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403b Plan With Over 20,000 No Load And Load Waived Mutual Funds

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We recently introduced a 403b plan to a public school district that has over 1,000 employees.

The 403b plan offers over 20,000 no load and load waived (participant pays no load) mutual funds.

 

The employees were very unhappy with the salespeople from the insurance companies offering annuities, with all their restrictions, Morality and Expense (M&E) charges and lack of full disclosure.

 

The employees are now very happy with their no load and load waived mutual funds based 403b plan.

Now, the employees work with fiduciaries obligated by law to act in their best interest.

The school district is also very happy, as the plan costs them nothing.

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"The 403b plan offers over 20,000 no load and load waived (participant pays no load) mutual funds."

According to this report (see the link below), there were about 8000 mutual fund companies at the end of 2008.

Also this is very suspect because there are only about 7-8 no load companies. Sounds like you managed to waive the the remaining commissions of all of the other fund companies on the entire stock market exchanges.

This space is not used for advertising. If you want to talk about your fees, strategies, and the law which says that your people must be fiduciaries, please explain but do not sell.

 

 

http://mutualfunds.about.com/b/2009/04/18/...utual-funds.htm

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Point well taken.

We have modified the post to remove any suggestions to calling us.

There are oftentimes multiple share classes (A,B,C,D,etc.) of the same mutual fund.

Technically, it is over 23,000.

 

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Many mutual funds have different share classes.

 

For example, the American Funds Growth Fund of America (largest open end equity mutual fund) has:

Class A (front end sales load, unless waived)

Class B (back end sales load, unless waived)

Class C (back end sales load, unless waived)

Class F-1 (load waived, only available from fee based Financial Advisors)

Class F-2 (load waived, only available from fee based Financial Advisors)

Class 529-A (for 529 account)

Class 529-B (for 529 accounts)

Class 529-C (for 529 accounts)

Class R1 (for retirement plans)

Class R2 (for retirement plans)

Class R3 (for retirement plans)

Class R4 (for retirement plans)

Class R5 (for retirement plans)

Class R6 (for retirement plans)

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Many mutual funds have different share classes.

 

For example, the American Funds Growth Fund of America (largest open end equity mutual fund) has:

Class A (front end sales load, unless waived)

Class B (back end sales load, unless waived)

Class C (back end sales load, unless waived)

Class F-1 (load waived, only available from fee based Financial Advisors)

Class F-2 (load waived, only available from fee based Financial Advisors)

Class 529-A (for 529 account)

Class 529-B (for 529 accounts)

Class 529-C (for 529 accounts)

Class R1 (for retirement plans)

Class R2 (for retirement plans)

Class R3 (for retirement plans)

Class R4 (for retirement plans)

Class R5 (for retirement plans)

Class R6 (for retirement plans)

 

 

This is just my opinion but I'd prefer to see you not include different share classes of the same fund in your overall count of "over 20,000". Especially considering your example contains classes not available in a 403(b) plan. They're really all the same fund, are they not? Or am I just naive in the accepted way of counting mutual funds?

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The count of 23,000 I am referencing to only includes funds available on the 403b platform.

Different clients may be best suited by different share classes.

Some share classes require minimum investment amounts.

 

The point is districts and employees should be aware there is a viable platform available, offering thousands of no load and load waived SEC registered mutual funds.

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23000 choices does not automatically mean that they are quality choices or that it is better for the participant to have so many available: check this out

 

Around here we suggest the following as core investments.

 

For young teachers:

20% Vanguard Total Bond Market Index Fee, .20%

60% Vanguard Total Stock Market Index Fee, .18%

20% Vanguard Total International Stock Index Fee, .34%

 

Near retirement:

70% Vanguard Total Bond Market Index

20% Vanguard Total Stock Market Index

10 % Vanguard Total International Stock Index

 

These portfolios offer extensive diversification, bond exposure and diversification reflected by time horizen and age and low cost.

 

Gives us an example of a portfolio that includes fees that the participants actually pay (not just the fund expense ratios), diversification, education, and followup that your people set up for the teachers.

 

Steve

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When you have 23,000 choices, hundreds are going to be excellent (defined by risk adjusted performance), thousands are going to be average and thousands are going to be poor.

 

That said, few plans can even offer hundreds of excellent mutual funds.

 

Every investor's needs are different, so portfolios and fees (based on assets) will vary.

 

Always happy to talk specifics, no obligation, on a one-on-one basis.

 

 

 

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When you have 23,000 choices, hundreds are going to be excellent (defined by risk adjusted performance), thousands are going to be average and thousands are going to be poor.

 

That said, few plans can even offer hundreds of excellent mutual funds.

 

Every investor's needs are different, so portfolios and fees (based on assets) will vary.

 

Always happy to talk specifics, no obligation, on a one-on-one basis.

 

 

Sorry the one to one doesn't work around here. You are sounding like a sales person. We want objective information.

Come on finadvnj...give us an example. Surely, you can generalize that makes sense for many teachers.

 

What would the plan look like for each of the following hypothetical teachers:

 

For example, 25 year old female teacher who knows next to nothing about retirement planning was encouraged to start planning now.

 

Or the 55 year old male teacher who all of a sudden is thinking retirement, again knows nothing.

 

still again, how about the 45 year old, very savvy and only wants Vanguard back after losing it as a result of the new IRS regs.

 

Another, is a teacher who has just learned about fees in TSAs and wants to transfer the proceeds to a low cost no load mutual fund vendor.

 

I gave you some hints in my last post. You first post sounded good but I sense now as the questions and comments added up that you either cannot or don't want to spend the time providing information, objective information for all to see.

 

We are having a discussion thats all.

 

Steve

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Unfortunately, almost 80% of 403b investors are still foolishly using annuity providers instead of open architecture, no load and load waived mutual funds.

 

 

Tells us something we don't know. You started by saying that your TPS has waived virtually then entire stock market loads. I didn't know any TPA could do that. The rest of the TPAs waive the loads in the plan and thats all.

This is your chance to separate yourself from all of the other TPAs. Give us more information.

 

This forum is for everybody to learn, to be transparent, to fully understand this mysterious benefit plan and to begin to avoid the annuity providers from large insurance companies.

 

Steve

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We offer plans (401k, 403b, 457b) where participants can have access to thousands of no load and load waived mutual funds.

The 403b plan we recently implemented chose to offer thousands of no load and load waived mutual funds to its participants.

The insurance companies are not happy about this.

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We offer plans (401k, 403b, 457b) where participants can have access to thousands of no load and load waived mutual funds.

The 403b plan we recently implemented chose to offer thousands of no load and load waived mutual funds to its participants.

The insurance companies are not happy about this.

 

 

How is the load being waived? Are you saying that companies traditionally charging loads, Putnam for example, are just forgoing the sales charge?

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The loads are waived for clients utilizing our Registered Investment Advisor (RIA), even if the only account we manage for the client is their 403b.

 

Yes, companies traditionally charging loads (Putnam for example) are just forgoing the sales charge, for our RIA clients.

 

We have the same relationships on other platforms and other types of accounts (401k, 457, IRA, Roth IRA, SEP-IRA, Individual accounts, Joint accounts, Trust accounts, etc.).

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