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Old 02-05-2014, 02:21 PM   #41
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Old 02-05-2014, 03:39 PM   #42
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When I pressed him on the fees, his commission, and surrender policies, he became more and more flustered, and finally told me that I should not bother with the details, but simply transfer all my retirement accounts to him and trust him as he had my best interest in mind - always.

When I asked him for a list of his clients that would be willing to speak with me, he stalled for a while, blurted out an expletive, and abruptly hung up on me.
Salesmen always hate intelligent customers don't they?
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Old 02-05-2014, 06:45 PM   #43
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Got a call from an Ameriprise salesman today. Pushing the usual VUL with promises of "guaranteed" returns that were so unbelievable I could hardly believe I was talking with a supposedly professional FA.

When I pressed him on the fees, his commission, and surrender policies, he became more and more flustered, and finally told me that I should not bother with the details, but simply transfer all my retirement accounts to him and trust him as he had my best interest in mind - always.

When I asked him for a list of his clients that would be willing to speak with me, he stalled for a while, blurted out an expletive, and abruptly hung up on me.
I'm impressed. It's really hard to get these guys to drop their pose, and you certainly did!

I have never been called by any financial products salesman. I must turn up on some stay away list.

Ha
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Old 02-05-2014, 10:36 PM   #44
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I can't remember if the OP said he needed the insurance. If it is needed, then don't completely surrender the VUL until you have other insurance in place.
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Old 02-06-2014, 12:02 AM   #45
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When a person gains the CFP designation, does it always mean he/she is acting in that capacity? Clearly, that same person could go to work as a stock broker and would not have a fiduciary responsibility to his clients. And if that person goes to work for Ameriprise ?

The roles of advisor and the client should be spelled out in the relevant written contracts/agreements.
I work in this industry. People in my firm with CFP designation are nothing more than sales people. Plus getting a CFP isn't hard. Getting a CFA is hard. Selling high commission products such as annuities is what get them the big bonus.

Fiduciary? LOL. Only person they are looking out for is themself and their paycheck. That's why I'm trying to ER. Working in this industry sucks. It's all about a money grab. People only care about sales number.

You don't met you sales goal, you will have to take your CFP designation somewhere else. RE agent have a fiduciary responsibility too...but do you really think they are looking out for your best interest?

My advice, learn more about investing and stick with low expense index fund with Vanguard or Fidelity. the 1% to 2% you're paying won't beat the index
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Old 02-06-2014, 01:25 AM   #46
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Kind of strange, this thread is 4 days old, and so far , no sign of an Ameriprise sales , uh , I mean "Advisor" troll signing up and trying to defend the company.
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Old 02-06-2014, 06:30 AM   #47
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I work in this industry. People in my firm with CFP designation are nothing more than sales people. Plus getting a CFP isn't hard. Getting a CFA is hard. Selling high commission products such as annuities is what get them the big bonus.

Fiduciary? LOL. Only person they are looking out for is themself and their paycheck. That's why I'm trying to ER. Working in this industry sucks. It's all about a money grab. People only care about sales number.
Geez, I feel like I just posted this but I guess it was the same issue on another thread... whether an advisor is a salesperson has nothing to do with being a CFP, it has to do with the fee structure of the firm. Most firms are commission-based, which results in biased information and a sales environment and CFPs can fall into the same trap. However, an advisor in a fee-only environment are not incented to sell products and hit sales goals, making that type of firm a better fit for CFPs IMO. Also, only about half of CFP applicants actually obtain the designation... granted that's probably a higher pass rate than the CFA but they're two different areas of expertise. Having said all that, I agree that no one cares more about their own finances than themselves.
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Old 02-10-2014, 03:39 AM   #48
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I've been reading up on Mutual Funds, expense ratios, front loads, and index funds. There's still a lot for me to learn and my initial plan was to learn as much as I can first and then start moving my money out of Ameriprise. But as I read about index funds versus mutual funds and as I look at my 401(k) that I moved to Ameriprise's actively managed account that has literally earned $479.60 in the past year for my $50,000 that I rolled over, I really am considering just telling my advisor that I want to move it to Vanguard and put it in the Vanguard 500 Index Fund for the time being. At least it would be hopefully earning a little more, right? Would this be a good move? It's making me so upset that I moved my 401(k) from Fidelity to Ameriprise and am paying 5-6% loads and 1-2% in expense ratios and also because it is actively managed, I believe I am paying another fee. It makes me so sick but I don't know what to do. We have about $200K in Ameriprise but not sure how the rest is invested. I just know about this one because it was a big chunk of change that I did recently based on the recommendation of my advisor. Am I being impatient and jumping the gun?
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Old 02-10-2014, 04:25 AM   #49
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Another question since I am learning to DIY. Btw, I'm loving Vanguard! So my advisor would normally project how much we need to save each month for a particular goal. So for preschool tuition currently it is about $10K per year. I know Vanguard has the LifeStrategy Funds which make the AA simple but how do people calculate how much to put away every month factoring in inflation, returns, time, etc. My advisor used to just plug it into her program and it would spit out a number and that's how much she said we would need to save every month and give to her to invest in order to have enough to pay for preschool when the time comes. I think that's one of the parts I'm scared of. That I will calculate it wrong and not put in enough.
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Old 02-10-2014, 05:25 AM   #50
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Hey cucumber. You are not being impatient. You have just realized you are being hosed big time. I think it is reasonable to move everything to Vanguard ASAP. You could maintain your current asset allocation until you figure out where you want to be.

