Who Still Offers B Shares & Best Bond Funds

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bigcheese09's picture
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So I am new to the industry and keep running into people who despise the idea of taking almost 6% off their initial investment with A shares, yet also hate C shares higher annual fees which never decrease.  When I explain B shares, many people seem to like the idea, however many Fund Companies no longer offer them.  What are some solid Mutual Fund Families that still have B Shares?Lastly, I need some good Bond Funds...Any ideas?

BigCheese's picture
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Change your forum name. You can't be a Big Cheese until you have earned it!

bigcheese09's picture
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haha nice touch mr. cheese

SometimesNowhere's picture
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Do your clients a favor and tell them the truth about B-shares. Run a hypo on any B-share, and compare it to an A-share. Ask them which performance they prefer.
If you plan on having a bit more active role in the process, i.e. moving from fund to fund, then suggest C-shares so they aren't always getting killed with the up front sales charge.
 
I explain how all the shares work, give the numbers, talk about my investment philosophy, then tell them to make the decision. If they ask for help, I do the math for them. I have yet to find a situation where a B-share makes sense for the client.

bigcheese09's picture
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Really? I did a hypo on FINRA's website and after 10 years, B shares beat A and C every time...It is not by much, but regardless of the rate of return I selected (5,6,7% annually) the investor always had more money with B shares

bigcheese09's picture
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MFS Total Return Fund Class AMFS Total Return Fund Class BMFS Total Return Fund Class C

Data As Of2/8/20102/8/20102/8/2010

Ticker SymbolMSFRXMTRBXMTRCX

Investment Amount$10,000.00$10,000.00$10,000.00

Estimated Return You Selected5.00%5.00%5.00%

Holding Period101010

Fund Value After 10 Year(s)$14,003.01$14,104.49$13,922.33

bigcheese09's picture
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Did I do something wrong here or is there something about B shares I don't know here?

Spaceman Spiff's picture
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6%?  You do understand breakpoint rules, don't you?  It's actually pretty rare for anyone to pay the full load.  And those folks typically aren't great clients anyway.  If they're complaining about paying you 5.7% for the next 10 years, then they're better off buying an asset allocation fund from Vanguard and letting it ride.  Your book with thank you in the long run.      
 
If you have to sell B shares look at MFS, Goldman, Lord Abbett, Van Kampen (soon to be AIM/Invesco), or Oppenheimer.  I'm sure there are others out there, but many of the big companies have lost their financing on the B shares, so they stopped doing them. 
 
You're going to have to be more specific on the bond fund thing.  Are you looking for a total return bond fund, high yield fund, government bond fund, foreign bond fund?  Be more specific and you'll get some better responses.  
 
Oh yeah, stop using the FINRA website.  Figure out how to use your firm's hypo system.  If you can't have your internal wholesaler do it for you.  Morningstar shows the 10 year ending numbers (as of 1/31/10) on the MFS funds you used as $15,476, $15,432, and $15,416 for the A, B, and C shares respectively.  So, a $60 difference over a 10 year time frame between the A and C.  Less for the B.  The 5 year hypo isn't even close.  C share wins hands down.  Plus the flexibility of the C share is a big draw.  Plus you get paid better in the long run on the C share.  So, for $6 a year in performance you get a client without the handcuffs (commissions paid or CDSC fees), an FA who has a regular stream of income who is happier about servicing that client with $10K, and no headaches from your compliance officer when in 3 years you want to switch out of XYZ A share because the money manager has changed or the entire fund family got overweighted in financials or the landscape has changed and it's time to move to bonds.
 
 

bigcheese09's picture
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Maybe i'm off here, but I have been recommending B shares for people just wanting to open a roth IRA and just wanna put in 5k for 1 or 2 years and then just let it grow...Because it is such a small amount, I've been telling them about B shares.  Thank you for those names/funds.As for the Bond Funds, I guess I am primarily looking for some good generic bond funds and maybe 1 or 2 extraordinary performers that may be a little more risky or international etc.

Ron 14's picture
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bigcheese09 wrote:Which performance do you prefer SometimesNowhere?
 
