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Posts posted by FrenchTeacher

  1. <!--QuoteBegin--Redwoods+Mar 22 2004, 09:37 PM-->

    QUOTE (Redwoods @ Mar 22 2004, 09:37 PM)
    <!--QuoteEBegin--> High French Teacher,


    The AFT has just followed what their New York State and other state affiliates have done some time ago. They have recently endorsed the high cost 403b programs provided by ING. So now the various state affiliates do not have to do any due dilligence. They can simply tell their local affiliates and their respective school boards that if the AFT says ING is the way to go then that is the way to go!! These local unions don't have to worry about the school boards doing their own due dilligence because they have been out to lunch on these matters for decades. So who gets screwed----the rank and file dues paying member. How does the saying go...power corrupts and absolute power corrupts absolutely---well... you know what I mean.


    Frech Teacher, insofar as you think of my NYSUT/ING story, as published on this website, as a "diatribe" how do you describe the AFT's article "Shark Attack"? In your letter to the AFT (I trust you are working on it) you may want to ask them to justify their national endorsement of ING in light of their denunciation of such 403(b) providers as reported in their Shark Attack article.


    Once you finish your letter why don't you email it to me and I will sign it too.


    Peace and Hope,

    Joel <!--QuoteEnd-->



    Just so I'm clear, Joel...are you now asking me to write to AFT to question their "Shark Attack" article, a mere few days after telling everyone on this site on March 17th that you highly recommended the article? (I'm surprised you don't want me to include an unsubstantiated allegation that the AFT is merely endorsing ING for the extra ten grand or so in advertising revenue.)


    I think I'll pass on including you as a signatory on my letter to the AFT and/or NYSUT, largely because I doubt you'd agree with my conclusions. Should I decide to write to them, it'll be to thank them for working with ING to create Opportunity Plus, a 403(b) program wherein I pay no annual account fee, no front-end sales charges, no back-end sales charges (declining or otherwise), and no surrender fees of any kind; and which features a fixed account that contractually cannot go lower than 4%, a pretty outstanding rate in today's interest rate environment. (Funny, when TIAA-CREF or Vanguard offer funds that have no sales charges, they're the model providers; when ING does it, they're sharks.) Yes, their expense ratios are certainly higher than the no-loads; I'm happy to pay more to receive the services of a certified financial planner as part of the deal. Why that should be anathema to you, when it would be perfectly acceptable to pay much much more for a fee-only financial planner to guide me to no-load funds, remains a mystery to me.

  2. Hi Gadfly,

    I too think your post was very good. Of course, the full disclosure issue is important. We see it all the time on the stock market related news stories, analysts forecasts and predictions, financial reporters etc, are all being asked routinely if they own the stock or mutual fund they are recommending.


    For this site, however, full disclosure is slightly different. By definition, if people recommend a commissioned based or high fee product, there is the strong possibility that the person recommending that product could be the beneficiary. Since we don't know, it is my responsibility (if nobody says it first) as a regular contributor to this board (others can speak for themselves) to show that this product is expensive and inappropriate 403b product. Sure, sometimes we can get , but it is our way of getting what you want, full disclosure only in a slightly different approach—FULL DISCLOSURE OF THE 403b PRODUCT.


    On the other hand, we do know from studies that 85% of the educators who are contributing to a 403b, contribute to an expense annuity. Most educators are simply not aware that lower cost options exist and that is what this site is for, to discourage people from throwing their money away and learning a little more about finances and that costs matter. I would regret it if this site just became another TSA way of selling its message, the VERY SAME message that 85% of all educators get every day in their school cafeterias and union halls.


    This site is a refuge for what educators are not getting--information about low cost 403b options.


    In comes TIAA CREF and Vanguard: We also know for a fact is that TIAA CREF and Vanguard do not pay commissions and their annual expense ratios are the lowest in the industry. If an employee of TIAA CREF is recommending TIAA CREF on this site, they would be fired promptly. TIAA CREF has never operated in the normal rip-off wall street secret dealings (Read Arthur Levitt's or Larry Swedroe books on how wall street works, its pretty scary for little folks like us), probably the reason why most retail financial advisers and agents literally hate TIAA CREF. TC and Vanguard are not in bed with the analysts, stock brokers, bankers, insurance agents, wall street traders and CEOs, etc that permeate the investment world where people make money from trades, commissions, fees whether the market goes up or down. Investors take all the risks while all of the wall street pros and TSA agents rake it in on fees, commissions, high expense ratios year after year.

