Can Northwestern Mutual offer me anything competitive?

[huskie92]

I think my NWML advisor feels the breakup coming as my wife and I are beginning to take more control of our retirement. I have told him we are holding off on any more policies etc until I can go out and do some research on my own. I have found them to be much more expensive than other options.  He, of course, responds to me about coming in and he can walk us through all our options for retirement with what we want. So, my question is, Does NWML have any products that are worth while for us looking into? Are they a company we want to get in bed with more than we already are? We have maxed my wife's 401k but not my 403b yet. I also just found out that I am eligible for a government backed 457 plan through my school. Our agent has talked in the past about having assets like a 401k/403b that are pre-tax and then having other assets that are post tax dollars (cue the whole life policy we almost bought into). It was something about balancing tax implications with respect to the market or something like that. To be honest I didn't really understand. We do have some old roth IRA's through them that we don't contribute to anymore. How are their IRA's? Anyways, I have started the WCI course but haven't gotten to the insurance part yet so perhaps my questions are answered there.

Thanks very much!

[Hank]

No.  Nothing.

Run, don't walk.

[Rando]

The short answer is no.  On the investment side you will be better off either finding a reputable financial advisor, or doing it yourself after you learn the basics.  As far as insurance goes I used to have NWML for both life and disability, and was able to get much better pricing through an independent agent that worked with multiple insurers.

 

I don't know specifics about their IRA's and you don't say what the holdings are in your IRA, but again my guess is you could do better elsewhere.  i suspect you are being charged fees and the holdings are in mutual funds with relatively high expense ratios.  Using a low-cost brokerage for the IRA's and building a simple investment plan would probably be much better than NWM in the long run.  The WCI course will probably answer these questions for you.

[VagabondMD]

^^

I totally agree. Stop returning his calls. Do not meet with him. He is a well-trained salesperson and will get you to buy stuff that is not in your best interest. He is not your friend.

[ACN]

This is a business decision.  Take emotion out of the equation.

[Lithium]

Hopefully the WCI course teaches you what the conflicts of interest are for insurance agents and financial advisors.  To sum it up, insurance salesmen get gigantic commissions from selling products, and when they charge for assets under management (i.e. their compensation scales linearly with how much you invest with them) they will almost always advise you to invest in their accounts, rather than do anything else (HSA, 457(b), paying off your mortgage, buying investment properties, the list goes on).

I'd move those old Roth IRA's out ASAP.  The only thing unique about their IRAs is they're probably charging fees for services you can essentially get for free through any self-directed broker.

[The White Coat Investor]

For those of you who said, "Who needs a WCI Online Course?", well, now you know. I get emails like this every day. I haven't put one on the inappropriate WL policy thread in a while though. Probably ought to.

Thanks for buying the course huskie92, and no, there is no reason to go back and meet with the NML advisor. You are likely going to face some tough questions about whether to keep policies you've already bought unfortunately. These posts will help:

https://www.whitecoatinvestor.com/how-to-evaluate-your-own-whole-life-policy/

https://www.whitecoatinvestor.com/how-to-dump-your-whole-life-policy/

[Jason Veirs]

As others have mentioned, NWM's policies are severely overpriced, but yet they still continue to be a main player in the insurance industry, as they HEAVILY recruit new agents and try to get them to sell to their "warm market", by bugging all of their family and friends and asking them to talk about insurance. Most agents end up losing said friends and failing out of the business within a few years, but a few of them continue to go on and become 'successful'.

They will also tell you that a WL policy offers tax-deferred growth and that you can access the cash via a policy loan, which is essentially tax-free, but don't buy into it. It's essentially a "bank on yourself" sort of concept that many of the captive carriers pound into the head of their agents. They also try to come across as 'advisors', which is quite comical.

Anyway, he will continue to call you, so I would just avoid his calls. In fact, there's an old saying in the industry which refers to many of the captive agents, and it goes like this: Hire them in masses, train them in classes, and then fire their....

