I just looked up the definition of fake news on Wikipedia. I found this sentence among the multiple paragraph definition:
Fake news is written and published usually with the intent to mislead in order to damage an agency, entity, or person, and/or gain financially.
For the first time in my 34 years of meeting with individual investors, I was accused of providing fake news.
Last week, I met with a new individual investor. As usual, my first meeting with any individual company 401(k) investment advice prospect includes an in-depth analysis of two things.
First, I analyze the entire menu of default company 401(k) retirement plan options. Second, I analyze the handful of mutual funds on that menu currently owned by the individual investor.
Full disclose. There are 23 mutual funds found on this investor’s default company 401(k) retirement plan menu. This prospect currently owns four of these mutual funds in his company 401(k) retirement plan account. Three of his four mutual funds were ranked exactly in the last three spots of my analysis.
As soon as I finished my five-minute presentation, I provided the prospect with a copy of the original, third-party, research documents that I used in my analysis. At that point, the strangest event in my 34 years as an investment advisor occurred.
The individual investor accused me of providing him with a distorted picture of his current company 401(k) mutual fund choices. He instantly accused me of providing him with charts, graphs, and rankings that were fake.
More disclosure. My analysis of both the default company 401(k) retirement plan menu and the four mutual funds on that menu owned by this individual investor were based upon independent, third-party, unbiased analysis.
The information I shared with this investor was about as far away from fake news as you can get in the investment advice business.
In real life, it does not take much of a conflict to upset me. In business, I am unfazed by any level of individual investor response.
To my credit, I immediately launched into my “fiduciary speech” to this investor. In three short sentences, I defined what a fiduciary is, and what the personal consequences to me would be if I failed to act in the best interest of any of my individual company 401(k) retirement plan investment advice clients.
That speech did not slow down the prospect. He thought my response was as much a spinning of alternative facts as my analysis of his company 401(k) and his mutual fund investment choices.
The meeting soon concluded. In my car on the way back to my office, I recovered from the initial shock. Then I got depressed.
I sincerely hope that that investment advisory world is not losing all basis for meaningful analysis and dialogue. Investment performance history and rankings matter. So do annual mutual fund expenses. For any individual company 401(k) retirement plan participant to deny those facts exist is not in his or her best interest.
Each individual company 401(k) retirement plan participant has the ability to dramatically improve his or her long-term company 401(k) retirement plan investment management decisions. Fake news has nothing to do with it.
Ric Lager
Lager & Company, Inc.
