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Monday, September 10, 2001

Get your finances in shape

Planners can help reassess goals

Gannett News Service

Press & Sun-Bulletin

Stock markets are falling, tax laws change every year, college and health costs rise and employee benefits are getting more complicated. Many working people do not realize that professional help is available to guide them through their own personal money maze.

Consumer advocates recommend that individuals and families hire a financial planning consultant to develop a comprehensive plan for managing investments, taxes, debt, insurance, college and retirement savings and estates.

You need not be a Wall Street tycoon or lottery millionaire to put a financial adviser to work for you. Advice from a fully certified financial adviser usually costs $300 to $500, according to the Institute of Consumer Financial Education.

That includes consultations, evaluation of financial needs and a written plan, plus execution and monitoring of the plan.

"It's not just for the wealthy," said Paul M. Benesch, senior financial adviser at American Express Financial Advisors in Johnson City. "Just about anybody can benefit. For a few hundred dollars, you can make sure that it's done right."

Paul S. Richard, an Endwell native who is executive director at the California-based Institute of Consumer Financial Education, said a consumer shopping for money advice should hire a certified financial planner, chartered financial consultant/chartered life underwriter or registered financial consultant.

Only those credentials ensure that the adviser is properly trained, adheres to ethical standards, and receives the appropriate continuing education on personal finance, Richard said.

As a general guideline, a person earning $40,000 or less annually who does not receive an inheritance or other sudden windfall probably will not require the services of a financial adviser, Richard said.

"The average individual does not need that sort of detailed plan, though even a low-income person may benefit from sitting down and getting some ideas from a financial planner," he said.

Such a consultant can be useful after a marriage or divorce, during a crisis such as a job loss, or when a family decides to save for a particular goal like college tuition, a vacation home or nursing-home care. The advice can be worthwhile, too, in making decisions on employee health or life insurance benefits and 401(k) rollovers, Benesch said.

Pain caused by the recent slide in the value of stocks and the U.S. economic downturn has prompted more middle-income clients to seek professional advice, according to the National Association of Personal Financial Advisors.

"Especially now, when the market is down, it's a good time to see a financial adviser and reassess your financial goals," said Benesch, who is a certified financial planner.

Consultants can be paid in variety of ways, and consumers should be aware of how their own adviser will be compensated, Richard said. Some advisers work for a fee only. Others collect commissions on securities or other products they sell. Others receives some combination of fees plus commissions or a salary.

Advisers should be willing to disclose business relationships -- including product sales or referral fees -- that may create a conflict of interest in handling an individual financial plan, according to the Financial Planning Association. They also should be prepared to disclose any disciplinary actions from government or professional associations.

Richard recommends meeting with at least three consultants before choosing one. Initial visits are usually free, he said.

"Just like if you're selecting a new doctor or a new church, sit down with a few of them and see if you're comfortable," Richard said. "It should be a personal relationship. They should become your friends."


Consumers should avoid financial consultants who:

* Seem generally untrustworthy or more interested in selling products than meeting the client's needs.

* Call themselves a "registered representative," which means they have simply sent a small fee to the New York Stock Exchange and do not necessary have proper training or ethical standards.

* Are reluctant to discuss exactly how they are compensated, including any commissions or referral fees they may receive.

* Offer to meet you at your home. The consumer should visit the adviser's office instead to judge professionalism and inspect certifications.

* Say they will deliver product recommendations in 10 days or less. A proper evaluation and financial plan take at least two weeks to three weeks to prepare.

Source: Institute of Consumer Financial Education.


To find a local financial planner or related information, check out these Web sites:

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