Here's a statement of the obvious: The opinions expressed here are those of the participants, not those of the Mutual Fund Observer. We cannot vouch for the accuracy or appropriateness of any of it, though we do encourage civility and good humor.
"Hence, since 401k plans at present do not offer any income stream options ..."
I think you misunderstand the change. For decades under ERISA, employers have been able to offer an annuitization option. This was not previously unavailable, just …
I just registered for a free account and had no problem accessing Instant X-Ray.
I did not accept the 14 day premium free trial - at the top of the Instant X-Ray page is a banner w/link saying "Activate Premium Access FREE for 14 Days".
Question …
The ACA subsidizes health care in a number of ways - premium tax credits for participants below 400% of the poverty level, cost sharing subsidies for participants below 250% of the poverty level, Medicaid expansion to 133% of poverty level (100% pai…
I just registered for a free account and had no problem accessing Instant X-Ray.
I did not accept the 14 day premium free trial - at the top of the Instant X-Ray page is a banner w/link saying "Activate Premium Access FREE for 14 Days".
SEC Final Rules page: https://www.sec.gov/rules/final.shtml
Perhaps the bigger item got buried - funds are now allowed to use swing pricing in times of stress (essentially impose redemption fees by passing through the cost of selling underlying sec…
I was aware of the tax differences, but didn't mention it for a couple of reasons. One was that we weren't talking about tax-adjusted figures. The other was because the situation is more complex than you described in case 2 (where the fund pays t…
Suppose you have an advisor who charges 1% for managing your account and he gives you two choices for how he'll collect his fee:
1) He'll periodically skim money from your account, let's say on a daily basis, or
2) He'll delegate that to the fund…
See my separate thread on RESA. There already was a DOL safe harbor rule from 2008 for employer-offered annuities.
The new DOL rule didn't touch that. If an employer follows the 2008 safe harbor rule for offering annuities, then it has by defini…
Converting defined contribution (e.g. 401(k)) money into income streams.
Defined contribution plans may offer participants the option to annuitize their DC upon retirement. Obviously retirees can also do this on their own - take a lump sum and rol…
Advice is advice, whether from a human being motivated by profit, or a "robot" programmed by a human being motivated by profit.
Same potential conflicts of interest, so same fiduciary rule applies.
What I'd read was that the rule could make thin…
Merrill Edge isn't affected - no advice provided.
From a column I linked to in another thread:
"Merrill plans to encourage its retirement clients to consult with their advisor about whether to move their brokerage IRA accounts to Merrill Lynch On…
Did I read that right? That because of the new rule, Edward Jones won't sell mutual funds in commission-based accounts, but will continue to sell VAs? And that they won't sell ETFs but they will sell stocks? I wonder whether they'll sell REOCs b…
I know people have short memories, but this headline is ridiculous.
US News, writing about 2016 SS benefits:
No payment increase. This is the third time there has been no Social Security payment increase since automatic cost-of-living adjustments b…
Glad you mentioned annuities (seriously). I'd run across comments by Milevsky and was debating whether to post a link. He's someone who has studied the annuity market extensively, and IMHO does objective analyses. He seems to be generally well …
As with most load funds, it looks like the no load R1 version charges higher expenses, mostly in the form of a giant 12b-1 fee, so long-term investors are still better off paying the load if they plan to stick around for a long time.
Part of that is…
No - if there were a wrap fee then this would represent no change, i.e. you would still be required to buy the fund though an advisor and pay the advisor a fee. That was the status quo.
For example, here's the entry an F-1 fund at Scottrade:
http…
BobC, you wrote that the DOL rules do not apply to ordinary IRAs.
