Jump to content
Kim

Comparing 403bs

Recommended Posts

I am a first year teacher in New York and I have been doing research about the 403B plan. I am looking for help in finding the best company to get a 403B plan through. I have been approached by 2 men; one from AXA-Equitable, and the other from CITI Group-Travelers. Other teachers at my school have Aetna, ING, Fidelity. I am finding it difficult to compare and choose. I saw the one note posted for the 403B compare for people in California. Is there a site to compare for those in NY? Please help!

Share this post


Link to post
Share on other sites
Guest Sierra

Stay far away from a provider that assigns a salesperson to you. This means you are paying a broker to acquire the 403(b) investment for you. I would rather see you use that brokerage commission to grow your investment instead. Fidelity looks like the best of the lot. But investigate before investing. Also go to your local school board and tell them that they can opt into the NY state deferred compensation 457(b) Plan. Maybe they have already done so. Find out. This is the plan of choice for all teachers in NY. NY City teachers participate in the 457(b) Plan of the City of NY.

 

Get back to us with your findings.

 

Peace,

Joel L. Frank

Share this post


Link to post
Share on other sites

 

Hi Kim,

 

Welcome to NY! Can't speak to the two companies you first mentioned, but two of the companies that you listed as available to you are great choices, depending on what you're looking for. If you're a self-starter and feel comfortable handling most of your investment decisions yourself, I'd go with Fidelity. Great company, low fees overall, and their website has a lot of educational material that will get you up to speed on different aspects of investing. If you're looking more for individual assistance, then I'd strongly recommend ING. I've found their agents knowledgeable (though you should talk to the person yourself to make sure it's someone you'd be comfortable with) and their 403b accounts VERY reasonably priced for a full-service account. I'm assuming you belong to a NYSUT local? If so, you should know that ING is NYSUT's endorsed carrier, and as such carries a lot of price reductions and perks that are worth checking out.

 

Whoever you go with, the most important thing is definitely to get started, and to contribute as much as you can. Good luck!

Share this post


Link to post
Share on other sites
Guest Sierra

Kim: Please be aware that if you use a commission salesperson to acquire the investment for you your investment is not growing as fast as it would if you acquired the investment directly thru a no-load (no commission) outfit like Fidelity. Paying Fees/commissions to acquire/buy the investment is simply foolish. If I were you I would use Fidelity and if you need some help in asset allocation go to their fine website. Why pay a middleman when you can buy direct?

 

In the spirit of full disclosure please be advised that ING pays NYSUT $4,000,000 for the endorsement. The $4,000,000 comes from the unnecessary fees/commisions NYSUT members pay to acquire their 403(b) investment from ING. A former client of ING posted on these boards that he was paying about 3 cents on the dollar to ING. He subsequently got rid of ING in favor of investing in no-loads.

 

Peace and Hope,

Joel L. Frank

Share this post


Link to post
Share on other sites

 

I would expect that ANY financial service firm has its detractors. The report of someone paying 3% of their money to ING, though, sounds exaggerated; it simply doesn't seem possible under the terms of NYSUT's contract with ING.

 

Equally in the spirit of "full disclosure," Kim, you should know that a.) I have no affiliation with ING, other than being a very satisfied client who tires of hearing them bashed on this board, and b.) Joel would never, under any circumstances, recommend ANY of the full-service providers. His sole criterion seems to be cost. This is defensible, I suppose, if you are happy to handle your own investments, but since one size does NOT fit all, I'm glad that ING is available to us.

Share this post


Link to post
Share on other sites

Hi,

I went on Compare403b.com and took a look at ING that French Teacher recommended. Here is what I found: ING charges 1.25% with a 5% surrender charge that takes 10 years to go away. Their subaccounts are all high cost mutual funds of about .85% and more. That adds up to 2.15% and more for one fund. Believe me costs do matter especially when you can do better.

 

If you feel that you need an advisor, then find yourself a fee only financial planner to help you make your decisions. The ING people will not be advisors. They will just be sales people that will be more than happy to sell you ING products. If you are smart enough to find this website and ask good questions, you will be able to see a bad deal.

 

Another good website to take a look at is Morningstar.com. The discussion forums there can be a good source of information. Read some good books about investing by John Bogle, William Bernstein, and Larry Swedroa. While investing can seem confusing at first, smart investing in the end is really very simple. The more you know about the subject, the better off you will be. Keep asking questions. It is your money. Best Wishes.

 

Joe

Share this post


Link to post
Share on other sites
Guest Sierra

b.) Joel would never, under any circumstances, recommend ANY of the full-service providers.

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

Kim:

 

Full service in my book means you pay the least to ACQUIRE the investment and then at your option and expense hire an individual that is not associated with the investment provider, ie ING, on an hourly basis to provide investment advice. The advisor will be registered with the SEC and is subject to the Investment Advisors Act of 1940 which provides you with a higher degree of investor protection than using a commission rep employed by the investment provider, ie ING, that is exempt from registering with the SEC as an advisor and is exempt from the Investment Advisors Act of 1940.

 

Registration with the SEC as an investment advisor requires the applicant to disclose to the Commission the methods one employs in dispensing investment advice. The commissioned rep is not trained in methods of investing---s(he) is trained in methods of selling and maintaining assets under management for a long as possible.

