Am I being conned?

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climber2020
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Am I being conned?

Post by climber2020 » Sun Mar 25, 2012 8:34 pm

Hi everyone! Up until recently, I knew practically nothing about investing and left it all up to a financial planner. Over the last several months, I've been reading up on the topic and am now comfortable with the basics; however, I wanted some advice from people in this forum regarding my financial planner.

I started a roth IRA several years back and contributed to it every year until I made too much money to qualify; at that point I used a traditional IRA. As soon as I was eligible, I began participating in my work's 401K plan. My previous IRAs were with my bank, and eventually I transferred the funds to Metlife where they are currently managed by my certified financial planner who is a Metlife employee. I pay a yearly fee to Metlife to manage the funds and never really bothered to look into any of the specifics of the funds. At the time, I wouldn't have even understood what I was looking at.

So recently I read through all the prospectuses of the various funds, and half of them are mutual funds with loads averaging 5.75% (the ones with the loads are through American Funds if anyone is curious). Expense ratios range from 0.5% to 1.4%. Based on my independent reading, I hear that there is really no advantage to investing in load funds compared to commission free funds, and am wondering if my financial planner picked these specific ones to make himself a nice commission. Any other explanation as to why he may have picked these as opposed to no load funds?

Another red flag is that the guy keeps trying to push whole life insurance on me. I'm single with no kids, so I turned this idea down a few times in the past just based on principle. Now that I've researched whole life insurance and all the pitfalls of this sort of policy, my suspicions about this guy have escalated.

A few questions I have:

1) Is it even possible for an employee of a company like Metlife to provide sound, unbiased financial advice? It seems like the conflicts of interest are huge. He says he is officially a fee-based planner, but I'm sure commissions abound.

2) Should I move my IRA funds out of Metlife and into something with no load and a lower expense ratio that I could manage myself?

I'm in my late 20's with a high income, so all the money that I have in my retirement accounts is likely to stay in there for at least 30 years. I'd rather move it earlier than later if it will save me decades of fees and commissions.

Any thoughts would be greatly appreciated!

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greenspam
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Re: Am I being conned?

Post by greenspam » Sun Mar 25, 2012 9:47 pm

1). No
2). Yes
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norookie
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Re: Am I being conned?

Post by norookie » Sun Mar 25, 2012 9:55 pm

:beer Welcome to BHs!
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mickens16
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Re: Am I being conned?

Post by mickens16 » Sun Mar 25, 2012 9:58 pm

Sounds like you just want confirmation to take the plunge and get away from the FA - I mean salesperson. This stuff isn't terribly difficult as there are thousands of Bogleheads doing it themselves. If you have any questions about your plan, just ask the board, simple enough. Now get away from Metlife and the pressure of buying whole life insurance.

mac

livesoft
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Re: Am I being conned?

Post by livesoft » Sun Mar 25, 2012 10:05 pm

There is a difference between fee-based and fee-only. Google it. :)
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Re: Am I being conned?

Post by yobria » Sun Mar 25, 2012 10:08 pm

[personal attack removed by admin alex]

livesoft
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Re: Am I being conned?

Post by livesoft » Sun Mar 25, 2012 10:14 pm

You are not being conned except by yourself. That's a blunt way of saying you are naive.
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newlyretired
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Re: Am I being conned?

Post by newlyretired » Sun Mar 25, 2012 10:18 pm

[response to personal attack removed by admin alex. Please do not respond on thread, instead report the post by clicking the little yield sign with an exclamation point near the top right of the offending post.]

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bob90245
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Re: Am I being conned?

Post by bob90245 » Sun Mar 25, 2012 10:18 pm

It's common for novices to have someone like your Metlife person helping you with your investments. And as you've learned, that advice is not free.

Once you climb up the learning curve, you'll have the knowledge to do this investing stuff yourself. It appears you're on that track.

