Morningstar Advisor - Fall 2007 - (Page 9)

Inbox E-mail your feedback, ideas, and viewpoints to magazine_editor@morningstar.com Kudos Suitability Investors Behaving Badly We found the article on variable annuity regulations informative (“When It Comes to VAs, It’s Seller Beware,” Summer 2007), and it summarizes the current regulatory environment as it exists today very well. In the section discussing NASD crackdowns on variable annuity sales, the Minnesota attorney general’s case against American Equity Investments Life Insurance Co. was mentioned. It is my understanding that particular case is about equity-indexed annuity contracts and not variable annuity contracts. It’s unfortunate that the media continues to mix these products up with variable annuities—leading to confusion for the investing public. Most equity-indexed annuities are not currently classified as securities and thus not overseen by the same regulatory bodies that supervise variable annuity activity, and their discussion was out of place in this otherwise excellent article. Mark A. Cortazzo MACRO Consulting Group Parisppany, NJ In the Spring 2007 issue, the chart in Christine Benz’s article (“Your Mileage May Very”) was the best example of investor behavior I have ever seen. Is this chart available in PowerPoint or some other format for use with clients? Barry Corkin Barry M. Corkin and Co. Little Rock, AR Cash Flows Growth of $10,000 Just wanted to tell you that I think the magazine is a wonderful resources for advisors. I appreciate the up-to-date information and that more than the basics are covered. Jenny Migdal Forthright Financial Planning Albuqueque, NM $44,000 $30M 27,000 12.5M 0 97 98 99 00 01 02 03 04 05 06 07 10,000 Editor’s note: Great idea. We have plans to add it to Principia Presentations & Education next year. Finding Funds with Consistency I want to thank you for producing what is, in my opinion, the best debut for a magazine in our industry’s history! It was to the point, contained excellent use of Morningstar research, and focused on an area of investing that advisors have not paid enough attention to—using mutual funds and ETFs as a surrogate for hedge fund strategies (“A Clear-Eyed Look at Hedge Funds,” Spring 2007). It was clear from the comments of Gareth Lyons, Don Phillips, and Joe Mansueto that the topic of alternative investments is not as simple as “which hedge fund do I buy?” Robert A. Isbitts Emerald Asset Advisors Weston, FL All of this verbiage about “product suitability” is nothing new. It is not about compliance but just another tool of sales prevention that home offices use to force agents into leaving the business, so the home office can inherit their trail commissions from the volumes of business they leave. Then, the remaining agents or new ones will be asked to service those orphaned accounts. They will be expected to take over all liabilities, resolve all of those clients’ problems, and be the first point of contact when it comes to customer service—all of this labor for absolutely zero pay and zero expense reimbursement. This is nothing more than a form of involuntary servitude. Ralph Mitchell Independent Agent Boston, MA Thanks for your Screens article (“Finding Funds with Conviction,” Summer 2007). Attached is one I use for a breakdown of the funds available through Financial Network PAM. It gives me a composite of consistent funds. Reeves Byrd Financial Network Gainesville, FL Correction In the article “Marathon Man” (Summer 2007), our profile of manager John Osterweis, we incorrectly said co-manager and analyst Sasha Kovriga received a Ph.D. in philosophy in the Ukraine. Kovriga received a B.A. in philosophy and history with honors from Brandeis University, a M.A. in philosophy from the University of Massachusetts, and a MBA from Harvard. Editor’s Note: Thanks for sharing. If other advisors have a favorite mutual fund or stock screen they’d like to share, they can send it to magazine_editor@morningstar.com MorningstarAdvisor.com 9 http://MorningstarAdvisor.com

Table of Contents Feed for the Digital Edition of Morningstar Advisor - Fall 2007

Morningstar Advisor Fall 2007 Features Departments Letter from the Editor Inbox 10 Years After: Developing Markets Make Progress Research Briefs Investors Should Adjust Their Home Bias Few Mutual Funds Exhibit Serial Correlation Valuating ETFs, the Equity Analyst's Way It’s All About Location See the World (Differently) The Return of the Global Flexible Investor Map of International Value Sound as a Loonie? Fair Exchange In Their Own Worlds A Good Read Putting Their Heads Together Buying Protection Scoping Out Easy-to-Use Funds Finding Good Stewards Consumer Firms Go Global Mutual Fund Analyst Picks Undervalued Stocks Most Popular Variable Annuities New at Morningstar The Whole Wide World

Morningstar Advisor - Fall 2007

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