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#1 NJ25

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Posted 04 March 2008 - 09:23 PM

Hi everyone.

I'm new to the board, but after 5 years teaching in NJ, I'm finally starting to wise up to all the ###### going on between the unions and some 403b providers. I have about 10k invested in AXA (I have a ratio of 10% fixed and 90% stocks). Thus far, my 403b has returned a paltry (sarcasm) 1.9%. I have been told to chalk it up to the market being very volatile - especially over the past year and a half.

I'm curious to see what everyone thinks of the AXA funds. I've read a half dozen articles tonight and none list Equitable as one of the worst, but I'd hate to realize in 35 years when I retire that I pissed away a few hundred grand.

What should I ask my "financial advisor" to ensure that I'm not getting ripped off? Should I transfer my funds to a different provider?

I'd really appreciate any advice on this matter. They don't teach you this shit in college.




#2 apteacher

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Posted 04 March 2008 - 10:01 PM

QUOTE(NJ25 @ Mar 4 2008, 06:23 PM) View Post

Hi everyone.

I'm new to the board, but after 5 years teaching in NJ, I'm finally starting to wise up to all the ###### going on between the unions and some 403b providers. I have about 10k invested in AXA (I have a ratio of 10% fixed and 90% stocks). Thus far, my 403b has returned a paltry (sarcasm) 1.9%. I have been told to chalk it up to the market being very volatile - especially over the past year and a half.

I'm curious to see what everyone thinks of the AXA funds. I've read a half dozen articles tonight and none list Equitable as one of the worst, but I'd hate to realize in 35 years when I retire that I pissed away a few hundred grand.

What should I ask my "financial advisor" to ensure that I'm not getting ripped off? Should I transfer my funds to a different provider?

I'd really appreciate any advice on this matter. They don't teach you this shit in college.

Way to go, NJ! I like your attitude! You're not willing to put up with the nonsense. And you are learning at a young age. Excellent!

What should you ask your adviser? First of all, in all likelihood, he is not an adviser. He is a salesperson. Repeat after me, he is there to SELL you products. He is not there to meet your financial needs. Drop the word "adviser" from your vocabulary. Then:

Ask him if the products he is selling you charge front end loads, back end loads, surrender fees, and 12b-1 fees. If his answer is "Yes" to any of those, ask why he would put you into such products. This may get his attention. However, judging from your post, you have lots of NJ moxie, and I suspect you may actually enjoy his discomfort a bit. For extra fun, ask him if he owns these same products.

As for AXA Equitable, I like to look at it as one of the usual list of suspects - an insurance company with high fees and lousy products. Others may want to chime in.


#3 danc

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Posted 04 March 2008 - 10:02 PM

AXA is a typical high cost, expense laden provider. Your "advisor" is paid to distribute product and keep you in line, and keep you in the fold, year after year after year. You have read these posts by Joel & APTeacher & Tony and other well-informed educators. You have also read the posts from agents -who do not want to see the status quo change a bit. Very simply - once you wise up to the game - minimize your fees, determine an appropriate asset allocation, and pay attention so you do not get ripped off.

If you have another vendor that can help you do these things, go for it. By the way, nice to see that the profanity filter is working!


DC

#4 NJ25

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Posted 04 March 2008 - 11:37 PM

Thanks for the feedback. I'll be sure to call my "advisor" during the week.

Where would you suggest I go? I've read about Vanguard, Fidelity, and T. Rowe Price, but will I be able to transfer my money to any one of these 403b providers if my district union does not endorse them?




#5 Ferret

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Posted 05 March 2008 - 12:50 PM

You are lucky that you only have 10K w/AXA, by the time we moved my wife's 403(b) to Tiaa Cref it was 65K+ & we still moved it. AXA was a black hole of low returns & high costs - coupled with a useless website. If you are going to do it, don't wait !

I bet you are tired of looking at that 800lb gorilla !!! (AXA web thug ? I'm surprised its not a monkey ! )

#6 tony

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Posted 05 March 2008 - 03:02 PM



I'd like to know how our friend in New Jersey got passed the filter !! I have never been able to do it. I get XXXXXXXXX!!!


I think no choices are better than bad choices. I really do. If your 403B choices are bad I'd invest elsewhere
like tax efficient accounts or IRA's or both.


IT really is time for us to start sending strong messages that we won't but up with all that crap that is told us by these reps and their companies. Don't pay those fees.

Refuse to lose!!!

#7 Guest_Skeptical_*

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Posted 05 March 2008 - 03:40 PM

I thought AXA was one of those "best in class" providers that will save Florida teachers billions in expenses. Ha! Just a little humor on a quiet afternoon.



Cheers,

Jim



#8 TimDex

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Posted 05 March 2008 - 04:34 PM

What you need to look for is the list of finance companies serving your district and hope that one of them is a large mutual fund company (like Vanguard, Fidelity, T Rowe Price etc). Unfortunately, most of them will probably be large insurance companies, all of which do a marvelous job of hiding the fees. In which case, I would consider funding an IRA instead. Tim

#9 dcfas

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Posted 05 March 2008 - 04:57 PM

QUOTE(NJ25 @ Mar 4 2008, 09:23 PM) View Post

Hi everyone.

I'm new to the board, but after 5 years teaching in NJ, I'm finally starting to wise up to all the ###### going on between the unions and some 403b providers. I have about 10k invested in AXA (I have a ratio of 10% fixed and 90% stocks). Thus far, my 403b has returned a paltry (sarcasm) 1.9%. I have been told to chalk it up to the market being very volatile - especially over the past year and a half.

I'm curious to see what everyone thinks of the AXA funds. I've read a half dozen articles tonight and none list Equitable as one of the worst, but I'd hate to realize in 35 years when I retire that I pissed away a few hundred grand.

