Fee for Financial Advisor

[brewer12345]

Oh good grief
the right wing Ayy Rand "lets destroy social security" crowd decry the "Nanny state" and Paternalism and insist that every Jeffersonian Yeoman farmer can take care of him or herself. Kill those pensions and go to 401 ks At the same time the vultures are circling the poor unfortunates with claims that they need external hand-holding and discipline

Or is it just that the poor bastards are told they need privately paid FAs instead of that nasty old social security system ?

If we need to look after people since they might make wrong choices nothing does it cheaper than social security.

[-]So did that tractor that was pulling the telephone pole out of your butt break down?[/-]

What on earth are you talking about?

 

[Emeritus]

[-]So did that tractor that was pulling the telephone pole out of your butt break down?[/-]

What on earth are you talking about?

The thread is on fees for financial advisers. Why would ordinary people need financial advisers? To plan retirement? But that's what pensions were for.
Pensions were enthusiastically destroyed by those who are now trying to destroy social security on the mantra that people can do it on their own. Whether people can do it on their own is a question of fact. The FAs are happy to do it for a service fee. So we have come full circle. We now have people who want to be paid a fee for doing something that was never needed.

My academic field is the quality of evidence used to support regulatory processes. I try to distinguish slogans from evidence.

 

[FinanceDude]

The thread is on fees for financial advisers. Why would ordinary people need financial advisers? To plan retirement? But that's what pensions were for.

Don't know where you've been living, but pensions are all but extinct, except for govt and state employees and military.

Pensions were enthusiastically destroyed by those who are now trying to destroy social security on the mantra that people can do it on their own. Whether people can do it on their own is a question of fact. The FAs are happy to do it for a service fee. So we have come full circle. We now have people who want to be paid a fee for doing something that was never needed.

Blah-balh-blah.........

My academic field is the quality of evidence used to support regulatory processes. I try to distinguish slogans from evidence.

Greatest oxymoron this year on here..........

 

[brewer12345]

The thread is on fees for financial advisers. Why would ordinary people need financial advisers? To plan retirement? But that's what pensions were for.
Pensions were enthusiastically destroyed by those who are now trying to destroy social security on the mantra that people can do it on their own. Whether people can do it on their own is a question of fact. The FAs are happy to do it for a service fee. So we have come full circle. We now have people who want to be paid a fee for doing something that was never needed.

My academic field is the quality of evidence used to support regulatory processes. I try to distinguish slogans from evidence.

Dunno about you, but I live in the real world. That means I try not to spend a lot of time and energy wishing for what was or might have been, and instead try to get on with the business of living life. So I don't spend a lot of time wishing the pension fairy would come and sprinkle some sparkling dust on all of us, because she is about as real as the easter bunny.

I wish everyone had the ability to capably manage their own financial affairs, but the evidence that is all around us emphatically demonstrates that this is not the case. You'll see me advocate to anyone who asks here that they manage their own affairs because if you are asking here you almost certainly have the ability to do so. But the general population has tens of millions of people who will never be able to do so and probably should not try. I wish it weren't so, but it is.

 

[Emeritus]

I wish everyone had the ability to capably manage their own financial affairs, but the evidence that is all around us emphatically demonstrates that this is not the case. You'll see me advocate to anyone who asks here that they manage their own affairs because if you are asking here you almost certainly have the ability to do so. But the general population has tens of millions of people who will never be able to do so and probably should not try. I wish it weren't so, but it is.

I agree, which is why the politically motivated attacks on social security and DB pensions were and are disgraceful

 

[ziggy29]

I agree, which is why the politically motivated attacks on social security and DB pensions were and are disgraceful

You know, it really *is* possible to think that most people can't manage their own retirement security and still think SS and DB public pensions (as we know them today) aren't the Holy Grail which is the only possible way to increase retirement security.

You want the masses to stop attacking DB pensions? Start advocating a plan to restore that deal to so many of us in the private sector who either lost it or never had it. I'm pretty sure you'll see a lot less backlash from people who feel like they are getting the same deal as well. The backlash comes when we lose our retirement security but are asked to sacrifice even more so others can keep it.

Until then, you have no idea what it feels like to walk in the shoes of the rest of us who will never know the retirement security that you have. "I got mine, now leave it alone and accept tax hikes to pay for it" is not an attitude that will fly very far or for very long.

