Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
Old 03-14-2015, 10:04 AM   #21
Thinks s/he gets paid by the post
 
Join Date: Oct 2012
Location: Colorado Mountains
Posts: 2,143
Quote:
Originally Posted by O2Bfree View Post
An FA at my bank is trying to talk me into moving one of my matured IRAs into a frond-load mutual fund. I have just over $10,000 in the IRA. Among the funds he's offering is the Franklin Rising Dividends Fund Class A (FRDPX). It's front-loaded at 4-5%, depending on the amount invested, and has a 0.91% management fee, which includes 12b-1 fees.

The fund's performance looks pretty good, and my portfolio is light on dividend producers, but I'm wary for a number of reasons.

First, I've never really gotten any good advice from FAs. They've talked me into buying funds that performed poorly and tried to talk me into selling stock that has continued to rise after they said it was due to drop, for the purpose of investing in their recommended stocks or funds.

Second, I've read that loaded funds should be avoided because they don't necessarily perform any better than no-load funds.

Third, the fees are higher than, say, an index fund, and there seems to be little evidence that higher fees mean better performance.

So what you you all think?
If you go with this fund, you can think of yourself as a kindly uncle who is helping the nephew FA feed his hungry family (and also help him make the payments on his Mercedes.) You will be reminded of your kindness when they take out the fees for years to come.
__________________

__________________
Hermit is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 03-14-2015, 11:10 AM   #22
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Apr 2013
Posts: 5,584
Quote:
Originally Posted by O2Bfree View Post
An FA at my bank is trying to talk me into moving one of my matured IRAs into a frond-load mutual fund. I have just over $10,000 in the IRA. Among the funds he's offering is the Franklin Rising Dividends Fund Class A (FRDPX). It's front-loaded at 4-5%, depending on the amount invested, and has a 0.91% management fee, which includes 12b-1 fees.

So what you you all think?
Your reasons to be afraid are sound. Great reasons not to do business with the bank. As someone said banks are terrible places to invest. You're better off with moving your money to Vanguard, Fidelity, Schwab.

You wrote "Among the funds he's offering". Don't you want to be in control of what funds you buy? "He's offering" sounds like the relationship is backwards. Your money, your choices, you are in charge. I'd take my money elsewhere. The bank is treating you like it's the last century. The .25% 12B-1 fee is more than you'll pay on any low cost index fund or etf. The bank takes that money, for what? That's why the bank offers these funds they take the load, and reoccurring fees. They win, getting paid with your money? No, it doesn't work like that today!
__________________

__________________
MRG is online now   Reply With Quote
Old 03-14-2015, 11:22 AM   #23
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: May 2004
Posts: 11,615
Quote:
Originally Posted by travelover View Post
Move your IRA to Vanguard. This bank has demonstrated that they just consider you a sucker.
+1. You'd be making a big mistake going this route. If I found out my bank was offering these things (or allowing them to be offered in their branches), I'd have a talk with the branch manager, write a letter to the HQs, and get my money out of that institution and into a place where they have some interest in the financial well-being of their customers.
__________________
"Freedom begins when you tell Mrs. Grundy to go fly a kite." - R. Heinlein
samclem is offline   Reply With Quote
Old 03-14-2015, 11:30 AM   #24
Full time employment: Posting here.
 
Join Date: Jul 2011
Posts: 721
Quote:
Originally Posted by ERD50 View Post
And it doesn't even look like that includes the effect of the ~5% FE load. Else, it would show that $10,000 invested is actually $9,500 invested, no?

-ERD50
Good question and I'm not entirely sure. But I would think that the expense adjustment must be built in over time so they can show growth of $10,000 on an apples to apples basis.
__________________
panacea is offline   Reply With Quote
Old 03-14-2015, 12:34 PM   #25
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
pb4uski's Avatar
 
Join Date: Nov 2010
Location: Vermont & Sarasota, FL
Posts: 16,439
Quote:
Originally Posted by ERD50 View Post
And it doesn't even look like that includes the effect of the ~5% FE load. Else, it would show that $10,000 invested is actually $9,500 invested, no?

-ERD50
Yes, I don't think the M* growth or $10k charts account for the 5% load because the chart starts out at $10,000 at time 0. That is why in the comparisons that I did in post #20 I took the ending values times 95% to account for the 5% load and get an apples-to-apples comparison with the no-load fund.
__________________
If something cannot endure laughter.... it cannot endure.
Patience is the art of concealing your impatience.
Slow and steady wins the race.
pb4uski is online now   Reply With Quote
Old 03-14-2015, 01:30 PM   #26
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Mulligan's Avatar
 
Join Date: May 2009
Posts: 7,380
O2B you missed a chance to have some fun. After being offered that "deal", you should have responded "I thought those 5% loads were illegal. I could have sworn I saw on an American Greed episode where someone went to jail peddling those 5% loaded funds".


