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jphillips

Why Won't Joel Say Who He Is?

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We ARE ALL WONDERING WHO YOU ARE.

 

 

No, Pathfinder, we are not all wondering who Joel is. I am, however, wondering why this 'harrasment' of Joel is continuing. I'm sure Joel has seen the request to reveal his occupation. If he chooses to do so, fine. But if not, then I think the matter should be dropped. After all, people shouldn't be assumed to be guilty because they wish to remain silent.

Hal

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I think joel is a big boy and can fight his own fights. As far as silence NOT leading to assuming guilt...isn't that what this board is made up of. If you are a newcomer, everyone believes you are the enemy...unless you start praising joel, schullo, etc. and letting them know how smart you think they are.

Give me a break!

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Path,

 

I have been gone for a while from these boards. Joel and I have had many heated discussions. This board does not assume everyone is guilty. However, over time there have been many of my fellow "professionals" who have trolled this board. Add this to the fact that teachers have been taken advantage of with most 403b products since time began, you can understand the stance they take.

 

Bill Mahoney

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Hi Bill, I'm glad to see your posts.

 

Many use the term "teachers" "k-12 educators" when referring to 403(b) contributors. But as we all know there are many other employment titles that are eligible for 403(b). The entire workforce of the 501©3 community is entitled to 403(b). This includes skilled and unskilled trades people as well as college educated professionals working for hospitals, libraries, research organizations, colleges and universities.

 

For example, TIAA-CREF has been available to the 'professional/ pedagogical/administrative staff at the City University of NY since the mid 1960s. Yet the University sees fit to offer a high priced Travelers VA to the skilled trades people and exclude them from TC. THIS IS AN OUTRAGE! (carpenters/electricians/plumbers).

 

As currently constituted there are about 4-5 million people employed by the nations public school districts. There are about another 14 million people employed by state and local governments that DO NOT HAVE THE RIGHT TO THE 403(b). Hopefully, this will all change with the passage of HR 3718. LET US ALL FIGHT FOR ITS PASSAGE. Our task is before all of us.

 

Peace and Hope,

Joel L. Frank

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Hi Gadfly,

I too think your post was very good. Of course, the full disclosure issue is important. We see it all the time on the stock market related news stories, analysts forecasts and predictions, financial reporters etc, are all being asked routinely if they own the stock or mutual fund they are recommending.

 

For this site, however, full disclosure is slightly different. By definition, if people recommend a commissioned based or high fee product, there is the strong possibility that the person recommending that product could be the beneficiary. Since we don't know, it is my responsibility (if nobody says it first) as a regular contributor to this board (others can speak for themselves) to show that this product is expensive and inappropriate 403b product. Sure, sometimes we can get , but it is our way of getting what you want, full disclosure only in a slightly different approach—FULL DISCLOSURE OF THE 403b PRODUCT.

 

On the other hand, we do know from studies that 85% of the educators who are contributing to a 403b, contribute to an expense annuity. Most educators are simply not aware that lower cost options exist and that is what this site is for, to discourage people from throwing their money away and learning a little more about finances and that costs matter. I would regret it if this site just became another TSA way of selling its message, the VERY SAME message that 85% of all educators get every day in their school cafeterias and union halls.

 

This site is a refuge for what educators are not getting--information about low cost 403b options.

 

In comes TIAA CREF and Vanguard: We also know for a fact is that TIAA CREF and Vanguard do not pay commissions and their annual expense ratios are the lowest in the industry. If an employee of TIAA CREF is recommending TIAA CREF on this site, they would be fired promptly. TIAA CREF has never operated in the normal rip-off wall street secret dealings (Read Arthur Levitt's or Larry Swedroe books on how wall street works, its pretty scary for little folks like us), probably the reason why most retail financial advisers and agents literally hate TIAA CREF. TC and Vanguard are not in bed with the analysts, stock brokers, bankers, insurance agents, wall street traders and CEOs, etc that permeate the investment world where people make money from trades, commissions, fees whether the market goes up or down. Investors take all the risks while all of the wall street pros and TSA agents rake it in on fees, commissions, high expense ratios year after year.

