[TV static drones]
[bright tone]
[upbeat rock music]
[cheers and applause]
Welcome, welcome, welcome
to "Last Week Tonight."
I'm John Oliver.
Thank you so much for joining us,
and let's begin with a quick recap
of the U.S. presidential election,
or, as it's now better known,
the fiery two-party pileup
on the hellbound fuckspressway.
There was big news this week when Hillary Clinton
became her party's presumptive nominee.
- Thanks to you,
we've reached a milestone.
The first time--
[cheers and applause]
The first time in our nation's history
that a woman will be a major party's nominee
for president of the United States.
- Now, whatever you think of her,
that is a truly historic step,
if conspicuously overdue.
It's a bit like celebrating the fact your 12-year-old
has finally stopped breast-feeding.
Sure, sure, it's definitely good news,
but it clearly should have happened way sooner.
So after three years of relentless campaigning,
we are left with one candidate everyone expected
and one that everyone very much did not,
because one side of this
was a real bracket buster.
It's like if the NCAA finals
ended up being between Duke University
and a flaming Jet Ski driven by a dog
dressed like a clown.
And you might've hoped this week
that the level of political discourse
would finally rise,
but after the president endorsed Hillary on Thursday,
this happened.
Welker: Trump reacted to the president's endorsement
this afternoon, tweeting...
Clinton's campaign responding...
- Now, now, hold-- hold on.
You--you might've enjoyed that tweet.
Frankly, many did.
It has over half a million likes,
but I would argue that getting a lot of likes
does not necessarily mean
you've accomplished something good.
Incidentally, that is a sentence anyone under the age of 20
should frame and hang in their bedroom,
because there is two problems
with telling Donald Trump to delete his account.
First, he's never going to do that.
Even when he's been dead for 50 years,
he'll still somehow be tweeting
from beyond the grave with "Met God..."
And--and second,
you just moved this fight onto his turf,
which is a huge mistake.
Hillary was dominating news coverage this week,
and even those who were speaking out against her
were talking about substantive issues
like women's history and gender equality,
and because Trump is an ego-goblin
who feasts on verbal filth,
that national conversation, much like a department store
sold out of gloves in boys' sizes,
was of no use to him.
But--but as soon as she engaged with Trump on Twitter,
the fight was back on his turf,
and no one fights better there.
Blitzer: Trump responded, and I'll read to you
what he said on Twitter, "How long did it take..."
All right, so she really seemed to walk into that one.
- Yeah, yeah, she absolutely did,
and that right there is the problem.
Hillary, you are not going to beat
Donald Trump at social media.
His tweets are the Tom Cruises of tweets:
short and unhinged,
but you kind of can't look away.
And just like that,
Hillary went from a pioneer and a trailblazer
into a minor player in an online spat.
Doocy: Hillary demands Trump delete his account.
- That Twitter war a preview
of how ugly the fall fight could be.
Gibson: The words "Delete your account"
are fighting words. - It's just smack talk.
- Yeah, I didn't even know what that means, but apparently
our producers said that's what kids use
to, like, say they don't like you.
- Well, actually--
actually, it's what kids used to say,
because the minute it was tweeted
by a 68-year-old presidential candidate,
I'm pretty sure they moved on to whatever the new phrase is,
whether it's "Eat a gerbil,"
or "Snap it up, Snoopy,"
or "Not in my taco truck."
But if this is how
the next five months are going to play out,
Clinton has got a problem.
Trump's mastery on social media is unprecedented.
He misspells words, overuses caps,
passes along un-vetted information
and is overtly racist.
He's basically Twitter's id made manifest;
whereas, for her part, Hillary Clinton
has been very much hit-or-miss on social media,
with excruciating mistakes like posting
"7 things Hillary Clinton has in common
with your abuela,"
or changing her Twitter avatar so that Rosa Parks
was sitting at the back of her logo.
Oh, she took real heat for that,
and yet just a couple of weeks later,
she changed her logo again,
this time attempting to honor Kwanzaa like this.
And come on.
