A story in the Sunday Business section listed an incorrect phone number for the American Institute of Certified Public Accountants. The correct number is: 1-800-862-4272.
The Sun regrets the error.
Financial planners had several chances to continue raising the standards of their profession in 1992, but couldn't manage it. Maybe they'll do better in 1993.
FOR THE RECORD - CORRECTION
The delay is unfortunate for the industry, because as people start putting their income tax records together in the next few weeks, many will once again ask themselves whether they need long-range financial and investment advice. They will be good candidates for financial planning. Meanwhile, the growing affluence of the nation's aging baby boomers should give planners another huge source of clients.
But by failing to come to terms with one issue, many people will not have the confidence in financial planners that is needed to make this business grow.
The issue is disclosure.
Simply put, every person who performs financial planning services, including those who sell investment products or insurance policies, should disclose the dollar amount and timing of any compensation they get for selling those products. That includes front-end loads, back-end loads, 12b-1 fees, redemption fees, prizes and any other incentives the planner might receive for selling mutual funds, stocks, bonds, life insurance or limited partnerships.
The commissions should be stated in general terms before any products are sold; then, the exact dollar amount that the planner will receive should be disclosed in writing before the customer agrees to buy.
Consumers interviewing financial planners should ask for this information. After all, if you can see how much you're really paying for an investment, you can assess the planner's motives for suggesting it. You can also decide whether fee-only planning is really too expensive or whether you're paying more in commissions over the long haul.
While full disclosure seems like a reasonable concept, most financial planners don't see it that way. After a long debate, one ++ of their largest trade associations, the Institute for Certified Financial Planners in Denver, adopted a new Code of Ethics and Professional Responsibility in June that fails to require disclosure.
