Commission-based model is fatally flawed

I read Libby Dubick's Marketing Strategies column, "Grit your teeth and make that call," in the Aug. 19 issue on reaching out to clients during this volatile time, and I couldn't agree with her more. What surprised me is that she uses UBS AG of Zurich, Switzerland, as her financial manager. I would think that someone as astute as her would use an independent adviser. It has become quite clear that the traditional commission-based sales model is fatally flawed. If a financial adviser is being compensated on the basis of sales, it is next to impossible to provide fiduciary standards of investment management. External influence and production pressure make any recommendation suspect. The fee-only independent registered investment adviser is a viable and attractive alternative for individuals, trusts, pension plans and non-profit organizations that demand high-quality, independent investment advice and portfolio management. The blank-sheet, open-architecture approach is in sharp contrast to the restricted (and often more costly) offerings from brokerage firms. Oh, well. To each his (or her) own. Lettie J. Bien Director of marketing and business development Investor Solutions Inc. Miami

CPAs are well-suited to financial planning

I am concerned about the misleading comments from the financial adviser quoted in the story "More accounting firms are adding financial planning," which appeared in the Aug. 25 issue. He said that CPA firms that offer financial planning can't give objective advice. As a certified public accountant who has been a financial planner for more than 25 years, I find the statement uninformed, if not offensive. CPA financial planners pride ourselves on, and are known for, objective advice. Moreover, we are bound by a very strict code of professional conduct that requires it. This same adviser also said that 50% of a CPA's tasks involve audit work that has no connection to a client's investment strategy. Clearly, this individual knows very little about CPA practices. We aren't all auditors. In fact, many of us do no audits at all. Personal financial planning has been a specialty within the CPA profession for many years, and there are more than 4,000 CPAs who hold the personal financial specialist designation. The study from the New York-based American Institute of Certified Public Accountants that was used as the basis for the story reports a significant growth in CPA financial planning practices, which is due in part to market demand. The public understands and wants CPAs to do financial planning because of the trust, independence, experience, knowledge and objectivity that they bring to the discipline. Lyle K. Benson President L.K. Benson & Co. Baltimore

Public should beware of Wall Street's next product

Evan Cooper hit the ball out of the park with his opINion column on auction rate securities that ran on investmentnews.com Aug. 6. Unfortunately not much will change. Wall Street will create another product that will be gobbled up with very little disclosure and a ton of profit to the firms. Let's be honest: These firms are going to need a way to make up for all these losses. The problem that I continually face in trying to build my company is competing with unrealistic returns that carry very little risk. If we thought it was scary before auction rate securities were created, the unsuspecting public best beware the next time their broker calls. John M. Nowicki President LCM Capital Management Chicago

Tax column overlooked crucial fee discussion

The taxINsight article by Ken Strauss that ran on investment news.com Sept. 2 about the tax deductibility of management fees was good, but any discussion that doesn't address the difference between fees charged on taxable accounts and those charged on tax-deferred accounts is subpar. You may want to follow up on that point. Nice work overall on some very relevant and interesting articles. James M. Dunphy President Dunphy Wealth Management Inc. Milford, Ohio