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bjackson

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  1. Jason, AXA does a great job of hiding charges, but here are the charges with Equivest (their most popular product). Administration charge: 2% or $30 Separate Account Charges: 1.20 % (Mortality & Expense charge 0.95% + other expenses 0.25%) Underlying Portfolio Operating Expenses: 1.03% (average fund expense) Personal Income Benefit Charge: 1% Withdrawal Charges: 5%
  2. Thank you for the feedback and I love the idea of moving new hires to Target Date Funds. I know this is common in private company 401Ks and hope it is just as easy in 403Bs. On to the million dollar question...what is the best route to move current employees out of their Axa and other insurance company annuities? Also, is it possible to eliminate Axa as an option when employees are already enrolled?
  3. I know there have been many similar discussions, but our union president and I are meeting with the Supt. of Business Services next Tuesday and I wanted any input/advice on some specific things I hope to accomplish. Note, the Supt. seems to understand our plight, which is very helpful as the former had the "if teachers are stupid enough to do this, it is all their fault and I'm not changing anything" attitude. Below is a list of hopeful outcomes (some may be included in bargaining, which starts in January).. 1. Annuity Timeshare Salesmen "Agents": We would like them banned from solicitation in all buildings. 2. Vetting Plans: The district leadership and union, or possibly another outside organization, will create a transparency sheet detailing all fees related to investment products to be shared with all employees. We will also explore getting better providers like Vanguard (currently Fidelity is the only decent option) and possibly RIAs with ethics (this is really difficult as summarized in my post from a couple weeks ago about my journey to become this person). 3. Dissemination of Information: The district and union will have a town hall meeting detailing the issues with 403Bs, particularly the impact high fees and overselling of poor investment products like annuities (A ton of additional information as well..if this is granted I will share my staff presentation with the board:). A session will also be included in new teacher orientation every year. Please share any helpful information from others that have done this or what I may be missing. Thanks!
  4. Ed, I agree with you 100% as I manage my own account on Fidelity and could teach a primate how to set up an index portfolio or target date fund in less than a half hour. However, the idea of managing their own finances scares some teachers to death. They want an “expert” managing their account and in the absence of ethical advisors, they stay with their annuity Shark. I would never pay an advisor any fee as it is an unnecessary charge..for me. However, an advisor charging .6% AUM and investing wisely is much better than an annuity shark charging over 3% and unknowingly selling the teacher Equivest 3.0 with a 60% surrender fee. As noted, I even hope to have my clients fire me when they finally feel comfortable.
  5. Thanks Mo, Ed, Tony, and Schulo for the thoughtful responses, I know this is lofty and idealistic, but worth pursuing. I am aware of the Catch-22 of helping people without becoming part of the problem. I guess my thought is that I could be the ethical business that teachers flock to. Since I really don't need to make money (I am more than happy living on my teacher compensation), I am fine with making very little in commisions/fees. The only way I would make substantial money would be if I ended up with a ton of clients, which means I would be removing these same teachers from the time-share salesmen, annuity crooks. I did come across this guy, Tony Isola, from the Barrons article. His journey is similar to mine and he charges .62% fees, but invests clients and in low cost Fidelity and Vanguard Funds. I am going to reach out to him. As far as advocacy, I am already busy in my district. I will also follow Moe's advice and spread the word through social media. I purchased the book as well Schullo. The biggest hurdle right now is the difficulty of starting a private financial advisory business. I'd like to find a mentor, but few would want to follow a model that limits profit in favor of helping clients. That is where I am hoping someone like Tony Isola can point me to the right person. Once again, your replies have helped me greatly in the first steps of my journey and I greatly appreciate!
  6. A couple years ago, I did a deep dive into my AXA portfolio(along with 403B wise resources) and discovered I was a 403B Equivest scam victim. I quickly moved all funds to Fidelity and learned to manage my own account. I decided I would learn as much on investing as possible by reading every post on 403B wise, listen to every podcast from Warren Buffet, Bogleheads, etc, and reading finance articles. I learned that I enjoy Investing and want to help as many as teachers as possible not fall into the same trap I did. With assistance from my union, we are attempting to vet policies, ban salesman from our buildings, and overall bring transparency to the process. I've discovered that the problem is bigger than I thought with over 200 of the 500 teachers in the district using AXA. While district leadership is somewhat receptive, I've encountered a problem... or possibly an opportunity. While I originally hoped all teachers would switch to self-managing their funds through Vanguard or Fidelity, many teachers were not comfortable investing without a manager and sadly the only companies offering "advisors" are the annuity sharks. In addition, I have been considering a second career (I am in year 17 teaching, so 13 years until full retirement) that allows more flexibility. I had a thought..What if I became a financial advisor that served teachers? It would be a second career and I'm a minimalist so I would be happy to offer very low fees for teachers. I would also offer to teach my clients investing with an end goal that they fire me and manage their own portfolio. After some research, I found that the requirements for becoming an advisor are to pass a few tests and complete a bachelors degree (I have a Ph. D. in Ed Leadership). That is the easy part. The hard part is that I would want to be completely independent because otherwise I would lose autonomy of my vision to the bureaucracies of corporate America. Has anyone followed a similar path? What advice can anyone provide or do you have a person I could reach out to? Thanks and together we can put an end to this 403 BS!
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