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My Thoughts on PBS Frontline The Retirement Gamble


The PBS show Frontline recently aired The Retirement Gamble, an investigative documentary on the state of retirement savings and the problems with 401(k) and similar retirement plans.  The show did a great job of highlighting a number of issues and was pretty scathing in its treatment of the financial services industry and workplace retirement savings plans.

The Retirement Gamble

As a professional who serves as a financial advisor to a number of 401(k) plan sponsors as well as to individual clients (most of whom are either close to retirement or in retirement) I watched this broadcast with great interest.  Here are my reactions to what I saw.

Key issues highlighted by The Retirement Gamble

  • The high fees imbedded in some retirement plans, often these fees are next to impossible for the average participant to uncover.
  • Poor investment choices offered in some plans.
  • There are a lot of lousy 401(k) plans out there.
  • The confusion and frustration that many retirement savers in 401(k) and other defined contribution plans feel due to the fact that they are responsible for accumulating enough for retirement.  This is in contrast to the era when many folks were covered by a defined benefit pension plan where the investment risks and responsibilities for funding the plan were on the employer’s shoulders.
  • While the issues highlighted were not new to me nor to many of us in the industry, I think this documentary was a bit of an eye-opener to many in the general public.  I say this as there have been several surveys taken over the years where a shocking number of investors responded that they had no idea that there were fees charged by their 401(k) plan.

Where the documentary fell a bit short in my opinion 

As regular readers of this blog and those who follow me on Twitter and other social media outlets know, I am highly in favor of lower retirement plan fees and anything that increases transparency for investors.  That said I thought The Retirement Gamble had a very decided bias against the financial services industry and almost felt as though they had come to their conclusions before they started on the project.

  • The show did not highlight a single good 401(k) plan and there are many out there.
  • The show did not highlight a single person who had used the 401(k) to accumulate a significant nest egg. I have the privilege to serve as advisor to a number of folks who have done just that.
  • While I am an admirer of Vanguard founder John Bogle and use index funds extensively in the 401(k) plans that I advise and in the portfolios of all clients, I disagree that there are no actively managed funds worthy of investor’s dollars.  That’s not to say that these are the majority of active funds, but they do exist.  Finding them and determining if they are an appropriate investment choice for a plan sponsor to offer is what plan investment consultants are paid to do.
  • While the program did mention advisors who act as Fiduciaries in passing, the focus was on those advisors, reps, and brokers who sell plans and/or suggest investment options that serve to line their pockets sometimes at the expense of the plan’s participants.  Why not interview some advisors who do the right thing for their plan sponsor clients and the participants of those plans?
  • The worst part of The Retirement Gamble was that while many problems and issues were brought to light, there was little in the way of advice or suggestions for plan participants on what to do to improve their situation.

I do have to say that the most amazing part of the show was the interview with the head of Prudential Retirement Christine Marcks.  She insisted that she was unaware of any of the research showing the advantages of low cost index investing over high cost active management.  While she may or may agree with the findings, the fact that she insisted that she was unaware of this research was jaw-dropping in my opinion.  I think Ms. Marcks should have been coached prior to her appearance by someone at Prudential.

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  1. Thank you for posting a balanced reaction. I watched the documentary with interest, and while it did not advance any new ideas, I think the general population needs a higher awareness of the ideas that were set forth. I have been ignoring my industry’s reactions due to the vehemently indignant headlines they’ve posted.

    • Roger Wohlner says

      Diana thank you for your comment. The show did a good job of highlighting a number of issues that are important to retirement savers and that likely many were no aware of. However I think the show would have been far more effective if they had not started with such a huge and obvious (at least to me) bias as to their conclusions.

  2. Madblogger says

    I, too, found the program on the unbalanced side and agree that the Prudential rep’s admission about index funds jaw-dropping. I wonder where her PR rep was because that was damaging to her firm.

    • Roger Wohlner says

      Thanks for your comment. The Prudential thing was unbelievable in this day and age. The show did a nice job, but the obvious bias prevented it from truly being an outstanding documentary.

      • I completely agree. I thought the show raised some important points, but was woefully one-sided. I would have preferred that they had interviewed people who could represent the “other side” competently.

        • Roger Wohlner says

          Thanks for your comment Julie. Overall the show presented some great information, but it would have been much more beneficial if they had been a bit more balanced in their approach.

