Jump to content
CSC

Helping a Teacher

Recommended Posts

That is cheaper than the pricing that I was quoted from Vanguard. Of course with NEA Direct Invest you don't have access to all the Vanguard funds, but you don't really need all of them. This is what I have found in my research on pricing. Please correct me if anyone has found out something different.

Fidelity:
$24 annual maintenance fee
$24 fee that goes to the TPA
Plus the mutual fund expense ratio

Vanguard:
$60 per year for the record keeping fee. Vanguard now uses newport group for their record keeping. (I'm assuming the TPA fee is included in this price)
Plus the mutual fund expense ratio

NEA Direct Invest:
$35 Administration fee on balances less than 50k, no fee above 50K
Plus the mutual fund expense ratio

Share this post


Link to post
Share on other sites
48 minutes ago, ChrisC said:

I will say it is difficult for me to believe that the only fees with NEA Direct invest are $35 admin fee per year and the Mutual fund expense ratio.

Believe me , If Ed says it's so than it must be true because he is the low fee expert around here. I nudge him at times for being so adamant for finding the absolute lowest fee possible but he knows what he is doing. It probably is the best choice available to you. However if your friend has no interest in managing her account and her interest in investing issues is low, I would still recommend a Vanguard Target Fund for her through Aspire or a target  directly through Vanguard or Fidelity.

Also I just read that Jeb just confirmed it as well

Share this post


Link to post
Share on other sites
11 minutes ago, ChrisC said:

Vanguard:
$60 per year for the record keeping fee. Vanguard now uses newport group for their record keeping. (I'm assuming the TPA fee is included in this price)
Plus the mutual fund expense ratio

 

Chris the maintenance fees are not a big deal. Expense ratios are the most draining on your assets over the long term. One time fees and ongoing fees are a different kind of fee that most companies will charge  .  Also unless something has changed, I thought the Vanguard fee disappeared after you reach a certain assets level. But since Newport manages the 403b universe for Vanguard that may have changed again. I've dealt with Newport and I must say they were not very competent. That was a few years ago as they first came on board so maybe now they've got it all together.  But having NEA Direct and Aspire is better than anything else in your choices so things really aren't so bad for you guys if you know what you are doing.

Share this post


Link to post
Share on other sites
1 hour ago, ChrisC said:

I will say it is difficult for me to believe that the only fees with NEA Direct invest are $35 admin fee per year and the Mutual fund expense ratio. Are you all sure there are no other fees?

I enrolled my ex-wife in this plan around March of 2017 and we haven't noticed any other fees (trust me, we've been looking for them).

I'm feeling too lazy to dig into this right now, but there might be a 0.01% 12b-1 fee added on top of each fund. I have a vague memory of this being the case, but I couldn't find it in 15 seconds of looking so I gave up.

2 hours ago, ChrisC said:

Another concern I have is investing with a company that seems to be so incompetent when I call them and they can't give me any answers. All the more reason for us to keep pressing for Fidelity and Vanguard. 

Honestly, that's how I feel about every product or service I buy. You're right to be paranoid/untrusting when it comes to anything in the financial industry so I'd like to encourage that instinct.

In this case the incompetence you're seeing is likely because:

1. The customer reps are poorly paid and unskilled.

2. The customer reps are likely only trained on the products that generate revenue for Security Benefit.

Please push for Fidelity and Vanguard. The ease of enrollment there will result in more people signing up.

1 hour ago, tony said:

I nudge him at times for being so adamant for finding the absolute lowest fee

It's okay that we have different views on this, but I do acknowledge the reality that some people will want to pay in order to not rebalance themselves. I just want people to make an educated decision on what that convenience is worth to them.

In this case it'll cost an extra 0.29% to buy a single fund-of-funds at Aspire than it will cost to buy the three fund portfolio at NEA DirectInvest. Let's assume 6% annual returns and 3% inflation. After 1 year that extra fee will consume 10.7% of inflation adjusted profits. After 30 years that fee will consume 14.25% of inflation adjusted profits.

Rebalancing takes maybe 30 minutes per year. It's a personal decision whether or not that convenience is worth it.

Share this post


Link to post
Share on other sites

ED

its a nice comparison between Aspire and Direct Invest. Now do a comparison in fees between  Chris's friend's Franklin Funds and Aspire. That will show the massive improvement her portfolio would experience in going with Aspire If she would go the target route. Just sayin.

We don't really disagree. You know what you are talking about. I just believe one size does not fit all. And believe some minor fees offer value for the investor who may not feel comfortable with self management. Plenty of studies show folks often mess with their portfolios when they should just leave it alone. A target fund is a great invention for hands off folks. But we've had this discussion before.

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...