The Socialisation of Your Retirement Nest Egg Begins

The great experiment with private retirement nest eggs is coming to a close. All over the world governments advised by failed retirement funds and investment advisers are quickly deciding the fate of your retirement nest egg.

It’s not sufficient that the governments together with the wealth managers managed to stifle competition, hide fees and charges and use your money in highly leveraged investments through which they lost a large proportion.

What was in it for your government? Windfall tax receipts which they spent as quickly as they got them.

What was in it for the wealth managers? Massive bonuses paid every quarter based on rules of performance they set themselves.

What was in it for you? Only losses and more losses. For many of you it was two stock market crashes in ten years taking 30-40% of the retirement nest eggs each time.

Now these irresponsible and/or misguided people, many of whom have guaranteed retirement nest eggs indexed for ever, or have so much money paid to them in bonuses from your nest egg they don’t need to care, are worried that their “greed machine” is disappearing.

If you get your money out and put it under the bed there will be deflation. Neither government nor wealth managers could handle that. It won’t be a picnic for you either but won’t it be fun watching them squirm? 🙂 Prices will fall, there will be no tax return from investments, and the wealth mangers would be out of business overnight. If only….

So government must once again get into bed with the financial industry and come up with a scheme to sell you that shows they really do know what they are doing – this time!

First send out some test articles and wait for the response. If no one objects then move to stage two and select establishment figures with no contact with the general public to put together the new investment plan which government will legislate.

Stage one has begun in Australia with an article entitled, “How to Make Super More Efficient“. I strongly recommend you sign on for the free trial and read the article in full. On the surface this article seems quite innocuous. It appeals to your valid complaint that you have been wronged by a retirement industry. But it implies that it has failed you due to high costs and failure to compete. The market crash and the failure of the industry to protect your nest egg is not mentioned.

Note that last phrase – failure to compete. The industry doesn’t want to compete. It get’s 9% of the national wage to divide up each month. About 85% of that money goes to the big banks. It has ensured you cannot know what the “real” cost of investing in a managed fund is by use of hidden fees and charges and unit pricing that often takes three days to work out by computer.

The article writer advocates the setting up of 6 large fundamental managers. They would then form a co-operative and manage ALL Australia’s superannuation contributions.

They would chose a “small” number of index and active (managed) funds to invest your money into. How many is not stated.

They will only use fundamental investing techniques. Trend following or technical analysis will not be allowed. This is dark age stuff. Any new investment technique will be excluded too under their investment philosophy.

They make the claim that their research shows the lack of fundamental investors resulted in the misallocation of capital and leads to lower economic growth and lower investment returns. Huh! Is this research published and available for comment?

Didn’t we just go through several years of stellar investment returns before the financial crisis hit? It seems any misallocation worked in your favour for several years but the retirement industry failed to protect those gains as it will in the future using this model.

I never cease to be amazed that people actually believe they can manage and manipulate highly complex financial markets using “carefully” selected fundamental managers who can then “carefully” select index and active managed funds to invest with on your behalf of course. Aren’t they nice?

By what criteria do all these people get selected? Who selects the selectors?

The Commentary section of the AFR states that such a system would allow funds to hire better-quality assets consultants. Where were these omniscient beings BEFORE the financial crisis?

What rights would you have to select where you wanted to invest your money – The answer is simple – NONE. It seems the great fundamental manager co-operative, the wise ones would select them for you. You cannot be trusted to make your own investment decisions or select your own financial adviser to help you.

Don’t forget it is all your fault you lost 30% or more of your nest egg last year. You were supposed to educate yourself so you would avoid it. You are so ignorant and irresponsible 🙁

Here is the one thing that caused me to fall about laughing. They actually do want to encourage competition. Their idea is that the chosen few funds would be FREE within limited constraints.

That’s an oxymoron if ever I saw one. If you are FREE you cannot be CONSTRAINED. If you are CONTRAINED you are certainly not FREE.

What happens if they do not adhere to those constraints. Will they be banished from the chosen few?

In summary what is proposed as a solution to the retirement industry and governments total failure to protect your nest egg, ensure fair competition and full transparency and easy portability of your retirement funds, is nothing short of the socialization of your retirement nest egg.

Remember the further away they can remove your money from you the easier it is for them to use it for their own personal, corporate and government ends. it’s not about you. It’s about getting control of your retirement nest egg.

Unless you can walk into your retirement funds office and be shown your personal account with all transactions included all fees and charges, profits and losses,  and if you so decide walk out with a cheque to take to another retirement fund manager, then you can be sure in the long term you will lose much of your nest egg again.

You must stand up and fight these dangerous ideas or you will only have yourself to blame this time around.

I don’t have any comments on the writers other than they have their right to express their views and ideas even though I know those ideas are completely wrong.

One Response to “The Socialisation of Your Retirement Nest Egg Begins”

  1. viky says:

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