 

[FinanceDude]

You know, it really *is* possible to think that most people can't manage their own retirement security and still think SS and DB public pensions (as we know them today) aren't the Holy Grail which is the only possible way to increase retirement security.

You want the masses to stop attacking DB pensions? Start advocating a plan to restore that deal to so many of us in the private sector who either lost it or never had it. I'm pretty sure you'll see a lot less backlash from people who feel like they are getting the same deal as well. The backlash comes when we lose our retirement security but are asked to sacrifice even more so others can keep it.

Until then, you have no idea what it feels like to walk in the shoes of the rest of us who will never know the retirement security that you have. "I got mine, now leave it alone and accept tax hikes to pay for it" is not an attitude that will fly very far or for very long.

+1

 

[Bestwifeever]

To give Emeritus his due, I'm interpreting his comments as saying when DB pension plans were established, we were led to believe we weren't smart enough to manage our own money so we had pensions instead. Now the pensions plans (and possibly SS) have been under attack not here on these boards but by government and corporations, who are now telling us we need to manage our own money and can use FAs (indirectly, in the managed fund plans that replaced pensions, or directly, in our own IRAs and other retirement accounts) since we're not smart enough to manage our own money, and we have to pay for that level of management, which wasn't needed with the pension plan. I don't think he is either attacking pension plans nor referring to the many, many threads and polls that have run ad nauseum recently re pension and other benefits for public employees.

But I'm not fluent in emeritusese, so I apologize if something got lost in translation.

 

[ziggy29]

To give Emeritus his due, I'm interpreting his comments as saying when DB pension plans were established, we were led to believe we weren't smart enough to manage our own money so we had pensions instead. Now the pensions plans (and possibly SS) have been under attack not here on these boards but by government and corporations, who are now telling us we need to manage our own money ....

Well, it *is* true we were sold 401Ks largely as a *supplement* to a pension plan. I suspect if we were told these plans would wind up *replacing* the DB pension for most large private sector employers, the general response would have been a bit less receptive. Of course, in retrospect, this was probably the corporate goal all along -- sell it as a supplement, use it as a replacement. Classic bait and switch. Which stinks, of course.

Having said that, my point to Emeritus still remains: if those who want their public DB pension plans protected and preserved for the future, don't sit around and do nothing while the rest of us fall farther and farther behind you. The farther they let us fall behind them (and expect us to keep propping up their deal), the more resentment and resistance there will be to the deal they are getting.

 

[Bestwifeever]

...
Having said that, my point to Emeritus still remains: if those who want their public DB pension plans protected and preserved for the future, don't sit around and do nothing while the rest of us fall farther and farther behind you. The farther they let us fall behind them (and expect us to keep propping up their deal), the more resentment and resistance there will be to the deal they are getting.

Most definitely agree. The private sector once made all the same promises the government made and look where those promises are. No one is immune.

 

[simas]

Dunno about you, but I live in the real world. That means I try not to spend a lot of time and energy wishing for what was or might have been, and instead try to get on with the business of living life. So I don't spend a lot of time wishing the pension fairy would come and sprinkle some sparkling dust on all of us, because she is about as real as the easter bunny.

+1

welcome to the real world - pensions were feasible at the time when we owned the world as far as production, productivity and output went. they were consequence and result of technological, industrial and ideological dominance that allowed us to afford them (at least for a while). neither currently exists , wishing for return of the pension fairy does not address the facts that our share of GDP is shrinking, that we went from being world's creditor to its worst debtor and are continuing to severely overextend ourselves every year spending more than we earn as a nation.
Political off-topic - what is worse is that we now have administration government that is bent on increasing itself (its share in the GDP) even more under 'free health care' strategies that only leads us to ruin faster. Expecting 'guarantees' of any kind from anyone over long term is silly, especially from the government that is notorious for changing rules in the middle of the game, sometimes severely ( taxability of social security benefits anyone)? so for my generation (30-40), give us something that is our own, something we can control , manage and take with us in any way we wish - not some empty promises decades from now that may or may not be honored at all (upps, sorry, we run out of money, decided you worked and saved but we will not give your own money to you because we think you 'do not need it as much' as the next guy). Seeing how badly government run social security and medicare programs (as far as their finances and unfunded liabilities go) I can not see who would anyone ever argue for more government involvement.

