Speaking Directly (About Advice and Cloning)
Dear American schools,
Can I be honest with you? You are failing your teachers. I am not talking about salary, class size, working conditions, support, or testing mandates, which are all very legitimate concerns. I am talking about the financial predators that you let prey upon teachers and other school employees. In state after state, and in district after district, teachers and school employees are stuck with largely lousy 403(b) choices that are largely sold by salespeople masquerading as financial advisors.
The New York Times, in an amazing series by reporters Tara Siegel Bernard and Ron Lieber, describe in detail the problems plaguing these plans.
- Think Your Retirement Plan Is Bad? Talk to a Teacher
- An Annuity for the Teacher and the Broker
- Even Math Teachers Are at a Loss to Understand Annuities
- Nonprofit Employees, Already Underpaid, Face Special Challenges in Retirement
- How to Fix a Retirement Plan at a School or Nonprofit
We Hear From Teachers and School Employees
My podcast partner, Scott Dauenhauer, CFP®, and I have spoken to teachers and school employees nationwide about saving for retirement. Again and again, audience members ask: Who can we turn to for objective advice? I usually just point to Scott. He can be trusted because he’s a fiduciary advisor. This means he agrees in writing to put the interest of his clients above his own. He’s also a CFP®. Folks who have been authorized to use the CFP® certification have met rigorous professional standards and have agreed to adhere to the principles of integrity, objectivity, competence, fairness, confidentiality, professionalism and diligence when dealing with clients. But Scott is only one person.
Cloning to the Rescue?
Several years ago I began to wonder if Scott could be cloned. I was dubious. And not just because of the science. He’s a great guy but do we really want more Scotts? His wife was uncertain too. She listed some pros (trash would probably be emptied more frequently, ditto for dog poop clean up). But there would be cons. Scott’s wife is a teacher. She works hard. Would she really want to have multiple humans in the house talking about asset allocation after a tough day of teaching? I guess the Scotts wouldn’t have to all live under the same roof. But because Scott 1 is so financially sensible he would advise Scott 2 against getting his own place. “Waste of money,” Scott 1 would argue. He would say the same to Scott 3 through 9.
Just to be thorough, which is a very Scott 1 thing to do, I looked at the science. My assessment: It’s unproven. For now.
Fiduciary Advice for the Masses
What’s the best thing about the Directory? Seven of the 8 charter members are way more attractive than Scott. So when cloning is ready, look for us to start with those 7.