A Response to the PBS Documentary "Can You Afford to Retire"

By Donald B. Trone, AIFA, CEO of Fiduciary360, the only national entity to define and substantiate specific investment fiduciary practices that are applicable to investment advisors, trustees, and investment committee members.

The PBS documentary, "Can You Afford to Retire," gave me the chills. Even as close as I am to the retirement industry, it scared the living daylights out of me. And the worst part was the fact that the documentary only scratched the surface.

The documentary could have covered the number of public pension plans that are plagued by "pay-to-play" schemes, malfeasance, and a failure to meet even the most basic fiduciary standards. Mismanaged public pension plans impact more than the plan participants they're supposed to serve: they impact taxpayers who have to contribute more to cover the shortfalls, and society as a whole that has to settle for fewer police, firefighters, and teachers.

The program should have highlighted the failure of the SEC and the DOL to initiate any meaningful reform to eliminate the conflicts of interest that persist across a large percentage of the investment consulting industry. And it could have focused on the failure of federal regulators to stop the sale of inappropriate and/or abusively expensive investment products to retirement plans.

Unfortunately, the documentary overlooked the high probability that, within only 10 to 15 years, Social Security will not be able to provide a retirement supplement to the next generation of retirees.

On the other hand, I was particularly pleased that the documentary contrasted the leaders of retirement reform, such as Brooks Hamilton, with the paid cheerleaders who fervently defend the status quo. It will take independent and objective documentaries such as this to inform the public that we are negligently managing our nation's retirement wealth. I hope this documentary will serve as the seminal event that spurs a greater sense of stewardship within our industry.

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