Hope this helps,

Steve

 

Hi Steve,

 

There are two points about your post that I'd like to respond to. The first is the statement that "this site is a refuge for what educators are not getting--information about low cost 403b options." I have no problem with that...except that that's NOT what the site describes itself to be. When you go to the homepage, and click "About us," you get the following description (excerpted): "Our goal is to provide valuable information and education so that participants can make informed investment decisions whether that means directing their own 403(b) investments, or using the services of an agent or advisor." This is, in a nutshell, what I find to be problematic about the site: while it claims to want only to "play a role in increasing the understanding of and participation in a 403(b)" (taken from the same section), it's really not that at all. The site appears to me to have an agenda: to portray all low-cost financial products and the fee-only financial planners who sell them as good, and all full-service financial service providers (and their "higher cost" products) as bad, or at the very least, not even close to worth the extra money. That's certainly a defensible position, but it seems like the folks running the site should at least come clean and say so in their self-description. I acknowledge that perhaps I'm confusing the site with the participants in this discussion group, but since the site owners have leaped to Joel Frank's defense so readily, it seems a logical link to make.

 

The other part that I find interesting is the notion of full disclosure. Whenever an agent comes on this site, and engages in full disclosure, (s)he is routinely hooted off the site, or (worse!) portrayed as a charlatan. (Most recent example was Joel Frank's recent Bob Grant imitation, in which he branded such an agent a fraud and a phony, despite a complete lack of evidence that the original poster had said ANYthing to merit such treatment.) Yet someone like Joel, who may well be a fee-only financial planner, is allowed to simply speak at length without giving any indication of what HIS agenda is. And yes, his (possible) status as a fee-only financial planner WOULD be quite relevant. Let's say I'm a first-year teacher, salaried at $33,000, and I'm deferring 4% of my salary to a 403(b) plan. If I do so with a full-service provider, I get an agent, who assists me with asset allocation and rudimentary education on the markets. So I invest the money with him, receive his advice, and pay him an amount...let's say 2% of everything. So I'm investing $1,320 with him, and paying him $26.40 for his efforts. Let's say Joel is a fee-only financial planner, offering his services to me at a fixed rate of $150 per hour, which would be a very modest fee where I live. Is anyone seriously suggesting that I'm unequivocally better off paying many times more money for "low-cost" funds accompanied by advice, vs. $26.40 for "overpriced" ones, also accompanied by advice? And if my agent is also a CFP (he is, by the way), is there anyone really arguing that the quality of his advice is substantially lower simply because his product range is more limited? Someone will undoubtedly extrapolate how many thousands of dollars this will cost me over the years...but if I'm meeting with my fee-only financial planner for annual updates that take at LEAST a few hours (as I'm sure you would all recommend wholeheartedly), the difference is a LOT smaller than you think.

 

I'm not suggesting that all fee-only financial planners are bad, nor would I expect a truly neutral site to be so thoroughly dominated by people who believe that full-service agents are all frauds, or phonies. You'll find some good people in both camps; I just wish the proprietors of this site, and more specifically, the denizens of this discussion board, would take the trouble to point that out as well. You do a great disservice to your teachers if you promote fee-only financial planners and THEIR products as the One True Way.

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Bonjour Professeur Français. Merci de vos commentaires.

 

As one of the proprietors of the site I appreciate your participation on our Discussion Board. I also appreciate your posting of site information from our "About Us" section. I would like to add some more information that visitors to the Discussion Board may find of value.

 

Subject: DISCUSSION BOARD

- from the 403(b)wise story “Learn How to Use Board.” http://www.403bwise.com/discussion/info.html

 

We believe that participants who frequent our Discussion Board should use it as a starting point for their due diligence, not as the sole decision point. There is no substitute for your own mathematical and factual analysis. Making financial decisions strictly on information derived from our Discussion Board begs foolishness, i.e., it's unWise.

