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elliot

403(b) Vendor Reps

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EIBarnes,

 

You have my curiousity. Could you please share with us, Which specific funds you are invested in, and the name of the outfit you invest thru. Thanks..

 

 

 

 

I shared the name of all of my funds, any comments?

 

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Hi Hartford,

 

Thanks so much for your post. Your story is not a surprise to many of us. We have been discussing the 403b system for many years and you provide more evidence from the pros side. It may surprise you that there are some pros who have taken on this system and agree with you 100%.

 

My question is why did you write your story? Have you had clients who found out the game was rigged against them and asked you for help? If so, what did you do? Have clients simply pulled their money out of your products, paid the surrender charges and invested in Vanguard or some other no load company?

 

I sometimes think of the $6,000 I paid in surrender charges to transfer my money from a TSA to a no load company and what my agent did with her share. The anger I have for her and just about all TSA agents has turned me into an advocate for reform. That was a gift, albeit painful, but life's gifts and opportunities are often guised in mysterious ways; sometimes they don't come in pretty packages and are not predictable. I had never planned to be a 403b/457 advocate. Heck, never heard of such a position.

 

Would you consider writing a major piece for the media? We know many reporters and business editors that might be interested in your story as a pro in the field for many years. All the stories so far have been the educator's side but a story from a pro would be very provocative, to say the least.

 

I can see the headlines: "Retired Financial Pro Confesses." Subtitle: "The 403b system is totally corrupt involving all parties, complicit teachers’ unions, arrogant district staff and naive educators. All form this unique and smooth system, smooth as a tightly fitted leather glove with each party patting each other on the back in circuitous rhythm for 5 decades. Furthermore, NO PARTY EVER ASKS IF THIS SYSTEM IS GOOD FOR TEACHERS OR PUBLICALLY DISCUSSES THE 403B AS A POLICY ISSUE EVER!”

 

What do you think?

Steve

 

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Annual review = Let's sit down and see if you have any more money I can get control over. Also, do you have any friends or family that I can do the same thing to.

 

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Elliot,

 

Your analogy between buying a car and an investment is not valid. If I am in the market for a new car, then the brands will compete for my new business. I am replacing an old product for a new one that is appreciably better.

 

In the case of a rollover, the new rep is replacing a mutual fund or VA with a similar MF or VA. The client does not benefit from obtaining a better product. The replacement is driven by the rep's desire to make a nice payday. A typical situation, Bob the rep sits down with teacher Sue. Sue tells Bob that she has $100,000 in her 403b with company A. Bob says, company A is bad(fill in the reason), but his company B is great. Let's roll the money over to B, and you financial future will be secure due to me and my company. Will it cost me anything, Sue asks? No, it is a custodian to custodian transfer so there are no taxes, and my company pays me not you, Bob responds.

 

One last thing Sue, do you have any friends that are invested in Company A? I would like to be able to help them also.

 

 

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Guest TR1982

Annual review = Let's sit down and see if you have any more money I can get control over. Also, do you have any friends or family that I can do the same thing to.

 

 

It's sad that you do that.

 

 

Elliot,

 

Your analogy between buying a car and an investment is not valid. If I am in the market for a new car, then the brands will compete for my new business. I am replacing an old product for a new one that is appreciably better.

 

In the case of a rollover, the new rep is replacing a mutual fund or VA with a similar MF or VA. The client does not benefit from obtaining a better product. The replacement is driven by the rep's desire to make a nice payday. A typical situation, Bob the rep sits down with teacher Sue. Sue tells Bob that she has $100,000 in her 403b with company A. Bob says, company A is bad(fill in the reason), but his company B is great. Let's roll the money over to B, and you financial future will be secure due to me and my company. Will it cost me anything, Sue asks? No, it is a custodian to custodian transfer so there are no taxes, and my company pays me not you, Bob responds.

 

One last thing Sue, do you have any friends that are invested in Company A? I would like to be able to help them also.

 

 

This goes on everyday in the financial services industry. In fact, most people in this industry (including every financial advisor) do this everyday. They all tell prospective clients that they can give them something more or different or better than what they currently have. How can any fee only advisor suggest they don't do this? Of course they do!!!!!!!!!! They just have a different way of charging for their services. I know Scott Dauenhauer doesn't sit around printing money in his office to invest. He goes around advertising that he manages money a certain way and charges a certain price. He wants people to bring their money to him to invest!!!!!!!!!! Unbelievable!!!!!!!!!!!!!!!

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Annual review = Let's sit down and see if you have any more money I can get control over. Also, do you have any friends or family that I can do the same thing to.

 

 

It's sad that you do that.

 

 

 

 

 

I don't and I do not have a book. However, I have seen it done and taught to reps.

 

 

 

 

 

This goes on everyday in the financial services industry. In fact, most people in this industry (including every financial advisor) do this everyday. They all tell prospective clients that they can give them something more or different or better than what they currently have. How can any fee only advisor suggest they don't do this? Of course they do!!!!!!!!!! They just have a different way of charging for their services. I know Scott Dauenhauer doesn't sit around printing money in his office to invest. He goes around advertising that he manages money a certain way and charges a certain price. He wants people to bring their money to him to invest!!!!!!!!!! Unbelievable!!!!!!!!!!!!!!!