          • The other side of the coin would be to highlight 401k programs that don’t overcharge and that do offer good investment choices. Why on earth would they waste time in a documentary revealing the parts of the industry that are NOT problematic?

          • Roger Wohlner says

            Thank you for your comment. I don’t think it is either or but rather how about being a bit more fair and balanced in their reporting?

  3. I did not catch the documentary, but I’ve heard a lot about the topic recently. I fully agree with you that people in the financial services industry get a bad rap, but there are quite a few who are looking out for their client’s best interest (like you). These people never seem to get much attention because all of the attention goes to the greedy ones.

  4. You pointed out exactly what I was thinking:

    “The show did not highlight a single good 401(k) plan and there are many out there.”

    “The show did not highlight a single person who had used the 401(k) to accumulate a significant nest egg. I have the privilege to serve as advisor to a number of folks who have done just that.”

    All they did was point out the bad, while failing to suggest or advise on the good plans. Which makes it less balanced and informative as it could have been.

  5. I saw this show as well, and putting up my own thoughts tomorrow.
    One that I’ll share now – no mention of matching funds. A dollar for dollar match on the first 6% of income goes a long way to offsetting even a 1%+ fee, which is why, I thing we agree, there’s a strong incentive to grab that free money.

  6. Interesting comments. Many of you agree that the program was biased and yes it was, but I have to say that the filmaker gave the Prudential and the JP Morgan officers plenty of chances to defend their industry and their positions and both of them failed miserably. They can’t possibly have been as unprepared as they seemed, so perhaps the filmmaker cherry-picked their responses to make them seem worse than they were.
    As a participant, between me and my husband, in a number of 401(k) plans, I see two huge problems, neither of which was adequately addressed in the program. One is the agency issue of “who gets to decide.” As a newbie MBA at a startup, I was charged with implementing a 401(k) plan for our company back in the early ’90s. Not having any serious investment experience at the time, I was at a loss, and thank goodness, found a kind and ethical plan administrator who helped me set up something simple and useful. But I was lucky. That CAN’T possibly be the right way, from a public policy perspective, to determine the financial prospects of the many, many small business employees in this country.
    The other big problem is that the typical 401(k) options are so limited, and employees are completely at the mercy of their HR departments and whatever plan advisor they choose to determine those options for them (and they rarely seem to change!). They can do a good job, or they can be like the manager at the large global bank who manages my husband’s 401(k) – pick only load-bearing mutual funds, never contact the client to suggest alternatives for growing cash balances, and bristle defensively whenever their judgment or advice is questioned. Thank goodness his firm finally offers a PCRA as an option, but for so many out there, they are stuck with this type of situation. And for the uneducated, they are just plain victimized by such a structure.
    As a society we need to think through how to make plans more versatile, how to convince people to participate (and give them incentives to do so), and how to create simple, cheap, but productive alternatives for the unsavvy, the young, and the people who can barely afford to save 1%. All this as the markets turn into casinos. It’s a big task.

    • Roger Wohlner says

      Kathryn thank you for your comment and for visiting the site. Your first point about the Pru and the JP Morgan folks is well taken. But as an example of the program’s bias, why didn’t they interview an advisor/consultant who acts as a Fiduciary, helps sponsors by instituting a prudent investment process for managing the plan and so on. Yes there are “bad actors” in the 401(k) industry but there are also folks who do it right.

      I understand your frustration as a participant especially given the personal experiences you cited.

      I can say this from my own experience in working with a number of plan sponsor clients. My clients tend to be concerned with offering their employees the best possible retirement savings vehicle that they can. My clients generally pay my professional fees from company, not plan assets. My clients are concerned with their Fiduciary obligations and potential liabilities, but they recognize that by working to meet these obligations they will be offering a better plan with better investment choices for their employees. With my help they continually push the plan provider to allow them to offer better (cheaper) share classes of the funds offered in the plan. I can site an example of a plan administered by a major fund complex where through a collaboration of the company’s investment committee and myself, and in cooperation of the plan provider we have taken a plan that was a solid one seven years ago and have transformed it into an outstanding one.

      My point is not to toot my own horn but rather to point out that by not profiling good advisors and good plans the show did viewers a great disservice. How can you ask a company to offer a good plan if they don’t know what one looks like? Also wouldn’t it have made sense to profile a few folks who have used their 401(k) to accumulate a substantial nest egg? Again teach by example.

