Last Week Tonight with John Oliver (2014–…): Season 3, Episode 15 - Money - full transcript

Tonight's main story focuses on navigating the complex financial labyrinth of retirement plans, including hints to get through the maze. John also highlights the emerging social media war between 2016 presidential candidates Hillary Clinton and Donald Trump.

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Welcome to Last Week Tonight.

I'm John Oliver.
Thank you so much for joining us.

Let's begin tonight with a quick recap
of the US presidential election.

Or as it's now better known,

the fiery two party-pile up
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
in our nation's history

that a woman will be a major party's
nominee for president of the US.

Now whatever you think of her,
that is a truly historic step,

if conspicuously overdue.

It's like celebrating the fact your
12-year-old has stopped breast-feeding.

Sure, it's definitely good news. But
it 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, this happened...

Trump reacted
to the president's endorsement

tweeting Obama
just endorsed crooked Hillary.

He wants four more years of Obama
but nobody else does.

Clinton's campaign responding:
"Delete your account".

Now, hold on, you might
have 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 mean
you've accomplished something good.

That is a sentence
anyone under the age of 20

should frame
and hang in their bedroom.

There is two problems with telling
Donald Trump to delete his account.

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.
Very disappointing, dopey beard,"

"can't even lift a heavy rock
that he himself created. Sad."

And second, you just moved
this fight onto his turf,

which is a huge mistake.

Hillary was dominating
news coverage.

Even those
who were speaking out against her

were talking about substantive issues:
women's history, gender equality.

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 as soon as she engaged
with Trump on Twitter,

the fight was back on his turf,
and no one fights better there.

Trump responded, and I'll read
to you what he said on Twitter:

"How long did it take your staff
of 823 people to think that up ?"

"And where are your 33 000 emails
that you deleted ?"

Alright, 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.

Hillary demands Trump
delete his account.

That Twitter war a preview
of how ugly the fall fight could be.

The words "delete your account"
are fighting words.

It's just smack talk.

Our producers said that's what kids
use to say they don't like you.

it's what kids used to say.

The minute it was tweeted by
a 68-year-old presidential candidate,

they moved on to whatever
the new phrase is: "eat a gerbil",

"snap it up, snoopy",
"not in my taco truck !"

But if this is how the next 5 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 Hillary Clinton has been
very much hit-or-miss on social media,

with excruciating mistakes
like posting,

"seven 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.

This 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.

Hillary Clinton's attempt
to use emoji backfires.

On Twitter
she asked her followers...

How does your student loan debt make
you feel ? Tell us in 3 emojis or less.

That's right, three emojis.
Because nothing says,

I will listen o your concerns'
like saying, I'm pretty busy.

Can you condense your thoughts
into 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...

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.

Whenever Clinton's campaign
tries to hashtag-engage us,

or Trump says something awful,
it's going to be pretty useful

in articulating
what we're all wanting to say.

And now this.

And now, people on television
asking you to imagine things.

Imagine hearing glass shatter
but no glass fell.

Or waking up to a car crash
that didn't happen.

Imagine coming home find that
someone had broken in to your home,

ransacked all your possessions
and even kidnapped your parrot.

Imagine being stuck inside
during like a barbeque,

and the barbeque 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 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 Direct TV.

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.

Moving on: our main story tonight
concerns money.

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 ?

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.

I want to get
a Louis Vuitton Tivoli PM bag.

So denied it's not even funny.
I'm gonna deny you again.

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 !

No one should be spending $4 000
to get an elf-spotting qualification.

you can print out a free,
official elf-spotting certificate,

which is every bit as valid as the
most expensive elf-spotting education.

Now go spot some elves.

One of the big reasons that
Suze Orman denies so many people

is because she thinks we all
should be saving for our retirement.

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

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 "How much money
you think you'll need when you retire ?"

then we gave each person a ribbon
to show how many years that might last.

I was trying to pull it further,
to stretch it a little bit more...

Got me to 70 years old. I'm going
to have to re-think this thing.

That's a pretty creepy ad.

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,

it said exactly how each person
was going to die.