May be I am biased, but I came from the world there socialist dreams came true - no worries about unemployment (everyone is guaranteed a right to work), no worries about healthcare (everyone is guaranteed health care), no worried about education (all education is free), no worries about pension (the state provides all of the pensions as being the only employer), no worries about inequality , them greedy 'banksters' or financial advisors (full equality is guaranteed , any dissidents would be shot). the problem is that the only place there everyone is equal , meals and healthcare is guaranteed, and employment is guaranteed is prison, for all , and forever, see example of Soviet Union that tried to realize it. Every time we fear uncertainty, shrink from challenges by demanding certainty or 'equality' - we give up opportunity, liberty and through it prosperity. It saddens me beyond words to see one of the greatest cultures of the world to which I now proudly belong , move in such a horrible direction with well known and well experienced results throughout the world. there is reason why people are willing to die coming here, there is reason why hundreds of thousands of people are willing to wait decades to have an opportunity to leave in this country. whose who trade liberty in pursuit of security/stability deserve (and will receive) neither ...

 

[keegs]

We can argue whether the motivation to drop defined benefit plans is/was based on greed, globalization, ideology, demographics, deregulation or the unintended consequences of ERISA, my guess is that they're all contributors.

But the result I'm afraid has put retirement beyond the reach of many if not most Americans.

 

[Emeritus]

You want the masses to stop attacking DB pensions? Start advocating a plan to restore that deal to so many of us in the private sector who either lost it or never had it. I'm pretty sure you'll see a lot less backlash from people who feel like they are getting the same deal as well. The backlash comes when we lose our retirement security but are asked to sacrifice even more so others can keep it.

Until then, you have no idea what it feels like to walk in the shoes of the rest of us who will never know the retirement security that you have. "I got mine, now leave it alone and accept tax hikes to pay for it" is not an attitude that will fly very far or for very long.

I've heard those greedy state bondholders actually expect the taxpayers to pay off the bonds even though those who took higher returns to get corporate bonds got stiffed when the corporations went bankrupt. Why aren't "you" (plural) out there demanding the state default on its bonds? How can you be asked to sacrifice to pay the state's debts?

I took the low pay for years. Yes I feel I earned every penny of the pension. The others got their money up front. The majority of my colleagues are in the DC system. They leveraged that into bigger pay raises because they could threaten to leave.

 

[simas]

"
But the result I'm afraid has put retirement beyond the reach of many if not most Americans."

or may be we started confusing incredible privilege with 'right', as in 'we have a right to retirement'.
the idea of having enough money to not have to work and not starve to death doing so is born from abundance that is not common, natural or expected in majority of the world outside of the 'golden billion'. Life is pretty simple (and pretty brutal) there - you put it a day of work and you get to eat, you stop working (when you are unable to) and better hope your family likes you enough to feed you that evening. Nowhere is it expected that you get to 'travel the world', 'enjoy golf', take up your hobbies like sailing or flying and do it for a decade or more. Anyone who complains about 'retirement out of reach' has to review and examine his or her expectations. My grandparents (who now passed) very recently have been living on king's ransom worth of pensions in mid size city (0.8 million) in central Russia - all $250 worth of it a month for each of them based on 9+ decades worth of work between two of them . And groceries and utilities and clothes and everything else is pretty much the same price in Russia as it is here - so no travel (much less foreign travel), very limited budget majority of which is went to drugs/medicine and payment for the apartment, but happy neither-less. My family who is still in one of the 'stans' of former Soviet Union work for less than $100 a month which is considered a good salary and have to save for a year to afford cross border air-travel to see our relatives and it is also considered normal, unlike here where I can get Southwest tickets to most places in US for a few days worth of pay at most. Our (american) standard is living is so high and so much higher than the absolute majority of the rest of the world that we forget about it and take it granted, including idea of right to retirement. The big problem is that a lot of that standard of living was maintained through ever expanding consumption fueled by ever decreasing cost of credit generating artificial demand all of the sake of 'growth'. Now we having our first real hangover when we can not inflate growth by additional consumption (without devaluation and resulting drop in standard of living) , we can not decrease the cost of credit below zero, we can not create demand where there is none - something has to give and our joint standard of living will go down , the question is to what degree and how it will be distributed. The system will have to adjust and the sooner it does it , the less painful it will be - the example i saw with my own eyes was Soviet Union in early 90s when millions worth of livelihoods, dreams, hopes were all destroyed in matter of months as system collapse economically. Imagine saving to own a house for two decades and then see that money not buying you a piece of bread in two years. Imagine being told on Friday that we have new currency that takes affect on Monday and you are allowed to exchange $200 dollars worth per physical person, the rest would be frozen for 10 years, all for sake of equality and sticking it to the banksters ('speculators' in Soviet Union where private enterprise of any form was jailable crime) . If you have more money, sorry - they are worthless , feel free to deposit them to frozen accounts. If you have money in the accounts, you can not use them anymore or withdraw in any form.

