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Everything posted by FrenchTeacher

  1. Much like advisors, newsletters or other teachers, I would think that the answer to that question depends entirely on the union representative in question. I imagine some of them are extremely knowledgeable, and some are quite ignorant. And while I bet some of them take "paybacks," I bet there are some that are honest and forthright. By the way, I'm happy to see that teachers as a whole have been upgraded from "stupid" to "ignorant, and not interested." Charming view you have of your colleagues, there. If they agree with you, they have seen the light, and are wise; if they disagree, it must be because they are ignorant and apathetic, or just need to read Bogle and then they'll see things The Right Way. (And to answer your question, yes, I did read the Bogle book. It was an interesting read.)
  2. I wasn't trying to imply that the SEC or anyone else "approved" of the fee arrangement. But I'd be pretty surprised if the NEA and NYSUT were both foolish enough to enter into an agreement that was illegal. You have suggested several times that you believe the unions may be in violation of securities law with these arrangements. Can you cite a specific law that they may be violating?
  3. If it's the LESSER of $15k or 100% of compensation...and he makes $35k, and wants to contribute 50% of his income...isn't the answer no?
  4. Wow. We teachers are really, really stupid people, huh? So according to side-splitting joke #1, teachers are not good investors, and are "in the dark." According to joke #2, teachers need no help to successfully invest. Sigh. I guess I must be humorless.
  5. I won't pretend to be a mindreader, but I imagine both NYSUT and ING would welcome such an inquiry. Since the entire fee arrangement is disclosed in the prospectus from ING, and NYSUT puts disclaimer language on every piece of mail I get from them, there's nothing going on "under the table." That being the case, they should both welcome the opportunity to end the whisper campaign and get the blessing of the guy who has been a whistleblower against so much of what is wrong in the financial services industry. (For that matter, the NEA probably feels the same way, unless they have not been as forthcoming in their disclosures as NYSUT.)
  6. One man's opinion: A good agent is RESPONSIVE. If you call with a question about your account, the agent either takes your call or responds to it in a timely fashion. A good agent is KNOWLEDGEABLE. If you ask about asset allocation, you won't get a list of funds with a wink and a "Trust me." I appreciate that my agent is a Certified Financial Planner, as well. I've never heard anyone suggest the CFP is an easy degree or designation to get. A good agent is HONEST. He won't duck questions, or hide things from you (such as cost, everyone's favorite subject). And last but not least, a good agent is a good TEACHER, too. I've learned a lot about my account from holding it with the guy that I have. I've also made, I think, a fair effort to educate myself independent of him, and I've not found the things he says to be contradicted by most reasonable people. I'd say those are the best indicators of a good agent. I'd add that it's nice if he has social graces, but if he's not competent, then it doesn't really matter how courteous or friendly he is, now, does it? I dunno. Perhaps I am the ONLY satisfied client of a full-service provider in New York State? Or the country? Maybe the WORLD...! In all seriousness, you might ask the same question of Vanguard Diehards, or other sites that are obviously geared towards do-it-yourself investors. Most appear to share the same contempt for agents, insurance companies, high fees, etc. Sites like this one, as Dan Otter has written himself, welcome all points of view, but are obviously meant to be addressing a self-help-oriented audience. I'm not surprised that mine is a minority voice in this particular group of people...it's kind of like going to Giants Stadium on any given Sunday and wondering where all the Redskins fans are. If you came to my lunchroom on any given day, on the other hand, you in turn might be surprised at how many people are as satisfied as I. Thanks, Ira...I would hope that you would see that I have never made any blind defenses of agents in general, or how great it is to pay a sales charge. I speak (usually) about my circumstances only, or at the very least of circumstances that I know well. The LA Times raised a number of issues in their article; I raised my voice only against the handful that I knew to be factually wrong. While these errors don't give me great confidence about the remainder of the facts that were presented, I have no way of fact-checking them (or at least, don't care to spend my time that way!).