You are a clown. You are stealing screen names and now ripping on guys who actually know the business? Get bit and go sell your B shares at Fidelity.

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I agree with Spiff and Cheese.  B shares are better for small amounts for younger people, A shares are better if you hit breakpoints.  Unfortunately, B shares are going away, so I would not bother selling them.
This is just one reason our industry is so fukced up.

SometimesNowhere's picture
Joined: 2008-12-22

FTAZX,FBAZX,FBEIX,FISEX,TEBBX,TEBIX,TESIX,FMUBX
 
Do yourself a favor and run those in Morningstar, it's a random grab bag of Franklin funds. Even if you buy those in piker amounts with a full A share sales charge in 10 years every one of the A's outperforms the B's.
 
By the way, if you look at the ACTUAL performance return instead of a return you randomly select, the numbers on your selected fund are better for the A too. Look at the report and tell me "which performance you prefer". 
 
Then do us all a favor and jump off a bridge and kill yourself.

chief123's picture
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bigcheese09 wrote:Maybe i'm off here, but I have been recommending B shares for people just wanting to open a roth IRA and just wanna put in 5k for 1 or 2 years and then just let it grow...Because it is such a small amount, I've been telling them about B shares.  Thank you for those names/funds.As for the Bond Funds, I guess I am primarily looking for some good generic bond funds and maybe 1 or 2 extraordinary performers that may be a little more risky or international etc.

Where do you work?

Ron 14's picture
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It has to be EJ

3rdyrp2's picture
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Here's an interesting thought:
 
If B shares are going to be eliminated pretty soon across the board, would it benefit the client to buy all B shares in the meantime in anticipation that they will be converted to A shares as soon as that specific fund family decides to make the change?  I have a client that had Columbia B shares until this past August and they converted automatically to A shares w/out charging him any fees.  Wouldn't doing this allow the client to avoid paying a front-load, the majority of the CDSC, and still pay us good?

Incredible Hulk's picture
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In my very limited experience with B shares from companies no longer offering them (American and Franklin) they didn't immediately end the B share fund. They simply stopped allowing new sales and are allowing the existing shares to eventually run their course.

KensLoveChild's picture
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Did those Columbia funds reach the end of the CDSC?  All Col. B shares convert to A after the CDSC. And I think Bigsneeze09 should just sell his customers all no loads...

3rdyrp2's picture
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KensLoveChild wrote:Did those Columbia funds reach the end of the CDSC?  All Col. B shares convert to A after the CDSC.
 
Ahhh...just checked.  They actually eliminated the whole fund and combined it with a similar fund that no longer had B shares, so they put it in the A share. 

Ron 14's picture
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In regards to Bond Funds I like -- Templeton Global Bond, JPMorgan Core Bond, Pimco Low Duration and Total Return

bigcheese09's picture
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Who ripped  who Ron?

bigcheese09's picture
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And I assure you I did not take the time to look up bigcheese and then add an 09...bigcheese09 has been my aim name since high school and my password since middle school...and again, I was not ripping anybody...I simply showed the hypo I did with the 10k a client was investing into a Roth and the B-shares won...how is that a rip?

bigcheese09's picture
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And you aren't kidding about Templeton's Global Bond Fund...It's 10 year annual return is stupid...Appreciate that 

Ron 14's picture
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Just change your screen name or start another one. See if bigjackass09 is available.

bigcheese09's picture
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Who pissed in your cheerios this a.m Ron?

bigcheese09's picture
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I'll keep checking on other fund companies, but if that is the case, that's a pretty legit idea 3rdyrp2...Appreciate it

bigcheese09's picture
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And Ron, seriously (I'm not trying to stir up sh*t or anything) but I'm curious who I ripped...I swear I was not trying to rip anybody...It was just a question

Ron 14's picture
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You made a smart ass comment to Sometimesnowhere and then went back and changed it. Too bad I already quoted it and replied, preventing you from erasing it completely.

bigcheese09's picture
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What??? Ron, I promise you I didn't do that...I don't even know how to change stuff on here...I'm brand new to the site I swear...I've been on this site all day long but had to go out for a few meetings, so maybe one of the guys in the office came in and changed some sh*t to f with me and make me look like a cuntnugget or something, but I promise you that what is posted now is what I posted

Wet_Blanket's picture
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Is this the third coming of Windy?

