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Kim

Comparing 403bs

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By definition a biased advisor is not skilled in your best interests. He is skilled in generating sales for his broker/dealer along with the commission income they generate. He/she makes a living by selling not advising!

 

 

Well, we can certainly re-hash this entire conversation, but I'm not interested in doing so. (Kim, if you are, by all means, start at screen one and follow your way through again!)

 

Kim, another item for your consideration: my account with ING also entitles me to membership in the financial counseling program that NYSUT Member Benefits provides. The program is run by Ernst & Young, and is an EXCELLENT source of impartial advice not only for your 403(b) plan, but also for any other financial matters you may want to discuss with experts. (This came in really handy for me around tax time last year!)

 

I'm pretty sure NYSUT is closed this week for the vacation, but you can call them at 800-626-8101 next week and get more information about signing up. Hope this is helpful to you.

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Guest Sierra

Kim,

 

The Ernst and Young offering is available to all NYSUT members not just those that elect to invest in the NYSUT/ING 403(b) annuity. So now you have two excellent financial education programs: one at Fidelity and the other at Ernst and Young. Between the two there is no reason for you not to get started with confidence NOW.

 

I once spoke to a rep at E & Y and he specifically said that the 403(b) variable annuity endorsed by NYSUT is too expensive.

 

Joel

 

 

 

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Guest Sierra

Here is what Ted Siedle the benefits attorney thinks of NYSUT/ING

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

SIEDLE: There's not a pension fund in this country that has in place the procedures to detect and prevent fraud. That's what I do for a living, and I've seen the largest funds to some of the smallest funds simply do not have procedures in place. So, pension funds are being ripped off, and there's a lot of self-dealing going on. For example, in products, it simply makes no sense, like variable annuities, including, you know, charging 4.5 percent in some cases to 403(b) and 457 plans. It's virtually impossible to accumulate wealth over time in a plan that's charging fees of 4 percent.

 

COLVIN: Well, it would be almost impossible. A fee that high is going to wipe out any differential above the market you could hope to get, almost ever. And you have found there are plans with expenses this high?

 

SIEDLE: Sure. Huge ones. The New York State United Teachers endorses an ING variable annuity product for their 403(b) plans.

 

COLVIN: That is analogous to a 401-k, but it's in an organization like that.

 

SIEDLE: Yeah. And the fees on that product are, I believe, 2.5 percent. The Ohio Association of School Business Officials, they have a product, same ING product that is endorsed by the association and that charges fees up to 3.5 percent, plus you have brokerage and other costs that bring it over 4. And these unions are getting paid by these insurance companies, or these variable annuity companies to promote the product. In the case of the New York State United Teachers they will be getting paid in excess of $3 million in 2005 to endorse the product and promote it among its membership.

 

 

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Where do these Siedle quotes come from?

 

More importantly, I'd love to see his "work" showing that ANYONE in New York State pays 4 percent using ING.

 

Edit: googling Siedle's name comes up with the Wall Street Week program on which he aired these comments, so that answers that question.

 

Googling his name FURTHER reveals (http://www.benchmarkalert.com/library/alerts/061204july.html) that Siedle is the president of Benchmark Financial Services, Inc., "a firm specializing in investigations of money management abuses." This link reveals that in July of this year, Benchmark formed the Center for Investment Management Investigations; in their own words, CIMI "will serve as a resource for aggrieved investors and operate a network of firms expert in matters related to investigating money managers, including mutual fund advisers, as well as securities brokerages, pension consultants and actuaries."

 

So Siedle's agenda is clear now: his little song and dance on Wall Street Week was little more than a commercial for his own company. Clearly he hopes to pick the deep pockets of various entities like NYSUT by convincing their members that they have a right to be aggrieved. He had a material, commercial interest in saying what he did on Wall Street Week. Nice job.

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The Ernst and Young offering is available to all NYSUT members not just those that elect to invest in the NYSUT/ING 403(b) annuity.

