.”  These advisors and financial Bloggers thrive through less than ethical financial journalists, that put their profits over the safety and performance of America’s retirement investors.

  • The SEC is proposing that more data on holdings be gathered from Advisors, for both financial system systemic risk and protections of retirement investors, as outlined in this May 22, 2015 Reuter‘s article, “SEC proposes rules to gather more data on Funds, Advisors”.   The SEC states:  “Some of this new data would involve information about management of so-called “separate accounts,” or accounts that companies manage for individual clients, as opposed to pooled investment vehicles.” Lift Off places the young, through their online platform (Upside) in Envestnet Asset Management’s separate accounts.

The average 401k is $89,000.  If you give that $89,000 to Lift Off to manage, before unknown brokerage fees and other ETF/mutual fund fees, you have given your intermediaries over $2000 annually.  If interest rates remain low, with the stock market at record highs, the young might be actually losing money annually, with such high intermediary fees.

 

The media and Wall Street have a new campaign going on to save the intermediaries that the Executive Branch has clearly acknowledged are fleecing billions of dollars from American’s nest eggs.  The intermediaries, the salesmen, who have distributed product since the advent of 401k’s and IRA, who call themselves “trusted advisors” have now been outed for what they are. As a January 13 White House memo wrote: “studies generally find that investors using financial advisors pay excess fees and that their returns are lower…”  The White House memo estimates Americans could be losing in excess of $17 billion to these conflicted intermediaries.

We all know the phenomenal savings through direct models, from Expedia, to Amazon. Technology also eliminates the need for these conflicted “advisors” or salesmen that distribute investment product, but saveourretirement.com will not tell you about the more cost effective, prudent options that are now available, such as Not On My Nickel.

Bona Fide Retirement Advocacy Groups, such as The Derivative Project, Push for Real Consumer Transparency and Change with Cost-Effective Private Sector Solutions

After over six years working for retirement investor protections with the SEC, the Department of Labor and Congress, The Derivative Project realized Congress, the Department of Labor and the SEC are captured by Wall Street money.  We learned the “advocates” work for Wall Street.

The only solution is for Americans to take charge, which they can, with the proper tools, direct platforms and transparency.  The Derivative Project launched Not On My Nickel to empower every American to take charge to ensure their retirement was invested with the best money manager, who files regular performance with the SEC, at the lowest cost.  “Advisors” do not file their performance with the SEC, but they take an annual fee, without any responsibility. Why pay twice for the same service? The White House memo is an alert, these fees are worthless and harming the average American’s nest egg.

“Save Our Retirement” Promotes this Notion “This is So Complicated You Must Have an Advisor”

Here is an excerpt from their website:

“With so many complicated investment choices to make, Americans need reliable advice they can trust.”

Not On My Nickel research demonstrates the retirement investor is fully capable of selecting a SEC performance filing money manager with the proper platform, education and tools.  To counter act Not On My Nickel’s message, Wall Street began a media campaign, from the New York Times, to Huff Post, stating “everyone needs a financial advisor”, as the Saveourretirement.com website proudly displays, below.

What “Advice” Does the Average American Retirement Investor Need Concerning Investment Selection? 

None:  The average American needs independent, targeted education. The average American needs, like the consumer of any product, the transparency and the ability to understand what option is in their best interest.  They need the tools, information and platform to make an informed choice.  Workplace education on investment selection, provided by Wall Street, for a fee, is like hiring a Ford or Chevy car sales person to tell you what truck is in your best interest.  10,000 poorly performing mutual funds, that Wall Street and employers have stuffed full with American’s life savings, is confusing.

There are so very few top performing fiduciary money managers.  They need to be transparent and accessible to every American.  Competition must become robust, if the best cannot take on any more assets.  New managers must evolve and be in the pipeline.  Women must be encouraged to engage in this profession, not be a “financial advisor” that delivers no value to society.  The trend, written about today in the Financial Times, “Female Fund Managers Decline”, should be the focus of retirement investor advocates, not promoting conflicted intermediaries that cost taxpayers billions to regulate and skim from American’s life savings, while adding no value.

Not On My Nickel has a message:  End the “learned helplessness” Wall Street has created over the past forty years.  If you want more money at retirement, take charge, spend a few minutes to learn how to empower yourself to go direct.  You are very capable. Your fees will be lower, your performance will be better and academic studies estimate you will have at least $155,000 more at retirement.

Not On My Nickel Believes Every American Deserves Fiduciary Advice, From an Investment Company, Registered under the Investment Company Act of 1940, that files regular Performance with the SEC

There is a crucial difference on who is providing the “advice” and if the advisor files regular performance with the SEC, so the retirement investor can determine if the advice is any good. Without accountability as to performance and proper benchmarks, there can be no “fiduciary” relationship.