 

Peace and Hope,

Joel L. Frank

Share this post


Link to post
Share on other sites
Hi,

I went on Compare403b.com and took a look at ING that French Teacher recommended. Here is what I found: ING charges 1.25% with a 5% surrender charge that takes 10 years to go away. Their subaccounts are all high cost mutual funds of about .85% and more. That adds up to 2.15% and more for one fund. Believe me costs do matter especially when you can do better.

 

If you feel that you need an advisor, then find yourself a fee only financial planner to help you make your decisions. The ING people will not be advisors. They will just be sales people that will be more than happy to sell you ING products. If you are smart enough to find this website and ask good questions, you will be able to see a bad deal.

 

Another good website to take a look at is Morningstar.com. The discussion forums there can be a good source of information. Read some good books about investing by John Bogle, William Bernstein, and Larry Swedroa. While investing can seem confusing at first, smart investing in the end is really very simple. The more you know about the subject, the better off you will be. Keep asking questions. It is your money. Best Wishes.

 

Joe

JMacDonald, in the state of California, I agree with you, ING runs a little high. But 403bcompare does NOT list products sold exclusively in the state of NY. ING has a variable product called "Opportunity Plus" in New York which is substantially better than any of its full-service counterparts. The M&E is 1.00%, for one thing; there are no sales charges of any kind, no annual account fees, etc.

 

That's why I specified to "Kim" that ING made excellent sense for her IF SHE WERE IN New York... otherwise, I'd back off that recommendation, since I have no idea what ING makes available elsewhere. Either way, just an FYI: the product described on 403bcompare is NOT Opportunity Plus.

Share this post


Link to post
Share on other sites
Registration with the SEC as an investment advisor requires the applicant to disclose to the Commission the methods one employs in dispensing investment advice. The commissioned rep is not trained in methods of investing---s(he) is trained in methods of selling and maintaining assets under management for a long as possible.

 

 

This kind of blanket statement is not particularly useful. For example, my ING agent is not only registered with the SEC, he is also a Certified Financial Planner! If you know anything about the CFP program, you know it qualifies as being very WELL "trained in methods of investing." They also have a strict code of ethics to which they must adhere, at the risk of losing their designation. So I'm quite comfortable in refuting Joel's broad accusation, at least in terms of its application to the company and the individual with whom I have MY money invested.

 

Of course, I did not say in my original post that ING (or ANY company, for that matter!) should be trusted without qualification. I say again that you should speak to any agent before committing a dime to them. And I would be very wary of any advice that leads you to "The One True Path To Investment Success."

Share this post


Link to post
Share on other sites
Guest Sierra

Regardless of your reps professional designation he or she is not employed by you as an investment advisor. He is paid by ING to distribute product. Many if not all of the CFPs out there use it to gain creditability with a prospect that knows next to nothing about where to start when it comes to investing. So if it is between picking the Valic rep without the CFP designation and the ING rep with the CFP designation he picks the ING rep. Big Deal. Both reps are not working for the customer...they are working for their broker/dealer employers---Valic and ING respectfully.

Share this post


Link to post
Share on other sites

 

Your original comment was that the commissioned rep was not trained in the methods of investing. I'm simply pointing out that that isn't always the case, and therefore intelligent investors need not always run from a full-service provider.

Share this post


Link to post
Share on other sites
Guest Sierra

Posted on Dec 15 2004, 06:24 PM

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

 

Your original comment was that the commissioned rep was not trained in the methods of investing. I'm simply pointing out that that isn't always the case, and therefore intelligent investors need not always run from a full-service provider.

===============================================

Having a commissioned rep that is also a CFP is not common. But even if it were he/she is not being hired by you to be your investment advisor. So even if he is trained in various methods of investing he is not legally obligated to divulge or share those investment strategies with you because you are not paying him for those methods/strategies as you would be if you hired him/her as your personal RIA.

 

Suggestion: Hire your ING rep to be your investment advisor on an hourly fee basis after you effectuate a RR 90-24 Transfer to a no-load firm.

Share this post


Link to post
Share on other sites

Hi,

F. T., So ING sells their products for more in California than in New York, interesting. The next time I run into an ING salesperson, I'll ask why. Better yet, when I get time, I'll contact ING and ask why.

 

Just because ING is cheaper in New York doesn't mean that ING is cheap. A 1% M&E fee is still very high, especially when it is just a junk fee. 1% is a $1000 on a portfolio of a $100,000. That is a $1000 down the drain. Kim would be better served by hiring a fee only financial planner that would help her in all areas of her financial life rather than a sales agent from ING that is only going to be interested in getting a commission.

 

Granted, Kim doesn't have a $100,000 now, but she will before she knows it. It surprized me how fast my portfolio built up. It helped that I haven't been paying those high fees from insurance companies. Best Wishes.

 

Joe

Share this post


Link to post
Share on other sites
Guest Sierra

Kim,

 

You may also want to know that the largest local affiliate of the NY State Teachers Union, the United Federation of Teachers in NYC has never allowed ING to sell its 403b products to its members. About 50 percent of the state's teachers teach in the City.

 

Peace and hope,

Joel

Share this post


Link to post
Share on other sites
Guest Sierra

Joe,

 

Its plain as day just how profitable the ING robber baron is. Even though it charges Opportunity Plus participants 100 bp for the M & E fee compared to the 125 bp it charges in California it STILL is making enough money in NY that warrants the payment of $4,000,000 to the teachers union in return for its endorsement. The loss of 25 bp is more than made up in the added business the union endorsement generates.

 

Peace and Hope,

Joel

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...

×
×
  • Create New...