When you're ready to cut the cord with your Metlife person, you'll need an exit plan where the IRA funds will go and a long-term plan that is consistent with your goals, circumstances and ability, need and willingness to take stock market risk.

Does that sound like a good plan to you? :D
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hoppy08520
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Re: Am I being conned?

Post by hoppy08520 » Sun Mar 25, 2012 10:29 pm

Conned might be a bit strong. Exploited = yes.

Trust me, if you're smart enough to be earning enough to not qualify for a Roth IRA, then you're smart enough to manage your investments better than Metlife which is likely earning 1 or 2 percentage points a year off your wealth that you can do just as well on your own after you read a couple of the books from the Amazon.com link above. That was a long sentence.

You were smart enough to find this website which means that you've taken the first step. It's like taking a cold shower to realize that you've been exploited for several years, but at least now you know and you can stop giving any more of your money away. What everyone else is saying is true. Just be glad you figured this out now in your twenties before the stakes are higher.

What I'm discovering from all of these investments salesmen is they purposely make investing out to be so complicated that no one would want to do it on their own. You're probably in 20+ funds -- one for each of the nine sectors (small/mid/large X value/blend/growth) for US and international stocks plus a couple of different bond funds, plus some specific sectors (REIT, energy, tech, etc.). They do all this to make themselves look smart and to make you feel like investing is incomprehensible so you'll keep handing your money over to them every year.

But, after you read some of the Boglehead books, you'll learn that you really only need three primary mutual funds -- US Total Stock Market, Total International Market, and Total Bond Market, which will give you virtually total diversification across the world's stock market and the US bond market. That's really all you need. You won't necessarily beat the market, but you won't be more than a smidge behind the market, and over decades of investing, that's about the best you can hope for and if you stay the course with this philosophy, you'll be ahead of 90% or more of everyone else.

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VictoriaF
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Re: Am I being conned?

Post by VictoriaF » Sun Mar 25, 2012 10:43 pm

climber2020 wrote:Over the last several months, I've been reading up on the topic and am now comfortable with the basics; however, I wanted some advice from people in this forum regarding my financial planner.


It is very important what you read. Personal finance literature is full of books that are less than useless and occasionally as dangerous as your financial adviser. Some of the best books to get started are the Bogleheads guides to investing and to retirement planning and Bernstein's Investor's Manifesto.

Move your IRA funds from Metlife as soon as you are comfortable with doing so, the sooner the better. Where to move to will be based on your research, particularly on reading books and this Forum. If you are interested in a simple default option, move all your IRA money to Vanguard and split it 50/50 between TSM and TBM (Total Stock Market and Total Bond Market). As you learn more about investing you may later decide to add or change funds and allocations.

Good luck,

Victoria
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Re: Am I being conned?

Post by Khanmots » Sun Mar 25, 2012 10:45 pm

yobria wrote:personal attack deleted by admin alex


Strangely we're not all born knowing this stuff. We're also accustomed to going to experts when we don't have knowledge in a subject. For instance I go to a doctor when I want medical advice. I go to a lawyer when I want legal advice. In a perfect world this would hold true for the financial industry as well. Sadly it doesn't.

I figure that the vast majority of posters here initially operated under this assumption. I know that I did. But then, like the OP too many things didn't add up and I adjusted my world view.

That said, I'm not sure what good you believe will come from insulting those who are seeking to improve their knowledge and seeking some reassurance that they're really doing the right thing... so I'm at a loss as to why you have done so.

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mhc
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Re: Am I being conned?

Post by mhc » Sun Mar 25, 2012 10:54 pm

Everyone in life makes bad decisions. The hope is that we learn from them and move on. Op, in your case, move on from Metlife. There is a better way.

Many people don't realize their investing mistakes until much later in life than you. Good job.

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BigFoot48
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Re: Am I being conned?

Post by BigFoot48 » Sun Mar 25, 2012 11:06 pm

climber2020 wrote:2) Should I move my IRA funds out of Metlife and into something with no load and a lower expense ratio that I could manage myself?

