LETTERS

What is the root of evil?

In your May 18 editorial, you present the case for the bill introduced by Rep. John Dingell, D-Mich., calling for further disclosure of commissions and fees in financial product transactions.

I am a certified financial planner and registered investment adviser in the state of Pennsylvania. I have been in practice since 1982, fee-based since 1986, and manage about 25 clients’ portfolios. I am not against disclosure.

I do, however, understand how bills are made in Washington and which way the political winds are blowing there these days.

I feel that there is nothing more to this bill than a crude political agenda to prick the recent “prosperity” of planners by forcing them to “come clean” about how we are making our money.

Rep. Dingell — and InvestmentNews — lobby for “cutting through the morass and deepening consumers’ understanding of exactly what it is that they are paying for.” I have a number of problems with your righteousness.

The morass will not disappear because the money motive is so strong. Conflicts of interest are part of any interdependent economic fabric.

For example, how many of your articles were placed by interested parties and not independently thought of by your reporters?

Rep. Dingell never had to work for a living in as much of a regulated environment as I and my colleagues have to. I challenge him — and you — to try to survive in this field for more than a year and deliver quality, honesty, trust and performance. You really have not a clue.

If Rep. Dingell attempted to be as client-driven as most of us are, the quality of his legislative activity would greatly improve.

And you, as the editor, exactly what code of ethics and standards of practice do you follow?

I grew up in a family where I did not know what my father made until he died; I did, however, have access in public libraries to how to make a portable A-bomb.

Where does the privacy regarding my compensation start and end?

Please tell me how much you make annually. Because, essentially, that is what I must do now to follow full disclosure requirements existing in the International Association for Financial Planning and the Institute for Certified Financial Planners.

Congressman Dingell: Can I see your tax return? I share mine with clients if they ask.

I agree that some of my fellow planners and others in the industry are rogues and charlatans, unethical as the day is long.

Kill them and not my practice with more disclosure; force them to meet existing standards.

I close on this: Money is a strong motivator.

As long as there is a pecuniary interest, there will be a strong force for making as much money as possible with as little openness as possible.

Things will only open up when the individual CFP, investment professional and others feel they have to be honest to live with themselves.

You and Rep. Dingell can shame people, but if the pay is big enough then the risk is worth it for some people. They will merely find other avenues for exploitation. Crime does pay for a long time — until it doesn’t. But by then, the damage is done to the client and to good certified financial planners and investment professionals alike.

All the best.

GEORGE TOTH

President

Chestnut Investment Advisory

Glenside, Pa.