But look, it is true that,
as we all live longer,

you should absolutely save
for retirement if you can.

And many do, we currently have
around 24 trillion dollars

sitting in retirement assets.

That figure doesn't include the wealth
we have in stockpiled beanie babies,

so let's call it
24 trillion and 32 dollars.

A lot of that money is in the hands
of financial services companies.

Let's talk about how they work.
Which I know sounds boring,

but 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 advisers,
they are the wholesome,

friendly-faced experts that you see
in ads like this one, from Chase.

Our trusted advisers
are with you every step of the way.

Thanks for helping me
plan for my retirement.

- You should come celebrate with us.
- I'd be honored.

Plan with advisers
you know and trust.

Wait, that is a clear example
of deceptive advertising.

Because nobody invites their
financial adviser to a wedding.

If cousin Barbara finds out
that she didn't get an invite

but your Chase guy did,
she's going to flip her shit on you.

There is something you should
know about financial advisers:

even their name
means less than you might think.

The financial industry regulatory
authority warns customers

to "be aware that financial analyst,
financial adviser,"

"financial consultant,
financial planner, or wealth manager"

are generic terms and may be used
by investment professionals

who may not hold
any specific credential.

Financial analyst is a fancy term
that doesn't actually mean anything.

Sort of like "brand ambassador"
or "the John Oliver effect".

Completely meaningless.

Even many well-credentialed financial
advisers are paid on commission.

If they recommend something, it may be
because they stand to make money,

in fact sometimes they're incentivized
not to act in your best interest.

Take annuities:
now certain types of those

can be complicated investment products
that have high fees,

and would be appropriate
for certain types of portfolios.

But some financial advisers
push them hard.

Just look how Suze Orman
reacts when a caller,

who had just inherited $80 000,
asked for some advice...

We have talked
to a financial adviser,

and he recommended
that we put it in an annuity.

I knew it. Before you said that,
I was gonna say, wait !

Let me tell you. I could tell you
what the financial adviser said.

Did that adviser 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 ?

"He or she" ! Thank you,
Suzie Orman, for pointing out

disingenuous financial
swindlers can be women too !

Hashtag ladycrimes,
hashtag feminism.

And yeah, why not ?

Brokers pushing annuities
may not just be getting money.

Elizabeth Warren released a report
on sales perks in the annuity industry

ranging from free cruises
to luxury watches

to this tacky super bowl-style
ring, which is absolutely ghastly.

At least it makes it easy to spot
brokers you shouldn't work with.

Nice ring, Irwin.
But I'm going to guess

you didn't get that playing running
back for the Green Bay Packers.

It is legal for financial advisers to
put their interests ahead of yours,

unless, and this is interesting,
they are what's called a fiduciary.

Not all financial advisers 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.

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 advisers
are just one part of this.

If you are lucky, your job
offers a 401-k retirement plan.

If it does, you should
take advantage of it.

They can be a goldmine
for financial service companies.

It's not unreasonable for them
to get paid for providing a service,

there can be a lot of different fees.

There are legal fees, trustee fees,
transactional fees, stewardship fees,

bookkeeping fees, finders' fees
and the list goes on and on.

I wouldn't be surprised
if they had an elf-spotting fee,

but thanks to your certification,
you no longer have to pay it.

Go spot some elves.

Seemingly tiny fees
can really mount up,

thanks to something
called "compound interest".

Whenever retirement companies
like Prudential mention that,

if you
start with a small investment,

by the time you retire,
it will have substantially grown.

It's hard to imagine
how something so small

can help with something so big.

If you start putting that
towards your retirement every week

and let it grow over time,
for twenty to thirty years,

that retirement challenge

might not seem so big after all.

Holy shit, is it me, or did that last
domino fall "really" hard ?

Might be the most upsetting
commercial involving dominos

that doesn't involve the phrase
"Cali chicken bacon ranch".

Compound interest
works both ways,

while your money adds up,
your fees can really add up, too.

You invested in a fund that is earning
a gross annual return of 7 percent.

They charge you
a 2 percent annual fee.