 

[ziggy29]

Yes I feel I earned every penny of the pension.

I never said you didn't. And I have no desire to take a penny of it away.

(By the way-- although I don't think anything I'm about to say is over the line, this is ALL me as an individual, not as a mod.)

What I AM saying is that if you ignore the hose job some of us in the private sector got, you do so at your own peril.

Open your eyes to what is happening outside the ivory tower. People are losing jobs, getting their pay cut, losing their pension and their health insurance. Do you really expect these "pension have nots" -- a rather dominant majority of the population by now -- to just sit around while they keep getting screwed and acquiesce to bail out your pensions while (a) no one gives a damn about their 401K-based retirement AND (b) they are expected to sacrifice more to prop up your pension deal when no one cares to help them?

You need an attitude adjustment if so, IMO. Your best bet to get people supporting your retirement deal is not treating them like a bunch of private-sector mercenaries whose plans backfired and whose main purpose now is to secure your retirement even though theirs is set back by many years. Maybe you ought to think that maybe, if the "rest of us," the majority without the sweet pension deal, had some retirement security restored then maybe we'd be more likely to back yours?

If you think the majority of people with little retirement security should simply accept getting taxed more to protect "noble public servants" (whom you OBVIOUSLY think are more worthy than the rest of us mercenary private sector fiends; your repeated posts make that abundantly obvious) while no one gives a damn about the loss of our retirement security, you do so at the risk of increased backlash. And that in turn increases the risk of YOUR pension security -- something I personally don't want.

Right now many of us merely want to stop making the DB pension deal *as we know it today* to new hires. Keep acting like an adversary who insults our motives and acts like we should shut up and get back in line and you may see some folks wanting to go beyond just shutting it off for new hires.

Your choice. I really think you need to reconsider your attitude. If you see no problem with the private sector getting screwed, the private sector might see no problem screwing you back. I'd much rather see equilibrium come from bringing us up than from bringing you down, but if you continue to show you don't give a damn about what happens to us, it's silly to expect us to accept tax increases and service cuts to give a damn for you.

And again, speaking personally and not as a moderator, your "I'm nobler than thou because I chose public sector work" is a load of garbage. If it were totally altruistic (as you seem to be making it sound) you wouldn't refuse to see that sacrifice needs to be shared as compared to your apparent attitude that sacrifice only be borne by "other people" as long as you get yours. You wouldn't say "screw the private sector and make them pay more for me, give me everything I was promised even though much of the deal they signed up for was taken away." If you expect everyone else to sacrifice for you in a crisis so you don't have to sacrifice, your obvious claims to altruism are gone.

In short, sir, you are contributing to the backlash and the "pension envy" more than anyone else I'm aware of with your callous attitude toward those who don't have your deal (or had it taken away midstream). I can't believe someone with your academic credentials and education would think that's in your best interests.

I have been very clear in not wanting to yank the pension deal from anyone who is already in a system, and only applying changes to new hires. Your attitude is making it hard for me to maintain that position. I hardly think that's in your best interest, but what do I know? I don't have your academic credentials.

