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Kevin P

403(b) Choices

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Hello everyone. We (my wife and I) are new to the forum. Thanks for doing this by the way. It's awesome to have a resource like this to help people who don't have a lot of knowledge. We started looking for info because after receiving her last quarterly statement we felt the fees were to high. She's bringing her vendor list home from school today so I don't have that yet. Here is a list of her current holdings along with their loads and expense ratios. I originally read here statement incorrectly. Turns out the one transaction ($87.06) is a Premier Fee renewal on a Lord Abbett Growth fund.  Not sure what that is or how it's figured (a % of holdings)? The end of the statement had the advisor fee - 1.25%. She is currently with Lincoln Investments. We are also considering an appointment with a fee only advisor to evaluate our finances. Has anyone ever used one? Thoughts? We appreciate your time. Thank you. 

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Kevin, that list of funds reflects an "advisor" that is doing very well for himself and for those various fund companies. But not so well for your wife! Those loads and ERs are really awful! Is she also paying an advisor a fee for this collection? I haven't looked up to see how those funds have done over the years because the fees are so high that I wouldn't want to own them no matter how well they have done in the past! Please find out the exact name of the Lincoln Investment plan. They call them Platforms. 

Let's hope that the list of 403b and 457 vendors that her school district allows her to use has some lower cost options. Even if she is stuck with Lincoln Investment, I think there are lower cost options possible.

What state are you in? Some states have low-cost 457 plans available to teachers.  

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Kevin

8 hours ago, Kevin P said:

 We are also considering an appointment with a fee only advisor to evaluate our finances. Has anyone ever used one? Thoughts? We appreciate your time. Thank you. 

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Kevin, these fees are truly awful. What competent advisor would put a client in so many holdings ? I haven't checked out the funds but O would guess there is plenty of overlap.Your wife is getting ripped off beyond belief.  Are you sure you need a fee only advisor at this moment? Sure its a smart choice but perhaps you do not need one right now If all you going to do is pay him to pick funds in your 403b plan. I would hold off on that right now. Once you get that vendor list the folks here might be able to fix her account and advise what to do. No need IMHO to spend more money right now on a fee  only advisor unless you have something complex going on in your finances or need financial counseling beyond your retirement saving. Can't you access her vendor list online?

Basically we need to hope you have at least one good choice among the many turkeys that are common in school 403b plans. Your 457b might offer some hope as Krow mentions. Please give us more information on how much you all are saving, your ages etc so we can draw some proper conclusions as to whats best for you two going forward. 

I truly believe you can get competent advice from the folks that post here and its 100% free. Collectively I think we've pretty much been through it all and want to help.

Thanks for posting.  

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Thank you both for the response. My wife teaches in NY. To my knowledge the list is not available online but she was going to stop in the office today to get the list. If so I will post it tonight. Part of the reason we were contemplating the advisor is because we have the following - Sep IRA (me), 403B (her), we both have Roths, three 529 plans for the kids & insurance policies. I'm in a family business that will someday be left to my sister and myself. It's not a wealthy industry but still not sure what planning we need to do for that. We've never looked at everything as a whole to see if our allocation was proper. We also wanted to attempt to set some sort of retirement date and calculate if we were setting enough aside to meet that date. All a bit overwhelming. Given that we are both 44, the sooner we "straighten out" our approach the better. The advisor is still up in the air. Lets start small and straighten out the 403b first.

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I don't know your allocation but I looked up the investment strategy of your funds. There is too many repetitive funds in this portfolio. This could be easily narrowed down to half the funds you currently own. Also the fees are way excessive. This portfolio is not serving your wife well at all. Plus these are all managed funds which usually underperform their indexes. A simple three- four fund index portfolio would cover same allocation at a much lower cost and overtime  perform better . Also you have little  international exposure from what I can tell. I would fire this advisor. He is milking your wife.  I've seen this nonsense before and its very sad that they do this to an unsuspecting teacher but thats how they make their living. I would initiate a transfer  as soon as we can find a better option.

