BI > JULY 2003

ICLUBcentral Acquires Investor Advisory Service (IAS)

Seger-Elvekrog Will Continue Authorship

Tracking down unbiased investing advice has always been a challenge. NAIC investors who perform their own stock studies bring a healthy skepticism to professional research, but even they can benefit from the insight of experts.

Back in the bear market of 1975, to help its members access such insights, NAIC founded the Investor Advisory Service, an independent newsletter intended to give its readers a practical education in NAIC principles and tools while advising them on specific stocks. The service sought to demonstrate the proper usage of the Stock Selection Guide (SSG) by including completed SSGs on three stocks, with supporting comments about the companies and explanations of certain judgments made in the SSGs.

NAIC Trustee Ralph Seger was selected to lead the independent service, and Seger-Elvekrog, the money management firm he co-founded, continues to generate the newsletter's content to this day. (BI readers are likely to recognize this name: Seger has been a regular contributor to BI since the late 1960s; see the June 2003 cover story.)

The newsletter has performed exceedingly well. The Hulbert Financial Digest reports that IAS has consistently outperformed the Wilshire 5000. As of January 2003, over five years IAS was up 41 percent, whereas the index was down 7.2 percent; over three years IAS was up 15.2 percent, whereas the Wilshire was down 36.2 percent.

Emphasizing Independence

To underscore NAIC's focus on impartial investor education, ownership of the Investor Advisory Service has passed from NAIC to ICLUBcentral Inc., a Cambridge, Mass.-based firm that has offered software and support to NAIC members since 1989. ICLUBcentral, which also produces nine software products customized to the needs of NAIC's membership -- including NAIC Classic and NAIC Stock Prospector -- will commence its publication of IAS with the June issue.

"NAIC has always stressed the need for individual investors and investment clubs to utilize independent research when making studies of companies," says NAIC Chairman Ken Janke. "Although the Investor Advisory Service has always operated independently of NAIC, the Board of Trustees felt the change in ownership of the service would help emphasize its independence. This is especially important at a time when some research by brokerage firms is being questioned."

The change in stewardship demonstrates that the investing opinions expressed in the Investor Advisory Service are objectively determined by neutral professionals -- the Chartered Financial Analysts at Seger-Elvekrog -- and that their suggestions are completely separated from NAIC's programs, partners and corporate members.

Enhancing Services

ICLUBcentral is very excited to assume management of the publication. CEO Robert Brooker explains: "We feel that the Investor Advisory Service is a great complement for NAIC investing software. The content produced by Seger-Elvekrog serves a large and loyal group of NAIC-style investors who want some help in finding or studying great companies at great prices. No one can guarantee that IAS will continue to outperform the market as it has in the past, but the continued authorship by Ralph Seger and his colleagues certainly bodes well."

Subscribers will be pleased to know that the pillars of the service -- its mission, its authors and its format -- will remain unaltered:

• IAS remains committed to offering high-quality investing advice at a reasonable cost, and educating readers in NAIC methods remains a priority.
• Investor Advisory Service will continue to be written by the team of independent investing professionals at Seger-Elvekrog. To maintain the service's independence, ICLUBcentral will not influence IAS stock recommendations or its portfolio.
• The newsletter's current components (three in-depth stock studies per month, plus market commentary and updates on the IAS portfolio) will endure.

ICLUBcentral does intend to enhance the service where possible. For instance:

• Noted writer Doug Gerlach has joined the IAS staff as editor-in-chief. Doug has authored several books and Web sites on personal finance. A frequent speaker at NAIC events around the country, he also serves as a vice president of NAIC's Computer Group Advisory Board.
• To improve on the timeliness of the monthly offering, IAS will soon begin issuing e-mail updates on some of its portfolio companies between issues, a frequent request of subscribers.

We invite your suggestions for other improvements. Just write to us at ideas@iclub.com.

Bryce Klempner

ICLUBcentral

Vice President of Marketing and Business Development, ICLUBcentral Inc.

Cambridge, Mass.