A Fee-Only Planner Responds

To The Editor:

In his Dec. 22/29, 2003 column in National Underwriter, Jack Bobo criticizes “fee-only [financial] planners who do not disclose that they have ties to the companies that sell the products they recommend.”

Yes, the term financial planner is in vogue and makes it difficult for people to determine who they are really dealing with. It is important to pick an advisor with integrity, common sense, knowledge and ability. Another key is making sure that the compensation system is transparent and one that eliminates or reduces conflicts of interest.

The National Association of Personal Financial Advisors (NAPFA) is a professional association that provides consumers a vehicle to turn to when seeking a fee-only financial planner who is unbiased, objective and works for the client. Their oath pledges that “The advisor does not receive a fee or other compensation from another party based on the referral of a client or the clients business.”

In order to join this group, I had to forfeit my brokers (Series 7) license to ensure that I cannot receive a commission. My only income from clients is the fee they pay me directly, not income derived from selling a particular companys products or services. It is a simple concept that eliminates and reduces conflicts that could be harmful to a client.