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Our Recent Experience With Axa

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Hello to all! I recently came across 403bwise after doing some financial planning and have found it to be an incredible resource. I'll start with a short introduction-my wife is a teacher in her 18th year and I've worked in the medical field as an -ray tech for 20. We are 39 and 42 respectively and have 2 children ages 15 and 13. We live in rural Southern Illinois. We have followed Dave Ramsey's debt snowball and budget plan for several years and are completely debt free(did our debt free scream live on-air and got the tee shirt). We have always been savers into our employer 403b and 401k plans from the very start of our careers. My wife is on board with all of our financial decisions but doesn't care to do the actual handling of affairs so I pretty much take care of that end of things.

 

From her very first paycheck, my wife has contributed 10% into her 403b. For the first four years she was buying American Funds through a local investing firm, but then she switched employers and had to go with an insurance company, Northwestern Mutual. That company got out of the game in 2008, and her school district now only has 2 options, American Fidelity and AXA, and we have been with AXA since then. Our experience with AXA has been frustrating at best and very recently downright horrible. Our contact "advisor" has changed multiple times with no warning, phone calls are mostly not returned, and in general its a headache every time the name comes up. Even though the service has been bad, we have plowed ahead because of the convenience. I know that's not a good excuse, but we save best when the money comes out before we cash out pay checks. I have always known that the fees were higher than they should be and for the past couple of years I've been thinking that we should be doing Roth IRA's instead, but again convenience. I don't really want to know what this convenience has cost us. About a month ago, my company provided the employees with a free session with an independent financial advisor and I set up a meeting with the sole purpose of having him review my wife's 403b. Naturally, he suggested that we would be better off funding either traditional or Roth IRA's, but he did recommend the Roth option for us.

 

So, this got us looking into what exactly it was costing us to invest with AXA. This has always been confusing because none of the advisors would EVER pin point it out. I guess maybe someone people can decipher an AXA prospectus, but I cannot. I found a phone servicing center and finally found out that her account has a 1.1% sub account fee and a 1.34% mortality expense. After getting the name of our current "advisor" from the school, it took several days of calls and phone messages to get the person on the phone. His first question to me was "what makes you think I'm your advisor?". I told him that we were going to be making some changes in our investments and he instantly said that we don't want to do that and that we needed to meet. He came to the school on Monday and we met, or as my wife said argued, for an hour. I had told him beforehand on the phone that we were meeting to go over the account fees and he said that he would be more than glad to do that and that its mandatory for his company to disclose all fees. During our meeting he told at least 4 untruths, or lies if you would like. He insisted over and over that the total account fee averaged .80% and flatly denied that there was a mortality expense. He said that "whoever told me that didn't know what they were talking about". He grossly under quoted what the surrender charge for the account would be. When I asked if he had fiduciary responsibility he said that "yes I do". And lastly, he went on this long spiel about how regulated the 403b market is, unlike 401k plans, so that we should feel comfortable knowing that there is oversight. I couldn't believe he was saying this so I asked if my wife's 403b plan was subject to ERISA laws and he said "yes it is". Unreal!! I'm sure that he thought that we would both be clueless about what he was telling us and that we would be impressed with his minion sidekick, who didn't utter 10 words, his Rolex and his big Mercedes in the parking lot. Boy was he wrong on all counts!

 

Yesterday I called the Equi-Vest phone servicing center to again confirm that the account fees total 2.44%. The phone rep also confirmed that, of course, the advisor has no fiduciary responsibility, and that the plan is not subject to ERISA. She also gave me the correct surrender charge for the account. She sounded genuinely shocked that we had been told such obvious lies and said that she was opening a formal complaint with her compliance department on our behalf and that I would be hearing from them within a few days. Does anyone here have any other suggestions on a course of action against this "advisor"? I'm a realist so I know that probably not much will come of it and that it will be our word vs his. This person is a 20 year Vice President of some sort for his region. I know these people are scummy, but I was surprised at the depth of his lies. Depending on what AXA does, I will at minimum petition the school to have him removed from the account so that no one else there will be subject to him. If AXA doesn't want to push the issue, would this be something that could be appealed to FINRA?

