Letters to the editor: July 23

Oh, no! Kids in their 30s and 40s still need help? Money you give them might not…

Oh, no!

Kids in their 30s and 40s still need help? Money you give them might not be there for your retirement? (“Bankrolling adult kids imperils boomer retirement,” June 25).

Somebody better tell Suzie and Dave that their notion that families don’t need permanent insurance because the kids are out of the house at age 22 is wrong.

By the way, since we are on the subject, how the heck has that “buy term and invest the difference” been working for you the past 15 years?

Mark D. Lowe

Senior vice president

International Planning Alliance LLC

Shrewsbury, N.J.

You just received the news that you lost $84 million last year.

The losses are mainly attributable to exorbitant employee benefits and compensation expenses that represent 65% of your total operating expenses. You are one of the few employers left that can pay for full medical, dental and supplemental insurance benefits for full- and part-time employees.

You also can afford to match up to 4% of employee contributions to their 401(k) plans while providing a defined-benefit pension plan. The average compensation per employee equates to $174,000.

During the global economic crisis, you decided to continue to expand your business, even though between 2007 and 2011 the customers that you serve underwent a serious contraction, with a significant portion of them going out of business or being shut down.

In fact, in the same period over which you expanded your business, you saw your customer base shrink to 4,456 last year, from 5,005 in 2007. During that period, in which your customer base declined by 11%, you have hired additional staff to serve your shrinking market and increased your total compensation expense by almost $100 million.

You argue to your remaining customers, who will be forced to pay more for your services, that you need to expand and that they should pay. Your customers respond that they can barely afford to pay for your services now, much less after any proposed price increases.

Fortunately for you, you have a government-sanctioned monopoly.

Your customers can’t go to a competitor or discontinue using your services, because the government says they can’t. Also fortunately for you: Your customers have no say in what you can charge.

The government, without any regard for the impact on your customers, has recently approved the largest price increase in history. No doubt the price increase will have a substantial negative effect on all your customers and probably will result in an acceleration of the decline in the number of customers, with more of them going out of business.

And just to be sure that your customers have no alternative but to continue to pay, you ask the government to extend your monopoly to another related business that has no requirement to use your services. With a government-sanctioned increase in your customer base, the assurance of a continued monopoly and no limits on the price that you can charge, you are confident that you can continue to charge whatever you want to help pay for the lavish compensation and benefits for you and your growing staff.

In any effort to rein in this activity, your customers have no recourse because the government has extended immunity for any activities you engage in with regard to them.

Of course, just to be sure, any attempt to have the government limit or restrict your activities will be quickly silenced by your spending hundreds of thousands of dollars lobbying Congress to ensure your continued good fortune. And your customers will pay for the lobbying to ensure their own extinction.

All this sums up how the Financial Industry Regulatory Authority Inc. operates.

If advisers ran their businesses this way, in all likelihood, they would face significant regulatory and legal action for a host of issues, including a lack of transparency, excessive charges and unfair trade practices. They could be assured that Finra, the Securities and Exchange Commission and state regulators would be screaming about their activities and the significant conflicts of interests.

Running a business in this manner doesn’t serve the best interests of your customers, a lesson that Finra would do well to study and learn from.

Kevin A. Carreno

Principal and general counsel

International Assets Advisory LLC

Orlando, Fla.

Mr. Carreno is running for a small-firm seat on Finra’s board.