Not On My Nickel believes every American needs advice from a SEC fiduciary Investment Adviser registered under the Investment Adviser Act of 1940, however, that “Adviser” does the actual investing, files regular performance with the SEC, does rebalancing, picks the stocks or bonds. The investor knows first hand who their manager is, what their investment strategy is, and what their fees and performance are.

Saveourretirement.com – Wall Street’s Campaign to Save their Lucrative Business Model – Obsolete Intermediaries

Consumer Advocates in Sheep's Clothing

Investment Company Act of 1940 Adviser or Intermediary Advisor, Salesperson

These conflicted advocates, operating in Wall Street’s best interest, have launched their latest campaign, a fervent attempt to save these redundant, costly intermediaries that serve to strip billions from the already stagnant wages of the middle class.   Saveourretirement.com states:

“The reality is that—

1)Many advisers are providing investment advice that pays them handsomely but doesn’t serve their clients’ best interest;

2)Those conflicts of interest are taking a huge toll on the retirement savings of millions of workers and retirees; and…”

However, Better Markets’ solution simply perpetuates the excessive costs of the current situation: so-called “fiduciary advisors” who are not subject to existing securities laws.  Just who is the “fiduciary advisor” that Better Markets proposes?  Brokers that took a simple SEC test to say they are now a “fiduciary”, who sell a product, a Wrap Account, with high redundant fees and questionable legal recourse for the consumer. They have no additional experience, they have no higher standards, just a new filing with the SEC.

“Consumer advocate” Better Markets tweeted a recent Huff Post Money article by Paladin Registry:

 

Better Markets Endorses Paladin Registry

 

Better Markets promotes a solution that is in the best interest of Wall Street, not middle class retirement savers.

Most Concerning Is a Consumer Advocate- Recommended Registry that Promote Advisers with Criminal Histories

However the most egregious push by Better Markets is promoting to retirement investors Paladin Registry’s listing of “fiduciary advisors.”  Better Markets’ referral implies they are fiduciaries, ethical and will operate in your best interest, as the Paladin Registry states on their website.

A random selection of Paladin Registry “fiduciary advisors” and inspection of their SEC filings, shown below, revealed advisors that provide no transparency, charge excessively high fees and many who have criminal records.

The Solution -Transparency, Empowered and Informed Consumer, Robust Investment Company Money Manager Competition 

Ask your employer to give you the opportunity to try Not On My Nickel’s tools, direct platforms and transparency.  If they say “no”, what does that tell you about their concerns for your future retirement savings?

There is a better solution.  Join us at Not On My Nickel.

 A Paladin Registry Advisor’s Firm SEC Filings – “Felonies” are deemed Criminal Offenses

Charged with A Felony - Fiduciary Advisor

  A Paladin Registry Advisor’s SEC Filings – Admits Fales Statements, Dishonest, Unethical Behavior

Omits False Statements Unethical

 

A Paladin Registry Advisor Firm Had Past Felonies and is Continuing to Be Subject to Ongoing Civil Proceedings

Ongoing Civil Proceedings

Is the financial industry a scam? Dilbert, Scott Adams, wrote on his Blog last Thursday, “How to Make More Money in Stocks”,

“So my suggestion for permanently lifting the value of the stock market to new sustainably high price-earnings ratios is to pass a law making it illegal to offer financial services without disclosing the truth – that they are mostly a waste of your time.”

Josh Brown and Dilbert on CNBC 8814CNBC hosted Scott Adams  yesterday to discuss his position that financial advisors and the industry are a scam.  Josh Brown, (he calls himself the “Reformed Broker”) and went from being a broker to being a “money manager”, took issue with Dilbert’s critique of financial advisors.  Josh and Scott Adams are pictured to the left.

Not On My Nickel believes there is value in professional money management, strictly with the very few money managers that meet our strict seven criteria, detailed below. Not On My Nickel Criteria for Money Manager Selection

Josh Brown is not “reformed” since he does the same thing he did when he was a broker, he sells product without any accountability at Ritholtz Wealth Management.  Dilbert’s argument is sound.  “Financial advisors” such as Josh Brown throw together a few things and call themselves “wealth managers”, with no published performance measurement standards or benchmarks.

Josh may be good at social media, but he has yet to show any value that he has added, after all fees, on his website, at Ritholtz Wealth Management.  Before one selects a manager, review the NOMN checklist to the left.  In this instance, based on our seven criteria, CNBC regular, The Reformed Broker, who sparred with Dilbert, fails to deliver (1) a minimum of five years published performance against an agreed upon benchmark on his website or with the SEC, (2) fails to detail portfolio turnover and trading costs and thus (3) an operating philosophy that clients come first.  Clients have no idea what value they are receiving for money management, after all fees.

As the retirement investor advocate, The Derivative Project, recently wrote, the Government Accountability Office (GAO) has warned about fiduciary lapses in managed accounts and the failure to provide benchmarks and performance. Yes performance reporting and benchmarks matter.  The GAO has called the Department of Labor to task for not mandating performance and benchmarks for firms such as Ritholtz Wealth Management that seek to manage retirement assets in 401k plans. Without SEC-filed performance reporting, yes, the industry is a scam, that media is actively promoting to the detriment of every retirement investor.

