This has been warned of before on Reddit, but I have specifics now. Teachers, please avoid AXA, The Legend Group, Lincoln Financial, Voya, Valic or any other company with a high expense ratio. If you’d like an important read: https://nyti.ms/3viOcw7.
Just got off the phone with AXA (Equitable). I have $13,700 in my AXA account. If I were to roll this money to my Vanguard account, there is a $561 Surrender Fee and a $9 (prorated) Transfer Fee. To avoid a Surrender Fee, I need to wait 6 years AFTER my last contribution.
Furthermore, smart Redditors previously suggested that clients of these predatory investment companies can pull 10% out of the account every year. I asked the rollover agent about this, she said every time the 10% is rolled over to my Vanguard account, there will be a $65 Transfer Fee.
I asked her how much longer I have to wait for the account to waive a Surrender Fee. I started the account January 2019, so I assumed she would say January 2025. I was wrong. It has to be 6 years AFTER your last contribution which I made March 2021. So the surrender fee will not be waived until March 2027.
TL; DR – Read the NYT article. Use Vanguard, TIAA or a company you actually research and fits your needs.
Question to my Master Finance Redditors: Am I making the right choice here to wait until March 2027? Or should I be spiteful and swallow these fees to leave AXA now? Thank you for dealing with investment noobz like myself.
**EDIT** After reading comments:
- Lincoln Financial, Voya and Valic are not as bad as the NYT article describes – fees depend on who the third party is – please simply double check your contract or call
- TIAA is not as great as I thought, I was wrong
- Research “self directed brokerage” accounts (SDBA)
- This is for teachers with 403(b)s only, not other professions or investment accounts
- If your district does not offer Vanguard, pressure HR to add any company with low fees, for example – Redditors say Fidelity is great
Disclaimer: This content does not necessarily represent the views of IWB.