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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.

 

 

 

 

 

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Greetings all,

 

I was going to suggest that FT and/or TR post the story and as I have been writing these words I see that they have. As was pointed out by FT WSJ is a pay site so we would not be able to post it.

 

We are pretty clear that this site supports the low-cost, no-load mutual fund/low cost annuity, no surrender charge approach to investing. We are not against investment advice. However, we seriously question advice that is tied to product being sold. We think there is an inherent conflict of interest in that approach. We think an investor seeking advice would be much better off going with a low-cost company such as Fidelity (not a sponsor), T. Rowe Price, TIAA-CREF, Vanguard (not a sponsor) and USAA (not a sponsor) then contacting a fee-only advisor through The National Association of Personal Financial Advisors.

 

We endorse the investment approach of John Bogle (thank you for calling Teach and Retire Rich "Right on!", Burton G. Malkiel, William Bernstein (thank you for the foreword in Teach and Retire Rich, Jeremy Siegel et al. Until the ideas of these gentleman and similar thinkers are found to be error we will continue to advocate this approach.

 

 

Dan Otter

 

 

 

 

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I have had a moment to read what was posted by FT. Scott Dauenhauer has spoken about much of these issues in the past. TIAA-CREF is a company that is undergoing a needed transformation. Clearly there have been glitches. It's hard to see how the information shared here is even remotely similar to the story in the LA Times. That story highlights how teachers have been taken advantage of. The WSJ story talks about a company struggling to transform.

 

I just did a quick search and found this story from January:

 

TIAA-CREF, one of the nation's largest private retirement systems, continues to struggle with serious issues with internal systems that have caused delayed access to pensioner funds.

 

While TIAA-CREF officials said only a small percentage of users have been affected by the infrastructure upgrade snafu, pensioners and employees have put the number closer to 15,000. Some pensioners who still do not have access to funds want to know what's being done to solve the issues. Few concrete answers are coming from TIAA-CREF, so some want to seek help from regulatory authorities.

 

"I don't understand how they can do this," said one pensioner who has been waiting for rollover funds since late October. "Why aren't they sending me e-mails and updates? Why isn't there any information about the situation on their Web site? Can't they be penalized for failing to perform?"

 

The problems are the result of difficulties with a major initiative called Open Plan Solutions, a commercial platform that integrates the company's legacy annuity, mutual funds and other service offerings into a single system, according to internal documents obtained by eWEEK. The company also has consolidated its data network, implemented a single data security firewall, put in a new trading and settlement system, developed new desktop systems for customer service agents, and upgraded its financial systems.

 

At the same time, TIAA-CREF developed the infrastructure to support Open Plan Solutions—or TOPS, as it's known internally—and reorganized IT across the company, according to its 2005 annual report.

 

"We were replacing older software and systems that run our payments processing and online functions," said TIAA-CREF spokesperson Glen Weiner at the company's New York headquarters. "The sheer complexity of upgrading our service infrastructure, including the rollout of our new platform, led to the recent customer service problems."

 

TIAA-CREF operates as both an insurance and a mutual funds company, and as such is under the regulatory authority of the Securities and Exchange Commission and the New York State Insurance Department. TIAA-CREF is incorporated in New York.

 

TIAA-CREF informed the Insurance Department in December that there were some issues in getting funds to customers. But given the lack of consumer complaints and an understanding that the issues are not widespread, the department hasn't gone any further with investigations, according to Wayne Cotter, research director at the department.

 

Two former TIAA-CREF employees who requested anonymity likewise point to migration issues specifically with TOPS as the culprit for pensioner problems.

 

"The bottom line is, this project, and the company, is a mess. The code we put into production [we should not] have put into QA [quality assurance], and yet it's been put into production," said a former company IT manager. "People's bonuses are tied to how many schools they convert to TOPS, and people can't keep up [with manual workarounds]."

 

One TIAA-CREF participant, Nick Chase, isn't taking any chances. After having a funds disbursement issue solved last month followed by a new IRA funds transfer issue, Chase is moving what money he can to a Fidelity Investments account.

 

"Anything that involves people's money—those systems are supposed to be very, very carefully tested before they're switched over," said Chase, a retired systems manager in Worcester, Mass. "This smacks of testing pressure. My feeling is they were in too much of a hurry and didn't test accurately. If something like this happens, they're going to lose business. They're already losing my business."

