Friday, September 06, 2019

NTSA, AXA and VALIC Team Up To Mislead CT ASBO Leaders

I've written recently about the issues surrounding the latest reports put out by the National Tax-deferred Savings Association (NTSA), a lobbying organization for insurance agents, brokers and vendors who market to public school employees. The report used statistics to mislead readers into believing things that haven't been proven. You can read the article here.

Now the NTSA and two of its members are teaming up to present the report to the leaders of the CT ASBO. Why this conflicted organization was invited is not clear to me, though it does appear AXA is a member. These three highly conflicted organizations should not have a seat at the table.

I've included a copy of the presentation that was made, see below.

You'll immediately notice the push for "education," which of course will be fulfilled by members of NTSA and their new designation program. The new education program is, in my opinion, just a trojan horse. Under the guise of education, the representatives of insurance companies will use the opportunity to sell financial products.

You'll also see who has served on the CT ASBO Financial Services Coalition, it's a who's who of some of the worst players in the 403(b) industry.

One slide, in particular, is demonstrative of why the NTSA shouldn't be allowed to provide education. In the slide, they use an 8% growth rate (which is overly optimistic) and compare a pre-tax account to a taxable account. The problem is that they only portray the accumulation, which advantages the pre-tax account, they don't show the de-cumulation time period. The slide isn't even necessary, yet it's misleading (for no apparent reason).

On several slides, they summarize the findings in the report mentioned above (which I thoroughly debunked). The NTSA is fully aware that the report they put out would not pass any academic muster, it's just a propaganda piece. This is a situation in which a good bit of propaganda works. The entire point of the presentation is to preserve their precious payroll slots and expand their insurance rep and broker access to the campuses.

They even had the gall to present a slide on fees and why they matter, acting like they care about fees even though their goal seems to be to ensure a fiduciary doesn't provide the education to employees. They are VERY concerned that they won't be the ones providing the education.

Another slide talks about another fake study that AXA put out last year about how vital Advisors are. While I agree that an advisor is essential and can make a difference, what is not mentioned is that the NTSA, AXA, and VALIC representatives almost exclusively don't provide advice as Registered Investment Advisors or Investment Advisor Reps. If they do so, they are not and will not commit to being a fiduciary in 100% of their dealings with school district employees (note: there might be a few full-time fiduciaries now who are members of the NTSA, but this would represent a minority).

The vendors and agents who sell products to teachers have a powerful lobby. They are backed by deep pockets with significant incentives. School employees should be fully informed about these conflicts. Relying on the NTSA to provide balanced financial education is a terrible idea and can only lead to a more significant percentage of school teachers income going into the pockets of an insurance company.

What schools need is auto-enroll, coalitions that provide truly unbiased financial education and low-cost vendor access.

Scott Dauenhauer

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