Over 50 years, the difference
between your net, the red line,

and what you'd have made without
fees, green line, is staggering.

You've lost almost two thirds
of what you would have had.

Two-thirds of what
you would've had is gone.

So think of fees like termites.
Tiny, they're barely noticeable

and they
can eat away your future.

One place where your 401-k can
be full of termites is the funds.

You can choose between
low-fee index funds,

which 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 stocks
for you, trying to beat the market.

Companies that sell active funds
really believe in themselves.

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.

Active investment management
isn't reactive, it's active.

That's not so much
a coherent commercial

as it is a drinking game where you do
a shot every time he says "active".

But even many Wall Street experts
find it difficult to beat the market.

There is sometimes
embarrassing evidence,

like when professionals were
pitted in a stock-picking challenge

against a cat named Orlando.

Orlando throws a toy mouse at a grid
of companies, very scientific.

Last year Orlando's picks returned
11% while the pros gained 3.5 percent.

My God ! Let's all agree that
"The Wolf of Wall Street"

would have been way better
starring that cat.

Of course, instead of drugs,
there's a plot hole...

His downfall would come when someone
bust out a laser pointer in a meeting.

But that cat wasn't
a complete anomaly.

Over the longterm,
most managed funds do no better

and often do worse
than the market.

It's 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.

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
the other fund companies

own index funds in their
own accounts and don't talk about it,

unless you put
a couple beers in them.

"Sometimes I invest
in index funds"

might be the least interesting secret
anyone ever divulged while drunk.

It's up there with "my favorite
movie is "The Constant Gardener"

and "in college,
I got totally wasted"

"and read the entire Wikipedia page
for "rope".

So don't tell anyone.

Between financial advisers, high fees,
underperforming active management,

the retirement-plan industry
is a potential minefield.

You need to pay attention.
And the reason that we know about this

is, earlier this year, we decided
to set up a 401-k for our employees.

You might want to learn from our
experience. Here's what happened:

we reached out to the production
company behind this show,

and we asked them
to take care of it.

They told us: "we have your plan,
it's provided by John Hancock".

We said okay
and we went back to work.

We went back to Googling
"teacup pigs eating ice cream".

In March, representatives gave our
staff presentations on their new plan.

It's a thing no one in their right
mind wants to sit through.

Most of us spent it on our
phones Googling,

"teacup pig, comma top hat,
comma, shopping, comma beer".

And boom.
We hit the fucking jackpot.

Our researchers started
going through the documents

adding up the fees, which came
to a combined 1.69 percent,

before we paid a $24 per person per
year fee and the fees on our funds.

They asked John Hancock
why the fees were that high,

and we were told that it was
normal for a startup plan,

and Hancock gave us a lower number
that it would come down to over time.

We said: "That sounds fine".
And our researchers said:

"That number is still higher than
experts have told us we'd want it".

"We'll figure it out. Go back to
Googling teacup pigs in teacups".

We went: "My god, is
that a thing that exists and it was !"

That was the rest of our
afternoon. Right there.

Our researchers sent the Hancock
contract to financial experts,

who flagged an "intermediary fee"
to a broker,

one percent the first year
and half a percent after that.

With 35 employees
contributing just $6,000 a year,

after 30 years, half a percent could
add up to roughly a 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 brought cupcakes for the break
room and she adopted a kitten.

We asked:
"who the fuck is this broker ?"

He was a guy Avalon paid to help
them set up and administer our plan.

We asked: why didn't you present us
with low-cost plans like Vanguard ?

What are we paying you so much for ?

He said our plan was too
complicated for Vanguard.

He did a lot of things for us,
like acting as our financial adviser.

Although, as we now know, that term
doesn't necessarily mean much.

If you go to our website,
you can print out a free,

official financial advisor certificate
and there you go !

Congratulations, you are one, too.
Well done !

Our broker has other credentials,
when we asked if he was a fiduciary,

he, unsurprisingly, said no.

He said his fees would come down.
He sent us an excel spreadsheet

showing how they could come
down as our fund assets grew.