      I applaud this program and that is one reason that I included a link on this site. However this program could have been so much more effective had the producers taken a more balanced approach.

  7. Genuine fiduciaries are not threatened by the broadcast. They get it 100%. While there are good 401k plans on there, those examples are few and far between.
    What they left out in our interview (Dan and I were the gay couple) was after our tech wreck, we revamped our portfolio by getting out of the horrific actively managed tech sector funds and into Vanguard low cost index funds, had a fix accounted that match our ages, rebalanced and saved about $150,000 in fees in the last ten years. Bogle’s numbers are right on.

    • Roger Wohlner says

      Thanks for your comment Steve. First I applaud you and Dan for taking charge of your financial lives and moving on financially.

      As an advisor who acts in a fiduciary role with his retirement plan, foundation, and individual clients I didn’t feel the least bit threatened by the broadcast. What I did feel was that the show’s producers were so biased that I suspect that they started out with a conclusion and were going to build to that conclusion no matter what they found from their investigation. Don’t get me wrong, there are plenty of bad plans and advisors who do not put the interests of clients/participants first. They should be exposed and called out. However focusing only here leaves the impression that all plans/advisors are bad and might actually discourage some viewers from taking charge of their retirement as the two of you did.

      In the end journalism should be fair and unbiased, the PBS show was anything but that in my opinion.

      I use Vanguard index funds and ETFs extensively and I have a lot of respect for John Bogle. However there are solid actively managed funds. Finding and monitoring them takes work and an advisor who knows what he or she is doing, this doesn’t mean that it is not a worthwhile endeavor. I advise several retirement plans with a mix of index and active choices and I think you’d agree that the overall expenses of these plans are quite reasonable.

      One thing I’ve noticed is that the index choices in several of these plans don’t attract the dollars I would have expected or hoped for.

      • Hi Roger,
        Your first “however” has to do with fear. People are afraid because of 2008. They have suspected something is wrong with the entire financial industry for five years now. One major reason why so much money is in MM accounts.
        Your second “however” has to do with the active/passive debate which will never end. Allow me to take a stab at this: Sure, there are excellent actively managed funds that will beat the pants of indexes, but there are 3 problems that the active side cannot address: 1. You can’t tell me ahead of time which ones will beat the indexes, 2. Actively managed funds are short term with many going under because of survival biases. Warren Buffett and I are long term buy and hold and, 3. They cost more than passively managed funds.

        Take a look at these reviews of PBS Frontline’s excellent and timely report:
        Here is National Association of Professional Financial Advisers press release: http://www.napfa.org/UserFiles/File/NAPFAFrontlineRelease.pdf. NAPFA GETS IT!
        ARY ROSENBAUM, Ary’s comment: http://therosenbaumlawfirm.com/blog/?p=1362. Ary gets it too!

        Lastly, Frontline broadcasted the solution all through the show. Bogle and the indexing strategy. Look for indexes in your 401k plan, find a genuine fiduciary financial planner from NAPFA to help you set up a plan and read a book or two on investing and bang, the problem is fixed.

        • Roger Wohlner says

          Steve I don’t think that you and I really disagree except on two points. First I thought the show was biased and had a pre-set conclusion. Second I am a huge user of index funds/ETFs mostly from Vanguard across my client, institutional, and retirement plan clients. Where we disagree is that I don’t view index funds as the ONLY solution at the exclusion of all other funds/products.

          As far as what NAPFA and Ary had to say, again I don’t think I differ much from either of them.

          As far as you and your partner as a I recall you were both teachers. I can think of few groups who are the recipients of worse “advice” in many cases from the “nice annuity sales types” that show up for a chat in the cafeteria. School districts should outlaw this practice and bar these folks from the school grounds in my opinion.

          That said here is some data as of 3/31 from a local 401(k) plan that I advise. The plan offers the Signal shares of Vanguard’s 500 Index, Growth Index, Total International Stock Index, and Total Bond Index. In total 10.5% of the plan’s assets were invested in those funds.

          Additionally the same plan offers the Vanguard Target Date funds, essentially funds of index funds with very low cost. In total 12.8% of the plan’s assets were invested there.

          My point is that you can lead a horse to water but you can’t make them drink.

          Thanks again for your comments.