You will greatly benefit in moving to a lower-cost brokerage, lest in 30 years you have a Colonel Nicholson "What have I done?" moment. As to managing it yourself, the answer is absolutely and without question, with the amazing thing being how easy it is. You've found the right place to learn how simple it really is. Start reading to learn all about it!
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lawman3966
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Re: Am I being conned?

Post by lawman3966 » Sun Mar 25, 2012 11:28 pm

I endorse the comments above but wanted to add a few thoughts of my own.

In brief, you are being taken advantage of by your FA. I note that you mention that you pay an annual fee to ML in addition to the loads and expense ratios, though you don't say how much this fee is. It appears as though the sum of your fees would be something like 9-10% in the first three years. This is without a doubt the expensive end of a very expensive and exploitative industry.

But, the news going forward is all good. You have stumbled upon the Boglehead oasis in that desert of con artistry and parasitism known as the U.S. financial industry. Look forward rather than backward, and be thanful you found this place in your 20s instead of your 60s. Others have found out much later in life, and still others will never figure it out. By following the path of passive investing with low-fee index funds, you may just have doubled your ultimate retirement assets.

Hopefully, you will begin reading the entries in the recommended reading list. My personal favorite is The Investor's Manifesto by William Bernstein. He addresses many of the points you raise in greater detail than any of the posters here can.
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dratkinson
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Re: Am I being conned?

Post by dratkinson » Sun Mar 25, 2012 11:57 pm

You make too much to contribute to a Roth IRA, but you do contribute to a traditional IRA. So investigate the "back door Roth IRA" concept. Do that.

Yes, you are being taken advantage of as paying more only reduces your returns. It is that simple.

Life insurance is to replace the salary of a lost breadwinner so your dependents will be taken care of. You have no dependents, therefore you don't need life insurance. And when the day comes that you do need life insurance, buy term, not whole-life... it's cheaper.

Welcome.
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ilmartello
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Re: Am I being conned?

Post by ilmartello » Mon Mar 26, 2012 1:13 am

You're being played, not being conned.

Roll over all your accounts to an IRA at Vanguard.

In the time it takes for that process to take place, read this site, look at the wiki, and perhaps post your info with the suggested format under this sub-forum, and get your financial situation order.

jazzykat
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Re: Am I being conned?

Post by jazzykat » Mon Mar 26, 2012 1:55 am

Welcome to growing up...it took me until I was 30 to get serious about long term financial planning.

Your questions have already been answered. I'm surprised no one pointed you to the Wiki and the Bogleheads guide to retirement planning. I invest in a dirt simple 4 fund VG portfolio (TSM, TI, TBM, TIPS). Some guys use only 3 and some use just a targeted date. I wouldn't trust myself to do plumbing or even prepare my taxes, however, the Boglehead way (should you select it) is so easy even I do it. BTW, if you want to be a good investor you should at least understand the tax implications because taxes play a huge part in how much money you keep.

The good news is that you figured this out before you are 30 and are making some serious money. With a little self education and some self discipline you should be in good shape!

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Re: Am I being conned?

Post by climber2020 » Mon Mar 26, 2012 6:24 am

Thanks everyone :oops: I've already been looking at funds at Vanguard and will make the switch before things get any worse.

And thanks for the reading recommendations; for anyone who's interested, the books that led me to this forum are Personal Finance for Dummies by Eric Tyson and A Beginner's Guide to Investing by Frey. I'll check those other books out ASAP.

FinanceFun
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Re: Am I being conned?

Post by FinanceFun » Mon Mar 26, 2012 6:59 am

I think loads SHOULD be illegal. Criminal to rob someone who simply doesn't have an interest in finance....

I'm happy to see you are learning. I just wonder how many "grandmothers" are getting raked over the coals by some 20-something sales guy trying to make a commission on a 5% load?

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Re: Am I being conned?