At least remove the arrow in the logo,
because this actually looks like the campaign is saying,
"Please move away from the Kwanzaa celebration."
But for true toe-curling tone deafness,
nothing could beat one particular attempt she made
to engage young people online.
Nguyen: Hillary Clinton's attempt to use emoji backfires.
On Twitter, she asked her followers...
- That's right, three emojis,
because nothing says "I will seriously listen
to your concerns" like saying,
"Hey, I'm pretty busy.
"Can you just condense your thoughts into tiny pictures
of ghosts, dolphins, and sex eggplants?"
Now, the rest of this campaign
is going to be depressing
if the two people running for president,
a task requiring a grasp of nuance and complexity,
repeat--repeatedly stoop to pandering
and flame-throwing online,
and it seems that we are going to need
a shorthand way to express our disappointment and disgust,
which is why we have created this GIF
of a vomiting Abraham Lincoln.
It is on our Twitter feed right now,
and it is all yours to have,
because whenever Clinton's campaign tries to #engage us,
or Trump says something awful,
I think it's going to be pretty useful
in articulating what we're all wanting to say.
And now this.
- Imagine falling asleep and hearing glass shatter
but no glass fell
or waking up to a car crash that didn't happen.
- Imagine coming home after a long day of work
to find that someone had broken into your home
and ransacked all your possessions
and even kidnapped your parrot.
- Imagine, like, being stuck inside
during a-- like, a barbecue,
and the barbecue being inside.
- Imagine this: you're at a ball game,
a foul ball is flying right at you,
and you're carrying a baby.
- Imagine waking up one day and finding out
your entire life is a lie.
- Imagine being locked in a windowless steel box
for 17 months by choice.
- Imagine that God purchased
the total NFL package on DirecTV.
- Imagine your dog having its own Twitter page.
- Imagine not being able to use your thumbs.
- Imagine sleeping in a bedroom the size of a coffin.
- Imagine being asleep and then being stung by bees.
[applause]
- Moving on.
Moving on.
Our main story tonight concerns money.
You know, the thing everyone likes to think
they're good with, despite the evidence provided
in every episode of the Suze Orman show.
- Tina, what do you want to buy?
Tina: Hi, Suze. Thanks for taking my call.
I'd like to buy a Mercedes E550.
- It's about $1,400 a month. That is true.
You are denied. Woman: Oh.
Woman: I want to get a Louis Vuitton Tivoli PM bag.
- So denied.
So denied, it's not even funny.
I'm gonna deny you again.
Woman: I would like to buy a study abroad in Iceland.
I want to go to the famous Elf School in Reykjavik
and get a certification as an elf spotter.
- Here's the thing, I'm denying you.
- Yeah, of course she is,
'cause no one should be spending $4,000
to get an elf-spotting qualification.
In fact, if you go to lastweektonight.com right now,
you can print out a free
official elf-spotting certificate,
which I promise you is every bit as valid
as the most expensive elf-spotting education.
Now go spot some elves.
Now--now one--
one of the big reasons
that Suze Orman denies so many people
is because she thinks we should all be saving
for our retirement,
and before we go any further,
it is important to acknowledge
there are people who just do not have the money to do that
for systemic reasons
that we've addressed on this show before
and will doubtless address again
on Johnny O's Sad-tastical Circus of Misery and Math.
But tonight,
let's talk about those who can save for retirement,
the target audience for ads like this.
- We asked people a question.
How much money do you think you'll need
when you retire?
Then we gave each person a ribbon
to show how many years that amount might last.
- I was trying to, like, pull it a little further,
and I was trying to stretch it a little bit more.
- Got me to 70 years old.
I'm gonna have to rethink this thing.
- That's--that's actually a pretty creepy ad,
'cause it's basically people walking
toward the date of their own death.
The only way it could've been creepier is if,
at the end of their ribbons,
it said exactly how each person was going to die.
But look, it is true--
it is true that as-- as we all live longer,
you should absolutely save for retirement
if you can, and many do.
