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I Think We've Been Taken For A Ride By Axa

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JarHead- Do your wife and her co-workers a favor, dont give up!!! I am a former AXA RBG rep (Retirement Benefit Group) I was one of those preditors walking the halls in schools in Denver. AXA reps are very knowledgeable but are forced to sell AXA annuities. That is how we got paid. On the 403b plans I got paid 6% of the 1st year contribution and a 2% renewal after the 1st year. Where does your wife and sister-in-law think that money comes from. Every AXA RBG member has a mandatory goal of getting150 new clients a year. After a while you have several hundred clients, how can an advisor have 500+ clients and service them and meet with them on a regular basis??? AXA service is great in the beginning but falls of quick because of the amount of clients you have and the fact that you make 3x as much on new clients. The guy you met with told you to Google Ellie Lowder(I am laughing now), she ran our training sessions in Alpharetta Georgia!! Of course he wants you to look her up she is a paid consultant to AXA.

 

On a side note the next time an AXA rep approaches you, tell them you don’t want to spend 45minutes seeing their “yellow pad Presentation” this is a ###### sales presentation that every rep learns before they start and is used on every new client.

 

As to why I left AXA: Google, Gordon Moore AXA, he was our VP in Denver and was rewarded with trips to Europe, Mexico and the Bahamas for his efforts.

 

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Good for you Jar...

 

Ask th advisor why an annuity is better suited for a young teacher rather than any other investment?

Ask what is the total fee that you are paying and why?

How much commission is he receiving from this sale?

 

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JarHead- Do your wife and her co-workers a favor, dont give up!!! I am a former AXA RBG rep (Retirement Benefit Group) I was one of those preditors walking the halls in schools in Denver. AXA reps are very knowledgeable but are forced to sell AXA annuities. That is how we got paid. On the 403b plans I got paid 6% of the 1st year contribution and a 2% renewal after the 1st year. Where does your wife and sister-in-law think that money comes from. Every AXA RBG member has a mandatory goal of getting150 new clients a year. After a while you have several hundred clients, how can an advisor have 500+ clients and service them and meet with them on a regular basis??? AXA service is great in the beginning but falls of quick because of the amount of clients you have and the fact that you make 3x as much on new clients. The guy you met with told you to Google Ellie Lowder(I am laughing now), she ran our training sessions in Alpharetta Georgia!! Of course he wants you to look her up she is a paid consultant to AXA.

 

On a side note the next time an AXA rep approaches you, tell them you don’t want to spend 45minutes seeing their “yellow pad Presentation” this is a ###### sales presentation that every rep learns before they start and is used on every new client.

 

As to why I left AXA: Google, Gordon Moore AXA, he was our VP in Denver and was rewarded with trips to Europe, Mexico and the Bahamas for his efforts.

 

Shoulder,

 

You have done a tremendous service with this post. I think that you have put the lie to the term "adviser." Excellent, excellent post.

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Guest Sierra

Met with the AXA salesman tonight to go over our accounts and tell him that we are planning to stop contributing to 403(b) annuity account and stop our variable life insurance. Here are some of the points that were made and debated:

 

His main statement: "I would never give you advise that would not be in your best interest - my livelihood depends on it."

 

"All the articles bad-mouthing annuities are sponsored by companies like Vanguard and Fidelity; they want you to buy their no load funds which equates to low returns."

 

"The high fees that we are paying are for highly educated fund managers. If you invest with Vanguard (low fees), the funds will not give you the same rate of return as those managed by the Harvard-educated fund managers."

 

He asked me why i think 457 plan is better than 403(b)... I read him the comparison that I printed online: "457 plans are the only plans that do not have a 10% penalty for withdrawals prior to age 59½"

His reply was that you can do the same with 403(b)... I guess he failed to add that I will have to pay 10% penalty.

 

He told me to Google Ellie Lowder and read what she says about annuities. At the very top was none other but 403bwise link with rebuttals:

http://www.403bwise.com/wisemoves/annuities_el.html

 

He told me to look up what Ben Stein had to say about variable annuities.