Post by dhodson » Mon Mar 26, 2012 7:39 am

congrats on starting on your financial education.

try not to take any of the rude comments personally. Many of us like to pretend we were never in your shoes or we never made the same mistakes. The little secret is that most of us made those mistakes.

Always avoid "financial advisors" who are really insurance agents. They get most of their "Education" from the insurance companies and thus either dont know what they are talking about or are okay with depleting your retirement in order to maximize theirs. NEVER EVER buy any permanent life insurance product unless you need a permanent death benefit (which very few people need). NEVER buy any of them as an investment. As soon as someone tries to get you into any permanent life insurance as an investment, kick them to the curb immediately (assuming you arent managing this yourself). If you remember that and start following a more boglehead style, im confident you will do a lot better in retirement.

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Re: Am I being conned?

Post by Grt2bOutdoors » Mon Mar 26, 2012 7:47 am

1) You are not being conned, simply the agent in his fiduciary duty to him/herself sees you as a very large meal ticket. Think of it as going out to dinner with someone, you pay for their transportation and full course steak dinner, at the end of the evening you get a simple "thank you". So for paying all those sales commissions and fees, you get 30 minutes of company and biased (in Metlife's favor) advice.

2) May I suggest the Bogleheads Guide to Investing and perusing the forum wiki. Come back and post your desired asset allocation and plan to bounce your ideas here - you will find an unbiased crowd here though we do tend to recommend Vanguard because of their low expense ratios. It will be the equivalent of going to an expensive steak dinner and leaving with your money. :happy
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BL
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Re: Am I being conned?

Post by BL » Mon Mar 26, 2012 8:47 am

greenspam wrote:1). No
2). Yes


+1

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Re: Am I being conned?

Post by Fallible » Mon Mar 26, 2012 9:52 am

climber2020 wrote:...

A few questions I have:

1) Is it even possible for an employee of a company like Metlife to provide sound, unbiased financial advice? It seems like the conflicts of interest are huge. He says he is officially a fee-based planner, but I'm sure commissions abound.

2) Should I move my IRA funds out of Metlife and into something with no load and a lower expense ratio that I could manage myself? ...


I would not only say 'yes' to No. 2, but also say that you seem well on your way to doing this. Don't stop now! I was in a similar situation many years ago (I'm now retired), discovering that I did want to learn about investing on my own and avoid commissions and load funds. I gradually shifted into low-cost index funds with Vanguard and my only regret is that I didn't do it sooner.
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Re: Am I being conned?

Post by hlfo718 » Mon Mar 26, 2012 10:15 am

Just think of it as paying a very expensive tuition or learning experience. Now find a firm to transfer your money, Vanguard, Fidelity, Schwab... and get your money out. Hope there are no back end loads for your sake.

But just curious, did Metlife charge you a management fee on top of the 5% load? Can they actually dip twice?

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Re: Am I being conned?

Post by pkcrafter » Mon Mar 26, 2012 10:18 am

This has not been mentioned, but the person you are dealing with is probably not a certified financial planner. He is most likely a broker/insurance salesman. The big difference is brokers/agents do not have any fiduciary duty to you as does a certified planner/advisor. Note that banks and insurance are probably the most expensive places to buy mutual funds or hold retirement accounts.

Be careful with the IRA transfers; do not close the accounts, but it's probably best to move funds to cash. You need to contact Vanguard, provide the needed information and provide the necessary information, then Vanguard will do a custodian to custodian transfer of assets. MetLife will no doubt charge you an account closing fee.


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Re: Am I being conned?

Post by tphp99 » Mon Mar 26, 2012 10:33 am

hoppy08520 wrote:Trust me, if you're smart enough to be earning enough to not qualify for a Roth IRA, then you're smart enough to manage your investments better than Metlife which is likely earning 1 or 2 percentage points a year off your wealth that you can do just as well...


Not all high earners can or want to manage their own accounts.

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Re: Am I being conned?

Post by fishndoc » Mon Mar 26, 2012 10:46 am

Before you do anything with your current ML account, spend some time reading the books on the recommended list.