Not On My Nickel subscriber’s know the danger of no benchmarks and performance, which we have written on many times.  The media has allowed the scam, that Dilbert describes, to perpetuate as we have detailed here:

Can You Trust Bloomberg’s Financial Reporting?

Public Radio’s Chris Farrell Shills for Wall Street – Financial Engines

Time to Uber Your Retirement Portfolio

McGraw Hill Financial/Education published the Reformed Broker’s two books, Backstage Wall Street and Clash of the Financial Pundits.  McGraw is owned by Apollo Global Management LLC, a private equity fund, that also owns S&P.  No surprise that Josh and his partner, Barry Ritholtz, who writes for Bloomberg, are now actively pushing passive investments, on CNBC and at Bloomberg, as this Tweet from McGraw yesterday, indicates:

McGraw Hill Financial and S&P

Why would one ever hire a “money manager” without five year’s performance history?  Probably because CNBC endorses and promotes them, without any financials and performance reporting, to back them up.  Passive investing, with an additional advice fee, is indeed a scam, as you are guaranteed to underperform the index. It matters which passive funds are chosen and how they are managed.  Why go with an unproven management style, unknown performance, guaranteed below the index, when there are excellent, but very few, active managers, that outperform the index, after all fees for over 15 years?

The “investing revolution” that Wall Street is promoting, such as in this McGraw Hill Financial Tweet, is a scam and not in the best interest of retirement investors. McGraw Hill’s unit, S&P is still being investigated for their conflicts in ratings during the financial crisis, as this July 23rd Press Release describes: S&P’s July 22, 2014 Wells Notice from the SEC.  The trust is gone, one must see the hard facts, in terms of published performance.

However, NOMN disagrees with Dilbert.  There are a few money managers that have withstood the test of time and deliver excellent value to retirement investors. There is a genuine societal need for professional money managers.  There are a few that add value.  There need to be more.

End the Wall Street created “learned helplessness” and dependency on conflicted “advisors”. Simply cut out the noise and allow free markets to take over, where retirement investors have the tools and transparency to access the best passive or active portfolio manager—on the first independent, non-conflicted soon- to – be released retirement platform, Not On My Nickel.

End the Wall Street-created “passive revolution” nonsense.  

(1) With passively managed accounts, there is no accountability for performance.  Wall Street does not file any returns with the SEC for their new “passive” investing revolution.  Chances are the retirement investor is losing more, than in the old model, one simply does not know.  Frauds and Ponzi schemes are proliferating at record rates in retirement accounts due to lack of performance reporting at the SEC.

(2) Wall Street is pushing trillions of dollars of retirement assets into dark pools, detracting from investor returns through poor trade execution and taking the daily trading revenue on retirement ETFs, for their own account and not passing the savings on to the retirement investor.

(3) Earning fee income on the $10 trillion dollar retirement account, where firms such as Wealthfront, Betterment, Ritholtz Wealth Management slap an assets under management fee on a few passive investments and head to the Hamptons, without a worry on investment selection, is hardly revolutionary.

Dilbert is correct-there is a scam— a fake, Wall Street created revolution….that pretends to be helping the retirement investor.

Uber Proof your Portolio

It is time to Uber your retirement portfolio.  What do you get when you Not On My Nickel?  You are in the driver’s seat.  You get a road-map. You have the tools to choose what is in your best interest.  It is a pretty picture, not to mention empowering and pleasurable to take charge.  No more headaches of Ponzi schemes or being duped or needlessly sacrificing over 1/3 to 1/2 of your nest egg for the pleasure of having your hand held by a salesman.

There is something new under the Sun.  We spent the weekend in San Francisco. Wow.  Uber is a bona-fide disruptor and a pleasure.  Let’s start with ease of use, followed by cost and a more pleasurable experience.  One appreciates transparency, beauty and cost.

Not On My Nickel delivers transparency and tools — a pretty, sunny, real-time picture:

  • Performance measurement with transparency of returns and costs – In simple, clean charts, you quickly have Performance, updated daily, after all fees.  For the very first time you are able to measure your performance, something your financial advisor has yet to provide you, after all fees. Not On My Nickel believes in evidenced-based investing.  Show me the money, the performance and the actual results, after all fees, not some fancy sales pitch.

 

  • You are in the driver’s seat.  You do not have to wait.  You know exact where your money is, how it is being invested, since you are no longer dependent on an intermediary.  You have direct access to the money manager’s investment philosophy and learn first when there are any changes.  There is no more dependency on an intermediary who filters what you see.

