The 20 minute segment by John Oliver of LastWeekTonight from early June has been making the rounds in the financial services industry. If you haven’t seen it yet, here it is. Very clever and – warning – with adult humor throughout. Many laughs and the spoof commercial at the end is fantastic.
Generally speaking, his comments about the industry are spot on! It appears to be motivated by the research they were doing on their 401k plan. I was quite surprised they decided to take this issue on. Seems like something that might not hold his audience. In fact, he had to ask for their patience during the segment.
Their 401k with John Hancock is lame. It is not “competitively priced” for new plans. Yes, there are administrative costs, etc. for all 401k plans, but the fees built in to their product are absurd. They are part of the problem – not the solution.
While it is a great segment, their focus on the benefits of working with a fiduciary is misplaced. (BTW, PlanVision is a fiduciary – but we understand that how we are compensated is more important than whether or not we are a fiduciary.) Fiduciaries can rip-off their clients just as well as brokers! Fiduciaries are notorious for charging assets under management (AUM) fees. AUM fees can create just as strong a conflict of interest as commissions. In addition, most fiduciary AUM programs imply that they provide value by managing their clients’ money. It’s a bunch of nonsense. See here for an example.
The overall cynicism in the segment is fully warranted! People are paying way too much for investment and financial planning guidance. I was pleased he researched it and went forward with it. Great to see this important message for consumers show up in popular culture.