Ron 14's picture
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Ron 14 wrote:bigcheese09 wrote:Which performance do you prefer SometimesNowhere?
 
You are a clown. You are stealing screen names and now ripping on guys who actually know the business? Get bit and go sell your B shares at Fidelity.
 
This is what you posted clown car.
 

bigcheese09's picture
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Ron, I assure you that is not what I posted...Does that sound like anything else I posted the entire time? I swear I just got on here to research, find great ideas from some veterans, and ask questions that I keep running into...I promise you I didn't write that...That doesn't fit what I'm trying to do at all

Ron 14's picture
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How the hell would I get it to quote then ? Nevermind. You are a waste of my time.

bigcheese09's picture
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No i'm not accusing you of lying, you said it went to that line (that you quoted) and then back to the question...I'm saying that when I left my office to go to my meetings, I'm guessing someone from the office changed it to that smartass remark you quoted, then changed it back when I got back to make me look like a cuntnugget and I was clueless as to what the hell was going on and why ppl wanted me to jump off a bridge etc.

BigCheese's picture
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As the creator of Big Cheese, I think the forum administrator has to share the revenue allowing bigcheese09 to this forum.
 
I will be expecting the check soon.
 
The greatest form of flattery is to replicate what others have done...If your production 09 spikes I take full credit and expect a check from you too...

3rdyrp2's picture
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bigcheese09's picture
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haha do I make it out to Big Cheese?

Ronnie Dobbs's picture
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Makes me wish EDJ had a fee based platform that we as advisors actually had control of and could build the portfolio however. I think every client deserves the right to decide if they want to pay an annual fee or transactional. Of course at Jones we have Advisory.....Where we give EDJ COMPLETE control!...That's great....except then Jones has COMPLETE control of our business:) ...Then we are just babysitters and any chump can do that job...

3rdyrp2's picture
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Why do you think so many firms make fun of you guys?  EDJ and Primerica are the only two "firms" in the industry without a fee-based platform advisors can trade on.

Spaceman Spiff's picture
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Ronnie Dobbs wrote:Makes me wish EDJ had a fee based platform that we as advisors actually had control of and could build the portfolio however. I think every client deserves the right to decide if they want to pay an annual fee or transactional. Of course at Jones we have Advisory.....Where we give EDJ COMPLETE control!...That's great....except then Jones has COMPLETE control of our business:) ...Then we are just babysitters and any chump can do that job...
 
Technically that's not accurate.  You could do Advisory on the custom model side.  You have more control over it then.  Granted, you still have to stay within the guidelines with percentages in G/I, G, etc and you can't use individual securities, but if control is what you're looking for then you've got quite a bit of it that way. 
 
If you see Advisory as reducing your role with your clients down to simply babysitting, then you're missing the point of the program altogether.   With my Advisory clients I've become MORE involved with them rather than less.  We just spend more time talking about things other than performance and fund companies.   

Spaceman Spiff's picture
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3rdyrp2 wrote:Why do you think so many firms make fun of you guys?  EDJ and Primerica are the only two "firms" in the industry without a fee-based platform advisors can trade on.
 
Aren't you an Ameriprise guy?

3rdyrp2's picture
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Yes, and we have several fee based models which we have complete control over.  Whats the issue w/Ameriprise?  We can do everything, but the only real issue investment-wise is the lack of annuity carriers.  Who gives a flying f*** about annuities if you don't do a lot of annuity business.

joelv72's picture
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Ronnie Dobbs wrote:Makes me wish EDJ had a fee based platform that we as advisors actually had control of and could build the portfolio however. I think every client deserves the right to decide if they want to pay an annual fee or transactional. Of course at Jones we have Advisory.....Where we give EDJ COMPLETE control!...That's great....except then Jones has COMPLETE control of our business:) ...Then we are just babysitters and any chump can do that job...

