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Herbert

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  1. Sierra; I resisted responding to your comments about annuities because I saw them as purely negative. However, I am going to assume that you are seriously asking me to reply to the things you have said. I cant get to all of them today, but let me respond to some of your comments: Service; the first rule of service is: "know your customer", which includes, but not limited to, understanding goals, risk tolerance, financial security, family and/ work issues. I would tend to disagree that Product Suitability is the first step in service, knowledge of the client is first. In fact, knowledge of the client can lead to refusing the sell to the client or referring the client to another provider. Annuitization: this contract benefit is disclosed in discussion and in writing by way of company provided Disclosure forms and brochures. Annuitization is rarely used in tradtional annutities, but is required in "two tier annuties"in order to receive the full value of the annuity. (Thank goodness "two tiers" are few and far between) Annuitization is usually ignored in the pricing of traditional, fixed annuties as it is rarely used. You are correct that annuitization requires returning the contract and receiving a series of checks. The relevant fact of annuitization, though, is that the arrangement can not be modified once begun. It is this unchangeable feature that makes annuitization unattractive to many annuity purchasers. Tax Qualified Plan and Annuities: the correct caution on using annuities in tax qualieifed plans is that there is no additional tax benefit to using annuities for tax qualified plans, not cost. This is all I can get to today. Let me get to you in a couple of days and I will comment on M/E fees. ps: You got me on that Stable Fund thing. Dont know what that is; I am not licensed to sell/discuss it
  2. Sierra; it is tiresome to deal with someone who cant see that there just might be another point of view. It is always displeasing to deal with someone who presumes he or she knows eveything about everyone. You truly dont like insurance agents, the products they sell, and, most surprisingly, you truly dont like the people that buy the products. There is no middle ground, or common ground, to discuss 403b issues with you. So, discussion is pointless. I do know this; you hurt your own case by taking so extreme a position. The teacher that visits this site has just been called ignorant. Just been told he doesnt have a clue. Too bad. He wont be back. And, that's the last I will say about this.
  3. Sierra; Is your position that all people that buy annuity products are ignorant and dont have a clue? Do you really believe that? Really?.....
  4. Hi Steve; ".....and no contact for the rest of the teacher's career." This is a servicing problem. This is where the agent is completely wrong. This is where he is most vulnerable, because the client doesnt hear from him, this is where the client does not see value in what he bought, and the fees he paid for the product. This is, also, exactly what insurance companies tell agents NOT TO DO. This is where complaints are born. This is where agents find out just how good their E & O coverage is. The other side of the coin is there as well; when an agent sells a product AND services his clients, the clients are happy. There is a cost to the product, the client understands that. But, when serviced, the client sees value in what he has paid for. But, without the service, a cheap product costs too much. Consider the hundreds of thousands of teachers that have purchased insurance products. If the level of dis-satisfaction is as a high as others here believe, the insurance industry would be awash in class action law suits. They are not. Therefore, the level of service, and satisfaction with that service, must be sufficient. I bring this up because, I fear, that focusing on product and investment advice, the forum may be missing the larger driving issue--service. That being said, I hope you have a good and relaxing weekend. For me, I have to find a way of dealing with the heat. Best to you.
  5. There is another point that is routinely missed here; investment performance is not predictable (OK, unless your are talking about fixed annuity accounts), but service is predictable and expected by the client. Service is the reason that the client works with an agent/rep. This is the reason why people use full-service brokerage houses. They expect and hope for a fair rate of return based on the product they purchase. However, they will DEMAND service. There is an important fact that Sierra brought up- that investments are to become more conservative as the client ages. Therefore, in his view, fire the full rep and do it yourself. If product were the ONLY issue, then Sierra is absolutely correct. But product is not the only issue. The other one is service. That is why client stays with the rep. And, this is why they leave. Look at the dissatisfied-with-agent-do-it-yourselfers that are at this site. They left because the agent did not take care of their needs. That is a service issue. Casting the argument in terms of only investment and investment advice is to miss the point entirely on why the client chooses to work with an agent or rep. But, if the client does not need the service, he should be able to invest as he wishes. He is knowledgable to handle his own account, and is does not need assistance. This is great for him or her. Herb, the Self Serving (hats off to Sierra)
  6. Sierra; I think that's great about NY teachers. Just because I am agent does not mean that I can't see and appreciate another point of view. I understand that there are many people that dont need my services and people that do. Just as there are people that go to Fidelity and people that want to work with Merrill Lynch. The most important thing is that the individual's needs are met. What say you, Sierra?
  7. You have it the nail on the head; that people that want one option (just high cost or just low cost) are not looking out for the best interests of the teachers. It is important to admit something that some people here resist; that there is more than one type of participant. there are at least two-people that can go-it-alone and those that want to work with a rep. Educators know that there are different types of intelligences, and different learning styles. The same goes for saving for retirement; there are different types. To be critical of one style is to fail to appreciate the the situation another person comes from and the goals they may set for themselves.
  8. Mark: there are problems to be sure with what is provided by insurance companies to the 403b market. We all know the "usual suspects" Though I am an agent, I am aware of the limitations of the insurance companies. But my point is this: the companies are there ALREADY and they are not going to leave. The question is: how to improve the service, the product and advice that supports the efforts of the insurance companies. Many on this forum take the postion that the insurance companies are all bad, and arent worth anything. This is wrong.
  9. This is a good thread. I find the comments realistic: the small investor is not going to be served by the advisor. So, maybe its time to stop beating up on insurance companies. They are doing the work that the fee-advisor does not. And, they are doing the work now.
  10. Herbert