 

  • Crowd sourcing – Our website is a social hub.  Did your advisor testify to the Financial Stablility Oversight Council about the systemic risks of money market mutual funds?  Not a one did!  Not On My Nickel’s advocate did on your behalf.  Advisors will not tell you about the critical issues, nor fight for what is in society’s best interest,  if it detracts from their revenues. As you Not On My Nickel, you know the issues that advisors do not tell you about, before they detract from your performance,  such as:
  1. Why a money market fund might not be in your best interest.  How do they pose systemic risk?
  2. Has your Advisor told you about the SEC’s proposed changes and new exit fees in money market mutual funds?  You may have limited access to your cash in money market mutual funds for over ten days if Wall Street causes another run on your money, as in 2008, with the Reserve Money Market fund.
  3. What is voluntary recapture in a money market fund?
  4. What are the issues with Target Date Funds?
  • Access to superior money managers, based on the most critical Not On My Nickel seven criteria.  Not On My Nickel shows you how to know if you are paying more, in trading costs, if your advisor’s firm is trading in dark pools.  Is your Advisor?

 

  • Dynamic rebalancing – Let the pros do it. Do not let sales personnel, with no investment management experience or some computer algorithm, a so-called “disruptor”, based on historical trends, decide when it is time to rebalance, Not On My Nickel your portfolio and let the pros, the experienced money managers, do it for you.

Remember every “trusted adviser” must file with the SEC in their ADV:

 “Registration of an investment adviser does not imply any level of skill or training.”

As Neil Irwin wrote in The New York Times today:  “Why Can’t the Banking Industry Solve its Ethics Problems?“,  “The complexity of modern finance, the greed and gullibility of individual financial consumers…and financial sharp practices that fall short of fraud…”,

There is a reason why financial advisors’ profits are sky high, as reported in Investment News today:

Ameriprise Advice Unit Reports 29% Increase in Pretax Profit”

There is a reason why financial advisors select the mutual funds that pay them the most:

“DFA, American Funds Retain Top Spot — and Most Money Fund Advisors”

Advisors skim from your retirement nest egg, without adding any value, after all fees.

You can access superior money managers to DFA and American Funds, without paying an Advisor one percent, such as DFA Advisors. One distributor of DFA Funds, Buckingham Asset Management LLC charges 1.25 % (portfolio up to $500,000) to sell DFA Funds. American funds charges a 5.75 % up front-end load.

Every Nickel You Pay to an Advisor is a Nickel that is not Invested in Your Retirement

It is time to DIY your retirement savings and go direct to the best portfolio managers, without a conflicted intermediary.

On a $25,000 retirement account, to purchase a DFA small cap fund, one would pay Buckingham Asset Management $313, annually, or and American Funds, $1437.50, upfront, in addition to their 12B-1 fee, that goes to the Advisor annually–for an additional $60.  Note, the American Fund’s advisor, has no requirement by law, to monitor the investment for you (Non-discretionary portfolio.)  Yes, it is annual income to the Advisor for doing absolutely nothing.

Time to Uber-proof your retirement portfolio.  Learn how to access superior performance, at less cost, with an upfront investment of your time, that will pay dividends each year in greater returns. Take charge with the tools that show you the picture that you have been waiting for:

Look at the Performance Chart Below

The green line is what you could have chosen, on your own, if you had Not On My Nickel’d earlier this year.

The blue line is what your Advisor will sell you for one percent.

The red line is what the so-called Silicon Valley “disruptors”, like Wealthfront or Betterment, will sell you–an Index fund that is cheap, but under performs seasoned money managers.

Screen Shot 2014-07-30 at 12.42.31 PM

Do not be greedy and do not be gullible.  Take charge, as you have the power of compounding on your side.  If you wait, the advantage of time is gone.

Time to Uber – proof your portfolio and take charge, where you are in the driver’s seat.  It is time to Not On My Nickel on our soon to-be released retirement platform.

Time to end the learned helplessness and dependency on conflicted sales personnel, whose objective is their bottom line, not yours.

 

 

 

Chris Farrell, Economics Editor at Minnesota Public Radio (Marketplace Money) writes today,  New Thinking on When to File for Social Security“.  This is more media-induced nonsense Screen Shot 2014-05-06 at 11.24.35 AMsimply to get you to pay more for Wall Street’s advice services, promoted through media shills, in this case the Minneapolis Star Tribune and Minnesota Public Radio, a leader in promoting expensive financial intermediaries, on your nickel.

Why Financial Literacy Efforts Failed:  Wall Street Wrote the Curriculum and Spread the Message with the Help of Public Radio.

Remember, Minnesota Public Radio obtains “sponsorship revenues” from Wall Street firms, such as Financial Engines and the Minneapolis Star Tribune prominently places “financial advisor” ads, next to Chris Farrell’s article.  We would label this piece by Mr. Farrell, “Paid Advertising” and think it only proper for the Star Tribune to do so.

Wall Street’s latest push —”everyone needs a financial advisor” is now a PR Blitz that everyone needs an advisor to understand social security’s complexities.  It is their way to get you in the door and cross sell all their other expensive intermediary services.

