Professor Shiller Says Everyone Needs a Financial Advisor and the Government Should Help Pay for Them
Professor Shiller received the Nobel Prize for his work in behavioral economics. On October 15, 2013, the Washington Post‘s Neil Irwin interviewed Professor Shiller, as described here: “On Monday, the Nobel Prize committee awarded three American economists, Eugene Fama, Lars Peter Hansen, and Robert Shiller, the world’s leading economic prize. Shiller won for his work explaining some of the limits of the hypothesis — advanced in no small part by Fama — that financial markets are efficient. Shiller, a professor at Yale, spoke with me by phone on Monday afternoon”.
What Does a Real 401k Investor think of Professor Shiller’s views that the government should provide everyone a Financial Advisor?
The first comment to the Washington Post article linked to above is, verbatim:
“Excuse me, but this talk about 401Ks has me very interested… If anyone wanted to know what REAL people do and how they act if they’re “fortunate” enough to have one, they’d ask REAL people. It isn’t that REAL people aren’t “interested” in managing “their portfolios.” It is that most REAL people don’t even know what a portfolio is. Or what it’s supposed to do. They’re intimidated by financial talk. They’re too busy working all the time or trying to figure out how to survive and pursue happiness, the little bit of time they’re not working. 401K? We have one. Used to have two. In 2008, we had $50K stolen in the middle of the night! And you want to talk about we need “financial advisors?” Ha! There’s NO ONE we can trust, and we are not economists, we are human beings. We just want to live, survive, eat real healthy food, have roofs over our heads, love and nurture our children and have something to smile about once in awhile. But that just seems like too much to ask anymore. Instead, we give and give and give our lifeblood, everything for the grind that takes more and more and leaves us depleted and defeated. There’s so much expected of us, not by the poor or the sick, or the downtrodden, but by those who exploit us. There’s some real life behavior for you. All you had to do is ask.”
Not On My Nickel was created for the “real” 401k investor, who has limited time, energy and just wishes to spend their precious time with their family and not give every last penny to aggressive, selfish intermediaries. They are devastated by their children drowning in student debt and unable to find a job. They scared about their future job prospects. They want to trust someone. They want real tools and education, no more hidden fine print disclosures of never-ending conflicts of interest. Of course, they want to be in the lowest cost and best performing blue chip investment. They honestly believed that is what their employer would choose for them. Why wouldn’t their employer give them the best investment alternatives? They are not. It is what the economists call lack of “price transparency.” If you have more interest on the ins and outs, you may read more here from our retirement investor advocacy group, The Derivative Project.
Look hard at the chart, below. If you are a retirement investor would you choose:
Option A – The Department of Labor mandated Target Date Fund (HLHAX) option in your 401(k) that automatically deducts a fee for “financial advice” from your savings, without your prior approval? Your Employer places you in this Department of Labor selection, Target Date Fund, if you did not have the time to choose, or
Option B – The Not On My Nickel researched balanced fund (PRWCX) that meets all Department of Labor standards, but provides you $20,000 more on the average 401(k) balance ($80,000) after 5 years. Yes, better performance, lower fees and a long-term track record with a well defined investment strategy you can understand.
Hint: Your 401(k) does not currently provide you Option B – Not On My Nickel tools, reserach and education to make an informed choice. In reality, you are stuck with Option A. Ask your employer to give you the Not On My Nickel option to understand what is the better alternative that places your limited time and needs ahead of the old type of defined contribution plan designed by Wall Street, not designed for the 401k investor.
Does this Chart Give you A Headache?
Does the Chart, below right stress you out? Now our readers know where the Washington Post comment comes from. Exhaustion from an industry that keeps taking and taking without delivering any value.
Yes, this chart is exhausting. In fact it is beyond outrageous that over $1.75 billion dollars of retirement savings have actually been invested in this fund, NLHAX, a State Farm Target Date Fund. Please, if you know anyone that is so unlucky to be in this Fund, let us know. They have options!
The performance of NLHAX is abysmal. The fees are excessive. And we are not done. You are being automatically charged by your employer a fee that goes directly to pay for “financial advice” fees to help you retire–without your prior approval! Whoa, that is aggressive. We honestly cannot think of any other industry that has convinced the government to take money directly from your paycheck without your prior approval. Can you? If so, please send us an email at firstname.lastname@example.org.
You Now Have a New Choice!
Retirement Investing Defined Contribution Plan 2.0 at Not On My Nickel
Everyone has a choice. It is a small investment in time, but once you understand the process, your time will be limited, you will understand what is of value and the never ending fees will be eliminated. You will be able to measure the good from the bad, as to performance. You will protect your self from Ponzi schemes and rogue advisors. You will be empowered and the clouds and confusion, the unhealthy dependency on Wall Street, will all disappear. You will begin again to trust.
Not On My Nickel is completely independent from all financial services providers. We give you the tools, education and research to end the dependency on an industry that places their profits ahead of your family and financial well-being. We designed this new service for investors such as the Washington Post commenter. We tried for five years of meeting after meeting with the SEC, Department of Labor, FINRA and Congress to change the abysmal chart on the right. They refused. It is called “regulatory capture.” Money gives Wall Street the access to the government officials to keep their profit model that is in their best interest, not yours, flourishing. The Derivative Project would need millions upon millions to match their access and influence. We do not have that. Only you can make the change to end the current cycle. It can be done.
Your only choice is to take charge and not be a victim. The tools, training and research are now available. It is a small investment of time in your future, that research has shown will save you hundreds of thousands of dollars. The tools will get you excited to finally understand the simplicity of selecting the best portfolio manager, on your own. Come take a look. Email us today and we will get started. We look forward to hearing from you.