I received a class action lawsuit notice in the mail today, regarding First Commands investment practices.

First Command Financial Planning

"A class action lawsuit has been filed against First Command Financial Planning on behalf of military investors who bought the company's systematic investment plans before Dec. 15, 2004 and did not sell the plan before that date. The suit alleges that the company employed "false and misleading marketing" in its dealings with troops. According to the complaint, the systematic investment plans took as much as 50 percent of investors' first-year savings in broker fees and higher-than-needed fees after that. The suit further claims that the firm's salespeople lied about the likelihood of recouping that money, and misled customers about better investment plans."

FYI for those of us that were dumb enough to invest with them when we knew no better!! This is a prime example of why we need to read the fine print and not be quick to just invest w/o doing our research first!!

MK1

Let's see...you give me $10,000. I'll invest $5,000 and pocket the other $5,000 for myself. Because you've lost $5,000 right out of the gate, you'll feel obligated to leave the other $5,000 invested for years so you can (hopefully) make up that missing $5,000 as soon as possible.

How's that for a business plan that instills investor confidence?

In addition, having a salesperson who also served in the military using his/her military service to gain your confidence is just a little icing on the cake, too.

I was first introduced to them when they were known as USPA and IRA. In a nutshell, it blew me away that what little I had in savings at the time, they wanted me to invest it all but for them to keep ½ of it as commission! As you know, if it looks, smells & taste like you know what, it must be then.

Anyhow, I departed from the idea of doing business w/ them. Many years later, a neighbor of mine, now a very good friend and the father of my goddaughter (West Point Grad) left the Army and became one of them. Nowadays, he is a regional manager in the PA area. At first, his philosophy was not to approach friends and family. But after some years, the deviated from that and started making his sales pitch to all. However, I have to say, his approach was “this is what I can do for you, let me know” and it was a one time approach. My answer was that I preferred not mixing my finances w/ friendship (now family). To this day, we are good.

Apparently, he is doing very well. So there seems to be people out there that rather not be bother and simply “pay” and by God, they do pay lots of $$$$$! But my other problem w/ them is not just their mutual funds and their systematic investment plan, but their push for their life insurance! What I do not understand, is how they can get away w/ calling themselves “financial advisers” when in fact, what they really are, is nothing more than a salesman! But to make it worse, our military leadership allows them to infiltrate our ranks and take our people to the cleaners! But then, many of these very senior military retires that can not find a real job in the outside, are part of them.

Sorry for the novel, but this entire issue just blows me away!

quote:

those of us that were dumb enough to invest with them when we knew no better

Interesting statement on today's world that a person or group's own stupidity is actionable against someone else!

I sat down with a First Command rep years ago and told the guy what I was looking to do and also what I didn't want to do with my money. He worked out a plan that included doing exactly what I told him I didn't want to do. After telling him again, he still tried to pressure me into doing what I did not want to do. Needless to say he didn't get one dime from me. He was surely looking out for his best interests and not mine. I am glad I didn't get pulled into his trap.

Five years ago my CO brought a First Command Salesman to our unit and suggested we all buy into what this guy was selling. I was an E5 with no investments and had total trust in my CO, if it was good enough for him it was good enough for me, so I thought. I invested a $100/month and they took half for the first year, I understood all this, well sort of, I still don't really understand it. However, I do know that I have made good money off this account and have been making very good interest for the last four years. I'm not breaking the bank or anything but it is doing a lot better than my TSP account which is pretty much a glorified savings account. So, I "gave away" $600 for the first year but I've made that back. I'm not defending First Command but other than the initial fee it's been pretty good to me. Does anyone know what this lawsuit entails? Are we going to get that initial fee back?

Please elaborate. Where do you have your First Command funds invested? What TSP fund(s) are you invested in?

I don't really know how my investment works through First Command. My wife handles all the investment stuff and I see the paper that comes in the mail every now and then with what we've made. My TSP is split 50/50 between the I and the S fund. Again, I don't know a lot about any of this but I do know that I have made money on my First Command account every year since I've had it. I can't say that for the TSP. The last statement I got for the TSP showed a pretty good loss of money. I'm sure it will equal out over time because they are both

This is exactly the issue w/ 1st Command, most (not to say all) of their clients have no clue and no desire to know how their $ is being invested. They don't want to be bothered. And if that is the case and you are willing to pay (and by God you will pay), then that's ok. It is better than not saving, investing and owning a life insurance. But if you have the time, desire and inclination to do your own research, then do so.

I once heard that there are 3 types of people. Those who make things happen. Those who watch things happened. And those who wonder what the hell happened. The class action lawsuit is just a group of those in the category of "what the hell happened" that realized that they were paying a lot f $$$ for a service they could have done themselves. But if they read the fine print to their contract, this is just a waste of their time. A lawsuit that if and when settled, the law firm will keep most of the $ and those signing up and completing the VERY lengthy paperwork will get a few $.

Trust me, I was part of one against AOL a few years ago and the paperwork was by far not worth the few $. Which by the way, it took over a year to get. The law firm made millions!!!

Sorry, but I have to echo whitehullchips, in that I understood the 50% FRONT LOAD. But that only amounted to a little more than a grand - nothing compared to what it is worth now. I have been earning well over 14% average now for over 20 YEARS! My investment is in six figures now and that's all you need to know.

I think I'll stay with First Command.

It is not theonly egg in my basket, and I would not advise anyone to trust everything in one investment vehicle. It is always good advise to diversify your savings. But my First Command egg IS a nice egg. But heh, if they want to give some of the front load back, it's okay by me!

I am sure that all of you bad mouthing the company you said NO to took the advise of other so-called "fianancial advisors," who I'm sure had no vested interest of their own in selling their own wares to you, must have made just tons more money than I did, right? Happy investing!

BT

Terry,

Would you mind indicating what funds they have you in?

Brian,

I have in no important order; AIM Summit Fund - Class P (0591)
- these are basic IRA's. I have two of them.
One is mine, the other my working spouse's.

Templeton World Fund - Class A
- again, basic IRA's, two of them. One is mine
the other is my working spouse's.

One other AIM Summit Fund - Class P
- this one is not an IRA, just a savings plan (not
tax deferred).

Then of course I have two life insurance policies through First Command with an independent company underwriter. These are Whole Life and as such I do not consider them 'investments,' but were part of the Triad (investments/savings/insurance) that USPA/IRA (First Command) recommended when I first started with them.

These policies do have accumulated value, and that means I could cash them out now , but I intend to eventually just stop making principal payments and let them ride out their decreasing annual value as "paid up" free insurance. One policy is mine and one again is on my working spouse's life. They aren't much, but they were piece of mind before my nest egg grew.
The AD&D my company has on me and the one on my wife is worth a lot more.

Badge, perhaps I came across the wrong way. 1st Command services are not for everyone. They do provide a service but at a price that personally many of us consider too expensive. But if you feel comfortable w/ the situation, more power to you. Nevertheless, you are still investing and saving. That we think you can do better on your own or w/ another company, is besides the point. It's a matter of taste. For me, there is no way possible I could feel comfortable knowing what it cost for their services.

Anybody know how I can partner in on the lawsuit? Will I get a notice? I've moved at least once since I closed that account.