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Old 11-18-2015, 08:50 AM   #41
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If Pfau's ramblings went anywhere other than to annuities (even some of the time), I might be inclined to give him a listen. But he is a shill for the industry, so that is where he lands.

I'd hardly be the one to argue that annuitization is never a good idea. I will likely annuitize a chunk of my assets at some point if it makes sense. But they are not the Holy Grail, especially when we are at a historically low level of interest rates. YMMV.
+1

It always amazes me that anyone could actually read Pfau's stuff and come to any other conclusion. I guess that is why we have discussions, but gosh. Nothing about him inspires me to even discuss.
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Old 11-18-2015, 09:02 AM   #42
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His predisposition towards recommending annuities does make me question his objectivity. Whenever I hear the name Wade Pfau the following song immediately pops into my mind:

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Old 11-18-2015, 09:23 AM   #43
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Our brush may be a little broad here. I, too, have called out Pfau for his "emphasis" on annuities and also for his assertion that traditional WRs needed to be cut back--largely because he inserted a big advisory fee into his calcs. But he has also written papers that don't push annuities, and which don't have an obvious push toward products that generate commissions/fees. For example, his papers on use of PE10 to adjust portfolio allocations have been informative and handy. (see this paper and this previous discussion here).

So, as with other authors, I read each of Pfau's contributions to learn what I can from it, and remain aware of the author's frame of reference/vested interests.
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Old 11-18-2015, 10:24 AM   #44
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The thing to do is to argue with the assumptions and methodology rather than making accusations of fraud.
Feel free. Personally, when I find out that someone has pissed into a well, I generally choose to go find another source of drinking water rather than making 3 flavors of Kool Aid with the tainted water and try to decide which one tastes best.
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Old 11-18-2015, 10:59 AM   #45
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Feel free.
I think you need to be pointing out the holes in the research if you think it's wrong. Personally I like Pfau's use of lower than historical bond rates and a 0.5% fee as they seem to be sensible assumptions given todays bond rate and most people's less than fanatical quest to keep fees down.

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Personally, when I find out that someone has pissed into a well, I generally choose to go find another source of drinking water rather than making 3 flavors of Kool Aid with the tainted water and try to decide which one tastes best.
And that's perfectly fine. Call him out for recommending annuities, say they are terrible, question his assumptions about returns and fees, pick holes in the methodology....all those are valid reasons for not liking the work of Wade Pfau, but please stop short of the allegations of fraud without evidence. There is a big difference between an advertorial or puff piece in Forbes or USA Today that is sponsored by the Insurance industry where someone pushes annuities....that's sleazy, but not illegal. However, to say that someone publishes research that comes to an incorrect conclusion from the data or assumptions used because of a relationship with an industry sponsor is a serious allegation.
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Old 11-18-2015, 11:08 AM   #46
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It would be very interesting to see the personal portfolios and AAs of all these financial gurus. Then we'd see if they practice what they preach. I tend to believe that Bogle's portfolio is just as he describes it.

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Old 11-18-2015, 01:31 PM   #47
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Not sure about that. In fact on one of the Bogleheads threads when asked what he would wish for in retirement he mentioned Tontines because they would omit the insurance companies as middlemen. Also, if we see something in his work that shows that he is skewing then we should all point it out. But I haven't seen anyone do that yet. He seems to show all his work. He only recommends SPIAs. Not the evil variable annuities. Silly reason to dog him if you ask me.


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If you do a little research on the "college" you will find it is operated strictly for the investment industry. The accrediting agency name sounds like one of the standard college accrediting institutions, but it is not. Probably took me all of 10 minutes to track that info down. I wouldn't have a problem with him if he and his 'college' were up front on what they do and where they get their money.
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Old 11-18-2015, 02:03 PM   #48
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I think you need to be pointing out the holes in the research if you think it's wrong. Personally I like Pfau's use of lower than historical bond rates and a 0.5% fee as they seem to be sensible assumptions given todays bond rate and most people's less than fanatical quest to keep fees down.



