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403bannuitysalesman

School District District Got Rid of Vanguard Slot for Individaul Annuity Product

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Hello,

one of the districts I frequent went sole provider with the AXA series 201.  They had a Vanguard 403b-7 in place but the district shut that down, along with the other companies, and said they  were consolidating down to one provider. I asked why and they said it was easier for record and book keeping purposes. No one was using the Vanguard 403b-7, because it was not promoted and everyone had an AXA 403b. As I travel throughout the state, I see this from time-to-time: annuity companies phasing out the 403b-7 custodial companies self-directed programs because no one is using them or if there is a slot for them,  no one utilizes it and it goes away. 

There was a study done and it stated that only 18% of teachers care about fees in their retirement program.  What they want is for someone to communicate and be there for them  to help get them to retirement.  

Welcome to the world of chaos in 403b land. 

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1 hour ago, 403bannuitysalesman said:

here was a study done and it stated that only 18% of teachers care about fees in their retirement program.  What they want is for someone to communicate and be there for them  to help get them to retirement.  

Welcome back. This again is no surprise and again I repeat myself in my comments.  I am disappointed with the general lack of financial interest among educators. They are educated  enough and bright enough to do the needed research to do the right thing for themselves but they seem uninterested. The administrators have  no interest in making sure their employees are exposed to the best possible retirement options which is disgraceful.  Administrative support and leadership  could change  the landscape but they too are ignorant. They too don't get it. As a result folks like AXA can continue to take advantage of educators with slick marketing and salemanship . No surprise Vanguard has been eliminated. Its always caveat emptor in 403b land but the sharks paint a helping caring picture of themselves when in fact they are professional rip-off artists. It ought to be a crime but it ain't. If I had not figured it all out I would probably still be working and funding the sales agent's retirement instead of my own.

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3 hours ago, 403bannuitysalesman said:

What they want is for someone to communicate and be there for them to help get them to retirement.  

We're referring to the sales reps' retirement, right?

1 hour ago, tony said:

again I repeat myself...they seem uninterested

I must admit, the energy I had when I first got involved has been greatly diminished because of this fact. I'm always thrilled to help those who want to help themselves, but if those who are directly impacted don't care then my energy would be wasted on them.

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18 hours ago, 403bannuitysalesman said:

Hello,

No one was using the Vanguard 403b-7, because it was not promoted and everyone had an AXA 403b. As I travel throughout the state, I see this from time-to-time: annuity companies phasing out the 403b-7 custodial companies self-directed programs because no one is using them or if there is a slot for them,  no one utilizes it and it goes away. 

 

 

If it were promoted and sold like the AXA, it would be utilized. Also, there is another secret group of financially savvy educators whether administers or teachers who do know about all of the concepts we talk about here but they keep quiet and don't complain. 

When pensions are eliminated or benefits reduced, then educators might take notice. 

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Ed, I think he means teachers want someone to communicate with them and help take them into their own (teacher's) retirement. 

If say 40% of teachers use a 403b, (I don't know the actual percentage) and 18% care about fees, ugh....someone else do the math for me. 

403bannuitysalesman, what state are you located in?

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1 hour ago, MoeMoney said:

Ed, I think he means teachers want someone to communicate with them and help take them into their own (teacher's) retirement.

You're right. I was just alluding to the end result rather than the hope/desire.

@403bannuitysalesman confounds me a bit and I've always wondered if they're just trolling...something I contemplated in this post. I hope they feel free to post, but at the same time I question their intention and can't engage too seriously with their posts.

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Hello,

I am not a troll.  I am just torn between making a living and providing teachers with the best possible options.  Most are unaware of their options and that they don't have to invest through the district if the products provided are not in their best interest.  I always share that they can invest outside the district if they don't want to pay for a higher cost product through the district.  Unfortunately, some do nothing then, and I cannot set up a low cost IRA for them.

The 403b companies are in this to make money and they have to pay their sales force, so will not  push/offer lower cost products unless forced to by the administrators or if teachers start clamoring for lower cost options.  But according to a recent report, only 18% of teachers care about lower cost products, so if there is not a push for reform, it will continue to be business as usual.

