A 403b account is the equivalent of a 401k, for employees of non-profits like public schools. Each August, I enroll teachers in the 403b plan at a school in my city. It takes me 25 pages of paperwork to enroll each teacher. Each of them must sign three different forms and tell me their date of birth, SS #, driver’s license number or passport number, address, phone number, marital status, name of spouse, citizenship, investment experience and risk tolerance. In most cases they only put in $100 a month, which nets me an annual commission of $12. I offer them a tax sheltered custodial account because it has lower expenses than the alternative, a tax sheltered annuity. That, plus my company’s application for variable annuities is forty pages long instead of twenty five and requires the customer to sign or initial in six places instead of only three. I do most of this rigmarole at the behest of FINRA (formerly NASD), those wonderful folks who can ensure that I have a SIPC sign on prominent display in my office but couldn’t keep Bernard Madoff from swindling people out of FIFTY BILLION DOLLARS.
