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Everything posted by FrenchTeacher

  1. Given the fact that every representative from every company that either you or I has spoken to has agreed with me so far, what makes you think for a moment that my CFP will agree with you? TR's a financial planner, and he doesn't. Chadposner is a financial planner, and he doesn't.
  2. Joel, you're actually getting more annoying than usual. Which is saying something. By my count, you, Scotty and Danc are saying one thing; I, TR and chadposner are saying something different. Only you would look at a 3-3 tie and call it a victory. Strike that, actually: we've consulted two annuity companies, ING and TIAA-CREF, and they've broken the tie in our favor! Rather than just cherry-pick the quotes from only those people who agree with us, I'm perfectly content to agree to disagree. Nothing you say will convince me of the definitive existence of an M&E in a fixed annuity, and nothing I say will convince you otherwise, so further dialogue is pointless.
  3. Joel, I'm arguing with you because I don't agree with what you're saying. I think that's allowed. M&E = Mortality & Expense. Chadposner has stated that there is no Mortality charge, and with companies such as TIAA-CREF, Vanguard, et al, there is clearly no Expense charge. Full-service companies may have a fee on their accounts to compensate their agents, but that would be an implicit "E" charge, not necessarily an "M&E" fee. By the way, you can add two more answers to your list: ING says "FALSE." TIAA-CREF says "FALSE."
  4. Joel, you may quote all the out-of-context snippets that you'd like in an attempt to convey universal agreement here. That doesn't make it so. Long AFTER TR wrote "It is a cost in the product," he responded to my assertion that there didn't appear to be an M&E fee on fixed annuities by writing, "FT, You are correct but Joel wants to call it an M&E. I say let him have his way. It's OK." Doesn't really sound like he agrees with you. You want to quote Scottyd as agreeing with you, though what he really wrote was that he saw both sides of this argument as equally valid (and, I believe, equally stupid). And chadposner, also a financial planner, has never wavered from his opinion that there is no M&E fee on fixed annuities, either. And ING and TIAA-CREF both have reps that have confirmed that there is no M&E fee on fixed annuities. All of which is a roundabout way of saying, I'm perfectly content to agree to disagree. But please don't summarize this whole thing with the illusion that you've proved a point somehow. Too many people in the room continue to disagree with you.
  5. Joel, you and I (and everyone else familiar with you) knows that if I had called ING and said that they agreed with me, you simply would have impugned their integrity. So I saved myself a few exchanges with you and went right to TIAA-CREF. Imagine my shock now to hear you impugn THEIR integrity. TR called an actuary at Genworth, a company who issues fixed annuities, and HE said that there is no M&E on a fixed annuity. I called TIAA-CREF, one of the largest issuers of fixed annuities to teachers (if not THE largest), and THEY said there is no M&E on a fixed annuity. That's good enough for me. By the way, if your TIAA-CREF, whose service you're so proud of saying is as good as any full-service provider, were really giving out wrong information, wouldn't THAT speak volumes about your constant assertions that they are so good? At this point, you should really admit that you're wrong about at least ONE of two things: the quality of service at TIAA-CREF, or the existence of the M&E fee in a fixed annuity. Please feel free to take your last s. I've done my research, I've concluded there is no M&E for a fixed annuity, and I'm done running around the maypole with you.
  6. Joel, just to clarify: if you were right about the fixed annuities, I'd be happy to post it here. To the extent that I feel any personal animus towards you, it's because I don't feel you were truthful in our previous discussions. But if you were right about this issue, I'd happily say so here. It's just that, so far, I haven't found anyone who agrees with you, including the experts that others have cited, and now TIAA-CREF.
  7. I'll go you one better, Joel: I contacted your beloved TIAA-CREF, and I have already posted their response here. Any questions?
  8. Then you and danc are overgeneralizing. Perhaps you're extrapolating from an individual experience that scarred you for life. Perhaps you're just making it up as you go, not that that's ever happened before. Ahem. Either way, you are stating something to be universally true when it's not. It's no truer than an agent who would post here that paying more ALWAYS gets you GREAT service. There are no absolutes here, as much as you try to pretend that there are.