 

[simas]

"I've heard those greedy state bondholders actually expect the taxpayers to pay off the bonds even though those who took higher returns to get corporate bonds got stiffed when the corporations went bankrupt. Why aren't "you" (plural) out there demanding the state default on its bonds? How can you be asked to sacrifice to pay the state's debts? "

Emerirus,
I think it is being discussed now - the problem is that we do not have a known way for a state to go bankrupt and a system to handle it properly. Personally I would not mind it at all wiping out all of the delayed obligations , the problem is that we use borrowing extensively to close gaps and this deficit financing becomes unavailable when state default. Again, I would not mind it at all which would cause a real moment of reckoning when people of the state have to make real decision of how much are we willing to pay for these benefits and either pay more or use benefits less (decrease costs), and not dump these costs onto our children through borrowing. I believe this amounts to stealing from our children whenever receive benefits (spend) for more than we put in (pay in taxes in) and cover the rest through borrowing.


"
I have been very clear in not wanting to yank the pension deal from anyone who is already in a system, and only applying changes to new hires. Your attitude is making it hard for me to maintain that position."

Ziggy,

you are we better 'man' than me - I see no problems with it and see it happen all the time in multiple states. why is it different from any other system and how is it 'fair' to everyone else who is not in ivory towers to keep earlier unrealistic promises ? ' you, public employee , you had a plan , plan went bankrupt and can not support you anymore, ok , sucks to be you - the door is there, the Kleenex is on the table. this is exactly what happens to everybody else who works in this economy. why should we as taxpayers pay for some contract that was made with us, long before us and was unsustainable (fraudulent) to begin with - scrap it and start over. I think it would be actually better in the long run to kill all DB plans as it would force honesty into the system based on real market supply and demand vs corrupt and screwed up system of interests and unions we have right now. Put it to the vote and see what people say, the number of people paying for these costs far outnumbers the number of people benefiting from the system so results are easier to predict even with all the corruption unions are placing into political process (major contributors to democratic party).

As example - I live in Chicago that has a huge budget hole (enormous part of the are our obligations to police and firemen pensions, also almost all of the city budget goes to fire, police, streets and sanitation, remaining costs are minimal) and also have a shortage of cops who are willing to join. We can not have it both ways - getting good and motivated people while paying them below market rates with future promises and than complain about not being able to fund such promises, again something has to give. We can not keep same pay level and eliminate future benefits as we would have no police, and we can not support future benefits for current employees , much less all future ones.

It would be much better to destroy this system, significantly raise the pay to the market level to attract best candidates, pay them here and now (vs future intent) and remove all intermediates that add no value to the system (fraternal orders , teachers unions ,etc any organization that is not merit based and instead follows seniority, patronage, political insider policies). Otherwise we are cheating people who we hire to do this work and cheating ourselves of the best people for the job.

 

[ziggy29]

why is it different from any other system and how is it 'fair' to everyone else who is not in ivory towers to keep earlier unrealistic promises ? ' you, public employee , you had a plan , plan went bankrupt and can not support you anymore, ok , sucks to be you - the door is there, the Kleenex is on the table. this is exactly what happens to everybody else who works in this economy.

I simply don't wish what happened to me on anyone else. And at least in the public sphere, I can advocate that we not screw anyone the way I was screwed because I can vote on it. It happened to me, but I don't wish it on anyone else and I don't want to be a driving force toward screwing people by taking away their deal in the way it happened to me.

But having said that, if most public employees had the attitude I critiqued a few minutes ago, it would be a lot easier for me to turn on them.

 

[brewer12345]

Paging Porky Pig...

 

[Emeritus]

(By the way-- although I don't think anything I'm about to say is over the line, this is ALL me as an individual, not as a mod.)

What I AM saying is that if you ignore the hose job some of us in the private sector got, you do so at your own peril.

Open your eyes to what is happening outside the ivory tower. People are losing jobs, getting their pay cut, losing their pension and their health insurance. Do you really expect these "pension have nots" -- a rather dominant majority of the population by now -- to just sit around while they keep getting screwed and acquiesce to bail out your pensions while (a) no one gives a damn about their 401K-based retirement AND (b) they are expected to sacrifice more to prop up your pension deal when no one cares to help them?

You need an attitude adjustment if so, IMO. Your best bet to get people supporting your retirement deal is not treating them like a bunch of private-sector mercenaries whose plans backfired and whose main purpose now is to secure your retirement even though theirs is set back by many years. Maybe you ought to think that maybe, if the "rest of us," the majority without the sweet pension deal, had some retirement security restored then maybe we'd be more likely to back yours?

