Clients are being steered into prime money funds

Investors are being steered or forced into prime money market funds as asset managers close their Treasury money…

Investors are being steered or forced into prime money market funds as asset managers close their Treasury money market funds, be-cause they can no longer make the obscene fees that they have historically made without “breaking the buck.”

Companies, rather than waiving fees on these funds during this unprecedented period of turmoil and offering a safe haven for their loyal customers, have chosen instead to pursue short-term profits, putting investors at risk in prime money market funds that, more likely than not, will be hit with losses in the near future.

Investors who have chosen Treasury money market funds are told that they can’t have what they want.

When prime money market fund losses materialize, you can be certain that firms will argue in their defense that investors freely chose these prime funds. Nothing could be further from the truth.

My large 401(k)-plan-sponsor clients aren’t happy about having their arms twisted in this way, and any plan fiduciary who takes the time to seriously consider what is happening should be outraged.

In the article, “Prime money funds see recent inflows,” which appeared in the Feb. 23 issue, Matthew Illian, a wealth manager with Marotta Wealth Management Inc. of Richmond, Va., was quoted as saying, “People are able to discern the difference between a collateralized debt obligation, a structured investment vehicle and the type of money market fund they own.”

In the 25 years I have been in the business, I have never, ever heard such a preposterous comment.

Edward Siedle
President
Benchmark Financial Services Inc.
Ocean Ridge, Fla.

Kudos on article focusing on opportunity

Just a short note of thanks for the article, “Downturn spells opportunity for some advisers,” which appeared in the March 2 issue.

Although I can’t speak from a tremendous amount of personal experience, as I have only been in the industry for two years, it is good to see a story talking about great opportunity rather than great losses.

We are a small registered investment advisory firm that specializes in retirement plans, but we do have a staff of financial planners, and our focus has really shifted to prospecting to build the business.

Eric Morrison

Investment adviser
Sundvold Financial
Columbia, Mo.

Obama’s tax plan kills the American Dream

Here is a letter I would like to send to President Obama:

I want to personally thank you. It appears that you are taking a huge burden off my shoulders for 2009.

I am a self-made entrepreneur, and I have spent the past 18 years of my life chasing the American Dream.

I now can sleep peacefully.

There is no need to earn more than $249,999, because if I do, I will be punished. And if I were to increase my company’s earnings, I would have to hire another employee.

And if I hired an employee, I would have to pay them.

And if I were to pay him or her, I would also have to pay Social Security taxes and contribute 4% of his or her salary into my company’s 401(k). And I would also have to add him or her to the silly little health insurance plan that we provide to employees.

By taking from my pockets so you can give to others, you have greatly simplified my life.

By trying to multiply other people’s wealth by first dividing my wealth, my work week will no longer last 60 hours.

By lowering the bar of excellence for our country, my firm no longer needs to strive for that excellence.

By killing the American Dream, you will let me sleep at night.

Maybe I will start taking Fridays off and simply downsize.

Thanks for the change because we may have to change the way we do business, versus the way we have done it the previous 18 years.

Gregory D. Gardner
President
The Gardner Group
Dallas

ADD YOUR VOICE to this mix. Readers: Keep letters brief. Include your name, title, company, address and a telephone number for verification purposes. Write, Attn: Jim Pavia, 711 Third Ave., Third Floor, New York, NY 10017-4036. All mail may be edited.