First Command Financial

[Guest deweygcc]

So i went to FCF and started with them.

First it is NOT FCF that takes the %50 its Templeton AIM , Fidelity or whatever fund you pick.

Next i decided to go WHOLE life. Reason: Because I want to be able to get something back, for lack of a better word choice, its kinda like a Xmas savings account.

With TERM its like car insurance: u pay for x number of years, and if something happens in those years GREAT, if not... your screwed.

WHOLE get dollars back and guaranteed coverage.

Term NOTHING back, and coverage for only the years you are paying.

Reason I went with a front loaded fund( MY CHOICE) because A: I'll never pay a fee after the first year and 1500 bucks for 30 years of service is pretty cheap. I pay a SMALLER fee for any increase. Also, I have 2 times to get out and get everything back, 45 days and 18 months.

What does a front load do for you? It keeps the wishy washy investor AND the wave riders OUT. Its a fund meant to allow acculumation.

Look if I keep my monthly investment at the amount I started, I WILL NEVER PAY ANOTHER FEE, AND will be able to talk to an advisor everywhere im stationed, and every year, for FREE!!

Sorry but for my needs this is the best. I saw some SICK fees in a pre USAF life and I'll tell you the BIG BOYS take a HUGE fee hit.

[Guest IAGuardWife]

Good for you!!

Something I learned when I was selling insurance. Term life is making a bet each month with your insurance company. "I bet I am going to die this month." Your insurance company says "Okay, I will take that bet." You don't die, and the insurance company wins.

If you live to be 115 years old, you will have to make those premium payments from the time you are 23 (or whatever) until the day you die. If you ever miss ONE month, EVER in that 90 something years, you are screwed. Believe me, that's where insurance companies make their big bucks. People who don't follow thru on term life. That's why it's so cheap. I would estimate that at least 70% of term life policies that are issued are never paid out.

I don't like that rate of return.

[Guest Bart]

There is a very long article (9 pages) in today's New York Times entitled "Basic Training Doesn't Guard Against Insurance Pitch to G.I.'s". This article discusses First Command Financial and the tactics of their agents.

You may have to sign up for a free account with the Times, but it is worth it to read the article.

https://www.nytimes.com/2004/07/20/business/20military.html

[Guest TheBobGoat]

Originally posted by deweygcc:

Reason I went with a front loaded fund( MY CHOICE) because A: I'll never pay a fee after the first year and 1500 bucks for 30 years of service is pretty cheap. I pay a SMALLER fee for any increase.

what is the smaller fee for each increase?

is it still half of what you increased by?

you have them taking 250 out of each check now?

[Guest deweygcc]

Bob PM. To the rest, the Funds FCF offers to SOME, are funds by AIM templeton etc. FCF does NOT put these fees on the funds. The front load is to discourage people that are short term investors, as in buy a stock wait under 5 years then sell.

You will never pay another fee after that 50% for the life of the investment. After 12 months the full amount goes to the fund. The only fee you will pay is the 10 dollar IRA fee that everyone charges. If you invested that 2400 for 30 years you'd barely stay above inflation.

[Guest Bart]

Sorry this is so long. It looks like First Command Financial will be investigated by the Pentagon and Congress.

--------------------------------------------------------------------------------------------------

New York Times

Sales of Investments to G.I.'s Under Scrutiny in Washington

By DIANA B. HENRIQUES

Published: July 22, 2004

Securities regulators and lawmakers are looking into the sale of investments to military personnel that may be ill suited to the financial needs of the service members who buy them.

Two prominent lawmakers have called on the Pentagon and Congress to investigate the sale of mutual funds and life insurance on military installations, citing concerns that young recruits and other personnel are being treated as a captive market.

In addition, securities regulators in Washington are looking into the sale of mutual funds to military personnel to determine whether they are suitable for those who buy them and whether the funds' fees have been adequately explained, according to people close to the two investigations that are under way.

The inquiries, the people close to them said, focus on the sales practices of First Command Financial Planning in Fort Worth, which sells mutual funds, insurance and banking services to officers on military bases around the world. Company officials declined to comment yesterday, but in earlier interviews they defended their products as appropriate for their customers and said that their agents were held to the highest standards of business practice.

First Command heavily promotes the sale of contractual plans, an archaic type of mutual fund that vanished from the civilian market two decades ago. These plans require investors to pay half of their first year's contributions in sales charges. As a result, investors who drop out early - historically a high percentage - wind up paying a very high portion of their investment as fees, and even investors who do not drop out earn less than if they had avoided the high first-year fees.

The company's sales agents are all licensed securities brokers, subject to regulation by NASD and the Securities and Exchange Commission.

NASD has been investigating First Command's marketing since last summer, two people who were briefed on that inquiry said yesterday. Its work is "in its very late stages," one of those people said. More recently, the S.E.C. has opened an "active inquiry" of its own, exploring similar issues of suitability and disclosure, another person close to that effort said. Neither of the investigations has so far produced any formal disciplinary action against the company or its agents.

Concern about the marketing of insurance and mutual funds to military men and women also led yesterday to calls for public hearings in both houses of Congress.

Representative Rahm Emanuel, an Illinois Democrat who was an adviser to President Bill Clinton and is a member of the House Financial Services Committee, yesterday asked Representative Michael G. Oxley, an Ohio Republican and the committee's chairman, to hold hearings "as soon as possible" to investigate products and sales practices in the military market. An aide to Mr. Oxley said the request was under review.