 

 

 

You are right that it does go on everyday. That does not make it right.

 

From what I know about Scott, I am sure he fully discloses the fees and costs involved with anyting he recommends. I am also sure that he has passed up many rollovers, because in many cases they do not make sense. However, from my experience, most commission based 430b salesmen are not like Scott.

 

I noticed that you do not argue that the client benefits from the transaction

 

 

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Guest TR1982

Wrong!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! Clients can benefit. Are you suggesting that if SD had someone walk into his office with an annuity account worth $500k invested in "high priced" funds that he wouldn't transfer it? That is hysterical. I guess people like him only take on customers who have money invested in sacks in their backyards. This is the kind of slop that makes this site so ridiculous.

 

The kind of behavior you are talking about IS what this industry is about. You KNOW that. If the client is better off, so be it. Are there unscrupulous people? Of course. But that doesn't make the transfer of funds by clients unethical just because they move.

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Wrong!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! Clients can benefit. Are you suggesting that if SD had someone walk into his office with an annuity account worth $500k invested in "high priced" funds that he wouldn't transfer it? That is hysterical. I guess people like him only take on customers who have money invested in sacks in their backyards. This is the kind of slop that makes this site so ridiculous.

 

 

In your example, I would suspect that he would transfer it to no load funds and the client would not be subject to a new round of fees/commissions.

 

On the other hand, if the client is moved from one high priced annuity to another, what does he gain? This is happens far more often than the other example.

 

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Guest TR1982

 

Wrong!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! Clients can benefit. Are you suggesting that if SD had someone walk into his office with an annuity account worth $500k invested in "high priced" funds that he wouldn't transfer it? That is hysterical. I guess people like him only take on customers who have money invested in sacks in their backyards. This is the kind of slop that makes this site so ridiculous.

 

 

In your example, I would suspect that he would transfer it to no load funds and the client would not be subject to a new round of fees/commissions.

 

On the other hand, if the client is moved from one high priced annuity to another, what does he gain? This is happens far more often than the other example.

 

 

I'm not suggesting that it doesn't. I'm just making the point that EVERY advisor thinks what he is doing is best for the client when he does it. You are saying that any transfer is wrong. I'm not going to pass judgement on people who I don't know.

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I'm just making the point that EVERY advisor thinks what he is doing is best for the client when he does it.

 

 

That is crap. Most 403b advisers think they are doing the best for themselves. The client best interest is not what motivates them. I have been in too many sales meetings, and the clients' best interest is not discussed. Sales pitches, how to generate more commissions, and how to win free stuff is the topic du jour.

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Guest Sierra

Elliot: I hope you are paying attention to what Mark Fischer is asserting. YOU CAN TAKE HIS ASSERTIONS TO THE BANK. This is the world you will be entering, no matter what your motives. Remember how Serpico was treated by his fellow officers when he wanted to do the right thing? You will find out that it is like spitting in the wind and the wind is blowing in your face.

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Guest TR1982

 

 

 

I'm just making the point that EVERY advisor thinks what he is doing is best for the client when he does it.

 

 

That is crap. Most 403b advisers think they are doing the best for themselves. The client best interest is not what motivates them. I have been in too many sales meetings, and the clients' best interest is not discussed. Sales pitches, how to generate more commissions, and how to win free stuff is the topic du jour.

 

 

You are missing my point. I don't think most people get into this business to screw people. If you think that why are you in the business? People get into this business to make money. Companies that make and create investment products are in the business of distributing those products. Advisors that recommend those products SHOULD do so because it's in the clients best interests. Companies can have all the sales contests they want, that says nothing about whether an advisor did the right thing for a client. Most of the fund managers of the world can get huge bonuses (including those at Vanguard, Fidelity, and TC). Are they screwing their shareholders? I think it's interesting how some of you guys in this business accuse others of being so dirty but you are so squeaky clean. Judge not, lest you be judged.

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One of the things I find interesting about this thread is that it is titled, "403b Vendor Reps: "Information About Good Experiences ...."

 

... and, with more than 1500 views and more than 100 replies, I can't remember seeing a single post from an investor who was complimentary about his/her 403b salesperson.

 

Gee, I wonder why.

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ap,

I also find interesting is the response of Elliot, who started this thread with a very legitimate question. He wants to do the right thing and we suggest and inform him (fee only adviser, educate clients, not just sell them a rip off product, join the growing number of pros who also want what we want, etc) about our experiences, and he defends the entire 403b system, the outrageous fees, the complicit unions and lunatic school district staff, the vendors with no accountability and teachers who have no where to turn but a salesman! From beginning to end!

Well, we tried.

Steve

 

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Guest TR1982

One of the things I find interesting about this thread is that it is titled, "403b Vendor Reps: "Information About Good Experiences ...."

 

... and, with more than 1500 views and more than 100 replies, I can't remember seeing a single post from an investor who was complimentary about his/her 403b salesperson.

 

Gee, I wonder why.

 

 

It's because there are about 5-7 people who post here who HATE anybody that works in the industry and they are the ones always replying here.

 

Like somebody else already reported AP, you and 2 others here account for 22.5% of the posts.

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