Jump to content

FrenchTeacher

Members
  • Content Count

    804
  • Joined

  • Last visited

Posts posted by FrenchTeacher


  1.  

    Just ignorant, and not interested. The facts speak for themselves.

     

    FT, Beside paybacks, what makes a union representative knowledgeable about investment products?

    Answer: I don't have one, do you?

     

    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. FT you might find the following informative; It is required by law to be printed at the beginning of every Prospectus:

     

    "NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE"

     

    So just because your New York State United Teachers and ING have disclosed their $3 million fee arrangement in the Opportunity Plus variable annuity prospectus doesn't mean the SEC or the NYS regulators approve of it.

     

     

    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. From our 457 FAQ section.

     

    How much can be contributed to a governmental 457(b) plan?

    For 2006, workers are able to contribute the lesser of:

     

    1. the new employee elective deferral limit of $15,000, or

     

    2. up to 100% of includable compensation (must be less than the elective deferral limit).

     

    So the answer is yes.

     

    Dan Otter

     

     

    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. How do you know when a teacher buys an insurance product that is endorsed by his union?

    He has less money, now and in the future, and keeps on voting to keep the union representative in office.

     

    Wow. We teachers are really, really stupid people, huh?

     

     

    How many teachers who are good investors does it take to change a light bulb?

    Can't find any, teachers remain in the dark.

     

    How many agents does it take to help a teacher successfully invest?

    NONE. .

     

     

    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. What makes a "better agent"---what is "good service"

     

    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?

     

    "3. FT is an example of someone who is informed and chose to work with an agent. I think that is to be saluted. Really that is a key goal of this site: that each investor make an informed decision. He knows exactly what he is paying, and exactly what services he is getting".

     

    Why is he the only one that has certified to receiving fair value on his investment return notwithstanding the fact that he pays a commission every two weeks to ACQUIRE product?

     

    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.

     

     

    OK, FT I will take you at your word, and not make any further references to associate you with TR with respect to industry paid posts. I will simply respond to your posts, both the one's I agree with and the one's that I don't.

     

    Your right, at times communication skills can be improved by all of us; hopefully the posts will be more on target to discuss the issues rather than personal attacks on each other.

     

    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. Joel.............I believe that FT claims to be impartial, and believes that there is a place for both low fee expense funds that saves the investor houndreds of thousands of dollars over time, and extremely high priced funds sold by "SALES advisors". He likes to site the example of the SALES advisor who helps the client(which in my opinion would be mimimal at best since there are signifcantly higher fees paid that decrease returns significantly versus any asset allocation advantage the the SALES advisor might bring when compared with low cost, no load funds. It's also interesting to me that FT has started to post l when TR, an advocate of loaded funds sold to investors, has been called on his statements about the benefits of load funds, and has not been able to defend his statements at this site

     

    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.

     

    Actually, I think I am suggesting something different. I'm not talking about yearly maintenance fees that appear on a year end statement. I'm talking about the actual amount of dollars that were deducted from the account over the course of a year to pay for the expenses. In other words, Fidelity would not simply state in its prospectus that it charges .10 for its Spartan funds; rather, it would show on each year end statement the dollar amount that an investor actually paid for the year. I don't know of any fund that does this.

     

    What would be so remarkable about requiring a seller of a product to tell the consumer how much he/she paid for that product?

     

    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. Some low cost providering companies such as Fidelity and Vanguard currently do this [disclose cost structure in a simplified format].

     

    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 know lots of people who had no idea what they are/were paying because it was not disclosed to them. Plenty of folks don't even know IF they are paying anything. They don't know enough to even ask the question.

     

     

    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.

     

     

     

     

    Go back to my early post about a Valuebuilder money market fund charging between 2.07% and 3.62%. Again, I'll be happy to criticize TC for the reasons noted in the WSJ article; however, those problems do not rise to the level of the abuses committed by some (not all, to be sure) 403b providers. I ask you French Teacher, fair minded person that you certainly are, is there any excuse at all for an agent selling a money market fund charging those fees?