"DOL rule & regs. Remember they apply to 401k rollovers, not regular IRAs and personal accounts. "
That was just plain wrong. BICE may not apply to some vanilla IRAs, but tha…
I think you're confusing a rule about giving advice on what to do with 401k money (i.e. how or whether to roll it over), with the general fiduciary rules that DOL has promulgated. 401k plan advisors already had to be fiduciaries under ERISA. The …
Maybe the problem is that there are too many dishonest advisors, or to be more generous, too many selling the sky dearly. Shouldn't part of advisors' responsibility already be to advise on likely returns as well as on buys and sells? If they're …
@Bitzer - I was commenting on the fee structure more than the component structure of these funds. Because I don't generally concentrate on target funds, and in particular not on funds that add such a large second layer of fees, I'm not familiar wi…
Funny you should mention the target date funds. Prof. Snowball was quoted in the WSJ a month ago criticizing these funds for adding charges on top of the underlying fee expenses. "Extra premiums are 'generally a sign of greed,' says David Snowba…
FWIW, I've been looking off and on at AICFX (F-1 class) which could already be purchased without an advisor.
I've a small HSA that I likely won't be adding to (hard to get a decent HDHP in my county). Until one's account reaches five figures, mo…
"While I wouldn't pay a wrap fee, one presumably isn't tied to one (possibly bloated) fund family, so a lucky adviser might earn his 1% by skilled diversification."
@STB65 - an excellent point, more so now than in the past. In days of yore, it wa…
The F-1 (or F) share class has existed since 2002. The only thing changing is that you can now purchase the existing F-1 share class without going through an advisor. So if you were working with an advisor nothing has changed on the fund side. …
This basically means they are acknowledging active management is worthless. Loads which are wrong in first place add insult to injury.
I'm sure ER is jacked up on those F1 class shares.
That's all a tad cynical, don't you think?
If opening up sal…
Typically F-2 shares carry transaction fees, even when purchased through an advisor. For example, here are Scottrade's pages for EuroPacific Growth F-1 (AEGFX) and F-2 (AEPFX). At Scottrade both are sold only through advisors. The F-1 class is l…
If I recall correctly, somewhere in the 1990s or early 2000s, American Funds F shares (before they split into F-1 and F-2) were available through some second tier brokerages. That is, not Fidelity or Schwab, but some of the more obscure brokerages…
I respectfully disagree with the use of SSO, or any leveraged fund, as a long term holding. Leveraged funds are precisely the vehicles designed for traders.
See FINRA Alert: Leveraged and Inverse ETFs: Specialized Products with Extra Risks for Bu…
ETFs psychologically encourage trading (since you can sell them any time of day), but that doesn't mean they have to be used that way. In fact, the Vanguard ETFs are just other share classes of their "regular" funds. So VTI and VTSAX are different…
Whatever she does, remember that brokerages have promotions. Make sure she asks about that when she opens the account, otherwise she might lose the bonus.
https://rewards.fidelity.com/offers/friendsandfamilyoffer1
Be mindful of her risk toleranc…
Yes I read Forbes, and the linked Facebook page. Some people, say a certain CEO, might argue that the scope of the fraudulent account openings wasn't known until this year. Likewise that "eight is great" was supposed to help the customers; that it…
I may have been unclear (or unduly harsh) - this was the 2015 award, made early this year. We can reasonably assume that Stumpf will not be getting the 2016 award this winter.
Of course WF has a long record of settlements before 2016, as was made…
I'm going for a two-fer: beating two dead horses with a single whip. I just noticed that Morningstar had named Stumpf 2015 CEO of the year. (Sorry if this has been mentioned before.)
http://www.prnewswire.com/news-releases/wells-fargos-john-stum…
The Scottrade response seems consistent with Fidelity's interpretation of FINRA rules.
What linter did was go to Fidelity and say: "please give me money". Asked for a gift.
With Scottrade, Junkster said: I will refrain from closing my account;…
The typical spending pattern in retirement (remembering that typical, i.e. "average" may mean mode or median :-)) is that one spends more in early retirement than later. In part, that's simply because as one reaches (very) old age, there's less on…
Agreed. How "Fool"-ish can one get?
These are actually existing funds, just changing legal structure. The funds were series of the Motley Fool Funds Trust, and they will be series of the RBB Fund, Inc. Grouping funds as series of a trust is oft…
I believe the paren was the whole problem. Similar to what some email clients do, the MFO web server automatically interprets something beginning with http://something as a URL when you post it. That's why you don't have to use the "link" icon (a…