True, the E&Y program IS available to all NYSUT members, at a cost of $79 per year. And it's a great deal even at that price, though ING account holders receive it at no cost.

 

Of course, if Kim is only planning on setting aside $1,000 in her 403(b) this year, that $79 fee represents an added cost of almost 800 basis points! If you're going apoplectic about the 4 percent that ING allegedly charges (which is an inaccurate figure, by the way), I can only imagine your reaction to someone paying twice that much!

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Guest Sierra
The Ernst and Young offering is available to all NYSUT members not just those that elect to invest in the NYSUT/ING 403(b) annuity.

True, the E&Y program IS available to all NYSUT members, at a cost of $79 per year. And it's a great deal even at that price, though ING account holders receive it at no cost.

 

Of course, if Kim is only planning on setting aside $1,000 in her 403(b) this year, that $79 fee represents an added cost of almost 800 basis points! If you're going apoplectic about the 4 percent that ING allegedly charges (which is an inaccurate figure, by the way), I can only imagine your reaction to someone paying twice that much!

It is hardly free to those that pay NYSUT/ING 2 per cent to invest. Moreover, the $79 is a one time fee. She is not locking herself into paying 2 percent in fees each and every time she invests (twice a month) like you so proudly report that you do.

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The Ernst and Young offering is available to all NYSUT members not just those that elect to invest in the NYSUT/ING 403(b) annuity.

True, the E&Y program IS available to all NYSUT members, at a cost of $79 per year. And it's a great deal even at that price, though ING account holders receive it at no cost.

 

Of course, if Kim is only planning on setting aside $1,000 in her 403(b) this year, that $79 fee represents an added cost of almost 800 basis points! If you're going apoplectic about the 4 percent that ING allegedly charges (which is an inaccurate figure, by the way), I can only imagine your reaction to someone paying twice that much!

It is hardly free to those that pay NYSUT/ING 2 per cent to invest. Moreover, the $79 is a one time fee. She is not locking herself into paying 2 percent in fees each and every time she invests (twice a month) like you so proudly report that you do.

The $79 is NOT a one-time fee, but an annual fee for the program. If Kim wants the advice for more than a year, she'll need to keep paying.

 

Even so, it's still a good deal. Just doesn't make as much financial sense as it does to invest with ING for the first few years, and have that program and all its benefits given to you for much less money, on a percentage basis.

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Guest Sierra

Surely you did not interpret my remarks to mean that the fee is payable only once in a career that could last 40 years or more. Surely it is an annual fee and renewable on an annual basis at the option of the member.

 

You appear to be well versed with basis points/fees. How many years have you been investing in ING? For 2004 can you tell us in dollar terms how much you paid ING?

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Surely you did not interpret my remarks to mean that the fee is payable only once in a career that could last 40 years or more. Surely it is an annual fee and renewable on an annual basis at the option of the member.

 

You appear to be well versed with basis points/fees. How many years have you been investing in ING? For 2004 can you tell us in dollar terms how much you paid ING?

Surely it is. And no, *I* didn't interpret your remarks inaccurately, but I clarified your statement to make sure no one else did, either.

 

I've been investing with ING for a couple of years now. I certainly couldn't tell you to the penny what I have paid ING--indeed, no mutual fund investor could, not even the no-loads, as mutual fund charge expenses in ways that stop short of presenting investors with an invoice!--but on the back of an envelope, I could certainly figure it out.

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Hi Kim,

Like Joe MacDonald, I am an elementary educator in Los Angeles. I am very glad you came back to give us an update about what you are thinking. Too many newbies come here and are intimated by the ensuing discussion by our regulars and never come back. Much of it is good. Some of it is heated and opinionated, but that is the nature of money. It can be very emotional.

