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Dan Otter

Time To Stop Blaming Agents?

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Hi

 

I am not new to retirement investing but the 403b is totally a new thing for me. When I went to human resources today to get the list of available vendors I received a list of 10 all of which require you to have an agent or broker which means high fees. I would like a low cost online service like Vanguard. I would especially like a service were I don't have to go through a middleman all the tine. Any suggestions on how to get my HR department to add cheaper companies?

 

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Actually, the non-ERISA employer is responsible for the tax compliance of the plan. The IRS has been audinting non-ERISA 403(b) plans for at least 5 years.

 

I agree that at the end of the day, the individual is responsible for their investment choices. However, more than any other investment vehicle, the 403(b) market is the least regulated. The 403(b) investor has to deal with more white shoe salesmen, then any other. The salesmen(and women) that are selling high commission products with only their personal interest in mind are truly disgusting. Add to that group the majority of 403(b) reps that counldn't invest their way out of a paper bag, but sell themselves as financial advisors.

 

Just my 2 cents.

 

Mark

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Guest TR1982

The issue is: the employer does not want to act as a fiduciary. That's what opens them up to liability.

 

BTW, the 403b market is not the least regulated market. Whatever least regulated is. This industry is the most highly regulated industry in the US.

 

"The 403(b) investor has to deal with more white shoe salesmen, then any other. The salesmen(and women) that are selling high commission products with only their personal interest in mind are truly disgusting. Add to that group the majority of 403(b) reps that counldn't invest their way out of a paper bag, but sell themselves as financial advisors."

 

You know, it might make you feel better to say this. If it does, great. Just remember, though, the same could be said about teachers. Think about that the next time you make a comment like that.

 

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"The 403(b) investor has to deal with more white shoe salesmen, then any other. The salesmen(and women) that are selling high commission products with only their personal interest in mind are truly disgusting. Add to that group the majority of 403(b) reps that counldn't invest their way out of a paper bag, but sell themselves as financial advisors."

 

You know, it might make you feel better to say this. If it does, great. Just remember, though, the same could be said about teachers. Think about that the next time you make a comment like that.

 

TR,

 

I've been called many things in my life, but white shoe salesman is not one of them. Nor have I sold any high commission products to my students. And if I only had my own personal interests in mind, I would put in far fewer hours than I do in my job.

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Guest TR1982

I thought this sight might have the potential to have some useful dialogue about the issues regarding 403b plans. It appears that I am wrong. All I see are individuals who appear to be embittered about issues that have had little or no personal impact on them. They personally attack and malign the character of individuals who work in certain parts of the industry simply because they don't approve of the products they sell. While I respect the right of people to buy what they want, I don't understand why people on this board don't respect the right of others to work in this industry. No one is making you buy these products!!!!! We live in America! You have the right to not invest in annuities if you don't want to.

 

I have worked in this industry for quite a long time and feel that I have contributed considerable value to my clients over that time. I am assured by my clients that they feel similarly. I respect the rights of other people to not do business with me. I think this sight would add far greater value to people who come here if the focus was on educating people about all their choices rather than maligning the character of certain people in the industry who they don't agree with. In the end, it comes across as petty and juvenile. I think the people who work in education are better than that and deserve better than that.

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TR,

 

" No one is making you buy these products!!!!! "

 

Ah, but the problem, you see, is that in so many districts teachers MUST buy these products if they want to start a 403b account. They have no choice.

 

"I think this sight would add far greater value to people who come here if the focus was on educating people about all their choices..."

 

That is what many of us are doing. In so doing, we must point out the problems associated with some of the products that you may be selling. We are trying to educate folks (many of whom are new to investing) about surrender fees, 12b1 fees, front end loads, back end loads, and M&E charges. And, since you mention the importance about choices, some of us point out the alternatives to the products that you are selling.

 

This is important because, for so many folks, the first exposure to investing comes from a salesman. I think that this site does a good job of balancing that information with the experiences of others who are able to invest on their own.

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Guest TR1982

It's fine to point out other choices. I have no problem with that. What I don't understand and what you failed to respond to is the petty criticism of some people who work in the industry and the industry itself. It seems silly for so many on this board to spend so much energy attacking people.

