Thank you for the August 2004 cover story, “Keeping The Faith,” by Robert Keane. It is good to raise awareness about the value of faith-based investing, or what we call Biblically responsible investing.

My experience is that Christian clients are thankful to know about this issue–an issue most have never considered but immediately come to understand as a vital part of living out their faith. Unfortunately, many Christian financial consultants never make their clients aware that their “regular” mutual funds put clients in a position of indirect ownership in companies that support abortion, pornography, homosexuality, and other issues that run counter to Biblical teaching.

Fortunately, an increasing number of Christian advisors are coming to understand that how/if they discuss this issue with clients is not just a marketing decision, but rather a decision about allowing Christian principles to permeate every aspect of their practices. Many Christians who are prospective clients come to me because they know I am a Christian. If I fail to employ Christian principles at every stage of the financial plan–from goal-setting to implementation–I have given the client less than they should have expected and have lost the opportunity to see the temporal from an eternal perspective.

Dan Hardt, President

National Association of Christian Financial Consultants

Louisville, Kentucky

Defining Value

I just finished your August 2004 article, “The True Meaning of Value,” and am writing to offer kudos on this insightful and thought-provoking article. I am relatively new to the financial services business and have been struggling to find a way to differentiate myself. This article gives me a good point from which to start. Thank you.

Christopher Lewis

Legend Group

Rochester, New York

The Real World

Regarding “Is Indexing’s Time Over?” in your July issue: Everything Ms. Lisanti predicts may or may not happen, but this will have nothing to do with indexing’s time being over. She argues that active management will beat indexing because small-cap stocks will do well. If she is arguing that small-cap stocks will beat the S&P 500 index, then she is simply betting on one asset class over another. This has nothing to do with indexing. Odds are in her favor since the Fama-French model predicts a greater return for small-cap stocks in return for the greater risk assumed.

The more appropriate question would be: “Will actively managed small-cap stocks beat the appropriate index of small-cap stocks?” The Russell 2000 is only the appropriate index for the largest of the small-cap stocks.

This will be the decade of active management only if the laws of mathematics suddenly stop working: That is to say, when aggregate market performance minus costs is greater than actual returns. This cannot happen in the real world.

Allan S. Roth

Wealth Logic, LLC

Colorado Springs, Colorado

Another Source of Help

I thought Mark Tibergien’s article on staff compensation in the September edition (“Show Them the Money”) was very good. However, I did want to comment on one item. Tibergien wrote, “They need to add technology, people, and processes to become more productive and efficient.” While I agree with this, he left out the option of outsourcing some of the work. For most firms, there are at least some tasks that easily can be outsourced, such as payroll, bookkeeping, portfolio reporting, administrative work, computer support, etc. While outsourcing should not eliminate the need to grow a staff, it can be an efficient way to manage growth.

Jim Starcev

Etelligent Consulting

Overland Park, Kansas

Correction

In our August 2004 story on 529 plans, “Coming of Age,” we misspelled the name of Paul Fichera, of MFS Investment Management in Boston.