Advisors Should Evaluate Annuities

I read with interest the April FA article "Conservatism Rules" and, similar to the advisors quoted, over the past several years we and our clients better understand the need to balance risk and return.

We have used some of the concepts mentioned in the article.

I was somewhat surprised that a discussion of variable annuities was not mentioned in the context of providing some additional downside protection when constructing an investment portfolio.

While there are certainly pros and cons that financial advisors consider about annuities, the reason we have clients consider them is for the guarantees that are now available, which under the right circumstances are worth the difference in expenses when compared to other arrangements.

This isn‚t meant to be a review of the different options available today or to recommend one form of guarantee over another, but to say that these programs need to be considered when reviewing available options with a client.

Steve Fraidstern

Associated Financial Consultants Inc.

Ft. Lauderdale, Fla.

Clearing Up Confusion

Your report in the Frontline News section of your April 2004 Financial Advisor magazine, titled "Advisor Group Says Come One, Come All," reflects critical confusion that calls for needed clarifications.

You mistakenly state, "The effort by the IAQFP places it at odds with the CFP Board of Standards and the Financial Planning Association, both of which have embarked on a campaign to make the board‚s CFP certification the unifying designation for financial planning practitioners." What the CFP Board and the FPA have actually embarked on is to make the CFP designation the exclusive and only designation of financial planning and not the "unifying designation."

We oppose their approach for the reason that it disenfranchises 60%, or more than 60,000 equally qualified financial planners bearing the designations QFP, ChFC, PFS, MSFS and MS (the latter two with a concentrated study in Financial Planning).

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