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Beauxdru

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Please advise.. My sisters school district reduced the number of 403b vendors to three. All of them low cost mutual fund companies. She was “advised” by the district in a letter that her choice of company that she used would no longer have deductions sent to it and she should consider moving her account to one of the newly selected vendors. She did this back in March and has lost close to 24% of her account value.. funny thing.. those low cost fees are still being charged.

 

She has contacted the company and asked for some investment advice and has been given reams of data to try and sort through to figure out her options and there is no local company representative for her to meet with, so she is more or less on her own with the exception of the 800 number.

 

She wants to move her money back to the previous company but cannot. From what I can gather.. the district is not going to sign an information sharing agreement with the other vendors and the plan administrator cannot sign off on the exchange??

 

I guess you get what you pay for??

 

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On the contrary, your sister should be celebrating her employer's decision to go with three low-cost providers. If the scenario your portray is even true (which I doubt), why weren't you able to guide her in her transfer of funds? Why didn't she seek the services of objective advice on where to transfer the money? I'll call your bluff: Who is the employer? Who are the mutual fund companies her employer now uses? Which specific investment lost 24 percent? Where exactly was the money before transferring?

 

Dan Otter

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Of course. Name everything. I am really interested to know exactly what investment(s) she was in prior to transferring and exactly what investment(s) she transferred to. Also, please share the date the money was transferred.

 

Also, what company gave her "reams of data to try and sort through to figure out her options"? Did they mail this to her? What exactly did they mail?

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It's either going to get real silent or there are going to be excuses about confidentiality and not wanting to name the employer or vendors or similar non-sense. There are lies, there are damn lies, and then there are extremely poor attempts by reps to masquerade as one who knows one who has been wronged by low-cost investments.

 

But hey maybe there really is a school district that only chose low-cost investments (this seems to be counter to everything we've heard to date about what school districts are doing). If true, I can't wait to contact them to congratulate them and promote their story. And maybe this person's "sister" really did move money from a rep-sold product (which this poster seems to allude to) into a low-cost product that lost 24% in four months.

 

Dan Otter

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It's either going to get real silent or there are going to be excuses about confidentiality and not wanting to name the employer or vendors or similar non-sense. There are lies, there are damn lies, and there are extremely poor attempts by reps to masquerade as one who knows one who has been wronged by low-cost investments.

 

But hey maybe there really is a school district that only chose low-cost investments (this seems to be counter to everything we've heard to date about what school districts are doing). If true, I can't wait to contact them to congratulate them and promote their story. And maybe this person's "sister" really did move money from a rep-sold product (which this poster seems to allude to) into a low-cost product that lost 24% in four months.

 

Dan Otter

 

 

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

I've never paid a load to get into a 403b fund! The funds I'm in DO have annual expense ratios, but PAYING to get in? No. I read this kind of thing and marvel at how successful the lobbyists have been in literally buying the Congress to do their bidding, and am amazed at how easily School District Administrators are "sold" on plans that all carry front-end loads. I REFUSE to even consider dealing with funds that carry such loads---or back-end loads, too.

 

My 403b is self-guided. I myself tell the Treasurer where the money goes. And I make sure that my selections do not charge a load.

 

Going forward, fewer fund houses are going to be willing to handle 403b accounts. Nevertheless, why can't these School Districts offer a no-load Plan? They are out there, just a phone call away. Why do I continue to read that these teachers are restricted to only this fund company or that fund company---all with front-end loads????? This is preposterous! ---John Doe.

 

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I've never paid a load to get into a 403b fund! The funds I'm in DO have annual expense ratios, but PAYING to get in? No. I read this kind of thing and marvel at how successful the lobbyists have been in literally buying the Congress to do their bidding, and am amazed at how easily School District Administrators are "sold" on plans that all carry front-end loads. I REFUSE to even consider dealing with funds that carry such loads---or back-end loads, too.

 

My 403b is self-guided. I myself tell the Treasurer where the money goes. And I make sure that my selections do not charge a load.

 

Going forward, fewer fund houses are going to be willing to handle 403b accounts. Nevertheless, why can't these School Districts offer a no-load Plan? They are out there, just a phone call away. Why do I continue to read that these teachers are restricted to only this fund company or that fund company---all with front-end loads????? This is preposterous! ---John Doe.

 

 

John,

We know how corrupt the 403b system is and the horror stories, but you have not answered Dan's question. What "low fee" company gave her "reams of data?" Pretty easy question for somebody who is seeking help.

Steve

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