Expect Ameriprise to give you some grief when moving. Expect calls from you FA and expect your paperwork to get delayed. The final indignity will be the fee they charge for closing your account.

I'm not a big fan of target date or life strategy funds. I'd rather have control of my asset allocation.

As for predicting what you need to save, you will just have to wing it like the rest of us. You can't accurately predict how much your investments will return and what preschool tuition (or anything else) will actually cost in the future. The shorter the time frame the more you should look at CDs or something that won't lose value. If you are going to save three years for a year of $10K preschool, you would need to put away $280/month. You can hope that the interest equals any price increase. Longer term savings like for a distant retirement can be planned with any of the financial calculators that are around. You just can't assume they are perfect and you are always safer to over-save.
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Old 02-10-2014, 08:31 AM   #51
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Am I being impatient and jumping the gun?
No, you are apparently doing some good reading and learning a lot. If you want to stop the high fees/costs right now, just move all your funds to Vanguard. You can put it in a fund, or a group of funds, right now as a temporary measure while you do more reading and make plans for your permanent asset allocation.
No one can know what the "best" fund/mix of funds would be. A lot depends on your risk tolerance. I'd say that for most people, the best single-fund, set-it-and-forget-it answer would be the appropriate Target Date Retirement Fund. These contain a mix of assets that the folks at Vanguard believe are likely to be appropriate for a person retiring at various dates in the future. You'd have exposure to US stocks, foreign stocks, bonds, etc. Later you'll probably decide to customize your asset allocation, and that's fine (as 2B says, with the Target Funds you can't tweak them to maximize tax efficiency, etc). I'd say 80% of investors would be better off in a low-cost Target Fund than in following the path they are currently on (hot stock sector of the month, investing in 100% CDs to "avoid risk" etc).

The simplest thing: move everything to a Vanguard money market account (or two: one for your IRA, one for your other investments) while you figure out what to do next. That stops the Amerirpise fees and assures your assets won't go down if the market dips. The big risk with this is that you'll miss any gains if stocks go up while your money is parked there. On average (over many, many years) stocks have gone up over 8% per year, so on average you'd be better off leaving your money in the market (even with Ameriprise) than having it in a money market fund. But, years are very seldom average, and 2014 probably won't be average, either.

Good luck!
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Old 02-10-2014, 09:00 AM   #52
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I find Target Date funds a bit challenging in the ER world. They start with the assumption that you work until 65 years old. So for me, based on my age of 47, it would tell me to have a very high percentage in equities. I would guess around 80%. However, because I'm semi-retired, I would not want to have that much exposure. However, if I choose a fund that is designed for someone in retirement, it will drop the equity exposure significantly, again under the assumption that I'm around 65 years old and have at most a 30 year time horizon to plan for.

So I find myself looking for a target date that is somewhere in between the two, and I realize that by the time I find just the right date, I could have just as easily set the AA myself by using a lazy portfolio of two index funds and a bond fund or two, and then gradually adjusting the mix as I age.

In addition, I suspect that if the stock market does extremely well over the next decade, I may go one of two ways - keep the equity exposure high and go for it, or ratchet back because I've "won the game". I like having control over that, and I would not want some fund manager to be making all of those decisions for me.
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Old 02-10-2014, 09:19 AM   #53
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I find Target Date funds a bit challenging in the ER world. They start with the assumption that you work until 65 years old. So for me, based on my age of 47, it would tell me to have a very high percentage in equities. I would guess around 80%. However, because I'm semi-retired, I would not want to have that much exposure. However, if I choose a fund that is designed for someone in retirement, it will drop the equity exposure significantly, again under the assumption that I'm around 65 years old and have at most a 30 year time horizon to plan for.