    • I recently bought Steve and Dan’s book called “Late Bloomer Millionaires” to find out more about their financial recovery. Between the book and the Frontline piece, I think this has been eye opening for the average person like me who hasn’t been paying much attention to their 401(k) for decades. As I approach 50 next year, it gives me hope that it’s not too late to turn things around with a new strategy from what I’ve learned about index funds and low fees. I have a lot of catching up to do, but I am educating myself as a do-it-yourself investor.

      • Roger Wohlner says

        Thanks for your comment and kudos to you for taking proactive steps toward your retirement goals.

      • Hi Catz,
        As I was saying to Roger, just yesterday a stranger called and said that he and his wife saw the Frontline piece and both read my book. They fired their broker and found a great financial adviser from NAPFA. This adviser is so good that I cited him and his two man firm in the book. He loves the indexing strategy and Vanguard without hesitation. It’s not too late, we didn’t learn the indexing strategy until my late fifties. You are just a kid! 🙂
        Have a great day and thanks for the comment,

  8. It’s a good post and i really enjoyed while reading it. So thanks to it’s admin by posting it and share it with us.

  9. Dave Bonin says

    As I look back at my 401k, I see a very nice total from my current employer over the last 13 years. Our plan is nothing special. Our investment options are limited. Still, with about an 6%-8% deduction and about a 3%-4% match, my account value has increased rapidly. If this were all my savings and this was my first job, I could retire comfortably well before 50. Oh, and I rode the market down and up in 2008-2012.

    By comparison, I rolled over 401k funds from previous employers into actively managed accounts. Their performance has been lackluster. I’m told that their plan provides a lower risk overall. Peaks aren’t quite so high, but valleys are not deep either. I’m giving them more time to see how true that is.

    What do I advise new graduates? Start saving in your 401k. Let it grow. The key is to start saving on day one so that you never miss the money and saving is a habit. When you have more money, you can look at more sophisticated savings. By then, you’ll have a tidy sum saved.

    • Roger Wohlner says

      Dave thank you for your comments. As to your last comment you and I think alike because that is exactly what I told my 24 year old daughter (a 2010 college grad) when she started working. Thankfully she listened and has an impressive balance in her 403(b) for someone her age.

  10. Bill Cullifer says

    Roger, Great read. In particular, I liked reading the comments and your responses to them. I seem to learn a lot more from discussions in the hallway.

    I also watched the PBS special and as a novice investor, I am still scratching my head. That said, I did some digging with my own 401k and here’s what I found out:

    * I couldn’t get a straight answer to exactly what the “fees” were in the funds that I was invested in. Turns out they call them something foreign and for obvious reasons
    * I also couldn’t easily find a prospectus on each funds that featured an historical analysis on the rate of return for each
    * Of the three reps that I talked to no one had watched the PBS show but they were aware of it
    * I couldn’t determine what the definition of an “active” trading fund was. In other words, how am I suppose to know how active the fund mangers are. In fact, I couldn’t find any detail about who they are or if the have a “fiduciary” or a sales role.
    * One of the reps that I talked to over the weeks that I made the inquires tole me that she had heard of the show and that they way she understood the situation is that the issue was with IRA’s and not 401ks. Huh?
    * All of the reps that I did talk to were professional enough and were willing to help me with whatever I wanted but had a limited idea what I was talking about. One however said shed been getting a lot of calls and transfer request to index funds.

    As a result, I did find out that I could transfer all of my funds into a Vangaurd index account without any fees and I did so (Yay)

    At the end of the day, those of you in the industry need to know that as a consumer I don’t mind paying for fees for service rendered. Particularly if I am making a profit. When you rename the fees into something foreign so you can mask the fees then that’s a whole different story.

    I’m still confused if I did the right thing but after reading all of the comments I feel good about my decision.

    • Roger Wohlner says

      Bill thanks for your comment and for the perspective that you lend to this conversation. To address some of your comments:

      An actively managed fund (let’s use a stock fund for example) is one where the fund manager makes decisions as to which stocks to hold (and not hold) in the fund vs. a passively managed index fund that seeks to replicate the performance of its underlying index. In the Vanguard world for example the Vanguard Primecap fund is an actively managed fund that invests in large cap stocks contrasted by the Vanguard 500 Index fund which seeks to replicate the performance of the S&P 500 Index.

