ASPPA/NTSSA Releases The Hounds, Resorts to Personal Attacks

ASPPA Unloads on Scott Dauenhauer

I must really be getting under ASPPA’s skin. Since I released a stinging critique of ASPPA’s latest “research” titled “ASPPA 403(b) Research Falls Flat” the organization has written three straight blog posts attacking me (They can be found on their Project Albatross website

Where I attack ASPPA on the issues – ASPPA has sunk to the level of grade school bully, attacking me personally and spreading lies. They have accused me of selling ads on my website/blogs to financial services companies that I do business with – yet there is NO advertising on my website(s) and I receive no compensation from anyone other than my clients directly. These defamatory statements are desperate attempts to get the public to stop looking at ASPPA’s strange belief system regarding 403(b) plans.

ASPPA believes that having more than one vendor in a 401(k) is bad, but having as many vendors and products as possible available in a 403(b) is good. This is despite all behavioral finance research that proves that too much choice is bad for participation. ASPPA believes that the Fiduciary Standard is great….for 401(k) – but should not apply to Advisors working with 403(b) plans. I’m attacked for pointing out these peculiar positions (the real peculiarity is how ASPPA and NTSAA can survive as one entity when they clearly have two separate and opposite belief systems).

ASPPA has disappointed me – they are such a great organization and can be a force for good. They have great people in membership and have been a force for good in the past, the sudden change to promoting non-fiduciary behavior has me perplexed.

I’m not going to sink to ASPPA’s level by digging up dirt on all of the people who have been writing about me – it would distract from the real debate that needs to happen – the Fiduciary one. Yes, I said the “F” word. Fiduciary to ASPPA in 403(b) is like a silver bullet to a werewolf or sunlight to a vampire.

So ASPPA – when will you stop sending out the hounds to attack me and actually debate the issues that I bring up? When will you answer the questions I posed to Brian Graff over a month ago?

I’ll post them for you one more time – I know you are reading…by the way, so is your membership (guess what, they support me, not you on this issue):

Here are five questions that I challenge Brian Graff to answer publicly and in writing. His response is welcomed to be posted unedited on the website (of which I am not an owner).

1. Do you believe School Employees should always have their best interest put first by any advisor they work with, in other words, a conflict-free fiduciary standard?

2. Why shouldn’t all advisors who want to work with School Employees be held to a fiduciary standard?

3. Would ASPPA be open to allowing multiple 401(k) providers for their organization with no process for “screening costs, fees or other terms or conditions” and would they support such a structure for private sector 401(k)’s? If not, why and do you believe this would violate ERISA?

4. You have stated several times that competitive bidding and/or single vendor options will not lower costs and fees and that participation rates suffer under such regimes, disregarding the fact that this is standard practice in the 401(k) world which you represent. Where is your evidence to support such conclusions?

5. In your recent NTSSA article you claimed victory over the Los Angeles Unified School District (LAUSD), please explain how, by hiring a lobbyist law firm and sending threatening letters, you were not acting as a bully for the financial services industry?

Everyone is waiting.

Scott Dauenhauer, CFP, MSFP, AIF


11 thoughts on “ASPPA/NTSSA Releases The Hounds, Resorts to Personal Attacks”

  1. Graff has never been challenged intellectually. He doesn’t know what to do. After his presentation at LAUSD, he and his colleague walked out. The committee asked similar questions (4 and 5) and challenged his assertion that reducing vendors will hurt teachers 403b plans.

    1. “Graff has never been challenged intellectually.” What does this have to do with anything? I don’t agree with everything that ASPPA does/say etc. but for the most part, for the retirement plan industry, we are fortunate to have this organization batting for us in DC.

  2. Scott, thanks for raising these questions. There needs to be more of us standing up for the workers who save into 403(b)s.

  3. Scott Hayes refuses to approve my comment regarding his post – so I’ll post it here:

    Scott Hayes,

    You are a real class act from a real classy organization. I must really be getting under your skin for this website (savemy403b) to post three (3) separate blogs attacking me – none of which address the questions I pose. Will you be the one to answer the question – Should 403(b) Advisors always act in the best interest of their clients? Should they be fiduciaries? Somehow I doubt you will.

    You fail to mention that I am audited by the State Department of Corporations and held to a MUCH higher standard of care – that of a Fiduciary. I’m REQUIRED to place my clients best interest first – unlike Registered Reps and Insurance Agents, whom you represent. You mock my Disclosure document – which is required by the SEC and State – yet you don’t produce one, where is your personal Form ADV? Yes, mine looks like a brochure – because its required to look like a brochure and be in plain language (this was a new SEC reg that went into affect last year).

