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May 03, 2013 at 08:18 AM
I rediscovered an important lesson last year just before my speaking engagement at the annual fi360 Conference. After being greeted by scores of satisfied readers, I was surprised to learn very few of them intended to attend my presentation. As the conversation continued, I casually let it be known that, not only do I report on fiduciary matters, I actually work in the field. Indeed, I’ve had my own firm for 15 years and for 15 years before that I worked for another major firm. With that, my readers looked at me in shock, as if I’d crossed some line.
“You actually work in this business,” said one such reader. I nodded reluctantly, not knowing what to expect. “Then,” she continued, “you not only know how to write, but you really know what you’re writing about! Maybe I will attend your presentation after all.”
There, in a nutshell, lies the common problem. People like good writing, but they don’t trust the media. Prior to admitting I owned my own investment advisor, ran my own proprietary mutual funds, and have been offering 401(k) fiduciary consulting services for more than a decade, people just assumed I was a member of the media. That was fine with me. I was trying my best to be viewed that way. I didn’t want people to think I was just another industry hack trying to promote his own wares.
But this reader’s comment made me remember a science writing seminar I once took while studying physics and astronomy in ivy-covered New Haven. The class showed how the factual integrity of a technical story deteriorates the farther the author of an article is removed from practicing the subject. Even Scientific American and New York Times articles contain many more factual errors than the original paper written by the scientists themselves.
With this in mind, I spoke to Martin Smith, the producer of the much debated PBS Frontline segment on “The Retirement Gamble” (read the special four-part interview series for free here: “Exclusive Interview: Frontline Producer Explains Controversial 401k Documentary – Part I: The Good,” FiduciaryNews.com, April 30, 2013). Let me tell you this immediately and upfront: While many commenters assume Smith is just another arrogant liberal with an agenda, I can assure you he is not arrogant. He also gave no indication he was out to promote a liberal agenda. In fact, he was quite specific on what he hoped his show would do. He wanted people to stop believing their 401(k) plan was free and he wanted to shock them with the amount of fees they’re paying.
Smith himself has clearly been a victim of using a high-priced bundled nonfiduciary advisor for his small company’s 401(k) plan. Not only that, but he’s been a victim of bad advice (his financial advisor told him to start the 401(k) plan so he could then take a loan out to pay for his two children’s college education – a choice he now regrets) as well as a victim of bad luck (he went through a divorce and – Holy Solomon! – you know what that means when it comes to retirement assets).