As already mentioned, not everyone can or even wants to manage their investments - while the fees you are currently being charged come close to being categorized as rip-off, if the advisor kept you from panicking and selling your equites during the recent crash, then he probably at least neutralized his high fees.

After some serious reading, if you are confident you can work out an AA and stay with it, no matter what the stock market does, then go for it.
If you doubt your ability to stay the course, then perhaps you would be better off using a fee-only financial advisor.
" Successful investing involves doing just a few things right, and avoiding serious mistakes." - J. Bogle

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Re: Am I being conned?

Post by irishraj » Mon Mar 26, 2012 1:17 pm

You are not being conned. You have been paying for someone to do what you could/can do for yourself. The good news, is now you can transfer your investments to a company with a No load, low Expense ratios.

Good Luck.

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Re: Am I being conned?

Post by robocop » Mon Mar 26, 2012 2:40 pm

I am like you- high income, but pretty young, and pretty new to figuring all of this out.

One thing I have learned is that Vanguard offers top-notch funds and customer service. If I were you, I would list some more specific details about your situation (specific age, income, tax bracket, current AA, desired year of retirement, desired % of income in retirement, etc.) and let the experts here help you pick out good Vanguard options for your IRA funds.

Another thing you should look at, now that you understand how fees and loads can eat up your retirement earnings, is your 401K allocation. How do those fees look, and does your employer offer better no-load and/or low-fee alternatives?

Please ignore the snide comments on here about deserving to be conned. I have found that 99% of this site is wise, witty, and considerate of other human beings. Unfortunately, the other 1% are not shy about insulting others. There is no shame in making a financial mistake, especially early in your adult life. You should have great pride in taking it upon yourself to teach yourself how to do better, and pride that you figured this out so young. Remember to teach your children and grandchildren the lessons you have learned so you can save them from having to learn your lesson the way you did!

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Re: Am I being conned?

Post by fishndoc » Mon Mar 26, 2012 3:09 pm

robocop wrote:. I have found that 99% of this site is wise, witty, and considerate of other human beings. Unfortunately, the other 1% are not shy about insulting others. There is no shame in making a financial mistake, especially early in your adult life.

Best post on this board today, Robo.
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Re: Am I being conned?

Post by epilnk » Mon Mar 26, 2012 3:26 pm

dhodson wrote:congrats on starting on your financial education.

try not to take any of the rude comments personally. Many of us like to pretend we were never in your shoes or we never made the same mistakes. The little secret is that most of us made those mistakes.

Yes, think of the loads as tuition, for a program in which tuition is on a sliding scale based on your ability to pay. Some of us had to pay more than others, but it all works out in the end and you'll be a better investor in the future. Accept your diploma, shake hands, and move on to the next phase of your education. The good news is that from now on the education is tuition free - you can even borrow your textbooks from the library if you prefer.

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Re: Am I being conned?

Post by asult.jain » Mon Mar 26, 2012 4:20 pm

Don't feel bad. I was suckered into Virginia's 529 with American Funds through a "friend" of my wife's. Not only did I get taken for a 5.75% load but American Funds did WORSE than the S&P during the 2008-2009 meltdown. Ouch. I can chalk it up to being sleep deprived from our 2nd baby at the time but, like you, the good news is I only had a couple years' investments and wasn't allocating much in the first place. Also on the bright side, bad investing decisions are best made when you're young and starting out. Investing really isn't rocket science and with some effort and maybe 6th grade math you'll never be in need or have to rely on some charlatan financial planner/advisor, watch CNBC or pay attention to 99% of what comes out of Wall Street. Good luck.

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Re: Am I being conned?

Post by climber2020 » Mon Mar 26, 2012 4:36 pm

A few replies to some comments posted recently:

pkcrafter wrote:This has not been mentioned, but the person you are dealing with is probably not a certified financial planner.
The guy I've been working with is actually a certified financial planner. I don't know if that necessarily changes anything at this point, but he does have that official designation.

hlfo718 wrote:But just curious, did Metlife charge you a management fee on top of the 5% load? Can they actually dip twice?


