Letters to the editor: Nov. 26

Nov 25, 2012 @ 12:01 am

The reference to Barry Gillman, principal of Longevity Financial Consulting LLC, and his estimation of life expectancy raised some concerns about the misuse of the concept of life expectancy in the article “Does LTC insurance still make sense?” (Investment News.com, Nov. 16).

I have been teaching the certified financial planner retirement-planning course for a dozen years or so.

I have repeatedly told each and every class that if there is only one thing that they remember from the course, it is that the definition of life expectancy is that half the people in a group will live longer and half will die sooner. There is no way on God's green earth, short of a medical diagnosis or mob contract, of knowing which group any one person belongs in.

The law of large numbers requires large numbers, and 1 isn't a large number.

Any number that Mr. Gillman comes up with for a client's life expectancy means only that the client has a 50% chance of living longer and a 50% chance of dying sooner. That is a pretty flimsy basis on which to base a financial decision.

Don't get me wrong — I am not an advocate for long-term-care insurance, and the only policies (and there have not been many of those) that I have ever sold were [from the New York State Partnership for Long-Term Care], where the most valuable part of what you get is the part you get for free.

I always introduce the subject by saying that there are no good answers to this problem, only bad answers, so let's see which is the least bad answer. Still, any attempt to tie the decision to any calculation of life expectancy (except in the instances listed in my admonition to my classes) is highly misleading, statistically meaningless and dangerous.

David Mendels

Director of planning

Creative Financial Concepts LLC

New York

I am a devoted reader of InvestmentNews, and I found the perspective and information in the IN Tech Blog “New H-P printers should appeal to smaller investment adviser firms” (Nov. 12) very interesting.

I am also interested in document scanning and hope you can address that. The last time I looked into this issue, I found great research on Fujitsu ScanSnap machines as being a possible good/efficient solution for small to midsize advisers/registered investment advisers.

I think that I am ready to move to a more paperless environment as a practice management initiative for next year, and I would greatly appreciate any feedback.

David A. Hodges

Principal 

Integra Wealth LLC

Chattanooga, Tenn.

I read the excellent blog on Hewlett-Packard Co. printers.

It was perfect timing, and the content was excellent, as we are evaluating our color printing options. Currently, we outsource it, primarily because the ink jets can't really handle a certain volume, but now I know that there is another option — which we will explore.

Tom Daley

Founder and chief executive

The Advisor Center LLC

Lake Zurich, Ill.

0
Comments

What do you think?

View comments

Recommended for you

Latest news & opinion

The appeal and pitfalls of holding unconventional assets in retirement accounts

While non-traditional asset classes held in individual retirement accounts may have return and portfolio diversification benefits, there are "unique complexities" that limit their value for most investors.

Wells Fargo's move to boost signing bonuses could give it a lift

Wirehouse is seen as trying to shore up adviser ranks that took a hit after banking scandal

New Jersey fines David Lerner Associates for nontraded REIT sales

Firm will pay $650,000 for suitability, compliance and books and records violations.

Report predicts $400 trillion retirement savings gap by 2050

Shortfall driven by longer life spans and disappointing investment returns.

Wells Fargo will ramp up spending to lure brokers

Wirehouse, after losing 400 brokers in first quarter, is bucking trend among rivals who have said they are going to cut back on spending big bucks recruiting veteran advisers

X

Subscribe and Save 60%

Premium Access
Print + Digital

Learn more
Subscribe to Print