    Hope this helps,



    Hi Steve,


    There are two points about your post that I'd like to respond to. The first is the statement that "this site is a refuge for what educators are not getting--information about low cost 403b options." I have no problem with that...except that that's NOT what the site describes itself to be. When you go to the homepage, and click "About us," you get the following description (excerpted): "Our goal is to provide valuable information and education so that participants can make informed investment decisions whether that means directing their own 403(b) investments, or using the services of an agent or advisor." This is, in a nutshell, what I find to be problematic about the site: while it claims to want only to "play a role in increasing the understanding of and participation in a 403(b)" (taken from the same section), it's really not that at all. The site appears to me to have an agenda: to portray all low-cost financial products and the fee-only financial planners who sell them as good, and all full-service financial service providers (and their "higher cost" products) as bad, or at the very least, not even close to worth the extra money. That's certainly a defensible position, but it seems like the folks running the site should at least come clean and say so in their self-description. I acknowledge that perhaps I'm confusing the site with the participants in this discussion group, but since the site owners have leaped to Joel Frank's defense so readily, it seems a logical link to make.


    The other part that I find interesting is the notion of full disclosure. Whenever an agent comes on this site, and engages in full disclosure, (s)he is routinely hooted off the site, or (worse!) portrayed as a charlatan. (Most recent example was Joel Frank's recent Bob Grant imitation, in which he branded such an agent a fraud and a phony, despite a complete lack of evidence that the original poster had said ANYthing to merit such treatment.) Yet someone like Joel, who may well be a fee-only financial planner, is allowed to simply speak at length without giving any indication of what HIS agenda is. And yes, his (possible) status as a fee-only financial planner WOULD be quite relevant. Let's say I'm a first-year teacher, salaried at $33,000, and I'm deferring 4% of my salary to a 403(b) plan. If I do so with a full-service provider, I get an agent, who assists me with asset allocation and rudimentary education on the markets. So I invest the money with him, receive his advice, and pay him an amount...let's say 2% of everything. So I'm investing $1,320 with him, and paying him $26.40 for his efforts. Let's say Joel is a fee-only financial planner, offering his services to me at a fixed rate of $150 per hour, which would be a very modest fee where I live. Is anyone seriously suggesting that I'm unequivocally better off paying many times more money for "low-cost" funds accompanied by advice, vs. $26.40 for "overpriced" ones, also accompanied by advice? And if my agent is also a CFP (he is, by the way), is there anyone really arguing that the quality of his advice is substantially lower simply because his product range is more limited? Someone will undoubtedly extrapolate how many thousands of dollars this will cost me over the years...but if I'm meeting with my fee-only financial planner for annual updates that take at LEAST a few hours (as I'm sure you would all recommend wholeheartedly), the difference is a LOT smaller than you think.


    I'm not suggesting that all fee-only financial planners are bad, nor would I expect a truly neutral site to be so thoroughly dominated by people who believe that full-service agents are all frauds, or phonies. You'll find some good people in both camps; I just wish the proprietors of this site, and more specifically, the denizens of this discussion board, would take the trouble to point that out as well. You do a great disservice to your teachers if you promote fee-only financial planners and THEIR products as the One True Way.

  3. This case is quite relevant to those who detest the terrible confiscatory surrender charges inflicted by 403(b) sharks. Please note that the term "sharks" was proudly used by the American Federation of Teachers (AFT) a couple of years ago in an article they published on this very topic. I encourage all to read the article.


    [Later, from the AFT article you cite:]


    The New York State United Teachers, Education Minnesota and the United Federation of Teachers (New York City) have also used their significant clout to force positive changes in the 403(b) options offered to their members and to reduce administrative expenses.


    Joel, this article stands in stark contrast to your earlier diatribes against New York State United Teachers, in which you pilloried them for their supposedly profit-motivated endorsement of ING/Aetna. This article singles them out for praise for having used their clout to "force positive changes" and "reduce administrative expenses." That's REDUCE administrative expenses...exactly the opposite of what you were accusing them of in your previous pieces. I wonder if you could comment on the contradiction here?

  4. Tom: your post is placed on this website in violation of the rules of the NASD. Why? Because your compliance department has not apprroved it for public advertising. If they did they would have corected your spelling: The "principle" is to learn how to invest your "principal"


    Having said that I would like to get rid of you by asking: When was the last time you sold your snake oil to a qualified Defined Contribution Plan, like a 401(k), where there is a Board of Trustees to look out for the participant?


    You are only prospecting the 403(b) market because the 403b account owner is the decision maker. You do not have to wrestle with a Board of Trustees like you would if you were prospecting a 401(k) Plan.





    Joel L. Frank



    Did anyone else enjoy the delicious irony of a vitriol-filled rant from a guy who routinely (and hypocritically) signs each posting, "Peace"? Talk about phony...

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