Sent from my iPad using Tapatalk
__________________
Mulligan is online now   Reply With Quote
Old 03-14-2015, 01:47 PM   #27
Moderator
Alan's Avatar
 
Join Date: Jul 2005
Location: Eee Bah Gum
Posts: 21,109
Quote:
Originally Posted by Gatordoc50 View Post
My DD has a employer sponsored Simple Plan that only offers front end loaded American Funds. I hate the fees but still recommend that she max out her contribution. She has recently become a partner so hopefully she can convince the majority owner to switch to a better plan.
My son is in a similar situation with his company's 401k and I was disappointed for him when I first saw them, but the front end fees are waived in his plan. You may want to check if your DD's contributions are indeed reduced by a front end fee before the shares are bought.
__________________
Retired in Jan, 2010 at 55, moved to England in May 2016
Now it's adventure before dementia
Alan is online now   Reply With Quote
Old 03-14-2015, 01:53 PM   #28
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Apr 2013
Posts: 5,584
Quote:
Originally Posted by Alan View Post
My son is in a similar situation with his company's 401k and I was disappointed for him when I first saw them, but the front end fees are waived in his plan. You may want to check if your DD's contributions are indeed reduced by a front end fee before the shares are bought.
I've seen that too.
__________________
MRG is online now   Reply With Quote
Old 03-14-2015, 02:01 PM   #29
Moderator
Walt34's Avatar
 
Join Date: Dec 2007
Location: Eastern WV Panhandle
Posts: 16,544
Quote:
Originally Posted by pb4uski View Post
Crazy. Run.

Move your IRA to Vanguard or PenFed.
What he said.

That's near-insanity for someone who doesn't have a clue. Agree with the others that I would immediately sever my relationship with that bank. They are clearly just trying to fleece you.
__________________
I heard the call to do nothing. So I answered it.
Walt34 is offline   Reply With Quote
Old 03-14-2015, 03:08 PM   #30
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Sep 2005
Location: Northern IL
Posts: 18,282
Quote:
Originally Posted by panacea View Post
Good question and I'm not entirely sure. But I would think that the expense adjustment must be built in over time so they can show growth of $10,000 on an apples to apples basis.
Quote:
Originally Posted by pb4uski View Post
Yes, I don't think the M* growth or $10k charts account for the 5% load because the chart starts out at $10,000 at time 0. That is why in the comparisons that I did in post #20 I took the ending values times 95% to account for the 5% load and get an apples-to-apples comparison with the no-load fund.
I agree it does not appear to be taken out. I'm guessing that they are figuring you could already have the money in there from more than 10 years ago, and often additions are not loaded (I think?).

So to take out the load, they'd have to make some statement like "Growth of $10,000 of initial investment after FE Load", but they should at least have a prominent notice that the chart does not reflect the FE load on new money.

-ERD50
__________________
ERD50 is offline   Reply With Quote
Old 03-15-2015, 06:33 PM   #31
Recycles dryer sheets
 
Join Date: Jan 2014
Location: Everett
Posts: 284
Thanks all! I'll walk on this one!

Quote:
Originally Posted by aja8888 View Post
I think the OP answered all his own questions....
...her own questions .
__________________
O2Bfree is online now   Reply With Quote
Old 03-15-2015, 07:18 PM   #32
Thinks s/he gets paid by the post
 
Join Date: Jul 2005
Posts: 3,862
A "matured IRA"? Since it is at a bank I assume this is a CD. And here we are telling you to place it in a Vanguard equity fund. While that may be a good option, you need to consider how much you want in equities, bonds, and cash before you go switching between them. You may want to stay in a CD.
__________________
Animorph is offline   Reply With Quote
Old 03-16-2015, 08:11 AM   #33
Recycles dryer sheets
 
Join Date: Jan 2014
Location: Everett
Posts: 284
Quote:
Originally Posted by Animorph View Post
A "matured IRA"? Since it is at a bank I assume this is a CD. And here we are telling you to place it in a Vanguard equity fund. While that may be a good option, you need to consider how much you want in equities, bonds, and cash before you go switching between them. You may want to stay in a CD.
Yes, it's a CD. I'm currently at 62% in equities and 32% in bonds, cash, and such. I'm almost 53, with $1.025 M in retirement assets, and hope to retire within four years. Perhaps my investments are a bit heavy on the risky side for where I am, but with the market as it's been, that hasn't been a bad thing. But it'd probably be ok to leave it in a CD.

At any rate, you guys got my ire up . Thanks!
__________________

__________________
O2Bfree is online now   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
Front Load Washing Machine Pete Other topics 79 07-08-2010 08:52 PM
Front load washer tryan Other topics 8 06-13-2009 10:34 AM
Question On Load Waived Mutual Funds Alan123 FIRE and Money 3 07-01-2008 06:35 AM
Washer:Front load versus Top Load gwix98 Other topics 11 12-09-2006 03:39 PM
Hedge fund-like mutual fund: SWHEX brewer12345 FIRE and Money 2 11-01-2005 02:29 PM

 

 
All times are GMT -6. The time now is 04:04 PM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.