 

TIAA-CREF's Open Plan Solutions

 

Brings together fixed annuities, variable annuities, mutual funds, homegrown platforms onto single, commercial platform

 

* Flexible, state-of-the-art record-keeping platform

 

* Streamlined enrollment process

 

* Comprehensive remittance services

 

* Improved Web-based institutional reporting on accumulations, transactions and salary reduction agreements

 

* New and improved participant quarterly statements

 

Source: TIAA-CREF 2005 Annual Report

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Guest TR1982

FT is correct, I am referring to the front page of the site. Look, I don't run or sponsor this site. But Dan has often said to me and others in responses that he is open to other points of view. I would simply reply that if you feel that way then make a little effort to fairly represent what is out there in the media. Many of the articles that are posted on the front page of the web site simply recycle the same allegations and assertions that were made in other articles. I would think that when there is something new out there you might want to give it some attention. I think this site would get a lot more attention if it wasn't so slanted against the annuity providers. That doesn't mean you have to like them or agree with them. But when you go out of your way to attack them, people can see that someone has an ax to grind.

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The WSJ doesn't allow for their content to be linked too. I read part of that article and it was a well written article, but it could not be posted. I guess posting bad article's about TIAA & Vanguard (there aren't many) don't get as much priority because even there 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. I came across a white paper the other day put out by 4 TIAA prof's and it was highly critical of TIAA (for all the exact reasons I have been critical of them) - I was going to send it to Dan, but after reading it I realized that it was not applicable anymore as TIAA has made significant changes since the paper came out. I still don't believe TIAA is a great place for 403b money in the K-12 environment unless you are looking for a fixed account. It is too difficult to get diversified in TIAA' k-12 product. I've said this for years.

 

In defense of Dan - he does post articles of opposing views - he just posted VALICs take over of a Maryland district and he routinely offers anyone the ability to write an op-ed who diasagrees with his views - he just receives very few takers - not his fault. He also turns down a lot of advertising because it doesn't mesh with his belief system. You can go anywhere you want and get the "company line" on 403bs - 403bwise is the only place you can go for the real truth.

 

Scottyd

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TR,

 

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 Otter

 

 

 

 

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Guest TR1982

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.

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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!

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Thanks FT,

 

I always appreciate your thoughtful responses. You raise a good point about the advice being offered by TIAA-CREF. Companies such as Vanguard, Fidelity and Charles Schwab also have advisory services. This discussion has given me an idea for a story on advice. I am a doctoral student right now with finals week looming so it may take some time to put together, but I will address that issue in it. Thanks for raising the question.

 

TR,

 

I will make my point again: if teachers were no longer being taken advantage of, such stories would not be coming out. Why would the editors of the LA Times choose to make this a front page story if it was not newsworthy? I get why you are worried. In the NY Times bestseller Freakonomics the authors address the information advantage enjoyed by those in real estate, law, financial services industry and other areas. They contend that the Internet is shrinking and in some case eliminating that advantage and thus drastically reducing the fees these industries can command (it's doubtful the law industry will ever be fully affected!). They detail how term life insurance fees have dropped dramatically as a result. These authors suggested in a recent follow up piece in a special NY Times Magazine real estate issue that real estate agents are becoming largely superfluous. Of course, the Real Estate industry is striking back hard at this assertion. I believe the same thing is happening with the 403(b). Why would AIG-VALIC adopt a mutual fund only approach at Richmond Schools? (I am still trying to get fee information on that plan). I believe this site and others (along with the financial media) is having an affect. Participants now have a place to go to learn about the 403(b) in a non-sales environment before making their decision. Our FAQ section addresses the advisor question as follows:

 

Do I have to use an agent to set up a 403(b)?

No. This site believes that with financial education, patience and realistic expectations, individuals are perfectly capable of managing their own 403(b). It is important to point out, however, that many agents provide valuable services to their clients. These services can include: retirement planning, information about state retirement plans, and analysis of other financial needs. Such agents rightly deserve to be compensated for their services. The key is to figure out exactly what services you are receiving, and exactly what fees you are paying for these services. Only then can you determine the true value of using an agent. Other options include hiring a financial planner who can be paid on an hourly basis to aid you with your 403(b).

 

Notice it doesn't say: no, never, don't dare.

