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pghchrism

Subpar fund offerings through Aspire?

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My wife has a 403(b) plan with Aspire. We haven't used it much to this point, but are considering making more significant contributions going forward. According to 403bwise Aspire is a good vendor that offers access to low-cost funds from Vanguard and others. Unfortunately when I log into our account and try to change the portfolio allocation I'm not seeing anything like that. There are ~70 funds on offer, almost all of which have 1-2% expense ratios. Are we out of luck here, or it possible to access more funds somehow? I noticed there's an Edward Jones financial advisor listed in our account; would starting a new self-directed account open up more investment options? Unfortunately, the Aspire website FAQ suggests it's the school district or third-party administrator limiting access to additional fund families, which is really disappointing: "Aspire has access to a universe of over 20,000 mutual funds within over 400 fund families. Many plans are restricted to certain fund families by their school district or common remitter/TPA. You can find your choices in Review your Plan Investment Options on your school district's plan site."

AFAICT the vendor list is pretty slim pickings outside of Aspire, so I'm not sure we have any other viable 403(b) options: Aspire Financial Services, Brighthouse Life Ins (MetLife CT/Travelers), Equitable (formerly AXA), Horace Mann Life Ins. Co., Kades-Margolis, MetLife, Security Benefit, Voya Financial (VRIAC), Waddell & Reed Inc. Any others worth considering there?

Thanks in advance for any assistance!

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pghchrism, welcome to the forum! It looks like the EJ guy has tied up Aspire to some funds he can make a profit from. I'd blame that on the district, although they are probably ignorant of the fact that Aspire self-directed would be most beneficial to their employees. I guess you could take it up with the district, but it might be a fight.

The only low-cost vendor on your list is NEA Direct Invest from Security Benefit. The NEA, the national union, has "rented" their name to Security Benefit (SB) for several million bucks a year. SB put NEA on a number of very expensive annuity based 403b plans. Several years ago, NEA arranged for SB to offer a low-cost alternative. It offers a small number of low-cost Vanguard index funds and charges only $35 per year for balances under 50k. It’s based on the internet and does not use a local rep. Repeated phone calls have sometimes been reported as necessary. It’s bare-bones but adequate for those who want very low-cost and can do without handholding.

The only NEA Direct Invest funds needed are:

Vanguard Total Stock Mkt Admiral, expense ratio (ER) = 0.04%

Vanguard Total International Stock Mkt Admiral, ER = 0.11%

Vanguard Intermediate-term Bond Index Admiral, ER = 0.07% (a good substitute for Total Bond Mkt Index Admiral fund)

You should not use their TR Price target retirement funds as they are too expensive (ER 0.77 to 0.96%).

This webpage gives the basics of NEA Direct Invest

https://securitybenefit.com/individuals/product/nea-directinvest

On this webpage, click on “Enroll Now” to access the steps to get started.

https://www.nearetirementprogram.com/nea-directinvest

Here’s my interpretation of the Steps:

1. Read over Step 1.

2. Your district will likely require their own Salary Reduction Agreement. Hold off on giving this to your district.

3. Hold off on moving other accounts into this 403b until this account is established.

4. Complete the application form and mail it to SB. If you have questions about the form, ask us rather than trying to talk to SB about it.

5. After about 2 weeks, call if they haven’t contacted you, and inquire about your account’s progress.

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I would like to chime in here about Aspire

My Aspire experience  when I was employed also had a limited amount of offerings but did include a few Vanguard offerings which I didn't want because the offerings were scattered and did not offer  adequate diversification options within Vanguard.  It also had some more expensive options not associated with Vanguard on the list which I also did not want . On a whim,I  called Aspire and they told me I could not be restricted to the funds on the list if I did my own paperwork , picked the funds I wanted, and wrote self direct on the paperwork and IF I sent my own paperwork in myself with no advisor signatures. You might want to call them directly.  If they don't allow you to do that, I would ream them out for allowing this arrangement with the district and Edward Jones because I think it goes against their mission statement of allowing lower cost options than the 403b norm.

I find your Aspire current set up disgusting. I don't blame Aspire necessarily as they do associate themselves with the advisor option if one prefers that at a higher cost, but  I blame Edward Jones for trying to set up the Aspire account in a way that serves the salesperson more than the customer/ investor.  

Now it's been a while ,so maybe something has changed but I still believe if you completely circumvent / bypass Edward Jones and go straight to Aspire on your own you may be in luck and pick ANY Vanguard funds you want or even Fidelity for that matter which also offers low cost index funds.

If worse comes to worse skip Aspire and do the NEA invest which is  somewhat cheaper but has more limited choices.

But I would love you to follow through with my advice and see what happens and then report back to us so others in your same situation can better understand the  Aspire situation if it's duplicated in their school system. Calling Aspire costs you nothing and you might help others.

In summary if you can get past Edward Jones' hold on this platform you probably can get funds through Aspire at a fraction of the cost they list.