He made an error, our fund's
interest didn't compound correctly.

We pointed that out,
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 was helping us navigate
our very complicated plan.

Our lawyers say I have to tell you
that the broker and John Hancock

claim their fees would come down,
they're worth it for the services.

We decided early on to pay almost
all the fees for our employees

because we were embarrassed about
the situation that we got them in.

We're going to be leaving both
Hancock and the broker.

I'm guessing after they've seen this
show, they will be happy to let us go.

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
is if you don't pay close attention,

all of this can get away from you.

It doesn't actually have to be
that complicated.

In April, the Department of Labor
issued a final rule

requiring that "all" advisors handling
retirement accounts act as fiduciaries

and that is great, because the
industry fought this rule hard.

They even launched terrible ads:
might have seen one like this on TV.

These new regulations worry me.

They want to make it hard to get
advice from our advisor.

No more help from Anne ?
Even with our IRA and 401k savings ?

Only if we want to pay more.

We'll never get the information
we need. We'll call our senators.

My only takeaway from that ad is that
that guy is definitely fucking Anne.

It's so obvious. Leave him
"non-threatening wife character".

Kick him to the curb.

While the rule has
gone through anyway,

five lawsuits have been filed by
financial-services groups attacking it

and legislators passed a resolution
to overturn that fiduciary rule,

although a few days ago,
the president did veto it.

That is something I think we're
going to be seeing a lot more of.

Obama's last year in office
seems to be moving

from "bipartisan solution"
to "bye Felicia".

I am not saying
all of this is not complicated.

We spent weeks just trying
to understand our own 401-k plan.

For your average person
trying to save for retirement,

it doesn't need
to be this confusing.

As long as you remember a few key
things, you're going to be fine.

We wanted to outline them. Whenever
you are able to save for retirement,

come back and re-play this video,
from this exact spot.

Enjoy !

I'm Billy Eichner and I'm here
with a bunch of fucking ribbon.

I'm using it to show people how much
they needed to save for retirement.

Look at you !
You're so precocious.

One tiny thing, these are fees.
That's your recordkeeping fee,

that's your wrap fee,
that's your monthly participation fee,

that's your 12B-1 fee, that goes to
some middle man you don't know about

and that's your fee for not knowing
about a fee, fee !

Here's what you've got left !
Try ribbon dancing with this !

Idiots like Karen
here make shitty choices

about what to do
with their money.

If you had $4,000, would you
invest it in your 401(k)

or go
to the elf school in Reykjavik ?

- Elf school ?
- No ! You put it in your 401(k) !

The only elf you should be studying
is Kristin Chenoweth !

Come out, Kristin !

Hi, Billy. I love elves, and who
wouldn't want to go to Reykjavik ?

It's not the Tony Awards.
Go !

That was Kristin Chenoweth.

The best advice most experts
can give you is to do 5 things.

Number one, start saving now.
In fact, start saving 10 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 average,

should just invest in low-cost
index funds and leave it alone.

Check on it 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 !

It's very strange when a grown man
is wearing a class ring.

The fuck is a fiduciary ?
Number four, as you get older,

shift your investments
from stocks to bonds.

Every time they pick a new James Bond,
switch more of your stocks into bonds,

go back to wondering if
Daniel Craig is actually attractive.

- What do you think, Doris ?
- He's so handsome.

He looks like a blonde chimpanzee
in a tux and you know it.

I wish this was Veep.

Try to keep your fees like your milk,
under one percent.

Like interest compounds,
so do fees.

And even one tenth of one percent
can really fuck you.

Like this.

- Shit ! Kristin, watch out !
- What ?

That reminds me.
One last tip, don't forget to die.

- Billy, I'm not dead.
- Kristin, you're even shorter now !

Stop coughing. Disgusting.
Excuse me.

Retirement, no Kristin Chenoweth's
were harmed in the filming.

Thank you so much for watching,
see you next week, goodnight !

I love elves, who
wouldn't want to go to Reykjavik ?

Go back !

Give me this ! Take it off !
It's not "Behind the Candelabra" !