Listen to Financial Engines 2/20/14 Analyst Call, in the upper left box..  In this call you will hear Financial Engines describe their strategy to increase the American retirement investor’s dependency on their service: “The social security” strategy.  We aren’t making this up. The facts are on the Analyst Call (2/20/14) linked to above.

You might also want to listen in this afternoon to see how Financial Engines Q1 results are with their new social security entrapment strategy for workplace retirement investors.

As Chris Farrell is telling you, on behalf of Financial Engines,  Social Security is so complicated you now need a financial advisor, such as Financial Engines, to run it through their computer, to determine when you and you spouse should take the benefits.  This is Wall Street’s ongoing push to create brain-dead Americans who are incapable of thinking or feeling, without paying Wall Street a fee.

Financial Engines has moved into your corporate 401k and now are pushing your employer to take greater and greater fees from you for Financial Engines paid “advice” services. 90% of the services Financial Engines offers, one can obtain on the Web, for free. One of the supposed new “value-added” services is when you should take social security.  You are fully capable of determining this on your own.  Take out your annual Social Security statement and you can calculate yourself how much you and your spouse get under varying scenarios.  The puzzle is quite easy to determine, based on your own needs and desires, particularly when many couples have worked their entire lives and may be close to getting the max from social security.  That limits the options and quickly reduces the “8000″ permutations for most people.

Here is an excerpt from Mr. Farrell’s, New Thinking on When to File Social Security – his latest syndicated piece, promoting Financial Engines:

“Here’s the thing: Social Security is immensely complicated. The program has been revised ever since it was signed into law in 1935. For example, married couples have an estimated 8,000 permutations for deciding when and how to file for their Social Security benefits, according to Christopher Jones, chief investment officer at Financial Engines, the online 401(k) adviser.

The U.S. retirement system is like a pyramid. The base is Social Security. Additional layers are homeownership, employer-sponsored retirement plans (private and government, defined benefit and defined contribution plans), IRAs, and other assets such as bank deposits and savings accounts. In an interview, Jones emphasized the importance of understanding how all these assets affect each other during retirement.”

Mr. Farrell, as Minnesota Public Radio’s economics editor, we would expect more.  (Star Tribune, lets label articles “paid advertising”, when it should be labeled such). Tell the average American how they can analyze their social security statement on their own to make this determination.  It is possible without a computer and without going to an Advisor. Don’t push the already stretched middle class American to pay more intermediary fees, that they simply cannot afford on stagnant wages, as you are well aware.

Let us know if you would like Not On My Nickel to do a follow-up education on the five easy steps to determine when to take social security, without paying onerous fees to do so. That adds value, not another Wall Street wolves’ scheme to extract more …from a turnip.

 

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The concept of “Fiduciary” is meaningless today when discussing the financial advice industry, whether that be a stockbroker or a RIA*

Are financial advisors worth the money?  Are they adding any value in investment selection?

In an article yesterday, pictured to the left, The Financial Times is asking the questions that American media and  our Department of Labor, tasked with regulating retirement plans, refuse to ask.  Whether it is a new unproven passive strategy, a mutual fund that is loaded with fees and poor performance or a financial advisor that overcharges you to select one of these high-fee mutual funds, it is long over-due for the US media to follow the media coverage lead of those across the “pond “. As this article states, ” The question financial advisors have to ask are the moral and ethical questions, as the Financial Times wrote:

“Asked by an audience member how asset managers could stop their reputation becoming as bad as that of estate agents and second-hand car salesmen, Mr Utermann said managers have to question whether they are delivering value for money to clients.”

 

The Goal of American Fiduciary Advisors is Singular:  Gather More Assets Under Management – Not Am I Adding Value

What value are financial advisors, for investment selection, delivering to American retirement investors, after all fees?

What is the primary focus of US financial intermediaries today?  A picture, below, is worth a thousand Screen Shot 2013-11-25 at 4.23.15 AMwords.  This is from an article in a trade journal for financial advisors, published last week.  The primary focus of the financial advice industry is to gather as many assets they can, at the lowest possible cost, and then see how much money that can charge the retirement investor, without the investor crying foul. “100 Billion or Bust”. It is just that simple.

Performance, after all fees is not relevant to advisors and advice firms.  They have never been held accountable. There are now trillions of dollars in 401(k) plans and IRA plans these financial advisors are salivating over and the smoothest salesmen or those with the best guerilla marketing plans, such as Dimensional Fund Advisors, are coming out the winners.  Your retirement performance, after all advisor fees, is never revealed by any of these “fiduciary” advisors.

Ironically, the new “passive” movement has yet to provide performance results, after all fees.  For example Dimensional Fund Advisors, charges 1 percent to purchase a predominantly passive strategy.  Hint:  If you pay one percent to buy an “index” your performance is one percent below the index.