 

 

At times I got very annoyed with him since he was trying to sugar coat annuities and was only concentrating on the positives. My wife also got on my case accusing me of being rude. I straight out told him that he is working on commission and pushes annuities for that reason. At this point my wife said that we should end the conversation and reserve the judgment until we see a CFP. BTW, she is not convinced that a fee-only CFP will not steer us in the direction that is beneficial to him/her.

This evening sure wore me out.

 

 

Re: Spitzer Vs. NYSUT/ING

 

In this case Spitzer told the union that the ING variable annuity that it endorsed, for a fee, is high cost while lower cost 403(b) investment options are available. Decision: the insurer, ING, agreed to return $30,000,000.00 to NY State teachers that invested in "Opportunity Plus" and fined the union $100,000. Please note that over the years that the endorsement agreement was in effect the union collected about $10,000,000.00 in aggregate fees. Why should they be allowed to keep those ill gotten gains?

 

Peace and hope,

Joel L. Frank

Pension Columnist

The Chief-Civil Service Leader

277 Broadway

New York, NY 10007

 

 

 

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Good for you Jar...

 

Ask th advisor why an annuity is better suited for a young teacher rather than any other investment?

Ask what is the total fee that you are paying and why?

How much commission is he receiving from this sale?

 

 

 

 

Hey WLTHKR8R

 

 

Don't let our strong opinions scare you off. Join us by continuing to contribute. WE would like to belief there are some decent advisors out there. WE need to hear from them and you.

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JarHead- Do your wife and her co-workers a favor, dont give up!!! I am a former AXA RBG rep (Retirement Benefit Group) I was one of those preditors walking the halls in schools in Denver. AXA reps are very knowledgeable but are forced to sell AXA annuities. That is how we got paid. On the 403b plans I got paid 6% of the 1st year contribution and a 2% renewal after the 1st year. Where does your wife and sister-in-law think that money comes from. Every AXA RBG member has a mandatory goal of getting150 new clients a year. After a while you have several hundred clients, how can an advisor have 500+ clients and service them and meet with them on a regular basis??? AXA service is great in the beginning but falls of quick because of the amount of clients you have and the fact that you make 3x as much on new clients. The guy you met with told you to Google Ellie Lowder(I am laughing now), she ran our training sessions in Alpharetta Georgia!! Of course he wants you to look her up she is a paid consultant to AXA.

 

On a side note the next time an AXA rep approaches you, tell them you don’t want to spend 45minutes seeing their “yellow pad Presentation” this is a ###### sales presentation that every rep learns before they start and is used on every new client.

 

As to why I left AXA: Google, Gordon Moore AXA, he was our VP in Denver and was rewarded with trips to Europe, Mexico and the Bahamas for his efforts.

 

s2s,

Thank you for opening my eyes wider and getting my jaw to drop to the floor. One thing for sure... they are slick speakers - my wife started feeling sorry for him.

 

 

Re: Spitzer Vs. NYSUT/ING

 

In this case Spitzer told the union that the ING variable annuity that it endorsed, for a fee, is high cost while lower cost 403(b) investment options are available. Decision: the insurer, ING, agreed to return $30,000,000.00 to NY State teachers that invested in "Opportunity Plus" and fined the union $100,000. Please note that over the years that the endorsement agreement was in effect the union collected about $10,000,000.00 in aggregate fees. Why should they be allowed to keep those ill gotten gains?

Joel,

Yes, I came across this case while researching the topic.

 

I can't believe how much I have learned from reading this forum since last week. Still a lot more to learn. Thank you all.

 

Slightly off-topic... why are some innocent words getting filtered? (ie, p-h-o-t-o, v-i-d-e-o, and some other word in shoulder2shoulder's post above are getting flagged and replaced by #'s)

 

 

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All- since my days at AXA i have gone to work for another financial service company as a wholesaler. I am no longer advising/selling to the public but "selling/advising" the advisor. My clientele is Fee Only advisors. I must say in the beginning it was a little bit of a culture shock but I have enjoyed every moment of it.. You will always find a few bad apples but the fee only community as a whole is amazing. They are completely independent for the most part, aren’t influenced by a commission check. Their sole responsibility is to grow your investments because the more you have the more they make. A very fair tradeoff in my opinion. I would look for a fee only advisor that charges somewhere around 1% for assets under management, as I have found that is a very fair and competitive rate. Fee only advisors will do their best to get you in the best performing, lowest fee products because it will help yours and their bottom lines.