  7. Ira, not entirely sure what you're implying here, since you've couched it in such "diplomatic" language. But TR and I are very different people: he's an agent who makes his living at this, whereas I am a teacher who has been assisted by an agent, and can vouch for their value if they do their jobs. And for what it's worth, I have avoided posting here for months because of the pissing contest that things had "devolved" into. I came back when I saw the article that explicitly mentioned ING and NYSUT, because it involved factual inaccuracies. Yet everyone continues to praise the article as though it were Gospel truth! Guess not much has changed around here, at least among certain contributors. To return to your statement above: I don't stand in defense of loaded funds at all. ALL THINGS BEING EQUAL, only the most obtuse person would say that a fund with a sales charge will outperform one that has no such charge. What I do say is that people in general, and (in my experience) teachers specifically, need assistance with their investments, either through lack of knowledge or lack of interest. I agree that most people CAN learn how to handle their own investments; I also observe that most people FAIL to. A GOOD advisor can pay for himself (or herself) many times over. You seem to want to deride all such advisors as mere "SALES advisors," as you say, and that's your opinion; that's fine. Your experience with such people must have been pretty horrible over the years, and I don't doubt that there are a lot of such advisors out there that aren't worth defending. But to write them all off is a bit extreme, I would think. AP, this is a great idea. The financial services industry benefits from the same double standard that helps gas stations gouge us (or, more accurately, the Federal and state governments). With virtually ANY other purchase you make, the sales tax is clearly shown on the receipt...but not when you buy gas! So most people shake their fists in anger at ExxonMobil for the high prices instead of where they SHOULD: at Washington DC. (Not that ExxonMobil and their energy-industry brethren don't deserve a lot of anger, too...but that's a whole longer story.)
  8. Of course, THEY do it because it's a selling point. It might be nice to see some of the more "expensive" companies do it. Of course, that would mean they have to justify the expenses, and only the better agents would be willing to do so. An agent who provides good service shouldn't be afraid to disclose such costs; only the "hit and run" agents should really be afraid.
  9. I go back and forth when I see responses like this one. On the one hand, I want to say, How can anyone be that ignorant? Does anyone think that agents work for free? How could it NOT occur to someone to ask how the agent is being compensated, or what the cost of the investment is? My mind reels, in much the same way it would if it became a common practice to walk into a car dealership, purchase a car, hand over your credit card and accept whatever price got rung up on it. And finally, it's simply not possible that costs were not disclosed to an investor: that would be a violation of securities laws, as I understand them. On the other hand, of course, reality is that the ways in which costs are usually disclosed (a prospectus that is, to put it politely, not easily readable) is borderline criminal in and of itself. This isn't the agents' fault, of course, but the fault of the people at the SEC who are allegedly looking out for investors' best interests. Costs should be disclosed on a one-page, simple-English sheet of paper that is signed by the investor when he/she invests. That would solve a multitude of problems. Moreover, the ways in which those costs are PAID are utterly ridiculous. Ridiculous, as in invisible. You can find out that you're paying 2% a year, but since that 2% doesn't come out as a line-item on your statement, like it would if you charged something on your credit card, it's virtually impossible for even the most savvy investors to know to the penny how much they paid for an investment in a mutual fund or an annuity in any given year. And that's another bad joke that the SEC should be taking care of. At the end of the day, everybody needs to accept personal responsibility for their self-directed investments (the very name, "self-directed investments," is a big enough tip-off to that). But it'd be nice if the SEC were on the side of investors instead of the firms running the show. Nope. No excuse at all. Taking it a step further, I don't see much of a defense for the NEA's endorsement of such a lame product to begin with. Virtually any of the options that are mentioned in this space would be infinitely preferable to THAT boondoggle. "Valuebuilder," indeed. (In short, if my choices were limited to the NEA-endorsed annuity and TIAA-CREF, then TIAA-CREF would be my selection, without hesitation. I do agree with you that whatever problems are plaguing them now aren't nearly as harmful to an investor's health as being a Valuebuilder investor.)