 

LGLAX-Lord Abbett Growth Leaders Fund Class A  Large cap growth

Federated Bond Fund Class A Shares Corporate Bond

GFAFX-Growth Fund Of America-Large Cap Growth

FKiNX-Franklin Income Fund-Large Cap Growth - Bond Allocation

STIAX-Federated Strategic Income fund-Large Cap Stock -Bond Allocation

PGSGX- JPMorgan Small Cap -Small Cap Fund

0SGIX-JPMORGAN Mid Cap Growth -Mid Cap

SAMCX-Saratoga Moderately Aggressive Balanced Fund-Large Mid cap -Small Cap

PSOAX-JPMORGAN SMALL CAP VALUE FUND-Small Cap

FBTAX-Fidelity Biotechnology Fund-Large-Mid-Small Cap

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Kevin,

Let's get to the point because your wife is getting ripped off, as others have already said:

FIRE THIS SO-CALLED "ADVISER" NOW!

Those commissions (loads) are absolutely hideous! He or she has plenty of others who he or she is bilking. IT'S A SHAME and this abuse will not stop for another generation of teachers.   

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This kind of stuff should be illegal. I stand by my earlier statements that school systems should be held responsible for allowing such thievery. When they allow it, they are condoning it. Ignorance is no excuse. Districts need to be sued.

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Kevin,

Welcome to the forums. While the sentiments here are strongly expressed, understand that neither you nor your wife had little to no opportunity for success without doing the research that you are now exposed to here. The current 403b system in NY is stacked against participants. You have probably figured that out by now but by no means should your wife feel like she should have or could have made a better decision up until now. There are unfortunately thousands more who will not get the memo, or understand it when it comes in front of them.

Good luck. 

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You’ll want to get the full list of vendors for both the 403b plans and the 457b plans. If you don’t know the difference, ask and we can explain.

I strongly agree with everybody else. Those fees are way too high and the “advisor” is acting in their best interest, which is in direct conflict with your interests.

We can get you pointed in the right direction when you have the complete list of available vendors. 

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Here is what my wife forwarded to me:

Here is list of investors:

  • Legend
  • AXA
  • Voya

*Legend approves who we do business with as they have the contract with the district. 

WOW! was all I could respond to her. I assumed there would be more options.

So I went to Legend's website. They offer many options. Vanguard being one of them. I'm assuming that she would still have to deal with a rep which is going to charge a fee?

 

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3 hours ago, Kevin P said:

Here is what my wife forwarded to me:

Here is list of investors:

  • Legend
  • AXA
  • Voya

*Legend approves who we do business with as they have the contract with the district. 

WOW! was all I could respond to her. I assumed there would be more options.

So I went to Legend's website. They offer many options. Vanguard being one of them. I'm assuming that she would still have to deal with a rep which is going to charge a fee?

 

Can you provide a link to the Legend website? Who does the "advisor" work for? Is Legend the third party administrator (TPA)?

I assume the 4 vendors you listed are on the 403b vendor list. Is there a 457 list?

Because your wife teaches in NY state, she should be able to contribute to the NY state 457 plan which is available to all NY state teachers. However it may not be on her district’s list of 457 vendor choices. In fact her district may not even have a 457 vender list!? There could be several reasons for that possibility, none of which are valid. So I think finding out about the NY state 457 should be a priority. It’s an excellent low-cost plan.

NY state 457 plan: guide to investing  https://www.nysdcp.com/tcm/nysdcp/static/Brochure_NYSDCP_Education_Kit.pdf?r=1

plan partners & fees https://www.nysdcp.com/tcm/nysdcp/static/fee_transparency.pdf?r=1

update to recent changes  https://www.nysdcp.com/iApp/tcm/nysdcp/about/fund_change_2017.jsp#_ 

Your wife cannot move her 403b account money into the 457 plan if both plans are with the current school district. So even if she can set up and contribute to the state 457 plan, she needs to find a better 403b solution. Please post a link to the Legend website. I think I've read that Legend and Lincoln have recently joined to form one company.  

 

 

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http://www.lincolninvestment.com/

http://www.lincolninvestment.com/assets/pdfs/available_fund_families.pdf

 

Advisor has been in practice for 29 years, the last 24 years at Legend Equities Corporation, Lincoln Investments. You are correct in that they are one in the same. I don't believe the school has the 457 option. I will talk to her tonight and have her ask. 

 

Thank you for the links about the 457. I will read those tonight. 

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There is another possibility with Lincoln Investment (LI) and that is their Participant Directed Platform. It seems to be available to all districts in NJ that have LI on their provider list. I think it is allowed in a few NY school districts. Permission to use it must be received by a LI regional office (not from a local rep). Lincoln obviously wants to restrict its use and publishes nothing about it on the internet.

Here’s a recent thread on it:

 

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