     

     

    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. If teachers would stopped getting abused then publications such as the LA Times/Forbes/Wall Street Journal et al. wouldn't be running such stories. This is hardly recycling. As long as these problems persist we will continue to highlight. It just hits home that your industry has not changed its practices and will continue to be taken to task until it does (just as TIAA will be taken to task until it fixes its computer issues). I concur with Scott that "even their (Vanguard, TIAA-CREF) worst offenses (raising fees from .30 - to .46%) don't seem to harm participants nearly as badly as the high cost products talked about in the Times article."

     

     

    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.

     

     

     

     

    Well, Dan, you make my point. Your reaction just proves that all you care about is bashing annuities. And many of those articles do recycle and you know it. They all do searches on articles with similar content and include it in their articles. This is not new, it's done all the time in the press. Most of these incidences of abuse are referred to again and again until the impression is that 75% of all teachers are being ripped off. If that serves your purposes and that's all you care about, fine, but that's hardly the truth.

     

     

    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.

     

     

    TIAA-CREF's share of its main market -- managing retirement funds for employees of universities -- has tumbled to 70% from essentially 100% in about a decade. The problem: While rivals innovated and clients demanded new services, TIAA-CREF's ways of doing business seemed frozen in time.

     

     

    For the past three years, the task of reviving its fortunes has fallen to an unlikely leader for a firm founded as a nonprofit and steeped in the academic world. Former investment banker Herbert Allison, once a contender for the top post at Merrill Lynch & Co., arrived in late 2002 to transform the stodgy organization and go head-to-head with financial powerhouses such as Fidelity Investments, Charles Schwab & Co. and AIG Valic, the retirement-plan arm of insurer American International Group Inc.

    His plans at TIAA-CREF are ambitious. Mr. Allison, 62 years old, is launching an online brokerage arm. He is replacing a computer system so antiquated it's hard to find programmers to update it. (Mr. Allison jokes that it was "programmed in Aramaic.") To focus on the core business, he has dropped his predecessor's plan to market more to non-academics. In the biggest departure, he is hiring 500 financial advisers to persuade retiring university employees to keep their money at TIAA-CREF rather than roll it into a competitor's shop.

     

     

    But missteps and controversies have hobbled the overhaul. In 2004, two members of the board of trustees caused a scandal when they went into a side business with TIAA-CREF's independent auditors. Criticized for a conflict of interest, they left the board. Then, a bid to upgrade the computer system in a hurry backfired on thousands of clients, some of whom didn't receive pension or other retirement-account payments for a time. Meanwhile, a program of steeply raising mutual-fund fees angered some clients and prompted fund-tracker Morningstar Inc. to accuse TIAA-CREF of "blatant disregard" for shareholders.

     

    Reactions like that could imperil one of TIAA-CREF's great strengths: the nonprofit's longtime reputation as being on the side of the little guy. "It doesn't seem right that they would turn this company into a Merrill Lynch. They're not as interested in the individual clients as they are in making profits," says Benson, a retired math professor in Bellevue, Wash. Mr. Allison says the challenge is to execute a transformation "without the company losing its soul."

     

     

    TIAA-CREF's nonprofit heritage and low management fees persuaded many it was on the side of the angels. Bolstering this image, it has offered people the chance to have their retirement money in "socially responsible" investments, such as firms with environmentally friendly policies. It also has sometimes used its large stockholdings to pressure companies on issues such as high executive pay.

     

    But by the 1980s, TIAA-CREF was falling behind the times. For instance, it didn't offer a basic money-market account until late in the decade, after they had become common. In the 1990s, Fidelity, Vanguard Group and other large mutual-fund firms started making inroads on its campus business. Colleges were feeling pressure from employees to offer more choices for retirement money than just TIAA-CREF's limited lineup.