Here's where some people are missing the point of the fee based platform and the whole suitability/fiduciary issue.  I have to admit, I am struggling through it from an indepent RIA viewpoint.  If you are offering a fee platform you are (or soon will be according to the news) held to the fiduciary standard.  Your firms have processed this.  They have formed Investment Committees tasked with the management of the due dilly process for the model portfolios that are ultimately recommended.  A single person couldn't possibly go through the hoops that they are going through and expect to produce at the same time.  If you deviate from the model portfolio, what are the reasons and rationale?  What type/amount of research went into that decision?  I have in front of me right now the Due Diligence Process Manual for a broker/dealer provided platform.  It's 33 pages long and more complex than all get out.  Can you honestly say that you went through as thorough a process as the Investment Committee in coming up with your own model, and then bring that into context of fiduciary responsibility?

Ronnie Dobbs's picture
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Spaceman Spiff wrote: 
Technically that's not accurate.  You could do Advisory on the custom model side.  You have more control over it then.  Granted, you still have to stay within the guidelines with percentages in G/I, G, etc and you can't use individual securities, but if control is what you're looking for then you've got quite a bit of it that way. 
 
If you see Advisory as reducing your role with your clients down to simply babysitting, then you're missing the point of the program altogether.   With my Advisory clients I've become MORE involved with them rather than less.  We just spend more time talking about things other than performance and fund companies.   
 
Spiff I still think Advisory is more for control over our business than anything. I know we have the side that you have "more" control over, but it's no different than having a 401K and having limitations on what you can choose from. Picture this:
 
Spiff has 90% of his book in Advisory. What happens when you have one little quarrel with Jones. You are easily replaced. They boot you out and put someone else in your place to talk about other things, other than their performance, which in reality, is the only reason that client is sitting across the desk from you. To know his performance for the last quarter, month, year...whatever...Take the ability for an advisor to ACTUALLY build a portfolio and you are useless..To me the best part of this job is building the portfolio and doing the research....Maybe thats just me...
 
Speaking of this, I have a good friend who works in the IT department on supporting different programs. We were talking a week or 2 ago and he was telling me about some of the new programs Jones has coming out. Did you know that Jones is working on a system that you put all the parameters in for a client, age, income, etc...and it builds a portfolio for you? Thats control my friend.....
 
I think we should have a real option of fee based. I have LOTS of clients who would go for the fee, if they could trade stocks and swap fund families without any cares. In some cases, it's just a better deal for them...in others..transactional is best. Although I highly agree with a post someone had on here recently, that Bonds should never be wrapped...

3rdyrp2's picture
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mlgone wrote:Ameriprise=weak minor league ball
 
Yeah, well.  Thats just, like, your opinion, man.

Ronnie Dobbs's picture
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joelv72 wrote:Here's where some people are missing the point of the fee based platform and the whole suitability/fiduciary issue.  I have to admit, I am struggling through it from an indepent RIA viewpoint.  If you are offering a fee platform you are (or soon will be according to the news) held to the fiduciary standard.  Your firms have processed this.  They have formed Investment Committees tasked with the management of the due dilly process for the model portfolios that are ultimately recommended.  A single person couldn't possibly go through the hoops that they are going through and expect to produce at the same time.  If you deviate from the model portfolio, what are the reasons and rationale?  What type/amount of research went into that decision?  I have in front of me right now the Due Diligence Process Manual for a broker/dealer provided platform.  It's 33 pages long and more complex than all get out.  Can you honestly say that you went through as thorough a process as the Investment Committee in coming up with your own model, and then bring that into context of fiduciary responsibility?
 
Actually Jones is going the other way with that. By going fee based with Advisory, we have no fiduciary responsibility, because Jones makes all the decisions. Atleast thats what J-Dub said....

