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Fox Business TV: Retirement savings within reach. Today, a new way to poach from your IRA.

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11-18-2008

DATE 11/17/2008
TIME 6:00 PM – 7:00 PM
STATION Fox Business Network
LOCATION National
PROGRAM Cavuto

NEIL CAVUTO, host:

Retirement savings within reach. Today, a new way to poach from your IRA. The Entrust Group introducing a new debit card that takes money right out of your retirement. But is it really as simple as a swipe? Let us ask Hugh Bromma, the chairman and the CEO of the Entrust Group.

Hugh, how does this work?

Mr. HUGH BROMMA (Chairman & CEO, Entrust Group): Well, the way it is, that, when people want to make investments in their retirement account, especially within our group, they have to tell us how to make that investment. In other words, they actually give us a buy direction letter. And because we deal with self-directed plans, the turnaround time to make a transaction occur is often days. And the way that we look at this is saying, ‘Let’s make it easy and convenient for our customer.

We want our customer to have access to their account to make investments. And for that, we’re going to provide them with checks and a debit card that they can actually go out and--let’s say they want to buy real estate for their individual retirement account. They can use those checks or a debit card to do that.

CAVUTO: What about shopping?

Mr. BROMMA: Well, you can do shopping. Now, here’s how that works.

CAVUTO: Now, see that--that--that scares me right there, because the intention of this...

Mr. BROMMA: Well--

CAVUTO: ...is to save for the long term. And if you’re out at store and you look at something great, ‘Oh, I forgot. I have my IRA.’

Mr. BROMMA: Yeah. Well, you see, there is very, very important distinction and it is a retirement account. And of course, we want people to save for retirement. That’s really the essential part. However, people--

CAVUTO: I know--I know you want them to, but if they have that debit card, I mean, it’s tempting.

Mr. BROMMA: Can’t they just go out and shop, right?

CAVUTO: Right.

Mr. BROMMA: And--and the--and the answer is, yes, they can. However, they would do that now anyway. So, if somebody says, I want to take money out of my--

CAVUTO: Well, you’re making, actually you--no, no. They can’t do it very easily at least. You’re making it, I know what you’re doing. It’s convenient and this is kind of high-tech and all that. But you are making it easier to do that.

Mr. BROMMA: Yes. We want them to take the required minimum distributions, very, very important, because, at 70 1/2, they need to start taking money out of their retirement accounts, their traditional IRAs. And that’s one way to do it through the card. Yes, it’s convenience. But it’s very important to understand the difference between the convenience of taking it out and also the convenience of making the investment. So--

CAVUTO: Yeah, but I’m just wondering--we just showed these two very nice old ladies who, apparently, were blowing their entire retirement savings on shoes. I’m not saying that happens, but I worry. I worry with the best of high-tech intentions and convenience you could, though that’s not your intention, be killing America’s savings.

Mr. BROMMA: It could if individuals are not oriented to savings. And we believe that now, in particular, in this era that we’re reaching into, that people are going to be oriented to savings as opposed to spending. In fact, our data show among our clients that people are taking less out of their retirement accounts over the last four years, over time. So, that means people are really saving for retirement and investing in their self-directed accounts.

CAVUTO: All right.

Mr. BROMMA: So yes...

CAVUTO: We shall see.

Mr. BROMMA: ...that’s how people might do it.

CAVUTO: We shall see.

Mr. BROMMA: We will.

CAVUTO: All right, we’ll see what those two old ladies do. Not that they’re old, but they just--they do like shoes apparently.

Mr. BROMMA: They’re younger people.

CAVUTO: All right, Hugh Bromma. Thank you very, very much.

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