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Old 12-14-2007, 10:52 AM   #41
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Originally Posted by FUEGO View Post
Financedude,

Maybe you should spend an hour or so tooling around the vanguard advisor's site. They actually have most of what "Barclay's and others" offer, from what I can tell without registering for a login ID. Sure, it might take you a couple hours to figure out what they have to offer, but after all, if you can save your clients tens of thousands of dollars in fees, wouldn't it be worth your while?
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Do you workfor Vanguard or something?

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After all, aren't folks paying you to advise them. I'd expect no less from an adviser if I chose to retain one.
I am not paid by my clients to index........they can do that themselves.........

I know this may be hard to understand, but Vanguard is not the only well-run financial firm in America............
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Old 12-14-2007, 11:04 AM   #42
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"Okay I'll ask again ,what are the benefits of a ETF as compared to a index fund ?"

I'd like to know the answer to this too. FD, gonna help us out here or ignore the question again?
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Old 12-14-2007, 11:04 AM   #43
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Originally Posted by Moemg View Post
Okay I'll ask again ,what are the benefits of a ETF as compared to a index fund ?
Okay, a quick, probably insufficient, answer:

Assuming that both have the same holdings, an ETF generally has lower expenses. You'll have higher trading costs to buy and sell the ETF, since the commissions are similar to the commissions for stocks (through discount brokers you can get this down to about $10 for trade). Of course, the no-load MFs charge nothing to buy or sell.

ETFs are good for people who:
- Want to trade a lot. Many of the low-cost MF providers put limits in place to discourage frequent trading, but you can buy/sell ETFs through your broker every time the panicked talking heads come on CNBC. Just pay the fee.
- Buy-and-holders who want rock-bottom costs.

MFs are best for:
- Those who are accumulating small amounts monthly or selling small amounts monthly. They pay no trading costs, and these trading costs costs can easily overwhelm the slightly lower internal costs of ETFs.

IIRC, one reason for the slightly lower internal costs of ETFs is the way taxes are handled.

All that said, I don't own any ETFs yet. I should, as I would be saving some money compared to index funds, but I just haven't gotten around to making the changes and don't want to take the tax hit in our taxable accounts. A lot of folks will probably sell their MFs during the short window before the cap gains tax goes up in 2010 and will buy into ETFs when they do.
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Old 12-14-2007, 11:06 AM   #44
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Originally Posted by Getting short View Post
"Okay I'll ask again ,what are the benefits of a ETF as compared to a index fund ?"

I'd like to know the answer to this too. FD, gonna help us out here or ignore the question again?
Do I know you?
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Old 12-14-2007, 11:08 AM   #45
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Okay, a quick, probably insufficient, answer:

Assuming that both have the same holdings, an ETF generally has lower expenses. You'll have higher trading costs to buy and sell the ETF, since the commissions are similar to the commissions for stocks (through discount brokers you can get this down to about $10 for trade). Of course, the no-load MFs charge nothing to buy or sell.

ETFs are good for people who:
- Want to trade a lot. Many of the low-cost MF providers put limits in place to discourage frequent trading, but you can buy/sell ETFs through your broker every time the panicked talking heads come on CNBC. Just pay the fee.
- Buy-and-holders who want rock-bottom costs.

MFs are best for:
- Those who are accumulating small amounts monthly or selling small amounts monthly. They pay no trading costs, and these trading costs costs can easily overwhelm the slightly lower internal costs of ETFs.

IIRC, one reason for the slightly lower internal costs of ETFs is the way taxes are handled.

All that said, I don't own any ETFs yet. I should, as I would be saving some money compared to index funds, but I just haven't gotten around to making the changes and don't want to take the tax hit in our taxable accounts. A lot of folks will probably sell their MFs during the short window before the cap gains tax goes up in 2010 and will buy into ETFs when they do.
great post...articulated better than I could have....thanks........
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Old 12-14-2007, 11:09 AM   #46
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I'd like to know the answer to this too. FD, gonna help us out here or ignore the question again?
Please see my short response. IMO, FD has no obligation to respond, especially as this topic (ETFs vs MFs) is not what he started the thread to discuss. If you demand quick answers from a particular person, you should pay an advisor.
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Old 12-14-2007, 11:12 AM   #47
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Please see my short response. IMO, FD has no obligation to respond, especially as this topic (ETFs vs MFs) is not what he started the thread to discuss. If you demand quick answers from a particular person, you should pay an advisor.
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Old 12-14-2007, 11:16 AM   #48
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samclem,
Thanks for your excellent explaination! No, I don't assume that FD has an obligation to answer anything, but since he was going on extensively about how informed he is about this subject, I thought that he would answer a straightforward question. I was not demanding a quick answer, just referring to the fact that he was responding to other questions, but not to this one. Actually, I do pay an advisor, but for some reason I thought that a question like this was what this board was about. Sorry, I must have been wrong, bye.
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Old 12-14-2007, 08:44 PM   #49
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Originally Posted by FUEGO View Post
I'm still not clear on what else is needed to know beyond publicly available information in prospectuses/annual reports/SEC filings plus the VG website.

