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We are presently in a non-ira annutiy fund, American Skandia. The planner who suggested and got us invovled in the fund has us using a "money management" firm that moves the monies between the 30+ mutual funds that comprise AmSkandia. The money manager is extracting a 1.65% fee for their service. This is in addition to the annutiy fee and the individual mutual fund fees. We have been involved for 3 1/2 years and have seen a return of 133% during that time. In discussing with financial people, however, the general feeling is that we are crazy to be paying a 1.65% fee for someone to move around money between funds that are already professionaly managed. One source went as far to say that it appeared to be "gouging" and borderline illegal. The alternative would be to asset allocate and adjust on a as needed, quarterly or annual basis. Presently, the money management firm is moving the monies on a weekly, sometimes daily basis. Comments are welcome..I am a novice and would appreciate opinions! Thank you!
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If the manager is getting you a return better than you could get for yourself, he may be earning his fee.
You might try taking a part of the money and asset-allocate it yourself. After a few months see which would do better. Or you could see what asset allocation you would use and back-test it.
Mutual fund companies hate people that move in and out like that. It drives their buying and selling plans nuts.
You should have no loads, so the trading in and out should be free from your point of view.
Good luck! Chris
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We are presently in a non-ira annutiy fund, American Skandia. The planner who suggested and got us invovled in the
fund has us using a "money management" firm that moves the monies between the 30+ mutual funds that comprise
AmSkandia. The money manager is extracting a 1.65% fee for their service. This is in addition to the annutiy fee and
the individual mutual fund fees. We have been involved for 3 1/2 years and have seen a return of 133% during that
time. In discussing with financial people, however, the general feeling is that we are crazy to be paying a 1.65% fee for
someone to move around money between funds that are already professionaly managed. One source went as far to say
that it appeared to be "gouging" and borderline illegal. The alternative would be to asset allocate and adjust on a as
needed, quarterly or annual basis. Presently, the money management firm is moving the monies on a weekly, sometimes
daily basis. Comments are welcome..I am a novice and would appreciate opinions! Thank you!


I would say run don't walk away from the deal BUT the guy is delivering the goods. As long as he is getting good results I would be inclined to stay, but not add new money. I think the approach is high risk.

Are you sure about the return? Is it after all fees?
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bbenn -

Welcome to the "Retirement Investing" Board!

You have presented an interesting post. I'm not sure, however, if I know enough to render an opinion here. I don't fully understand the idea that your funds are being transferred among investment options often - I generally prefer a longer-term investment strategy for growth, rather than frequent changes.

Your 133% growth over 3½ years is ok - better than some & worse than others. The management fee itself is an issue that is most important when your earnings are below average & unsatisfactory.

Review your annuity contract & discover your alternatives within the plan. Meet with the planner to discuss the strategy & whether it's still valid.

Good luck & best wishes, PP
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