      I’m a bit surprised and very disappointed by the answers you received when you asked about your 401(k) fees and expenses. I would have thought that providers and advisors would be more responsive to these questions and have the answers at the ready.

  11. Chuck Murray says

    I learned more from that Frontline one hour video than I’ve learned in 18 years of investment education classes sponsored by my employer’s brokers. I changed my investment elections to index stock funds for growth and lower fee bond funds for safety. My yield shot up dramatically in the year the followed. I’ve shared the video with several of my fellow employees who have also made the switch. I was shocked that my employer’s brokers never educated us about the fees and the effect on yields but after watching the video, I realized that they had a good reason not to tell us about fees and index funds. I learned not to trust anyone paid commissions. They make their money on what they sell you and they couldn’t care less if you lose everything. Why pay them if they have no vested interest in my earnings and growth?

    • Roger Wohlner says

      Chuck thanks for the comment and for visiting the site. I agree that the Frontline special did an excellent job of highlighting the issues that you mentioned. My only complaint was that it was too one sided and failed to highlight some of the positives of 401(k)s and similar plans or examples of 401(k) success stories of which I’ve seen many. Glad to hear that your investing efforts have gone so well.

    • Hi Chuck,
      I am going to use your positive comment to try once again to get my district to send a link of this wonderful broadcast to the thousands of LAUSD employees. Many of them will benefit as you have.
      Have a great day,

  12. Paula Iveland says

    I am also a teacher and watching that documentary, biased or not, has gotten me into gear for retirement planning, with an educated approach, in a BIG way. I can say from an English teacher who knows that bias is not a great thing, that in this case, especially for teachers who are at the mercy of, in the words of a previous commenter’s comments, “the guy who shows up in the cafeteria”, I can really relate. I went and talked to an advisor from my school district’s NEW company after watching that show and was trying to decide whether to invest my money with Vanguard or open a new 403B with his company. Although he did a decent job of being partial, he never even mentioned the fact that I could’ve chosen Vanguard funds through my school! Nor did he mention that I could do a self-directed option, either, which if he had, I would’ve probably made the move to start my 403b plan months ago . . . i spoke with a new advisor after crash course reading the last two weeks and maybe had a slightly more sophisticated vocab while speaking with her and right away she said I could choose Vanguard funds and either do self-directed right away, hence no fees through the company itself, just associated ERs with Vanguard. (I think I’m going with Life Strategy moderate growth) or I could pay 2% of what I invest for a bit and then go to self-directed. Boglheads forum has made me feel comfortable about just going directed right away and putting my money in Life Strategy. So in a sense, I’m getting the best of both worlds, access to Vanguard’s index funds and an ability to max out my contributions – to make up for lost time. So, despite everyone’s criticism about the bias in the program, I can only solute PBS for this educational program. If they had had more in there about “good” 401k/403b plans and what to look for, I doubt I would’ve changed my tack much . . .
    P in NM

    • Roger Wohlner says

      Paula thanks for your comment and I’m glad to hear that the program served to both educate and motivate you. I agree the the Frontline special had many good aspects especially in the 403(b) arena. Here in IL my experience in working with a few (now retired) teacher clients is similar and thankfully we were able to get them out of some of the terrible annuity products and into places like Vanguard.

      My beef with the program was more on the 401(k) side in that they failed to mention that there are many good plans out there. In addition there are many folks who have amassed very nice nest eggs via their 401(k) plan. As an advisor to many plans and to many folks who have or are in the process of amassing these types of 401(k) nest eggs the program felt very biased and agenda-driven.

      Overall though the special did a nice job of highlighting some of the issues to be dealt with.

    • Hi Paula,
      After 1.5 years, people are still commenting about how this great documentary steered them from a bad investment plan into a low-cost Vanguard plan. I am extremely happy you and so many others benefited from this broadcast.
      All the best,

  13. Roger,

    You keep saying the documentary wasn’t balanced because it didn’t offer good 401k plans. Perhaps the documentary refrained from giving out investment advice because it doesn’t seek to advise but just highlight the problem. PBS isn’t trying to give out advice like you are because it doesn’t seek to be part of the problem it’s trying to expose.