  10. Dan, thanks for your honest responses. I do agree that (over)charging for advice (and subsequently not providing that advice) is a worse offense than the ones detailed in the WSJ/TIAA-CREF piece. Given your stance (echoed by others here) that "we seriously question advice that is tied to product being sold" and "we think there is an inherent conflict of interest in that approach", I wonder how you feel about TIAA-CREF's stated plan (already in effect) to hire financial advisors to keep people within their family of products? It seems to me that talking to one of these advisors would invite the same potential conflict of interests. The only other thing I would want to point out is that my original post here highlighted inaccuracies detailed in the LA Times article, which frankly calls into question whether the same sorts of inaccuracies might not also be present in the much larger part of the article that doesn't deal with New York, but rather California and elsewhere. Obviously, I can't speak to what is happening in California, and IF the numbers are accurate about the NEA's "ValueBuilder," then those numbers really speak for themselves...but given how badly off the numbers were from the single example cited of an unsatisfied teacher in New York, I wonder if the NEA numbers are also a bit skewed. Ultimately, I guess this all goes back to the dangers of proposing a "one size fits all" solution. If the solution you're touting is picked as The One, then you'll love it...if not, of course, you'll hate it. I don't know if I'd go that far, but it's fair to point out that if a writer approaches an article with an agenda, then it's fairly easy to find an example of the horrors he/she is trying to illustrate. When one of the earlier posters in this thread praised the LA Times piece with words to the effect of "Kathy Kristof has done it again!", then that told me something about her lack of objectivity in writing this. She clearly has an ax to grind about the "full service" model, and she found a few examples of people who had had bad experiences with full-service companies to flesh out her piece. I don't think that means that there is necessarily widespread dissatisfaction with union-sponsored plans...unions are, after all, democratic organizations, responsive to what their members tell them to do. Anyway, I'm probably over my head now, since 90% of the LA Times article was about California, and my own experience is much farther east, so I should leave the debate about California to the West Coasters here. Again, though, I hope that what she wrote in the LA Times piece is more accurate than the stuff she came up with about New York!
  11. Here, at any rate, are excerpts from the April 24th piece in the Wall Street Journal regarding TIAA-CREF. I'm only printing excerpts because the WSJ site is pay-only, and I don't want to infringe on copyright. I gathered excerpts I thought were relevant to the discussion.
  12. As I said, Steve, my "issue" (I hesitate to use that word) is that the LA Times piece was placed on the front page of this site, which presumably gets a whole lot more eyeballs than this thinly-read discussion group. I'll happily post the TIAA-CREF piece that I saw here, and offer it up for discussion, but clearly it won't get the same attention among the site readership that the LA Times piece did. Hey, it's Dan's site and he can do with it whatever he wants, at the end of the day. I'd just be interested in hearing his rationale for "overlooking" the piece that was critical of TIAA-CREF. Even accepting apteacher's opinion that... ...I can't see how ongoing allegations of bad service at a low-cost provider would NOT be relevant to such an investor. Can you?
  13. I won't presume to speak for TR, but I think he was referring to articles that are posted on the main page of the site. It's true that we can all come into the far less visible discussion groups and post what we want, of course...but the slam piece on "high-fee" 403(b)'s was given a prominent page-one placement here, whereas the piece I saw in the Wall Street Journal on TIAA-CREF (along with a couple of others that TR cited) were not placed there at all. Perhaps the Journal forbids such placement of their material, perhaps there is some other reasonable explanation. But if the site is genuinely intended to educate 403(b) investors to manage their accounts in a "wise" fashion, wouldn't such investors be equally interested in the ongoing difficulties at TIAA-CREF?
  14. This is, indeed, the same logic that people on this site constantly use to denigrate the "financial ography" of investment magazines that won't recommend indexing strategies when their pages are filled with advertising from actively-managed funds. If this site aspires to higher standards, it should also rise above such double standards, no? Is it considered "wise" to just stick with TIAA-CREF, regardless of how high they raise their fees or how slipshod their service becomes?
  15. apteacher, I don't disagree with a single thing you just wrote. In particular, I wholeheartedly agree that a.) we should all be looking out for the interests of investors, criticizing and praising whichever companies earn it, and b.) it's important not to make generalizations for ALL investors...there is NO one-size-fits-all solution. I have been equally outspoken in my time as a teacher for the need not only for full-service companies (whose quality should be monitored and reported on) but also for the low-cost providers, so that those teachers who don't need professional advice aren't forced to pay for it. Good post. Thanks.
  16. Guess it's easier to disregard the dissenters than answer them, huh, Joel? Maybe do one of two things before sweeping my entire post under the rug: * point out if I've said anything that's incorrect? * since you have a copy of the Opportunity Plus prospectus, show me the investment that costs 3.59% annually, as the article cites? I'm pointing out inconsistencies and inaccuracies in the LA Times piece. Please do the same with my writing if you wish others to consider it worthless. Thanks.
