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Posts posted by 403bannuitysalesman

  1. Someone needs to start a business where they assist districts across the U.S.A. in implementing no-cost 403b-7 plans.  This should be a mandatory enrollment, single provider concept.. One would think it could be accomplished if the districts' have the teacher's best interest in mind. It would also get rid of all the sleazy, corrupt, salespeople that steal teacher's hard-earned money.  It is a disgrace that teachers are given crappy products, poor advice, etc. by their districts and someone needs to step up.

  2. I have been clamoring for a low-cost self-directed 403b product produced by the insurance companies for some time and have hit a wall. There is no interest at all by the agents or the companies.  Most reps want to be paid as much as possible and will not do anything that detracts from their pay.  The companies have also said that they do not want to go this route.  No one is listening and it is very frustrating. They basically said leave the industry if you do not like it.

  3. I tell teachers while sitting down with them the differences between the self-directed accounts and the 403b-1 annuity or advisor 403b-7 accounts.  If they have a self-directed account at the school, I inform them of the advantages of this.  I also explain they can invest outside the district in an IRA through a self-directed account if they choose.  But I tell them I cannot assist them as my company does not offer this. Many times then, the teacher  does nothing as they want someone to set it up for them.

  4. The 403b industry is adapting though.  They are coming out with their own 403b-7 now, which is actually more expensive than the annuity product they are selling.  They either place you in loaded funds or charge a yearly 1.25% wrap fee.   Unlike annuity products, however, 403b-7 applicants have to pay the TPA fee out of their contract, which can range from $35 to $60 a year, in addition to the contract fee on these products.  So be careful about saying the 403b-7 is always better than a 403b-1 annuity, because in some instances, it is actually the lower cost product.

    The only good option is the self-directed 403b-7.  Everything else is a rip off in my opinion.

  5. I agree.  I wish the agents could sell what is best for the teachers and not be hindered by what the company makes them sell.  It is disgraceful.  They should be able to sell quality products to teachers.  My peers always say they are worth that extra 1% because they are CFPs or they are helping them with retirement planning and no one does anything pro-bono.  Most of us though, just set up the teacher with a 2% a year fee product and never talk to them again. 

  6. 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.


  7. 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. 

  8. 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. 




  9. 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.

  10. 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.

  11. 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. 

  12. On ‎2‎/‎4‎/‎2018 at 7:13 PM, krow36 said:

    The Security Benefit NEA Direct Invest has an administration fee of $35 if the balance is <$50k, $0>$50k. There is no AUM fee. I wonder if the rep wasn't selling other expensive SB products? 

    Yes.  He most of been selling the broker product as it was not direct.  However, he said he was only charging 35 basis points.  Compared to the other products, this was a slam dunk, in my humble opinion.


  13. 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. 

  14. 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.

  15. 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.


  16. 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.


  17. 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 .


  18. I am not a troll and I have not sold an annuity in an unethical way intentionally.  I always tell my client there maybe better alternatives to this product and that this is a high cost vehicle that locks their money up for a long time.  Unfortunately, many don't seem to care as they are told to get an annuity by the teacher down the hall and that it was the best thing ever.   I am just vetting my frustration at how unethical this practice can be and how some of these 403b reps are presenting this product. Some of these teachers are only putting $12.50 a check and a lot of it going to pay the fees/expenses.   There were over 1500  403b Variable annuity contracts written by just one company in my small area last year and there are more than 4 companies that sell the 403b variable annuity..  The average fee/expenses on these contracts were around 2.2%, $30 admin fee, and a 12-year surrender charge. I don' t know if they are being trained this way or are just willing to say anything for a dollar.  Maybe they want to make a trip, get a bonus, or are afraid of losing their benefits. I don't know how long you can go on misrepresenting a product (lying about expenses, guaranteeing returns, calling it a mutual fund, etc) before it catches up with you. 

    I have approached superintendents about putting in a low cost, self-directed 403b-7 alternative, but after talking to their principals, they say there is no interest.  The principals don't even know the difference between an annuity and custodial account, so I don't understand how they know enough info to say there is no interest. So they keep on promoting the 2.2%, $30 admin fee, 12-year surrender charge, 403b-1.

    We have been told not to come into certain school districts, but some reps totally ignore whatever the district says and still sneak in (they work by their own rules).  Many have been kicked out numerous times, but come back again and again. What can the districts do, as some of these companies are the largest providers in the district, and even though they have been told countless times not to come on the school grounds, they completely ignore the district's rules. 

  19. Here is another moral dilemma.  We are told not to talk about cheaper alternatives when educating prospects.  We are told to only mention those products that benefit us, regardless if it is not as financially beneficial to the client.  If we do not offer it, we are not supposed to talk about it.  Our job is not to educate people, but sell them a product that gets us paid. 

    A day in the life of 403b salesman: I had an appointment with a teacher after school to talk about the 403b.  I mentioned other low cost options available in addition to a 403b and the teacher didn't realize there were fees in these things and her husband takes care of this kind of thing.  I get back to the office and find out that someone was told by a 403b representative in the lounge that he should move a 403b annuity over to another 403b annuity and pay the 8% surrender charge to take advantage of the great small cap returns in his own variable annuity. 

    I asked myself: Why are you moving from one high cost annuity-to another high-cost annuity, chasing small cap returns, and locking your money up for another 12 years.  If you don't have access to a lower cost option at your district, and you understand the volatility of the small cap sector, all that is needed to do is switch your fund line up.  This was never told to you because it does not benefit the 403b representative's commission.

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