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How Many Hidden Costs Does Ameriprise Have?


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#1 emmie

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Posted 22 January 2007 - 05:31 PM

Emmie here. Our school division's choice of 403b providers is pretty dismal. I have Metlife, but would like to freeze my contributions, and transfer the part I am eligible to transfer to another provider. In a 90-24 transfer I understand that all parties involved must allow the transfer and that there is an 8 year surrender schedule. I would love to hear from anyone out there who has successfully transferred from Metlife. If I asked my Metlife rep point blank what the total yearly cost of running my account is, is she obligated by law to tell me including all those hidden costs? At our last meeting, she was extremely huffy when I discussed costs and when I told her about this website. I have a 100K in a Vanguard taxable account--they tell me the costs. If only my county offered something like Vanguard instead of Ing, Valic, Ameriprise, and the like. Would Ameriprise be the lesser of the two evils between Metlife and Ameriprise? I would love to take greater advantage of the tax savings a 403b would provide me, but the hidden costs make me ill. Any advice would be much appreciated. Emmie

#2 VAteacher

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Posted 22 January 2007 - 06:01 PM

Hi Emmie. I don't think your Metlife salesperson is obligated (by law) to tell you what you are paying, but they are at least obligated to give you the paperwork (prospectus) that shows the fees. But ask yourself, would you trust what a salesperson says to you about something as important as this?

Metlife is on my school sytem's list of providers and I found that almost all of the annuities they sell will involve anywhere from 2% to 3% in fees. You might as well continue investing in your taxable Vanguard account with those types of fees.

What you have to ask yourself is if you have to dig so hard just to find out what you are paying for something, should you really be paying for it? You know what eggs cost at the grocery store and the sales tax.

Hopefully someone else here knows about Ameriprise.

#3 apteacher

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Posted 22 January 2007 - 07:37 PM

QUOTE(emmie @ Jan 22 2007, 02:31 PM)  

At our last meeting, she was extremely huffy when I discussed costs and when I told her about this website.

Hmmm, isn't that interesting? I just can't imagine why the salesperson would be huffy when you asked her about costs. And why on earth would she be huffy about your mention of this web site?

(My sarcasm is just dripping at this point).

You might want to think long and hard about employing a salesperson who gets huffy with a client who is asking as basic a question as you are about costs.

While you are thinking about that, go to the following site, where you can find out about the MetLife costs:

http://www.403bcompa...l.aspx?vid=1315

I'm afraid the news is not good. If you are in the MetLife Financial Freedom Select (MFFS) program, you are paying 1.15 to 2.0% (!) for Mortality and Expense. You have surrender fees of up to 9%. If you are in the Preference Plus Account ("PPA"), you have Mortality and Expenses charges of "only" 1.25% and surrender charges of up to 7%. These costs, of course, are IN ADDITION TO the expenses of the underlying funds.

It's possible you are in neither of these programs, so be (politely) persistent in asking the salesperson about costs. Then report back here and let us know what you found out.

For info about Ameriprise, go to:

http://www.403bcompa...t.aspx?vid=1378

Unfortunately, that's pretty ugly, too.

#4 jerseyteacher

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Posted 22 January 2007 - 08:06 PM

Emmie,

I recently opened a 403b(7) with Vanguard after contributing to a MetLife account for nearly 7 years. Without paying any fees or penalties here is what you can do with MetLife:
-You can transfer up to 10% per year from your MetLife to your new 403b provider- penalty/fee free
-After 5 years of no contributions to MetLife you may tranfer the remainder of your balance
-For some reason MetLife's fiscal year begins in November so for example you can transfer 10% now but wouldn't be able to transfer again until November of 2007, and then November of 2008, and so on
-Also, you must fill out the asset transfer paperwork every year, you can't have it done automatically every year.

This process was a big pain for me to get through, but now that I've done it I'm very pleased to see my money moving, although slowly, away from MetLife and into a more efficient savings vehicle. Say goodbye to mortality and 12b-1 fees, and hello Vanguard.

#5 JMacDonald

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Posted 22 January 2007 - 09:42 PM

Hi Emmie,
You stated: "At our last meeting, she was extremely huffy when I discussed costs and when I told her about this website."

We just had a sales rep with the username of Blabbermouth come here upset because we are corrupting the youth on this website. I wonder if your rep isn't Blabbermouth. Read the post here:

http://bwise.ibforum...?showtopic=1854

You need to get away from MetLife ASAP. Do you have any other options other than MetLife? Best Wishes.

Joe

#6 fischermh

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Posted 23 January 2007 - 10:30 AM

I would agree that the rep is obligated by law to disclose the fees. If you ask the question, the rep has a legal obligation to answer it, and not just hand you a prospectus.
Mark Fischer, CFA

#7 Guest_Sierra_*

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Posted 23 January 2007 - 11:31 AM

QUOTE(VAteacher @ Jan 22 2007, 06:01 PM)  

Hi Emmie. I don't think your Metlife salesperson is obligated (by law) to tell you what you are paying, but they are at least obligated to give you the paperwork (prospectus) that shows the fees. But ask yourself, would you trust what a salesperson says to you about something as important as this?

Metlife is on my school sytem's list of providers and I found that almost all of the annuities they sell will involve anywhere from 2% to 3% in fees. You might as well continue investing in your taxable Vanguard account with those types of fees.

What you have to ask yourself is if you have to dig so hard just to find out what you are paying for something, should you really be paying for it? You know what eggs cost at the grocery store and the sales tax.

Hopefully someone else here knows about Ameriprise.


The salesperson is always obligated to tell you the costs of acquiring an investment. How else can you compute your gain or loss?

Joel