 

Inspired by the podcasts that I have listened to on this site, I have already opened a dialogue with the district superintendent about the possibility of getting a low cost option available. He was open minded and is looking into it. I'm hopeful that something will happen because otherwise the money in her account will be stuck with AXA indefinitely. We would gratefully appreciate any feedback or suggestions on how to deal with this situation. Thanks

 

 

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If you were able to successfully go after the individual, and in my uninformed opinion I have no reason to believe it would be a success, I would still applaud you because they deserve a consequence for their immoral actions. However, if it were me I would not go after the individual because the individual is simply carrying out the core values of AXA. If the individual is removed, the machine keeps going. If it were me, and in some ways it is, I'd put all of my effort into two areas:

  • Educating everybody in the school and the district about exactly what is happening.
  • Lobbying the school district to replace every unethical vendor with ethical vendors.
This is exactly what I'm doing here in Orange County, Florida. You can check out my site at https://educatorsfightingforfairness.wordpress.com.

  • My blog documents some of the steps I've taken.
  • I've got a page documenting AXA in particular.
  • I've got a page calling for specific reforms.
You'll find some other stuff on the site and I'm always available to help in any way possible if you go down this road.

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Ed, thanks for the information. You have a great website, good for you for raising awareness!!

 

I agree, going after this guy would probably be a frustrating waste of time, however he deserves. I'm partly hamstrung because I don't work at the district and my wife doesn't want me causing major issues. I won't do anything until I get a reaction from AXA.

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Thanks!

 

We're in very similar situations. I'm a software engineer and I wish I could get into schools and raise some hell. My wife on the other hand wants to help people, but doesn't want to make waves. It is a classic problem, we're in great shape but trying to help people could hurt us and will not provide us with a direct benefit.

 

...I'm personally of the belief that attacking this problem without anger, but with pure concern for the teachers will not produce any negative issues for us. My wife isn't 100% sold on this notion.

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As a retired teacher, I can understand why teachers who are so selfless and spend 24/7 helping others would not want to make a stink. Teachers though need a push and shove in the right direction when it comes to these awful 403b plans. I am glad both you and Ed are encouraging your wives to open their eyes to the situation. I went through this with my wife too. She kept telling me that pushing the 403b issue would get us both fired from our jobs. Then I thought " This advisor is lying to us, stealing from us and others, and we are the ones who might get fired for being a whistleblower " ???? Makes no sense. You are dealing with a SCUMBAG who cares nothing about your wives financial futures. He must be exposed to as many people as possible before he continues to do more damage. Why is it though that so many folks tend to believe the advisor over a fellow teacher who knows the facts? I guess because they think the advisor knows more . They don't. So many of these guys are taught more about salesmanship and getting folks to sign on the dotted line than they are about investing. Sometimes they simply will do and say anything because the system they work in has them working on commission and teachers are easy prey. If they told the truth about what they are selling and the fees they charge no-one would buy in and they would starve!!

 

I would do everything I could to not give this guy or company another penny of your money. I would stop all contributions immediately. I would channel money to a Roth Ira with Vanguard for the time being. I would also correct him on his lies to his face. He probably gets away with his lines over and over again from unsuspecting young teachers and thinks you are just as naive too. Obviously you are not. I would also address this with someone in your administration and with permission talk to other teachers about this at a faculty meeting if allowed. I would go after the company and not the advisor.From there you may contact a school board member and ask if the board could work towards adding some decent choices. It can be done because I did it and so have others here on this board. I have said this before and I will say it again, you have nothing to fear by exposing this advisor and company. You are helping the greater good by doing so. You must do so.

Also I just noticed you have opened a dialogue already with the district superintendent. Thats a great start towards change.

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I loved your post Tony. You got me fired up a bit.

I thought "This advisor is lying to us, stealing from us and others, and we are the ones who might get fired for being a whistleblower"????


Let me start by acknowledging that the 403b/457b issue is, in reality, small potatoes. I know this, but I only know one way to engage in matters of right and wrong and that comes from Dr. King and Gandhi. In my view, they essentially laid out a theory of everything; their philosophy works beautifully at the personal, group, national, and international levels because it is based on a deep understanding of human nature.

One of the most beautiful aspects of their shared philosophy is how they view suffering. Suffering for a righteous cause is to be celebrated because it connects you to a higher level of humanity and softens the heart of your so called enemy. Both men transformed jail cells from things of shame and fear to badges of honor and human dignity.

I've internalized this to a deep degree and so if I were a teacher, and I know this isn't on the scale of Indian independence or American human rights, I'd happily invite any cost somebody was misguided enough to inflict. It would be an honor and I'd use it for everything it is worth. I want to go up against a Bull Connor, not a Laurie Pritchett.

