“The Retirement Gamble,” a PBS Frontline documentary, looks critically at inherent conflicts between the financial services industry and investors. The program excellently frames these complex issues in an easy to understand manner. Of particular note, the producers did an outstanding job of breaking down how investment-related fees destroy investment returns.

Readers of our work will recognize that the issues raised in the program are near and dear to our hearts. We’ve previously described these very issues raised in the program as the greatest consumer scam of our time, a scam that is so enormous and wide reaching that is almost difficult to fathom.

We were thoroughly entertained when correspondent Martin Smith, armed with data from the investment legend Jack Bogle, confronted Michael Falcon, the head of retirement for J.P. Morgan Asset Management, about the eye-opening negative impact J.P. Morgan mutual fund fees have on investors’ returns. Mr. Falcon appears totally baffled by Mr. Smith’s question—he literally fumbles around, struggling to articulate a single word.

Having worked for a major Wall Street firm for many years, I can tell you that the folks like Mr. Falcon, who run big divisions of these large institutions, are very savvy and highly trained with respect to making media appearances. They’re the best of the best, and they never fumble. His awkward response to the question underscores the fact that this industry has run virtually unquestioned.

We don’t mean to pick on Mr. Falcon, the fact is that there is no intelligent way for anyone in his shoes to defend the punitive nature of investment-related fees and expenses. The mainstream media, or more specify the financial media, wouldn’t dream of asking a high profile industry executive these kinds of “gotcha” questions. If they embarrass their industry guest they will be boycotted, and no major financial firm will allow their firms to be exposed like this. These media outlets also risk losing large advertising clients if they alienate the industry.

The program puts a large focus on the demise of traditional pensions plans and the rise of contribution plans, e.g., IRA and 401k accounts, but misses an important point about this transition. Individual investors today are investing for capital appreciation; they want their nest egg to grow so they can harvest capital gains to fund their retirement. On the other hand, the investment objective of a pension plan is to generate a stream of future income and these goals can be achieved by investing directly in income-generating assets, like office buildings, shopping centers and bonds.

The individual is handicapped straight out of the gate as they’re forced to take far more risk to achieve their goals compared to the pension plan. Add to this the current Federal Reserve ultra low interest rate policies and most of these investors are seeking these investment returns in higher risk assets, generally equities. Not surprisingly, these higher risk assets generate higher profit margins for the financial services firms.

The only real disappointment in the program came when the topic of fiduciary duty was addressed. The producers, who overall did an admirable job of analyzing the costs and benefits of various financial products and services, really dropped the ball here.

While it’s true that, in the purest sense, a fiduciary has to put the clients’ interests first, in the real world of financial services you don’t get a pure fiduciary, in fact it’s far from it.

Fiduciary duty has become just another financial industry marketing gimmick. Make no mistake, all the conflicts of interest are alive and well in the land of fiduciary advisers. Once the fiduciary discloses the conflicts in the fine print, the conflicts are fair game. On top of this, fiduciary advisers tend to be higher cost, which further erodes investor value.

The Retirement Gamble is a must-watch for individual investors. The producers have done a great job making these complex issues easy to understand. But there is much more ground to cover on this important topic and we hope to see a sequel.