 

Remember, the function of our Discussion Board, indeed most message boards, is the free-flowing exchange of ideas and insights; sometimes, but not always, it is also includes the posting of facts and figures. Much can be learned by distinguishing between the two.

 

Finally, information obtained from the Discussion Board does not constitute any tax, investment or legal advice. We encourage you to research and educate yourself from many sources.

 

A Few Closing Notes... No one person is a financial expert in the real sense of the word. It is impossible for any one individual to be fully informed about every single aspect of the financial world. In fact it has been reported that the IRS is wrong with its advice more than 25% of the time. Constant changes in retirement plans like the 403(b) and 457(b) make understanding them a real challenge — even for the experts!

 

Subject: VALUE OF AN AGENT

- from the 403(b) FAQ Section http://www.403bwise.com/faqs/index.html and from page 20 of The 403(b) Wiseguide (second edition)

 

Do I have to use an agent to set up a 403(b)?

No. This site believes that with financial education, patience and realistic expectations, individuals are perfectly capable of managing their own 403(b). It is important to point out, however, that many agents provide valuable services to their clients. These services can include: retirement planning, information about state retirement plans, and analysis of other financial needs. Such agents rightly deserve to be compensated for their services. The key is to figure out exactly what services you are receiving, and exactly what fees you are paying for these services. Only then can you determine the true value of using an agent. Other options include hiring a financial planner who can be paid on an hourly basis to aid you with your 403(b).

 

Au revoir,

Dan Otter

 

 

 

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Heureux de voir des francophones dans le monde financier! :)

 

Seriously, Monsieur Otter, thanks for your response. While I remain concerned about some of the rather responses that await people of good faith who don't agree 100% with the low-cost company line, I do appreciate that those remarks are confined to the discussion board, and not necessarily espoused by the site itself. I'm actually quite heartened by the quote above that emphasizes that agents are not all working for the Dark Side of the force! I, too, have heard some horror stories about agents who are taking the cash from their clients while offering little or nothing in return, but I'm just not ready to say that these people are the rule rather than the exception. I hope readers of this site (and especially of this discussion board) are capable of keeping an equally open mind.

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I Let's say I'm a first-year teacher, salaried at $33,000, and I'm deferring 4% of my salary to a 403(b) plan. If I do so with a full-service provider, I get an agent, who assists me with asset allocation and rudimentary education on the markets. So I invest the money with him, receive his advice, and pay him an amount...let's say 2% of everything. So I'm investing $1,320 with him, and paying him $26.40 for his efforts. Let's say Joel is a fee-only financial planner, offering his services to me at a fixed rate of $150 per hour, which would be a very modest fee where I live. Is anyone seriously suggesting that I'm unequivocally better off paying many times more money for "low-cost" funds accompanied by advice, vs. $26.40 for "overpriced" ones, also accompanied by advice? And if my agent is also a CFP (he is, by the way), is there anyone really arguing that the quality of his advice is substantially lower simply because his product range is more limited? Someone will undoubtedly extrapolate how many thousands of dollars this will cost me over the years...but if I'm meeting with my fee-only financial planner for annual updates that take at LEAST a few hours (as I'm sure you would all recommend wholeheartedly), the difference is a LOT smaller than you think.

--------------------------------------------------------------------

 

 

French Teacher,

I think your example is a good illustration of why even ‘good’ financial advice does not apply equally to everyone. Each person’s individual situation has to be taken into consideration.

For those people who are able to contribute close to the maximum allowable amount, the 2% charges you mentioned would end up being quite high over a decade or two. If one contributed $12,000 annually for ten years with a 4% return, they would have paid almost $15,000 in fees to their full-service provider. I doubt they would have needed to pay a fee-only provider $1500 annually for that advice. And then there are those of us who prefer to do our own homework and pay no advisor fees at all.

It is not so much that I think a fee-based advisor is going to be inherently better than a full-service vendor, rather I tend to assume the value of their advice would be equivalent.

