Jump to content
Admin

Union Advice Failing Teachers

Recommended Posts

Herb,

 

I, too, find it difficult to accept union endorsement of 403b products. I think that you are absolutely right on when you say that union members expect these products to be superior, when in fact that is probably not the case. My association president explicitly said that our 457 endorsed product was NOT chosen on the basis of providing the best product that could be found. And yet members believe otherwise.

 

Your comments about people on this forum providing "investment advice" are a little disturbing. You seem to be asking if folks here who make suggestions are liable for negative consequences that may result from such advice. Merely raising this question could have a chilling effect on people who want to express an opinion about, for example, low cost index funds vs. high cost actively managed funds. I know that you were just asking the question, but suppose that I suggest that someone consider Fidelity Spartan funds. Are you suggesting that it is even remotely possible that this is "investment advice" for which I could be held responsible for adverse consequences? If so, then:

 

1) The 1st Amendment has little meaning.

2) Every forum of this type should be shut down in order to avoid lawsuits.

 

Again, you are a true gentleman, and you were only raising the question, but I can't imagine that the posts on this forum could be construed as "investment advice." They are opinions. Nobody here is taking any money for offering these opinions. Nobody here is pushing across the table any forms to sign.

Edited by apteacher

Share this post


Link to post
Share on other sites

AP: I raise the question about "investment advice" precisley because I dont know the answer. But, as an agent, I know that if I posted comments with the same,how shall I say, "enthusiasm" as some non-agents, I would be getting calls from the home office. I am not an attorney, I dont know the answer, but it is an important question.

 

I raise the question, though, to make one clear point; that there can be consequences to the people that read these posts, and those consequences can be unintended. These are not private posts, this is a public site. TR, another agent, raises the question of consequences all the time when he ask how the non-agent knows all about the rep or the company that is being attacked. The professional is required to consider the conequences of advice he gives, to the best of his ability. If the client is hurt, the agent must explain.

 

If the same rules apply to the non-agents (and again, I just dont know), then some moderation is in order. If the non-agent is not bound by the same rules as the agent, then, it is important for the non-agent to understand that silence, on the part of the agent, does not mean agreement or that the agents arguments are defeated. It may mean that the professionals have left the field.

 

Herb Hussey

Share this post


Link to post
Share on other sites
Guest Sierra

Steve; you and I agree on the issue of M&E. I dont sell VA products. My firm sells fixed account and mutual funds. We dont offer VA's because we are concerned about the M&E fees. My point about the VA was this: when a non-agent posts regular attacks on the VA, they are focusing on the cost issue. Very little attention is given to a benefit of the insurance contract. And, while the non-agent may find no personal value to the insurance coverage afforded under the VA, that benefit is there, and accrues to the contract owner.

 

So, my question is this: are the people that post here giving investment advice without knowing all the reasons why a person purchased the VA? Are they liable for poor consequences for the advice they give?

 

Steve, people can share any idea they wish. But, at what point does a person go from being an advocate to being considered an "expert"? And, if they put themselves out there as knowing the "truth", and "knowledgeable" about a topic, and they "encourage" other to take a course of action, and "discourage" other actions, and people "rely" on their "expertise", are they giving investment advice?

 

In this situation, the agents take one very large step back. But, the non-agents rush forward. Is this the wisest move to make?

 

 

Herb Hussey

===================================================================

Herb: The fixed or guaranteed interest rate annuity product is subject to the ME fee. The ME fee like all other costs of doing business is simply factored into the declared interest rate. So if you were genuinely concerned with the ME fee you would not sell the fixed annuity product either.

 

Joel L. Frank

Edited by Sierra

Share this post


Link to post
Share on other sites

Herb,

 

"... that there can be consequences to the people that read these posts, and those consequences can be unintended."

 

That's a reasonable point, Herb. However, I don't want folks to cower from suggesting that people who post questions here should consider low cost index funds.

 

In fact, the people who run this site make that very suggestion. If people who post here are potentially liable, what position does this place the administrators of this site in?

 

I would like to hear from the administrators of this site on this issue.

 

I just can't believe that posting something as innocuous as "Look into Vanguard" or "Consider Fidelity Spartan" brings about any legal liability for non-agents. In fact, the more I think about this, the more ridiculous it seems.