    I am not registered with a broker-dealer, nor have I been since 2001. The document on IARD contains an error that will be corrected on the next update.

    You accuse me of taking money from advertisers – I have no advertisers and accept no compensation from anyone other than my clients. There is no advertising on my website – thus no conflicts, thus no disclosure. Its interesting that you make things up about me in order to avoid the real questions that this debate encompasses – putting clients best interests first.

    You then purposely distort my ADV (purposeful distortion – ASPPA/NTSAA would never do that…) by implying a minimum fee of $3,000. It is clear that this is my minimum retainer fee for ongoing client services that are not hourly. I notice you didn’t include any of my hourly information.

    There is one basher here – it is you. Perhaps someday ASPAA/NTSAA would like to actually debate the real issue here instead of personally attacking me. Of course that would entail you actually facing facts – which aren’t on your side.

    Its a shame, participants deserve better than this.

    If you are really interested in disclosure and improving participant outcomes – prove it and debate me openly without resorting to personal, childish attacks.

    Scott Dauenhauer

  4. Whether ERISA-covered or not, 403(b) plans, as a general rule, are loaded with high fee products and exhibit rampant noncompliance. It’s a miracle workers actually accumulate savings in these plans.

    Woe to he (or she) who enters here.

  5. The nonprofit retirement plans market is far less mature than the corporate markets. The companion plans are also richer and more stable. Given the huge opportunity, advisors have increased their focus on 403(b) plans in recent years.

    Based on an evolving regulatory environment, the need for fiduciary oversight and increased use of consultants, nonprofit plan sponsors are steadily moving away from a multi-vendor approach and retail products. Ignoring the fact that they can’t be administered, individual annuity products are not a prudent choice for plan fiduciaries.

    Ironically, ASPPA is championing the continued use of these inappropriate products along with distribution by advisors who are not licensed to provide participant level investment advice. They are also endorsing a non-fiduciary standard for 403(b) plans. In short, ASPPA is on the wrong side of history and the fiduciary debate.

    ASPPA’s recent release on Protecting Participation: The Impact of Reduced Choice by School District Employees in 403(b) Plans should be renamed. A more appropriate title would be: Abusive Fees, Sales, Loads, Surrender Charges, Non-Licensed Advice Providers, Needless Administrative Complexities & Inappropriate Fiduciary Decisions Are Vital to ASPPA’s NTSAA Sponsors.

    ASPPA’s attempts to hide behind participation analysis are flawed, non-believable and irrelevant In short, nonprofit plan participants that do not have access to institutional products are better off not participating in their plan. A choice between cancer, a heart attack and abusive products is no choice at all. An institutional workplace retirement plan program is the preferred choice, but those eligible can always purchase a non-qualified, low fee, Vanguard type annuity or a low fee index fund with low portfolio turnover.

    Individuals eligible for nonprofit plans are already free to engage ANY appropriately licensed individual for participant advice. They don’t need bundled commissions, abusive fees, sales loads & surrender charges and salespeople to obtain advice. It is, however, important to note that advisors and dually registered reps compensated by commissions can be just as skilled as IARs paid on a fee basis. This is about fiduciary standards and competitive products, not advisor compensation. In totality, there is very little difference between the fees charged by IARs and commissions paid to advisors.

    ASPPA has done many good things for the industry, but their current position precludes nonprofit plan participants from retiring with dignity. Their members should rise up, right the ship and restore credibility. Non-competitive products cannot be justified in an ERISA environment when institutional products are widely available.