In my example, the full-service advisor is going to be charging much more for that equivalent value. And in yours, the reverse could very well be true.

Hal

 

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French Teacher,

I think your example is a good illustration of why even ‘good’ financial advice does not apply equally to everyone. Each person’s individual situation has to be taken into consideration.

For those people who are able to contribute close to the maximum allowable amount, the 2% charges you mentioned would end up being quite high over a decade or two. If one contributed $12,000 annually for ten years with a 4% return, they would have paid almost $15,000 in fees to their full-service provider. I doubt they would have needed to pay a fee-only provider $1500 annually for that advice. And then there are those of us who prefer to do our own homework and pay no advisor fees at all.

It is not so much that I think a fee-based advisor is going to be inherently better than a full-service vendor, rather I tend to assume the value of their advice would be equivalent.

In my example, the full-service advisor is going to be charging much more for that equivalent value. And in yours, the reverse could very well be true.

Hal

 

Hal, I agree completely. For anyone inclined to do their own homework, it makes little sense to pay an advisor any kind of fee to do little more than double-check. No-load funds, accompanied by little help (since little help is needed), would be perfect for such a person.

 

I agree with you entirely that, as you say, "each person's individual situation has to be taken into consideration." My quibble here has been with certain folks who insist that no-load funds are ALWAYS the way to go, augmented if needed by a fee-only financial planner. That's certainly a viable solution for some...but not for all.

 

In general, I agree that there is no "one size fits all" solution. Not even the mighty TIAA-CREF!

 

Cheers. :)

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The fact that you are looking at this website means that you are a member of a very small class of investment saavy or at least curious about your investments. The vast majority of educators do not understand the issues that have intentionally been made more complex than they need to be so that innocent individuals aka "income streams" can be shunted into high-cost revenue sharing bastardized investment vehicles known by the sanitized name of "annutities."

 

The last thing I did yesterday before I left school was help a teacher who had brought all her account information from three jobs, four different 403b's and at least 20 funds. The grand total of ALL of the investments over the years was less than $20,000!

 

This, my friends, is where the anger on this list comes from. This is simple stuff, but the simple stuff doesn't make money for anyone.

 

Gadfly

 

 

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To all,

 

We appreciate the measured, open-mindedness of this debate. It is exactly the kind of information that should prove valuable to a 403(b) newcomer. The truth is there are several ways to go when it comes to contributing to a 403(b)--self directed, commission-based, fee-only planner--and no one course of action is suitable for all. But I think we can all agree that each method requires: patience and realistic expectations, and some degree of financial self education. It's also important to note that in many school districts throughout the country not all options are available to all investors.

 

Dan Otter

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nice post dan, but truthfully, when someone comes in here talking of their current provider (Travelers, VALIC, etc.) everyone, and I mean everyone, is very quick to point out how costly these plans are. In addition, if the person replies and states how happy they are, someone will reply they can be happier with TC or VG and encourage them to immediately speak to their HR to get VG or TC in their system.

You speak of fairness and not one thing is right for everyone, but then you and others turn around and bash their current providers. Hypocritical don't you think?

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Hi Pathfinder,

 

Thanks for your participation. Please show where I have bashed. I will again repost what is says in our FAQ section and on page 20 of our book "The 403(b) Wise Guide" (second edition):

 

---

Do I have to use an agent to set up a 403(b)?

No. This site believes that with financial education, patience and realistic expectations, individuals are perfectly capable of managing their own 403(b). It is important to point out, however, that many agents provide valuable services to their clients. These services can include: retirement planning, information about state retirement plans, and analysis of other financial needs. Such agents rightly deserve to be compensated for their services. The key is to figure out exactly what services you are receiving, and exactly what fees you are paying for these services. Only then can you determine the true value of using an agent. Other options include hiring a financial planner who can be paid on an hourly basis to aid you with your 403(b).

---

 

I will also repeat the following: It's also important to note that in many school districts throughout the country not all options are available to all investors.

 

Dan Otter

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