 

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P.S.  to answer the above question: It was just a small district, and I mentioned it more to vent my frustration about the total lack of knowledge in this sector.  I really don't want to lambast a particular district, so I would rather not say.

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27 minutes ago, 403bannuitysalesman said:

I am just torn between making a living and providing teachers with the best possible options.

Seeing as how your name is literally "annuity salesman", I assume you take advantage of teachers by selling them unnecessarily expensive and complex products. If all of the folks you "worked" with went with a low cost, self-directed option then I assume you'd be out of a job.

I must emphatically state, nobody has to decide between making a living or ripping off teachers. That is a false choice. There are an almost endless number of ways to make a living without taking advantage of people, public servants in particular. If you're selling high cost products to teachers then you're a huge part of the problem...and the fact that you understand what you're doing makes it much worse.

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As 403bannuitysalesman states, he is “torn between making a living and providing teachers with the best possible options.” Yes, there’s an obvious  conflict there and hopefully he is planning his escape. His posts imply that he is able to avoid the outrageous conflicts he describes, at least to some degree. Is he able to avoid signing teachers up to expensive annuity plans charging 2-3% in fees? We don't know. Perhaps he’s working on the CFP qualification that will help him move into a less conflicted part of the financial investment field?

Dan and Scott’s recent podcast was with Daniel Alexander, a former 403b salesman. http://teachandretirerich.libsyn.com/fighting-conflict-of-interest-61

He has started Principal Review, a firm that specializes in “Providing expertise to empower plan participants to make informed and educated decisions with their retirement savings while protecting employer sponsored retirement plans from service providers with hidden conflicts of interest.”  Principal Review is now a sponsor of this forum.     https://www.principalreview.com/specialized-expertise/

I admire 403bannuitysalesman for contributing to the forum and giving us a view from the inside. Yes many of us are aware of many of those rip-off practices. But as the NYTimes articles demonstrated, getting information from those working inside the industry is a powerful tool for reform. I would like to see greater use of 403bannuitysalesman’s observations and hope he will continue to post. Maybe another NYT article by Tara and Ron?

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I have no problem with annuity salesmen making a living as long as they agree to disclose the following information, before being allowed on school grounds:

 

1.  That they are a commissioned salesperson, and not a fiduciary advisor.

2.  List all fees including loads, expense ratios, annual service charges, and surrender penalties.

3.  The length of the surrender charge period for getting your money out.

4.  Define exactly what an annuity is (most new teachers have no idea).

5.  Don't tell potential clients that you need to annuitize to get the benefit of tax deferred investments (this is a big selling point in my area).

 

 

 

 

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2 hours ago, MNGopher said:

I have no problem with annuity salesmen making a living as long as they agree to disclose the following information, before being allowed on school grounds:

 

1.  That they are a commissioned salesperson, and not a fiduciary advisor.

2.  List all fees including loads, expense ratios, annual service charges, and surrender penalties.

3.  The length of the surrender charge period for getting your money out.

4.  Define exactly what an annuity is (most new teachers have no idea).

5.  Don't tell potential clients that you need to annuitize to get the benefit of tax deferred investments (this is a big selling point in my area).

 

 

 

 

Hi MNGopher,

Most of us teachers, friends or spouses of teachers who post here have known about the non-disclosure items for years.

I would always have a problem if the annuity product was what they sold. Annuities are insurance products, not investments. This issue has been discussed for years on this board and especially by Stan the Annuity Man. In my opinion annuities in the accumulation stage should be outlawed. Purchasing an annuity in retirement after you invested for years in genuine investments such as Vanguard or Fidelity would be appropriate for those that need a guaranteed benefit for as long as they live. But for us teachers, we already have a lifetime retirement benefit, our pension plan. Sooo, for teachers, we never need an annuity. 

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12 hours ago, 403bannuitysalesman said:

P.S.  to answer the above question: It was just a small district, and I mentioned it more to vent my frustration about the total lack of knowledge in this sector.  I really don't want to lambast a particular district, so I would rather not say.

You have been on this board off and on all year.  Its been well over a decade since the last annuity salesperson posted here. Back in the early 2000s, annuity salespeople were all over this board because they wanted to use this board for their self-conflicted reasons. But I guess they grew tired of defending their practices and left never to return. 

With all due respect, what do you want?  

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