We currently have around $24 trillion
sitting in retirement assets,
and that figure doesn't even include the wealth we have
in stockpiled Beanie Babies,
so let's call it $24 trillion and 32,
and a lot of that money is in the hands
of financial services companies,
so let's talk a little about how they work,
which I know sounds boring,
but as a favor to your future self,
it is worth watching this for 20 minutes,
because you could easily make small mistakes
which could seriously cost you down the line.
So let's start with financial advisors.
They are the wholesome, friendly-faced experts
that you see in ads like this one from Chase.
Female narrator: Through all life's milestones
our trusted advisors are with you
every step of the way. - Congratulations.
- Thanks for helping me plan for my retirement.
You should come celebrate with us.
- I'd be honored.
narrator: Plan for your goals
with advisors you know and trust.
- Wait, that is a clear example
of deceptive advertising,
because nobody invites their financial advisor
to a wedding.
If Cousin Barbara finds out that she didn't get an invite,
but your Chase guy did,
she's gonna flip her shit on you.
But there is something you should know
about financial advisors.
Even their name means less than you might think.
The Financial Industry Regulatory Authority
warns customers to be aware...
So "financial analyst" is just a fancy term
that doesn't actually mean anything,
sort of like "brand ambassador"
or "the John Oliver effect."
Meaningless. Completely meaningless.
But even many well-credentialed financial advisors
are paid on commission,
so if they recommend something for you,
it may be because they stand to make money.
In fact, sometimes they're actively incentivized
not to act in your best interest.
Take annuities.
Now, certain types of those can be very complicated
investment products that have high fees
and would only be appropriate for certain types of portfolios,
but some financial advisors push them hard.
Just look how Suze Oman reacts
when a caller, who had just inherited $80,000,
asked for some advice.
Woman: We have talked to a financial advisor,
and he recommended that we put it in an annuity.
- I knew it.
I was go--before you said that,
I was gonna say, wait!
Wait. Let me tell you.
I could tell you what the financial advisor said.
Did they--did that advisor also say to you
that if you put that $80,000 in there,
I'm gonna make about $4,000 of commissions?
Did he or she happen to tell you that as well?
- Ooh, "he or she."
Thank you, Suze Orman, for pointing out
disingenuous financial swindlers
can be women too.
And--yeah, why not?
And--and brokers pushing annuities
may not just be getting money.
Last year, Elizabeth Warren released a report
on sales perks in the annuity industry,
ranging from free cruises to luxury watches to--
and this is true--
this tacky Super Bowl-style ring,
which is absolutely ghastly,
but I guess at least it makes it easy
to spot brokers that you shouldn't work with.
"Uh, hey, nice ring, Irwin,
"but I'm gonna guess that you didn't get that
playing running back for the Green Bay Packers."
Now, generally, it is currently legal
for financial advisors to put their own interests
ahead of yours, unless-- and this is interesting--
they are what's called a fiduciary,
because not all financial advisors
are bound to act in your best interest,
but fiduciaries are,
which is a bit weird.
It's like finding out that only some restaurant waiters
are forbidden from ejaculating in your soup.
"Hey, why is it up to me to ask you which kind you are?
"I'm sending this chowder back.
"I'm not risking it.
You take it back."
But financial advisors are just one part of this.
If you are lucky,
your job offers a 401(k) retirement plan,
and if it does, you should probably
take advantage of it, but you should also know
they can be a goldmine for financial service companies,
and while it's not unreasonable
for them to get paid for providing a service,
there can be a lot of different fees.
Kroft: There are...
And the list goes on and on.
- I honestly wouldn't be surprised
if they also had an elf-spotting fee,
but remember, thanks to your new certification,
you no longer have to pay it.
Go spot some elves.
And--and look, seemingly tiny fees
can really mount up
thanks to something called "compound interest."
Now, whenever retirement companies like Prudential
mention that, it's always as a positive,
that if you start with a really small investment,
by the time you're ready to retire,
it will have substantially grown.
- It's hard to imagine how something so small
can help with something so big, but if you start
putting that towards your retirement every week
and let it grow over time
for 20 to 30 years...
