Jump to content
Sign in to follow this  
Scottyd

Kickbacks Anyone?

Recommended Posts

I just came across this disclosure in an ING prospectus, I can't verify if the relationship still exists:

 

"Oregon Education Association (OEA) and the Company's Agreement. Under the agreement, OEA agrees to 1) exclusively endorse, and facilitate OEA members' access to, the variable annuity and other related investment products; and 2) adverise the Company's (ING) products in the OEA newsletter. In return, the Company agreed, effective October 1, 2001, to compensate the OEA $10,417 per month to help the OEA defray the costs incurred in providing this support"

 

If you check the OEA website you will still see a relationship between ING & the OEA. I can't imagine that it costs the OEA in excess of $120,000 a year to advertise ING's products in a newsletter. The product in question is has expenses that I have never seen before in comparison to the benefits offered, averaging between 2.5 - 3.4% at it's highest, even the money market account is 2.34% annually - can you say negative returns in a "safe" investment.

 

The OEA website says the following about what it exists to do "The Oregon Education Association has a long history of working on behalf of education professionals in Oregon." I can't say that I believe them when they say this, they are not working on their members behalf when they select vendors based on the kickbacks they will recieve. If you think this is an isolated case you are wrong, this is how it works with state, & national unions - it isn't the best product that wins, it is the one with the best kickbacks.

 

ScottyD

Share this post


Link to post
Share on other sites
Guest Also concerned

OEA, that's nothing. If you are curious about ING's business dealings, and their relationship to the entities that endorse them, check out almost any of the major teacher's unions in the state of New York (how about 40 basis points in the state of NY? The union is getting about 1.4 million from ING per annum. Where do you think that comes from? Yep, teachers). Now let's move west. Pennsylvania? Same thing on a smaller scale. Ohio? Take a look at the OASBO recommended 457(b) plan, it's ING. Now look at the expeneses; some of the highest in the industry. All the way to CA, there is a patern here, and I've been watching it grow for some time. They're a big company, and they are buying themselves a nice cushy market share, perhaps most of the market. I won't tell you who I am, or where I work, because I've been blasted before for mentioning a company, but I will tell you that I work for a small operation with good integrity and well-intentioned, that is routenely muscled aside by big ING companies that can pay big bucks for endorsements and market captures. Who's hurt here? The consumer, (the teacher). The solution? This website, and other resources like it. Read every line of every entry that you can. There's a reason prospectuses are hard to read. But by reading it thoroughly, as you seem to be, you can inform yourself. You'll be amazed at what fees may apply to your money and how it impacts your financial future.

 

Don't touch an endorsement, you don't know where it's been!

Share this post


Link to post
Share on other sites

also concerned,

 

ING isn't the only one, SBL has a nice cushy relationship with the NEA as well - Valuebuilder! Should be called the Valuedestroyer. A new 457 plan is being offered in Orange County by ING and the fees are nearly 3%.

 

You don't have to post your name but I would be interested in your stories - e-mail me at scott@meridianwealth.com

 

Have a great weekend.

Share this post


Link to post
Share on other sites
Guest Guest_Joel L. Frank

The New York State United Teachers (NYSUT) has the same type of deal with ING. The world is really a small place.

Share this post


Link to post
Share on other sites
Guest Guest_Joel L. Frank

The following group of funds make up the 403b7 offering of NYSUT/ING. These funds are sold by ING salespersons. All have 12b1 fees.

 

Investment Option

Fund Code

 

Global/International

 

Fidelity® Advisor Overseas Fund

140

 

Goldman Sachs International Equity Fund

919

 

ING International Growth Fund

443

 

Janus Worldwide Fund

610

 

Lazard Emerging Markets Portfolio

936

 

Lazard International Equity Portfolio

937

 

MFS® Global Equity Fund

913

 

Templeton Growth Fund, Inc.

612

 

Aggressive Growth

 

AIM Constellation Fund

942

 

Ariel Fund

187

 

Baron Asset Fund

921

 

Baron Growth Fund

920

 

Calvert Capital Accumulation Fund

909

 

Franklin Small-Mid Cap Growth Fund

972

 

ING Index Plus Mid Cap Fund

489

 

ING Index Plus Small Cap Fund

606

 

ING Small Company Fund

473

 

INVESCO Dynamics Fund

960

 

Lazard Small Cap Portfolio

935

 

MFS® Emerging Growth Fund

947

 

Growth

 

AIM Weingarten Fund

941

 

Fidelity® Advisor Growth Opportunities Fund

613

 

Goldman Sachs Capital Growth Fund

918

 

ING Growth Fund

471

 

ING Value Opportunity Fund

605

 

INVESCO Growth Fund

908

 

Janus Twenty Fund

926

 

Massachusetts Investors Growth Stock Fund

912

 

Oppenheimer Capital Appreciation Fund

944

 

Growth & Income (Stocks)

 

AIM Charter Fund

939

 

ING Growth and Income Fund

472

 

ING Index Plus Large Cap Fund

602

 

INVESCO Value Equity Fund

930

 

Oppenheimer Main Street® Fund

 

Effective 4/30/03; formerly Oppenheimer Main Street Growth and Income Fund®

958

 

Pioneer Equity-Income Fund

925

 

Pioneer Fund

923

 

Growth & Income (Stocks & Bonds)

 

Fidelity® Advisor Balanced Fund

165

 

ING Balanced Fund

474

 

Janus Balanced Fund

166

 

Income

 

ING Government Fund

463

 

Templeton Global Bond Fund

614

 

 

 

ING does not offer tax advice. Please consult a tax advisor or attorney before making a tax-related investment/insurance decision.