Either way, it's a good thing that you found WCI and purchased his course, as you will not make these sort of mistakes moving forward.

[notadoc]

Suggestion:  Edit the title to the correct name of northwestern mutual.  If you do a forum search on northwestern mutual this one doesn't show up because of incorrect name.  Seems like a useful thread because of the ubiquity of NM at residency programs and the generally poor practices of NM based on the response to this and other threads.

[huskie92]

Good idea. Done

notadoc wrote:

Suggestion:  Edit the title to the correct name of northwestern mutual.  If you do a forum search on northwestern mutual this one doesn’t show up because of incorrect name.  Seems like a useful thread because of the ubiquity of NM at residency programs and the generally poor practices of NM based on the response to this and other threads.

Click to expand...

 

[djohnflatfeecfp]

Have him take you out to a few dinners to try and convince you to stay.  Maybe you can slowly get back some of the commissions you paid him.

 

As Hank said - run, don't walk!

[huskie92]

Ok, so I checked out my portfolio on NW and have the following policies...

Variable Comp Life (~100k): Got this fresh out of college in 2001. Not worth a whole bunch. $75 premium a month. Cash Value: $22,104

Term 80 (400k) $554/yr: This one has one of those options to but into a whole life policy at a later date.

Non-Custodial Roth IRA: Value: $12,015. I have attached the holdings...

What should I do with the Variable life and the Roth? Its not a ton of money but it is something and if its not in the right place I am open to doing something smarter with it. Any advice here would be awesome.

djohnflatfeecfp wrote:

Have him take you out to a few dinners to try and convince you to stay.  Maybe you can slowly get back some of the commissions you paid him.

 

As Hank said – run, don’t walk!

Click to expand...

This is a great idea!   :lol:

[jfoxcpacfp]

The Roth is all "A" funds. That means you're paying a load (commission) on every share you buy. You can move your account electronically to another custodian, like E*Trade; very simple to do, and you don't have to argue with him any more. He has to know it's coming, anyway...

[djohnflatfeecfp]

huskie92 wrote:

Ok, so I checked out my portfolio on NW and have the following policies…

Variable Comp Life (~100k): Got this fresh out of college in 2001. Not worth a whole bunch. $75 premium a month. Cash Value: $22,104

Term 80 (400k) $554/yr: This one has one of those options to but into a whole life policy at a later date.

Non-Custodial Roth IRA: Value: $12,015. I have attached the holdings…

What should I do with the Variable life and the Roth? Its not a ton of money but it is something and if its not in the right place I am open to doing something smarter with it. Any advice here would be awesome.

djohnflatfeecfp wrote:

Have him take you out to a few dinners to try and convince you to stay.  Maybe you can slowly get back some of the commissions you paid him.

 

As Hank said – run, don’t walk!

Click to expand…

This is a great idea!   

Click to expand...

A share American Funds.  Ughhhhhh.  I haven't made it too far into the WCI course either and don't know if it is covered, but you pay a nice upfront load on A share funds of usually at least 5%.  Hopefully he disclosed that along with the commissions he made on the insurance policies.  I try not to give individual advice on this forum, however, the Roth allocation does not impress me. When did you make those investments in the Roth?  American Funds are not the worst and it may be worth holding onto them assuming you paid a big upfront load.  There is always the option of just cutting bait, moving it to Vanguard, and buy some low cost Vanguard funds.  This may be your best option, again, depending on when you bought those funds.

 

I will leave commentary on the insurance policies to the insurance experts here.  My guess is just like your Roth you can do better with your insurance choices too.

 

Good news is you are in the right place and asking the right questions!

 

Oh, as to the dinner comment, make sure it is a nice place.  Tell him you have the names of three friends, preferably physicians, you would like to refer his way.  That's part of the script for those guys to ask.

[Scott at MD Financial Services]

You should re-quote what you have, you will be surprised at the $$$ you can save while improving the language of your policies.