[people cheering]
That retirement challenge...
[cheers and applause]
Might not seem so big after all.
- Holy shit.
Is it just me, or did that last domino
fall really hard?
That might be the most upsetting commercial involving dominos
that doesn't involve the phrase "Cali Chicken Bacon Ranch."
But--but compound interest works both ways,
meaning, while your money add ups--adds up,
your fees can really add up too.
Smith: Assume you're invested in a fund
that is earning a gross annual return of 7%.
They charge you a 2% annual fee.
Over 50 years, the difference between your net of 5%,
the red line,
and what you would have made without fees,
the green line, is staggering.
You've lost almost 2/3 of what you would have had.
- 2/3 of what you would have had is gone.
So think of fees like termites.
They're tiny, they're barely noticeable,
and they can eat away your fucking future.
And one place where your 401(k) can be full of termites
is the funds themselves.
Generally speaking, you can choose
between low-fee index funds, which basically just try
to match the average returns of the stock market,
or, for a higher fee,
you can get an "actively managed" fund,
with experts who will pick and choose stocks for you,
trying to beat the market,
and companies that sell active funds
really believe in themselves.
male narrator: At MFS Investment Management,
we believe active management
can protect capital long-term.
Active management can take calculated risks.
Active management can seek to outperform,
because active investment management isn't reactive.
It's active.
- Okay.
That's not so much a coherent commercial
as it is a drinking game where you do a shot
every time he says the word "active."
But the problem with active management
is that even many Wall Street experts
find it difficult to consistently beat the market,
and there is sometimes embarrassing evidence of this,
like when a group of professionals
were pitted in a stock-picking challenge
against a cat named Orlando.
man: Orlando's method?
He throws a toy mouse at a grid of companies,
very scientific.
Last year, Orlando's picks returned nearly 11%
while the pros had gained just 3.5%.
- Oh, my God!
Let's all agree that "The Wolf of Wall Street"
would have been way better starring that cat.
Of course-- of course, you know,
instead of drugs-- there's a plot hole,
because instead of drugs, his downfall would come
when someone busts out a laser pointer in a meeting.
But that cat wasn't a complete anomaly.
There is growing evidence that, over the long term,
most managed funds do no better,
and often do worse, than the market.
It's basically the plot
of "Charlie and the Chocolate Factory."
If you stick around doing nothing
while everyone around you fucks up,
you're going to win big.
And the thing is, this is not a secret.
Even some of the people charging those fees
know that this is the reality.
- One of the ultimate dirty secrets
of the fund industry
is that a lot of people who run other fund companies
own index funds in their--
in their own accounts and don't talk about it
unless you put a couple beers in them.
- Wow, "Sometimes I invest in index funds"
might be the least interesting secret
anyone has ever divulged while drunk.
It's right up there with "My favorite movie
is 'The Constant Gardener,'"
and "One time in college, I got totally wasted
and read the entire Wikipedia page for 'rope.'"
So--so--
so don't tell anyone.
Don't tell anyone.
So--so between financial advisors,
high fees, and underperforming active management,
the entire retirement-plan industry
is a potential minefield,
and you need to pay attention.
And the reason that we know about this is,
earlier this year,
we actually decided we wanted to set up
a 401(k) for our employees,
and you might want to learn from our experience,
because here's what happened.
We reached out to the production company behind this show,
Avalon Television,
and we asked them to take care of it.
A couple of months later, they told us,
"We have your plan. It's provided by John Hancock,"
and we said, "Okay, fine," and we went back to work,
by which I mean we went back to Googling
"teacup pigs eating ice cream."
But--but then-- but then in March,
representatives came to our office
and gave our staff presentations on their new plan.
It's the kind of thing no one in their right mind
wants to sit through.
Honestly, most of us spent it on our phones,
Googling "teacup pig, top hat, shopping, beer,"
and boom. Boom.
We hit the fucking jackpot.
