Conflict of Interest
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meant “incorporate” not “encorporate” not even sure why I put that… oh yeah it’s negative 29 outside… without the windchill
[quote=Squash1]meant “incorporate” not “encorporate” not even sure why I put that… oh yeah it’s negative 29 outside… without the windchill[/quote]
Whatever you do, don’t put your tongue on any metal poles.
I guess you're not going to the club tonight?[quote=Squash1]meant “incorporate” not “encorporate” not even sure why I put that… oh yeah it’s negative 29 outside… without the windchill[/quote]
Whatever you do, don’t put your tongue on any metal poles.
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Forced? How, exactly, has anyone been ‘forced’ into ‘stocks’ in their 401Ks? Even if you meant equity funds, I don’t know of any decent 401K plan that doesn’t offer fixed income, money market, or similar investment alternatives to equities.
[quote=buyandhold]Maybe 401ks should only be equity indexed annuites or some type of defined benefit plans. Retirement could be an insurance policy and not an investment.[/quote]
401Ks cannot ever be defined benefit plans, since they are, by definition, defined contribution plans. One cannot possibly be the other.
And most life insurance/annuities already enjoy tax advantaged status, so anyone that wants to use insurnce as part of their retirement strategy is already free to do so.
[quote=buyandhold]Finally, in perfect world, interest rates would be more consistent. If the Treasury rate was 4 or 5 percent, year after year, people could invest with some certainty. All this whipsawing of interest rates and stock markets is good only for the financial service industry.[/quote]
Did you really just say that, comrade?! Is your perfect world - where rates are consistent year after year - based in Moscow??
How long have you been in this business, buyandhold?
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The reason they hate 401Ks is because they are lazy and/or stupid… Pensions worked because the employee didn’t have to do anything.
401K require people to actually participate..Pensions actually aren’t bad at all. It’s funny that we expect 100 millionpeople to understand ivnesting and manage their 401K the right way. It’s just not conceivable, and the 401K industry is handcuffed from providing any real guidance (both due to rules, as well as poor compensation structures). And even if the employee was smart and judicious, they likely still would have lost 25-40% in their 401K’s this past year. Believe it or not, many people I know shifted all into cash when things started turing down in early 2008. They actually saved themselves without really having a clue what they were doing.
In almost every case, my clients that have pensions are FAR better off than my clients that have big 401K balances (obviously the one's that have both are golden). And my pension clients (which are probably half my clients) sleep much better at night. Most of them have 40-90K per year in income (including SS) that is guaranteed. Yes, much of it isn't tied to inflation, but I'd rather have a flat 80K per year in GTD income for the rest of my life than none.“it has to be true asset allocation… Not just lets buy 5 different American Funds… ta da… your diversified…It needs to encorporate non correllated assets, and you can’t get those from any mutual funds… If you can fit everything you have in your portfolio into a Morningstar hypo, you don’t have true asset allocation”
YES!I accept your thoughts as yours. Not being rude, I just like that line. Let me ask you this: Would you say that more often than not, when you ACAT an account in, it is fully invested? I'll go further. When I ACAT an account in that has an advisor on it, I find it almost always fully invested, minus maybe a couple of months of emergency money. When I ACAT an account in that does not have an advisor, like an old 401(k) or I actually see heavy amounts of cash sometimes. I realize that can be because the person doesn't know WTF they are doing or they sold out when they got scared. Point is, most advisors I see have their clients fully invested possibly against the client's will. The client probably doesn't say anything because they trust the advisor, who fully invests them to maximize profit. This goes beyond being fee based or not. Same thing applies to A shares or any commissioned sale. For you guys that are fee based and charging on cash, it doesn't matter what the hell you do, you're still going to get paid maximum revenue. Regarding your question, which is a good one: The question I think you're getting at is: after 2008, is the market an appropriate investment at all? This is exactly why I'm changing the focus of my practice.[quote=gvf]1. Should they be invested in the market or not? If so, how much of their money?
