The Equitable Bermuda Triangle

The gaslighting of public school employees

Opinion Piece

AXA recently changed its name to Equitable, but it’s working hard to poison its new name also. 

Equitable has been off to a busy start in 2021, though not in a positive manner. They say that good things come in threes. With this company, bad things do. 

In addition to the same issues most of our readers face with Equitable (hurdles to moving money out of the company via constant changes in the exchange/distribution process, surrender charges and high costs), our audience is learning about some of the other games this company plays. 


This January, the Wall Street Journal ran a story on insurance companies that require proprietary product sales from their agents to maintain employee benefits like retirement and health insurance. Yes, you read that correctly; agents must sell a certain amount of their company’s products to qualify or maintain their health insurance. Talk about conflict of interest. 

Tying health insurance to proprietary product sales is not just immoral; it creates an obvious barrier between the agent and the customer. If you have a family member who is sick or needs certain medicines to live, you will put that family member’s interest ahead of your clients; it’s human nature. While Equitable was not mentioned, the article reminded me that I had researched this issue in the past and was shocked to find out that this nonsense was also disclosed.

Here is a link to the disclosure document that references the shenanigans:

Here is the section on proprietary products (emphasis added):

“Equitable Advisors and its FPs receive other compensation and benefits related to recommendations of or involving Proprietary Products. Specifically, consistent with Internal Revenue Service (IRS) rules, FPs must meet certain minimum sales requirements in proprietary insurance products to qualify for health and retirement benefits provided by Equitable Financial, and this is an incentive for FPs to recommend Proprietary Products over third-party products.”

Agents who refuse to sell proprietary Equitable products may not qualify for health and retirement benefits. If ever there was a reason not to tie health insurance to one’s employer…

It gets worse.

Equitable’s disclosure document seems like it’s written purely to gaslight their customers.

The beginning of the Equitable disclosure document states:

“In providing this guidance, whether with respect to brokerage or advisory products or services, we are obligated to act in your best interest.”

I’m unclear what Equitable thinks the term “obligated” means, but I don’t think it means what they think it means.

Obligate literally means “to bind legally or morally.”

In one paragraph, they are telling you that they will “bind legally or morally” to act in your best interest, and then in another, they force their agents to sell you products that are not likely in your best interest while holding those agent’s health insurance hostage. There are several other huge conflicts disclosed in the document. 

This is gaslighting.


As if dangling health insurance as an incentive isn’t enough, Equitable continued down a path trodden by the National Tax-Sheltered Account Association (NTSA) in claiming something to be true without providing credible evidence for it.

Equitable released a “study” that seemingly disproves everything we know about behavioral finance and psychology.  Equitable wants you to believe that there exists an exception to what is known as The Paradox of Choice when it comes to public school employees in the United States and their 403(b) plans. If this claim were true it would be groundbreaking.  In reality, it seems they’ve commissioned an online survey designed to get the results they desired. 

I can’t say with certainty that they purposely designed the study to get the results they wanted because Equitable won’t release a detailed methodology, so I’m left to ponder whether they have truly made a breakthrough in the field. I have emailed Equitable and tweeted out to them asking for the detailed methodology. Thus far, no response. Mark Twain once said, “Lies, Damn Lies, and Statistics,” about the use of numbers in trying to sway opinion. 

Equitable (and the NTSA) would have you believe that the more vendors you add to a school district 403(b) plan, the more participation will rise. They want you to believe that there is a causal connection between the two. Behavorial science and behavioral finance have demonstrated that the more choice a human is offered, the less likely they are to make a decision. Equitable would have you believe that this phenomenon magically disappears when presented in the context of an obscure retirement plan in a public school. 

The truth, more likely, is that Equitable is terrified of losing access to public school districts. They’ve no doubt observed that educators across the country are waking up to the high fees and costs they are paying in their 403(b) products and demanding better. 

If the multi-vendor environment is so good for the employee, why aren’t companies like Apple Corporation rushing to ditch their single vendor plans (Apple uses Fidelity Investments)? If having multiple vendors is so beneficial, why is there so much opposition to adding at least one low-cost, high-quality vendor?