Share this post


Link to post
Share on other sites
Guest Sierra

Hi,

Herb: "One key point I would make is this: the agent does not work for the client. He works for the company with whom he is contracted. There is a written contract between the agent and the company; there is no contract between the agent and the client. The agent represents the company, but can act independently of the company when suggesting products to a potential client. Once the client says he wants to buy, the agent then represents the company."

 

That is precisely the point. That is why the client needs an independent voice like a fee-only financial advisor. Or for the person who would like to manage their own portfolio, then this website can be helpful. Best Wishes.

 

Joe

 

I WOULD LIKE THIS POSTED IN EVERY WORKPLACE IN THIS GREATEST OF ALL COUNTRIES, OUR UNITED STATES. JMacDonald, this goes to the very essence of the question: WHO IS PROTECTING/ACTING AS FIDUCIARY FOR THE INVESTING PUBLIC?

 

Peace and Hope,

Joel

 

Share this post


Link to post
Share on other sites
Guest Sierra

Herb: anyone who is in the business of selling investment product must be licensed. Anyone who is in the business of dispensing investment advice for a fee must be registered with the SEC as a Registered Investment Advisor. So if a non-securities person "advises" someone on this board to buy a specific product (load or no-load) the "advisor" is not dispensing investment advice because he/she is not charging a fee for the "advice".

 

Joel L. Frank

Share this post


Link to post
Share on other sites

Sierra: M&E charges for VA and fixed annuity are structurally different. The fixed annuity M&E is built into the cost of the product, and cant easily be broken out. On the other hand, the M&E for VA's are a separate fee that is charged to the client's account. The proof of that is that the M&E for VA is charged against the mutual funds in the VA, but not the fixed account of the VA. Therefore, if the client wants mutual funds, and wishes to reduce fees, the client can focus on products that dont have M&E costs.

 

Sierra: On the issue of investment advice, as I said, I am not an attorney. If you are, thats fine. Are you an attorney?

 

AP; the question of investment advice is truly interestimg. Please do ask the Admin. Notice, though, how this discussion has changed behavior? If the posts were truly "innocuous as look into Vangaurd", then there is probably no issue. But, honestly, and these comments are not directed to you, some of the posts are extreme in their hostility. Agents, companies and their products are attacked again and again. I just wonder, what would happen is someone happened to act on what was said. If it goes badly, does the poster just walk away by saying; "oh well, I was just expressing my opinion, I was not giving advice". Would that work?

 

 

Herb Hussey

Share this post


Link to post
Share on other sites
Guest TR1982

Herb: anyone who is in the business of selling investment product must be licensed. Anyone who is in the business of dispensing investment advice for a fee must be registered with the SEC as a Registered Investment Advisor. So if a non-securities person "advises" someone on this board to buy a specific product (load or no-load) the "advisor" is not dispensing investment advice because he/she is not charging a fee for the "advice".

 

Joel L. Frank

 

 

Sierra,

Please examine the following quote from a newsletter which charges a subscription fee but is not regulated by the SEC or NASD.

 

"Since 1976, NoLoad Fund* has concentrated on one thing and one thing only—performance. And our focus has paid off.

 

The Hulbert Financial Digest ranks NoLoad Fund* the very best risk-adjusted newsletter for the past 25 years. More importantly, our single-minded attention has paid off for those who follow our strategy. Our Class 3 portfolio has turned in an impressive 18% annualized gain for the 25 years ending October 31, 2005."

http://www.fundx.com/subscribe.cfm

 

Is the newsletter providing investment advice? Is the newsletter charging a fee? If it walks like a duck and talks like a duck, it must be a duck.

 

Share this post


Link to post
Share on other sites

Herb,

 

"But, honestly, and these comments are not directed to you, some of the posts are extreme in their hostility. Agents, companies and their products are attacked again and again. I just wonder, what would happen is someone happened to act on what was said. If it goes badly, does the poster just walk away by saying; "oh well, I was just expressing my opinion, I was not giving advice". Would that work?"

 

I have attacked NEA-endorsed Valuebuilder repeatedly. In fact, I'll do it again: Valuebuilder is atrocious. Now, have I just incurred some liability? How on earth is that investment advice? It is an opinion.

