Recently Brian Graff penned an op-ed for The 403(b) Advisor (see below), the official magazine of the National Tax Sheltered Account Association titled “Eliminating Choice Will Hurt Public Employees.”
The op-ed was an effort to show support by NTSSA/ASPPA of brokers and agents who act in a non-fiduciary capacity when advising school employees. Nowhere did the article talk about participant’s rights to conflict-free fiduciary advice; instead it focused on restraining competition by allowing any vendor that wants to offer a product (in a school district) to offer such product without obstruction. Mr. Graff certainly doesn’t support such a vision for the 401(k) industry, so why for the 403(b)?
As Mr. Graff begins his Project Albatross lobbying group (any chance the details on this will be made public Mr. Graff?) I believe it is time he answers some hard questions.
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 403bWise.com website.
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?
Mr. Graff – the fiduciary community is awaiting your response.
Scott Dauenhauer CFP, MSFP, AIF