LETTERS

Earning wrath on Roth

Your April 2 front page story “Advisers not winning Roth converts” didn’t sit well with me.

I’m an adviser with 18 years of experience. My clients are primarily retirees or near-retired middle-class people. Most have large untaxed individual retirement accounts that came from 401(k) or other contributory pension plans.

Your article stereotypes me as a person who is trying to persuade my clients to convert their IRA money. Nothing could be further from the truth. My analysis and common sense leads me to believe conversion is not in the best interest of most of my clients. They are very pleased with my input.

Your article portrays advisers as being in an adversarial position with our clients on this issue. This is not correct. I believe that most experienced advisers feel the same as I do about conversion for older clients.

I’m not against the Roth idea. I have initiated a number of Roth accounts for younger, low-tax-bracket clients and have even initiated conversions for small IRAs. However, for the older client with a large pool of IRA money, it makes no sense to irrevocably give up a larger percentage of this money to the IRS.

FRANK J. MACRI

Certified financial planner

Vestal, N.Y.

. . . tell ’em anything

One point I have yet to see anyone discuss is the total untrustworthiness of the U.S. government to keep its promise. How foolish will you feel in years to come when, having cashed out a traditional IRA and paid the income tax way back in 1998, you find the income tax eliminated in favor of a flat tax?

How angry will you be when, having accepted in good faith the promise to let you withdraw your Roth IRA funds tax-free, you now find that the government’s need for still more tax revenue has caused it to rescind the Roth contract? You get to pay tax on what you had been promised would be tax free!

Think it can’t happen? Just go back to the 1986 tax law changes and remind yourselves that the government now considers grandfathering to be an obsolete concept.

JON D. MANDELL

Certified financial planner

Torrance, Calif.

Nothing wrong here

Re: “SEC sniffs at mart costs” (InvestmentNews, March 30), and your editorial in the same issue –Amen!

Not only should funds and brokerages disclose supermarket fees, they’re required to (check the 1940 Investment Company Act and an ADV notice regarding “possible conflicts” needing to be disclosed). So, too, should all such “access” and “revenue sharing” fees be disclosed under current rules (see the National Association of Securities Dealer’s Notice to Members 97-50 regarding Rule 2830[1], which requires disclosure of “special compensation arrangements” between firms and vendors).

Brokers and advisers need this information to make appropriate decisions. Clients, too. Yet the industry continues to flout the rules. The Securities and Exchange Commission’s response? Another study.

Investment professionals need to take it upon themselves to pressure their broker-dealers and vendors for full disclosure. It ain’t gonna get done otherwise.

Love your pub!

Dan Jamieson

Editor in Chief

Registered Representative

Irvine, Calif.

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