 

In Teach and Retire Rich I readily share my approach to retirement investing: a low-fee target date mutual fund (annual fees less than 30 basis points) with advice solicited from a fee-only planner, an accountant and an attorney when needed. How do you invest for retirement? You don't have to name companies but what products are you in? What fees are you paying? Do you practice what you preach? Do you share with clients the option of investing on their own through a low-cost provider and/or fee only planner? Sharing this information would violate no law as you are not open about what your name is or who you work with.

 

Gotta go work on two papers and a presentation.

 

Dan Otter

 

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Guest Sierra

Would it be accurate to say that just like the latimes series is not 1000 percent accurate neither is the wsj article? But on balance they are both overwelmingly accurate.

 

Q.: Other than the retirement/investment/savings industry in what other walk of life do we pay someone every two weeks a commission to ACQUIRE the same thing?

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French Teacher,

 

Thank you for posting the excerpts on TC. Here are my observations:

 

1) Had I been a shareholder, I would have been mighty upset by the fee increases. I would have considered transferring my money to Vanguard or Fidelity, which have been driving down fees rather than raising them.

 

2) Failing to provide those pension checks on time is utterly unconscionable. I don't care what the software issues were. There is no excuse for that whatsoever. Again, I would have seriously considered transferring my money.

 

Now, I don't see much of a comparison between the TC issues above and the ongoing damage that some plans are wreaking upon investors. 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?

 

 

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Ohno....The LA Times article set me thinking and so I first checked with my union. They assured me that they do no receive kickbacks. But then I found this forum and started reading....My money is all with AXA where I moved it one year ago after a major scandal in my county. I have read many negative things about AXA charging huge fees as I read different parts of the website. Where should I start to find a better company and how do I move the money? I guess I should stop putting money in there now? Five years til retirement!!! Yikes....Does anyone have some advice?

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Ohno....The LA Times article set me thinking and so I first checked with my union. They assured me that they do no receive kickbacks. But then I found this forum and started reading....My money is all with AXA where I moved it one year ago after a major scandal in my county. I have read many negative things about AXA charging huge fees as I read different parts of the website. Where should I start to find a better company and how do I move the money? I guess I should stop putting money in there now? Five years til retirement!!! Yikes....Does anyone have some advice?

 

Others will probably provide better ideas but one of the recurrent pieces of advice is to "read the contract". It will tell you about fees include surrender charges and maybe contingent deferred charges. In my wife's 403b the terms say things like 10% can be transferred fee free each year. Also there is a scale of charges going from 7% to 1% from one to seven years from putting money into the account. But at 59.5 years of age all funds can be transferred fee free. So I suppose if you are over that age and working all funds would qualify. So read the details of the contract and see what you can do. Not adding any more sounds like a good first step.

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Guest TR1982

 

TR,

 

I will make my point again: if teachers were no longer being taken advantage of, such stories would not be coming out. Why would the editors of the LA Times choose to make this a front page story if it was not newsworthy? I get why you are worried. In the NY Times bestseller Freakonomics the authors address the information advantage enjoyed by those in real estate, law, financial services industry and other areas. They contend that the Internet is shrinking and in some case eliminating that advantage and thus drastically reducing the fees these industries can command (it's doubtful the law industry will ever be fully affected!). They detail how term life insurance fees have dropped dramatically as a result. These authors suggested in a recent follow up piece in a special NY Times Magazine real estate issue that real estate agents are becoming largely superfluous. Of course, the Real Estate industry is striking back hard at this assertion. I believe the same thing is happening with the 403(b). Why would AIG-VALIC adopt a mutual fund only approach at Richmond Schools? (I am still trying to get fee information on that plan). I believe this site and others (along with the financial media) is having an affect. Participants now have a place to go to learn about the 403(b) in a non-sales environment before making their decision. Our FAQ section addresses the advisor question as follows:

 

Do I have to use an agent to set up a 403(b)?

No. This site believes that with financial education, patience and realistic expectations, individuals are perfectly capable of managing their own 403(b). It is important to point out, however, that many agents provide valuable services to their clients. These services can include: retirement planning, information about state retirement plans, and analysis of other financial needs. Such agents rightly deserve to be compensated for their services. The key is to figure out exactly what services you are receiving, and exactly what fees you are paying for these services. Only then can you determine the true value of using an agent. Other options include hiring a financial planner who can be paid on an hourly basis to aid you with your 403(b).

