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Old 11-10-2010, 11:19 AM   #81
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Just an FYI, you can buy American Funds products at places other than Ameriprise, JohnGalt.
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Old 11-10-2010, 12:13 PM   #82
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It sure sounds like a corrupt company to me. They set up a system so the advisors have to choose between selling a probably unsuitable product to their clients, or getting fired.
Not really, more of a packaged product that is priced to support their promises and pay everyone along the way. Amerprise owns their own annuity company called Riversource. Unless you have a good reason AND are one of their TOP producers, the wrath of God will descend upon you if you put them in another annuity company.

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Like Lisa, I'm pleased to be a former Ameriprise client. I suggest if you are going to use a financial advisor, go with a fee-only one.
Did you mean hourly fee, or fee-based?
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Old 11-10-2010, 12:26 PM   #83
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Continuing on, I offer:

Part 2: The firm the FA works for point of view:

Much of this depends upon what kind of firm the FA works for. If they work for a "wirehouse" (Merrill Lynch, Smith Barney, etc) the firm caps payouts at around 45-50% unless you are one of the largest producers there. Like I said, most VAs are sold with 7 year or longer surrenders, so the brokerage firm gets roughly 7% of the lump sum as commission. So, on a $100,000 annuity sale, the FIRM collects $7,000. They then apply that to a commission "grid" that the rep's cut is taken from, generally 42-48%, but sometimes 50%. At 50%, the wirehouse rep gets $3,500 as W-2 income, and the firm keeps the other $3,500 to pay marketing desk space, phone expense, etc. Not a terrible deal for them. At banks, they really screw the reps, since their mantra is that since the rep gets a ready-made "book" of business to call on, so they are capped at 35% commissions, and the bank keeps 65%.

Brokerage firms like large commission items like VAs. As far as compliance on these products, it is pretty strict as fas as what documentation is needed to process the sale. Most firms have pretty stringent forms that need client signatures and a review from a Compliance officer before the sale is finalized. That being said, most VA sales are approved at most firms, unless there is evidence of churning or other improprities.

Most brokerage firms have selling agreements with the big insurers, i.e. Pacific Life, Prudential, Nationwide, Allianz, ING, Hartford and John Hancock. However, at Amerprise, you have to use Riversource, so there's only one option.
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Old 11-10-2010, 01:06 PM   #84
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How do mutual funds hide their fees? Even VG has transaction costs.........
Oh the game I hear they play, is that they pay (big time) their in-house team for "research" and then tack that onto the transaction costs. You never see it. But it comes out of your pocket.
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Old 11-10-2010, 02:24 PM   #85
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Oh the game I hear they play, is that they pay (big time) their in-house team for "research" and then tack that onto the transaction costs. You never see it. But it comes out of your pocket.
You "hear" this. but do you know it for a fact? Sounds like "hearsay".....
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Old 11-10-2010, 02:27 PM   #86
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Get the insurers to play ball..they are the ones who set the high fees inside the annuity.........why blame the advisor?


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Old 11-17-2010, 09:01 AM   #87
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I'm back!

Wow! This thread took a life of its own..but now I'm returning it back to me since it was all about me in the beginning anyway.

So, I am finally completely free of Ameriprise's grip, have all my money and am ready to gamble, I mean invest.

I already rolled over 45K into an IRA at Vanguard, some of which I was thinking of converting to a Roth IRA. I also have about 35K that I want to invest which will, of course, have to go into a taxable account.

However, as much reading as I've been doing, I just know that I'm going into this blindly and so I thought that I would hire a Vanguard Financial Advisor. With about 80K that I will have at Vanguard, I'll be a Voyager member. Woohoo!! I wonder what that means in terms of dryer sheets??

Anyway, it would only be $250, I think. Is it worth it?? I ask because someone, FD I think, made a smart quip about Vanguard giving tax advice.

Thanks again!
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Old 11-17-2010, 09:40 AM   #88
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From my observations Vanguard gives the same advice to most people. They recommend keeping investments very simply (index funds) with core choices.

We had a mid six-figure portfolio to invest with them and their recommendations included Vanguard Total Stock Market Index, Vanguard Total International Index, Vanguard Small Cap Index and Vanguard Bond Market Index. (we're 6+ years from retirement)

They also gave advice on which funds should be in tax deferred vs taxable and on the percentage split of each fund based on our asset allocation.

I personally would pay them to build a plan. When meeting with the advisor it is a learning opportunity (he answered endless questions that I had) and $250 is a small price to pay when you're talking about your retirement funds.
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Old 11-17-2010, 09:41 AM   #89
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..........
Anyway, it would only be $250, I think. Is it worth it??..............
Personally, I would not pay it, at least not until I'd read a few key books off the Boglehead's reading list, starting with the Bogleheads Guide to Investing. I'd also post over at Bogleheads for suggestions for your taxable account. I suspect you'll get a recommendation for the total US market plus international index funds.

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Old 11-17-2010, 09:44 AM   #90
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Personally, I would not pay it, at least not until I'd read a few key books off the Boglehead's reading list, starting with the Bogleheads Guide to Investing. I'd also post over at Bogleheads for suggestions for your taxable account. I suspect you'll get a recommendation for the total US market plus international index funds.

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Very good point on self-educating first, but I think if you're really new at this having the planner help might make one sleep better at night.
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Old 11-17-2010, 10:11 AM   #91
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Hint: if you want to reach FIRE, never use the words "only" and "$250" in the same sentence.
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Old 11-17-2010, 11:05 AM   #92
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Hint: if you want to reach FIRE, never use the words "only" and "$250" in the same sentence.
The funny thing is that I throw around so much money because I save so much money, if that makes sense.

But, now, I just want to throw my money in investments since I've caught the FIRE fever!

I've been reading quite a bit and visiting forums and other websites, but too frequently I come across information or a suggestion that throws a curve ball at whatever investment plan I have at that moment.

So, I figured that throwing money at a professional might be a smart thing to do. Though, NOT ONE FROM AMERIPRISE!!!!

Also, the tax events are confusing me more than anything else.
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Old 11-17-2010, 11:33 AM   #93
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..............
So, I figured that throwing money at a professional might be a smart thing to do. ...........
Hint#2: No one cares as much about your money as you. That is why you need to self educate, even if you end up hiring a "professional". It ain't rocket science.
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Old 11-17-2010, 11:38 AM   #94
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Personally, I would not pay it, at least not until I'd read a few key books off the Boglehead's reading list, starting with the Bogleheads Guide to Investing. I'd also post over at Bogleheads for suggestions for your taxable account. I suspect you'll get a recommendation for the total US market plus international index funds.

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+1 Good advice.
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