401(k) “Safe Harbor” Scam? Why Wall Street Is Targeting Your Retirement

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Investors marked for disaster. When I say marked, I you’re a mark. They’re looking at you. I’ve been doing this for a very long time. I know what they’re thinking. I know what they’re up to. Well, what am I talking about? This latest plan here, latest plan that is going to in essence, what it does is it gives. It gives employers.

It gives 401k companies a get out of jail free card. A get out of jail free card, a legal safe harbor for people who want to diversify 401ks into alternative investments. What could possibly go wrong? I was very upset with the Biden administration.

when they allowed for a big get out of jail free card for advisors and 401k plan providers for their DEI funds. Basically saying if you are putting people into DEI funds, remember that? Diversity, equity, inclusion, all of these awful underperforming funds. And they did exactly what I said they were gonna do, underperform.

You wouldn’t be held liable. You wouldn’t be breaking your fiduciary duty. What is a fiduciary duty? I have to put my client’s interests above my own. Now, what they want to do, okay, what the goal is, what Wall Street wants, is they want to open up the 401k market.

for all of their private equity, all their private credit and all sorts of other alternative investments, anything they can think of. Why? Well, let’s be honest. Let’s be honest. Many 401k investors are novice investors. new. Novice investors, people investing for the first time.

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and they can sit down and have their meeting there, you know, when they, with human resources and their Merrill Lynch or their whatever, their 401k provider out there. And they say, well, okay, you know, answer a series of questions. And it’ll still give you your product mix for your 401k. you got a lot of time. Well, you know, these various different alternative investments that we’ve put together would be just great for you.

I’m sorry, it’s bullshit. It’s not going to end well. I know who these people are. Again, I am a libertarian guy. I don’t like rules and regulations as much as anyone does. But, know, certain things, certain things are done for a certain reason to protect people.

especially in an atmosphere or in an environment, an environment where you’re gonna be actively marketed to. You’re gonna be hit upside the head with information or telling you how awesome something is. I’m gonna try to explain this to you. Well, like a pack of cigarettes has got the label on the side and how harmful it is and gee thanks.

Anyone with a quarter of a brain knows that probably cigarettes probably aren’t that great for you. even when even back in the day when they had baseball players advertising bloody things Okay, don’t don’t tell me that they thought it was a wonderful and great thing. Come on. Give me a break You’re sucking and smoke neither here nor there. This is different This is completely different these types of investments designed for more

astute investors, or people that actually have advisors that are helping them out that can walk them through this part of the problems with 401ks. And it’s, you know, it’s better than nothing. Okay, it’s better than nothing. It’s, you know, I’m glad that we have these plans where, you know, people are able to put money away and, you know, deduct from their top line. I think that that’s great. Okay, but

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quite frankly, it’s a big cash grab for Wall Street. These things are laden with all sorts of ridiculous nonsensical fees. And for the life of me, all of these various, these myriad of different accounts, you got Trump accounts, 401ks, IRAs, all these different things. Okay, why do you need, why does one need a plan provider? Why can’t people automatically have a simple 401k? I mean, you have your own checking account, right?

You do automatic deposit, you they’re to do the same thing with the money that you want to put away. But again, that would take a big business away from Wall Street. Now, fees matter. Fees compound to you take a look at the type of fees that you’re paying and some of these 401ks get it’s nonsensical. And the other thing as well is that Wall Street loves these things because they can collect fees.

and they don’t have to deal with you. Okay, your new investors out there, they don’t have to talk, they’re not gonna talk to you. You don’t get assigned an advisor that’s gonna help you with everything. We do that at Markowski Investments, but I don’t know anybody else who does. Honestly, I don’t know another investment firm out there that, people just starting out. Yeah, you get to speak with a CFP, a registered investment via, and we will help you.

Have any questions? We’re going to walk you through all of that. We do that. But you think the big firms that are doing it, putting these big 401k plans together? No. No, this is it’s great for them. It is such a cash cow. OK, with the amount of fees that are laying into the things that are there and it just, you know, the register keeps ringing. You you need you need an advisor that is going to accept responsibility.

It’s gonna accept fiduciary responsibility in order to put these things into people’s accounts. I know. I know whether or not it is suitable for someone. There not many times, know, I get questions from certain clients, because again, we help everyone out. And I’m like, no, no, not suitable for you. Not at this point in time.

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That’s it. mean, you need you need someone there that’s going to be that guardrail for you and you’re not getting this in this 401k market. And let’s be honest here. I’ve explained there’s more more private equity companies in the United States. More private equity companies in the United States and there are McDonald’s. There’s a lot of poor performers out there and I’m sorry to give a get out of jail free card to all of these big banks and these big firms.

They’re gonna take advantage of that.

They are. know people. You ever. Ever read the story the scorpion and the frog.

Scorpion and frog and you know, you know, scorpion the frog having a conversation and scorpion wants to get across the water and the frog’s like, I’m not taking you across the water. You’re going to, you know, you’re going to kill me. The scorpion’s like, no, I’m not. No, I’m not. If I do that, you know, then we’re both going to die. Well, you know, scorpion gets on the frogs back halfway across. scorpion. Stings the frog and they’re going down the frogs like, why did you do that?

He’s like, well, it’s my nature. I know what their nature is. I know how they operate. And yeah, if they need to get out of something, they’re going to unload it on the people that are not going to know any better in the same way that Morgan Stanley absolutely dismantled Dean Witter during the whole dot com catastrophe.

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the arguments being made are all government pension funds have been invested in these private equity companies for some time. Yeah, they have. They have and their performance has sucked quite frankly, across the board. And then they’re making the arguments. Well, you know, colleges and universities and their endowments. Investing for an endowment is completely different than investing for a family that investing for an individual.

And the fact that, you know, they actually talk about this in the Wall Street Journal, the fact that you’re making that argument is just patently absurd. Harvard? Harvard could have timeframes on certain investments of theirs that could go into the decades. Okay. Well, how the college has been there since what 16 something for crying out loud.

I know it’s a completely different ball of wax and it’s not suitable for everyone and the idea that they want to make that suitable for everyone and then give Wall Street a big fat get out of jail free card. No good. Watchdog on wallstreet.com.