Senator Hillary Clinton, the New York Democrat, sent a letter on Tuesday to Defense Secretary Donald H. Rumsfeld asking him to start a Pentagon investigation into the issue. Mrs. Clinton, a member of the Senate Armed Forces Committee, said in an interview yesterday that she had forwarded that letter to the leadership of the committee and requested formal hearings on the issue as soon as Congress returns from its summer recess.

Both lawmakers said their requests were prompted by articles in The New York Times this week that showed how some financial companies used misleading and improper sales practices to persuade people in the military to buy products, like high-cost insurance and mutual funds, that were ill suited to their financial needs.

Congress already has several items on its agenda that deal with the sale of insurance on military installations.

In March, several influential members of Congress asked the Government Accountability Office to investigate insurance industry complaints that officers on some military bases were interfering with the sale of insurance policies to their troops, either discouraging them from buying the policies or holding up the paperwork for having the premium payments automatically deducted from paychecks. That study is expected to be completed by the end of the year, Congressional aides say.

And the defense appropriations bill, which could come up for final action in the Senate today, includes a provision introduced in the House that would prevent the Pentagon from tightening its rules for on-base insurance sales until at least a year after the delivery of the G.A.O. report. Similar language is in the defense authorization bill, which is awaiting action by a Congressional conference committee.

Senator Clinton's office said last night that she was trying to have that language stripped out of the appropriations bill before it comes to a vote.

Mr. Emanuel noted that the contractual plans and insurance policies being sold in the military market had been criticized by regulators and financial experts for years. "When the Pentagon lets these things be sold on base, it's implicitly saying these products are O.K., and they're not O.K.," he said.

Senator Clinton also expressed concern about financial companies that cultivate credibility with military consumers by recruiting sales agents and corporate advisers who have military ties and relationships with active-duty officers.

[Guest TheBobGoat]

story about it on CNBC right now

[Guest Bart]

You know something's pretty bad if Hillary Clinton thinks it's unethical or illegal.

[ 23. July 2004, 02:33: Message edited by: Bart ]

[Guest deweygcc]

Yes and you can get out of fees in 45 days and 18 months, and FCF DOESNT promote its own funds. Believe me I will be watching this story unfold. Again one big thing you are all missing, is there are NO more fees. If one firm charges one lump some are fees, and another nickles and dimes, I'll tell you right now the nickle and dimer is going to steal more $$ from you.

[Guest AKROTC]

deweygcc: I agree with you. I have an account with FCF and have had 0 problems. I'm keeping tabs on the story as well, but I doubt anything will come of it.

[Guest deweygcc]

Im still trying to research whats the bad thing about it? I felt NO pressure at all. I got the best quote from FCF and I had called a few other companies besides the ones they SUGGEST. SEC cant do anything because FCF doesnt FORCE anything.

My agent explained EVERYTHING. and for a fund two decades old its funny that the major firms have quite a few of these.

Please fill me in on the bad things of a front loaded fund. I'll be paying less that 2400 dollars in fees TOTAL for 30 years. I understand that I could "invest" that 2400 dollar and with a boatload of luck and 12%+ I MAY turn it into 10k after 30 years..... Or I could buy microsoft and get 3 bucks a share as a one time divend.

[Guest TheBobGoat]

new news about first command

"New York Times

October 6, 2004

-- The bill, which easily passed the House, would abolish an archaic form of mutual funds sold almost exclusively to military personnel. The funds, known as contractual plans, impose sales fees that eat up half of an investor's contributions in the first year.

By the mid-1980's, contractual plans had virtually disappeared from the civilian market. But they continued to be promoted in the military market, most prominently by First Command Financial Planning of Fort Worth, which has sold hundreds of thousands of the plans to young servicemen and women."

vote was 396 to 2

i have a link for the article - but you have to be AD military to view via my link -

i guess that settles it

bg

[CD512]

I have to echo the comments made about USAA. They are great I have investment accounts, homeowners and auto insurance, and a credit card. Excellent customer service. Another great feature is when you become a member, your kids can become a member, their kids and etc. I am member because of my grandfather's service during WWII and korea.

[Guest sbrewer]

Originally posted by IAGuardWife:

sbrewer- Having been someone who used to sell life insurance for a living (and yes, I did say USED TO SELL) I am curious about your statement "Whole life is for idiots". What is your experience with it and why is it for idiots? Because believe me, I can go on all day about why term life is foolish, and I know what I am talking about....do you?

IAGUARDWIFE...no offense since you use to sell insurance

Whole life....

Whole life is a low yield tool with some term life insurance benifits. You should take the money you invest in it and try another security…you will end up with 100% more by the time you die.

I also think term life insurance is as you described....except the "I bet you I am going to die this month" wager is often in the service members’ favor (SGLI). I don't know where you can get a $250,000 term life insurance policy as a combat aircrew member for $16.50 a month -- except SGLI.

If you are intelligent enough to make money to invest, you’re more intelligent than 80% of the financial advisors out there and 100% more intelligent than any First Command dirty bastard. The girl at the video store selling the $0.25 "accidental coverage" on my $4 rented DVD gave a better pitch than those soon-to-be-illegal assclowns.

[Champ Kind]

Originally posted by sbrewer:

The girl at the video store selling the $0.25 "accidental coverage" on my $4 rented DVD gave a better pitch than those soon-to-be-illegal assclowns.

Amen.