I often wonder why millions of boomers have not figured this out. They spend 30 or 40 years saving trillions of dollars of pension assets in their retirement accounts. Then they turn the assets over to Wall Street professionals who are supposed to increase their pension amounts with sage advice and sophisticated investment services.

The role of pension assets is to produce income during retirements that may last 30 or more years. That’s right, a lot of boomers will spend as many years in retirement as they did working. That’s the good news. The bad news is rising longevity means investors will have to generate higher investment performance to offset the erosive impact of expenses and inflation for a lot longer than they may have thought. Or, they may face their biggest nightmare, inadequate assets late in life when they need it the most.  

I am also curious about the apparent naiveté of investors who spend so many years accumulating pension assets then blindly turn those assets over to the first advisor who tells them what they want to hear. Apparently, investors have not connected the dots. They will be dependent on their pension assets when they retire for income and financial security. Wall Street is dependent on those same assets to produce fees and commissions that drive the profits of companies and the bonuses of key executives.

Apparently, boomers must have missed the headlines documenting the millions of dollars of fines that Wall Street firms have paid for cheating investors. The headlines should create some major concerns for boomers. They document that Wall Street firms are willing to cheat investors to make more money. And second, Wall Street depends on the same pension assets that investors depend on to produce company earnings and executive bonuses. Let me repeat that, hiring Wall Street to invest your assets is the same as hiring a fox to guard your chicken coop. If your pension assets were chickens you have just hired your biggest competitor to guard them for you.