 

Prospectuses containing more complete information, including charges and expenses, are available. Please read them carefully before you invest or send money. Mutual funds offered through a retirement plan are long-term investments designed for retirement purposes. An administration fee and fund management fees will apply. Early withdrawals may be subject to a 10% federal penalty, if taken prior to age 59½. Money distributed from the annuity will be taxed as ordinary income in the year the money is received. Account values fluctuate with market conditions, and when surrendered the principal may be worth more or less than its original amount invested.

 

Opportunity Independence is a series of mutual funds offered through a custodial account with ING National Trust. All fees and expenses associated with Opportunity Independence, including those of the Trust, are detailed in the fund prospectuses and custodial documents, which should be read carefully prior to investing or sending money. Call your ING representative or the Service Center at 1-800-677-4636 for additional information.

 

Insurance products are offered through ING Life Insurance and Annuity Company (ILIAC), 151 Farmington Avenue, Hartford, Connecticut 06156. Securities are offered through ING Financial Advisers, LLC (member SIPC) and other broker/dealers with which it has agreements. Custodial services are offered through ING National Trust. These companies are wholly owned subsidiaries of ING Groep N.V. Products and services may not be available in all states.

 

© 2002-2003 ING North America Insurance Corporation

 

Share this post


Link to post
Share on other sites
Guest Guest_Joel L. Frank

To "also concerned":

 

You mentioned that the NYSUT/ING funds come with 40 basis points. I think you meant 140 bp. They range from 100-200 basis points depending on the particular fund.

 

It is interesting to note that the largest union local in the world the United Federation of Teachers, AFT (City of NY) is resposible for the founding of NYSUT 20 years ago. The organization is a merge of the old NYS Teachers Association (NEA) and the Empire State Federation of Teachers (AFT). Half the members of NYSUT are members of the United Federation of Teachers/NYC.

 

Having said that, Mayor Mike Bloomberg along with the NYC teachers union have said no to the 403(b) programs of NYSUT/ING. NYC teachers are offered a 457(b) and a 401(k) through the Deferred Compensation Plans of the City of New York. The governing Board has recently changed from no-load funds to "separate accounts" for even lower costs. It costs about 20 bp to manage a portfolio of $4 billion.

 

 

Peace,

Joel L. Frank

Share this post


Link to post
Share on other sites
Guest Also concerned
To "also concerned":

 

You mentioned that the NYSUT/ING funds come with 40 basis points. I think you meant 140 bp. They range from 100-200 basis points depending on the particular fund.

 

The 100-200 basis points are part of the overall fund expense, but only a portion of that money is "kicked-back" to the union for it's endorsement.

 

The governing Board has recently changed from no-load funds to "separate accounts" for even lower costs. It costs about 20 bp to manage a portfolio of $4 billion.

 

20 bp is a great deal. Anything under 25 bp can be listed as a no-load fund. I was unaware of, and pleasantly surprised by, this alternative option.

 

-also concerned

 

 

 

To "also concerned":

 

You mentioned that the NYSUT/ING funds come with 40 basis points. I think you meant 140 bp. They range from 100-200 basis points depending on the particular fund.

 

The 100-200 basis points are part of the overall fund expense, but only a portion of that money is "kicked-back" to the union for it's endorsement.

 

The governing Board has recently changed from no-load funds to "separate accounts" for even lower costs. It costs about 20 bp to manage a portfolio of $4 billion.

 

20 bp is a great deal. Anything under 25 bp can be listed as a no-load. I was unaware of, and pleasantly surprised by, this alternative option.

 

-also concerned

Share this post


Link to post
Share on other sites
Guest D.G.

While we're on the subject, I have been fuming over the Opportunity Plus program for years. Specializing with Long Island educators, I have done battle in many districts to combat this. I have also been cautious, knowing the "shoot the messenger" mentality might hurt me in the long run by getting locked out. Perhaps an anonymous letter to Lynn Brenner (financial writer) at Newsday would shine some light in the vampires eyes (ING+NYSUT).

Share this post


Link to post
Share on other sites
Guest Guest_Joel L. Frank

also concerned,

 

You say that funds that have expense ratios of less that 25 bp may be considered no-load. What name is given to funds that have an expense ratio in excess of 25 bp?

 

Peace,

Joel L. Frank

Share this post


Link to post
Share on other sites
Guest Dean G.

Hi Scott,

 

I'm currently drafting the letter to Lynn Brenner (Newsday) on Long Island. Now I just have to build the nerve to send it, which will definitely stir the manure.

 

Be well,

 

Dean G.

Share this post


Link to post
Share on other sites

Dean G. and ScottyD: Go get 'em, cowboys. Hopefully, this works all around.

 

There's this story about these little boys who were identical twins, except that one was a Pessimist, the other an Optimist. They were told that in the next room was a BIG SURPRISE for their birthday. When the Pessimist twin was led into the nextdoor room their was nothing in it but a big pile of manure. The Pessimist glared at the pile and said, "What is this? Get me out of here, there's nothing here but a pile of s**t."

 

The second boy was then led into the room. But this twin, the Optimist, upon seeing the pile of manure made a beeline to the top shouted, "YIPPEE!" and started digging frantically through the pile. Asked what he was doing he replied. " With this much s**t here, there's got to be a pony somewhere."

 

Nothing ventured, nothing gained. Good, luck.

Share this post


Link to post
Share on other sites
Guest Guest_Ted Leber

D.G.

 

I'm sure that 403bwise.com will print your letter. Persistence.

 

Ted

Share this post


Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

Loading...
Sign in to follow this  

×
×
  • Create New...