Snags, it’s our job to understand this question. I don’t know any planners/advisors who don’t think about this. Know the client’s situation, know their pensions, their incomes, their debts, their savings, their bank CDs, their annuities–that’s our job–and then find an appropriate investment with respect to their time-frame.
The question I think you’re getting at is: after 2008, is the market an appropriate investment at all?
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Have you ever considered that maybe you don't have all of your clients' assets and that the cash portion of their portfolio just might be sitting in the local bank?
As I metioned in a post several weeks ago, it's obvious you've been spending a considerable amount of time visiting with "Hank" and have decided that safe money alternatives, i.e., annuities, are the only way to go. It's obvious from your posts that you're a different class of person than "Hank." You're just terrified right now and looking for something to hang onto. You're going to make some good money selling annuities for now, but I assure you that after the economy and markets improve, you'll again see that a balanced portfolio will give your clients the best chance at not outliving their income. Of course, you won't make anywhere near 10-12% in commissions, but you'll have the satisfaction of knowing you're doing the right thing. Hang in there, buddy.[quote=Borker Boy]
Have you ever considered that maybe you don't have all of your clients' assets and that the cash portion of their portfolio just might be sitting in the local bank?
As I metioned in a post several weeks ago, it's obvious you've been spending a considerable amount of time visiting with "Hank" and have decided that safe money alternatives, i.e., annuities, are the only way to go. It's obvious from your posts that you're a different class of person than "Hank." You're just terrified right now and looking for something to hang onto. You're going to make some good money selling annuities for now, but I assure you that after the economy and markets improve, you'll again see that a balanced portfolio will give your clients the best chance at not outliving their income. Of course, you won't make anywhere near 10-12% in commissions, but you'll have the satisfaction of knowing you're doing the right thing. Hang in there, buddy.[/quote] I am not terrified at all. Quite the contrary. I'm terrified of people making stupid decisions with their money. I have never said annuities were the only way to go. I am saying that I will concentrate on annuities this year and take other business as it comes. At least I have something different to say that people have not been hearing. I will get business however I can. If three years from now, REITs are the coolest thing in the world, I'll probably sell that. If it's something else, I'll sell that. I have a feeling though that since there are years of baby boomers retiring that think nothing of the market anymore, I will probably keep myself very busy for a long time to come. If other advisors don't show annuities to their clients, I WILL. I'll let the client choose what they want. One thing is true: Many clients are not comfortable with the investments they are currently in. They didn't understand the worst case scenario. If I show them something with the best and worst case scenarios and compare it to what their guy is doing, I'll probably win some new clients. And as far as the commission is concerned, it's not as glamorous as you think. I might make 5%-8% upfront depending on the length of the contract. .80% per year for 10 years is hardly worth my time. But they might question why you didn't show them it as you're making 1.5% per year every year.10 years? Why would you leave it that long? Annuitize after two years (so you don’t get your commission charged back) and go into another product so you can get paid again.
That's what our local guys do and they are getting filthy rich. Don't miss out on the fun![quote=Borker Boy]10 years? Why would you leave it that long? Annuitize after two years (so you don’t get your commission charged back) and go into another product so you can get paid again.
That's what our local guys do and they are getting filthy rich. Don't miss out on the fun! [/quote] That wouldn't be fun for me, sorry. I do what's right for the client, with no intention of doing anything you wrote above. If something changed in the client's situation, then it would be addressed. Guys like that make it easier for me to do business, quite frankly.[quote=Borker Boy]10 years? Why would you leave it that long? Annuitize after two years (so you don’t get your commission charged back) and go into another product so you can get paid again.
That's what our local guys do and they are getting filthy rich. Don't miss out on the fun! [/quote]Why are you criticizing what he does? Does he go to your job and slap the penises out of your mouth?
Hum — MMYields = .5%; my fee = 1%. client return = .5% - 1% = -.5%
SP500 = - 37%; my fee = 1%. Client return = -38% so if I get them into cash I've / they'e avoided losses of -37.5% Seems reasonable to me.