  9. Quick update: I called TIAA-CREF's 800 number, and asked the woman who answered specifically about the M&E fee on the CREF variable accounts. The information they gave me corresponded precisely to the information that is on the prospectuses on their website, and she pointed out (quite correctly) that they were among the lowest M&E fees in the industry. I then asked them if there was an M&E fee on their fixed annuities. I was on hold for about 3-4 minutes, then the woman got back on the line and said that there was no M&E fee on the fixed annuities at TIAA-CREF. I said, "No M&E fee whatsoever?" She responded, "That's right, none." I trust that I have been of assistance in helping you understand this complex issue. :-)
  10. The article's conclusion--don't buy a long-term annuity if you're over the age of 65--appears sound. It's the details leading up to this conclusion that are puzzling.
  11. No, no, silly. The advisor NEVER provides service. He only distributes product and cashes that commission check for which he does no work. Repeat that mantra. Forget that you are an advisor who provides service, and I am a client who receives service from my advisor. We're obviously both just imagining things.
  12. You can rest well tonight, confident that you've done your usual transparent job of obfuscating the issue at hand. You're asking us to believe that: 1. all fixed annuities charge M&E fees, but that 2. no fixed annuity explicitly mentions them, and furthermore that 3. in one of the most highly regulated industries in the country, the M&E fee is something that an insurance company can just slip into the deal without having to mention it anywhere, even though 4. every site I've visited, including TIAA-CREF, goes out of their way to mention the M&E fee for their variable annuities but doesn't mention them at all in conjunction with their fixed annuities, and 4. to illustrate just how "obvious" this is, you cite completely irrelevant examples of phone bills and other items that have nothing to do with financial services. Sorry, but this is classic Joel L. Frank: repeat something a hundred times, and hope that people will accept it as truth. Having seen you be less than truthful about other issues, though, and exhibit an inability to simply admit when you're wrong, I can't accept your word at face value.
  13. Never mind, TR...answered my own question. Ah, the miracle of Google! http://www.dalbarinc.com/content/printerfriendly.asp?page=2003071601
  14. These numbers are amazing. They clearly speak to the need for research before making a mutual fund investment, and patience after making that decision. TR, is this Dalbar study available online anywhere, and if so could you provide a link? (Or is it a subscription-only thing?)
  15. Without wanting to run in circles, Joel, what you've shown here is that there IS an implicit cost in fixed annuities. What you HAVEN'T shown is why we should call that cost an "M&E fee." You could just as easily call it an "annual fee," an "accounting fee," a "cost of doing business" fee, or a "profit for the bank" fee. An M&E fee is a very specific thing with a very specific definition. I still haven't seen any evidence that it exists in a fixed annuity. There are implicit costs in a fixed annuity, of course, and the issuers of such annuities make their money through those fees. But I don't see where they are M&E fees.
  16. I have no trouble believing that there are fees, of course. With the exception of TIAA-CREF, these companies are all for-profit entities, so of course they will maximize profits however they can, as long as the market will bear whatever cost structure they try to pass on to their customers. But "Common Sense" (ahem) dictates that if there is a fee, there is a legal requirement to disclose it to the customer. Credit card companies can't simply charge $30 late fees if you miss a payment, they are legally obligated to inform you that they will do so. The M&E fee is no different. If the SEC doesn't govern notification of an M&E fee for a fixed annuity (the way they do for VA's) because there is no "investment risk," then there is some other legal mechanism by which the company must inform the customer. A fixed annuity requires the signing of a contract, yes? So perhaps contract law applies here?
  17. TIAA charges an M&E fee on their fixed annuity? Could you please show me where it says they do that on their website? Because the funny thing is, they DO mention an M&E fee on their variable annuities on their website. And they talk about other kinds of charges, like surrender charges, on their FIXED annuities on their website. But an M&E on a fixed annuity? Not a word.
  18. What? Crushing of dissent because someone is posting a different point of view? I'm shocked...shocked!
  19. Are you saying there are no laws that govern full disclosure of mortality and expense fees? Because if there ARE such laws, and those fees exist but are not being disclosed by insurance companies selling fixed annuities, you've got one hell of a class-action lawsuit on your hands. I urge you to contact Eliot Spitzer immediately.
