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You work too hard to have your savings messed with. You have enough on your plate as it is. Between keeping track of the rules for Roths, IRAs, RMDs, it all adds up. You read about ESG funds that are supposed to be “good” for the environment and wonder, “But, are they good for me?” In my series for you, “You invest, they win,” you wonder.
You may also wonder about my concerns with Vanguard being too big. “How do you know if it’s too big?” you ask. “Well, it might be too big,” I respond, “if your phone rep is greener than a recycling bin and working in a room the size of a football field.” If you’re looking for seasoned guidance by counsel, think about a small private family office, not a 1(800) call center with phones worked by kids fresh out of college.
You know about my concerns with low-cost index funds and ETFs. So-called advisers stuff your portfolio with them. You pay upwards of two percent, and then they try to sell you the latest environmental or ESG fund.
The “low-cost” ETFs and mutual funds get you in the door. Then they force-feed you higher cost “active” management products. The next thing you know, your portfolio is saving the world with ESG. You just wanted to save enough to retire.
It all happens fast. One of the risks of a GOP Senate loss is the unraveling of President Trump’s deregulation program. A GOP Senate can block Democrats from using the Congressional Review Act to overturn rules. The GOP can protect the wall.
“Last month DOL finalized a rule underlining that the Employee Retirement Income Security Act (Erisa) requires plan fiduciaries to act ‘solely in the interest’ of plan participants ‘for the exclusive purpose of providing benefits’ and defraying reasonable expenses,” explains the WSJ. “In other words, managers can’t prioritize their own pecuniary or political interest.”
We can thank Labor Secretary Gene Scalia, son of the late Supreme Court Justice Anthony Scalia for this.
Oftentimes, ESG dreams get put in front of your goals when it belongs in the recycling bin.
Action Line: Is your investment counsel investing in ESG funds for you, or for them? You don’t want to find out you’ve been investing in someone else’s pet project to save the world when all you wanted to do was save enough to retire comfortably.
Originally posted on Your Survival Guy.
