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jphillips

Why Won't Joel Say Who He Is?

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Q.: Why are no endorsement fees paid to your union by Opportunity Independence?

From the NYSUT website:

 

Opportunity Independence 403(b)(7)

If you're a do-it-yourself type of person, you'll want to consider the NYSUT-sponsored tax-deferred custodial account that offers more than 50 mutual funds to match your risk/reward preferences. This 403(b)(7) program is another way to boost your retirement income .

 

Wow...so NYSUT *does* sponsor Opportunity Independence...and according to you, it does so without receiving a penny from ING for doing so!

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Now we are on to something. If the union receives no endorsement fee from "Opportunity Independence" but $338K 4 from "Opportunity Plus" which program will the NYSUT Benefit Trust steer the teacher to? Most people consider this a blantant conflict of interest and is the primary reason why the UFT, with half the NYSUT membership, has not signed on.

 

Additionally, if "Opportunity Independence" is for do-it-yourselfers where are the no-load funds like Vanguard, etc? Why are only B shares offered?

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Now we are on to something. If the union receives no endorsement fee from "Opportunity Independence" but $338K 4 from "Opportunity Plus" which program will the NYSUT Benefit Trust steer the teacher to? Most people consider this a blantant conflict of interest and is the primary reason why the UFT, with half the NYSUT membership, has not signed on.

 

Additionally, if "Opportunity Independence" is for do-it-yourselfers where are the no-load funds like Vanguard, etc? Why are only B shares offered?

 

Well, this was predictable...you're changing the focus of your question, now that you have had yet another inaccurate statement pointed out to you. Since you are now aware that NYSUT does indeed endorse Opportunity Independence, you want to attack the quality of the program itself. You also allege that NYSUT Benefit Trust is steering business towards Opportunity Plus and away from Opportunity Independence. Apparently you believed that they were doing so by endorsing one and not the other. Since that has been shown to be inaccurate, can you demonstrate for us how NYSUT Benefit Trust is "steering" business to Opportunity Plus? Or is this going to be yet another in the GROWING list of groundless allegations and grassy-knoll theories that you have yet to either substantiate or retract?

 

 

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Pathfinder,

 

I'm glad you find us interesting fodder. But insofar as you felt that your M & E charge was money well spent I would like to know if you still feel that way.

 

Peace and Hope,

Joel

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From the NYSUT website:

 

Opportunity Independence 403(b)(7)

If you're a do-it-yourself type of person, you'll want to consider the NYSUT-sponsored tax-deferred custodial account that offers more than 50 mutual funds to match your risk/reward preferences. This 403(b)(7) program is another way to boost your retirement income .

____________________________________________________________

 

FT: Do it your selfers by definition use no-loads. But your NYSUT feels Opportunity Independence with its B shares is for do-it-your selfers. Why? Because there is no personal rep. But you, as an Opportunity Plus client, also buy B shares but you ARE assigned a personal rep. You are entitled to this personal service because of the higher expense ratios associated with B shares.

 

Q.: So if B shares are priced to include the services of a personal rep I ask you, who is receiving the rep's compensation if no personal rep is assigned to the Opportunity Independence client?

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FT: Do it your selfers by definition use no-loads. But your NYSUT feels Opportunity Independence with its B shares is for do-it-your selfers. Why? Because there is no personal rep. But you, as an Opportunity Plus client, also buy B shares but you ARE assigned a personal rep. You are entitled to this personal service because of the higher expense ratios associated with B shares.

 

Q.: So if B shares are priced to include the services of a personal rep I ask you, who is receiving the rep's compensation if no personal rep is assigned to the Opportunity Independence client?

 

According to the Opportunity Independence website, the plan comes with no upfront sales charges, no deferred sales charges, and no M&E fees. A closer examination reveals that the funds offered in Opportunity Independence actually offers "A" shares, with the upfront sales charge waived. Again, Joel, you simply have your facts wrong.

 

Someone made a tongue-in-cheek reference recently to my posting activity, which brought a smile to my face. Touche. I assure you that I have no plans to keep posting to this site at such a pace. But as long as one person continues his anti-union crusade by factually misrepresenting the union to which I belong, I will continue to follow up his misrepresentations with clarifications.