If you think the majority of people with little retirement security should simply accept getting taxed more to protect "noble public servants" (whom you OBVIOUSLY think are more worthy than the rest of us mercenary private sector fiends; your repeated posts make that abundantly obvious) while no one gives a damn about the loss of our retirement security, you do so at the risk of increased backlash. And that in turn increases the risk of YOUR pension security -- something I personally don't want.

Right now many of us merely want to stop making the DB pension deal *as we know it today* to new hires. Keep acting like an adversary who insults our motives and acts like we should shut up and get back in line and you may see some folks wanting to go beyond just shutting it off for new hires.

Your choice. I really think you need to reconsider your attitude. If you see no problem with the private sector getting screwed, the private sector might see no problem screwing you back. I'd much rather see equilibrium come from bringing us up than from bringing you down, but if you continue to show you don't give a damn about what happens to us, it's silly to expect us to accept tax increases and service cuts to give a damn for you.

And again, speaking personally and not as a moderator, your "I'm nobler than thou because I chose public sector work" is a load of garbage. If it were totally altruistic (as you seem to be making it sound) you wouldn't refuse to see that sacrifice needs to be shared as compared to your apparent attitude that sacrifice only be borne by "other people" as long as you get yours. You wouldn't say "screw the private sector and make them pay more for me, give me everything I was promised even though much of the deal they signed up for was taken away." If you expect everyone else to sacrifice for you in a crisis so you don't have to sacrifice, your obvious claims to altruism are gone.

In short, sir, you are contributing to the backlash and the "pension envy" more than anyone else I'm aware of with your callous attitude toward those who don't have your deal (or had it taken away midstream). I can't believe someone with your academic credentials and education would think that's in your best interests.

I have been very clear in not wanting to yank the pension deal from anyone who is already in a system, and only applying changes to new hires. Your attitude is making it hard for me to maintain that position. I hardly think that's in your best interest, but what do I know? I don't have your academic credentials.

You cant have it both ways. You think you can make make nasty nasty comments towards a person who worked for a living and earned the total compensation package. You make unspecified threats E.G. "peril" You did not limit your comments to new workers

"Having said that, my point to Emeritus still remains: if those who want their public DB pension plans protected and preserved for the future, don't sit around and do nothing while the rest of us fall farther and farther behind you. The farther they let us fall behind them (and expect us to keep propping up their deal), the more resentment and resistance there will be to the deal they are getting. "
That is a specific threat to those of us who have already retired. Are you making the same threat against those who picked good investments e.g. shorted the market? what give you the right to threaten people?
IMHO You are so caught up in anger you can't see the forest for the trees. Other workers did not do this to you.
Powerful political interests did it to to you.
You didn't answer the question about the state defaulting on their bonds ?
Do you feel you can tee off on employees but have to give the bondholders a pass?

As to new workers , its a total compensation package. We are not in any kind of union. We negotiated personally every year. If they knew you had the good pension you got less in salary. Most of my colleagues are in TIAA CREF a defined contribution system They get hit just as hard as anyone.

 

[ERD50]

I've heard those greedy state bondholders actually expect the taxpayers to pay off the bonds even though those who took higher returns to get corporate bonds got stiffed when the corporations went bankrupt. Why aren't "you" (plural) out there demanding the state default on its bonds? How can you be asked to sacrifice to pay the state's debts?

I assume you are making the analogy of "state bonds" to "state pensions" and "corp bonds" to "corp pensions"?

If so, it points out exactly the problem that some of us see. In most cases, the public pensions are not only better but more secure than private pensions. Higher benefits AND more security. When you buy any bond, you give up security for yield and vice verse.

So thanks for the analogy.

Now, if you want to say that the current total compensation for public employees is lower, and it is the pension bennies that bring that up to par - you are going to need some data to back that up. Even then, security is lean in the private sector, so maybe that equivalent "leanness" should apply to the public pension as well, since it is part of the total compensation?

-ERD50

 

[ERD50]

You are so caught up in anger you can't see the forest for the trees. Other workers did not do this to you.
Powerful political interests did it to to you.

In other posts, you have lectured us that as voters, we are responsible for what the politicians do.

So we will all hold you responsible. Thanks.

-ERD50

 

[W2R]

YouTube - Porky Pig Cartoon Ending "That's All Folks!"