Is the complaint that there isn't a dedicated adviser hotline you can call in to ask questions about funds? As a vanguard customer, I can call in and talk to very knowledgeable folks. Is a similar service not available to advisers?
Allow me to (try) to clarify.

Barclays (iShares) is a great example of what you can give advisors without charging high fees. Barclays (through their distributor SEI Investments) offers a ton of sales support for their advisor clients. there is a dedicated advisor website that allows you to create proposals, a correlation calculator along with an analysis tool to help you integrate ishares into existing portfolios. In addition, the offer you a dedicated internal wholesaler who will do a lot of the proposal work if you ask them.

We don't use a lot of their tools, but for a smaller shop they could be a huge help for both the advisor and the investing public.
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Old 12-14-2007, 09:17 PM   #50
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samclem,
Thank you ! I do have an ETF QQQ but I never was really sure of the advantages .Thanks again you made it simple !
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Old 12-15-2007, 10:25 AM   #51
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Quite honestly, Vanguard has been weak on this issue........I got some calls a year ago asking me to do ETF business with Vanguard, but their support is terrible.
I don't get it, FD, and here's what I think the others are asking.

If you're a qualified financial advisor then my impression is that you should already have a pretty powerful toolbox at your disposal. Yet you're complaining that Vanguard is of no use to you because they don't give you any tools. I agree with your assessment of Vanguard, but why do you need their tools to do their job? Don't you already have tools of your own?

If you already have your own tools, it would seem to benefit you to invest your client's money in the lowest-overhead investments (in accordance with the IPS you've crafted for them) to give yourself the biggest margins you can find. Conversely you could offer your clients a "rock-bottom" fee with Vanguard ETFs or a slightly higher fee with anyone else, and let them choose.

What about your clients who happen to be eligible to invest in the TSP, with even less service than Vanguard and only a 0.03% ER? Do you tell them that you can't use the TSP in their portfolio?

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If you want an ETF that uses quantitative screens in it's process, then I can't use Vanguard....it's that simple...............
I thought much of Vanguard's ETF offerings were based on the same indexing skills that Gus Sauter has applied to their mutual funds. Or else they're making up their ETFs from other agency's indexes, both of which would imply some quantitative screens. So I don't understand this comment, and perhaps it's not that simple after all.

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You seem to be dodging the question and if this is too personal or confidential, just say so, no problem.
I'm no fan of Vanguard myself, FinanceDude, but your treatment of the poster's questions-- to say nothing of the posters-- makes me feel sympathetic toward Vanguard's attempts to educate financial advisors. Maybe they're really trying to tell you that you're paying too much for fancy tools.

The way you've treated this thread should have the posters in an uproar over your restriction of free speech, your lack of knowledge of how the moderator features affect the users, and your persistent gibes & jokes instead of straight answers. You posted the article but you don't seem to be willing to handle the discussion you evoked with it.

You screwed up by closing the thread. You seem reluctant to admit that, although I appreciate that much goes on behind the scenes that posters do not see. IMO your flip answers and your precipitate action, followed by your lack of appreciation for treating the posters you used to be a part of, and perhaps only acting before the other moderators take action in your place, does not improve your credibility as a financial advisor or as a moderator.

And yes, I had to check: vBulletin has informed me "Sorry FinanceDude is a moderator/admin and you are not allowed to ignore him or her."
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Old 12-17-2007, 12:12 AM   #52
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I don't get it, FD, and here's what I think the others are asking.
This is my last post on this thread. Admittedly, I violated several unspoken rules on here: 1)Don't pick on Vanguard, 2)Don't pick on anyone that picks on Vanguard (the article I posted), and 3)Don't expect that people know what you are trying to say, or assume anything............

Quote:
If you're a qualified financial advisor then my impression is that you should already have a pretty powerful toolbox at your disposal. Yet you're complaining that Vanguard is of no use to you because they don't give you any tools. I agree with your assessment of Vanguard, but why do you need their tools to do their job? Don't you already have tools of your own?
The tools for my job are aplenty, it's almost overkill. What happens to advisors like me is we look for a support network of folks that we can leverage to help us help clients, in effect time manage through them, and their "reward" if you will is the hopeful expectation that I will not only continue to do business through them but increase the amount of business I do with them. One should not assume the customer service they get as a no-load customer at Vanguard is as good as or better than an advisor gets. Quite honestly, Vanguard has a long way to go with advisors to get to where their direct fund business side is. I was agreeing with the article, in all simplicity.........:confused:

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If you already have your own tools, it would seem to benefit you to invest your client's money in the lowest-overhead investments (in accordance with the IPS you've crafted for them) to give yourself the biggest margins you can find. Conversely you could offer your clients a "rock-bottom" fee with Vanguard ETFs or a slightly higher fee with anyone else, and let them choose.
An IPS (Investment Policy Statement) does not necessarily involve investing in the lowest cost instrument. Hedge funds, managed futures, commodities, and the like are not known for low costs, but offer other benefits.......... Most of my clients have loads of mutual funds, and use our firm as a diversification model different from their current one. We charge a fee based on assets managed, but it is all-inclusive, adjusted based on what's in the portfolio, etc. We do not use MF and wrap a fee around them like some on here have assumed............