Can we expect that Equitable employees will now be offered multiple 401(k) vendor options going forward? I suspect not.

Would it surprise you to know that as of February 2021, fully 29% of Equitable’s 401(k) is invested in low-cost index funds?1 What’s good the for the goose I guess…

I wrote a piece on a prior NTSA “study” debunking the “choice” myth a few years ago; you can find it here.


This brings us to the third piece of the Bermuda Triangle, phishy email marketing (and creepy freedom of information act requests).

Equitable is locked out of most school campuses due to the pandemic. They’ve likely noticed that many of the worst vendors are having success using deceptive emails to lure unsuspecting public school employees into appointments. Instead of doing the right thing and working to stop such email abuse (we call them phishy emails), they’ve decided to join them. Here is an example of one they’ve sent out recently:

Subject: CALSTRS and 403b Review with (agent name)

Dear xxxx,

My name is (agent name), my firm specializes in the CALSTRS pension and I handle the 403b, which is your 401k for the (insert name) School District. This is the time of year for open enrollment and to meet with employees to review their plan options. I am available throughout the day and night to meet with you to review the 403b offered by the district and answer any questions that you might have. Let me know what works best for you.

I am looking forward to speaking with you!                                                                                                                                       



PS. If it is easier, please click my calendar link below to see availability and schedule an appointment.

Here are the issues:

1. Using CalSTRS in the title is an attempt to use the credibility of an entity in which Equitable has no affiliation. Notice they capitalize CalSTRS incorrectly (CALSTRS).

2. This teacher has no relationship with Equitable and thus no review is necessary; worse, this particular teacher has a 403(b) with CalSTRS, which adds to the confusion.

3. “I handle the 403(b)…for (your) district” - This is a flat out lie. This teacher works in a school district that offers multiple vendors and no vendor is given the sole job of handling the 403(b). In fact, in this district, these emails are prohibited by the compliance administrator. The person sending the email is an employee of a vendor who is allowed to distribute a 403(b) product, not the person or entity who “handles” the 403(b). Using this language, the broker also appears to be affiliated and thus endorsed by the district, even though they are not.

4. There is literally no “time of the year” for “open enrollment” - you can start and make changes to the 403(b) at any time of the year in this (and most) district(s).

I’m unclear how the above email passed through the very strict compliance rules that brokers must abide by. One thing is clear, the desperation of these agents is palpable. 

If the above email upset you, the next piece of information should send you into a rage.

Equitable sent a Freedom of Information Act request to 27 school districts in Michigan requesting the following info for all employees:

1. Full name

2. Job title

3. Job location

4. Salary

5. District - years of service

6. MI ORS - years of service

7. Employee address

8. Cell phone number

9. Home phone number

10. Date of birth or age

11. Email

Yes, you read that correctly; Equitable sent out a request to get your home address, home phone, mobile number, date of birth, and email. Talk about creepy. 

The Michigan Office of Retirement Services warned their school districts about this request:

Though you work for the public, the public does not by default get access to your personal information. Thankfully, the request was denied, but how many school employers sent this information without thinking about it (my hope is that number is zero). The question remains, what would they have done with this information had they received it?

We are in the middle of a once in a lifetime pandemic (we hope), and school employees are being stretched to the brink; some have died, others are feeling intense stress and pressure, and most are severely underpaid for the work they do. Our education employees are often forced to work in unsafe conditions and then face ridicule when they express frustration and fear. On top of all this, education employees are viewed as prey and feasted upon.

Michigan educators deserve an apology and Equitable deserves a visit from a regulator.

It seems to me that Equitable is like the proverbial cornered rat. They see the end is near for their business model and are lashing out in a final act of self-preservation. 

There is a war on for your retirement dollars. Those waging it are not concerned about your best interest; the evidence shows they are more concerned about their bottom line. School employees deserve better.

1, Investments Section on 2.8.2021