He must be exposed to as many people as possible before he continues to do more damage.


I often think about this before going to sleep. We're obligated to do something.

I have said this before and I will say it again, you have nothing to fear by exposing this advisor and company. You are helping the greater good by doing so. You must do so.


YES!

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grw, thanks for telling us your story! You should check to see if there are other complaints against that rep. FINRA has a website for this: https://brokercheck.finra.org

I think you are certainly justified in making a complaint of your own. FINRA has information on how to make a complaint here: https://www.finra.org/sites/default/files/InvestorDocument/p011944.pdf

Prohibited Conduct

Certain types of conduct in the securities industry are prohibited, including the following:

  1. Misrepresenting or failing to disclose material facts concerning an investment. Examples of information that may be considered material and that should be accurately presented
    to customers include:
    the risks of investing in a particular security; the charges or fees involved; company financial information; and technical or analytical information, such as bond ratings. (bolding added)

 

Of course AXA deserves a complaint for not disclosing all the fees in your statements. You have a great opportunity to call attention to “Prohibited Conduct”. Too bad you didn’t get it in writing. They want to do a face to face so they can avoid anything in writing.

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Too bad you didn’t get it in writing. They want to do a face to face so they can avoid anything in writing.

Krow,

 

The agent can simply deny ever saying those things. It would be hard to prove and he could claim that he was misunderstood. The burden of proof would be on grw. Not worth the hassle but I would go through with it anyway just to put him on notice.

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Yesterday I called the Equi-Vest phone servicing center . . . said that she was opening a formal complaint with her compliance department on our behalf and that I would be hearing from them within a few days.

 

As the AXA service center is opening a formal complaint, I think grw should make the complaint also. A FINRA complaint will get attention, regardless of whether there's "proof".

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his Rolex and his big Mercedes in the parking lot.

 

They get the goldmine. We get the shaft. Its often the case in 403bland

 

To be fair not all 403b advisors are like this guy. Some are just good honest people trying to make a living in a bad system.Thats why I am more apt to go after the companies that force their employees to pedal these annuity products . When I hear about advisors like this guy it really upsets me but its his employer who must have allowed and enabled him to act like this.

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To be fair to the sales reps, I bet a lot of them don't understand investing themselves and just parrot what they've been told during a week of 'training'.

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To be fair to the sales reps, I bet a lot of them don't understand investing themselves and just parrot what they've been told during a week of 'training'.

 

 

 

Ed

 

Its true. I read once an expose' on what goes on in training these insurance guys . I've also known a teacher or two who left teaching for a financial career only to quit and return to teaching . Its a brutal way to make a living .They are sent off for a week to get training and most of it is on selling skills. They pay them very little base salary at first and they must sell, sell, sell in order to make it. Thats why so many drop out. Eventually if they stick with it long term they do start working on real financial credentials and gain knowledge along the way as well as professional designations. Some also have to pass tests eventually . Its true that they are giving a script to follow. Obviously the AXA advisor mentioned above is a seasoned salesman, who has learned the ropes enough to make good money in the career. Unfortunately the conflict of interest is a huge problem with the current set up of doing business. We know its an awful scenario for teachers but annuities sales still are very profitable and thats why they are so aggressively pushed.

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Krow, thanks for the link to broker check. This guy has 5 disclosures listed including a customer dispute pertaining to undisclosed variable annuity information and a termination from AIG for violating company policy and falsifying documents. Obviously this guy is complete scum and has no conscience. This is very good information to have.

 

Am I correct in understanding that AXA s required to report complaints to FINRA themselves? I'm still thinking I'll make a complaint myself, especially after learning that he already has multiple complaints.

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his Rolex and his big Mercedes in the parking lot.

 

They get the goldmine. We get the shaft. Its often the case in 403bland

 

To be fair not all 403b advisors are like this guy. Some are just good honest people trying to make a living in a bad system.Thats why I am more apt to go after the companies that force their employees to pedal these annuity products . When I hear about advisors like this guy it really upsets me but its his employer who must have allowed and enabled him to act like this.

 

 

Not just the companies. In California, we have an insurance code that protects insurance agents access to every classroom in California. No other vendor is allowed to come into classrooms during recess and sell textbooks, computers, desks, but the 403b salesperson is allowed and nobody can kick them off campus. Would you think the principal or school police? The principal perhaps, but our school chief of police has already informed our committee that they have no authority.

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