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NYSUT says: "If you're a do-it-yourself type of person, you'll want to consider the NYSUT-sponsored tax-deferred custodial account that offers more than 50 mutual funds to match your risk/reward preferences. This 403(b)(7) program is another way to boost your retirement

income". "Opportunity Independence offers you a wide range of mutual funds through the 403(b)(7) custodial account. This allows you the flexibility to build a portfolio to help meet your needs. You determine which options, or combination of options, are best for you based on your individual investment and risk tolerance"

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

Q.1: In light of the fact that the same high expense ratios are charged to participants of Opportunity Plus why is it that those participants have a personal rep while participants of Opportunity Independence do not?

 

Q. 2: Is there any do-it-yourself type of person out there that would find these funds attractive?

 

The NYSUT sponsors the following mutual funds for for those who consider themselves a "do-it-yourself type of person". The expense ratio for each fund is in ( ).

 

Peace and Hope,

Joel

 

 

Investment Option

Fund Code

 

Global/International

 

Fidelity® Advisor Overseas Fund (1.46 pecent)

140

 

Goldman Sachs International Equity Fund ((1.79 percent)

919

 

ING International Growth Fund (1.61 percent0

443

 

Janus Worldwide Fund (0.87 percent)

610

 

Lazard Emerging Markets Portfolio (1.60 percent)

936

 

Lazard International Equity Portfolio (1.21 percent)

937

 

MFS® Global Equity Fund (1.62 percent)

913

 

Templeton Growth Fund, Inc. (1.13 percent)

612

 

Aggressive Growth

 

AIM Constellation Fund (1.27 percent)

942

 

Ariel Fund (1.19 percent)

187

 

Baron Asset Fund (1.35 percent)

921

 

Baron Growth Fund (1.35 percent)

920

 

Calvert Capital Accumulation Fund (1.74 percent)

909

 

Franklin Small-Mid Cap Growth Fund (1.06 percent)

972

 

ING Index Plus Mid Cap Fund (1.00 percent)

489

 

ING Index Plus Small Cap Fund (1.00 percent)

606

 

ING Small Company Fund (1.38 percent)

473

 

INVESCO Dynamics Fund (1.46 percent)

960

 

Lazard Small Cap Portfolio (1.15 percent)

935

 

MFS® Emerging Growth Fund (1.27 percent)

947

 

Growth

 

AIM Weingarten Fund (1.33 percent)

941

 

Fidelity® Advisor Growth Opportunities Fund (0.91 percent)

613

 

Goldman Sachs Capital Growth Fund (1.48 percent)

918

 

ING Growth Fund (1.24 percent)

471

 

ING Value Opportunity Fund (1.35 percent)

605

 

INVESCO Growth Fund (1.55 percent)

908

 

Janus Twenty Fund (0.84 percent)

926

 

Massachusetts Investors Growth Stock Fund (0.94 percent)

912

 

Oppenheimer Capital Appreciation Fund (1.17 percent)

944

 

Growth & Income (Stocks)

 

AIM Charter Fund (1.22 percent)

939

 

ING Growth and Income Fund (1.18 percent)

472

 

ING Index Plus Large Cap Fund (0.95 percent)

602

 

INVESCO Value Equity Fund (1.64 percent)

930

 

Oppenheimer Main Street® Fund (0.97 percent

 

Pioneer Equity-Income Fund (1.11 percent)

925

 

Pioneer Fund (1.11 percent)

923

 

Growth & Income (Stocks & Bonds)

 

Fidelity® Advisor Balanced Fund (1.23 percent)

165

 

ING Balanced Fund (1.42 percent)

474

 

Janus Balanced Fund (0.86 percent)

166

 

Income

 

ING Government Fund (0.95 percent)

463

 

Templeton Global Bond Fund (1.10 percent)

614

 

 

 

 

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Q.1: In light of the fact that the same high expense ratios are charged to participants of Opportunity Plus why is it that those participants have a personal rep while participants of Opportunity Independence do not?

 

Q. 2: Is there any do-it-yourself type of person out there that would find these funds attractive?

 

 

1. By talking about "the same high expense ratios," you imply that the cost of these two plans is the same, but given the absence of M&E fees from Opportunity Independence accounts, you already know that that is NOT the case.

 

As to why Opportunity Independence clients are not afforded a personal rep, please furnish us with the name of a financial provider which DOES provide personal reps for their 403(b)(7) clients.

 

2. In general, as I look down the menu of fund options, I see more or less what I would expect to see: higher expense ratios for equity funds, especially for international funds, and lower expense ratios for fixed-income offerings. I also note higher expense ratios for funds that come from "load" companies such as Goldman Sachs, with lower expense ratios from "no-load" providers such as Fidelity and Janus. (I do see both types of funds available to Independence investors.)