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Ronnie Dobbs wrote:joelv72 wrote:Here's where some people are missing the point of the fee based platform and the whole suitability/fiduciary issue.  I have to admit, I am struggling through it from an indepent RIA viewpoint.  If you are offering a fee platform you are (or soon will be according to the news) held to the fiduciary standard.  Your firms have processed this.  They have formed Investment Committees tasked with the management of the due dilly process for the model portfolios that are ultimately recommended.  A single person couldn't possibly go through the hoops that they are going through and expect to produce at the same time.  If you deviate from the model portfolio, what are the reasons and rationale?  What type/amount of research went into that decision?  I have in front of me right now the Due Diligence Process Manual for a broker/dealer provided platform.  It's 33 pages long and more complex than all get out.  Can you honestly say that you went through as thorough a process as the Investment Committee in coming up with your own model, and then bring that into context of fiduciary responsibility?
 
Actually Jones is going the other way with that. By going fee based with Advisory, we have no fiduciary responsibility, because Jones makes all the decisions. Atleast thats what J-Dub said....
Uhhhhh....That was actually my point.  You are acting as a fiduciary, Jones provides the CYA.

Ronnie Dobbs's picture
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My bad for mis-reading. I, however, still think the best part of this job is doing the research and building the portfolio. Not very keen to giving that up. After all, that is our job.

3rdyrp2's picture
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That avatar is killing me mlgone!  Funniest sh!t I've seen.

joelv72's picture
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Ronnie Dobbs wrote:Spaceman Spiff wrote: 
Technically that's not accurate.  You could do Advisory on the custom model side.  You have more control over it then.  Granted, you still have to stay within the guidelines with percentages in G/I, G, etc and you can't use individual securities, but if control is what you're looking for then you've got quite a bit of it that way. 
 
If you see Advisory as reducing your role with your clients down to simply babysitting, then you're missing the point of the program altogether.   With my Advisory clients I've become MORE involved with them rather than less.  We just spend more time talking about things other than performance and fund companies.   
 
Spiff I still think Advisory is more for control over our business than anything. I know we have the side that you have "more" control over, but it's no different than having a 401K and having limitations on what you can choose from. Picture this:
 
Spiff has 90% of his book in Advisory. What happens when you have one little quarrel with Jones. You are easily replaced. They boot you out and put someone else in your place to talk about other things, other than their performance, which in reality, is the only reason that client is sitting across the desk from you. To know his performance for the last quarter, month, year...whatever...Take the ability for an advisor to ACTUALLY build a portfolio and you are useless..To me the best part of this job is building the portfolio and doing the research....Maybe thats just me...
 
Speaking of this, I have a good friend who works in the IT department on supporting different programs. We were talking a week or 2 ago and he was telling me about some of the new programs Jones has coming out. Did you know that Jones is working on a system that you put all the parameters in for a client, age, income, etc...and it builds a portfolio for you? Thats control my friend.....
 
I think we should have a real option of fee based. I have LOTS of clients who would go for the fee, if they could trade stocks and swap fund families without any cares. In some cases, it's just a better deal for them...in others..transactional is best. Although I highly agree with a post someone had on here recently, that Bonds should never be wrapped...
Stepping back and looking at the big picture, you make a very good point.  You guys have to remember that technically you are employees of the firm.  It reminds me of the evolution of commercial banking.  Loan officers used to do the loan analysis themselves and present it to loan committee, and ultimately to the board (if it was large enough).  Credit departments sprung up to support loan officers, taking some of the analytical burden off of their shoulders, but the loan officer ultimately called the shots.  Now the tables are turned, and the loan officers are nothing more than paper shufflers taking orders from the credit department.  Which makes me glad I own my own business now.

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mlgone wrote:3rdyrp2 wrote:That avatar is killing me mlgone!  Funniest sh!t I've seen.
 
it's Mel and Shoe
 
I need to start looking at this site at home more often.  The only thing I see in your avatar in the guy with the question mark in his head. 

Ron 14's picture
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Ronnie Dobbs wrote:My bad for mis-reading. I, however, still think the best part of this job is doing the research and building the portfolio. Not very keen to giving that up. After all, that is our job.
 
Picking mutual funds that are approved by EJ is not research or building a portfolio. This is not a shot. I don't do research either.

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