When you buy a car or a house, there are “lemon laws” and home inspections, documenting all the potential pitfalls of what you may be buying.  You can comparison shop online for cars.  You have full transparency. The new breed “online advisors” believe they are above full transparency and because they are not placing you in high-fee mutual funds, their new-fangled service must be better.  You must trust their computer model and their theories, even though many academics have proven them wrong.

Are these new services any better?  Unless, they can provide you with at a minimum a five year past performance history, based on their model, after all fees, including theirs, and you can then compare their results to comparable top performing active or passive managers, who can provide 5 – 20 year history, why would you run the risk of selecting underperformance over a proven strategy?

Car Salesmen and Real Estate Agents Have Full Transparency

Buyer beware, these new breed “advisors” should not be compared to real estate agents or car salesmen—at least there you know what you are paying for and have full transparency.  The financial advice industry is far worse. There is no transparency or accountability for performance after all fees.

At Not On My Nickel, we are not a stockbroker or a financial advisor.  We are the first and only independent financial education and research service that gives you the tools to compare the value of your traditional advisor or the new-fangled passive strategies to the proven portfolio managers that have outperformed indices for decades, after all fees.  We have run the numbers.  Not On My Nickel researched portfolio managers outperform the new-fangled passive modern portfolio theory computer models, after all fees every time. Yes, you are also diversified and the portfolio managers, human beings, do the rebalancing for you, not a computer model.

There are not many portfolio managers that have-outperformed- but why not invest with them if your performance far out performs, after all fees?  Who are these active or passive portfolio managers, you can easily access directly without paying an advisor 1 -2 percent?

*RIA is the term for a SEC registered investment advisor, who is supposedly held to the strict “fiduciary” standard in the Investment Advisers Act of 1940.

An Exception to the Free Market Economy – Something Just Doesn’t Add Up with So Many Poorly Performing Mutual Funds

Many studies repeat the theory that there are approximately 10,000 mutual funds and 75% under perform their relevant index.  We all know a free market economy is based on free choice and competition. If a free market is based on free choice and competition why is anyone investing in these perennial under performers?  Wall Street has some explaining to do–why are there so many poorly performing mutual funds if there is a competitive marketplace?

Screen Shot 2013-11-12 at 3.35.33 PMWho is investing in all the poorly performing mutual funds?

  • Who are the advisors recommending these funds to their retirement clients?
  • Why hasn’t anyone given retirement investors the tools to make an informed choice and not select the poorly performing/high fee funds?
  • Why do employers put poorly performing Funds in their 401(k)’s?
  • Why do paid CFP’s and other Defined Contribution Plan consultants recommend these poorly performing funds to employers?
  • Why is the Department of Labor allowing poorly performing/high fee funds in your 401(k) plan?

Listen to this video interview with a Financial Advisor, conducted by the Financial Times’ Financial Advsor IQ, on how an Advisor selects a mutual fund.  The reality, as the last financial advisor in this interview told the Financial Advisor IQ, is one needs an Advisor to sort through all these poorly performing funds.  The industry, “Wall Street” has created the need for a “financial advisor” by stuffing thousands of poorly performing mutual funds with retirement investor assets and into 401(k) Plans.

In the article linked to above, Michael Rosen, Financial Advisor told the Financial Times Financial IQ:

“Hey, you could just throw a dart at a board. No, realistically, there’s a million of them out there, but there’s plenty of tools that you can break them down, like tenure of the manager, the volatility of the fund, then doing a fact-find on what the client’s looking to do and then you try and put it together and make the best decision. But, again, that’s why you need a financial advisor, because there are a million different choices out there and you try and simplify it for the client.”

Not On My Nickel’s concept is simply you select the one or two portfolio managers that will do all the work for you, with top performance and low fees.

Your results:

  • Less Fees to the mutual fund manager
  • Proven investment strategy from top portfolio manager, that has a 10-15 year track record of out-performing their relevant index
  • No Fee to a Financial Advisor, who you do not know if they are any good at selecting Funds for you or if they may have conflicts on what they select for you
  • The tools and training for you to decide what portfolio manager/mutual fund is in your best interests.

Remember, just because Wall Street has created over 10,000 poorly performing mutual funds, you do not need to pay an Advisor to select one of these poorly performing funds for you, as they have in the past. Not On My Nickel gives you the tools and the confidence to select the portfolio manager, the investment style and a top performing Portfolio Manager to manage your retirement nest egg.

Further, how do you know if the financial advice you have been given is any good, in terms of investment selection?  You do not know unless you can compare the Advisor’s recommendations against a benchmark.  Chances are you are losing thousands of dollars in worthless fees and poor performance.

Not On My Nickel is the education service that shows you how to evaluate the investment selection advice you are given, through tools and the benchmark.  When there are a few top portfolio managers that have demonstrated they can out perform the relevant index, why would you ever settle for an index fund or a passive investment or poorly performing fund. You are guaranteed to under perform the index, if you pay an Advisor for a passive investment or a package of passive ETF’s, based on a computer model.