They charge an annual $35 fee for account maintenance in addition to all the commission. My financial advisor also recently recommended an official financial planning session that runs a flat fee of between $1000 and $2500. It goes without saying, but that's not happening.

dhodson wrote:try not to take any of the rude comments personally


It's all good. I work in a profession where I have to deal with unpleasant people pretty much every day. I have a skin that's thicker than my... well, it's pretty thick.

robocop wrote:If I were you, I would list some more specific details about your situation (specific age, income, tax bracket, current AA, desired year of retirement, desired % of income in retirement, etc.) and let the experts here help you pick out good Vanguard options for your IRA funds.


I'll be 30 fairly soon, make a little under 200 G's a year, am in the 28% tax bracket (after all my deductions), and my current asset allocation is 20% bonds, 50% domestic equity, 18% global equity, and the rest in balanced/hybrid with a sliver in money market. I'd like to have the option to retire at age 60 (55 would be even better), and would be very comfortable at 50% of my current income. I have no consumer debt or student loans (all paid off), and with the type of job I have, my income should go up about 30-50% over the next 5-10 years. My living expenses are minimal compared to most of my peers who are in a similar situation (I hate clutter and don't buy much stuff), so I'm sure I'll be okay as long as I don't do anything stupid with my cash.

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Re: Am I being conned?

Post by ddunca1944 » Mon Mar 26, 2012 4:55 pm

I agree with the posts comparing loads and fees to tuition. My husband and I were pretty ignorant about investing when he retired. We had a decent amount in our 401K accounts, but no clue as to what to do with them. We saw a CFP and moved our accounts to Smith Barney for him to manage (for a 1.2% fee). That was about 9 years ago.

I've been reading and trying to learn as much as I can. This forum has been especially helpful. Last year, I realized that although the management fee was still coming out of our accounts, we had to made any changes in three years, and in fact, had had only brief telephone conversations with the financial planner. I began to have some confidence that I could manage our accounts.

Last April, I moved our accounts to Vanguard. They are now in just 4 funds (previously were in 12). I posted questions on this forum and received great advice as well as encouragement. My husband and I are both glad we made the move. I just wish I had done this many years ago.

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Re: Am I being conned?

Post by Easy Rhino » Mon Mar 26, 2012 6:16 pm

American Funds are a pretty decent fund family, if you can avoid the loads. A few of them are in my 401k, without the load, and they're good enough choices to invest in.

climber2020 wrote:The guy I've been working with is actually a certified financial planner. I don't know if that necessarily changes anything at this point, but he does have that official designation.


he may have a CFP license, but he may not be working as what you'd think of as a financial planner. The key is if he's working in a "fiduciary" role with your investments. He sounds like his job is as a salesman, like a broker or insurance salesman.

They charge an annual $35 fee for account maintenance in addition to all the commission. My financial advisor also recently recommended an official financial planning session that runs a flat fee of between $1000 and $2500.


The snarky part of me would question exactly what purpose he surves, if you need to pay for an official planning session.

Migrating funds to a company like Vanguard sounds like a good idea. If you have enough (I don't know the number) they'll even do a free financial review. It will recommend some of their actively managed funds (which is non bogleheadian), but still be infinitely lower key than an insurance company.

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Re: Am I being conned?

Post by climber2020 » Tue Mar 27, 2012 6:11 am

Easy Rhino wrote:he may have a CFP license, but he may not be working as what you'd think of as a financial planner. The key is if he's working in a "fiduciary" role with your investments. He sounds like his job is as a salesman, like a broker or insurance salesman.


Yeah I agree. The fact that he kept pushing cash value life insurance on me when I'm single with no dependents really set an alarm off, which in turn encouraged me to read up on all this stuff.

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Re: Am I being conned?