    Irs Rules

    Sierra; as I re-read this, what comes to mind is this: it sounds like the company is attempting to distance itself from the agent. It seems to be saying that the company sells products, but, if advice is given to the client by the agent, the company sees that as "incidental" to its core business. Thats how I read it. How do you? Also, these disclosures can be very different from state to state. Is this from NY? Also, is this found on the application or a specific product? Herb
  11. Herbert

    Irs Rules

    Sierra; wow, that's pretty clear. I havent seen one like that before but that is pretty direct.
  12. Herbert

    Irs Rules

    Sierra; I havent seen that disclosure, what does it say?
  13. Herbert

    Irs Rules

    App; Okeydokey. (This is why I enjoy chatting with you; we can disagree without being disagreeable) Herb
  14. Herbert

    Irs Rules

    My point is that the client can and should expect the best level of service from their advisor, be that an commission guy or for-fee guy. I dont know, in general terms, who is good out in the market. The issue is not that one is better than the other; they are both supposed to be good at what they do. If there is dissatisfaction, it is incumbent upon the client to make sure the advisor performs as advertised. If that means filing complaints, writing the GA, or calling the homeoffice (ask for Compliance), this is good. I believe that the root cause of problems with the 403B plan is a lack of accountabilty, top to bottom. This is why, in opinion, that PCG got as far down the road as it did before anyone knew about the internal problems. This is why inapproprate products are sold in the market place. And, this is why the level of customer service is poor. For me, I am glad that the changes in the regs are coming. At least, under them, someone will be responsible. As friend of mine in the business described it; "right now, its like the Wild Wild West.."
  15. Herbert

    Irs Rules

    AP: It comes down to what the client believes the agent or for-fee advisor is providing. There is no actual difference between the two professions. It comes down to what the client believes. If the client believes that the person they are talking to IS providing retirement information that the client can rely on, and does rely on; then that person is an advisior. Specifically, that person is the client's advisor. Trying to draw distinctions between the professionals based on compensation is to define a difference that doesnt exist. Both professions provide information that the client relies on. I am concerned that making that kind of distinction in a public forum may give people the incorrect impression that only one of the professions is a "real" profession, and that does a disservice to the agent that does a good job. Also, statements like that can create the impression that the for-fee guys are called to a higher standard. The standard is the same. Hold them both to it. That's the small point I was trying to make. Hope you are having a good day, AP Herb
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