But--but unfortunately for John Hancock,
our researchers started going through the documents
and started adding up the fees,
which came to a combined 1.69%,
and that was before we paid a $24 per person per year fee
and the fees on our funds.
So they asked John Hancock
why the fees were that high,
and--and we were told that it was normal
for a start-up plan at a new company,
and Hancock gave us a lower number
that it would come down to over time,
and we said, "Okay, okay, that sounds fine,"
and our researchers said, "Wait, no, that is not fine.
"That number is still higher than experts have told us
"that we'd want it to be.
"Look, leave this. We'll figure it out.
"Why don't you all just go back to Googling
"'teacup pigs in teacups'
or whatever the fuck it is that you do all day?"
And we went, "Oh, my God, is that a thing that exists?"
And yes, it was!
Yes, it was.
That was the rest of our afternoon right there.
Meanwhile, our researchers took the Hancock contract
and sent it to financial experts,
who flagged an "intermediary fee" to a broker:
1% the first year and half a percent after that,
and remember, that could add up.
We did some very rough estimates, and--
and with 35 employees contributing just $6,000 a year,
after 30 years,
half a percent could add up to roughly $1 million dollars.
That number was so high,
you'll never guess what happened.
Janice in accounting actually gave a fuck.
I'm serious. She's a changed woman now.
She--she bought cupcakes for the break room yesterday,
and she adopted a kitten. She named him Tuppence.
So anyway, we asked,
"Who the fuck is this broker?"
And it turned out, he was a guy Avalon had agreed to pay
to help them set up and support our plan,
and we asked him,
"Why didn't you present us with low-cost,
"low-frills plans like the one from Vanguard?
And what are we paying you so much for?"
And he said, well, first of all,
our plan was probably too complicated for Vanguard
and that he did a lot of things for us
like acting as our financial advisor,
although, as we now know,
that term doesn't necessarily mean much.
In fact, if you go to our website right now,
you can print out a free official
financial advisor certificate, and there you go.
Congratulations, you are one too.
Well done. Well done.
And--and although our broker has other credentials,
when we asked if he was a fiduciary,
he, unsurprisingly, said no.
As for his fees, he said they would come down,
and last night, he sent us an Excel spreadsheet
showing how they could come down as our fund assets grew.
Unfortunately, in that spreadsheet,
he made an error which meant that our fund's interest
didn't compound correctly,
and when we pointed that out to him,
he sent a second sheet
showing that his original math had been off
by more than $10 million,
which does not inspire confidence in the man who,
as he'd repeatedly reminded us,
was helping us navigate our very complicated plan.
Now, our lawyers at this point
say that I have to tell you that both the broker
and John Hancock claim their fees would come down,
that they're competitive within the industry
and worth it for the services they provide,
although you should know we decided early on
to pay almost all of the fees for our employees
'cause we were so fucking embarrassed
about the situation that we'd got them in,
and we're going to be leaving both Hancock and the broker,
and I'm guessing after they've seen this show,
they will be happy to let us go.
Just so--just so you know,
we'll be replacing both of them
with that stock-picking cat,
'cause he seems to really know his shit.
The whole point of telling you this--
the whole point of telling you this is,
if you don't pay close attention,
all of this can really get away from you,
but here is the good news:
it doesn't actually have to be that complicated,
and it might be getting simpler.
Back in April, the Department of Labor
issued a final rule requiring that all advisors
handling retirement accounts act as fiduciaries
beginning next year, and that is great,
because the financial services industry fought this rule hard.
They even launched terrible attack ads.
You might've seen one like this on TV.
- It's these new regulations they're pushing
in Washington that worry me. They want to make it really hard
to get advice from our financial advisor.
- No more help from Anne?
Even with our IRA and 401(k) savings?
- Well, only if we want to pay a lot more.
- We'll never get the information we need.
We're gonna call our senators.
- Okay, okay.
To be honest, my only takeaway from that ad
is that that guy is definitely fucking Anne.
It's so obvious.
It's--you need to leave him,
non-threatening wife character.
Kick him to the curb.