Help Us Return to A Free Market, A Competitive Market Place for Mutual Funds

Once you exercise your informed choice and select the top performing mutual funds, the poorly performing funds will disappear. It is call free and open competition. You are in charge of restructuring this flawed marketplace, littered with thousands of poorly performing, high fee mutual funds.

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Someone Has Made Picking a Mutual Fund Way Too Complicated

It just isn’t that tough to do, with the proper tools, training and benchmarks.  Here is a very simple secret.  Before the advent of 401(k)’s,  individuals with some accumulated wealth were able to locate a top performing fiduciary portfolio manager without a financial intermediary.  Not On My Nickel takes you back to those days.

There is a debate going on at both the Securities and Exchange Commission and the Department of Labor on whether or not a stockbroker should act in your best interests, to the “fiduciary” standard of ERISA or the “fiduciary” standard of the Investment Advisers Act of 1940 or the “suitability” standard of the stockbroker.  The reality is it really doesn’t matter for the average retirement investor.  Why?  Both types of Advisors are conflicted and the only solution for the average retirement investor is to learn how to use the simple tools to make an informed choice themselves. Neither stockbroker nor fee only planner provides any performance results after all fees.  You simply do not know the value of either intermediary – stockbroker or fee-only fiduciary planner.  Based on Not On My Nickel’s analysis comparing the returns of the top performing active balanced fund managers and blended growth and mid-cap growth funds, to the very few performance records available for fee-only planners, you are losing out significantly to high fee and poor performance selections using either type of intermediary.

Listen to Representative Hurt (Republican VA) speak on why you need access to a stockbroker’s advice to pick a mutual fund, Congressman Hurt Floor Speech on HR 2374.  

Ask Congressman Hurt why it makes sense to pay more each and every year for the exact same product that you can buy yourself at a discount brokerage firm, or directly from the Fund firm, without these high fees, using tools, research and information through educational services, such as Not On My Nickel?  (For the record, Not On My Nickel offered to show our analysis to the House Financial Services Committee prior to their vote on HR 2374.  They refused to accept the information and refused to meet with us to understand another alternative for today’s retirement investors, that might be in their best interest.)

Do you really believe it is worth paying more money to a stockbroker each year for the exact same product?  Do you think you should pay your real estate agent a finders fee each year for the wonderful home she found for you?  Also, remember the Stockbroker has no ongoing duty to monitor this Fund they told you to buy.  That is your responsibility.

  • Do you know what your investment performance is after all fees, when you pay an intermediary for advice?
  • Do you know how that compares to if you simply invested, yourself, in the top performing balanced fund and growth funds that have out performed their relevant indices for decades?
  • Do you know if your returns are better after 10 years based on a computerized portfolio management model based on modern portfolio theory, in active or passive funds and paying a fee for advice, compared to selecting these Funds yourself, based on targeted research?

It is more than beyond time that you are given the answers to these questions.  Not On My Nickel helps you gather these answers so you can know what you are paying for in all-in asset management fess, just as easily as you can determine what is a fair fee to pay today for the IPad Air.  However, the difference is you need this transparency as the costs have estimated to impact you in the $100,000′s of dollars – a far greater impactful decision that saving $20 on the IPad Air.

How To Save Hundreds of Thousands of Dollars Over Your Retirement Investing Lifetime

Today we will share with you how you can purchase the same mutual fund, yourself, and save thousands upon thousands of dollars over your investing lifetime in one simple step.

As the concept of Target Date Funds is suggesting, the average retirement investor just needs one or two low fee, consistently managed balanced funds and for the young, one or two top growth funds. The problem is the Target Date Funds currently offered carry higher fees and poor performance compared to the select top balanced funds that NOMN has researched.

As NOMN wrote on August 2, 2013:  Target Date Funds Carry Greater Risk and Cost More: Why is the Department of Labor Allowing Them?

Let us a assume you buy the T. Rowe Price moderate allocation fund (PRWCX) directly from  a discount brokerage, such as Scottrade, your self.  You pay Scottrade a one-time fee of $17. You can also buy the Fund directly from T. Rowe price and save any transaction fee.

If you buy the same fund through a stock broker you will pay greater fees each year, for the exact same Fund, or precisely .35% more of your outstanding balance, than if you purchased the Fund on your own.

Think about this.  Your are paying more for the exact same product, year after year, after year.  What other industry allows this type of dysfunctional pricing?  What are you getting for paying hundreds of dollars more for the same product?  Nothing. Under the “suitability” standard the stockbroker has no further obligation to you.  Once you buy the fund, his responsibility ends, even though you keep paying him an annual fee!

The Drawback of the Stockbroker – How Much You Lose Each Year By Using a Stockbroker in Dollars and Cents

Here is the chart from the moderate allocation mutual fund, PRWCX, T. Rowe Price’s 6-30-13 semi-annual prospectus, filed with the SEC.  Take a look at how much you are giving to the stockbroker and the financial services firm for using an intermediary. You pay 1.04% each year of the outstanding balance if you buy the Fund from a stockbroker. If you buy it your self, you pay only .73% each year!