 

Notice it doesn't say: no, never, don't dare.

 

In Teach and Retire Rich I readily share my approach to retirement investing: a low-fee target date mutual fund (annual fees less than 30 basis points) with advice solicited from a fee-only planner, an accountant and an attorney when needed. How do you invest for retirement? You don't have to name companies but what products are you in? What fees are you paying? Do you practice what you preach? Do you share with clients the option of investing on their own through a low-cost provider and/or fee only planner? Sharing this information would violate no law as you are not open about what your name is or who you work with.

 

Gotta go work on two papers and a presentation.

 

Dan Otter

 

 

Dan,

I can only say the following:

1) Nowhere on this site is there any reference to any firm other than TC or a no load mutual fund company as being an acceptable choice for a 403b plan. You point out "model plans" but the irony is that you recommend that employers go through an RFP to chose the best platform. When I pointed out one that had done just that and used a consultant that advertises on this site, almost everyone, including you, sneered at it. All the "model plans" you point out use TC or no load fund companies. I have no problem if you think no load mutual funds are the best way for everybody to invest. Why don't you just admit it instead of saying things like "It is important to point out, however, that many agents provide valuable services to their clients." You don't ever show or point out any example of that and instead, you go to great pains to show the opposite.

 

2) I get really tired of everybody suggesting that a fee schedule that is not acceptable to them as a "rip-off". If Vanguard charges 10 basis points and Fidelity charges 50 basis points, is Fidelity "ripping off" their customers? What happened to shopping around and finding the best price? I'm all for that. The truth is that no fee only planner is going to manage $100 a month into a 403b. I've been in this business 20 years and I've yet to meet anyone willing to work under any arrangement like that. I invite any planner to come here and explain their fee schedule for an arrangement less than $50,000. You call it a rip off but I know thousands of people who are willing to pay for that under the current system and THEY KNOW WHAT THEY ARE PAYING. How can it be a rip off if THEY KNOW WHAT THEY ARE PAYING AND CHOSE THAT ARRANGEMENT? Some of the folks here need a dose of reality about what a lot of people in the general public want.

 

3) I am under no obligation (moral, ethical, or legal) to suggest to someone that they should go do their investing on their own. That's even silly. Should teachers tell parents that they can teach their children more cheaply and with better results than hiring you? Only here would someone suggest that idea. Besides, I've seen the results of what most do it yourself investors have accomplished and it ain't pretty. It convinces me every day of the value I bring to most of my clients. The plain truth is that the results of investors who manage their own investments have been consistently worse than advisor managed funds.

 

4) Finally, please tell me what possible difference it would make if you knew my name or the firm I work for? It would satisfy your curiosity but wouldn't change what you think.

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Hi........there sure has been a lot of activity on this thread, and it took mequite awhile to read thru it.

 

Here are some of my comments,

 

First this thread was initially started to discuss the LA TIMES article showing collusion between the unions and certain insurance companies. I consider this is key subject of the thread, however to get away from discussion of this main subject other subjects, TIAAcref's problems, and attacks that aledge that this site itself is impartial, and other comments and issues were brought upto divert from the main subject. Please start another thread(s) to discuss each of these concerns so we can stay on subject.

 

It is also my opinion that this series of LA articles bring lots of attention to the concerns that we the "good guys" have brought up time and time again, and of course threatens the livilihood of others who have posted on this thread to divert interest form the main topic.

 

With so much money being spent by the insurance companies to create an environment where their sales personnel can operate freely, I would not be surprised if there are paid representatives of the industry posting here to stop the message from clearly coming out to readers. By the way, I wish to acknowledge that French teacher has started to post here again at this time when this series of LA articles have come out, so welcome back to the site.

 

Dan, you wrote,

 

"I too was very shocked when I first read that the "NEA received $49.6 million from Security Benefit Life Insurance, the provider of Valuebuilder." But the sentence goes on to read: and other endorsed companies in 2004." It's my understanding the deal is more along the lines of $2 million from Security Benefit. I am no fan of this product in its current form but I think it is important to point that "

 

Please remember that these are money's reprted to be received for 2004 only. Also, the articles, also talks about gratuities to individuals (which are not reported in the above amount).

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