  20. 1. AIM is a "load" mutual fund company, meaning that their mutual funds have sales charges. Can't speak to how good bad or ugly they are, but it shouldn't matter unless you stick with them, since the money market will not subject you to market risk. 2. The money market account is an investment option within the 403(b) account. There might be a few dozen other investment options than the money market account, but it sounds like everyone's money will START in the money market account because it won't subject you to market risk. And there shouldn't be any sales charge on a money market fund, either. Other than that $20 they're taking from you. 3. Yes, there is, and no, it shouldn't. 4. Yes, you absolutely SHOULD be entitled to the details in writing. When our local did something similar for our members, we all got copies of a memorandum of understanding that was signed by local and district. You should ask for and receive this. 5. Upset over nothing? I wouldn't say so. The rep has done a bad job (sounds like) of explaining things to you. And that $20 per person would tick me off a little, too. When our local did the same deal, we used a company that guaranteed no sales charges of any kind and no account fee of any kind, so that everyone received 100% of their money even if they closed the account right away. Just my two cents.
  21. I never expressed an opinion on the subject. I asked for proof of the existence of an M&E in a fixed annuity. So are you saying it's legal for an insurance company to sell a fixed annuity with an M&E fee without disclosing said fee in the contract that must be signed? I remain skeptical.
  22. Steve, I'm still asking, too: show me that guarantee that your fees will remain low. Seems to me that mutual funds change their fee structures all the time. TIAA-CREF was a different kind of company before a former Merrill Lynch guy took it over, and now there are a whole litany of complaints (some of them voiced by you, if I'm not mistaken), and even an investigation from the SEC. What's to stop the same thing from happening at Vanguard? The answer, I would think, is that there IS no guarantee that Vanguard (or any other company) will remain "the lowest fees in the world," or even relatively low. If they change how much they are charging for their funds, they issue a new prospectus and notify their investors. Then, I imagine, you'd head for the doorway, and rightfully so if you feel you can do better elsewhere. The same is certainly true of performance figures. I won't trouble you with a whole different list of funds that will pay that 10% looking forward, because TR has already provided you with a list that beat the S&P 500, whose management is substantially intact, and therefore from whom we can realistically expect continued excellence in the future. Guarantee? No. But again, anyone looking for guarantees of any kind really has no business in equities, do they? I appreciate your resolve never to use a high cost vendor again. I'm really not trying to convince you otherwise, so much as I am trying to explain the thought process that leads me to those very funds sometimes. I also do some no-load investing outside of my 403(b), very small potatoes, but I enjoy the process of finding good investments and following them. Some of those good investments have been no-loads, and some have been loads. And there have been some turkeys along the way, too! As you say, either way, it's quite an education. I resent your saying that your willingness to admit mistakes distinguishes you from me, though. Believe me, I'm quite willing to admit my mistakes. I just don't believe my 403(b) investments qualify as such, at least not for the time being.
  23. Joel, if you're insisting that there is such a thing as an M&E fee for a fixed annuity, it should be no trouble to quote one from a prospectus. Please do so. Two financial advisors (TR & Chad) have written here insisting there is no such , and a Genworth actuary has been quoted. The simplest way to settle this is to quote from a prospectus. If you can't find an M&E fee in a prospectus for a fixed annuity, then there is simply no such thing. I don't want to hear any more about "common sense," because (and this is not said to offend) your version of "common sense" has not corresponded to mainstream definitions of common sense in the past.
  24. Steve, I'll stop you right there and hit you with some stunning news: I agree entirely. For those teachers who do want to take responsibility, the process that you're outlining is a solid one, and makes a great deal of sense. Knowing and working with as many teachers as I do, where I become "pro-money management" as you phrased it is in the knowledge that so many of my colleagues DON'T care enough, or AREN'T interested enough in this stuff, to take responsibility. Hence our job should be to guide them into the right hands, if we know they're going to hire pros. But I completely agree with you that EVERYONE (regardless of profession, really, but it's teachers that I work with) should be fully engaged in their own financial future, and if they are, your process makes a great deal of sense. The other thing is that even if you're doing it yourself, I don't think it's helpful to have a blind spot about funds that have been successful over a long period of time just because their expenses are higher. It seems obvious to me that it makes more sense to pay 2% for a fund that returns 10% (net gain of 8%) than it does to pay zero for a fund that returns 6%. But as much as you accuse me of drinking the professional money management Kool-Aid, I think you've been sold a bill of goods in making cost the SOLE determinant of what funds you work with. I guess we really will have to agree to disagree about that.
  25. TR, doubtless the response is that you can't GUARANTEE these numbers for the NEXT ten years, so they don't matter. Which, I think, is a vast oversimplification. Anyone who is interested in guarantees has no business in equities in the first place. There is a middle ground to be explored here, somewhere between "Past performance guarantees future performance" (which no responsible person claims) and "There is absolutely NO relationship between past performance and future performance," which no responsible person should claim.
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