A Disservice Was Done
I have purposely not read "Stairway To Heaven," the article you critiqued in your editor‚s note in the June Issue of Financial Advisor, because I didn‚t want Mr. Anthony‚s comments to affect my comments to you. Basically, I am troubled by your failure to address the "yield to maturity" concept that is a critical and defining aspect of any bond. It would appear that you are considering bonds in a similar performance class to equities when you say, "... studies show that bonds, over the long term, are just as volatile as equities." This may indeed be true if one views equities and bonds as the same type of investment vehicle.
But to do so, would be a mistake.
Bonds have something stocks can only wish for, that being a maturity date. And along with credit quality, purchase price, call features and the ever-important yield-to-maturity calculation ... bonds can offer advisors and their clients important tools that can be used very effectively in the right situations. I‚d gladly stipulate to the study you mention; holding bonds, especially long-term issues like the 30-year Treasury, can certainly produce wide swings in values at any given point as interest rates move up or down. And bond mutual funds are the most dangerous way to invest in bonds because, with apologies to that old saw, "a rolling bond mutual fund gathers no maturity."
But a savvy advisor who, 1) understands the critically important bid-ask environment in which bonds are bought and sold and which can, unlike stocks, produce an unlimited spectrum of prices for a given bond at the same moment, 2) has the ability to inject transparency into a buy/sell process that is totally obscured by the archaic, clouded way bonds are traded, 3) has access to a network of effective bond traders, 4) has reasoned and well-researched insight into the interest rate environment, 5) has the courage to help clients understand the important differences between equities and bonds (Equities MAKE money, Bonds YIELD money), such an advisor is worth their weight in gold!
Finally, I would respectfully introduce you to the concept of "inoculation." This is an approach wherein bonds can be used to guarantee a client a stream of money regardless of how the markets might gyrate. If you have a second‚s doubt about the validity of this approach, just look at the portfolios that were destroyed because clients were forced to make withdrawals during falling markets like the 2001, 2002, 2003 period. Believe me, clients with bonds that kicked out regular dividends like clockwork may have had a temporary decline in the value of the equity portion of their portfolio, but the checks never stopped coming, and they never had to sell anything into a falling market and sustain a loss that could never be recovered.
The evil in bonds are bond mutual funds that have no maturity and wherein net asset values can plummet in rising interest rate environments when investors redeem in a panic as they see their statements. Individual bonds acquired with the intention of being held to maturity (or until potentially called) are far different than stocks, and I believe you did a disservice by not pointing these differences out to those who are less knowledgeable.
Craig Carnick
Carnick & Co., Colorado Springs, Colo.

Editor‚s Response: Thanks. Next month we‚ll publish a letter from a reader who was equally outraged for diametrically different reasons.

The Future Of Advice
I enjoyed your latest editor‚s note [May 2005]. In March of 2000 "walking with their (my) feet" is what I did after 12 years with Morgan Stanley–leaving behind a substantial golden handcuff. The reason: It is clear that a fiduciary standard of care is the future of financial advice. However, we face a momentous task. We must educate the public, the end users of our craft in addition to financial advisors. I applaud the FPA and others for fighting on our behalf, but equally important is the need for a campaign to educate the public and advisors about the meaningful difference between a suitability and fiduciary standard. I fear that very few truly understand the issue.
I became so frustrated by the fact the public does not really "get it" or care that I authored a book based on the Foundation for Fiduciary Studies‚ 27 practices to educate the public "one investor at a time." Your magazine is in a powerful position to aid in this effort.
Congress will not act in the best interests of investors until they fear losing their seats; investors acting as educated voters may provide a much needed push to right this wrong.
Tim Hatton, CFP, CIMA, AIF
Hatton Consulting Inc., Phoenix, Ariz.

CPA Planners Offer Experience
Just when I thought it was time to once more venture forth and read your magazine, it contained another bash-the-CPA article. Amazing that they seem to be included in magazines during tax season.
I have to agree with your writer ["Accounting For CPA Referrals," May 2005] that not all CPAs are prepared to provide financial planning, nor are all CFPs or MBAs, either. I would not expect a CPA who works for a major CPA firm to provide accounting services for a small mom and pop business. It‚s simply two different levels of service. Therefore CPAs who do not invest the time and effort in financial planning should not pursue it. CPAs, under their code of professional ethics, would not accept clients or provide professional services to them if they do not possess the knowledge of that industry. That would not be in their clients‚ best interest or theirs. On the other hand, I believe a CPA who truly takes on the mantle as a financial planner will simply do it better.
Anyone can call themselves a financial planner, as evidenced by the many insurance companies and large brokerage firms now using that term. What separates CPA planners from others is their depth of experience, knowledge of taxes and the connection between that knowledge and financial planning.
In my case, a majority of my clients are individuals and small businesses. My knowledge of their total financial picture allows me to provide a focused approach to their particular financial situation. My goal is to provide them with tax-saving financial solutions. I combine my tax-planning expertise, knowledge of investments, retirement plans, life insurance, health plans and other planning vehicles to leverage their money, while concentrating on providing them with a solid retirement plan and reducing current and possibly future taxes while still meeting their current life goals. It is simply the most effective way to give the client what they desire most: simplicity, or for some, one-stop shopping.  
Many articles on CPAs entering the planning market question their competence, but show envy of the client loyalty and respect individuals have for their CPAs. Many CPAs haven‚t embraced financial planning, but for those who have, myself included, it is the most enjoyable and rewarding area of practice. For those non CPAs, unless you accept the fact that within the next ten years CPAs will be a force to reckon with in the financial planning field, you surely will be left behind.
Brian E. Glickman, CPA, RFC
Smithtown, N.Y.