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...My clientele is Fee Only advisors. I must say in the beginning it was a little bit of a culture shock but I have enjoyed every moment of it.. You will always find a few bad apples but the fee only community as a whole is amazing. They are completely independent for the most part, aren’t influenced by a commission check. Their sole responsibility is to grow your investments because the more you have the more they make. A very fair tradeoff in my opinion. I would look for a fee only advisor that charges somewhere around 1% for assets under management, as I have found that is a very fair and competitive rate. Fee only advisors will do their best to get you in the best performing, lowest fee products because it will help yours and their bottom lines.

 

I have searched napfa.org and for local advisors and contacted this one:

http://mawhelanfinancial.com/Fee-Only.asp

Any questions I should ask upfront before signing anything?

 

******************

 

I just exchanged a couple of emails with the AXA rep on what transpired last night:

My email to AXA rep -

"Just to touch up on one point that was made... You asked me why I thought

the 457 plan was better than 304(b). I replied that one difference which I

am aware of is that a participant can withdraw money at retirement or upon

termination of employment., regardless of age. You said that one can do

the same with 304(b)... yes, you can, but the big difference is with 304(b)

you will pay 10% penalty if you withdraw prior to age 59 1/2.

 

BTW, I did look Google Ellie Lowder and read what she has to say about

annuities - I also was informed that she ran training sessions as a paid consultant to AXA. Bias? Perhaps."

 

notice that I mistyped 403(b)

 

His reply:

"You can withdraw from a 403b when a person seperates from service and attains age 59 and a half. Yes, ellie ran training sessions just as fidelity and vanguard pay for ads in money magazine. Did you look up Ben Stein?

The bottom line is this. If you see no value in my services then I would be more than happy to send you forms to roll all of your accounts to a no load mutual fund. If you see more value in a no load fund that offers no advice then I urge you to move all your accounts to wherever you like. I can only work with people that are looking for professional advice and help.

 

Just so that you aware. You currently have guarantees in your annuities that you would not have with a no load fund. If you would like to discuss further then please contact me."

 

 

Notice how he sidesteps the "regardless of age" point.

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It continues to amaze me that Jar, and teachers like him, continue to have to suffer through the painful 403(b) learning process.

 

Two years ago I was able to get my BOE to add Vanguard to our list of 403(b) providers. During that process I gave presentations at most of the schools in the district to the teachers interested in learning the differences between a 403(b) and a 403(b)(7). I now continue to give one presentation each year to those teachers interested in learning and I usually get about 20 teachers. As a result of my passion in this field, when I introduce myself at school functions, I am often greeted by "Oh you're that 403(b) guy, I get your e-mails." Has is made a difference, definitely. Is there work to do, definitely. Is it a crime the way the system works now, definitely.

 

Consider these numbers.

 

In my district there are currently 670 teachers contributing to a 403(b). Want to guess the breakdown between Vanguard and the others.

 

Read 'em and weep.

 

Insurance Provider.. 558

TIAA-CREF..30

Vanguard..80

 

Even when we have a good choice, and I am willing to show teachers the difference, most of them still don't get it right.

 

The real crime is that people like Jar have to go through this learning process as if no one has ever figured out the truth about 403(b)'s?

 

It's a disgrace that the system is what it is and it's even more of a disgrace that the typical teacher doesn't take a couple hours to research 403(b)'s before making one of the most important financial decisions of their life.

 

If it wasn't so aggrevating I would say it's a fascinating study in human behavior, but seeing all those teachers buying BMW's for Insurance Company execs is too much for me to find the humor in it.

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Guest Skeptical
...

Consider these numbers.

 

In my district there are currently 670 teachers contributing to a 403(b). Want to guess the breakdown between Vanguard and the others.

 

Read 'em and weep.

 

Insurance Provider.. 558

TIAA-CREF..30

Vanguard..80

 

Even when we have a good choice, and I am willing to show teachers the difference, most of them still don't get it right.