And while the rule has gone through anyway,
five lawsuits have been filed
by financial services groups attacking it,
and legislators in the House and Senate
have passed a resolution trying to overturn that fiduciary rule,
although, just a few days ago,
the president did veto it.
And by the way, that is something I think
we're probably going to be seeing a lot more of,
because President Obama's last year in office
seems to be moving from "bipartisan solution"
to "Bye, Felicia."
And--and look.
I am not saying all of this is not complicated.
We spent weeks just trying to understand
our own 401(k) plan,
but for your average person trying to save for retirement,
it doesn't need to be this confusing.
The truth is, as long as you remember a few key things,
you're probably going to be fine,
and we wanted to outline them for you,
so whenever you are ready or able to save for retirement,
please come back and replay this video
from this exact spot.
Enjoy.
- Hi, I'm Billy Eichner,
and I'm here with a bunch of fucking ribbon,
and I'm using it to show people
how much money they needed to save for retirement.
Aww, look at you.
You're so precocious.
One tiny thing:
these are fees.
That's your record-keeping fee.
That's your wrap fee.
That's your monthly participation fee.
That's your 12B-1 fee. That fee goes to some middleman
you don't even know about, and that's your fee
for "not knowing about a fucking fee" fee,
and here's what you've got left to retire on.
Try ribbon dancing with this.
You look like an idiot.
The problem is that idiots like Karen here make shitty choices
when it comes to what to do with their money.
Karen, if you had $4,000,
would you invest it in your 401(k)
or would you go to the Elf School in Reykjavik?
- Elf School? - No.
You put it in your 401(k), you idiot.
The only elf you should be studying is Kristin Chenoweth.
She's a delight. Come on out here, Kristin Chenoweth.
- Hi, Billy.
I love elves, and who wouldn't want
to go to Reykjavik?
- Okay, it's not the Tony Awards.
Go. Shoo, shoo.
That was Kristin Chenoweth.
The point is, the best advice most experts can give you
is to do five things.
Number one, start saving now.
In fact, start saving ten years ago.
Invent a time machine.
Use it to go back and start saving money.
Then...
kill baby Hitler.
Next, average people like you--
and let's face it, you're very, very average--
should probably just invest in low-cost index funds
and leave it alone.
You should check on it about as often as you Google
whether or not Gene Hackman is still alive:
about once a year.
And he is.
He's still alive.
He's writing novels now.
Third thing: if you have an advisor,
ask if they're a fiduciary.
If they say no, run.
If they say yes, but they're wearing
a tacky Super Bowl ring, run.
If they say yes, but they're wearing a class ring, run.
That has nothing to do with this.
I just think it's very strange when a grown man
is wearing a class ring.
The fuck is a fiduciary?
Number four, as you get older,
gradually shift your investments from stocks to bonds.
Here's a way to remember it:
every time they pick a new James Bond,
gradually switch more of your stocks into bonds.
Then go back to wondering
if Daniel Craig is actually attractive.
What do you think, Doris?
- Oh, he's so handsome. - No, he's not.
He looks like a blonde chimpanzee in a tux,
and you know it. Ugh, I wish this was "Veep."
[upbeat music]
Finally, try to keep your fees like your milk:
under 1%,
because just like interest compounds,
so do fees,
and even 1/10 of 1% can really fuck you.
Like this.
[applause]
Oh, shit, Kristin. Watch out.
- What?
[cheers and applause]
[all screaming]
- Oh, that reminds me.
One last tip: don't forget to die.
- Billy, I'm not dead.
- Aw, Kristin, you're even shorter now.
- [coughing]
- Ugh, stop coughing. Disgusting.
- [coughing] - Excuse me.
male announcer: No Kristin Chenoweths were harmed
in the filming of this piece.
- That's our show.
Thank you so much for watching.
See you next week. Good night.
- I love elves, and who wouldn't want to go to Reykjavik?
- Okay, bye. Go.
Go do a voice-over somewhere. Go.
Just give me this.
Give me this. Take it off.
It's not "Behind the Candelabra."
[upbeat rock music]
[bright tone]