There's this popular phenomenon called "crowdsourcing" that's been used in a variety of industries with some success.
Think of the popular show, "Who Wants to be a Millionaire" when the contestant asks the audience what they think the answer to the question is, and you can see both the value – and the bane – of crowd sourcing.
On one hand, there's a good chance the average person might know the correct response. On the other hand, there's a good chance the average person will merely echo the false myth surrounding the topic. It's a test not of factual accuracy, but of popular belief. It's like any poll. It tells you what other people think is right, it doesn't tell you other people's thinking is right.
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Still, even knowing the tendencies of peoples' thoughts can allow you to uncover important trends, especially when the crowd is narrowly focused (hence, the use of focus groups). Our readers set their collective sites within a well-defined subject area. That makes them ideal for crowdsourcing.
We took a look at the most widely-read stories FiduciaryNews.com published in 2014 to see what sort of trends we can discern. We've taken a handful of them to pick the Winners and Losers List for 2014 (or, in keeping with the spirit of the Holidays, "Santa's Naughty and Nice List"). If you want to read the entire list – and some snarky commentary – then go to "Top Ten 2014 FiduciaryNews.com Stories," (FiduciaryNews.com, December 23, 2014).
The Naughty List of Losers
#1. The MyRA: There are those who say next year will be the year of the MyRA. And that might not be a good thing. Here's why. The MyRA really doesn't offer any practical value. Those that could afford to save – and don't – have plenty of more flexible (and possibly less costly) alternatives. Those that cannot afford to save – and, ironically, may not have to – simply won't use this vehicle. So, why might it not be a good thing if the MyRA takes off in 2015? Because, for the market to really embrace the MyRA, there must be sales force with enough incentive to sell the product. Given the small amount of assets that will accumulate in MyRAs, the fees associated with incentivizing that sales force may make the MyRA the White Elephant of financial products.
#2. Hidden Fees: To be honest, with the 2012 Fee Disclosure Rule from the DOL, there should technically no longer be "hidden" fees. But industry pros know better. Those "disclosures" offer about as much information as a Magic Eye picture offers a picture (you know what I'm talking about – one of those posters with "noisy" color that, if you stare at it long enough, you'll see a picture). It's like finding a needle in a haystack where the needle is the same color as hay, shaped like hay, and is make from hay. Well, with the announcement that the Supreme Court will hear one of Jerry Schlichter's hidden fee cases, you can be sure, come spring, the media will be filled with sleuths looking for those "hidden" fees. Here's hoping they find the real ones.
#3. Conflicts-of-Interest: These are directly related to the above, but they get over the whole disclosure thing. Whereas high fees can be blessed merely through disclosure, conflict-of-interest fees cannot be disclosed away. At least they should be. With the DOL on the record saying they will propose a new "Conflict-of-Interest Rule" in January, we'll see if they'll continue to allow conflicts-of-interest to be condoned through disclosure, or if they'll revise the Self-Dealing Prohibited Transaction Rule of old.
The Nice List of Winners
#1. HSAs: If you thought Health Savings Accounts were just boring, little-used, employee benefits, think again. There's a new view that positions these much ignored devices as super-powered retirement savings vehicles. Best of all, it's not an either/or proposition when it comes to HSAs and 401ks. Clever providers have discovered ways to package both to maximize the tax savings for workers.
#2. Retirement Readiness: Could it be that 2014 was the watershed year when it comes to shifting focus of retirement plans away from investments and back to what it was originally intended to be about: savings? Clearly, the term "retirement readiness" has witnessed acceleration within many popular "trending" categories. We've seen a subtle shift away from investments (and even fees) and more towards concepts like "deferral rates" and "auto"-anything. That these terms have worked their way into various benchmarking templates tells you retirement readiness is a growing focus within the industry.
#3. "Child" IRA: This is one of those, "Oops! I spilled these two chemicals together. Hey! Look what I discovered!" sort of moments. The subject of not less than three articles, the idea is plainly simple: If each new-born baby gets $1,000 a year in an IRA from birth until they turn 19 – and that's it for contributions – those savings will grow to two-and-a-quarter million dollars by the time they retire at age 70. Hello? Can you hear "Fool-proof no-cost solution to the impending Social Security crisis"? Believe it or not, there's rumblings something like this may actually get passed in the new Congress.
There you have it folks, straight from Santa's tablet (don't ask me how I got my hands on it).
A very Merry Christmas to all, and to all a good night!
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Christopher Carosa
Chris Carosa has been writing a weekly article and monthly column for BenefitsPRO online and BenefitsPRO Magazine since 2011 and is a nationally recognized award-winning writer, researcher and speaker. He’s written seven books, including From Cradle to Retire: The Child IRA; Hey! What’s My Number? – How to Increase the Odds You Will Retire in Comfort; A Pizza The Action: Everything I Ever Learned About Business I Learned By Working in a Pizza Stand at the Erie County Fair; and the widely acclaimed 401(k) Fiduciary Solutions. Carosa is also Chief Contributing Editor of the authoritative trade journal FiduciaryNews.com and publisher of the Mendon-Honeoye Falls-Lima Sentinel, a weekly community newspaper he founded in 1989. Currently serving as President of the National Society of Newspaper Columnists and with more than 1,000 articles published in various publications, he appears regularly in the national media. A “parallel” entrepreneur, he actively runs a handful of businesses, including a small boutique investment adviser, providing hands-on experience for his writing. A trained astrophysicist, he also holds an MBA and has been designated a Certified Trust and Financial Advisor. Share your thoughts and story ideas with him through Facebook (https://www.facebook.com/christophercarosa/)and Twitter (https://twitter.com/ChrisCarosa).