  6. No conflict here

    TIAA-CREF Partners with Center for Due Diligence to Create a
    Network of Independent Registered Investment Advisors to Provide
    Participant Level Services
    New Program to Help Plan Sponsors and Participants Evaluate and Select Independent
    Registered Investment Advisors for Worksite Communication, Financial Education, and
    New York, June 7, 2011 – TIAA-CREF today announced a new partnership with the
    Center for Due Diligence (CFDD) and PlanTools to help plan sponsors and participants
    select an independent advisor to meet their evolving retirement planning needs.
    TIAA-CREF has collaborated with the CFDD and PlanTools to create a due diligence
    standard to qualify advisors to participate in the TIAA-CREF Advisor Network and who
    can work with plan sponsors and their participants. An annual fee paid by advisors to the
    CFDD for managing the program allows advisors to benefit from an increased level of
    support from TIAA-CREF, including personalized marketing materials, exclusive plan
    level arrangements, special training sessions, and participation in a new referral program.
    The Advisor Network’s minimum standards and advisor review will assist plan sponsors
    in meeting their fiduciary responsibilities. It will also provide participants with access to
    a pre-screened network of qualified investment advisors who provide participant level
    advice at an investment advisory fiduciary standard of care.
    “Our experience shows that individuals benefit from retirement planning advice and this
    Network offers a nice complement to the advice services we offer through our retirement
    plans,” said Rob Rickey, Head of Advisor Services, TIAA-CREF. “At the same time,
    increased focus on plan sponsor’s fiduciary responsibilities has led to greater demand for
    information and support. Our own experience with both individual and institutional
    clients has confirmed the growing need to support independent advisors.”
    According to Phil Chiricotti, President, CFDD, “participant advice provided by qualified,
    competent and compliant advisors is a proven path to successful retirement outcomes for
    participants. TIAA-CREF’s decision to adopt and share the CFDD/Plan Tools
    documented prudent process for selecting qualified advisors with their clients will
    accelerate the distribution of meaningful advice to participants in need of expert
    TIAA-CREF is currently selecting a limited number of advisors for a controlled launch of
    the Network over the next six months. This group will be the Network’s charter members
    and will provide feedback on the minimum standards and process for applying to the
    Network. The Network will be introduced nationally in early 2012.
    As part of TIAA-CREF’s commitment to participant advice, Roger Ferguson, TIAACREF’s
    President and CEO, will deliver a keynote session on Positive Outcomes for
    Retirement Plan Participants: The Power of Advice at the CFDD’s October 17-19, 2011
    Advisor Conference at the downtown Chicago Swissotel.
    For more information on the conference go to:
    Advisors who wish to learn more about the new TIAA-CREF Advisor Network
    should call TIAA-CREF’s Advisor Services at 888-842-0318.
    About TIAA-CREF:
    TIAA-CREF ( is a national financial services organization with $466
    billion in combined assets under management (3/31/11) and the leading provider of
    retirement services in the academic, research, medical and cultural fields.
    About the Center for Due Diligence:
    The Center for Due Diligence (CFDD) is an independent information and strategic
    services firm serving the retirement plans industry. Formerly the premier provider of
    401(k) program competitive analysis, the CFDD is now focused on providing unbiased
    resources, industry leading conferences, ERISA Advisor Evaluation services and
    participant advice research.
    About PlanTools:
    A provider of robust web-based customized risk management solutions configured to
    meet the needs of industry service providers. PlanTools is the architect and developer of
    the ERISA Advisor Evaluator Request for Proposal system and is a technical consultant
    on ERISA issues.
    Media Contact:
    Jeannine DeFoe
    Cell: 917-837-2094
    TIAA-CREF Individual & Institutional Services, LLC and Teachers Personal Investors
    Services, Inc., members FINRA, distribute securities products.

    1. FYI – for those of you who are interested – the anonymous poster above is from Security Benefit Life (according to the information captured by WordPress). I guess I’m trying to determine how the CFDD has a conflict commenting on my blog just because they work with TIAA. I’m pretty sure my blog posting had nothing to do with TIAA-CREF. Fact Checker – you might want to check your facts.

  7. I don’t work with 403(b) plans, but over my 30+ years in the business I’m very familiar with them.

    They historically have had abusive fee structures and brutal withdrawal penalties. When compared to the 401k market, the traditional products that comprise the not-for-profit sector…..well…….they’re just not really competitive.

    This only hurts the plan participants in the not-for-profit sector in the long run.

    Why is ASPPA on the wrong side of this debate? I’d follow the money to find that answer real quickly.

    Why shouldn’t 403(b) advisors be held to a fiduciary standard? Why shouldn’t 403(b) plans be run in terms of ERISA oversight similar to a 401(k) plan? I am failing to see the distinction between doing what’s right in the for-profit sector via 408(b)(2), 404(a)(5), etc. and the lack of transparency and accountability in the not-for-profit sector.

    I do know quite well that there are some serious stakeholders within ASPPA that don’t want to see the 403(b) market come into the 21st century. And they will “release the hounds” if somebody dares to upset their well-structured sandbox that the old guard there likes to play in all by themselves.

    Advisors and professional fiduciaries who want to see real change in this market need to ignore what will surely continue to be an ongoing protest from ASPPA about modernizing the 403(b) marketplace and take their case directly to the mainstream press and the regulators.

Leave a Reply