    A growing number of people are waking up to the scam of actively managed funds, poor 401k options, and financial advisers. Even fiduciary pledges don’t always protect the consumer. (http://www.nytimes.com/2014/10/12/business/mutfund/before-the-advice-check-out-the-adviser.html). The documentary also provides a subtle recommendation by featuring Jack Bogle. Broad, diversified mix of stock/bond index funds work for the vast majority of small average American investors. It seems very natural for a financial adviser who derives income and business by making recommendations on investing would find some conflict with PBS’s documentary about the dangers, mistrust, and deceit in many who advise their customers.

    You may complain about Prudential’s VP or others but that’s pretty emblematic of the whole industry. The only part the documentary I find lacking is that it failed to mention many employers offer pretty poor 401k plans to begin with and there are not many if any options for them to pick other than to have the advantage of deferring taxes. I’m pretty loathe to recommend a FA for anyone unless they have large amount of assets or will do something more stupid than the average person or if there is some really complex issue. Otherwise for funds to pick for retirement and retirement planning, a lot can be found on the internet already free of charge, a lot with similar suggestions such as yours and saving by not paying fees. At the very least it doesn’t seem you are the same kind of predatory FA many people have experience

    • Roger Wohlner says

      David thank you for your comment. Again my point was that I agreed with much of what was said. From a journalistic standpoint unfortunately the show was more of an editorial piece than an unbiased look at 401(k) plans and retirement. In this viewer’s opinion that type of approach would have made the piece and the points they were trying to make even more effective.

  14. “Editorial Piece!” That’s a strong condemnation of a documentary. We will continue to disagree about this, almost 2 years after the broadcast.

    David, I was in this documentary as a participant. I talked with the producers for hours and they did a fine job of showing, not editorializing, the differences in investment philosophies between low cost Vanguard investors with insurance and brokerage company executives. The MS executive and the lady from Prudential were perfect examples of people who were not fiduciaries, they are broker/dealers, far different from Bogle, Zweig, who are genuine fiduciaries. Their statements speak for themselves. I have heard from a lot of people who fired their brokers and hired a fee only financial adviser from NAPFA or Garrett Networks and invested with Vanguard. People should keep their money away from the big banks and wall street brokerage firms.

    • Roger Wohlner says

      Steve while I am a fan of John Bogle and Jason Zweig the journalist (I honestly don’t recall his part in the show or if this is who you are referring to) but neither one is a fiduciary as much as I admire both of them. Again my issue with the show was that they did not portray any one of the many good plans that do exist or 401(k) savers who have amassed sizable nest eggs via their plans, again these people do exist and I can cite examples of both.

      There are a lot of lousy 401(k) plans and 403(b) plans out there offered by any number of providers who offer high cost crappy investments. But that is not all of the plans. To not highlight good plans and success stories is one-sided and you can go on and on about how wonderful you feel the PBS folks were but this documentary for all of the good parts came off as having an agenda and full of bias rather than being an objective look at retirement saving and retirement. Just because you agree with the points being made doesn’t mean that the piece was unbiased Steve.

      I loath advisors of the type that I believe you mentioned that troll the lunch rooms of schools peddling high cost annuities and load mutual funds to teachers trying to save for retirement. But just because these people exist doesn’t mean that anyone providing advice is a crook which is what I took away from the show after watching it.

      An editorial piece is OK just label it as such which is where the show failed in this viewers opinion.

      • Morning* chimed in on the terrible 401(k) industry. Competition from Vanguard is pushing fund costs lower but 401k fees remain high because of the lack of competition in that market. 401k investors are captive clients with no lower cost alternatives. http://news.morningstar.com/articlenet/article.aspx?id=679506
        Roger, do you disagree with Morning* too?

        • Roger Wohlner says

          Steve thanks for your comment. As I have been saying to you here in the comments on this post for the past couple of years my beef with the program was the one-sided approach. I see lousy retirement plans and retirement advice provided by companies and advisors who charge absurd fees and sell high priced products frequently. The piece you linked to from John Reckenthaler was spot on. But that all said there are very solid 401(k) plans out there and there are many people who have used their 401(k) or similar DC plan to accumulate sizable nest eggs. Why not show some examples of success stories? If nothing else it would show viewers what the good side of the industry looks like and how people can use these plans to achieve their goals. Again the out and out bias and one-sided nature of the piece actually detracted from the otherwise excellent job they did in my opinion.

