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Kevin P

403(b) Choices

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44 minutes ago, Rhaegar said:

But I also disagree and believe there are advisors worth it. There are few of us but to say there is none does not seem logical.

Knowing that you are apparently an advisor makes total sense. I can see how it would be difficult for you to grapple with the fact that you're hurting people (especially if you're in the 403b/457b world).

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So you are an advisor?  If so then  I can understand your rationalization . 

“It is difficult to get a man to understand something, when his salary depends on his not understanding it.”

 Upton Sinclair

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Teachers are a small part of our business that we got into because we saw what they were exposed too. We are fiduciaries and to lump all advisors into one group is dumb.

It’s more like:

annuity company advisors - never use

commissioned advisors - never use

independent fee only advisors - use of you need one

last clients I took on were DIYers that needed a plan so I’m not charging an AUM and just a planning fee.

90% of the talk in this thread is about investments when in reality if I spend 5 minutes talking about investments with a client or prospect it is a lot. Investments are the easy part of the job. Vanguard and call it a day.

what about advisors in XYPN that may just charge a monthly retainer fee? Are they useless too? From what I am getting it sounds like you hate all advisors not just the ones that charge AUM fees.

 

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1 hour ago, Rhaegar said:

to lump all advisors into one group is dumb.

Honestly, I’m enjoying this.

Even the most ethical and well intentioned advisor can not justify their fee. The worst advisor is a crook. Don’t worry, I see the full spectrum of your entire profession and none of it is pretty or useful 

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1 hour ago, Rhaegar said:

if I spend 5 minutes talking about investments with a client or prospect it is a lot. Investments are the easy part of the job.

Haha, mind if I save this quote to show how useless advisors are?

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Sure since you seem to think that’s all an advisor does.

this forum does a good job of pointing people to the low cost option in their district but i would not call that financial advice.

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15 minutes ago, Rhaegar said:

this forum does a good job of pointing people to the low-cost option in their district but i would not call that financial advice.

Of course, your won't because you people never point your clients to low-cost options as an absolute priority, your rationale makes sense to you. But for us consumers, low-cost options ARE THE BEST FINANCIAL ADVICE EVER because it doesn't exist in the financial industry except for one man, and one man only--John Bogle. AKA St. Jack to us followers to this great man! 

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13 hours ago, Rhaegar said:

We only use vanguard and low cost options. I tell people all the time to use aspire or the 457 if they don’t want an advisor.

The reason we are so hard on insurance company financial advisors and commissioned advisors is because of all the negative experiences teacher's are having with them. I don't see how any salesperson working for a large financial company can escape the constant pressure of having to sell . Companies like  AXA  claim that  they tailor financial plans to the needs of the clients, but I've read  that AXA and other Financial Advisory firms in reality have a "Boiler Room" type climate, with pressure on the advisor to sell insurance, mutual funds, and other investments that clients may not need. This kind of corporate culture is bad news for the end user which is unfortunately the teacher/investor. I have seen it first hand from teachers who left teaching to sell very high cost annuities, unneeded life insurance , car insurance ,and other unneeded investment products. Former teachers ripping new teachers off. Just proves the corporate  system is broken and highly dishonest.

Now I realize  maybe you  and a few others may be sincerely interested in doing the right thing for your clients. That's great. You have some value in my opinion but the problem remains that how you guys are compensated causes a conflict of interest that would undo any benefit you offer.  The whole financial delivery system must change. I've seem some change over the years but I am still seeing wild coyotes entering schools selling high cost inappropriate  plus unneeded add-on products to teachers often without explaining the fees and the consequences of those fees  and purchases over time. And you know this is also happening to financial consumers outside school buildings as well. And while you may claim pushing Vanguard, you are well aware that getting Vanguard through an insurance company is not the same as getting Vanguard directly from Vanguard because suddenly a simple index fund suddenly costs 10 times more.

I've also heard the argument that advisors get teachers to save and start thinking about retirement planning. It's true you do but the cost of that encouragement is like having your hand in their back pocket. I also realize commissioned sales is easier because most teachers would bulk at a $ 200 .00 an hour consultation fee . When you hide fees, they are more likely to bite. This is where teachers hold some blame by lacking enough financial literacy to be able to deal with a financial advisor effectively.

I don't blame advisor's because the  money grubbing system they work in sucks and they too must make a living. But I ethically could not sell unsuspecting clients in good conscience most of the products these insurance products pawn off on unsuspecting clients who come to them for help.

Sorry I went on this long. We need a total restructure in 403b land and beyond but as long as there is money to be made it won't happen. It remains a buyer beware environment.

 

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I agree and have never sold an annuity in 15 years in the business. I was 100% for the DOL fiduciary rule to hopefully get rid of some of the bad products and advisors. Schools should just use the 457 and drop the 403b all together most options are so bad.

so for the people that do need help from an advisor, what is your opinion on how to find a good one?

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