FPA, NAPFA should offer health insurance

I wanted to provide some feedback on the article “Planning groups look to cut health insurance deals,” which appeared in the May 4 issue.

It is about time that the Financial Planning Association and the National Association of Personal Financial Advisors got on the stick about this issue.

When I outsourced my business about six years ago and let my staff of eight go, my group insurance carrier wouldn’t keep me on the plan.

Instead, I had to take a conversion plan that had a premium higher than my monthly income. Or I had to take a HIPAA plan with a high premium and little total coverage (about $50,000 worth.)

If it hadn’t been for the true-group-health-insurance plan (no underwriting, no pre-existing-conditions waiting period), introduced by the Wealth Advisor Institute (now The Advisors Forum of Bend, Ore.) in 2007, I might have fallen into the camp of the uninsured or underinsured (and I was a health insurance agent in my younger days).

The FPA of Denver didn’t have any plan like this then and still doesn’t, which made me question the value of FPA membership.

So if the FPA and NAPFA of Arlington Heights, Ill., want to offer health insurance, merge them with The Advisors Forum so that there is true group insurance. Otherwise, it isn’t worth the time and effort on the FPA’s or NAPFA’s part to bother with this.

Also, there is little reason to belong to either organization if they can’t pull this off like the upstart Advisors Forum.

Chris Cooper
President
Chris Cooper & Co. Inc. and ElderCare Advocates Inc.
Toledo, Ohio

Financial-literacy solution to retirement savings issue

So-called experts’ calling for “guaranteed-income” options for 401(k)s serves only the insurance industry.

In the article “Radical retirement initiative from Brookings in the works,” which appeared in the May 4 issue, I found it interesting that you seemed to accept their ideas and not realize that the same industry that offers very little in the way of financial literacy to its consumers now finds it necessary to sell them its products by force rather than allowing them the vast choices they have with their rollover dollars.

Some would call the forced decisions being sought to replace the choices families make for themselves socialism. I find it to be nothing more than the same corporatism that helped cause the problem and that handcuffs many individuals’ 401(k) balances in funds that are either too costly due to revenue-sharing arrangements that keep out better choices or too risky as we have seen with many of the bond and stable-value options.

The automatic individual retirement plan is also nothing more than a boon to the same insurance and fund industry, which provides consumers with less freedom over their affairs and keeps them locked into products that they don’t need.

It is interesting the number of articles in your paper recently that suggest that these fund and insurance companies offer no independent advice to participants and often have reasons to steer them into high-fee products. These are the firms with which we need to lock up half of our retirement money?

The auto-annuity and auto-IRA will be no different.

The solution to our retirement savings problem isn’t forced behavioral changes; it is promotion of financial literacy of plan participants by independent advisers — something at which the insurance and fund industries have failed.

True choice would allow participants the ability to prevent their funds from being held hostage by fund companies and insurers that don’t have the employees’ interests at heart.

Robert Schmansky
Associate
Northern Financial Advisors Inc.
Franklin, Mich.

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