  17. I've served this function in the past. Answer honestly, Joel: how far did that "discussion" get us? I read the LA Times article with interest. I can't speak for California, of course, since I'm not familiar with the situation there. But the reference to ING in New York appears to feature at least a little hyperbole. I'd love to speak with the Middletown teacher who claims to have paid 3.59% annually in fees. That figure seemed high to me, so I looked in my prospectus for the fees paid. According to the one I have (dated May 2005), the highest-cost investment available in the ING program is something called Oppenheimer Developing Markets, with an annual expense of 2.77%, which is considerably lower than 3.59%. (I got this information from pages 172-73 of the prospectus.) Even so, to be paying that amount on the entire account, this teacher would have had to be 100% allocated in what sounds like an emerging-markets fund. And if THAT were the case, then his claim of annual returns less than 2% would ring a bit hollow, since the fund in question is listed in the prospectus as having a five-year annual average return of 10.83% (page 154). So either the teacher is mistaken, or the LA Times is guilty of using accurate but outdated information. Either way, the article implies things about ING in New York that simply aren't true. One last point: I noticed that this site and its scribes chose to feature this article from the LA Times, yet remained strangely silent on an article that appeared in Monday's Wall Street Journal that was HIGHLY critical of the low-cost darling, TIAA-CREF. Among other things, the WSJ article cited...no kidding, folks...ongoing problems with the SERVICE that TIAA-CREF investors get (or, apparently, DON'T get). I wonder if it's possible that, at least sometimes, you get what you pay for?
  18. Real life, mostly. A bit busier this school year than last...plus I suffered the indignity of having my classroom moved...I'm no longer in a room with a ready internet connection, so I can't visit nearly as often as I like. I see the debates are carrying on quite nicely without me, though. :)
  19. Hope I'm not too late for inclusion here! I'll throw my entire $50,000 in the Marshall Government Income Fund (MRGIX). I've decided to have some fun with this and go tactical, and the next three months look like hell for the stock market. Will re-evaluate and re-allocate as circumstances warrant.
  20. Parrott, four of the five providers listed are insurance companies. As such, they are likely (if not certain) to be selling you insurance products (a.k.a. annuities), which offer a few different perks unavailable with straight mutual funds, and which offer the services of a professional advisor. Sometimes, the advisor is nothing more than a salesman with the word "advisor" on his/her business card. Sometimes not. You'd need to talk to all four possibilities to see if there is a fit there. The drawback on ANY of the four is that, being annuities, they will be a lot more expensive than mutual funds. It's important to find out exactly how MUCH more expensive, and what exactly you can expect to receive for the extra money you would be spending. The only mutual fund option listed here is Vanguard. They have an excellent reputation for having low-cost funds, and are well worth your consideration. While a Vanguard account will come with limited assistance (i.e., no one will be assigned to your account, and you're likely to have only the person who answers the 800 number to handle any quyestions you may have), it's entirely possible that you won't need the advice or assistance that one of the full-service providers would offer. Whatever choice you make, I think the most important thing is to get the account going, and sooner is better in this regard. Good luck.
  21. I'm assuming that the contest encompasses the ACTUAL 403(b) plans that people have available to them, no? Or at least, plans that should be available in a semi-perfect world? I have no problem with Fidelity, Vanguard et all being included, seeing as they are widely available where I am (and SHOULD be widely available elsewhere). But to pick a mutual fund with a $2 million minimum contribution is not quite in the spirit of the contest. I could probably research a few local hedge funds with great returns, too, but that takes us way out of the realm of 403(b) accounts.
  22. Five years sounds fine...though we could just as easily make it ten, with 9 1/2 years of "bragging rights" preceding. :-)
  23. Here come about fifty different responses, all saying "Mine!"
  24. Here's a really interesting question: when is "the end"? Given that investing is usually a long-range endeavor, seems like this might go on a while. If anyone trumpets victory after only a year, they're sure to get pasted by those who will remind them that investing success isn't judged over a one-year period.
  25. It depends what the stated purpose of the fee increase is, I think...if they are simply doing it to buy themselves a nicer office building and raise the salaries of TIAA-CREF officers, then that's problematic. If they are raising funds in order to finance the hiring of a long-needed bunch of financial planners who might increase the level of personalized service available to TIAA-CREF clients, then I'd be all for it.
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