There are foxes in the henhouse


Mike Miles is a Certified Financial Planner licensee and principal adviser for Variplan LLC, an independent fiduciary in Vienna, Virginia. Email your financial questions to and view his blog at


How did Kenneth McLeod steal more than $15 million in personal assets from unsuspecting Drug Enforcement Administration employees over more than two decades? By feeding his Ponzi scheme with victims through retirement and financial planning seminars sponsored by the DEA, that’s how. At least, that’s the conclusion reached by the Department of Justice’s inspector general after reviewing the case. If it’s surprising that an agency would lead its employees to such a slaughter, it should surprise you even more that the practice that allowed it to happen is still going strong today, all over the federal government, despite the obvious risk it poses.

The risky practice is that of a federal agency or office inviting, or even allowing, unqualified or untrustworthy individuals to conduct retirement-planning seminars for employees. In some cases, the people conducting these seminars are unqualified. In other cases, they are nothing more than salespeople looking for an opportunity to generate easy income with the endorsement that an employer’s invitation implies.

I’ve heard many stories of misinformation and abuse from clients over the years, and I have seen some of the results of the “advice” provided either in, or following these seminars. These results make it clear that the advice that produced them was either incompetent or corrupt. The standard that should be imposed is simple and should be strictly enforced: When employees’ financial lives are at stake, an employer should do the diligence necessary to make certain the educational seminars provide accurate information, refrain from offering baseless or anecdotal advice, and that instructors are entirely free from conflict with the interests of attendees. In other words, they should be salaried instructors and not commissioned salespeople.

I have been solicited by several of these firms to conduct seminars as a subcontractor over the years, and I have always declined. I did, however, get a clear picture of the business model that seems to pervade this industry.

The proposal was always the same: If I would deliver a particular seminar for the producer, who had procured the contract to do so, I would be presented to a room full of eligible customers in a favorable light. I could pass out business cards and promote my own business during the seminar, and my compensation would come from the sales I would make to individuals in the days, weeks and months after the seminar was over, and beyond the scrutiny of the employer and the seminar producer. What happened after that was up to me and the employee. Let the buyer beware.

It’s a very successful business model. The producer is insulated from liability, for the most part. The agency or office meets its requirement to provide benefits education easily and at a relatively low cost, and the “instructors” harvest sales from a receptive audience — an audience selected to have a need and the elevated level of trust that comes with their employer’s endorsement.

The problem for you is that this model subsidizes the producers of the seminars, and the agency that hires them, at the expense of the employees. The producer gets labor below cost, and can, in turn, charge less for its seminar services, because the instructors expect to, and often enough do, get paid by selling products or services directly to the employees outside of the seminars.

I suspect that the reason this has been allowed to continue for so long, and at such cost to federal employees, is that few employees recognize the problem. Let this be your wake-up call.

You deserve better and should demand it. The stakes are too high, and mistakes can be costly to take reckless chances. Let your employer know that it is their responsibility to thoroughly vet any individual before they are invited or allowed to present a retirement or benefits seminar on behalf of your agency. No one with conflict of interest should be allowed to present these seminars. The seminars should be what they claim to be:; educational, and not veiled sales presentations. It’s time to pull back the curtains, open the door, and chase the foxes out of your henhouse. Your future may depend on it.


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Mike Miles is a Certified Financial Planner licensee and principal adviser for Variplan LLC, an independent fiduciary in Vienna, Virginia. Email your financial questions to and view his blog at

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