Since you are new to 403b investing, I just want to add on to what Joe said. I totally agree with him that the fact that you found this website and asked questions already means you are a million miles ahead of the 99% of all educators. You will never regret learning something about investing and knowing what you and especially what your adviser does (if you decide to hire a fee only adviser). Like Joe, I have built a considerable nest egg and none of it is from inherences etc. It is all my doing.

Here are some ideas to think about:

 

1. Learn as much as you can by starting slowly. There is no rush.

2. Think long term

2. Watch the fees closely; avoid mixing insurance with 403b investing.

3. Be careful about trusting anybody offering you advice anywhere on the web.

4. Ignore the personal opinions about who you should do. When people express their views without reference to books and articles about personal investing, they are expressing their opinion. They have a perfect right to do that, BUT what happened to them will not automatically apply to you. The point is that there is an investment knowledge base that is extremely valuable to anybody learning about personal investing. You need to tap into this base and the only way to do that is to read and read some more. Start with any book by John Bogle, the god father of Index funds. Learn about indexing backwards and forward. Its very simple really. There is a forum called Vanguard Diehards on Morningstar.com that is devoted entirely to index investing reflecting Mr. Bogle’s contribution to personal investing. There are plenty of very savvy people on that site.

Other books to seriously consider:

A Random Walk Down Wall Street by Burton G. Malkiel

The Intelligent Asset Allocator by William J. Bernstein

The Four Pillars of Investing by William J. Bernstein

All about Index Funds by Richard A. Ferri

The Intelligent Investor by Benjamin Graham, Jason Zweig

 

Click on the Amazon.com link on the home page of this website and start browsing these books. Much of what I post here is from these books.

I was so scared when I started investing in mutual funds, I started with a bond fund and I learned about the other fund families and then slowly started diversifying.

Good luck,

Steve

 

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Guest Sierra

As an agrieved ING policyholder as well as an expert on the Opportunity Plus VA that Mr. Siedle refers to why don't you call up Wall Street Week and ask them for an opportunity to prove Mr. Siedle wrong? This will surely be unique---a shark policyholder defending his predator. I promise to watch.

 

PS: You need to be more attentive. The 4 percent refers to the ING charges in Ohio, not in NY. You see, your favorite company charges whatever the traffic will bear.

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PS: You need to be more attentive. The 4 percent refers to the ING charges in Ohio, not in NY. You see, your favorite company charges whatever the traffic will bear.

Gosh, it's almost like they're a for-profit corporation or something! Oh, wait...never mind.

 

So they pay 4+ percent in Ohio, and 2 percent (or less) in NY? Another reason to thank NYSUT for the excellent work they do on our behalf! Too bad the Ohio Association of School Business Officials had no union working as diligently on their behalf. Then again, the way Siedle misquotes the fees that ING customers pay in NY (it's NOT 2.5 percent, Ted!), I have a hard time taking him at his word when he throws around numbers like "over 4 percent" in Ohio.

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Guest Sierra

So are you going to request equal time on PBS? If you are so secure with your point of view why not tell it to a national audience?

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IMO, Siedle's self-serving appearance isn't worthy of being dignified by commentary. I'm also quite certain that, if either NYSUT or ING were rankled by these mistruths, they have the appropriate spokespersons with which to refute them. They hardly need me to step up to the plate for them.

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Guest Sierra

So why are we honored with your commentary? I think you're just chicken!

 

Moreover did you not tell us that ING customers like you receive the Financial Counseling for free? NYSUT says different. Please be more careful with your assertions!

 

"The financial counseling program includes up to 3 hours per year of toll-free access to Ernst & Young LLP's Financial Planner Line. Objective financial counselors will provide assistance with your personal financial planning and answer questions about your plan. It also provides up to 3 written targeted financial reports on specific topics, access to E&Y's Financial Planning Center Web site, and an in-person consultation. The consultation can be scheduled with an ING Financial Advisers, LLC certified financial planner for $70 or with an E&Y financial counselor for $400."

 

 

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