If you are saying that this type of expression is not protected, you are not only going to have to shut down sites like this, you are going to have to shut down Money, Smart Money, Kiplinger's, CNBC, Fox, and any number of other media outlets that I cannot think of now.

 

Herb, you are the perfect gentleman, but I do believe that you are on the verge of suggesting that nobody can express opinions on investing matters.

 

Again, I would like the site administrators to weigh in.

 

Share this post


Link to post
Share on other sites

AP; I think its good to ask the Admin, because I dont really know where the boundries are for this type of forum. I know what I can/ cannot do in my profession; but I am not sure where the line is for non-agent posting on public sites.

 

I can truly understand when someone has an opinion. It is what they think is best for them. But, what happens when they tell others to do something? Is that advice or just chatting? I honestly, deeply, and truly do not know. This is why I ask.

 

Since this is a website for the do-it-yourselfer, I believe that this is the group that has ask that question of the Admin, and see where that discussion goes. Agents have their rules (I know, for some, this is very, very hard to believe; but just go with me on this, OK?!!). What are the rules for the non-agents? Tell me, I would dearly like to know.

 

Aloha,

 

Herb

 

 

Share this post


Link to post
Share on other sites

Herb,

 

If Jim Cramer recommends a stock, I buy it, and then it goes south, can I sue him?

 

If Money magazine has a list of recommended stocks, I buy some, and they tank, can I sue Money? If Money has a cover story, "Buy Stocks Now!," I follow that advice, and then the market crashes, can I sue the magazine? How about a cover story, "Five Funds for the Future," that leads me to buy one, only to find that it's a dog? Can I sue Money then?

 

If a financial guru on a Fox Saturday morning financial show urges viewers to buy a stock, I buy some, and then it collapses, can I sue the guru?

 

Do you see what I'm driving at, Herb? If I say, "Don't use an agent; invest on your own," for Pete's sake, that is just an opinion. We are all responsible for making our own financial decisions.

 

Herb, is it possible that you are feeling a bit put out that agents on this forum do not always have the same leeway to discuss financial matters as the rest of us? If true, that is understandable. But please do not try to create a climate of fear that inhibits the rest of us from sharing our opinions, objectionable as they may be to you. After all, TR drives me nuts, but I sure don't want him to stop sharing his views.

 

 

 

Share this post


Link to post
Share on other sites

AP; geeeezzz.

 

That was the best post I read all day, it is a pleasure to chat with you. You must be a good teacher, AP!

 

Aloha and Good Day from Herb, the Instller of Fear

Share this post


Link to post
Share on other sites
Guest TR1982

"After all, TR drives me nuts, but I sure don't want him to stop sharing his views."

 

 

That's really nice. Thanks!

Share this post


Link to post
Share on other sites

I appreciate the fact that the sales agent is contracted to the insurance/mutual fund industry primarily, and accordingly has a fiduciary responsibility to his employers. I recently needed advice and went to an independant "fee only" advisor who took my information and unique particulars into account and gave me a solid viable plan which I use..his fiduciary responsibility was to me..by that I mean he looked after my interests first. And I think that is the point of so many of these discussions.

 

Calling salespeople "professionals" has a nice "ring" to it..what are the characteristics of any group that allows it to call itself "professional"?..self-policing? Has anyone heard of an insurance salesman getting ousted lately...for mis-advice to unsuspecting teachers?

 

I also think that steering clients away from this sort of forum is very telling. Too much information I suppose?

 

Best of fortunes, Dan

Share this post


Link to post
Share on other sites

Herb,

I second what you said about AP. I have said this before, AP, and Ill say it again. You have been a prize right from the start with your elegant posts. You have the keen ability to explain, rebuttal in focused approach and with class.

By the way, AP, do you think you can make it to the lunch this Saturday? It would be a pleasure meeting you and in return you can meet the poster teacher of 403b reform, Crystal Mendez, her boyfriend and Joe MacDonald. I have sent an invitation out to over hundred people, not including the good folks here.

How about it?

Best to you,

Steve

Share this post


Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

Loading...

×
×
  • Create New...