So I find myself looking for a target date that is somewhere in between the two, and I realize that by the time I find just the right date, I could have just as easily set the AA myself by using a lazy portfolio of two index funds and a bond fund or two, and then gradually adjusting the mix as I age.

In addition, I suspect that if the stock market does extremely well over the next decade, I may go one of two ways - keep the equity exposure high and go for it, or ratchet back because I've "won the game". I like having control over that, and I would not want some fund manager to be making all of those decisions for me.

I think you are spending WAY to much time analyzing a target date fund... the difference between a 2020 and a 2025 fund is going to be minimal....

And who says they are based on you working till 65 Nope, they ask you what year you plan to retire, not when you turn 65.... now, you might think that when you retire at say 50, the asset allocation is not what you want, but what they are doing is moving money to more income producing investments instead of growth investments as the vast majority of people are going to be living off their income from the fund...


I think the OP can do a target for now, getting it into Vanguard ASAP and then worry later if that AA is not right for her and adjust then....
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Old 02-10-2014, 09:29 AM   #54
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I think you are spending WAY to much time analyzing a target date fund... the difference between a 2020 and a 2025 fund is going to be minimal....
Well, I suppose I do like to analyze things!

Looking at the Vanguard Target Date fund for people who are in retirement (VTENX), I see an AA of 39.66% equities. If I move to a 2015 fund (VTXVX), it increases to 53%.

Based on my retirement date of last year, I would be in VTENX at 39.66%. If I were 65, I might be comfortable with that. But retiring mid 40's, that just doesn't feel right to me. And even 53% feels too low for my time horizon, even though that fund is for people who don't even plan to retire for two more years.

There is nothing wrong with these funds, but I would just recommend that an investor decide what AA they are comfortable with first, and then pick the fund that gets them there, rather than simply picking a fund based on their retirement date.
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Old 02-10-2014, 09:59 AM   #55
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No, you are apparently doing some good reading and learning a lot. If you want to stop the high fees/costs right now, just move all your funds to Vanguard. You can put it in a fund, or a group of funds, right now as a temporary measure while you do more reading and make plans for your permanent asset allocation.
No one can know what the "best" fund/mix of funds would be. A lot depends on your risk tolerance. I'd say that for most people, the best single-fund, set-it-and-forget-it answer would be the appropriate Target Date Retirement Fund. These contain a mix of assets that the folks at Vanguard believe are likely to be appropriate for a person retiring at various dates in the future. You'd have exposure to US stocks, foreign stocks, bonds, etc. Later you'll probably decide to customize your asset allocation, and that's fine (as 2B says, with the Target Funds you can't tweak them to maximize tax efficiency, etc). I'd say 80% of investors would be better off in a low-cost Target Fund than in following the path they are currently on (hot stock sector of the month, investing in 100% CDs to "avoid risk" etc).

The simplest thing: move everything to a Vanguard money market account (or two: one for your IRA, one for your other investments) while you figure out what to do next. That stops the Amerirpise fees and assures your assets won't go down if the market dips. The big risk with this is that you'll miss any gains if stocks go up while your money is parked there. On average (over many, many years) stocks have gone up over 8% per year, so on average you'd be better off leaving your money in the market (even with Ameriprise) than having it in a money market fund. But, years are very seldom average, and 2014 probably won't be average, either.

Good luck!
Cucumber,

I agree with what Samclem says. Especially the idea of moving everything to a Vanguard (in one money market for non IRA, and one for IRA) while you figure what to do next.

Years ago, I wasn't as deep in with a CFP as you are, but did just that. Moved everything to Vanguard, then learned about index funds and Dollar Cost Averaging (DCA). I've been happy with that strategy ever since.
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Old 02-10-2014, 02:28 PM   #56
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So I told my advisor that I have been doing research and am seriously considering moving all of our funds to Vanguard. Here is her response.

" I can assist with any changes to Vanguard funds and you can do this within your Ameriprise brokerage account. I do like some of the Vanguard funds, but just because they have lower fees, does not make them the most competitive overall. Which funds were your looking to invest in? I can help compare and offer suggestions."