And that's perfectly fine. Call him out for recommending annuities, say they are terrible, question his assumptions about returns and fees, pick holes in the methodology....all those are valid reasons for not liking the work of Wade Pfau, but please stop short of the allegations of fraud without evidence. There is a big difference between an advertorial or puff piece in Forbes or USA Today that is sponsored by the Insurance industry where someone pushes annuities....that's sleazy, but not illegal. However, to say that someone publishes research that comes to an incorrect conclusion from the data or assumptions used because of a relationship with an industry sponsor is a serious allegation.
So do you prefer the fruit punch or grape flavor?
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Old 11-18-2015, 03:59 PM   #49
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The problem is that Dr. Pfraud starts out with the premise that the answer is an annuity of some kind. What was the question again?
I think you've made your point.
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Old 11-18-2015, 04:32 PM   #50
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If you do a little research on the "college" you will find it is operated strictly for the investment industry. The accrediting agency name sounds like one of the standard college accrediting institutions, but it is not. Probably took me all of 10 minutes to track that info down. I wouldn't have a problem with him if he and his 'college' were up front on what they do and where they get their money.
Pfau is upfront about his affiliations and does not claim to be self employed. The funding of the College is right there on the first page of the website. He seems to do a lot of contract research and the white papers are done for clients so you have to approach them with the understanding that they might be limited in their analysis or comparisons. He is also employed by a financial planning company. The peer reviewed publications acknowledge funding and are far more rigorous. Given his assumptions, methodology and the peer review process I'm ok taking the results of those papers at face value....the white papers not so much as they can often be closer to advertising than research.
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Old 11-19-2015, 06:47 AM   #51
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Sounds a bit like this in here:
https://en.wikipedia.org/wiki/J'accuse

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Old 11-19-2015, 08:42 PM   #52
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He is an annuity salesman with an increasingly thin veneer of academic respectability.
+1. He was not like that earlier though. But recently all his article was centered around annuity which turned me off from reading it anymore.
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Old 11-20-2015, 11:11 AM   #53
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Sounds a bit like this in here:
https://en.wikipedia.org/wiki/J'accuse


I agree. Wimpy name calling versus showing evidence of anything fraudulent.


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Old 11-20-2015, 11:12 AM   #54
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So do you prefer the fruit punch or grape flavor?

Well either of those would be fine over the very thin soup that you are serving.


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Old 11-20-2015, 11:14 AM   #55
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Let's keep it friendly ..
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Old 11-20-2015, 11:25 AM   #56
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It would be very interesting to see the personal portfolios and AAs of all these financial gurus. Then we'd see if they practice what they preach. I tend to believe that Bogle's portfolio is just as he describes it.

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Excellent point. Thanks for the link to the Bogle article also - so nice to hear from a straight shooter who practices what he preaches. I don't remember hearing about his heart transplant, but that was before I started switching into Vanguard funds.
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Old 11-20-2015, 11:34 AM   #57
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Let's keep it friendly ..

I agree we should be friendly. But accusations of fraud against someone not obviously fraudulent aren't very friendly. The accusations should be backed up, not casually swatted aside with sarcasm.




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Ok, don't kill the newbie for the stupid question but who is Wade Pfau?
Old 11-20-2015, 11:41 AM   #58
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Ok, don't kill the newbie for the stupid question but who is Wade Pfau?

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I agree we should be friendly. But accusations of fraud against someone not obviously fraudulent aren't very friendly. The accusations should be backed up, not casually swatted aside with sarcasm.




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I'll add one thing. Pfaus work on comparing fixed income to annuities has enticed me to consider changing my AA to reflect that. And many others on Bogleheads are the same, as he came on there to discuss it. So this is not just a pissing contest here, it's a serious question for many if they have been convinced by someone who is a fraud as Brewer says.


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Old 11-20-2015, 12:19 PM   #59
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I don't have anything in particular to prove one way or another about Pfau, but when you know what the annuity industry looks like and how they are marketed and sold by folks like Pfau, it doesn't take much to just take a pass on his form of "gospel".

Like Brewer, I may look at annuitizing at some point in the future, but it won't be on the advice of Pfau, but rather would be after reading research from those not in the pocket of the insurance/annuity industry.
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Old 11-20-2015, 12:23 PM   #60
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I agree we should be friendly. But accusations of fraud against someone not obviously fraudulent aren't very friendly. The accusations should be backed up, not casually swatted aside with sarcasm.




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if you want to slobber all over the guy's shoulder, feel free. He is obviously tainted via funding, so I have no interest in anything he says.
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