frontline, “the retirement gamble” aired june 18, 2013
dear Terry, what do you think about the frontline program, are managed mutual funds good for retirement or are mutual index funds the way to go. who is really making money on the investors money? thank you for your time. chuck lazzaro. retired age 63
SAVAGE SAYS: I’m so disappointed that I missed seeing it. However I read the info that PBS provided, and I must say that I agree with the overall premise that individual investors pay too much in fees and charges. Of course, initially all that advertising had the beneficial effect of encouraging people to save something, anything being better than nothing!? But I was one of the original signers of the “Fiduciary” letter, three years ago, requesting that Congress pass a law making all brokers live up to the fiduciary standard required of Certified Financial Planners. And the documentary was correct in reporting the pushback from the brokerage firms and sales organizations that call it “too expensive” to live up to this standard, whch requires brokers to divulge conflicts of interest (including commissions), and to put the client’s welfare above their own!
I have spent my life trying to teach individuals how they can avoid those high fees, and get advice at a reasonable cost. That’s the centerpiece of my book, The Savage Truth on Money. And although I do own some managed mutual funds (my long-time favorite being the T. Rowe Price Equity Income fund, which I have owned for 25+ years — and please do read the prospectus before jumping in just because I like it!!!), I have done most of my stock investing through index funds. And I buy some individual stocks, as well. The key is to understand what you’re paying — and what you’re getting for it!? I’ve always said there is nothing wrong with paying for good advice — but you have to know the facts to judge whether you’re getting that good advice you’re paying for!
