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tomkoz

Annuities In A 403b

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Hey Scotty,

Fees do matter. I agree with you about the MPT which backs up the indexing strategy. Right on. Consequently, TIAA cREF is right there looking out for us by lowering their fees. Take a look at my post about TC fees, I just found out about this on TIAA CREF's forum on Morningstar. I looked on TC website and compared the fees to my 2003 annual report from TC. Wow!

This is great news.

Steve

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I hope that we can get over all the fighting and actually focus on issues that make a difference.

 

Fees do matter, high fees don't lead to higher returns. But at the same time, somene who lacks the ability to invest will do very poorly and thus paying an advisor a fee may actually increase the returns they would have earned doing it themselves (read the Dalbar study). We may not all agree, but we should at least work together to ensure that all viewpoints are considered and debated rationally.

 

 

These are far and away the wisest words I've seen anywhere in this discussion group. Thanks, Scottyd. (And I hope the "Survivor" finale didn't disappoint. The Sopranos, on the other hand, was a little slow tonight.)

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But the advisor must be completely independent of the investment provider regardless of his personal integrity or degrees or designations. This means that a separate RIA contract is entered into by the investor/client and the RIA. The RIA is paid directly by billing the investor. The RIA should not be compensated by the investment provider in any way shape or form. This fire wall assures that the advisor is free to comb the universe for the best products out there and if he/she happens to find one that is acknowledge by his/her peers to be the best in its class and sports a load then with the independent advice of his/her advisor the purchase of a load fund would be fine. And as Bill pointed out the load is quite reasonable because the investor is using a personal RIA.

 

There are many individuals out there that have let's say at least 500k that they have accumulated in Tiaa over the past 30-40 years. They did this without a personal RIA. But now, they are nearing retirement or they may not be as quick as they once were and decide to hand over the management of their account to a RIA firm that specializes in this particular market. Knowing that the prospect has been associated with TIAA for many years he/she is more than willing to use the TIAA platform to manage $500,000 going forward. Again the key bedrock principle is that the advisor has absolutely no relationship with TIAA.

 

Another key to the equation is operating expenses of the investment funds as well as the ability to move money freely without any of the usual black clouds like 12b-1 charges, CDSC and ME fees. This is why the RIA firms that consentrate on the individual account market like 403(b)s, focus in on the higher education community because these prospects are ideally situated with the no-load outfit TIAA and the RIA does not have to effectuate a Revenue Ruling 90-24 Transfer to a no-load outfit.Another market is the 401(k) especially the ones that have a no-load menu which is the norm. The best ally for both the investor and RIA is a no-load platform. A good RIA like a good (you fill in the profession or craft) is worth his or her weight in gold.

 

Peace,

Joel

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But the advisor must be completely independent of the investment provider regardless of his personal integrity or degrees or designations. This means that a separate RIA contract is entered into by the investor/client and the RIA. The RIA is paid directly by billing the investor. The RIA should not be compensated by the investment provider in any way shape or form. This fire wall assures that the advisor is free to comb the universe for the best products out there and if he/she happens to find one that is acknowledge by his/her peers to be the best in its class and sports a load then with the independent advice of his/her advisor the purchase of a load fund would be fine. And as Bill pointed out the load is quite reasonable because the investor is using a personal RIA.

 

 

Joel, I'm still troubled by your insistence that an independent, fee-only financial planner is the ONLY possible source for good investment advice (as illustrated by your usage of the word "must", above). Two people have posted here so far with their positive experiences with financial planners that were affiliated with a single company. The scenario you paint above sounds great, but isn't a guarantee of quality any more than investing with [insert your favorite company here] assures you great results. As clients of these guys (whoever "these guys" are), it is US who have to remain vigilant as to what results are being achieved on our behalf, regardless of which business model we choose to support with our choice.

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"positive experiences" is in the eyes of the beholder. If I want steak I do not order it from a diner.

 

A commission salesperson gets paid to sell not to advise. So when all is said and done he is much better at selling than at "advising." A commission salesperson is not allowed to give investment advice. Let's not confuse advice in the legal sense with sales and service. Jim made it a point to tell us that his rep told him he could not manage/advise him. This is a crucial point that we all need to understand. The only management he is getting is from the RIA who manage his sub-account. The rep is being paid to distribute the product to him---nothing more nothing less. Surely there are millions of people who accept the "advice" of their commission salesperson but they do so at their peril.

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A commission salesperson gets paid to sell not to advise. So when all is said and done he is much better at selling than at "advising." A commission salesperson is not allowed to give investment advice. Let's not confuse advice in the legal sense with sales and service. Jim made it a point to tell us that his rep told him he could not manage/advise him. This is a crucial point that we all need to understand. The only management he is getting is from the RIA who manage his sub-account. The rep is being paid to distribute the product to him---nothing more nothing less. Surely there are millions of people who accept the "advice" of their commission salesperson but they do so at their peril.

 

On the other hand, my own commissioned salesperson is also a Certified Financial Planner. I believe he is qualified to provide me with such advice, and I've followed his advice thus far to great satisfaction.

 

Again, it is the burden of the client to know the source of his/her advice, and to judge its quality on an ongoing basis.

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I Have no problem with that relationship so long as you know his pay from Opportunity Plus is to distribute product not to give you investment advice. In my view if you accept his advice you should enter into RIA agreement with him---this is to protect BOTH of you. He should have no problem with that if he is a RIA. Is he an RIA?

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