(Complete Show Notes Below)
In the 48th episode of the Financial Procast:
Letter to 6,000 401(k) Sponsors Causes a Stir
Yes indeed…there are a great many financial advisers who are running around with their hair on fire after many of their plan sponsor clients received letters from Ian Ayres, a Yale Law School professor, stating that the 401k plans they are responsible for monitoring/controlling are a bit heavy on the expenses.
Over the last few weeks, these letters were sent to employers and have caused more than a few to raise their eyebrows. Evidently this is all part of a study that Mr. Ayres is conducting to measure “the relative costs to 401k participants of menu limitations, excess fees and investor allocation mistakes.”
The letters remind the plan sponsors of their fiduciary duty to the plan and of the stringent nature of the laws surrounding fiduciary liability. Perhaps this is all meant to be a warning as Professor Ayres says the results of the study are to be released in the spring of 2014. This gives the plan sponsors a bit of time to “right the ship”.
Wells Fargo Doesn't Make Payday Loans…Just Direct Deposit Advance Loans, Which Are Much Worse
An elderly customer of Wells Fargo in Sacramento, CA just testified before a Senate Special Committee on Aging hearing on payday loans and older Americans. The now 69-year old lady told the committee her story of borrowing $500 from her local Wells Fargo branch to make needed repairs on her truck. That was in 2007.
Since then she's paid Wells Fargo more than $3,000 in “fees” as she's been caught up in a vicious cycle of robbing Peter to pay Paul. Check this story out for yourself here, you won't believe how it ends!
Didn't we bailout Wells Fargo with more than $25 billion in taxpayer funds? Yea, I thought so.