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Guest Sierra

Bob Brinker

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Guest Sierra

Yesterday's first question fielded by Bill Flanigan had to do with a 401k investor investing with the Lord Abott family of funds. The questioner was concerned with his poor investment return. Mr. Flanigan, in his answer, never mentioned that Lord Abott funds are a commissioned based product line and that he would be much better off investing his 401k money in no-load mutual funds. Shame on you Mr. Flanigan.

 

I have a question for Bob: Are you disappointed that Bill, who has substituted for you for years and must know that you are a great fan of no-load mutual fund investing, furnished such an answer. Your listeners deserve to hear your reaction.

 

Joel L. Frank

Pension Columnist

The Chief-Civil Service Leader

277 Broadway

New York, NY 10007

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Joel, Joel, Joel,

 

You're right. Flanagan seems like a nice guy, but he ain't no Bob Brinker.

 

However, in 401(k)s, a sales person generally brings a mutual fund line-up to the sponsor. In many 401(k)s there are several parties with their hands out -- the sales person who brings the plan to the sponsor, the TPA, and the company actually managing the selection of funds. If you read the Bloomberg article in the Markets Magazine about my husband's plan, there was the sales staff bringing the product to the sponsor, the TPA, and John Hancock, who put together the selection of mutual funds, some of which were (on a retail basis, anyway) no-loads. In fact, in this VERY pricey plan, three of the choices were actually DFA funds, which we still cannot figure out. In my husband's case -- as in about 1/3 of 401(k)s, we understand -- it was actually set up as an annuity, though the sales person denied that (he probably didn't know). It took an independent fiduciary many, many hours to estimate how much $$ was missing from my husband's account. Whether the funds are loaded or not inside the plan (which may be quite different than whether they are loaded in a retail basis) is often difficult to figure out. In the end, in some of these 401(k)s, the "loads" may be the least of of a participant's worries. There's revenue sharing and admin costs and all sorts of other "leaks" where $$ disappears.

 

Most people don't know, and according to the recent article in Kiplinger's, very few people complain to ERISA, appropriate authorities, or their congressmen.

 

http://www.kiplinger.com/magazine/archives...html?kipad_id=1

 

This story cites Loeper's book, "Stop the 401(k) Ripoff". I cannot recommend this book strongly enough!!!! Loeper is so committed that each book you buy has coupons inside that allow you to send a FREE copy to someone who may need it! Amazon has plenty -- and it's fascinating reading.

 

JudyS

 

 

 

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I don't think Mr. Flanagan is providing a good service to his listeners. One caller asked about investing internationally. At least he should have asked

-age?

-what are your current investment?

-approx. income.

 

Another was a caller inquiring about FDIC insurance at one of the top bank. Caller stated that he had substantial amount. What is substantial? 10,000 is substantial for one

and other's it's weekly income. Also should have stated that $100K is the coverage....

 

Interesting to know if he is registered/licensed??

 

After the second call, I had to finds a new entertainment.

 

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Guest Sierra

I don't think Mr. Flanagan is providing a good service to his listeners. One caller asked about investing internationally. At least he should have asked

-age?

-what are your current investment?

-approx. income.

 

Another was a caller inquiring about FDIC insurance at one of the top bank. Caller stated that he had substantial amount. What is substantial? 10,000 is substantial for one

and other's it's weekly income. Also should have stated that $100K is the coverage....

 

Interesting to know if he is registered/licensed??

 

After the second call, I had to finds a new entertainment.

 

 

A couple of years ago a caller told BB on the air that he was displeased with BF and BB should announce in advance when BF will be hosting the show. BB was indignant that a caller should have the temerity to speak his mind. What arrogance!

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