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Author: TMFDj Big gold star, 5000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 23  
Subject: Re: First Command Date: 8/13/2006 10:37 PM
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I'm a part-time, paid consultant to TMF, and my work agreement with TMF calls for my attention elsewhere. However I was asked to reply to your post.

Just wanted to get a few feelers out about 1st Command and their investment options.

FirstCommand (formerly USPA&IRA) does not enjoy a good reputation in the military community. They offer decent products, but their service fees are very high, they use high-pressure sales tactics to sell products that sometimes are not appropriate for specific customers, and once you're a customer, there's not a good way to exit.

FirstCommand's sins have been documented repeatedly. At the tail end of 2004, FirstCommand paid $12M to settle complaints with the SEC and NASD:
http://www.sec.gov/news/press/2004-170.htm

Based on the SEC's action, the commanders of military reservations have the option to ban or limit the activities of FirstCommand on their facilities, but FirstCommand still has the same rights as other businesses to solicit military members. Perhaps FirstCommand has turned a new leaf. Perhaps not.

I've been with them since 2002 and have just about reached the 5yr mark for both my Roth IRA and a mutual fund. Now, without getting into too much detail, I've invested roughly $10K in each (after the 50% frontload that first year, which I now know was my BIGGEST investing mistake). My Roth has made me a measley 2% return on investments and the mutual fund has returned -2%, which comes to 0.4% and -0.4% annualized. I'm feeling burned.

You're seeing the effect of FirstCommand's commissions and fees at a time when the market is flat. In a go-go market, the commissions and fees don't seem like much of a drag. When the market is flat or contracting, the commissions and fees eat all your gains and perhaps some of your principal.

Does anyone have any good experience with them? Does anyone know how to go about shifting funds out without incurring giant penalties?

You should read your contract carefully, perhaps with the assistance of your SJA. You'll discover that you agreed to pay extremely heavy loads during your first years of business with FirstCommand, but then the loads tail off. You might also find that you agreed to pay an exit fee if you elect to terminate your relationship with FirstCommand.

Depending upon where you are in the contract with FirstCommand, you might be better off taking your licks and going elsewhere, or you might be better off sticking with the contract. FirstCommand's products aren't bad products; it's their commissions and fees, and tactics that make other choices better.

Your conversation with your SJA probably will be enlightening. Once you know your legal options, I can help you to sort your options according to financial implications.

As I mentioned at the top of my reply, I normally don't reply to posts on this discussion board. I will reply to replies to this one reply here, but normally I roam the GreenLight, Money Advisor, and Rule Your Retirement discussion boards.

David Jacobs
TMFDj
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