 

 

Bruce,

 

Your hard data is proof that education about the available choices, however delivered, is ineffective aginst the persuasive professional salesperson. These folks are good, no, make that very good at what they do. Unsophisticated investors have little chance. The responsibility lies with the people who choose first, the professional administrators, who allow these vendors to sell in the first place. But the vendors, who make payments to the membership groups like ASBO, wine and dine these decision makers at every opportunity, and we wonder why things don't change. Oh yeah, don't forget the campaign contributions made to the local elected officials. It's all perfectly legal and smells to high heaven.

 

You couldn't be more unbiased since you have zero financial incentive for your fellow teachers to use a low-cost vendor. And that you still come out on the low end against the pros says it all.

 

Hey Plan Administrators: Why not just eliminate these lousy vendors?? Is a round of golf and free lunch at the annual conference worth the MILLIONS you are costing your participants?

 

Bruce, keep up the work and I sincerely applaud your efforts.

 

Cheers,

 

Jim

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It continues to amaze me that Jar, and teachers like him, continue to have to suffer through the painful 403(b) learning process.

It's actually my spouse who is a teacher, but of course it affects me.

 

I visited your web site and thank you for putting it together - very helpful. I am thinking of going on a similar crusade (on a smaller scale) to educate the teachers in my wife's school.

 

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Jim-

 

You are so right. When I was at AXA we used to sponsor the new hire orientation every year. We would pay for lunches and do drawings several times a day. It was a 2day event. All you had to do to enter the drawing was fill out an info card. once we got that card we would call and set up appointments and teach the new employees all about their benefits and they were happy because HR didn't have the resources to educate their new employees. I would guess that 50% of the new hires every year had an annuity 403b set up before their 1st day in the class room!! AXA was the largest provider in Denver Public Schools and all of Colorado but we weren't the only one sponsoring the new teacher orientation. AIG, VALIC, ING, MET LIFE... we were all begging to buy lunches and give away I Pods and gift cards to office depot. TIAA CREF was/is available in the district and in my 3+ years and meeting almost every teacher, janitor, admin person in the district I only met one person that had TIAA CREF. The sad thing was it took me 4 appointments but I was able to get her to roll the money into an AXA plan with me. Gosh I feel dirty even thinking about how many people I signed up in the AXA equivest 403b. We had a 12yr surrender charge on that thing!!!!!! I guess it still beats the other companies that had 5 years surrender charges that started over on every new deposit, so every pay period you got a brand new 5yr surrender charge!

 

time to go take a ######, i feel dirty.

 

To all the teachers that I put in expensive, long surrender period annuities I am sorry!!! I had to eat too.

 

All I can do now is try and educate everyone and encourage them to teach their co-workers. Every teacher on here should take the time and teach one coworker (teach the young teacher, they will listen) and spread the word

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To all the teachers that I put in expensive, long surrender period annuities I am sorry!!! I had to eat too.

 

All I can do now is try and educate everyone and encourage them to teach their co-workers. Every teacher on here should take the time and teach one coworker (teach the young teacher, they will listen) and spread the word

 

 

You hit the nail on the head with everything you've posted! I'm in the same exact situation as you were and looking to get out for the same reason you did. I couldn't/ wouldn't bring myself to sell a VA once I figured out how crap the products are. It's amazing the lengths these companies will go to in order to gain access to the schools, but you know what? I'm hopeful that things WILL change as people learn and become more savvy. It won't happen overnight, but it will happen. And, I firmly believe a lot of agents have NO idea what they're selling or how badly they can cripple an unsuspecting teacher's retirement goals by putting them in a high-cost, inappropriate product. Companies that recruit agents aren't looking to hire people with a background in finance, and for good reason! If you're young, hungry, inexperienced and have a nice smile, you're filet mignon to an insurance company recruiter! Sad but true.

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Kudos to all of you. This has been an enlightening thread. I'm feeling the passion here from all of you.

 

Please tell others about this website and please continue to contribute. Again, change can only come to the financial marketplace if the consumer demands it. I think there are ways that a salesman-advisor/customer

mutually beneficial relationship is possible. But its up to the customer to demand the change in a free market society.

 

 

Tony

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Shoulder,

 

Your honesty is both stunning and refreshing. Thank you once again for giving us an inside view on such sorry @#$ outfits like AXA. Most of the insurance salesmen on this forum are not nearly as forthcoming as you have been.

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