 

All of the information in the various investment products discussed on this site are regulated by the SEC and the NASD. They are all subject to the same disclosure. That is true for a product sold by Vanguard or MetLife. These disclosures were put in place to provide investors with the same information at the time of sale. If investors chose not to read the information and educate themselves, who is responsible?

 

I don't know how many school districts across the US do not offer any no load funds in their 403b programs. I also doubt anyone on this site knows that information either. My question is this: why criticize those that are offered when you can spend your time and energy trying to get the types of firms you want in place? How does maligning an existing firm make a case for what you want? Why can't you just say what you want without ad hominem attacks?

 

I have no doubt that if Fidelity and Vanguard wanted to be serious players in the 403b market, they could. They are not because they chose not to be. They don't want to do what is necessary to build the business in the market. That is their choice. That, however, is not the fault of the other firms in the industry. You don't have no load fund companies as choices because the insurance companies are trying to keep them out of school districts. They are not there because they chose not to be. No amount of bashing annuity companies is going to change that.

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I've been called many things in my life, but white shoe salesman is not one of them. Nor have I sold any high commission products to my students. And if I only had my own personal interests in mind, I would put in far fewer hours than I do in my job.

Westerndad,

 

What your "selling" is an education for our kids and judged as a whole Teachers are just not getting the job done.

 

Your not a no-load teacher...you get paid 12 months of salary for a 10 month job. If you live in CA you get paid by MY tax dollars. What do I get for my money? Some of the lowest test scores in the Nation and something like a 60% graduation rate. If I had those results I would be out of business but you get to keep on teaching.

 

And guess what - your "clientele" has even fewer good choices for education than you do for your investments.

 

Westerndad, the state of education is a mess and your a teacher so you get part of the blame. Don't tell me about how much time you put in...the results are just not there.

 

The funny thing is, in my area some of the worst TSA reps, selling the most outrageous products are ex-teachers!! They have the access. I can't get on the school campus but they can - like a fox in the hen house. Then I get to clean up the mess.

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OK, Murph, let's take off the gloves.

 

1) I can't even understand the first sentence that you wrote. The rest of your post indicates that you are in serious need of a refresher course in grammar and spelling. Perhaps you didn't pay much attention in English.

 

2) I get paid an eleven month salary for more than eleven months of work. I do not receive a paycheck in August.

 

3) Your comparison of student learning to investment returns is ridiculous.

 

4) My students have any number of choices when they graduate. They are going to community colleges, California State Universities, UC campuses, and private colleges that run the gamut from lower tier to Ivy League schools. You might be surprised to know that there is a pretty strong correlation between how much work students put in and where they end up in college.

 

5) My results, Murph, are indeed "there." I have five sections of AP classes, and virtually all of my students pass the AP exam. More than half of them earn the highest score of "5." About forty percent of them earn a "4." I have so many offers to do consulting work that I turn down nearly half of them (including two today). Comparing student learning to investment returns is ridiculous, as noted above, but if you want to make that comparison, I'll compare my results to yours any day.

 

6) Teachers like me persevere in spite of cretins like you. We love our jobs, and we work hard to overcome the attitudes that you displayed in your pathetic excuse of a post.

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TR,

 

1) "Petty criticism?" Check out the latest post from Murph.

 

2) Until my last post, I did not spend much time criticizing people. I did spend time criticizing poor 403b options. I did spend time describing alternatives to the typical choices offered to teachers. I have repeatedly noted that some people need and/or want professional investment advice, and they should have access to it.

 

3) Investors in no load funds are indeed responsible for reading through disclosure notices. I would argue, however, that investors who pay for professional guidance should receive help in understanding disclosure. I wonder how often salesmen take their clients through the fine print of investment contracts.

 

4) I have, indeed, spent time trying to get my district to offer better choices for investors. I'm happy to say that, since Fidelity is now offered by my district, I won't be needing your services. I'm spreading the word about this, too, TR.

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Guest TR1982

This is so pathetic. How is this discussion going to benefit anybody? If I don't like your teaching product I go to a private school. What's wrong with that? Why do you care? Why does everything have to be so personal? Let it go.

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Guest TR1982

So western,

 

If somebody else does it, it's ok for you to do it? Is that what you teach the kids?