     

    Then in 2002, one of its oldest clients, Stanford University, brought in Fidelity for a computer upgrade. Stanford wanted a better system to track money withheld from paychecks and to generate account statements. In a sign of TIAA-CREF's lack of awareness of its changing industry, it declined to help. Fidelity provided the computer system free. In the process, it made it more convenient for Stanford employees to invest with Fidelity.

     

     

    One thing that hasn't been an issue for most is investment performance. TIAA-CREF's fixed annuities provide higher returns than are available just about anywhere else. And the giant $116 billion CREF stock fund has returned 5.9% annually over the five years ended March 31, just short of its benchmark, which gained 6.4% a year.

     

     

    (New CEO Herb Allison) quickly made a bid to salvage the Stanford relationship -- and got a taste of the challenges. When he visited the campus early on, he says, its officials complained loudly that TIAA-CREF wasn't following through on a promise to provide client information to Fidelity, so Fidelity could create unified account statements. "They blistered my ears for about 40 minutes," he recalls.

     

    He moved quickly to cut costs. He let go 500 employees, about 8% of the staff, in what the company says were its first ever large-scale layoffs. The move -- with scenes of security guards escorting former staffers off the premises -- sent a shock through the paternalistic company.

     

     

    The heart of Mr. Allison's strategy is offering financial advice doled out by "wealth management consultants." They will offer detailed investment advice to current clients -- especially those nearing retirement, who have the right to accept a lump sum and take it elsewhere. The specifics of those recommendations will come from an independent company to avoid potential conflicts of interest, such as touting higher-fee investments that benefit TIAA-CREF. The company also is opening dozens of branch offices near college campuses, another big change.

     

    The adviser strategy has some risks. For one, it assumes clients will want financial advice from TIAA-CREF, a firm with no track record in giving it. TIAA-CREF is betting clients will turn to it in part because of decades of goodwill it has earned at universities.

     

    Yet that goodwill has been stressed by other aspects of Mr. Allison's strategy. He is determined that the firm won't stick with money-losing projects.

     

    In 2003, he sold off one such business: insurance for long-term care, as in nursing homes. This sort of insurance has been a tricky area for consumers, who worry that an insurer might nickel-and-dime them later when they're old and vulnerable. In this respect, TIAA-CREF's good-guy reputation as a nonprofit was a selling point.

     

    But the sale of its existing long-term-care policies to a for-profit insurer has upset some clients. "They betrayed me," says Jeremy Stone, former head of the Federation of American Scientists and a TIAA-CREF client since 1964. With a long-term-care policy, "you have to trust the organization to follow through," he says.

     

     

    Last summer, Mr. Allison's approach set off another backlash. TIAA-CREF's eight-year-old mutual-fund group, which had a consumer-friendly policy of low management fees, also was losing money. Executives decided they had to either raise fees or shut the group down.

    Mr. Allison figured the fees were so low they could be raised significantly and still be below most funds. But he proposed to as much as quadruple some of them. When shareholders in the funds got a chance to vote on the increases, they rejected them on nine of the 30 funds then offered. Those funds had $4.6 billion in them -- about 40% of the fund group's assets.

    Now he was boxed in. He didn't want to close the funds and return that money to investors. But he also didn't want to continue a business that was losing money. Mr. Allison decided to hold a second shareholder vote on the boosts.

    Top executives at TIAA-CREF warned him he was putting his own reputation at stake and it would take a hit if he lost again. He says he saw it a different way: Retreating on the fee strategy would make the company look weak. So he made an aggressive lobbying push to get several big clients to reconsider. The fee increases passed in January.

     

     

    Technology continues to bedevil TIAA-CREF. Last year it started phasing in new software. Some executives urged a slow timetable. Mr. Allison went for an aggressive one, saying the old system's limits were costing it business.

    One upgrade took place just before Thanksgiving, and the timing was terrible. The new software had bugs that surfaced just as the traditional end-of-year surge in account activity commenced. Thousands of people suffered delays in receiving or moving money, and to some who used TIAA-CREF's Web site, it looked as if money had vanished from their accounts. Although the 13,000 clients who had problems were a tiny share of TIAA-CREF's total, some had to wait till January to get fully restored service.