Post by dhodson » Tue Mar 27, 2012 7:20 am

once you understand how cash value life insurance works, you will realize its always a horrible investment. Until you fully understand it, you either need to avoid such agents or just get very good at saying no. They have all kinds of tactics to try and get you to think its smart ususally pretending that some tax angle will make it a smart thing to do. It is never smart unless you need a permanent death benefit. When you are new, it is easy to fall prey to their tactics.

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Random Musings
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Re: Am I being conned?

Post by Random Musings » Tue Mar 27, 2012 8:17 am

1) Don't make any moves yet. Ignore your advisor for now.

2) Read and do some research. Utilize the Wiki.

3) Big picture, there are a (very) few cases where whole life can be utilized effectively, and I highly doubt in your situation that it would make sense.

4) Costs matter. In order to meet your goals, higher costs require you to save more, take more risk or work longer (or a combo of all three).

5) After you complete your research, and if you find you don't want to do it yourself - find a low-cost ethical advisor that will do a far better job for you (there are some out there, you know).

6) But if you decide you are going to DIY, develop a written investment plan and make your moves.

Good Luck

RM
I figure the odds be fifty-fifty I just might have something to say. FZ

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Re: Am I being conned?

Post by climber2020 » Wed Mar 28, 2012 7:05 am

Quick question since I am new to this forum: once I do come up with an investment plan, should I post it here as a follow-up to this thread, or is it customary to start a new thread with all the relevant info?

Thanks again to everyone for all the helpful advice.

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bertilak
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Re: Am I being conned?

Post by bertilak » Wed Mar 28, 2012 7:10 am

climber2020 wrote:Quick question since I am new to this forum: once I do come up with an investment plan, should I post it here as a follow-up to this thread, or is it customary to start a new thread with all the relevant info?

Thanks again to everyone for all the helpful advice.

I say start a new thread, with a new subject line. The discussion will (hopefully!) have nothing to do with "being conned."
Listen very carefully. I shall say this only once. (There! I've said it.)

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Re: Am I being conned?

Post by Buysider » Wed Mar 28, 2012 7:22 am

The key is if he's working in a "fiduciary" role with your investments.


I've heard this thrown around, and think next to financial sales practices, the legal profession blows a lot of smoke around relative to actual service. A fiduciary can buy a high fee, load mutual fund, and fiduciary can put your IRA in a variable annuity, a fiduciary can charge high (but not unconscionable) fees. A fiduciary can have a 401k lan loaded with high cost mutual funds, when lower cost ones are available.

Just because "we" know what a fiduciary "ought" to do, doesn't mean the legal profession sees that the same way, sadly.

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TheGreyingDuke
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Re: Am I being conned?

Post by TheGreyingDuke » Wed Mar 28, 2012 7:28 am

For clarity, I would start a new thread with a title that reflects the new query.

And don't sweat the past, I guarantee you that in five years you will look back at this with wry amusement and confidence in your new path.
"Every time I see an adult on a bicycle, I no longer despair for the future of the human race." H.G. Wells

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Re: Am I being conned?

Post by Regal 56 » Wed Mar 28, 2012 3:00 pm

For what it's worth, consider my own experience. Five years ago I did a lot of careful research, and decided on a slice and dice portfolio that closely mimics a recommended portfolio by a number of respected sources. Each year I stuck to my plan and added one or two funds as more money became available. For comparison sake, I kept track of my portfolio performance, and also tracked what would have happened if I'd merely socked away my money in a target retirement fund with a equity/bond allocation similar to whatever I actually had at the moment.

In three out of five of those years, I'd have been better off with the target retirement fund.

Good investing doesn't need to be complicated. If you select a low cost retirement fund appropriate to your risk tolerance, and couple that with disciplined saving, you'll get where you want to go. And you'll get there faster if you don't help financial shills fund their annual European vacations. By the way, congratulations on learning about this in your 20's. Wish I could say I'd done the same.

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