 

You have spent a considerable amount of time criticizing people and other firms on this thread.

 

Regarding disclosure, do you expect your students to do their homework? If they don't do it, do you do it for them?

 

I think it's great that your school system offers Fidelity and you have a chance to participate. Does that mean every other employee should do exactly what you did? Could there be a chance that somebody might want and need my services? If so, why do you care?

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TR,

 

1) If somebody else does "it," is it OK for me to do it? Damned right. I have no problem defending myself, especially against lightweights such as you and Murph.

 

2) Yes, I have indeed criticized front loads, back loads, 12b1s, surrender fees and the like. I will proudly plead guilty to that. After being egged on by you and Murph, I now am criticizing people like you, as well.

 

3) Comparing student homework to financial disclosure for adults is about as idiotic as comparing student achievement to investment returns. Coming from you, however, this is no great surprise.

 

4) How many times do I have to say that I am all in favor of giving people the choice between investing on their own and having professionals assist them? You and Murph need some serious help in reading comprehension.

 

5) And now, here is a question for you, dear professional: Do you invest in the same products that you sell to your clients? Do you pay front loads? Back loads? 12b1 fees? Surrender fees? If these are so good for your clients, do you pay them as well?

 

6) Here's another question for you: Would you sell such products to your own children?

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Guest TR1982

Western,

This is my last post, so you can breathe a sigh of relief.

 

1) I tried to make some valid points on this thread regarding the issue. I suggested that maybe blaming insurance companies and maligning the character of salespeople who work for these firms is energy that is not well spent. I don't think the problems that people on this site raise regarding 403b plans have anything to do with annuity companies. These companies did not create these problems and cannot solve them.

 

2) Your use of personal insults is fascinating. It must make you feel good to call me a "cretin", "lightweight", "idiotic", and having "reading comprehension" problems as well as "truly disgusting" and "couldn't invest their way out of a paper bag". I certainly hope that when parents like me come for conferences you don't address them this way. This would be very bad manners.

 

3) You say you have repeatedly advocated that people have the choice to seek out professional advice. I scanned every comment on this thread you made and I cannot find where you suggested this of your own accord. In addition, you take issue with all the various fees in investment programs. "Yes, I have indeed criticized front loads, back loads, 12b1s, surrender fees and the like." That's fine, but for those that want advice, that is how they compensate the advisor. What I fail to understand is if you don't pay these fees because you don't want the advice, why would you criticize these fees for those who do want advice? You can't have it both ways.

 

4) Regarding my own investing: I don't pay these expenses because I am like you. I don't need to compensate someone else for advice since I am in this business. However, I do pay people for other kinds of advice. My kids' teachers, doctor, CPA, attorneys on occasion, plumber, etc. Those people add value to my life by taking care of things which I don't know how to do and don't want to learn how to do. I would not be as good at what I do if I had to spend the time to do all these things myself.

 

5) I'm sorry that you feel so much animosity toward people like me. I respect the fact that you don't need my services. I just think it's sad that you are unwilling to consider that people who do what I do are ethical and honest and do good work for their clients. I certainly don't feel that way toward teachers. I have worked with many of them over the years and have great respect for the work they do.

 

 

 

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This is so pathetic. How is this discussion going to benefit anybody? If I don't like your teaching product I go to a private school. What's wrong with that? Why do you care? Why does everything have to be so personal? Let it go.

 

Sounds great if you have the resources to go to a private school. Of course, if you're not lucky enough to be that wealthy, you're stuck with whatever "teaching product" is offered.

 

By the same token, it's all well and good to turn to no-load products IF YOU HAVE THEM TO TURN TO. There are too many places in the country that are force-fed high-cost annuities, and are done so without the proper explanations and full disclosure that you claim to offer to your clients. In a perfect world, all advisors are honest and competent, and all customers have many options from which to choose. In the real world, a lot of people only find out what words like "contingent deferred sales charge" and "12b-1 fee" mean through the efforts of people like westerndad.

 

If you're one of the exceptional advisors, then good for you, and keep up the good work. But look around you, eyes wide open, and tell me that the 403(b) world ISN'T riddled with more than its fair share of disreputable people.

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