A Great Start
I greatly enjoyed Patrick Chitwood‚s article (Financial Advisor, September 2007) on volatility and risk. It is surprising how many factors contained in modern portfolio theory are not fully developed and are based on limited inputs. Over the last eight years we have seen the reality of the market vs. the theory. More recently we see that models are not money in the world. I think his article is a great start in a much-needed discussion.
John P. Smallwood
Smallwood Capital Management
Shrewsbury, N.J.

Tell The Whole Story
I am an RIA who is solely involved as "plan sitter" for retirement plans. I do not get involved in personal financial planning per se.
I just finished reading Financial Advisor, and I am not trying to pick a fight but I‚d like to make some comments that apply to your Parting Shot column (Financial Advisor, August 2007). They also apply to many articles appearing in this and other similar magazines over the past several years.  
It seems like every magazine or periodical involving 401(k) plans carries an article about the "hidden costs" of the plans. I read them carefully … trying to learn something about my fees.
I always come away unsettled and unfulfilled. My problem is that everyone seems to take the time to write about hidden costs, but I have yet to read a single article that sets down ANY information about what "par" really is.  
If it is fair to make such allegations, then why not detail some specific examples? What is hidden, and whom is it hidden from? What cost is excessive? It may just be possible that some of us provide our services at reasonable rates. I am not sure that these articles, although well written AND well intended, serve any valid purpose.
Writer Weber clearly calls for lists of fees and charges. I support that. But I wonder if the requirements of good journalism shouldn‚t require articles like Mr. Weber‚s to do more than merely "allege" excessive fees. I suggest that this column is not a problem, but merely a symptom of a problem … that of not telling the whole story.
  Ray Galarneault
  GALARNO Co. Ltd.
  St. Cloud, Minn.

More August Issue Comments
First, let me say that I am a big fan of Financial Advisor. I have been a dedicated reader for over five years and thoroughly enjoy the commentary of your publication. Although I typically read most of the articles each month, your interview with Jean-Marie Eveillard (Financial Advisor, August 2007) was one that I particularly enjoyed. It is always informative to read in-depth interviews with successful money managers, especially those who tend to be more private in the manner in which they conduct themselves.
By way of background I am a CFP practitioner, registered investment advisor representative and life and health insurance producer. Our company, Jedi Management Inc., is an RIA and management consulting firm that provides financial planning and related services to clients. One of the services our firm developed a number of years ago is ongoing consulting for plan sponsors of both employer/trustee directed qualified plans (e.g. defined benefit plans) and employee participant directed qualified plans (e.g. 401(k) plans) based on seeing a need for plan sponsors to receive independent, objective advice and offer more suitable investment options to the plan participants.
On the last page of the August issue of your magazine was an article written by Ken Weber entitled "What You Don‚t Know Can Hurt You." It dealt with fees in 401(k) plans and the difficulty many plan sponsors and plan participants have in discerning them. I completely agree with Mr. Weber regarding the need for simpler, more straightforward disclosure of all 401(k) related fees being incurred by plan sponsors and plan administrators.
Unfortunately, Bill H.R. 3185, "The 401k Fair Disclosure for Retirement Security Act of 2007," introduced by Representative George Miller in late July of this year misses the mark. Aside from failing in its mission to require meaningful and relevant disclosures to be made to plan participants and beneficiaries regarding 401(k) fees and potential conflicts of interest, the bill delves into areas that have absolutely nothing to do with its purported mission and, consequently, would have potentially negative consequences for everyone involved with 401(k) plans.
Jason Hochstadt
JEDI Management Inc.
Fort Lee, N.J.ꆱ