I have been a big fan of Dilbert comic strips since my youth.  There is something amusing about a micromanaged, white collar worker with a big head and his little pet dog who seems to know it all.  Most everyone will agree that creator Scott Adams writes some pretty funny stuff.

Over the years, Scott’s comic strips have poked fun at financial advisors, mutual funds and the financial services industry as a whole.  Here are a few examples in ascending order by date:

July 7, 1992*

dilbert1

April 17, 1995*

dilbert2

March 14, 2007

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What I did not realize about Scott Adams, until I read his August 4, 2014 blog entry, is just how well he understands the inherent flaws in the financial services industry.    In his blog, he advocates index based investing and he emphasizes the fact that every study shows that “professionals generally don’t beat the market average over time.”  He calls for the government to “pass a law making it illegal to offer financial services without disclosing the truth – that they are mostly a waste of your time.”

The issue of suitability versus the fiduciary standard has long been debated and lawmakers are contemplating a formal definition of “Fiduciary” that would clearly illustrate who is actually working in the best interest of retirement plan participants and their beneficiaries.  This guiding principal is known as the “Exclusive Benefit Rule” under Title I of ERISA and it is intended to be the baseline for all retirement planning decisions.

At Burke Group, like Scott Adams, we know that the financial services industry is not looking out for the best interests of retirement plan participants and their beneficiaries.  We recognize that the average working couple is retiring with significantly less money in their retirement accounts because of excessive fees.  We know that lower fees translate into more wealth accumulation over one’s working career, which is why we advocate index based investing as opposed to chasing returns or “churning.”

Successful financial advisors of the future will need to be willing to sign a pledge stating that they will be a fiduciary.  They must understand that plan sponsors are nervous about their fiduciary responsibility and find ways to insulate individuals from personal risk.

I will close with the same question that Scott Adams closed his blog with: Do you think the government should require investment advisors to disclose to customers that their services are proven by studies to be harmful to your wealth?

* “Dilbert” and the comics above are copyrighted materials, trademarks and proprietary information of SAI. They have been used for illustrative purposes only.