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  1. MO districts join to form low cost 403b/457 plans

    As I understand, the representatives make more when placed in managed accounts. I just hope the aspect of earning more money by placing a 24-year old in a managed account doesn't override doing the right thing and placing someone that young in a low-cost target fund. To the uninformed, a managed account sounds more impressive and if the representative doesn't explain things equitably, many might make the wrong decision. Also, how do we know the representative won't roll all these accounts over to Traditional IRA VALIC annuities to earn commission after the teacher retires. I just hope the representative is honest and can ignore the temptations of placing people in a high-fee products to get commission.
  2. 403b Annuity Salesman Perspective

    I love target funds and place myself in target funds. However, every client I stick in target funds get rolled out because the annuity agent claims he can do better. I have to defend target funds everyday, because annuity agents say they are for people that don't know what they are doing. I am in the field everyday and this is what I run up against.
  3. 403b Annuity Salesman Perspective

    Administrators don't know the difference and think everything is the same. The don't even know about custodial accounts. Most teachers are just confused and don't want to bother about the differences between products. They just want to know they will be able to retire on time with a nest egg.
  4. 403b Annuity Salesman Perspective

    I agree. You should be in a self directed plan and stick yourself in a low-cost target fund if you don't know what you are doing...otherwise you are being ripped off. The problem is 403b annuity salesman bash that approach and say they can do better and the teachers have no clue, so move out of them over to the high cost commissioned product annuity. I see it all the time.
  5. Model Disclosure form & the 403 B task force

    This is a joke. They need a single vendor policy implemented in each school district. The school district should put out bids every 5 years in order to maintain the best plan. They should have a fiduciary responsibility for their employees as well. The reps should be salaried that are in the schools as well. In the private sector, you don't see 10 401k plans and each company sitting in the lounge trying churn your portfolio over to their company.
  6. MO districts join to form low cost 403b/457 plans

    My question would be the will the VALIC rep make more money by placing them teacher's in managed accounts? Are we leaving it to the VALIC rep to educate the 24-year old teacher whether to go active verses passive approach with 40 years till retirement? I would like to know whether there is a potential monetary conflict of interest.
  7. 403b Annuity Salesman Perspective

  8. 403b Annuity Salesman Perspective

    I know we talk about how great Aspire is on this board and rightfully so. However, many independent brokers sell Aspire in the schools, but charge a 1% to 1.25% wrap fee on it. So make sure the product you sign up for is direct and not through a broker.
  9. Even though it is a multi-vendor platform, the Iowa model is better than current course of things in most districts.  Some 403b companies are hiring people and paying them salary to offer their 403b7 platforms.  Salaried personnel are not as aggressive as commissioned agents as they don't make a couple grand off the rollover or over 8% on the new contributions, and that is why participation has dropped.

  10. Actually, they are hiring salaried agents to sell their products in Iowa and North Carolina because the commissioned agents are refusing to sell products they don't get paid on. 

  11. 403b Annuity Salesman Perspective

    Went to a vendor fair recently and every teacher ran to the young, good looking 403b-annuity salesmen and their 2.2% VA, 12-year surrender charge. What is so sad is there was someone offering the NEA Value Builders DIRECT investment platform two tables down...I think it around 35 basis points. Not one teacher went to the table to fill out an interest card. We older brokers know what is the best investment, when talking among ourselves, but most say nothing to teachers when asked by them what distinguishes the different products. The districts need an auto enrollment, single provider, low-cost 403b-7 platform. It has to be auto enrollment or the most teachers will not sign up because there wont be a commissioned sales agent prodding them to sign up. Stick everyone in a target date fund based on their projected retirement date. If they want to go in and change it later, they can. It is not rocket science.
  12. 403b Annuity Salesman Perspective

    A logical choice, if you have zero investment experience, is a low-cost index target date retirement fund. It is not a "cure all" and not for everyone, but if you don't know what you are doing, this can be a good choice, in my opinion. If a broker bashes your choice and says he can triple your return, by moving you out of it, is he really going to be around every year to make sure you are invested according to your risk tolerance and time horizon? I think not.
  13. 403b Annuity Salesman Perspective

    Most of us are selling as brokers, earning commissions. We are not wearing the advisor hat when selling you a high-cost product. Most don't know the difference and the financial representative will not tell you the difference. It is mind boggling we have "advisors" on our business card, when 99% of the products we sell are as brokers with no fiduciary responsibility. We are technically not supposed to pick the funds for you, when we sell as brokers, because they are not investment advisory accounts. The teacher doesn't know the difference however. Many of us have over 1300 contracts to look over. Do you really think the representative is going back to look over the risky investments he placed the teacher into every year or is he going after new clients for new commission. I have seen teachers in their mid 40s who said they were conservative investors, but placed the year before into a 50% small cap, 20% international, 5% large cap index, and 25% fixed account. Is the rep going to go back to correct this travesty? Brokers love to bash those in target funds. They call them lazy funds that don't do their job. They promise the naïve that they can do better. How long will they be around to check with the client to see if they are investing correctly with their actively managed funds. I have a hard time believing someone with over 1300 contracts is meeting with every client once a year.
  14. 403b Annuity Salesman Perspective

    Couple more points: I overheard there was study done and that Iowa 403b participation is down 50% since they went to the lower-cost state sponsored plans and replaced the 403b-1 annuity insurance companies. Now some are claiming this is a failure and yearning for the 403b-1 to make a comeback. It doesn't take a genius to figure out why participation is down. They don't have insurance agents knocking on teacher's doors selling them high-cost products now and the salaried or non-commissioned agents that replaced them are not as pushy since commission is not involved. Also, I spoke with a couple of agents in different states with self-directed state sponsored 403b plans and they love them, because they can pick them apart saying they are not actively managed and that there is no face-to-face contact and that they have no problem in rolling them over to higher cost products. I think this is a problem too.
  15. 403b Annuity Salesman Perspective

    I think eliminating the surrender charges on 403b-1 annuities would be a positive first step. If the teacher becomes better informed or leaves the district, they can move their money at will. I also think that single-fee vendor should not be self-directed. The reason is most teachers will not sign up for anything unless they have face-to-face contact. They want their hand held. I think the single vendor should be fee-based, not commission-based,and the wrap-fee/advisory fee should be around 20 basis points all in. They should use institutional shares rather than retail shares and there should be over 100 funds available out of 36k at any given time to choose from. I have heard this is not an unheard of request if there are enough assets transferred over. This is just my opinion of course and there are better ideas out there .