Does this mean Ameriprise offers Vanguard funds and I don't have to move it? I'm so confused. So low fees aren't necessarily good? Are there times when you would want to pay high fees in order to get high return? But there's no guarantee and it's not really a proven method is it? From what I've read so far, it sounds like I would want the lowest fees and most diversified (i.e. Index funds).
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Old 02-10-2014, 02:48 PM   #57
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Here is her response.

" I can assist with any changes to Vanguard funds and you can do this within your Ameriprise brokerage account. I do like some of the Vanguard funds, but just because they have lower fees, does not make them the most competitive overall. Which funds were your looking to invest in? I can help compare and offer suggestions."
Reply: "Thank you very much for your offer of assistance. However, I am looking eliminate a significant layer of fees, that being yours."
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Old 02-10-2014, 02:49 PM   #58
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So I told my advisor that I have been doing research and am seriously considering moving all of our funds to Vanguard. Here is her response.

" I can assist with any changes to Vanguard funds and you can do this within your Ameriprise brokerage account. I do like some of the Vanguard funds, but just because they have lower fees, does not make them the most competitive overall. Which funds were your looking to invest in? I can help compare and offer suggestions."

Does this mean Ameriprise offers Vanguard funds and I don't have to move it? I'm so confused. So low fees aren't necessarily good? Are there times when you would want to pay high fees in order to get high return? But there's no guarantee and it's not really a proven method is it? From what I've read so far, it sounds like I would want the lowest fees and most diversified (i.e. Index funds).
Don't fall for it. Kind of late to be offering that now.

Call Vanguard and get them to do the transfer. They should be able to assist you and do most of the work.
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Old 02-10-2014, 02:49 PM   #59
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So low fees aren't necessarily good? Are there times when you would want to pay high fees in order to get high return? But there's no guarantee and it's not really a proven method is it? From what I've read so far, it sounds like I would want the lowest fees and most diversified (i.e. Index funds).
Your Ameriprise rep would prefer to keep you in her high-fee funds AND also collect her advisory fee. If you've wised up to that, she'll help you go to Vanguard funds and skip the high fund fees, but she'll still get her "cut" from the advisory fees (and maybe even charge you a brokerage fee to move the money). Do you really want to pay her over 1% every year for that? You've got $200K with them, that amounts to over $2000 per year.
High-cost managed funds do >not< outperform low cost funds. On average, they underperform them for three reasons:
- Fees charged to you to pay for their managers
- Added taxes you'll pay due to their trading (in a non-401K/non-IRA account)
- Added trading/transaction costs for the stocks they sell inside the funds.

Every year a share of managed funds do outperform their index. It's usually a small share, sometimes it is many. But nobody knows which funds these will be. Ameriprise doesn't know, and neither does your FA. If they did know, if they could invest and earn even slightly better than market returns on a consistent basis, they could become fabulously wealthy by trading options, they would not need to pester people like you and I so they can skim off a small commission. They don't know which funds will outperform, and if they tell you otherwise then they are simply lying.

If you tell your FA which Vanguard funds you plan to invest in, you can bet her "research" will turn up several funds with better performance- - -in the past. Maybe with much higher risk. Just like I can tell you with 100% certainty who will win the 2014 Super Bowl.

Keep reading the books on low-cost investing ("Bogle on Mutual Funds", etc). Your FA is only looking out for her commissions. Don't back down, escape and be ruthless about it.
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Old 02-10-2014, 02:53 PM   #60
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So I told my advisor that I have been doing research and am seriously considering moving all of our funds to Vanguard. Here is her response.

" I can assist with any changes to Vanguard funds and you can do this within your Ameriprise brokerage account. I do like some of the Vanguard funds, but just because they have lower fees, does not make them the most competitive overall. Which funds were your looking to invest in? I can help compare and offer suggestions."

Does this mean Ameriprise offers Vanguard funds and I don't have to move it? I'm so confused. So low fees aren't necessarily good? Are there times when you would want to pay high fees in order to get high return? But there's no guarantee and it's not really a proven method is it? From what I've read so far, it sounds like I would want the lowest fees and most diversified (i.e. Index funds).
She's just looking out for herself. I dont think Vanguard offers funds for FAs (class c) but if Ameriprise is involved you will be paying them something.

You understand, there are few active fund managers that consistently beat their index. Even if they do, in taxable accounts the churn could eat up any extra retuns from taxes. Your on the correct path, run away.

If this advisor thought Vanguard was the correct place to be, likes some of their funds, why didnt they put you in them to begin with? You know why!
Best wishes,
MRG
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