 

I'm not a "do-it-yourself" type of person, so I won't pretend to speak for them, but by definition, won't do-it-yourselfers do the necessary research to discover what financial provider will give them the best plan? If they find these funds as unappealing as you do, they'll no doubt gravitate towards a different provider. Fortunately, since NYSUT's endorsement is not a mandate, or a limit of any kind, they are perfectly free to do so.

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NYSUT says: "Opportunity Plus offers you a wide range of investment options under a variable annuity contract, issued by ING Life Insurance and Annuity Company (ILIAC) - from variable funds to guaranteed investment options. Each option is designed to help meet a different financial objective, allowing you to react to changing economic circumstances. You determine which options, or combination of options, are best for you based on your individual investment and risk tolerance. Guarantees apply to the claims-paying ability of the ILIAC."

 

Joel says: NYSUT endorses the following funds for Opportunity Plus variable annuity investing. The expense ratios are in ( ) and INCLUDE the 1.00 percent Mortality and Expense fee charged by ING. It is interesting to note that participants of Opportunity Plus ARE entitled to a personal rep while participants of Opportunity Independence, the mutual funds alternative, are not.

 

Peace and Hope,

Joel

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

 

Global/ International

 

Fidelity VIP Overseas Portfolio * (1.90 percent)

722

 

ING JPMorgan Fleming International Portfolio (2.00 percent)

 

 

ING VP Emerging Markets Fund (3.33 percent)

457

 

ING VP International Equity Portfolio ** (2.15 percent)

055

 

Janus Aspen Series Worldwide Growth Portfolio (1.70 percent)

411

 

Oppenheimer Developing Markets Fund - Class A (2.81 percent

190

 

Oppenheimer Global Securities Fund/VA*** (1.67 percent)

097

 

Aggressive Growth

 

AIM V.I. Capital Appreciation Fund - Series I Shares (1.85 pecent)

076

 

Evergreen Special Values Fund (2.36 percent)

191

 

FTVIP Franklin Small Cap Value Securities Fund - Class 2 (2.01 percent)

 

ING Baron Small Cap Growth Portfolio (2.45 percent)

 

ING Salomon Brothers Aggressive Growth Portfolio (1.82 percent)

 

ING VP Global Science and Technology Portfolio - Class R (2.12 percent)

 

ING VP Index Plus MidCap Portfolio (1.53 percent)

053

 

ING VP Index Plus SmallCap Portfolio (1.60 percent)

052

 

ING VP Small Company Portfolio (1.87 percent)

042

 

Janus Aspen Series Mid Cap Growth Portfolio (1.67 percent)

 

Lord Abbett Series Fund - Mid-Cap Value Portfolio - Class VC Shares (2.15 percent)

 

Pioneer Mid Cap Value VCT Portfolio (1.80 percent)

 

Growth

 

AIM V.I. Growth Fund - Series I Shares (1.91 percent)

077

 

AIM V.I. Premier Equity Fund - Series I Shares (1.85 percent)

078

 

Fidelity® VIP Contrafund® Portfolio (1.68 percent)

491

 

ING MFS Capital Opportunities Portfolio (1.90 percent)

420

 

ING MFS Research Equity Portfolio (1.85 percent)

 

ING T. Rowe Price Growth Equity Portfolio (1.75 percent)

487

 

ING VP Growth Portfolio (1.72 percent)

040

 

ING VP Value Opportunity Portfolio (1.72 percent)

041

 

Janus Aspen Series Capital Appreciation Portfolio - Service Shares

(1.92 percent)

188

 

Janus Aspen Series Growth Portfolio (1.67 percent)

413

 

Growth & Income (Stocks)

 

AIM V.I. Core Equity Fund - Series I Shares (1.78 percent)

079

 

American Century® Income and Growth Fund - Advisor Class (1.94 percent)

189

 

Fidelity® VIP Equity-Income Portfolio (1.57 percent)

493

 

Fidelity® VIP Index 500 Portfolio (1.28 percent)

497

 

ING Van Kampen Comstock Portfolio (2.20 percent)

 

ING VP Growth and Income Portfolio (1.59 percent)

002

 

ING VP Index Plus LargeCap Portfolio (1.45 percent)

035

 

Pioneer Equity Income VCT Portfolio - Class I (1.80 percent)

 

Growth & Income (Stocks & Bonds)

 

Calvert Social Balanced Portfolio (1.91 percent)

430

 

ING VP Balanced Portfolio, Inc. (1.60 percent)