What should I ask my "financial advisor" to ensure that I'm not getting ripped off? Should I transfer my funds to a different provider?

I'd really appreciate any advice on this matter. They don't teach you this shit in college.


Check with your business office on what providers, other than AXA, are offered. If Vanguard, Tiaa-Cref, TRowe Price, or Fidelity are offered, open an account with one. Stop contributions to AXA. Start contributions to your new, low cost, no fee provider. In the mean time, consider transferring your assets from AXA to your new provider but don't rush into it. Educate yourself on what fees and costs you will have to pay. When you understand what it is going to cost you, plan for it and then make the transfer.

Start reading up on the above financial companies-- many people here are fans and customers of Vanguard. I have an index fund of funds which includes one "basket" full of index funds for a total of 0.21% and 15 bucks a year. Its allocation historically averages 10%. I say go with an index fund.

Good luck,
d

#10 NJ25

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Posted 05 March 2008 - 10:13 PM

Thanks for all the feedback!

I called my Central Office and they faxed me a list of companies that work with the district. I discovered that Fidelty is actually one of the providers we deal with. I called the gentleman this afternoon and we had a very lengthy discussion that was quite revealing. The company seems to have a great reputation both on this board and in some other literature I've read, so that is pretty comforting.

I got off the phone and immediately called AXA to question my 403b. I discovered I am paying for a life insurance that included with my funds. Kicker is, not only wasn't I even told about this when I initially set up the account, but it costs 1.34% for each fund and I only receive the "benefit" if I die AND the current balance in my account is less than the amount I contributed since inception. And even if that did indeed happen, I only get what I put in. Unbelievable. AND on top of that 1.34% for insurance fees, I pay an additional fee for the funds which range anywhere from 0.34 - 1.5%!!!!!!! That is a fee as high as 2.54% on some funds!!!!!

Additionally, I discovered that my surrender fees include a $50 administrative fee and a $500 withdrawal fee - or basically 6% of my contributions. But I figure sacrificing this 6% now will be much more cost effective than the hit I take in the long run staying with a company like this.

Teachers really ought to know about this stuff so they don't get taken advantage of.


Steve


PS - I kept it clean this time! Sorry about that!!!

#11 apteacher

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Posted 05 March 2008 - 11:12 PM

QUOTE(NJ25 @ Mar 5 2008, 07:13 PM) View Post

Thanks for all the feedback!

I called my Central Office and they faxed me a list of companies that work with the district. I discovered that Fidelty is actually one of the providers we deal with.

I got off the phone and immediately called AXA to question my 403b. I discovered I am paying for a life insurance that included with my funds. Kicker is, not only wasn't I even told about this when I initially set up the account, but it costs 1.34% for each fund and I only receive the "benefit" if I die AND the current balance in my account is less than the amount I contributed since inception. And even if that did indeed happen, I only get what I put in. Unbelievable. AND on top of that 1.34% for insurance fees, I pay an additional fee for the funds which range anywhere from 0.34 - 1.5%!!!!!!! That is a fee as high as 2.54% on some funds!!!!!

Additionally, I discovered that my surrender fees include a $50 administrative fee and a $500 withdrawal fee - or basically 6% of my contributions. But I figure sacrificing this 6% now will be much more cost effective than the hit I take in the long run staying with a company like this.

Teachers really ought to know about this stuff so they don't get taken advantage of.

Steve


Steve,

You are typical of so many people who have been taken to the cleaners by unscrupulous insurance salesmen. The 1.34% sounds like it was for "mortality and expense" - the ol' M&E.

If the Fidelity funds you have access to are "Fidelity Direct" rather than "Fidelity Adviser," you are in good shape, especially if you have access to Fidelity Spartan funds. These index funds charge only .10%. In other words, when you were paying 2.54%, you were paying 25 TIMES WHAT YOU WOULD BE PAYING FOR FIDELITY SPARTAN. And you can build a terrific portfolio around the Spartan funds.

The great thing about all of this is that you are young, and figured this stuff out long before many of us on this forum did. Good for you! Keep up that NJ attitude!

#12 ratski

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Posted 06 March 2008 - 12:40 AM

I played lemming and also opened an Equitable account years ago. Then I discovered the 457b plan. In my state the fees are low, low, low. Just a couple of years ago, I learned that I can put money in both, thus doubling my contribution limit. This has been a handy way to keep my family in a lower tax situation.

#13 NJ25

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Posted 06 March 2008 - 10:53 PM

Great advice.

I'm meeting with Lincoln Financial tomorrow. Any feedback on them?




#14 apteacher

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Posted 06 March 2008 - 11:58 PM

QUOTE(NJ25 @ Mar 6 2008, 07:53 PM) View Post

Great advice.

I'm meeting with Lincoln Financial tomorrow. Any feedback on them?

Lincoln Financial is also on the usual list of suspects. Ask the salesperson the same questions I posed in a previous post and let us know his reaction:

Ask him if the products he is selling you charge front end loads, back end loads, surrender fees, and/or 12b-1 fees. If his answer is "Yes" to any of those, ask why he would put you into such products. This may get his attention. However, judging from your post, you have lots of NJ moxie, and I suspect you may actually enjoy his discomfort a bit. For extra fun, ask him if he owns these same products, and if he pays the same fees you would pay.

#15 tony

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Posted 07 March 2008 - 07:49 AM




I was with Lincoln Financial for a short time. Still an insurance company, still an annuity situation,. They come on with Big Name Fund names like Fidelity, American, Janus etc but they are at a higher price than you can normaly buy them direct. Your fees are higher than they need to be.

You can do better.