          As for Morningstar I subscribe to two of their products and was on a panel at their conference moderated by Christine Benz in 2013 but hell no I don’t agree with everything they say. Christine and John are both must-reads as far as I’m concerned but Morningstar nor anyone else has the corner on being right. I read everything I can on these topics and do so with a critical eye. I would hope you would as well.

  15. Roger Wohlner keeps saying the documentary should have given more time to the 401k success stories. First, the industry mouthpieces were given time and they showed their true colors in the interviews. Second, I’m sure there are plenty of rich people who have big fat 401k’s; we already know that so the documentary didn’t need to repeat it. The problem is, according to the financial industry’s own recommendations, the system is a failure. They tell us we probably need a good million bucks or more saved to sustain a middle class lifestyle in retirement. How many middle class people nearing retirement have that kind of nest egg, Roger?

    • Roger Wohlner says

      Thank you for your comment. I work with a number of middle class clients with nest eggs in excess of $1 million with most of that accumulated over the years in 401(k) and similar type plans. It can be done. You seem bitter against “rich people” and I’m not sure why you would have anything against those who have worked to achieve success? Does the system need to be fixed? Certainly. Are there bad 401(k) plans out there? Absolutely, far too many. My beef with the PBS program was that it had an agenda and did not present a fair and balanced view of the situation.

      • “It can be done.” But is it the norm? It sounds like you wanted the documentary to obscure the failure of our current retirement system with feel-good anecdotes that painted a misleading picture of the overall situation. That situation being, most Americans approaching retirement do not have anywhere near the amount saved they will need. Being a financial advisor you must be aware of those statistics.

        PS – I didn’t realize I had entered a politically correct zone where referring to people with lots of money as rich would bring on accusations of bitterness. Please accept my abject apology… from now on I will refer to the rich as “those who have worked to achieve success.”

        • Roger Wohlner says

          Thank you for your comment. Please reread the piece and you might realize that I was praising it as well as pointing out what I felt were its shortcomings. From the tone of your comments I sense some sort of intense anger or at least your own agenda. Instead of berating the rich why not try to encourage folks to emulate them. To be clear the success stories I would like to have seen are people like some I’ve had the opportunity to serve over the years, middle class and middle management folks who have diligently saved and invested in their retirement plans and have built up solid nest eggs for a comfortable retirement.

          I agree that there are some lousy 401(k) plans out there. They should be called out and the show was right to do so. Let me ask you, what do you suggest to help folks save for retirement? Whining about the rich and and those who have done well strikes me as the wrong answer however. I’m for encouraging people to take action.

        • Hi freed,
          Freed. No need to apologize. You were expressing your frustration as an investor trying to figure out this complicated system. The program was aimed towards us to watch out and don’t trust anybody handling our money. As a Do It Yourselfer, trust should not be part of the equation anyway. You can still have a positive professional relationship with an adviser, but when the relationship is centered on 100% trust, those clients will probably paying more for advice than they should. Paul Merriman, a respected and influential financial author and creator of many podcasts, implied this in his latest Podcast where he answers the question, “Where can you get unbiased financial advice?” And he wrote a free book on how to select an adviser: “Get Smart or Get Screwed.”

          You pointed out an important fact that the Retirement Gamble gave amble time to the industry to explain itself. At the end of the show, it reported that the results are “mixed.” So it wasn’t all negative. It showed one participant (she was not “rich”) who planned well with her retirement planning using the existing system, while almost the rest were not in good shape financially. The main complaint from the industry is that not enough time was given to them for the positive aspects of the 401k system. Hmm… Jack Bogle is a GIANT in the industry and he was given plenty of time. Following his advice will lead us to low cost choices, broad diversification, and allocation in bonds, most of these choices are available in many current 401k plans.

          I have disagreed that the showed had an agenda. Now 2.5 years later, I changed my mind. Yes, the show had an agenda, because all documentaries have one and as I said above, the agenda slanted towards us consumers. The great Dr. William Bernstein who wrote one of the greatest books on personal finance, (The four Pillars of Investment), said, “If you assume that every financial professional you interact with is a hardened criminal, you’ll do okay.” Of course, the good doctor’s comment was a tongue and cheek opinion, but there is a lesson. Learn enough about investment basics to monitor your adviser. As Paul Merriman has said in many podcasts, sign up with a competent genuine fiduciary fee only adviser for a year and learn the basics with him or her.