    There's more work to do. TIAA-CREF clients don't yet have the ability to reset passwords on their online accounts if they forget them. They have to phone in. Expenses charged on TIAA-CREF's main retirement offerings rose last year, partly to cover the technology bill.

    Mr. Allison says the firm was right to stick to a fast-paced computer upgrade. He says it has moved 1.9 million accounts to a new record-keeping system. In the long term, "it's in the participants' and institutions' interests," he says.

     

     

     

     

     


  12. TR and FT,

    I like AP suggestion. Do something different and start a new discussion. In all of your combined posts, which are over a thousand, both of you have only started 7 discussion threads. Its soooooo easy to criticize, but sooooo hard to come up with new ideas. Both of you have NONE. But heck thats OK. We are all here to learn.

     

    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 speak for the folks who run the site, but my impression is that it generally has a point of view that investors are capable of running their own 403b accounts without the services of agents. People who come here generally want to inform themselves so that they can become better investors without the paying the costly fees that agents charge. Therefore, an article like the one in the LA Times is relevant to those folks. An article about (still) low cost TC seems less relevant.

    ...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. Equal time? Are you kidding? This site provides it to folks like you day in and day out, and I'm glad they do. If you see criticism of companies that advertise here, just post it. If there is valid criticism of companies like Vanguard, Fidelity, TRP, or TC, I would like to see it. That will help to make me a more informed investor. Have you been unable to post anything critical about advertisers of this site?

     

     

    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. How is that a cheap s? If the people who run this site and set the content aren't willing to criticize advertisers or a least give equal time to the criticism that exists in the press, how can that be construed any differently than a union being paid to give an endorsement? The truth is that this site bashes annuities. That's OK. I don't see any annuity companies advertising here. But this site also has advertising from TC, T. Rowe Price and Bolton Partners. It seems pretty intellectually dishonest to ignore front page criticism of one of these firms in a national daily on 3 different occasions to focus on the same old annuity bashing story in the LA Times. I don't care, but don't ignore the facts when they are out there in plain view for everybody to see. I'm not naive enough to think the site owners don't feel pressure to ignore criticism of advertisers. That doesn't mean I can't point it out!

     

     

    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. French Teacher,

     

    I have no problem at all criticizing TIAA-CREF, Vanguard, Fidelity, or any other company that does a poor job of service. I'll also put in my two cents and criticize TIAA-CREF for raising fees on some of its funds.

     

    I'm in favor of looking out for the interests of investors. Companies that do a good job deserve commendation, and those that do a bad job deserve criticism.

     

    Having said that, I have had absolutely no problem with service from Vanguard, T. Rowe Price, and Fidelity. Without exception, they have been terrific. With these companies, I have paid very low fees and have gotten excellent service.

     

    By the way, I had lousy service from AIM (which charges a nice heft sales fee for its former INVESCO funds). In that case, I certainly did not get what I paid for. Those morons could not even provide average cost basis when I redeemed some shares.

     

    My experience with GALIC was even worse. No service at all would have been far better than the service I got from my sales agent.

     

    I cannot make generalizations for all investors, but in my case, the low cost companies provided much better service than the high cost providers.

     

     

    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. Oh, that's right I forgot about the French Teacher. I should have stipulated that we are looking for another, just one more teacher, that believes his/her union is NOT failing the members.

     

     

    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. Isn't there one union member out there that believes the unions' advice is NOT failing teachers? Why don't you step up and defend your union?

     

     

    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.  

    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.


  19. DGEIX looks like a great fund. Is it available for 403(b)? Morningstar shows the minumum investment to be $2,000,000.00. This contest should be limited to products where the average 403(b) participant could actually open an account and account would take monthly payroll contributions.

     

    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.


  20. We start with $50,000. Who ever has the most at the end wins.

     

     

    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.


  21.  

    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.

×
×
  • Create New...