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The Fund firm, T. Rowe Price, also shows you how much you lose in performance on your investment by buying the mutual fund through a stockbroker in this chart below:

 

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What the above chart tells you, for the year ending June 30, 2013, if you had purchased the Mutual Fund PRWCX from the stockbroker you would have made on $200,000, $35,780.  If you bought the Fund on your own, you would have made on a $200,000 investment, $36,520 or $740 more in one year!  Remember, through the power of compounding and as your balance grows, your loss for purchasing this fund from the stockbroker will grow larger and larger each year, as you will always pay expenses at the “Advisor Class” rate.  Again, under the “Suitability” standard, the stockbroker does not even owe you a telephone call for the extra fees you are paying.

Do You Know Where to Get the Best Price on the New I Pad Air?

Of course you do.  There is complete transparency on the new I Pad Air pricing.  It is called capitalism and a free and competitive marketplace.  Read today’s article from “tom’s Hardware.”

Apple, Staples, Best Buy, Matching I Pad Air Pricing

The financial services firms provide the “financial education” in your workplace.  There control the message and information flow. There is not any transparency, which is a major contribution to our current retirement crisis and “financial literacy.”  Retirement investors have been made to depend on all these high-fee intermediaries and have no idea about how to value the pricing and performance of the advice they are paying for. Of course, these intermediaries are conflicted.  Their livelihood depends on you buying mutual funds from them and not on your own. We are certain very few employees are trained in their workplace by the financial services firms on the devastating impact these fees have on the growth of your retirement portfolio.

Not On My Nickel seeks to provide retirement investors the same pricing transparency you can get from tom’s Hardware, so one can make an informed choice on the largest investment of their lifetime.

Part II of this post is forthcoming on why a “Fee Only Planner” costs you as much or more as a stockbroker and may even be less of a fiduciary, despite their claims that they are.

 

Academic Study Reveals many large investors are “throwing away billions of dollars a year on worthless advice from investment consultants”.

Screen Shot 2013-09-27 at 5.04.29 AMThe Derivative Project, our retirement investor advocacy group, just tweeted a September 21 article in the Financial Times that reports a recent academic study found large investors are throwing away billions of dollars a year on “worthless advice from investment consultants.”  Not On My Nickel’s tools demonstrate the same concept is valid for every retirement investor.

As the Financial Times reported from this study:

“Since consultants do not disclose their individual recommendations, pension funds are allocating assets on advice the quality of which is impossible to judge,” said Mr Jones, who contrasted the situation with consultants’ “ruthless” scrutiny of fund managers.
“It is high time that pension funds or regulators required consultants to disclose their past recommendations. Unless investment consultants are ashamed of their performance, they should come out of the shadows.”

Not On My Nickel Provides the Tools to Determine if the Advice is Any Good

Not On My Nickel is the new service that gives you the tools and bona-fide education to determine if the advice you receive is providing better returns.  We believe the “proof is in the pudding.”  The rule is very simple.

Do you have five years past history of investment style and performance against an agreed upon, SEC approved, performance index that proves the Advisors “advice” will add value, after all fees?  If not, do not take the advice.  Go with what you know.  The risks are too great for your life savings.  You now have a more conservative option – invest directly with the top US portfolio managers that have 5, 10 and sometimes 15 year history of out-performing their relevant index.

Not On My Nickel Now Provides You An Option to Poor Investment Advice or Advice You Cannot Measure, while you save thousands of dollars 

Here are Not On My Nickel’s rules.  We provide the training. Invest in educating yourself:

1.  Past performance is not indicative of future performance, but it can be used as a guide.  Ideally only choose a portfolio manager with over 10 years of performance that outperforms their relevant index.

2.  There are only a handful, in the United States, of portfolio managers that fall into the requirement of Not On My Nickel’s Number 1 rule.  We give you the tools and education to find them. We do not give advice.  Not On My Nickel provides you with the transparency, the tools and the access to information for you to make an informed decision.

3. Eliminate the middleman fee:

  • It costs you more money and detracts from your performance, unless you have the “Proof” that their advice will deliver superior returns to the top US portfolio managers
  • It eliminates the risk that the advisor may put you into a poorly performing investment.  You are in control and no where your money will be and can watch it grow.
  • It eliminates the risk the advisor will put you into a product that enriches their bottom line but exposes you to a money losing scheme such as Charles Schwab’s High Yield Mutual Fund or auction rate securities
  • It eliminates the risk you will be subject to a Ponzi scheme.
  • It gives you peace of mind and the satisfaction of empowerment – you are in control, through transparency and tools of your destiny.

Remember the “proof is in the pudding.” Measurable results are the only thing that counts.  If the Advisor cannot give you, at a minimum, five years history of how their advice outperforms the returns of our nation’s top portfolio managers, do not pay them a fee.