          To their credit, the National Association of Personal Financial Advisors (NAPFA) wrote a press release praising the program. Excerpt: “PBS Frontline put a spotlight on how commissions, hidden fees, and expenses can devastate the average consumer’s retirement savings and how the lack of a fiduciary standard leaves investors unprotected. While broker-dealers largely want to maintain the status quo, Americans are struggling to make ends meet and save for their futures — they deserve the protection of a fiduciary standard from every professional who touches their financial lives. This is a wake-up call for legislators and regulators to finally do something to protect American investors.”

          NAPFA had the guts and the courage to look at their profession from OUR POINT OF VIEW. It’s also a lesson for all of us–isn’t almost all of our best teachers and consultants in life, for our happiness and in success in our business or profession, have had the courage to be critical with us at times? Of course! The Retirement Gamble was a perfect example of being one of the industries’ “critics.”Moreover, it would behoove the industry to clean up their act with providing fiduciary advice or there will be more programs in the future (I hope there is a 403b program). Since 2008, regular folks are terrified of the stock market and for good reason. They can’t trust the stock market to protect their money from another crash, so trillions are left in MM or cash accounts. They have missed all of the growth in the last seven years because they don’t know who to trust.

          The Retirement Gamble reflects the challenge posed by regular folks who are realizing that the advice and products they are getting day in and day out are not in their best interests. The Vanguard Group, Jack Bogle and the NAPFA are the exceptions because they UNDERSTAND our POV. NAPFA requires that their advisers be trained in investments and charge by the hour (I have a problem with the AUM in that clients don’t really know how much they are paying for advice. 1.0% over many years adds up! But I digress).

          What the industry unfortunately doesn’t say is that those individuals who were successful in their defined contribution plans were probably do it yourselfers, and those who had a competent low cost adviser. DIYers are fortunate. There are just too many reports in the last 20 years that the defined contribution plans are not delivering as promised for most others. Those DIY can find lower cost funds and go about their business. It’s not because 401k plans are so great, it’s because DIYers found the lowest cost investments, constructed a diversified portfolio with an allocation of bonds and went about their business.

          DIYers don’t get into the news, except for this one piece of information–the Vanguard Group has over three trillion in assets, the largest and most respected investment company in the world for the regular guy and gal (For the record, Blackrock has more assets but they work for institutions). By sheer numbers, people are flocking over to Vanguard because it is one institution people know looks after their best interests.

          However, to get to be a DIY is a long and difficult road for most. I am extremely lucky that I am a DIYer! Through thick and thin, bad mistakes in the short term, I eventually became successful in one of the worst plans ever created for retirement, the 403b with K-12 school districts. My story is so compelling about what I had to go through with my benefits department just to locate low-cost choices with my employer, I wrote a free downloadable book, aimed at K12 educators (but all employees would benefit). I don’t wish my experience on anybody. Nevertheless, I wrote the free book to help my fellow educator colleagues avoid all of the crap I had to endure to get a decent plan and to be DIY.

          This financial industry is far from ever getting to a place where most people can participate in a plan and go about their business knowing that their plan will grow and not be eaten up with excessive advisery fees, inappropriate annuity plans or investment fees. That’s what the Retirement Gamble addressed. Yes, it was biased and had an agenda, but it was aimed for the regular audience, because many of the participants in the documentary were regular folks. If I and millions of other employees could have just selected what we wanted 20 years ago, a low-cost, best in class investments, there would be no need to write any books, nor a need for this discussion or the Retirement Gamble.

          Once again, freed, you have no need to apologize and thank you for bring this discussion up again. It’s STILL a very frustrating financial world out there, in the wake of the industry fighting with all of their money and power over being a simple fiduciary.

          The bottom line for all of us is don’t wait for somebody else to come up with a regulation or a strategy to take care of your money. DIY! Read anything that John Bogle wrote, Bill Bernstein, Larry Swedroe, Allan Roth, and another nonprofessional MD, Dr. James Dalhe, visit Boglehead.org, and start asking questions. It is not that hard now with all of the information available. It’s worth it.

          Have a great day,

          • Roger Wohlner says

            Steve at some point I have to wonder if your seemingly cult-like defense of every aspect of the show doesn’t have something to do with the fact that you and your partner were featured. If you would bother to reread the post I had some good things to say about the program and some areas that I disagreed with. Just because somebody doesn’t think that this show wasn’t the end all be all doesn’t mean they are part of the problem.