 

Regards

 

Tony

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I spoke with an Aspire rep yesterday. She said the financial advisor was responsible for limiting the selection of funds when the 403(b) was initially set up. I asked if there was any way to access Vanguard funds through our existing account, or by opening a new self-directed account without a financial advisor. She told me that was not possible, but that I "might" be able to open an IRA and roll the 403(b) money into that.

Honestly, this rep didn't exactly inspire confidence (especially the part about an IRA rollover, which sounds wrong?). So I'm not fully convinced that a self-directed 403(b) is out of the question, but FWIW that's the story I was given. If I were committed to Aspire I would call back to verify that info with another CSR before abandoning the idea entirely, but since I prefer the lower fees of NEA DirectInvest over the broader fund list of Aspire I won't be pursuing this further unless DirectInvest fails to pan out for some reason.

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pghchrism

 

Thanks for following through. I think the person you talked to is a lightweight and might not have her facts straight or in proper context .  I've notice more incompetent people on  bad phone lines since the pandemic in all areas of my consumer business dealings. I just dealt with one minutes ago who gave me wrong information after keeping me on hold for 25 minutes on a phone that sounded really difficult to hear. I 'm a  Trust but verify kind of guy.  They may be working from home, poorly trained  or basically just stupid . But I believe Aspire is in Florida and the state is wide open. I realize they don't have the kind of customer service Vanguard or Fidelity might offer but Aspire was always "O.K" in the past for me.

 I think you can transfer your 403b to an IRA  only if you separate from service or retire. You can't at will  transfer money to an IRA from a 403b unless you change jobs or retire. I guess you technically could but you would pay penalties and taxes.

Actually you are in a good place with Krow's recommendation of NEA invest. Basically the Vanguard funds they offer is all you need and the cost can't be beat so I would forget Aspire at this point.

If you are willing to send me your school district and a link to your 403b plan with Aspire, I'm willing to pose as an employee and get the right information for you. I don't like this Edward Jones/Aspire arrangement at all. If there is no way around this arrangement than something must have changed since I was working which is highly unfortunate. Perhaps enough people figured out the self direct option and advisors are complaining that they are not making enough commissions selling Aspire products.

Most folks we have helped here who did go with Aspire were able to self direct so ,something is very wrong here. I know Edward Jones probably set up the restriction by telling the school district that employees can't set up investments by themselves so they need an advisor otherwise they might screw up. Of course they have commissions in mind , not the employee. I  wonder what roll your TPA played in all this. I can't understand why Aspire would buy in to this restriction. It goes against their whole purpose in 403b land.

This really bugs me because I really pushed for better choices when I was working and adding Aspire seemed like a step in the right direction. In 403bland seems like its always one step forward, two steps back.

 

If anyone at ASPIRE might be reading this could you please explain yourself?  Clarity needed.

 

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Original poster, if you want more information you can email Matthew.drummond@pcsretirement.com

There are several ways that plans get set up at Aspire, which follows employer instructions.  Most Aspire plans do allow for a variety of ways to enroll, including self directed.  Very rarely will a school district REQUIRE a rep, but it can happen.  If you email more details we can look into your exact situation.

 

Thanks

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Hey Matt,

Good to see you here. This site is the oldest forum for enlightening teachers on the hazards of the 403b. These days, most people are joining the FB page and tuning in on Scott and Dan's Zoom meetings. I enjoyed your information about Aspire as you were a guest one of their Zoom meetings a few months ago.

Aren't those Zoom meetings terrific? Sometimes over a hundred teachers from all over the country listen in and ask questions. This week, I will be on a panel with three other people. We are all retired. Two are teachers, one a brilliant school district custodian who just retired at 55, and one a 36 year old author. She is part of the FIRE movement. I just adore both the FI and FIRE movements. Heck I didn't start saving for retirement until I was 37! These young people are the future and they are making us older folks rethink this thing called "RETIREMENT."

Again good to see you. 

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Most Aspire plans do allow for a variety of ways to enroll, including self directed.

Matthew, thank-you for  offering your help with this.

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On 3/29/2021 at 4:39 PM, pghchrism said:

Great info, thanks a bunch. Will look into NEA Direct Invest. 🙂

Security Benefit's NEA DirectInvest is an elite 403b plan that lets you build a fully diversified portfolio with rock bottom fees. I documented their plan here.

The self-directed variant of Aspire is worth using, but is clearly a step down. I documented their plan here.

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I applaud Ed for really pushing and evaluating NEA DirectInvest. I would never had known it existed and  wouldn't have known how good it was if it wasn't Ed beating the drum.  Glad to see you back commenting Ed.   I bring up Aspire a lot because I invested in it and am familiar with it. At that time it was a pretty good addition and helped us break the monopoly like control of insurance companies. It was a step in the right direction.

As long as they make the self direct option available to all its a=still a decent option. But this relationship with Edward Jones is not good.

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