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I thought much of Vanguard's ETF offerings were based on the same indexing skills that Gus Sauter has applied to their mutual funds. Or else they're making up their ETFs from other agency's indexes, both of which would imply some quantitative screens. So I don't understand this comment, and perhaps it's not that simple after all.
As I stated above, the clients we have do not pay us to index. As a matter of fact, we specifically tell them we are not trying to "beat the index" up front. We tell them we could lag in a boom market because our portfolios have a lower beta than the market. However, we use covered call writing and strategic use of put options in volatile markets to lower risk, etc, etc.

Quote:
I'm no fan of Vanguard myself, FinanceDude, but your treatment of the poster's questions-- to say nothing of the posters-- makes me feel sympathetic toward Vanguard's attempts to educate financial advisors. Maybe they're really trying to tell you that you're paying too much for fancy tools.
I made a statement about my experience as it compares to an article I posted in an FA trade magazine. If folks can take Al Gore's book and post quotes verbatim, and use it as a bible about global warming, I don't see the harm I caused............:confused::confused:

Quote:
The way you've treated this thread should have the posters in an uproar over your restriction of free speech, your lack of knowledge of how the moderator features affect the users, and your persistent gibes & jokes instead of straight answers. You posted the article but you don't seem to be willing to handle the discussion you evoked with it.
Nords, if I really pissed you off you could have PM'd me instead of dragging this into the overall thread.........

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You screwed up by closing the thread.
I said I was sorry, I didn't know that was not enough...........

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You seem reluctant to admit that, although I appreciate that much goes on behind the scenes that posters do not see. IMO your flip answers and your precipitate action, followed by your lack of appreciation for treating the posters you used to be a part of, and perhaps only acting before the other moderators take action in your place, does not improve your credibility as a financial advisor or as a moderator.
Admittedly, I am adjusting to being a new moderator. It is a different world than just posting on here. I think PM's are the best way to settle differences, but some folks like to play it out in public, I guess you are one of those folks..........not much I can do about it as far as I can see...................
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Old 12-17-2007, 09:26 AM   #53
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Nords, if I really pissed you off you could have PM'd me instead of dragging this into the overall thread.........
Admittedly, I am adjusting to being a new moderator. It is a different world than just posting on here. I think PM's are the best way to settle differences, but some folks like to play it out in public, I guess you are one of those folks..........not much I can do about it as far as I can see...................
Oh, but I do use PMs for about 95% of the situations. You don't have to take my word for it; maybe you should talk with some of the other long-term moderators or Andy R.

Or go read the exchange that Cut-Throat and I had concerning his moderation skills. I don't have the access to look that one up.

The reason I "played this out in public" is because you don't appear to be taking responsibility for your moderator actions-- you respond to very real poster concerns with one-liners and emoticons instead of complete thoughts that validate a poster's concerns. You, in your occupations, would presumably have learned to do the latter and your choice of the former implies that you really aren't that concerned about the poster. (Look at all the posters who objected to the moderation of SG's posts, and then read the moderator's board comments about that situation.) If you did something in a PM then great, but the rest of the board can't see that. I thought it would be appropriate for someone to show that they really do give a damn about what a poster thinks and to do so in public instead of five PM addresses at a time. You didn't even apologize for closing the thread, let alone discuss the concerns that led you to do so in the first place or the reasons you changed your behavior.

Much of a moderator's work goes on behind the scenes, which may be appropriate in most situations when a poster misbehaves, but it's very difficult for the rest of the posters to see that anything has been done to enforce the board's standards. This is difficult enough when the issue is a poster's behavior, let alone a moderator's. Now instead of wondering what's going on, a poster can at least see that something is being done.

Maybe you can use your team skills to work a little more closely with the other moderators on developing those poster-interaction skills, or at least not act so precipitously by doing things that have greatly annoyed people in the past.

And when you're a moderator talking about moderator actions, perhaps it'd come across better if you drop the emoticons. Or, heaven forbid, apologize for moderator mistakes.
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Old 12-17-2007, 10:29 AM   #54
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I think we can let the thread closing issue go. In post 24 FD said he was wrong and why he reopened the thread.
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Old 12-17-2007, 02:24 PM   #55
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I think we can let the thread closing issue go. In post 24 FD said he was wrong and why he reopened the thread.
Agreed. Thank you, everyone, for working on this.
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