008

 

Janus Aspen Series Balanced Portfolio (1.67 percent)

712

 

MFS® Total Return Series (1.86 percent)

138

 

PAX World Balanced Fund (1.95 percent)

193

 

Asset Allocation

 

Fidelity® VIP Asset Manager Portfolio (1.63 percent)

490

 

ING VP Strategic Allocation Balanced Portfolio (1.70 percent)

017

 

ING VP Strategic Allocation Growth Portfolio (1.75 percent)

016

 

ING VP Strategic Allocation Income Portfolio (1.65 percent)

018

 

Income

 

Fidelity® VIP High Income Portfolio (1.70 percent)

132

 

ING PIMCO Total Return Portfolio (2.10 percent)

 

ING VP Bond Portfolio (1.49 percent)

004

 

Oppenheimer Strategic Bond Fund/VA (1.78 percent)

098

 

Stability of Principal

 

Guaranteed Accumulation Account ++ (not available)

 

ING Fixed Account ++ (not available)

001

 

ING VP Money Market Portfolio +++ (1.34 percent)

003

 

 

 

 

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Joel says: NYSUT endorses the following funds for Opportunity Plus variable annuity investing. The expense ratios are in ( ) and INCLUDE the 1.00 percent Mortality and Expense fee charged by ING. It is interesting to note that participants of Opportunity Plus ARE entitled to a personal rep while participants of Opportunity Independence, the mutual funds alternative, are not.

 

 

And the expenses for Plus are higher than the expenses for Independence...which you would expect for an account with the services of a personal rep and an insurance component.

 

I would again invite you to furnish for us the name of a provider which does furnish a personal rep to its 403(b)(7) clients.

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"Securities are offered through ING Financial Advisers, LLC (member SIPC) and other broker/dealers with which it has agreements". ING Financial Advisors is a BD.

 

So any B/D that signs a joinder agreement with a 403b employer would sell the same priced funds as your Opportunity Independence, i.e; Merrill Lynch. Through their higher expense ratios (12b-1 fees), that you have attested to, (compared to pure no-loads) the mutual funds that they sell are expensed to include compensating an individual rep, if in fact the BD wishes to hire a salesperson to assist in the distribution process. In the case of your PLUS product, ING Financial Advisors (the B/D) is retaining a higher portion of the expense ratio because it has made the decision not to hire individual reps.

 

We all stipulate that a do-it-yourselfer uses pure no-load funds and pure no-load funds do not come with a personal rep. So if it was NYSUT intention to design a do-it-yourselfer 403(b)7 program, which by definition does NOT come with a personal rep, why didn't they go to a pure no-load firm with its much lower expense ratios? In other words why are there only 1-2 pure no-loads out of a menu of 40 + funds?

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The FT says: "I also note higher expense ratios for funds that come from "load" companies such as Goldman Sachs, with lower expense ratios from "no-load" providers such as Fidelity and Janus. (I do see both types of funds available to Independence investors.)"

 

Joel Says: Fidelity offers load and no-load funds. The three Fidelity funds on the Opportunity Independence platform could hardly be no-load offerings because they sport those notorious 12b-1 fees. The 12b-1 fees are: 0.51 percent for the Fidelity Advisor Overseas Fund; 0.52 percent for the Fidelity Advisor Growth Opportunity Fund and 0.51 percent for the Fidelity Advisor Balanced Fund. (These 12b1-fees are used to compensate the personal rep if the Broker/Dealer wishes to hire a sales force.)

 

You are, therefore, left with only the three Janus Funds that can be said to be no-loads. And those are quite pricey as no-loads go. The Janus Worldwide Fund has an expense ratio of 0.87 percent; the Janus Twenty charges 0.84 percent and the Janus Balanced Fund charges 0.86 percent.

 

So out of 41 funds three are no-load and 38 are load. Out of 41 funds 33 have expense ratios of 1.0 percent or greater with 8 charging 0.99 percent or less.

 

Note: The Fidelity VIP Index 500 Portfolio, with its 0.28 percent expense ratio, is NOT available on the Opportunity Independence mutual fund platform, which was designed for the do-it-your-selfer, but IS available on the variable annuity Opportunity Plus platform. But that fine value is wiped out because you must pay that 1.00 percent M & E charge bringing the total expense ratio up to 1.28 percent. All of us stipulate as to the value of index investing especially for those who are do-it-yourselfers. Yet there are just 3 index funds on the Opportunity Independence platform---all 3 are ING funds.

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